July 2008
Simplified prospectus for sub-fund UBS (CH) Vitainvest – 50
Contractually based investment fund under Swiss law (Category Other Funds for Traditional Investments) Investment fund with sub-funds (umbrella fund) Fund management company: UBS Fund Management (Switzerland) AG Custodian bank: UBS AG
This simplified prospectus contains a summary of the key information about the sub-fund. The detailed prospectus including the fund contract gov- erns the legal and economic aspects definitively. These include such aspects as the rights of investors, the duties and obligations of the fund manage- ment company and the custodian bank and the investment policy of the umbrella fund. Investors are advised to consult the detailed prospectus. The annual and semi-annual reports provide information about the capital account and income statement. These documents are available free of charge from the fund management company, the custodian bank and all distributors.
INVESTMENT INFORMATION
Investment objective The investment objective of the sub-fund is principally to achieve an optimum overall return by using a balanced risk strategy and investing in other funds (tar- get funds).
Using an appropriate selection of target funds, the overall risk of the sub-fund is equivalent to that of a diversified asset allocation portfolio with an average equity component corresponding to the respective figure in the name of the sub-fund. In addition, the individual sub-funds differ in respect of their various foreign cur- rency components (all investment currencies other than the Swiss franc). Within the framework of the sub-fund’s investments, the fund management company complies with the prevailing investment guidelines for the financial investments of pension schemes as set out in the Swiss Federal Law on Occupational Retire- ment, Survivors’ and Disability Pension Plans (BVG) and its ordinances [currently in particular Article 54 ff. of the Ordinance on Occupational Retirement, Survivors’ and Disability Pension Plans (BVV2)].
Investment strategy Following deduction of liquid assets, the sub-fund invests at least 51% of its (Investment policy) assets in units of other collective investments (target funds) in the category “Secu- rities funds” and “Other funds for traditional investments” or units of undertak- ings for collective investment in transferable securities (UCITS) which correspond to Directive 85/611/EEC of 20 December 1985 (UCITS I) and 2001/107/EC or 2001/108/EC of 21 January 2002 (UCITS III), as well as units of undertakings for collective investment (UCIs) authorised for public distribution in and from Switzer- land in accordance with Article 119 ff. of the CISA or these target funds have been approved as collective investments in the country of domicile and supervi- sion in that country is equivalent to that in Switzerland in respect of the protec- tion afforded to investors and international official assistance is granted. The fund management company may also invest in units of other collective investments that correspond to other funds for traditional investments, other funds for alter- native investments or real estate funds (provided there is equivalent supervision).
The sub-fund must invest in at least five different target funds; up to 80% of the sub-fund’s assets may be invested in units of the same target fund.
Balanced risk diversification is achieved through appropriate diversification at asset class and fund manager level.
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This sub-fund can engage in securities lending.
Derivative financial instruments can be used to ensure that the sub-fund’s assets are managed efficiently. The use of derivatives is part of the investment strategy.
Currency of account: Swiss franc (CHF)
Risk profile of the sub-fund The sub-fund’s main risks are as follows:
The sub-fund’s investments are subject to normal market volatility and other risks associated with securities investments. There is no guarantee that the investments will rise in value. Both the value and return of the investments can rise or fall. There is no guarantee that the investment objective will actually be reached. There is no guarantee that investors will achieve a specific return, or that they will be able to submit units to the fund management company for redemption at a specific price.
Due to the projected use of derivatives, this sub-fund qualifies as a “simple securi- ties fund”. Commitment approach II (extended procedure) shall be used for the measurement of risk, with the exception that leveraging is not permitted for this sub-fund on the basis of the provisions of the aforementioned BVG and its ordi- nances. The fund management company shall ensure that the use of derivatives does not alter the investment objectives as stated in this simplified prospectus, the fund contract and the prospectus, or the investment profile of the sub-fund even in exceptional market circumstances.
Besides market risk, derivatives are also subject to counterparty risk, i.e. the risk that the contracting party is unable to meet its obligations and causes a financial loss as a result.
The detailed prospectus contains more specific information about the risks noted here.
Performance of the sub-fund Performance (CHF-based) The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.
115 Indexed in % +3
110 +2
105 +1
100 0
95 –1
90 –2 2006 2007 2008 Indexed performance (left-hand scale) Performance per year (right-hand scale)
in % 2004 2005 2006 2007 2008 May since Ø p.a. YTD1 2008 20.1.06 2 years Fund (CHF) – – – -1.22 -4.50 0.55 -0.12 0.78
1 YTD: Year to date
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Average annual return as at end-May 2008:
Past 3 years: n/a Past 5 years: n/a Past 10 years: n/a
Past performance provides no indication of the future performance of the sub- fund. This depends on market developments and how successfully the asset man- ager implements the investment policy.
Profile of the typical investor The sub-fund is appropriate for investors who do not themselves wish to imple- ment the investment strategy for their assets, but want to delegate this task to the fund manager.
Distributions The net income of the sub-fund will be distributed free of charge to the investors annually within four months of the close of the financial year in the accounting currency Swiss franc (CHF) (see Tax aspects (sub-fund)).
As a rule, capital gains are not distributed but are held in the sub-fund for rein- vestment.
Unit classes This sub-fund is subdivided into the following unit classes:
a) Class “U” units are offered to all investors.
b) Class “D” units are offered to investors who subscribe their units via – banks or – insurance companies or – foundations for vested pension benefits and pension fund foundations or – securities dealers, which have concluded with UBS AG a distribution agreement in accordance with the guidelines on distribution from the Swiss Funds Association (SFA).
The aforementioned unit classes differ in terms of investor group. A distinction is made between the unit classes for UBS (CH) Vitainvest solely to make them easier to administer.
The unit classes are not segmented assets. Accordingly, the possibility that a unit class may be liable for the liabilities of another unit class cannot be ruled out, even though costs as a rule may only be charged to the specific unit class benefiting from a specific service.
ECONOMIC INFORMATION
Remuneration and incidental costs Remuneration and incidental costs 20061 20072
Remuneration and incidental costs incurred directly *) by the investor when subscribing to and redeeming units
Issuing commission max. 3% 3% at custodian bank in Switzerland 3% 3%
Redemption commission max. 3% 3% at custodian bank in Switzerland none none
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Remuneration and incidental costs Remuneration and incidental costs 20061 20072
Remuneration and incidental costs charged to the fund’s assets on an ongoing basis
Flat fee charged by the fund management company 1.64% 1.64%
Management commission charged at target fund level max. 2.16% 2.16%
Total expense ratio (TER) (excluding securities transaction costs) 1.66% 1.65%
Portfolio turnover rate (PTR) according to Swiss Funds Association (SFA) 12.93% 90.50%
1 For the financial year 20 January 2006 to 31 December 2006 2 For the financial year 1 January 2007 to 31 December 2007 *) Figures not yet available when the simplified prospectus was being produced. A preliminary estimate for the year to date is based on recent years’ figures. The flat fee can be used in full or in part for distribution remuneration and/or for reimbursements granted to specific types of investors.
Fee-sharing agreements and There are no fee-sharing agreements. and soft commissions The fund management company has not concluded any agreements on retroces- sions relating to so-called soft commissions.
Tax aspects (sub-fund) The sub-fund has no legal personality in Switzerland. It is subject to neither income tax nor capital gains tax.
The fund management company shall apply for a refund of all Swiss federal with- holding tax levied on the sub-fund’s domestic income on behalf of the sub-fund.
Any income and capital gains realised abroad may be subject to the relevant with- holding tax deductions imposed by the country of investment. These taxes will, as far as possible, be reclaimed by the fund management company on behalf of investors resident in Switzerland under the terms of double taxation treaties or other such agreements.
Tax aspects (investors with Income distributions made by the sub-fund to investors domiciled in Switzerland tax domicile in Switzerland) are subject to Swiss federal withholding tax (tax at source) at a rate of 35%. Capi- tal gains are not subject to withholding tax provided they are distributed with a separate coupon or listed separately in the statement sent to the investor. Investors domiciled in Switzerland may reclaim Swiss withholding tax by declaring it in their tax returns, or by submitting a separate application for a refund.
Income distributions and/or interest income realised on sale or redemption are not subject to European savings tax in Switzerland.
Other tax implications for investors who hold, buy or sell units in the sub-fund are defined by the tax laws and regulations in the investor’s country of domicile.
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ISSUE AND REDEMPTION OF SUB-FUND UNITS
Swinging single pricing If, on any one order day, the sum of subscriptions and redemptions of units in the sub-fund result in a net inflow or outflow, the fund’s net asset value will be increased or reduced by the average costs accruing to the fund from the invest- ment of a net inflow or from the sale of a portion of investments corresponding to the net outflow. The net asset value calculated and published on the basis of swinging single pricing is thus a modified, or “swung”, net asset value.
Publication of prices Unit net asset values are published for each day units in the sub-fund are issued or redeemed (daily) by Swiss Fund Data AG, on the Internet at www.ubs.com/quotes, in other electronic media and in Swiss and foreign news- papers.
Other information is published in the Swiss Commercial Gazette (SHAB) and by Swiss Fund Data AG (www.swissfunddata.ch).
Type and manner of acquiring Units may be issued or redeemed on any bank business day. and redeeming units Subscription and redemption orders received at the custodian bank by 2 p.m. on a bank business day (order date) will be settled on the following bank business day (valuation date) on the basis of the net asset value calculated on this date (forward pricing).
Brief description of the sub-fund
Inception 2005 under Swiss law
Financial year 1 January to 31 December
Securities no. Unit class D 2247651 Unit class U 2247650
ISIN Unit class D CH0022476516 Unit class U CH0022476508
Term (of the sub-fund) unlimited
Promoter UBS AG, Zurich and Basel
Fund management company UBS Fund Management (Switzerland) AG, Basel
Asset manager UBS AG, UBS Global Asset Management, Zurich
Custodian bank UBS AG, Zurich and Basel
Auditors Ernst & Young AG, Basel
Supervisory authority Swiss Federal Banking Commission, Berne
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Contacts In Switzerland: UBS Fund Management (Switzerland) AG Brunngässlein 12, CH-4002 Basel Tel.: +41 44 235 36 36 Fax: +41 44 234 93 20 E-mail: [email protected] or the following Internet address: www.ubs.com
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