2019

6%46.06

31.30%

17.60%

3.13%

0.98%

0.64%

0.24%

0.03%

0.02%

0% 10% 20% 30% 40% 50%

PR GVMNT. INST. TAX EXPT. NOTE

US GVMNT. SPONSORED ENT.

US MUNICIPAL OBLIGATIONS

PR FANNIE MAE TAXABLE

PR TAX EXEMPT NOTES

PR FREDDIE MAC TAXABLE

PR GNMA EXEMPT

PR GNMA TAXABLE

AFICA

Figure 1.Asset Allocation

as of August 31,2019

1

––

––

––

2

3

4

5

6

––

7

8

9

10

11

12

FIN

ANC

IAL

HIG

HLI

GH

TS

Incr

ease

(Dec

reas

e) in

Net

Ass

et V

alue

:

Per S

hare

O

pera

ting

Perf

orm

ance

:

Tota

l Inv

estm

ent

Ret

urn:

(g)

Rat

ios:

(c)

Supp

lem

enta

l D

ata:

13

SCHEDULE OF INVESTMENTS

14

SCHEDULE OF INVESTMENTS (concluded)

15

STATEMENT OF ASSETS AND LIABILITIES

Assets:

Liabilities:

Net Assets Applicable to Common Shares:

Net AssetsConsist of:

16

STATEMENT OF OPERATIONS

Investment income:

Expenses:

Net investment income:

Realized Gain (Loss) & UnrealizedAppreciation (Depreciation) onInvestments:

17

STATEMENTS OF CHANGES IN NET ASSETS

Increase (Decrease) in Net Assets:

Operations:

Distributions to CommonShareholders from:

Capital ShareTransactions:

Net Assets:

18

STATEMENT OF CASH FLOWS

Increase (Decrease) in Cash

Cash Provided byOperating Activities:

Cash Used inFinancing Activities:

Cash:

Cash FlowInformation:

19

The Fund’s investment objective is to achi

“ ” Financial Services – Investment –Companies “ ” tates (“US”)

“ ”

a) Cash and Cash Equivalents ––

(b) Valuation of Investments Investments included in the Fund’s financial statements have been stated at fair values

pricing services, which are approved by the Fund’s management and the

(c) Taxation ––

(“PR”)

20

Fund’s taxreturn to determine whether the tax positions are “more not” of beauthority. Tax positions not deemed to meet the “more not” threshold are recorded as a tax benefit or

rrent year. Management has analyzed the Fund’s tax positions taken on its Puerto Rico in

(d) Statement of Cash Flows

(e) Dividends and Distributions to Shareholders -

dividend date. The Fund does not expect to make distributions of net realized capital gains, although the Fund’s

(f) Securities Sold under Agreements to Repurchase -

77777777777

ments based on the estimated fair value of the pledged assets, the Fund’s ongoing ability to

(g) Short-term notes -

21

(h) Paydowns

(i) Restructuring Expenses -

(j) Other –

––

independent sources. Unobservable inputs reflect the Fund’s estimates about assumptions that market participants

––

––

–– Unobservable inputs reflect the Fund’s

nt’s fair value is adequately

22

olio instruments for which no price or value is available at the time the Fund’s NAV is calculated on a a

d’s valuation methodologies used fo

backed securities (“MBS”) are prion a bond’s theoretical value derived from the prices of similar bonds; “similar” being defined by credit qua

23

based on a bond’s theoretical value from similar bonds defined by credit quality and market sector, and for which the

22222222222222222222

222222222222222222222 22222222222222222222 22222222222222222222

2222222

“ ” “”

of the Fund’s average weekly

of the Fund’s average weekly

of the Fund’s average weekly net

24

Services Incorporated of Puerto Rico (“UBS Puerto Rico”) or their affiliates “”(“Procedures”)

(“SEC”)

Fund’s

25

The Fund’s policies require that

26

5555555 555555555

5555555555555 5555555

5555555555555 5555555

5555555555555 555555555

27

––

,000,000 or ten percent (10%) of Banco Popular’s capital stock and surplus, provide

5555555

(“the 67 quirement”). Therefore, to the extent the sec

Financial Institutions (“OCFI”) regulation

28

Commissioner’s ruling, non

their issuance the value of the Fund’s total assets less all the Fund’s liabilities and indebtedness which are not

nd consistent with the Fund’s investment

the Fund’s investment

t presentation, the Fund’s net investment income

on securities’ p

on securities’ paydown

29

––

Fund’s maximum expo

––

’s assets are invested primarily in secu

. Also, the Fund’s net

the market’s assessmen

est rates may rise and that as a result the Fund’s investmend’s yield will tend to l

et interest rate, increase the security’s

he Fund’s portfolio will decline in price or fail to make d

30

Fund’s investments ralized mortgage obligations or “CMOs” exh

the Fund’s leverage limit

"), Moody’s Investors Service ("Moody's"), and S&P Global Ratings ("S&P") have downg“GOs”) of

Fitch downgraded the GOs to “D” (default) and nd issuer, to “ D” on July 6, 2016, and for ERS to “D” on July 20, 2017,

“D” (default) on July 7, 2016, and the debt ratings for the Government Dev r Puerto Rico, to “D” Moody’s downgraded ERS, to "C" on April 5, 2017, and the GOs, to “Ca” on

31

ion (“COFINA”), as described below.

(“PREPA”).

bondholders’

Order”),

“payments”

“adequate ayments”

32

Court’s

weren’t

bondholders’ature’s

rejected the government’

––

“Transition ”),

holder’s

33

the Fund’s asset

nd’s net investment income and its ability to declare and pay dividends in

––

34

“TaxAgreement”

“IRS”)

“IRS Agreement”

35

Remember that:

Mutual Funds Shares are not bank deposits or FDIC insured. Mutual Funds Shares are not obligations of or guaranteed by Banco Popular de Puerto Rico or UBS

Financial Services Incorporated of Puerto Rico or any of their affiliates. Mutual Funds Shares are subject to investment risks, including possible loss of the principal amount

invested.