Simplified Prospectus for the Retail Funds in UBS Investment ...

Simplified Prospectus for the Retail Funds in UBS Investment Funds ICVC,UBS Investment Funds ICVC II and UBS Investment Funds ICVC IIIas at 30 October 2009

www.ubs.com/retailfunds 0800 587 2113

Table of contents

Page

Fundsavailableforinvestment.......................................................................................................................................2

Risks..............................................................................................................................................................................5

Investor risk profile........................................................................................................................................................7

Fundperformance.........................................................................................................................................................8

Taxation.......................................................................................................................................................................10

Chargesandexpenses.................................................................................................................................................11

HowtobuysharesintheFunds...................................................................................................................................14

IndividualSavingsAccounts(ISA).................................................................................................................................15

Cancellationrights.......................................................................................................................................................15

HowtosellsharesintheFunds....................................................................................................................................16

SwitchingFunds...........................................................................................................................................................16

TransferringISAs..........................................................................................................................................................16

IncomepaidbyFunds..................................................................................................................................................17

HowtoobtaininformationonourFunds.....................................................................................................................17

Howtocomplain.........................................................................................................................................................18

ISATermsandConditions............................................................................................................................................19

DirectDebitGuarantee............................................................................................................................................... 23

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You should read the following information when investing within the UBS Global Asset Management Retail Fund range, as well as the through the UBS ISA (where you should read the attached Terms and Conditions).

All of the information found in this Simplified Prospectus maybefoundinthemainProspectusforeachInvestmentCompanywithVariableCapital(ICVC)availablefromtheAuthorisedCorporateDirector(ACD)attheaddressbelow.

UBSInvestmentFundsICVCisincorporatedinEnglandandWalesunderregisterednumberIC000096,authorisedby the Financial Services Authority with effect from 7 March2001.TheCompanyhasanunlimitedduration.

UBSInvestmentFundsICVCIIisincorporatedinEnglandandWalesunderregisterednumberIC000307,authorisedby the Financial Services Authority with effect from 18 February2004.TheCompanyhasanunlimitedduration.

UBSInvestmentFundsICVCIIIisincorporatedinEnglandandWalesunderRegisterednumberIC000333,authorisedby the Financial Services Authority with effect from 1 October2004.TheCompanyhasunlimitedduration.

Thereare15fundswithinUBSInvestmentFundsICVC,ofwhichsevenaregenerallyavailableforsaletoretailinvestors.Thefundsare:

Fund Share Classes

Launch Date

UBSAlphaChoiceFund K,LA&LB 11March2009

UBSBroadBondMarketUKPlusFund

A,J&K 7March2007

UBSCorporateBondUKPlusFund

A,J&K 7March2007

UBSFixedInterestUKPlusFund

A,J&K 7March2007

UBSGlobalEmergingMarketsEquityFund

A,B,J&K 7December2001

UBSGlobalOptimalFund A&B 1July2002

UBSGlobalOptimalThirdsFund

A&J 3February2003

UBS Inflation LinkedBondUKPlusFund

A,J&K 7March2007

UBSLongDatedCorporateBondUKPlusFund

A,J&K 7March2007

UBSLongDatedFixedInterestUKPlusFund

A,J&K 7March2007

UBSMediumTermFixedInterestFund

A 20January2003

UBSUKEquityIncomeFund A&B 30March2007

UBSUKSelectFund A,B&Z 1July2002

UBSUKSmallerCompaniesFund

A&B 17February2003

UBSUSEquityFund A,B&J 14October2002

TherearesixfundswithinUBSInvestmentFundsICVCII,allofwhicharegenerallyavailableforsaletoretailinvestors.Thefundsare:

Fund Share Classes

Launch Date

UBSAbsoluteReturnBondFund A,B&Z 21March2005

UBSActiveBondFund A,B&Z 1April2005

UBSAsianEquityFund A,B&J relaunched1December20061

UBSEuropeanEquityFund A,B&J 21May2004

UBSUSGrowthFund A,B,J,K&Z 10November2008

UBSUS130/30EquityFund A&B 6July20071PreviouslyknownasUBSDevelopedAsiaEquityFund

TherearefourfundswithinUBSInvestmentFundsICVCIII,allofwhicharegenerallyavailableforsaletoretailinvestors.Thefundsare:

Fund Share Classes

Launch Date

UBSGlobalAllocationFund(UK) A,B,J&Z 23November2007

UBSMulti-AssetIncomeFund A,K&Z 30October2009

UBSTargetedReturnFund A,B,C,J&K 26February2007

UBSUK&InternationalEquityManagedFund

A,B,C&Z 7October2004

ForeachoftheICVCsClassASharesaredesignedforinvestmentbytheretailmarket.ClassB,C,J,K,LA,LBandZSharesaredesignedforinvestmentbycompaniesofUBSAGgroupandclientsofthosecompanies,aswellasothersatthediscretionoftheACD,andarenotgenerallymadeavailabletothepublic.

Consequently, this Simplified Prospectus has been preparedonarepresentativeshareclassbasis,onlyincludingdetailsoftheClassASharesdesignedfortheretailmarket.DetailsoftheothershareclassesareavailableintheProspectusforeachICVCandbycontacting the ACD. There are no differences between theshareclassesotherthanthechargesandminimuminvestmentlimits.

Ofthefundsmentionedabove,onlythefollowingaregenerallyavailabletoRetailinvestors:

UBSAbsoluteReturnBondFund,UBSActiveBondFund,UBSAsianEquityFund,UBSCorporateBondUKPlusFund,UBSEuropeanEquityFund,UBSGlobalEmergingMarketsEquityFund,UBSGlobalAllocationFund(UK),UBSGlobalOptimalFund,UBSMulti-AssetIncomeFund,UBSTargetedReturnFund,UBSUK&InternationalEquityManagedFund,UBSUKEquityIncomeFund,UBSUKSelectFund,UBSUKSmallerCompaniesFund,UBSUSEquityFund,UBSUSGrowthFundandUBSUS130/30EquityFund.Theseareknowcollectivelyasthe“RetailFunds”.

Who is the Operator and Authorised Corporate Director (ACD) of the companies?UBSGlobalAssetManagementFundsLtd21LombardStreetLondonEC3V9AH

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Who is the Depositary of the companies?TheRoyalBankofScotlandplcTrustee&DepositaryServices1stFloor,WaterhouseSquare138–142HolbornLondonEC1N2TH

Who are the Auditors of the Company?Ernst&YoungLLP1MoreLondonPlaceLondonSE12AF

Who are UBS Global Asset Management Funds Ltd?UBSGlobalAssetManagementFundsLtdisacompanyregisteredinEngland(number02218008)andispartofthefundmanagementarmofUBSAG.UBSAGisoneof the one of the world’s leading financial services firms, whichincludesaleadingglobalwealthmanager,aswellas a leading global investment banking and securities firm. UBSGlobalAssetManagementFundsLtdisthecompanyyou have a contract with, the main business of the firm beinginvestmentmanagement.

InveSTMenT InFORMATIOn

What funds are available for investment?

UBS Absolute Return Bond FundTheinvestmentobjectiveoftheFundistoseektogenerateapositivereturnregardlessofmarketconditionsthrough a diversified global bond portfolio.

TheinvestmentpolicyoftheFundisthatitwillinvestatleast two-thirds of its net assets in a global diversified portfolio of fixed and variable interest rate, secured and unsecured debt securities, (including floating rate notes) issuedbygovernmentsandlocalauthorities,corporates,supra-nationalorgovernmentagencies.ThemajorityoftheassetswillbeinvestedininvestmentgradesecuritiesbuttheFundmayalsoinvestinhighyieldandemergingmarketdebt.

Withintheremainingone-thirdofitsnetassets,theFundmayinvestinmoneymarketinstrumentsandcollectiveinvestmentschemes.Inaddition,theFund,accordingtocurrentmarketassessment,mayholdcashandnearcash.

The ACD may use financial instruments including forward foreignexchange,forwardandfuturescontracts,swaps,optionsandrepurchaseagreements,forinvestmentpurposesand/ortomanageinterestrateandcurrencyexposures.Therearenogeographicalrestrictionsonthecountriesofinvestment.

TheFundwillholdamaximumof20%ofitsportfolioinnon-investmentgradebonds,andamaximumof20%ofitsportfoliocanbeheldinemergingmarketsbonds,whetherinvestmentgradeornot.Thereisnodurationlimitsfortheunderlyingbonds,althoughtheFundwillmanagedurationexposureto±2yearswiththeuseofderivatives.

Availableshareclasses:ClassAaccumulationshares;ClassBaccumulationshares;ClassZaccumulationshares.

UBS Active Bond FundTheinvestmentobjectiveoftheFundistoseektoachieve returns by investing in a diversified portfolio of predominantlyinvestmentgradeUKandGlobalbonds.TheFundwillseektomaximisethereturnsbytheactivemanagementofdurationandinvestmentgraderiskwhilstminimisingwherepossibletheriskofcapitalloss.

TheinvestmentpolicyoftheFundisthatitwillinvestpredominantlyininvestmentgradeEurobonds,corporatebonds, government bonds and floating rate notes. In additiontheFundmayalsoinvestinmonetarydeposits,certificates of deposit, commercial paper, government cashinstruments,commercialbillsandderivativesforthepurpose of efficient portfolio management. The Fund will investinbothsterlingandnon-sterlinginstrumentsanditwill seek to minimise the exposure to currency fluctuation risksbytheuseofhedgingandothertechniquesandinstruments.

TheFundwillgenerallyholdinvestmentgradebonds,althoughupto10%oftheportfoliocanbeheldinnon-investmentgradebonds.Thereisnorestrictiononthedurationoftheunderlyingbondsheld.

TheFundwillusederivativesonlyforthepurposeofEfficient Portfolio Management.

Availableshareclasses:ClassAincomeshares;ClassAaccumulationshares;ClassBincomeshares;ClassBaccumulationshares;ClassZaccumulationshares.

UBS Asian equity FundTheinvestmentobjectiveandpolicyoftheFundistoseektoachievelong-termcapitalappreciationpredominantlythroughinvestmentinequitiesintheAsianregion,excludingJapan.

TheFundmayalsoinvestinothertransferablesecurities(includingwarrants),moneymarketinstruments,deposits,cashandunitsincollectiveinvestmentschemes.


Availableshareclasses:ClassAaccumulationshares;ClassBaccumulationshares;ClassJincomeshares.

UBS Corporate Bond UK Plus FundTheinvestmentobjectiveandpolicyoftheFundistoseektogenerateareturngreaterthanthereturnprovidedbyUKinvestmentgradecorporatebondsderivedfrominvestmentinUKandglobalsecurities.

TheFundinvestsingovernmentbonds,non-governmentbonds(includingbondsissuedbylocalauthorities,supra-nationals, agencies and corporate entities); fixed rate, variable rate, inflation-linked, index-linked and non-sterlingbonds(includingemergingmarketdebt);securedand unsecured debt securities (including floating rate notes);andinvestmentgradeandhighyieldbonds;andmayexpressviewsonexchangerates.Additionally,the

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Fundmayinvestinothertransferablesecurities(includingwarrants),moneymarketinstruments,deposits,cashandnearcashandunitsincollectiveinvestmentsschemes.

AtitsdiscretiontheManagermayusederivativesincludingforwardforeignexchange,forwardandfuturescontracts,swaps,options,repurchaseagreementsandstructuredcredit,forinvestmentpurposesandortomanageinterestrate, inflation, credit and currency exposures.

Availableshareclasses:ClassAincomeshares;ClassAaccumulationshares;ClassBincomeshares;ClassBaccumulationshares;ClassJincomeshares;ClassJaccumulationshares;ClassKincomeshares;ClassKaccumulationshares.

UBS european equity FundTheinvestmentobjectiveandpolicyoftheFundistoseektoachievelong-termcapitalappreciationpredominantlythroughinvestmentinContinentalEuropeanequities.

TheFundmayalsoinvestinothertransferablesecurities(includingwarrants),moneymarketinstruments,deposits,cashandunitsincollectiveinvestmentschemes.



UBS Global Allocation Fund (UK)TheinvestmentobjectiveandpolicyoftheFundistoachievelong-termcapitalgrowththroughactivemanagement of a diversified portfolio invested primarily indomesticandinternationalequitiesandbondsandinunitsinUKandoverseasregulatedcollectiveinvestmentschemes.TheFundmayalsoinvestinothertransferablesecurities(includingwarrants),moneymarketinstruments,depositsandcashandnearcash.

Atitsdiscretion,themanagermayusederivativesincludingforwardforeignexchange,forwardandfuturecontracts,swaps,optionsandrepurchaseagreementsorotherinvestmenttechniquespermittedinapplicableFSArules.

Availableshareclasses:ClassAaccumulationshares;ClassBaccumulationshares;ClassJaccumulationshares;ClassZaccumulationshares.

UBS Global emerging Markets equity Fund TheinvestmentobjectiveandpolicyoftheFundistoachievelong-termcapitalgrowththroughactivelymanaged diversified investment primarily in global emergingsecuritymarkets.

TheFundmayalsoinvestinothertransferablesecurities(includingwarrants),moneymarketinstruments,deposits,cashandnearcashandunitsincollectiveinvestmentsschemes.


Availableshareclasses:ClassAaccumulationshares;ClassBaccumulationshares;ClassJaccumulationshares;ClassKaccumulationshares.

UBS Global Optimal Fund TheinvestmentobjectiveandpolicyoftheFundistoachievelong-termcapitalgrowththroughactivemanagement of a diversified portfolio invested primarily in overseassecurities.



Availableshareclasses:ClassAaccumulationshares;ClassBaccumulationshares.

UBS Multi-Asset Income FundTheinvestmentobjectiveandpolicyoftheFundistoseek to provide an income, through a diversified portfolio ofinvestments.Capitalgrowthwillnotbeaprimaryconsideration,althoughopportunitiesforgrowthmayoccurifmarketconditionsarefavourable.TheFundwillinvestinamixoftransferablesecuritiesincludingdomesticandinternationalequitiesandbonds,unitsincollectiveinvestmentschemes,warrants,moneymarketinstruments,deposits,andcashornearcash,astheInvestmentManagerdeemsappropriate.Therearenogeographicalrestrictionsonthecountriesofinvestment.

TheFundmayusearangeofderivativesinstrumentswhichincludeforeignexchange,forwardandfuturescontracts,swapsandoptionsandotherderivativesforinvestmentpurposesand/ortomanageinterestrateandcurrencyexposures.

Indexfuturesandotherderivativesareusedtomanagemarketexposureinherentinaninvestedportfolio.Increasingorreducingmarketandcurrencyexposurewillentailtheuseoflongornetshortpositionsinsomederivativeinstruments.

Availableshareclasses:ClassAaccumulationshares;ClassAincomeshares;ClassKaccumulationshares;ClassKincomeshares;ClassZaccumulationshares;ClassZincomeshares.

UBS Targeted Return FundTheinvestmentobjectiveandpolicyoftheFundistoseektoachieveareturnaboveUKRetailPriceIndexthroughadiversified portfolio of investments. The Fund will invest inamixofassetsincludingdomesticandinternationalequitiesandbonds,warrants,derivatives,moneymarketinstruments,deposits,cashofnearcash,andunitsincollectiveinvestmentschemesinvaryingproportionsattheACD’sdiscretion.Therearenogeographicalrestrictionsonthecountriesofinvestment.

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TheFundwillusearangeofderivativesinstrumentswhichincludeforeignexchange,forwardandfuturescontracts,swapsandoptionsforinvestmentpurposesand/ortomanageinterestrateandcurrencyexposures.

Indexfuturesandotherderivativesareusedtomanagemarketexposureinherentinaninvestedportfolio.Increasingorreducingmarketandcurrencyexposurewillentailtheuseoflongornetshortpositionsinsomederivativeinstruments.

Availableshareclasses:ClassAaccumulationshares;ClassBaccumulationshares;ClassCaccumulationshares;ClassJaccumulationshares;ClassKaccumulationshares.

UBS UK & International equity Managed FundTheobjectiveandpolicyoftheFundistoachievelong-termcapitalgrowthbyinvestingpredominantlyinarangeofUKauthorisedunittrustsandOEICswhichthemselvesinvestinamixtureofUKandglobalequities.

TheFundmayalsoinvestdirectlyinUKandinternationalequitiesandnon-UKfundsandmoneymarketinstrumentsandfundsthatinvestinsuchinstruments.


Availableshareclasses:ClassAaccumulationshares;ClassBaccumulationshares;ClassBincomeshares;ClassZaccumulationshares.

UBS UK equity Income FundTheinvestmentobjectiveandpolicyoftheFundistoseektogenerateincomeandachievelongtermcapitalgrowththrough active management of a diversified portfolio investedprimarilyinUKequities.

Theportfoliowillaimtohaveatleast80%investedinUKequitiesandtogeneratearunningyieldequaltoorgreaterthan110%oftherunningyieldontheFTSEAll-ShareIndex.TheFundmayalsoinvestinothertransferablesecurities(includingwarrants),moneymarketinstruments,deposits,cashandnearcashandunitsincollectiveinvestmentsschemes.Atitsdiscretion,themanagermayusederivativesincludingforwardforeignexchange,forwardandfuturecontracts,swaps,optionsandrepurchaseagreementsorotherinvestmenttechniquespermittedinapplicableFSArules.

Whilsttheinvestmentobjectivegivestheabilitytousederivativesforinvestmentpurposes,theFundwillonlyuse derivatives for the purpose of Efficient Portfolio Management.

Availableshareclasses:ClassAincomeshares;ClassAaccumulationshares;ClassBincomeshares;ClassBaccumulationshares

UBS UK Select Fund TheinvestmentobjectiveandpolicyoftheFundistoachievelong-termcapitalgrowththroughactivemanagementofadiversified portfolio invested primarily in UK equities.

Theportfoliomanagerwillgenerallyselectaportfolioof securities from a universe of UK equities identified by analysts as offering superior growth and/or income prospects.



Availableshareclasses:ClassAaccumulationshares;ClassBaccumulationshares;ClassZaccumulationshares.

UBS UK Smaller Companies Fund TheinvestmentobjectiveandpolicyoftheFundistoachievelong-termcapitalgrowththroughactivemanagement of a diversified portfolio invested primarily in UKsmallercompaniesequities.



Availableshareclasses:ClassAaccumulationshares;ClassBaccumulationshares.

UBS US equity FundTheinvestmentobjectiveandpolicyoftheFundistoachievelong-termcapitalgrowththroughactivemanagement of a diversified portfolio invested primarily in USequities.




UBS US Growth FundTheinvestmentobjectiveandpolicyoftheFundistoseektoachievelongtermcapitalgrowthprimarilythroughinvestmentinUSequitieswithgrowthcharacteristics.

The ACD may use derivatives for the purpose of efficient portfoliomanagement.TheFundmayalsoinvestinothertransferablesecurities(includingwarrants),moneymarketinstruments,deposits,cashandnearcashandunitsincollectiveinvestmentsschemes.


Availableshareclasses:ClassAaccumulationshares;ClassBaccumulationshares;ClassJaccumulationshares;ClassKaccumulationshares;ClassZaccumulationshares.

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UBS US 130/30 eqUITY FUnD

TheinvestmentobjectiveandpolicyoftheFundistoseektoachievelong-termreturnsthroughactivemanagementof a diversified portfolio invested primarily in US equities, equityinstrumentsandderivatives.

TheFundwillinvestonaverage130%ofitsnetassetsinlongpositionsandexposurestoUSequitiesandaround30%ofitsnetassetsinshortpositions.Indoingso,theFundwillinvestmainlybetween110%and140%ofnetassetsinlongpositionswiththecorrespondingshortpositionsmainlycomprisingbetween10%and40%oftheFund’snetassets.

TheFundwillachieveitslongandshortpositionsandexposuresbyinvestinginequities,equityinstrumentsandderivatives,includingforwardforeignexchange,forwardandfuturescontracts,structuredproducts,swaps,options, equity-linked notes, contracts for differences and repurchaseagreementsorotherinvestmenttechniquespermittedinFSArules.


Availableshareclasses:ClassAaccumulationshares;ClassBaccumulationshares

What are the risks when investing?Allinvestmentswithinthefundscontainadegreeofrisk,andarenotguaranteed.Noristhereanyassurancethatthefundswillmeettheirinvestmentobjectives.Youmay find details of the risks mentioned below in the full Prospectus,availablefromtheACD.

Thevalueofinvestmentsandtheincomefromthemmaygodownaswellasup,andyoumaynotgetbacktheamount invested. The price depends on fluctuations in the financial markets outside of our control and therefore past performanceisnoindicationoffutureperformance.

ThebasecurrencyoftheICVCsissterling.Thereforeifafundinvestsinoverseasstockmarketsorassetsthatarenotpricedinsterling,thenchangesinratesofexchangemay adversely affect the value of your investment.

Shouldchargesbeappliedtothecapitalofthefund,orif there is insufficient income to meet the charges, the potentialgrowthwillbereduced.FundsthatapplychargestocapitalareUBSActiveBondFund,UBSCorporateBondUKPlusFund,UBSMulti-AssetIncomeFundandUBSUKEquityIncomeFund.

Shouldyoumakeregularwithdrawalsfromyourinvestmentthataregreaterthanitsinvestmentgrowth,therewillbeapotentialrisktoyourcapital.

Whereaninitialorredemptionchargeisimposed,aninvestor who sells their shares after a short period may not (evenintheabsenceofafallinthevalueoftherelevantinvestments)realisetheamountoriginallyinvested.

Any tax relief or benefit currently enjoyed by funds or investors (whether inside or outside of a tax efficient wrapper),issubjecttogovernmentlegislation,andassuchmaynotbemaintained.

Any losses realised within your ISA can not be offset against anypotentialcapitalgainsyoumayincurwithinanytaxyear.

Are there any risks specific to any of the funds?Yes, some of the funds have risks specific to them:

UBS Absolute Return Bond FundWithinvestmentinhighyieldbondsthereisanincreasedrisktocapitalthroughdefault(wherebondissuerseitherfailtopaytheinterestorcapitalrepaymentdueatmaturity),orwheretheredemptionyieldisbelowtheincomeyield.Youshouldbeawarethateconomicconditionsandchangestointerest rate levels may significantly affect the values of high yieldbonds.

Over35%ofthisFundmaybeinvestedinsecuritiesissuedbyanyonebody.

TheFundwillusederivativestomanageitssensitivitytointerestratemovementsandtopotentiallytakeadvantageofcertainmarketconditionsnormallytothedetrimentofabondfund.However,suchinstrumentsareinherentlyvolatileandtheFundcouldbepotentiallyexposedtoadditionalriskandcostsshouldthemarketmoveagainstit.

Shouldinterestratesmovesubstantiallyinafavourabledirection, the Fund may not be able to fully benefit from suchmovementduetothereductionofinterestratesensitivity.

TheFundmayenterintoswaps,whichcancarryahigherriskthaninvestmentinbondsdirectly.Themarketforswapsmaysometimesbemoreilliquidthanbondmarketswhichinturnmayrequireustosellothermorefavouredassetstomeetrepurchases.

Inordertotradeswapandderivativeinstrumentsweenterintoanagreementwithacounterparty.Whilstweassessthecreditworthinessofthecounterparty,theFundis at risk that it may not fulfil its obligations under the agreement.AnycollateralpaidbytheFundmaynotbereturned,normayanypaymentduetotheFundbemade.

Bondsaresubjecttobothactualandperceivedmeasuresofcreditworthiness.Bonds,andespeciallyhighyieldbonds, could be affected by adverse publicity and investor perception,whichmaynotbebasedonfundamentalanalysis, and would have a negative effect on the value andliquidityofthebond.

Investmentsinemergingmarketsmaybemorevolatilethaninvestmentsinmoredevelopedmarkets.Theyaregenerallylesswellregulatedwhichmayleadtofraudulentactivity,havelessreliabletrading,settlement,custodyandaccountingarrangementsandmaybelessliquid.

InaimingtoreducethevolatilityoftheFundweutiliseariskmanagementprocesstomonitorthelevelofrisktakeninmanagingtheportfolio,howeverthereisnoguaranteethatthisprocesswillworkinallinstances.

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UBS Active Bond FundOver35%ofthisFundmaybeinvestedinsecuritiesissuedbyanyonebody.

UBS Corporate Bond UK Plus FundWithinvestmentinhighyieldbondsthereisanincreasedrisktocapitalthroughdefault(wherebondissuerseitherfailtopaytheinterestorcapitalrepaymentdueatmaturity),orwheretheredemptionyieldisbelowtheincomeyield.Youshouldbeawarethateconomicconditionsandchangestointerestratelevelsmaysignificantly affect the values of high yield bonds.

TheFundwillusederivativestoaspartofitsinvestmentcapabilities.However,suchinstrumentsareinherentlyvolatileandtheFundcouldbepotentiallyexposedtoadditionalriskandcostsshouldthemarketmoveagainstit.



The difference between the redemption yield and the income yieldisthattheredemptionyieldgivesalongertermviewoftheportfolio,takingintoaccounttherepaymentofcapitalaswellastheinterestpaid,whereastheincomeyieldisbasedsolelyontheinterestcurrentlypaid.





TheFundwillusederivativestotake‘shortpositions’in some investments. This effectively allows us to sell a holdingwedonotownontheanticipationthatitsvaluewillfall.However,ifthevalueofthatinvestmentincreases,it will have a negative effect on the Fund’s value.

UBS european equity Fund and UBS US Growth FundTheFundispermittedto,andmayonoccasion,holdalimitednumberofinvestments.Shouldoneormoreofthoseinvestments decline or be otherwise adversely affected, it may have a more pronounced effect on the Fund’s value thanifalargernumberofinvestmentswereheld.

UBS Global Allocation Fund (UK)Withinvestmentinhighyieldbondsthereisanincreasedrisktocapitalthroughdefault(wherebondissuerseitherfailtopaytheinterestorcapitalrepaymentdueatmaturity),orwheretheredemptionyieldisbelowtheincomeyield.Youshouldbeawarethateconomicconditionsandchangestointerestratelevelsmaysignificantly affect the values of high yield bonds.






InaimingtoreducethevolatilityoftheFundweutiliseariskmanagementprocesstomonitorthelevelofrisktakeninmanagingtheportfolio,howeverthereisnoguaranteethatthisprocesswillworkinallinstances

UBS Global emerging Markets equity Fund and UBS Asian equity FundInvestmentsinlessdevelopedmarketsmaybemorevolatilethaninvestmentsinmoredevelopedmarkets.Theyaregenerallylesswellregulatedwhichmayleadtofraudulentactivity,havelessreliabletrading,settlement,custodyandaccountingarrangementsandmaybelessliquid.

Poorliquiditymayresultinaholdingbeingsoldatalessfavourableprice,oranotherholdinghavingtobesoldinstead.

Theymayalsohaveapotentialriskofforeignownershiprestrictions.

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UBS Multi-Asset Income FundBondsaresubjecttobothactualandperceivedmeasuresofcreditworthiness.Bonds,andespeciallyhighyieldbonds, could be affected by adverse publicity and investor perception,whichmaynotbebasedonfundamentalanalysis, and would have a negative effect on the value andliquidityofthebond.

Withinvestmentinhighyieldbondsthereisanincreasedrisktocapitalthroughdefault(wherebondissuerseitherfailtopaytheinterestorcapitalrepaymentdueatmaturity),orwheretheredemptionyieldisbelowtheincomeyield.Youshouldbeawarethateconomicconditionsandchangestointerestratelevelsmaysignificantly affect the values of high yield bonds.


TheFundwillusederivativesaspartofitsinvestmentcapabilities.However,suchinstrumentsareinherentlyvolatileandtheFundcouldbepotentiallyexposedtoadditionalriskandcostsshouldthemarketmoveagainstit.




UBS Targeted Return FundTheFund’sobjectivemeansthatintimesofstrongstockmarketappreciation,theFundmaynotproduceareturnobtainedbyinvestinginatraditionalequityfund.Withacorrespondingstockmarketdecline,anyfallinvalueoftheFundwillpotentiallyalsonotbeasmarkedaswithaninvestmentinatraditionalequityfund.

TheFundwillusederivativesaspartofitsinvestmentcapabilities.However,suchinstrumentsareinherentlyvolatileandtheFundcouldbepotentiallyexposedtoadditionalriskandcostsshouldthemarketmoveagainstit.

Inordertotradeinderivativeinstrumentsweenterintoanagreementwithvariouscounterparties.Whilstweassessthecreditworthinessofeachcounterpartyweenterintoanagreementwith,theFundisatriskifthatcounterpartydoes not fulfil its obligations under the agreement. Any collateralpaidbytheFundmaynotbereturned,normayanypaymentsduetotheFundbemade.


TheFundwillusederivativestotake‘shortpositions’in some investments. This effectively allows us to sell a holdingwedonotownontheanticipationthatitsvaluewillfall.However,ifthevalueofthatinvestmentincreases,it will have a negative effect on the Fund’s value.

UBS UK Smaller Companies FundSmallercompaniesareriskierandlessliquidthanlargercompanieswhichmeanstheirsharepricecanbemorevolatile.Poorliquiditymayresultinaholdingbeingsoldatalessfavourableprice,oranotherholdinghavingtobesoldinstead.

UBS US 130/30 equity FundTheFundwillusederivativesaspartofitsinvestmentcapabilities.However,suchinstrumentsareinherentlyvolatileandtheFundcouldbepotentiallyexposedtoadditionalriskandcostsshouldthemarketmoveagainstit.

Inordertotradeinderivativeinstrumentsweenterintoanagreementwithvariouscounterparties.Whilstweassessthecreditworthinessofeachcounterpartyweenterintoanagreementwith,theFundisatriskifthatcounterpartydoes not fulfil its obligations under the agreement. Any collateralpaidbytheFundmaynotbereturned,normayanypaymentsduetotheFundbemade.

TheFundwillusederivativestotake‘shortpositions’in some investments. This effectively allows us to sell a holdingwedonotownontheanticipationthatitsvaluewillfall.However,ifthevalueofthatinvestmentincreases,it will have a negative effect on the Fund’s value. In extremestockmarketconditions,theFundmaybefacedwithunlimitedlosseswhichwouldmeanyourinvestmentcouldbecomeworthless.

InaimingtoreducethevolatilityoftheFund,weutiliseariskmanagementprocesstomonitorthelevelofrisktakeninmanagingtheportfolio,howeverthereisnoguaranteethatthisprocesswillworkinallinstances.

What is the risk profile of investors into the funds?Thefundsareaimedatinvestorswhoarelookingtoinvestforthemediumtolongterm,whoarepreparedtoacceptfluctuations in the value of their capital, including capital loss,andwhoarealsopreparedtoacceptthepossibilityofpayingincomeandcapitalgainstaxonreturns.

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PeRFORMAnCe

Pastperformanceisnotaguidetofutureperformance.

Allperformanceshownisbasedonnetassetvaluepriceswithincomereinvestednetofbasicratetax.Itdoesnotinclude the effect of any fees for the purchase of shares in thefunds.UptodateperformanceisavailablefromtheACD,your financial adviser or from www.ubs.com/retailfunds.

TheperformancerecordofUBSMulti-AssetIncomeFundandUBSUSGrowthFundwillnotbeavailableuntiloneyear after Fund launch.

AllperformanceissourcedfromLipperHindsightandisbasedonNAVpriceswithincomereinvestednetofbasicratetaxandinsterlingtermsto31December2008.

PerformancehasbeenprovidedoverwholecalendaryearstoendDecember2008.

UBS Absolute Return Bond Fund

UBS Active Bond Fund

UBS Asian equity Fund

UBS Corporate Bond UK Plus Fund

UBS european equity Fund

Performance per year in %

Indexed performance

-40

-35

-30

-25

-20

-15

-10

-5

0

5

10%

Dec-05 Dec-06 Dec-07 Dec-08


Indexed performance

-40

-30

-10

0

10

20

30

40

50%

Dec-06 Dec-07 Dec-08

-20


Indexed performance

-40

-20

20

40

60

80

100%

0


Indexed performance

%

-20

-15

-5

0

5

Dec-07 Dec-08

-10



Indexed performance

-2

0

4

6

8

10

12

14

16%

2


9

UBS Global Allocation Fund (UK)

UBS Global emerging Markets equity Fund

UBS Global Optimal Fund

UBS Targeted Return Fund

UBS UK & International equity Managed Fund

UBS UK equity Income Fund

Indexed performance

%

-30

-20

-10

0

10

Dec-07 Dec -08


Indexed performance

%

-40

20

10

0

Dec-07 Dec-08

30



Indexed performance

-30

-20

10

20

30

40

50%

-10

0

Dec-04 Dec-06 Dec-07Dec-05 Dec-08

Indexed performance

%

-30

-20

-15

-10

-5

0

Dec-07 Dec-08

-25



Indexed performance

-50

50

100

150

200

250%

0



Indexed performance

-40

0

20

40

60

80%

-20


10

UBS UK Select Fund

UBS UK Smaller Companies Fund

UBS US equity Fund

UBS US130/30 equity Fund

eCOnOMIC InFORMATIOn

ThefollowingisbasedonourunderstandingofcurrentUKtaxlegislationandissubjecttochange.Itshouldbeforinformationpurposesonly,asyourowntaxliabilitiesaredependantonyourpersonalcircumstances.Shouldyoubeunsureaboutanyelementofyourtaxposition,itisrecommendedyouseekprofessionaladvice.

What is the tax position of the ICvCs and investors?

TheCompany:ThefundsaresubjecttotheOpen-endedInvestmentCompanies(Tax)Regulations1997.EachfundwillbetreatedasaseparateentityforUnitedKingdomtaxpurposes.

ThefundsareexemptfromUnitedKingdomtaxoncapitalgainsrealisedonthedisposalofinvestments(includinginterest-payingsecurities)heldwithinthem.

Thefundswilleachbesubjecttocorporationtaxat20%onincome(otherthanondividendsreceivedfromUnitedKingdom companies) but after deducting allowable managementexpenses(includingtheagreedfeesandexpensesoftheACDandtheDepositary).Whereafundsuffers foreign tax on income received, this may normally be deductedfromtheUnitedKingdomtaxdueonthatincome.

Investors:Certaintransactionsinsharescanresultinastampdutyreservetaxliabilitybeingpaidoutoftheschemepropertyofthefunds.Withaviewtoprotectinginvestorsfromaresultingdiminutioninthevalueoftheirshares,theACDisentitledtochargeaStampDutyReserveTax(SDRT)provision.ItistheACD’spolicythatingeneralanySDRTwillbepaidoutofthepropertyofthefundandanSDRTprovisionwillnotbelevieddirectlyontheshareholderexceptinthecaseoflargedeals.AnSDRTprovision,however,mayalsobeleviedbytheACDwhereanonpro-ratain-specieredemptionorathird-partytransferoccurs.


Indexed performance

-60

-40

40

60

80

120

140%

100

-20

0

20



Indexed performance

-30

-20

20

30

40

60%

50

-10

0

10

Dec-02 Dec-06Dec-04 Dec-08

Indexed performance

%

-30

-20

-10

0

Dec-07 Dec-08

Performance per year in %Performance per year in %

Indexed performance

-40

-20

40

60

80

100

120%

0

20

Dec-02 Dec-06Dec-04 Dec-08

11

CapitalGainsTax:Youmaybeliabletopaycapitalgainstaxonanycapitalgainwhenredeemingallorpartofyourholding,dependingonwhatotheruseyoumayhavemadeofyourpersonalcapitalgainstaxallowance(£10,100inthe2009-10taxyear).Wewillsendyouatax voucher when any dividend is paid. The first income allocation received by an investor after buying shares mayincludeanamountofincomeequalisation.Thisiseffectively a repayment of the income equalisation paid as partofthepurchaseprice.Beingcapital,itisnotsubjecttoincometax,butshouldbedeductedfromthecostofsharesforcapitalgainstaxpurposes.

Ifswitchingsharesbetweenonefundandanother,youmaybesubjecttoCapitalGainsTaxontheredemptionoftheoriginalpurchase.However,ifswitchingbetweenshareclasseswithinthesamefund,thisisnottreatedasataxableexent.

IncomeTax(forallfundsexceptUBSAbsoluteReturnBondFund,UBSActiveBondFund,UBSCorporateBondUKPlusFundandUBSMulti-AssetIncomeFund):IfyouareabasicrateUKtaxpayer,therewillbenofurtherincometaxtopayondividendincomereceived.Ifyouareliabletopayincometaxatthehigherrate,youwillberequiredtopayadditionaltaxontheamountreceived.Non-taxpayerswillbeunabletoreclaimthetaxcreditondividends.

ForUBSAbsoluteReturnBondFund,UBSActiveBondFund,UBSCorporateBondUKPlusFundandUBSMulti-AssetIncomeFundifyouareabasicrateUKtaxpayer,therewillbenofurtherincometaxtopayonincomereceived.Ifyouareliabletopayincometaxatthehigherrate,youwillberequiredtopayadditionaltaxontheamountreceived.Non-taxpayerswillbeabletoreclaimthetaxcreditondividends.

IfyouholdyourinvestmentinanISAyouwillnothavetopayfurthertaxonincome,orcapitalgainstaxwhenrealisingyourinvestment.

How will charges and expenses affect my investment?Therearefeeschargedtothefundsfortheirdaytodaymanagement.Theannualmanagementchargeis1.5%(1.6%forUBSTargetedReturnFundandUBSUS130/30EquityFund,1.25%forUBSMulti-AssetIncomeFund,1.1%forUBSCorporateBondUKPlusFund,1%forUBSAbsoluteReturnBondFundand0.75%forUBSActiveBondFund)ofthenetassetvalue,whichisaccrueddailyanddeductedmonthly,andischargedtoincomeexceptforUBSActiveBondFund,UBSCorporateBondUKPlusFund,UBSMulti-AssetIncomeFundandUBSUKEquityIncomeFundwhereitischargedtocapital.Inadditiontothischarge,annualexpensesofbetweenapproximately0.09%and1.01%arepaiddirectlybythefundsfromincomeandcovercostssuchasregistration,depository,auditandcustodyfees,transactioncharges,regulatorycostsandanybankinterest.Werequirenofurtherpaymentotherthanthatforthecostofinvestingin the funds. Should there be insufficient income to cover ashareclass’sexpenses,theexpensesmaybetakenfromcapital.VATispayableonchargesandexpenseswhere

appropriate.Anyriseinthechargesabovethatstatedinthe Prospectus can only be made at least 60 days after theACDhasgivennoticeinwritingtothoseshareholdersandthedateofitscommencement.Dealingcostsarenotincluded.

Also,wheninvesting,dependingonthefundandshareclassyouinvestin,youwillpayaninitialchargeof4%(1%forUBSAbsoluteReturnBondFundand3.5%forUBSCorporateBondUKPlusFund).Theinitialchargecoversthecostsofsettingupyouraccountwithus,includinganycommissionthatmaybepayabletoyourregulatedintermediary.

Thetablesbelowandoverleafillustratetheamountofchargesandexpensesthatwillbedeductedfromyourinvestment,allowingforanydiscountyoumayreceive.Youshouldbeawarethattheamountinthecolumnheaded“Whatyoumightgetback”isnotguaranteed,and is shown only to demonstrate the effect of charges andexpensesonaninvestmentbasedonagrowthrateof6%ayear(5%forUBSAbsoluteReturnBondFund)or7%ayear(6%forUBSAbosluteReturnBondFund)forbondfundsinanISA.

UBSAbsoluteReturnBondFundhasaninvestmentobjectiveaimingtoproduceapositivereturnthrougha diversified global bond portfolio. The effect on an investmentof£1,000assuminggrowthof5%ayearor6%ayearinanISA,issetoutbelowandoverleaf.


DirectFundInvestment

At end of year

Investment to date

£

Effect of deductions

to date £

What you might get

back at 5% £

1 1,000 36 1,020

3 1,000 64 1,100

5 1,000 96 1,190

10 1,000 202 1,430Thelastlineofthetableshowsthatovertenyearstheeffect of total charges and expenses could amount to £202. Putting it another way this would have the same effect as bringinginvestmentgrowthfrom5%ayeardownto3.7%.


ISAInvestment

At end of year

Investment to date

£


to date £

What you might get

back at 6% £

1 1,000 37 1,030

3 1,000 65 1,130

5 1,000 100 1,250

10 1,000 221 1,580

12

WheretheinvestmentisheldinanISA,thelastlineofthe table shows that over ten years the effect of total chargesandexpensescouldamountto£221.Puttingitanother way this would have the same effect as bringing investmentgrowthfrom6%ayeardownto4.6%.

UBSActiveBondFundhasaninvestmentobjectiveaimingtoachieve returns by investing in a diversified portfolio of UK and global bonds. The effect on an investment of £1,000 assuminggrowthof6%ayearor£1,000assuminggrowthof7%ayearinanISA,issetoutbelow.Thecolumnentitled“What you might get back” does not take into effect the “incometodate”youwillhavealreadyreceived.



At end of year

Investment to date

£


to date £

Income to date

£

What you might get

back at 6% £

1 1,000 51 45 962

3 1,000 77 137 965

5 1,000 105 229 968

10 1,000 194 460 976Thelastlineofthetableshowsthatovertenyearstheeffect of total charges and expenses could amount to £194.Puttingitanotherwaythiswouldhavethesameeffect as bringing investment growth from 6% a year downto4.5%.


ISAInvestment

At end of year

Investment to date

£


to date £

Income to date

£

What you might get

back at 7% £

1 1,000 52 45 971

3 1,000 79 139 992

5 1,000 110 235 1,010

10 1,000 213 483 1,070WheretheinvestmentisheldinanISA,thelastlineofthe table shows that over ten years the effect of total chargesandexpensescouldamountto£213.Puttingitanother way this would have the same effect as bringing investmentgrowthfrom7%ayeardownto5.5%.

UBSCorporateBondUKPlusFundhasaninvestmentobjectiveseekingtogenerateareturngreaterthanthatprovidedbyUKinvestmentgradecorporatebonds.Theeffect on an investment of £1,000 assuming growth of 6%ayear,or7%ayearinanISA,issetoutbelow.



At end of year

Investment to date

£


to date £

What you might get

back at 6% £

1 1,000 90 978

3 1,000 128 1,070

5 1,000 173 1,170

10 1,000 324 1,470Thelastlineofthetableshowsthatovertenyearstheeffect of total charges and expenses could amount to £324.Puttingitanotherwaythiswouldhavethesameeffect as bringing investment growth from 6% a year downto3.9%.


ISAInvestment

At end of year

Investment to date

£


to date £

What you might get

back at 7% £

1 1,000 91 987

3 1,000 132 1,100

5 1,000 181 1,230

10 1,000 356 1,620WheretheinvestmentisheldinanISA,thelastlineofthe table shows that over ten years the effect of total chargesandexpensescouldamountto£356.Puttingitanother way this would have the same effect as bringing investmentgrowthfrom7%ayeardownto4.9%.

UBSMulti-AssetIncomeFundhasaninvestmentobjectiveseeking to provide an income, through a diversified portfolio of investments. The effect on an investment of £1,000assuminggrowthof6%ayear,or7%ayearinanISA,issetoutbelow.Thecolumnentitled“Whatyoumight get back” does not take into effect the “income to date”youwillhavealreadyreceived.

UBS Multi-Asset Income Fund


At end of year

Investment to date

£


to date £

Income to date

£

What you might get

back at 6% £

1 1,000 63 51 944

3 1,000 114 152 912

5 1,000 170 249 881

10 1,000 336 479 809Thelastlineofthetableshowsthatovertenyearstheeffect of total charges and expenses could amount to £336.Puttingitanotherwaythiswouldhavethesameeffect as bringing investment growth from 6% a year downto3.2%.

13

UBS Multi-Asset Income Fund

ISAInvestment

At end of year

Investment to date

£


to date £

Income to date

£

What you might get

back at 7% £

1 1,000 64 52 953

3 1,000 118 154 938

5 1,000 178 256 923

10 1,000 369 502 888WheretheinvestmentisheldinanISA,thelastlineofthe table shows that over ten years the effect of total chargesandexpensescouldamountto£369.Puttingitanother way this would have the same effect as bringing investmentgrowthfrom7%ayeardownto4.2%.

UBSUKEquityIncomeFundhasaninvestmentobjectiveaimingtogeneratebothcapitalgrowthandanincome.The effect on an investment of £1,000 assuming growth of6%ayear,issetoutbelow.Thecolumnentitled“What you might get back” does not take into effect the “incometodate”youwillhavealreadyreceived.

UBS UK equity Income Fund

At end of year

Investment to date

£


to date £

Income to date

£

What you might get

back at 6% £

1 1,000 106 31 932

3 1,000 153 93 946

5 1,000 206 157 960

10 1,000 374 321 998Thelastlineofthetableshowsthatovertenyearstheeffect of total charges and expenses could amount to £374. Putting it another way this would have the same effect as bringinginvestmentgrowthfrom6%ayeardownto3.2%.

Allthefundswiththeobjectiveoflong-termcapitalgrowthhavebroadlythesamelevelofcharges,andtheir effect on an investment of £1,000 in the UBS US EquityFundassuminggrowthof6%ayear,issetoutbelow.TheFundispopularamongstinvestorsandhasarepresentativelevelofcharges.

UBS US equity Fund

At end of year

Investment to date

£


to date £

What you might get

back at 6% £

1 1,000 105 964

3 1,000 151 1,050

5 1,000 206 1,140

10 1,000 391 1,410

ThelastlineoftheUBSUSEquityFundtableshowsthatover ten years the effect of total charges and expenses couldamountto£391.Puttingitanotherwaythiswouldhave the same effect as bringing investment growth from 6%ayeardownto3.5%.

DetailsoftheReducedInvestmentGrowthfortheotherfundsissetoutinthetablebelowtogetherwithdetailsoftheTotalExpenseRatioandPortfolioTurnoverRate.

TheReducedInvestmentGrowthisdesignedtoshowthe effect of all charges within a fund in reducing the investmentgrowthfromalevelof6%(5%fortheUBSAbsoluteReturnBondFund)tothatshownbelow.TheincreasedgrowthrateforISAinvestmentsforUBSAbsoluteReturnBondFund,UBSActiveBondFund,UBSCorporateBondUKPlusFundandUBSMulti-AssetIncomeFundisduetotheabilitytoreclaimtaxoninterestdistributionspaidbytheFunds.

Fund Share Class

Reduced Investment

Growth%

Total expense

Ratio%

Portfolio Turnover

Rate%

UBSAbsoluteReturnBondFund

A 3.7 1.09 114.87

UBSAbsoluteReturnBondFund(ISA)

A 4.6

UBSActiveBondFund A 4.5 0.93 50.09UBSActiveBondFund(ISA)

A 5.5

UBSAsianEquityFund

A 3.2 1.80 14.09

UBSCorporateBondUKPlusFund

A 3.9* 1.24* 157.87

UBSCorporateBondUKPlusFund(ISA)

A 4.9*

UBSEuropeanEquityFund

A 3.5 1.60 59.20

UBSGlobalAllocationFund(UK)

A 3.4 1.63 224.79

UBSGlobalEmergingMarketsEquityFund

A 3.4 1.66 50.08

UBSGlobalOptimalFund

A 3.4 1.61 16.00

UBSMulti-AssetIncomeFund

A 3.2* 2.16* n/a

UBSMulti-AssetIncomeFund(ISA)

A 4.2*

UBSTargetedReturnFund

A 3.4 1.66 172.63

UBSUK&InternationalEquityManagedFund

A 2.5 2.51 48.22

UBSUKEquityIncomeFund

A 3.2 1.71 579.92

UBSUKSelectFund A 3.5 1.59 56.17UBSUKSmallerCompaniesFund

A 3.4 1.60 146.93

UBSUSEquityFund A 3.5 1.59 24.25UBSUSGrowthFund A 3.4* 1.65* n/aUBSUS130/30EquityFund

A 3.3 1.71 117.94

*Estimated.

14

TheTotalExpenseRatioshowsthetotalcostsofoperatingthefundasapercentageofitsaverageassetsoveroneyear.ThePortfolioTurnoverRateshowshowactivelytheFundismanaged,andismeasuredbythefollowingformula:

(purchase of securities + sale of securities) - (subscription of shares + redemption of shares)

(average fund value over 12 months)x 100

TheTotalExpenseRatioshowstheannualoperatingexpensesoftheFund–itdoesnotincludetransactionexpenses.AllEuropeanfundshighlighttheTERtohelpyou compare the annual operating expenses of different funds.theTotalExpenseRatioforpreviouscalenderyearscanbeobtainedfromtheACD.

The ACD does not undertake any soft-commission arrangements.Insomeinstancesweenterintofee-sharingagreements,detailsofwhichareexplainedfullyintheProspectusforeachCompany,whichareavailablebycallingtheACD.

Are there any other costs for buying or selling?TheassetvalueofeachfundiscalculatedonthemidpricebetweenthebuyingandsellingpricesoftheunderlyingstocksandsharesintheFund.

AssharesintheCompanyaresinglepricedthefundsmay suffer dilution (reduction) in the value of the scheme propertyasaresultofthecostsincurredindealingintheunderlyinginvestmentsandofanyspreadbetweenthebuyingandsellingpricesofthoseinvestments.

Dilutionoccurswhenthereisahighproportionofnetinvestmentsorrepurchasesinafundonanydealingday,orwhenafundexperiencesaprolongedperiodofnetsalesorredemptions.Therefore,inordertoprotectexistingandcontinuinginvestorsinafundthatissubjecttodilution,itistheACD’spolicytochargea‘dilutionlevy’.TheACDmaychargeadilutionlevyora‘dilutionadjustment’,dependingonwhichfundisheld.RetailfundswhereadilutionlevywillcontinuebepaidinsteadofadilutionadjustmentareUBSAbsoluteReturnBondFundandUBSTargetedReturnFund.

Adilutionlevyandadilutionadjustmentiscalculatedinthe same manner and have the same effect, in that capital retainedorinvestedbecomespartoftherelevantfundto offset dilution, and is not paid to the ACD. A dilution adjustmentiscalculatedaspartofthepricepaidbyorpaidtoaninvestordependingonwhethertheyarebuyingorsellingsharesinafund.Adilutionlevyisanadditionto(butnotpartof)thepriceofshareswhenaninvestorsubscribesforshares,orasadeductionfromtheamountpaidtoaninvestorwhentheyredeemshares.

Certaintransactionsinsharescanresultinastampdutyreservetaxliabilitybeingpaidoutoftheschemepropertyofthefunds.Withaviewtoprotectinginvestorsfromaresultingdiminutioninthevalueoftheirshares,theACDisentitledtochargeaStampDutyReserveTax(SDRT)provision.

ItistheACD’spolicythatingeneralanySDRTwillbepaidoutofthepropertyoftheFundandanSDRTprovisionwillnotbelevieddirectlyontheshareholderexceptinthecaseoflargedeals.AnSDRTprovision,however,mayalsobeleviedbytheACDwhereanon-proratain-specieredemptionorathird-partytransferoccurs.

FurtherdetailsonbothdilutionandSDRTaresetoutinthefullprospectusforeachICVCwhichareavailablefromtheACD.

How much will any advice cost?If you have a financial adviser, they will provide you with detailsaboutthecostoftheadvicetheyprovide.Thisisdependantonthesizeofyourinvestment,itsinvestmentperformanceandtheamountoftimeyouholdyourinvestment.AnycommissionwepayyouradviserwillcomeoutofFundcharges,andwillnotrepresentanadditionalcosttoyou.

How do I buy shares directly in the funds?ClassAShares:investmentsmaybemadeviayourprofessionaladviserorotherintermediary,ordirectlybycontactingtheACD’sadministrator,InternationalFinancialDataServices(UK)Limited(“IFDS”).

Whendealingdirectly,youcancompleteanapplicationformandsendittoUBSGlobalAssetManagementFundsLtd,POBox9046,Chelmsford,CM992XR.ApplicationformsmaybeobtainedfromtheACDorfromIFDS.Alternatively,youmayalsotelephoneIFDSon08005872112toplaceyourinvestment.Ifpayingbycheque,theseshouldbemadepayabletoUBSGlobalAssetManagementFundsLtd.

Theminimuminitiallump-suminvestmentforClassASharesis£1,000.Theminimumsubsequentinvestmentis£500andtheminimumsumforregularsavingsis£50.Theminimumholdingis£500.

Alldealsplacedbefore12noon(2pmforUBSGlobalEmergingMarketsEquityFundand10.45pmforUBSUK&InternationalEquityManagedFund)onanybusinessdaywill be priced at that day’s valuation. Deals placed after 12 noon(2pmforUBSGlobalEmergingMarketsEquityFundand10.45pmforUBSUK&InternationalEquityManagedFund)willbepricedatthefollowingday’svaluation.Thisisknownas“forward”dealing.

ClassASharesinUBSAbsoluteReturnBondFund,UBSActiveBondFundandUBSCorporateBondUKPlusFundhavebothnetandgrosssharesclasses.Grossshareclassesareonlyavailabletothepublicinlimitedcircumstances,forexamplewhereaninvestorisnotordinarilyresidentintheUnitedKingdomfortaxationpurposes,andtoexemptinstitutionslikecharities.EvidenceoftheabilitytoreceiveincomegrossoftaxmustbesuppliedtotheACDbeforeinvestmentmaybemadeintoagrossshareclass.

ISAinvestmentsintoUBSAbsoluteReturnBondFund,UBSActiveBondFund,UBSCorporateBondUKPlusFundandUBSMulti-AssetIncomeFundwillbeautomaticallymadeintothegrossshareclass.Shouldyoubecomeineligibletoholdthegrossshareclass,wewillautomaticallytransfer

15

yourinvestmentintoanetshareclass.Thisisdonefreeofchargeandwillnotbesubjecttocapitalgainstax.

TheACDhastherighttorejectanyapplicationonreasonablegroundsrelatingtotheapplicant,withmoniesbeingreturnedattheapplicant’sownrisk.

YoucaninvestintoanyfundthroughaRegularSavingsPlanbycompletingthedirectdebitmandateontheapplicationform.Theminimuminvestmentis£50permonth.Shouldcontributionsceaseformorethanthreemonthsandtheminimumholdingforthatshareclasshasnotbeenreached,theACDreservestherighttoredeemthatholding.

WHAT IS An ISA AnD CAn I InveST In One?AnIndividualSavingsAccount(ISA)isawayofinvestingin a tax-efficient environment and is available to anyone whoisresidentandordinarilyresidentintheUKovertheageof18,althoughitispossibleforsomeoneaged16or17toinvestinaCashISA.ISAsaresplitintotwocomponents:•Cash•Stocksandshares(whichincludesOEICs,unittrusts

andinvestmenttrusts).ISAswereintroducedinApril1999andyoucancurrentlyinvestuptotherelevanttotaleachtaxyear,whichcanbesplitacrossthetwocomponents:

•Cash(maximum£3,600or£5,100forthosebornonorbefore5April1960)

•Stocksandshares,whichincludesOEICshares(maximum£7,200or£10,200forthosebornonorbefore5April1960)

Your ISA investmentUBS only offers a stocks and shares ISA. You can currently investbetween£1,000and£7,200(£10,200forthosebornonorbefore5April1960)intheUBSISAeachtaxyear.From6April2010,alleligibleISAinvestorswillbeabletoinvestuptothesenewlimits.

Anyadditionalsubscriptionsmustbeforaminimumof£500uptothemaximumannualsubscriptionlimit.Aminimumof£500mustbemaintainedineachfundselected.Ifyouareinvestingbyaregularsavingsplantheminimuminvestmentis£50permonth.Directdebitsaretaken on the first working day of each month.

AllRetailFundsareavailableforinvestmentintheUBSISA.ISAinvestmentwillbeinClassAShares.

You can invest directly or through your financial adviser. YoushouldcompleteanapplicationformandforwardthistoustogetherwithachequemadepayabletoUBSGlobalAssetManagementFundsLtd.Ifyouareinvestingthroughregularsavingspleasecompletethedirectdebitsectionoftheapplicationform.Wewilltheninvestyourmoneyonthedaywereceiveyourapplicationprovidingitisreceivedbefore12noon(2pmforUBSGlobalEmergingMarketsEquityFundand10.45pmforUBSUK&InternationalEquityManagedFund),otherwiseitwillbeinvestedonthenextbusinessday.Thepricewillbedeterminedat12noonontherelevantbusinessday(2pmforUBSGlobalEmergingMarketsEquity

Fundand10.45pmforUBSUK&InternationalEquityManagedFund).

Yourinitialinvestmentmustbemadebycompletinganapplicationform.Ifyouwishtoaddtoyourinvestment(minimumis£500perfund),letusknowinwritinghowmuchandintowhichfund(orfunds)andsendusyourchequemadepayabletoUBSGlobalAssetManagementFundsLtd.Pleasequoteyouraccountnumber.

Can I cancel my application?If you invest through a financial adviser you may be given cancellation rights. Your financial adviser will give you detailsofsuchrights.Ifyouhavearighttocancel,youhave14daysfromreceiptofcancellationnoticetoreturnitbyposttoUBSGlobalAssetManagement,POBox9046,Chelmsford,CM992XR.Exercisingyourrighttocanceldoesnotmeanyouwillnecessarilyreceivebackthefullamountinvested.Ifthepurchasepriceofyourinvestmenthasfallenovertheperiodbetweenreceivingandnotifyingusofyourcancellation,youwillbesubjecttothecorrespondingshortfallandthereforewillnotgetthefullamountinvested.Shouldyounotwishtocancelyourinvestmentbutencashitbeforethesellingpricehasequalledthepurchaseprice,youwillnotgetbacktheamountyouinvested.

Is there any other documentation required when making an investment?AntimoneylaunderingregulationsrequireustoobtaindocumentaryevidenceoftheidentityandpermanentaddressofexistingandnewclientsofUBSGlobalAssetManagement,andalsoonoccasion,clientsseekingtowithdrawsomeoralloftheirinvestment(forexample,ifthebankaccounttobecreditedasaresultofarepurchaseis different to the account from which you paid for your investment).

Wenormallyobtainevidenceofidentityandpermanentaddressautomaticallybyusinganindependentcreditreferenceagency.Ifweareunabletoobtainindependentdocumentaryevidenceofyouridentityandpermanentaddress,wewillwritetoyou.Untilwereceivetherequesteddocuments,wemayneedtodelayprocessingyourinstructionsand/ortowithholdanypaymentsduetoyoufromusinrespectofyourinvestment.

Itwouldhelpusavoidtheneedtoobtainthisdocumentaryevidenceifyoucould,whereverpossible,payforanylumpsuminvestmentyoumakebyachequedrawnonyourown(orjoint)personalbankaccount.Whereyouareinvestingmoneyusingachequemadeoutbyyourbuildingsociety,pleasearrangeforthemtoendorsethechequewithyournameinordertoidentifytheaccountfromwherepaymentisbeingmade.

IfyouarenotordinarilyresidentintheUnitedKingdomfortaxpurposes,orarenotsubjecttoincometax,youmayinvestintoagrossshareclassforfundsthatpayaninterestdistribution.Pleasecontactusfordetailsoftherelevantdocumentstobecompleted.

16

How do I sell shares?Youmaysellyoursharesonanybusinessday.TosellClassAsharesyoucanwrite,sendingyourinstructionstoUBSGlobalAssetManagementFundsLtd,POBox9046,Chelmsford,CM992XRortelephoneIFDSon08005872112.

If you sell your shares by telephone, you need to confirm yourinstructioninwriting,orbyreturningthedulycompletedformorrenunciation,totheaboveaddress.Theformofrenunciationissenttoyouwiththecontractnote confirming your instructions.

Alldealsplacedbefore12noon(2pmforUBSGlobalEmergingMarketsEquityFundand10.45pmforUBSUK&InternationalEquityManagedFund)onanybusinessdaywill be priced at that day’s valuation. Deals placed after 12 noon(2pmforUBSGlobalEmergingMarketsEquityFundand10.45pmforUBSUK&InternationalEquityManagedFund)willbepricedatthefollowingday’svaluation.Thisisknownas“forward”dealing.

Wewillsendyouachequefortheproceedsofyourredemptionwithinfourbusinessdaysofthelaterofeitherthe receipt of your written confirmation, or the valuation pointfollowingreceiptofyourwritteninstructions.Paymentwillbemadeintheregisteredholdersname.

Wewillnotmakepaymenttoathirdpartyunlessitisfortheclientmoneyaccountofaregulatedintermediary.Wedonotnormallymakepaymentsbytelegraphictransfer,howeverifyourequirepaymentinthismanner,pleasecalluson08005872113.

YoucanwithdrawmoneyfromorsellyourISA,byinstructingusinwritingorbysignedfax.Wewillselltheamountrequestedonthedayofreceiptofyourinstructionprovidingitisreceivedbefore12noon(2pmforUBSGlobalEmergingMarketsEquityFundand10.45pmforUBSUK&InternationalEquityManagedFund).Wewillthensendtheproceedstoyouwithinfourworkingdays,providedwehavereceivedtheoriginalofyoursigned confirmation. To keep your ISA open, you should keepaminimumbalanceof£500ineachfund.

If you cash in part or all of your ISA after the cancellation period,youwillnotbeabletoreinvestthemoneyintheUBSISAoropenanotherISAinthesametaxyear.

Can I switch between funds?YoumayswitchbetweentheotherfundswithintheCompanyandshareclasseswithinthefund,subjecttotherestrictionsoninvestmentandminimumholdingsreferredtoin“HowdoIbuysharesinthefunds?”.Achargemaybepayable,detailsofwhicharesetoutbelow.

InstructionsforswitchingwithinorbetweenClassAsharescanbemadeinwritingtoUBSGlobalAssetManagementFundsLtd,POBox9046,Chelmsford,CM992XR.Alternatively,youmayalsotelephoneIFDSon08005872112toplaceyourswitch.Telephoneinstructionsneedtobe confirmed in writing to us at the above address.

Shouldaswitchinstructionresultinyouholdinglessthantheminimumpermittedineithertheoriginalornewinvestmentfortheclassconcerned,theACDmayconvertthewholeoftheholdingoforiginalsharesintonewshares, or refuse to effect the switch instruction.

ThecurrentchargesonswitchingbetweenfundsorshareclasseswithintheCompanyareasfollows:

ClassASharestoClassB,C,J,K,LA,LBorZSharesinthesamefundoranotherfund

0.00%

ClassASharesofanyfundtoClassASharesofanyfund

0.25%

ClassB,C,J,K,LA,LBorZSharesofanyfundtoClassB,C,J,KorZSharesinthesamefundoranotherfund

0.00%

ClassB,C,J,K,LA,LBorZSharestoClassASharesinthesamefundoranotherfund

0.25%WheretheminimumholdingforClassB,C,J,K,LA,LBorZSharesisnotmaintainedtheACDmayswitchthemtoClassAShares,andachargeonswitchingof0.25%willbecharged,althoughtheACDhasthe discretion to offer a waiver or partialwaiverofthisinitialcharge.

AStampDutyReserveTaxprovisionmayalsobeleviedontheredemptionoftheoriginalshares.

YoucanswitchyourinvestmentbetweenISAfundsatany time by instructing your financial adviser or writing tous.Writteninstructionswillneedtobereceivedbeforetheswitchcantakeplace.Theshareswillbesoldandtheproceedsreinvestedwithnoinitialcharge,althoughthereisaswitchingchargeof0.25%.

Can I transfer my ISA?YoucantransferbothcashcomponentISAsandstocksandsharescomponentISAsintoaUBSISA,howeveryoucannottransferastocksandsharescomponentISAintoacashcomponentISA.

IftransferringyourcurrenttaxyearISAtous,youmusttransferitinfull.PrevioustaxyearISAsmaybetransferredinpartorinwhole.

IftransferringacurrenttaxyearcashcomponentISAtous,theamountsubscribedintothecashcomponentcountstowardsyourstocksandsharescomponentsubscriptionthistaxyear,thereforeenablingyoutofurthersubscribetoyourstocksandsharescomponentISAortoopenanothercashcomponentISAwithaseparateISAmanager,subjecttotheoverallsubscriptionlimit.Youcannot,however,openanotherstocksandsharescomponentISAwithanotherISAmanagerinthesametaxyear.Ingeneralterms,thisisknownasthe“one-ISA-of-each-type-atax-year”rule.

IfyouwishtotransferyourexistingISA(s)tousfromanotherplanmanager,youshouldcompletetheUBSISAtransferformandreturnittousatthefollowingaddress:UBSGlobalAssetManagement,POBox9046,Chelmsford,CM992XR.WewillthencontactyourISAmanagerandarrangeforyourinvestmenttobetransferred.

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WhenyourcurrentISAManagerreceivestheinstructiontotransferyourISAtous,asinstructedonourapplicationformtheywillsellyourcurrentholdingsandsendthecashproceedstous.Whenwereceivetheproceedswillinvestthematthenextvaluationpointfollowingtheirreceipt.Youshouldbeawarethatthismaytakeuptoeightworkingdays,orlongerinexceptionalcircumstances.Your ISA will be affected by any rise or fall in stock marketsbetweenthedateyourinvestmentsaresoldandoursubsequentreinvestmentoftheproceeds.

WedonotlevyanadministrationchargefortransferringyourISAtous,butyoushouldcheckwithyourexistingISAManagertoseeiftheylevyanyexitcharges.WhentransferringyourISA,youpaythesameinitialchargeasifyouwereinvestingwithusnormally.

Youcantransferfrom£1,000upwards.AlloftheRetailFundsareavailableforinvestmentintheUBSISA.ISAinvestmentwillbeinClassAShares.Thereisnomaximumamountyoucantransfer.

Ifyouareeligibleforcancellationrightsandexercisethoserights,andifthevalueofyourshareshavefallen,youwillnotreceivebackthefullsuminvested.Inadditiontothis,ifyoucancelyourinvestmentwithustheproceedswillbereturnedtoyouandtheISAwillbeclosed.Youwillnotbeabletore-openitatalaterdate.

Is there any income paid by the funds?TheannualaccountingdatefortheUBSInvestmentFundsICVCis31December,withtheinterimaccountingdateon30June.Anyincomeavailablefordistributionbyfunds with income shares is payable two months after the accountingdateson28February(29Februaryinaleapyear)and31August.UBSUKEquityIncomeFundandUBSCorporateBondUKPlusFundpaydistributionsquarterly,andwillalsomakepaymentswhenavailable,on31Mayand30November.

TheannualaccountingdatefortheUBSInvestmentFundsICVCIIisonthe31March,withtheinterimaccountingdateon30September.Anyincomeavailablefordistributionby funds with income shares is payable two months after theaccountingdatesonthe31Mayand30November.UBSActiveBondFundpaysdistributionsquarterlyandwillalsomakepayments,whenavailable,on31Augustand28February(29Februaryonaleapyear).

TheannualaccountingdatefortheUBSInvestmentFundsICVCIIIis30September,withtheinterimaccountingdateon31March.Anyincomeavailablefordistributionby funds with income shares is payable two months after theaccountingdateson30Novemberand31May.UBSMulti-AssetIncomeFundpaysdistributionsquarterly,andwillalsomakepaymentswhenavailable,on28February(29Februaryinaleapyear)and31August.

Foraccumulationshares,thedistributableincomebecomes part of the capital of the Fund and is reflected as anincreaseinthepriceoftheshares.

Any income unclaimed after a period of six years automaticallybecomespartofthepropertyoftheFund.

What is the Regular Withdrawal Option?We offer the facility to sell regular amounts of your investment(s)intheUBSAbsoluteReturnBondFund.Totalannualwithdrawalsof2%,3%,4%and5%canbemadeeithersixmonthlyorannually,andcanbebasedontheinitialorcurrentvalueofyourinvestment.SharesintheFundaresoldon15Juneand/or15Decemberonlyandproceedsarepaidwithinfourbusinessdaysofthosedates.Should15Juneand15Decembernotbeabusinessday in England, the repurchase will be made on the first businessdayfollowingthosedates.YoumusthaveheldyourinvestmentintheUBSAbsoluteReturnBondFundforatleastthreemonthsbeforewithdrawalscanbemade.Withdrawalsarepaiddirectlyintoyourbankorbuildingsocietyaccountandmaynotbepaidtoathirdparty.YoushouldrememberthatshouldthelevelofthepaymentchosenexceedtheinvestmentgrowthoftheFund,thenyourcapitalwillbeeroded.

Where can I find details of prices for the funds?DetailsofpricesforClassASharesandClassBSharesarepublisheddailyontheACD’swebsiteathttp://fundgate.ubs.com/custom/uk/prices.jsporareavailablebycallingourinvestorhelplineon08005872113orourdealinglineon08005872112.ThepricesforClassCSharesareavailablebycallingtheinvestorhelplineorthedealingline.

DetailsofpricesforClassJShares,ClassKShares,ClassLASharesandClassLBSharesarepublisheddailyontheACD’swebsiteathttp://www.ubs.com/1/e/globalam/emea/uk/institutional/prices.htmlorareavailablebycalling02079015387or02079015432.ThepricesforClassZSharesareavailablebycallingthenumbersabove.

Where can I get additional information on the funds?You can find additional information on the funds on the ACD’swebsite,www.ubs.com/retailfunds,orbycalling08005872113.Pleasenote,however,thatweareunabletogiveinvestmentadvice.AcopyofthefullProspectusaswellascopiesoftheAnnualandInterimReportandAccountsareavailablefreeofchargebywritingtotheACD or by calling 0800 587 2113 during UK office hours.

Who is the ACD’s regulator?TheACDisauthorisedandregulatedbytheFinancialServicesAuthority(FSA).Theymaybecontactedbywritingtothemat25TheNorthColonnade,CanaryWharf,LondonE145HSorbytelephoningthemon08456061234.Weareenteredontheirregisterunderreferencenumber141661.

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How do I complain if I am not happy with the service I receive? You can write to the Compliance Officer, UBS Global Asset Management,POBox9046,Chelmsford,CM992XR.AcopyoftheCompany’scomplainthandlingprocedureanddetailsofcompensationarrangementsareavailableonrequest.

If you are not satisfied with the response received you canalsocomplaindirectlytotheFinancialOmbudsmanScheme,SouthQuayPlaza,183MarshWall,LondonE149SR,telephone:08450801800.

Ifyouhavealegaldispute,theLawofEnglandandWaleswillapply.AllcommunicationswillbeinEnglish.

WearecoveredbytheFinancialServicesCompensationScheme.Youmaybeentitledtocompensationfromtheschemeifwecannotmeetourobligations.Thisdependsonthetypeofbusinessandthecircumstancesoftheclaim.Mosttypesofinvestmentbusinessarecoveredfor100%of the first £30,000 and 90% of the next £20,000, so the maximumcompensationis£48,000.From1January2010,themaximumlimitrisesto£50,000.FurtherinformationaboutcompensationarrangementsisavailablefromtheFinancialServicesCompensationScheme,7thFloor,LloydsChambers,PortstokenStreet,London,E18BNorbytelephoningthemon02078927300.

Are details of my investments passed outside of the european economic Area?TheACDwillactasdatacontroller(andincertaincircumstances,dataprocessor)withinthemeaningoftheDataProtectionAct1998(the“DataProtectionAct”).The ACD and its agents and affiliates may process and use personal data (as defined in the Data Protection Act) givenbyShareholderspursuanttotheirinvestmentintheFundsfortheprovisionofservicestoShareholders,whichmayincludethetransferofsuchdataoutoftheEuropeanEconomicArea.SuchdatamayalsobeusedbytheACDand its agents and affiliates for the purposes of updating recordsrelatingtoShareholdersandtoadviseShareholdersofadditionalproductsandservicesavailabletothem,exceptinthecaseofanyShareholderswhohaveindicatedotherwiseinwritingtotheACD.

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TheseTermsandConditions,togetherwiththeApplicationForm,formalegalagreementbetweenyouandUBSGlobalAssetManagementFundsLtd(the“Manager”)whichsetsouthowyourISAwillbeoperated.As part of this agreement, you will be classified as a ‘RetailClient’inaccordancewiththeFSA’sNewConductof Business Sourcebook. The definitions below apply throughouttheseTerms.

1 DefinitionsThefollowingwordsandexpressions,whenusedintheseTerms,havethemeaningssetoutoppositethem:

ApplicationForm–aUBSISAapplicationformortransferapplicationform;

FSA–theFinancialServicesAuthority(andanysuccessorbody);

Investments–Shares,UnitsandanyotherinvestmentsheldinanISA;

ISA–aUBSIndividualSavingsAccountgovernedbytheseTerms;

OEICs–anopen-endedinvestmentcompany(and,inthecaseofanumbrellacompany,asub-fundofsuchcompany);

OEICShares–sharesinanOEICwhichmaybeheldinanISA;

Regulations–theIndividualSavingsAccountRegulations1998,asfromtimetotimeamendedandinforce;

Shares–SharesintheUBSOEIC;

Simplified Prospectus–theKeyFeaturesoftheUBSISA(and,whereapplicable,thekeyfeaturesofanyOEIC);

StocksandSharesComponent–astocksandsharescomponentmakingupthewholeorpartofanISA;

Terms–theseTerms(asamendedfromtimetotime),togetherwiththeApplicationForm;

UBSOEICs–theUBSInvestmentFundsICVCandUBSInvestmentFundsICVCII.Bothareopen-endedinvestmentcompanies;

UnitTrust–anauthorisedunittrust;

Units–unitsinaUnitTrustwhichmaybeheldinanISA;

Year–ataxyearbeginningon6Aprilinanycalendaryearandendingon5Aprilinthefollowingcalendaryear;

You–anindividualwhohasopenedortransferredanISAundertheseTerms.Theterm“you”includessuchindividual’spersonalrepresentatives.Referencestothesingularshallincludethepluralandviceversa.

SeCTIOn 1 General Provisions for ISAs

2 ManagerTheManagerisauthorisedandregulatedbyFSAandisapprovedbyHMRevenue&CustomstoactasamanagerofISAs.

SubjecttotheRegulations,yourISAwillbemanagedinaccordancewiththedirectionssetoutinyourApplicationForm.

TheseTermswillcomeintoforcewhenyourApplicationFormisacceptedbytheManager,whichwillnormallybeonthedayofitsreceipt.Yourapplicationisdeemedtohavebeenreceivedwhenitarrivesatthefollowingaddress:

UBSGlobalAssetManagementPOBox9046ChelmsfordCM992XR

TheManagerreservestherightnottoacceptanyapplication(includingatransferapplication).

3 Investment objectiveTheinvestmentobjectiveofyourISAwillcorrespondtotheobjectivesoftheFundinwhichyouholdShares,orother qualifying investments specified in your Application Formifyoudonotspecify.

4 Investments(a) YourISAincludesyourInvestmentsandanycash

balances, all income and other rights, and the benefit ofanytaxreliefinrespectofsuchinvestments.

(b) YourcashcontributionsandanyothercashheldunderyourISAwillbedeposited,pendinginvestment,withabankselectedbytheManager(whichcanbeaUBSGroupCompany)inanoninterest-bearingaccountinthenameoftheManageroritsnominee.TheManagerdoesnotacceptliabilityfordefaultbyanybankwhichholdscashforyourISA.

(c) TheManagerreservestherighttoholdOEICSharesorunitsincollectiveinvestmentschemeswhichhavereplacedschemesinwhichyouheldaninvestmentasaresultofamerger,reconstruction,closure,conversionorotherwiseunlesswereceivepriorinstructionsfromyoutothecontrary.

5 Title(a) The Investments will be beneficially owned by you at

alltimes.

(b) InvestmentswillberegisteredinthenameofanomineeoftheManager(whichmaybeaUBSGroupCompany).Inthecaseofregistrationthroughanominee,registrationwillbemadecollectivelyinthenameofthenominee,andalthoughtheamountofyour holding will be noted and separately identified intheManager’srecords,yourentitlementmaynotbe identified by separate documents or certificates oftitle.Intheeventofadefault,anyshortfallinthesecuritiesregisteredinthenameofeachnomineemaybebornepro-rataamongallclientswhoseinvestmentsareregisteredinthisway.

UBS ISA Terms and Conditions

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(c) No unit or share certificates will be issued to you. The Manager(oranominee,whichmaybeaUBSGroupCompany)willholdanytitledocumentsordocumentsevidencingtitletotheInvestments.

(d) TheManagermaynotlendInvestmentsorthetitledocumentstoathirdpartyandmaynotborrowagainstthesecurityofInvestmentsorsuchdocuments.

(e) Youmaynotassignortransfertoanyotherpersonyour beneficial or other interest in your UBS ISA or in theincomefromthem.TheManagerwillnotcomplywithanyassignmentofthisaccountyoutrytomake.

6 Income(a) TheManagerwillautomaticallyreinvestallincomein

respectofInvestmentsandallrelatedtaxreclaims,netofanytaxliability(forexample,stampduty),unlessyouelecttobepaidtheincomefromyourISA(seeparagraph(b)below).

(b) Providingyouholdincomeshares,youcanelecttoreceivetheincomefromyourISAhalf-yearlybycompletingtherelevantsectionoftheApplicationFormornotifyingtheManagerinwriting.PaymentisnormallybydirectcredittoyourbankorbuildingsocietyunlessyouinstructtheManagertomakepaymentbysterlingchequepayabletoyouandsenttoyourhomeaddress.

(c) YoumustinformtheManagerifyouwishtocancelapreviouselectiontoreceiveincome.

(d) AmountsofincomeequalisationreceivedaspartofdistributionsonOEICSharesofthesametypeandinthesamefundmaybeaggregatedandtheaverageamountofincomeequalisationattributedtoeachsuchOEICShareacquiredduringtherelevantperiod.

7 Taxation(a) TheManagerwillmakeallnecessaryclaimsfortax

reliefrelatingtoyourISA.

(b) InaccordancewiththeRegulationsanISAisavailableonlytoindividualswhoareUKresidentfortaxpurposesundertheRegulations.

8 StatementsTheManagerwillsendyouastatementatleastannually,showingdetailsofalltransactionsinyourISAsincethepreviousstatement.Thestatementswillnotincludeameasureofperformance.TheManagermayproduceaconsolidatedstatementifyouhavemorethanoneISA.YoumayrequestcopiesofanycontractnotesandentriesintheManager’srecordsrelatingtoordersplacedorsettledforyou.TheManagermaychargeyouanadministrationfeeforprovidingextracopiesofanyaccountstatement,contractnoteorentryinitsrecordsrelatingtoyourorders.

9 Reports and voting(a) Ifyousorequest,theManagerwillarrangeforyou

toreceivecopiesoftheannualreportsandaccountsissuedtoinvestorsintheUBSOEICinwhichyourISAisinvested.

(b) Subjecttoanyapplicablelaworregulationandifyousorequest,theManagerwillarrangeforyoutobeabletoattendanymeetingsofinvestorsineachOEICinwhichyourISAisinvested,toexercisevotingrights,andtoreceive,inadditiontothedocumentsreferredtoinparagraph(a)above,anyotherinformationissuedtoinvestors.

(c)Subjecttoanyapplicablelaworregulationandsubjectasprovidedbelow,theManagermayexerciseorrefrainfromexercisinganyvotingrightsattachingtoInvestmentsunlessyouhaveelectedtoexercisesuchrightsyourself.

10 Switching investments(a) YoumayinstructtheManagertosellSharesorUnits

andtoreinvesttheproceedsinotherSharesorUnits(asthecasemaybe)tobeheldwithinyourISA.TheManager will normally effect the transaction as soon as practicable after receiving your instructions.

(b)TherewillnormallybeachargeappliedforswitchingfundswithintheUBSOEIC.Thiswillbenogreaterthan0.25%.CurrentchargesaredetailedintheSimplified Prospectus document.

11 Withdrawals(a) YoumaybywrittenrequesttotheManager,make

cashwithdrawalsfromyourISA.

(b) UnlessotherwisepermittedbytheManager,theminimumwithdrawalis£500.Yourholdingineachfundinwhichyouareinvestedmusthaveaminimumvalueof£500(failingwhichtheManagermaytreatyourwithdrawalrequestasaninstructiontoterminateyourISA).

(c) WithdrawalswillbemetbysellingInvestments.UnlessyougivetheManagerinstructionswithyourwithdrawalrequest,theManagerwillhavediscretiontochoosewhichInvestmentstosell.

(d) TheamounttobewithdrawnwillbepaidtoyoufollowingreceiptofclearedfundsresultingfromthesaleofInvestments.

(e) TheManagermaydeductfromanywithdrawaltobepaidtoyouanyoutstandingfees,chargesandexpensesdueandretainsuchsumsastheManagermayreasonablyestimatetoberequiredtomeetanytaxliabilityforwhichtheManagermustaccounttoHMRevenue&Customs.AnyamountduemaybeheldoutsideyourISApendingpayment.Paymentsofsaleproceedsonwithdrawalandanycostsmaybe delayed until confirmation has been received by theManagerthatallsubscriptionshavebeenclearedandtheManagerhasreceivedallamountsowedtoit. Security checks may be carried out to confirm your identitybeforeanypaymentismade.

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12 Charges(a) TherearenoadditionalchargesforholdingUBSOEIC

SharesinanISA.

(b) Sharesaresubjecttoinitialcharges,managementfees,andotherchargesandexpenseswhicharedetailedinthe Simplified Prospectus document.

(c) TheManagerreservestherighttodiscountorwaiveanycharges.

(d) The Manager may increase charges but only after givingyou60days’writtennotice.

(e) TheManagershallbeentitledtodeductandretainallchargespayableundertheseTermsandmayapplyanycashorsellanyInvestmentstopaysuchchargesortopayanytaxliabilitiesunderyourISA.

13 Termination(a) YoumayterminateyourISAbygivingnoticetothe

Manager which will be effective on receipt.

(b) TheManagermayterminateyourISAbygivingyouonemonth’snoticeinwriting.IfitbecomesimpracticalorimpossibletocomplywiththeRegulations,theManagermayterminateyourISAimmediately,inwhich case you will be notified in writing.

(c) WhenanISAisterminatedbytheManager,itwillselltheInvestmentsandpayyoutheproceedstogetherwithanycashbalanceheldintheISA.Interestwillnotbepaidonanycashbalance.TheManagermaydeductanychargesorotheramountsduetoit,anytaxliabilitiesundertheISA,andanyadditionalexpensesincurredinterminatingtheISA.

(d) YourISAceasestobeexemptfromtaxonyourdeathandwillterminate.TheManagerwillcontinuetoholdtheinvestmentsinyourISAuntiltheManagerreceives a copy of the death certificate and a grant of probateorlettersofadministrationasappropriate.TheManagerwillthenterminatetheISAandtheinvestmentswillbeheldontheFund’sregisterinthenameofyourpersonalrepresentative(s).TheManagermaydeductanychargesorotheramountsduetoit,andanytaxliabilitiesundertheISA,andanyadditionalexpensesincurredinterminatingtheISA.TheseTermsarebindingonyourpersonalrepresentative(s).TheManagermayattheirdiscretionacceptorrejectinstructionsreceivedfromyourpersonalrepresentative(s),suchaswhereincorrectdocumentationhasbeenreceivedfromthem.

14 void ISAsYourISAwillbemanagedinaccordancewiththeRegulations,whichtakeprecedenceovertheseTerms.TheManagerwillnotifyyouif,byreasonofanyfailuretosatisfytheprovisionsoftheRegulations,yourISAhasorwillbecomenolongerexemptfromtaxbyvirtueoftheRegulations.WhenanISAisvoided,theManagerwilltransfertheInvestment(s)intoyourname.TheManagermaydeductanychargesorotheramountsduetoit,anytaxliabilitiesundertheISA,andanyadditionalexpensesincurredinterminatingtheISA.

15 Transfer to UBSYoumayapplytotransfertotheManagereitherthewholeorpartofanexistingIndividualSavingsAccount,subjecttoandinaccordancewiththeRegulations.Transferswillbeacceptedincashformonlyandsubjectto the minimum transfer value specified in the transfer applicationform.Theinitialchargewillbedeductedfromtheamounttransferred.TheseTermswillapplyfromacceptanceofyourtransferApplicationForm.

16 Information for the ManagerYoumustprovidetheManagerwithallinformationwhichtheyreasonablyrequestsand,inparticular,youmustimmediatelyinformtheManagerinwritingofanychangeoftaxstatusorothermaterialchangeincircumstances.InparticularyoumustinformusimmediatelyifyouceasetobeeligibletoholdanISAorofanychangeinyourresidencystatus.

17 notices and instructions(a) NoticesandinstructionstotheManagershould

generallybeinwritingandsignedbyyou.Noticesandinstructionssentonlybyfacsimilewillnotbeaccepted,buttheManagermayactonthesesubjectto subsequent written confirmation.

(b) Noticesandotherdocumentstobegiventoyouwillbepostedtoyourlastregisteredaddressandwillbedeemed received by you two days after posting.

(c) TheManagerisentitledtotreatasvalid,instructionsgivenbyyouoronyourbehalfevenifthatisnotthecasebecauseofthewrongdoingofanotherperson,unlessthatotherpersonisanemployeeoragentoftheManager.

18 Liability(a) Youagreethatyouwillberesponsibleforanylosses,

expensesorotherliabilitiesincurredbytheManagerinconnectionwithyourISA,otherthanthosewhicharecausedasadirectresultoftheManager’snegligence,knowingdefault,orbreachoftherulesoftheFSAoroftheseTerms.

(b) TheManagerisliableforthedirectresultsoftheirnegligence,knowingdefault,andforanybreachoftherulesoftheFSAoroftheseTerms.TheManagerisnotliableforanylosswhichisnotareasonablyforeseeableconsequenceofabreachbytheManageroftheseTerms,orforanylosscausedthroughafallinvalueofInvestments.

(c) TheManageracceptsnoresponsibilityforyourISA(orforanISAtransferredtotheManager)untilclearedfundsarereceived,norforanylossordelaycausedinthepaymentortransferoffundstotheManagerduetocircumstancesbeyonditscontrol.TheManagershallbeentitledtocancelanytransactionforthepurchaseofInvestments(ifclearedfundsarenotreceivedbytheManagerwithinsevendaysofacceptingyourinstructions,regardlessofthemethodofpayment),andyouagreetobeliableforanyresultinglosses,

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expensesorotherliabilitiesincurredbytheManagerinaccordancewithparagraph(a)above.WhereyouaretransferringanexistingISAtotheManager,youmustensurethatyourexistingISAmanagercomplieswiththetransferinstructionsgivenbytheManager.

(d) ThenomineecompanythatisusedisanassociateoftheManager.TheManagerthereforeacceptsliabilityforthenegligentactsandomissionsofthenominee.

19 Complaints and compensationTheManagerhasestablishedproceduresinaccordancewiththeFSA’srequirementsfortheconsiderationofcomplaints.Detailsofthoseproceduresandofyourrightstocompensation(ifany)iftheManagerisunabletomeetitsliabilitiestoyouareavailablefromtheManageronrequest.Inaddition,youhavetherighttocomplaindirectlytotheFinancialOmbudsmanServiceshouldyouconsideryourcomplainthasnotbeensatisfactorilyresolvedbytheManager.IfyoumakeavalidclaimagainsttheManageranditisunabletomeetitsliabilities,youmaybeentitledtocompensationfromtheFinancialServicesCompensationScheme,detailsofwhichtheManagerwillprovideonrequest.

20 Amendments(a) TheManagermayamendtheseTermsbywritingto

you.Anyamendmentsmadetotheextentpermittedbylaw,willcomplywiththeRegulationsandwiththerulesoftheFSAhandbook.AnyamendmentstotheseTermswillbemadetomakethemfairertoyouormorecomprehensibleortocorrectamistake(providedthat such changes would not adversely affect your rights) or to reflect new practices or developments or to reflect operational changes or whenever there isanyothervalidreasontodoso.TheManagerwillgiveyouatleast30days’priornoticeinwritingofanyproposedamendments.

(b)Iftheunitsinanycollectivescheme(includingshareswithinanOEIC)inwhichyouhaveinvestedaresubjecttoaschemeofarrangement,yourholdingwillcontinueintothesuccessorschemeorschemesunlessthesuccessorschemeorschemesarenotavailableforinvestmentinyourISAinwhichcasetheManagerwillrequireyoutoswitchyourholdingtoaschemethatisavailableortocloseyourISA.

21 LawTheseTermswillbegovernedbyandconstruedinaccordancewithEnglishlawandaresubjecttotheexclusivejurisdictionofthecourtsofEnglandandWales.NeithertheManagernoryouintendsanyprovisionoftheseTermstobeenforceablebyanypersonotherthanthemselvesortheirpermittedsuccessorsorassignees.

22 Assignment and delegation(a) TheManagermayassigntoanyappropriateUBSGroup

Company all of its benefits and obligations under these Terms. You will be notified of any such assignment.

(b) TheManagermayappointanyperson(whetherornotaUBSGroupCompany)toadviseonorperformanyofitsfunctionsorresponsibilitiesundertheseTermsandmayprovideinformationaboutyouandyourISAtoanysuchperson.TheManagerwillsatisfyitselfthatanypersontowhomitdelegatesanyofitsfunctionsorresponsibilitiesundertheseTermsiscompetenttocarryoutthosefunctionsorresponsibilities.

23 AddressShouldyouwishtowritetotheManagerpleasedosoatthefollowingaddress:

UBSGlobalAssetManagement21LombardStreetLondonEC3V9AHTel:020-79015000

24 Application to open an ISA and paymentAnapplicationtoopenanISAmustbemadeonanApplicationFormwhichmustbecompletedinhardcopy.YoumayinvestoneormorelumpsumsinyourISAduringtheYearsubjecttotheoverallannualcontributionlevelsstatedintheRegulations.YoumustsubmitwithyourApplicationFormachequeforthefullamountofyourinitialsubscription.Youwillbesentanacknowledgementonceyouhavemadethecontribution.

25 Minimum subscriptionThe minimum initial investment is as specified in the Simplified Prospectus document. Additional lump sum contributions are subject to the minimum specified in the Simplified Prospectus document.

26 CancellationIf you have received advice from an independent financial adviser,youmayhavetherighttocancelyourISAwithin14 days after receiving notice of your cancellation rights fromtheManager.Ifyouexerciseyourrighttocancel,anymoneypaidtotheManagerwillberepaid(subjecttodeductionoftheamount,ifany,bywhichthevalueofyourInvestmenthasfallen).

27 Transfer to new ISA Manager(a) YoumayinstructtheManagertotransfertoanother

approvedmanager,either(i)thewholeofyourISA,or(ii)partofyourISA(“apartialtransfer”),thatisatransferofpartoftherealisedInvestmentsandcashheldundertheStocksandSharesComponent,subjecttoandinaccordancewiththeRegulations.WhentransferringacurrentyearISA,itmustbetransferredinfull.TheManagerwillendeavourthatthiswilltake5to10daystocomplete.Transfersmaybeinspecie,wherebyInvestmentswillbetransferredbythe

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Managertothenewmanager,orincash,inwhichcasetheManagerwillsellyourInvestmentsatthenextvaluation point after receiving your instructions. The Managermaydeductfromthetransferanysumsduetoit.

(b) ApartialtransferinvolvingthetransferofpartoftherealisedInvestmentsandcashheldunderacomponentmustrepresentallsubscriptionstothecomponentandanygainsorotherproceedsrelatingtotheinvestmentofsuchsubscriptionsforoneormorecompleteYears.

(c) Alsointhecaseofapartialtransfer,theInvestmentsremaining after the transfer must, unless otherwise permittedbytheManager,haveaminimumvalueof£500ineachfund,failingwhichtheManagermaytreatyourinstructionasaninstructiontotransferthewholeISA.

The Direct Debit Guarantee

• This Guarantee is offered by all Banks and Building SocietiesthattakepartintheDirectDebitScheme.Theefficiency and security of the Scheme is monitored and protectedbyyourownBankorBuildingSociety.

• Iftheamountstobepaidorthepaymentdateschange,UBSGlobalAssetManagementwillnotifyyouinadvancebyatleast14daysasagreed.

• IfanerrorismadebyUBSGlobalAssetManagementoryourBankorBuildingSociety,youareguaranteedafullandimmediaterefundfromyourbranchoftheamountpaid.

• YoucancanceladirectdebitatanytimebywritingtoyourBankorBuildingSociety.Pleasealsosendacopyofyourlettertous.

UBSGlobalAssetManagement(UK)Ltd21LombardStreetLondonEC3V9AH

Tel.0800-5872113Fax020-79016550

www.ubs.com

©UBS2009.ThekeysymbolandUBSareamongtheregisteredandunregisteredtrademarksofUBS.Allrightsreserved.IssuedinOctober2009byUBSGlobalAssetManagement(UK)Ltd,asubsidiaryofUBSAG.Telephonecallsmayberecorded.

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