Asset Management

Important Disclosures

Performance, gross and net expense ratios table:

1Expense ratios are as of a fund's most recent prospectus. Prospectus dates vary among funds. Unless otherwise indicated, for UBS Funds, expense ratios are as of the October 28, 2016 prospectus, as supplemented from time to time. For UBS U.S. Allocation Fund, expense ratios are as of the December 29, 2016 prospectus, as supplemented from time to time. For PACE® Funds, expense ratios are as of the November 28, 2016 prospectus, as supplemented from time to time. This expense ratio includes dividend expense, borrowing costs and related interest expense attributable to securities sold short, if any, which may vary based on actual investments.

2Net expenses reflect fee waivers and expense reimbursements pursuant to agreements that were in effect, as of a fund's most recent prospectus, to cap the expenses for each fund. In the event a fund's operating expense ratio for the period exceeds its expense cap, these waivers and reimbursements would apply. Current effective fee waivers and expense reimbursement agreements for each fund are listed in the paragraphs below.

The Fund and UBS Asset Management (Americas), Inc. ("UBS AM) have entered into a written agreement, separate from UBS AM's investment advisory agreement with the Fund, whereby UBS AM has agreed to permanently reduce its advisory and administration fee based on the Fund's average daily net assets to the following rates: $0 to $250 million: 0.50%; in excess of $250 million up to $500 million: 0.45%; in excess of $500 million up to $2 billion: 0.40%; over $2 billion: 0.35%. Effective December 29, 2016, UBS AM has contractually undertaken to waive fees/reimburse a portion of the fund's expenses, when necessary, so that the ordinary total annual operating expenses of each class through December 31, 2017 (excluding (1) dividend expense, borrowing costs and interest expense relating to short sales, and (2) investments in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses, if any) would not exceed 1.15% for Class A, 1.90% for Class C and 0.90% for Class P.

The Advisor has agreed irrevocably to waive its fees and reimburse certain expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, and extraordinary expenses) so that total operating expenses of the Fund do not exceed 1.25% for Class A shares, 2.00% for Class C shares and 1.00% for Class P shares.

The Trust, with respect to each Fund listed below, and the Advisor, UBS AM, have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, and extraordinary expenses and with respect to UBS Dynamic Alpha Fund, and UBS U.S. Small Cap Growth Fund, also excluding dividend expense and security loan fees for securities sold short) to the extent necessary so that a Fund's operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, and extraordinary expenses and with respect to UBS Dynamic Alpha Fund, and UBS U.S. Small Cap Growth Fund, also excluding dividend expense and security loan fees for securities sold short), through the period ending October 27, 2017, do not exceed the percentages for each Fund listed below. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Advisor by a Fund will not cause a Fund to exceed the applicable expense limit that is in place for each share class of a Fund as follows:

UBS Dynamic Alpha Fund

1.35% for Class A, 2.10% for Class C and 1.10% for Class P.

UBS Global Allocation Fund

Effective October 28, 2016, 1.20% for Class A, 1.95% for Class C and 0.95% for Class P (Prior to October 28, 2016, 1.35% for Class A, 2.10% for Class C and 1.10% for Class P).

UBS U.S. Large Cap Equity Fund

Effective March 23, 2016, 0.95% for Class A, 1.70% for Class C and 0.70% for Class P (Prior to March 23, 2016, 1.20% for Class A, 1.95% for Class C and 0.95% for Class P).

UBS U.S. Small Cap Growth Fund

1.24% for Class A, 1.99% for Class C and 0.99% for Class P.

UBS Municipal Bond Fund

0.65% for Class A, 1.15% for Class C and 0.40% for Class P.

UBS Total Return Bond Fund

0.75% for Class A, 1.25% for Class C and 0.50% for Class P.

The fund and UBS Asset Management (Americas) Inc. (“UBS AM”) have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS AM is contractually obligated to: (1) waive its management fees through November 30, 2017 to the extent necessary to reflect the lower sub-advisory fee paid by UBS AM to Pacific Investment Management Company LLC, the fund’s investment advisor; and (2) waive its management fees and/or reimburse expenses so that the fund’s ordinary total operating expenses of each class through November 30, 2017 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed 0.97% for Class A, 1.47% for Class C, 0.72% for Class Y and 0.72% for Class P. The fund has agreed to repay UBS AM for any waived fees/reimbursed expenses (pursuant to item (2)) to the extent that it can do so over the following three fiscal years without causing the fund’s expenses in any of those three years to exceed these expense caps and that UBS AM has not waived the right to do so. The fee waiver/expense reimbursement agreement may be terminated by the fund’s board at any time and also will terminate automatically upon the expiration or termination of the fund’s advisory contract with UBS AM. Upon termination of the agreement, however, UBS AM’s three year recoupment rights will survive.

The fund and UBS AM have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS AM is contractually obligated to waive its management fees and/or reimburse expenses so that the fund’s ordinary total operating expenses of each class through November 30, 2017 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed 0.96% for Class A, 1.46% for Class C, 0.71% for Class Y and 0.71% for Class P. The fund has agreed to repay UBS AM for any waived fees/reimbursed Expenses to the extent that it can do so over the following three fiscal years without causing the fund’s expenses in any of those three years to exceed these expense caps and that UBS AM has not waived the right to do so. The fee waiver/expense reimbursement agreement may be terminated by the fund’s board at any time and also will terminate automatically upon the expiration or termination of the fund’s advisory contract with UBS AM. Upon termination of the agreement, however, UBS AM’s three year recoupment rights will survive.

The fund and UBS AM have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS AM is contractually obligated to: (1) waive its management fees and/or reimburse expenses so that the fund's ordinary total operating expenses of each class through November 30, 2017 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed 0.90% for Class A, 1.40% for Class C, 0.65% for Class Y and 0.65% for Class P; and (2) waive its management fees through November 30, 2017 to reflect a lower management fee paid by the fund to UBS AM. The fund has agreed to repay UBS AM for any waived fees/reimbursed expenses (pursuant to item (1)) to the extent that it can do so over the following three fiscal years without causing the fund's expenses in any of those three years to exceed these expense caps and that UBS AM has not waived the right to do so. The fee waiver/expense reimbursement agreement may be terminated by the fund's board at any time and also will terminate automatically upon the expiration or termination of the fund's advisory contract with UBS AM. Upon termination of the agreement, however, UBS AM's three year recoupment rights will survive.

The fund and UBS AM have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS AM is contractually obligated to: (1) waive its management fees through November 30, 2017 to the extent necessary to reflect the lower subadvisory fee paid by UBS AM to Rogge Global Partners plc, the fund's investment advisor; (2) waive its management fees and/or reimburse expenses so that the fund's ordinary total operating expenses of each class through November 30, 2017 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed 1.25% for Class A, 1.75% for Class C, 1.00% for Class Y and 1.00% for Class P; and (3) waive its management fees through November 30, 2017 to reflect a lower management fee paid by the fund to UBS AM. The fund has agreed to repay UBS AM for any waived fees/reimbursed expenses (pursuant to item (2)) to the extent that it can do so over the following three fiscal years without causing the fund's expenses in any of those three years to exceed these expense caps and that UBS AM has not waived the right to do so. The fee waiver/expense reimbursement agreement may be terminated by the fund's board at any time and also will terminate automatically upon the expiration or termination of the fund's advisory contract with UBS AM. Upon termination of the agreement, however, UBS AM's three year recoupment rights will survive.

The fund and UBS AM have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS AM is contractually obligated to: (1) waive its management fees and/or reimburse expenses so that the fund’s ordinary total operating expenses of each class through November 30, 2017 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed 1.28% for Class A, 1.78% for Class C, 1.03% for Class Y and 1.03% for Class P; and (2) waive its management fees through November 30, 2017 to reflect a lower management fee paid by the fund to UBS AM. The fund has agreed to repay UBS AM for any waived fees/reimbursed expenses (pursuant to item (1)) to the extent that it can do so over the following three fiscal years without causing the fund’s expenses in any of those three years to exceed these expense caps and that UBS AM has not waived the right to do so. The fee waiver/expense reimbursement agreement may be terminated by the fund’s board at any time and also will terminate automatically upon the expiration or termination of the fund’s advisory contract with UBS AM. Upon termination of the agreement, however, UBS AM’s three year recoupment rights will survive.

The fund and UBS AM have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS AM is contractually obligated to: (1) waive its management fees through November 30, 2017 to the extent necessary to offset other unaffiliated pooled investment vehicles and index futures; and (2) waive its management fees and/or reimburse expenses so that the fund's ordinary total operating expenses of each class through November 30, 2017 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed 1.88% for Class A, 2.63% for Class C, 1.63% for Class Y and 1.63% for Class P. The fund has agreed to repay UBS AM for any waived fees/reimbursed expenses (pursuant to item (2)) to the extent that it can do so over the following three fiscal years without causing the fund's expenses in any of those three years to exceed these expense caps and that UBS AM has not waived the right to do so. The fee waiver/expense reimbursement agreement may be terminated by the fund's board at any time and also will terminate automatically upon the expiration or termination of the fund's advisory contract with UBS AM. Upon termination of the agreement, however, UBS AM's three year recoupment rights will survive.

The funds and UBS AM have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS AM is contractually obligated to waive its management fees and/or reimburse expenses so that the fund's ordinary total operating expenses of each class through November 30, 2017 (excluding dividend expense, borrowing costs and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed the percentages for each fund listed below. The funds listed below have agreed to repay UBS AM for any waived fees/reimbursed expenses to the extent that they can do so over the following three fiscal years without causing the funds' expenses in any of those three years to exceed the expense caps and that UBS AM has not waived the right to do so for each share class as detailed below. The fee waiver/expense reimbursement agreement may be terminated by the fund's board at any time and also will terminate automatically upon the expiration or termination of the fund's advisory contract with UBS AM. Upon termination of the agreement, however, UBS AM's three year recoupment rights will survive.

PACE® Intermediate Fixed Income Investments

0.93% for Class A, 1.43% for Class C, 0.68% for Class Y and 0.68% for Class P.

PACE® Large Co Value Equity Investments

1.27% for Class A, 2.02% for Class C, 1.02% for Class Y and 1.02% for Class P.

PACE® Large Co Growth Equity Investments

1.30% for Class A, 2.05% for Class C, 1.05% for Class Y and 1.05% for Class P.

PACE® Small/Medium Co Value Equity Investment

1.41% for Class A, 2.16% for Class C, 1.16% for Class Y and 1.16% for Class P.

PACE® Small/Medium Co Growth Equity Investments

1.38% for Class A, 2.13% for Class C, 1.13%, for Class Y and 1.13% for Class P.

PACE® International Equity Investments

1.55% for Class A, 2.30% for Class C, 1.30% for Class Y and 1.30% for Class P.

PACE® International Emerging Markets Equity Investments

1.75% for Class A, 2.50% for Class C, 1.50% for Class Y and 1.50% for Class P.

PACE® Global Real Estate Securities Investments

1.45% for Class A, 2.20% for Class C, 1.20% for Class Y and 1.20% for Class P.

Performance results assume the reinvestment of all dividends and capital gains, and are shown both with and without the effect of the maximum applicable sales charges. The investment return and principal value of an investment will fluctuate, and Fund shares, when redeemed may be worth more or less than their original cost. Accordingly, you can lose money investing in a Fund. Performance is historical and no guarantee of future results. Certain Funds were subject to certain fee waivers and/or expense reimbursements for certain reported periods. The performance of such Funds would have been lower if the Fund had borne all the expenses that were waived or reimbursed.

Class A shares: Maximum initial sales charge of 5.50% on equity Funds and asset allocation Funds and 3.75% on fixed income Funds (except for UBS Municipal Bond Fund and PACE Municipal Fixed Income Investments that have an initial sales charge of 2.25%). Ongoing 12b-1 service fees. 1% CDSC for redemptions of purchases of $1 million or more made within one year (for UBS Municipal Bond Fund and PACE Municipal Fixed Income Investments, 0.75% CDSC for redemptions of purchases of $500,000 or more made within one year).

Class C shares: 1% CDSC charged on the sale of shares within one year of the date of purchase for equity Funds and asset allocation Funds and 0.75% CDSC charged on the sale of shares within one year of the date of purchase for fixed income Funds. Ongoing 12b-1 service and distribution fees.

Class Y shares of the PACE Funds are not subject to sales charges and are available for limited groups of eligible investors, including institutional investors. Effective July 28, 2014, Class Y shares are no longer offered for The UBS Funds and the US Allocation Fund; Class Y shares of those Funds have been re-designated as Class "P" shares.

Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance. Please refer to each Fund's prospectus for further information on the eligibility to purchase Class P shares.

Investment Considerations

Investors should carefully read and consider a mutual Fund's investment objectives, risks, charges and expenses before investing. The prospectus contains this and other information about a mutual Fund. Contact your Financial Advisor, or UBS AM at 888-793 8637 for a current Fund prospectus.

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