UBS PRIVATE INVESTOR FUNDS INC, N-30D, 1998-08-26

UBS PRIVATE INVESTOR FUNDS INC
N-30D, 1998-08-26

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BOND FUND S/A/R

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

UBS
BOND
FUND

--------

UBS
Private Investor
Funds, Inc.

Semi-Annual Report
June 30, 1998

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

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 semi-annual report for the six
months ended June 30, 1998. This report contains a letter from the portfolio
manager discussing the performance of the Fund for the six months ended June 30,
1998, including a market overview. In addition, it includes a complete set of
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. The
merger was completed on Monday June 29, 1998, creating UBS A.G.

UBS A.G. is a top-tier global financial services company which concentrates on
clearly defined core businesses. As private banking and asset management are
core businesses of the bank, 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 confidence in the UBS Private Investor Funds.

Sincerely,

Dr. 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.

The semi-annual report must be accompanied or preceded by the Fund's prospectus.

UBS Private Investor Funds, Inc.
Fund Commentary
- --------------------------------------------------------------------------------

FUND PERFORMANCE

For the six months ended 6/30/98, the UBS Bond Fund (the 'Fund') had a total
return of 3.15% versus an average total return for the Lipper Analytical
Services Intermediate bond fund universe of 3.15% and a 3.46% 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 dividends
and capital gains distributions) of a hypothetical $10,000 investment made on
April 2, 1996* and held through June 30, 1998.

[PERFORMANCE GRAPH]

<TABLE>
<CAPTION>
Lehman
Brothers
Intermediate
Government/
UBS Corporate
Bond Fund Bond Index
--------- ------------
<S> <C>
10,000 10,000
9,935 9,958
9,930 9,950
10,031 10,056
10,057 10,086
10,072 10,094
10,199 10,234
10,378 10,415
10,512 10,553
10,436 10,485
10,470 10,526
10,485 10,546
10,419 10,473
10,532 10,597
10,605 10,685
10,706 10,782
10,902 11,001
10,842 10,946
10,951 11,073
11,080 11,196
11,095 11,220
11,190 11,310
11,332 11,458
11,309 11,449
11,339 11,486
11,388 11,543
11,469 11,627
11,543 11,702
</TABLE>

Average Annual Total Return:

<TABLE>
<CAPTION>
LEHMAN BROTHERS
INTERMEDIATE
UBS BOND GOVT/CORP
FUND BOND INDEX
-------- ---------------

<S> <C> <C>
Six months ended June 30, 1998............................. 3.15% 3.46%
1 year ended June 30, 1998................................. 7.82% 8.53%
Since inception* through June 30, 1998..................... 6.59% 7.25%
</TABLE>

----------------------
* Commencement of operations -- April 2, 1996

ECONOMIC OVERVIEW AND BOND MARKET OUTLOOK

The first half of 1998 was dominated by two major themes; first the dampening
impact on US GDP growth from the deterioration in Asian economic conditions and
second, further declines in inflation largely driven by the strength in the US
dollar. These factors contributed to the Federal Reserve's unchanged policy and
a steady improvement in bond prices during the period. The yield curve flattened
with the 2 year yield falling 17 basis points to 5.47% and the 30 year yield
declining 31 basis points to 5.63%.

UBS Private Investor Funds, Inc.
Fund Commentary
- --------------------------------------------------------------------------------

Looking forward, we forecast that domestic demand will continue to grow at a
rapid rate; specifically, we expect gross domestic purchases, which is the sum
of consumer spending, residential and business investment, and government
spending, to grow at around 4%. A forecasted $30 billion decline in net exports
and a $20 billion decline in business inventory accumulation are expected to
result in an overall GDP growth rate of around 2.7%. This is somewhat slower
than in recent quarters, but still quite healthy. For the year, this implies GDP
growth of around 3.2%.

On the inflation front, we are forecasting low core CPI inflation of around 2.1%
in the second half of the year. Core service sector inflation is expected to
remain at its current rate of 3.2% in the second half. For the year, this
implies a core CPI inflation rate of 2.2%.

We expect monetary policy to remain stable. The Federal Reserve Bank has not
changed overnight rates in nearly a year and a half, and Chairman Greenspan
indicated that stable policy is likely to continue in coming months.
Additionally, the supply of Treasury instruments continues to decline as the
federal government has moved into surplus. Finally, and most importantly,
uncertainty regarding Asia remains quite high, and the most powerful force
acting on the bond market in the last nine months has been a flight-to-quality.
We suspect that the mere potential of further turmoil in Asia places a ceiling
on US interest rates not far above current levels.

STRATEGY
The Fund has had a duration that is .15 to .20 years longer than the benchmark
for most of the year. We increased our overweight in corporates in January and
have maintained a 10% to 15% overweight. The sectors we have favored include
cable and media, utilities and banks. We have been underweighted in yankee
bonds. We have added 6% in AAA commercial mortgage backed securities which have
performed well because of their positive convexity. Additionally we have taken
gains in the asset backed positions that we purchased at the end of 1997.

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.

UBS Bond Fund
Statement of Assets and Liabilities
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Investment in UBS Investor Portfolios Trust -- UBS Bond Portfolio, at value......... $16,827,940
Receivable from funds services agent................................................ 5,465
Deferred organization expenses and other assets..................................... 74,565
-----------
Total Assets.............................................................. 16,907,970
-----------
LIABILITIES:
Administrative services fees payable................................................ 1,019
Dividends payable................................................................... 419
Payable for purchase of capital stock............................................... 13,332
Other accrued expenses.............................................................. 19,686
-----------
Total Liabilities......................................................... 34,456
-----------
NET ASSETS.......................................................................... $16,873,514
-----------
-----------

SHARES OUTSTANDING ($0.001 par value, 10 million shares authorized)................. 165,457
-------
-------

NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE...................... $101.98
-------
-------

COMPOSITION OF NET ASSETS:
Shares of common stock, at par...................................................... $ 165
Additional paid-in capital.......................................................... 16,718,696
Net unrealized appreciation of investments.......................................... 88,373
Accumulated undistributed net investment income..................................... 16,913
Accumulated net realized gain on securities......................................... 49,367
-----------
Net Assets................................................................ $16,873,514
-----------
-----------
</TABLE>

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

UBS Bond Fund
Statement of Operations
For the Six Months Ended June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Investment Income and Expenses allocated from UBS Investor Portfolios
Trust -- UBS Bond Portfolio
Interest............................................................ $493,291
--------
Investment income.............................................. 493,291
Total expenses...................................................... $ 54,997
Less: Fee waiver.................................................... (15,816)
--------
Net expenses........................................................ 39,181
--------
Net Investment Income from UBS Investor Portfolios Trust -- UBS Bond
Portfolio.............................................................. 454,110

EXPENSES:
Shareholder service fees............................................ 20,087
Administrative services fees........................................ 5,223
Registration fees................................................... 14,579
Amortization of organization expenses............................... 11,432
Reports to shareholders expense..................................... 10,684
Transfer agent fees................................................. 7,438
Audit fees.......................................................... 6,190
Fund accounting fees................................................ 4,590
Directors' fees..................................................... 1,700
Legal fees.......................................................... 1,071
Miscellaneous expenses.............................................. 2,767
--------
Total expenses................................................. 85,761
Less: Fee waiver and expense reimbursements.................... (60,664)
--------
Net expenses................................................... 25,097
--------
Net investment income.................................................... 429,013
--------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS FROM UBS INVESTOR
PORTFOLIOS TRUST -- UBS BOND PORTFOLIO
Net realized gain on securities transactions............................. 70,007
Net change in unrealized depreciation of investments..................... (21,098)
--------
Net realized and unrealized gain on investments from UBS Investor
Portfolios Trust -- UBS Bond Portfolio................................. 48,909
--------

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $477,922
--------
--------
</TABLE>

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

UBS Bond Fund
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SIX MONTHS
ENDED FOR THE YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income.......................................................... $ 429,013 $ 521,100
Net realized gain (loss) on securities......................................... 70,007 (3,776)
Net change in unrealized (depreciation) appreciation of investments............ (21,098) 108,850
Net increase in net assets resulting from operations........................... 477,922 626,174
------------- -----------

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.......................................................... (427,516) (521,100)
Net realized gains............................................................. -- (11,079)
------------- -----------
Total dividends and distributions to shareholders.............................. (427,516) (532,179)
------------- -----------

TRANSACTIONS IN SHARES OF COMMON STOCK:
Net proceeds from sale of shares............................................... 10,848,739 10,921,938
Net asset value of shares issued to shareholders in reinvestment of dividends
and distributions............................................................ 413,855 509,400
Cost of shares redeemed........................................................ (7,985,848) (5,479,261)
------------- -----------
Net increase in net assets from transactions in shares of common stock......... 3,276,746 5,952,077
------------- -----------

NET INCREASE IN NET ASSETS..................................................... 3,327,152 6,046,072

NET ASSETS:
Beginning of period............................................................ 13,546,362 7,500,290
------------- -----------
End of period (including undistributed net investment income of $16,913 and
$15,416, respectively)....................................................... $ 16,873,514 $13,546,362
------------- -----------
------------- -----------

</TABLE>

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

UBS Bond Fund
Financial Highlights
- --------------------------------------------------------------------------------

Net asset value, beginning of period...................... $101.50 $100.13 $100.00
------- ------- -------
Income from investment operations:
Net investment income................................ 2.67 5.71 4.12
Net realized and unrealized gain on investments...... 0.49 1.30 0.14
------- ------- -------
Total income from investment operations.............. 3.16 7.01 4.26
------- ------- -------

Less dividends and distributions to shareholders:
Dividends from net investment income................. (2.68) (5.53) (4.11)
Distributions from net realized gains................ -- (0.11) (0.02)
------- ------- -------
Total dividends and distributions.................... (2.68) (5.64) (4.13)
------- ------- -------
Net asset value, end of period............................ $101.98 $101.50 $100.13
------- ------- -------
------- ------- -------
Total return.............................................. 3.15%(1) 7.22% 4.36%(1)

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted)............. $16,874 $13,546 $ 7,500
Ratio of expenses to average net assets(2)........... 0.80%(3) 0.80% 0.80%(3)
Ratio of net investment income to average net
assets(2).......................................... 5.34%(3) 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 0.95% (annualized), 1.54% and 3.33%
(annualized) for the respective periods.
(3) Annualized.

See notes to financial statements.

UBS Bond Fund
Notes to Financial Statements
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

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 June 30,
1998, 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 June 30, 1998,
certain shares of the Fund were held by UBS or its affiliates on behalf of its
clients.

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
(19.23% at June 30, 1998). 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. Dividends and distributions are recorded on the ex-dividend date.

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

UBS Bond Fund
Notes to Financial Statements
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

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.

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
be 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, 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. For the six months ended June 30,
1998, the administrative services fee amounted to $5,223.

B. DISTRIBUTION AGREEMENT -- Under the terms of a Distribution Agreement, FFDI
serves as the distributor of Fund shares. FFDI does not receive any fees from
the Fund for services provided pursuant to this agreement.

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 six months ended June 30, 1998,
the shareholder service fee amounted to $20,087, 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 six months ended June 30, 1998, UBS reimbursed
the Fund for expenses totaling $40,577 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.

UBS Bond Fund
Notes to Financial Statements
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

4. CAPITAL SHARE TRANSACTIONS
At June 30, 1998 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>
SIX MONTHS ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
---------------- -----------------
<S> <C> <C>
Shares subscribed...................................... 106,414 108,662
Shares issued to shareholders from reinvestment of
dividends and distributions.......................... 4,066 5,076
Shares redeemed........................................ (78,490) (55,177)
------- -------
Net increase in shares outstanding..................... 31,990 58,561
------- -------
------- -------
</TABLE>

UBS Bond Portfolio
Schedule of Investments
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FACE COUPON MATURITY MARKET
VALUE SECURITY DESCRIPTION RATE DATE VALUE
- ---------- ------------------------------------------------------------------ ------ -------- -----------
<C> <S> <C> <C> <C>
U.S. TREASURY & U.S. GOVERNMENT AGENCY OBLIGATIONS -- 45.7%
U.S. TREASURY OBLIGATIONS -- 39.7%
$7,050,000 U.S. Treasury Bond................................................ 5.875% 11/15/99 $ 7,081,931
1,203,000 U.S. Treasury Bond................................................ 7.750% 1/31/00 1,242,843
7,000,000 U.S. Treasury Note................................................ 5.500% 2/29/00 6,997,830
755,000 U.S. Treasury Note................................................ 6.375% 4/30/99 760,308
700,000 U.S. Treasury Note................................................ 5.375% 1/31/00 698,362
375,000 U.S. Treasury Note................................................ 5.875% 2/15/00 377,051
500,000 U.S. Treasury Note................................................ 5.500% 5/31/00 499,920
3,500,000 U.S. Treasury Note................................................ 6.250% 5/31/00 3,545,920
1,000,000 U.S. Treasury Note................................................ 6.000% 8/15/00 1,009,530
1,500,000 U.S. Treasury Note................................................ 6.625% 7/31/01 1,545,465
3,140,000 U.S. Treasury Note................................................ 6.500% 8/31/01 3,225,377
1,100,000 U.S. Treasury Note................................................ 5.875% 11/30/01 1,111,176
2,020,000 U.S. Treasury Note................................................ 6.375% 8/15/02 2,081,852
500,000 U.S. Treasury Note................................................ 5.750% 11/30/02 504,140
1,419,000 U.S. Treasury Note................................................ 7.250% 5/15/04 1,539,615
100,000 U.S. Treasury Note................................................ 7.250% 8/15/04 108,797
500,000 U.S. Treasury Note................................................ 5.875% 11/15/05 509,530
1,850,000 U.S. Treasury Note................................................ 5.625% 2/15/06 1,857,515
50,000 U.S. Treasury Note................................................ 7.000% 7/15/06 54,602
-----------
34,751,764
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 6.0%
1,400,000 Federal Home Loan Mortgage Corp................................... 5.960% 10/20/00 1,408,750
1,000,000 Federal Home Loan Mortgage Corp................................... 5.750% 11/15/18 994,370
900,000 Federal Home Loan Mortgage Corp................................... 7.000% 7/01/28 913,500
1,900,000 Federal National Mortgage Association............................. 6.500% 12/18/17 1,927,303
-----------
5,243,923
-----------
TOTAL U.S. TREASURY & U.S. GOVERNMENT AGENCY
OBLIGATIONS (COST $39,681,553).................................. 39,995,687
-----------

CORPORATE OBLIGATIONS -- 43.4%

CORPORATE OBLIGATIONS -- DOMESTIC -- 34.8%
AEROSPACE/DEFENSE -- 1.0%
750,000 Northrop Grumman Corporation...................................... 8.625% 10/15/04 838,035
-----------
AIRLINES -- 0.9%
600,000 Delta Air Lines, Inc.............................................. 10.375% 2/01/11 791,748
-----------
BANKING -- 8.9%
500,000 BanPonce Corp..................................................... 6.750% 4/26/00 506,125
800,000 Bayerische Landesbank NY.......................................... 6.200% 2/09/06 792,128
750,000 Boatmen's Bancshares National Bank................................ 9.250% 11/01/01 818,805
1,000,000 Capital One Bank.................................................. 6.375% 2/15/03 1,000,900
450,000 Credit Suisse First Boston (a).................................... 6.500% 5/01/08 454,950
600,000 First National Bank of Boston..................................... 7.375% 9/15/06 642,588
1,000,000 Fleet Financial Group, Inc........................................ 6.500% 3/15/08 1,012,020
500,000 Key Bank NA....................................................... 6.950% 2/01/28 517,415
500,000 Mercantile Bancorporation Inc..................................... 6.800% 6/15/01 510,420
500,000 Society National Bank............................................. 7.250% 6/01/05 530,110
1,000,000 SunTrust Banks, Inc............................................... 6.250% 6/01/08 998,440
-----------
7,783,901
-----------
BROKERAGE -- 5.5%
500,000 Donaldson, Lufkin & Jenrette, Inc................................. 6.110% 5/15/01 501,575
1,000,000 Goldman Sachs (a)................................................. 7.800% 7/15/02 1,061,110
1,003,000 Morgan Stanley Group, Inc......................................... 8.100% 6/24/02 1,072,187
1,500,000 Salomon, Inc...................................................... 6.500% 3/01/00 1,511,400
</TABLE>

- ------------------------
See notes to financial statements.
11

FINANCING & LEASING -- 5.9%
950,000 Associates Corp. N.A.............................................. 8.500% 1/10/00 988,105
1,100,000 Chrysler Financial Corporation.................................... 6.080% 3/12/01 1,105,830
500,000 CIBC Capital Funding LP (a)....................................... 6.250% 12/17/02 500,745
500,000 CIT Group Holdings................................................ 6.375% 8/01/02 504,575
265,000 General Electric Capital Corp..................................... 6.875% 4/15/00 269,995
1,000,000 General Motors Acceptance Corporation............................. 6.375% 12/01/01 1,007,120
750,000 Heller Financial, Inc............................................. 6.440% 10/06/02 751,658
-----------
5,128,028
-----------
FOOD -- 0.2%
200,000 Flowers Industries, Inc........................................... 7.150% 4/15/28 205,536
-----------
INSURANCE -- 0.5%
400,000 Equitable Companies Incorporated.................................. 7.000% 4/01/28 408,656
-----------
LODGING -- 0.4%
350,000 FelCor Suite Hotels, Inc.......................................... 7.375% 10/01/04 345,639
-----------
MEDIA/CABLE -- 2.3%
600,000 Century Communications Corp....................................... 9.500% 8/15/00 627,000
125,000 Clear Channel Communications, Inc................................. 6.875% 6/15/18 125,238
660,000 Continental Cablevision, Inc...................................... 11.000% 6/01/07 720,581
500,000 Turner Broadcasting............................................... 7.400% 2/01/04 522,656
-----------
1,995,475
-----------
OFFICE EQUIPMENT AND SUPPLIES -- 1.7%
1,500,000 Xerox Corporation................................................. 6.500% 6/29/00 1,512,002
-----------
REAL ESTATE -- 1.3%
350,000 Chelsea GCA Realty................................................ 7.750% 1/26/01 358,365
700,000 Crescent Real Estate (a).......................................... 7.125% 9/15/07 691,964
125,000 Susa Partnership LP............................................... 7.125% 11/01/03 127,865
-----------
1,178,194
-----------
RETAIL -- 0.2%
200,000 K Mart Corporation................................................ 9.780% 1/05/20 226,244
-----------
TECHNOLOGY -- 0.5%
450,000 Dell Computer Corporation......................................... 7.100% 4/15/28 459,639
-----------
TELECOMMUNICATIONS -- 1.0%
125,000 AirTouch Communications, Inc...................................... 6.650% 5/01/08 125,966
700,000 WorldCom, Inc..................................................... 7.550% 4/01/04 741,314
-----------
867,280
-----------
TRANSPORTATION -- 0.6%
500,000 Wisconsin Central Transportation Corporation...................... 6.625% 4/15/08 501,729
-----------
UTILITIES -- 3.9%
300,000 Cleveland Electric Illuminating Company........................... 7.880% 11/01/17 327,453
550,000 Connecticut Light And Power....................................... 7.750% 6/01/02 563,822
450,000 Gulf States Utilities............................................. 8.250% 4/01/04 484,065
500,000 NICOR Gas Company................................................. 6.580% 2/25/28 509,650
1,000,000 Nipsco Capital Markets, Inc....................................... 7.390% 4/01/04 1,058,330
500,000 Penn Power & Light................................................ 6.550% 3/01/06 510,230
-----------
3,453,550
-----------
</TABLE>

- ------------------------
See notes to financial statements.
12

UBS Bond Portfolio
Schedule of Investments
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE COUPON MATURITY MARKET
VALUE SECURITY DESCRIPTION RATE DATE VALUE
- ---------- ------------------------------------------------------------------ ------ -------- -----------
<C> <S> <C> <C> <C>
TOTAL CORPORATE OBLIGATIONS -- DOMESTIC (COST $30,181,703)........ $30,496,777
-----------
CORPORATE OBLIGATIONS -- FOREIGN -- 8.4%
BANKING -- 2.3%
$ 500,000 Merita Bank (a)................................................... 7.150% 12/29/49 508,565
450,000 Skandinaviska Enskilda Banken* (a)................................ 6.500% 12/29/49 451,462
1,000,000 Svenska Handelsbanken............................................. 8.350% 7/15/04 1,092,220
-----------
2,052,247
-----------
DIVERSIFIED -- 0.6%
500,000 Tyco International Ltd............................................ 6.375% 6/15/05 501,779
-----------
FINANCING & LEASING -- 4.6%
1,108,000 Caisse Centrale Desjardins........................................ 6.750% 4/17/01 1,127,488
1,200,000 McKesson Financial Of Canada (a).................................. 6.550% 11/01/02 1,216,656
850,000 Scotland International Finance BV................................. 8.800% 1/27/04 957,279
700,000 Yorkshire Power Finance (a)....................................... 6.496% 2/25/08 708,720
-----------
4,010,143
-----------
MEDIA/CABLE -- 0.3%
200,000 Le Groupe Videotron ltee.......................................... 10.625% 2/15/05 219,652
-----------
UTILITIES -- 0.6%
550,000 United Utilities PLC.............................................. 6.450% 4/01/08 549,907
-----------
TOTAL CORPORATE OBLIGATIONS -- FOREIGN (COST $7,305,026).......... 7,333,728
-----------
CORPORATE OBLIGATIONS -- EURODOLLAR -- 0.2%
ENERGY -- 0.1%
50,000 BP America, Inc................................................... 9.750% 3/01/99 51,328
-----------
INDUSTRIAL -- CAPTIVE FINANCE -- 0.1%
80,000 Unilever Capital.................................................. 9.250% 3/29/00 84,366
-----------
TOTAL CORPORATE OBLIGATIONS -- EURODOLLAR (COST $134,784)......... 135,694
-----------
TOTAL CORPORATE OBLIGATIONS (COST $37,621,513).................... 37,966,199
-----------
ASSET BACKED SECURITIES -- 9.3%
AUTO LEASES -- 2.3%
650,000 Arcadia Automobile Receivables Trust, Series 98-B................. 6.000% 11/15/03 650,406
650,000 Key Auto Finance Trust, Series 97-2............................... 6.150% 10/15/01 653,734
700,000 WFS Financial Owner Trust, Series 97-D............................ 6.250% 3/20/02 705,023
-----------
2,009,163
-----------
BROKERAGE -- 2.7%
600,000 First Union -- Lehman Brothers Commercial Mortgage Trust, Series
98-C2........................................................... 6.560% 11/18/08 614,595
838,086 Merrill Lynch Mortgage Investors, Inc., Series 98-C2.............. 6.220% 2/15/30 843,646
900,000 Morgan Stanley Capital, Series 98-WF2A2........................... 6.540% 7/15/30 914,484
-----------
2,372,725
-----------
CREDIT CARD RECEIVABLES -- 1.1%
515,000 Discover Card Master Trust I, Series 98-4......................... 5.750% 10/16/03 511,941
440,000 First Omni Bank Credit Card Trust, Series 96-A.................... 6.650% 9/15/03 447,836
-----------
959,777
-----------
FINANCING & LEASING -- 3.2%
688,806 DLJ Commercial Mortgage Corporation, Series 98-CF1................ 6.140% 10/15/06 690,910
1,293,142 GMAC Commercial Mortgage Securities, Inc., Series 98-C1........... 6.411% 5/15/30 1,311,847
787,519 Nomura Asset Securities Corporation, Series 98-D6................. 6.280% 3/17/28 795,792
-----------
2,798,549
-----------
</TABLE>

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

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

* Non-income producing security.

(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 June 30, 1998,
the value of these securities amounted to $5,594,172 or 6.39% of net assets.

Note: Based upon the cost of investments of $86,257,303 for Federal Income Tax
purposes at June 30, 1998, the aggregate gross unrealized appreciation and
depreciation was $738,681 and $36,013, respectively, resulting in net
unrealized appreciation of $702,668.

See notes to financial statements.
14

UBS Bond Portfolio
Statement of Assets and Liabilities
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Investment, at value (cost $86,257,303)........................................... $86,959,971
Cash.............................................................................. 179,070
Receivable for investment securities sold......................................... 704,523
Dividends and interest receivable................................................. 1,272,626
Deferred organization expenses and other assets................................... 13,230
-----------
Total Assets................................................................. 89,129,420
-----------

LIABILITIES:
Investment advisory fees payable.................................................. 20,477
Administrative services fees payable.............................................. 5,342
Payable for investment securities purchased....................................... 1,579,547
Other accrued expenses............................................................ 33,175
-----------
Total Liabilities............................................................ 1,638,541
-----------
NET ASSETS........................................................................ $87,490,879
-----------
-----------
</TABLE>

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

UBS Bond Portfolio
Statement of Operations
For the Six Months Ended June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest.................................................................. $2,567,901
----------
Total income......................................................... 2,567,901

EXPENSES:
Investment advisory fees.................................................. $187,926
Administrative services fees.............................................. 29,233
Custodian fees and expenses............................................... 22,729
Audit fees................................................................ 18,688
Fund accounting fees...................................................... 17,355
Legal fees................................................................ 2,726
Amortization of organization expenses..................................... 2,378
Trustees' fees............................................................ 1,984
Miscellaneous expense..................................................... 3,305
--------
Total expenses....................................................... 286,324
Less: Fee waiver..................................................... (82,449)
--------
Net expenses......................................................... 203,875
----------
Net investment income..................................................... 2,364,026
----------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities transactions.............................. 586,035
Net change in unrealized depreciation of investments...................... (224,526)
----------
Net realized and unrealized gain on investments........................... 361,509
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...................... $2,725,535
----------
----------
</TABLE>

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

UBS Bond Portfolio
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SIX MONTHS
ENDED FOR THE
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income........................................... $ 2,364,026 $ 3,560,778
Net realized gain on securities................................. 586,035 272,072
Net change in unrealized (depreciation) appreciation of
investments................................................... (224,526) 699,788
------------- -------------
Net increase in net assets resulting from operations............ 2,725,535 4,532,638
------------- -------------

CAPITAL TRANSACTIONS:
Proceeds from contributions..................................... 25,329,856 34,422,392
Value of withdrawals............................................ (15,325,530) (17,194,864)
------------- -------------
Net increase in net assets from capital transactions............ 10,004,326 17,227,528
------------- -------------

NET INCREASE IN NET ASSETS...................................... 12,729,861 21,760,166

NET ASSETS:
Beginning of period............................................. 74,761,018 53,000,852
------------- -------------
End of period................................................... $ 87,490,879 $ 74,761,018
------------- -------------
------------- -------------
</TABLE>

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

UBS Bond Portfolio
Financial Highlights
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SIX MONTHS
ENDED FOR THE YEAR APRIL 2, 1996*
JUNE 30, 1998 ENDED THROUGH
(UNAUDITED) DECEMBER 31, 1997 DECEMBER 31, 1996
------------- ----------------- -----------------
<S> <C> <C> <C>
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted)............ $87,491 $74,761 $53,001
Ratio of expenses to average net assets(1).......... 0.49%(2) 0.49% 0.50%(2)
Ratio of net investment income to average net
assets(1)......................................... 5.66%(2) 5.88% 5.83%(2)
Portfolio turnover.................................. 95% 129% 100%
</TABLE>

- ------------------------
(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 0.20% (annualized), 0.25% and 0.45%
(annualized) for the respective periods.
(2) Annualized.

See notes to financial statements.

UBS Bond Portfolio
Notes to Financial Statements
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

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 June 30, 1998,
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

UBS Bond Portfolio
Notes to Financial Statements
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

counterparties to the contracts are unable to meet the terms of their contracts
and from unanticipated 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 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 six months ended June 30,
1998, the investment advisory fee amounted to $87,926. UBS voluntarily agreed to
waive $82,449 of this amount.

B. ADMINISTRATION AGREEMENT -- Under the terms of an Administration Agreement
with the Trust, 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. For the six
months ended June 30, 1998, the administrative services fee amounted to $29,233.

UBS Bond Portfolio
Notes to Financial Statements
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------

4. PURCHASE AND SALES OF INVESTMENTS
For the six months ended June 30, 1998, purchases and sales of investment
securities, excluding short-term investments, were as follows:

<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------

<S> <C> <C>
U.S. Government Securities..................................... $41,391,251 $40,548,915
Corporate obligations.......................................... 50,245,078 36,985,777
----------- -----------
Total..................................................... $91,636,329 $77,534,692
----------- -----------
----------- -----------
</TABLE>

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

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, Massachusetts 02116

The accompanying financial statements dated as of June 30, 1998 were not
audited and, accordingly, no opinion is expressed on them.

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