BRINSON FUNDS INC, 497, 2000-05-08

BRINSON FUNDS INC
497, 2000-05-08

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<PAGE>

The Brinson Funds

Global Fund
Global Equity Fund
Global Technology Fund
Global Biotech Fund
Global Bond Fund
U.S. Balanced Fund
U.S. Equity Fund
U.S. Value Equity Fund
U.S. Large Cap Equity Fund
U.S. Large Cap Growth Fund
U.S. Small Cap Equity Fund
U.S. Small Cap Growth Fund
U.S. Real Estate Equity Fund
U.S. Bond Fund
High Yield Fund
Emerging Markets Debt Fund
Global (Ex-U.S.) Equity Fund
Emerging Markets Equity Fund

Class I Shares [BRINSON LOGO
HERE]
Prospectus

May 2, 2000

As with any mutual fund, the Securities and Exchange Commission (SEC) has not
approved or disapproved of these securities or determined whether this
prospectus is adequate or complete. Any representation to the contrary is a
criminal offense.

<PAGE>

<TABLE>
<CAPTION>
Table of Contents
<S> <C>
The Brinson Investment Process ........................ 2
Overview of the Funds
Global Fund ....................................... 3
Global Equity Fund ................................ 4
Global Technology Fund ............................ 5
Global Biotech Fund ............................... 6
Global Bond Fund .................................. 7
U.S. Balanced Fund ................................ 8
U.S. Equity Fund .................................. 9
U.S. Value Equity Fund ............................ 10
U.S. Large Cap Equity Fund ........................ 11
U.S. Large Cap Growth Fund ........................ 12
U.S. Small Cap Equity Fund ........................ 13
U.S. Small Cap Growth Fund ........................ 14
U.S. Real Estate Equity Fund ...................... 15
U.S. Bond Fund .................................... 16
High Yield Fund ................................... 17
Emerging Markets Debt Fund ........................ 18
Global (Ex-U.S.) Equity Fund ...................... 19
Emerging Markets Equity Fund ...................... 20
Risk Considerations ................................... 21
Fees and Expenses ..................................... 24
Investment Advisor .................................... 26
Pricing of Fund Shares ................................ 27
Purchasing Shares ..................................... 28
Redeeming Shares ...................................... 30
Dividends and Distributions ........................... 31
Tax Considerations .................................... 32
Financial Highlights .................................. 33
</TABLE>

1
<PAGE>

Overview of the Funds

A Look at the Brinson Investment Process

At Brinson Partners, Inc. ("Brinson Partners" or the "Advisor"), we believe that
the fundamental value of any investment is related to the future cash flows that
it will generate for its investors. We believe that this determination must be
made within a framework of globally integrated capital markets. World economies
and financial markets are interactive. Thus, investment management, both within
and across global stock and bond markets, must be based upon comprehensive
knowledge and analysis of integrated investment fundamentals.

When making asset allocation decisions, if we are indifferent with respect to a
market, industry, or other characteristic, we tend toward the "normal" weight,
as determined by its proportion within the passive benchmark. Decisions to
deviate from the normal mix of assets are a blend of rigorous quantitative
analysis, an understanding of the fundamental relationships among global
markets, and the expertise and insights of our investment professionals.
Security selection decisions for the core/value equity, growth equity and fixed
income Funds are also made in relation to the benchmark, as described in each
Fund's principal strategy section. We may substitute securities from an
equivalent index that we believe more accurately reflects changes in our
expectations for various classes of investments.

Equity Selections

Core/Value Equity Funds

Our Core/Value equity process focuses on identifying discrepancies between
securities' fundamental values and their observed market prices. For each stock
under our analysis, we estimate an intrinsic or fundamental value using
disciplined quantitative techniques that incorporate our team of analysts'
considerations of company management, competitive advantage, and each company's
core competencies. These value estimates are then compared to current market
prices and ranked against the other stocks in our valuation universe. Portfolios
are constructed by focusing on those stocks that rank in the top 20% of the
valuation output. The Fund's risk is carefully monitored, with consideration
given to market sensitivity, common factor exposures, industry weightings and
individual stock selection.

Growth Equity Funds

Brinson Partners also manages portfolios against growth-oriented equity
benchmarks. In the growth universe, we seek to invest in companies that possess
a dominant market position and franchise, a major technical edge or a unique
competitive advantage. Factors employed in our quantitative disciplines include
earnings revisions, favorable analyst diffusion trends, positive stock price
momentum and sales acceleration. Our seasoned investment professionals then
conduct intensive fundamental research on the universe of companies identified
as attractive by our quantitative models. Portfolios are constructed and
monitored with close adherence to risk control guidelines.

Specialized Sector Funds

In response to changing market conditions and to the varied and dynamic needs of
our clients, we offer several specialized sector Funds. These Funds are
diversified among narrower market segments than our core/value and growth Funds,
and are intended to compliment a diversified investment program. Security
selection for these Funds is driven by relative valuation attractiveness over
other securities within the specified sector. Investment decisions rely on
quantitative analysis and screening, as well as fundamental research and
valuation work.

Fixed Income Selections

We use an internally developed valuation model for fixed income selections for
our Funds, which quantifies our return expectations for all of the bond markets.
Inputs to this model include forecasts of inflation, risk premiums and interest
rates. Our credit review process incorporates both a top-down strategy, which
focuses on how macroeconomic forces shape various industry outlooks, and a
bottom-up strategy, which relies on a combination of qualitative and
quantitative factors. Our qualitative assessment focuses on management strength,
market position, competitive environment and financial flexibility. Our
quantitative assessment focuses on historical operating results, calculation of
various credit ratios and an expected future outlook. With the exception of the
High Yield Fund, our fixed income selections generally include all categories of
investment grade fixed income securities, but emphasize the higher quality
securities in this spectrum (those with a credit rating of AA and above). Our
fixed income strategies combine judgments about the absolute value of the fixed
income universe and the relative value of issuer sectors, maturity intervals,
duration of securities, quality and coupon segments and specific fixed income
securities.

Cash and Cash Equivalents

Each Fund may invest in cash or cash equivalent instruments, including units of
an affiliated money market fund. See the Statement of Additional Information for
further information.

Shares of The Brinson Funds are not bank deposits and are not insured or
guaranteed by the FDIC or any other government agency. The value of your
investment in a Fund will fluctuate, which means that you may lose money.

<PAGE>

Global Fund

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income.

Principal Strategies

The Fund employs both core/value equity and fixed income strategies. The Fund
invests primarily in a portfolio of global equity and global fixed income
securities. At least 65% of the Fund's assets are invested in securities of
issuers in at least three countries (which may include the United States).

All security selection decisions are made relative to the Global Securities
Markets Index (GSMI) Mutual Fund Index, the benchmark against which the Fund
measures its portfolio.

Although it may invest anywhere in the world, the Fund invests primarily in:
* Equity markets listed in the Morgan Stanley Capital International ("MSCI")
World Equity (Free) Index
* Fixed income markets listed in the Salomon Smith Barney World Government Bond
Index

The Fund may invest in different types of securities in order to access these
markets.

Other investments may include other open-end investment companies advised by
Brinson Partners.

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance

The chart and table which follow give an indication of the Fund's risks and
performance. The chart shows you how the Fund's performance has varied from year
to year. The table compares the Fund's performance over time to that of a broad
measure of market performance. When you consider this information, please
remember that the Fund's past performance is not necessarily an indication of
how it will perform in the future.

Annual Total Returns for the periods ended 12/31*
[BAR CHART APPEARS HERE]

11.15% -1.89% 24.14% 14.10% 11.00% 8.32% 1.49%
- ------------------------------------------------------------------
93 94 95 96 97 98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was -1.07%.

Best Quarter: Q2 1997 8.24%
Worst Quarter: Q3 1998 -5.32%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (8/31/92)
- ---------------------------------------------------------------
Global Fund 1.49% 11.56% - 9.51%
Salomon Smith Barney -4.26% 6.42% - 6.06%
World Gov't. Bond Index
MSCI World Equity (Free) 25.12% 20.09% - 17.22%
Index
GSMI Mutual Fund Index 16.85% 17.03% - 14.07%
</TABLE>

GSMI Mutual Fund Index

An unmanaged index compiled by Brinson Partners, currently constructed as
follows:

40% Wilshire 5000 Equity 3% Merrill Lynch High
Index Yield Master
22% MSCI World Ex USA Index
(Free) Index 3% MSCI Emerging
21% Salomon Smith Barney Markets Free
BIG Bond Index Index
9% Salomon Smith Barney 2% JP Morgan EMBI+
Non-U.S. Gov't.
Bond Index

From time to time, underlying indices may change.

MSCI World Equity (Free) Index

A broad based securities index that represents the U.S. and developed global
(ex-U.S.) equity markets in terms of capitalization and performance. It is
designed to provide a representative total return for all major stock exchanges
located inside and outside the United States.

Salomon Smith Barney World Government Bond Index

A securities index that represents the broad global fixed income markets and
includes debt issues of U.S. and most developed global (ex-U.S.) governments,
governmental entities and supranationals.

3
<PAGE>

Global Equity Fund

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income.

Principal Strategies

The Fund employs a core/value equity strategy, and invests primarily in a
portfolio of global equity securities, which may include dividend-paying
securities. At least 65% of the Fund's assets are invested in securities of
issuers in at least three countries (which may include the United States).

Although it may invest anywhere in the world, the Fund invests primarily in
equity markets listed in the Morgan Stanley Capital International ("MSCI") World
Equity (Free) Index, the benchmark against which the Fund measures its
portfolio.

Investments in equity securities may include:
* Common stock
* Preferred stock

Fund Performance

Annual Total Returns for the periods ended 12/31*
[BAR CHART APPEARS HERE]

21.93% 17.26% 10.72% 14.03% 12.87%
- ----------------------------------------------------
95 96 97 98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was -5.47%.

Best Quarter: Q4 1998 14.25%
Worst Quarter: Q3 1998 -9.97%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (1/31/94)
- ---------------------------------------------------------------
Global Equity Fund 12.87% 15.29% - 11.94%
MSCI World Equity 25.12% 20.09% - 16.52%
(Free) Index
</TABLE>

MSCI World Equity (Free) Index

<PAGE>

Global Technology Fund

Objective

The Fund seeks to provide long-term capital appreciation.

Principal Strategies

Under normal circumstances, the Fund invests at least 65% of its assets in
equity securities of technology companies. The Fund employs a specialized sector
strategy, and is a non-diversified portfolio.

The selection of companies is mainly influenced by a strong competitive position
allowing the Fund to participate in the growth of each industry. Furthermore,
the quality of the management, the technological innovation and the revenue
growth of the companies are very important.

The Fund's benchmark is the Morgan Stanley High Tech Index.

Investments in equity securities may include:

* Common stock
* Preferred stock

Given that the Fund invests primarily in technology-related securities, there is
a risk that economic factors such as patent considerations, intense competition,
rapid technological changes and obsolescence may have a substantial impact on
the Fund's investments.

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance

There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Technology Companies

Technology companies develop, sell, or significantly benefit from the use of
technology products and services. The term technology includes electronics, data
processing, semi-conductors, telecommunications, and technology services.

Non-Diversified Portfolio

Invests in fewer securities, which may result in more potential volatility than
a diversified portfolio. Gains or losses on a single security or issuer within
the portfolio will, therefore, have a greater impact on the Fund's net asset
value.

Morgan Stanley High Tech Index

The Morgan Stanley High Tech Index is an equal dollar-weighted index of 35
stocks from 9 technology subsectors: computer services, design software, server
software, PC software and new media, networking and telecom equipment, server
hardware, PC hardware and peripherals, specialized systems, and semiconductors.
The index was developed with a base value of 200 as of December 16, 1994, and is
rebalanced annually.

5
<PAGE>

Global Biotech Fund

Objective

The Fund seeks to provide long-term capital appreciation.

Principal Strategies

Under normal circumstances, the Fund invests at least 65% of its assets in
equity securities of biotechnology companies. The Fund employs a specialized
sector strategy, and is a non-diversified portfolio.

Stock selection is based on bottom-up, fundamental analysis. Biotechnology
companies generate value by developing new kinds of drugs and technologies. The
basis of the fundamental analysis is to analyze the science behind the drugs and
technologies.

Although the Fund may invest anywhere in the world, it principally invests in
the equity securities contained in the NASDAQ Biotech Index, which consists of
200 companies. One company currently represents approximately 30% of this index,
occasionally causing direct comparison to the Fund to be distorted.

Investments in equity securities may include:

* Common stock

* Preferred stock

Given that the Fund invests primarily in biotechnology-related securities, there
is a risk that factors such as patent considerations, intense competition, rapid
technological changes and obsolescence, and government regulation may have a
substantial impact on the Fund's investments.

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance

There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Biotechnology Companies

Companies focusing on research, product development, product manufacture and
distribution in the biotechnology sector. The majority of companies are newly
established and have a single product in its early development stage.

Non-Diversified Portfolio

NASDAQ Biotech Index

The NASDAQ Biotech Index is a capitalization-weighted index of 200 biotechnology
stocks listed on the NASDAQ exchange. The index was developed with a base value
of 200 as of November 1, 1993.

<PAGE>

Global Bond Fund

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income.

Principal Strategies

The Fund employs a fixed income strategy, and invests primarily in a portfolio
of global debt securities that may also provide the potential for capital
appreciation. The Fund is a non-diversified portfolio.

Normally, at least 65% of the Fund's assets are invested in long-term debt
securities of issuers in at least three countries (which may include the United
States).

Although it may invest anywhere in the world, the Fund invests primarily in
fixed income markets listed in the Salomon Smith Barney World Government Bond
Index, the benchmark against which the Fund measures its portfolio.

Investments in fixed income securities may include:

* Debt securities of the U.S. government, its agencies and instrumentalities
* Debt securities of global (ex-U.S.) governments
* Debt securities of corporations

* Mortgage-backed securities
* Asset-backed securities

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance

Annual Total Returns for the periods ended 12/31*
[BAR CHART APPEARS HERE]

-3.49% 20.32% 9.30% 1.63% 11.98% -6.27%
- ---------------------------------------------------------------------
94 95 96 97 98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was -0.99%.

Best Quarter: Q3 1998 6.06%
Worst Quarter: Q1 1999 -3.33%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (7/31/93)
- ---------------------------------------------------------------
Global Bond Fund -6.27% 7.00% - 5.45%
Salomon Smith Barney -4.26% 6.42% - 6.02%
World Government
Bond Index
</TABLE>

Non-Diversified Portfolio

Long-Term Debt

Debt securities with an initial maturity of more than one year.

Salomon Smith Barney World Government Bond Index

A securities index that represents the broad global fixed income markets and
includes debt issues of U.S. and most developed global (ex-U.S.) governments,
governmental entities and supranationals.

<PAGE>

U.S. Balanced Fund

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income.

Principal Strategies

The Fund employs both core/value equity and fixed income strategies. The Fund
invests primarily in a wide range of U.S. equity, fixed income and money market
securities. Under normal circumstances, the Fund will invest at least 25% of its
net assets in fixed income securities.

All selection decisions are made relative to the U.S. Balanced Mutual Fund
Index, the benchmark against which the Fund measures its portfolio.

Investments in equity securities may include:

* Common stock
* Preferred stock

Investments in fixed income securities may include:

* Debt securities of the U.S. government, its agencies and instrumentalities
* Debt securities of U.S. corporations
* Mortgage-backed securities
* Asset-backed securities
* When-issued securities

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance

Annual Total Returns for the periods ended 12/31*
[BAR CHART APPEARS HERE]

25.48% 11.32% 13.22% 9.92% -6.95%
- ----------------------------------------------------------
95 96 97 98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was -0.95%.

Best Quarter: Q2 1997 7.10%
Worst Quarter: Q3 1999 -5.12%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (12/31/94)
- ---------------------------------------------------------------
U.S. Balanced Fund -6.95% 10.09% - 10.09%
Salomon Smith Barney -0.84% 7.74% - 7.74%
BIG Bond Index
Wilshire 5000 Equity 23.56% 27.06% - 27.06%
Index
U.S. Balanced Mutual 14.66% 20.14% - 20.14%
Fund Index
</TABLE>

U.S. Balanced Mutual Fund Index

Compiled by Brinson Partners, this unmanaged index represents a fixed composite
of 65% Wilshire 5000 Equity Index and 35% Salomon Smith Barney Broad Investment
Grade (BIG) Bond Index.

From time to time, underlying indices may change.

Wilshire 5000 Equity Index

A broad-based, market capitalization weighted index that includes all U.S.
common stocks. It is designed to provide a representative indication of the
capitalization and return for the U.S. equity market.

Salomon Smith Barney Broad Investment Grade (BIG) Bond Index

A broad-based index that includes U.S. bonds with over one year to maturity.

<PAGE>

U.S. Equity Fund

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

Principal Strategies

The Fund employs a core/value equity strategy. Normally, the Fund invests at
least 65% of its assets in equity securities, which may include dividend-paying
securities, of U.S. companies.

All selection decisions are made relative to the Wilshire 5000 Equity Index, the
benchmark against which the Fund measures its portfolio.

Investments in equity securities may include:

* Common stock
* Preferred stock

Fund Performance

Annual Total Returns for the periods ended 12/31*
[BAR CHART APPEARS HERE]

40.58% 25.65% 24.76% 18.57% -4.05%
- ---------------------------------------------------------
95 96 97 98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was -5.83%.

Best Quarter: Q4 1998 16.35%
Worst Quarter: Q3 1999 -14.25%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (2/28/94)
- ---------------------------------------------------------------
U.S. Equity Fund -4.05% 20.17% - 16.71%
Wilshire 5000 Equity 23.56% 27.06% - 22.60%
Index
</TABLE>

Wilshire 5000 Equity Index

<PAGE>

U.S. Value Equity Fund

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

Principal Strategies

The Fund employs a core/value equity strategy. Under normal circumstances, the
Fund invests at least 65% of its assets in equity securities, which may include
dividend-paying securities, of U.S. companies.

The Fund invests primarily in securities in the Russell 1000(R) Value Index, the
benchmark against which the Fund measures its portfolio.

Investments in equity securities may include:
* Common stock
* Preferred stock

Fund Performance

There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Russell 1000(R) Value Index

The Russell 1000(R) Index measures the performance of the 1,000 largest
companies in the Russell 3000 Index, which represents approximately 92% of the
total market cap of the Russell 3000 Index. As of the latest reconstitution, the
average market cap of the Russell 1000(R) Index was approximately $12.1 billion;
the median market cap was approximately $3.8 billion. The smallest company in
the index had an approximate market cap of $1,350.8 million. The Russell 1000(R)
Value Index measures the performance of those Russell 1000 companies with lower
price-to-book ratios and lower forecasted growth values.

<PAGE>

U.S. Large Cap Equity Fund
(formerly the U.S. Large Capitalization Equity Fund)

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

Principal Strategies

The Fund employs a core/value equity strategy. Under normal circumstances,
the Fund invests at least 65% of its assets in equity securities of U.S. large
cap companies. The Fund is a non-diversified portfolio.

All selection decisions are undertaken relative to the Standard & Poor's 500
Equity Index ("S&P 500 Index"), the benchmark against which the Fund measures
its portfolio.

Investments in equity securities may include:
* Common stock
* Preferred stock

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance
The chart and table which follow give an indication of the Fund's risks and
performance. The chart shows the Fund's performance over the past year. The
table compares the Fund's performance over time to that of a broad measure of
market performance. When you consider this information, please remember that the
Fund's past performance is not necessarily an indication of how it will perform
in the future.

Annual Total Return for the period ended 12/31*

[BAR CHART APPEARS HERE]

- -11.05%
- -------
99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was -9.35%.

Best Quarter: Q4 1998 15.44%
Worst Quarter: Q3 1999 -15.36%

Average Annual Total Returns
(for the periods ended 12/31/99)

Performance
1 5 10 Inception
Year Year Year (4/30/98)
- -----------------------------------------------------
U.S. Large Cap
Equity Fund -11.05% - - -3.53%
S&P 500 Index 21.04% - - 19.85%

Large Cap Companies
Companies with market caps in the upper 65% of the Wilshire 5000 Equity Index.
Companies whose capitalization falls below this level after purchase will
continue to be considered large cap companies.

Non-Diversified Portfolio
Invests in fewer securities, which may result in more potential volatility than
a diversified portfolio. Gains or losses on a single security or issuer within
the portfolio will, therefore, have a greater impact on the Fund's net asset
value.

S&P 500 Index
A broad cap market-weighted index that includes common stocks of the leading
companies in the top industries in the United States. It is designed to provide
a representative indication of the capitalization and return of the large cap
U.S. equity market.

11
<PAGE>

U.S. Large Cap Growth Fund
(formerly the U.S. Large Capitalization Growth Fund)

Objective
The Fund seeks to provide long-term capital appreciation.

Principal Strategies

The Fund employs a growth equity strategy, and invests primarily in a
portfolio of equity securities of large cap growth companies. The Fund is a non-
diversified portfolio.

All selection decisions are made relative to the Russell 1000(R) Growth Index,
the benchmark against which the Fund measures its portfolio.

* Normally, at least 65% of the Fund's assets are invested in securities issued
by large cap growth companies.
* Up to 20% of the Fund's assets may be invested in foreign securities.

Investments in equity securities may include:
* Common stock
* Preferred stock

Fund Performance
The chart and table which follow give an indication of the Fund's risks and
performance. The chart shows you how the Fund's performance has varied from year
to year. The table compares the Fund's performance over time to that of a broad
measure of market performance. When you consider this information, please
remember that the Fund's past performance is not necessarily an indication of
how it will perform in the future.

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

24.90% 32.73%
- ---------------
98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was 7.15%.

Best Quarter: Q4 1998 26.41%
Worst Quarter: Q3 1998 -12.67%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (10/31/97)
- ------------------------------------------------------------
U.S. Large Cap 32.73% - - 28.53%
Growth Fund
Russell 1000(R) 33.16% - - 36.00%
Growth Index
S&P 500 Index/1/ 21.04% - - 26.23%

</TABLE>

(1) The Advisor has changed the Fund's benchmark index from the S&P 500 Index
to the Russell 1000(R) Growth Index based on the Advisor's determination that
the Russell 1000(R) Growth Index is more representative of the Fund's investment
strategies.

Large Cap Growth Companies
Companies with market caps in the upper 65% of the Wilshire 5000 Equity Index.
Companies whose capitalization falls below this level after purchase will
continue to be considered large cap growth companies.

Non-Diversified Portfolio
Invests in fewer securities, which may result in more potential volatility
than a diversified portfolio. Gains or losses on a single security or issuer
within the portfolio will, therefore, have a greater impact on the Fund's net
asset value.

Russell 1000(R) Growth Index
The Russell 1000(R) Index measures the performance of the 1,000 largest
companies in the Russell 3000 Index, which represents approximately 92% of the
total market cap of the Russell 3000 Index. As of the latest reconstitution, the
average market cap of the Russell 1000(R) Index was approximately $12.1 billion;
the median market cap was approximately $3.8 billion. The smallest company in
the index had an approximate market cap of $1,350.8 million. The Russell 1000(R)
Growth Index measures the performance of those Russell 1000 companies with
higher price-to-book ratios and higher forecasted growth values.

12
<PAGE>

U.S. Small Cap Equity Fund

Objective
The Fund seeks to maximize total U.S. dollar return, consisting of capital
appreciation and current income, while controlling risk.

Principal Strategies

The Fund employs a core/value equity strategy, and will invest primarily in
publicly traded companies represented in the Wilshire Small Stock Index.

All selection decisions are made relative to the Wilshire Small Stock Index,
the benchmark against which the Fund measures its portfolio.

* Normally, at least 65% of the Fund's assets are invested in equity securities
issued by U.S. small cap companies.

Investments in equity securities may include:
* Common stock
* Preferred stock

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Small Cap Companies
Companies with market caps in the lower 10% of the Wilshire 5000 Equity Index.

Wilshire Small Stock Index
This benchmark represents approximately the smallest 10% of the Wilshire 5000
Equity Index in terms of capitalization. The Wilshire 5000 Equity Index is a
broad-based, market cap weighted index that includes all U.S. common stocks.

13
<PAGE>

U.S. Small Cap Growth Fund
(formerly the U.S. Small Capitalization Growth Fund)

Objective
The Fund seeks to provide long-term capital appreciation.

Principal Strategies

The Fund employs a growth equity strategy. Under normal conditions, the Fund
invests at least 65% of its assets in equity securities of U.S. small cap
companies.

All selection decisions are made relative to the Russell 2000 Growth Index, the
benchmark against which the Fund measures its portfolio.

The Fund may also invest in securities of emerging growth companies. The Fund
may invest up to 20% of its assets in foreign securities.

Investments in equity securities may include:
* Common stock
* Preferred stock

The Fund's portfolio turnover rate may exceed 100%.

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

- -6.70% 41.70%
- ---------------
98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was 22.37%.

Best Quarter: Q4 1999 32.94%
Worst Quarter: Q3 1998 -23.86%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (9/30/97)
- -----------------------------------------------------------
U.S. Small Cap 41.70% - - 10.33%
Growth Fund
Russell 2000 Growth 43.09% - - 13.51%
Index
Russell 2000 Index/1/ 21.26% - - 6.08%

</TABLE>

/1/ The Advisor has changed the Fund's benchmark index from the Russell 2000
Index to the Russell 2000 Growth Index based on the Advisor's determination that
the Russell 2000 Growth Index is more representative of the Fund's investment
strategies.

Small Cap Companies
Companies with market caps in the lower 10% of the Wilshire 5000 Equity Index.

Emerging Growth Companies
Small or medium sized companies that have passed their start-up phase and are
showing positive earnings, as well as potential for achieving significant profit
in a relatively short period of time.

Russell 2000 Growth Index

An unmanaged index composed of those companies in the Russell 2000 Index with
higher price-to-book ratios and higher forecasted growth values. The Russell
2000 Index is an index composed of the 2,000 smallest companies in the Russell
3000 Index, which represents approximately 8% of the total market capitalization
of the Russell 3000 Index.

14
<PAGE>

U.S. Real Estate Equity Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

Principal Strategies

The Fund employs a specialized sector strategy. Normally, the Fund invests at
least 65% of its assets in real estate equity securities, including real estate
investment trusts (REITs). The Fund is a non-diversified portfolio.

Although the Fund may invest in any real estate related security, the Morgan
Stanley REIT Index serves as its benchmark.

Investments in equity securities may include:
* Common stock
* Preferred stock

Given that the Fund invests primarily in securities issued by REITs, there is a
risk that changes in real estate values or economic downturns can have a
substantial impact on the Fund's investments.

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

REITs
Publicly traded companies that own and often operate real property and/or invest
in mortgage and mortgage-backed securities.

Morgan Stanley REIT Index
The Morgan Stanley REIT Index is a total-return index comprised of the most
actively-traded real estate investment trusts and is designed to be a measure of
real estate equity performance. The index was developed with a base value of 200
as of December 31, 1994.

15
<PAGE>

U.S. Bond Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

Principal Strategies

The Fund employs a fixed income strategy, and invests primarily in a
portfolio of investment-grade fixed income securities that may also provide the
potential for capital appreciation. As a matter of fundamental policy, under
normal circumstances, at least 65% of the Fund's total assets are invested in
U.S. long-term debt securities.

All selection decisions are made relative to the Salomon Smith Barney Broad
Investment Grade (BIG) Bond Index, the benchmark against which the Fund measures
its portfolio.

Investments in fixed income securities may include:
* Debt securities of the U.S. government, its agencies and instrumentalities
* Debt securities of U.S. corporations
* Mortgage-backed securities
* Asset-backed securities

The Fund's portfolio turnover rate may exceed 100%.

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

3.53% 9.64% 8.37% -1.04%
- ------------------------------
96 97 98 99

*The Fund's total return for the period January 1, 2000 through March 31,
2000 was 1.95%

Best Quarter: Q4 1995 4.55%
Worst Quarter: Q1 1996 -2.23%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (8/31/95)
- ----------------------------------------------------------
U.S. Bond Fund -1.04% - - 5.94%
Salomon Smith Barney -0.84% - - 6.05%
BIG Bond Index

</TABLE>

Investment-Grade
Fixed income securities possessing a minimum rating of:
* BBB by Standard & Poor's Ratings Group ("S&P") or
* Baa by Moody's Investors Services, Inc. ("Moody's") or
* If unrated, are determined to be of comparable quality by the Advisor.

Long-Term Debt
Debt securities with an initial maturity of more than one year.

Salomon Smith Barney
Broad Investment Grade (BIG) Bond Index
A broad-based index that includes U.S. bonds with over one year to maturity.

16
<PAGE>

High Yield Fund

Objectives
The Fund's primary objective is to provide high current income from a portfolio
of higher-yielding, lower-rated debt securities issued by domestic and foreign
companies. The Fund also seeks capital growth, when consistent with high current
income, by investing in securities, including common stocks and non-income
producing securities, which the Advisor expects will appreciate in value as a
result of declines in long-term interest rates or favorable developments
affecting the business or prospects of the issuer which may improve the issuer's
financial condition and credit rating.

Principal Strategies

The Fund employs a fixed income strategy, and invests primarily in a
portfolio of U.S. higher-yielding, lower-rated bonds:
* Under normal conditions, at least 65% of the Fund's assets are invested in
fixed income securities that provide higher yields and are "lower-rated"
* Up to 25% of the Fund's assets may be invested in foreign securities

All selection decisions are undertaken relative to the Merrill Lynch High Yield
Master Index, the benchmark against which the Fund measures its portfolio.

Investments in fixed income securities may include:
* Debt securities of corporations
* Zero coupon securities
* Asset-backed securities
* When-issued securities
* Eurodollar securities

The Fund's portfolio turnover rate may exceed 100%.

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

7.75% 4.85%
- -------------
98 99

*The Fund's total return for the period January 1, 2000 through March 31,
2000 was -3.85%.

Best Quarter: Q4 1998 4.32%
Worst Quarter: Q1 2000 -3.85%

Average Annual Total Returns
(for the periods ended 12/31/99)

Performance
1 5 10 Inception
Year Year Year (9/30/97)
- ----------------------------------------------------------------
High Yield Fund 4.85% - - 6.66%
Merrill Lynch High Yield 1.57% - - 3.48%
Master Index

</TABLE>

Lower-Rated Bonds
Bonds rated in the lower rating categories of Moody's and S&P, including
securities rated:
* Ba or lower by Moody's or
* BB or lower by S&P.
Securities rated in these categories or lower are considered to be of poorer
quality and predominantly speculative.

Merrill Lynch High Yield Master Index
An index of publicly placed non-convertible, coupon-bearing U.S. domestic debt
with a term to maturity of at least one year.

17
<PAGE>

Emerging Markets Debt Fund

Objective
The Fund seeks to maximize total U.S. dollar return, consisting of capital
appreciation and current income, while controlling risk.

Principal Strategies
The Fund employs a fixed income strategy, and intends to invest primarily in a
portfolio of debt securities of issuers located in at least three emerging
markets countries, which may be located in Asia, Europe, Latin America, Africa
or the Middle East. As these markets change and other countries' markets
develop, the Fund expects the countries in which it invests to change. The Fund
is a non-diversified portfolio.

All selection decisions are undertaken relative to the J.P. Morgan Emerging
Markets Bond Index Plus, the benchmark against which the Fund measures its
portfolio.

Normally, the Fund invests at least 65% of its total assets in debt securities
issued by:
* Governments
* Government-related entities (including participations in loans between
governments and financial institutions)
* Corporations
* Entities organized to restructure outstanding debt of issuers in emerging
markets

The Fund also invests in debt securities on which the return is derived
primarily from other emerging market instruments, such as interest rate swap
contracts and currency swap contracts. The Fund may invest in Eurodollar
securities, which are fixed income securities of a U.S. issuer or a foreign
issuer that are issued outside the United States.

A substantial amount of the assets of the Fund may be invested in higher-
yielding, lower-rated bonds.

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Emerging Markets
The World Bank and other international agencies consider a country to be an
"emerging markets" country on the basis of such factors as trade initiatives,
per capita income and level of industrialization. Emerging market countries
generally include every nation in the world except the U.S., Canada, Japan,
Australia, New Zealand and most nations located in Western Europe.

Non-Diversified Portfolio
Invests most of its assets in a smaller number of issuers, resulting in more
potential volatility than a diversified portfolio. Gains or losses on a single
security or issuer within the portfolio will, therefore, have a greater impact
on the Fund's net asset value.

Lower-Rated Bonds
Bonds rated in the lower rating categories of Moody's and S&P, including
securities rated:
. Ba or lower by Moody's or
. BB or lower by S&P
Securities rated in these categories or lower are considered to be of poorer
quality and predominantly speculative.

J.P. Morgan Emerging Markets Bond Index Plus
Comprised of external-currency-denominated emerging markets debt, including
Brady Bonds, loans, Eurobonds and local market instruments.

18
<PAGE>

Global (Ex-U.S.) Equity Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income, by investing primarily in the equity securities of global (ex-
U.S.) issuers.

Principal Strategies

The Fund employs a core/value equity strategy. Normally, the Fund invests at
least 65% of its assets in equity securities of issuers in at least three
countries other than the United States.

Although it may invest anywhere in the world, the Fund invests primarily in the
equity markets listed in the Morgan Stanley Capital International ("MSCI") World
Ex USA (Free) Index, the benchmark against which the Fund measures its
portfolio.

Investments in equity securities may include:
* Common stock
* Preferred stock

Fund Performance

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

0.94% 15.55% 12.75% 5.74% 14.39% 19.16%
- -------------------------------------------------
94 95 96 97 98 99

*The Fund's total return for the period January 1, 2000 through March 31,
2000 was -4.25%.

Best Quarter: Q4 1998 17.15%
Worst Quarter: Q3 1998 -13.66%

Average Annual Total Returns
(for the periods ended 12/31/99)

Performance
1 5 10 Inception
Year Year Year (8/31/93)
- --------------------------------------------------------------------
Global (Ex-U.S.) Equity 19.16% 13.42% - 10.01%
Fund
MSCI World Ex USA 27.77% 13.12% - 11.28%
(Free) Index

</TABLE>

MSCI World Ex USA (Free) Index
An unmanaged, market driven broad based securities index which includes global
(ex-U.S.) equity markets in terms of capitalization and performance.

19
<PAGE>

Emerging Markets Equity Fund

Objective
The Fund seeks to maximize total U.S. dollar return, consisting of capital
appreciation and current income, while controlling risk.

Principal Strategies
The Fund employs a core/value equity strategy, and intends to invest
primarily in a portfolio of equity securities of issuers located in at least
three emerging markets countries, which may be located in Asia, Europe, Latin
America, Africa or the Middle East. As these markets change and other countries'
markets develop, the Fund expects the countries in which it invests to change.
The Fund is a non-diversified portfolio.

All selection decisions are undertaken relative to the Morgan Stanley Capital
International (MSCI) Emerging Markets (Free) Index, the benchmark against which
the Fund measures its portfolio.

Normally, the Fund invests at least 65% of its assets in the equity securities
of issuers in emerging markets or securities on which the return is derived from
the equity securities of issuers in emerging markets, such as equity swap
contracts and equity index swap contracts.

Up to 35% of the Fund's assets may be invested in higher-yielding, lower-rated
bonds. The Fund may invest in Eurodollar securities, which are fixed income
securities of a U.S. issuer or a foreign issuer that are issued outside of the
United States.

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Morgan Stanley Capital International (MSCI) Emerging Markets (Free) Index
A market capitalization weighted index which captures 60% of a country's total
capitalization while maintaining the overall risk structure of the market.
Stocks are included at their full market capitalization weight, and the index
reflects actual buyable opportunities for the non-domestic investor.

<PAGE>

Risk Considerations

The chart below illustrates the primary risks of investing in the Funds.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Foreign Geographic Industry Non-
Country Concen- High Concen- Interest Diversifi- Pre- Small
Credit & Currency tration Yield tration Rate Market cation payment Company
- ------------------------------------------------------------------------------------------------------------------------------------
Global Fund * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Global
Equity Fund * *
- ------------------------------------------------------------------------------------------------------------------------------------
Global
Technology Fund * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Global
Biotech Fund * * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Global
Bond Fund * * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S.
Balanced Fund * * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S.
Equity Fund *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Value
Equity Fund *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Large Cap
Equity Fund * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Large Cap
Growth Fund * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Small Cap
Equity Fund * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Small Cap
Growth Fund * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Real Estate
Equity Fund * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S.
Bond Fund * * *
- ------------------------------------------------------------------------------------------------------------------------------------
High
Yield Fund * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Emerging
Markets * * * * * *
Debt Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Global (Ex-U.S.)
Equity Fund * *
- ------------------------------------------------------------------------------------------------------------------------------------
Emerging
Markets * * * * *
Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

21
<PAGE>

Risk Considerations (cont.)

All Fund investments are subject to risk and may decline in value. Each Fund's
exposure depends upon its specific investment practices. The amount and types of
risk vary depending on:
* The investment objective(s)
* The Fund's ability to achieve its objectives
* The markets in which the Fund invests
* The investments the Fund makes in those markets
* Prevailing economic conditions over the period of an investment

Please note that there are other circumstances that could adversely affect your
investment and potentially prevent a Fund from achieving its objectives.

Credit Risk
The risk that the issuer of a security, or the counterparty to a contract, will
default or otherwise be unable to honor a financial obligation. Debt securities
rated below investment-grade are especially susceptible to this risk.

Foreign Country and Currency Risks
The risk that prices of a Fund's investments in foreign securities may go down
because of unfavorable foreign government actions, political instability or the
absence of accurate information about foreign issuers. Also, a decline in the
value of foreign currencies relative to the U.S. dollar will reduce the value of
securities denominated in those currencies. Foreign securities are sometimes
less liquid and harder to value than securities of U.S. issuers. These risks are
more severe for securities of issuers in emerging markets countries.

The World Bank and other international agencies consider a country to be an
"emerging markets" country on the basis of such factors as trade initiatives,
per capita income and level of industrialization. Emerging market countries
generally include every nation in the world except the U.S., Canada, Japan,
Australia, New Zealand and most nations located in Western Europe.

On January 1, 1999, the European Monetary Union introduced a new single
currency, the Euro, which replaced the national currencies of participating
member nations. If a Fund held investments in nations with currencies replaced
by the Euro, the investment process, including trading, foreign exchange,
payments, settlements, cash accounts, custody and accounting, was impacted. To
the extent the Funds hold non-U.S. dollar denominated securities (Euro or
other), they will still be exposed to currency risk due to fluctuations in
those currencies versus the U.S. dollar.

Geographic Concentration Risk
The risk that if a Fund has most of its investments in a single country or
region, its portfolio will be more susceptible to factors adversely affecting
issuers located in that country or region than would a more geographically
diverse portfolio of securities.

High Yield Risk
The risk that the issuer of bonds with ratings of BB (S&P) or Ba (Moody's) or
below will default or otherwise be unable to honor a financial obligation. These
securities are considered to be of poor standing and are predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligations and involve major risk
exposure. Bonds in this category may also be called "high yield bonds" or "junk
bonds."

Industry Concentration Risk
The risk that changes in economic, political or other conditions may have a
particularly negative effect on issuers in an industry in which a Fund's
investments are concentrated.

Interest Rate Risk
The risk that changing interest rates may adversely affect the value of an
investment. With fixed-rate securities, an increase in prevailing interest
rates typically causes the value of a Fund's securities to fall, while a decline
in prevailing interest rates may produce an increase in the market value of the
securities. Changes in interest rates will affect the value of longer-term fixed
income securities more than shorter-term securities and lower quality securities
more than higher quality securities.

The investment objective of each Fund is "fundamental" and may be changed only
with shareholder approval. Unless otherwise stated, each Fund's investment
policies are not fundamental and may be changed by the Trust's Trustees without
a shareholder vote. There can be no assurance that the Funds will be able to
attain their objectives.

Each Fund's primary investment practices and strategies are discussed in this
prospectus. Other practices, and their related risks, are described in the
Statement of Additional Information ("SAI").

22
<PAGE>

Risk Considerations (cont.)

Market Risk
The risk that the market value of a Fund's investments will fluctuate as the
stock and bond markets fluctuate. Market risk may affect a single issuer,
industry or section of the economy, or it may affect the market as a whole.

Non-Diversification Risk
The risk that a non-diversified Fund will be more volatile than a diversified
Fund because it invests its assets in a smaller number of issuers. The gains or
losses on a single security or issuer will, therefore, have a greater impact on
the non-diversified Fund's net asset value.

Portfolio Turnover
The Funds generally intend to purchase securities for long-term investment.
Portfolio turnover rates are not a factor in making buy and sell decisions.
Increased portfolio turnover may result in higher costs for brokerage
commissions, dealer mark-ups and other transaction costs. It may also result in
taxable capital gains. Higher costs associated with increased portfolio turnover
may offset gains in a Fund's performance.

Prepayment Risk
The risk that issuers will prepay fixed rate obligations when interest
rates fall, forcing the Fund to re-invest in obligations with lower interest
rates than the original obligations.

Small Company Risk
The risk that investments in smaller companies may be more volatile than
investments in larger companies, as smaller companies generally experience
higher growth and failure rates. The trading volume of smaller company
securities is normally lower than that of larger companies. Changes in the
demand for the securities of smaller companies generally have a disproportionate
effect on their market price, tending to make prices rise more in response to
buying demand and fall more in response to selling pressure.

23
<PAGE>

Fees and Expenses

The tables below describe the fees and expenses that you may pay if you buy and
hold shares of The Brinson Funds-Class I shares.

Shareholder Transaction Fees

(fees paid directly from your investment)

Sales Charge (Load) Imposed on Purchases None

Emerging Markets Equity Fund:
Purchase/Redemption Transaction Fee 1.50%*

* This transaction charge is paid to the Fund and used by it to defray
transaction costs associated with each purchase and sale of securities by the
Fund.

Annual Fund Operating Expenses

(expenses that are deducted from Fund assets, expressed as a % of average net
assets)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Amount of Fee Total Fund Operating
Waiver and/or Expenses (after fee
Investment Other Gross Operating Expense waiver and/or expense
(06/30/99) Advisory Fees/1/ Expenses/1/ Expenses/1/ Reimbursement/1/ reimbursement)/1/
- -----------------------------------------------------------------------------------------------------------------------
Global 0.80% 0.16% 0.96% 0.00% 0.96%
Global Equity 0.80% 0.25% 1.05% 0.05% 1.00%
Global Technology/2/ 1.40% 0.15% 1.55% 0.00% 1.55%
Global Biotech/2/ 1.15% 0.15% 1.30% 0.00% 1.30%
Global Bond 0.75% 0.15% 0.90% 0.00% 0.90%
U.S. Balanced 0.70% 0.26% 0.96% 0.16% 0.80%
U.S. Equity 0.70% 0.10% 0.80% 0.00% 0.80%
U.S. Value Equity/2/ 0.70% 0.15% 0.85% 0.00% 0.85%
U.S. Large Cap Equity 0.70% 0.59% 1.29% 0.49% 0.80%
U.S. Large Cap Growth/3/ 0.70% 1.68% 2.38% 1.58% 0.80%
U.S. Small Cap Equity/2/ 1.00% 0.15% 1.15% 0.00% 1.15%
U.S. Small Cap Growth/3/ 1.00% 0.32% 1.32% 0.17% 1.15%
U.S. Real Estate Equity/2/ 0.90% 0.15% 1.05% 0.00% 1.05%
U.S. Bond 0.50% 0.11% 0.61% 0.01% 0.60%
High Yield/3/ 0.60% 0.23% 0.83% 0.13% 0.70%
Emerging Markets Debt/2/ 0.65% 0.50% 1.15% 0.00% 1.15%
Global (Ex-U.S.) Equity 0.80% 0.19% 0.99% 0.00% 0.99%
Emerging Markets Equity/2/ 1.10% 0.50% 1.60% 0.00% 1.60%
</TABLE>

<PAGE>

Fees and Expenses (cont.)

(1) The Advisor has irrevocably agreed to permanently waive its fees and
reimburse certain expenses so that total operating expenses of the Funds do not
exceed the percentages noted in the chart on page 26.

(2) The fees and expenses noted for the Global Technology Fund, Global Biotech
Fund, U.S. Value Equity Fund, U.S. Small Cap Equity Fund, U.S. Real Estate
Equity Fund, Emerging Markets Debt Fund and Emerging Markets Equity Fund are
based on estimates.

(3) The U.S. Large Cap Growth Fund, the U.S. Small Cap Growth Fund and the High
Yield Fund were created as the result of a reorganization of three corresponding
funds of UBS Private Investor Funds, Inc. into these Funds on December 18, 1998.
The fees and expenses of these three Funds are based on fees and expenses
incurred for the period January 1, 1999 through June 30, 1999 (annualized).

Expense Example

This example is intended to help you compare the cost of investing in the
Brinson Funds-Class I shares to the cost of investing in other mutual funds. The
example assumes that you invest $10,000 in a Fund for the time periods indicated
and then redeem all of your shares at the end of those periods. The example also
assumes that your investment has a 5% return each year and that the Fund's
operating expenses remain the same. Although your actual costs and the return on
your investment may be higher or lower, based on these assumptions your costs
would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Global Fund $ 98 $306 $531 $1,178
Global Equity Fund $102 $318 $552 $1,225
Global Technology Fund $158 $490 $845 $1,845
Global Biotech Fund $132 $412 $713 $1,568
Global Bond Fund $ 92 $287 $498 $1,108
U.S. Balanced Fund $ 82 $255 $444 $ 990
U.S. Equity Fund $ 82 $255 $444 $ 990
U.S. Value Equity Fund $ 87 $271 $471 $1,049
U.S. Large Cap Equity Fund $ 82 $255 $444 $ 990
U.S. Large Cap Growth Fund $ 82 $255 $444 $ 990
U.S. Small Cap Equity Fund $117 $365 $633 $1,398
U.S. Small Cap Growth Fund $117 $365 $633 $1,398
U.S.Real Estate Equity Fund $107 $334 $579 $1,283
U.S. Bond Fund $ 61 $192 $335 $ 750
High Yield Fund $ 72 $224 $390 $ 871
Emerging Markets Debt Fund $117 $365 $633 $1,398
Global (Ex-U.S.) Equity Fund $101 $315 $547 $1,213
Emerging Markets Equity Fund $163 $505 $871 $1,900
</TABLE>

<PAGE>

Investment Advisor

Advisory Fees
The following chart shows the investment advisory fees payable to Brinson
Partners, before fee waivers, by each Fund during its last fiscal year.

Investment Advisory Fees
(expressed as a percentage of average net assets)

Global Fund 0.80%
Global Equity Fund 0.80
Global Technology Fund/1,2/ 1.40
Global Biotech Fund/1,2/ 1.15
Global Bond Fund 0.75
U.S. Balanced Fund 0.70
U.S. Equity Fund 0.70
U.S. Value Equity Fund/1,2/ 0.70
U.S. Large Cap Equity Fund 0.70
U.S. Large Cap Growth Fund 0.70
U.S. Small Cap Equity Fund/1,2/ 1.00
U.S. Small Cap Growth Fund 1.00
U.S. Real Estate Equity Fund/1,2/ 0.90
U.S. Bond Fund 0.50
High Yield Fund 0.60
Emerging Markets Debt Fund/1,2/ 0.65
Global (Ex-U.S.) Equity Fund 0.80
Emerging Markets Equity Fund/1,2/ 1.10

(1) Management fees shown for the Global Technology Fund, Global Biotech Fund,
U.S. Value Equity Fund, U.S. Small Cap Equity Fund, U.S. Real Estate Equity
Fund, Emerging Markets Debt Fund and Emerging Markets Equity Fund are based on
estimates as the Funds had not commenced operations as of the date of this
prospectus.

(2) The Advisor is entitled to reimbursement of advisory fees waived during any
of the previous five years, provided that the reimbursement will never cause the
total operating expense ratio to exceed the limits in the table below.

The Advisor has irrevocably agreed to waive its fees and reimburse certain
expenses so that the total operating expenses of the Brinson Fund-Class I shares
do not exceed the following amounts for each of the respective Funds:

Global Fund 1.10%
Global Equity Fund 1.00
Global Technology Fund 1.55
Global Biotech Fund 1.30
Global Bond Fund 0.90
U.S. Balanced Fund 0.80
U.S. Equity Fund 0.80
U.S. Value Equity Fund 0.85
U.S. Large Cap Equity Fund 0.80
U.S. Large Cap Growth Fund 0.80
U.S. Small Cap Equity Fund 1.15
U.S. Small Cap Growth Fund 1.15
U.S. Real Estate Equity Fund 1.05
U.S. Bond Fund 0.60
High Yield Fund 0.70
Emerging Markets Debt Fund 1.15
Global (Ex-U.S.) Equity Fund 1.00
Emerging Markets Equity Fund 1.60

About the Advisor
Brinson Partners, Inc., a Delaware corporation located in Chicago, Illinois, is
an investment advisor registered with the U.S. Securities and Exchange
Commission. As of December 31, 1999, Brinson Partners was responsible for the
management of USD 159 billion in institutional assets.

Brinson Partners was organized in 1989 when it acquired the institutional asset
management business of The First National Bank of Chicago and First Chicago
Investment Advisors, N.A. Brinson Partners and its predecessor entities have
managed both U.S. and non-U.S. investment portfolios since 1974 and global
investment portfolios since 1982. Brinson Partners is an indirect wholly owned
subsidiary of UBS AG, and a core business area within the UBS Asset Management
Division.

The UBS Asset Management Division is responsible for the institutional asset
management activities of UBS, and employs more than 1,800 people worldwide. The
Division manages USD 360 billion of institutional assets, including USD 236
billion of discretionary institutional assets on an active basis, as well as
mutual fund assets for UBS Private Banking which total over USD 124 billion.
Clients include corporations, public funds, endowments, foundations, central
banks and other investors located throughout the world.

Portfolio Management
Investment decisions for the Funds are made by an investment management team at
Brinson Partners. No member of the investment management team is primarily
responsible for making recommendations for portfolio purchases.

Brinson Partners, Inc.
209 South LaSalle Street
Chicago, Ill 60604-1295

26
<PAGE>

Pricing of Fund Shares

The Brinson Fund--Class I shares are bought and sold at net asset value ("NAV"),
which is calculated as of the close of business on each day that the New York
Stock Exchange ("NYSE") is open (currently 4:00 p.m. Eastern time). A Fund's
securities are valued based on the last sale price or, where market quotations
are not readily available, are based on fair value as determined in good faith
by the Trust's Board of Trustees.

Foreign securities are valued at their closing prices on the exchange on which
they are traded. The resulting values are converted from the local currency into
U.S. dollars using current exchange rates. Foreign securities may trade in their
local markets on weekends or other days when a Fund does not price its shares.
Therefore, the NAV of Funds holding foreign securities may change on days when
shareholders will not be able to buy or sell their Fund shares.

Purchase and redemption orders for shares received in good form by the close of
regular trading (currently 4:00 p.m., Eastern time) are priced according to the
NAV determined on that day. Purchase and redemption orders received after the
close of trading are priced according to the next determined price per share.
The Funds reserve the right to change the time at which purchases and
redemptions are priced if the NYSE closes at a time other than 4:00 p.m. Eastern
time or if an emergency exists.

How the Funds Calculate NAV

The NAV of a class of shares of a Fund is determined by dividing the value of
the securities and other assets, less liabilities, allocated to the class by the
number of outstanding shares of the class.

27
<PAGE>

Purchasing Shares

The minimum initial investment for shares of the Global Technology Fund, Global
Biotech Fund and U.S. Real Estate Equity Fund is $2,500. Subsequent investments
for shares of the Global Technology Fund, Global Biotech Fund and U.S. Real
Estate Equity Fund will be accepted in minimum amounts of $100. The minimum
initial investment for shares of each other Fund is $1,000,000. Subsequent
investments for shares of each other Fund will be accepted in minimum amounts of
$2,500. The minimum purchase requirement for Individual Retirement Accounts
("IRAs") is $2,000. The Funds reserve the right to vary the investment minimums
and subsequent minimums for additional investments at any time. In addition,
Brinson Partners may waive the minimum initial investment requirement for any
investor at its discretion. Purchases may be made in one of the following
ways:

By Telephone

Call 1-800-448-2430 to arrange for a telephone transaction.

If you want to make future transactions (e.g., purchase additional shares,
redeem or exchange shares) by telephone, you will need to elect this option
either on the initial application or subsequently in writing.

By Mail

Complete and sign an application for Class I shares.

Make your check payable to "Brinson __________ Fund - Class I."

If you are adding to your existing account, enclose the remittance portion of
your account statement and include the amount of investment, account name and
number.

Mail your application and/or check to:
The Brinson Funds
c/o Transfer Agent
P.O. Box 2798
Boston, MA 02208-2798

By Wire

If you are opening a new account, call the Funds at 1-800-448-2430 to arrange
for a wire transaction.

Then wire federal funds to:

The Chase Manhattan Bank
ABA#021000021
DDA#9102-783504
FBO: "Brinson ________ Fund - Class I" and include your name and new account
number.

Complete and sign an application for Class I shares and mail immediately
following the initial wire transaction to:

The Brinson Funds
c/o Transfer Agent
P.O. Box 2798
Boston, MA 02208-2798

If you are adding to your existing account, you do not need to call the Funds to
arrange for a wire transaction, but be sure to include your name and account
number.

Through Financial Institutions/Professionals

In some cases, the Funds have entered into one or more Sales Agreements with
brokers, dealers or other financial intermediaries ("Service Providers"), as
well as with financial institutions (banks and bank trust departments) (each an
"Authorized Dealer"). The Authorized Dealer, or intermediaries designated by the
Authorized Dealer (a "Sub-designee"), may accept purchase and redemption orders
that are in "good form" on behalf of the Funds. A Fund will be deemed to have
received a purchase or redemption order when the Authorized Dealer or Sub-
designee accepts the order. Such orders will be priced at the Fund's net asset
value next computed after such order is accepted by the Authorized Dealer or
Sub-designee. These Authorized Dealers may charge the investor a transaction fee
or other fee for their services at the time of purchase. These fees would not be
otherwise charged if you purchased shares directly from the Funds. It is the
responsibility of such Authorized Dealers or Sub-designees to promptly forward
purchase orders with payments to the Funds.

Telephone orders are accepted from broker-dealers or service organizations if
they have been previously approved by the Funds.

Brinson Partners, or its affiliates, may, from its own resources, compensate
Service Providers for services performed with respect to a Fund's Class I
shares. These services may include marketing, shareholder servicing,
recordkeeping and/or other services. Payments made for any of these purposes may
be made from Brinson Partners' revenues, its profits or any other sources
available. When these service arrangements are in effect, they are generally
made available to all qualified Service Providers.

If you have any questions or need further information, call 1-800-448-2430.
The Brinson Funds strongly discourage market timers and short-term traders from
investing in the funds.

28
<PAGE>

Purchasing Shares (cont.)

The Funds will not accept a check endorsed over by a third party. The Funds
reserve the right to reject any purchase order and to suspend the offering of
shares of The Brinson Funds. This includes purchase orders that, in the
reasonable belief of the Funds, have been made by market timers or short-term
traders.

You will be subject to a 1.50% transaction charge in connection with your
purchase of shares of the Emerging Markets Equity Fund. Shares of the Fund are
sold at a price which is equal to the NAV of such shares, plus the transaction
charge. The transaction charges do not apply to the reinvestment of dividends or
capital gains distributions. The transaction charge is paid to the Fund and used
by it to defray the transaction costs associated with each purchase and sale of
securities within the Fund.

Exchanging Shares

You can exchange your Class I shares for Class I shares of other Funds.
Exchanges will not be permitted between the Brinson Funds-Class I shares and
either the UBS Investment Funds class of shares or the Brinson Funds-Class N
shares.

Requests for exchanges received prior to the close of regular trading hours on
the NYSE will be processed at the net asset value computed on the date of
receipt. Requests received after the close of regular trading hours will be
processed at the next determined net asset value.

Under certain circumstances, the Funds may:
* Limit the number of exchanges between Funds
* Reject a telephone exchange order
* Modify or discontinue the exchange privilege upon 60 days' written notice

Exchanged Funds are subject to the minimum initial investment requirement. The
procedures that apply to redeeming shares also apply to exchanging shares. An
exchange is the sale of shares of one Fund and purchase of shares of another and
could result in taxable gain or loss in a non-tax sheltered account.

Account Options

The following account options are available. There are no charges for the
programs noted below and you may change or terminate these plans at any time by
written notice to the Funds. For information about participating in these
account options, call the transfer agent at 1-800-448-2430.

Automatic Investment Plan

Through this option, money can be electronically deducted from your checking,
savings or bank money market accounts and invested in the Funds each month or
quarter.

Complete the Automatic Investment Plan Application, which is available upon
request by calling 1-800-448-2430, and mail it to the address indicated.

The initial $2,500 minimum investment still applies for the Global Technology
Fund, Global Biotech Fund and U.S. Real Estate Equity Fund, however, subsequent
investments in these Funds can be as little as $100. The initial $1,000,000
minimum investment still applies to each of the other Funds, however, subsequent
investments can be as little as $2,500.

Systematic Withdrawal Plan

The Funds may alter or terminate the Automatic Investment Plan at any time.

If you have a minimum of $1,000,000 in your account, you may direct the transfer
agent to make payments to you (or anyone you designate) monthly, quarterly or
semi-annually.

Withdrawals are drawn from share redemptions and must be a minimum of $500 per
payment. Under the Systematic Withdrawal Plan ("SWP"), you must elect to have
dividends and distributions automatically reinvested in additional Fund shares.

The Funds may terminate any SWP if the value of the account falls below $50,000
due to share redemptions or an exchange of shares for Class I shares of another
Fund.

Individual Retirement Account

You may open an IRA, a tax-deferred retirement account, with the Funds if you
are under age 70 1/2. The minimum purchase requirement for an IRA is $2,000.

29
<PAGE>

Redeeming Shares

Your shares will be redeemed at the NAV next calculated after your order is
received by the Funds' transfer agent in good order. Redemption requests
received prior to the close of regular trading hours (generally 4:00 p.m.
Eastern time) on the NYSE will be executed at the net asset value computed on
the date of receipt. Redemption requests received after the close of regular
trading hours will be executed at the next determined net asset value. Your
order will be processed promptly and you will generally receive the proceeds
within seven days.

Please note that proceeds for redemption requests made shortly after a recent
purchase by check will be distributed once the check clears, which may take up
to 15 days.

The Funds reserve the right to pay redemptions "in kind" (i.e., payment in
securities rather than in cash) if the amount you are redeeming is large enough
to affect a Fund's operations (for example, if it represents more than $250,000
or 1% of the Fund's assets). In these cases, you might incur brokerage costs
converting the securities to cash.

You will be subject to a 1.50% transaction charge in connection with each
redemption of shares of the Emerging Markets Equity Fund. Redemption requests
for the Emerging Markets Equity Fund are paid at the NAV less the transaction
charge. Redemptions which are made in kind with securities are not subject to
the transaction charge.

You may redeem some or all of your shares any day the NYSE is open for business
by doing one of the following (if you have any questions, call the transfer
agent at 1-800-448-2430).

By Telephone

If you have chosen the telephone redemption privilege on the initial application
or subsequently arranged in writing, you may call 1-800-448-2430 to redeem
shares.

By Mail

Shareholders may sell shares by making a written request to:

The Brinson Funds
c/o Transfer Agent
P.O. Box 2798
Boston, MA 02208-2798

Include signatures of all persons required to sign for transactions, exactly as
their names appear on the account application.

To protect your account from fraud, the Funds may require a signature guarantee
for certain redemptions (see "Signature Guarantees" below).

By Bank Wire

If you have chosen the wire redemption privilege on the initial application or
subsequently arranged in writing, you may request the Funds to wire your
proceeds to a predesignated bank account.

Call 1-800-448-2430.

Wire redemption requests must be received by the transfer agent by 4:00 p.m.
Eastern time for money to be wired the next business day.

Through Financial Institutions/Professionals

Contact your financial institution or professional for more information. If you
purchased shares through an Authorized Dealer or Sub-designee, you should
contact it for more information.

Important note: Each institution or professional may have its own procedures and
requirements for selling shares and may charge fees.

30
<PAGE>

Redeeming Shares (cont.)

Redemption requests should be accompanied by the Fund's name, your Fund account
number and the dollar amount or number of shares to be redeemed. The Fund will
mail a check to your account address or, if you have elected the wire redemption
privilege, the Fund will wire the proceeds to your bank.

Signature Guarantees
To protect your account from fraud, the Fund and its agent may require a
signature guarantee for certain redemptions to verify the identity of the person
who has authorized a redemption from your account. Please contact the Fund for
further information.

Telephone Transactions
You may give up some level of security by choosing to buy or sell shares by
telephone, rather than by mail. The Funds will employ reasonable procedures to
confirm that telephone instructions are genuine. If they do not employ these
procedures, the Funds or the transfer agent may be liable for any losses due to
unauthorized or fraudulent transactions. A written confirmation will be provided
for all purchase, exchange and redemption transactions initiated by telephone.

Transfer of Securities
Under certain circumstances, investors may be permitted to purchase Fund shares
by transferring securities to the Fund that meet the Fund's investment objective
and policies. (Please see the SAI for more information.)

Dividends and Distributions

Each Fund passes most of its net investment income along to investors in the
form of distributions. All shareholders of a Fund are entitled to a
proportionate share of the Fund's net income and realized capital gains on its
investments.

Net investment income for all of the Funds consists of all dividends and
interest received, less expenses (including fees payable to the Advisor and its
affiliates).

Dividends from net investment income are declared, and paid, by each Fund semi-
annually - in June and December. In December, the Funds will distribute
substantially all of their net long-term capital gains and any undistributed net
short-term capital gains realized during the one year period commencing November
1(or date of the creation of the Fund, if later) and ending October 31. At the
same time, the Funds will distribute all of their net investment income earned
through the end of December and not previously distributed as ordinary (not
capital) income.

Dividends and other distributions paid on each class of shares of a Fund are
calculated at the same time and in the same manner. Dividends on each class
might be affected differently by the allocation of other class-specific
expenses.

Unless you notify the transfer agent in writing that you elect to receive your
income dividends and capital gains distributions in cash, all will be reinvested
automatically in additional Fund shares of the same class of a Fund.
Distribution options may be changed at any time by requesting a change in
writing. Dividends are reinvested on the reinvestment date at the net asset
value determined at the close of business on that date. Please note that shares
purchased shortly before the record date for a dividend or distribution may have
the effect of returning capital, although such dividends and distributions are
subject to taxes.

31
<PAGE>

Tax Considerations

Following is a brief discussion of the general tax treatment of various
distributions from the Funds. It is not an exhaustive discussion, and your
particular tax status may be different. We encourage you to consult with your
own tax advisor about federal, state and local tax considerations.

In general, distributions from a Fund are taxable to you as either ordinary
income or capital gains, depending upon how long the Fund has held the
underlying assets. This is true whether you invest your distributions in
additional shares of a Fund or receive them in cash. Any capital gains
distributed by a Fund are taxable to you as long-term capital gains no matter
how long you have owned your shares.

When you sell or exchange your shares of a Fund, you may have a capital gain or
loss. The tax rate on any gain from the sale or exchange of your shares depends
on how long you have held your shares.

Fund distributions and gains from the sale or exchange of your shares will
generally be subject to state and local income tax. Foreign investors may be
subject to U.S. withholding and estate tax.

If any of the following situations apply to you, the Funds will be required by
the IRS to withhold 31% of your taxable distributions:
* you do not provide your correct taxpayer identification number, or
* you do not certify that such number is correct, or
* the IRS instructs the Fund to do so.

Buying a Dividend
If you buy shares in a stock Fund just before the Fund makes any distribution,
or if you buy shares in any fixed income Fund just prior to a capital gains
distribution, you will receive some of the purchase price back in the form of a
taxable distribution.

Shareholders will be advised annually of the source and the tax status of all
Fund distributions for federal income tax purposes.

Multiple Classes

The Funds are series of The Brinson Funds, a Delaware business trust, and
currently offer three classes of shares: Brinson Funds-Class I, Brinson Funds-
Class N and UBS Investment Funds Class of shares.

32
<PAGE>

Financial Highlights

The financial highlights table is intended to help you understand a Fund's
financial performance for the past five years (or, if shorter, the period of the
Fund's operations). Certain information reflects financial results for a single
Fund share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in each Fund (assuming reinvestment
of all dividends and distributions).

Global Fund, Global Equity Fund, Global Bond Fund, U.S. Balanced Fund, U.S.
Equity Fund, U.S. Large Cap Equity Fund, U.S. Bond Fund and Global (Ex-U.S.)
Equity Fund
The selected financial information in the following table has been audited by
the Funds' independent auditors, whose unqualified reports thereon (the
"Reports") appear in the Funds' Annual Report to Shareholders dated June 30,
1999 (the "Annual Report"). In addition, the table includes unaudited financial
information for the period ended December 31, 1999, which is included in the
Funds' Semi-Annual Report to Shareholders (the "Semi-Annual Report") dated
December 31, 1999. Additional performance and financial data and related notes
are contained in the Annual Report and the Semi-Annual Report, which are
available without charge upon request. The Funds' financial statements for the
fiscal year ended June 30, 1999 and the Reports, as well as the Semi-Annual
Report, are incorporated by reference into the SAI.

U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund and High Yield Fund
The U.S. Large Cap Growth Fund, the U.S. Small Cap Growth Fund and the High
Yield Fund (collectively, the "New Funds") are successors to the UBS Large Cap
Growth Fund, the UBS Small Cap Fund and the UBS High Yield Bond Fund,
respectively (collectively, the "Predecessor Funds"). Each Predecessor Fund,
prior to its merger into a New Fund, operated as a separate portfolio of UBS
Private Investor Funds, Inc., another investment company that was advised by
another entity. The Predecessor Funds had fiscal years ending on December 31. On
December 18, 1998, following the approval of the shareholders of each
Predecessor Fund of an agreement and plan of reorganization, the UBS Large Cap
Growth Fund, the UBS Small Cap Fund and the UBS High Yield Bond Fund were
reorganized and merged into the U.S. Large Cap Growth Fund, the U.S. Small Cap
Growth Fund and the High Yield Fund, respectively. (These transactions are
collectively referred to as the "Reorganizations.") The New Funds had no
operations prior to the Reorganizations. The New Funds have fiscal years ending
on June 30.

The selected financial information in the following table, for the year ended
June 30, 1999, has been audited by the Funds' independent auditors, whose
unqualified reports on the financial statements containing such information
appear in the Annual Report. In addition, the table includes unaudited financial
information for the period ended December 31, 1999, which is included in the
Funds' Semi-Annual Report dated December 31,1999. The selected financial
information in the following table for the year ended December 31, 1998 has been
audited by the Funds' independent auditors, whose unqualified reports on the
financial statements containing such information appear in the New Funds' Annual
Report to Shareholders (the "New Funds' Report") dated December 31, 1998. The
selected financial information in the following table for the year ended
December 31, 1997 has been audited by the Predecessor Funds' independent
auditors, whose unqualified reports on the financial statements containing such
information (the "Predecessor Funds' Reports") appear in the Predecessor Funds'
Annual Report to Shareholders dated December 31, 1997 (the "Predecessor Funds'
Annual Report"). Additional performance and financial data and related notes are
contained in the Annual Report, the Semi-Annual Report, the New Funds' Report
and the Predecessor Funds' Annual Reports (collectively, the "New Funds' and
Predecessor Funds' Reports"), which are available without charge upon request.
The New Funds' financial statements for the fiscal years ended June 30, 1999 and
December 31, 1998, and the Predecessor Funds' financial statements for the
fiscal year ended December 31, 1997, and the New Funds' and Predecessor Funds'
Reports, are incorporated by reference into the SAI.

Global Technology Fund, Global Biotech Fund, U.S. Value Equity Fund, U.S. Small
Cap Equity Fund, U.S. Real Estate Equity Fund, Emerging Markets Debt Fund, and
Emerging Markets Equity Fund
No financial information is presented for these Funds as they had not commenced
operations as of the date of this prospectus.

33
<PAGE>

Financial Highlights (cont).

Financial Highlights-Fiscal Years Ended June 30 and December 31; and Semi-Annual
Period Ended December 31, 1999

The following table presents financial data relating to a share of beneficial
interest outstanding throughout the periods presented. This information has been
derived from the Funds' and the Predecessor Funds' financial statements.

BRINSON GLOBAL EQUITY FUND-Class I (Commencement of Operations January 28, 1994)/2/
1995 $ 9.49 0.18 0.39 0.57 (0.04) (0.09) (0.13)
1996 $ 9.93 0.18 2.29 2.47 (0.14) (0.69) (0.83)
1997 $ 11.57 0.16 2.14 2.30 (0.12) (0.99) (1.11)
1998 $ 12.76 0.22 0.78 1.00 (0.17) (1.05) (1.22)
1999 $ 12.54 0.14/3/ 1.09 1.23 (0.17) (0.18) (0.35)
1999 (December 31st) (unaudited) $ 13.42 0.03/3/ 0.64 0.67 (0.08) (1.21) (1.29)

BRINSON GLOBAL BOND FUND-Class I (Commencement of Operations July 30, 1993)/2/
1995 $ 9.55 0.50 0.58 1.08 (0.24) - (0.24)
1996 $ 10.39 0.84 0.31 1.15 (1.40) (0.10) (1.50)
1997 $ 10.04 0.67 0.08 0.75 (0.96) (0.19) (1.15)
1998 $ 9.64 0.43/3/ (0.18) 0.25 (0.31) (0.17) (0.48)
1999 $ 9.41 0.39/3/ (0.07) 0.32 (0.47) (0.08) (0.55)
1999 (December 31st) (unaudited) $ 9.18 0.20/3/ (0.19) (0.01) (0.13) (0.01) (0.14)

BRINSON U.S. BALANCED FUND-Class I (Commencement of Operations December 30, 1994)/2/
1995 $ 10.00 0.23 1.16 1.39 (0.16) - (0.16)
1996 $ 11.23 0.44 1.04 1.48 (0.43) (0.57) (1.00)
1997 $ 11.71 0.47 1.29 1.76 (0.40) (0.54) (0.94)
1998 $ 12.53 0.49/3/ 0.93 1.42 (0.77) (0.94) (1.71)
1999 $ 12.24 0.34/3/ 0.18 0.52 (0.73) (2.65) (3.38)
1999 (December 31st) (unaudited) $ 9.38 0.14 (0.87) (0.73) (0.19) (0.06) (0.25)

BRINSON U.S. EQUITY FUND-Class I (Commencement of Operations February 22, 1994)/2/
1995 $ 9.65 0.16 1.89 2.05 (0.14) (0.03) (0.17)
1996 $ 11.53 0.17 3.31 3.48 (0.17) (0.25) (0.42)
1997 $ 14.59 0.15 4.27 4.42 (0.14) (1.23) (1.37)
1998 $ 17.64 0.19 3.39 3.58 (0.18) (1.13) (1.31)
1999 $ 19.91 0.17/3/ 2.67 2.84 (0.15) (1.12) (1.27)
1999 (December 31st) (unaudited) $ 21.48 0.06/3/ (2.90) (2.84) (0.05) (1.77) (1.82)

BRINSON U.S. LARGE CAP EQUITY FUND4-Class I (Commencement of Operations April 6, 1998)
1998 $ 10.00 0.02 (0.20) (0.18) (0.02) - (0.02)
1999 $ 9.80 0.11/3/ 1.31 1.42 (0.09) - (0.09)
1999 (December 31st) (unaudited) $ 11.13 0.05/3/ (2.01) (1.96) (0.09) (0.95) (1.04)
</TABLE>

(1) Annualized.
(2) Formerly known as the Brinson Fund Class shares; redesignated as the Brinson
Fund-Class I shares on June 30, 1997.

34
<PAGE>

BRINSON GLOBAL EQUITY FUND-Class I (Commencement of Operations January 28, 1994)/2/
1995 $ 9.93 6.06% $ 20,706 2.06% 1.00% 0.71% 1.77% 36%
1996 $ 11.57 25.66% $ 27,126 1.77% 1.00% 0.57% 1.34% 74%
1997 $ 12.76 21.26% $ 48,054 1.25% 1.00% 1.35% 1.60% 32%
1998 $ 12.54 8.99% $ 22,724 1.02% 1.00% 1.29% 1.31% 46%
1999 $ 13.42 10.14% $ 42,106 1.05% 1.00% 1.05% 1.10% 86%
1999 (December 31st)
(unaudited) $ 12.80 5.41% $ 40,734 1.05%/1/ 1.00% 0.37%/1/ 0.42%/1/ 57%

BRINSON GLOBAL BOND FUND-Class I (Commencement of Operations July 30, 1993)/2/
1995 $ 10.39 11.34% $ 51,863 1.43% 0.90% 5.53% 6.06% 199%
1996 $ 10.04 11.50% $ 41,066 1.65% 0.90% 4.98% 5.73% 184%
1997 $ 9.64 7.71% $ 54,157 1.32% 0.90% 4.90% 5.32% 235%
1998 $ 9.41 2.69% $ 91,274 0.96% 0.90% 4.47% 4.53% 151%
1999 $ 9.18 3.13% $ 92,832 0.90% N/A 4.05% N/A 138%
1999 (December 31st)
(unaudited) $ 9.05 0.10% $ 77,217 1.04%/1/ 0.96%/1/ 4.16%/1/ 4.24%/1/ 35%

BRINSON U.S. BALANCED FUND-Class I (Commencement of Operations December 30, 1994)/2/
1995 $ 11.23 13.91% $ 157,724 1.06%/1/ 0.80%/1/ 4.36%/1/ 4.63%/1/ 196%
1996 $ 11.71 13.52% $ 227,829 1.01% 0.80% 3.76% 3.97% 240%
1997 $ 12.53 15.50% $ 282,860 0.88% 0.80% 3.78% 3.86% 329%
1998 $ 12.24 12.19% $ 80,556 0.81% 0.80% 3.88% 3.89% 194%
1999 $ 9.38 4.74% $ 37,603 0.96% 0.80% 3.00% 3.16% 113%
1999 (December 31st)
(unaudited) $ 8.40 (7.83)% $ 32,263 0.95%/1/ 0.80%/1/ 2.85%/1/ 3.00%/1/ 42%

BRINSON U.S. EQUITY FUND-Class I (Commencement of Operations February 22, 1994)/2/
1995 $ 11.53 21.45% $ 42,573 1.70% 0.80% 1.09% 1.99% 33%
1996 $ 14.59 30.57% $ 126,342 1.14% 0.80% 1.13% 1.47% 36%
1997 $ 17.64 31.87% $ 337,949 0.89% 0.80% 1.06% 1.15% 43%
1998 $ 19.91 21.48% $ 605,768 0.80% N/A 1.12% N/A 42%
1999 $ 21.48 15.22% $ 713,321 0.80% N/A 0.82% N/A 48%
1999 (December 31st)
(unaudited) $ 16.82 (13.13)% $ 445,593 0.80%/1/ N/A 0.84%/1/ N/A 26%

BRINSON U.S. LARGE CAP EQUITY FUND4-Class I (Commencement of Operations April 6, 1998)
1998 $ 9.80 (1.83)% $ 154 1.59%/1/ 0.80%/1/ 0.52%/1/ 1.31%/1/ 12%
1999 $ 11.13 14.54% $ 22,668 1.29% 0.80% 0.57% 1.06% 88%
1999 (December 31st)
(unaudited) $ 8.13 (17.67)% $ 29,012 1.18%/1/ 0.80%/1/ 0.72%/1/ 1.10%/1/ 84%
</TABLE>

(3) The net investment income per share data was determined by using average
shares outstanding throughout the period.

(4) The U.S. Large Cap Equity Fund changed its name from the U.S. Large
Capitalization Equity Fund on May 2, 2000.

N/A = Not Applicable.

35
<PAGE>

Financial Highlights (cont.)

BRINSON U.S. SMALL CAP GROWTH FUND/4,7,8/-Class I (Commencement of Operations September 30, 1997)/9/
1997/6/ $ 10.00 - (0.56) (0.56) - - -
1998 (December 31st) $ 9.44 (0.02) (0.57) (0.59) (0.05) - (0.05)
1999 (June 30th) $ 8.80 (0.02) 0.40 0.38 - - -
1999 (December 31st)
(unaudited) $ 9.18 (0.01)/3/ 3.30 3.29 - - -

BRINSON U.S. BOND FUND-Class I (Commencement of Operations August 31, 1995)/2/
1996 $ 10.00 0.50 (0.14) 0.36 (0.40) (0.03) (0.43)
1997 $ 9.93 0.51/3/ 0.32 0.83 (0.52) - (0.52)
1998 $ 10.24 0.53 0.53 1.06 (0.58) (0.14) (0.72)
1999 $ 10.58 0.58/3/ (0.26) 0.32 (0.47) (0.15) (0.62)
1999 (December 31st)
(unaudited) $ 10.28 0.31/3/ (0.27) (0.04) (0.56) - (0.56)

BRINSON HIGH YIELD FUND/4,7,8/-Class I (Commencement of Operations September 30, 1997)/9/
1997/6/ $ 10.00 0.18 0.05 0.23 (0.18) - (0.18)
1998 (December 31st) $ 10.05 7.30 0.02 7.32 (7.33) (0.06) (7.39)
1999 (June 30th) $ 9.98 0.44/3/ (0.15) 0.29 (0.31) - (0.31)
1999 (December 31st)
(unaudited) $ 9.96 0.46/3/ (0.27) 0.19 (0.47) (0.07) (0.54)

BRINSON GLOBAL (EX-U.S.) EQUITY FUND-Class I (Commencement of Operations August 31, 1993)/2,3,5/
1995 $ 9.69 0.15 (0.16) (0.01) - - -
1996 $ 9.68 0.18 2.05 2.23 (0.18) (0.56) (0.74)
1997 $ 11.17 0.18 1.97 2.15 (0.17) (0.56) (0.73)
1998 $ 12.59 0.18 0.30 0.48 (0.18) (0.74) (0.92)
1999 $ 12.15 0.16 0.27 0.43 (0.12) (0.12) (0.24)
1999 (December 31st)
(unaudited) $ 12.34 0.04/3/ 1.95 1.99 (0.07) (0.14) (0.21)
</TABLE>

(1) Annualized.

(2) Formerly known as the Brinson Fund Class shares; redesignated as the Brinson
Fund-Class I shares on June 30, 1997.

(3) The net investment income per share data was determined by using average
shares outstanding throughout the period.

(5) The Global (Ex-U.S.) Equity Fund changed its name from the Non-U.S. Equity
Fund on December 10, 1998.

(6) For the period from commencement of operations to December 31, 1997.

(7) Prior to the Reorganizations, each of these Series operated as a separate
portfolio of UBS Private Investor Funds, Inc. and invested all of its respective
investable assets in an affiliated investment company with an identical
investment objective. The U.S.

<PAGE>

BRINSON U.S. LARGE CAP GROWTH FUND/4,7,8/-Class I (Commencement of Operations October 14, 1997)/9/
1997/6/ $ 9.92 (0.55)% $ 4,137 8.54%/1/ 1.00%/1/ (6.19)%/1/ 1.35%/1/ N/A
1998 (December 31st) $ 11.84 24.90% $ 4,147 2.76% 0.99% (1.40)% 0.37% N/A
1999 (June 30th) $ 13.91 17.48% $ 2,947 2.38%/1/ 0.80%/1/ (1.26)%/1/ 0.32% 51%
1999 (December 31st)
(unaudited) $ 14.69 12.98% $ 3,767 2.17%/1/ 0.80%/1/ (1.29)%/1/ 0.08%/1/ 46%

BRINSON U.S. SMALL CAP GROWTH FUND/4,7,8/-Class I (Commencement of Operations September 30, 1997)/9/
1997/6/ $ 9.44 (5.62)% $ 11,954 3.63%/1/ 1.20%/1/ (2.53)%/1/ (0.10)%/1/ N/A
1998 (December 31st) $ 8.80 (6.70)% $ 22,607 1.69% 1.20% (0.76)% (0.27)% N/A
1999 (June 30th) $ 9.18 4.32% $ 35,211 1.32%/1/ 1.15%/1/ (0.62)%/1/ (0.45)%/1/ 71%
1999 (December 31st)
(unaudited) $ 12.47 35.84% $ 45,915 1.34%/1/ 1.15%/1/ (0.75)%/1/ (0.56)%/1/ 69%

BRINSON U.S. BOND FUND-Class I (Commencement of Operations August 31, 1995)/2/
1996 $ 9.93 3.60% $ 9,047 3.63%/1/ 0.60%/1/ 3.00%/1/ 6.03%/1/ 363%
1997 $ 10.24 8.45% $ 22,421 1.65% 0.60% 5.14% 6.19% 410%
1998 $ 10.58 10.60% $ 38,874 0.84% 0.60% 5.61% 5.85% 198%
1999 $ 10.28 2.97% $ 92,030 0.61% 0.60% 5.42% 5.43% 260%
1999 (December 31st)
(unaudited) $ 9.76 0.36% $ 74,461 0.61%/1/ 0.60%/1/ 5.94%/1/ 5.95%/1/ 103%

BRINSON HIGH YIELD FUND/4,7,8/-Class I (Commencement of Operations September 30, 1997)/9/
1997/6/ $ 10.05 2.34% $ 7,861 4.98%/1/ 0.90%/1/ 3.15%/1/ 7.23%/1/ N/A
1998 (December 31st) $ 9.98 7.75% $ 34,900 1.59% 0.89% 7.38% 8.08% N/A
1999 (June 30th) $ 9.96 2.91% $ 60,044 0.83%/1/ 0.70%/1/ 8.54%/1/ 8.67%/1/ 77%
1999 (December 31st)
(unaudited) $ 9.61 1.89% $ 53,461 0.83%/1/ 0.70%/1/ 9.14%/1/ 9.27%/1/ 29%

BRINSON GLOBAL (EX-U.S.) EQUITY FUND-Class I (Commencement of Operations August 31, 1993)/2,3,5/
1995 $ 9.68 (0.10)% $148,319 1.23% 1.00% 1.93% 2.16% 14%
1996 $ 11.17 23.64% $212,366 1.20% 1.00% 1.67% 1.87% 20%
1997 $ 12.59 20.27% $420,855 1.00% N/A 1.83% N/A 25%
1998 $ 12.15 4.78% $439,329 1.00% N/A 1.52% N/A 49%
1999 $ 12.34 3.65% $490,322 0.99% N/A 1.35% N/A 74%
1999 (December 31st)
(unaudited) $ 14.12 16.29% $522,621 0.98%/1/ N/A 0.33%/1/ N/A 32%
</TABLE>

Large Cap Growth Fund invested solely in the UBS Investor Portfolios Trust-UBS
Large Cap Growth Portfolio; the U.S. Small Cap Growth Fund invested solely in
the UBS Investor Portfolios Trust-UBS Small Cap Portfolio; and the High Yield
Fund invested solely in the UBS Investor Portfolios Trust-UBS High Yield Bond
Portfolio. The funds in which each of these Series invested are referred to
herein as the "Master Funds." The ratios set forth in this Financial Highlights
table for each of these Series include the Series' share of its respective
Master Fund's expenses. The annualization of these ratios is also affected by
the fact that the Investment Advisory Agreement and Investment Sub-Advisory
Agreement to which these Series were subject prior to the Reorganizations were
not ratified until December 29, 1997. Prior to that date, investment advisory
services were being provided without compensation.

(8) Prior to the Reorganizations, U.S. Large Cap Growth Fund, U.S. Small Cap
Growth Fund and High Yield Fund had a fiscal year end of December 31.

(9) Reflects 10 for 1 share split effective December 9, 1998.

N/A=Not Applicable.

<PAGE>

For More Information

More information on The Brinson Funds is available free upon request:

Shareholder Reports
Additional information about the Funds' investments is available in the Funds'
annual and semi-annual reports to shareholders. In the Funds' annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected each Fund's performance during its last fiscal year.

Statement of Additional Information ("SAI")
The SAI provides more details about each Fund and its policies. The SAI is on
file with the Securities and Exchange Commission ("SEC") and is incorporated by
reference into (is legally considered part of) this prospectus.

TO OBTAIN INFORMATION:

By Telephone
Call 1-800-448-2430

By Mail
The Brinson Funds
P.O. Box 2798
Boston, MA 02208-2798

By Email
[email protected]

On The Internet
Text-only versions of the prospectus and other documents pertaining to the Funds
can be viewed online or downloaded from:

SEC:http://www.sec.gov

Brinson Partners: http://www.ubsbrinson.com

Information about the Funds (including the SAI) can also be reviewed and copied
at the SEC's public reference room in Washington, DC (phone 1-800-SEC-0330). Or,
you can obtain copies of this information by sending a request, along with a
duplicating fee, to the SEC's Public Reference Section, Washington, DC 20549-
6009, or by electronic request at [email protected].

The Funds are series of The Brinson Funds;
Registration Number: 811-6637
<PAGE>

[BRINSON LOGO GOES HERE] The Brinson Funds

- -------------------------------------------------------
209 South LaSalle Street . Chicago, Illinois 60604-1295
Tel: 1-800-448-2430

<PAGE>

The Brinson Funds

Global Fund

Global Equity Fund

Global Technology Fund

Global Biotech Fund

Global Bond Fund

U.S. Balanced Fund

U.S. Equity Fund

U.S. Value Equity Fund

U.S. Large Cap Equity Fund

U.S. Large Cap Growth Fund

U.S. Small Cap Equity Fund

U.S. Small Cap Growth Fund

U.S. Real Estate Equity Fund

U.S. Bond Fund

High Yield Fund

Emerging Markets Debt Fund

Global (Ex-U.S.) Equity Fund

Emerging Markets Equity Fund

Class N Shares
Prospectus

May 2, 2000

Table of Contents

<TABLE>
<CAPTION>
<S> <C>
The Brinson Investment Process............ 2

Overview of the Funds
Global Fund............................ 3
Global Equity Fund..................... 4
Global Technology Fund................. 5
Global Biotech Fund.................... 6
Global Bond Fund....................... 7
U.S. Balanced Fund..................... 8
U.S. Equity Fund....................... 9
U.S. Value Equity Fund................. 10
U.S. Large Cap Equity Fund............. 11
U.S. Large Cap Growth Fund............. 12
U.S. Small Cap Equity Fund............. 13
U.S. Small Cap Growth Fund............. 14
U.S. Real Estate Equity Fund........... 15
U.S. Bond Fund......................... 16
High Yield Fund........................ 17
Emerging Markets Debt Fund............. 18
Global (Ex-U.S.) Equity Fund........... 19
Emerging Markets Equity Fund........... 20

Risk Considerations....................... 21

Fees and Expenses......................... 24

Investment Advisor........................ 26

Pricing of Fund Shares.................... 27

Purchasing Shares......................... 28

Redeeming Shares.......................... 30

Dividends and Distributions............... 31

Tax Considerations........................ 32

Distribution Arrangements................. 32

Financial Highlights...................... 33
</TABLE>
1
<PAGE>

Overview of the Funds

A Look At The Brinson Investment Process
At Brinson Partners, Inc. ("Brinson Partners" or the "Advisor"), we believe that
the fundamental value of any investment is related to the future cash flows
that it will generate for its investors. We believe that this determination must
be made within a framework of globally integrated capital markets. World
economies and financial markets are interactive. Thus, investment management,
both within and across global stock and bond markets, must be based upon
comprehensive knowledge and analysis of integrated investment fundamentals.

Equity Selections
Core/Value Equity Funds
Our Core/Value equity process focuses on identifying discrepancies between
securities' fundamental values and their observed market prices. For each stock
under our analysis, we estimate an intrinsic or fundamental value using
disciplined quantitative techniques that incorporate our team of analysts'
considerations of company management, competitive advantage, and each company's
core competencies. These value estimates are then compared to current market
prices and ranked against the other stocks in our valuation universe. Portfolios
are constructed by focusing on those stocks that rank in the top 20% of the
valuation output. The Fund's risk is carefully monitored, with consideration
given to market sensitivity, common factor exposures, industry weightings and
individual stock selection.

Growth Equity Funds
Brinson Partners also manages portfolios against growth-oriented equity
benchmarks. In the growth universe, we seek to invest in companies that possess
a dominant market position and franchise, a major technical edge or a unique
competitive advantage. Factors employed in our quantitative disciplines include
earnings revisions, favorable analyst diffusion trends, positive stock price
momentum and sales acceleration. Our seasoned investment professionals then
conduct intensive fundamental research on the universe of companies identified
as attractive by our quantitative models. Portfolios are constructed and
monitored with close adherence to risk control guidelines.

Specialized Sector Funds
In response to changing market conditions and to the varied and dynamic needs of
our clients, we offer several specialized sector Funds. These Funds are
diversified among narrower market segments than our core/value and growth Funds,
and are intended to compliment a diversified investment program. Security
selection for these Funds is driven by relative valuation attractiveness over
other securities within the specified sector. Investment decisions rely on
quantitative analysis and screening, as well as fundamental research and
valuation work.

Fixed Income Selections

We use an internally developed valuation model for fixed income selections for
our Funds, which quantifies our return expectations for all of the bond
markets. Inputs to this model include forecasts of inflation, risk premiums and
interest rates. Our credit review process incorporates both a top-down strategy,
which focuses on how macroeconomic forces shape various industry outlooks, and a
bottom-up strategy, which relies on a combination of qualitative and
quantitative factors. Our qualitative assessment focuses on management strength,
market position, competitive environment and financial flexibility. Our
quantitative assessment focuses on historical operating results, calculation of
various credit ratios and an expected future outlook. With the exception of the
High Yield Fund, our fixed income selections generally include all categories of
investment grade fixed income securities, but emphasize the higher quality
securities in this spectrum (those with a credit rating of AA and above). Our
fixed income strategies combine judgments about the absolute value of the fixed
income universe and the relative value of issuer sectors, maturity intervals,
duration of securities, quality and coupon segments and specific fixed income
securities.

Cash and Cash Equivalents
Each Fund may invest in cash or cash equivalent instruments, including units of
an affiliated money market fund. See the Statement of Additional Information for
further information.

2
<PAGE>

Global Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income.

Principal Strategies

All security selection decisions are made relative to the Global Securities
Markets Index (GSMI) Mutual Fund Index, the benchmark against which the Fund
measures its portfolio.

The Fund may invest in different types of securities in order to access these
markets.

Other investments may include other open-end investment companies advised by
Brinson Partners.

The Fund's portfolio turnover rate may exceed 100%.

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

8.00% 1.18%
- -------------------
98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was -1.17%.

Best Quarter: Q4 1998 7.61%
Worst Quarter: Q3 1998 -5.33%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
Performance
1 5 10 Inception
Year Year Year (6/30/97)
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Global Fund 1.18% - - 4.34%
Salomon Smith Barney World -4.26% - - 4.65%
Government Bond Index
MSCI World Equity (Free) Index 25.12% - - 19.61%
GSMI Mutual Fund Index 16.85% - - 14.58%
</TABLE>

GSMI Mutual Fund Index
An unmanaged index compiled by Brinson Partners, currently constructed as
follows:

<S> <C>
40% Wilshire 5000 9% Salomon Smith Barney
Equity Index Non-U.S. Gov't.
22% MSCI World Ex USA Bond Index
(Free) Index 3% Merrill Lynch High Yield
21% Salomon Smith Barney Master Index
BIG Bond Index 3% MSCI Emerging Markets
Free Index
2% JP Morgan EMBI+
</TABLE>

From time to time, underlying indices may change.

MSCI World Equity (Free) Index

Salomon Smith Barney World Government Bond Index

A securities index that represents the broad global fixed income markets and
includes debt issues of U.S. and most developed global (ex-U.S.) governments,
governmental entities and supranationals.

3
<PAGE>

Global Equity Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income.

Principal Strategies

Although it may invest anywhere in the world, the Fund invests primarily in
equity markets listed in the Morgan Stanley Capital International ("MSCI")
World Equity (Free) Index, the benchmark against which the Fund measures its
portfolio.

Investments in equity securities may include:
* Common stock
* Preferred stock

Fund Performance
The chart and table which follow give an indication of the Fund's risks and
performance. The chart shows you how the Fund's performance has varied from
year to year. The table compares the Fund's performance over time to that of a
broad measure of market performance. When you consider this information, please
remember that the Fund's past performance is not necessarily an indication of
how it will perform in the future.

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

13.63% 12.59%
- -----------------------
98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was -5.56%.

Best Quarter: Q4 1998 14.16%
Worst Quarter: Q3 1998 -10.06%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
Performance
1 5 10 Inception
Year Year Year (6/30/97)
- ------------------------------------------------------------
<S> <C> <C> <C> <C>
Global Equity Fund 12.59% - - 9.51%
MSCI World Equity 25.12% - - 19.61%
(Free) Index
</TABLE>

MSCI World Equity (Free) Index

4
<PAGE>

Global Technology Fund

Objective
The Fund seeks to provide long-term capital appreciation.

Principal Strategies

The Fund's benchmark is the Morgan Stanley High Tech Index.

Investments in equity securities may include:
* Common stock
* Preferred stock

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Technology Companies
Technology companies develop, sell, or significantly benefit from the use of
technology products and services. The term technology includes electronics, data
processing, semi-conductors, telecommunications, and technology services.

Morgan Stanley High Tech Index
The Morgan Stanley High Tech Index is an equal dollar-weighted index of 35
stocks from 9 technology subsectors: computer services, design software, server
software, PC software and new media, networking and telecom equipment, server
hardware, PC hardware and peripherals, specialized systems, and semiconductors.
The index was developed with a base value of 200 as of December 16, 1994, and is
rebalanced annually.

5
<PAGE>

Global Biotech Fund

Objective
The Fund seeks to provide long-term capital appreciation.

Principal Strategies
Under normal circumstances, the Fund invests at least 65% of its assets in
equity securities of biotechnology companies. The Fund employs a specialized
sector strategy, and is a non-diversified portfolio.

Investments in equity securities may include:
* Common stock
* Preferred stock

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Biotechnology Companies
Companies focusing on research, product development, product manufacture and
distribution in the biotechnology sector. The majority of companies are newly
established and have a single product in its early development stage.

NASDAQ Biotech Index
The NASDAQ Biotech Index is a capitalization-weighted index of 200 biotechnology
stocks listed on the NASDAQ exchange. The index was developed with a base value
of 200 as of November 1, 1993.

6
<PAGE>

Global Bond Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income.

Principal Strategies

Normally, at least 65% of the Fund's assets are invested in long-term debt
securities of issuers in at least three countries (which may include the United
States).

Investments in fixed income securities may include:
* Debt securities of the U.S. government, its agencies and instrumentalities
* Debt securities of global (ex-U.S.) governments
* Debt securities of corporations
* Mortgage-backed securities

* Asset-backed securities

The Fund's portfolio turnover rate may exceed 100%.

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

11.83% -6.58%
- --------------------
98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was -1.09%.

Best Quarter: Q3 1998 5.85%
Worst Quarter: Q1 1999 -3.44%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
Performance
1 5 10 Inception
Year Year Year (6/30/97)
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Global Bond Fund -6.58% - - 2.09%
Salomon Smith Barney -4.26% - - 4.65%
World Government
Bond Index
</TABLE>

Long-Term Debt
Debt securities with an initial maturity of more than one year.

Salomon Smith Barney World Government Bond Index

A securities index that represents the broad global fixed income markets and
includes debt issues of U.S. and most developed global (ex-U.S.) governments,
governmental entities and supranationals.

7
<PAGE>

U.S. Balanced Fund

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income.

Principal Strategies

All selection decisions are made relative to the U.S. Balanced Mutual Fund
Index, the benchmark against which the Fund measures its portfolio.

Investments in equity securities may include:

* Common stock
* Preferred stock

Investments in fixed income securities may include:

* Debt securities of the U.S. government, its agencies and instrumentalities
* Debt securities of U.S. corporations

* Mortgage-backed securities
* Asset-backed securities
* When-issued securities

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

9.92% -7.43%
- --------------------------------------
98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was -0.95%.

Best Quarter: Q1 1998 5.71%
Worst Quarter: Q3 1999 -5.12%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (6/30/97)
- ---------------------------------------------------------------
U.S. Balanced Fund -7.43% - - 2.96%
Salomon Smith Barney -0.84% - - 5.63%
BIG Bond Index
Wilshire 5000 23.56% - - 23.70%
Equity Index
U.S. Balanced Mutual 14.66% - - 17.51%
Fund Index
</TABLE>

U.S. Balanced Mutual Fund Index

Compiled by Brinson Partners, this unmanaged index represents a fixed composite
of 65% Wilshire 5000 Equity Index and 35% Salomon Smith Barney Broad Investment
Grade (BIG) Bond Index.

From time to time, underlying indices may change.

Wilshire 5000 Equity Index

Salomon Smith Barney Broad Investment Grade (BIG) Bond Index

A broad-based index that includes U.S. bonds with over one year to maturity.

8
<PAGE>

U.S. Equity Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

Principal Strategies

The Fund employs a core/value equity strategy. Normally, the Fund invests at
least 65% of its assets in equity securities, which may include dividend-paying
securities, of U.S. companies.

All selection decisions are made relative to the Wilshire 5000 Equity Index, the
benchmark against which the Fund measures its portfolio.

Investments in equity securities may include:
* Common stock
* Preferred stock

Fund Performance
The chart and table which follow give an indication of the Fund's risks and
performance. The chart shows you how the Fund's performance has varied from
year to year. The table compares the Fund's performance over time to that of a
broad measure of market performance. When you consider this information, please
remember that the Fund's past performance is not necessarily an indication of
how it will perform in the future.

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

17.99% -4.22%
- --------------------------------------------------
98 99

*The Fund's total return for the period January 1, 2000 through March 31, 2000
was -5.97%.

Best Quarter: Q4 1998 16.28%
Worst Quarter: Q3 1999 -14.31%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
Performance
1 5 10 Inception
Year Year Year (6/30/97)
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Equity Fund -4.22% - - 7.77%
Wilshire 5000 Equity 23.56% - - 23.70%
Index
</TABLE>

Wilshire 5000 Equity Index
A broad-based, market capitalization weighted index that includes all U.S.
common stocks. It is designed to provide a representative indication of the
capitalization and return for the U.S. equity market.

9
<PAGE>

U.S. Value Equity Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

Principal Strategies

The Fund invests primarily in securities in the Russell 1000(R) Value Index, the
benchmark against which the Fund measures its portfolio.

Investments in equity securities may include:
* Common stock
* Preferred stock

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Russell 1000(R) Value Index
The Russell 1000(R) Index measures the performance of the 1,000 largest
companies in the Russell 3000 Index, which represents approximately 92% of the
total market cap of the Russell 3000 Index. As of the latest reconstitution, the
average market cap of the Russell 1000(R) Index was approximately $12.1 billion;
the median market cap was approximately $3.8 billion. The smallest company in
the index had an approximate market cap of $1,350.8 million. The Russell
1000(R) Value Index measures the performance of those Russell 1000 companies
with lower price-to-book ratios and lower forecasted growth values.

10
<PAGE>

U.S. Large Cap Equity Fund
(formerly the U.S. Large Capitalization Equity Fund)

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

Principal Strategies

The Fund employs a core/value equity strategy. Under normal circumstances, the
Fund invests at least 65% of its assets in equity securities of U.S. large cap
companies. The Fund is a non-diversified portfolio.

All selection decisions are undertaken relative to the Standard & Poor's 500
Equity Index ("S&P 500 Index"), the benchmark against which the Fund measures
its portfolio.

Investments in equity securities may include:
* Common stock
* Preferred stock

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance
The chart and table which follow give an indication of the Fund's risks and
performance. The chart shows the Fund's performance over the past year. The
table compares the Fund's performance over time to that of a broad measure of
market performance. When you consider this information, please remember that
the Fund's past performance is not necessarily an indication of how it will
perform in the future.

Annual Total Return for the period ended 12/31*

[BAR CHART APPEARS HERE]

-11.12%
- ---------------------------------------------
99

* The Fund's total return for the period January 1, 2000
through March 31, 2000 was -9.55%.

Best Quarter: Q4 1998 15.41%
Worst Quarter: Q3 1999 -15.36%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
Performance
1 5 10 Inception
Year Year Year (4/30/98)
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Large Cap
Equity Fund -11.12% - - -3.74%
S & P 500 Index 21.04% - - 19.85%
</TABLE>

11
<PAGE>

U.S. Large Cap Growth Fund
(formerly the U.S. Large Capitalization Growth Fund)

Objective

The Fund seeks to provide long-term capital appreciation.

Principal Strategies

The Fund employs a growth equity strategy, and invests primarily in a portfolio
of equity securities of large cap growth companies. The Fund is a
non-diversified portfolio.

All selection decisions are made relative to the Russell 1000(R) Growth Index,
the benchmark against which the Fund measures its portfolio.

* Normally, at least 65% of the Fund's assets are invested in securities issued
by large cap growth companies.
* Up to 20% of the Fund's assets may be invested in foreign securities.

Investments in equity securities may include:

* Common stock
* Preferred stock

Fund Performance

The chart and table which follow give an indication of the Fund's risks and
performance. The chart shows the Fund's performance over the past year. The
table compares the Fund's performance over time to that of a broad measure of
market performance. When you consider this information, please remember that the
Fund's past performance is not necessarily an indication of how it will perform
in the future.

Annual Total Return for the period ended 12/31*

[BAR CHART APPEARS HERE]

32.22%
- ----------------------------------
99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was 7.11%.

Best Quarter: Q4 1999 21.92%

Worst Quarter: Q3 1999 -7.49%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (12/31/98)
- ---------------------------------------------------------------
U.S. Large Cap 32.22% - - 32.22%
Growth Fund

Russell 1000(R) 33.16% - - 33.16%
Growth Index

S&P 500 Index(1) 21.04% - - 21.04%
</TABLE>

(1) The Advisor has changed the Fund's benchmark index from the S&P 500 Index to
the Russell 1000(R) Growth Index based on the Advisor's determination that the
Russell 1000(R) Growth Index is more representative of the Fund's investment
strategies.

Large Cap Growth Companies

Companies with market caps in the upper 65% of the Wilshire 5000 Equity Index.
Companies whose capitalization falls below this level after purchase will
continue to be considered large cap growth companies.

Non-Diversified Portfolio

Russell 1000(R) Growth Index

The Russell 1000(R) Index measures the performance of the 1,000 largest
companies in the Russell 3000 Index, which represents approximately 92% of the
total market cap of the Russell 3000 Index. As of the latest reconstitution, the
average market cap of the Russell 1000(R) Index was approximately $12.1 billion;
the median market cap was approximately $3.8 billion. The smallest company in
the index had an approximate market cap of $1,350.8 million. The Russell
1000(R) Growth Index measures the performance of those Russell 1000 companies
with higher price-to-book ratios and higher forecasted growth values.

12
<PAGE>

U.S. Small Cap Equity Fund

Objective
The Fund seeks to maximize total U.S. dollar return, consisting of capital
appreciation and current income, while controlling risk.

Principal Strategies
The Fund employs a core/value equity strategy, and will invest primarily in
publicly traded companies represented in the Wilshire Small Stock Index.

All selection decisions are made relative to the Wilshire Small Stock Index, the
benchmark against which the Fund measures its portfolio.

* Normally, at least 65% of the Fund's assets are invested in equity securities
issued by U.S. small cap companies.

Investments in equity securities may include:
* Common stock
* Preferred stock

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Small Cap Companies
Companies with market caps in the lower 10% of the Wilshire 5000 Equity Index.

Wilshire Small Stock Index
This benchmark represents approximately the smallest 10% of the Wilshire 5000
Equity index in terms of capitalization. The Wilshire 5000 Equity Index is a
broad-based, market cap weighted index that includes all U.S. common stocks.

13
<PAGE>

U.S. Small Cap Growth Fund
(formerly the U.S. Small Capitalization Growth Fund)

Objective
The Fund seeks to provide long-term capital appreciation.

Principal Strategies
The Fund employs a growth equity strategy. Under normal conditions, the Fund
invests at least 65% of its assets in equity securities of U.S. small cap
companies.

All selection decisions are made relative to the Russell 2000 Growth Index, the
benchmark against which the Fund measures its portfolio.

The Fund may also invest in securities of emerging growth companies. The Fund
may invest up to 20% of its assets in foreign securities.

Investments in equity securities may include:
* Common stock
* Preferred stock

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance
The chart and table which follow give an indication of the Fund's risks and
performance. The chart shows you the Fund's performance over the past year. The
table compares the Fund's performance over time to that of a broad measure of
market performance. When you consider this information, please remember that
the Fund's past performance is not necessarily an indication of how it will
perform in the future.

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

41.14%
- ------
99

* The Fund's total return for the period January 1, 2000 through March 31,
2000 was 22.30%.

Best Quarter: Q4 1999 32.83%
Worst Quarter: Q1 1999 -6.48%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
Performance
1 5 10 Inception
Year Year Year (12/31/98)
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Small Cap 41.14% - - 41.14%
Growth Fund
Russell 2000 Growth 43.09% - - 43.09%
Index
Russell 2000 Index(1) 21.26% - - 21.26%
</TABLE>

(1) The Advisor has changed the Fund's benchmark index from the Russell 2000
Index to the Russell 2000 Growth Index based on the Advisor's determination
that the Russell 2000 Growth Index is more representative of the Fund's
investment strategies.

Small Cap Companies
Companies with market caps in the lower 10% of the Wilshire 5000 Equity Index.

Russell 2000 Growth Index
An unmanaged index composed of those companies in the Russell 2000 Index with
higher price-to-book ratios and higher forecasted growth values. The Russell
2000 Index is an index composed of the 2,000 smallest companies in the Russell
3000 Index, which represents approximately 8% of the total market
capitalization of the Russell 3000 Index.

14
<PAGE>

U.S. Real Estate Equity Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

Principal Strategies
The Fund employs a specialized sector strategy. Normally, the Fund invests at
least 65% of its assets in real estate equity securities, including real estate
investment trusts (REITs). The Fund is a non-diversified portfolio.

Although the Fund may invest in any real estate related security, the Morgan
Stanley REIT Index serves as its benchmark.

Investments in equity securities may include:
* Common stock
* Preferred stock

Given that the Fund invests primarily in securities issued by REITs, there is
a risk that changes in real estate values or economic downturns can have a
substantial impact on the Fund's investments.

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

REITs
Publicly traded companies that own and often operate real property and/or invest
in mortgage and mortgage-backed securities.

Morgan Stanley REIT Index
The Morgan Stanley REIT Index is a total-return index comprised of the most
actively-traded real estate investment trusts and is designed to be a measure
of real estate equity performance. The index was developed with a base value of
200 as of December 31, 1994.

15
<PAGE>

U.S. Bond Fund

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

Principal Strategies
The Fund employs a fixed income strategy, and invests primarily in a
portfolio of investment-grade fixed income securities that may also provide the
potential for capital appreciation. As a matter of fundamental policy, under
normal circumstances, at least 65% of the Fund's total assets are invested in
U.S. long-term debt securities

All selection decisions are made relative to the Salomon Smith Barney Broad
Investment Grade (BIG) Bond Index, the benchmark against which the Fund measures
its portfolio.

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance
The chart and table which follow give an indication of the Fund's risks and
performance. The chart shows you how the Fund's performance has varied from
year to year. The table compares the Fund's performance over time to that of a
broad measure of market performance. When you consider this information, please
remember that the Fund's past performance is not necessarily an indication of
how it will perform in the future.

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

8.25% -1.45%
- --------------
98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was 1.84%.

Best Quarter: Q3 1997 3.52%
Worst Quarter: Q2 1999 -1.30%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
Performance
1 5 10 Inception
Year Year Year (6/30/97)
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Bond Fund -1.45% - - 5.24%
Salomon Smith Barney -0.84% - - 5.63%
BIG Bond Index
</TABLE>

Long-Term Debt
Debt securities with an initial maturity of more than one year.

Salomon Smith Barney
Broad Investment Grade (BIG) Bond Index
A broad-based index that includes U.S. bonds with over one year to maturity.

16
<PAGE>

High Yield Fund

Principal Strategies
The Fund employs a fixed income strategy, and invests primarily in a
portfolio of U.S. higher-yielding, lower-rated bonds:
* Under normal conditions, at least 65% of the Fund's assets are invested in
fixed income securities that provide higher yields and are "lower-rated"
* Up to 25% of the Fund's assets may be invested in foreign securities

All selection decisions are undertaken relative to the Merrill Lynch High Yield
Master Index, the benchmark against which the Fund measures its portfolio.

Investments in fixed income securities may include:
* Debt securities of corporations
* Zero coupon securities
* Asset-backed securities
* When-issued securities
* Eurodollar securities

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance
The chart and table which follow give an indication of the Fund's risks and
performance. The chart shows you the Fund's performance over the past year. The
table compares the Fund's performance over time to that of a broad measure of
market performance. When you consider this information, please remember that the
Fund's past performance is not necessarily an indication of how it will perform
in the future.

Annual Total Returns for the periods ended 12/31*

[BAR CHART GOES HERE]

4.53%
- -----
99

* The Fund's total return for the period January 1, 2000 through March 31,
2000 was -3.85%.

Best Quarter: Q1 1999 3.91%
Worst Quarter: Q1 2000 -3.85%

Average Annual Total Returns
(for the periods ended 12/31/99)

Performance
1 5 10 Inception
Year Year Year (12/31/98)
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
High Yield Fund 4.53% - - 4.53%
Merrill Lynch High Yield 1.57% - - 1.57%
Master Index
</TABLE>

Lower-Rated Bonds
Bonds rated in the lower rating categories of Moody's and S&P, including
securities rated:

* Ba or lower by Moody's or
* BB or lower by S&P.
Securities rated in these categories or lower are considered to be of poorer
quality and predominantly speculative.

Merrill Lynch High Yield Master Index
An index of publicly placed non-convertible, coupon-bearing U.S. domestic debt
with a term to maturity of at least one year.

17
<PAGE>

Emerging Markets Debt Fund

Objective
The Fund seeks to maximize total U.S. dollar return, consisting of capital
appreciation and current income, while controlling risk.

Principal Strategies
The Fund employs a fixed income strategy, and intends to invest primarily in
a portfolio of debt securities of issuers located in at least three emerging
markets countries, which may be located in Asia, Europe, Latin America, Africa
or the Middle East. As these markets change and other countries' markets
develop, the Fund expects the countries in which it invests to change. The Fund
is a non-diversified portfolio.

All selection decisions are undertaken relative to the J.P. Morgan Emerging
Markets Bond Index Plus, the benchmark against which the Fund measures its
portfolio.

A substantial amount of the assets of the Fund may be invested in
higher-yielding, lower-rated bonds.

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Lower-Rated Bonds
Bonds rated in the lower rating categories of Moody's and S&P, including
securities rated:
. Ba or lower by Moody's or
. BB or lower by S&P.
Securities rated in these categories or lower are considered to be of poorer
quality and predominantly speculative.

J.P. Morgan Emerging Markets Bond Index Plus
Comprised of external-currency-denominated emerging markets debt, including
Brady Bonds, loans, Eurobonds and local market instruments.

18
<PAGE>

Global (Ex-U.S.) Equity Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income, by investing primarily in the equity securities of global
(ex-U.S.) issuers.

Principal Strategies
The Fund employs a core/value equity strategy. Normally, the Fund invests at
least 65% of its assets in equity securities of issuers in at least three
countries other than the United States.

Although it may invest anywhere in the world, the Fund invests primarily in the
equity markets listed in the Morgan Stanley Capital International ("MSCI")
World Ex USA (Free) Index, the benchmark against which the Fund measures its
portfolio.

Investments in equity securities may include:
* Common stock
* Preferred stock

Fund Performance
The chart and table which follow give an indication of the Fund's risks and
performance. The chart shows you how the Fund's performance has varied from
year to year. The table compares the Fund's performance over time to that of a
broad measure of market performance . When you consider this information, please
remember that the Fund's past performance is not necessarily an indication of
how it will perform in the future.

Annual Total Returns for the periods ended 12/31*

[BAR CHART GOES HERE]

13.96% 18.90%
- ---------------
98 99

* The Fund's total return for the period January 1, 2000 through March 31,
2000 was -4.32%.

Best Quarter: Q4 1998 16.86%
Worst Quarter: Q3 1998 -13.67%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
Performance
1 5 10 Inception
Year Year Year (6/30/97)
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------
Global (Ex-U.S.) Equity 18.90% - - 9.44%
Fund
MSCI World Ex USA 27.77% - - 14.13%
(Free) Index

</TABLE>

MSCI World Ex USA (Free) Index
An unmanaged, market driven broad based securities index which includes global
(ex-U.S.) equity markets in terms of capitalization and performance.

19
<PAGE>

Emerging Markets Equity Fund

Objective
The Fund seeks to maximize total U.S. dollar return, consisting of capital
appreciation and current income, while controlling risk.

Principal Strategies
The Fund employs a core/value equity strategy, and intends to invest
primarily in a portfolio of equity securities of issuers located in at least
three emerging markets countries, which may be located in Asia, Europe, Latin
America, Africa or the Middle East. As these markets change and other
countries' markets develop, the Fund expects the countries in which it invests
to change. The Fund is a non-diversified portfolio.

All selection decisions are undertaken relative to the Morgan Stanley Capital
International (MSCI) Emerging Markets (Free) Index, the benchmark against which
the Fund measures its portfolio.

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Morgan Stanley Capital International (MSCI)
Emerging Markets (Free) Index
A market capitalization weighted index which captures 60% of a country's total
capitalization while maintaining the overall risk structure of the market.
Stocks are included at their full market capitalization weight, and the index
reflects actual buyable opportunities for the non-domestic investor.

20
<PAGE>

Risk Considerations

The chart below illustrates the primary risks of investing in the Funds.

<PAGE>

Risk Considerations (cont.)

All Fund investments are subject to risk and may decline in value. Each Fund's
exposure depends upon its specific investment practices. The amount and types
of risk vary depending on:

* The investment objective(s)
* The Fund's ability to achieve its objectives
* The markets in which the Fund invests
* The investments the Fund makes in those markets
* Prevailing economic conditions over the period of an investment

Please note that there are other circumstances that could adversely affect your
investment and potentially prevent a Fund from achieving its objectives.

Credit Risk

The risk that the issuer of a security, or the counterparty to a contract, will
default or otherwise be unable to honor a financial obligation. Debt securities
rated below investment-grade are especially susceptible to this risk.

Foreign Country and Currency Risks

The risk that prices of a Fund's investments in foreign securities may go down
because of unfavorable foreign government actions, political instability or the
absence of accurate information about foreign issuers. Also, a decline in the
value of foreign currencies relative to the U.S. dollar will reduce the value of
securities denominated in those currencies. Foreign securities are sometimes
less liquid and harder to value than securities of U.S. issuers. These risks are
more severe for securities of issuers in emerging markets countries.

Geographic Concentration Risk

The risk that if a Fund has most of its investments in a single country or
region, its portfolio will be more susceptible to factors adversely affecting
issuers located in that country or region than would a more geographically
diverse portfolio of securities.

High Yield Risk

The risk that the issuer of bonds with ratings of BB (S&P) or Ba (Moody's) or
below will default or otherwise be unable to honor a financial obligation. These
securities are considered to be of poor standing and are predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligations and involve major risk
exposure. Bonds in this category may also be called "high yield bonds" or "junk
bonds."

Industry Concentration Risk

The risk that changes in economic, political or other conditions may have a
particularly negative effect on issuers in an industry in which a Fund's
investments are concentrated.

Each Fund's primary investment practices and strategies are discussed in this
prospectus. Other practices, and their related risks, are described in the
Statement of Additional Information ("SAI").

<PAGE>

Risk Considerations (cont.)

Interest Rate Risk

The risk that changing interest rates may adversely affect the value of an
investment. With fixed-rate securities, an increase in prevailing interest rates
typically causes the value of a Fund's securities to fall, while a decline in
prevailing interest rates may produce an increase in the market value of the
securities. Changes in interest rates will affect the value of longer-term fixed
income securities more than shorter-term securities and lower quality securities
more than higher quality securities.

Market Risk

The risk that the market value of a Fund's investments will fluctuate as the
stock and bond markets fluctuate. Market risk may affect a single issuer,
industry or section of the economy, or it may affect the market as a whole.

Non-Diversification Risk

The risk that a non-diversified Fund will be more volatile than a diversified
Fund because it invests its assets in a smaller number of issuers. The gains or
losses on a single security or issuer will, therefore, have a greater impact on
the non-diversified Fund's net asset value.

Portfolio Turnover

The Funds generally intend to purchase securities for long-term investment.
Portfolio turnover rates are not a factor in making buy and sell decisions.
Increased portfolio turnover may result in higher costs for brokerage
commissions, dealer mark-ups and other transaction costs. It may also result in
taxable capital gains. Higher costs associated with increased portfolio turnover
may offset gains in a Fund's performance.

Prepayment Risk

The risk that issuers will prepay fixed rate obligations when interest rates
fall, forcing the Fund to re-invest in obligations with lower interest rates
than the original obligations.

Small Company Risk

The risk that investments in smaller companies may be more volatile than
investments in larger companies, as smaller companies generally experience
higher growth and failure rates. The trading volume of smaller company
securities is normally lower than that of larger companies. Changes in the
demand for the securities of smaller companies generally have a disproportionate
effect on their market price, tending to make prices rise more in response to
buying demand and fall more in response to selling pressure.

23
<PAGE>

Fees and Expenses

The tables below describe the fees and expenses that you may pay if you buy and
hold shares of The Brinson Funds - Class N shares.

Shareholder Transaction Fees
(fees paid directly from your investment)

Sales Charge (Load) Imposed on Purchases None

Emerging Markets Equity Fund:
Purchase/Redemption Transaction Fee 1.50%*

* This transaction charge is paid to the Fund and used by it to defray
transaction costs associated with each purchase and sale of securities by the
Fund.

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets, expressed as a % of average net
assets)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Total Fund
Amount of Fee Operating Expenses
Waiver and/or (after fee waiver
Investment 12b-1 Other Gross Operating Expense and/or expense
(06/30/99) Advisory Fees/1/ Expenses/2/ Expenses/1/ Expenses/1/ Reimbursement/1/ reimbursement)/1/
- ------------------------------------------------------------------------------------------------------------------------------------
Global Fund 0.80% 0.25% 0.16% 1.21% 0.00% 1.21%
Global Equity Fund 0.80% 0.25% 0.25% 1.30% 0.05% 1.25%
Global Technology Fund/3/ 1.40% 0.25% 0.15% 1.80% 0.00% 1.80%
Global Biotech Fund/3/ 1.15% 0.25% 0.15% 1.55% 0.00% 1.55%
Global Bond Fund 0.75% 0.25% 0.15% 1.15% 0.00% 1.15%
U.S. Balanced Fund 0.70% 0.25% 0.26% 1.21% 0.16% 1.05%
U.S. Equity Fund 0.70% 0.25% 0.10% 1.05% 0.00% 1.05%
U.S. Value Equity Fund/3/ 0.70% 0.25% 0.15% 1.10% 0.00% 1.10%
U.S. Large Cap Equity Fund 0.70% 0.25% 0.59% 1.54% 0.49% 1.05%
U.S. Large Cap Growth Fund/4/ 0.70% 0.25% 1.68% 2.63% 1.58% 1.05%
U.S. Small Cap Equity Fund/3/ 1.00% 0.25% 0.15% 1.40% 0.00% 1.40%
U.S. Small Cap Growth Fund/4/ 1.00% 0.25% 0.32% 1.57% 0.17% 1.40%
U.S. Real Estate Equity Fund/3/ 0.90% 0.25% 0.15% 1.30% 0.00% 1.30%
U.S. Bond Fund 0.50% 0.25% 0.11% 0.86% 0.01% 0.85%
High Yield Fund/4/ 0.60% 0.25% 0.23% 1.08% 0.13% 0.95%
Emerging Markets Debt Fund 0.65% 0.25% 0.50% 1.40% 0.00% 1.40%
Global (Ex-U.S.) Equity Fund 0.80% 0.25% 0.19% 1.24% 0.00% 1.24%
Emerging Markets Equity Fund 1.10% 0.25% 0.50% 1.85% 0.00% 1.85%
</TABLE>

24
<PAGE>

Fees and Expenses (cont.)

(2) For purposes of this Table, "12b-1 Expenses" are comprised of an asset-based
sales charge of 0.25% of average daily net assets for each Fund. See
"Distribution Arrangements" on page 35. Pursuant to rules of the National
Association of Securities Dealers, Inc. ("NASD"), the aggregate initial sales
charges, deferred sales charges and asset-based sales charges on shares of the
Funds may not exceed 6.25% of total gross sales, subject to certain exclusions.
This 6.25% limitation is imposed on a Fund basis rather than on a per
shareholder basis. Therefore, long-term shareholders of the Funds may pay more
than the economic equivalent of the maximum front-end sales charges permitted by
NASD. This amount also includes service fees.

(3) The fees and expenses noted for the Global Technology Fund, Global Biotech
Fund, U.S. Value Equity Fund, U.S. Small Cap Equity Fund, U.S. Real Estate
Equity Fund, Emerging Markets Debt Fund and Emerging Markets Equity Fund are
based on estimates.

(4) The U.S. Large Cap Growth Fund, the U.S. Small Cap Growth Fund and the High
Yield Fund were created as the result of a reorganization of three corresponding
funds of UBS Private Investor Funds, Inc. into these Funds on December 18, 1998.
The fees and expenses of these three Funds are based on fees and expenses
incurred for the period January 1, 1999 through June 30, 1999 (annualized).

Expense Example

This example is intended to help you compare the cost of investing in the
Brinson Funds - Class N shares to the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in a Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs and the
return on your investment may be higher or lower, based on these assumptions
your costs would be:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------
Global Fund $ 123 $ 384 $ 665 $ 1,466
Global Equity Fund $ 127 $ 397 $ 686 $ 1,511
Global Technology Fund $ 183 $ 566 $ 975 $ 2,116
Global Biotech Fund $ 158 $ 490 $ 845 $ 1,845
Global Bond Fund $ 117 $ 365 $ 633 $ 1,398
U.S. Balanced Fund $ 107 $ 334 $ 579 $ 1,283
U.S. Equity Fund $ 107 $ 334 $ 579 $ 1,283
U.S. Value Equity Fund $ 112 $ 350 $ 606 $ 1,340
U.S. Large Cap Equity Fund $ 107 $ 334 $ 579 $ 1,283
U.S. Large Cap Growth Fund $ 107 $ 334 $ 579 $ 1,283
U.S. Small Cap Equity Fund $ 143 $ 443 $ 766 $ 1,680
U.S. Small Cap Growth Fund $ 143 $ 443 $ 766 $ 1,680
U.S. Real Estate Equity Fund $ 132 $ 412 $ 713 $ 1,568
U.S. Bond Fund $ 87 $ 271 $ 471 $ 1,049
High Yield Fund $ 97 $ 303 $ 525 $ 1,166
Emerging Markets Debt Fund $ 143 $ 443 $ 766 $ 1,680
Global (Ex-U.S.) Equity Fund $ 126 $ 393 $ 681 $ 1,500
Emerging Markets Equity Fund $ 188 $ 582 $ 1,001 $ 2,169
</TABLE>

25
<PAGE>

Investment Advisor

Advisory Fees

The following chart shows the investment advisory fees payable to Brinson
Partners, before fee waivers, by each Fund during its last fiscal year.

Investment Advisory Fees

(expressed as a percentage of average net assets)

(2) The Advisor is entitled to reimbursement of advisory fees waived during any
of the previous five years, provided that the reimbursement will never cause
the total operating expense ratio to exceed the limits in the table below.

The Advisor has irrevocably agreed to waive its fees and reimburse certain
expenses so that the total operating expenses, with the exception of 12b-1
expenses, of the Brinson Fund - Class N shares do not exceed the following
amounts for each of the respective Funds:

Global Fund 1.10%
Global Equity Fund 1.00
Global Technology Fund 1.80
Global Biotech Fund 1.55
Global Bond Fund 0.90
U.S. Balanced Fund 0.80
U.S. Equity Fund 0.80
U.S. Value Equity Fund 1.10
U.S. Large Cap Equity Fund 0.80
U.S. Large Cap Growth Fund 0.80
U.S. Small Cap Equity Fund 1.40
U.S. Small Cap Growth Fund 1.15
U.S. Real Estate Equity Fund 1.30
U.S. Bond Fund 0.60
High Yield Fund 0.70
Emerging Markets Debt Fund 1.15
Global (Ex-U.S.) Equity Fund 1.00
Emerging Markets Equity Fund 1.60

About the Advisor

Brinson Partners, Inc., a Delaware corporation located in Chicago, Illinois, is
an investment advisor registered with the U.S. Securities and Exchange
Commission. As of December 31, 1999, Brinson Partners was responsible for the
management of USD 159 billion in institutional assets.

Portfolio Management

Investment decisions for the Funds are made by an investment management team at
Brinson Partners. No member of the investment management team is primarily
responsible for making recommendations for portfolio purchases.

Brinson Partners, Inc.
209 South LaSalle Street
Chicago, Ill 60604-1295

26
<PAGE>

Pricing of Fund Shares

The Brinson Fund - Class N shares are bought and sold at net asset value
("NAV"), which is calculated as of the close of business on each day that the
New York Stock Exchange ("NYSE") is open (currently 4:00 p.m. Eastern time). A
Fund's securities are valued based on the last sale price or, where market
quotations are not readily available, are based on fair value as determined in
good faith by the Trust's Board of Trustees.

Foreign securities are valued at their closing prices on the exchange on which
they are traded. The resulting values are converted from the local currency
into U.S. dollars using current exchange rates. Foreign securities may trade in
their local markets on weekends or other days when a Fund does not price its
shares. Therefore, the NAV of Funds holding foreign securities may change on
days when shareholders will not be able to buy or sell their Fund shares.

How the Funds Calculate NAV
The NAV of a class of shares of a Fund is determined by dividing the value of
the securities and other assets, less liabilities, allocated to the class by
the number of outstanding shares of the class.

27
<PAGE>

Purchasing Shares

The minimum initial investment for Fund shares is $1,000,000. Subsequent
investments for Fund shares will be accepted in minimum amounts of $2,500. The
minimum purchase requirement for Individual Retirement Accounts ("IRAs") is
$2,000. The Funds reserve the right to vary the investment minimums and
subsequent minimums for additional investments at any time. In addition, Brinson
Partners may waive the minimum initial investment requirement for any investor
at its discretion. Purchases may be made in one of the following ways:

By Telephone
Call 1-800-448-2430 to arrange for a telephone transaction.

By Mail
Complete and sign an application for the Brinson Funds - Class N shares.

Make your check payable to "Brinson __________ Fund - Class N."

If you are adding to your existing account, enclose the remittance portion of
your account statement and include the amount of investment, account name and
number.

Mail your application and/or check to:
The Brinson Funds
c/o Transfer Agent
P.O. Box 2798
Boston, MA 02208-2798

By Wire
If you are opening a new account, call the Funds at 1-800-448-2430 to
arrange for a wire transaction.

Then wire federal funds to:
The Chase Manhattan Bank
ABA#021000021
DDA#9102-783504
FBO: "Brinson ________ Fund - Class N" and include your name and new account
number.

Complete and sign an application for the Brinson Funds - Class N shares and mail
immediately following the initial wire transaction to:
The Brinson Funds
c/o Transfer Agent
P.O. Box 2798
Boston, MA 02208-2798

If you are adding to your existing account, you do not need to call the Funds to
arrange for a wire transaction, but be sure to include your name and account
number.

Through Financial Institutions/Professionals
In some cases, the Funds have entered into one or more Sales Agreements with
brokers, dealers or other financial intermediaries ("Service Providers"), as
well as with financial institutions (banks and bank trust departments) (each an
"Authorized Dealer"). The Authorized Dealer, or intermediaries designated by
the Authorized Dealer (a "Sub-designee"), may accept purchase and redemption
orders that are in "good form" on behalf of the Funds. A Fund will be deemed to
have received a purchase or redemption order when the Authorized Dealer or
Sub-designee accepts the order. Such orders will be priced at the Fund's net
asset value next computed after such order is accepted by the Authorized Dealer
or Sub-designee. These Authorized Dealers may charge the investor a transaction
fee or other fee for their services at the time of purchase. These fees would
not be otherwise charged if you purchased shares directly from the Funds. It is
the responsibility of such Authorized Dealers or Sub-designees to promptly
forward purchase orders with payments to the Funds.

Telephone orders are accepted from broker-dealers or service organizations if
they have been previously approved by the Funds.

Brinson Partners, or its affiliates, may, from its own resources, compensate
Service Providers for services performed with respect to a Fund's Class N
shares. These services may include marketing, shareholder servicing, record
keeping and/or other services. Payments made for any of these purposes may be
made from Brinson Partners' revenues, its profits or any other sources
available. When these service arrangements are in effect, they are generally
made available to all qualified Service Providers.

If you have any questions or need further information, call 1-800-448-2430.

The Brinson Funds strongly discourage market timers and short-term traders from
investing in the Funds.

28
<PAGE>

Purchasing Shares (cont.)

Exchanging Shares

You can exchange your Class N shares for Class N shares of other Funds.
Exchanges will not be permitted between The Brinson Funds - Class N shares and
either the UBS Investment Funds class of shares or The Brinson Funds - Class I
shares.

Requests for exchanges received prior to the close of regular trading
hours on the NYSE will be processed at the net asset value computed on the date
of receipt. Requests received after the close of regular trading hours will be
processed at the next determined net asset value.

Exchanged Funds are subject to the minimum initial investment requirement. The
procedures that apply to redeeming shares also apply to exchanging shares.

An exchange is the sale of shares of one Fund and purchase of shares of another
and could result in taxable gain or loss in a non-tax sheltered account.

Account Options
The following account options are available. There are no charges for the
programs noted below and you may change or terminate these plans at any time by
written notice to the Funds. For information about participating in these
account options, call the transfer agent at 1-800-448-2430.

Automatic Investment Plan
Through this option, money can be electronically deducted from your checking,
savings or bank money market accounts and invested in the Funds each month or
quarter.

Complete the Automatic Investment Plan Application, which is available upon
request by calling 1-800-448-2430, and mail it to the address indicated.

The initial $1,000,000 minimum investment still applies, however, subsequent
investments can be as little as $2,500.

The Funds may alter or terminate the Automatic Investment Plan at any time.

Systematic Withdrawal Plan
If you have a minimum of $1,000,000 in your account, you may direct the transfer
agent to make payments to you (or anyone you designate) monthly, quarterly or
semi-annually.

The Funds may terminate any SWP if the value of the account falls below $50,000
due to share redemptions or an exchange of shares for Class N shares of another
Fund.

Individual Retirement Account
You may open an IRA, a tax-deferred retirement account, with the Funds if you
are under age 70 1/2. The minimum purchase requirement for an IRA is $2,000

29
<PAGE>

Redeeming Shares

Your shares will be redeemed at the NAV next calculated after your order is
accepted by the Funds' transfer agent in good order. Redemption requests
received prior to the close of regular trading hours (generally 4:00 p.m.
Eastern time) on the NYSE will be executed at the net asset value computed on
the date of receipt. Redemption requests received after the close of regular
trading hours will be executed at the next determined net asset value. Your
order will be processed promptly and you will generally receive the proceeds
within seven days.

Please note that proceeds for redemption requests made shortly after a recent
purchase by check will be distributed once the check clears, which may take up
to 15 days.

You may redeem some or all of your shares any day the NYSE is open for business
by doing one of the following (if you have any questions, call the transfer
agent at 1-800-448-2430

By Telephone
If you have chosen the telephone redemption privilege on the initial application
or subsequently arranged in writing, you may call 1-800-448-2430 to redeem
shares.

By Mail
Shareholders may sell shares by making a written request to:
The Brinson Funds
c/o Transfer Agent
P.O. Box 2798
Boston, MA 02208-2798

Include signatures of all persons required to sign for transactions, exactly as
their names appear on the account application.

To protect your account from fraud, the Funds may require a signature guarantee
for certain redemptions (see "Signature Guarantees" below)

By Bank Wire
If you have chosen the wire redemption privilege on the initial application or
subsequently arranged in writing, you may request the Funds to wire your
proceeds to a predesignated bank account.

Call 1-800-448-2430.

Wire redemption requests must be received by the transfer agent by 4:00 p.m.
Eastern time for money to be wired the next business day.

Through Financial Institutions/Professionals
Contact your financial institution or professional for more information. If you
have purchased shares through an Authorized Dealer or Sub-designee, you should
contact it for more information.

Important note: Each institution or professional may have its own procedures and
requirements for selling shares and may charge fees.

30
<PAGE>

Redeeming Shares (cont.)

Transfer of Securities
Under certain circumstances, investors may be permitted to purchase Fund shares
by transferring securities to a Fund that meet the Fund's investment objective
and policies. (Please see the SAI for more information.)

Dividends and Distributions

Net investment income for all of the Funds consists of all dividends and
interest received, less expenses (including fees payable to the Advisor and its
affiliates).

Dividends from net investment income are declared, and paid, by each Fund semi-
annually - in June and December. In December, the Funds will distribute
substantially all of their net long-term capital gains and any undistributed net
short-term capital gains realized during the one year period commencing November
1 (or date of the creation of the Fund, if later) and ending October 31. At the
same time, the Funds will distribute all of their net investment income earned
through the end of December and not previously distributed as ordinary (not
capital) income.

31
<PAGE>

Tax Considerations

When you sell or exchange your shares of a Fund, you may have a capital gain or
loss. The tax rate on any gain from the sale or exchange of your shares depends
on how long you have held your shares.

Fund distributions and gains from the sale or exchange of your shares will
generally be subject to state and local income tax. Foreign investors may be
subject to U.S. withholding and estate tax.

Shareholders will be advised annually of the source and the tax status of all
Fund distributions for federal income tax purposes.

Distribution Arrangements

The Funds have adopted a distribution plan under rule 12b-1 of the Investment
Company Act of 1940 to compensate Brinson Partners, Funds Distributor, Inc. and
others for distributing and promoting sales of the Brinson Funds - Class N
shares. Annual fees paid under the plan may not exceed 0.25% of the average
daily net assets of each Fund's Class N shares. Because these distribution and
service fees are paid out of the assets of the Class N Shares on an ongoing
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.

Multiple Classes

The Funds are series of The Brinson Funds, a Delaware business trust, and
currently offer three classes of shares: Brinson Funds - Class I, Brinson
Funds - Class N and UBS Investment Funds Class of shares.

32
<PAGE>

Financial Highlights

The financial highlights table is intended to help you understand a Fund's
financial performance for the past five years (or, if shorter, the period of
the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in each Fund (assuming
reinvestment of all dividends and distributions).

U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund and High Yield Fund
The U.S. Large Cap Growth Fund, the U.S. Small Cap Growth Fund and the High
Yield Fund (collectively, the "New Funds") are successors to the UBS Large Cap
Growth Fund, the UBS Small Cap Fund and the UBS High Yield Bond Fund,
respectively (collectively, the "Predecessor Funds"). Each Predecessor Fund,
prior to its merger into a New Fund, operated as a separate portfolio of UBS
Private Investor Funds, Inc., another investment company that was advised by
another entity. The Predecessor Funds had fiscal years ending on December 31.
On December 18, 1998, following the approval of the shareholders of each
Predecessor Fund of an agreement and plan of reorganization, the UBS Large Cap
Growth Fund, the UBS Small Cap Fund and the UBS High Yield Bond Fund were
reorganized and merged into the U.S. Large Cap Growth Fund, the U.S. Small Cap
Growth Fund and the High Yield Fund, respectively. (These transactions are
collectively referred to as the "Reorganizations.") The New Funds had no
operations prior to the Reorganizations. The New Funds have fiscal years ending
on June 30.

The selected financial information in the following table, for the year ended
June 30, 1999, has been audited by the Funds' independent auditors, whose
unqualified reports on the financial statements containing such information
appear in the Annual Report. In addition, the table includes unaudited financial
information for the period ended December 31, 1999, which is included in the
Funds' Semi-Annual Report dated December 31, 1999. The selected financial
information in the following table for the year ended December 31, 1998 has been
audited by the Funds' independent auditors, whose unqualified reports on the
financial statements containing such information appear in the New Funds' Annual
Report to Shareholders (the "New Funds' Report") dated December 31, 1998. The
selected financial information in the following table for the year ended
December 31, 1997 has been audited by the Predecessor Funds' independent
auditors, whose unqualified reports on the financial statements containing such
information (the "Predecessor Funds' Reports") appear in the Predecessor Funds'
Annual Report to Shareholders dated December 31, 1997 (the "Predecessor Funds'
Annual Report"). Additional performance and financial data and related notes are
contained in the Annual Report, the Semi-Annual Report, the New Funds' Report
and the Predecessor Funds' Annual Reports (collectively, the "New Funds' and
Predecessor Funds' Reports"), which are available without charge upon request.
The New Funds' financial statements for the fiscal years ended June 30, 1999
and December 31, 1998, and the Predecessor Funds' financial statements for the
fiscal year ended December 31, 1997, and the New Funds' and Predecessor Funds'
Reports, are incorporated by reference into the SAI.

Global Technology Fund, Global Biotech Fund, U.S. Value Equity Fund, U.S. Small
Cap Equity Fund, U.S. Real Estate Equity Fund, Emerging Markets Debt Fund and
Emerging Markets Equity Fund

No financial information is presented for these Funds as they had not commenced
operations as of the date of this prospectus.

33
<PAGE>

Financial Highlights (cont.)

Financial Highlights--Fiscal Year Ended June 30 and the Semi-Annual Period
Ended December 31, 1999
The following table presents financial data relating to
a share of beneficial interest outstanding throughout the periods presented.
This information has been derived from the Funds' financial statements.

<TABLE>
<CAPTION>
Income (Loss) from Investment
Operations Less Distributions
---------------------------------- ---------------------------
Distributions Distributions
Total from and from and
Net asset Net Net income in excess in excess
value- Invest- realized and (loss) from of net of net Total
beginning ment unrealized investment investment realized Distribu-
Year of period income (loss) gain (loss) operations income gain tions
BRINSON GLOBAL FUND - Class N (Commencement of Operations June 30, 1997)
<S> <C> <C> <C> <C> <C> <C> <C>
1998 $ 13.13 0.63 0.32 0.95 (0.63) (0.70) (1.33)
1999 $ 12.75 0.27 0.25 0.52 (0.44) (0.84) (1.28)
1999 (December 31st) (unaudited) $ 11.99 0.10/2/ (0.27) (0.17) (0.16) (0.52) (0.68)
------- ------- ------ ------ ------ ------ ------
BRINSON GLOBAL EQUITY FUND - Class N (Commencement of Operations June 30, 1997)
1998 $ 12.76 0.13 0.82 0.95 (0.13) (1.05) (1.18)
1999 $ 12.53 0.10/2/ 1.09 1.19 (0.14) (0.18) (0.32)
1999 (December 31st) (unaudited) $ 13.40 0.01 0.64 0.65 (0.06) (1.21) (1.27)
------- ------- ------ ------ ------ ------ ------
BRINSON GLOBAL BOND FUND - Class N (Commencement of Operations June 30, 1997)
1998 $ 9.64 0.42/2/ (0.20) 0.22 (0.29) (0.17) (0.46)
1999 $ 9.40 0.37/2/ (0.07) 0.30 (0.46) (0.08) (0.54)
1999 (December 31st) (unaudited) $ 9.16 0.19/2/ (0.19) - - (0.01) (0.01)
------- ------- ------ ------ ------ ------ ------
BRINSON U.S. BALANCED FUND - Class N (Commencement of Operations June 30, 1997)
1998 $ 12.53 0.47/2/ 0.94 1.41 (0.73) (0.94) (1.67)
1999 $ 12.27 0.29/2/ 0.18 0.47 (0.71) (2.65) (3.36)
1999 (December 31st) (unaudited) $ 9.38 0.13 (0.87) (0.74) (0.18) (0.06) (0.24)
------- ------- ------ ------ ------ ------ ------
BRINSON U.S. EQUITY FUND - Class N (Commencement of Operations June 30, 1997)
1998 $ 17.64 0.15 3.37 3.52 (0.15) (1.13) (1.28)
1999 $ 19.88 0.08/2/ 2.67 2.75 (0.12) (1.12) (1.24)
1999 (December 31st) (unaudited) $ 21.39 0.06/2/ (2.90) (2.84) (0.03) (1.77) (1.80)
------- ------- ------ ------ ------ ------ ------
BRINSON U.S. LARGE CAP EQUITY FUND/4/ - Class N (Commencement of Operations April 6, 1998)
1998 $ 10.00 0.02 (0.23) (0.21) (0.01) - (0.01)
1999 $ 9.78 0.09/2/ 1.31 1.40 (0.05) - (0.05)
1999 (December 31st) (unaudited) $ 11.13 0.05/2/ (2.01) (1.96) (0.05) (0.95) (1.00)
------- ------- ------ ------ ------ ------ ------
BRINSON U.S. LARGE CAP GROWTH FUND/4/ - Class N (Commencement of Operations December 31, 1998)
1999 $ 11.84 (0.01) 2.05 2.04 - - -
1999 (December 31st) (unaudited) $ 13.88 (0.01)/2/ 1.71 1.70 - (0.95) (0.95)
------- ------- ------ ------ ------ ------
BRINSON U.S. SMALL CAP GROWTH FUND/4/ - Class N (Commencement of Operations December 31, 1998)
1999 $ 8.80 (0.04) 0.40 0.36 - - -
1999 (December 31st) (unaudited) $ 9.16 (0.04)/2/ 3.30 3.26 - - -
------- ------- ------ ------
BRINSON U.S. BOND FUND - Class N (Commencement of Operations June 30, 1997)
1998 $ 10.24 0.61 0.42 1.03 (0.55) (0.14) (0.69)
1999 $ 10.58 0.57/2/ (0.26) 0.31 (0.44) (0.15) (0.59)
1999 (December 31st) (unaudited) $ 10.30 0.29/2/ (0.27) 0.02 (0.55) - (0.55)
------- ------- ------ ------ ------ ------
BRINSON HIGH YIELD FUND - Class N (Commencement of Operations December 31, 1998)
1999 $ 9.98 0.42 (0.15) 0.27 (0.30) - (0.30)
1999 (December 31st) (unaudited) $ 9.95 0.45/2/ (0.27) 0.18 (0.46) (0.07) (0.53)
------- ------- ------ ------ ------ ------ ------
BRINSON GLOBAL (EX-U.S.) EQUITY FUND/3/ - Class N (Commencement of Operations June 30, 1997)
1998 $ 12.59 0.16 0.29 0.45 (0.16) (0.74) (0.90)
1999 $ 12.14 0.12 0.27 0.39 (0.11) (0.12) (0.23)
1999 (December 31st) (unaudited) $ 12.30 0.02/2/ 1.95 1.97 - (0.14) (0.14)
------- ------- ------ ------ ------ ------ ------

</TABLE>

(1) Annualized.
(2) The net investment income per share data was determined by using average
shares outstanding throughout the period.

(3) The Global (Ex-U.S.) Equity Fund changed its name from the Non-U.S. Equity
Fund on December 10, 1998.

(4) The U.S. Large Cap Equity Fund, U.S. Large Cap
Growth Fund and U.S. Small Cap Growth Fund changed their names from the U.S.
Large Capitalization Equity Fund, U.S. Large Capitalization Growth Fund,
U.S. Small Capitalization Growth Fund, respectively, on May 2, 2000.
N/A = Not Applicable

34
<PAGE>

RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------
Ratio of Net
Ratio of Expenses Investment Income
to Average Net to Average Net
Assets Assets
--------------------------------------------------
Net Net
asset Total assets, Before After Before After
value- Return end of expense expense expense expense Portfolio
end of (non- period reimburse- reimburse- reimburse- reimburse- turnover
Year period annualized) (in 000s) ment ment ment ment rate

BRINSON GLOBAL FUND - Class N (Commencement of Operations June 30, 1997)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $ 12.75 7.90 % $ 1,163 1.19% N/A 2.45% N/A 88%
1999 $ 11.99 4.47 % $ 1,576 1.21% N/A 1.98% N/A 105%
1999 (December 31st) (unaudited) $ 11.14 (1.33)% $ 1,331 1.23%/1/ N/A 1.73%/1/ N/A 36%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
BRINSON GLOBAL EQUITY FUND - Class N (Commencement of Operations June 30, 1997)
1998 $ 12.53 8.60 % $ 1 1.27% 1.25% 1.04% 1.06% 46%
1999 $ 13.40 9.80 % $ 220 1.30% 1.25% 0.80% 0.85% 86%
1999 (December 31st) (unaudited) $ 12.78 5.29 % $ 232 1.30%/1/ 1.25%/1/ 0.12%/1/ 0.17% 57%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
BRINSON GLOBAL BOND FUND - Class N (Commencement of Operations June 30, 1997)
1998 $ 9.40 2.37 % $ 9 1.21% 1.15% 4.22% 4.28% 151%
1999 $ 9.16 2.89 % $ 1,085 1.15% N/A 3.80% N/A 138%
1999 (December 31st) (unaudited) $ 9.15 0.00 % $ 1 1.29%/1/ 1.21%/1/ 3.91%/1/ 3.99%/1/ 35%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
BRINSON U.S. BALANCED FUND - Class N (Commencement of Operations June 30, 1997)
1998 $ 12.27 12.15 % $ 1 1.06% 1.05% 3.63% 3.64% 194%
1999 $ 9.38 4.17 % $ 1 1.21% 1.05% 2.75% 2.91% 113%
1999 (December 31st) (unaudited) $ 8.40 (7.92)% $ 1 1.20%/1/ 1.05%/1/ 2.60%/1/ 2.75%/1/ 42%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
BRINSON U.S. EQUITY FUND - Class N (Commencement of Operations June 30, 1997)
1998 $ 19.88 21.10 % $ 268 1.05% N/A 0.87% N/A 42%
1999 $ 21.39 14.75 % $ 7,563 1.05% N/A 0.57% N/A 48%
1999 (December 31st) (unaudited) $ 16.75 (13.20)% $ 8,136 1.05%/1/ N/A 0.59%/1/ N/A 26%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
BRINSON U.S. LARGE CAP EQUITY FUND/4/ - Class N (Commencement of Operations April 6, 1998)
1998 $ 9.78 (2.02)% $ 16,033 1.84%/1/ 1.05%/1/ 0.27%/1/ 1.06%/1/ 12%
1999 $ 11.13 14.40 % $ 3,756 1.54% 1.05% 0.32% 0.81% 88%
1999 (December 31st) (unaudited) $ 8.17 (17.67)% $ 562 1.43%/1/ 1.05%/1/ 0.47%/1/ 0.85%/1/ 84%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
BRINSON U.S. LARGE CAP GROWTH FUND/4/ - Class N (Commencement of Operations December 31, 1998)
1999 $ 13.88 17.23 % $ 1 2.63%/1/ 1.05%/1/ (1.51)%/1/ 0.07%/1/ 51%
1999 (December 31st) (unaudited) $ 14.63 12.79 % $ 1 2.42%/1/ 1.05%/1/ (1.54)%/1/ (0.17)%/1/ 46%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
BRINSON U.S. SMALL CAP GROWTH FUND/4/ - Class N (Commencement of Operations December 31, 1998)
1999 $ 9.16 4.09 % $ 1 1.57%/1/ 1.40%/1/ (0.87)%/1/ 0.70%/1/ 71%
1999 (December 31st) (unaudited) $ 12.42 35.59 % $ 1 1.59%/1/ 1.40%/1/ (1.00)%/1/ (0.81)%/1/ 69%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
BRINSON U.S. BOND FUND - Class N (Commencement of Operations June 30, 1997)
1998 $ 10.58 10.30 % $ 1 1.09% 0.85% 5.36% 5.60% 198%
1999 $ 10.30 2.88 % $ 1 0.86% 0.85% 5.17% 5.18% 260%
1999 (December 31st) (unaudited) $ 9.77 0.14 % $ 1 0.86%/1/ 0.85%/1/ 5.69%/1/ 5.70%/1/ 103%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
BRINSON HIGH YIELD FUND - Class N (Commencement of Operations December 31, 1998)
1999 $ 9.95 2.71 % $ 1 1.08%/1/ 0.95%/1/ 8.29%/1/ 8.42%/1/ 77%
1999 (December 31st) (unaudited) $ 9.60 1.77 % $ 1 1.08%/1/ 0.95%/1/ 8.89%/1/ 9.02%/1/ 29%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
BRINSON GLOBAL (EX-U.S.) EQUITY FUND3 - Class N (Commencement of Operations June 30, 1997)
1998 $ 12.14 4.51 % $ 11 1.25% N/A 1.27% N/A 49%
1999 $ 12.30 3.30 % $ 15 1.24% N/A 1.10% N/A 74%
1999 (December 31st) (unaudited) $ 14.13 16.11 % $ 1 1.23%/1/ N/A 0.08%/1/ N/A 32%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
</TABLE>

35
<PAGE>

For More Information

More information on The Brinson Funds is available free upon request:

TO OBTAIN INFORMATION:

By Telephone
Call 1-800-448-2430

By Mail
The Brinson Funds
P.O. Box 2798
Boston, MA 02208-2798

By Email
[email protected]

On The Internet
Text-only versions of the prospectus and other documents pertaining to the Funds
can be viewed online or downloaded from:

SEC: http://www.sec.gov

Brinson Partners: http://www.ubsbrinson.com

Information about the Funds (including the SAI) can also be reviewed and copied
at the SEC's public reference room in Washington, DC (phone 1-800-SEC-0330). Or,
you can obtain copies of this information by sending a request, along with a
duplicating fee, to the SEC' s Public Reference Section, Washington, DC 20549-
6009, or by electronic request at [email protected].

The Funds are series of The Brinson Funds;
Registration Number: 811-6637

<PAGE>

[BRINSON FUNDS LOGO APPEARS HERE]

- -------------------------------------------------------
209 South LaSalle Street . Chicago, Illinois 60604-1295

Tel: 1-800-448-2430
<PAGE>

[UBS INVESTMENT FUNDS LOGO APPEARS HERE]

Prospectus

May 2, 2000

<PAGE>

Table of Contents

<TABLE>
<CAPTION>
<S> <C>
The Brinson Investment Process.......... 2

Overview of the Funds

Global Fund.......................... 3
Global Equity Fund................... 4
Global Technology Fund............... 5
Global Biotech Fund.................. 6
Global Bond Fund..................... 7
U.S. Balanced Fund................... 8
U.S. Equity Fund..................... 9
U.S. Value Equity Fund............... 10
U.S. Large Cap Equity Fund........... 11
U.S. Large Cap Growth Fund........... 12
U.S. Small Cap Equity Fund........... 13
U.S. Small Cap Growth Fund........... 14
U.S. Real Estate Equity Fund......... 15
U.S. Bond Fund....................... 16
High Yield Fund...................... 17
Emerging Markets Debt Fund........... 18
Global (Ex-U.S.) Equity Fund......... 19
Emerging Markets Equity Fund......... 20

Risk Considerations..................... 21
Fees and Expenses....................... 24
Investment Advisor...................... 27
Pricing of Fund Shares.................. 28
Purchasing Shares....................... 29
Redeeming Shares........................ 31
Dividends and Distributions............. 32
Tax Considerations...................... 33
Distribution Arrangements............... 34
Financial Highlights.................... 35

</TABLE> 1
<PAGE>

Overview of the Funds

A Look at the Brinson Investment Process
At Brinson Partners, Inc. ("Brinson Partners" or the "Advisor"), we believe that
the fundamental value of any investment is related to the future cash flows that
it will generate for its investors. We believe that this determination must be
made within a framework of globally integrated capital markets. World economies
and financial markets are interactive. Thus, investment management, both within
and across global stock and bond markets, must be based upon comprehensive
knowledge and analysis of integrated investment fundamentals.

Fixed Income Selections

2
<PAGE>

Global Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income.

Principal Strategies

All security selection decisions are made relative to the Global Securities
Markets Index (GSMI) Mutual Fund Index, the benchmark against which the Fund
measures its portfolio.

The Fund may invest in different types of securities in order to access these
markets.

Other investments may include other open-end investment companies advised by
Brinson Partners.

The Fund's portfolio turnover rate may exceed 100%.

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

13.54% 10.20% 7.60% 0.83
- --------------------------------
96 97 98 99

*The Fund's total return for the period January 1, 2000 through March 31, 2000
was -1.17%.

Best Quarter: Q2 1997 8.12%
Worst Quarter: Q3 1998 -5.51%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
Performance
1 5 10 Inception
Year Year Year (7/31/95)
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Global Fund 0.83% - - 9.18%
Salomon Smith Barney -4.26% - - 3.52%
World Government Bond Index
MSCI World Equity (Free) 25.12% - - 19.22%
Index
GSMI Mutual Fund Index 16.85% - - 15.18%
</TABLE>

GSMI Mutual Fund Index
An unmanaged index compiled by Brinson Partners, currently constructed as
follows:

40% Wilshire 5000 3% Merrill Lynch High Yield
Equity Index Master Index
22% MSCI World Ex USA 3% MSCI Emerging Markets
(Free) Index Free Index
21% Salomon Smith

Barney BIG 2% JP Morgan EMBI+
Bond Index
9% Salomon Smith Barney
Non-U.S. Gov't.
Bond Index

From time to time, underlying indices may change.

MSCI World Equity (Free) Index

Salomon Smith Barney World Government Bond Index

A securities index that represents the broad global fixed income markets and
includes debt issues of U.S. and most developed global (ex-U.S.) governments,
governmental entities and supranationals.

3
<PAGE>

Global Equity Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income.

Principal Strategies

Although it may invest anywhere in the world, the Fund invests primarily in
equity markets listed in the Morgan Stanley Capital International ("MSCI")
World Equity (Free) Index, the benchmark against which the Fund measures its
portfolio.

Investments in equity securities may include:
* Common stock
* Preferred stock

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

16.31% 9.86% 13.17% 12.02%
- ------------------------------------
96 97 98 99

*The Fund's total return for the period January 1, 2000 through March 31, 2000
was -5.71%.

Best Quarter: Q4 1998 14.11%
Worst Quarter: Q3 1998 -10.23%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
Performance
1 5 10 Inception
Year Year Year (7/31/95)
- --------------------------------------------------------
<S> <C> <C> <C> <C>
Global Equity Fund 12.02% - - 13.94%
MSCI World Equity 25.12% - - 19.22%
(Free) Index

</TABLE>

MSCI World Equity (Free) Index

4
<PAGE>

Global Technology Fund

Objective

The Fund seeks to provide long-term capital appreciation.

Principal Strategies

The Fund's benchmark is the Morgan Stanley High Tech Index.

Investments in equity securities may include:
* Common stock
* Preferred stock

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance

There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Technology Companies

Technology companies develop, sell, or significantly benefit from the use of
technology products and services. The term technology includes electronics,
data processing, semi-conductors, telecommunications, and technology services.

Non-Diversified Portfolio

Morgan Stanley High Tech Index

5
<PAGE>

Global Biotech Fund

Objective

The Fund seeks to provide long-term capital appreciation.

Principal Strategies

Investments in equity securities may include:

* Common stock

* Preferred stock

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance

There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Biotechnology Companies

Non-Diversified Portfolio

NASDAQ Biotech Index

The NASDAQ Biotech Index is a capitalization-weighted index of 200 biotechnology
stocks listed on the NASDAQ exchange. The index was developed with a base value
of 200 as of November 1, 1993.

6
<PAGE>

Global Bond Fund

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income.

Principal Strategies

Normally, at least 65% of the Fund's assets are invested in long-term debt
securities of issuers in at least three countries (which may include the United
States).

Investments in fixed income securities may include:

* Debt securities of the U.S. government, its agencies and instrumentalities
* Debt securities of global (ex-U.S.) governments
* Debt securities of corporations

* Mortgage-backed securities
* Asset-backed securities

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance

Annual Total Returns for the periods ended 12/31*
[BAR CHART APPEARS HERE]

8.70% 1.17% 11.58% -6.74%
- --------------------------------------------
96 97 98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was -1.11%.

Best Quarter: Q4 1998 5.86%
Worst Quarter: Q1 1999 -3.54%

Average Annual Total Returns

(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (7/31/95)
- ---------------------------------------------------------------
Global Bond Fund -6.74% - - 4.74%
Salomon Smith Barney -4.26% - - 3.52%
World Government
Bond Index

</TABLE>

Non-Diversified Portfolio

Long-Term Debt

Debt Securities with an initial maturity of more than one year.

Salomon Smith Barney World Government Bond Index

A securities index that represents the broad global fixed income markets and
includes debt issues of U.S. and most developed global (ex-U.S.) governments,
governmental entities and supranationals.

7
<PAGE>

U.S. Balanced Fund

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income.

Principal Strategies

All selection decisions are made relative to the U.S. Balanced Mutual Fund
Index, the benchmark against which the Fund measures its portfolio.

Investments in equity securities may include:

* Common stock
* Preferred stock

Investments in fixed income securities may include:

* Debt securities of the U.S. government, its agencies and instrumentalities
* Debt securities of U.S. corporations

* Mortgage-backed securities
* Asset-backed securities
* When-issued securities

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance

Annual Total Returns for the periods ended 12/31*
[BAR CHART APPEARS HERE]

10.86% 12.66% 9.57% -7.44%
- -------------------------------------------
96 97 98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was -1.08%.

Best Quarter: Q2 1997 6.99%
Worst Quarter: Q3 1999 -5.15%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (7/31/95)
- ---------------------------------------------------------------
U.S. Balanced Fund -7.44% - - 7.43%
Salomon Smith Barney -0.84% - - 6.21%
- ---------------------------------------------------------------
BIG Bond Index
Wilshire 5000 23.56% - - 24.88%
- ---------------------------------------------------------------
Equity Index
U.S. Balanced Mutual 14.66% - - 18.33%
Fund Index
</TABLE>

U.S. Balanced Mutual Fund Index

Compiled by Brinson Partners, this unmanaged index represents a fixed composite
of 65% Wilshire 5000 Equity Index and 35% Salomon Smith Barney Broad Investment
Grade (BIG) Bond Index.
From time to time, underlying indices may change.

Wilshire 5000 Equity Index

Salomon Smith Barney Broad Investment Grade (BIG) Bond Index

A broad-based index that includes U.S. bonds with over one year to maturity.

<PAGE>

U.S. Equity Fund

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

Principal Strategies

The Fund employs a core/value equity strategy. Normally, the Fund invests at
least 65% of its assets in equity securities, which may include dividend-paying
securities, of U.S. companies.

All selection decisions are made relative to the Wilshire 5000 Equity Index, the
benchmark against which the Fund measures its portfolio.

Investments in equity securities may include:
* Common stock
* Preferred stock

Fund Performance

Annual Total Returns for the periods ended 12/31*
[BAR CHART APPEARS HERE]

24.90% 24.23% 17.91% -4.51%
- ----------------------------------------
96 97 98 99

* The Fund's total return for the period January 1, 2000 through March 31, 2000
was -5.97%.

Best Quarter: Q4 1998 16.24%
Worst Quarter: Q3 1999 -14.40%

Average Annual Total Return
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (7/31/95)
- ---------------------------------------------------------------
U.S. Equity Fund -4.51% - - 16.71%
Wilshire 5000 Equity 23.56% - - 24.88%
Index
</TABLE>

Wilshire 5000 Equity Index

<PAGE>

U.S. Value Equity Fund

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

Principal Strategies

The Fund invests primarily in securities in the Russell 1000(r) Value Index, the
benchmark against which the Fund measures its portfolio.

Investments in equity securities may include:

* Common stock
* Preferred stock

Fund Performance

There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Russell 1000(r) Value Index

The Russell 1000(r) Index measures the performance of the 1,000 largest
companies in the Russell 3000 Index, which represents approximately 92% of the
total market cap of the Russell 3000 Index. As of the latest reconstitution, the
average market cap of the Russell 1000(r) Index was approximately $12.1 billion;
the median market cap was approximately $3.8 billion. The smallest company in
the index had an approximate market cap of $1,350.8 million. The Russell 1000(r)
Value Index measures the performance of those Russell 1000 companies with lower
price-to-book ratios and lower forecasted growth values.

<PAGE>

U.S. Large Cap Equity Fund
(formerly the U.S. Large Capitalization Equity Fund)

Objective

The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

Principal Strategies

The Fund employs a core/value equity strategy. Under normal circumstances, the
Fund invests at least 65% of its assets in equity securities of U.S. large cap
companies. The Fund is a non-diversified portfolio.

All selection decisions are undertaken relative to the Standard & Poor's 500
Equity Index ("S&P 500 Index"), the benchmark against which the Fund measures
its portfolio.

Investments in equity securities may include:
* Common stock
* Preferred stock

The Fund's portfolio turnover rate may exceed 100%.

Annual Total Return for the period ended 12/31*

[BAR CHART APPEARS HERE]

- -11.39%
- -------
99

*The Fund's total return for the period January 1, 2000 through March 31,
2000 was -9.41%.

Best Quarter: Q4 1998 15.29%
Worst Quarter: Q3 1999 -15.45%

Average Annual Total Returns
(for the periods ended 12/31/99)

Performance
1 5 10 Inception
Year Year Year (4/30/98)
- ----------------------------------------------------------------------
U.S. Large Cap
Equity Fund -11.39% - - -4.06%
S&P 500 Index 21.04% - - 19.85%

11
<PAGE>

U.S. Large Cap Growth Fund
(formerly the U.S. Large Capitalization Growth Fund)

Objective
The Fund seeks to provide long-term capital appreciation.

Principal Strategies

The Fund employs a growth equity strategy, and invests primarily in a
portfolio of equity securities of large cap growth companies. The Fund is a non-
diversified portfolio.

All selection decisions are made relative to the Russell 1000(R) Growth Index,
the benchmark against which the Fund measures its portfolio.

* Normally, at least 65% of the Fund's assets are invested in securities issued
by large cap growth companies.
* Up to 20% of the Fund's assets may be invested in foreign securities

Investments in equity securities may include:
* Common stock
* Preferred stock

Fund Performance
The chart and table which follow give an indication of the Fund's risks and
performance. The chart shows you the Fund's performance over the past year. The
table which follows compares the Fund's performance over time to that of a broad
measure of market performance. When you consider this information, please
remember that the Fund's past performance is not necessarily an indication of
how it will perform in the future.

Annual Total Return for the period ended 12/31*

[BAR CHART APPEARS HERE]

31.63%
- ------
99

*The Fund's total return for the period January 1, 2000 through March 31, 2000
was 6.94%

Best Quarter: Q4 1999 21.75%
Worst Quarter: Q3 1999 -7.58%

Average Annual Total Returns
(for the periods ended 12/31/99)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Performance
1 5 10 Inception
Year Year Year (12/31/98)
- -----------------------------------------------------------------
U.S. Large Cap 31.63% - - 31.63%
Growth Fund
Russell 1000(R) Growth
Index 33.16% - - 33.16%
S&P 500 Index/1/ 21.04% - - 21.04%

</TABLE>

/1/ The Advisor has changed the Fund's benchmark index from the S&P 500 Index
to the Russell 1000(R) Growth Index based on the Advisor's determination that
the Russell 1000(R) Growth Index is more representative of the Fund's investment
strategies.

Large Cap Growth Companies
Companies with market caps in the upper 65% of the Wilshire 5000 Equity Index.
Companies whose cap falls below this level after purchase will continue to be
considered large cap growth companies.

Russell 1000(R) Growth Index
The Russell 1000(R) Index measures the performance of the 1,000 largest
companies in the Russell 3000 Index, which represents approximately 92% of the
total market cap of the Russell 3000 Index. As of the latest reconstitution, the
average market cap of the Russell 1000(R) Index was approximately $12.1 billion;
the median market cap was approximately $3.8 billion. The smallest company in
the index had an approximate market cap of $1,350.8 million. The Russell
1000(R) Growth Index measures the performance of those Russell 1000 companies
with higher price-to-book ratios and higher forecasted growth values.

12
<PAGE>

U.S. Small Cap Equity Fund

Objective
The Fund seeks to maximize total U.S. dollar return, consisting of capital
appreciation and current income, while controlling risk.

Principal Strategies
The Fund employs a core/value equity strategy, and will invest primarily in
publicly traded companies represented in the Wilshire Small Stock Index.

All selection decisions are made relative to the Wilshire Small Stock Index, the
benchmark against which the Fund measures its portfolio.

* Normally, at least 65% of the Fund's assets are invested in equity securities
issued by U.S. small cap companies.

Investments in equity securities may include:
* Common stock
* Preferred stock

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

Small Cap Companies
Companies with market caps in the lower 10% of the Wilshire 5000 Equity Index.

<PAGE>

U.S. Small Cap Growth Fund
(formerly the U.S. Small Capitalization Growth Fund)

Objective

The Fund seeks to provide long-term capital appreciation.

Principal Strategies
The Fund employs a growth equity strategy. Under normal conditions, the Fund
invests at least 65% of its assets in equity securities of U.S. small cap
companies.

All selection decisions are made relative to the Russell 2000 Growth Index, the
benchmark against which the Fund measures its portfolio.

The Fund may also invest in securities of emerging growth companies. The Fund
may invest up to 20% of its assets in foreign securities.

Investments in equity securities may include:
* Common stock
* Preferred stock

The Fund's portfolio turnover rate may exceed 100%.

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

40.57%
- ------
99

*The Fund's total return for the period January 1, 2000 through March 31,
2000 was 22.07%.

Best Quarter: Q4 1999 32.73%
Worst Quarter: Q1 1999 -6.48%

Average Annual Total Returns
(for the periods ended 12/31/99)

Performance
1 5 10 Inception
Year Year Year (12/31/98)
- -----------------------------------------------------------
U.S. Small Cap 40.57% - - 40.57%
Growth Fund
Russell 2000 43.09% - - 43.09%
Growth Index
Russell 2000 Index/(1)/ 21.26% - - 21.26%

(1) The Advisor has changed the Fund's benchmark index from the Russell 2000
Index to the Russell 2000 Growth Index based on the Advisor's determination that
the Russell 2000 Growth Index is more representative of the Fund's investment
strategies.

Small Cap Companies
Companies with market caps in the lower 10% of the Wilshire 5000 Equity Index.

14
<PAGE>

U.S. Real Estate Equity Fund

Objective

The Fund seeks to maximize total return, consisting of capital appreciation
and current income, while controlling risk.

Although the Fund may invest in any real estate related security, the Morgan
Stanley REIT Index serves as its benchmark.

Investments in equity securities may include:
* Common stock
* Preferred stock

Given that the Fund invests primarily in securities issued by REITs, there is
a risk that changes in real estate values or economic downturns can have a
substantial impact on the Fund's investments.

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

REITs
Publicly traded companies that own and often operate real property and/or invest
in mortgage and mortgage-backed securities.

U.S. Bond Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income, while controlling risk.

All selection decisions are made relative to the Salomon Smith Barney Broad
Investment Grade (BIG) Bond Index, the benchmark against which the Fund measures
its portfolio.

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

3.15% 9.05% 7.80% -1.55%
- --------------------------------
96 97 98 99

*The Fund's total return for the period January 1, 2000 through March 31,
2000 was 1.85%.

Best Quarter: Q4 1995 4.46%
Worst Quarter: Q1 1996 -2.33%

Average Annual Total Returns
(for the periods ended 12/31/99)

Performance
1 5 10 Inception
Year Year Year (8/31/95)
- -----------------------------------------------------------
U.S. Bond Fund -1.55% - - 5.41%
Salomon Smith Barney -0.84% - - 6.05%
Big Bond Index

Long-Term Debt
Debt securities with an initial maturity of more than one year.

Salomon Smith Barney
Broad Investment Grade (BIG) Bond Index
A broad-based index that includes U.S. bonds with over one year to maturity.

16
<PAGE>

High Yield Fund

All selection decisions are undertaken relative to the Merrill Lynch High Yield
Master Index, the benchmark against which the Fund measures its portfolio.

Investments in fixed income securities may include:
* Debt securities of corporations
* Zero coupon securities
* Asset-backed securities
* When-issued securities
* Eurodollar securities

The Fund's portfolio turnover rate may exceed 100%.

Fund Performance
The chart and table which follow give an indication of the Fund's risks and
performance. The chart shows you the Fund's performance over the past year. The
table below compares the Fund's performance over time to that of a broad measure
of market performance. When you consider this information, please remember that
the Fund's past performance is not necessarily an indication of how it will
perform in the future.

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

4.09%
- -----
99

*The Fund's total return for the period January 1, 2000 through March 31,
2000 was -3.96%.

Best Quarter: Q1 1999 3.91%
Worst Quarter: Q1 2000 -3.96%

Average Annual Total Returns
(for the periods ended 12/31/99)

Performance
1 5 10 Inception
Year Year Year (12/31/98)
- -----------------------------------------------------------------
High Yield Fund 4.09% - - 4.09%
Merrill Lynch High Yield 1.57% - - 1.57%
Master Index

Merrill Lynch High Yield Master Index
An index of publicly placed non-convertible, coupon-bearing U.S. domestic debt
with a term to maturity of at least one year.

17
<PAGE>

Emerging Markets Debt Fund

Objective
The Fund seeks to maximize total U.S. dollar return, consisting of capital
appreciation and current income, while controlling risk.

Principal Strategies
The Fund employs a fixed income strategy, and intends to invest primarily in
a portfolio of debt securities of issuers located in at least three emerging
markets countries, which may be located in Asia, Europe, Latin America, Africa
or the Middle East. As these markets change and other countries' markets
develop, the Fund expects the countries in which it invests to change. The Fund
is a non-diversified portfolio.

All selection decisions are undertaken relative to the J.P. Morgan Emerging
Markets Bond Index Plus, the benchmark against which the Fund measures its
portfolio.

A substantial amount of the assets of the Fund may be invested in higher-
yielding, lower-rated bonds.

Fund Performance
There is no performance quoted as the Fund had not commenced operations prior to
the date of this prospectus.

J.P. Morgan Emerging Markets Bond Index Plus
Comprised of external-currency-denominated emerging markets debt, including
Brady Bonds, loans, Eurobonds and local market instruments.

18
<PAGE>

Global (Ex-U.S.) Equity Fund

Objective
The Fund seeks to maximize total return, consisting of capital appreciation and
current income, by investing primarily in the equity securities of global (ex-
U.S.) issuers.

Investments in equity securities may include:
* Common stock
* Preferred stock

Annual Total Returns for the periods ended 12/31*

[BAR CHART APPEARS HERE]

11.81% 5.02% 13.44% 18.15%
- --------------------------------
96 97 98 99

*The Fund's total return for the period January 1, 2000 through March 31,
2000 was -4.44%.

Best Quarter: Q4 1998 16.86%
Worst Quarter: Q3 1998 -13.78%

Average Annual Total Returns
(for the periods ended 12/31/99)

Performance
1 5 10 Inception
Year Year Year (7/31/95)
- --------------------------------------------------------------
Global (Ex-U.S.) Equity 18.15% - - 12.88%
Fund
MSCI World Ex USA 27.77% - - 12.68%
(Free) Index

MSCI World Ex USA (Free) Index
An unmanaged, market driven broad based securities index which includes global
(ex-U.S.) equity markets in terms of capitalization and performance.
19
<PAGE>

Emerging Markets Equity Fund

Objective
The Fund seeks to maximize total U.S. dollar return, consisting of capital
appreciation and current income, while controlling risk.

All selection decisions are undertaken relative to the Morgan Stanley Capital
International (MSCI) Emerging Markets (Free) Index, if the benchmark against
which the Fund measures its portfolio.

Fund Performance
There is no performance quoted as the Fund had not commenced operations as of
the date of this prospectus.

20
<PAGE>

Risk Considerations

The chart below illustrates the primary risks of investing in the Funds.

<PAGE>

Risk Considerations (cont.)
All Fund investments are subject to risk and may decline in value. Each Fund's
exposure depends upon its specific investment practices. The amount and types
of risk vary depending on:

Please note that there are other circumstances that could adversely affect your
investment and potentially prevent a Fund from achieving its objectives.

On January 1, 1999, the European Monetary Union introduced a new single
currency, the Euro, which replaced the national currencies of participating
member nations. If a Fund held investments in nations with currencies replaced
by the Euro, the investment process, including trading, foreign exchange,
payments, settlements, cash accounts, custody and accounting, was impacted. To
the extent the Funds hold non-U.S. dollar denominated securities (Euro or other)
they will still be exposed to currency risk due to fluctuations in those
currencies versus the U.S. dollar.

Each Fund's primary investment practices and strategies are discussed in this
prospectus. Other practices, and their related risks, are described in the
Statement of Additional Information ("SAI").

22
<PAGE>

Risk Considerations (cont.)

Interest Rate Risk

Market Risk

Non-Diversification Risk

Portfolio Turnover

Prepayment Risk

The risk that issuers will prepay fixed rate obligations when interest rates
fall, forcing the Fund to re-invest in obligations with lower interest rates
than the original obligations.

Small Company Risk

23
<PAGE>

Fees and Expenses

The tables below describe the fees and expenses that you may pay if you buy and
hold shares of the UBS Investment Funds Class of shares.

Shareholder Transaction Fees

(fees paid directly from your investment)

Sales Charge (Load) Imposed on Purchases None

Emerging Markets Equity Fund:
Purchase/Redemption Transaction Fee 1.50%*

* This transaction charge is paid to the Fund and used by it to defray
transaction costs associated with each purchase and sale of securities by the
Fund.

Annual Fund Operating Expenses

(expenses that are deducted from Fund assets, expressed as a % of average net
assets)

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Total Fund
Amount of Fee Operating Expenses
Waiver and/or (after fee waiver
Investment 12b-1 Other Gross Operating Expense and/or expense
(06/30/99) Advisory Fees/1/ Expenses/2/ Expenses/1/ Expenses/1/ Reimbursement/1/ reimbursement)/1/
- ------------------------------------------------------------------------------------------------------------------------------------
Global 0.80% 0.65% 0.16% 1.61% 0.00% 1.61%
Global Equity 0.80% 0.76% 0.25% 1.81% 0.05% 1.76%
Global Technology/3/ 1.40% 1.00% 0.15% 2.55% 0.00% 2.55%
Global Biotech/3/ 1.15% 1.00% 0.15% 2.30% 0.00% 2.30%
Global Bond 0.75% 0.49% 0.15% 1.39% 0.00% 1.39%
U.S. Balanced 0.70% 0.50% 0.26% 1.46% 0.16% 1.30%
U.S. Equity 0.70% 0.52% 0.10% 1.32% 0.00% 1.32%
U.S. Value Equity/3/ 0.70% 1.00% 0.15% 1.85% 0.00% 1.85%
U.S. Large Cap Equity 0.70% 0.52% 0.59% 1.81% 0.49% 1.32%
U.S. Large Cap Growth/4/ 0.70% 0.77% 1.68% 3.15% 1.58% 1.57%
U.S. Small Cap Equity/3/ 1.00% 1.00% 0.15% 2.15% 0.00% 2.15%
U.S. Small Cap Growth/4/ 1.00% 0.77% 0.32% 2.09% 0.17% 1.92%
U.S. Real Estate Equity Fund/3/ 0.90% 1.00% 0.15% 2.05% 0.00% 2.05%
U.S. Bond 0.50% 0.47% 0.11% 1.08% 0.01% 1.07%
High Yield/4/ 0.60% 0.85% 0.23% 1.68% 0.13% 1.55%
Emerging Markets Debt/3/ 0.65% 1.00% 0.50% 1.90% 0.00% 2.15%
Global (Ex-U.S.) Equity 0.80% 0.84% 0.19% 1.83% 0.00% 1.83%
Emerging Markets Equity/3/ 1.10% 1.00% 0.50% 2.45% 0.00% 2.60%
</TABLE>

<PAGE>

Fees and Expenses (cont.)

(2) For purposes of this Table, "12b-1 Expenses" are comprised of an asset-based
sales charge of up to 0.65% of average daily net assets and a service fee of
0.25% of average daily net assets for each of the Global Fund, Global Equity
Fund, Global Bond Fund, U.S. Balanced Fund, U.S. Equity Fund, U.S. Large Cap
Equity Fund, U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund, U.S. Bond
Fund, High Yield Fund and the GLobal (Ex-U.S.) Equity Fund. "12b-1 Expenses" are
comprised of an asset-based sales charge of up to 0.75% of average daily net
assets and a service fee of 0.25% of average daily net assets for each of the
Global Technology Fund, Global Biotech Fund, U.S. Value Equity Fund, U.S. Small
Cap Equity Fund, U.S. Real Estate Equity Fund, Emerging Markets Debt Fund and
Emerging Markets Equity Fund. See "Distribution Arrangements" on page 37.
Although the Distribution Plan provides that the Funds may pay fees at these
rates, the Funds and the Funds' underwriter have agreed to limit aggregate
distribution fees on certain of the Funds so they do not exceed the percentages
noted on page 37. Pursuant to rules of the National Association of Securities
Dealers, Inc. ("NASD"), the aggregate initial sales charges, deferred sales
charges and asset-based sales charges on shares of the Funds may not exceed
6.25% of total gross sales, subject to certain exclusions. This 6.25% limitation
is imposed on a Fund basis rather than on a per shareholder basis. Therefore,
long-term shareholders of the Funds may pay more than the economic equivalent of
the maximum front-end sales charges permitted by the NASD. This amount also
includes service fees.

25
<PAGE>

Fees and Expenses (cont.)

Expense Example

This example is intended to help you compare the cost of investing in the UBS
Investment Funds Class of shares to the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in a Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs and the
return on your investment may be higher or lower, based on these assumptions
your costs would be:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------
Global $ 164 $ 508 $ 876 $ 1,911
Global Equity $ 179 $ 554 $ 954 $ 2,073
Global Technology $ 258 $ 793 $ 1,355 $ 2,885
Global Biotech $ 233 $ 718 $ 1,230 $ 2,636
Global Bond $ 142 $ 440 $ 761 $ 1,669
U.S. Balanced $ 132 $ 412 $ 713 $ 1,568
U.S. Equity $ 134 $ 418 $ 723 $ 1,590
U.S. Value Equity $ 188 $ 582 $ 1,001 $ 2,169
U.S. Large Cap Equity $ 134 $ 418 $ 723 $ 1,590
U.S. Large Cap Growth $ 160 $ 496 $ 855 $ 1,867
U.S. Small Cap Equity $ 218 $ 673 $ 1,154 $ 2,483
U.S. Small Cap Growth $ 195 $ 603 $ 1,037 $ 2,243
U.S. Real Estate Equity $ 208 $ 643 $ 1,103 $ 2,379
U.S. Bond Fund $ 109 $ 340 $ 590 $ 1,306
High Yield Fund $ 158 $ 490 $ 845 $ 1,845
Emerging Markets Debt Fund $ 218 $ 673 $ 1,154 $ 2,483
Global (Ex-U.S.) Equity Fund $ 186 $ 576 $ 990 $ 2,148
Emerging Markets Equity Fund $ 263 $ 808 $ 1,380 $ 2,934
</TABLE>

<PAGE>

Investment Advisor

Advisory Fees

The following chart shows the investment advisory fees payable to Brinson
Partners, before fee waivers, by each Fund during its last fiscal year.

Investment Advisory Fees
(expressed as a percentage of average net assets)

The Advisor has irrevocably agreed to waive its fees and reimburse certain
expenses so that the total operating expenses, with the exception of 12b-1
expenses, of the UBS Investment Funds Class of shares do not exceed the
following amounts for each of the respective Funds:

About the Advisor

Portfolio Management

Brinson Partners, Inc.
209 South LaSalle Street
Chicago, Ill 60604-1295

<PAGE>

Pricing of Fund Shares

The UBS Investment Funds Class of shares are bought and sold at net asset value
("NAV"), which is calculated as of the close of business on each day that the
New York Stock Exchange ("NYSE") is open (currently 4:00 p.m. Eastern time). A
Fund's securities are valued based on the last sale price or, where market
quotations are not readily available, are based on fair value as determined in
good faith by the Trust's Board of Trustees.

How the Funds Calculate NAV

28
<PAGE>

Purchasing Shares

The minimum initial investment for Fund shares is $25,000, including Individual
Retirement Accounts ("IRAs"). Subsequent investments for Fund shares will be
accepted in minimum amounts of $5,000 (including IRAs). The Funds reserve the
right to vary the investment minimums and impose minimums for additional
investments at any time. In addition, Brinson Partners may waive the minimum
initial investment requirement for any investor at its discretion. Purchases
may be made in one of the following ways:

By Telephone
Call 1-800-794-7753 to arrange for a telephone transaction.

Complete and sign an application for the UBS Investment Funds Class of shares.

By Mail
Make your check payable to "UBS Investment Fund - ____________."

If you are adding to your existing account, enclose the remittance portion of
your account statement and include the amount of investment, account name and
number.

Mail your application and/or check to:
UBS Investment Funds
c/o Transfer Agent
P.O. Box 2798
Boston, MA 02208-2798

By Wire
If you are opening a new account, call the Funds at 1-800-794-7753 to arrange
for a wire transaction.

Then wire federal funds to:

The Chase Manhattan Bank
ABA#021000021
DDA#9102-783504
FBO: "UBS Investment Fund - _________" and include your name and new account
number.

Complete and sign an application for UBS Investment Funds Class of shares and
mail immediately following the initial wire transaction to:

UBS Investment Funds
c/o Transfer Agent
P.O. Box 2798
Boston, MA 02208-2798

If you are adding to your existing account, you do not need to call the Funds to
arrange for a wire transaction, but be sure to include your name and account
number.

Through Financial Institutions/Professionals
In some cases, the Funds have entered into one or more Sales Agreements with
brokers, dealers or other financial intermediaries ("Service Providers" as well
as with financial institutions (banks and bank trust departments) (each an
"Authorized Dealer"). The Authorized Dealer, or intermediaries designated by
the Authorized Dealer (a "Sub-designee"), may accept purchase and redemption
orders that are in "good form" on behalf of the Funds. A Fund will be deemed to
have received a purchase or redemption order when the Authorized Dealer or
Sub-designee accepts the order. Such orders will be priced at the Fund's net
asset value next computed after such order is accepted by the Authorized Dealer
or Sub-designee. These Authorized Dealers may charge the investor a transaction
fee or other fee for their services at the time of purchase. These fees would
not be otherwise charged if you purchased shares directly from the Funds. It is
the responsibility of such Authorized Dealers or Sub-designees to promptly
forward purchase orders with payments to the Funds.

Telephone orders are accepted from broker-dealers or service organizations if
they have been previously approved by the Funds.

Brinson Partners, or its affiliates, may, from its own resources, compensate
Service Providers for services performed with respect to the UBS Investment
Funds Class of shares. These services may include marketing, shareholder
servicing, recordkeeping and/or other services. Payments made for any of these
purposes may be made from Brinson Partners' revenues, its profits or any other
sources available. When these service arrangements are in effect, they are
generally made available to all qualified Service Providers.

If you have any questions or need further information, call 1-800-794-7753.

The Brinson Funds strongly discourage market timers and short-term traders from
investing in the Funds.

29
<PAGE>

Purchasing Shares (cont.)

You will be subject to a 1.50% transaction charge in connection with your
purchase of shares of the Emerging Markets Equity Fund. Shares of the Funds are
sold at a price which is equal to the NAV of such shares, plus the transaction
charge. The transaction charges do not apply to the reinvestment of dividends
or capital gains distributions. The transaction charge is paid to the Fund and
used by it to defray the transaction costs associated with each purchase and
sale of securities within the Fund.

Exchanging Shares

You can exchange your UBS Investment Funds shares for UBS Investment Funds
shares of other Funds. Exchanges will not be permitted between the UBS
Investment Funds shares and either the Brinson Funds - Class I shares or the
Brinson Funds - Class N shares.

Exchanged Funds are subject to the minimum initial investment requirement. The
procedures that apply to redeeming shares also apply to exchanging shares.

An exchange is the sale of shares of one Fund and purchase of shares of another
and could result in taxable gain or loss in a non-tax sheltered account.

Automatic Investment Plan
Through this option, money can be electronically deducted from your checking,
savings or bank money market accounts and invested in the Funds each month or
quarter.

Complete the Automatic Investment Plan Application, which is available upon
request by calling 1-800-794-7753, and mail it to the address indicated.

The initial $25,000 minimum investment still applies, however, subsequent
investments can be as little as $5,000.

The Funds may alter or terminate the Automatic Investment Plan at any time.

Systematic Withdrawal Plan
If you have a minimum of $25,000 in your account, you may direct the transfer
agent to make payments to you (or anyone you designate) monthly, quarterly or
semi-annually.

The Funds may terminate any SWP if the value of the account falls below $50,000
due to share redemptions or an exchange of shares for UBS Investment Fund shares
of another Fund.

Individual Retirement Account

You may open an IRA, a tax-deferred retirement account, with the Funds if you
are under age 70 1/2. The minimum purchase requirement for an IRA is $25,000.

30
<PAGE>

Redeeming Shares

Redemption requests received after the close of regular trading hours will be
executed at the next determined net asset value. Your order will be processed
promptly and you will generally receive the proceeds within seven days.

Please note that proceeds for redemption requests made shortly after a recent
purchase by check will be distributed once the check clears, which may take up
to 15 days.

You will be subject to a 1.50% transaction charge in connection with each
redemption of shares of the Emerging Markets Equity Fund. Redemption requests
for the Emerging markets Equity Fund are paid at the NAV less the transaction
charge. Redemptions which are made in kind with securities are not subject to
the transaction charge.

Minimum Balances
Due to the relatively high cost of maintaining smaller accounts, the Funds
reserve the right to involuntarily redeem shares in any Fund account for their
then current net asset value if at any time your total investment does not have
a value of at least $1,000 as a result of redemptions and not due to changes in
the asset value of the Fund.

You will be notified if your account drops below the required minimum and will
be allowed at least 60 days to bring the value of the account up to the minimum
before the redemption is processed. The Fund will promptly pay you the NAV for
such a redemption.

You may redeem some or all of your shares any day the NYSE is open for business
by doing one of the following (if you have any questions, call the transfer
agent at 1-800-794-7753).

By Telephone
If you have chosen the telephone redemption privilege on the initial application
or subsequently arranged in writing, you may call 1-800-794-7753 to redeem
shares.

By Mail
Shareholders may sell shares by making a written request to:
UBS Investment Funds
P.O. Box 2798
Boston, MA 02208-2798

Include signatures of all persons required to sign for transactions, exactly as
their names appear on the account application.

To protect your account from fraud, the Funds may require a signature guarantee
for certain redemptions (see "Signature Guarantees" below).

Call 1-800-794-7753.

Wire redemption requests must be received by the transfer agent by 4:00 p.m.
Eastern time for money to be wired the next business day.

Through Financial Institutions/Professionals

Contact your financial institution or professional for more information. If you
purchased shares through an Authorized Dealer or Sub-designee, you should
contact it for more information.

Important note: Each institution or professional may have its own procedures and
requirements for selling shares and may charge fees.

31
<PAGE>

Redeeming Shares (cont.)

Signature Guarantees
To protect your account from fraud, the Fund and its agent may require a
signature guarantee for certain redemptions to verify the identity of the
person who has authorized a redemption from your account. Please contact the
Fund for further information.

Telephone Transactions
You may give up some level of security by choosing to buy or sell shares by
telephone, rather than by mail. The Funds will employ reasonable procedures to
confirm that telephone instructions are genuine. If they do not employ these
procedures, the Funds or the transfer agent may be liable for any losses due to
unauthorized or fraudulent transactions. A written confirmation will be
provided for all purchase, exchange and redemption transactions initiated by
telephone.

Transfer of Securities

Under certain circumstances, investors may be permitted to purchase Fund shares
by transferring securities to the Fund that meet the Fund's investment
objective and policies. (Please see the SAI for more information.)

Dividends and Distributions

Net investment income for all of the Funds consists of all dividends and
interest received, less expenses (including fees payable to the Advisor and its
affiliates).

Dividends from net investment income are declared, and paid, by each Fund
semi-annually - in June and December. In December, the Funds will distribute
substantially all of their net long-term capital gains and any undistributed
net short-term capital gains realized during the one year period commencing
November 1 (or date of the creation of the Fund, if later) and ending October
31. At the same time, the Funds will distribute all of their net investment
income earned through the end of December and not previously distributed as
ordinary (not capital) income.

Unless you notify the transfer agent in writing that you elect to receive your
income dividends and capital gains distributions in cash, all will be
reinvested automatically in additional Fund shares of the same class of a Fund.
Distribution options may be changed at any time by requesting a change in
writing. Dividends are reinvested on the reinvestment date at the net asset
value determined at the close of business on that date. Please note that shares
purchased shortly before the record date for a dividend or distribution may
have the effect of returning capital, although such dividends and distributions
are subject to taxes.

32
<PAGE>

Tax Considerations

When you sell or exchange your shares of a Fund, you may have a capital gain or
loss. The tax rate on any gain from the sale or exchange of your shares depends
on how long you have held your shares.

Fund distributions and gains from the sale or exchange of your shares will
generally be subject to state and local income tax. Foreign investors may be
subject to U.S. withholding and estate tax.

If any of the following situations apply to you, the Funds will be required by
the IRS to withhold 31% of your taxable distributions:

* you do not provide your correct taxpayer identification number, or
* you do not certify that such number is correct, or
* the IRS instructs the Fund to do so.

Shareholders will be advised annually of the source and the tax status of all
Fund distributions for federal income tax purposes.

33
<PAGE>

Distribution Arrangements

Distribution Arrangements
The Funds have adopted two distribution plans under rule 12b-1 of the Investment
Company Act of 1940 to compensate Brinson Partners, Funds Distributor, Inc.
("FDI") and others for distributing and promoting sales of the UBS Investment
Funds Class of shares. One plan covers the Global, Global Equity, Global Bond,
U.S. Balanced, U.S. Equity, U.S. Large Cap Equity, U.S. Large Cap Growth, U.S.
Small Cap Growth, U.S. Bond, High Yield and Global (Ex-U.S.) Equity Funds and
annual fees paid under this plan may not exceed 0.90% of the average daily net
assets of each UBS Investment Fund's class of shares. The other plan covers the
Global Technology, Global Biotech, U.S. Value Equity, U.S. Small Cap Equity,
U.S. Real Estate Equity, Emerging Markets Debt and Emerging Markets Equity Funds
and annual fees paid under this plan may not exceed 1.00% of the average daily
net assets of each UBS Investment Fund's class of shares. 0.25% of each plan's
fees are service fees to be paid by the Funds to FDI, dealers and others, for
providing personal service and/or maintaining shareholder accounts. The plan
provides, however, that the aggregate distribution fees for each respective Fund
shall not exceed the following maximum amounts for the 2000 fiscal year:

Global Fund 0.65%
Global Equity Fund 0.76
Global Technology Fund 1.00
Global Biotech Fund 1.00
Global Bond Fund 0.49
U.S. Balanced Fund 0.50
U.S. Equity Fund 0.52
U.S. Value Equity Fund 1.00
U.S. Large Cap Equity Fund 0.52
U.S. Large Cap Growth Fund 0.77
U.S. Small Cap Equity Fund 1.00
U.S. Small Cap Growth Fund 0.77
U.S. Real Estate Equity Fund 1.00
U.S. Bond Fund 0.47
High Yield Fund 0.85
Emerging Markets Debt Fund 1.00
Global (Ex-U.S.) Equity Fund 0.84
Emerging Markets Equity Fund 1.00

Because these distribution and service fees are paid out of the assets of the
UBS Investment Funds Class of shares on an ongoing basis, over time these fees
will increase the cost of your investment and may cost you more than paying
other types of sales charges.

Multiple Classes
The Funds are series of The Brinson Funds, a Delaware business trust, and
currently offer three classes of shares: Brinson Funds--Class I, Brinson Funds--
Class N and UBS Investment Funds Class of shares.

34
<PAGE>

Financial Highlights
The financial highlights table is intended to help you understand a Fund's
financial performance for the past five years (or, if shorter, the period of the
Fund's operations). Certain information reflects financial results for a single
Fund share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in each Fund (assuming reinvestment
of all dividends and distributions).

Global Technology Fund, Global Biotech Fund, U.S. Value Equity Fund, U.S. Small
Cap Equity Fund, U.S. Real Estate Equity Fund, Emerging Markets Debt Fund and
Emerging Markets Equity Fund
No financial information is presented for these Funds as they had not commenced
operations as of the date of this prospectus.
35
<PAGE>

Financial Highlights (cont.)

Financial Highlights--Fiscal Year Ended June 30 and the Semi-Annual Period Ended
December 31, 1999.
The following table presents financial data relating to a share of beneficial
interest outstanding throughout the periods presented. This information has been
derived from the Funds' financial statements.

<TABLE>
<CAPTION>
Income (Loss) from Investment
Operations Less Distributions
------------------------------------------- -----------------------------
Distributions Distributions
Total from and from and
Net asset Net income in excess in excess
value- Net realized and (loss) from of net of net Total
beginning Investment unrealized investment investment realized Distribu-
Year of period income (loss) gain (loss) operations income gain tions
<S> <C> <C> <C> <C> <C> <C> <C>
UBS INVESTMENT FUND-GLOBAL (Commencement of Operations July 31, 1995)/(3)/
1996 $ 11.60 0.39 1.10 1.49 (0.59) (0.32) (0.91)
1997 $ 12.18 0.34 1.75 2.09 (0.57) (0.65) (1.22)
1998 $ 13.05 0.30 0.61 0.91 (0.55) (0.70) (1.25)
1999 $ 12.71 0.20 0.25 0.45 (0.37) (0.84) (1.21)
1999 (December 31st) (unaudited) $ 4.95 0.09/2/ (0.27) (0.18) (0.13) (0.52) (0.65)
--------- ------------- ------------ ----------- -------------- ------------- ---------
UBS INVESTMENT FUND-GLOBAL EQUITY (Commencement of Operations July 31, 1995)(3)
1996 $ 10.35 (0.01) 1.93 1.92 (0.01) (0.69) (0.70)
1997 $ 11.57 0.08 2.13 2.21 (0.06) (0.99) (1.05)
1998 $ 12.73 0.07 0.83 0.90 (0.07) (1.05) (1.12)
1999 $ 12.51 0.04/2/ 1.09 1.13 (0.06) (0.18) (0.24)
1999 (December 31st) (unaudited) $ 13.40 (0.03)/2/ 0.64 0.61 (0.02) (1.21) (1.23)
--------- ------------- ------------ ----------- -------------- ------------- ---------
UBS INVESTMENT FUND-GLOBAL BOND (Commencement of Operations July 31, 1995)(3)
1996 $ 10.56 0.78 0.15 0.93 (1.37) (0.10) (1.47)
1997 $ 10.02 0.62 0.10 0.72 (0.94) (0.19) (1.13)
1998 $ 9.61 0.38/2/ (0.18) 0.20 (0.25) (0.17) (0.42)
1999 $ 9.39 0.34/2/ (0.07) 0.27 (0.42) (0.08) (0.50)
1999 (December 31st) (unaudited) $ 9.16 0.19/2/ (0.19) - (0.11) (0.01) (0.12)
--------- ------------- ------------ ----------- -------------- ------------- ---------
UBS INVESTMENT FUND-U.S. BALANCED (Commencement of Operations July 31, 1995)(3)
1996 $ 11.38 0.42 0.86 1.28 (0.42) (0.57) (0.99)
1997 $ 11.67 0.38 1.31 1.69 (0.36) (0.54) (0.90)
1998 $ 12.46 0.42/2/ 0.95 1.37 (0.70) (0.94) (1.64)
1999 $ 12.19 0.27/2/ 0.18 0.45 (0.67) (2.65) (3.32)
1999 (December 31st) (unaudited) $ 9.32 0.13/2/ (0.87) (0.74) (0.17) (0.06) (0.23)
--------- ------------- ------------ ----------- -------------- ------------- ---------
UBS INVESTMENT FUND-U.S. EQUITY (Commencement of Operations July 31, 1995)(3)
1996 $ 11.94 0.10 2.92 3.02 (0.13) (0.25) (0.38)
1997 $ 14.58 0.11 4.22 4.33 (0.09) (1.23) (1.32)
1998 $ 17.59 0.09 3.38 3.47 (0.10) (1.13) (1.23)
1999 $ 19.83 0.06/2/ 2.67 2.73 (0.05) (1.12) (1.17)
1999 (December 31st) (unaudited) $ 21.39 0.08/2/ (2.90) (2.82) (0.05) (1.77) (1.82)
--------- ------------- ------------ ----------- -------------- ------------- ---------
UBS INVESTMENT FUND-U.S. LARGE CAP EQUITY (Commencement of Operations April 6, 1998)(3),(4)
1998 $ 10.00 0.02 (0.22) (0.20) (0.01) - (0.01)
1999 $ 9.79 0.04/2/ 1.31 1.35 (0.07) - (0.07)
1999 (December 31st) (unaudited) $ 11.07 0.05/2/ (2.01) (1.96) (0.08) (0.95) (1.03)
--------- ------------- ------------ ----------- -------------- ------------- ---------
</TABLE>

(1) Annualized
(2) The net investment income per share data was determined by using average
shares outstanding throughout the period.
(3) Formerly known as the SwissKey class of shares, redesignated as the UBS
Investment Funds Class of shares on September 15, 1998.
(4) The U.S. Large Cap Equity Fund changed its name from the U.S. Large
Capitalization Equity Fund on May 2, 2000.

36
<PAGE>

<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------
Ratio of Net
Ratio of Expenses Investment Income
to Average Net to Average Net
Assets Assets
------------------------ ------------------------
Net Net
asset Total assets, Before After Before After
value- Return end of expense expense expense expense Portfolio
end of (non- period reimburse- reimburse- reimburse- reimburse- turnover
Year period annualized) (in 000s) ment ment ment ment rate
<S> <C> <C> <C> <C> <C> <C> <C> <C>
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
UBS INVESTMENT FUND-GLOBAL (Commencement of Operations July 31, 1995)(3)
1996 $12.18 13.24% 1.69%/1/ N/A 3.04%/1/ N/A 142%
1997 $13.05 18.13% $26,303 1.64% N/A 2.38% N/A 150%
1998 $12.71 7.60% $30,436 1.59% N/A 2.05% N/A 88%
1999 $11.95 3.92% $22,060 1.61% N/A 1.58% N/A 105%
1999 (December 31st)
(unaudited) $11.12 (1.44)% $14,221 1.64%/1/ N/A 1.33%/1/ N/A 36%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
UBS INVESTMENT FUND-GLOBAL EQUITY (Commencement of Operations July 31, 1995)(3)
1996 $11.57 19.25% $33,012 2.53%/1/ 1.76%/1/ (0.19)%/1/ 0.58%/1/ 74%
1997 $12.73 20.34% $61,680 2.00% 1.75% 0.60% 0.85% 32%
1998 $12.51 8.15% $59,147 1.78% 1.76% 0.53% 0.55% 46%
1999 $13.40 9.28% $44,042 1.81% 1.76% 0.29% 0.34% 86%
1999 (December 31st)
(unaudited) $12.78 5.00% $42,061 1.81%/1/ 1.76%/1/ (0.39)%/1/ (0.34)%/1/ 57%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
UBS INVESTMENT FUND-GLOBAL BOND (Commencement of Operations July 31, 1995)(3)
1996 $10.02 9.17% $ 3,653 2.14%/1/ 1.39%/1/ 4.49%/1/ 5.24%/1/ 184%
1997 $ 9.61 7.20% $ 4,110 1.81% 1.39% 4.41% 4.83% 235%
1998 $ 9.39 2.28% $ 4,377 1.45% 1.39% 3.98% 4.04% 151%
1999 $ 9.16 2.58% $ 4,429 1.39% N/A 3.56% N/A 1.38%
1999 (December 31st)
(unaudited) $ 9.04 (0.07)% $ 3,624 1.53%/1/ 1.45%/1/ 3.67%/1/ 3.81%/1/ 35%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
UBS INVESTMENT FUND-U.S. BALANCED (Commencement of Operations July 31, 1995)(3)
1996 $11.67 11.54% $ 779 1.51%/1/ 1.30%/1/ 3.26%/1/ 3.47%/1/ 240%
1997 $12.46 14.99% $ 1,649 1.38% 1.30% 3.28% 3.36% 329%
1998 $12.19 11.79% $ 1,880 1.31% 1.30% 3.38% 3.39% 194%
1999 $ 9.32 4.13% $ 1,789 1.46% 1.30% 2.50% 2.66% 113%
1999 (December 31st)
(unaudited) $ 8.35 (7.44)% $ 1,446 1.45%/1/ 1.30%/1/ 2.35%/1/ 2.50%/1/ 42%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
UBS INVESTMENT FUND-U.S. EQUITY (Commencement of Operations July 31, 1995)(3)
1996 $14.58 25.70% $ 5,387 1.66%/1/ 1.32%/1/ 0.61%/1/ 0.95%/1/ 36%
1997 $17.59 31.28% $35,039 1.41% 1.32% 0.54% 0.63% 43%
1998 $19.83 20.80% $55,063 1.32% N/A 0.60% N/A 42%
1999 $21.39 14.63% $69,167 1.32% N/A 0.30% N/A 48%
1999 (December 31st)
(unaudited) $16.75 (4.51)% $50,772 1.32%/1/ N/A 0.32%/1/ N/A 26%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
UBS INVESTMENT FUND-U.S. LARGE CAP EQUITY (Commencement of Operations April 6, 1998)(3),(4)
1998 $ 9.79 (2.06)% $ 1 2.11%/1/ 1.32%/1/ 0.00%/1/ 0.79%/1/ 12%
1999 $11.07 13.86% $ 6 1.81% 1.32% 0.05% 0.54% 88%
1999 (December 31st)
(unaudited) $ 8.08 (11.39)% $ 77 1.70%/1/ 1.32%/1/ 0.20%/1/ 0.58%/1/ 84%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
</TABLE>

N/A = Not Applicable

37
<PAGE>

Financial Highlights (cont.)

<TABLE>
<CAPTION>
Income (Loss) from Investment
Operations Less Distributions
--------------------------------------- ------------------------------
Distributions Distributions
Net Total from and from and
Net asset Net realized income in excess in excess
value- Invest- and (loss) from of net of net Total
beginning ment unrealized investment investment realized Distribu-
Year of period income (loss) gain (loss) operations income gain tions
<S> <C> <C> <C> <C> <C> <C> <C>
UBS INVESTMENT FUND-U.S. LARGE CAP GROWTH/6/ (Commencement of Operations December 31, 1998)/4/
1999 $ 11.84 (0.04) 2.05 2.01 - - -
1999 (December 31st) (unaudited) $ 13.85 (0.05)/2/ 1.71 1.66 - (0.95) (0.95)
--------- ------------- ---------- ---------- -------------- ------------- ---------
UBS INVESTMENT FUND-U.S. SMALL CAP GROWTH/6/ (Commencement of Operations December 31, 1998)/4/
1999 $ 8.80 (0.06) 0.40 0.34 - - -
1999 (December 31st) (unaudited) $ 9.14 (0.07)/2/ 3.30 3.23 -
--------- ------------- ---------- ---------- -------------- ------------- ---------
UBS INVESTMENT FUND-U.S. BOND (Commencement of Operations August 31, 1995)/3/
1996 $ 10.00 0.46 (0.13) 0.33 (0.38) (0.03) (0.41)
1997 $ 9.92 0.46/2/ 0.32 0.78 (0.48) - (0.48)
1998 $ 10.22 0.50 0.49 0.99 (0.53) (0.14) (0.67)
1999 $ 10.54 0.52/2/ (0.26) 0.26 (0.42) (0.15) (0.57)
1999 (December 31st) (unaudited) $ 10.23 0.29/2/ (0.27) 0.02 (0.54) - (0.54)
--------- ------------- ---------- ---------- -------------- ------------- ---------
UBS INVESTMENT FUND-HIGH YIELD/6/ (Commencement of Operations December 31, 1998)
1999 $ 9.98 0.41/2/ (0.15) 0.26 (0.29) - (0.29)
1999 (December 31st) (unaudited) $ 9.95 0.42/2/ (0.27) 0.15 (0.43) (0.07) (0.50)
--------- ------------- ---------- ---------- -------------- ------------- ---------
UBS INVESTMENT FUND-GLOBAL (EX-U.S.) EQUITY (Commencement of Operations July 31, 1995)/3,5/
1996 $ 10.26 0.12 1.45 1.57 (0.15) (0.56) (0.71)
1997 $ 11.12 0.11 1.93 2.04 (0.11) (0.56) (0.67)
1998 $ 12.49 0.08 0.30 0.38 (0.08) (0.74) (0.82)
1999 $ 12.05 0.05 0.27 0.32 (0.05) (0.12) (0.17)
1999 (December 31st) (unaudited) $ 12.20 (0.03) 1.95 1.92 (0.02) (0.14) (0.16)
--------- ------------- ---------- ---------- -------------- ------------- ---------
</TABLE>

(1) Annualized.
(2) The net investment income per share data was determined by using average
shares outstanding throughout the period.
(3) Formerly known as the SwissKey class of shares, redesignated as the UBS
Investment Funds Class of shares on September 15, 1998.

(4) The U.S. Large Cap Growth Fund and U.S. Small Cap Growth Fund changed their
names from the U.S. Large Capitalization Growth Fund and U.S. Small
Capitalization Growth Fund, respectively, on May 2, 2000.
(5) The Global (Ex-U.S.) Equity Fund changed its name from the Non-U.S. Equity
Fund on December 10, 1998.
(6) Prior to the Reorganizations, U.S. Large Cap Growth Fund, U.S. Small Cap
Growth Fund and High Yield Fund had a fiscal year end of December 31.
N/A = Not Applicable

38
<PAGE>

<TABLE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
------------------------------------
Ratio of Net
Ratio of Expenses Investment Income
to Average Net to Average Net
Assets Assets
----------------------- -----------------------
Net Net
asset Total assets, Before After Before After
value- Return end of expense expense expense expense Portfolio
end of (non- period reimburse- reimburse- reimburse- reimburse- turnover
Year period annualized) (in 000s) ment ment ment ment rate
<S> <C> <C> <C> <C> <C> <C> <C> <C>
UBS INVESTMENT FUND-U.S. LARGE CAP GROWTH/6/ (Commencement of Operations December 31, 1998)/4/
1999 $ 13.85 16.98% $ 5,136 3.15%/1/ 1.57%/1/ (2.03)%/1/ (0.45)%/1/ 51%
1999 (December 31st) (unaudited) $ 14.56 31.63% $ 7,080 2.94%/1/ 1.57%/1/ (2.06)%/1/ (0.69)%/1/ 46%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
UBS INVESTMENT FUND-U.S. SMALL CAP GROWTH/6/ (Commencement of Operations December 31, 1998)/4/
1999 $ 9.14 3.86% $ 640 2.09%/1/ 1.92%/1/ (1.39)%/1/ (1.22)%/1/ 71%
1999 (December 31st) (unaudited) $ 12.37 40.57% $ 1,378 2.11%/1/ 1.92%/1/ (1.52)%/1/ (1.33)%/1/ 69%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
UBS INVESTMENT FUND-U.S. BOND (Commencement of Operations August 31, 1995)/3/
1996 $ 9.92 3.24% $ 636 4.10%/1/ 1.07%/1/ 2.53%/1/ 5.56%/1/ 363%
1997 $ 10.22 7.91% $ 1,399 2.12% 1.07% 4.67% 5.72% 410%
1998 $ 10.54 9.97% $ 2,444 1.31% 1.07% 5.14% 5.38% 198%
1999 $ 10.23 2.45% $ 6,015 1.08% 1.07% 4.95% 4.96% 260%
1999 (December 31st) (unaudited) $ 9.71 (1.55)% $ 5,771 1.08%/1/ 1.07%/1/ 5.47%/1/ 5.48%/1/ 103%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
UBS INVESTMENT FUND-HIGH YIELD/6/ (Commencement of Operations December 31, 1998)
1999 $ 9.95 2.61% $ 6,292 1.68%/1/ 1.55%/1/ 7.69%/1/ 7.82%/1/ 77%
1999 (December 31st) (unaudited) $ 9.60 4.09% $ 2,920 1.68%/1/ 1.55%/1/ 8.29%/1/ 8.42%/1/ 29%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
UBS INVESTMENT FUND-GLOBAL (EX-U.S.) EQUITY (Commencement of Operations July 31, 1995)/3,5/
1996 $ 11.12 15.78% $ 1,262 2.04%/1/ 1.84%/1/ 0.83%/1/ 1.03%/1/ 20%
1997 $ 12.49 19.32% $ 7,797 1.81% N/A 1.02% N/A 25%
1998 $ 12.05 3.90% $ 5,310 1.84% N/A 0.68% N/A 49%
1999 $ 12.20 2.78% $ 6,739 1.83% N/A 0.51% N/A 74%
1999 (December 31st) (unaudited) $ 13.96 18.15% $ 7,304 1.82%/1/ N/A (0.51)%/1/ N/A 32%
------- ----------- --------- ---------- ---------- ---------- ---------- ---------
</TABLE>
39
<PAGE>

Mail to: UBS Investment Funds
c/o Transfer Agent
P.O. Box 2798
[LOGO OF UBS] Boston, MA 02208-2798
ACCOUNT APPLICATION 1-800-794-7753
Investment Funds
- --------------------------------------------------------------------------------
1. Account Registration
- --------------------------------------------------------------------------------
If you have another Fund Account with the same registration and tax ID as this
account and would like to keep the same account number, please provide the
existing Account Number Name of Fund .
--------------- ---------------

[_] Individual Account
- --------------------------------------------------------------------------------
Name Social Security Number
- --------------------------------------------------------------------------------

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

[_] Joint Account
- --------------------------------------------------------------------------------
Name Social Security Number
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Name Social Security Number
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
(Joint Account will be Joint Account with rights of survivorship unless
otherwise specified)

[_] Custodial Account/Gift to Minor
- --------------------------------------------------------------------------------
Minor's Name Custodian's name
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Minor's Social Security Number Minor's State of Residence
- --------------------------------------------------------------------------------

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

[_] Trust, Corporation, Partnership or other Entity
(Please include a copy of the corporate resolution form)
- --------------------------------------------------------------------------------
Name of Legal Entity Taxpayer I.D. Number
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Name of Fiduciary (if to be included in registration) Date of Trust Document
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
2. Mailing Address
- --------------------------------------------------------------------------------
Street Address
- --------------------------------------------------------------------------------

================================================================================
City, State, Zip Code Daytime Phone
- --------------------------------------------------------------------------------

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

- --------------------------------------------------------------------------------
3. Fund Investment
- --------------------------------------------------------------------------------
Please make check payable to the appropriate Fund(s).
($25,000 minimum initial investment per Fund; $5,000 minimum additional
investment per Fund)
================================================================================

FUND NAME AMOUNT
- --------------------------------------------------------------------------------
UBS Global Fund $
- --------------------------------------------------------------------------------
UBS Global Equity Fund $
- --------------------------------------------------------------------------------
UBS Global Technology Fund $
- --------------------------------------------------------------------------------
UBS Global Biotech Fund $
- --------------------------------------------------------------------------------
UBS Global Bond Fund $
- --------------------------------------------------------------------------------
UBS U.S. Balanced Fund $
- --------------------------------------------------------------------------------
UBS U.S. Equity Fund $
- --------------------------------------------------------------------------------
UBS U.S. Value Equity Fund $
- --------------------------------------------------------------------------------
UBS U.S. Large Cap Equity Fund $
- --------------------------------------------------------------------------------

================================================================================
FUND NAME AMOUNT
- --------------------------------------------------------------------------------
UBS U.S. Large Cap Growth Fund $
- --------------------------------------------------------------------------------
UBS U.S. Small Cap Equity Fund $
- --------------------------------------------------------------------------------
UBS U.S. Small Cap Growth Fund $
- --------------------------------------------------------------------------------
UBS U.S. Real Estate Equity Fund $
- --------------------------------------------------------------------------------
UBS U.S. Bond Fund $
- --------------------------------------------------------------------------------
UBS High Yield Fund $
- --------------------------------------------------------------------------------
UBS Emerging Markets Debt Fund $
- --------------------------------------------------------------------------------
UBS Global (Ex-U.S.) Equity Fund $
- --------------------------------------------------------------------------------
UBS Emerging Markets Equity Fund $
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
4. Distribution Options
- --------------------------------------------------------------------------------
Check one -- if no box is checked, all dividends and capital gains will be
reinvested in additional shares of the Fund.

[_] Reinvest all dividends and capital gains

[_] Pay all capital gains in cash and reinvest dividends

[_] Pay all dividends in cash and reinvest capital gains

[_] Pay all dividends and capital gains in cash
<PAGE>

- --------------------------------------------------------------------------------
5. Fund Investment Options
- --------------------------------------------------------------------------------
This application confirms prior purchase made by [_] telephone or [_] wire. The
following account number was assigned
--------------
(See accompanying prospectus for telephone or wire instructions.)

Do you wish to be able to redeem shares by telephone? [_] Yes [_] No

Do you wish to be able to exchange shares between Funds by telephone?
[_] Yes [_] No

Do you wish to be able to wire redemption proceeds to your bank account
designated? [_] Yes [_] No

If no boxes are marked, you will not have the privileges specified.
For wire redemptions, complete information below.

================================================================================
Bank Name Bank ABA# Your Shareholder Account Number
- --------------------------------------------------------------------------------

================================================================================
Bank Street Address Bank City, State, Zip Code
- --------------------------------------------------------------------------------

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

A voided check from this bank account must be attached to this document.
NOTE: Be sure that your bank accepts wire transfers.

- --------------------------------------------------------------------------------
6. Automatic Investment Plan
- --------------------------------------------------------------------------------

[_] Automatic Investment Plan ($50 minimum) I (we) have read the description of
the Automatic Investment Plan in the prospectus. Please debit my account on the
[_] 10th [_] 15th [_] 20th (choose one). (If no date is specified, your account
will be debited the 20th of each month) ($1,000 minimum initial investment)
Fund: Monthly Dollar Amount:
- -------------- --------------

I agree that your rights with respect to such debit shall be the same as if it
were a check drawn upon you and signed personally by me. This authority shall
remain in effect until you receive written notice from me changing the terms or
revoking it. I agree that you shall be fully protected in honoring any such
debit. I further agree that if any debit be dishonored, whether with or without
cause or whether intentionally or inadvertently, you shall be under no liability
whatsoever.

I (we) understand that my automatic clearing house (ACH) debit will be dated on
the day of each month indicated above. If that day falls on a day in which the
NYSE is not open for business, the debit will occur on the next available
business day. I (we) agree that if such debit is not honored, Chase Global Funds
Services Company reserves the right to discontinue this service and any share
purchase made upon such deposit will be cancelled. I (we) further agree that if
the net asset value of shares purchased is less when said purchase is cancelled
than when the purchase was made, Chase Global Funds Services Company shall be
authorized to liquidate other shares or fractions thereof held in my (our)
account to make up the deficiency. This Automatic Investment Plan may be
discontinued by Chase Global Funds Services Company upon 30 days written notice
or at any time by the investor by written notice to Chase Global Funds Services
Company which is received not later than 5 business days prior to the above
designated investment date.

================================================================================

- --------------------------------------------------------------------------------
Signature(s) Date
================================================================================
A voided check from this bank account must be attached to this document.
<PAGE>

- --------------------------------------------------------------------------------
7. Signature Certification
- --------------------------------------------------------------------------------
This order is subject to acceptance by the Fund(s). Receipt of the current
prospectus(es) is hereby acknowledged. I (we) am of legal age in my state of
residence. I (we) agree that the UBS Investment Funds will not be liable for any
loss or damage for acting in good faith upon instructions received by telephone
and believed to be genuine. I (we) understand all telephone conversations with
the UBS Investment Funds' representatives are tape-recorded so you can compare
actions taken with original instructions should clarification be necessary and
hereby consent to such recording. The following is required by Federal tax law
to avoid 31% backup withholding: "By signing below, I certify under penalties of
perjury that the social security or taxpayer identification number entered
above is correct (or I am waiting for a number to be issued), and that I have
not been notified by the IRS that I am subject to backup withholding as a result
of a failure to report all interest or dividends, or the IRS has notified me
that I am no longer subject to backup withholding unless I have checked the box.
"If based on the foregoing you are subject to backup withholding, check box. [_]

[_] U.S.Citizen [_] Resident Alien [_] Nonresident Alien, Country
----------

The Internal Revenue Service does not require your consent to any provision of
this document other than the certification to avoid backup withholding.

================================================================================

- --------------------------------------------------------------------------------
Signature of: [_] Owner [_] Trustee [_] Custodian [_] Date
================================================================================
================================================================================

- --------------------------------------------------------------------------------
Signature of Joint Owner (if any) Date
- --------------------------------------------------------------------------------
================================================================================

- --------------------------------------------------------------------------------
8. For Investment Dealer Information Only
- --------------------------------------------------------------------------------
Firm Name Branch/Branch #
- --------------------------------------------------------------------------------

================================================================================
Branch Address City, State, Zip Code
- --------------------------------------------------------------------------------

================================================================================
Representative # Representative's Last Name
- --------------------------------------------------------------------------------

================================================================================
<PAGE>

Mail to: UBS Investment Funds
c/o Transfer Agent
[LOGO OF UBS] IRA APPLICATION and P.O. Box 2798
TRANSFER REQUEST Boston, MA 02208-2798
INVESTMENT FUNDS 1-800-794-7753

- --------------------------------------------------------------------------------
1. Account Registration
- --------------------------------------------------------------------------------
Name Social Security Number
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Street Address Birth Date
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
City, State, Zip Code Daytime Phone
- --------------------------------------------------------------------------------

================================================================================
2. Type of Account
- --------------------------------------------------------------------------------

Check one as applicable
- --------------------------------------------------------------------------------
TYPE OF ACCOUNT
- --------------------------------------------------------------------------------
Regular IRA [_] $ [_] Current Year [_] Prior Year
- --------------------------------------------------------------------------------
Spousal IRA [_] $ [_] Current Year [_] Prior Year
- --------------------------------------------------------------------------------
Rollover IRA [_] $ Do not combine with Regular IRA
- --------------------------------------------------------------------------------
IRA Transfer [_] $ Complete IRA Transfer Information below
- --------------------------------------------------------------------------------
SEP IRA [_] $ Include employer name and address
- --------------------------------------------------------------------------------
Roth IRA [_] $
- --------------------------------------------------------------------------------
Roth Conversion IRA [_] $
- --------------------------------------------------------------------------------
Employer Name
- --------------------------------------------------------------------------------
Employer Address
- --------------------------------------------------------------------------------

Page 1
<PAGE>

- --------------------------------------------------------------------------------
3. IRA Transfer Information
- --------------------------------------------------------------------------------
Name of Present Trustee/Custodian
- --------------------------------------------------------------------------------

================================================================================
Address
- --------------------------------------------------------------------------------

================================================================================
City, State, Zip
- --------------------------------------------------------------------------------

================================================================================
Investor's Name and Account Number
- --------------------------------------------------------------------------------
<TABLE>

- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Type of Account [_] Individual [_] Spousal [_] Rollover or Transfer [_] SEP
- -------------------------------------------------------------------------------------------------------------------
Type of Assets [_] Mutual Fund [_] Money Market [_] CD - [_] immediately [_] at maturity [_] Securities
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
4. Dividend Distributions
- --------------------------------------------------------------------------------
All dividends and capital gains are reinvested.

- --------------------------------------------------------------------------------
5. Fund Investment
- --------------------------------------------------------------------------------
Please make check payable to UBS Investment Funds

================================================================================

Page 2

<PAGE>

- --------------------------------------------------------------------------------
6. Beneficiary Designation
- --------------------------------------------------------------------------------

Primary Beneficiary
================================================================================
Name Social Security Number
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Street Address Birth Date
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
City, State, Zip Code Relationship
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Secondary Beneficiary
================================================================================
Name Social Security Number
- --------------------------------------------------------------------------------

================================================================================
Street Address Birth Date
- --------------------------------------------------------------------------------

================================================================================
City, State, Zip Code Relationship
- --------------------------------------------------------------------------------

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

Any married resident of a "community property" or "marital property" state,
which classifies this IRA under state law as community or marital property, who
designates a beneficiary or beneficiaries other than his or her spouse to
receive more than half of the account balance, must obtain the consent of his or
her spouse to such beneficiary designation. The spouse's signature below shall
serve as evidence of consent.

I hereby give the account holder any interest I may have in the funds deposited
in this account and consent to the beneficiary designation(s) indicated above. I
assume full responsibility for any adverse consequences that may result.

================================================================================

- --------------------------------------------------------------------------------
Spouse's Signature Date
- --------------------------------------------------------------------------------

Page 3
<PAGE>

- --------------------------------------------------------------------------------
7. Signature Certification
- --------------------------------------------------------------------------------

I hereby adopt UBS Investment Funds Individual Retirement Custodial Account
Agreement appointing Chase Manhattan Bank as custodian. I have received, read
and understood the Individual Retirement Custodial Account Agreement and
Disclosure Statement and the Prospectus for the UBS Investment Funds, under this
Agreement.

I certify under penalties of perjury that the social security number entered
above is correct and that I have not been notified by the IRS that I am subject
to backup withholding unless I have checked this box.

================================================================================

- --------------------------------------------------------------------------------
Signature Date
- --------------------------------------------------------------------------------

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

Page 4
<PAGE>

For More Information

More information on The Brinson Funds is available free upon request:

Shareholder Reports

Additional information about the Funds' investments is available in the Funds'
annual and semi-annual reports to shareholders. In the Funds' annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected each Fund's performance during its last fiscal year.

TO OBTAIN INFORMATION:

By Telephone
Call 1-800-794-7753

By Mail
UBS Investment Funds
P.O. Box 2798
Boston, MA 02208-2798

By Email
[email protected]

On The Internet
Text-only versions of the prospectus and other documents pertaining to the Funds
can be viewed online or downloaded from:

SEC: http://www.sec.gov

Brinson Partners: http://www.ubsbrinson.com

The Funds are series of The Brinson Funds;
Registration Number: 811-6637
<PAGE>

[LOGO OF UBS]

Investment Funds

P.O. Box 2798.Boston, MA 02208-9915

Tel: 1-800-794-7753
<PAGE>

THE BRINSON FUNDS

GLOBAL FUND
GLOBAL EQUITY FUND
GLOBAL TECHNOLOGY FUND
GLOBAL BIOTECH FUND
GLOBAL BOND FUND
U.S. BALANCED FUND
U.S. EQUITY FUND
U.S. VALUE EQUITY FUND
U.S. LARGE CAP EQUITY FUND
U.S. LARGE CAP GROWTH FUND
U.S. SMALL CAP EQUITY FUND
U.S. SMALL CAP GROWTH FUND
U.S. REAL ESTATE EQUITY FUND
U.S. BOND FUND
HIGH YIELD FUND
EMERGING MARKETS DEBT FUND
GLOBAL (EX-U.S.) EQUITY FUND
EMERGING MARKETS EQUITY FUND

STATEMENT OF ADDITIONAL INFORMATION

May 2, 2000

The Brinson Funds (the "Trust") currently offers eighteen separate
series, each with its own investment objective and policies. The Trust also
offers three classes of shares for each series - the Brinson Fund-Class I, the
Brinson Fund-Class N and the UBS Investment Funds class. Information concerning
the Brinson Fund-Class I of each series is included in a separate Prospectus
dated May 2, 2000. Information concerning the Brinson Fund-Class N of each
series is included in a separate Prospectus dated May 2, 2000. Information
concerning the UBS Investment Funds class of shares of each series is included
in a separate Prospectus dated May 2, 2000. This Statement of Additional
Information ("SAI") is not a Prospectus, but should be read in conjunction with
the current Prospectuses of the Trust. Much of the information contained herein
expands upon subjects discussed in the Prospectuses. No investment in shares
should be made without first reading the applicable Prospectus. A copy of each
Prospectus and the Annual Report and the Semi-Annual Report may be obtained
without charge from the Trust at the addresses and telephone numbers below.

<TABLE>
<CAPTION>
UNDERWRITER: ADVISOR:
<S> <C>
Funds Distributor, Inc. Brinson Partners, Inc.
60 State Street, Suite 1300 209 South LaSalle Street
Boston, MA 02109 Chicago, IL 60604-1295
1-800-448-2430 (Brinson Fund-Class I 1-800-448-2430 (Brinson Fund-Class I and
and Brinson Fund-Class N) Brinson Fund-Class N)
1-800-794-7753 (UBS Investment Funds class) 1-800-794-7753 (UBS Investment Funds
Class)
</TABLE>

<PAGE>

The Annual Reports dated June 30, 1999 and the Semi-Annual Reports
dated December 31, 1999 to shareholders of the Trust's series are separate
documents supplied with this SAI, and the financial statements, accompanying
notes and report of independent auditors appearing in each of the Annual Reports
and the financial statements and accompanying notes appearing in each of the
Semi-Annual Reports are incorporated by reference into (legally made a part of)
this SAI.

2
<PAGE>

<TABLE>
TABLE OF CONTENTS

<S> <C>
GENERAL INFORMATION ABOUT THE TRUST............................................................................. 5
Diversified Status......................................................................................... 5
General Definitions........................................................................................ 5
INVESTMENT STRATEGIES........................................................................................... 6
INVESTMENTS RELATING TO ALL FUNDS............................................................................... 6
Cash and Cash Equivalents.................................................................................. 6
Repurchase Agreements...................................................................................... 7
Reverse Repurchase Agreements.............................................................................. 7
Borrowing.................................................................................................. 8
Loans of Portfolio Securities.............................................................................. 8
Swaps...................................................................................................... 8
Futures.................................................................................................... 9
Options.................................................................................................... 11
Index Options.............................................................................................. 13
Special Risks of Options on Indices........................................................................ 14
Rule 144A and Illiquid Securities.......................................................................... 14
Investment Company Securities.............................................................................. 15
Real Estate Investment Trusts (REITS)...................................................................... 15
Other Investments.......................................................................................... 15
INVESTMENTS RELATING TO THE GLOBAL FUND, GLOBAL EQUITY FUND, GLOBAL TECHNOLOGY FUND, GLOBAL BIOTECH FUND,
U.S. BALANCED FUND, U.S. EQUITY FUND, U.S. VALUE EQUITY FUND, U.S. LARGE CAP EQUITY FUND, U.S. LARGE CAP GROWTH
FUND, U.S. SMALL CAP EQUITY FUND, U.S. SMALL CAP GROWTH FUND, U.S. REAL ESTATE EQUITY FUND, GLOBAL
(EX-U.S.) EQUITY FUND AND EMERGING MARKETS EQUITY FUND......................................................... 16
Equity Securities............................................................................................... 16
Exchange-Trust Index Securities................................................................................. 16
INVESTMENTS RELATING TO THE GLOBAL FUNDS, U.S. VALUE EQUITY FUND, U.S. LARGE CAP GROWTH FUND, U.S. SMALL CAP
EQUITY FUND, U.S. SMALL CAP GROWTH FUND, U.S. REAL ESTATE EQUITY FUND AND HIGH YIELD FUND....................... 16
Foreign Securities......................................................................................... 17
Forward Foreign Currency Contracts......................................................................... 17
Options on Foreign Currencies.............................................................................. 18
Short Sales................................................................................................ 19
INVESTMENTS RELATING TO THE GLOBAL FUND, GLOBAL BOND FUND, U.S. BALANCED FUND, U.S. REAL ESTATE EQUITY FUND,
U.S. BOND FUND, HIGH YIELD FUND, EMERGING MARKETS DEBT FUND AND EMERGING MARKETS EQUITY FUND.................... 19
Lower Rated Debt Securities................................................................................ 19
Pay-In-Kind Bonds.......................................................................................... 20
When-Issued Securities..................................................................................... 21
Mortgage-Backed Securities and Mortgage Pass-Through Securities............................................ 21
Collateralized Mortgage Obligations ("CMOs") and Real Estate Mortgage
Investment Conduits ("REMICs")........................................................................ 23
Other Mortgage-Backed Securities....................................................................... 24
</TABLE>

3
<PAGE>

<TABLE>
<S> <C>
Asset-Backed Securities.............................................................................. 24
Zero Coupon and Delayed Interest Securities.......................................................... 26
INVESTMENTS RELATING TO THE GLOBAL FUND, GLOBAL EQUITY FUND, GLOBAL TECHNOLOGY FUND, GLOBAL BIOTECH
FUND, HIGH YIELD FUND, EMERGING MARKETS DEBT FUND, GLOBAL (EX-US) EQUITY FUND AND EMERGING MARKETS
EQUITY FUND............................................................................................... 27
Emerging Markets Investments......................................................................... 27
Risks of Investing in Emerging Markets............................................................... 29
Investments in Russian Securities.................................................................... 30
Investments in Affiliated Investment Companies....................................................... 31
SECONDARY RISKS........................................................................................... 32
INVESTMENT RESTRICTIONS................................................................................... 32
MANAGEMENT OF THE TRUST................................................................................... 36
Trustees and Officers................................................................................ 36
Compensation Table................................................................................... 38
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES....................................................... 38
INVESTMENT ADVISORY AND OTHER SERVICES.................................................................... 46
Advisor.............................................................................................. 46
Administrator........................................................................................ 51
Independent Auditors................................................................................. 55
Legal Counsel........................................................................................ 55
Underwriter.......................................................................................... 55
Distribution Plan.................................................................................... 55
Code of Ethics....................................................................................... 59
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS.......................................................... 59
Portfolio Turnover................................................................................... 63
SHARES OF BENEFICIAL INTEREST............................................................................. 64
PURCHASES................................................................................................. 65
Exchanges of Shares.................................................................................. 66
Transfer of Securities............................................................................... 67
Net Asset Value...................................................................................... 67
REDEMPTIONS............................................................................................... 69
TAXATION.................................................................................................. 70
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION............................................................ 72
PERFORMANCE CALCULATIONS.................................................................................. 72
Total Return......................................................................................... 73
Yield................................................................................................ 77
FINANCIAL STATEMENTS AND REPORTS OF INDEPENDENT AUDITORS.................................................. 77
CORPORATE DEBT RATINGS --- APPENDIX A..................................................................... A-1
SECONDARY RISKS --- APPENDIX B............................................................................ B-1
</TABLE>

4
<PAGE>

GENERAL INFORMATION ABOUT THE TRUST

The Brinson Funds (the "Trust"), 209 South LaSalle Street, Chicago,
Illinois 60604-1295, is an open-end management investment company which
currently offers shares of eighteen series representing separate portfolios of
investments: Global Fund, Global Equity Fund, Global Technology Fund, Global
Biotech Fund, Global Bond Fund, U.S. Balanced Fund, U.S. Equity Fund, U.S. Value
Equity Fund, U.S. Large Cap Equity Fund (formerly, U.S. Large Capitalization
Equity Fund), U.S. Large Cap Growth Fund (formerly, U.S. Large Capitalization
Growth Fund), U.S. Small Cap Equity Fund, U.S. Small Cap Growth Fund (formerly,
U.S. Small Capitalization Growth Fund), U.S. Real Estate Equity Fund, U.S. Bond
Fund, High Yield Fund, Emerging Markets Debt Fund, Global (Ex-U.S.) Equity Fund
(formerly, Non-U.S. Equity Fund) and Emerging Markets Equity Fund. The Trust
currently offers three classes of shares for each Series: the Brinson Fund-Class
I, Brinson Fund-Class N and UBS Investment Funds class of shares. The Brinson
Fund-Class I shares of each Series, which are designed primarily for
institutional investors, have no sales charges and are not subject to annual
12b-1 plan expenses. The Brinson Fund-Class N shares, which are available
exclusively to 401(k) participants, have no sales charges, but are subject to
annual 12b-1 plan expenses of 0.25% of average daily net assets of the
respective Series. The UBS Investment Funds class of shares of each Series have
no sales charges, but are subject to annual 12b-1 expenses of up to a maximum of
either 0.90% or 1.00% of average daily net assets of the respective Series, as
further described below. The Trust was organized as a Delaware business trust on
December 1, 1993.

Diversified Status

Each of the Global Fund, Global Equity Fund, U.S. Balanced Fund, U.S.
Equity Fund, U.S. Value Equity Fund, U.S. Small Cap Growth Fund, U.S. Bond Fund,
High Yield Fund and Global (Ex-U.S.) Equity Fund is "diversified" as that term
is defined in the Investment Company Act of 1940, as amended (the "Act"). Each
of the Global Technology Fund, Global Biotech Fund, Global Bond Fund, U.S. Large
Cap Equity Fund, U.S. Large Cap Growth Fund, U.S. Small Cap Equity Fund, U.S.
Real Estate Equity Fund, Emerging Markets Debt Fund and Emerging Markets Equity
Fund is classified as "non-diversified" for purposes of the Act, which means
that each Fund is not limited by the Act with regard to the portion of its
assets that may be invested in the securities of a single issuer. To the extent
that a non-diversified Fund makes investments in excess of 5% of its assets in
the securities of a particular issuer, its exposure to the risks associated with
that issuer is increased. Because each Fund may invest in a limited number of
issuers, the performance of particular securities may adversely affect the
performance of the Fund or subject the Fund to greater price volatility than
that experienced by diversified investment companies.

General Definitions

As used throughout this SAI, the following terms shall have the
meanings listed:

"Act" shall mean the Investment Company Act of 1940, as amended.

"Advisor" or "Brinson Partners" shall mean Brinson Partners, Inc.,
which serves as the Funds' investment advisor.

"Board" shall mean the Board of Trustees of the Trust.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

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"Funds" or "Series" shall mean collectively the Global Fund, Global
Equity Fund, Global Technology Fund, Global Biotech Fund, Global Bond Fund, U.S.
Balanced Fund, U.S. Equity Fund, U.S. Value Equity Fund, U.S. Large Cap Equity
Fund, U.S Large Cap Growth Fund, U.S. Small Cap Equity Fund, U.S. Small Cap
Growth Fund, U.S. Real Estate Equity Fund, U.S. Bond Fund, High Yield Fund,
Emerging Markets Debt Fund, Global (Ex-U.S.) Equity Fund and Emerging Markets
Equity Fund (or individually, a "Fund" or a "Series").

"Global Funds" shall mean collectively the Global Fund, Global Equity
Fund, Global Technology Fund, Global Biotech Fund, Global Bond Fund, Emerging
Markets Debt Fund, Global (Ex-U.S.) Equity Fund and Emerging Markets Equity Fund
(or individually, as the "Global Fund").

"Moody's" shall mean Moody's Investors Services, Inc.

"SEC" shall mean the U.S. Securities and Exchange Commission.

"S&P" shall mean Standard & Poor's Ratings Group.

"Trust" shall mean The Brinson Funds, an open-end management
investment company registered under the Act.

"U.S. Funds" shall mean collectively the U.S. Balanced Fund, U.S.
Equity Fund, U.S. Value Equity Fund, U.S. Large Cap Equity Fund, U.S. Large Cap
Growth Fund, U.S. Small Cap Equity Fund, U.S. Small Cap Growth Fund, U.S. Real
Estate Equity Fund, U.S. Bond Fund and High Yield Fund.

"1933 Act" shall mean the Securities Act of 1933, as amended.

INVESTMENT STRATEGIES

The following discussion of investment techniques and instruments
supplements and should be read in conjunction with the investment objectives and
policies set forth in the Prospectuses of the Funds. The investment practices
described below, except for the discussion of percentage limitations with
respect to portfolio loan transactions and borrowing, are not fundamental and
may be changed by the Board without the approval of the shareholders.

INVESTMENTS RELATING TO ALL FUNDS

The following discussion applies to all Series.

Cash and Cash Equivalents

The Series may invest a portion of their assets in short-term debt
securities (including repurchase agreements and reverse repurchase agreements)
of corporations, the U.S. government and its agencies and instrumentalities and
banks and finance companies, which may be denominated in any currency. The
Series may also invest a portion of their assets in shares issued by money
market mutual funds. When unusual market conditions warrant, a Series may make
substantial temporary defensive investments in cash equivalents up to a maximum
of 100% of its net assets. Cash equivalent holdings may be in any currency
(although such holdings may not constitute "cash or cash equivalents" for tax
diversification purposes under the Code). When a Series invests for defensive
purposes, it may affect the attainment of the Series' investment objective.

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Under the terms of an exemptive order issued by the SEC, each Series
may invest cash (i) held for temporary defensive purposes; (ii) not invested
pending investment in securities; (iii) that is set aside to cover an obligation
or commitment of the Series to purchase securities or other assets at a later
date; (iv) to be invested on a strategic management basis (i-iv is herein
referred to as "Uninvested Cash"); and (v) collateral that it receives from the
borrowers of its portfolio securities in connection with the Series' securities
lending program, in a series of shares of Brinson Supplementary Trust (the
"Supplementary Trust Series"). Brinson Supplementary Trust is a private
investment company which has retained Brinson Partners to manage its
investments. The Trustees of the Trust also serve as Trustees of the Brinson
Supplementary Trust. The Supplementary Trust Series invests in U.S. dollar
denominated money market instruments having a dollar-weighted average maturity
of 90 days or less, and operates in accordance with Rule 2a-7 under the Act. A
Series' investment of Uninvested Cash in shares of the Supplementary Trust
Series will not exceed 25% of the Series' total assets. In the event that
Brinson Partners waives 100% of its investment advisory fee with respect to a
Series, as calculated monthly, then that Series will be unable to invest in the
Supplementary Trust Series until additional investment advisory fees are owed by
the Series.

Repurchase Agreements

When a Series enters into a repurchase agreement, it purchases
securities from a bank or broker-dealer which simultaneously agrees to
repurchase the securities at a mutually agreed upon time and price, thereby
determining the yield during the term of the agreement. As a result, a
repurchase agreement provides a fixed rate of return insulated from market
fluctuations during the term of the agreement. The term of a repurchase
agreement generally is short, possibly overnight or for a few days, although it
may extend over a number of months (up to one year) from the date of delivery.
Repurchase agreements are considered under the Act to be collateralized loans by
a Series to the seller secured by the securities transferred to the Series.
Repurchase agreements will be fully collateralized and the collateral will be
marked-to-market daily. A Series may not enter into a repurchase agreement
having more than seven days remaining to maturity if, as a result, such
agreement, together with any other illiquid securities held by the Series, would
exceed 15% of the value of the net assets of the Series.

In the event of bankruptcy or other default by the seller of the
security under a repurchase agreement, a Series may suffer time delays and incur
costs or possible losses in connection with the disposition of the collateral.
In such event, instead of the contractual fixed rate of return, the rate of
return to a Series would be dependent upon intervening fluctuations of the
market value of the underlying security and the accrued interest on the
security. Although a Series would have rights against the seller for breach of
contract with respect to any losses arising from market fluctuations following
the failure of the seller to perform, the ability of a Series to recover damages
from a seller in bankruptcy or otherwise in default would be reduced.

Repurchase agreements are securities for purposes of the tax
diversification requirements that must be met for pass-through treatment under
the Code. Accordingly, each Series will limit the value of its repurchase
agreements on each of the quarterly testing dates to ensure compliance with
Subchapter M of the Code.

Reverse Repurchase Agreements

Reverse repurchase agreements involve sales of portfolio securities of
a Series to member banks of the Federal Reserve System or securities dealers
believed creditworthy, concurrently with an agreement by the Series to
repurchase the same securities at a later date at a fixed price which is
generally equal to the original sales price plus interest. A Series retains
record ownership and the right to receive interest and principal payments on the
portfolio securities involved. In connection with each reverse repurchase
transaction, a Series will direct its custodian bank to place cash, U.S.
government securities, equity securities and/or investment and non-investment
grade debt securities in a segregated account of the Series in an amount equal
to the repurchase price. Any assets held in any segregated accounts

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maintained by a Series with respect to any reverse repurchase agreements,
when-issued securities, options, futures, forward contracts or other derivative
transactions shall be liquid, unencumbered and marked-to-market daily (any such
assets held in a segregated account are referred to in this SAI as "Segregated
Assets"), and such Segregated Assets shall be maintained in accordance with
pertinent positions of the SEC.

A reverse repurchase agreement involves the risk that the market value
of the securities retained by a Series may decline below the price of the
securities the Series has sold but is obligated to repurchase under the
agreement. In the event the buyer of securities under a reverse repurchase
agreement files for bankruptcy or becomes insolvent, the Series' use of the
proceeds of the agreement may be restricted pending a determination by the other
party, or its trustee or receiver, whether to enforce the Series' obligation to
repurchase the securities. Reverse repurchase agreements are considered
borrowings by the Series and as such, are subject to the same investment
limitations.

Borrowing

The Series may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. A Series will not borrow money in excess
of 33 1/3% of the value of its total assets. A Series has no intention of
increasing its net income through borrowing. Any borrowing will be done from a
bank with the required asset coverage of at least 300%. In the event that such
asset coverage shall at any time fall below 300%, a Series shall, within three
days thereafter (not including Sundays or holidays), or such longer period as
the SEC may prescribe by rules and regulations, reduce the amount of its
borrowings to such an extent that the asset coverage of such borrowings shall be
at least 300%. A Series will not pledge more than 10% of its net assets, or
issue senior securities as defined in the Act, except for notes to banks and
reverse repurchase agreements. Except with respect to the Global Technology
Fund, Global Biotech Fund, U.S. Value Equity Fund, U.S. Small Cap Equity Fund
and U.S. Real Estate Equity Fund, investment securities will not be purchased
while a Series has an outstanding borrowing that exceeds 5% of the Series' net
assets.

Loans of Portfolio Securities

The Series may lend portfolio securities to qualified broker-dealers
and financial institutions pursuant to agreements provided: (1) the loan is
secured continuously by collateral marked-to-market daily and maintained in an
amount at least equal to the current market value of the securities loaned; (2)
a Series may call the loan at any time and receive the securities loaned; (3) a
Series will receive any interest or dividends paid on the loaned securities; and
(4) the aggregate market value of securities loaned will not at any time exceed
33 1/3% of the total assets of the respective Series.

Collateral will consist of U.S. and non-U.S. securities, cash
equivalents or irrevocable letters of credit. Loans of securities involve a risk
that the borrower may fail to return the securities or may fail to maintain the
proper amount of collateral. Therefore, a Series will only enter into portfolio
loans after a review of all pertinent factors by the Advisor under the
supervision of the Board, including the creditworthiness of the borrower and
then only if the consideration to be received from such loans would justify the
risk. Creditworthiness will be monitored on an ongoing basis by the Advisor.

Swaps

The Series (except for the Global Equity Fund, U.S. Equity Fund, U.S.
Large Cap Equity Fund, U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund,
High Yield Fund and Global (Ex-U.S.) Equity Fund,) may engage in swaps,
including but not limited to interest rate, currency and index swaps and the
purchase or sale of related caps, floors, collars and other derivative
instruments. A Series expects to enter into these transactions primarily to
preserve a return or spread on a particular

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investment or portion of the portfolio's duration, to protect against any
increase in the price of securities the Series anticipates purchasing at a later
date, or to gain exposure to certain markets in the most economical way
possible.

Interest rate swaps involve the exchange by a Series with another
party of their respective commitments to receive or pay interest (e.g., an
exchange of fixed rate payments for floating rate payments) with respect to a
notional amount of principal. Currency swaps involve the exchange of cash flows
on a notional amount based on changes in the values of referenced currencies.

The purchase of a cap entitles the purchaser to receive payments on a
notional principal amount from the party selling the cap to the extent that a
specified index exceeds a predetermined interest rate or amount. The purchase of
an interest rate floor entitles the purchaser to receive payments on a notional
principal amount from the party selling the floor to the extent that a specified
index falls below a predetermined interest rate or amount. A collar is a
combination of a cap and a floor that preserves a certain return with a
predetermined range of interest rates or values.

The use of swaps involves investment techniques and risks different
from those associated with ordinary portfolio security transactions. If Brinson
Partners is incorrect in its forecast of market values, interest rates and other
applicable factors, the investment performance of the Series will be less
favorable than it would have been if this investment technique was never used.
Swaps do not involve the delivery of securities or other underlying assets or
principal. Thus, if the other party to a swap defaults, a Series' risk of loss
consists of the net amount of interest payments that the Series is contractually
entitled to receive. Under Internal Revenue Service rules, any lump sum payment
received or due under the notional principal contract must be amortized over the
life of the contract using the appropriate methodology prescribed by the
Internal Revenue Service.

The equity swaps in which all aforementioned Series intend to invest
involve agreements with a counterparty. The return to the Series on any equity
swap contact will be the total return on the notional amount of the contract as
if it were invested in the stocks comprising the contract index in exchange for
an interest component based on the notional amount of the agreement. A Series
will only enter into an equity swap contract on a net basis, i.e., the two
parties' obligations are netted out, with the Series paying or receiving, as the
case may be, only the net amount of the payments. Payments under the equity swap
contracts may be made at the conclusion of the contract or periodically during
its term.

If there is a default by the counterparty to a swap contract, the
Series will be limited to contractual remedies pursuant to the agreements
related to the transaction. There is no assurance that a swap contract
counterparty will be able to meet its obligations pursuant to a swap contract or
that, in the event of a default, the Series will succeed in pursuing contractual
remedies. The Series thus assumes the risk that it may be delayed in or
prevented from obtaining payments owed to it pursuant to a swap contract.
However, the amount at risk is only the net unrealized gain, if any, on the
swap, not the entire notional amount. The Advisor will closely monitor, subject
to the oversight of the Board, the creditworthiness of swap counterparties in
order to minimize the risk of swaps.

The Advisor and the Trust do not believe that the Series' obligations
under swap contracts are senior securities and, accordingly, the Series will not
treat them as being subject to its borrowing or senior securities restrictions.
However, the net amount of the excess, if any, of a Series' obligations over its
entitlements with respect to each swap contract will be accrued on a daily basis
and an amount of cash, U.S. government securities or other liquid assets having
an aggregate market value at least equal to the accrued excess will be
segregated in accordance with SEC positions. To the extent that a Series cannot
dispose of a swap in the ordinary course of business within seven days at
approximately the value at which the Series has valued the swap, the Series will
treat the swap as illiquid and subject to its overall limit on illiquid
investments of 15% of the Series' total net assets.

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Futures

The Series may enter into contracts for the purchase or sale for
future delivery of securities and indices. The Global Funds, U.S. Large Cap
Growth Fund, U.S. Small Cap Growth Fund, High Yield Fund, U.S. Small Cap Equity
Fund, U.S. Value Equity Fund and U.S. Real Estate Equity Fund may also enter
into contracts for the purchase or sale for future delivery of foreign
currencies.

A purchase of a futures contract means the acquisition of a
contractual right to obtain delivery to a Series of the securities or foreign
currency called for by the contract at a specified price during a specified
future month. When a futures contract is sold, a Series incurs a contractual
obligation to deliver the securities or foreign currency underlying the contract
at a specified price on a specified date during a specified future month. A
Series may enter into futures contracts and engage in options transactions
related thereto to the extent that not more than 5% of the Series' assets are
required as futures contract margin deposits and premiums on options, and may
engage in such transactions to the extent that obligations relating to such
futures and related options on futures transactions represent not more than 25%
of the Series' assets.

When a Series enters into a futures transaction, it must deliver to
the futures commission merchant selected by the Series an amount referred to as
"initial margin." This amount is maintained by the futures commission merchant
in a segregated account at the custodian bank. Thereafter, a "variation margin"
may be paid by the Series to, or drawn by the Series from, such account in
accordance with controls set for such accounts, depending upon changes in the
price of the underlying securities subject to the futures contract. The Series
may also effect futures transactions through futures commission merchants who
are affiliated with the Advisor or the Series in accordance with procedures
adopted by the Board.

The Series will enter into futures transactions on domestic exchanges
and, to the extent such transactions have been approved by the Commodity Futures
Trading Commission for sale to customers in the United States, on foreign
exchanges. In addition, all of the Series may sell stock index futures in
anticipation of or during a market decline to attempt to offset the decrease in
market value of their common stocks that might otherwise result; and they may
purchase such contracts in order to offset increases in the cost of common
stocks that they intend to purchase. Unlike other futures contracts, a stock
index futures contract specifies that no delivery of the actual stocks making up
the index will take place. Instead, settlement in cash must occur upon the
termination of the contract.

While futures contracts provide for the delivery of securities,
deliveries usually do not occur. Contracts are generally terminated by entering
into offsetting transactions.

The Series may enter into futures contracts to protect against the
adverse affects of fluctuations in security prices, interest or foreign exchange
rates without actually buying or selling the securities or foreign currency. For
example, if interest rates are expected to increase, a Series might enter into
futures contracts for the sale of debt securities. Such a sale would have much
the same effect as selling an equivalent value of the debt securities owned by
the Series. If interest rates did increase, the value of the debt securities in
the portfolio would decline, but the value of the futures contracts to the
Series would increase at approximately the same rate, thereby keeping the net
asset value of the Series from declining as much as it otherwise would have.
Similarly, when it is expected that interest rates may decline, futures
contracts may be purchased to hedge in anticipation of subsequent purchases of
securities at higher prices. Since the fluctuations in the value of futures
contracts should be similar to those of debt securities, the Series could take
advantage of the anticipated rise in value of debt securities without actually
buying them until the market had stabilized. At that time, the futures contracts
could be liquidated and the Series could then buy debt securities on the cash
market.

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To the extent that market prices move in an unexpected direction, a
Series may not achieve the anticipated benefits of futures contracts or may
realize a loss. For example, if a Series is hedged against the possibility of an
increase in interest rates which would adversely affect the price of securities
held in its portfolio and interest rates decrease instead, the Series would lose
part or all of the benefit of the increased value which it has because it would
have offsetting losses in its futures position. In addition, in such situations,
if the Series had insufficient cash, it may be required to sell securities from
its portfolio to meet daily variation margin requirements. Such sales of
securities may, but will not necessarily, be at increased prices which reflect
the rising market. A Series may be required to sell securities at a time when it
may be disadvantageous to do so.

Options

The Series may purchase and write call or put options on foreign or
U.S. securities and indices and enter into related closing transactions, but
will only engage in option strategies for non-speculative purposes.

The U.S. Funds may invest in options that are listed on U.S. exchanges
or traded over-the-counter and the Global Funds, the U.S. Large Cap Growth Fund,
U.S. Small Cap Growth Fund, U.S. Small Cap Equity Fund, U.S. Value Equity Fund,
U.S. Real Estate Equity Fund and High Yield Fund may invest in options that are
either listed on U.S. or recognized foreign exchanges or traded over-the-
counter. Certain over-the-counter options may be illiquid. Thus, it may not be
possible to close options positions and this may have an adverse impact on a
Series' ability to effectively hedge its securities. The Series have been
notified by the SEC that it considers over-the-counter options to be illiquid.
Accordingly, a Series will only invest in such options to the extent consistent
with its 15% limit on investments in illiquid securities.

Purchasing Call Options - The Series may purchase call options on
securities to the extent that premiums paid by a Series do not aggregate more
than 20% of the Series' total assets. When a Series purchases a call option, in
return for a premium paid by the Series to the writer of the option, the Series
obtains the right to buy the security underlying the option at a specified
exercise price at any time during the term of the option. The writer of the call
option, who receives the premium upon writing the option, has the obligation,
upon exercise of the option, to deliver the underlying security against payment
of the exercise price. The advantage of purchasing call options is that a Series
may alter portfolio characteristics and modify portfolio maturities without
incurring the cost associated with transactions.

A Series may, following the purchase of a call option, liquidate its
position by effecting a closing sale transaction. This is accomplished by
selling an option of the same series as the option previously purchased. The
Series will realize a profit from a closing sale transaction if the price
received on the transaction is more than the premium paid to purchase the
original call option; the Series will realize a loss from a closing sale
transaction if the price received on the transaction is less than the premium
paid to purchase the original call option.

Although the Series will generally purchase only those call options
for which there appears to be an active secondary market, there is no assurance
that a liquid secondary market on an exchange will exist for any particular
option, or at any particular time, and for some options no secondary market on
an exchange may exist. In such event, it may not be possible to effect closing
transactions in particular options, with the result that a Series would have to
exercise its options in order to realize any profit and would incur brokerage
commissions upon the exercise of such options and upon the subsequent
disposition of the underlying securities acquired through the exercise of such
options. Further, unless the price of the underlying security changes
sufficiently, a call option purchased by a Series may expire without any value
to the Series, in which event the Series would realize a capital loss which will
be short-term unless the option was held for more than one year.

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Covered Call Writing - A Series may write covered call options from
time to time on such portions of its portfolio, without limit, as Brinson
Partners determines is appropriate in seeking to achieve the Series' investment
objective. The advantage to a Series of writing covered calls is that the Series
receives a premium which is additional income. However, if the security rises in
value, the Series may not fully participate in the market appreciation.

During the option period for a covered call option, the writer may be
assigned an exercise notice by the broker-dealer through whom such call option
was sold, requiring the writer to deliver the underlying security against
payment of the exercise price. This obligation is terminated upon the expiration
of the option or upon entering a closing purchase transaction. A closing
purchase transaction, in which a Series, as writer of an option, terminates its
obligation by purchasing an option of the same series as the option previously
written, cannot be effected with respect to an option once the option writer has
received an exercise notice for such option.

Closing purchase transactions will ordinarily be effected to realize a
profit on an outstanding call option, to prevent an underlying security from
being called, to permit the sale of the underlying security or to enable a
Series to write another call option on the underlying security with either a
different exercise price or expiration date or both. A Series may realize a net
gain or loss from a closing purchase transaction depending upon whether the net
amount of the original premium received on the call option is more or less than
the cost of effecting the closing purchase transaction. Any loss incurred in a
closing purchase transaction may be partially or entirely offset by the premium
received from a sale of a different call option on the same underlying security.
Such a loss may also be wholly or partially offset by unrealized appreciation in
the market value of the underlying security. Conversely, a gain resulting from a
closing purchase transaction could be offset in whole or in part by a decline in
the market value of the underlying security.

If a call option expires unexercised, the Series will realize a
short-term capital gain in the amount of the premium on the option less the
commission paid. Such a gain, however, may be offset by depreciation in the
market value of the underlying security during the option period. If a call
option is exercised, a Series will realize a gain or loss from the sale of the
underlying security equal to the difference between the cost of the underlying
security and the proceeds of the sale of the security plus the amount of the
premium on the option less the commission paid.

The Series will write call options only on a covered basis, which
means that a Series will own the underlying security subject to a call option at
all times during the option period. Unless a closing purchase transaction is
effected, a Series would be required to continue to hold a security which it
might otherwise wish to sell or deliver a security it would want to hold. The
exercise price of a call option may be below, equal to or above the current
market value of the underlying security at the time the option is written.

Purchasing Put Options - The Series may only purchase put options to
the extent that the premiums on all outstanding put options do not exceed 20% of
a Series' total assets. A Series will, at all times during which it holds a put
option, own the security covered by such option. With regard to the writing of
put options, each Series will limit the aggregate value of the obligations
underlying such put options to 50% of its total net assets. The purchase of the
put on substantially identical securities held will constitute a short sale for
tax purposes, the effect of which is to create short-term capital gain on the
sale of the security and to suspend running of its holding period (and treat it
as commencing on the date of the closing of the short sale) or that of a
security acquired to cover the same if, at the time the put was acquired, the
security had not been held for more than one year.

A put option purchased by a Series gives it the right to sell one of
its securities for an agreed price up to an agreed date. The Series intend to
purchase put options in order to protect against a decline in the market value
of the underlying security below the exercise price less the premium paid for
the option ("protective puts"). The ability to purchase put options will allow
the Series to protect unrealized

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gains in an appreciated security in their portfolios without actually selling
the security. If the security does not drop in value, a Series will lose the
value of the premium paid. A Series may sell a put option which it has
previously purchased prior to the sale of the securities underlying such option.
Such sale will result in a net gain or loss depending on whether the amount
received on the sale is more or less than the premium and other transaction
costs paid on the put option which is sold.

The Series may sell a put option purchased on individual portfolio
securities. Additionally, the Series may enter into closing sale transactions. A
closing sale transaction is one in which a Series, when it is the holder of an
outstanding option, liquidates its position by selling an option of the same
series as the option previously purchased.

Writing Put Options - The Series may also write put options on a
secured basis which means that a Series will maintain in a segregated account
with its custodian Segregated Assets in an amount not less than the exercise
price of the option at all times during the option period. The amount of
Segregated Assets held in the segregated account will be adjusted on a daily
basis to reflect changes in the market value of the securities covered by the
put option written by the Series. Secured put options will generally be written
in circumstances where Brinson Partners wishes to purchase the underlying
security for a Series' portfolio at a price lower than the current market price
of the security. In such event, a Series would write a secured put option at an
exercise price which, reduced by the premium received on the option, reflects
the lower price it is willing to pay.

Following the writing of a put option, a Series may wish to terminate
the obligation to buy the security underlying the option by effecting a closing
purchase transaction. This is accomplished by buying an option of the same
series as the option previously written. The Series may not, however, effect
such a closing transaction after it has been notified of the exercise of the
option.

Index Options

The Series may purchase exchange-listed call options on stock and
fixed income indices depending upon whether a Series is an equity or bond series
and sell such options in closing sale transactions for hedging purposes. A
Series may purchase call options on broad market indices to temporarily achieve
market exposure when the Series is not fully invested. A Series may also
purchase exchange-listed call options on particular market segment indices to
achieve temporary exposure to a specific industry.

In addition, the Series may purchase put options on stock and fixed
income indices and sell such options in closing sale transactions for hedging
purposes. A Series may purchase put options on broad market indices in order to
protect its fully invested portfolio from a general market decline. Put options
on market segments may be bought to protect a Series from a decline in value of
heavily weighted industries in the Series' portfolio. Put options on stock and
fixed income indices may also be used to protect a Series' investments in the
case of a major redemption.

The Series may also write (sell) put and call options on stock and
fixed income indices. While the option is open, a Series will maintain a
segregated account with its custodian in an amount equal to the market value of
the option.

Options on indices are similar to regular options except that an
option on an index gives the holder the right, upon exercise, to receive an
amount of cash if the closing level of the index upon which the option is based
is greater than (in the case of a call) or lesser than (in the case of a put)
the exercise price of the option. This amount of cash is equal to the difference
between the closing price of the index and the exercise price of the option
expressed in dollars times a specified multiple (the "multiplier"). The indices
on which options are traded include both U.S. and non-U.S. markets.

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Special Risks of Options on Indices

The Series' purchases of options on indices will subject them to the
risks described below.

Because the value of an index option depends upon movements in the
level of the index rather than the price of a particular security, whether a
Series will realize gain or loss on the purchase of an option on an index
depends upon movements in the level of prices in the market generally or in an
industry or market segment rather than movements in the price of a particular
security. Accordingly, successful use by a Series of options on indices is
subject to Brinson Partners' ability to predict correctly the direction of
movements in the market generally or in a particular industry. This requires
different skills and techniques than predicting changes in the prices of
individual securities.

Index prices may be distorted if trading of a substantial number of
securities included in the index is interrupted causing the trading of options
on that index to be halted. If a trading halt occurred, a Series would not be
able to close out options which it had purchased and the Series may incur losses
if the underlying index moved adversely before trading resumed. If a trading
halt occurred and restrictions prohibiting the exercise of options were imposed
through the close of trading on the last day before expiration, exercises on
that day would be settled on the basis of a closing index value that may not
reflect current price information for securities representing a substantial
portion of the value of the index.

If a Series holds an index option and exercises it before final
determination of the closing index value for that day, it runs the risk that the
level of the underlying index may change before closing. If such a change causes
the exercised option to fall "out-of-the-money," the Series will be required to
pay the difference between the closing index value and the exercise price of the
option (times the applicable multiplier) to the assigned writer. Although a
Series may be able to minimize this risk by withholding exercise instructions
until just before the daily cutoff time or by selling rather than exercising the
option when the index level is close to the exercise price, it may not be
possible to eliminate this risk entirely because the cutoff times for index
options may be earlier than those fixed for other types of options and may occur
before definitive closing index values are announced.

Rule 144A and Illiquid Securities

The Series may invest in securities that are exempt under Rule 144A
from the registration requirements of the 1933 Act. Those securities purchased
under Rule 144A are traded among qualified institutional investors.

The Board has instructed Brinson Partners to consider the following
factors in determining the liquidity of a security purchased under Rule 144A:
(i) the frequency of trades and trading volume for the security; (ii) whether at
least three dealers are willing to purchase or sell the security and the number
of potential purchasers; (iii) whether at least two dealers are making a market
in the security; and (iv) the nature of the security and the nature of the
marketplace trades (e.g., the time needed to dispose of the security, the method
of soliciting offers and the mechanics of transfer). Although having delegated
the day-to-day functions, the Board will continue to monitor and periodically
review the Advisor's selection of Rule 144A securities, as well as the Advisor's
determinations as to their liquidity. Investing in securities under Rule 144A
could have the effect of increasing the level of a Series' illiquidity to the
extent that qualified institutional buyers become, for a time, uninterested in
purchasing these securities. After the purchase of a security under Rule 144A,
however, the Board and Brinson Partners will continue to monitor the liquidity
of that security to ensure that each Series has no more than 15% of its net
assets in illiquid securities.

The Series will limit investments in securities of issuers which the
Series are restricted from selling to the public without registration under the
1933 Act to no more than 15% of the Series' net assets, excluding restricted
securities eligible for resale pursuant to Rule 144A that have been determined

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to be liquid pursuant to a policy and procedures adopted by the Trust's Board
which includes continuing oversight by the Board. The U.S. Small Cap Equity Fund
may invest up to 10% of its net assets in equity securities or interests in
non-public companies that are expected to have an initial public offering within
18 months.

If Brinson Partners determines that a security purchased in reliance
on Rule 144A which was previously determined to be liquid, is no longer liquid
and, as a result, the Series' holdings of illiquid securities exceed the Series'
15% limit on investment in such securities, Brinson Partners will determine what
action shall be taken to ensure that the Series continue to adhere to such
limitation, including disposing of illiquid assets which may include such Rule
144A securities.

Investment Company Securities

Securities of other investment companies may be acquired by each
Series to the extent that such purchases are consistent with that entity's
investment objectives and restrictions and are permitted under the Act. The Act
requires that, as determined immediately after a purchase is made, (i) not more
than 5% of the value of the Series' total assets will be invested in the
securities of any one investment company, (ii) not more than 10% of the value of
the Series' total assets will be invested in securities of investment companies
as a group and (iii) not more than 3% of the outstanding voting stock of any one
investment company will be owned by the Series. Certain exceptions to these
limitations may apply. As a shareholder of another investment company, a Series
would bear, along with other shareholders, its pro rata portion of the other
investment company's expenses, including advisory fees. These expenses would be
in addition to the expenses that such a Series would bear in connection with its
own operations.

Real Estate Investment Trusts (REITs) (THE U.S. REAL ESTATE EQUITY FUND ONLY)

Real estate investment trusts ("REITs") pool investors' funds for
investment primarily in income producing real estate or real estate related
loans or interests. A REIT is not taxed on income distributed to its
shareholders or unitholders if it complies with regulatory requirements relating
to its organization, ownership, assets and income, and with a regulatory
requirement that it distribute to its shareholders or unitholders at least 95%
of its taxable income for each taxable year. Generally, REITs can be classified
as Equity REITs, Mortgage REITs or Hybrid REITs. Equity REITs invest the
majority of their assets directly in real property and derive their income
primarily from rents and capital gains from appreciation realized through
property sales. Equity REITs are further categorized according to the types of
real estate securities they own, e.g., apartment properties, retail shopping
centers, office and industrial properties, hotels, health-care facilities,
manufactured housing and mixed-property types. Mortgage REITs invest the
majority of their assets in real estate mortgages and derive their income
primarily from interest payments. Hybrid REITs combine the characteristics of
both Equity REITs and Mortgage REITs.

A shareholder in the U.S. Real Estate Equity Fund, by investing in
REITs indirectly through the Series, will bear not only his proportionate share
of the expenses of the Series, but also, indirectly, the management expenses of
underlying REITs. REITs may be affected by changes in the value of their
underlying properties and by defaults by borrowers or tenants. Mortgage REITs
may be affected by the quality of the credit extended. Furthermore, REITs are
dependent on specialized management skills. Some REITs may have limited
diversification and maybe subject to risks inherent in investments in a limited
number of properties, in a narrow geographic area, or in a single property type.
REITs depend generally on their ability to generate cash flow to make
distributions to shareholders or unitholders, and may be subject to defaults by
borrowers and to self-liquidations. In addition, the performance of a REIT may
be affected by its failure to qualify for tax-free pass-through of income, or
the REITs failure to maintain exemption from registration under the Act.

Other Investments

The Board may, in the future, authorize a Series to invest in
securities other than those listed in this SAI and in the Prospectuses, provided
such investment would be consistent with that Series'

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<PAGE>

investment objective and that it would not violate any fundamental investment
policies or restrictions applicable to that Series.

INVESTMENTS RELATING TO THE GLOBAL FUND, GLOBAL EQUITY FUND, GLOBAL TECHNOLOGY
FUND, GLOBAL BIOTECH FUND, U.S. BALANCED FUND, U.S. EQUITY FUND, U.S. VALUE
EQUITY FUND, U.S. LARGE CAP EQUITY FUND, U.S. LARGE CAP GROWTH FUND, U.S. SMALL
CAP EQUITY FUND, U.S. SMALL CAP GROWTH FUND, U.S. REAL ESTATE EQUITY FUND, HIGH
YIELD FUND, GLOBAL (EX-U.S.) EQUITY FUND AND EMERGING MARKETS EQUITY FUND

Equity Securities

The Series may invest in a broad range of equity securities of U.S. and
non-U.S. issuers, including common stocks of companies or closed-end investment
companies, preferred stocks, debt securities convertible into or exchangeable
for common stock, securities such as warrants or rights that are convertible
into common stock and sponsored or unsponsored American, European and Global
depositary receipts ("Depositary Receipts"). The issuers of unsponsored
Depositary Receipts are not obligated to disclose material information in the
United States. The Series, except for the U.S. Small Cap Growth Fund, U.S. Small
Cap Equity Fund and Global Biotech Fund, expect their U.S. equity investments to
emphasize large and intermediate capitalization companies. The U.S. Small Cap
Growth Fund, U.S. Small Cap Equity Fund and Global Biotech Fund, expect their
U.S. equity investments to emphasize small capitalization companies. The Global
Fund, U.S. Small Cap Growth Fund, U.S. Small Cap Equity Fund and Global Biotech
Fund, may also invest in small capitalization equity markets. The equity markets
in the non-U.S. component of the Series will typically include available shares
of larger capitalization companies. Capitalization levels are measured relative
to specific markets, thus large, intermediate and small capitalization ranges
vary country by country. The Global Fund, U.S. Small Cap Equity Fund, Global
Technology Fund and Global Biotech Fund may invest in equity securities of
companies considered by the Advisor to be in their post-venture capital stage,
or "post-venture capital companies." A post-venture capital company is a company
that has received venture capital financing either: (a) during the early stages
of the company's existence or the early stages of the development of a new
product or service, or (b) as part of a restructuring or recapitalization of the
company. The Global Fund, Global Equity Fund and Global (Ex-U.S.) Equity Fund
may also invest in open-end investment companies advised by Brinson Partners.
The Global Fund, Global Equity Fund, Global (Ex-U.S.) Equity Fund, Global
Technology Fund, Global Biotech Fund and Emerging Markets Equity Fund may invest
in equity securities of issuers in emerging markets and in securities with
respect to which the return is derived from the equity securities of issuers in
emerging markets.

Exchange-Traded Index Securities

Subject to the limitations on investment in investment company
securities and their own investment objectives, the Series may invest in
exchange-traded index securities that are currently operational and that may be
developed in the future. Examples of currently operational exchange-traded index
securities include, without limitation, DIAMONDS, QQQs, SPDRs, WEBS (each of
which is more fully described below) and various country index funds.
Exchange-traded index securities generally trade on the American Stock Exchange
and are subject to the risks of an investment in a broadly based portfolio of
common stocks, including the risk that the general level of stock prices may
decline, thereby adversely affecting the value of the investment. These
securities generally bear certain operational expenses. To the extent a Series
invests in these securities, the Series must bear these expenses in addition to
the expenses of its own operation.

DIAMONDS. Diamonds are shares of a publicly-traded unit investment
trust that owns the stocks in the Dow Jones Industrial Average ("DJIA") in
approximately the same proportions as represented in the DJIA.

QQQs. QQQs are shares of a publicly-traded unit investment trust that
owns the stocks in the NASDAQ-100 Index(R) in approximately the same proportions
as represented in the NASDAQ-100 Index(R).

SPDRs. (Standard & Poor's Depositary Receipts). SPDRs are shares of a
publicly-traded unit investment trust that owns the stocks in the Standard &
Poor's 500 Composite Stock Price Index(R) (the "S&P 500 Index") in approximately
the same proportions as represented in the S&P 500 Index.

WEBS (World Equity Benchmark Shares). WEBS are shares of index funds
based on the stock markets of particular countries or geographic regions.

INVESTMENTS RELATING TO THE GLOBAL FUNDS, U.S. VALUE EQUITY FUND, U.S LARGE CAP
GROWTH FUND, U.S. SMALL CAP EQUITY FUND, U.S. SMALL CAP GROWTH FUND, U.S. REAL
ESTATE EQUITY FUND AND HIGH YIELD FUND

The following discussion of strategies, techniques and policies
applies only to the Global Fund, Global Equity Fund, Global Bond Fund, U.S.
Value Equity Fund, U.S. Large Cap Growth Fund, U.S. Small Cap Equity Fund, U.S.
Small Cap Growth Fund, Global Technology Fund, Global Biotech Fund, U.S. Real
Estate Equity Fund, High Yield Fund, Emerging Markets Debt Fund, Global (Ex-
U.S.) Equity Fund and Emerging Markets Equity Fund.

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Foreign Securities

Investors should recognize that investing in foreign issuers involves
certain considerations, including those set forth in the Series' Prospectuses,
which are not typically associated with investing in U.S. issuers. Since the
stocks of foreign companies are frequently denominated in foreign currencies,
and since the Series may temporarily hold uninvested reserves in bank deposits
in foreign currencies, the Series will be affected favorably or unfavorably by
changes in currency rates and in exchange control regulations and may incur
costs in connection with conversions between various currencies. The investment
policies of the Series permit them to enter into forward foreign currency
exchange contracts, futures, options and interest rate swaps (in the case of the
Global Funds) in order to hedge portfolio holdings and commitments against
changes in the level of future currency rates.

The Global Bond Fund, High Yield Fund, Emerging Markets Debt Fund,
Emerging Markets Equity Fund, Global Technology Fund, U.S. Small Cap Equity
Fund, Global Biotech Fund, U.S. Value Equity Fund and U.S. Real Estate Equity
Fund may invest in Eurodollar securities, which are fixed income securities of a
U.S. issuer or a foreign issuer that are issued outside the United States.
Interest and dividends on Eurodollar securities are payable in U.S. dollars.

On January 1, 1999, the European Monetary Union introduced a new
single currency, the Euro, which replaced the national currencies of
participating member nations. If the Series hold investments in nations with
currencies replaced by the Euro, the investment process, including trading,
foreign exchange, payments, settlements, cash accounts, custody and accounting,
was impacted. Because this change to a single currency is new and untested, the
establishment of the Euro may result in market volatility. For the same reason,
it is not possible to predict the impact of the Euro on the business or
financial condition of European issuers which the Funds may hold in their
portfolios and the impact of the Euro on the performance of the Funds. To the
extent the Funds hold non-U.S. dollar (Euro or other) denominated securities,
they will still be exposed to currency risk due to fluctuations in those
currencies versus the U.S. dollar.

Additional risks that may result include the fact that European
issuers in which the Series invest may face substantial conversion costs which
may not be accurately anticipated and may impact issuer profitability and
creditworthiness.

Forward Foreign Currency Contracts

The Series may purchase or sell currencies and/or engage in forward
foreign currency transactions in order to expedite settlement of portfolio
transactions and to manage currency risk.

Forward foreign currency contracts are traded in the inter-bank market
conducted directly between currency traders (usually large commercial banks) and
their customers. A forward contract generally has no deposit requirement and no
commissions are charged at any stage for trades. The Series will account for
forward contracts by marking-to-market each day at current forward contract
values.

A Series will only enter into forward contracts to sell, for a fixed
amount of U.S. dollars or other appropriate currency, an amount of foreign
currency, to the extent that the value of the short forward contract is covered
by the underlying value of securities denominated in the currency being sold.
Alternatively, when a Series enters into a forward contract to sell an amount of
foreign currency, the Series' custodian or sub-custodian will place Segregated
Assets in a segregated account of the Series in an amount not less than the
value of the Series' total assets committed to the consummation of such forward
contracts. If the additional Segregated Assets placed in the segregated account
decline, additional cash or securities will be placed in the account on a daily
basis so that the value of the account will equal the amount of the Series'
commitments with respect to such contracts.

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<PAGE>

Options on Foreign Currencies

The Series also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter markets) to
manage the Series' exposure to changes in currency exchange rates. The Series
may purchase and write options on foreign currencies for hedging purposes in a
manner similar to that in which futures contracts on foreign currencies, or
forward contracts, will be utilized. For example, a decline in the dollar value
of a foreign currency in which portfolio securities are denominated will reduce
the dollar value of such securities, even if their value in the foreign currency
remains constant. In order to protect against such diminutions in the value of
portfolio securities, the Series may purchase put options on the foreign
currency. If the dollar price of the currency does decline, a Series will have
the right to sell such currency for a fixed amount in dollars and will thereby
offset, in whole or in part, the adverse effect on its portfolio which otherwise
would have resulted.

Conversely, where a rise in the dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
dollar price of such securities, the Series may purchase call options on such
currency.

The purchase of such options could offset, at least partially, the
effects of the adverse movement in exchange rates. As in the case of other types
of options, however, the benefit to the Series to be derived from purchases of
foreign currency options will be reduced by the amount of the premium and
related transaction costs. In addition, where currency exchange rates do not
move in the direction or to the extent anticipated, a Series could sustain
losses on transactions in foreign currency options which would require it to
forego a portion or all of the benefits of advantageous changes in such rates.

The Series may write options on foreign currencies for the same types
of hedging purposes. For example, where a Series anticipates a decline in the
dollar value of foreign currency denominated securities due to adverse
fluctuations in exchange rates, it could, instead of purchasing a put option,
write a call option on the relevant currency. If the expected decline occurs,
the option will most likely not be exercised, and the diminution in the value of
portfolio securities will be offset by the amount of the premium received.

Similarly, instead of purchasing a call option to hedge against an
anticipated increase in the dollar cost of securities to be acquired, a Series
could write a put option on the relevant currency which, if rates move in the
manner projected, will expire unexercised and allow the Series to hedge such
increased cost up to the amount of the premium. As in the case of other types of
options, however, the writing of a foreign currency option will constitute only
a partial hedge up to the amount of the premium, and only if rates move in the
expected direction. If this does not occur, the option may be exercised and the
Series would be required to purchase or sell the underlying currency at a loss
which may not be offset by the amount of the premium. Through the writing of
options on foreign currencies, a Series also may be required to forego all or a
portion of the benefit which might otherwise have been obtained from favorable
movements in exchange rates.

The Series may write covered call options on foreign currencies. A
call option written on a foreign currency by a Series is "covered" if the Series
owns the underlying foreign currency covered by the call or has an absolute and
immediate right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a segregated account
by the custodian bank) upon conversion or exchange of other foreign currency
held in its portfolio. A call option is also covered if a Series has a call on
the same foreign currency and in the same principal amount as the call written
where the exercise price of the call held (a) is equal to or less than the
exercise price of the call written, or (b) is greater than the exercise price of
the call written if the difference is maintained by the Series in Segregated
Assets in a segregated account with its custodian bank.

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<PAGE>

With respect to writing put options, at the time the put is written, a
Series will establish a segregated account with its custodian bank consisting of
Segregated Assets in an amount equal in value to the amount the Series will be
required to pay upon exercise of the put. The account will be maintained until
the put is exercised, has expired, or the Series has purchased a closing put of
the same series as the one previously written.

Short Sales

The U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund, High Yield
Fund, Emerging Markets Equity Fund, Emerging Markets Debt Fund, Global
Technology Fund, U.S. Small Cap Equity Fund, Global Biotech Fund, U.S. Value
Equity Fund and U.S. Real Estate Equity Fund may from time to time sell
securities short. In the event that the Advisor anticipates that the price of a
security will decline, it may sell the security short and borrow the same
security from a broker or other institution to complete the sale. The Series
will only enter into short sales for hedging purposes. The Series will incur a
profit or a loss, depending upon whether the market price of the security
decreases or increases between the date of the short sale and the date on which
the Series must replace the borrowed security. All short sales will be fully
collateralized and a Series will not sell securities short if immediately after
and as a result of the short sale, the value of all securities sold short by the
Series exceeds 25% of its total assets. Each Series will also limit short sales
of any one issuer's securities to 2% of its total assets and to 2% of any one
class of the issuer's securities. Short sales involve certain risks and special
considerations. Possible losses from short sales may be unlimited, whereas
losses from direct purchases of securities are limited to the total amount
invested.

INVESTMENTS RELATING TO THE GLOBAL FUND, GLOBAL BOND FUND, U.S. BALANCED FUND,
U.S. REAL ESTATE EQUITY FUND, U.S. BOND FUND, HIGH YIELD FUND, EMERGING MARKETS
DEBT FUND AND EMERGING MARKETS EQUITY FUND

The following discussion applies to the Global Fund, Global Bond Fund,
U.S. Balanced Fund, U.S. Real Estate Equity Fund, U.S. Bond Fund, High Yield
Fund, Emerging Markets Debt Fund and Emerging Markets Equity Fund, except as
otherwise noted.

Lower Rated Debt Securities

Fixed income securities rated lower than Baa by Moody's or BBB by S&P
are below investment grade and are considered to be of poor standing and
predominantly speculative. Such securities ("lower rated securities") are
commonly referred to as "junk bonds" and are subject to a substantial degree of
credit risk. Lower rated securities may be issued as a consequence of corporate
restructurings, such as leveraged buy-outs, mergers, acquisitions, debt
recapitalizations or similar events. Also, lower rated securities are often
issued by smaller, less creditworthy companies or by highly leveraged (indebted)
firms, which are generally less able than more financially stable firms to make
scheduled payments of interest and principal. The risks posed by securities
issued under such circumstances are substantial.

In the past, the high yields from lower rated securities have more
than compensated for the higher default rates on such securities. However, there
can be no assurance that diversification will protect the Series from widespread
bond defaults brought about by a sustained economic downturn, or that yields
will continue to offset default rates on lower rated securities in the future.
Issuers of these securities are often highly leveraged, so that their ability to
service their debt obligations during an economic downturn or during sustained
periods of rising interest rates may be impaired. In addition, such issuers may
not have more traditional methods of financing available to them and may be
unable to repay debt at maturity by refinancing. The risk of loss due to default
by the issuer is significantly greater for the holders of low-grade securities
because such securities may be unsecured and may be subordinated to other
creditors of the issuer. Further, an economic recession may result in default
levels with respect to such securities in excess of historic averages.

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The value of lower-rated securities will be influenced not only by
changing interest rates, but also by the bond market's perception of credit
quality and the outlook for economic growth. When economic conditions appear to
be deteriorating, lower rated securities may decline in market value due to
investors' heightened concern over credit quality, regardless of prevailing
interest rates.

Especially at such times, trading in the secondary market for lower
rated securities may become thin and market liquidity may be significantly
reduced. Even under normal conditions, the market for lower rated securities may
be less liquid than the market for investment grade corporate bonds. There are
fewer securities dealers in the high yield market and purchasers of lower rated
securities are concentrated among a smaller group of securities dealers and
institutional investors. In periods of reduced market liquidity, lower rated
securities prices may become more volatile and the Series' ability to dispose of
particular issues when necessary to meet the Series' liquidity needs or in
response to a specific economic event such as a deterioration in the
creditworthiness of the issuer may be adversely affected.

Low-grade securities frequently have call or redemption features that
would permit an issuer to repurchase the security from the Series. If a call
were exercised by the issuer during a period of declining interest rates, the
Series likely would have to replace such called security with a lower yielding
security, thus decreasing the net investment income to the Series and any
dividends to investors.

Besides credit and liquidity concerns, prices for lower rated
securities may be affected by legislative and regulatory developments. For
example, from time to time, Congress has considered legislation to restrict or
eliminate the corporate tax deduction for interest payments or to regulate
corporate restructurings such as takeovers or mergers. Such legislation may
significantly depress the prices of outstanding lower rated securities. A
description of various corporate debt ratings appears in Appendix A to this SAI.

Securities issued by foreign issuers rated below investment grade
entail greater risks than higher rated securities, including risk of untimely
interest and principal payment, default, price volatility and may present
problems of liquidity and valuation. The Emerging Markets Debt Fund and the
Emerging Markets Equity Fund do not intend to limit investments in low-grade
securities.

Pay-In-Kind Bonds

The U.S. Real Estate Equity Fund, High Yield Fund, the Emerging
Markets Debt Fund and the Emerging Markets Equity Fund may invest in pay-in-kind
bonds. Pay-in-kind bonds are securities that pay interest through the issuance
of additional bonds. The Series will be deemed to receive interest over the life
of such bonds and may be treated for federal income tax purposes as if interest
were paid on a current basis, although no cash interest payments are received by
the Series until the cash payment date or until the bonds mature.

Convertible Securities (also for Global Technology Fund, Global Biotech Fund,
U.S. Value Equity Fund, U.S. Large Cap Growth Fund, U.S. Small Cap Equity Fund,
U.S. Small Cap Growth Fund and U.S. Real Estate Equity Fund)

The Series may invest in convertible securities which generally offer
lower interest or dividend yields than non-convertible debt securities of
similar quality. The value of convertible securities may reflect changes in the
value of the underlying common stock. Convertible securities entail less credit
risk than the issuer's common stock because they rank senior to common stock.
Convertible securities entitle the holder to exchange the securities for a
specified number of shares of common stock, usually of the same company, at
specified prices within a certain period of time and to receive interest or
dividends until the holder elects to convert. The provisions of any convertible
security determine its ranking in a company's capital structure. In the case of
subordinated convertible debentures, the holder's claims on assets and earnings
are subordinated to the claims of other creditors and are senior to the claims
of

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preferred and common shareholders. In the case of preferred stock and
convertible preferred stock, the holder's claim on assets and earnings are
subordinated to the claims of all creditors but are senior to the claims of
common shareholders.

When-Issued Securities (also for U.S. Large Cap Growth Fund and U.S. Small Cap
Growth Fund)

The Series may purchase securities offered on a "when-issued" or
"forward delivery" basis. When so offered, the price, which is generally
expressed in yield terms, is fixed at the time the commitment to purchase is
made, but delivery and payment for the when-issued or forward delivery
securities take place at a later date. During the period between purchase and
settlement, no payment is made by the purchaser to the issuer and no interest on
the when-issued or forward delivery security accrues to the purchaser. While
when-issued or forward delivery securities may be sold prior to the settlement
date, it is intended that a Series will purchase such securities with the
purpose of actually acquiring them unless a sale appears desirable for
investment reasons. At the time a Series makes the commitment to purchase a
security on a when-issued or forward delivery basis, it will record the
transaction and reflect the value of the security in determining its net asset
value. The market value of when-issued or forward delivery securities may be
more or less than the purchase price. The Advisor does not believe that a
Series' net asset value or income will be adversely affected by its purchase of
securities on a when-issued or forward delivery basis. The Series will establish
a segregated account in which it will maintain Segregated Assets equal in value
to commitments for when-issued or forward delivery securities. The Segregated
Assets maintained by the Series with respect to any when-issued or forward
delivery securities shall be liquid, unencumbered and marked-to-market daily,
and such Segregated Assets shall be maintained in accordance with pertinent SEC
positions.

Mortgage-Backed Securities and Mortgage Pass-Through Securities

The Series may also invest in mortgage-backed securities, which are
interests in pools of mortgage loans, including mortgage loans made by savings
and loan institutions, mortgage bankers, commercial banks and others. Pools of
mortgage loans are assembled as securities for sale to investors by various
governmental, government-related and private organizations as further described
below. The Series may also invest in debt securities which are secured with
collateral consisting of mortgage-backed securities (see "Collateralized
Mortgage Obligations") and in other types of mortgage-related securities.

The timely payment of principal and interest on mortgage-backed
securities issued or guaranteed by the Government National Mortgage Association
("GNMA") is backed by GNMA and the full faith and credit of the U.S. government.
These guarantees, however, do not apply to the market value of Series shares.
Also, securities issued by GNMA and other mortgage-backed securities may be
purchased at a premium over the maturity value of the underlying mortgages. This
premium is not guaranteed and would be lost if prepayment occurs. Mortgage-
backed securities issued by U.S. government agencies or instrumentalities other
than GNMA are not "full faith and credit" obligations. Certain obligations, such
as those issued by the Federal Home Loan Bank are supported by the issuer's
right to borrow from the U.S. Treasury, while others such as those issued by
Fannie Mae, formerly known as the Federal National Mortgage Association
("FNMA"), are supported only by the credit of the issuer. Unscheduled or early
payments on the underlying mortgages may shorten the securities' effective
maturities and reduce returns. The Series may agree to purchase or sell these
securities with payment and delivery taking place at a future date. A decline in
interest rates may lead to a faster rate of repayment of the underlying
mortgages and expose the Series to a lower rate of return upon reinvestment. To
the extent that such mortgage-backed securities are held by a Series, the
prepayment right of mortgagors may limit the increase in net asset value of the
Series because the value of the mortgage-backed securities held by the Series
may not appreciate as rapidly as the price of noncallable debt securities.

A decline in interest rates may lead to a faster rate of repayment of
the underlying mortgages and expose a Series to a lower rate of return upon
reinvestment. To the extent that such mortgage-backed

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securities are held by a Series, the prepayment right will tend to limit to some
degree the increase in net asset value of the Series because the value of the
mortgage-backed securities held by the Series may not appreciate as rapidly as
the price of noncallable debt securities.

For federal tax purposes other than diversification under Subchapter
M, mortgage-backed securities are not considered to be separate securities but
rather "grantor trusts" conveying to the holder an individual interest in each
of the mortgages constituting the pool.

Interests in pools of mortgage-backed securities differ from other
forms of debt securities, which normally provide for periodic payment of
interest in fixed amounts with principal payments at maturity or specified call
dates. Instead, these securities provide a monthly payment which consists of
both interest and principal payments. In effect, these payments are a "pass-
through" of the monthly payments made by the individual borrowers on their
mortgage loans, net of any fees paid to the issuer or guarantor of such
securities. Additional payments are caused by repayments of principal resulting
from the sale of the underlying property, refinancing or foreclosure, net of
fees or costs which may be incurred. Some mortgage-backed securities (such as
securities issued by the GNMA) are described as "modified pass-through." These
securities entitle the holder to receive all interest and principal payments
owed on the mortgage pool, net of certain fees, at the scheduled payments dates
regardless of whether or not the mortgagor actually makes the payment.

Any discount enjoyed on the purchases of a pass-through type mortgage-
backed security will likely constitute market discount. As a Series receives
principal payments, it will be required to treat as ordinary income an amount
equal to the lesser of the amount of the payment or the "accrued market
discount." Market discount is to be accrued either under a constant rate method
or a proportional method. Pass-through type mortgage-backed securities purchased
at a premium to face will be subject to a similar rule requiring recognition of
an offset to ordinary interest income, an amount of premium attributable to the
receipt of principal. The amount of premium recovered is to be determined using
a method similar to that in place for market discount. A Series may elect to
accrue market discount or amortize premium notwithstanding the amount of
principal received but such election will apply to all bonds held and thereafter
acquired unless permission is granted by the Commissioner of the Internal
Revenue Service to change such method.

The principal governmental guarantor of mortgage-related securities is
GNMA, which is a wholly-owned U. S. government corporation within the Department
of Housing and Urban Development. GNMA is authorized to guarantee, with the full
faith and credit of the U.S. government, the timely payment of principal and
interest on securities issued by institutions approved by GNMA (such as savings
and loan institutions, commercial banks and mortgage bankers) and backed by
pools of mortgages which are insured by the Federal Housing Authority or
guaranteed by the Veterans Administration. These guarantees, however, do not
apply to the market value or yield of mortgage-backed securities or to the value
of Series shares. Also, GNMA securities often are purchased at a premium over
the maturity value of the underlying mortgages. This premium is not guaranteed
and should be viewed as an economic offset to interest to be earned. If
prepayments occur, less interest will be earned and the value of the premium
paid will be lost.

Government-related guarantors (i.e., not backed by the full faith and
credit of the U.S. government) include FNMA and the Federal Home Loan Mortgage
Corporation ("FHLMC"). FNMA is a government-sponsored corporation owned entirely
by private stockholders. It is subject to general regulation of the Secretary of
Housing and Urban Development. FNMA purchases conventional (i.e., not insured or
guaranteed by any government agency) mortgages from a list of approved
seller/servicers which include state and federally chartered savings and loan
associations, mutual savings banks, commercial banks and credit unions and
mortgage bankers. Pass-through securities issued by FNMA are guaranteed as to
timely payment of principal and interest by FNMA but are not backed by the full
faith and credit of the U.S. government.

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FHLMC is a corporate instrumentality of the U.S. government and was
created by Congress in 1970 for the purpose of increasing the availability of
mortgage credit for residential housing. Its stock is owned by the twelve
Federal Home Loan Banks. FHLMC issues Participation Certificates ("PCs") which
represent interests in conventional mortgages from FHLMC's national portfolio.
FHLMC guarantees the timely payment of interest and ultimate collection of
principal, but PCs are not backed by the full faith and credit of the U.S.
government.

Commercial banks, savings and loan institutions, private mortgage
insurance companies, mortgage bankers and other secondary market issuers also
create pass-through pools of conventional mortgage loans. Such issuers may, in
addition, be the originators and/or servicers of the underlying mortgage loans
as well as the guarantors of the mortgage-related securities. Pools created by
such non-governmental issuers generally offer a higher rate of interest than
government and government-related pools because there are no direct or indirect
government or agency guarantees of payments. However, timely payment of interest
and principal of these pools may be supported by various forms of insurance or
guarantees, including individual loan, title, pool and hazard insurance and
letters of credit. The insurance guarantees are issued by governmental entities,
private insurers and the mortgage poolers. Such insurance and guarantees and the
creditworthiness of the issuers thereof will be considered in determining
whether a mortgage-related security meets a Series' investment quality
standards. There can be no assurance that the private insurers or guarantors can
meet their obligations under the insurance policies or guarantee or guarantees,
even if through an examination of the loan experience and practices of the
originators/servicers and poolers, the Advisor determines that the securities
meet the Series' quality standards. Although the market for such securities is
becoming increasingly liquid, securities issued by certain private organizations
may not be readily marketable.

Collateralized Mortgage Obligations ("CMOs") and Real Estate Mortgage Investment
Conduits ("REMICs")

A CMO is a debt security on which interest and prepaid principal are
paid, in most cases, semi-annually. CMOs may be collateralized by whole mortgage
loans but are more typically collateralized by portfolios of mortgage pass-
through securities guaranteed by GNMA, FHLMC, or FNMA and their income streams.
Privately-issued CMOs tend to be more sensitive to interest rates than
Government-issued CMOs.

CMOs are structured into multiple classes, each bearing a different
stated maturity. Actual maturity and average life will depend upon the
prepayment experience of the collateral. CMOs provide for a modified form of
call protection through a de facto breakdown of the underlying pool of mortgages
according to how quickly the loans are repaid. Monthly payments of principal
received from the pool of underlying mortgages, including prepayments, is first
returned to investors holding the shortest maturity class. Investors holding the
longer maturity classes receive principal only after the first class has been
retired. An investor is partially guarded against a sooner than desired return
of principal because of the sequential payments.

In a typical CMO transaction, a corporation issues multiple series
(e.g., A, B, C, Z) of CMO bonds ("Bonds"). Proceeds of the Bond offering are
used to purchase mortgages or mortgage pass-through certificates ("Collateral").
The Collateral is pledged to a third party trustee as security for the Bonds.
Principal and interest payments from the Collateral are used to pay principal on
the Bonds in the order A, B, C, Z. The Series A, B and C Bonds all bear current
interest. Interest on the Series Z Bond is accrued and added to principal and a
like amount is paid as principal on the Series A, B, or C Bond currently being
paid off. When the Series A, B and C Bonds are paid in full, interest and
principal on the Series Z Bond begins to be paid currently. With some CMOs, the
issuer serves as a conduit to allow loan originators (primarily builders or
savings and loan associations) to borrow against their loan portfolios. REMICs
are private entities formed for the purpose of holding a fixed pool of mortgages
secured by an interest in real property. REMICs are similar to CMOs in that they
issue multiple classes of securities.

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Most if not all newly-issued debt securities backed by pools of real
estate mortgages will be issued as regular and residual interests in REMICs
because, as of January 1, 1992, new CMOs which do not make REMIC elections will
be treated as "taxable mortgage pools," a wholly undesirable tax result. Under
certain transition rules, CMOs in existence on December 31, 1991 are unaffected
by this change. The Series will purchase only regular interests in REMICs. REMIC
regular interests are treated as debt of the REMIC and income/discount thereon
must be accounted for on the "catch-up method," using a reasonable prepayment
assumption under the original issue discount rules of the Code.

CMOs and REMICs issued by private entities are not government
securities and are not directly guaranteed by any government agency. They are
secured by the underlying collateral of the private issuer. Yields on privately-
issued CMOs, as described above, have been historically higher than yields on
CMOs issued or guaranteed by U.S. government agencies. However, the risk of loss
due to default on such instruments is higher since they are not guaranteed by
the U.S. government. Such instruments also tend to be more sensitive to interest
rates than U.S. government-issued CMOs. The Series will not invest in
subordinated privately-issued CMOs. For federal income tax purposes, the Series
will be required to accrue income on CMOs and REMIC regular interests using the
"catch-up" method, with an aggregate prepayment assumption.

Other Mortgage-Backed Securities

The Advisor expects that governmental, government-related or private
entities may create mortgage loan pools and other mortgage-related securities
offering mortgage pass-through and mortgage-collateralized investments in
addition to those described above. The mortgages underlying these securities may
include alternative mortgage instruments, that is, mortgage instruments whose
principal or interest payments may vary or whose terms to maturity may differ
from customary long-term fixed rate mortgages. As new types of mortgage-related
securities are developed and offered to investors, the Advisor will, consistent
with a Series' investment objective, policies and quality standards, consider
making investments in such new types of mortgage-related securities. The Advisor
will not purchase any such other mortgage-backed securities until the Series'
Prospectuses and this SAI have been supplemented.

Asset-Backed Securities (also for U.S. Large Cap Growth Fund and U.S. Small Cap
Growth Fund)

The Series may invest a portion of their assets in debt obligations
known as "asset-backed securities." Asset-backed securities are securities that
represent a participation in, or are secured by and payable from, a stream of
payments generated by particular assets, most often a pool or pools of similar
assets (e.g., receivables on home equity and credit loans and receivables
regarding automobile, credit card, mobile home and recreational vehicle loans,
wholesale dealer floor plans and leases). The High Yield Fund will not invest in
asset-backed securities with remaining effective maturities of less than
thirteen months.

Such receivables are securitized in either a pass-through or a pay-
through structure. Pass-through securities provide investors with an income
stream consisting of both principal and interest payments in respect of the
receivables in the underlying pool. Pay-through asset-backed securities are debt
obligations issued usually by a special purpose entity, which are collateralized
by the various receivables and in which the payments on the underlying
receivables provide that the Series pay the debt service on the debt obligations
issued. The Series may invest in these and other types of asset-backed
securities that may be developed in the future.

The credit quality of these securities depends primarily upon the
quality of the underlying assets and the level of credit support and/or
enhancement provided. Such asset-backed securities are subject to the same
prepayment risks as mortgage-backed securities. For federal income tax purposes,
the Series

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will be required to accrue income on pay-through asset-backed securities using
the "catch-up" method, with an aggregate prepayment assumption.

The credit quality of most asset-backed securities depends primarily
on the credit quality of the assets underlying such securities, how well the
entity issuing the security is insulated from the credit risk of the originator
or any other affiliated entities, and the amount and quality of any credit
support provided to the securities. The rate of principal payment on asset-
backed securities generally depends on the rate of principal payments received
on the underlying assets which in turn may be affected by a variety of economic
and other factors. As a result, the yield on any asset-backed security is
difficult to predict with precision and actual yield to maturity may be more or
less than the anticipated yield to maturity. Asset-backed securities may be
classified as "pass-through certificates" or "collateralized obligations."

Asset-backed securities are often backed by a pool of assets
representing the obligations of a number of different parties. To lessen the
effect of failures by obligors on underlying assets to make payment, such
securities may contain elements of credit support. Such credit support falls
into two categories: (i) liquidity protection; and (ii) protection against
losses resulting from ultimate default by an obligor on the underlying assets.
Liquidity protection refers to the provision of advances, generally by the
entity administering the pool of assets, to ensure that the receipt of payments
due on the underlying pool is timely. Protection against losses resulting from
ultimate default enhances the likelihood of payments of the obligations on at
least some of the assets in the pool. Such protection may be provided through
guarantees, insurance policies or letters of credit obtained by the issuer or
sponsor from third parties, through various means of structuring the transaction
or through a combination of such approaches. The Series will not pay any
additional fees for such credit support, although the existence of credit
support may increase the price of a security.

Due to the shorter maturity of the collateral backing such securities,
there is less of a risk of substantial prepayment than with mortgage-backed
securities. Such asset-backed securities do, however, involve certain risks not
associated with mortgage-backed securities, including the risk that security
interests cannot be adequately, or in many cases, ever, established. In
addition, with respect to credit card receivables, a number of state and federal
consumer credit laws give debtors the right to set off certain amounts owed on
the credit cards, thereby reducing the outstanding balance. In the case of
automobile receivables, there is a risk that the holders may not have either a
proper or first security interest in all of the obligations backing such
receivables due to the large number of vehicles involved in a typical issuance
and technical requirements under state laws. Therefore, recoveries on
repossessed collateral may not always be available to support payments on the
securities.

Examples of credit support arising out of the structure of the
transaction include "senior-subordinated securities" (multiple class securities
with one or more classes subordinate to other classes as to the payment of
principal thereof and interest thereon, with the result that defaults on the
underlying assets are borne first by the holders of the subordinated class),
creation of "reserve funds" (where cash or investments, sometimes funded from a
portion of the payments on the underlying assets, are held in reserve against
future losses) and "over collateralization" (where the scheduled payments on, or
the principal amount of, the underlying assets exceeds that required to make
payments of the securities and pay any servicing or other fees). The degree of
credit support provided for each issue is generally based on historical
information respecting the level of credit information respecting the level of
credit risk associated with the underlying assets. Delinquencies or losses in
excess of those anticipated could adversely affect the return on an investment
in such issue.

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Zero Coupon and Delayed Interest Securities

The Series may invest in zero coupon or delayed interest securities
which pay no cash income until maturity or a specified date when the securities
begin paying current interest (the "cash payment date") and are sold at
substantial discounts from their value at maturity. When held to maturity or
cash payment date, the entire income of such securities, which consists of
accretion of discount, comes from the difference between the purchase price and
their value at maturity or cash payment date. The discount varies depending on
the time remaining until maturity or cash payment date, prevailing interest
rates, liquidity of the security and the perceived credit quality of the issuer.
The discount, in the absence of financial difficulties of the issuer, decreases
as the final maturity or cash payment date of the security approaches. The
market prices of zero coupon and delayed interest securities are generally more
volatile and more likely to respond to changes in interest rates than the market
prices of securities having similar maturities and credit qualities that pay
interest periodically. Current federal income tax law requires that a holder of
a zero coupon security report as income each year the portion of the original
issue discount on such security (other than tax-exempt original issue discount
from a zero coupon security) that accrues that year, even though the holder
receives no cash payments of interest during the year. The Series will be
required to distribute such income to shareholders to comply with Subchapter M
of the Code and avoid excise taxes, even though the Series have not received any
cash from the issue.

Zero coupon securities are subject to greater market value
fluctuations from changing interest rates than debt obligations of comparable
maturities which make current distributions of interest (cash). Zero coupon
convertible securities offer the opportunity for capital appreciation as
increases (or decreases) in market value of such securities closely follow the
movements in the market value of the underlying common stock. Zero coupon
convertible securities generally are expected to be less volatile than the
underlying common stocks as they usually are issued with short maturities (15
years or less) and are issued with options and/or redemption features
exercisable by the holder of the obligation entitling the holder to redeem the
obligation and receive a defined cash payment.

Zero coupon securities include securities issued directly by the U.S.
Treasury, and U.S. Treasury bonds or notes and their unmatured interest coupons
and receipts for their underlying principal ("coupons") which have been
separated by their holder, typically a custodian bank or investment brokerage
firm. A holder will separate the interest coupons from the underlying principal
(the "corpus") of the U.S. Treasury security. A number of securities firms and
banks have stripped the interest coupons and receipts and then resold them in
custodial receipt programs with a number of different names, including "Treasury
Income Growth Receipts" ("TIGRS") and Certificate of Accrual on Treasuries
("CATS"). The underlying U.S. Treasury bonds and notes themselves are held in
book-entry form at the Federal Reserve Bank or, in the case of bearer securities
(i.e., unregistered securities which are owned ostensibly by the bearer or
holder thereof), in trust on behalf of the owners thereof. Counsel to the
underwriters of these certificates or other evidences of ownership of the U.S.
Treasury securities has stated that for federal tax and securities purposes, in
its opinion, purchasers of such certificates, such as the Series, most likely
will be deemed the beneficial holder of the underlying U.S. government
securities. The Series understand that the staff of the SEC no longer considers
such privately stripped obligations to be U.S. government securities, as defined
in the Act; therefore, each Series intends to adhere to this staff position and
will not treat such privately stripped obligations to be U.S. government
securities for the purpose of determining if the Series is "diversified," or for
any other purpose, under the Act.

The U.S. Treasury has facilitated transfers of ownership of zero
coupon securities by accounting separately for the beneficial ownership of
particular interest coupon and corpus payments on Treasury securities through
the Federal Reserve book-entry record-keeping system. The Federal Reserve
program as established by the U.S. Treasury Department is known as "STRIPS" or
"Separate Trading of Registered Interest and Principal of Securities." Under the
STRIPS program, a Series will be able to have its beneficial ownership of zero
coupon securities recorded directly in the book-entry record-keeping system in
lieu of having to hold certificates or other evidences of ownership of the
underlying U.S. Treasury securities.

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When U.S. Treasury obligations have been stripped of their unmatured
interest coupons by the holder, the principal or corpus is sold at a deep
discount because the buyer receives only the right to receive a future fixed
payment on the security and does not receive any rights to periodic interest
(cash) payments. Once stripped or separated, the corpus and coupons may be sold
separately. Typically, the coupons are sold separately or grouped with other
coupons with like maturity dates and sold in such bundled form. Purchasers of
stripped obligations acquire, in effect, discount obligations that are
economically identical to the zero coupon securities that the U.S. Treasury
sells itself. These stripped securities are also treated as zero coupon
securities with original issue discount for tax purposes.

INVESTMENTS RELATING TO THE GLOBAL FUND, GLOBAL EQUITY FUND, GLOBAL TECHNOLOGY
FUND, GLOBAL BIOTECH FUND, HIGH YIELD FUND, EMERGING MARKETS DEBT FUND, GLOBAL
(EX-U.S.) EQUITY FUND AND EMERGING MARKETS EQUITY FUND

Emerging Markets Investments

The Global Fund may invest up to 10% of its assets in each of equity
and debt securities of emerging market issuers, or securities with respect to
which the return is derived from the equity or debt securities of issuers in
emerging markets. The Global Equity Fund, Global Technology Fund, Global Biotech
Fund and Global (Ex-U.S.) Equity Fund may each invest up to 15% of their assets
in equity securities of emerging market issuers, or securities with respect to
which the return is derived from the equity securities of issuers in emerging
markets. The Emerging Markets Debt Fund and the Emerging Markets Equity Fund may
invest substantially all of their assets in equity and debt securities of
emerging market issuers, or securities with respect to which the return is
derived from the equity or debt securities of issuers in emerging markets. The
High Yield Fund may invest up to 25% of its assets in securities of foreign
issuers, which may include securities of issuers in emerging markets. The Series
may invest in equity securities of issuers in emerging markets, or securities
with respect to which the return is derived from the equity securities of
issuers in emerging markets. The Series also may invest in fixed income
securities of emerging market issuers, including government and government-
related entities (including participation in loans between governments and
financial institutions), and of entities organized to restructure outstanding
debt of such issuers. The Series also may invest in debt securities of corporate
issuers in developing countries.

The Series' investments in emerging market government and government-
related securities may consist of: (i) debt securities or obligations issued or
guaranteed by governments, governmental agencies or instrumentalities and
political subdivisions located in emerging countries (including participation in
loans between governments and financial institutions), (ii) debt securities or
obligations issued by government owned, controlled or sponsored entities located
in emerging countries and (iii) interests in issuers organized and operated for
the purpose of restructuring the investment characteristics of instruments
issued by any of the entities described above.

Except as noted, the Series' investments in the fixed income
securities of emerging market issuers may include investments in Brady Bonds,
Structured Securities, Loan Participation and Assignments (as such capitalized
terms are defined below), and certain non-publicly traded securities.

The High Yield Fund, the Emerging Markets Debt Fund and the Emerging
Markets Equity Fund may invest in Brady Bonds, which are securities created
through the exchange of existing commercial bank loans to public and private
entities in certain emerging markets for new bonds in connection with debt
restructurings under a debt restructuring plan introduced by former U.S.
Secretary of the Treasury, Nicholas F. Brady (the "Brady Plan"). Brady Plan debt
restructurings have been implemented to date in Argentina, Bulgaria, Brazil,
Costa Rica, Jordan, Mexico, Nigeria, the Philippines, Poland, Uruguay, Panama,
Peru and Venezuela. Brady Bonds have been issued only in recent years, and for
that reason do not have a very long payment history. Brady Bonds may be
collateralized or uncollateralized, are issued in various currencies (but
primarily the U.S. dollar), and are actively traded in over-the-counter
secondary markets. Dollar-denominated, collateralized Brady Bonds, which may be
fixed-rate bonds or floating-rate bonds, are generally collateralized in full as
to principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds.

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Brady Bonds are often viewed as having three or four valuation
components: the collateralized repayment of principal at final maturity; the
collateralized interest payments; the uncollateralized interest payments; and
any uncollateralized repayment of principal at maturity (these uncollateralized
amounts constitute the "residual risk"). In light of the residual risk of Brady
Bonds and the history of defaults of countries issuing Brady Bonds with respect
to commercial bank loans by public and private entities, investments in Brady
Bonds may be viewed as speculative. There can be no assurance that the Brady
Bonds in which the Series invests will not be subject to restructuring
arrangements or to requests for a new credit which may cause the Series to
suffer a loss of interest or principal in any of its holdings.

The High Yield Fund, the Emerging Markets Debt Fund and the Emerging
Markets Equity Fund may invest a portion of their assets in entities organized
and operated solely for the purpose of restructuring the investment
characteristics of sovereign debt obligations. This type of restructuring
involves the deposit with, or purchase by, an entity, such as a corporation or
trust, of specified instruments (such as commercial bank loans or Brady Bonds)
and the issuance by that entity of one or more classes of securities
("Structured Securities") backed by, or representing interests in, the
underlying instruments. The cash flow of the underlying instruments may be
apportioned among the newly issued Structured Securities to create securities
with different investment characteristics, such as varying maturities, payment
priorities and interest rate provisions, and the extent of the payments made
with respect to Structured Securities is dependent on the extent of the cash
flow on the underlying instruments. Because Structured Securities of the type in
which the Series anticipate investing typically involve no credit enhancement,
their credit risk generally will be equivalent to that of the underlying
instruments. The Series are permitted to invest in a class of Structured
Securities that is either subordinated or unsubordinated to the right of payment
of another class. Subordinated Structured Securities are typically sold in
private placement transactions, and there currently is no active trading market
for Structured Securities. Thus, investments by a Series in Structured
Securities will be limited by the Series' prohibition on investing more than 15%
of its net assets in illiquid securities.

The High Yield Fund, the Emerging Markets Debt Fund and the Emerging
Markets Equity Fund may invest in fixed rate and floating rate loans ("Loans")
arranged through private negotiations between an issuer of sovereign debt
obligations and one or more financial institutions ("Lenders"). The Series'
investments in Loans are expected in most instances to be in the form of a
participation in loans ("Participation") and assignments of all or a portion of
Loans ("Assignments") from third parties. The Series will have the right to
receive payments of principal, interest and any fees to which they are entitled
only from the Lender selling the Participation and only upon receipt by the
Lender of the payments from the borrower. In the event of the insolvency of the
Lender selling a Participation, the Series may be treated as a general creditor
of the Lender and may not benefit from any set-off between the Lender and the
borrower. Certain Participations may be structured in a manner designed to avoid
purchasers of Participations being subject to the credit risk of the Lender with
respect to the Participations. Even under such a structure, in the event of the
Lender's insolvency, the Lender's servicing of the Participation may be delayed
and the assignability of the Participation may be impaired. A Series will
acquire the Participations only if the Lender interpositioned between the Series
and the borrower is determined by the Advisor to be creditworthy.

When a Series purchases Assignments from Lenders, it will acquire
direct rights against the borrower on the Loan. However, because Assignments are
arranged through private negotiations between potential assignees and potential
assignors, the rights and obligations acquired by the Series as the purchaser of
an Assignment may differ from, and be more limited than, those held by the
assigning Lender.

The Series also may invest in securities that are neither listed on a
stock exchange nor traded over-the-counter, including privately placed
securities and limited partnerships. Investing in such unlisted emerging market
equity securities, including investments in new and early stage companies, may
involve a high degree of business and financial risk that can result in
substantial losses. As a result

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of the absence of a public trading market for these securities, they may be less
liquid than publicly traded securities.

The Series' investments in emerging market securities will at all
times be limited by the Series' prohibition on investing more than 15% of its
net assets in illiquid securities.

Risks of Investing in Emerging Markets

There are additional risks inherent in investing in less developed
countries which are applicable to the Global Fund, Global Equity Fund, Global
Technology Fund, Global Biotech Fund, High Yield Fund, Emerging Markets Debt
Fund, Global (Ex-U.S.) Equity Fund and Emerging Markets Equity Fund. The Series
consider a country to be an "emerging market" if it is defined as an emerging or
developing economy by any one of the following: the International Bank for
Reconstruction and Development (i.e., the World Bank), the International Finance
Corporation, or the United Nations or its authorities. An emerging market
security is a security issued by a government or other issuer that, in the
opinion of the Advisor, has one or more of the following characteristics: (i)
the principal trading market of the security is an emerging market; (ii) the
primary revenue of the issuer (at least 50%) is generated from goods produced or
sold, investments made, or services performed in an emerging market country; or
(iii) at least 50% of the assets of the issuer are situated in emerging market
countries.

Compared to the United States and other developed countries, emerging
countries may have relatively unstable governments, economies based on only a
few industries, and securities markets that trade only a small number of
securities and employ settlement procedures different from those used in the
United States. Prices on these exchanges tend to be volatile and, in the past,
securities in these countries have offered greater potential for gain (as well
as loss) than securities of companies located in developed countries. Further,
investments by foreign investors are subject to a variety of restrictions in
many emerging countries. Countries such as those in which the Series may invest
have historically experienced and may continue to experience, high rates of
inflation, high interest rates, exchange rate fluctuations or currency
depreciation, large amounts of external debt, balance of payments and trade
difficulties and extreme poverty and unemployment. Additional factors which may
influence the ability or willingness to service debt include, but are not
limited to, a country's cash flow situation, the availability of sufficient
foreign exchange on the date a payment is due, the relative size of its debt
service burden to the economy as a whole, its government's policy towards the
International Monetary Fund, the World Bank and other international agencies and
the political constraints to which a government debtor may be subject.

The ability of a foreign government or government-related issuer to
make timely and ultimate payments on its external debt obligations will be
strongly influenced by the issuer's balance of payments, including export
performance, its access to international credits and investments, fluctuations
in interest rates and the extent of its foreign reserves. A country whose
exports are concentrated in a few commodities or whose economy depends on
certain strategic imports could be vulnerable to fluctuations in international
prices of these commodities or imports. To the extent that a country receives
payment for its exports in currencies other than dollars, its ability to make
debt payments denominated in dollars could be adversely affected. If a foreign
government or government-related issuer cannot generate sufficient earnings from
foreign trade to service its external debt, it may need to depend on continuing
loans and aid from foreign governments, commercial banks, and multilateral
organizations, and inflows of foreign investment. The commitment on the part of
these foreign governments, multilateral organizations and others to make such
disbursements may be conditioned on the government's implementation of economic
reforms and/or economic performance and the timely service of its obligations.
Failure to implement such reforms, achieve such levels of economic performance
or repay principal or interest when due may curtail the willingness of such
third parties to lend funds, which may further impair the issuer's ability or
willingness to service its debts in a timely manner. The cost of servicing
external debt will also generally be adversely affected by rising international
interest rates, because many external debt obligations bear interest at rates
which are adjusted based upon international interest rates. The ability to
service external

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debt will also depend on the level of the relevant government's international
currency reserves and its access to foreign exchange. Currency devaluations may
affect the ability of a governmental issuer to obtain sufficient foreign
exchange to service its external debt.

As a result of the foregoing, a governmental issuer may default on its
obligations. If such a default occurs, the Series may have limited effective
legal recourse against the issuer and/or guarantor. Remedies must, in some
cases, be pursued in the courts of the defaulting country itself, and the
ability of the holder of foreign government and government-related debt
securities to obtain recourse may be subject to the political climate in the
relevant country. In addition, no assurance can be given that the holders of
commercial bank debt will not contest payments to the holders of other foreign
government and government-related debt obligations in the event of default under
their commercial bank loan agreements.

The issuers of the government and government-related debt securities
in which the Series expect to invest have in the past experienced substantial
difficulties in servicing their external debt obligations, which has led to
defaults on certain obligations and the restructuring of certain indebtedness.
Restructuring arrangements have included, among other things, reducing and
rescheduling interest and principal payments by negotiating new or amended
credit agreements or converting outstanding principal and unpaid interest to
Brady Bonds, and obtaining new credit to finance interest payments. Holders of
certain foreign government and government-related debt securities may be
requested to participate in the restructuring of such obligations and to extend
further loans to their issuers. There can be no assurance that the Brady Bonds
and other foreign government and government-related debt securities in which the
Series may invest will not be subject to similar defaults or restructuring
arrangements which may adversely affect the value of such investments.
Furthermore, certain participants in the secondary market for such debt may be
directly involved in negotiating the terms of these arrangements and may
therefore have access to information not available to other market participants.

Payments to holders of the high yield, high risk, foreign debt
securities in which the Series may invest may be subject to foreign withholding
and other taxes. Although the holders of foreign government and government-
related debt securities may be entitled to tax gross-up payments from the
issuers of such instruments, there is no assurance that such payments will be
made.

Investments in Russian Securities

The Global Fund, Global Equity Fund, Global Technology Fund, Global
Biotech Fund, Emerging Markets Debt Fund, Global (Ex-U.S.) Equity Fund and
Emerging Markets Equity Fund may invest in securities of Russian companies. The
registration, clearing and settlement of securities transactions in Russia are
subject to significant risks not normally associated with securities
transactions in the United States and other more developed markets. Ownership of
shares of Russian companies is evidenced by entries in a company's share
register (except where shares are held through depositories that meet the
requirements of the Act) and the issuance of extracts from the register or, in
certain limited cases, by formal share certificates. However, Russian share
registers are frequently unreliable and a Series could possibly lose its
registration through oversight, negligence or fraud. Moreover, Russia lacks a
centralized registry to record securities transactions and registrars located
throughout Russia or the companies themselves maintain share registers.
Registrars are under no obligation to provide extracts to potential purchasers
in a timely manner or at all and are not necessarily subject to state
supervision. In addition, while registrars are liable under law for losses
resulting from their errors, it may be difficult for a Series to enforce any
rights it may have against the registrar or issuer of the securities in the
event of loss of share registration. Although Russian companies with more than
1,000 shareholders are required by law to employ an independent company to
maintain share registers, in practice, such companies have not always followed
this law. Because of this lack of independence of registrars, management of a
Russian company may be able to exert considerable influence over who can
purchase or sell the company's shares by illegally instructing the registrar to
refuse to record transactions on the share register. Furthermore, these
practices may prevent a Series from investing in the securities

30
<PAGE>

of certain Russian companies deemed suitable by the Advisor and could cause a
delay in the sale of Russian securities by the Series if the company deems a
purchaser unsuitable, which may expose the Series to potential loss on its
investment.

In light of the risks described above, the Board has approved certain
procedures concerning the Series' investments in Russian securities. Among these
procedures is a requirement that the Series will not invest in the securities of
a Russian company unless that issuer's registrar has entered into a contract
with the Series' sub-custodian containing certain protective conditions
including, among other things, the sub-custodian's right to conduct regular
share confirmations on behalf of the Series. This requirement will likely have
the effect of precluding investments in certain Russian companies that the
Series would otherwise make.

Investments in Affiliated Investment Companies

The Series may invest in securities issued by other registered investment
companies advised by Brinson Partners pursuant to exemptive relief granted by
the SEC. Currently, the Global Fund is the only Series of the Trust that intends
to invest in portfolios of the Brinson Relationship Funds, another investment
company which is advised by Brinson Partners, and only to the extent consistent
with the Advisor's investment process of allocating assets to specific asset
classes. The Global Fund will invest in corresponding portfolios of the Brinson
Relationship Funds only to the extent that the Advisor determines that such
investments are a more efficient means for the Global Fund to gain exposure to
the asset classes referred to below than by investing directly in individual
securities.

To gain exposure to equity and fixed income securities of issuers located
in emerging market countries, the Global Fund, Global Equity Fund and Global
(Ex-U.S.) Equity Fund may invest that portion of their assets allocated to
emerging markets investments in the Brinson Emerging Markets Equity Fund
portfolio and, in the case of the Global Fund, the Brinson Emerging Markets Debt
Fund portfolio of the Brinson Relationship Funds. The investment objective of
the Brinson Emerging Markets Equity Fund and the Brinson Emerging Markets Debt
Fund is to maximize total U.S. dollar return, consisting of capital appreciation
and current income, while controlling risk. Under normal circumstances, at least
65% of the total assets of the Brinson Emerging Markets Equity Fund is invested
in the equity securities of issuers in emerging markets or securities with
respect to which the return is derived from the equity securities of issuers in
emerging markets. At least 65% of the total assets of the Brinson Emerging
Markets Debt Fund is invested in the debt securities issued by governments,
government-related entities (including participations in loans between
governments and financial institutions), corporations and entities organized to
restructure outstanding debt of issuers in emerging markets, or debt securities
the return on which is derived primarily from other emerging markets
instruments. The Brinson Emerging Markets Equity Fund is permitted to invest in
the same types of securities that the Global Fund, Global Equity Fund and Global
(Ex-U.S.) Equity Fund may invest in directly and the Brinson Emerging Markets
Debt Fund is permitted to invest in the same types of securities that the Global
Fund may invest in directly.

In lieu of investing directly in certain high yield, higher risk
securities, the Global Fund may invest a portion of its assets in the Brinson
High Yield Fund portfolio of the Brinson Relationship Funds. The investment
objective of the Brinson High Yield Fund is to maximize total U.S. dollar
return, consisting of capital appreciation and current income, while controlling
risk. The Brinson High Yield Fund maintains a high yield portfolio and as such,
at least 65% of its assets are invested in high yield securities. The Global
Fund currently intends to limit its investment in non-investment grade debt
securities to no more than 5% of its net assets. Any investment in the Brinson
High Yield Fund will be considered within this limitation.

In lieu of investing directly in equity securities issued by companies with
relatively small overall market capitalizations, the Global Fund may invest a
portion of its assets in the Brinson U.S. Small Capitalization Equity Fund
portfolio (the "U.S. Small Capitalization Equity Fund") of the Brinson
Relationship Funds. The investment objective of the U.S. Small Capitalization
Equity Fund is to maximize total U.S. dollar return, consisting of capital
appreciation and current income, while controlling risk. The U.S.

31
<PAGE>

Small Capitalization Equity Fund invests primarily in publicly-traded companies
representing the lower 7.5% of the Wilshire 5000 Equity Index, and, as such, at
least 65% of its assets are invested in small capitalization equity securities.

Each portfolio of the Brinson Relationship Funds in which the Global Fund,
Global Equity Fund and Global (Ex-U.S.) Equity Fund may invest is permitted to
invest in the same securities of a particular asset class in which the Global
Fund, Global Equity Fund and Global (Ex-U.S.) Equity Fund are permitted to
invest directly, and with similar risks. Pursuant to undertakings with the SEC,
the Global Fund, Global Equity Fund and Global (Ex-U.S.) Equity Fund will not be
subject to the imposition of double management or administration fees with
respect to its investments in portfolios of the Brinson Relationship Funds.

SECONDARY RISKS

The principal risks of investing in each Fund are described in the "Risk
Considerations" section of the Funds' prospectus. The secondary risks of
investing in each Fund are described in Appendix B hereto.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below are fundamental policies and
may not be changed as to a Series without the approval of a majority of the
outstanding voting securities (as defined in the Act) of the Series. Unless
otherwise indicated, all percentage limitations listed below apply to the Series
only at the time of the transaction. Accordingly, if a percentage restriction is
adhered to at the time of investment, a later increase or decrease in the
percentage which results from a relative change in values or from a change in a
Series' total assets will not be considered a violation.

Except as set forth under "The Funds" and "Risk Considerations" in each
Prospectus, or "Investment Strategies" in this SAI, each of the Funds may not:

(i) As to 75% of the total assets of each Series, purchase the
securities of any one issuer, other than securities issued by the
U.S. government or its agencies or instrumentalities, if immediately
after such purchase more than 5% of the value of the total assets of
a Series would be invested in securities of such issuer (this does
not apply to the Global Technology Fund, Global Biotech Fund, Global
Bond Fund, U.S. Value Equity Fund, U.S. Large Cap Equity Fund, U.S
Large Cap Growth Fund, U.S. Small Cap Equity Fund, U.S. Real Estate
Equity Fund, High Yield Fund, Emerging Markets Debt Fund and
Emerging Markets Equity Fund);

(ii) Invest in real estate or interests in real estate (this will not
prevent a Series from investing in publicly-held REITs or marketable
securities of companies which may represent indirect interests in
real estate), interests in oil, gas and/or mineral exploration or
development programs or leases (this prohibition, with respect to
interests in oil, gas and/or mineral exploration or development
programs or leases, does not apply to the Global Technology Fund,
Global Biotech Fund, U.S. Value Equity Fund, U.S. Small Cap Equity
Fund, and U.S. Real Estate Equity Fund);

(iii) Purchase or sell commodities or commodity contracts, but may enter
into futures contracts and options thereon in accordance with its
Prospectus. Additionally, each Series may engage in forward foreign
currency contracts for hedging and non-hedging purposes;

(iv) Make investments in securities for the purpose of exercising control
over or management of the issuer (this does not apply to the Global
Technology Fund, Global Biotech Fund, U.S. Value Equity Fund, U.S.
Large Cap Growth Fund, U.S. Small Cap Equity Fund, U.S. Small Cap
Growth Fund, U.S. Real Estate Equity Fund, High Yield Fund, Emerging
Markets Debt Fund and Emerging Markets Equity Fund);

(v) Purchase the securities of any one issuer if, immediately after such
purchase, a Series would own more than 10% of the outstanding voting
securities of such issuer (this does not apply to the Global
Technology Fund, Global Biotech Fund, U.S. Value Equity Fund, U.S.
Small Cap Equity Fund and U.S. Real Estate Equity Fund);

32
<PAGE>

(vi) Sell securities short or purchase securities on margin, except such
short-term credits as are necessary for the clearance of
transactions. For this purpose, the deposit or payment by a Series
for initial or maintenance margin in connection with futures
contracts is not considered to be the purchase or sale of a security
on margin (this does not apply to the Global Technology Fund, Global
Biotech Fund, U.S. Value Equity Fund, U.S. Large Cap Growth Fund,
U.S. Small Cap Equity Fund, U.S. Small Cap Growth Fund, U.S. Real
Estate Equity Fund, High Yield Fund, Emerging Markets Debt Fund and
Emerging Markets Equity Fund);

(vii) Make loans, except that this restriction shall not prohibit (a) the
purchase and holding of a portion of an issue of publicly
distributed or privately placed debt securities, (b) the lending of
portfolio securities, or (c) entry into repurchase agreements with
banks or broker-dealers;

(viii) Issue senior securities or borrow money in excess of 33 1/3% of the
value of its assets except as a temporary measure for extraordinary
or emergency purposes to facilitate redemptions. All borrowings will
be done from a bank and to the extent that such borrowing exceeds 5%
of the value of a Series' assets, asset coverage of at least 300% is
required. Except for the Global Technology Fund, Global Biotech
Fund, U.S. Value Equity Fund, U.S. Small Cap Equity Fund and U.S.
Real Estate Equity Fund, a Series will not purchase securities when
borrowings exceed 5% of that Series' total assets;

(ix) Purchase the securities of issuers conducting their principal
business activities in the same industry, other than obligations
issued or guaranteed by the U.S. government, its agencies or
instrumentalities, if immediately after such purchase, the value of
a Series' investments in such industry would exceed 25% of the value
of the total assets of the Series across several countries (this
does not apply to the Global Technology Fund, Global Biotech Fund or
U.S. Real Estate Equity Fund);

(x) Act as an underwriter of securities, except that, in connection with
the disposition of a security, a Series may be deemed to be an
"underwriter" as that term is defined in the 1933 Act;

(xi) Invest in securities of any open-end investment company, except that
(i) a Series may purchase securities of money market mutual funds,
(ii) the Global Fund and Global Equity Fund may each invest in the
securities of closed-end investment companies at customary brokerage
commission rates in accordance with the limitations imposed by the
Act and the rules thereunder, and (iii) in accordance with any
exemptive order obtained from the SEC which permits investment by a
Series in other Series or other investment companies or series
thereof advised by the Advisor. In addition, each Series may acquire
securities of other investment companies if the securities are
acquired pursuant to a merger, consolidation, acquisition, plan of
reorganization or a SEC approved offer of exchange (this does not
apply to the Global Technology Fund, Global Biotech Fund, U.S. Value
Equity Fund, U.S. Large Cap Growth Fund, U.S. Small Cap Equity Fund,
U.S. Small Cap Growth Fund, U.S. Real Estate Equity Fund, High Yield
Fund, Emerging Markets Debt Fund and Emerging Markets Equity
Fund);

(xii) Invest in puts, calls, straddles or combinations thereof except to
the extent disclosed in a Series' Prospectus (this does not apply to
the Global Technology Fund, Global Biotech Fund, U.S. Value Equity
Fund, U.S. Large Cap Growth Fund, U.S. Small Cap Equity Fund, U.S.
Small Cap Growth Fund, U.S. Real Estate Equity Fund, High Yield
Fund, Emerging Markets Debt Fund and Emerging Markets Equity Fund);
and

33
<PAGE>

(xiii) Invest more than 5% of its total assets in securities of companies
less than three years old. Such three year periods shall include the
operation of any predecessor company or companies (this does not
apply to the Global Technology Fund, Global Biotech Fund, U.S. Value
Equity Fund, U.S. Large Cap Growth Fund, U.S. Small Cap Equity Fund,
U.S. Small Cap Growth Fund, U.S. Real Estate Equity Fund, High Yield
Fund, Emerging Markets Debt Fund and Emerging Markets Equity
Fund).

34
<PAGE>

MANAGEMENT OF THE TRUST

The Trust is a Delaware business trust. Under Delaware law, the Board
has overall responsibility for managing the business and affairs of the Trust.
The Trustees elect the officers of the Trust, who are responsible for
administering the day-to-day operations of the Series.

The Trustees and executive officers of the Trust, along with their
principal occupations over the past five years and their affiliations, if any,
with Brinson Partners, are listed below.

Trustees and Officers

<TABLE>
<CAPTION>
POSITION
WITH
NAME AGE THE TRUST PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ---- --- --------- -------------------------------------------
<S> <C> <C> <C>
Walter E. Auch 79 Trustee Retired; prior thereto, Chairman and CEO of Chicago Board
6001 N. 62nd Place of Options Exchange 1979-1986; Trustee of the Trust since
Paradise Valley, AZ 85253 May, 1994; Trustee, Brinson Relationship Funds since 1994;
Trustee, Brinson Supplementary Trust since 1997; Director,
Thomson Asset Management Corp. since 1987; Director, Fort
Dearborn Income Securities, Inc. 1987-1995; Director, Smith
Barney VIP Fund since 1991; Director, SB Advisers since
1992; Director, SB Trak since 1992; Director, Banyan Realty
Trust since 1988; Director, Banyan Land Fund II since 1988;
Director, Banyan Mortgage Investment Fund since 1989; and
Director, Express America Holdings Corp. since 1992, and
Nicholas/Applegate Funds and Legend Properties, Inc.;
Director, Geotek Industries, Inc. 1987-1998.

Frank K. Reilly 64 Chairman Professor, University of Notre Dame since 1982; Trustee
College of Business and of the Trust since 1993; Trustee, Brinson Relationship
Administration Trustee Funds since 1994; Trustee, Brinson Supplementary Trust
University of Notre Dame since 1997; Director of The Brinson Funds, Inc. 1992-
Notre Dame, IN 46556-0399 1993; Director, Fort Dearborn Income Securities, Inc. since
1993; Director, Greenwood Trust Company since 1993; and
Director, Dean Witter Trust, FSB since 1996.

Edward M. Roob 65 Trustee Retired; prior thereto, Senior Vice President, Daiwa
841 Woodbine Lane Securities America Inc. 1986-1993; Trustee of the Trust
Northbrook, IL 60002 since 1995; Trustee, Brinson Relationship Funds since 1995;
Trustee, Brinson Supplementary Trust since 1997; Director,
Fort Dearborn Income Securities, Inc. since 1993; Director,
Brinson Trust Company since 1993; Committee Member, Chicago
Stock Exchange since 1993.
</TABLE>

36
<PAGE>

<TABLE>
<CAPTION>
POSITION
WITH OFFICER
NAME AGE THE TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ---- --- --------- ----- -------------------------------------------
<S> <C> <C> <C>
E. Thomas 56 President 1992 Managing Director, Brinson Partners, Inc. since 1991; Chairman,
McFarlan Brinson Trust Company since 1996; Trustee, Brinson Trust Company
since 1991; Chairman, UBS Brinson Funds Management Co. since 1999;
Managing Director, UBS Brinson since 1998; President, The Brinson
Funds since 1993; Treasurer and Principal Accounting Officer, The
Brinson Funds 1995-1997; President, Brinson Relationship Funds
since 1994; President, Brinson Supplementary Trust since 1997.

Thomas J. 36 Vice 1993 Director, Brinson Partners, Inc. since 1993; Vice President, The
Digenan President Brinson Funds since 1997; Assistant Treasurer, The Brinson Funds
1995-1997; Assistant Secretary, The Brinson Funds 1993-1995; Vice
President, Brinson Relationship Funds 1994-1995 and since 1997;
Assistant Treasurer and Assistant Secretary, Brinson Relationship
Funds since 1995-1997; Vice President, Brinson Supplementary Trust
since 1997.

Debra L. 34 Vice 1992 Director, Brinson Partners, Inc. since 1995; Associate, Brinson
Nichols President Partners, Inc. 1991-1995; Vice President, The Brinson Funds since
1997; Secretary, The Brinson Funds 1997; Assistant Secretary, The
Brinson Funds 1993-1997; Assistant Secretary, Brinson Relationship
Funds 1994-1997; Secretary, Brinson Relationship Funds 1997; Vice
President, Brinson Relationship Funds since 1997; Vice President,
Brinson Supplementary Trust since 1997.

Carolyn M. 33 Treasurer, 1995 Director, Brinson Partners, Inc. since 1997; Associate, Brinson
Burke Secretary Partners, Inc. 1995-1996; Secretary, Treasurer and Principal
and Accounting Officer, The Brinson Funds since 1997; Assistant
Principal Secretary, The Brinson Funds 1996-1997; Assistant Secretary,
Accounting Brinson Relationship Funds, 1996-1997; Secretary, Treasurer and
Officer Principal Accounting Officer, Brinson Relationship Funds since 1997;
Secretary, Treasurer and Principal Accounting Officer, Brinson
Supplementary Trust since 1997; Financial Analyst, Van Kampen
American Capital Investment Advisory Corp. 1992-1995.

David E. 31 Assistant 1998 Associate Director, Brinson Partners, Inc. since 1998; Associate,
Floyd Secretary Brinson Partners, Inc., 1994-1998; Assistant Trust Officer,
Brinson Trust Company since 1993; Assistant Secretary, The Brinson
Funds since 1998; Assistant Secretary, Brinson Relationship Funds
since 1998; Assistant Secretary, Brinson Supplementary Trust since
1998.

Mark F. 42 Assistant 1999 Assistant Secretary, Brinson Partners, Inc. since 1993; Assistant
Kemper Secretary Secretary, Brinson Trust Company since 1993; Secretary, UBS
Brinson since 1998; Assistant Secretary, Brinson Holdings, Inc.
1993-1998; Assistant Secretary, The Brinson Funds since 1999;
Assistant Secretary, Brinson Relationship Funds since 1999;
Assistant Secretary, Brinson Supplementary Trust since 1999.
</TABLE>

37
<PAGE>

COMPENSATION TABLE

Trustees

<TABLE>
<CAPTION>
AGGREGATE COMPENSATION TOTAL COMPENSATION FROM
FROM TRUST FOR FISCAL YEAR TRUST AND FUND COMPLEX
NAME AND POSITION HELD ENDED JUNE 30, 1999 PAID TO TRUSTEES/1/
- ---------------------- ------------------- -------------------
<S> <C> <C>
Walter E. Auch, Trustee $17,400 $42,600
6001 N. 62nd Place
Paradise Valley, AZ 85253

Frank K. Reilly, Trustee $17,400 $54,600
College of Business Administration
University of Notre Dame
Notre Dame, IN 46556-0399

Edward M. Roob, Trustee $17,400 $55,350
841 Woodbine Lane
Northbrook, IL 60002
</TABLE>

/1/ This amount represents the aggregate amount of compensation paid to the
Trustees for (a) service on the Board for the Trust's most recently completed
fiscal year; and (b) service on the Board of Trustees of three other investment
companies managed by Brinson Partners for the fiscal year ended June 30, 1999
with respect to Messrs. Reilly and Roob and two other investment companies
managed by Brinson Partners for the fiscal year ended June 30, 1999 with respect
to Mr. Auch.

No officer or Trustee of the Trust who is also an officer or employee of
Brinson Partners receives any compensation from the Trust for services to the
Trust. The Trust pays each Trustee who is not affiliated with Brinson Partners a
fee of $6,000 per year, plus $300 per Series per meeting, and reimburses each
Trustee and officer for out-of-pocket expenses in connection with travel and
attendance at Board meetings.

The Board has an Audit Committee which has the responsibility, among other
things, to (i) recommend the selection of the Trust's independent auditors, (ii)
review and approve the scope of the independent auditors' audit activity, (iii)
review the audited financial statements, and (iv) review with such independent
auditors the adequacy of the Series' basic accounting system and the
effectiveness of the Series' internal controls. The Audit Committee met once
during the fiscal year ended June 30, 1999. There is no separate nominating or
investment committee. Items pertaining to these committees are submitted to the
full Board.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of April 14, 2000, the officers and Trustees unless otherwise noted, as
a group owned less than 1% of the outstanding equity securities of the Trust and
of each class of equity securities of the Trust.

As of April 14, 2000, the following persons owned of record or beneficially
more than 5% of the outstanding voting shares of the Brinson Fund-Class I,
Brinson Fund-Class N, UBS Investment Funds class of shares or the Series, as
applicable:

<PAGE>

GLOBAL FUND

<TABLE>
<CAPTION>
Percentage of Percentage of
Name & Address of Beneficial and Record Owners Class Series
- ---------------------------------------------- ----- ------
<S> <C> <C>
Brinson Fund-Class I

Wilmington Trust Company 14.38% 13.87%
Wilmington, DE

Northern Trust Company 8.13% 7.84%
Chicago, IL

Charles Schwab & Co., Inc. 7.45% 7.19%
San Francisco, CA

Norwest Bank 6.53% 6.30%
Minneapolis, MN

American Express 6.47% 6.24%
Minneapolis, MN

Alabama Business Charitable Trust 5.32% 5.13%
Birmingham, AL

Wilmington Trust Company 5.24% 5.05%
Wilmington, DE

Brinson Fund-Class N

* Emjayco 65.57% N/A
Milwaukee, WI

* Merrill Lynch Trust Co. 30.60% N/A
Jacksonville, FL

UBS Investment Funds Class

* UBS AG 72.06% N/A
New York, NY

UBS AG 5.86% N/A
New York, NY
</TABLE>

GLOBAL EQUITY FUND

* State Street Bank & Trust 34.29% 19.55%
Westwood, MA

* Wilmington Trust Co. 27.44% 15.64%
Wilmington, DE

Charles Schwab & Co., Inc. 11.72% 6.68%
San Francisco, CA

Resources Trust Company 8.58% 4.89%
Englewood, CO

Brinson Fund-Class N

* National Financial Services Corp. 99.46% N/A
New York, NY

UBS Investment Funds Class

* UBS AG 43.23% 18.46%
New York, NY

UBS SA 13.47% 5.75%
Zurich, Switzerland

UBS SA 7.34% N/A
Zurich, Switzerland
</TABLE>

GLOBAL BOND FUND

Wilmington Trust Co. 16.59% 15.99%
Wilmington, DE

Munson Williams Proctor Institute 14.14% 13.63%
Utica, NY

Baptist Health Systems, Inc. 13.15% 12.68%
Birmingham, AL

Resources Trust Company 13.07% 12.60%
Englewood, CO

Charles Schwab & Co., Inc. 11.76% 11.34%
San Francisco, CA

Wilmington Trust Co., Trustee 10.60% 10.22%
Wilmington, DE

State Street Bank & Trust 6.40% 6.17%
Westwood, MA

Brinson Fund-Class N

* Brinson Partners, Inc. 73.10% N/A
Chicago, IL

* Merrill Lynch Trust Co. 26.90% N/A
Jacksonville, FL

UBS Investment Funds Class

* UBS AG 39.39% N/A
New York, NY

* UBS AG 26.18% N/A
New York, NY

UBS SA 8.35% N/A
Zurich, Switzerland

</TABLE>

U.S. BALANCED FUND
<TABLE>
<CAPTION>
Percentage of Percentage of
Name & Address of Beneficial and Record Owners Class Series
- ---------------------------------------------- ----- ------
<S> <C> <C>
Brinson Fund-Class I

*+ State Street Bank & Trust 33.08% 29.75%
Westwood, MA

The Society of Sisters of Christian Charity 15.09% 13.57%
Wilmette, IL

Carn & Co. 14.10% 12.68%
Washington, DC

National Investors Corp. 9.93% 8.93%
New York, NY

Charles Schwab & Co., Inc. 9.56% 8.59%
San Francisco, CA

Carn & Co. 7.63% 6.86%
Washington, DC

Wilmington Trust Company 5.83% 5.25%
Wilmington, DE

Brinson Fund-Class N

* Brinson Partners, Inc. 100% N/A
Chicago, IL

UBS Investment Funds Class

*UBS AG 54.79% 5.51%
New York, NY

APD Profit Sharing Plan 15.98% N/A
Key West, FL

UBS SA 12.03% N/A
Zurich, Switzerland

Thomas M. Quinn 4.60% N/A
St. Albans Herts, England
</TABLE>

U.S. EQUITY FUND

Charles Schwab & Co., Inc. 23.50% 21.74%
San Francisco, CA

State Street Bank & Trust 17.21% 15.92%
Westwood, MA

The Chase Manhattan Bank 6.24% 5.77%
Rochester, NY

Brinson Fund-Class N

* Merrill Lynch Trust Co. 98.10% N/A
Jacksonville, FL

UBS Investment Funds Class

* UBS SA 43.12% N/A
Zurich, Switzerland

UBS AG 9.56% N/A
New York, NY

UBS SA 9.56% N/A
Zurich, Switzerland
</TABLE>

U.S. LARGE CAP EQUITY FUND

*+ Firlin Co. 54.13% 53.64%
Lincoln, NE

Resources Trust Company 14.37% 14.24%
Englewood, CO

Norwest Bank 10.85% 10.75%
Minneapolis, MN

Charles Schwab & Co., Inc. 6.34% 6.29%
San Francisco, CA

Brinson Fund-Class N

* National Financial Services Corp. 99.98% N/A
New York, NY

UBS Investment Funds Class

* Thomas Michael Quinn 63.27% N/A
England, United Kingdom

* UBS AG 28.41% N/A
New York, NY
</TABLE>

U.S. LARGE CAP GROWTH FUND

*+ UBS AG 29.94% 43.63%
New York, NY

* Howard Smith & Levin LLP 29.88% 12.42%
New York, NY

Wilmington Trust Company 19.44% 8.08%
Wilmington, DE

RDA International Inc. 10.67% N/A
Houston, TX

Brinson Fund-Class N

* Brinson Partners, Inc. 100% N/A
Chicago, IL

UBS Investment Funds Class

*+ UBS AG 53.38% 43.63%
New York, NY

Brian Vaughan 12.66% 7.40%
Moraga, CA
</TABLE>

U.S. SMALL CAP GROWTH FUND

*+ UBS AG 71.43% 71.46%
New York, NY

Island Holdings 7.59% 7.16%
Honolulu, HI

Wilmington Trust Company 5.65% 5.33%
Wilmington, DE

Brinson Fund-Class N

* Brinson Partners, Inc. 100% N/A
Chicago, IL

UBS Investment Funds Class

*+ UBS AG 71.94% 71.46%
New York, NY

Donald L. Chalmers 9.97% N/A
Profit Sharing Plan
Houston, TX
</TABLE>

U.S. BOND FUND

Charles Schwab & Co., Inc. 24.71% 23.20%
San Francisco, CA

State Street Bank & Trust 18.88% 17.73%
Westwood, MA

Resources Trust Company 13.21% 12.40%
Englewood, CO

Norwest Bank 9.35% 8.78%
Minneapolis, MN

UBS AG 6.20% 5.82%
New York, NY

Reid Hospital & Health Care 6.03% 5.66%
Richmond, IN

Brinson Fund-Class N

* Brinson Partners, Inc. 100% N/A
Chicago, IL

UBS Investment Funds Class

UBS AG 21.74% N/A
New York, NY

UBS AG 21.51% N/A
New York, NY

UBS AG 18.95% N/A
Zurich, Switzerland

PJ Mechanical Corp. 7.95% N/A
Employee Pension Plan
New York, NY

Anron Heating & Air Conditioning 6.86% N/A
North Babylon, NY

Donald L. Chalmers 4.59% N/A
Profit Sharing Plan
Houston, TX
</TABLE>

HIGH YIELD FUND

*+ UBS AG 78.18% 75.02%
New York, NY

Brinson Fund-Class N

* Brinson Partners, Inc. 100% N/A
Chicago, IL

UBS Investment Funds Class

* UBS AG 44.28% N/A
New York, NY

UBS AG 14.04% N/A
New York, NY

David J. Nash 7.04% N/A
New York, NY

PJ Mechanical Corp. 5.68% N/A
Employee Pension Plan
New York, NY
</TABLE>

GLOBAL (EX-U.S.) EQUITY FUND

The Northern Trust Company 15.45% 15.23%
Chicago, IL

The Northern Trust Company 11.58% 11.41%
Chicago, IL

Key Trust Company 10.81% 10.65%
San Francisco, CA

Charles Schwab & Co., Inc. 5.38% 5.30%
Cleveland, OH

Edna McConnell Clark Foundation 4.51% N/A
New York, NY

Brinson Fund-Class N

* Brinson Partners, Inc. 100% N/A
Chicago, IL

UBS Investment Funds Class

* UBS AG 35.74% N/A
New York, NY

* Emjayco 28.80% N/A
Milwaukee, WI

UBS AG 12.03% N/A
Zurich Switzerland
</TABLE>

39
<PAGE>

UBS Investment Funds Class

* Person deemed to control the class within the meaning of the Act. Note
that such persons possess the ability to control the outcome of matters
submitted for the vote of shareholders of that class.

+ Person deemed to control the Series within the meaning of the Act. Note
that such persons possess the ability to control the outcome of matters
submitted for the vote of shareholders of that Series.

INVESTMENT ADVISORY AND OTHER SERVICES

Advisor

Brinson Partners, a Delaware corporation, is an investment management
firm, managing as of December 31, 1999, USD 159 billion, primarily for
institutional pension and profit sharing funds. Brinson Partners was organized
in 1989 when it acquired the institutional asset management business of The
First National Bank of Chicago and First Chicago Investment Advisors, N.A.
Brinson Partners and its predecessor entities have managed domestic and
international investment assets since 1974 and global investment assets since
1982. Brinson Partners has offices in Australia, Bahrain, Brazil, China, France,
Germany, Japan, Singapore, Switzerland and the United Kingdom in addition to its
principal office at 209 South LaSalle Street, Chicago, IL 60604-1295. Brinson
Partners is a wholly-owned subsidiary of UBS AG. UBS AG, with headquarters in
Zurich, Switzerland, is an internationally diversified organization with
operations in many aspects of the financial services industry. UBS AG was formed
by the merger of Union Bank of Switzerland and Swiss Bank Corporation in June
1998.

Brinson Partners also serves as the investment advisor to seven other
investment companies: Brinson Relationship Funds, which includes nineteen
investment portfolios (series); Fort Dearborn

40
<PAGE>

Income Securities, Inc.; The Hirtle Callaghan International Trust -International
Equity Portfolio; John Hancock Variable Annuity Series Trust I -International
Balanced Portfolio; Managed Accounts Services Portfolio Trust -Pace Large
Company Value Equity Investments; The Republic Funds -Republic Equity Fund;
Governor Funds International Equity Fund and Villanova Mutual Fund Trust
- -Prestige Large Cap Value Fund.

Pursuant to its investment advisory agreements (the "Agreements") with
the Trust, on behalf of each Series, Brinson Partners receives from each Series
a monthly fee at an annual rate (as described in the Prospectuses and below)
multiplied by the average daily net assets of that Series for providing
investment advisory services. Brinson Partners is responsible for paying its
expenses. Under the Agreements, each Series pays the following expenses: (1) the
fees and expenses of the Trust's disinterested Trustees; (2) the salaries and
expenses of any of the Trust's officers or employees who are not affiliated with
Brinson Partners; (3) interest expenses; (4) taxes and governmental fees; (5)
brokerage commissions and other expenses incurred in acquiring or disposing of
portfolio securities; (6) the expenses of registering and qualifying shares for
sale with the SEC and with various state securities commissions; (7) auditing
and legal costs; (8) insurance premiums; (9) fees and expenses of the Trust's
custodian, administrative and transfer agent and any related services; (10)
expenses of obtaining quotations of the Series' portfolio securities and of
pricing the Series' shares; (11) expenses of maintaining the Trust's legal
existence and of shareholders' meetings; (12) expenses of preparation and
distribution to existing shareholders of reports, proxies and prospectuses; and
(13) fees and expenses of membership in industry organizations.

Under the Agreements, the Advisor is entitled to a monthly fee of the
respective Series' average daily net assets as follows: annual rates of 1.40%
for the Global Technology Fund; 1.15% for the Global Biotech Fund; 1.10% for the
Emerging Markets Equity Fund; 1.00% for the U.S. Small Cap Equity Fund and the
U.S. Small Cap Growth Fund; 0.90% for the U.S. Real Estate Equity Fund; 0.80%
for the Global Fund, Global Equity Fund and Global (Ex-U.S.) Equity Fund; 0.75%
for the Global Bond Fund; 0.70% for the U.S. Balanced Fund, U.S. Equity Fund,
U.S. Value Equity Fund, U.S. Large Cap Growth Fund and the U.S. Large Cap Equity
Fund; 0.65% for the Emerging Markets Debt Fund; 0.60% for the High Yield Fund;
and 0.50% for the U.S. Bond Fund. The fee payable to Brinson Partners by the
Global Fund, Global Equity Fund, Global Technology Fund, Global Biotech Fund,
U.S. Small Cap Equity Fund, U.S. Small Cap Growth Fund, U.S. Real Estate Equity
Fund, Global (Ex-U.S.) Equity Fund and Emerging Markets Equity Fund is higher
than the advisory fees paid by most other mutual funds, but is comparable to
those of other mutual funds with similar investment objectives. The Advisor has
agreed irrevocably to waive its fees and reimburse expenses to the extent that
total operating expenses exceed the following rates of the respective Series'
average daily net assets as follows, without regard to 12b-1 Plan expenses for
the UBS Investment Funds class of shares or the Brinson-Class N shares of each
Series: 1.60% for the Emerging Markets Equity Fund; 1.55% for the Global
Technology Fund; 1.30% for the Global Biotech Fund; 1.15% for the U.S. Small Cap
Equity Fund, U.S. Small Cap Growth Fund and the Emerging Markets Debt Fund;
1.10% for the Global Fund; 1.05% for the U.S. Real Estate Equity Fund; 1.00% for
the Global Equity Fund and the Global (Ex-U.S.) Equity Fund; 0.90% for the
Global Bond Fund; 0.85% for the U.S. Value Equity Fund; 0.80% for the U.S.
Balanced Fund, the U.S. Equity Fund, the U.S. Large Cap Equity Fund and the U.S.
Large Cap Growth Fund; 0.70% for the High Yield Fund; and 0.60% for the U.S.
Bond Fund. The Advisor may recapture any amounts waived or reimbursed with
respect to the Global Technology Fund, Global Biotech Fund, U.S. Value Equity
Fund, U.S. Small Cap Equity Fund, U.S. Real Estate Equity Fund, Emerging Markets
Debt Fund or Emerging Markets Equity Fund subject to the following conditions:
(1) the Advisor must request reimbursement within five years from the date on
which the waiver and/or reimbursement was made, and (2) the Fund must be able to
reimburse the Advisor and remain within the operating expense limits noted in
the preceding chart.

Advisory fees accrued to Brinson Partners were as follows:

A. FISCAL YEAR ENDED JUNE 30, 1997

<TABLE>
<CAPTION>
GROSS ADVISORY FEES NET ADVISORY FEES PAID FUND EXPENSES PAID
SERIES* EARNED BY ADVISOR AFTER FEE WAIVER BY ADVISOR
- ------ ----------------- ---------------- ----------
<S> <C> <C> <C>
GLOBAL FUND $4,294,925 $4,294,925 $ 0
GLOBAL EQUITY FUND $ 641,075 $ 445,564 $195,511
GLOBAL BOND FUND $ 344,152 $ 149,228 $194,924
U.S. BALANCED FUND $1,775,454 $1,559,981 $215,473
</TABLE>

41
<PAGE>

<TABLE>
<S> <C> <C> <C>
U.S. EQUITY FUND $1,423,666 $1,234,361 $189,305
U.S. BOND FUND $ 67,835 $ 0 $142,178
GLOBAL (EX-U.S.) EQUITY FUND $2,420,667 $2,420,667 $ 0
</TABLE>

* The U.S. Large Cap Equity Fund, the U.S. Large Cap Growth Fund, the U.S.
Small Cap Growth Fund, the High Yield Fund, the Emerging Markets Debt Fund, the
Emerging Markets Equity Fund, the Global Technology Fund, the U.S. Small Cap
Equity Fund, the Global Biotech Fund, the U.S. Value Equity Fund and the U.S.
Real Estate Equity Fund had not commenced operations as of the time period
indicated. Effective December 10, 1998, the Non-U.S. Equity Fund changed its
name to the Global (Ex-U.S.) Equity Fund.

B. FISCAL YEAR ENDED JUNE 30, 1998

<TABLE>
<CAPTION>
GROSS ADVISORY FEES NET ADVISORY FEES PAID FUND EXPENSES PAID
SERIES* EARNED BY ADVISOR AFTER FEE WAIVER BY ADVISOR
- ------ ----------------- ---------------- ----------
<S> <C> <C> <C>
GLOBAL FUND $5,378,141 $5,378,141 $ 0
GLOBAL EQUITY FUND $ 719,439 $ 697,541 $21,898
GLOBAL BOND FUND $ 500,982 $ 457,480 $43,502
U.S. BALANCED FUND $1,674,661 $1,655,564 $19,097
U.S. EQUITY FUND $3,792,120 $3,792,120 $ 0
U.S. LARGE CAP EQUITY FUND
U.S. BOND FUND $ 142,474 $ 74,626 $67,848
GLOBAL (Ex-U.S.) EQUITY FUND $3,475,953 $3,475,953 $ 0
</TABLE>

* The U.S. Large Cap Growth Fund, the U.S. Small Cap Growth Fund, the
High Yield Fund, the Emerging Markets Debt Fund, the Emerging Markets Equity
Fund, the Global Technology Fund, the U.S. Small Cap Equity Fund, the Global
Biotech Fund, the U.S. Value Equity Fund and the U.S. Real Estate Equity Fund
had not commenced operations as of the time period indicated. Effective December
10, 1998, the Non-U.S. Equity Fund changed its name to the Global (Ex-U.S.)
Equity Fund. Effective as of the date hereof, the U.S. Large Capitalization
Equity Fund changed its name to the U.S. Large Cap Equity Fund.

42
<PAGE>

C. PERIOD FROM DECEMBER 19, 1998 THROUGH DECEMBER 31, 1998

<TABLE>
<CAPTION>
GROSS ADVISORY FEES
EARNED NET ADVISORY FEES PAID FUND EXPENSES PAID
SERIES*,** BY BRINSON PARTNERS AFTER FEE WAIVER BY BRINSON PARTNERS
- ------ ------------------- ---------------- -------------------
<S> <C> <C> <C>
U.S. LARGE CAP GROWTH FUND $ 849 $ 0 $ 849

U.S. SMALL CAP GROWTH FUND $6,538 $2,107 $4,431

HIGH YIELD FUND $6,278 $3,630 $2,648
</TABLE>

D. FISCAL YEAR ENDED JUNE 30, 1999

<TABLE>
<CAPTION>
GROSS ADVISORY FEES
EARNED NET ADVISORY FEES PAID FUND EXPENSES PAID
SERIES* BY ADVISOR AFTER FEE WAIVER BY ADVISOR
- ------ ---------- ---------------- ----------
<S> <C> <C> <C>
GLOBAL FUND $ 4,403,642 $ 4,403,642 $ 0
GLOBAL EQUITY FUND $ 628,067 $ 591,107 $36,960
GLOBAL BOND FUND $ 957,176 $ 957,176 $ 0
U.S. BALANCED FUND $ 347,296 $ 268,010 $79,286
U.S. EQUITY FUND $ 5,047,492 $ 5,047,492 $ 0
U.S. LARGE CAP EQUITY FUND $ 137,200 $ 0 $97,158
U.S. LARGE CAP GROWTH FUND* $ 18,582 $42,136
U.S. SMALL CAP GROWTH FUND** $ 148,873 $ 123,087 $25,786
U.S. BOND FUND $ 418,445 $ 407,073 $11,372
HIGH YIELD FUND** $ 173,302 $ 137,039 $36,263
GLOBAL (EX-U.S.) EQUITY FUND $ 3,713,448 $ 3,713,448 $ 0
</TABLE>

* The Emerging Markets Debt Fund, the Emerging Markets Equity Fund, the
Global Technology Fund, the U.S. Small Cap Equity Fund, the Global Biotech Fund,
the U.S. Value Equity Fund and the U.S. Real Estate Equity Fund had not
commenced operations as of the time period indicated. Effective December 10,
1998, the Non-U.S. Equity Fund changed its name to the Global (Ex-U.S.) Equity
Fund. Effective as of the date hereof, the U.S. Large Capitalization Equity
Fund, U.S. Large Capitalization Growth Fund and U.S. Small Capitalization Growth
Fund changed their names to the U.S. Large Cap Equity Fund, U.S. Large Cap
Growth Fund and U.S. Small Cap Growth Fund, respectively.
** Effective on December 19, 1998, and as further discussed below, the UBS
Large Cap Growth Fund, UBS Small Cap Fund and UBS High Yield Bond Fund were
reorganized into the U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund and
High Yield Fund, respectively. Fees for the U.S. Large Cap Growth Fund, U.S.
Small Cap Growth Fund and High Yield Fund reflect fees paid during the period
from January 1, 1999 through June 30, 1999. The U.S. Large Cap Growth Fund, U.S.
Small Cap

43
<PAGE>

Growth Fund and High Yield Fund initially had fiscal years ending on December
31. At the February 22, 1999 Board of Trustees' meeting, the Board of Trustees
of the Trust voted to change the fiscal year end of these three Funds to June
30.

Prior to the reorganization of the UBS Large Cap Growth Fund, UBS Small Cap
Fund and UBS High Yield Bond Fund (collectively, the "UBS Funds" and each a "UBS
Fund") into the U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund and High
Yield Fund, respectively, each of the UBS Funds invested substantially all of
its investable assets in a corresponding portfolio of UBS Investor Portfolios
Trust (collectively, the "UBS Portfolios" and each a "UBS Portfolio"). Under the
investment advisory agreement of each UBS Portfolio with the New York office of
UBS A.G., as the successor to the New York Branch of the Union Bank of
Switzerland ("UBS"), UBS was entitled to a monthly fee of the corresponding UBS
Portfolios' average daily net assets as follows: annual rates of 0.60% for the
UBS Large Cap Growth Fund and the UBS Small Cap Fund and 0.45% for the UBS High
Yield Bond Fund. UBS agreed to waive its fees and reimburse each UBS Fund and
its corresponding Portfolio to the extent that each UBS Fund's total operating
expenses (including its share of its corresponding Portfolio's expenses)
exceeded, on an annual basis, the following rates of the respective UBS Fund's
average daily net assets: 1.00% for the UBS Large Cap Growth Fund, 1.20% for the
UBS Small Cap Fund and 0.90% for the UBS High Yield Bond Fund.

Advisory fees accrued to UBS for the UBS Funds were as follows:

A. PERIOD FROM DECEMBER 21, 1997 THROUGH DECEMBER 31, 1997

<TABLE>
<CAPTION>
GROSS ADVISORY FEES
EARNED NET ADVISORY FEES PAID FUND EXPENSES PAID
SERIES BY UBS AFTER FEE WAIVER BY UBS
- ------ ------ ---------------- ------
<S> <C> <C> <C>
UBS LARGE CAP GROWTH FUND* $ 923 $ 0 $ 923

UBS SMALL CAP FUND $4,233 $ 0 $4,233

UBS HIGH YIELD BOND FUND $1,611 $ 0 $1,611
</TABLE>

* Advisory fees for the UBS Large Cap Growth Fund were for the period
December 29, 1997 through December 31, 1997.

B. PERIOD FROM JANUARY 1, 1998 THROUGH DECEMBER 18, 1998

<TABLE>
<CAPTION>
GROSS ADVISORY FEES NET ADVISORY FEES PAID FUND EXPENSES PAID
SERIES EARNED BY UBS AFTER FEE WAIVER BY UBS
- ------ ------------- ---------------- ------
<S> <C> <C> <C>
UBS LARGE CAP GROWTH FUND $ 32,644 $ 0 $ 97,199

UBS SMALL CAP FUND $107,673 $19,971 $ 87,702

UBS HIGH YIELD BOND FUND $ 71,860 $ 0 $117,430
</TABLE>

Under Sub-Advisory Agreements with UBS Brinson, Inc., as the successor to
UBS Asset Management (New York) Inc. (the "Sub-Advisor"), UBS paid the Sub-
Advisor a monthly fee of the respective UBS Portfolios' average daily net assets
as follows:

44
<PAGE>

UBS LARGE CAP GROWTH PORTFOLIO 0.30% of the first $25 million; 0.25%
of the next $25 million; and 0.20%
over $50 million

UBS SMALL CAP PORTFOLIO 0.40% of the first $25 million;
0.325% of the next $25 million; and
0.25% over $50 million

UBS HIGH YIELD BOND PORTFOLIO 0.25% of the first $25 million; 0.20%
of the next $25 million; and 0.15%
over $50 million

UBS was responsible for paying the Sub-Advisor its fees. For the period
December 29, 1997 to December 31, 1997, UBS paid $100 to the Sub-Advisor on
behalf of the UBS Large Cap Growth Portfolio. For the period December 22, 1997
to December 31, 1997, UBS paid $1,250 and $535 to the Sub-Advisor on behalf of
the UBS Small Cap and UBS High Yield Bond Portfolios, respectively. For the
period January 1, 1998 to December 20, 1998, UBS paid $ 0 to the Sub-Advisor on
behalf of the UBS Large Cap Growth Portfolio, UBS Small Cap Portfolio and UBS
High Yield Bond Portfolio.

General expenses of the Trust (such as costs of maintaining corporate
existence, legal fees, insurance, etc.) will be allocated among the Series in
proportion to their relative net assets. Expenses which relate exclusively to a
particular Series, such as certain registration fees, brokerage commissions and
other portfolio expenses, will be borne directly by that Series.

Administrator

Administrative, Accounting, Transfer Agency and Custodian Services

Effective May 10, 1997, the Trust, on behalf of each Fund, entered into a
Multiple Services Agreement (the "Services Agreement") with Morgan Stanley Trust
Company, One Pierrepont Plaza, Brooklyn, New York 11201 ("MSTC"), pursuant to
which MSTC was required to provide general administrative, accounting, portfolio
valuation, transfer agency and custodian services to the Funds, including the
coordination and monitoring of any third party service providers. Effective
October 1, 1998, MSTC was merged into The Chase Manhattan Bank, 270 Park Avenue,
New York, New York 10017 ("Chase"), and Chase assumed all of MSTC's rights and
obligations under the Services Agreement.

Custody Services. Chase provides custodian services for the securities and
cash of the Funds. The custody fee schedule is based primarily on the net amount
of assets held during the period for which payment is being made plus a per
transaction fee for transactions during the period and out-of-pocket expenses.
Effective October 1, 1998, Chase became the custodian of the Funds pursuant to
the Services Agreement as a result of the merger of MSTC into Chase.

As authorized under the Services Agreement, MSTC had entered into a Mutual
Funds Service Agreement (the "CGFSC Agreement") with Chase Global Funds Services
Company ("CGFSC"), a corporate affiliate of Chase, under which CGFSC provides
administrative, accounting, portfolio valuation and transfer agency services to
the Funds. Chase has assumed all of MSTC's rights and obligations under the
CGFSC Agreement. CGFSC's business address is 73 Tremont Street, Boston,
Massachusetts 02108-3913.

Pursuant to the CGFSC Agreement, CGFSC provides:

(1) administrative services, including providing the necessary office
space, equipment and personnel to perform administrative and clerical
services; preparing, filing and

45
<PAGE>

distributing proxy materials, periodic reports to investors,
registration statements and other documents; and responding to
investor inquiries;

(2) accounting and portfolio valuation services, including the daily
calculation of each Fund's net asset value and the preparation of
certain financial statements; and

(3) transfer agency services, including the maintenance of each investor's
account records, responding to investors' inquiries concerning
accounts, processing purchases and redemptions of each Fund's shares,
acting as dividend and distribution disbursing agent and performing
other service functions. Shareholder inquiries should be made to the
transfer agent at 1-800-448-2430 (for the Brinson Fund-Class N and
Brinson Fund-Class I) or 1-800-794-7753 (for the UBS Investment Funds
class of shares).

For its administrative, accounting, transfer agency and custodian services,
Chase receives the following as compensation from the Trust on an annual basis:
0.0025% of the average daily U.S. assets of the Trust; 0.0525% of the average
daily non-U.S. assets of the Trust; 0.3250% of the average daily emerging
markets equity assets of the Trust; and 0.019% of the average daily emerging
markets debt assets of the Trust. Chase receives an additional fee of 0.075% of
the average daily net assets of the Trust for administrative duties, the latter
subject to the expense limitation applicable to the Trust. No fee (asset based
or otherwise) is charged on any investments made by any fund into any other fund
sponsored or managed by the Advisor and assets of a fund that are invested in
another investment company or series thereof sponsored or managed by the Advisor
will not be counted in determining the 0.075% administrative duties fee or the
applicability of the expense limitation on such fee. The foregoing fees include
all out-of-pocket expenses or transaction charges incurred by Chase and any
third party service provider in providing such services.

Also as authorized under the Services Agreement, Chase has entered into a
sub-administration agreement (the "FDI Agreement") with Funds Distributor, Inc.
("FDI") under which FDI provides administrative assistance to the Funds with
respect to: (i) regulatory matters, including regulatory developments and
examinations, (ii) all aspects of each Fund's day-to-day operations, (iii)
office facilities, clerical and administrative services, and (iv) maintenance of
books and records. FDI's business address is 60 State Street, Suite 1300,
Boston, Massachusetts 02109.

Pursuant to the CGFSC Agreement and the FDI Agreement, Chase pays CGFSC and
FDI, respectively, for the services that CGFSC and FDI provide to Chase in
fulfilling Chase's obligations under the Services Agreement.

For the period October 1, 1998 through June 30, 1999, aggregate fees paid
to Chase for administration, accounting, portfolio valuation and transfer agency
services under the Services Agreement were as follows:

<TABLE>
<CAPTION>
OCTOBER 1, 1998
THROUGH FISCAL YEAR
SERIES* ENDED JUNE 30, 1999
- ------- -------------------
<S> <C>
GLOBAL FUND $ 265,350
GLOBAL EQUITY FUND $ 0
GLOBAL BOND FUND $ 13,905
U.S. BALANCED FUND $ 0
U.S. EQUITY FUND $ 209,093
U.S. LARGE CAP EQUITY FUND $ 0
U.S. LARGE CAP GROWTH FUND $ 0
U.S. SMALL CAP GROWTH FUND $ 0
U.S. BOND FUND $ 0
HIGH YIELD FUND $ 0
</TABLE>

46
<PAGE>

<TABLE>
<S> <C>
GLOBAL (EX-U.S.) EQUITY FUND $ 265,131
</TABLE>

* Effective December 10, 1998, the Non-U.S. Equity Fund changed its name to
the Global (Ex-U.S.) Equity Fund. Effective as of the date hereof, the U.S.
Large Capitalization Equity Fund, U.S. Large Capitalization Growth Fund and U.S.
Small Capitalization Growth Fund changed their names to the U.S. Large Cap
Equity Fund, U.S. Large Cap Growth Fund and U.S. Small Cap Growth Fund,
respectively. Effective on December 19, 1998, and as further discussed below,
the UBS Large Cap Growth Fund, UBS Small Cap Fund and UBS High Yield Bond Fund
were reorganized into the U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund
and High Yield Fund, respectively. Fees for the U.S. Large Cap Growth Fund, U.S.
Small Cap Growth Fund and High Yield Fund reflect fees paid during the period
from January 1, 1999 through June 30, 1999. The Global Technology Fund, U.S.
Small Cap Equity Fund, Global Biotech Fund, U.S. Value Equity Fund, U.S. Real
Estate Equity Fund, Emerging Markets Debt Fund and Emerging Markets Equity Fund
had not commenced operations as of the time periods indicated.

For the period December 19, 1998 through December 31, 1998, the U.S. Large
Cap Growth Fund, U.S. Small Cap Growth Fund and High Yield Fund did not pay any
fees to Chase for administration, accounting, portfolio valuation and transfer
agency services under the Services Agreement.

For the fiscal years ended June 30, 1997, June 30, 1998 and the period July
1, 1998 through September 30, 1998, aggregate fees paid to MSTC, prior to the
merger into Chase, for administration, accounting, portfolio valuation and
transfer agency services under the Services Agreement were as follows:

<TABLE>
<CAPTION>
MAY 10, 1997 FISCAL YEAR JULY 1, 1998
THROUGH FISCAL ENDED THROUGH
SERIES* YEAR END JUNE 30, 1997 JUNE 30, 1998 SEPTEMBER 30, 1998
- ------- ---------------------- ------------- ------------------
<S> <C> <C> <C>
GLOBAL FUND $69,572 $464,398 $ 112,813
GLOBAL EQUITY FUND $ 7,799 $ 9,809 $ 865
GLOBAL BOND FUND $ 3,707 $ 0 $ 1,985
U.S. BALANCED FUND $10,324 $ 79,503 $ 0
U.S. EQUITY FUND $12,495 $247,167 $ 58,362
U.S. LARGE CAP
U.S. BOND FUND $ 0 $ 0 $ 0
GLOBAL (EX-U.S.) EQUITY $17,159 $305,643 $ 82,044
FUND
</TABLE>

* The U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund, High Yield
Fund, Emerging Markets Debt Fund, Emerging Markets Equity Fund, Global
Technology Fund, U.S. Small Cap Equity Fund, Global Biotech Fund, U.S. Value
Equity Fund and U.S. Real Estate Equity Fund had not commenced operations as of
the time periods indicated. Effective December 10, 1998, the Non-U.S. Equity
Fund changed its name to the Global (Ex-U.S.) Equity Fund. Effective as of the
date hereof, the U.S. Large Capitalization Equity Fund changed its name to the
U.S. Large Cap Equity Fund.

Until May 9, 1997, FPS Services, Inc., 3200 Horizon Drive, King of Prussia,
PA 19406-0903 ("FPS"), provided certain administrative services to the Trust
pursuant to an administration agreement (the "Administration Agreement").

As compensation for services performed under the Administration Agreement,
FPS received a fee payable monthly at an annual rate multiplied by the average
daily net assets of the Trust.

47
<PAGE>

Administration fees paid to FPS were as follows:

<TABLE>
<CAPTION>
JULY 1, 1996 THROUGH
SERIES* MAY 9, 1997
- ------ ----------
<S> <C>
GLOBAL FUND $ 271,364
GLOBAL EQUITY FUND $ 38,047
GLOBAL BOND FUND $ 25,412
U.S. BALANCED FUND $ 121,580
U.S. EQUITY FUND $ 76,534
U.S. BOND FUND $ 6,542
GLOBAL (EX-U.S.) EQUITY FUND $ 122,780
</TABLE>

* The U.S. Large Cap Equity Fund, U.S. Large Cap Growth Fund, U.S. Small Cap
Growth Fund, High Yield Fund, Emerging Markets Debt Fund, Emerging Markets
Equity Fund, Global Technology Fund, U.S. Small Cap Equity Fund, Global Biotech
Fund, U.S. Value Equity Fund and U.S. Real Estate Equity Fund had not commenced
operations as of the time period indicated. Effective December 10, 1998, the
Non-U.S. Equity Fund changed its name to the Global (Ex-U.S.) Equity Fund.

Prior to the reorganization of the UBS Funds into the Trust, IBT Trust &
Custodial Services (Ireland) Limited ("IBT Ireland") and Investors Bank and
Trust Company ("Investors Bank"), 200 Clarendon Street, Boston, Massachusetts
02116, provided certain administrative services to the UBS Portfolios and the
UBS Funds, respectively, pursuant to Administration Agreements. For its services
under the Administration Agreements, each corresponding UBS Portfolio paid IBT
Ireland a fee calculated daily and paid monthly equal, on an annual basis, to
0.07% of the UBS Portfolio's first $100 million in average daily net assets and
0.05% of the assets in excess of $100 million. For its services under the
Administration Agreements, each corresponding UBS Fund paid Investors Bank a fee
calculated daily and paid monthly equal, on an annual basis, to 0.065% of the
UBS Fund's first $100 million in average daily net assets and 0.025% of the next
$100 million in average daily net assets. Investors Bank was not paid a fee from
a UBS Fund on average daily net assets in excess of $200 million.

Administrative fees paid to IBT Ireland by the UBS Portfolios were as
follows:

<TABLE>
<CAPTION>
COMMENCEMENT OF JANUARY 1, 1998
OPERATIONS** THROUGH THROUGH
SERIES* DECEMBER 31, 1997 DECEMBER 18, 1998
------- ----------------- -----------------
<S> <C> <C>
UBS LARGE CAP GROWTH PORTFOLIO $2,096 $12,574

UBS SMALL CAP PORTFOLIO $3,362 $22,896

UBS HIGH YIELD BOND PORTFOLIO $1,870 $16,854
</TABLE>

Administrative fees paid to Investors Bank by the UBS Funds were as
follows:

<TABLE>
<CAPTION>
COMMENCEMENT OF JANUARY 1, 1998
OPERATIONS** THROUGH THROUGH
SERIES* DECEMBER 31, 1997 DECEMBER 18, 1998
- ------ ----------------- -----------------
<S> <C> <C>
UBS LARGE CAP GROWTH FUND $ 450 $ 7,361
</TABLE>

48
<PAGE>

<TABLE>
<S> <C> <C>
UBS SMALL CAP FUND $1,580 $24,165

UBS HIGH YIELD BOND FUND $1,185 $21,515
</TABLE>

* Effective on December 19, 1998, the UBS Large Cap Growth Fund, UBS Small
Cap Fund and UBS High Yield Bond Fund were reorganized into the U.S. Large Cap
Growth Fund, U.S. Small Cap Growth Fund and High Yield Fund, respectively. The
U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund and High Yield Fund
initially had fiscal years ending on December 31. At the February 22, 1999 Board
of Trustees' meeting, the Board of Trustees of the Trust voted to change the
fiscal year end of these three Funds to June 30.

** The UBS Large Cap Growth Portfolio and its corresponding UBS Fund
commenced operations on October 14, 1997. The UBS Small Cap Portfolio and UBS
High Yield Bond Portfolio and their respective corresponding UBS Funds commenced
operations on September 30, 1997.

Independent Auditors

Ernst & Young LLP, Chicago, Illinois, are the independent auditors of the
Trust.

Legal Counsel

Stradley, Ronon, Stevens & Young, LLP, Philadelphia, Pennsylvania, is legal
counsel to the Trust.

Underwriter

FDI, 60 State Street, Suite 1300, Boston, MA 02109, acts as an underwriter
of the Series' continuous offer of shares for the purpose of facilitating the
filing of notices regarding sale of the shares of the Series under state
securities laws and to assist in sales of shares pursuant to an underwriting
agreement (the "Underwriting Agreement") approved by the Board. In this regard,
FDI has agreed at its own expense to qualify as a broker-dealer under all
applicable federal or state laws in those states which the Trust shall from time
to time identify to FDI as states in which it wishes to offer the Series' shares
for sale, in order that state filings may be maintained for the Series. FDI does
not receive any compensation under the Underwriting Agreement.

FDI is a broker-dealer registered with the SEC and a member in good
standing of the National Association of Securities Dealers, Inc.

The Trust does not impose any sales loads or redemption fees, except for a
transaction charge applicable to purchases of shares of the Emerging Markets
Debt Fund and Emerging Markets Equity Fund and to redemptions of shares of the
Emerging Markets Equity Fund. Each Series shall continue to bear the expense of
all filing fees incurred in connection with the filing of notices regarding sale
of shares under state securities laws.

The Underwriting Agreement may be terminated by either party upon sixty
(60) days prior written notice to the other party, and if so terminated, the pro
rata portion of the unearned fee will be returned to the Trust.

Distribution Plan

The Board has adopted a distribution plan pursuant to Rule 12b-1 under the
Act, for the UBS Investment Funds class of shares of the Global Fund, Global
Equity Fund, Global Bond Fund, U.S. Balanced Fund, U.S. Equity Fund, U.S. Large
Cap Equity Fund, U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund, U.S.
Bond Fund, High Yield Fund and

49
<PAGE>

Global (Ex-U.S.) Equity Fund (the "UBS Investment Plan I") and a separate
distribution plan pursuant to Rule 12b-1 under the Act, for the UBS Investment
Funds class of shares of the U.S. Value Equity Fund, U.S. Small Cap Equity Fund,
Global Technology Fund, Global Biotech Fund, U.S. Real Estate Equity Fund,
Emerging Markets Debt Fund and Emerging Markets Equity Fund (the "UBS Investment
Plan II", and together with UBS Investment Plan I, the "UBS Investment Plans").
The Board has also adopted a separate distribution plan (the "Class N Plan")
pursuant to Rule 12b-1 under the Act, for each Series' Brinson Fund-Class N
shares (the UBS Investment Plans and the Class N Plan together, the "Plans").
The UBS Investment Funds class of shares was formerly known as the SwissKey
class of shares. The name change was made effective on September 15, 1998. The
Plans permit each Series to reimburse FDI, Brinson Partners and others from the
assets of the UBS Investment Funds class of shares and Brinson Fund-Class N
shares with a quarterly fee for services and expenses incurred in distributing
and promoting sales of UBS Investment Funds class of shares and Brinson Fund-
Class N shares, respectively. These expenses include, but are not limited to,
preparing and distributing advertisements and sales literature, printing
prospectuses and reports used for sales purposes, and paying distribution and
maintenance fees to brokers, dealers and others in accordance with a selling
agreement with the Trust on behalf of the UBS Investment Funds class of shares
and the Brinson Fund-Class N shares or FDI. In addition, each Series may make
payments directly to FDI for payment to dealers or others, or directly to
others, such as banks, who assist in the distribution of the UBS Investment
Funds class of shares or Brinson Fund-Class N shares or provide services with
respect to the UBS Investment Funds class of shares or Brinson Fund-Class N
shares.

UBS A.G., or one of its affiliates, pursuant to a selected dealer
agreement, may provide additional compensation to securities dealers from its
own resources in connection with sales of the UBS Investment Funds class of
shares or Brinson Fund-Class N shares of the Series.

The aggregate distribution fees paid by the Series from the assets of the
respective UBS Investment Funds class of shares to FDI and others under the UBS
Investment Plan I and UBS Investment Plan II may not exceed 0.90% and 1.00%,
respectively, of a Fund's average daily net assets in any year (0.25% of which
are service fees to be paid by the Series to FDI, dealers and others, for
providing personal service and/or maintaining shareholder accounts). The UBS
Investment Plan I provides, however, that the aggregate distribution fees for
each subject Fund shall not exceed the following maximum amounts for the 1999
fiscal year: UBS Investment Fund-Global - 0.65%, UBS Investment Fund-Global
Equity - 0.76%, UBS Investment Fund-Global Bond - 0.49%, UBS Investment Fund-
U.S. Balanced - 0.50%, UBS Investment Fund-U.S. Equity - 0.52%, UBS Investment
Fund-U.S. Large Cap Equity - 0.52%, UBS Investment Fund-U.S. Large Cap Growth -
0.77%, UBS Investment Fund-U.S. Small Cap Growth - 0.77%, UBS Investment Fund-
U.S. Bond - 0.47%, UBS Investment Fund-High Yield - 0.85% and UBS Investment
Fund-Global (Ex-U.S.) Equity - 0.84%. The UBS Investment Plan II provides that
the aggregate distribution fees for each subject Fund shall not exceed the
following maximum amounts for the 2000 fiscal year: UBS Investment Fund-U.S.
Value Equity - 1.00%, UBS Investment Fund-U.S. Small Cap Equity - 1.00%, UBS
Investment Fund-Global Technology - 1.00%, UBS Investment Fund-Global Biotech -
1.00%, UBS Investment Fund-U.S. Real Estate Equity Fund - 1.00%, UBS Investment
Fund-Emerging Markets Debt - 1.00% and UBS Investment Fund-Emerging Markets
Equity - 1.00%.

The aggregate distribution fees paid by the Series from the assets of the
respective Brinson Fund-Class N shares to FDI and others under the Class N Plan
may not exceed 0.25% of a Fund's average daily net assets in any year.

The UBS Investment Plans do not apply to the Brinson Fund-Class I or the
Brinson Fund-Class N shares of each Series and those shares are not included in
calculating the UBS Investment Plans' respective fees. The Class N Plan does not
apply to the Brinson Fund-Class I or the UBS Investment Funds class of shares of
each Series and those shares are not included in calculating the Class N Plan's
fees.

50
<PAGE>

The quarterly fees paid to FDI under the Plans are subject to the review
and approval by the Trust's Trustees who are not "interested persons" of the
Advisor or FDI (as defined in the Act) and who may reduce the fees or terminate
the Plans at any time.

Amounts spent on behalf of each UBS Investment Funds class of shares
pursuant to the UBS Investment Plan I during the fiscal year ended June 30, 1999
are set forth below.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPENSATION COMPENSATION COMPENSATION TO
OF OF UBS SALES
FUND* PRINTING UNDERWRITERS DEALERS PERSONNEL ADVERTISING OTHER
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
UBS Investment $0.00 $0.00 $0.00 $169,039.77 $0.00 $0.00
Fund-Global
- ------------------------------------------------------------------------------------------------------------------------------------
UBS Investment $0.00 $0.00 $0.00 $359,693.61 $0.00 $0.00
Fund-Global Equity
- ------------------------------------------------------------------------------------------------------------------------------------
UBS Investment $0.00 $0.00 $0.00 $21,247.50 $0.00 $0.00
Fund-Global Bond
- ------------------------------------------------------------------------------------------------------------------------------------
UBS Investment Fund-U.S. $0.00 $0.00 $0.00 $9,692.92 $0.00 $0.00
Balanced
- ------------------------------------------------------------------------------------------------------------------------------------
UBS Investment Fund-U.S. $0.00 $0.00 $0.00 $352,849.81 $0.00 $0.00
Equity
- ------------------------------------------------------------------------------------------------------------------------------------
UBS Investment Fund-U.S. $0.00 $0.00 $0.00 $6.22 $0.00 $0.00
Large Cap Equity
- ------------------------------------------------------------------------------------------------------------------------------------
UBS Investment Fund- $0.00 $0.00 $0.00 $8,852.64 $0.00 $0.00
U.S. Large Cap Growth**
- ------------------------------------------------------------------------------------------------------------------------------------
UBS Investment Fund- $0.00 $0.00 $0.00 $1,597.63 $0.00 $0.00
U.S. Small Cap Growth**
- ------------------------------------------------------------------------------------------------------------------------------------
UBS Investment Fund-U.S. $0.00 $0.00 $0.00 $24,945.86 $0.00 $0.00
Bond
- ------------------------------------------------------------------------------------------------------------------------------------
UBS Investment Fund- $0.00 $0.00 $0.00 $15,533.05 $0.00 $0.00
High Yield**
- ------------------------------------------------------------------------------------------------------------------------------------
UBS Investment Fund-
Global (Ex-U.S.) Equity $0.00 $0.00 $0.00 $43,437.06 $0.00 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------

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

- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Amounts spent on behalf of each Brinson Fund - Class N class of shares
pursuant to the Class N Plan during the fiscal year ended June 30, 1999 are set
forth below.

51
<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
COMPENSATION COMPENSATION COMPENSATION TO
OF OF UBS SALES
FUND* PRINTING UNDERWRITER DEALERS PERSONNEL ADVERTISING OTHER
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Global Fund - $0.00 $0.00 $ 758.24 $0.00 $0.00 $0.00
Class N
- ------------------------------------------------------------------------------------------------------------------------------------
Global Equity Fund $0.00 $0.00 $ 0.00 $0.00 $0.00 $0.00
- - Class N
- ------------------------------------------------------------------------------------------------------------------------------------
Global Bond Fund - $0.00 $0.00 $ 5.57 $0.00 $0.00 $0.00
Class N
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Balanced Fund $0.00 $0.00 $ 0.00 $0.00 $0.00 $0.00
- - Class N
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Equity Fund - $0.00 $0.00 $ 701.32 $0.00 $0.00 $0.00
Class N
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Large Cap $0.00 $0.00 $9,277.02 $0.00 $0.00 $0.00
Equity Fund -
Class N
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Large Cap $0.00 $0.00 $ 0.00 $0.00 $0.00 $0.00
Growth - Class N**
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Small Cap $0.00 $0.00 $ 0.00 $0.00 $0.00 $0.00
Growth Class N**
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Bond Fund - $0.00 $0.00 $ 0.00 $0.00 $0.00 $0.00
Class N
- ------------------------------------------------------------------------------------------------------------------------------------
High Yield - $0.00 $0.00 $ 0.00 $0.00 $0.00 $0.00
Class N**
- ------------------------------------------------------------------------------------------------------------------------------------
Global (Ex-U.S.) $0.00 $0.00 $ 6.03 $0.00 $0.00 $0.00
Equity Fund - Class N
- ------------------------------------------------------------------------------------------------------------------------------------

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

- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* The U.S. Value Equity Fund, U.S. Small Cap Equity Fund, Global
Technology Fund, Global Biotech Fund, U.S. Real Estate Equity Fund,
Emerging Markets Debt Fund and Emerging Markets Equity Fund had not
commenced operations as of the time period indicated. Effective December
10, 1998, the Non-U.S. Equity Fund changed its name to the Global (Ex-U.S.)
Equity Fund. Effective as of the date hereof, the U.S. Large Capitalization
Equity Fund, U.S. Large Capitalization Growth Fund and U.S. Small
Capitalization Growth Fund changed their names to the U.S. Large Cap Equity
Fund, U.S. Large Cap Growth Fund and U.S. Small Cap Growth Fund,
respectively.

** Effective on December 19, 1998, the UBS Large Cap Growth Fund, UBS Small
Cap Fund and UBS High Yield Bond Fund were reorganized into the U.S. Large
Cap Growth Fund, U.S. Small Cap Growth Fund and High Yield Fund,
respectively. Amounts spent for the U.S. Large Cap Growth Fund, U.S. Small
Cap Growth Fund and High Yield Fund reflect the amounts spent for the
period from January 1, 1999 to June 30, 1999.

52
<PAGE>

The U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund and High Yield
Fund did not pay any fees under their respective Plans for the period December
19, 1998 through December 31, 1998.

Code of Ethics

The Trust and the Advisor have each adopted a Code of Ethics. Each Code of
Ethics establishes standards by which certain access persons must abide relating
to personal securities trading conduct.

Under each Code of Ethics, access persons are prohibited from engaging in
certain conduct, including, but not limited to: 1) investing in companies in
which the Series invest unless the securities have a broad public market and are
registered on a national securities exchange or are traded in the over-the-
counter markets; 2) making or maintaining an investment in any corporation or
business with which the Series have business relationships if the investment
might create, or give the appearance of creating, a conflict of interest; 3)
participating in an initial public offering; 4) entering into a securities
transaction when the access person knows or should know that such activity will
anticipate, parallel or counter any securities transaction of a Series; 5)
entering into any securities transaction, without prior approval, in connection
with any security which has been designated as restricted; 6) entering into a
net short position with respect to any security held by a Series; 7) entering
into any derivative transaction when a direct transaction in the underlying
security would be a violation; and 8) engaging in self-dealing or other
transactions benefiting the access person at the expense of the Series or its
shareholders.

In addition, access persons are required to receive advance approval prior
to purchasing or selling a restricted security, and may not buy or sell certain
prohibited securities. The Advisor will identify for access persons prohibited
securities, which include securities that are being considered for purchase or
sale by any account or fund managed by the Advisor, and provide a list of such
securities to all access persons. Access persons of the Trust and the Advisor
are required to file the following reports: 1) an initial holdings report
disclosing all securities owned by the access persons and any securities
accounts maintained by the access persons, which must be filed within ten days
of becoming an access person and then annually thereafter; 2) quarterly reports
of security investment transactions and new securities accounts. Access persons
of FDI need only file quarterly reports of securities transactions. Trustees or
officers who are not "interested persons" of the Trust, as defined in the Act,
need only report a transaction in a security if such Trustee or officer, at the
time of the transaction, knew or should have known, in the ordinary course of
fulfilling his or her official duties as a Trustee or officer, that, during the
15-day period immediately preceding or after the date of the transaction by the
Trustee or officer, such security was purchased or sold by a Series, or was
being considered for purchase by a Series.

Copies of each of the Trust's and the Advisor's Code of Ethics have been
filed with and are available through the SEC.

PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS

Brinson Partners is responsible for decisions to buy and sell securities
for the Series and for the placement of the Series' portfolio business and the
negotiation of commissions, if any, paid on such transactions. Fixed income
securities in which the Series invest are traded in the over-the-counter market.
These securities are generally traded on a net basis with dealers acting as
principal for their own accounts without a stated commission, although the
bid/ask spread quoted on securities includes an implicit profit to the dealers.
In over-the-counter transactions, orders are placed directly with a principal
market-maker unless a better price and execution can be obtained by using a
broker. Brokerage commissions are paid on transactions in listed securities,
futures contracts and options thereon. Brinson Partners is responsible for
effecting portfolio transactions and will do so in a manner deemed fair and
reasonable to the Series. Under its advisory agreements with the Global Funds
and the Global (Ex-U.S.) Equity Fund, Brinson Partners is authorized to utilize
the trading desk of its foreign subsidiaries to execute foreign securities

53
<PAGE>

transactions, but monitors the selection by such subsidiaries of brokers and
dealers used to execute transactions for those Series. The primary consideration
in all portfolio transactions will be prompt execution of orders in an efficient
manner at the most favorable price. However, subject to policies established by
the Board of the Trust, a Series may pay a broker-dealer a commission for
effecting a portfolio transaction for the Series in excess of the amount of
commission another broker-dealer would have charged if Brinson Partners
determines in good faith that the commission paid was reasonable in relation to
the brokerage or research services provided by such broker-dealer, viewed in
terms of that particular transaction or such firm's overall responsibilities
with respect to the clients, including the Series, as to which it exercises
investment discretion. In selecting and monitoring broker-dealers and
negotiating commissions, Brinson Partners considers the firm's reliability, the
quality of its execution services on a continuing basis and its financial
condition. When more than one firm is believed to meet these criteria,
preference may be given to brokers who provide research or statistical material
or other services to the Series or to Brinson Partners. Such services include
advice, both directly and in writing, as to the value of the securities; the
advisability of investing in, purchasing or selling securities; and the
availability of securities, or purchasers or sellers of securities, as well as
analyses and reports concerning issues, industries, securities, economic factors
and trends, portfolio strategy and the performance of accounts. This allows
Brinson Partners to supplement its own investment research activities and obtain
the views and information of others prior to making investment decisions.
Brinson Partners is of the opinion that, because this material must be analyzed
and reviewed by its staff, its receipt and use does not tend to reduce expenses
but may benefit the Series by supplementing the Advisor's research.

Brinson Partners effects portfolio transactions for other investment
companies and advisory accounts. Research services furnished by dealers through
whom the Series effect their securities transactions may be used by Brinson
Partners in servicing all of its accounts; not all such services may be used in
connection with the Series. In the opinion of Brinson Partners, it is not
possible to measure separately the benefits from research services to each of
the accounts (including the Series). Brinson Partners will attempt to equitably
allocate portfolio transactions among the Series and others whenever concurrent
decisions are made to purchase or sell securities by the Series and another. In
making such allocations between the Series and others, the main factors to be
considered are the respective investment objectives, the relative size of
portfolio holdings of the same or comparable securities, the availability of
cash for investment, the size of investment commitments generally held and the
opinions of the persons responsible for recommending investments to the Series
and the others. In some cases, this procedure could have an adverse effect on
the Series. In the opinion of Brinson Partners, however, the results of such
procedures will, on the whole, be in the best interest of each of the clients.

When buying or selling securities, the Series may pay commissions to
brokers who are affiliated with the Advisor or the Series. The Series may
purchase securities in certain underwritten offerings for which an affiliate of
the Series or the Advisor may act as an underwriter. The Series may effect
future transactions through, and pay commissions to, futures commission
merchants who are affiliated with the Advisor or the Series in accordance with
procedures adopted by the Board.

The Series incurred brokerage commissions as follows:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED
SERIES* JUNE 30, 1997 JUNE 30, 1998 JUNE 30, 1999
- ------- ------------- ------------- -------------
<S> <C> <C> <C>
GLOBAL FUND $385,571 $442,603 $ 612,462
GLOBAL EQUITY FUND $142,922 $166,103 $ 225,396
GLOBAL BOND FUND $ 0 $ 0 $ 0
U.S. BALANCED FUND $139,165 $ 85,784 $ 38,711
U.S. EQUITY FUND $290,526 $560,721 $ 798,223
U.S. LARGE CAP EQUITY FUND* N/A $ 9,714 $ 33,488
</TABLE>

54
<PAGE>

<TABLE>
<S> <C> <C> <C>
U.S. LARGE CAP GROWTH FUND**
N/A N/A $ 6,142
U.S. SMALL CAP GROWTH FUND**
N/A N/A $ 110,942
U.S. BOND FUND $ 0 $ 0 $ 0
HIGH YIELD FUND** N/A N/A $ 0
GLOBAL (EX-U.S.) EQUITY FUND* $833,293 $942,155 $1,617,312
</TABLE>

* The U.S. Large Cap Equity Fund commenced operations on April 6, 1998. The
U.S. Value Equity Fund, U.S. Small Cap Equity Fund, Global Technology Fund,
Global Biotech Fund, U.S. Real Estate Equity Fund, Emerging Markets Debt Fund
and Emerging Markets Equity Fund had not commenced operations as of the time
periods indicated. Effective December 10, 1998, the Non-U.S. Equity Fund changed
its name to the Global (Ex-U.S.) Equity Fund. Effective as of the date hereof,
the U.S. Large Capitalization Equity Fund, U.S. Large Capitalization Growth Fund
and U.S. Small Capitalization Growth Fund changed their names to the U.S. Large
Cap Equity Fund, U.S. Large Cap Growth Fund and U.S. Small Cap Growth Fund,
respectively.

** Effective on December 19, 1998, the UBS Large Cap Growth Fund, UBS Small
Cap Fund and UBS High Yield Bond Fund were reorganized into the U.S. Large Cap
Growth Fund, U.S. Small Cap Growth Fund and High Yield Fund, respectively.
Brokerage commissions for the U.S. Large Cap Growth Fund, U.S. Small Cap Growth
Fund and High Yield Fund reflect fees paid during the period from January 1,
1999 to June 30, 1999.

For the fiscal year ended June 30, 1998, the Global Fund, U.S. Balanced
Fund, U.S. Equity Fund and U.S. Large Cap Equity Fund paid brokerage commissions
to Warburg Dillon Read ("Warburg"), an affiliated broker-dealer, as
follows:

<TABLE>
<CAPTION>
AGGREGATE % OF AGGREGATE
DOLLAR AMOUNT OF % OF AGGREGATE DOLLAR AMOUNT
COMMISSIONS PAID COMMISSIONS PAID TO
SERIES TO WARBURG PAID TO WARBURG WARBURG
- ------ ---------- -------------- -------
<S> <C> <C> <C>
GLOBAL FUND $ 6,078 1.37% 0.78%
U.S. BALANCED FUND $ 2,190 2.55% 0.27%
U.S. EQUITY FUND $93,356 16.65% 21.43%
U.S. LARGE CAP EQUITY FUND $ 453 4.66% 5.16%
</TABLE>

For the fiscal year ended June 30, 1999, the Global Fund, Global Equity
Fund, U.S. Balanced Fund, U.S. Equity Fund, U.S. Large Cap Equity Fund, U.S.
Large Cap Growth Fund, and U.S. Small Cap Growth Fund paid brokerage commissions
to Warburg, as follows:

55
<PAGE>

<TABLE>
<CAPTION>
AGGREGATE % OF AGGREGATE
DOLLAR AMOUNT OF % OF AGGREGATE DOLLAR AMOUNT
COMMISSIONS PAID COMMISSIONS PAID TO
SERIES TO WARBURG PAID TO WARBURG WARBURG
- ------ --------- --------------- -------
<S> <C> <C> <C>
GLOBAL FUND $42,341 6.91% 2.26%
GLOBAL EQUITY FUND $ 6,322 2.80% 4.45%
U.S. BALANCED FUND $ 3,207 8.28% 2.08%
U.S. EQUITY FUND $55,295 6.93% 8.01%
U.S. LARGE CAP EQUITY FUND $10,625 31.73% 22.35%
U.S. LARGE CAP GROWTH FUND $ 2,469 40.20% 59.78%
U.S. SMALL CAP GROWTH FUND $ 5,232 4.72% 8.23%
</TABLE>

For the fiscal year ended June 30, 1999, the Global (Ex-U.S.) Equity Fund
paid brokerage commissions to UBS, A.G., London, an affiliated broker-dealer, as
follows:

<TABLE>
<CAPTION>
AGGREGATE % OF AGGREGATE
DOLLAR AMOUNT OF % OF AGGREGATE DOLLAR AMOUNT
COMMISSIONS PAID COMMISSIONS PAID TO
SERIES TO UBS, A.G. PAID TO UBS, A.G. UBS, A.G.
- ------ ------------ ----------------- ---------
<S> <C> <C> <C>
GLOBAL (EX-U.S.) EQUITY FUND $47,584 2.94% 2.46%
</TABLE>

For the fiscal years ended June 30, 1998 and June 30, 1999, the Trust and
the Advisor had no agreements or understandings with a broker or otherwise
causing brokerage transactions or commissions for research services.

The U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund and High Yield
Fund, and the UBS Funds that were merged into the Funds, incurred brokerage
commissions as follows:

<TABLE>
<CAPTION>
COMMENCEMENT OF
OPERATIONS ** JANUARY 1, 1998 DECEMBER 19, 1998
THROUGH THROUGH THROUGH
SERIES* DECEMBER 31, 1997 DECEMBER 18, 1998 DECEMBER 31, 1998
- ------- ----------------- ----------------- -----------------
<S> <C> <C> <C>
U.S. LARGE CAP GROWTH FUND $18,270*** $31,628*** $ 25

U.S. SMALL CAP GROWTH FUND $30,680*** $52,862*** $4,722

HIGH YIELD FUND N/A*** N/A*** $ 0
</TABLE>

* The U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund and High Yield
Fund commenced operations effective on December 19, 1998. Effective on December
19, 1998, the UBS Large Cap Growth Fund, UBS Small Cap Fund and UBS High Yield
Bond Fund were reorganized into the U.S. Large Cap Growth Fund, U.S. Small Cap
Growth Fund and High Yield Fund, respectively. The U.S. Large Cap Growth Fund,
U.S. Small Cap Growth Fund and High Yield Fund initially had fiscal

56
<PAGE>

years ending on December 31. At the February 22, 1999 Board of Trustees'
meeting, the Board of Trustees of the Trust voted to change the fiscal year end
of these three Funds to June 30.

** The UBS Large Cap Growth Fund commenced operations on October 14, 1997. The
UBS Small Cap Fund and UBS High Yield Bond Fund commenced operations on
September 30, 1997.

*** Prior to the reorganization of the UBS Funds into the corresponding series
of the Trust, each of the UBS Funds invested substantially all of its investable
assets in corresponding series of the UBS Investor Portfolios Trust
(collectively, the "UBS Portfolios"). As a result, the UBS Funds did not incur
brokerage commissions. The brokerage commissions reflected were incurred by the
UBS Portfolios.

Portfolio Turnover

The Series are free to dispose of their portfolio securities at any time,
subject to complying with the Code and the Act, when changes in circumstances or
conditions make such a move desirable in light of the respective investment
objective. The Series will not attempt to achieve or be limited to a
predetermined rate of portfolio turnover, such a turnover always being
incidental to transactions undertaken with a view to achieving that Series'
investment objective.

The Series do not intend to use short-term trading as a primary means of
achieving their investment objectives. The rate of portfolio turnover shall be
calculated by dividing (a) the lesser of purchases and sales of portfolio
securities for the particular fiscal year by (b) the monthly average of the
value of the portfolio securities owned by that Series during the particular
fiscal year. Such monthly average shall be calculated by totaling the values of
the portfolio securities as of the beginning and end of the first month of the
particular fiscal year and as of the end of each of the succeeding eleven months
and dividing the sum by 13.

Under normal circumstances, the portfolio turnover rate for the Global
Equity Fund, U.S. Equity Fund, U.S. Value Equity Fund, U.S. Large Cap Growth
Fund and Global (Ex-U.S.) Equity Fund is not expected to exceed 100%. The
portfolio turnover rates for the Global Fund, Global Bond Fund, U.S. Large Cap
Equity Fund, High Yield Fund, Emerging Markets Equity Fund, Emerging Markets
Debt Fund, Global Technology Fund, U.S. Small Cap Equity Fund, Global Biotech
Fund and U.S. Real Estate Equity Fund may exceed 100%, and in some years, 200%.
The portfolio turnover rate for the U.S. Small Cap Growth Fund may exceed 150%,
and for the U.S. Balanced Fund and U.S. Bond Fund, may exceed 100% and in some
years, 300%. High portfolio turnover rates (over 100%) may involve
correspondingly greater brokerage commissions and other transaction costs, which
will be borne directly by the Series and ultimately by that Series'
shareholders. In addition, high portfolio turnover may result in increased
short-term capital gains, which, when distributed to shareholders, are treated
as ordinary income.

With respect to the Global Fund, for the fiscal years ended June 30, 1998
and June 30, 1999, the portfolio turnover rate of the Series was 88% and 105%,
respectively. With respect to the Global Bond Fund, for the fiscal years ended
June 30, 1998 and June 30, 1999, the portfolio turnover rate of the Series was
151% and 138%, respectively. With respect to the U.S. Balanced Fund, for the
fiscal years ended June 30, 1998 and June 30, 1999, the portfolio turnover rate
of the Series was 194% and 113%, respectively. With respect to the U.S. Bond
Fund, for the fiscal years ended June 30, 1998 and June 30, 1999, the portfolio
turnover rate of the Series was 198% and 260%, respectively. With respect to the
Global Equity Fund, for the fiscal years ended June 30, 1998 and June 30, 1999,
the portfolio turnover rate of the Series was 46% and 86%, respectively. With
respect to the Global (Ex-U.S.) Equity Fund, for the fiscal years ended June 30,
1998 and June 30, 1999, the portfolio turnover rate of the Series was 49% and
74%, respectively. With respect to the U.S. Equity Fund, for the fiscal years
ended June 30, 1998 and June 30, 1999, the portfolio turnover rate of the Series
was 42% and 48%, respectively. With respect to the U.S. Large Cap Equity Fund,
for the period April 6, 1998 (commencement of

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operations) to June 30, 1998 and for the fiscal year ended June 30, 1999, the
portfolio turnover rate of the Series was 12% and 88%, respectively. With
respect to the High Yield Fund for the period December 19, 1998 to December 31,
1998 the portfolio turnover rate was 2%. With respect to the High Yield Fund for
the period January 1, 1999 to June 30, 1999, the portfolio turnover rate of the
Series was 77%. With respect to the U.S. Large Cap Growth Fund, for the period
December 19, 1998 to December 31, 1998 , the portfolio turnover rate was 0%.
With respect to the U.S. Large Cap Growth Fund for the period January 1, 1999 to
June 30, 1999, the portfolio turnover rate of the Series was 51%. With respect
to the U.S. Small Cap Growth Fund, for the period December 19, 1998 to December
31, 1998, the portfolio turnover rate was 5%. With respect to the U.S. Small Cap
Growth Fund for the period January 1, 1999 to June 30, 1999, the portfolio
turnover rate of the Series was 71%. Any significant variation in portfolio
turnover rates over such periods was due to an increase in the assets of the
Series which caused the Series to reposition their portfolio holdings in order
to meet their investment objectives and policies.

SHARES OF BENEFICIAL INTEREST

Each Series is authorized to issue an unlimited number of shares of
beneficial interest with a $0.001 par value per share. Each share of beneficial
interest represents an equal proportionate interest in the assets and
liabilities of the applicable Series and has identical voting, dividend,
redemption, liquidation, and other rights and preferences as the other class of
that Series, except that only shares of the UBS Investment Funds class may vote
on any matter affecting only the UBS Investment Plans under Rule 12b-1.
Similarly, only shares of the Brinson Fund-Class N may vote on matters that
affect only the Class N Plan. No class may vote on matters that affect only
another class. Under Delaware law, the Trust does not normally hold annual
meetings of shareholders. Shareholders' meetings may be held from time to time
to consider certain matters including changes to a Series' fundamental
investment objective and fundamental investment policies, changes to the Trust's
investment advisory agreement and the election of Trustees when required by the
Act. When matters are submitted to shareholders for a vote, shareholders are
entitled to one vote per share with proportionate voting for fractional shares.
The shares of the Series do not have cumulative voting rights or any preemptive
or conversion rights, and the Trustees have authority from time to time to
divide or combine the shares of the Series into a greater or lesser number of
shares so affected. In the case of a liquidation of a Series, each shareholder
of the Series will be entitled to share, based upon the shareholder's percentage
share ownership, in the distribution out of assets, net of liabilities, of the
Series. No shareholder is liable for further calls or assessment by the Series.

On any matters affecting only one Series or class, only the shareholders of
that Series or class are entitled to vote. On matters relating to the Trust but
affecting the Series differently, separate votes by the Series or class are
required. With respect to the submission to shareholder vote of a matter
requiring separate voting by a Series or class, the matter shall have been
effectively acted upon with respect to any Series or class if a majority of the
outstanding voting securities of that Series or class votes for the approval of
the matter, notwithstanding that: (1) the matter has not been approved by a
majority of the outstanding voting securities of any other Series or class; and
(2) the matter has not been approved by a majority of the outstanding voting
securities of the Trust.

The Trustees of the Trust do not intend to hold annual meetings of
shareholders of the Series. The SEC, however, requires the Trustees to promptly
call a meeting for the purpose of voting upon the question of removal of any
Trustee when requested to do so by not less than 10% of the outstanding
shareholders of the respective Series. In addition, subject to certain
conditions, shareholders of each Series may apply to the Series to communicate
with other shareholders to request a shareholders' meeting to vote upon the
removal of a Trustee or Trustees.

Currently, the Trust offers eighteen Series: Global Fund, Global Equity
Fund, Global Technology Fund, Global Biotech Fund, Global Bond Fund, U.S.
Balanced Fund, U.S. Equity Fund, U.S. Value Equity Fund, U.S. Large Cap

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Equity Fund, U.S. Large Cap Growth Fund, U.S. Small Cap Equity Fund, U.S. Small
Cap Growth Fund, U.S. Real Estate Equity Fund, U.S. Bond Fund, High Yield Fund,
Emerging Markets Debt Fund, Global (Ex-U.S.) Equity Fund and Emerging Markets
Equity Fund. Three classes of shares are currently issued by the Trust for each
Series: the Brinson Fund-Class N, Brinson Fund-Class I and UBS Investment Funds
classes. Prior to September 15, 1998, the "UBS Investment Funds class" of shares
was known as the "SwissKey Class" of shares.

PURCHASES

Shares of each class of each Series are sold at the net asset value
(plus transaction charges applicable to purchases of shares of the Emerging
Markets Equity Fund) next determined after the receipt of a purchase application
in proper form by the transfer agent. There is no sales load in connection with
the purchase of Fund shares. The Trust reserves the right to reject any purchase
order and to suspend the offering of shares of the Brinson Fund-Class I shares,
Brinson Fund-Class N shares, UBS Investment Funds class of shares or any Series.
The minimum for initial investments with respect to the Brinson Fund-Class I for
each Series is $1,000,000; subsequent investment minimums are $2,500. The
minimum for initial investments with respect to the UBS Investment Funds class
of shares for each Series is $25,000; subsequent investment minimums are $5,000.
The minimum for initial investments with respect to the Brinson Fund-Class N for
each Series is $1,000,000. The Trust reserves the right to vary the initial
investment minimum and minimums for additional investments in any of the Funds
at any time. In addition, Brinson Partners may waive the minimum initial
investment requirement for any investor.

The Brinson Fund-Class N shares and UBS Investment Funds class of shares
may be purchased through broker-dealers having sales agreements with FDI, or
through financial institutions having agency agreements with FDI. The Brinson
Fund-Class N shares are subject to annual 12b-1 plan expenses of 0.25% (all of
which are service fees to be paid by the Funds to FDI, dealers or others for
providing personal service and/or maintaining shareholder accounts) of the
Funds' average daily net assets of such share class. The UBS Investment Funds
class of shares of the Global Fund, Global Equity Fund, Global Bond Fund, U.S.
Balanced Fund, U.S. Equity Fund, U.S. Large Cap Equity Fund, U.S. Large Cap
Growth Fund, U.S. Small Cap Growth Fund, U.S. Bond Fund, High Yield Fund and
Global (Ex-U.S.) Equity Fund are subject to annual 12b-1 plan expenses of 0.90%
(0.25% of which are service fees to be paid by the Funds to FDI, dealers or
others for providing personal service and/or maintaining shareholder accounts)
of the Funds' average daily net assets of such share class. The UBS Investment
Funds class of shares of the U.S. Value Equity Fund, U.S. Small Cap Equity Fund,
Global Technology Fund, Global Biotech Fund, U.S. Real Estate Equity Fund,
Emerging Markets Debt Fund and Emerging Markets Equity Fund are subject to
annual 12b-1 expenses of 1.00% (0.25% of which are service fees to be paid by
the Funds to FDI, dealers or others for providing personal service and/or
maintaining shareholder accounts) of the Funds' average daily net assets of such
share class. The Brinson Fund-Class N shares may also, and the UBS Investment
Funds will, be marketed directly through the offices of UBS A.G. Through its
branches and subsidiaries, UBS A.G. conducts securities research, provides
investment advisory services and manages mutual funds in major cities throughout
the world, including Amsterdam, Basel, Frankfurt, Geneva, Hong Kong, Houston,
London, Los Angeles, Luxembourg, Miami, Monte Carlo, New York, Paris, San
Francisco, Singapore, Sydney, Tokyo, Toronto and Zurich.

Purchase orders for shares of the Funds which are received by the transfer
agent in proper form prior to the close of regular trading hours (currently 4:00
p.m. Eastern time) on the New York Stock Exchange (the "NYSE") on any day that
the Funds' net asset values per share are calculated, are priced according to
the net asset value determined on that day. Purchase orders for shares of the
Funds received after the close of the NYSE on a particular day are priced as of
the time the net asset value per share is

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next determined. The Funds reserve the right to change the time at which
purchases are priced if the NYSE closes at a time other than 4:00 p.m. Eastern
time or if an emergency exists.

Under certain circumstances, the Trust has entered into one or more
agreements (each, a "Sales Agreement") with brokers, dealers or financial
institutions (each, an "Authorized Dealer") under which the Authorized Dealer
may directly, or through intermediaries that the Authorized Dealer is authorized
to designate under the Sales Agreement (each, a "Sub-designee"), accept purchase
and redemption orders that are in "good form" on behalf of the Funds. A Fund
will be deemed to have received a purchase order when the Authorized Dealer or
Sub-designee accepts the purchase order and such order will be priced at the
Fund's net asset value next computed after such order is accepted by the
Authorized Dealer or Sub-designee.

The Trust may accept telephone orders for Fund shares from broker-dealers
or service organizations which have been previously approved by the Trust. It is
the responsibility of such broker-dealers or service organizations to promptly
forward purchase orders and payments for the same to the Fund. Shares of the
Funds may be purchased through broker-dealers, banks and bank trust departments
which may charge the investor a transaction fee or other fee for their services
at the time of purchase. Such fees would not otherwise be charged if the shares
were purchased directly from the Trust.

Brinson Partners, or its affiliates, from its own resources, may compensate
broker-dealers or other financial intermediaries ("Service Providers") for
marketing, shareholder servicing, recordkeeping and/or other services performed
with respect to a Fund's Class N shares, Class I shares and UBS Investment Funds
class of shares. Payments made for any of these purposes may be made from its
revenues, its profits or any other sources available to it. When such service
arrangements are in effect, they are made generally available to all qualified
Service Providers.

Certificates representing shares purchased are not issued. However, such
purchases are confirmed to the investor and credited to the shareholder's
account on the books maintained by the Trust's transfer agent. The investor will
have the same rights of ownership with respect to such shares as if certificates
had been issued.

Exchanges of Shares

Shares of one class of a Series may only be exchanged for the same class of
another Series of the Trust. Exchanges will not be permitted between the
different classes. Exchanges may be made only for shares of a Series and class
then offering its shares for sale in your state of residence and are subject to
the minimum initial investment requirement.

Each qualifying exchange will be made on the basis of the relative net
asset values per share of both the Series from which, and the Series into which,
the exchange is made, that is next computed following receipt of the exchange
order in proper form by the Trust's transfer agent. Transaction charges
applicable to purchases and redemptions of shares of the Emerging Markets Equity
Fund will apply to exchanges of shares into and out of that Fund. Exchanges may
be made by telephone if the shareholder's Account Application Form includes
specific authorization for telephone exchanges. The telephone exchange privilege
may be difficult to implement during times of drastic economic or market
changes.

The transactions described above will result in a taxable gain or loss for
federal income tax purposes. Generally, any such taxable gain or loss will be a
capital gain or loss (long-term or short-term, depending on the holding period
of the shares) in the amount of the difference between the net asset value of
the shares surrendered and the shareholder's tax basis for those shares. Each
investor should consult his or her tax adviser regarding the tax consequences of
an exchange transaction.

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Any shareholder who wishes to make an exchange should first obtain and
review the Prospectus of the Series to be acquired in the exchange. Requests for
telephone exchanges must be received prior to the close of regular trading on
the NYSE (currently 4:00 p.m. Eastern time) on any day on which the NYSE is open
for regular trading. The Funds reserve the right to change the time at which
exchanges are priced if the NYSE closes at a time other than 4:00 p.m. Eastern
time or if an emergency exists.

At the discretion of the Trust, this exchange privilege may be terminated
or modified at any time for any of the participating Series upon 60 days' prior
written notice to shareholders. Contact the transfer agent for details about a
particular exchange.

Transfer of Securities

At the discretion of the Trust, investors may be permitted to purchase Fund
shares by transferring securities to a Series that meet the Series' investment
objective and policies. Securities transferred to a Series will be valued in
accordance with the same procedures used to determine the Fund's net asset value
at the time of the next determination of net asset value after such acceptance.
Shares issued by a Series in exchange for securities will be issued at net asset
value per share of the Fund determined as of the same time. All dividends,
interest, subscription, or other rights pertaining to such securities shall
become the property of the Series and must be delivered to the Series by the
investor upon receipt from the issuer. Investors who are permitted to transfer
such securities will be required to recognize a gain or loss on such transfer
and pay tax thereon, if applicable, measured by the difference between the fair
market value of the securities and the investors' basis therein. Securities will
not be accepted in exchange for shares of a Fund unless: (1) such securities
are, at the time of the exchange, eligible to be included in the Series'
portfolio and current market quotations are readily available for such
securities; (2) the investor represents and warrants that all securities offered
to be exchanged are not subject to any restrictions upon their sale by the
Series under the 1933 Act, or under the laws of the country in which the
principal market for such securities exists, or otherwise; and (3) the value of
any such security (except U.S. government securities) being exchanged, together
with other securities of the same issuer owned by the Series, will not exceed 5%
of the Series' net assets immediately after the transaction.

Net Asset Value

The net asset value per share is calculated separately for each class of
each Series. The net asset value per share of a class of a Series is computed by
dividing the value of the assets related to that class of the Series, less the
liabilities related to that class, by the number of shares of the class of the
Series outstanding.

Each class of a Series will bear pro rata all of the common expenses of
that Series. The net asset values of all outstanding shares of each class of a
Series will be computed on a pro rata basis for each outstanding share based on
the proportionate participation in the Series represented by the value of shares
of that Series. All income earned and expenses incurred by a Series will be
borne on a pro rata basis by each outstanding share of a class, based on each
class' percentage in the Series represented by the value of such shares of such
classes, except that none of the shares of a class will incur any of the
expenses under the 12b-1 plan of another class.

Portfolio securities are valued and net asset value per share is determined
as of the close of regular trading on the NYSE which currently is 4:00 p.m.
Eastern time on each day the NYSE is open for trading. The Series of the Trust
reserve the right to change the time at which purchases, redemptions or
exchanges are priced if the NYSE closes at a time other than 4:00 p.m. Eastern
time or if an emergency exists. The NYSE is open for trading on every day except
Saturdays, Sundays and the following holidays: New Year's Day, Dr. Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day (day observed),
Independence Day, Labor Day, Thanksgiving Day and Christmas Day and on the
preceding Friday or subsequent Monday when any of these holidays falls on a
Saturday or Sunday, respectively.

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Portfolio securities listed on a national or foreign securities exchange
are valued on the basis of the last sale on the date the valuation is made.
Securities that are not traded on a particular day or an exchange, are valued at
either (a) the bid price or (b) a valuation within the range considered best to
represent value in the circumstances. Price information on listed securities is
generally taken from the closing price on the exchange where the security is
primarily traded. Other portfolio securities which are traded in the over-the-
counter market are valued at the bid price as long as the bid price, in the
opinion of the Advisor, continues to reflect the value of the security.
Valuations of fixed income and equity securities may be obtained from a pricing
service and/or broker-dealers when such prices are believed to reflect the fair
value of such securities. Use of a pricing service and/or broker-dealers has
been approved by the Board.

Futures contracts are valued at their daily quoted settlement price on the
exchange on which they are traded. Forward foreign currency contracts are valued
daily using the mean between the bid and asked forward points added to the
current exchange rate and an unrealized gain or loss is recorded. A Series
realizes a gain or loss upon settlement of the contracts. Swaps will be priced
at fair value based on (1) swap prices provided by broker-dealers; (2) values,
or estimates of values, of the applicable equity indices and foreign rates
underlying the contracts; and (3) consideration of other relevant factors. A
Series' obligation under a swap agreement will be accrued daily (offset by any
amounts owing to the portfolio) and any accrued but unpaid net amounts owed to a
swap counterparty will be covered by the maintenance of a segregated account
consisting of Segregated Assets. For valuation purposes, foreign securities
initially expressed in foreign currency values will be converted into U.S.
dollar values using WM/Reuters closing spot rates as of 4:00 p.m. London time.
Securities with a remaining maturity of 60 days or less are valued at amortized
cost, which approximates market value. Fixed income securities having a
remaining maturity of over 60 days are valued at market price. Debt securities
are valued on the basis of prices provided by a pricing service, or at the bid
price where readily available, as long as the bid price, in the opinion of the
Advisor, continues to reflect the value of the security. Redeemable securities
issued by open-end investment companies are valued using their respective net
asset values for purchase orders placed at the close of the NYSE. Securities
(including over-the-counter options) for which market quotations are not readily
available and other assets are valued at their fair value as determined in good
faith by or under the direction of the Trustees.

Because of time zone differences, foreign exchanges and securities markets
will usually be closed prior to the time of the closing of the NYSE and values
of foreign futures and options and foreign securities will be determined as of
the earlier closing of such exchanges and securities markets. However, events
affecting the values of such foreign securities may occasionally occur between
the earlier closings of such exchanges and securities markets and the closing of
the NYSE which will not be reflected in the computation of the net asset value
of a Series. If an event materially affecting the value of such foreign
securities occurs during such period, then such securities will be valued at
fair value as determined in good faith by or under the direction of the Board.
Where a foreign securities market remains open at the time that a Series values
its portfolio securities, or closing prices of securities from that market may
not be retrieved because of local time differences or other difficulties in
obtaining such prices at that time, last sale prices in such market at a point
in time most practicable to timely valuation of the Series may be used.

Due to the specific distribution expenses and other costs that will be
allocable to each class, the dividends paid to each class, and related
performance, of the Series may vary. The per share net asset value of the
Brinson Fund-Class N shares and the UBS Investment Funds class of shares will
generally be lower than that of the Brinson Fund-Class I shares of a Series
because of the higher expenses borne by the UBS Investment Funds class of shares
and the Brinson Fund-Class N shares. It is expected, however, that the net asset
value per share of the two classes will tend to converge immediately after the
payment of dividends, which will differ by approximately the amount of the
service and distribution expenses differential among the classes.

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REDEMPTIONS

Under normal circumstances shareholders may redeem their shares at any time
without a fee, except for the transaction charge applicable to redemptions of
shares of the Emerging Markets Equity Fund. The redemption price will be based
upon the net asset value per share (less the transaction charge applicable to
redemptions of shares of the Emerging Markets Equity Fund) next determined after
receipt of the redemption request, provided it has been submitted in the manner
described below. Redemption requests received prior to the close of regular
trading hours (generally 4:00 p.m. Eastern time) on the NYSE will be executed at
the net asset value computed on the date of receipt. Redemption requests
received after the close of regular trading hours will be executed at the next
determined net asset value. The redemption price may be more or less than the
original cost, depending upon the net asset value per share at the time of
redemption.

Payment for shares tendered for redemption is made by check within seven
days after tender in proper form, except that the Trust reserves the right to
suspend the right of redemption, or to postpone the date of payment upon
redemption beyond seven days, (i) for any period during which the NYSE is closed
(other than customary weekend and holiday closings) or during which trading on
the NYSE is restricted, (ii) for any period during which an emergency exists as
determined by the SEC as a result of which disposal of securities owned by a
Series is not reasonably practicable or it is not reasonably practicable for the
Series fairly to determine the value of its net assets, or (iii) for such other
periods as the SEC may by order permit for the protection of shareholders of the
Series.

Shares of the Funds may be redeemed through certain broker-dealers, banks
and bank trust departments who may charge the investor a transaction fee or
other fee for their services at the time of redemption. Such fees would not
otherwise be charged if the shares were redeemed directly from the Trust.

Under the Sales Agreement, the Authorized Dealer or Sub-designee is
authorized to accept redemption orders on behalf of the Funds. A Fund will be
deemed to have received a redemption order when the Authorized Dealer or Sub-
designee accepts the redemption order and such order will be priced at the
Fund's net asset value next computed after such order is accepted by the
Authorized Dealer or Sub-designee.

The Trust will satisfy redemption requests in cash to the fullest extent
feasible, so long as such payments would not, in the opinion of Brinson Partners
or the Board, result in the necessity of a Series selling assets under
disadvantageous conditions and to the detriment of the remaining shareholders of
the Series. Pursuant to the Trust's Agreement and Declaration of Trust, payment
for shares redeemed may be made either in cash or in-kind, or partly in cash and
partly in-kind. Under unusual circumstances, when the Board deems it in the best
interest of the Series' shareholders, the Trust may make payment for shares
repurchased or redeemed in whole or in part in securities of the Series taken at
current values. With respect to such redemptions in kind, the Trust has made an
election pursuant to Rule 18f-1 under the Act. This will require the Trust to
redeem in cash at a shareholder's election in any case where the redemption
involves less than $250,000 (or 1% of the Series' net asset value at the
beginning of each 90 day period during which such redemptions are in effect, if
that amount is less than $250,000), during any 90-day period for any one
shareholder. Should payment be made in securities, the redeeming shareholder may
incur brokerage costs in converting such securities to cash. In-kind payments to
non-affiliated shareholders need not constitute a cross-section of a Series'
portfolio. Where a shareholder has requested redemption of all or a part of the
shareholder's investment and where a Series computes such redemption in-kind,
the Series will not recognize gain or loss for federal tax purposes on the
securities used to compute the redemption, but the shareholder will recognize
gain or loss equal to the difference between the fair market value of the
securities received and the shareholder's basis in the Fund shares redeemed.
Pursuant to an exemptive order issued by the SEC, the Trust is permitted to pay
redemptions in-kind to shareholders that are affiliated persons of the Funds by
nature of a greater than 5% ownership interest in the Funds. Any such
redemptions in-kind would be undertaken in compliance with the order's
condition.

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Due to the relatively high cost of maintaining smaller accounts, the Trust
reserves the right to involuntarily redeem UBS Investment Funds class of shares
in any Fund account for their then current net asset value (which will be
promptly paid to the shareholder) if at any time the total investment does not
have a value of at least $1,000 as a result of redemptions and not due to
changes in the asset value of the Series. The shareholder will be notified that
the value of his or her Fund account is less than the required minimum and will
be allowed at least 60 days to bring the value of the account up to the minimum
before the redemption is processed.

Shareholders who wish to initiate purchase, exchange or redemption
transactions by telephone must elect the option either on the initial
application or by subsequently arranging it in writing. With respect to such
telephone transactions, the Funds will ensure that reasonable procedures are
used to confirm that instructions communicated by telephone are genuine
(including verification of the shareholder's social security number or mother's
maiden name) and, if they do not, the Funds or the transfer agent may be liable
for any losses due to unauthorized or fraudulent transactions. Written
confirmation will be provided for all purchase, exchange and redemption
transactions initiated by telephone.

TAXATION

Additional Information On Distributions And Taxes

Distributions

Distributions of Net Investment Income. Each Series receives income
generally in the form of dividends and interest on its investments. This income,
less expenses incurred in the operation, constitute a Series' net investment
income from which dividends may be paid to you. Any distributions by a Series
from such income will be taxable to you as ordinary income, whether you take
them in cash or in additional shares.

Distributions of Capital Gains. A Series may derive capital gains and
losses in connection with sales or other dispositions of its portfolio
securities. Distributions derived from the excess of net short-term capital gain
over net long-term capital loss will be taxable to you as ordinary income.
Distributions paid from long-term capital gains realized by a Series will be
taxable to you as long-term capital gain, regardless of how long you have held
your shares in the Series. Any net short-term or long-term capital gains
realized by a Series (net of any capital loss carryovers) generally will be
distributed once each year, and may be distributed more frequently, if
necessary, in order to reduce or eliminate federal excise or income taxes on the
Series.

Effect of Foreign Investments on Distributions. For Series which invest in
foreign debt instruments, most foreign exchange gains realized on the sale of
debt instruments are treated as ordinary income by such Series. Similarly,
foreign exchange losses realized by such Series on the sale of debt instruments
are generally treated as ordinary losses by the Series. These gains when
distributed will be taxable to you as ordinary dividends, and any losses will
reduce the Series' ordinary income otherwise available for distribution to you.
This treatment could increase or reduce the Series' ordinary income
distributions to you, and may cause some or all of the Series' previously
distributed income to be classified as a return of capital.

A Series may be subject to foreign withholding taxes on income from certain
of its foreign securities. If more than 50% of the Series' total assets at the
end of the fiscal year are invested in securities of foreign corporations, the
Series may elect to pass-through to you your pro rata share of foreign taxes
paid by the Series. If this election is made, the year-end statement you receive
from the Series will show more taxable income than was actually distributed to
you. However, you will be entitled to either deduct your share of such taxes in
computing your taxable income or claim a foreign tax credit

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for such taxes against your U.S. federal income tax. The Series will provide you
with the information necessary to complete your individual income tax return if
such election is made.

Information on the Tax Character of Distributions. Each Series will
inform you of the amount and character of your distributions at the time they
are paid, and will advise you of the tax status for federal income tax purposes
of such distributions shortly after the close of each calendar year. If you have
not held shares of a Series for a full year, you may have designated and
distributed to you as ordinary income or capital gain a percentage of income
that is not equal to the actual amount of such income earned during the period
of your investment in the Series.

Taxes

Election to be Taxed as a Regulated Investment Company. Each Series has
elected to be treated as a regulated investment company under Subchapter M of
the Code, has qualified as such for its most recent fiscal year, and intends to
so qualify during the current fiscal year. As a regulated investment company,
each Series generally pays no federal income tax on the income and gains it
distributes to you. The Board reserves the right not to maintain the
qualification of the Series as a regulated investment company if it determines
such course of action to be beneficial to you. In such case, the Series will be
subject to federal, and possibly state, corporate taxes on its taxable income
and gains, and distributions to you will be taxed as ordinary dividend income to
the extent of the Series' available earnings and profits.

Excise Tax Distribution Requirements. The Code requires each Series to
distribute at least 98% of its taxable ordinary income earned during the
calendar year and 98% of its capital gain net income earned during the twelve
month period ending October 31 (in addition to undistributed amounts from the
prior year) to you by December 31 of each year in order to avoid federal excise
taxes. Each Series intends to declare and pay sufficient dividends in December
(or in January that are treated by you as received in December) but does not
guarantee and can give no assurances that its distributions will be sufficient
to eliminate all such taxes.

Redemption of Series Shares. Redemptions and exchanges of shares of a
Series are taxable transactions for federal and state income tax purposes that
cause you to recognize a gain or loss. If you hold your shares as a capital
asset, the gain or loss that you realize will be capital gain or loss. Any loss
incurred on the redemption or exchange of shares held for six months or less
will be treated as a long-term capital loss to the extent of any long-term
capital gains distributed to you by the Series on those shares.

All or a portion of any loss that you realize upon the redemption of
your shares of a Series will be disallowed to the extent that you purchase other
shares in such Series (through reinvestment of dividends or otherwise) within 30
days before or after your share redemption. Any loss disallowed under these
rules will be added to your tax basis in the new shares you purchase.

U.S. Government Obligations. Many states grant tax-free status to
dividends paid to you from interest earned on direct obligations of the U.S.
government, subject in some states to minimum investment requirements that must
be met by a Series. Investments in GNMA/FNMA securities, bankers' acceptances,
commercial paper and repurchase agreements collateralized by U.S. government
securities do not generally qualify for tax-free treatment. The rules on
exclusion of this income are different for corporations.

Dividends-Received Deduction for Corporations. Corporate investors in
certain Series may be entitled to a dividends-received deduction on a portion of
the ordinary dividends they receive from such Series. The portion of the
dividends which qualifies for the dividends-received deduction depends on the
aggregate qualifying dividend income received by a Series from domestic (US)
sources. Certain holding period and debt financing restrictions may also apply
to corporate investors seeking to claim the

65
<PAGE>

deduction. All dividends (including the deducted portion) must be included in
your alternative minimum taxable income calculation.

Investment in Complex Securities. A Series may invest in complex
securities. Such investments may be subject to numerous special and complex tax
rules. These rules could affect whether gains and losses recognized by a Series
are treated as ordinary income or capital gain, accelerate the recognition of
income to a Series or defer a Series' ability to recognize losses, and, in
limited cases, subject the Series to U.S. federal income tax on income from
certain of its foreign securities. In turn, these rules may affect the amount,
timing or character of the income distributed to you by a Series.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Shareholders of the Emerging Markets Equity Fund are subject to a 1.50%
transaction charge in connection with each purchase and redemption of shares of
the Series. Shareholders of the Emerging Markets Debt Fund are subject to a
0.75% transaction charge in connection with each purchase of shares of the
Series. Shares of the Series are sold at a price which is equal to the net asset
value of such shares, plus the transaction charge. Redemption requests for the
Emerging Markets Equity Fund are paid at the net asset value less the
transaction charge. The transaction charges do not apply to the reinvestment of
dividends or capital gain distributions. The transaction charges are paid to the
Series and used by them to defray the transaction costs associated with the
purchase and sale of securities within the Series. The amount of the transaction
charge on purchase and redemptions represents the estimate of the costs
reasonably anticipated to be associated with the purchase of securities with
cash received from shareholders and the sale of securities to obtain cash to
redeem shareholders. Therefore, the transaction charges offset the dilutive
effect such costs would otherwise have on the net asset value of the Series'
shares. Purchases and redemptions which are made in kind with securities are not
subject to the transaction charges.

PERFORMANCE CALCULATIONS

From time to time, performance information, such as yield or total
return, may be quoted in advertisements or in communications to present or
prospective shareholders. Performance quotations represent the Funds' past
performance and should not be considered as representative of future results.
The current yield will be calculated by dividing the net investment income
earned per share by a Fund during the period stated in the advertisement (based
on the average daily number of shares entitled to receive dividends outstanding
during the period) by the maximum net asset value per share on the last day of
the period and annualizing the result on a semi-annual compounded basis. The
Funds' total return may be calculated on an annualized and aggregate basis for
various periods (which periods will be stated in the advertisement). Average
annual return reflects the average percentage change per year in value of an
investment in a Fund. Aggregate total return reflects the total percentage
change over the stated period.

To help investors better evaluate how an investment in the Brinson Funds
might satisfy their investment objectives, advertisements regarding the Funds
may discuss yield or total return as reported by various financial publications.
Advertisements may also compare yield or total return to other investments,
indices and averages. The following publications, benchmarks, indices and
averages may be used: Lipper Mutual Fund Performance Analysis; Lipper Fixed
Income Analysis; Lipper Mutual Fund Indices; Morgan Stanley Indices; Lehman
Brothers Treasury Index; Salomon Smith Barney Indices; Dow Jones Composite
Average or its component indices; Standard & Poor's 500 Stock Index or its
component indices; Wilshire Indices; The New York Stock Exchange composite or
component indices; CDA Mutual Fund Report; Weisenberger-Mutual Funds Panorama
and Investment Companies; Mutual Fund Values and Mutual Fund Service Book,
published by Morningstar, Inc.; comparable portfolios managed by the Advisor;
and financial publications, such as Business Week, Kiplinger's Personal Finance,
Financial World, Forbes, Fortune, Money Magazine, The Wall Street Journal,
Barron's, et al., which rate fund performance over various time periods.

66
<PAGE>

The principal value of an investment in the Funds will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. Any fees charged by banks or other institutional investors
directly to their customer accounts in connection with investments in shares of
the Funds will not be included in the Brinson Funds' calculations of yield or
total return.

Performance information for the UBS Investment Funds class of shares,
Brinson Fund-Class N and Brinson Fund-Class I shares of each Series will vary
due to the effect of expense ratios on the performance calculations.

Total Return

Current yield and total return quotations used by the Series (and
classes of shares) are based on standardized methods of computing performance
mandated by rules adopted by the SEC. As the following formula indicates, the
average annual total return is determined by multiplying a hypothetical initial
purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation and dividends and distributions
paid and reinvested) for the stated period less any fees charged to all
shareholder accounts and annualizing the result. The calculation assumes that
all dividends and distributions are reinvested at the net asset value on the
reinvestment dates during the period. The quotation assumes the account was
completely redeemed at the end of each period and deduction of all applicable
charges and fees. According to the SEC formula:

P(1+T)/n/=ERV

where:
P = a hypothetical initial payment of $1,000,
T = average annual total return,
n = number of years,
ERV = ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the 1,
5 or 10 year periods at the end of the 1, 5 or
10 year periods (or fractional portion
thereof).

Based upon the foregoing calculations, the average annual total return
for the Brinson Fund-Class I (previously Brinson Fund Class) shares of:*

(i) the Global Fund, for the one and five-year periods ended
December 31, 1999 and the period August 31, 1992 (commencement
of operations) through December 31, 1999 was 1.49%, 11.56% and
9.51%, respectively;

(ii) the Global Equity Fund, for the one and five-year periods
ended December 31, 1999 and the period January 28, 1994
(commencement of operations) through December 31, 1999 was
12.87%, 15.29%, and 11.94%, respectively;

(iii) the Global Bond Fund, for the one and five-year periods ended
December 31, 1999 and the period July 30, 1993 (commencement
of operations) through December 31, 1999 was -6.27%, 7.00% and
5.45%, respectively;

(iv) the U.S. Balanced Fund, for the one- and five-year periods
ended December 31, 1999 and the period December 30, 1994
(commencement of operations) through December 31, 1999 was
-6.95%, 10.09% and 10.09%, respectively;

(v) the U.S. Equity Fund, for the one- and five-year periods ended
December 31, 1999 and the period February 22, 1994
(commencement of operations) through December 31, 1999 was
-4.05%, 20.17% and 16.17%, respectively;

67
<PAGE>

(vi) the U.S. Large Cap Equity Fund, for the one-year period ended
December 31, 1999 and for the period April 30, 1998
(performance inception date) through December 31, 1999 was
11.05% and -3.53%, respectively;

(vii) the U.S. Large Cap Growth Fund, for the one-year period ended
December 31, 1999 and the period October 31, 1997
(performance inception date) through December 31, 1999 was
32.73% and 28.53%, respectively;**

(viii) the U.S. Small Cap Growth Fund, for the one-year period ended
December 31, 1999 and the period September 30, 1997
(commencement of operations) through December 31, 1999
was 41.70% and 10.33%, respectively; **

(ix) the U.S. Bond Fund, for the one- and three-year periods ended
December 31, 1999 and the period August 31, 1995 (commencement
of operations) through December 31, 1999 was -1.04%, 5.55%
and 5.94%, respectively;

(x) the High Yield Fund, for the one-year period ended December
31, 1999 and the period September 30, 1997 (commencement of
operations) through December 31, 1999 was 4.85% and 6.66%,
respectively; ** and

(xi) the Global (Ex-U.S.) Equity Fund, for the one- and five-year
periods ended December 31, 1999 and the period August 31, 1993
(commencement of operations) through December 31, 1999 was
19.16%, 13.42%, and 10.01%, respectively.

* The U.S. Value Equity Fund, U.S. Small Cap Equity Fund, Global
Technology Fund, Global Biotech Fund, U.S Real Estate Equity Fund,
Emerging Markets Debt Fund and Emerging Markets Equity Fund had not
commenced operations as of the time periods indicated.
** These Series were reorganized as Series of the Trust on December 18,
1998. The average annual total return calculations also reflect the
performance of these Series while they were series of the UBS Private
Investor Funds, Inc.

Based upon the foregoing calculations, the average annual total return
for the Brinson Funds-UBS Investment Funds (previously the SwissKey Class) class
of shares of:*

(i) the Global Fund, for the one- and three-year periods ended
December 31, 1999 and the period July 31, 1995 (commencement
of operations) through December 31, 1999 was 0.83%, 6.13%
and 9.18%, respectively;

68
<PAGE>

(ii) the Global Equity Fund, for the one- and three-year periods
ended December 31, 1999 and the period July 31, 1995
(commencement of operations) through December 31, 1999 was
12.02%, 11.68% and 13.94%, respectively;

(iii) the Global Bond Fund, for the one- and three-year periods
ended December 31, 1999 and the period July 31, 1995
(commencement of operations) through December 31, 1999 was
-6.74%, 1.73% and 4.74%, respectively;

(iv) the U.S. Balanced Fund, for the one- and three-year periods
ended December 31, 1999 and the period July 31, 1995
(commencement of operations) through December 31, 1999 was
-7.44%, 4.54% and 7.43%, respectively;

(v) the U.S. Equity Fund, for the one- and three-year periods
ended December 31, 1999 and the period July 31, 1995
(commencement of operations) through December 31, 1999 was
-4.51%, 11.83% and 16.71%, respectively;

(vi) the U.S. Large Cap Equity Fund, for the one-year period ended
December 31, 1999 and the period April 30, 1998 (performance
inception date) through December 31, 1999 was 11.39% and
-4.06%, respectively;

(vii) the U.S. Large Cap Growth Fund, for the one-year period ended
December 31, 1999 and the period December 31, 1998
(commencement of operations) through December 31, 1999 was
31.63%;**

(viii) the U.S. Small Cap Growth Fund, for the one-year period ended
December 31, 1999 and the period December 31, 1998
(commencement of operations) through December 31, 1999 was
40.57%; **

(ix) the U.S. Bond Fund, for the one- and three-year periods ended
December 31, 1999 and the period August 31, 1995 (commencement
of operations) through December 31, 1999 was -1.55%, 4.99%
and 5.41%, respectively;

(x) the High Yield Fund, for the one-year period ended December
31, 1999 and the period December 31, 1998 (commencement of
operations) through December 31, 1999 was 4.09%; ** and

(xi) the Global (Ex-U.S.) Equity Fund, for the one- and three-year
periods ended December 31, 1999 and the period July 31, 1995
(commencement of operations) through December 31, 1999 was
18.15%, 12.07% and 12.88%, respectively.

* The U.S. Value Equity Fund, U.S. Small Cap Equity Fund,
Global Technology Fund, Global Biotech Fund, U.S. Real Estate Equity
Fund, Emerging Markets Debt Fund and Emerging Markets Equity Fund

69
<PAGE>

had not commenced operations as of the time periods indicated.

** These Series were reorganized as Series of the Trust on December 18,
1998.

Based on the foregoing calculations, the average annual total return for
the Brinson Fund-Class N shares of *:

(i) the Global Fund, for the one-year period ended December 31,
1999 and the period June 30, 1997 (commencement of operations)
through December 31, 1999 was 1.18% and 4.34%,
respectively;

(ii) the Global Equity Fund, for the one-year period ended December
31, 1999 and the period June 30, 1997 (commencement of
operations) through December 31, 1999 was 12.59% and 9.51%,
respectively;

(iii) the Global Bond Fund, for the one-year period ended December
31, 1999 and the period June 30, 1997 (commencement of
operations) through December 31, 1999 was -6.58% and 2.09%,
respectively;

(iv) the U.S. Balanced Fund, for the one-year period ended December
31, 1999 and the period June 30, 1997 (commencement of
operations) through December 31, 1999 was -7.43% and 2.96%,
respectively;

(v) the U.S. Equity Fund, for the one-year period ended December
31, 1999 and the period June 30, 1997 (commencement of
operations) through December 31, 1999 was -4.22% and 7.77%,
respectively;

(vi) the U.S. Large Cap Equity Fund, for the one-year period ended
December 31, 1999 and the period April 30, 1998 (performance
inception date) through December 31, 1999 was -11.12% and
-3.74%, respectively;

(vii) the U.S. Large Cap Growth Fund, for the one-year period ended
December 31, 1999 and the period December 31, 1998
(commencement of operations) through December 31, 1999 was
32.22%;**

(viii) the U.S. Small Cap Growth Fund, for the one-year period ended
December 31, 1999 and the period December 31, 1998
(commencement of operations) through December 31, 1999 was
41.14%; **

(ix) the U.S. Bond Fund, for the one-year period ended December 31,
1999 and the period June 30, 1997 (commencement of operations)
through December 31, 1999 was -1.45% and 5.24%,
respectively;

(x) the High Yield Fund, for the one-year period ended December
31, 1999 and the period December 31, 1998 (commencement of
operations) through December 31, 1999 was 4.53%;** and

(xi) the Global (Ex-U.S.) Equity Fund, for the one-year period
ended December 31, 1999 and the period June 30, 1997
(commencement of operations) through December 31, 1999 was
18.90% and 9.44%, respectively.

70
<PAGE>

** These Series were reorganized as Series of the Trust on December
18, 1998.

Yield

As indicated below, current yield is determined by dividing the net
investment income per share earned during the period by the maximum offering
price per share on the last day of the period and annualizing the result.
Expenses accrued for the period include any fees charged to all shareholders
during the 30-day base periods. According to the SEC formula:

Yield = 2[(a-b + 1)/6/ - 1
------------------
cd

where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends.
d = the maximum offering price per share on the last
day of the period.

The yield of a Series may be calculated by dividing the net investment
income per share earned by the particular Series during a 30-day (or one month)
period by the net asset value per share on the last day of the period and
annualizing the result on a semi-annual basis. A Series' net investment income
per share earned during the period is based on the average daily number of
shares outstanding during the period entitled to receive dividends and includes
dividends and interest earned during the period minus expenses accrued for the
period, net of reimbursements.

FINANCIAL STATEMENTS AND REPORTS OF INDEPENDENT AUDITORS

The Series' unaudited financial statements for the six month period
ended December 31, 1999, which are contained in the Series' Semi-Annual Reports
dated December 31, 1999 (as filed with the SEC on March 3, 2000 pursuant to
Section 30(b) of the Act and Rule 30b2-1 thereunder (Accession Number
000950109-00-000763)) are incorporated herein by reference.

The Series' financial statements for the fiscal year ended June 30,
1999 and the reports thereon of August 11, 1999, which are contained in the
Series' Annual Reports dated June 30, 1999 (as filed with SEC on September 3,
1999, pursuant to Section 30(b) of the Act and Rule 30b2-1 thereunder (Accession
Number 0000950109-99-003295)) are incorporated herein by reference.

71
<PAGE>

CORPORATE DEBT RATINGS APPENDIX A

Moody's Investors Service, Inc. describes classifications of corporate bonds as
follows:

Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edged". Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa - Bonds which are rated Aa are judged to be of high-quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.

Baa - Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.

C - Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

Moody's also supplies numerical indicators 1, 2, and 3 to rating
categories. The modifier 1 indicates the security is in the higher end of its
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates a ranking toward the lower end of the category.

A-1
<PAGE>

Standard & Poor's Ratings Group describes classifications of corporate bonds as
follows:

AAA - This is the highest rating assigned by Standard & Poor's Ratings
Group to a debt obligation and indicates an extremely strong capacity to pay
principal and interest.

AA - Bonds rated AA also qualify as high-quality debt obligations. Capacity
to pay principal and interest is very strong and in the majority of instances
they differ from the AAA issues only in small degree.

A - Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.

BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.

BB - Debt rated BB has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lend
to inadequate capacity to meet timely interest and principal payments.

B - Debt rated B has a greater vulnerability to default but presently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.

CCC - Debt rated CCC has a current identifiable vulnerability to default,
and is dependent upon favorable business, financial and economic conditions to
meet timely payments of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, it is not likely to have the
capacity to pay interest or repay principal.

CC - The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.

C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.

CI - The rating CI is reserved for income bonds on which no interest is
being paid.

D - Debt rated D is in default, or is expected to default upon maturity or
payment date.

Plus (+) or minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

A-2
<PAGE>

APPENDIX B

SECONDARY RISKS

The chart below illustrates secondary risks of investing in the Funds.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Foreign Geographic
Counter- Country Concen- High Interest Non-Public Pre- Small
party Credit Derivative & Currency tration Yield Rate Securities payment Company
- ------------------------------------------------------------------------------------------------------------------------------------
Global Fund * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Global
Equity Fund * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Global
Technology Fund * * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Global
Biotech Fund * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Global
Bond Fund * * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S.
Balanced Fund * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S.
Equity Fund * * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Value
Equity Fund * * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Large Cap
Equity Fund * * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Large Cap
Growth Fund * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Small Cap
Equity Fund * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Small Cap
Growth Fund * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Real Estate
Equity Fund * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
U.S.
Bond Fund * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
High
Yield Fund * * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Emerging
Markets * * * *
Debt Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Global (Ex-U.S.)
Equity Fund * *
- ------------------------------------------------------------------------------------------------------------------------------------
Emerging
Markets * * * * * *
Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

B-1
<PAGE>

Definition of Risks

Counterparty Risk
The risk that when a Fund engages in repurchase, reverse repurchase,
derivative, when-issued, forward commitment, delayed settlement and securities
lending transactions with another party, it relies on the other party to
consummate the transaction and is subject to the risk of default by the other
party. Failure of the other party to complete the transaction may cause the Fund
to incur a loss or to miss an opportunity to obtain a price believed to be
advantageous

Derivative Risk
The risk that downward price changes in a security may result in a loss greater
than a Fund's investment in the security. This risk exists through the use of
certain securities or techniques that tend to magnify changes in an index or
market.

B-2
<PAGE>

Interest Rate Risk
The risk that changing interest rates may adversely affect the value of an
investment. With fixed-rate securities, an increase in prevailing interest rates
typically causes the value of a Fund's securities to fall, while a decline in
prevailing interest rates may produce an increase in the market value of the
securities. Changes in interest rates will affect the value of longer-term fixed
income securities more than shorter-term securities and lower quality
securities more than higher quality securities.

Non-Public Securities Risk
The risk that there may be a less liquid market for unlisted securities than for
publicly traded securities. A Fund, therefore, may not be able to resell its
investments. In addition, less disclosure is required from non-public companies.
Although unlisted securities may be resold in private transactions, the prices
realized from the sale may be less than what the investing Fund considers the
fair value of the securities.

Prepayment Risk
The risk that issuers will prepay fixed rate obligations when interest rates
fall, forcing the Fund to re-invest in obligations with lower interest rates
than the original obligations.

Small Company Risk
The risk that investments in smaller companies may be more volatile than
investments in larger companies, as smaller companies generally experience
higher growth and failure rates. The trading volume of smaller company
securities is normally lower than that of larger companies. Changes in the
demand for the securities of smaller companies generally have a
disproportionate effect on their market price, tending to make prices rise more
in response to buying demand and fall more in response to selling pressure.

B-3