UBS PRIVATE INVESTOR FUNDS INC, N-30D, 1998-03-03

UBS PRIVATE INVESTOR FUNDS INC
N-30D, 1998-03-03

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UBS
BOND
FUND

-------

UBS
Private Investor
Funds, Inc.

Annual Report
December 31, 1997

<PAGE>
<PAGE>
UBS Private Investor Funds, Inc.
Chairman's Letter
- --------------------------------------------------------------------------------

Dear Shareholder,

Thank you for your investment in the UBS Bond Fund, which is part of the UBS
Private Investor Funds.

We are pleased to provide you with the Fund's annual report for the year ended
December 31, 1997. This report contains a letter from the portfolio manager
discussing the performance of the Fund for the year ended December 31, 1997
including a market overview. In addition, it includes a complete set of audited
financial statements as well as a schedule of investments.

The UBS Private Investor Funds are an integral part of the asset allocation
service provided by The Private Bank* of Union Bank of Switzerland, the largest
bank in Switzerland. The Funds provide investment opportunities in U.S. and
international securities markets to enhance investment performance, diversify
risk and preserve capital within your investment objectives.

The UBS Private Investor Funds bring you:

The expertise of The Private Bank's professional money managers

Global investment perspective and knowledge

A high priority on financial stability and preservation of wealth

As you are aware, in December, 1997, Union Bank of Switzerland and Swiss Bank
Corporation ('SBC') announced their intention to merge. Early in February, 1998,
the shareholders of UBS and SBC overwhelmingly approved the proposed merger.
Completion of the merger is still subject to regulatory approvals which are
expected to be received soon.

This merger will create a top-tier global financial services group which will
concentrate on clearly defined core businesses. As private banking and asset
management are core businesses of the banks, shareholders of the UBS Private
Investor Funds will continue to see a commitment to growing and building the
mutual fund business.

We will continue to keep you informed of any new developments as they occur.

To learn more about the other UBS Private Investor Funds, please call (888)
UBS-FUND. You will be provided with a copy of the prospectus which contains more
complete information including charges and expenses. Please read it carefully
before investing.

We appreciate your continued confidence in the UBS Private Investor Funds.

Sincerely,

/s/ HansPeter Lochmeier
Dr. HansPeter Lochmeier
Chairman of the Board
UBS Private Investor Funds, Inc.

- ------------
* 'The Private Bank', as used in this document, refers to Union Bank of
Switzerland, New York Branch.

This annual report must be accompanied or preceded by the Fund's prospectus.

<PAGE>
<PAGE>
UBS Private Investor Funds, Inc.
Fund Commentary
- --------------------------------------------------------------------------------

FUND PERFORMANCE

For the year ended December 31, 1997, the UBS Bond Fund had a total return
of 7.22% versus an average total return of 8.57% for the Lipper Analytical
Services Intermediate Bond Fund universe, a 6.19% return for the Lipper
Analytical Services Short-Intermediate Bond Fund universe and a 7.87% return for
the Lehman Brothers Intermediate Government/Corporate Index.

This chart provides a comparison of the Fund's performance to that of the Lehman
Brothers Intermediate Government/Corporate Bond Index. This chart compares total
returns (which includes changes in share price and reinvestment of all income
dividends and capital gains distributions) of a hypothetical $10,000 investment
made on April 2, 1996 (commencement of operations) and held through December 31,
1997.

[PERFORMANCE GRAPH]

LEHMAN BROTHERS
INTERMEDIATE GOVERNMENT/
DATE UBS BOND FUND CORPORATE BOND INDEX
---- ------------- -----------------------
4/02/96 10000 10000
4/30/96 9935.01 9958
5/31/96 9930.16 9950
6/30/96 10031 10055.5
7/31/96 10056.6 10085.7
8/31/96 10071.7 10093.7
9/30/96 10198.6 10234
10/31/96 10378.3 10415.2
11/30/96 10512.3 10552.7
12/31/96 10436.4 10485.1
01/31/97 10470.4 10526
02/28/97 10485.2 10546
03/31/97 10419.4 10473.2
04/30/97 10531.9 10596.8
05/31/97 10605 10684.8
06/30/97 10705.8 10782
07/31/97 10901.7 11000.9
08/31/97 10842.1 10945.9
09/30/97 10951.2 11072.9
10/31/97 11079.9 11195.8
11/30/97 11094.6 11220.4
12/31/97 11190 11310.2

Average Annual Total Return

<TABLE>
<CAPTION>
LEHMAN BROTHERS
INTERMEDIATE
UBS BOND GOVT./CORP.
FUND BOND INDEX
-------- ---------------
<S> <C> <C>
For the year ended December 31, 1997................................ 7.22% 7.87%
April 2, 1996 (commencement of operations) through
December 31, 1997................................................. 6.63% 7.29%
</TABLE>

<PAGE>
<PAGE>
UBS Private Investor Funds, Inc.
Fund Commentary
- --------------------------------------------------------------------------------

1997 MARKET REVIEW

In the first quarter of 1997, interest rates rose as economic growth was
unexpectedly strong, prompting the Fed to raise interest rates by 25 basis
points (0.25%) in March. However, in the last three quarters of the year,
interest rates declined as growth decelerated moderately and inflation
expectations plummeted, thanks to dollar appreciation, economic turmoil in Asia,
and below-consensus readings on the Consumer Price Index and Producer Price
Index during most of the year. In 1997, the yield on the 30-year Treasury Bond
fell 72 basis points, the yield on the 10-year Treasury Note fell 68 basis
points, and the yield on the 2-year Treasury Note fell 23 basis points.

Investment grade corporate bonds performed well in the first three quarters of
the year. By the fourth quarter, however, deepening economic crises in Asia
raised investor concern about corporate exposure to the region. In the fourth
quarter, corporates underperformed and ended up underperforming for the year as
a whole.

1998 FIXED INCOME OUTLOOK
The Economy

A combination of decent payroll gains, real wage growth and low interests rates
will fuel consumption spending growth of 2.9% in 1998. The Asian impact on our
net export account and an inventory reduction will reduce real Gross Domestic
Product growth to 2.2% in 1998. Real final sales will grow at a 2.5% rate.
Industrial production growth will slow from the recent 5.7% level to a 3.0%
growth rate in 1998. In addition, the core Consumer Price Index inflation rate
will end the year at 1.8% with negative goods inflation offsetting the rising
service inflation in the US economy.

Interest Rates

In this type of moderate growth and low inflation environment, the Federal
Reserve is most likely to maintain a steady interest rate policy. We do expect
the US 10-year Treasury Note to touch the low yields (5.17%) established in
1993. At the same time, we expect the US Treasury bond market to be fairly range
bound, 5.15% to a 6.00%.

Sector

Mortgage Backed Securities

Given the rally in January, the option adjusted mortgage spreads are now the
widest since November, 1996 but will widen further if we rally more (as we
expect). CMO spreads have widened with the corporate market and appear
attractive at current levels. We believe that the higher quality Commercial
Mortgage Backed Securities are quite attractive and have targeted an allocation
in the AAA rated tranches of deals which are well diversified by both geography
and types of properties.

Corporate Bonds /Asset Backed Securities

After we took our corporate bond exposure down to the lowest level since
inception last summer, we modestly increased our corporate allocation in
November and December after yields became more attractive. We focused on sectors
which we believe will outperform in 1998 which include media, cable, utility,
and airline equipment trusts. We also significantly increased our exposure to
asset backed

<PAGE>
<PAGE>
UBS Private Investor Funds, Inc.
Fund Commentary
- --------------------------------------------------------------------------------
securities from 2.0% to 10% . We have weighted our corporate bond exposure in
the intermediate part of the yield curve and have avoided subordinated debt,
structured product, and companies and financial institutions in industries which
we fear will be impacted by Asia.

Ranjani Nagaswami
Portfolio Manager

Maud I. Welles
Portfolio Manager

- ------------------------

The Fund is not insured by the FDIC and is not a deposit with, an obligation of,
or guaranteed by Union Bank of Switzerland. The Fund is subject to investment
risks, including possible loss of principal amount invested.

Shares of the Fund are distributed by First Fund Distributors, Inc. which is not
affiliated with Union Bank of Switzerland.

Unlike other mutual funds, the Fund seeks to achieve its investment objective by
investing all of its investable assets in UBS Investor Portfolios Trust -- UBS
Bond Portfolio (the 'Portfolio') which is a separate fund with an identical
investment objective.

Union Bank of Switzerland is voluntarily waiving all shareholder servicing fees
for the Fund and reimbursing a portion of the Fund's expenses. Union Bank of
Switzerland is also waiving a portion of its advisory fees for the Portfolio. If
Union Bank of Switzerland had not waived fees and reimbursed expenses, total
return would have been lower. Past performance is not a guarantee of future
results. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost.

The Lehman Brothers Intermediate Government/Corporate Bond Index is an unmanaged
composite of intermediate duration consisting of publicly issued, fixed rate,
non-convertible domestic bonds.

<PAGE>
<PAGE>
UBS Bond Fund
Statement of Assets and Liabilities
December 31, 1997
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Investment in UBS Investor Portfolios Trust -- UBS Bond
Portfolio, at value............................................................... $13,471,492
Receivable from funds services agent................................................ 10,256
Receivable from sale of capital stock............................................... 5,008
Deferred organization expenses and other assets..................................... 89,144
-----------
Total Assets.............................................................. 13,575,900
-----------

LIABILITIES:
Administrative services fees payable................................................ 1,413
Dividends payable................................................................... 264
Other accrued expenses.............................................................. 27,861
-----------
Total Liabilities......................................................... 29,538
-----------

NET ASSETS.......................................................................... $13,546,362
-----------
-----------

SHARES OUTSTANDING ($0.001 par value, 10 million shares authorized)................. 133,467
-----------
-----------

NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE...................... $101.50
-----------
-----------
COMPOSITION OF NET ASSETS:
Shares of common stock, at par...................................................... $ 133
Additional paid-in capital.......................................................... 13,441,982
Net unrealized appreciation of investments.......................................... 109,471
Accumulated undistributed net investment income..................................... 15,416
Accumulated net realized loss on securities and foreign currency transactions....... (20,640)
-----------
Net Assets................................................................ $13,546,362
-----------
-----------
</TABLE>

- ------------------------
See notes to financial statements.

<PAGE>
<PAGE>
UBS Bond Fund
Statement of Operations
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Investment Income and Expenses allocated from UBS Investor Portfolios
Trust -- UBS Bond Portfolio
Interest............................................................ $584,252
Dividends........................................................... 12,171
--------
Investment income.............................................. 596,423
Total expenses...................................................... $ 68,883
Less: Fee waiver.................................................... (23,467)
--------
Net expenses........................................................ 45,416
--------
Net Investment Income from UBS Investor Portfolios Trust -- UBS Bond
Portfolio.............................................................. 551,007

EXPENSES:
Shareholder service fees................................................. 23,536
Administrative services fees............................................. 5,783
Reports to shareholders expense.......................................... 23,614
Registration fees........................................................ 21,494
Amortization of organization expenses.................................... 21,330
Legal fees............................................................... 16,968
Transfer agent fees...................................................... 10,487
Audit fees............................................................... 9,741
Fund accounting fees..................................................... 7,744
Directors' fees.......................................................... 5,357
Miscellaneous expenses................................................... 6,170
--------
Total expenses................................................. 152,224
Less: Fee waiver and expense reimbursements.................... (122,317)
--------
Net expenses................................................... 29,907
--------
Net investment income.................................................... 521,100
--------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS FROM UBS INVESTOR
PORTFOLIOS TRUST -- UBS BOND PORTFOLIO
Net realized loss on securities transactions............................. (18,474)
Net realized gain on foreign currency transactions....................... 14,698
Net change in unrealized appreciation of investments..................... 96,595
Net change in unrealized appreciation of foreign currency contracts and
translations........................................................... 12,255
--------
Net realized and unrealized gain on investments from UBS Investor
Portfolios Trust -- UBS Bond Portfolio................................. 105,074
--------

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $626,174
--------
--------
</TABLE>

- ------------------------
See notes to financial statements.

<PAGE>
<PAGE>
UBS Bond Fund
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FOR THE APRIL 2, 1996*
YEAR ENDED THROUGH
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income..................................................... $ 521,100 $ 171,160
Net realized (loss) gain on securities and foreign currency transaction... (3,776) 3,907
Net change in unrealized appreciation of investments, foreign currency
contracts and foreign currency translations............................. 108,850 621
----------------- -----------------
Net increase in net assets resulting from operations...................... 626,174 175,688
----------------- -----------------

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income..................................................... (521,100) (170,408)
Net realized gains........................................................ (11,079) (1,273)
----------------- -----------------
Total dividends and distributions to shareholders......................... (532,179) (171,681)
----------------- -----------------

TRANSACTIONS IN SHARES OF COMMON STOCK:
Net proceeds from sale of shares.......................................... 10,921,938 10,846,978
Net asset value of shares issued to shareholders in reinvestment of
dividends and distributions............................................. 509,400 127,366
Cost of shares redeemed................................................... (5,479,261) (3,503,061)
----------------- -----------------
Net increase in net assets from transactions in shares of common stock.... 5,952,077 7,471,283
----------------- -----------------

NET INCREASE IN NET ASSETS................................................ 6,046,072 7,475,290

NET ASSETS:
Beginning of period....................................................... 7,500,290 25,000
----------------- -----------------
End of period (including undistributed net investment income of $15,416
and net investment loss of $4,086, respectively)........................ $13,546,362 $ 7,500,290
----------------- -----------------
----------------- -----------------
</TABLE>

- ------------------------

* Commencement of operations.

See notes to financial statements.

<PAGE>
<PAGE>
UBS Bond Fund
Financial Highlights
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FOR THE APRIL 2, 1996*
YEAR ENDED THROUGH
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- -----------------
<S> <C> <C>
FOR A SHARE OUTSTANDING FOR THE PERIOD:

Net asset value, beginning of period...................................... $100.13 $100.00
----------------- -----------------
Income from investment operations:
Net investment income................................................ 5.71 4.12
Net realized and unrealized gain on investments...................... 1.30 0.14
----------------- -----------------
Total income from investment operations.............................. 7.01 4.26
----------------- -----------------

Less dividends and distributions to shareholders:
Dividends from net investment income................................. (5.53) (4.11)
Distributions from net realized gains................................ (0.11) (0.02)
----------------- -----------------
Total dividends and distributions.................................... (5.64) (4.13)
----------------- -----------------

Net asset value, end of period............................................ $101.50 $100.13
----------------- -----------------
----------------- -----------------
Total return.............................................................. 7.22% 4.36%(1)

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted)............................. $13,546 $ 7,500
Ratio of expenses to average net assets(2)........................... 0.80% 0.80%(3)
Ratio of net investment income to average net assets(2).............. 5.52% 5.61%(3)
</TABLE>

- ------------------------
* Commencement of operations.
(1) Not annualized.
(2) Includes the Fund's share of UBS Investor Portfolios Trust -- UBS Bond
Portfolio expenses and net of fee waivers and expense reimbursements. Such
fee waivers and expense reimbursements had the effect of reducing the ratio
of expenses to average net assets and increasing the ratio of net investment
income to average net assets by 1.54% and 3.33% (annualized) for the
respective periods.
(3) Annualized.

See notes to financial statements.

<PAGE>
<PAGE>
UBS Bond Fund
Notes to Financial Statements
December 31, 1997
- --------------------------------------------------------------------------------

1. GENERAL

UBS Bond Fund (the 'Fund') is a diversified, no-load mutual fund registered
under the Investment Company Act of 1940. The Fund is one of several series of
UBS Private Investor Funds, Inc. (the 'Company'), an open-end management
investment company organized as a corporation under Maryland law. At December
31, 1997, the Company included six other funds, UBS International Equity Fund,
UBS Value Equity Fund, UBS Institutional International Equity Fund, UBS High
Yield Bond Fund, UBS Small Cap Fund and UBS Large Cap Growth Fund. These
financial statements relate only to the Fund.

The Fund seeks to achieve its investment objective by investing substantially
all of its investable assets in the UBS Bond Portfolio of UBS Investor
Portfolios Trust (the 'Portfolio'), an open-end management investment company
that has the same investment objective as that of the Fund. At December 31,
1997, certain shares of the Fund were held by UBS or its affiliates on behalf of
its clients. Three shareholders, individually owning greater than 10% of the
shares of the Fund, collectively held 35.4% at December 31, 1997.

Investors Bank & Trust Company ('IBT') serves as the Fund's administrator and
First Fund Distributors, Inc. ('FFDI') serves as the Fund's distributor. Union
Bank of Switzerland, New York Branch ('UBS') serves as the funds services agent
to the Fund.

The financial statements of the Portfolio, including its Schedule of
Investments, are included elsewhere within this report and should be read in
conjunction with the Fund's financial statements.

2. SIGNIFICANT ACCOUNTING POLICIES

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. Significant accounting policies
followed by the Fund are as follows:

A. INVESTMENT VALUATION -- The value of the Fund's investment in the Portfolio
included in the accompanying Statement of Assets and Liabilities reflects the
Fund's proportionate beneficial interest in the net assets of the Portfolio
(18.0% at December 31, 1997). Valuation of securities by the Portfolio is
discussed in Note 2A of the Portfolio's Notes to Financial Statements.

B. INVESTMENT INCOME, EXPENSES AND REALIZED AND UNREALIZED GAINS AND
LOSSES -- The Fund records its share of the investment income, expenses and
realized and unrealized gains and losses recorded by the Portfolio on a daily
basis. The investment income, expenses and realized and unrealized gains and
losses are allocated daily to investors of the Portfolio based upon the amount
of their investment in the Portfolio.

C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies, including
the requirement to distribute substantially all of its taxable income, including
any net realized capital gains on investment transactions, to its shareholders.
Accordingly, no provision for federal income or excise taxes is necessary.

D. DIVIDENDS AND DISTRIBUTIONS -- The Fund declares dividends from net
investment income to shareholders of record on the day of declaration. Such
dividends are declared daily and paid monthly. Net realized gains, if any, will
be distributed at least annually. However, to the extent that net realized gains
of the Fund can be reduced by capital loss carryovers, such gains will not be
distributed. At December 31, 1997, the Fund had a capital loss carryforward of
$20,238 which will expire in 2005. Dividends and distributions are recorded on
the ex-dividend date.

<PAGE>
<PAGE>
UBS Bond Fund
Notes to Financial Statements
December 31, 1997
- --------------------------------------------------------------------------------

The amounts of dividends from net investment income and distributions from net
realized gains are determined in accordance with federal income tax regulations
which may differ from generally accepted accounting principles. These 'book/tax'
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the composition of net assets based upon their federal tax-basis
treatment; temporary differences do not require reclassification. For the year
ended December 31, 1997, the Fund increased accumulated undistributed net
investment income by $19,502, decreased accumulated net realized loss on
securities and foreign currency by $14,463 and decreased paid-in-capital by
$5,039. Net investment income, net realized gains and net assets were not
affected by this change.

E. DEFERRED ORGANIZATION EXPENSES -- Expenses incurred by the Fund in connection
with its organization in the amount of approximately $107,000 have been deferred
and are being amortized on a straight line basis over five years from the Fund's
commencement of operations (April 2, 1996).

F. OTHER -- The Fund bears all costs of its operations other than expenses
specifically assumed by IBT, FFDI and UBS. Expenses incurred by the Company on
behalf of any two or more funds are allocated in proportion to the net assets of
each fund, except when allocations of direct expenses to each fund can otherwise
by made fairly. Expenses directly attributable to the Fund are charged directly
to the Fund.

3. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
A. ADMINISTRATION AGREEMENT -- Under the terms of an Administration Agreement
with the Company, effective March 13, 1997, IBT provides overall administrative
services and general office facilities. As compensation for such services, the
Company has agreed to pay IBT a fee, accrued daily and payable monthly, at an
annual rate of 0.065% of the Fund's first $100 million average daily net assets
and 0.025% of the next $100 million average daily net assets. IBT does not
receive a fee on average daily net assets in excess of $200 million. Prior to
March 13, 1997, Signature Broker-Dealer Services, Inc. ('Signature') provided
overall administrative services and general office facilities. As compensation
for such services, the Company had agreed to pay Signature a fee, accrued daily
and paid monthly, at an annual rate of 0.05% of the Fund's first $100 million
average daily net assets and 0.025% of the next $100 million average daily net
assets. Signature did not receive a fee on average daily net assets in excess of
$200 million. For the year ended December 31, 1997, the administrative services
fee amounted to $5,783.

B. DISTRIBUTION AGREEMENT -- Under the terms of a Distribution Agreement,
effective March 13, 1997, FFDI serves as the distributor of Fund shares. FFDI
does not receive any fees from the Fund for services provided pursuant to this
agreement. Prior to March 13, 1997, Signature served as the distributor of Fund
shares. Signature did not receive any additional fees for services provided as
the distributor.

C. SHAREHOLDER SERVICING AGREEMENT -- The Fund has entered into a Shareholder
Servicing Agreement with UBS pursuant to which UBS provides certain services to
shareholders of the Fund. The Fund has agreed to pay UBS a fee for these
services, accrued daily and payable monthly, at an annual rate of 0.25% of the
average daily net assets of the Fund. For the period ended December 31, 1997,
the shareholder service fee amounted to $23,536, all of which was waived.

D. FUNDS SERVICES AGREEMENT -- Under the terms of a Funds Services Agreement
with the Company, UBS has agreed to provide certain administrative services to
the Fund. UBS is not entitled to any additional compensation pursuant to this
agreement.

E. EXPENSE REIMBURSEMENT -- UBS has voluntarily agreed to limit the total
operating expenses of the Fund, including its share of the Portfolio's expenses
and excluding extraordinary expenses, to an annual rate of 0.80% of the Fund's
average daily net assets. For the year ended December 31, 1997, UBS

<PAGE>
<PAGE>
UBS Bond Fund
Notes to Financial Statements
December 31, 1997
- --------------------------------------------------------------------------------
reimbursed the Fund for expenses totaling $98,781 in connection with this
voluntary limitation. UBS may modify or discontinue this voluntary expense
limitation at any time with 30 days' advance notice to the Fund.

4. CAPITAL SHARE TRANSACTIONS
At December 31, 1997 there were 500 million shares of the Company's common stock
authorized, of which 10 million shares were classified as common stock of the
Fund. Transactions in shares of the Fund were as follows:

<TABLE>
<CAPTION>
PERIOD FROM APRIL 2, 1996
YEAR ENDED (COMMENCEMENT OF OPERATIONS)
DECEMBER 31, 1997 THROUGH DECEMBER 31, 1996
----------------- ----------------------------
<S> <C> <C>
Shares subscribed............................... 108,662 108,567
Shares issued to shareholders in reinvestment of
dividends and distributions................... 5,076 1,278
Shares redeemed................................. (55,177) (35,189)
----------------- ----------
Net increase in shares outstanding.............. 58,561 74,656
----------------- ----------
----------------- ----------
</TABLE>

<PAGE>
<PAGE>
UBS Bond Fund
Report of Independent Accountants
- --------------------------------------------------------------------------------

To the Board of Directors
and Shareholders of
UBS Private Investor Funds, Inc.

In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the UBS Bond Fund (the 'Fund') (one of the funds constituting UBS Private
Investor Funds, Inc.) at December 31, 1997, the results of its operations for
the year then ended and the changes in its net assets and the financial
highlights for the year then ended and for the period April 2, 1996
(commencement of operations) through December 31, 1996, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as 'financial statements') are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

PRICE WATERHOUSE LLP
1177 Avenue of Americas
New York, New York
February 17, 1998

<PAGE>
<PAGE>
UBS Bond Portfolio
Schedule of Investments
December 31, 1997
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FACE COUPON MATURITY
VALUE SECURITY DESCRIPTION RATE DATE VALUE
- ---------- ------------------------------------------------------------------ ------ -------- -----------
<S> <C> <C> <C> <C>
U.S. TREASURY & U.S. GOVERNMENT AGENCY OBLIGATIONS -- 52.3%
U.S. TREASURY OBLIGATIONS -- 49.2%
$7,550,000 U.S. Treasury Bond................................................ 5.88% 11/15/99 $ 7,577,096
1,203,000 U.S. Treasury Bond................................................ 7.75% 1/31/00 1,251,120
1,375,000 U.S. Treasury Bond................................................ 6.25% 4/30/01 1,396,478
400,000 U.S. Treasury Bond................................................ 6.75% 8/15/26 440,376
500,000 U.S. Treasury Bond................................................ 6.63% 2/15/27 542,810
1,100,000 U.S. Treasury Note................................................ 5.00% 1/31/99 1,092,784
1,100,000 U.S. Treasury Note................................................ 6.50% 4/30/99 1,111,858
1,255,000 U.S. Treasury Note................................................ 6.38% 4/30/99 1,266,370
1,700,000 U.S. Treasury Note................................................ 6.38% 7/15/99 1,717,799
1,500,000 U.S. Treasury Note................................................ 5.88% 8/31/99 1,504,680
375,000 U.S. Treasury Note................................................ 5.88% 2/15/00 376,466
755,000 U.S. Treasury Note................................................ 6.75% 4/30/00 772,222
3,500,000 U.S. Treasury Note................................................ 6.25% 5/31/00 3,543,750
800,000 U.S. Treasury Note................................................ 5.50% 12/31/00 795,496
1,300,000 U.S. Treasury Note................................................ 6.50% 8/31/01 1,332,292
400,000 U.S. Treasury Note................................................ 6.63% 3/31/02 412,936
2,020,000 U.S. Treasury Note................................................ 6.38% 8/15/02 2,072,076
2,690,000 U.S. Treasury Note................................................ 6.25% 2/15/03 2,750,955
1,419,000 U.S. Treasury Note................................................ 7.25% 5/15/04 1,531,413
100,000 U.S. Treasury Note................................................ 7.25% 8/15/04 108,078
2,000,000 U.S. Treasury Note................................................ 5.88% 11/15/05 2,010,620
1,850,000 U.S. Treasury Note................................................ 5.63% 2/15/06 1,829,765
1,000,000 U.S. Treasury Note................................................ 6.88% 5/15/06 1,070,000
250,000 U.S. Treasury Note................................................ 6.63% 5/15/07 264,610
-----------
36,772,050
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 3.1%
1,400,000 Federal Home Loan Mortgage Corp. ................................. 5.96% 10/20/00 1,404,816
937,818 Federal National Mortgage Assc., Pool #250576..................... 7.00% 6/01/26 946,812
-----------
2,351,628
-----------
TOTAL U.S. TREASURY & U.S. GOVERNMENT AGENCY
OBLIGATIONS (COST $38,599,244).................................. 39,123,678
-----------
CORPORATE OBLIGATIONS -- 32.8%
CORPORATE OBLIGATIONS -- DOMESTIC -- 30.7%
BANKING -- 4.5%
500,000 BanPonce Corp. ................................................... 6.75% 4/26/00 504,905
800,000 Bayerische Landesbank NY.......................................... 6.20% 2/09/06 785,336
600,000 First USA Bank.................................................... 7.00% 8/20/01 614,652
720,000 J.P. Morgan & Co. ................................................ 8.50% 8/15/03 794,081
650,000 J.P. Morgan & Co. ................................................ 6.70% 11/01/07 656,247
-----------
3,355,221
-----------
BROKERAGE -- 4.0%
1,000,000 Goldman Sachs (a)................................................. 7.80% 7/15/02 1,060,000
750,000 Lehman Brothers Inc. ............................................. 6.89% 10/10/00 761,153
200,000 Lehman Brothers Inc. ............................................. 7.25% 4/15/03 205,342
250,000 Paine Webber Group Inc............................................ 7.12% 1/27/04 259,343
650,000 Salomon, Inc. .................................................... 7.50% 2/01/03 679,406
-----------
2,965,244
-----------
BUILDING SUPPLIES -- 0.7%
500,000 Sherwin Williams.................................................. 6.25% 2/01/00 503,398
-----------
CAPITAL EQUIPMENT -- 1.1%
800,000 Case Corp. ....................................................... 7.25% 8/01/05 833,264
-----------
</TABLE>

- ------------------------
See notes to financial statements.
13

<PAGE>
<PAGE>
UBS Bond Portfolio
Schedule of Investments
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE COUPON MATURITY
VALUE SECURITY DESCRIPTION RATE DATE VALUE
- ---------- ------------------------------------------------------------------ ------ -------- -----------
<S> <C> <C> <C> <C>
FINANCING & LEASING -- 6.4%
$ 950,000 Associates Corp. N.A. ............................................ 8.50% 1/10/00 $ 995,268
500,000 CIBC Capital Funding LP (a)....................................... 6.25% 12/17/02 498,047
500,000 CIT Group Holdings................................................ 6.38% 8/01/02 502,307
750,000 Countrywide Home Loan............................................. 6.84% 10/22/04 766,028
265,000 General Electric Capital Corp. ................................... 6.88% 4/15/00 271,241
1,000,000 General Motors Acceptance Corporation............................. 6.38% 12/01/01 1,005,400
750,000 Heller Financial, Inc. ........................................... 6.44% 10/06/02 745,403
-----------
4,783,694
-----------
FOOD -- 0.3%
200,000 Foodbrands America Inc. .......................................... 10.75% 5/15/06 232,830
-----------
FUNERAL SERVICES -- 0.8%
600,000 Loewen Group International, Inc................................... 7.50% 4/15/01 618,424
-----------
INDUSTRIAL -- CAPTIVE FINANCE -- 0.8%
600,000 Sears Roebuck Acceptance Corp..................................... 5.59% 2/16/01 590,082
-----------
LODGING -- 0.5%
350,000 FelCor Suite Hotels, Inc. (a)..................................... 7.38% 10/01/04 352,982
-----------
MEDIA/CABLE -- 2.5%
660,000 Continental Cablevision, Inc...................................... 11.00% 6/01/07 732,838
600,000 News America Holdings............................................. 7.50% 3/01/00 613,476
500,000 Turner Broadcasting............................................... 7.40% 2/01/04 517,173
-----------
1,863,487
-----------
OFFICE EQUIPMENT AND SUPPLIES -- 2.0%
1,500,000 Xerox Corporation................................................. 6.50% 6/29/00 1,512,765
-----------
REAL ESTATE -- 1.3%
350,000 Chelsea GCA Realty................................................ 7.75% 1/26/01 361,568
500,000 Crescent Real Estate (a).......................................... 7.13% 9/15/07 511,565
125,000 Susa Partnership LP............................................... 7.13% 11/01/03 126,874
-----------
1,000,007
-----------
TELECOMMUNICATIONS -- 1.9%
650,000 GTE South, Inc. .................................................. 7.25% 8/01/02 672,295
700,000 WorldCom, Inc. ................................................... 8.88% 1/15/06 753,144
-----------
1,425,439
-----------
UTILITIES -- 3.9%
300,000 Cleveland Electric Illuminating Company (a)....................... 7.88% 11/01/17 315,944
550,000 Connecticut Light And Power (a)................................... 7.75% 6/01/02 561,336
450,000 Gulf States Utilities............................................. 8.25% 4/01/04 485,928
1,000,000 Nipsco Capital Markets, Inc. ..................................... 7.39% 4/01/04 1,049,470
500,000 Penn Power & Light................................................ 6.55% 3/01/06 503,910
-----------
2,916,588
-----------
TOTAL CORPORATE OBLIGATIONS -- DOMESTIC (COST $22,628,952)........ 22,953,425
-----------
CORPORATE OBLIGATIONS -- FOREIGN -- 1.9%
BANKING -- 1.2%
500,000 Merita Bank (a)................................................... 7.15% 12/29/49 507,910
400,000 Spintab (a)....................................................... 7.50% 8/14/49 422,236
-----------
930,146
-----------
UTILITIES -- 0.7%
550,000 Southern Investments.............................................. 6.80% 12/01/06 555,429
-----------
TOTAL CORPORATE OBLIGATIONS -- FOREIGN (COST $1,452,557).......... 1,485,575
-----------
</TABLE>

- ------------------------
See notes to financial statements.
14

<PAGE>
<PAGE>
UBS Bond Portfolio
Schedule of Investments
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE COUPON MATURITY
VALUE SECURITY DESCRIPTION RATE DATE VALUE
- ---------- ------------------------------------------------------------------ ------ -------- -----------
<S> <C> <C> <C> <C>
CORPORATE OBLIGATIONS -- EURODOLLAR -- 0.2%
ENERGY -- 0.1%
$ 50,000 BP America, Inc. ................................................. 9.75% 3/01/99 $ 52,030
-----------
INDUSTRIAL -- CAPTIVE FINANCE -- 0.1%
80,000 Unilever Capital.................................................. 9.25% 3/29/00 85,205
-----------
TOTAL CORPORATE OBLIGATIONS -- EURODOLLAR (COST $136,560)......... 137,235
-----------
TOTAL CORPORATE OBLIGATIONS (COST $24,218,069).................... 24,576,235
-----------
ASSET BACKED SECURITIES -- 11.4%
AUTO LEASES -- 5.8%
1,000,000 Aesop Funding II LLC, Series 97-1 (a)............................. 6.22% 10/20/01 1,004,450
650,000 Arcadia Automobile Receivables Trust, Series 97-D................. 6.20% 5/15/03 652,438
650,000 General Motors Acceptance Corporation, Series 97-C2............... 6.45% 12/15/04 654,266
650,000 Key Auto Finance Trust, Series 97-2............................... 6.15% 10/15/01 651,703
700,000 MMCA Automobile Trust, Series 97-1................................ 6.08% 5/15/01 701,134
700,000 WFS Financial Owner Trust, Series 97-D............................ 6.25% 3/20/02 700,219
-----------
4,364,210
-----------
CREDIT CARD RECEIVABLES -- 1.1%
350,000 Chemical Master Credit Card Trust 1, Series 96-1.................. 5.55% 9/15/03 346,084
440,000 First Omni Bank Credit Card Trust, Series 96-A.................... 6.65% 9/15/03 447,286
-----------
793,370
-----------
EQUIPMENT LEASES -- 3.0%
1,000,000 Case Equipment Loan Trust, Series 97-B............................ 6.24% 9/15/04 1,004,690
1,240,000 Newcourt Receivables Asset Trust, Series 97-1..................... 6.19% 5/20/05 1,245,619
-----------
2,250,309
-----------
UTILITIES -- 1.5%
750,000 California Infrastructure PG & E, Series 97-1..................... 6.25% 6/25/04 754,102
350,000 California Infrastructure SCE, Series 97-1........................ 6.22% 3/25/04 351,531
-----------
1,105,633
-----------
TOTAL ASSET BACKED SECURITIES (COST $8,477,633)................... 8,513,522
-----------
FOREIGN GOVERNMENT OBLIGATIONS -- 0.7%
CANADA -- 0.1%
50,000 Province Of Ontario............................................... 7.38% 1/27/03 52,558
50,000 Province Of Quebec................................................ 9.13% 8/22/01 54,489
-----------
107,047
-----------
JAPAN -- 0.6%
355,000 Japan Finance Corp. .............................................. 9.13% 10/11/00 381,700
-----------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS (COST $480,043).............. 488,747
-----------
TOTAL INVESTMENTS AT MARKET VALUE -- 97.2% (COST $71,774,989)..... 72,702,182
OTHER ASSETS IN EXCESS OF LIABILITIES -- 2.8%..................... 2,058,836
-----------
NET ASSETS -- 100.0%.............................................. $74,761,018
-----------
-----------
</TABLE>

- ------------------------

(a) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1997, the value of these securities amounted to $5,234,470 or 7.00% of net
assets.

Note: Based upon the cost of investments of $71,744,989 for Federal Income Tax
purposes at December 31, 1997, the aggregate gross unrealized appreciation
and depreciation was $932,919 and $5,726, respectively, resulting in net
unrealized appreciation of $927,193.

See notes to financial statements.
15

<PAGE>
<PAGE>
UBS Bond Portfolio
Statement of Assets and Liabilities
December 31, 1997
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Investment, at value (cost $71,774,989)............................................. $72,702,182
Cash................................................................................ 2,574,005
Dividends and interest receivable................................................... 1,111,572
Deferred organization expenses and other assets..................................... 16,809
-----------
Total Assets................................................................... 76,404,568
-----------

LIABILITIES:
Investment advisory fees payable.................................................... 12,160
Administrative services fees payable................................................ 12,904
Payable for investment securities purchased......................................... 1,573,410
Other accrued expenses.............................................................. 45,076
-----------
Total Liabilities.............................................................. 1,643,550
-----------

NET ASSETS.......................................................................... $74,761,018
-----------
-----------
</TABLE>

- ------------------------
See notes to financial statements.

<PAGE>
<PAGE>
UBS Bond Portfolio
Statement of Operations
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest............................................................... $3,772,752
Dividends.............................................................. 82,826
----------
Total income...................................................... 3,855,578

EXPENSES
Investment advisory fees............................................... $272,781
Administrative services fees........................................... 39,647
Custodian fees and expenses............................................ 46,405
Audit fees............................................................. 36,000
Fund accounting fees................................................... 31,904
Trustees' fees......................................................... 7,000
Amortization of organization expenses.................................. 6,896
Miscellaneous expense.................................................. 5,711
--------
Total expenses.................................................... 446,344
Less: Fee waiver.................................................. (151,544)
--------
Net expenses...................................................... 294,800
----------
Net investment income.................................................. 3,560,778
----------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities transactions........................... (16,439)
Net realized gain on foreign currency transactions..................... 288,511
Net change in unrealized appreciation of investments................... 784,709
Net change in unrealized depreciation of foreign currency contracts and
translations......................................................... (84,921)
----------
Net realized and unrealized gain on investments........................ 971,860
----------

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... $4,532,638
----------
----------
</TABLE>

- ------------------------
See notes to financial statements.

<PAGE>
<PAGE>
UBS Bond Portfolio
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FOR THE APRIL 2, 1996*
YEAR ENDED THROUGH
DECEMBER 31, 1997 DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income..................................................... $ 3,560,778 $ 1,703,082
Net realized gain on securities and foreign currency transactions......... 272,072 44,624
Net change in unrealized appreciation of investments, foreign currency
contracts and foreign currency translations............................. 699,788 227,405
----------------- -----------------
Net increase in net assets resulting from operations...................... 4,532,638 1,975,111
----------------- -----------------

CAPITAL TRANSACTIONS:
Proceeds from contributions............................................... 34,422,392 59,142,218
Value of withdrawals...................................................... (17,194,864) (8,116,477)
----------------- -----------------
Net increase in net assets from capital transactions...................... 17,227,528 51,025,741
----------------- -----------------

NET INCREASE IN NET ASSETS................................................ 21,760,166 53,000,852
NET ASSETS:
Beginning of period....................................................... 53,000,852 --
----------------- -----------------
End of period............................................................. $74,761,018 $53,000,852
----------------- -----------------
----------------- -----------------
</TABLE>

- ------------------------
* Commencement of operations.

See notes to financial statements.

<PAGE>
<PAGE>
UBS Bond Portfolio
Financial Highlights
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FOR THE APRIL 2, 1996*
YEAR ENDED THROUGH
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- -----------------
<S> <C> <C>
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000s omitted)............................. $74,761 $53,001
Ratio of expenses to average net assets(1)........................... 0.49% 0.50%(2)
Ratio of net investment income to average net assets(1).............. 5.88% 5.83%(2)
Portfolio turnover................................................... 129% 100%
</TABLE>

- ------------------------
* Commencement of operations.
(1) Net of fee waivers. Such fee waivers had the effect of reducing the ratio of
expenses to average net assets and increasing the ratio of net investment
income to average net assets by 0.25% and 0.45% (annualized) for the
respective periods.
(2) Annualized.

See notes to financial statements.

<PAGE>
<PAGE>
UBS Bond Portfolio
Notes to Financial Statements
December 31, 1997
- --------------------------------------------------------------------------------

1. GENERAL
UBS Bond Portfolio (the 'Portfolio'), a separate series of UBS Investor
Portfolios Trust (the 'Trust'), is registered under the Investment Company Act
of 1940, as a diversified, open-end management investment company. The Trust is
organized as a trust under the laws of the State of New York. At December 31,
1997, all of the beneficial interests in the Portfolio were held by UBS Bond
Fund and UBS Bond Fund, Ltd.

The investment adviser of the Portfolio is Union Bank of Switzerland, New York
Branch ('UBS'). Investors Fund Services (Ireland) Limited ('IBT Ireland') acts
as the Portfolio's administrator.

2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the
Portfolio in preparation of its financial statements:

A. INVESTMENT VALUATION -- Debt securities with remaining maturities of more
than 60 days are normally valued by a pricing service approved by the
Portfolio's Board of Trustees (the 'Trustees'). Such pricing service will
consider various factors when arriving at a valuation for a security. Such
factors include yields and prices of comparable securities, indications as to
values from dealers in such securities and general market conditions. In the
event a pricing service is unable to price a security, the security will be
valued by taking the average of the bid and ask prices as provided by a dealer
in such security.

Debt securities that mature in 60 days or less are valued at amortized cost,
which approximates market value. The amortized cost method involves valuing a
security at its cost on the date of purchase or, in the case of securities
purchased with more than 60 days until maturity, at their market value each day
until the 61st day prior to maturity, and thereafter assuming a constant
amortization to maturity of the difference between the principal amount due at
maturity and such valuation.

Securities or other assets for which market quotations are not readily available
are valued at fair value in accordance with procedures established by and under
the general supervision of the Trustees.

B. FOREIGN CURRENCY TRANSLATION -- The accounting records of the Portfolio are
maintained in U.S. dollars. Assets, including investment securities, and
liabilities denominated in foreign currency are translated into U.S. dollars at
the prevailing rate of exchange at period-end. Purchases and sales of
securities, income and expenses are translated at the prevailing rate of
exchange on the respective dates of such transactions. Gain/loss on translation
of foreign currency includes net exchange gains and losses, gains and losses on
disposition of foreign currency and adjustments to the amount of foreign taxes
withheld.

The assets and liabilities are presented at the exchange rates and market value
at the close of the period. The changes in net assets arising from changes in
exchange rates and the changes in net assets resulting from changes in market
prices of securities at period-end are not separately presented. However, gains
and losses from certain foreign currency transactions are treated as ordinary
income for U.S. Federal income tax purposes.

C. FORWARD FOREIGN CURRENCY CONTRACTS -- The Portfolio may enter into forward
foreign currency contracts in connection with planned purchases or sales of
securities or to hedge the U.S. dollar value of portfolio securities denominated
in a particular currency. The Portfolio could be exposed to risks if the
counterparties to the contracts are unable to meet the terms of their contracts
and from unanticipated

<PAGE>
<PAGE>
UBS Bond Portfolio
Notes to Financial Statements
December 31, 1997
- --------------------------------------------------------------------------------
movements in the value of a foreign currency relative to the U.S. dollar. The
forward foreign currency contracts are marked-to-market daily using the daily
exchange rate of the underlying currency and any resulting gains or losses are
recorded for financial statement purposes as unrealized gains or losses until
the contract settlement date.

The Portfolio's use of forward contracts involves, to varying degrees, elements
of market risk in excess of the amount recognized in the statement of assets and
liabilities. The contract or notional amounts reflect the extent of the
Portfolio's involvement in these financial instruments. Risks arise from the
possible movements in the foreign exchange rates underlying these instruments.
The unrealized appreciation/depreciation on forward contracts reflects the
Portfolio's exposure at period-end to credit loss in the event of counterparty's
failure to perform its obligations.

D. ACCOUNTING FOR INVESTMENTS -- Securities transactions are accounted for on
trade date. Realized gains and losses on security transactions are determined on
the identified cost basis. Dividend income and other distributions from
portfolio securities are recorded on the ex-dividend date. Interest income,
adjusted for amortization of premiums and accretion of discounts on investments,
is accrued daily.

E. U.S. FEDERAL INCOME TAXES -- The Portfolio is considered a partnership under
the U.S. Internal Revenue Code (the 'Code'). As such, each investor in the
Portfolio will be taxed on its share of the Portfolio's ordinary income and
capital gains. Accordingly, no provision for federal income taxes is necessary.
It is intended that the Portfolio will be managed in such a way that an investor
will be able to satisfy the requirements of the Code applicable to regulated
investment companies.

F. DEFERRED ORGANIZATION EXPENSES -- Expenses incurred by the Portfolio in
connection with its organization in the amount of approximately $30,000 have
been deferred and are being amortized on a straight line basis over five years
from the Portfolio's commencement of operations (April 2, 1996).

G. OTHER -- The Portfolio bears all costs of its operations other than expenses
specifically assumed by UBS and IBT Ireland. Expenses incurred by the Trust on
behalf of any two or more portfolios are allocated in proportion to the net
assets of each portfolio, except when allocations of direct expenses to each
portfolio can otherwise be made fairly. Expenses directly attributable to the
Portfolio are charged directly to the Portfolio.

3. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
A. INVESTMENT ADVISORY AGREEMENT -- The Portfolio has retained the services of
UBS as investment adviser. UBS makes the Portfolio's day-to-day investment
decisions, arranges for the execution of portfolio transactions and generally
manages the Portfolio's investments and operations. As compensation for overall
investment management services, the Trust has agreed to pay UBS an investment
advisory fee, accrued daily and payable monthly, at an annual rate of 0.45% of
the Portfolio's average daily net assets. For the year ended December 31, 1997,
the investment advisory fee amounted to $272,781. UBS voluntarily agreed to
waive $151,544 of this amount.

B. ADMINISTRATION AGREEMENT -- Under the terms of an Administration Agreement
with the Trust, effective March 13, 1997, IBT Ireland provides overall
administrative services and general office facilities to the Portfolio and the
Trust. As compensation for such services, the Portfolio has agreed to pay IBT
Ireland an administrative services fee, accrued daily and payable monthly, at an
annual rate of 0.07% of the Portfolio's first $100 million average daily net
assets and 0.05% of the Portfolio's average daily net assets in excess of $100
million. Prior to March 13, 1997, Signature Financial Group (Grand Cayman), Ltd.
('SFG') provided overall administrative services and general office facilities
to the Portfolio and the Trust. As compensation for such services, the Portfolio
had agreed to pay SFG an administrative services fee, accrued daily and paid
monthly, at an annual rate of 0.05% of the Portfolio's

4. PURCHASES AND SALES OF INVESTMENTS
For the year ended December 31, 1997, purchases and sales of investment
securities, excluding short-term investments, were as follows:

<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
U.S. Government Securities............................................. $48,120,195 $41,466,639
Corporate obligations.................................................. 49,714,078 34,578,344
----------- -----------
Total........................................................ $97,834,273 $76,044,983
----------- -----------
----------- -----------
</TABLE>

<PAGE>
<PAGE>
UBS Bond Portfolio
Report of Independent Accountants
- --------------------------------------------------------------------------------

To the Board of Trustees
and Investors of
UBS Investor Portfolios Trust

In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the UBS Bond Portfolio (the
'Portfolio') (one of the portfolios constituting UBS Investor Portfolios Trust)
at December 31, 1997, the results of its operations for the year then ended and
the changes in its net assets and the financial highlights for the year then
ended and for the period April 2, 1996 (commencement of operations) through
December 31, 1996, in conformity with accounting principles generally accepted
in the United States. These financial statements and financial highlights
(hereafter referred to as 'financial statements') are the responsibility of the
Portfolio's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted in
the United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1997 by
correspondence with the custodian and brokers, and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.

PRICE WATERHOUSE
Chartered Accountants

Toronto, Ontario
February 17,1998

<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]

UBS Bond Fund
200 Clarendon Street
Boston, Massachusetts 02116

Investment Adviser Union Bank of Switzerland
New York Branch
1345 Avenue of the Americas
New York, NY 10105

Administrator Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116

Distributor First Fund Distributors, Inc.
4455 East Camelback Road
Phoenix, AZ 85018

Custodian and Transfer Agent Investors Bank & Trust Company
200 Clarendon Street
Boston, Masschusetts 02116