annual report 2018 - fundsquare

ab Asset managementUBS Funds

Annual Report 2018

Investment Fund under Luxembourg Law

R.C.S. Luxembourg N° K 344

Audited annual report as of 31 December 2018

UBS (Lux) Institutional FundUBS (Lux) Institutional Fund – Emerging Markets Equity UBS (Lux) Institutional Fund – Global Convertible BondsUBS (Lux) Institutional Fund – Euro Bonds UBS (Lux) Institutional Fund – Key Selection European EquityUBS (Lux) Institutional Fund – Euro Corporate Bonds UBS (Lux) Institutional Fund – Key Selection Global Equity

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Audited annual report as of 31 December 2018

Table of contents Page ISIN

Management and Administration 2Features of the Fund 3Independent auditor’s report 6

UBS (Lux) Institutional Fund 8UBS (Lux) Institutional Fund – Emerging Markets Equity 10 AA LU0200130796 BA LU0200131414 FA LU0225528644 XA LU0200132651UBS (Lux) Institutional Fund – Euro Bonds 15 AA LU0093640489 AD-T2 LU0157015289 BA LU0093640562 XA LU0176375417UBS (Lux) Institutional Fund – Euro Corporate Bonds 20 AA LU0130421521 BA LU0130422412 XA LU0176376811UBS (Lux) Institutional Fund – Global Convertible Bonds 26 AA (EUR) LU0251252234 AD-T2 (EUR) LU0251255765 BA (EUR) LU0251253554 CA (CHF) LU0251472279 DA (CHF) LU0262434755 YA (CHF) LU0251487541UBS (Lux) Institutional Fund – Key Selection European Equity 34 AA LU0154869704 AD-T2 LU0154876311 BA LU0154870629UBS (Lux) Institutional Fund – Key Selection Global Equity 39 AA (EUR) LU0155225690 AA (USD) LU0154864812 BA (EUR) LU0155226235 FA (USD) LU0225530384 XA (USD) LU0176377546

Notes to the Financial Statements 46Unaudited Information 52

Sales restrictions

Units of this Fund may not be offered, sold or delivered within

the United States of America.

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UBS (Lux) Institutional FundAnnual Report as of 31 December 2018

Management and Administration

Management Company

UBS Fund Management (Luxembourg) S.A.33A, avenue J.F. KennedyL-1855 LuxembourgR.C.S. Luxembourg N° B 154 210

Board of Directors

André Müller-Wegner, Chairman Managing Director, UBS AG, Basel and Zurich

Andreas Schlatter, MemberIndependent Director, Küttingen, Switzerland

Pascal KistlerManaging Director, UBS AG, Basel and Zurich

Gilbert Schintgen, Member (until 1 September 2018) Independent Director, UBS Fund Management(Luxembourg) S.A., Luxembourg

Portfolio Manager

UBS (Lux) Institutional Fund – Emerging Markets EquityUBS (Lux) Institutional Fund – Euro BondsUBS (Lux) Institutional Fund – Euro Corporate BondsUBS (Lux) Institutional Fund – Global Convertible Bonds

UBS AG, UBS Asset Management, Basel and Zurich

UBS (Lux) Institutional Fund – Key Selection European EquityUBS (Lux) Institutional Fund – Key Selection Global Equity

UBS Asset Management (UK) Ltd, London

Depositary and main paying agent

UBS Europe SE, Luxembourg Branch33A, avenue J.F. KennedyL-1855 Luxembourg

Administrative Agent

Northern Trust Global Services SELuxembourg Branch6, rue Lou HemmerL-1748 Senningerberg

Independent Auditor of the Fund and of theManagement Company

ERNST & YOUNG S.A.35E, avenue J.F. KennedyL-1855 Luxembourg

Sale in Germany

Paying, sales and information agentUBS Europe SEBockenheimer Landstrasse 2–4D-60306 Frankfurt am Main

The sales prospectus, the KIID, management regulations, annual and semi-annual reports as well as the portfolio movements of the invest-ment fund mentioned in this publication are available free of charge from UBS Europe SE, Bockenheimer Landstrasse 2–4, D-60306 Frankfurt am Main.

Sale in Finland, in France, and in Italy

Units of this Fund may be sold in these countries.

The sales prospectus, the KIID, management regulations, annual and semi-annual reports as well as the portfolio movements of the invest-ment fund mentioned in this publication are available free of charge at the sales agencies and at the registered office of the Management Company.

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Features of the Fund

UBS (Lux) Institutional Fund (hereinafter called the “Fund”) offers investors a range of different subfunds (“umbrella construction”), which invest in accordance with the investment policy described in the sales prospec-tus. The sales prospectus, which contains specific details on each subfund, will be updated upon the inception of each new subfund.

The Fund was established as an open-ended investment fund without legally independent status in the form of a collective investment fund (fonds commun de place-ment, FCP) pursuant to Part I of the Luxembourg law relating to Undertakings for Collective Investment of 17 December 2010. UBS (Lux) Institutional Fund origi-nally established under the title UBS Brinson Portfolio has been approved on 28 December 1998. The activities of the UBS Institutional Fund Management Company S.A. in its function as Management Company of the UBS (Lux) Institutional Fund expired with effect as of 30 September 2010. On 1 October 2010 UBS Fund Management (Luxembourg) S.A. has taken over the function of the Management Company.

The Fund has no legal personality as an investment fund. The entire assets of each subfund are the undivided property of all investors who have equal rights in pro-portion to the number of units, which they hold. These assets are separate from the assets of the Management Company. The securities and other assets of the fund are managed by UBS Fund Management (Luxembourg) S.A. as in-house funds in the interest and for the account of the unitholders.

The Management Regulations give the Management Company the authority to establish different subfunds for the Fund as well as different unit classes with specific characteristics within these subfunds. The sales prospec-tus will be updated each time a new subfund or an addi-tional unit class is issued.

There is no limit on the size of the net assets, the num-ber of units, number of subfunds or the duration of the Fund.

The fund forms an indivisible legal entity. With respect to the unitholders, each subfund is regarded as being separate from the others. The assets of a subfund can only be used to offset the liabilities, which the subfund concerned has assumed.

Given that there is no segregation of liabilities between unit classes, there is a risk that, under certain circum-stances, currency hedging transactions in relation to unit

classes which hedge the foreign currency exposure of the respective subfund against their respective reference currency could result in liabilities which might affect the net asset value of the other unit classes of the same subfund.

The Management Company can issue several classes of units for each of the subfunds. All unit classes presently in issue are reserved to institutional investors having con-cluded an agreement (such as, but not limited to a portfolio management agreement) with UBS Asset Management or one of its authorised delegates.

Currently, the following unit classes are offered: – Unit Class XA and YA for which the portfolio management, custody, distribution and administration fees are charged outside the fund, directly at the level of the agreement concluded by the investor.

– Unit Class FA, for which the portfolio management, custody, distribution and administration fees are charged outside the fund, directly at the level of the agreement concluded by the investor. These units will have an issue price of 10 000 (in each funds refer-ence currency). This class aims exclusively at financial products (i.e. Fund-of-Funds or other pooled struc-tures according to various legislations). This unit class has a high initial value aiming at facilitating day-to-day operations of these pooled structures. In addition, it features the same characteristics as the unit class XA.

– Unit Class BA, for which the portfolio management and distribution fees are charged outside the Fund, directly at the level of the agreement concluded by the investor. Unit Class BA only bears operational and administrative expenses.

– Unit Class DA, for which the portfolio management and distribution fees are charged outside the Fund, directly at the level of the agreement concluded by the investor. Unit Class DA only bears operational and administrative expenses.

Unit Class DA hedges the foreign currency exposure of the respective subfund against their respective refer-ence currency.

– Unit Classes AA, AD, AA-T1, AD-T2 and CA for which the flat fee is directly deducted from the Fund’s NAV and covers all expenses.

– Unit Class CA-T1, for which the portfolio management and distribution fees are charged at the subfund’s level, in addition to the normal operational and administra-tive expenses. Unit Class CA-T1 hedges the foreign currency exposure of the respective subfund against their respective reference currency.

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– Unit Classes CA and YA hedge the foreign currency exposure of the respective subfund against their respec-tive reference currency.

– Unit Classes AA, BA, DA, XA, FA, YA, AA-T1, CA-T1 and CA are reinvesting their dividends and other income, rather than distributing it on a regular basis.

– Unit Class AD-T2 is a distributing unit, which entitle the unitholder to an annual distribution.

– Unit Class AD is a distributing unit, which entitle the unitholder to a quarterly distribution.

Additional characteristics of unit classes:

Currency

The unit classes may be denominated in AUD, CAD, CHF, CZK, EUR, GBP, HKD, JPY, PLN, RMB, RUB, SEK, SGD or USD.

hedging

For unit classes whose reference currencies are not iden-tical to the currency of account of the subfund (“unit classes in foreign currencies”), the fluctuation risk of the reference currency price for those unit classes is hedged against the currency of account of the subfund. Provision is made for the amount of the hedging to be between 95% and 105% of the total net assets of the unit class in foreign currency. Changes in the market value of the portfolio, as well as subscriptions and redemptions of unit classes in foreign currencies, can result in the hedging temporarily surpassing the aforementioned range. The Management Company and the Portfolio Manager will then take all the necessary steps to bring the hedging back within the aforementioned limits. The hedging described has no effect on possible cur-rency risks resulting from investments denominated in a currency other than the subfund’s currency of account.

RMB denominated unit classes

Investors should note that the Renminbi (ISO 4217 currency code: CNY), abbreviated RMB, the official currency of the People’s Republic of China (the “PRC”), is traded on two markets, namely as onshore RMB (CNY) in mainland China and offshore RMB (CNH) outside mainland China.

Unit classes denominated in RMB are units whose net asset value is calculated in offshore RMB (CNH).

Onshore RMB (CNY) is not a freely convertible currency and is subject to foreign exchange control policies and repatriation restrictions imposed by the PRC government. Offshore RMB (CNH), on the other hand, may be traded freely against other currencies, particularly EUR, CHF and USD. This means the exchange rate between offshore RMB (CNH) and other currencies is determined on the basis of supply and demand relating to the respective currency pair.

RMB convertibility between offshore RMB (CNH) and onshore RMB (CNY) is a regulated currency process subject to foreign exchange control policies and repa-triation restrictions imposed by the PRC government in coordination with offshore regulatory or governmental agencies (e.g. the Hong Kong Monetary Authority).

Prior to investing in RMB classes, investors should bear in mind that the requirements relating to regulatory reporting and fund accounting of offshore RMB (CNH) are not clearly regulated. Furthermore, investors should be aware that offshore RMB (CNH) and onshore RMB (CNY) have different exchange rates against other currencies. The value of offshore RMB (CNH) can poten-tially differ significantly from that of onshore RMB (CNY) due to a number of factors including, without limitation, foreign exchange control policies and repatriation restric-tions imposed by the PRC government at certain times, as well as other external market forces. Any devaluation of offshore RMB (CNH) could adversely affect the value of investors’ investments in the RMB classes. Investors should therefore take these factors into account when calculating the conversion of their investments and the ensuing returns from offshore RMB (CNH) into their target currency.

Prior to investing in RMB classes, investors should also bear in mind that the availability and tradability of RMB classes, and the conditions under which they may be available or traded, depend to a large extent on the political and regulatory developments in the PRC. Thus, no guarantee can be given that offshore RMB (CNH) or the RMB classes will be offered and/or traded in future, nor can there be any guarantee as to the conditions under which offshore RMB (CNH) and/or RMB classes may be made available or traded. In particular, since the currency of account of the relevant subfunds offering the RMB classes would be in a currency other than offshore RMB (CNH), the ability of the relevant subfund to make redemption payments in offshore RMB (CNH) would be subject to the subfund’s ability to convert its currency of account into offshore RMB (CNH), which may be restricted by the availability of offshore RMB (CNH) or other circumstances beyond the control of the Management Company.

The hedging of the fluctuation risk will be carried out as described above under “hedging”.

Potential investors should be aware of the risks of rein-vestment, which could arise if the RMB class has to be liquidated early due to political and/or regulatory circumstances. This does not apply to the reinvestment risk due to liquidation of a unit class and/or the subfund in accordance with the section “Liquidation and merging of the Fund and its subfunds or unit classes” of the sales prospectus.

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seeding

Units in classes with “seeding” in their name are only offered for a limited period of time. At the end of this period, no further subscriptions are permitted unless the Management Company decides otherwise. However, these units may still be redeemed in accordance with the conditions for the redemption of units. Unless the Management Company decides otherwise, the smallest tradeable unit, the initial issue price and the minimum subscription amount are those of the aforementioned asset classes.

Generally, the unitholder of a subfund may convert any time into another subfund or unit class of the samesubfund.

However, the following exceptions apply: – The conversion is only possible into units issued; no conversion is possible if the issue of units by thesubfund has been suspended.

– The right to convert units is subject to compliance with any conditions applicable to the class or category of unit into which conversion is to be effected.

– Conversions can only be made for a definite number of units.

– Due to technical restrictions conversions from thefollowing classes: AA, AD, CA, DA, YA, BA and XA units into the following classes: AA-T1, CA-T1 and AD-T2 units and vice versa are not possible.

– Conversions into classes BA, DA, YA and XA units will only be executed at the Management Company’s dis-cretion, under the condition that the investor has signed an agreement as defined in the prospectus.

There is no provision in the Management Regulations for a meeting of the unitholders.

The financial year of the Fund ends on 31 December.

The acquisition of fund units implies acceptance of the Management Regulations by the unitholder.

Information on whether a subfund is listed on the Luxembourg Stock Exchange can be obtained from the Administrative Agent or the Luxembourg Stock Exchange website (www.bourse.lu).

Only the information contained in the sales prospectus and in one of the documents referred to therein shall be deemed to be valid.

The annual and semi-annual reports shall be available free of charge to unitholders at the registered office of the Management Company and the Depositary.

No subscription may be accepted on the basis of the financial reports. Subscriptions are accepted only on the basis of the current sales prospectus accompanied by the latest annual report and the latest semi-annual report if available.

The figures stated in this report are historical and not necessarily indicative of future performance.

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Independent auditor’s report

To the Unitholders of

UBS (Lux) Institutional Fund33A, avenue J.F. KennedyL-1855 Luxembourg

Opinion

We have audited the financial statements of UBS (Lux) Institutional Fund (the “Fund”) and each of its subfunds, which comprise the statement of net assets and the statement of investments in securities and other net assets as at 31 December 2018, and the statement of operations and the statement of changes in net assets for the year then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Fund and each of its subfunds as at 31 December 2018, and of the results of their operations and changes in their net assets for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the finan-cial statements.

Basis for Opinion

We conducted our audit in accordance with the Law of 23 July 2016 on the audit profession (the “Law of 23 July 2016”) and with International Standards on Auditing (“ISAs”) as adopted for Luxembourg by the “Commission de Surveillance du Secteur Financier” (“CSSF”). Our responsibilities under the Law of 23 July 2016 and ISAs are further described in the “responsibili-ties of the “réviseur d’entreprises agréé” for the audit of the financial statements” section of our report. We are also independent of the Fund in accordance with the International Ethics Standards Board for Accoun-tants’ Code of Ethics for Professional Accountants (“IESBA Code”) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the financial statements, and have ful-filled our other ethical responsibilities under those ethi-cal requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other information

The Board of Directors of the Management Company is responsible for the other information. The other infor-mation comprises the information included in the annual report but does not include the financial statements and our report of the “réviseur d’entreprises agréé” thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors of the Management Company

The Board of Directors of the Management Company is responsible for the preparation and fair presenta-tion of these financial statements in accordance with Luxembourg legal and regulatory requirements relat-ing to the preparation and presentation of the financial statements, and for such internal control as the Board of Directors Management Company determines is nec-essary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors Management Company is responsible for assessing the Fund and each of its subfunds’ ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors Management Company either intends to liquidate the Fund or any of its subfunds or to cease operations, or has no realistic alternative but to do so.

Responsibilities of the "reviseur d'entreprisesagree" for the audit of the financial statements

Our objectives are to obtain reasonable assurance aboutwhether the financial statements as a whole are freefrom material misstatement, whether due to fraud orerror, and to issue a report of the" reviseur d'entreprisesagree" that includes our opinion. Reasonable assuranceis a high level of assurance, but is not a guarantee that anaudit conducted in accordance with the Law of 23 July2016 and with ISAs as adopted for Luxembourg by theCSSFwill always detect a material misstatement when itexists. Misstatements can arise from fraud or error andare considered material if, individually or in the aggre-gate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of thesefinancial statements.

As part of an audit in accordance with the Law of 23 July2016 and with ISAs as adopted for Luxembourg by theCSSF,we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:

• Identify and assessthe risks of material misstatementof the financial statements, whether due to fraud orerror, design and perform audit procedures respon-sive to those risks, and obtain audit evidence that issufficient and appropriate to provide a basis for ouropinion. The risk of not detecting a material mis-statement resulting from fraud is higher than for oneresulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, orthe override of internal control.

• Obtain an understanding of internal control relevantto the audit in order to design audit procedures thatare appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectivenessof the Fund's internal control.

• Evaluate the appropriateness of accounting policiesused and the reasonableness of accounting estimatesand related disclosures made by the Board of Direc-tors Management Company.

• Conclude on the appropriateness of the Board ofDirectors Management Company use of the goingconcern basis of accounting and, based on the auditevidence obtained, whether a material uncertaintyexists related to events or conditions that may castsignificant doubt on the Fund or any of its subfunds


ability to continue as a going concern. If we concludethat a material uncertainty exists, we are requiredto draw attention in our report of the "reviseurd'entreprises agree" to the related disclosures in thefinancial statements or, if such disclosures are inad-equate, to modify our opinion. Our conclusions arebased on the audit evidence obtained up to the dateof our report of the "reviseur d'entreprises agree".However, future events or conditions may cause theFund and each of its subfunds to cease to continue asa going concern.

• Evaluate the overall presentation, structure and con-tent of the financial statements, including the disclo-sures, and whether the financial statements representthe underlying transactions and events in a mannerthat achieves fair presentation.

We communicate with those charged with governanceregarding, among other matters, the planned scope andtiming of the audit and significant audit findings, includ-ing any significant deficiencies in internal control that weidentify during our audit.

Luxembourg, 18 April 2019

Ernst & YoungSociete anonymeCabinet de revision agree

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8 The notes are an integral part of the fi nancial statements.


Consolidated Statement of Net Assets EURAssets 31.12.2018Investments in securities, cost 1 799 443 876.07Investments in securities, unrealized appreciation (depreciation) 451 473.18Total investments in securities (Note 1) 1 799 895 349.25Cash at banks, deposits on demand and deposit accounts 55 566 083.14Other liquid assets (Margins) 4 561 892.28Receivable on securities sales (Note 1) 66 369.33Receivable on subscriptions 2 090 082.65Interest receivable on securities 3 221 418.03Interest receivable on liquid assets 3 909.90Receivable on dividends 1 688 365.41Other receivables 51 098.77Unrealized gain (loss) on financial futures (Note 1) -1 675 357.49Unrealized gain (loss) on forward foreign exchange contracts (Note 1) 4 478 533.46Total Assets 1 869 947 744.73

LiabilitiesBank overdraft -418.58Payable on securities purchases (Note 1) -28 124.47Payable on redemptions -523 000.14Provisions for flat fee (Note 2) -108 962.37Provisions for taxe d’abonnement (Note 3) -46 407.33Provisions for other commissions and fees (Note 2) -127 254.35Total provisions -282 624.05Total Liabilities -834 167.24

Net assets at the end of the financial year 1 869 113 577.49

UBS (Lux) Institutional Fund

The notes are an integral part of the fi nancial statements. 9


Consolidated Statement of Operations EURIncome 1.1.2018-31.12.2018Interest on liquid assets 240 619.01Interest on securities 11 119 947.49Dividends 28 943 415.85Income on securities lending (Note 10) 1 114 961.19Other income (Note 2, 4) 464 688.19Total income 41 883 631.73

ExpensesFlat fee (Note 2) -1 438 509.29Taxe d’abonnement (Note 3) -212 894.43Cost on securities lending (Note 10) -445 984.48Other commissions and fees (Note 2) -351 543.16Interest on cash and bank overdraft -132 332.64Total expenses -2 581 264.00

Net income (loss) on investments 39 302 367.73

Realized gain (loss) (Note 1)Realized gain (loss) on market-priced securities without options 88 454 915.95Realized gain (loss) on yield-evaluated securities and money market instruments -376 419.69Realized gain (loss) on financial futures -3 736 278.79Realized gain (loss) on options, futures-styled -8 695.20Realized gain (loss) on forward foreign exchange contracts -3 471 343.99Realized gain (loss) on foreign exchange -1 205 892.46Total realized gain (loss) 79 656 285.82

Net realized gain (loss) of the financial year 118 958 653.55

Changes in unrealized appreciation (depreciation) (Note 1)Unrealized appreciation (depreciation) on market-priced securities without options -298 748 374.83Unrealized appreciation (depreciation) on yield-evaluated securities and money market instruments -255 739.61Unrealized appreciation (depreciation) on financial futures -2 458 235.50Unrealized appreciation (depreciation) on forward foreign exchange contracts 7 022 235.42Total changes in unrealized appreciation (depreciation) -294 440 114.52

Net increase (decrease) in net assets as a result of operations -175 481 460.97


UBS (Lux) Institutional Fund – Emerging Markets Equity Annual Report as of 31 December 2018

UBS (Lux) Institutional Fund – Emerging Markets Equity

Report of the Portfolio Manager

2018 was a year of many headwinds for emerging mar-kets equities (MSCI EM) which declined significantly in USD and underperformed developed markets equi-ties (MSCI World). Worsening trade tensions, a strong USD and China domestic headwinds (e.g deleveraging-led economic slowdown and increased regulations) all weighed on the asset class.

The subfund declined over the financial year. The team’s bottom up approach was challenged by rising geopoliti-cal and domestic regulatory uncertainty over the finan-cial year impacting certain portfolio holdings notably in China’s education and gaming sectors, India’s refining sector as well as Mexico’s banking sector despite solid fundamentals.

Structure of the Securities Portfolio

Geographical Breakdown as a % of net assetsChina 26.94South Korea 15.93India 9.75South Africa 8.10Brazil 7.88Hong Kong 6.79Taiwan 5.75Indonesia 4.26Russian Federation (CIS) 4.00Mexico 3.49Hungary 2.29Malaysia 1.42Thailand 1.41Poland 1.05Total 99.06

Economic Breakdown as a % of net assetsBanks & credit institutions 23.02Electronics & semiconductors 13.42Petroleum 7.95Internet, software & IT services 7.89Tobacco & alcohol 5.23Finance & holding companies 5.05Telecommunications 4.23Miscellaneous services 4.22Mining, coal & steel 3.68Graphic design, publishing & media 3.30Pharmaceuticals, cosmetics & medical products 3.19Insurance 2.71Vehicles 2.49Food & soft drinks 2.17Chemicals 2.10Energy & water supply 2.00Mechanical engineering & industrial equipment 1.26Healthcare & social services 1.23Real Estate 0.98Miscellaneous unclassified companies 0.87Building industry & materials 0.80Forestry, paper & pulp products 0.74Packaging industry 0.53Total 99.06

Three-year comparison

ISIN 31.12.2018 31.12.2017 31.12.2016Net assets in USD 62 181 532.77 77 470 161.45 81 433 143.56Class AA LU0200130796Units outstanding 32 820.7190 13 223.5150 13 223.5150Net asset value per unit in USD 160.06 191.80 131.48Issue and redemption price per unit in USD1 160.06 191.80 131.48Class BA LU0200131414Units outstanding 37 909.2950 36 685.0920 37 982.0980Net asset value per unit in USD 334.53 397.74 269.67Issue and redemption price per unit in USD1 334.53 397.74 269.67Class FA LU0225528644Units outstanding 1 646.0000 1 906.0000 3 310.0000Net asset value per unit in USD 25 375.25 30 115.77 20 380.96Issue and redemption price per unit in USD1 25 375.25 30 115.77 20 380.96Class XA LU0200132651Units outstanding 7 138.9480 7 138.9480 7 138.9480Net asset value per unit in USD 347.23 412.10 278.90Issue and redemption price per unit in USD1 347.23 412.10 278.90

1 See note 1



Statement of Net Assets USDAssets 31.12.2018Investments in securities, cost 55 979 598.48Investments in securities, unrealized appreciation (depreciation) 5 618 341.68Total investments in securities (Note 1) 61 597 940.16Cash at banks, deposits on demand and deposit accounts 421 369.48Receivable on securities sales (Note 1) 27 635.95Interest receivable on securities 485.36Interest receivable on liquid assets 4.31Receivable on dividends 170 921.74Other receivables 13 901.70Total Assets 62 232 258.70

LiabilitiesBank overdraft -478.50Payable on securities purchases (Note 1) -32 150.49Provisions for flat fee (Note 2) -5 753.37Provisions for taxe d’abonnement (Note 3) -1 554.53Provisions for other commissions and fees (Note 2) -10 789.04Total provisions -18 096.94Total Liabilities -50 725.93

Net assets at the end of the financial year 62 181 532.77

Statement of Operations USDIncome 1.1.2018-31.12.2018Interest on liquid assets 4 841.18Interest on securities 298.04Dividends 1 649 409.21Income on securities lending (Note 10) 19 408.50Other income (Note 2, 4) 43 510.47Total income 1 717 467.40

ExpensesFlat fee (Note 2) -66 893.32Taxe d’abonnement (Note 3) -6 955.71Cost on securities lending (Note 10) -7 763.40Other commissions and fees (Note 2) -11 436.19Interest on cash and bank overdraft -393.63Total expenses -93 442.25


Realized gain (loss) (Note 1)Realized gain (loss) on market-priced securities without options 4 117 561.61Realized gain (loss) on forward foreign exchange contracts 2 275.15Realized gain (loss) on foreign exchange -5 592.03Total realized gain (loss) 4 114 244.73


Changes in unrealized appreciation (depreciation) (Note 1)Unrealized appreciation (depreciation) on market-priced securities without options -17 478 687.98Unrealized appreciation (depreciation) on forward foreign exchange contracts 155.93Total changes in unrealized appreciation (depreciation) -17 478 532.05




Statement of Changes in Net Assets USD 1.1.2018-31.12.2018Net assets at the beginning of the financial year 77 470 161.45Subscriptions 11 786 939.35Redemptions -15 335 305.86Total net subscriptions (redemptions) -3 548 366.51Net income (loss) on investments 1 624 025.15Total realized gain (loss) 4 114 244.73Total changes in unrealized appreciation (depreciation) -17 478 532.05Net increase (decrease) in net assets as a result of operations -11 740 262.17Net assets at the end of the financial year 62 181 532.77

Development of the outstanding units

1.1.2018-31.12.2018Class AANumber of units outstanding at the beginning of the financial year 13 223.5150Number of units issued 51 429.7670Number of units redeemed -31 832.5630Number of units outstanding at the end of the financial year 32 820.7190Class BANumber of units outstanding at the beginning of the financial year 36 685.0920Number of units issued 4 312.5270Number of units redeemed -3 088.3240Number of units outstanding at the end of the financial year 37 909.2950Class FANumber of units outstanding at the beginning of the financial year 1 906.0000Number of units issued 21.0000Number of units redeemed -281.0000Number of units outstanding at the end of the financial year 1 646.0000Class XANumber of units outstanding at the beginning of the financial year 7 138.9480Number of units issued 0.0000Number of units redeemed 0.0000Number of units outstanding at the end of the financial year 7 138.9480



Statement of Investments in Securities and other Net Assets as of 31 December 2018

Description Quantity/ Valuation in USD as a % Nominal Unrealized gain of net (loss) on Futures/ assets Forward Exchange Contracts/ Swaps (Note 1)

Transferable securities and money market instruments listed on an official stock exchange

Bearer shares

Brazil

BRL VALE SA COM NPV 5 000.00 65 793.72 0.11Total Brazil 65 793.72 0.11

China

HKD CHINA CONST BK ‘H’CNY1 3 503 000.00 2 890 326.78 4.65HKD CHINA VANKE CO ‘H’CNY1 179 300.00 609 166.79 0.98HKD INDUSTRIAL & COM B ‘H’CNY1 1 888 000.00 1 347 994.41 2.17CNY JIANGSU HENGRUI ME ‘A’CNY1 91 870.00 705 848.27 1.13CNY KWEICHOW MOUTAI CO LTD-A 16 049.00 1 379 185.01 2.22HKD PING AN INSURANCE ‘H’CNY1 191 000.00 1 686 940.81 2.71HKD TENCENT HLDGS LIMI HKD0.00002 83 500.00 3 348 809.29 5.39Total China 11 968 271.36 19.25

Hong Kong

HKD CHINA MENGNIU DAIR HKD0.1 198 000.00 617 062.72 1.00HKD CHINA MOBILE LTD NPV 207 500.00 1 996 988.89 3.21HKD CNOOC LTD HKD0.02 1 039 000.00 1 605 739.94 2.58Total Hong Kong 4 219 791.55 6.79

Hungary

HUF OTP BANK HUF100 35 420.00 1 424 988.44 2.29Total Hungary 1 424 988.44 2.29

India

INR GAIL INDIA LTD INR10 134 262.00 692 896.92 1.12INR HCL TECHNOLOGIES INR2 51 400.00 709 984.82 1.14INR HDFC BANK INR2 48 148.00 1 463 232.99 2.35INR ITC INR1 234 531.00 946 152.78 1.52INR MAHINDRA &MAHINDRA INR5 134 775.00 1 551 799.52 2.50INR POWER GRID CORP ORD INR10 194 634.00 553 807.12 0.89Total India 5 917 874.15 9.52

Indonesia

IDR BK MANDIRI IDR250 2 688 100.00 1 378 632.07 2.21IDR GUDANG GARAM(PERUS IDR500) 101 500.00 590 259.66 0.95IDR PT BANK NEGARA IND LKD SHS(IDR7500 & IDR375) 1 116 500.00 683 254.23 1.10Total Indonesia 2 652 145.96 4.26

Malaysia

MYR CIMB GROUP HOLDINGS BHD MYR1 640 695.00 885 267.62 1.42Total Malaysia 885 267.62 1.42

Mexico

MXN FOMENTO ECONOMICO UNITS (REP 1’B’& 4’D’ SHS) 39 000.00 334 140.02 0.54MXN GRUPO FINANCIERO BANORTE SAB DE CV COM SER’O’NPV 145 000.00 705 203.43 1.13Total Mexico 1 039 343.45 1.67

Poland

PLN BK PEKAO PLN1 22 528.00 653 637.32 1.05Total Poland 653 637.32 1.05

South Africa

ZAR MONDI LTD NPV 15 300.00 329 261.11 0.53GBP MONDI ORD EUR0.20 22 026.00 458 234.54 0.74ZAR NASPERS ‘N’ ZAR0.02 10 196.00 2 050 023.28 3.30ZAR SASOL NPV 30 845.00 911 305.18 1.46ZAR STANDARD BANK GROUP 0.1 44 821.00 557 138.90 0.89ZAR TIGER BRANDS ZAR0.10 38 527.00 733 258.40 1.18Total South Africa 5 039 221.41 8.10

South Korea

KRW HYUNDAI HEAVY INDS KRW5000 6 805.00 783 691.11 1.26KRW LG CHEMICAL KRW5000 4 192.00 1 303 660.21 2.10KRW LG HOUSEHOLD&HEALT KRW5000 1 294.00 1 276 836.41 2.05KRW POSCO KRW5000 4 924.00 1 072 353.52 1.73KRW SAMSUNG ELECTRONIC KRW100 92 400.00 3 204 768.02 5.15KRW SHINHAN FIN GROUP KRW5000 19 590.00 695 253.66 1.12KRW SK HYNIX INC KRW5000 23 317.00 1 264 275.46 2.03Total South Korea 9 600 838.39 15.44

Taiwan

TWD TAIWAN SEMICON MAN TWD10 487 000.00 3 572 843.80 5.75Total Taiwan 3 572 843.80 5.75

Total Bearer shares 47 040 017.17 75.65

Preference shares

Brazil

BRL PETROL BRASILEIROS PRF NPV 148 312.00 867 887.80 1.39Total Brazil 867 887.80 1.39



South Korea

KRW SAMSUNG ELECTRONIC PFD KRW100 10 650.00 303 044.91 0.49Total South Korea 303 044.91 0.49

Total Preference shares 1 170 932.71 1.88

Depository receipts

Brazil

USD BCO BRADESCO SA SPON ADR EACH REP 1 PRF NPV 127 014.00 1 256 168.46 2.02USD ITAU UNIBANCO HOLDING SA ADR 1 PFD 170 378.00 1 557 254.92 2.51USD VALE S.A. SPONS ADR REPR 1 COM NPV 87 200.00 1 150 168.00 1.85Total Brazil 3 963 591.38 6.38

China

USD ALIBABA GROUP HLDG SPON ADS EACH REP ONE ORD-ADR 19 152.00 2 625 164.64 4.22USD NETEASE INC ADR REP 25 COM USD0.0001 3 600.00 847 332.00 1.36USD NEW ORIENTAL ED & TECH GRP INC SPON ADR 9 900.00 542 619.00 0.87USD TAL EDUCATION GRP ADS EA REPR 2 CL A ORD SHS 28 800.00 768 384.00 1.24Total China 4 783 499.64 7.69

India

USD HDFC BANK LTD ADR REPS 3 SHS 1 400.00 145 026.00 0.23Total India 145 026.00 0.23

Mexico

USD AMERICA MOVIL SAB DE C V SPON ADR L SHS 44 400.00 632 700.00 1.02USD CEMEX SAB DE CV SPON ADR 5 ORD 103 000.00 496 460.00 0.80Total Mexico 1 129 160.00 1.82

Russian Federation (CIS)

USD OIL CO LUKOIL PJSC ADR EACH REPR 1 ORD RUB0.02 21 782.00 1 556 977.36 2.50Total Russian Federation (CIS) 1 556 977.36 2.50

Thailand

THB BANGKOK BANK THB10 (NVDR) 140 700.00 877 214.37 1.41Total Thailand 877 214.37 1.41

Total Depository receipts 12 455 468.75 20.03

Total Transferable securities and money market instruments listed on an official stock exchange 60 666 418.63 97.56

Transferable securities and money market instruments traded on another regulated market

Bearer shares

Russian Federation (CIS)

USD SBERBANK PAO 347 435.00 931 521.53 1.50Total Russian Federation (CIS) 931 521.53 1.50

Total Bearer shares 931 521.53 1.50

Total Transferable securities and money market instruments traded on another regulated market 931 521.53 1.50

Total investments in securities 61 597 940.16 99.06

Cash at banks, deposits on demand and deposit accounts and other liquid assets 421 369.48 0.68Bank overdraft and other short-term liabilities -478.50 0.00Other assets and liabilities 162 701.63 0.26

Total net assets 62 181 532.77 100.00



UBS (Lux) Institutional Fund – Euro Bonds Annual Report as of 31 December 2018

UBS (Lux) Institutional Fund – Euro Bonds


ISIN 31.12.2018 31.12.2017 31.12.2016Net assets in EUR 111 916 092.94 135 279 938.33 147 111 898.59Class AA LU0093640489Units outstanding 21 968.8910 22 309.3930 25 308.4120Net asset value per unit in EUR 215.05 215.09 214.65Issue and redemption price per unit in EUR1 215.05 215.09 214.65Class AD-T2 LU0157015289Units outstanding 300 266.1930 271 571.1000 270 061.8980Net asset value per unit in EUR 110.44 112.50 114.61Issue and redemption price per unit in EUR1 110.44 112.50 114.61Class BA LU0093640562Units outstanding 196 097.8660 303 333.6110 297 984.8230Net asset value per unit in EUR 232.65 231.77 230.38Issue and redemption price per unit in EUR1 232.65 231.77 230.38Class XA LU0176375417Units outstanding 149 580.1280 156 694.8590 224 050.8870Net asset value per unit in EUR 189.91 189.07 187.81Issue and redemption price per unit in EUR1 189.91 189.07 187.81

1 See note 1


During the financial year, from 1 January 2018 to 31 December 2018, the ECB kept its lead interest rates unchanged at historic low levels but decreased its QE program as disinflationary pressures ceased. As GDP growth momentum decreased throughout the year, bond yields decreased slowly after an early yield spike until February. 10-year German government bond yields decreased from 0.43% to 0.24%, yields in the 5 year sector decreased from -0.20% to -0.31%.

Over the financial year, spreads of Spanish and Italian government bonds widened, the same was true for cor-porate bonds.

The subfund had a comparable return over the finan-cial year as its benchmark, the Bloomberg Barclays Euro Aggregate 500mio+ benchmark on a gross basis. The subfund had a mostly positive performance over the financial year.


Geographical Breakdown as a % of net assetsFrance 19.64Germany 15.21Italy 13.59Spain 11.58The Netherlands 9.25United States 4.84Belgium 4.70Luxembourg 3.56Supranationals 3.22Sweden 2.68United Kingdom 2.16Guernsey 1.62Ireland 1.46Australia 1.37Norway 1.17Japan 0.77Switzerland 0.62Total 97.44

Economic Breakdown as a % of net assetsCountries & central governments 52.41Banks & credit institutions 18.76Finance & holding companies 7.36Supranational organisations 5.71Public, non-profit institutions 2.16Energy & water supply 2.07Mortgage & funding institutions 1.16Telecommunications 1.09Petroleum 0.97Pharmaceuticals, cosmetics & medical products 0.93Computer hardware & network equipment providers 0.82Vehicles 0.77Cantons, federal states 0.77Insurance 0.67Tobacco & alcohol 0.58Real Estate 0.53Food & soft drinks 0.42Electrical devices & components 0.26Total 97.44



Statement of Net Assets EURAssets 31.12.2018Investments in securities, cost 108 997 796.92Investments in securities, unrealized appreciation (depreciation) 57 780.28Total investments in securities (Note 1) 109 055 577.20Cash at banks, deposits on demand and deposit accounts 1 100 131.38Other liquid assets (Margins) 267 506.59Receivable on subscriptions 1 077 239.96Interest receivable on securities 1 087 829.26Unrealized gain (loss) on financial futures (Note 1) -124 100.00Total Assets 112 464 184.39

LiabilitiesPayable on redemptions -523 000.14Provisions for flat fee (Note 2) -13 746.79Provisions for taxe d’abonnement (Note 3) -2 797.90Provisions for other commissions and fees (Note 2) -8 546.62Total provisions -25 091.31Total Liabilities -548 091.45


Statement of Operations EURIncome 1.1.2018-31.12.2018Interest on securities 2 617 496.35Income on securities lending (Note 10) 80 498.35Other income (Note 2, 4) 30 894.56Total income 2 728 889.26

ExpensesFlat fee (Note 2) -178 496.53Taxe d’abonnement (Note 3) -12 323.11Cost on securities lending (Note 10) -32 199.34Other commissions and fees (Note 2) -20 251.89Interest on cash and bank overdraft -11 975.72Total expenses -255 246.59


Realized gain (loss) (Note 1)Realized gain (loss) on market-priced securities without options 861 385.35Realized gain (loss) on financial futures -434 939.04Realized gain (loss) on options, futures-styled -8 695.20Total realized gain (loss) 417 751.11


Changes in unrealized appreciation (depreciation) (Note 1)Unrealized appreciation (depreciation) on market-priced securities without options -2 238 769.82Unrealized appreciation (depreciation) on financial futures -321 870.00Total changes in unrealized appreciation (depreciation) -2 560 639.82

Net increase (decrease) in net assets as a result of operations 330 753.96



Statement of Changes in Net Assets EUR 1.1.2018-31.12.2018Net assets at the beginning of the financial year 135 279 938.33Subscriptions 14 228 290.15Redemptions -37 316 237.01Total net subscriptions (redemptions) -23 087 946.86Dividend paid -606 652.49Net income (loss) on investments 2 473 642.67Total realized gain (loss) 417 751.11Total changes in unrealized appreciation (depreciation) -2 560 639.82Net increase (decrease) in net assets as a result of operations 330 753.96Net assets at the end of the financial year 111 916 092.94


1.1.2018-31.12.2018Class AANumber of units outstanding at the beginning of the financial year 22 309.3930Number of units issued 0.0000Number of units redeemed -340.5020Number of units outstanding at the end of the financial year 21 968.8910Class AD-T2Number of units outstanding at the beginning of the financial year 271 571.1000Number of units issued 47 546.2040Number of units redeemed -18 851.1110Number of units outstanding at the end of the financial year 300 266.1930Class BANumber of units outstanding at the beginning of the financial year 303 333.6110Number of units issued 28 743.0280Number of units redeemed -135 978.7730Number of units outstanding at the end of the financial year 196 097.8660Class XANumber of units outstanding at the beginning of the financial year 156 694.8590Number of units issued 12 002.2800Number of units redeemed -19 117.0110Number of units outstanding at the end of the financial year 149 580.1280

Annual Distribution

UBS (Lux) Institutional Fund – Euro Bonds Ex-Date Pay-Date Currency Amount per unitAD-T2 1.3.2018 6.3.2018 EUR 2.15




Description Quantity/ Valuation in EUR as a % Nominal Unrealized gain of net (loss) on Futures/ assets Forward Exchange Contracts/ Swaps (Note 1)


Notes, fixed rate

EUR

EUR BELGIUM, KINGDOM OF 5.00000% 04-28.03.35 890 000.00 1 367 894.40 1.22Total EUR 1 367 894.40 1.22

Total Notes, fixed rate 1 367 894.40 1.22

Notes, floating rate

EUR

EUR CNP ASSURANCES-SUB 6.000%/VAR 10-14.09.40 700 000.00 754 836.88 0.67Total EUR 754 836.88 0.67

Total Notes, floating rate 754 836.88 0.67

Medium term notes, fixed rate

EUR

EUR AGENCE FRANCE LOCALE-REG-S 0.37500% 15-20.03.22 1 300 000.00 1 316 718.00 1.18EUR APPLE INC 1.00000% 14-10.11.22 400 000.00 413 400.16 0.37EUR BANK OF AMERICA CORP-REG-S 2.50000% 13-27.07.20 850 000.00 880 526.90 0.79EUR BANQUE FEDER DU CREDIT MUTUEL-REG-S-SUB 3.00000% 15-11.09.25 300 000.00 315 563.79 0.28EUR BARCLAYS BANK PLC-SUB 6.62500% 11-30.03.22 300 000.00 336 183.63 0.30EUR BNP PARIBAS-REG-S-SUB 2.87500% 16-01.10.26 1 150 000.00 1 183 684.65 1.06EUR BP CAPITAL MARKETS PLC-REG-S 1.59400% 18-03.07.28 500 000.00 497 884.00 0.44EUR COCA-COLA HBC FINANCE BV-REG-S 1.87500% 16-11.11.24 700 000.00 736 595.58 0.66EUR COMMERZBANK AG-REG-S 0.50000% 18-28.08.23 600 000.00 591 886.22 0.53EUR COMPAGNIE DE FINANCEMENT FONCIER 2.00000% 14-07.05.24 500 000.00 543 209.00 0.49EUR DIAGEO FINANCE PLC-REG-S 1.00000% 18-22.04.25 250 000.00 250 283.10 0.22EUR DNB BANK ASA-REG-S 0.60000% 18-25.09.23 700 000.00 700 154.00 0.63EUR EDP FINANCE BV-REG-S 2.62500% 14-18.01.22 470 000.00 498 856.12 0.45EUR ELECTRICITE DE FRANCE-REG-S 1.87500% 16-13.10.36 1 000 000.00 908 374.00 0.81EUR EUROPEAN FINANCIAL STABILITY FAC-REG-S 1.87500% 13-23.05.23 800 000.00 866 227.20 0.77EUR EUROPEAN FINANCIAL STABILITY FAC-REG-S 0.20000% 15-28.04.25 612 000.00 607 126.03 0.54EUR EUROPEAN INVESTMENT BANK 3.62500% 11-15.01.21 700 000.00 757 737.26 0.68EUR EUROPEAN STABILITY MECHANISM-REG-S 0.50000% 16-02.03.26 1 026 207.00 1 034 976.96 0.92EUR EUROPEAN UNION-REG-S 2.50000% 12-04.11.27 1 462 000.00 1 703 469.77 1.52EUR FMS WERTMANAGEMENT 0.37500% 15-29.04.30 1 100 000.00 1 045 814.00 0.93EUR GAZ CAPITAL SA/GAZPROM-REG-S LPN 3.60000% 14-26.02.21 570 000.00 596 362.50 0.53EUR GENERAL MOTORS FINANCIAL CO INC-REG-S 0.95500% 16-07.09.23 640 000.00 613 146.88 0.55EUR GLENCORE FINANCE EUROPE SA-REG-S 3.75000% 14-01.04.26 280 000.00 299 400.11 0.27EUR GLENCORE FINANCE EUROPE SA-REG-S 1.87500% 16-13.09.23 300 000.00 298 932.00 0.27EUR HSBC FRANCE 1.87500% 13-16.01.20 900 000.00 918 429.84 0.82EUR INTESA SANPAOLO SPA-REG-S 2.00000% 14-18.06.21 310 000.00 314 535.30 0.28EUR JPMORGAN CHASE & CO-REG-S 1.50000% 15-27.01.25 300 000.00 305 228.40 0.27EUR KREDITANSTALT FUER WIEDERAUFBAU-REG-S 0.37500% 15-23.04.30 1 400 000.00 1 336 020.00 1.19EUR LANSFORSAKRINGAR HYPOTEK AB-REG-S 0.62500% 18-27.03.25 1 200 000.00 1 204 219.92 1.08EUR NATIONAL AUSTRALIA BANK LTD 1.87500% 12-13.01.23 500 000.00 532 241.25 0.48EUR ORIGIN ENERGY FINANCE LTD-REG-S 2.50000% 13-23.10.20 470 000.00 485 515.41 0.43EUR PHILIP MORRIS INTERNATIONAL INC 2.87500% 14-03.03.26 600 000.00 651 314.70 0.58EUR RABOBANK INTERNATIONAL 4.00000% 12-11.01.22 765 000.00 851 883.42 0.76EUR RABOBANK NEDERLAND NV-REG-S 1.50000% 18-26.04.38 1 700 000.00 1 701 706.80 1.52EUR ROYAL BANK OF SCOTLAND GROUP PLC-REG-S 2.50000% 16-22.03.23 300 000.00 305 762.61 0.27EUR SANOFI-REG-S 1.75000% 14-10.09.26 700 000.00 741 909.42 0.66EUR SANTANDER UK PLC-REG-S 2.62500% 13-16.07.20 410 000.00 424 182.19 0.38EUR SHELL INTERNATIONAL FINANCE BV-REG-S 1.87500% 15-15.09.25 676 000.00 718 250.20 0.64EUR SKANDINAVISKA ENSKILDA BANKEN AB 1.62500% 13-04.11.20 300 000.00 309 858.87 0.28EUR SPAREBANKEN 1 BOLIGKREDITT-REG-S 0.75000% 15-05.09.22 600 000.00 613 602.66 0.55EUR STOCKHOLMS LANS LANDSTING 2.12500% 12-12.09.22 800 000.00 860 528.00 0.77EUR TOYOTA MOTOR CORP-REG-S 2.37500% 13-01.02.23 800 000.00 862 107.44 0.77EUR UBS GROUP FUNDING SWISS AG-REG-S 1.25000% 16-01.09.26 709 000.00 689 481.69 0.62EUR UNICREDITO ITALIANO SPA 1.00000% 18-18.01.23 410 000.00 383 440.62 0.34EUR VODAFONE GROUP PLC-REG-S 1.60000% 16-29.07.31 664 000.00 605 828.29 0.54EUR VOLKSWAGEN BANK GMBH-REG-S 1.25000% 17-15.12.25 860 000.00 800 763.20 0.72EUR VONOVIA FINANCE BV-REG-S 0.87500% 18-03.07.23 600 000.00 588 717.28 0.53EUR WESTPAC BANKING CORP-REG-S 1.37500% 13-17.04.20 500 000.00 509 530.15 0.45Total EUR 33 711 569.52 30.12

Total Medium term notes, fixed rate 33 711 569.52 30.12

Medium term notes, floating rate

EUR

EUR BANK OF AMERICA CO-REG-S 1.379%/3M EURIBOR+103BP 17-07.02.25 420 000.00 421 929.48 0.37EUR DANONE SA-REG-S-SUB 1.750%/VAR 17-PRP 500 000.00 468 750.00 0.42EUR ENBW ENERGIE BADEN-WUERTT-REG-S-SUB 3.625%/VAR 14-02.04.76 540 000.00 556 804.80 0.50EUR IBERDROLA INTERNATIONAL BV-REG-S-SUB 2.625%/VAR 18-PRP 300 000.00 289 875.00 0.26EUR ING GROEP NV-SUB 3.000%/VAR 17-11.04.28 800 000.00 829 316.64 0.74EUR JP MORGAN CHASE & CO-REG-S 1.812%/VAR 18-12.06.29 700 000.00 702 139.20 0.63EUR SVENSKA HANDELSBANKEN AB-REG-S-SUB 1.625%/VAR 18-05.03.29 630 000.00 623 441.70 0.56EUR TOTAL SA-REG-S-SUB 2.708%/VAR 16-PRP 590 000.00 601 062.50 0.54Total EUR 4 493 319.32 4.02

Total Medium term notes, floating rate 4 493 319.32 4.02



Bonds, fixed rate

EUR

EUR ABBVIE INC 1.37500% 16-17.05.24 300 000.00 302 501.01 0.27EUR APPLE INC 1.37500% 17-24.05.29 500 000.00 506 724.00 0.45EUR AT&T INC 3.50000% 13-17.12.25 550 000.00 614 043.10 0.55EUR BANKIA SA-REG-S 1.12500% 15-05.08.22 1 500 000.00 1 546 794.00 1.38EUR BAYER CAPITAL CORP BV-REG-S 1.50000% 18-26.06.26 300 000.00 291 374.40 0.26EUR BAYER CAPITAL CORP BV-REG-S 2.12500% 18-15.12.29 300 000.00 291 657.94 0.26EUR BELGIUM, KINGDOM OF 4.50000% 11-28.03.26 2 237 000.00 2 887 609.08 2.58EUR BELGIUM, KINGDOM OF-144A-REG-S 0.80000% 18-22.06.28 1 000 000.00 1 002 704.80 0.90EUR CAISSE D’AMORTIS DE LA DETTE SOCIALE 4.00000% 12-15.12.25 1 100 000.00 1 373 086.00 1.23EUR CREDIT SUISSE GUERNSEY LTD-REG-S 0.75000% 14-17.09.21 1 780 000.00 1 816 643.08 1.62EUR EUROPEAN INVESTMENT BANK 1.00000% 16-14.04.32 1 430 000.00 1 426 751.53 1.27EUR FRANCE, REPUBLIC OF-OAT 5.75000% 01-25.10.32 1 186 000.00 1 918 414.30 1.71EUR FRANCE, REPUBLIC OF-OAT 8.25000% 92-25.04.22 1 480 000.00 1 903 576.00 1.70EUR FRANCE, REPUBLIC OF-OAT 4.00000% 06-25.10.38 1 210 000.00 1 787 654.00 1.60EUR FRANCE, REPUBLIC OF-OAT 4.50000% 09-25.04.41 1 168 000.00 1 868 878.26 1.67EUR FRANCE, REPUBLIC OF-OAT 3.50000% 10-25.04.20 700 000.00 737 429.42 0.66EUR FRANCE, REPUBLIC OF-OAT 4.00000% 10-25.04.60 500 000.00 825 118.00 0.74EUR FRANCE, REPUBLIC OF-OAT-REG-S 0.25000% 15-25.11.26 2 280 000.00 2 247 530.06 2.01EUR FRANCE, REPUBLIC OF-OAT-144A-REG-S 2.00000% 17-25.05.48 200 000.00 217 222.72 0.19EUR FRANCE, REPUBLIC OF-OAT-REG-S 0.75000% 18-25.11.28 800 000.00 803 048.32 0.72EUR GERMAN POSTAL PENSIONS SEC 3.75000% 05-18.01.21 900 000.00 972 219.24 0.87EUR GERMANY, REPUBLIC OF-REG-S 0.25000% 17-15.02.27 2 852 000.00 2 896 096.49 2.59EUR GERMANY, REPUBLIC OF-REG-S 0.25000% 18-15.08.28 500 000.00 500 342.90 0.45EUR GERMANY, REPUBLIC OF 5.50000% 00-04.01.31 500 000.00 804 170.00 0.72EUR GERMANY, REPUBLIC OF 4.75000% 03-04.07.34 420 000.00 684 709.20 0.61EUR GERMANY, REPUBLIC OF 4.00000% 05-04.01.37 400 000.00 630 477.79 0.56EUR GERMANY, REPUBLIC OF 4.25000% 07-04.07.39 2 200 000.00 3 701 482.84 3.31EUR GERMANY, REPUBLIC OF 2.50000% 12-04.07.44 2 500 000.00 3 471 456.00 3.10EUR IRELAND, REPUBLIC OF 4.50000% 04-18.04.20 117 000.00 124 517.29 0.11EUR IRELAND-REG-S 2.40000% 14-15.05.30 470 000.00 533 085.28 0.48EUR ITALY, REPUBLIC OF-BTP 1.35000% 15-15.04.22 954 000.00 956 720.81 0.85EUR ITALY, REPUBLIC OF-BTP-144A-REG-S 1.65000% 15-01.03.32 887 000.00 767 863.48 0.69EUR ITALY, REPUBLIC OF-BTP-144A-REG-S 2.70000% 16-01.03.47 1 200 000.00 1 064 445.60 0.95EUR ITALY, REPUBLIC OF-BTP-144A-REG-S 2.25000% 16-01.09.36 1 371 000.00 1 219 849.99 1.09EUR ITALY, REPUBLIC OF-BTP 1.25000% 16-01.12.26 1 528 000.00 1 411 984.19 1.26EUR ITALY, REPUBLIC OF-BTP 0.65000% 16-15.10.23 1 596 000.00 1 520 525.16 1.36EUR ITALY, REPUBLIC OF-BTP 0.35000% 16-01.11.21 4 767 000.00 4 688 585.90 4.19EUR ITALY, REPUBLIC OF-BTP 2.00000% 18-01.02.28 3 016 000.00 2 884 659.23 2.58EUR NETHERLANDS, KINGDOM OF THE 2.75000% 14-15.01.47 450 000.00 654 487.20 0.58EUR NETHERLANDS, KINGDOM OF THE-144A-REG-S 0.50000% 16-15.07.26 1 120 000.00 1 149 762.88 1.03EUR RABOBANK NEDERLAND NV-SUB 3.87500% 13-25.07.23 1 300 000.00 1 453 540.66 1.30EUR SPAIN GOVERNMENT BOND-144A-REG-S 2.75000% 14-31.10.24 4 066 000.00 4 553 061.26 4.07EUR SPAIN, KINGDOM OF-144A-REG-S 1.95000% 16-30.04.26 5 621 000.00 5 996 625.57 5.36EUR SPAIN, KINGDOM OF-144A-REG-S 2.90000% 16-31.10.46 811 000.00 868 175.50 0.77Total EUR 67 877 604.48 60.65

Total Bonds, fixed rate 67 877 604.48 60.65

Bonds, floating rate

EUR

EUR ALLIANDER NV-REG-S-SUB 1.625%/VAR 18-PRP 310 000.00 299 987.00 0.27EUR ENGIE SA-REG-S-SUB VAR 18-PRP 600 000.00 550 365.60 0.49Total EUR 850 352.60 0.76

Total Bonds, floating rate 850 352.60 0.76



Derivative instruments

Derivative instruments listed on an official stock exchange

Financial Futures on bonds

EUR EURO-BUND FUTURE 07.03.19 -45.00 -55 200.00 -0.05EUR EURO-BOBL FUTURE 07.03.19 -20.00 -8 000.00 -0.01EUR EURO-BUXL FUTURE 07.03.19 -15.00 -60 900.00 -0.05Total Financial Futures on bonds -124 100.00 -0.11

Total Derivative instruments listed on an official stock exchange -124 100.00 -0.11

Total Derivative instruments -124 100.00 -0.11

Cash at banks, deposits on demand and deposit accounts and other liquid assets 1 367 637.97 1.22Other assets and liabilities 1 616 977.77 1.45

Total net assets 111 916 092.94 100.00



UBS (Lux) Institutional Fund – Euro Corporate BondsAnnual Report as of 31 December 2018


ISIN 31.12.2018 31.12.2017 31.12.2016Net assets in EUR 89 163 986.33 94 394 770.39 103 054 993.66Class AA LU0130421521Units outstanding 12 944.0010 81 125.0900 76 869.8310Net asset value per unit in EUR 177.62 181.20 177.05Issue and redemption price per unit in EUR1 177.62 181.20 177.05Class BA LU0130422412Units outstanding 304 141.1780 281 502.0420 380 002.4880Net asset value per unit in EUR 195.07 197.93 192.34Issue and redemption price per unit in EUR1 195.07 197.93 192.34Class XA LU0176376811Units outstanding 170 551.5130 146 454.9750 102 873.7620Net asset value per unit in EUR 161.45 163.71 158.99Issue and redemption price per unit in EUR1 161.45 163.71 158.99

1 See note 1

UBS (Lux) Institutional Fund – Euro Corporate Bonds


During the financial year, from 1 January 2018 to 31 December 2018, the market produced a negative performance. Although risk-free rates decreased over the financial year, significant widening of corporate over government interest rate spreads had a stronger effect leading to negative returns. Financials and specifically financial subordinated bonds underperformed both industrial and utility issues.

The subfund produced a negative performance during the financial year. Our allocation to financial and non-financial (hybrid) subordinated bonds contributed nega-tively, while our allocation to single issuers with higher ratings was beneficial to performance. We held a neutral duration stance over the financial year.


Geographical Breakdown as a % of net assetsThe Netherlands 20.37France 16.93United States 16.66United Kingdom 11.93Germany 7.26Finland 2.72Ireland 2.07Spain 2.04Italy 2.01Luxembourg 1.85Switzerland 1.65Sweden 1.57Japan 1.35Jersey 1.05Denmark 0.95Australia 0.94Guernsey 0.79Singapore 0.55Belgium 0.33Total 93.02

Economic Breakdown as a % of net assetsBanks & credit institutions 32.40Finance & holding companies 28.27Telecommunications 4.86Insurance 4.03Energy & water supply 3.26Countries & central governments 2.47Electrical devices & components 2.27Food & soft drinks 2.12Petroleum 2.09Mortgage & funding institutions 2.05Tobacco & alcohol 1.99Pharmaceuticals, cosmetics & medical products 1.71Real Estate 1.35Aerospace industry 1.05Building industry & materials 0.77Internet, software & IT services 0.56Electronics & semiconductors 0.54Retail trade, department stores 0.45Miscellaneous services 0.45Chemicals 0.33Total 93.02



Statement of Net Assets EURAssets 31.12.2018Investments in securities, cost 83 888 469.47Investments in securities, unrealized appreciation (depreciation) -950 072.06Total investments in securities (Note 1) 82 938 397.41Cash at banks, deposits on demand and deposit accounts 5 197 792.92Interest receivable on securities 1 041 033.98Total Assets 89 177 224.31

LiabilitiesProvisions for flat fee (Note 2) -5 366.73Provisions for taxe d’abonnement (Note 3) -2 229.11Provisions for other commissions and fees (Note 2) -5 642.14Total provisions -13 237.98Total Liabilities -13 237.98


Statement of Operations EURIncome 1.1.2018-31.12.2018Interest on securities 2 005 679.06Other income (Note 2, 4) 53 890.98Total income 2 059 570.04

ExpensesFlat fee (Note 2) -91 970.92Taxe d’abonnement (Note 3) -9 029.11Other commissions and fees (Note 2) -14 602.90Interest on cash and bank overdraft -7 605.92Total expenses -123 208.85


Realized gain (loss) (Note 1)Realized gain (loss) on market-priced securities without options -270 031.64Realized gain (loss) on financial futures 53 653.61Total realized gain (loss) -216 378.03


Changes in unrealized appreciation (depreciation) (Note 1)Unrealized appreciation (depreciation) on market-priced securities without options -3 091 715.25Unrealized appreciation (depreciation) on financial futures -1 720.00Total changes in unrealized appreciation (depreciation) -3 093 435.25




Statement of Changes in Net Assets EUR 1.1.2018-31.12.2018Net assets at the beginning of the financial year 94 394 770.39Subscriptions 23 140 985.02Redemptions -26 998 316.99Total net subscriptions (redemptions) -3 857 331.97Net income (loss) on investments 1 936 361.19Total realized gain (loss) -216 378.03Total changes in unrealized appreciation (depreciation) -3 093 435.25Net increase (decrease) in net assets as a result of operations -1 373 452.09Net assets at the end of the financial year 89 163 986.33


1.1.2018-31.12.2018Class AANumber of units outstanding at the beginning of the financial year 81 125.0900Number of units issued 8 446.9920Number of units redeemed -76 628.0810Number of units outstanding at the end of the financial year 12 944.0010Class BANumber of units outstanding at the beginning of the financial year 281 502.0420Number of units issued 68 689.1610Number of units redeemed -46 050.0250Number of units outstanding at the end of the financial year 304 141.1780Class XANumber of units outstanding at the beginning of the financial year 146 454.9750Number of units issued 50 179.9190Number of units redeemed -26 083.3810Number of units outstanding at the end of the financial year 170 551.5130






Notes, fixed rate

EUR

EUR ENEL FINANCE INTERNATIONAL NV-REG-S 1.37500% 16-01.06.26 1 159 000.00 1 120 729.82 1.26EUR PHILIP MORRIS INTERNATIONAL INC 2.75000% 13-19.03.25 300 000.00 323 915.16 0.36Total EUR 1 444 644.98 1.62

Total Notes, fixed rate 1 444 644.98 1.62

Notes, floating rate

EUR

EUR BANK OF AMERICA CORP-SUB 4.750%/VAR 04-06.05.19 293 000.00 293 612.70 0.33EUR NGG FINANCE-REG-S-SUB 4.250%/VAR 13-18.06.76 800 000.00 818 176.64 0.92Total EUR 1 111 789.34 1.25

Total Notes, floating rate 1 111 789.34 1.25


EUR

EUR ABN AMRO BANK NV-REG-S-SUB 7.12500% 12-06.07.22 400 000.00 478 089.20 0.54EUR ACHMEA BANK NV 2.75000% 14-18.02.21 770 000.00 809 950.83 0.91EUR ANGLO AMERICAN CAPITAL PLC-REG-S 1.62500% 17-18.09.25 400 000.00 378 312.00 0.42EUR ASSICURAZIONI GENERALI SPA-REG-S-SUB 4.12500% 14-04.05.26 600 000.00 624 150.00 0.70EUR BANK OF AMERICA CORP-REG-S 1.37500% 14-10.09.21 400 000.00 410 440.00 0.46EUR BANK OF AMERICA CORP-REG-S 1.37500% 15-26.03.25 500 000.00 502 786.90 0.56EUR BANQUE FEDER DU CREDIT MUTUEL-REG-S 1.25000% 15-14.01.25 400 000.00 406 056.20 0.46EUR BANQUE FEDER DU CREDIT MUTUEL-REG-S 1.62500% 16-19.01.26 500 000.00 517 027.00 0.58EUR BANQUE FEDER DU CREDIT MUTUEL-REG-S-SUB 2.37500% 16-24.03.26 600 000.00 600 576.12 0.67EUR BANQUE FEDERATIVE DU CREDIT MUTUEL 2.62500% 13-24.02.21 500 000.00 526 872.05 0.59EUR BARCLAYS BANK PLC-SUB 6.62500% 11-30.03.22 300 000.00 336 183.63 0.38EUR BARCLAYS PLC-REG-S 1.87500% 16-08.12.23 300 000.00 296 265.77 0.33EUR BAT INTERNATIONAL FINANCE PLC-REG-S 0.87500% 15-13.10.23 300 000.00 291 517.77 0.33EUR BAT INTERNATIONAL FINANCE PLC-REG-S 2.25000% 17-16.01.30 500 000.00 458 469.00 0.51EUR BELFIUS BANK SA/NV-REG-S 1.00000% 17-26.10.24 300 000.00 292 345.20 0.33EUR BMW FINANCE NV-REG-S 2.62500% 14-17.01.24 300 000.00 324 138.00 0.36EUR BMW FINANCE NV-REG-S 0.75000% 16-15.04.24 300 000.00 295 736.40 0.33EUR BNP PARIBAS SA 2.37500% 14-20.05.24 300 000.00 325 320.00 0.37EUR BNP PARIBAS SA-REG-S 1.50000% 17-17.11.25 500 000.00 493 633.00 0.55EUR BNP PARIBAS-REG-S 1.12500% 16-15.01.23 700 000.00 716 312.87 0.80EUR BP CAPITAL MARKETS PLC-REG-S 1.57300% 15-16.02.27 400 000.00 402 472.80 0.45EUR BP CAPITAL MARKETS PLC-REG-S 1.63700% 17-26.06.29 800 000.00 791 303.93 0.89EUR BPCE SA 4.50000% 12-10.02.22 1 400 000.00 1 588 216.14 1.78EUR BRITISH TELECOMMUNICATIONS PLC-REG-S 1.75000% 16-10.03.26 200 000.00 197 734.00 0.22EUR BRITISH TELECOMMUNICATIONS PLC-REG-S 1.12500% 16-10.03.23 200 000.00 200 120.40 0.22EUR CIE DE SAINT-GOBAIN-REG-S 1.12500% 18-23.03.26 400 000.00 387 323.99 0.43EUR CITIGROUP INC-REG-S 1.50000% 16-26.10.28 1 000 000.00 961 300.11 1.08EUR COMMERZBANK AG-REG-S 0.50000% 18-28.08.23 600 000.00 591 886.22 0.66EUR CREDIT AGRICOLE SA LONDON 2.37500% 14-20.05.24 800 000.00 861 952.00 0.97EUR CREDIT AGRICOLE SA LONDON-REG-S 1.87500% 16-20.12.26 700 000.00 704 030.60 0.79EUR CREDIT SUISSE GRP FDNG GUERNSEY-REG-S 1.25000% 15-14.04.22 700 000.00 705 238.66 0.79EUR DANSKE BANK AS-REG-S 0.50000% 16-06.05.21 400 000.00 399 304.02 0.45EUR DEUTSCHE TELEKOM INTL FINANCE BV-REG-S 1.50000% 16-03.04.28 400 000.00 395 933.60 0.44EUR DEUTSCHE TELEKOM INTL FIN BV-REG-S 2.00000% 18-01.12.29 500 000.00 504 080.00 0.57EUR DIAGEO FINANCE PLC-REG-S 1.75000% 14-23.09.24 800 000.00 838 326.08 0.94EUR EDP FINANCE BV-REG-S 2.62500% 14-18.01.22 1 000 000.00 1 061 396.00 1.19EUR ENAGAS FINANCIACIONES SAU-REG-S 1.25000% 15-06.02.25 1 000 000.00 1 023 032.00 1.15EUR EUROGRID GMBH-REG-S 1.50000% 16-18.04.28 400 000.00 397 764.00 0.45EUR GAS NATURAL FENOSA FINANCE BV-REG-S 3.50000% 13-15.04.21 500 000.00 539 611.15 0.61EUR GE CAPITAL EUROPEAN FUNDING-REG-S 0.80000% 15-21.01.22 1 000 000.00 960 058.10 1.08EUR GENERAL MOTORS FINANCIAL CO INC-REG-S 0.95500% 16-07.09.23 500 000.00 479 021.00 0.54EUR GENERAL MOTORS FINANCIAL CO INC-REG-S 1.69400% 18-26.03.25 600 000.00 573 452.40 0.64EUR GLENCORE FINANCE EUROPE SA-REG-S 1.62500% 14-18.01.22 100 000.00 100 528.31 0.11EUR GLENCORE FINANCE EUROPE SA-REG-S 1.75000% 15-17.03.25 800 000.00 766 192.00 0.86EUR GOLDMAN SACHS GROUP INC 2.87500% 14-03.06.26 900 000.00 949 703.94 1.07EUR GOLDMAN SACHS GROUP INC-REG-S 1.62500% 16-27.07.26 300 000.00 290 530.20 0.33EUR GOLDMAN SACHS GROUP INC-REG-S 1.25000% 16-01.05.25 400 000.00 387 228.95 0.43EUR HEATHROW FUNDING LTD-REG-S 1.50000% 15-11.02.30 1 000 000.00 935 839.93 1.05EUR HEIDELBERGCEMENT AG-REG-S 1.50000% 16-07.02.25 300 000.00 297 445.20 0.33EUR HEIDELBERGCEMENT FIN LUX SA-REG-S 0.50000% 17-18.01.21 500 000.00 498 680.00 0.56EUR HEIDELBERGCEMENT FIN LUX SA-REG-S 1.75000% 18-24.04.28 300 000.00 283 372.80 0.32EUR HEINEKEN NV 2.00000% 13-06.04.21 300 000.00 312 650.61 0.35EUR HSBC HOLDINGS PLC-SUB 3.00000% 15-30.06.25 400 000.00 419 150.76 0.47EUR HSBC HOLDINGS PLC-SUB 3.12500% 16-07.06.28 200 000.00 210 461.46 0.24EUR IBERDROLA INTERNATIONAL BV-REG-S 3.50000% 13-01.02.21 700 000.00 749 602.00 0.84EUR INNOGY FINANCE II BV-REG-S 5.75000% 03-14.02.33 200 000.00 278 569.20 0.31EUR JP MORGAN CHASE & CO 2.75000% 13-01.02.23 800 000.00 866 419.20 0.97EUR JPMORGAN CHASE & CO 3.87500% 10-23.09.20 250 000.00 265 993.57 0.30EUR JPMORGAN CHASE & CO-REG-S 1.50000% 15-27.01.25 500 000.00 508 714.00 0.57EUR JPMORGAN CHASE & CO-REG-S 1.50000% 16-29.10.26 300 000.00 302 860.41 0.34EUR KONINKLIJKE KPN NV-REG-S 1.12500% 16-11.09.28 400 000.00 376 556.00 0.42EUR LLOYDS BANK PLC-SUB 6.50000% 10-24.03.20 300 000.00 319 750.29 0.36EUR MFINANCE FRANCE SA 2.37500% 14-01.04.19 200 000.00 200 000.00 0.22EUR MORGAN STANLEY 1.75000% 15-30.01.25 400 000.00 405 480.80 0.45EUR MORGAN STANLEY 1.87500% 17-27.04.27 300 000.00 300 807.00 0.34EUR MORGAN STANLEY 2.37500% 14-31.03.21 700 000.00 731 094.00 0.82EUR NATWEST MARKETS PLC-REG-S 5.50000% 10-23.03.20 200 000.00 212 265.48 0.24EUR NORDEA BANK ABP-REG-S 1.12500% 17-27.09.27 200 000.00 202 056.90 0.23



EUR NORDEA BANK ABP-SUB 4.00000% 10-29.03.21 200 000.00 214 863.44 0.24EUR OP CORPORATE BANK PLC-REG-S 0.75000% 15-03.03.22 200 000.00 202 599.48 0.23EUR OP CORPORATE BANK PLC-REG-S 0.87500% 16-21.06.21 800 000.00 813 353.36 0.91EUR ORANGE SA-REG-S 1.00000% 18-12.09.25 300 000.00 297 598.80 0.33EUR PGE SWEDEN AB-REG-S 1.62500% 14-09.06.19 740 000.00 744 521.40 0.84EUR PHILIP MORRIS INTERNATIONAL INC 2.87500% 14-03.03.26 500 000.00 542 762.25 0.61EUR RABOBANK NEDERLAND NV-REG-S-SUB 4.12500% 12-14.09.22 1 300 000.00 1 447 005.04 1.62EUR RCI BANQUE SA REG-S 1.25000% 15-08.06.22 900 000.00 899 708.40 1.01EUR RCI BANQUE SA-REG-S 0.50000% 16-15.09.23 200 000.00 190 688.80 0.21EUR REPSOL INTERNATIONAL FINANCE BV-REG-S 2.62500% 13-28.05.20 400 000.00 413 694.56 0.46EUR REPSOL INTERNATIONAL FINANCE BV-REG-S 2.25000% 14-10.12.26 200 000.00 213 596.00 0.24EUR SANOFI-REG-S 1.37500% 18-21.03.30 400 000.00 402 578.92 0.45EUR SHELL INTERNATIONAL FINANCE BV-REG-S 0.75000% 16-15.08.28 800 000.00 762 110.40 0.85EUR SKY PLC-REG-S 2.50000% 14-15.09.26 400 000.00 424 504.80 0.48EUR SOCIETE GENERALE SA-REG-S 0.75000% 16-26.05.23 500 000.00 503 870.50 0.57EUR SOCIETE GENERALE-REG-S 1.00000% 16-01.04.22 700 000.00 702 409.68 0.79EUR SSE PLC 2.00000% 13-17.06.20 400 000.00 408 720.00 0.46EUR SUMITOMO MITSUI FIN GP INC-REG-S 0.81900% 18-23.07.23 1 200 000.00 1 199 978.40 1.35EUR TELEFONICA EMISIONES SA-REG-S 1.46000% 16-13.04.26 400 000.00 396 144.00 0.44EUR TELEFONICA EMISIONES SA-REG-S 1.49500% 18-11.09.25 400 000.00 400 348.00 0.45EUR UBS GROUP FUNDING SWISS AG-REG-S 1.25000% 16-01.09.26 800 000.00 777 976.52 0.87EUR UNIBAIL-RODAMCO SE-REG-S 2.50000% 13-12.06.23 500 000.00 542 853.70 0.61EUR UNICREDITO ITALIANO SPA 1.00000% 18-18.01.23 1 250 000.00 1 169 026.27 1.31EUR VERIZON COMMUNICATIONS INC 3.25000% 14-17.02.26 100 000.00 112 234.60 0.13EUR VODAFONE GROUP PLC-REG-S 1.60000% 16-29.07.31 200 000.00 182 478.40 0.20EUR VODAFONE GROUP PLC-REG-S 1.50000% 17-24.07.27 400 000.00 388 827.20 0.44EUR VOLKSWAGEN INTERNATIONAL FIN NV-REG-S 1.62500% 15-16.01.30 500 000.00 432 795.00 0.49EUR VOLKSWAGEN LEASING GMBH-REG-S 0.75000% 15-11.08.20 200 000.00 200 877.20 0.23EUR VOLKSWAGEN LEASING GMBH-REG-S 1.12500% 17-04.04.24 300 000.00 289 494.00 0.32EUR VONOVIA FINANCE BV-REG-S 0.87500% 18-03.07.23 200 000.00 196 239.09 0.22EUR WELLS FARGO & CO-REG-S 2.62500% 12-16.08.22 400 000.00 428 256.00 0.48Total EUR 50 721 806.36 56.89

Total Medium term notes, fixed rate 50 721 806.36 56.89

Medium term notes, floating rate

EUR

EUR ALLIANZ FINANCE II-SUB 5.750%/3M EURIBOR+334.9BP 11-08.07.41 500 000.00 554 236.60 0.62EUR ALLIANZ SE-REG-S-SUB 4.750%/3M EURIBOR+360BP 13-PRP 800 000.00 878 211.28 0.98EUR AVIVA PLC-REG-S-SUB 3.375%/VAR 15-04.12.45 200 000.00 193 143.99 0.22EUR AVIVA PLC-SUB 6.125%/VAR 13-05.07.43 200 000.00 222 250.00 0.25EUR AXA SA-REG-S-SUB 3.250%/VAR 18-28.05.49 200 000.00 190 626.00 0.21EUR AXA SA-REG-S-SUB 3.375%/VAR 16-06.07.47 200 000.00 200 129.72 0.22EUR AXA SA-REG-S-SUB 3.941%/VAR 14-PRP 300 000.00 309 750.00 0.35EUR BARCLAYS PLC-REG-S 1.375%/VAR 18-24.01.26 600 000.00 554 873.06 0.62EUR BAYER AG-REG-S-SUB 3.000%/VAR 14-01.07.75 300 000.00 298 323.00 0.33EUR CITIGROUP INC-SUB 4.250%/FLR 05-25.02.30 300 000.00 347 689.38 0.39EUR COMMONWEALTH BK OF AUSTRLIA-REG-S-SUB 1.936%/VAR 17-03.10.29 400 000.00 379 056.00 0.43EUR DANONE SA-REG-S-SUB 1.750%/VAR 17-PRP 500 000.00 468 750.00 0.53EUR DBS GROUP HOLDINGS LTD-REG-S-SUB 1.500%/VAR 18-11.04.28 500 000.00 493 855.00 0.55EUR ENBW ENERGIE BADEN-WUERTT-REG-S-SUB 3.625%/VAR 14-02.04.76 300 000.00 309 336.00 0.35EUR IBERDROLA INTERNATIONAL BV-REG-S-SUB 2.625%/VAR 18-PRP 800 000.00 773 000.00 0.87EUR ING BANK NV-SUB 3.625%/VAR 14-25.02.26 1 400 000.00 1 478 602.30 1.66EUR ING GROEP NV-SUB 3.000%/VAR 17-11.04.28 300 000.00 310 993.74 0.35EUR LA BANQUE POSTALE-REG-S-SUB-2.750%/VAR 14-23.04.26 400 000.00 411 352.80 0.46EUR NORDEA BANK ABP-REG-S-SUB 1.000%/VAR 16-07.09.26 1 000 000.00 993 839.67 1.11EUR SKANDINAVISKA ENSKILDA BANKEN AB-SUB 2.500%/VAR 14-28.05.26 300 000.00 310 011.00 0.35EUR SVENSKA HANDELSBANKEN AB-REG-S-SUB 1.625%/VAR 18-05.03.29 350 000.00 346 356.50 0.39EUR TOTAL SA-REG-S-SUB 2.250%/VAR 15-PRP 1 000 000.00 1 008 700.00 1.13EUR TOTAL SA-REG-S-SUB 3.369%/VAR 16-PRP 400 000.00 408 103.20 0.46Total EUR 11 441 189.24 12.83

Total Medium term notes, floating rate 11 441 189.24 12.83

Bonds, fixed rate

EUR

EUR ABBVIE INC 2.12500% 16-17.11.28 400 000.00 407 172.48 0.46EUR ARGENTUM NETHERLANDS BV FOR GIV-REG-S 2.00000% 18-17.09.30 600 000.00 611 322.00 0.69EUR AT&T INC 2.60000% 14-17.12.29 400 000.00 401 376.80 0.45EUR AT&T INC 3.50000% 13-17.12.25 500 000.00 558 221.00 0.63EUR BAYER CAPITAL CORP BV-REG-S 1.50000% 18-26.06.26 300 000.00 291 374.40 0.33EUR BAYER CAPITAL CORP BV-REG-S 2.12500% 18-15.12.29 500 000.00 486 096.56 0.55EUR COCA-COLA EUROPEAN PARTNERS PLC-REG-S 1.75000% 16-26.05.28 900 000.00 909 619.20 1.02EUR CREDIT AGRICOLE SA-REG-S-SUB 2.62500% 15-17.03.27 150 000.00 152 341.80 0.17EUR CRH FINANCE LTD 3.12500% 13-03.04.23 800 000.00 881 723.36 0.99EUR GENERAL ELECTRIC CO 1.50000% 17-17.05.29 400 000.00 346 360.00 0.39EUR GENERAL ELECTRIC CO 2.12500% 17-17.05.37 200 000.00 155 817.20 0.17EUR GERMANY, REPUBLIC OF-REG-S 0.25000% 18-15.08.28 2 200 000.00 2 201 508.76 2.47EUR IMPERIAL BRANDS FINANCE PLC-REG-S 1.37500% 17-27.01.25 500 000.00 478 166.62 0.54EUR MOLSON COORS BREWING CO 1.25000% 16-15.07.24 600 000.00 591 259.22 0.66EUR MONDELEZ INTL 1.00000% 15-07.03.22 500 000.00 508 606.80 0.57EUR MORGAN STANLEY 1.87500% 14-30.03.23 400 000.00 414 756.00 0.46EUR PFIZER INC 0.25000% 17-06.03.22 200 000.00 200 222.70 0.22EUR RABOBANK NEDERLAND NV 4.12500% 10-14.07.25 200 000.00 242 238.80 0.27EUR SAP SE-REG-S 1.62500% 18-10.03.31 500 000.00 502 320.10 0.56EUR THERMO FISHER SCIENTIFIC INC 0.75000% 16-12.09.24 500 000.00 485 352.28 0.54EUR UBS GROUP FUNDING SWISS AG-REG-S 1.50000% 16-30.11.24 300 000.00 301 674.39 0.34EUR VERIZON COMMUNICATIONS INC 1.87500% 17-26.10.29 400 000.00 393 563.20 0.44EUR VONOVIA FINANCE BV-REG-S 1.50000% 18-14.01.28 500 000.00 468 764.00 0.53EUR WALMART INC 4.87500% 09-21.09.29 300 000.00 403 726.80 0.45Total EUR 12 393 584.47 13.90

Total Bonds, fixed rate 12 393 584.47 13.90




Bonds, floating rate

EUR

EUR AXA SA-SUB 5.250%/3MO EURIBOR+305BP 10-16.04.40 400 000.00 421 660.56 0.47EUR BHP BILLITON FINANCE LTD-REG-S-SUB 5.625%/VAR 15-22.10.79 400 000.00 460 106.80 0.52EUR ENGIE SA-REG-S-SUB 3.87500%/VAR 14-PRP 500 000.00 512 500.00 0.57EUR ENGIE SA-REG-S-SUB VAR 18-PRP 500 000.00 458 638.00 0.51EUR MERCK KGAA-REG-S-SUB 2.625%/VAR 14-12.12.74 500 000.00 510 779.00 0.57EUR ORSTED A/S-SUB VAR 13-PRP 400 000.00 447 780.80 0.50EUR RABOBANK NEDERLAND NV-REG-S-SUB 2.500%/VAR 14-26.05.26 600 000.00 620 963.22 0.70EUR SUEZ-REG-S-SUB 2.875%/VAR 17-PRP 200 000.00 192 441.12 0.22EUR UBS GROUP FUNDING SWISS AG-REG-S 1.250%/VAR 18-17.04.25 400 000.00 394 236.00 0.44EUR VOLKSWAGEN INTERNATIONAL FIN NV-REG-S-SUB 2.500%/VAR 15-PRP 900 000.00 862 641.00 0.97EUR VOLKSWAGEN INTL FIN NV-REG-S-SUB 2.700%/VAR 17-PRP 200 000.00 188 550.00 0.21EUR VOLKSWAGEN INTL FINANCE NV-REG-S-SUB 3.375%/VAR 18-PRP 600 000.00 561 000.00 0.63Total EUR 5 631 296.50 6.31

Total Bonds, floating rate 5 631 296.50 6.31


Transferable securities and money market instruments not listed on an official stock exchange and not traded on another regulated market


EUR

EUR BNP PARIBAS SA-REG-S 1.50000% 17-23.05.28 200 000.00 194 086.52 0.22Total EUR 194 086.52 0.22

Total Medium term notes, fixed rate 194 086.52 0.22

Total Transferable securities and money market instruments not listed on an official stock exchange and not traded on another regulated market 194 086.52 0.22



Total net assets 89 163 986.33 100.00



UBS (Lux) Institutional Fund – Global Convertible BondsAnnual Report as of 31 December 2018


ISIN 31.12.2018 31.12.2017 31.12.2016Net assets in EUR 303 186 515.64 338 359 944.07 317 637 034.50Class AA (EUR) LU0251252234Units outstanding 134 245.2720 212 283.8230 223 508.3680Net asset value per unit in EUR 194.62 207.20 188.14Issue and redemption price per unit in EUR1 194.62 207.20 189.08Class AD-T2 (EUR) LU0251255765Units outstanding 415 049.0000 415 049.0000 362 160.0000Net asset value per unit in EUR 142.64 153.49 140.52Issue and redemption price per unit in EUR1 142.64 153.49 141.22Class BA (EUR) LU0251253554Units outstanding 14 776.8170 14 776.8180 24 446.9550Net asset value per unit in EUR 208.32 220.44 198.97Issue and redemption price per unit in EUR1 208.32 220.44 199.96Class CA (CHF) LU0251472279Units outstanding 135 352.5520 137 633.0850 203 946.2680Net asset value per unit in CHF 275.24 294.13 268.21Issue and redemption price per unit in CHF1 275.24 294.13 269.55Class DA (CHF) LU0262434755Units outstanding 66 266.6160 78 209.9860 66 862.5710Net asset value per unit in CHF 297.11 315.59 286.06Issue and redemption price per unit in CHF1 297.11 315.59 287.49Class YA (CHF) LU0251487541Units outstanding 625 175.5060 639 401.7720 568 464.5950Net asset value per unit in CHF 296.07 314.28 284.68Issue and redemption price per unit in CHF1 296.07 314.28 286.10

1 See note 1

UBS (Lux) Institutional Fund – Global Convertible Bonds




The financial year, from 1 January to 31 December 2018, was a challenging year for risky assets. While economic and earnings growth continued, equities and high yield were challenged by less accommodative central bank policies and uncertainties around trade policies. Based on these headwinds the Global convertible bond (CB) market closed 2018 with its first annual loss since 2011.

The subfund posted a negative performance in the finan-cial year from 1 January 2018 to 31 December 2018. The main drivers of the negative performance were CBs that suffered from declining underlying equities. The widening of credit spreads and the raising interest rates in the US also added negatively to performance. Convertible bond valuations had only a limited impact on performance.


Geographical Breakdown as a % of net assetsUnited States 24.85Japan 13.84China 7.83France 5.29The Netherlands 5.02Jersey 4.55Germany 3.89Cayman Islands 3.75United Arab Emirates 2.88United Kingdom 2.47South Korea 2.03Cyprus 1.58Canada 1.36Switzerland 1.23Luxembourg 1.09Malta 1.05Singapore 1.00Austria 0.99Belgium 0.87Monaco 0.79Israel 0.76Norway 0.73Hong Kong 0.71New Zealand 0.63Bermuda 0.56Finland 0.52Ireland 0.50British Virgin Islands 0.49Spain 0.41Taiwan 0.28India 0.11Total 92.06

Economic Breakdown as a % of net assetsFinance & holding companies 20.67Electronics & semiconductors 10.76Real Estate 8.84Banks & credit institutions 7.14Internet, software & IT services 5.87Petroleum 4.40Traffic & transportation 4.02Pharmaceuticals, cosmetics & medical products 2.66Miscellaneous services 2.62Chemicals 2.54Energy & water supply 2.50Graphic design, publishing & media 1.86Miscellaneous unclassified companies 1.74Biotechnology 1.69Telecommunications 1.52Mining, coal & steel 1.45Precious metals & stones 1.39Computer hardware & network equipment providers 1.36Healthcare & social services 1.23Electrical devices & components 1.02Lodging, catering & leisure 1.00Retail trade, department stores 0.93Investment funds 0.90Vehicles 0.75Non-ferrous metals 0.52Miscellaneous trading companies 0.51Mechanical engineering & industrial equipment 0.46Textiles, garments & leather goods 0.44Food & soft drinks 0.43Miscellaneous consumer goods 0.43Building industry & materials 0.41Total 92.06



Statement of Net Assets EURAssets 31.12.2018Investments in securities, cost 296 520 225.71Investments in securities, unrealized appreciation (depreciation) -17 400 305.94Total investments in securities (Note 1) 279 119 919.77Cash at banks, deposits on demand and deposit accounts 21 929 245.45Interest receivable on securities 1 092 130.21Interest receivable on liquid assets 358.36Unrealized gain (loss) on forward foreign exchange contracts (Note 1) 1 127 335.64Total Assets 303 268 989.43



Statement of Operations EURIncome 1.1.2018-31.12.2018Interest on liquid assets 58 893.64Interest on securities 6 496 511.36Dividends 383 376.88Income on securities lending (Note 10) 114 671.20Other income (Note 2, 4) 93 148.69Total income 7 146 601.77

ExpensesFlat fee (Note 2) -808 184.64Taxe d’abonnement (Note 3) -32 617.26Cost on securities lending (Note 10) -45 868.48Other commissions and fees (Note 2) -52 718.19Interest on cash and bank overdraft -78 111.43Total expenses -1 017 500.00


Realized gain (loss) (Note 1)Realized gain (loss) on market-priced securities without options 15 345 225.08Realized gain (loss) on yield-evaluated securities and money market instruments -376 419.69Realized gain (loss) on forward foreign exchange contracts -10 136 095.83Realized gain (loss) on foreign exchange 228 716.34Total realized gain (loss) 5 061 425.90


Changes in unrealized appreciation (depreciation) (Note 1)Unrealized appreciation (depreciation) on market-priced securities without options -20 459 869.08Unrealized appreciation (depreciation) on yield-evaluated securities and money market instruments -255 739.61Unrealized appreciation (depreciation) on forward foreign exchange contracts -707 779.79Total changes in unrealized appreciation (depreciation) -21 423 388.48




Statement of Changes in Net Assets EUR 1.1.2018-31.12.2018Net assets at the beginning of the financial year 338 359 944.07Subscriptions 2 375 415.25Redemptions -26 531 540.26Total net subscriptions (redemptions) -24 156 125.01Dividend paid -784 442.61Net income (loss) on investments 6 129 101.77Total realized gain (loss) 5 061 425.90Total changes in unrealized appreciation (depreciation) -21 423 388.48Net increase (decrease) in net assets as a result of operations -10 232 860.81Net assets at the end of the financial year 303 186 515.64


1.1.2018-31.12.2018Class AA (EUR)Number of units outstanding at the beginning of the financial year 212 283.8230Number of units issued 0.0000Number of units redeemed -78 038.5510Number of units outstanding at the end of the financial year 134 245.2720Class AD-T2 (EUR)Number of units outstanding at the beginning of the financial year 415 049.0000Number of units issued 0.0000Number of units redeemed 0.0000Number of units outstanding at the end of the financial year 415 049.0000Class BA (EUR)Number of units outstanding at the beginning of the financial year 14 776.8180Number of units issued 0.0000Number of units redeemed -0.0010Number of units outstanding at the end of the financial year 14 776.8170Class CA (CHF)Number of units outstanding at the beginning of the financial year 137 633.0850Number of units issued 0.0000Number of units redeemed -2 280.5330Number of units outstanding at the end of the financial year 135 352.5520Class DA (CHF)Number of units outstanding at the beginning of the financial year 78 209.9860Number of units issued 0.0000Number of units redeemed -11 943.3700Number of units outstanding at the end of the financial year 66 266.6160Class YA (CHF)Number of units outstanding at the beginning of the financial year 639 401.7720Number of units issued 8 674.0280Number of units redeemed -22 900.2940Number of units outstanding at the end of the financial year 625 175.5060

Annual Distribution

UBS (Lux) Institutional Fund – Global Convertible Bonds Ex-Date Pay-Date Currency Amount per unit

AD-T2 (EUR) 1.3.2018 6.3.2018 EUR 1.89






Convertible bonds, fixed rate

CHF

CHF IDORSIA LTD-REG-S 0.75000% 18-17.07.24 1 800 000.00 1 340 168.83 0.44CHF SIKA AG-REG-S 0.15000% 18-05.06.25 2 640 000.00 2 380 156.98 0.79Total CHF 3 720 325.81 1.23

EUR

EUR AABAR INVESTMENTS PJSC-REG-S 1.00000% 15-27.03.22 5 700 000.00 4 694 634.00 1.55EUR ARCANDOR AG *DEFAULT* 8.87500% 08-11.07.13 3 200 000.00 0.32 0.00EUR BAYER CAPITAL CORP BV-REG-S-SUB 5.62500% 16-22.11.19 3 800 000.00 2 851 235.00 0.94EUR CA IMMOBILIEN ANLAGEN AG-REG-S 0.75000% 17-04.04.25 1 400 000.00 1 552 600.00 0.51EUR CONSUS REAL ESTATE AG-REG-S 4.00000% 17-29.11.22 1 600 000.00 1 488 000.00 0.49EUR DEUTSCHE WOHNEN AG-REG-S 0.32500% 17-26.07.24 700 000.00 746 375.00 0.25EUR DEUTSCHE WOHNEN AG-REG-S 0.60000% 17-05.01.26 1 200 000.00 1 266 180.00 0.42EUR EUROPEAN TOPSOHO SARL-REG-S 4.00000% 18-21.09.21 1 900 000.00 1 679 220.00 0.55EUR LEG IMMOBILIEN AG-REG-S 0.50000% 14-01.07.21 1 300 000.00 2 235 558.00 0.74EUR OUTOKUMPU OYJ-REG-S 3.25000% 15-26.02.20 1 600 000.00 1 581 200.00 0.52EUR PT JERSEY LTD-REG-S 0.50000% 14-19.11.19 1 600 000.00 1 552 800.00 0.51EUR SACYR VALLEHERMOSO SA-REG-S 4.00000% 14-08.05.19 1 300 000.00 1 245 270.00 0.41Total EUR 20 893 072.32 6.89

GBP

GBP BRAIT SE-REG-S 2.75000% 15-18.09.20 3 100 000.00 3 170 305.31 1.05GBP INTU JERSEY 2 LTD-REG-S 2.87500% 16-01.11.22 3 400 000.00 3 133 614.17 1.03GBP REMGRO JERSEY GBP LTD-REG-S 2.62500% 16-22.03.21 2 300 000.00 2 452 277.44 0.81GBP VOLCAN HOLDINGS PLC-REG-S 4.12500% 17-11.04.20 2 100 000.00 3 062 589.37 1.01Total GBP 11 818 786.29 3.90

HKD

HKD ASM PACIFIC TECHNOLOGY LTD-REG-S 2.00000% 14-28.03.19 14 000 000.00 1 563 051.41 0.52HKD REXLOT HOLDINGS LTD-REG-S STEP-UP/DOWN 14-17.04.19 16 000 000.00 311 284.63 0.10HKD SMART INSIGHT INTERNATIONAL LTD-REG-S 4.50000% 18-05.12.23 30 000 000.00 3 337 664.20 1.10Total HKD 5 212 000.24 1.72

USD

USD AFRICAN MINERALS *DEFAULT* 8.50000% 12-10.02.17 4 400 000.00 384.90 0.00USD DP WORLD-REG-S 1.75000% 14-19.06.24 3 200 000.00 2 654 447.80 0.88USD ELM BV FOR SWISS RE LTD 3.25000% 18-13.06.24 3 400 000.00 2 876 385.43 0.95USD HURRICANE ENERGY PLC-REG-S 7.50000% 17-24.07.22 1 400 000.00 1 597 603.12 0.53USD JAIPRAKASH HYDRO POWER-REG-S *DEFAULT* STEP-UP 10-13.02.49 1 500 000.00 6 654.06 0.00USD JUST ENERGY GROUP INC-REG-S 6.50000% 14-29.07.19 2 600 000.00 2 299 890.65 0.76USD MICRON TECHNOLOGY INC 3.00000% 13-15.11.43 835 000.00 801 655.51 0.26USD NMC HEALTH JERSEY LTD-REG-S 1.87500% 18-30.04.25 3 800 000.00 2 735 773.96 0.90USD POLARCUS LTD-144A-REG-S 5.60000% 11-01.07.22 858 414.00 544 416.88 0.18USD POLYUS FINANCE PLC-REG-S 1.00000% 18-26.01.21 2 200 000.00 1 819 621.22 0.60USD SINTEX INDUSTRIES LTD-REG-S STEP-UP/DOWN 16-25.05.22 390 000.00 317 281.20 0.10USD XERO INVESTMENTS LTD-REG-S 2.37500% 18-04.10.23 2 400 000.00 1 926 256.40 0.64Total USD 17 580 371.13 5.80

Total Convertible bonds, fixed rate 59 224 555.79 19.54

Convertible bonds, zero coupon

EUR

EUR AMS AG-REG-S 0.00000% 18-05.03.25 2 400 000.00 1 445 904.00 0.48EUR CHINA YANGTZE POWER INTERNATIONAL-REG-S 0.00000% 16-09.11.21 1 400 000.00 1 482 894.00 0.49EUR EXANE SA 0.00000% 16-12.04.19 3 000 000.00 3 740 566.80 1.23EUR LG CHEM LTD-REG-S 0.00000% 18-16.04.21 1 600 000.00 1 598 000.00 0.53EUR RAG-STIFTUNG-REG-S 0.00000% 17-16.03.23 3 100 000.00 3 030 250.00 1.00EUR STRATEGIC INTERNATIONAL GROUP-REG-S 0.00000% 17-21.07.22 1 250 000.00 1 359 787.50 0.45EUR UNICREDIT BANK AG/STXE50 EUR P RCV 0.00000% 17-14.09.20 2 970 000.00 3 024 648.00 1.00EUR ZHEJIANG EXPRESSWAY CO LTD-REG-S 0.00000% 17-21.04.22 1 600 000.00 1 522 192.00 0.50Total EUR 17 204 242.30 5.68

GBP

GBP BNP PARIBAS ARBITRAGE ISSUANCE BV-REG-S 0.00000% 17-03.06.20 2 025 000.00 2 288 118.24 0.76Total GBP 2 288 118.24 0.76

HKD

HKD ANGANG STEEL CO LTD-REG-S 0.00000% 18-25.05.23 13 000 000.00 1 354 625.19 0.45HKD CHINA CONCH VENTURE HLD INTL LTD-REG-S 0.00000% 18-05.09.23 26 000 000.00 2 800 408.93 0.92HKD HAITONG INTERNATIONAL SECURITIES-REG-S 0.00000% 16-25.10.21 20 000 000.00 2 142 429.03 0.70HKD HARVEST INTERNATIONAL CO-REG-S 0.00000% 17-21.11.22 14 000 000.00 1 476 549.80 0.49HKD ZHONGSHENG GROUP HOLDINGS-REG-S 0.00000% 18-23.05.23 22 000 000.00 2 268 796.03 0.75Total HKD 10 042 808.98 3.31

JPY

JPY ALL NIPPON AIRWAYS CO LTD-REG-S 0.00000% 17-19.09.24 370 000 000.00 2 987 684.61 0.99JPY CHUGOKU ELECTRIC POWER CO INC-REG-S 0.00000% 17-24.01.20 70 000 000.00 590 581.93 0.19JPY CHUGOKU ELECTRIC POWER CO INC-REG-S 0.00000% 17-25.01.22 270 000 000.00 2 327 472.23 0.77JPY COSMO ENERGY HOLDINGS CO LTD-REG-S 0.00000% 18-05.12.22 400 000 000.00 3 130 647.45 1.03JPY DAINIPPON SCREEN MFG CO LTD-REG-S 0.00000% 18-11.06.25 210 000 000.00 1 608 009.66 0.53JPY DIGITAL GARAGE INC-REG-S 0.00000% 18-14.09.23 180 000 000.00 1 380 087.96 0.45JPY IWATANI CORP 0.00000% 15-22.10.20 190 000 000.00 1 551 819.57 0.51JPY KANSAI PAINT CO LTD-REG-S 0.00000% 16-17.06.19 130 000 000.00 1 031 328.94 0.34JPY KYUSHU ELECTRIC POWER CO INC-REG-S 0.00000% 17-31.03.22 380 000 000.00 3 171 446.14 1.05JPY LINE CORP-REG-S 0.00000% 18-19.09.25 440 000 000.00 3 218 310.81 1.06



JPY MINEBEA MITSUMI INC-REG-S 0.00000% 15-03.08.22 170 000 000.00 1 507 247.19 0.50JPY MITSUBISHI CHEMICAL HOLDINGS CORP 0.00000% 17-29.03.24 370 000 000.00 2 990 634.67 0.99JPY SONY CORP-REG-S 0.00000% 15-30.09.22 310 000 000.00 3 015 747.76 0.99JPY TORAY INDUSTRIES INC-REG-S 0.00000% 14-31.08.21 310 000 000.00 2 676 830.82 0.88JPY UNICHARM CORP-REG-S 0.00000% 15-25.09.20 110 000 000.00 1 295 724.69 0.43Total JPY 32 483 574.43 10.71

KRW

KRW KAKAO CORP 0.00000% 16-11.05.21 2 200 000 000.00 1 729 089.50 0.57KRW LOTTE SHOPPING-REG-S 0.00000% 18-04.04.23 4 000 000 000.00 2 832 147.47 0.93Total KRW 4 561 236.97 1.50

USD

USD ABIGROVE LTD-REG-S 0.00000% 17-16.02.22 2 000 000.00 1 744 565.46 0.58USD CHINA MENGNIU DAIRY CO LTD-REG-S 0.00000% 17-05.06.22 1 600 000.00 1 312 163.76 0.43USD CHINA OVERSEAS FIN INV CAYMAN V-REG-S 0.00000% 16-05.01.23 3 200 000.00 2 962 340.90 0.98USD EXANE SA 0.00000% 17-03.08.20 4 000 000.00 3 732 878.10 1.23USD GUNMA BANK LTD-REG-S 0.00000% 14-11.10.19 1 700 000.00 1 429 493.07 0.47USD JP MORGAN STRUCTURED PRODUCTS BV-REG-S 0.00000% 17-06.03.20 4 000 000.00 4 128 941.96 1.36USD JPMORGAN CHASE BANK NA-REG-S 0.00000% 18-30.12.20 3 500 000.00 3 122 949.74 1.03USD SOCIETE GENERALE SA 0.00000% 16-07.03.19 2 789 000.00 3 308 300.75 1.09USD SOCIETE GENERALE SA/MARSH RCV 0.00000% 18-03.08.21 4 063 000.00 3 679 678.00 1.21USD UNITED REN ENERGY CO LTD/TAIWAN-REG-S 0.00000% 16-27.10.19 1 000 000.00 850 719.50 0.28USD ZHEN DING TECHNOLOGY-REG-S 0.00000% 14-26.06.19 2 000 000.00 1 776 232.34 0.59Total USD 28 048 263.58 9.25

Total Convertible bonds, zero coupon 94 628 244.50 31.21

Convertible bonds, floating rate

EUR

EUR AGEASFINLUX SA-REG-S-SUB 3M EURIBOR+135BP 02-PRP 3 250 000.00 1 625 000.00 0.54EUR BNP PARIBAS FORTIS SA-SUB 3M EURIBOR+200BP 07-PRP 3 500 000.00 2 625 000.00 0.86EUR NEOPOST SA-REG-S 3.375/VAR 15-PRP 28 657.00 1 577 134.38 0.52Total EUR 5 827 134.38 1.92

USD

USD SHIZUOKA BANK LTD-REG-S 3M LIBOR+50BP 18-25.01.23 1 900 000.00 1 579 801.42 0.52USD YAMAGUCHI FINANCIAL GROUP-REG-S 3M LIBOR-50BP 15-26.03.20 1 800 000.00 1 540 931.63 0.51Total USD 3 120 733.05 1.03

Total Convertible bonds, floating rate 8 947 867.43 2.95


Transferable securities and money market instruments traded on another regulated market


EUR

EUR COSMO PHARMACEUTICALS NV-REG-S 2.50000% 18-05.12.23 1 700 000.00 1 509 702.00 0.50Total EUR 1 509 702.00 0.50

USD

USD ALTERYX INC-144A 0.50000% 18-01.06.23 1 100 000.00 1 435 672.48 0.47USD ANTHEM INC 2.75000% 12-15.10.42 896 000.00 2 835 440.46 0.94USD BOOKING HOLDINGS INC 0.35000% 13-15.06.20 2 465 000.00 2 891 348.08 0.95USD CARDTRONICS INC 1.00000% 14-01.12.20 2 000 000.00 1 623 645.19 0.54USD CTRIP.COM INTERNATIONAL LTD 1.99000% 15-01.07.25 3 600 000.00 3 034 294.71 1.00USD EMPIRE STATE REALTY OP LP-144A 2.62500% 14-15.08.19 2 118 000.00 1 832 683.74 0.60USD ENSCO JERSEY FINANCE LTD 3.00000% 16-31.01.24 4 528 000.00 2 596 041.45 0.86USD EVOLENT HEALTH INC-144A 1.50000% 18-15.10.25 1 130 000.00 908 869.33 0.30USD EXACT SCIENCES CORP 1.00000% 18-15.01.25 2 965 000.00 2 855 830.73 0.94USD EXTRA SPACE STORAGE LP-144A 3.12500% 15-01.10.35 1 500 000.00 1 434 759.22 0.47USD GOLAR LNG LTD 2.75000% 17-15.02.22 1 699 000.00 1 385 350.47 0.46USD HERCULES CAPITAL INC 4.37500% 17-01.02.22 1 932 000.00 1 600 155.36 0.53USD ICONIX BRAND GROUP INC 5.75000% 18-15.08.23 2 850 000.00 1 014 751.08 0.34USD IH MERGER SUB LLC-144A 3.50000% 17-15.01.22 2 700 000.00 2 432 657.13 0.80USD INSULET CORP 1.25000% 17-15.09.21 1 283 000.00 1 587 164.66 0.52USD IQIYI INC-144A 18-01.12.23 3 600 000.00 3 015 138.18 0.99USD IRONWOOD PHARMACEUTICALS INC 2.25000% 15-15.06.22 1 715 000.00 1 405 207.83 0.46USD LENDINGTREE INC 0.62500% 17-01.06.22 1 337 000.00 1 441 092.20 0.48USD LEXICON PHARMACEUTICALS INC 5.25000% 14-01.12.21 862 000.00 838 639.32 0.28USD LIBERTY MEDIA CORP 1.37500% 13-15.10.23 4 015 000.00 3 797 839.12 1.25USD LIBERTY MEDIA CORP 4.00000% 99-15.11.29 1 470 000.00 805 722.44 0.27USD MICROCHIP TECHNOLOGY INC-SUB 1.62500% 15-15.02.25 4 887 000.00 5 979 526.55 1.97USD MICRON TECHNOLOGY INC 2.12500% 13-15.02.33 1 513 000.00 3 812 497.94 1.26USD NEUROCRINE BIOSCIENCES INC 2.25000% 17-15.05.24 1 363 000.00 1 417 250.54 0.47USD NOVELLUS SYSTEMS INC 2.62500% 11-15.05.41 957 000.00 3 435 388.48 1.13USD NXP SEMICONDUCTORS N.V 1.00000% 14-01.12.19 3 500 000.00 3 071 145.52 1.01USD ON SEMICONDUCTOR CORP 1.62500% 17-15.10.23 2 534 000.00 2 370 408.87 0.78USD PACIRA PHARMACEUTICALS INC/DE 2.37500% 17-01.04.22 2 595 000.00 2 255 263.05 0.74USD PTC THERAPEUTICS INC-144A 3.00000% 15-15.08.22 400 000.00 346 818.53 0.11USD SHIP FINANCE INTERNATIONA LTD 4.87500% 18-01.05.23 895 000.00 697 290.45 0.23USD SHIP FINANCE INTERNATIONAL LTD 5.75000% 16-15.10.21 1 875 000.00 1 525 062.33 0.50USD SILVER STANDARD RESOURCES INC 2.87500% 13-01.02.33 2 087 000.00 1 820 727.90 0.60USD SPIRIT REALTY CAPITAL INC 3.75000% 14-15.05.21 3 000 000.00 2 583 151.82 0.85USD SQUARE INC 0.37500% 17-01.03.22 819 000.00 1 753 569.17 0.58USD SUPERNUS PHARMACEUTICALS INC-144A 0.62500% 18-01.04.23 1 360 000.00 1 109 519.20 0.37USD TERADYNE INC 1.25000% 16-15.12.23 2 727 000.00 2 835 326.17 0.94




USD TULLOW OIL JERSEY-REG-S 6.62500% 16-12.07.21 1 400 000.00 1 328 576.30 0.44USD VEREIT INC 3.75000% 13-15.12.20 2 099 000.00 1 796 677.17 0.59USD WHITING PETROLEUM CORP 1.25000% 16-01.04.20 1 964 000.00 1 621 733.29 0.54Total USD 80 532 236.46 26.56


Convertible bonds, zero coupon

JPY

JPY CYBERAGENT INC-REG-S 0.00000% 18-19.02.25 210 000 000.00 1 789 259.64 0.59JPY HIS CO LTD REG-S 0.00000% 17-15.11.24 170 000 000.00 1 411 011.08 0.47JPY MEDIPAL HOLDINGS CORP-REG-S 0.00000% 17-07.10.22 190 000 000.00 1 729 063.04 0.57Total JPY 4 929 333.76 1.63

USD

USD POSEIDON FINANCE 1 LTD-REG-S 0.00000% 18-01.02.25 4 700 000.00 3 814 394.44 1.26USD WIX.COM LTD-144A 0.00000% 18-01.07.23 2 783 000.00 2 308 420.78 0.76Total USD 6 122 815.22 2.02

Total Convertible bonds, zero coupon 11 052 148.98 3.65

Total Transferable securities and money market instruments traded on another regulated market 93 094 087.44 30.71

Transferable securities and money market instruments not listed on an official stock exchange and not traded on another regulated market

Preference shares

United States

USD MANDATORY EXCH TST MAND EXCHANGEABLE TR 144A 20 251.00 2 733 969.15 0.90Total United States 2 733 969.15 0.90

Total Preference shares 2 733 969.15 0.90


HKD

HKD CHINA EVERGRANDE GROUP-REG-S 4.25000% 18-14.02.23 30 000 000.00 2 956 082.80 0.97Total HKD 2 956 082.80 0.97

USD

USD BORR DRILLING LTD-REG-S 3.87500% 18-23.05.23 2 000 000.00 1 388 479.20 0.46USD COBALT INTL ENERGY INC *DEFAULTED* 2.62500% 12-01.12.19 4 967 000.00 5 648.52 0.00USD DEUTSCHE BANK AG/LONDON/VOYA FINANCIAL 1.00000% 18-01.05.23 5 331 000.00 4 074 881.82 1.35USD ENDEAVOUR MINING CORP-144A 3.00000% 18-15.02.23 2 867 000.00 2 399 577.30 0.79USD SEA LTD-144A 2.25000% 18-01.07.23 3 985 000.00 3 040 720.76 1.00USD SEACOR HOLDINGS INC 3.25000% 18-15.05.30 1 951 000.00 1 449 517.14 0.48USD SUNEDISON INC-144A *ESCROW* 0.25000% 14-15.01.20 3 739 000.00 65 415.74 0.02Total USD 12 424 240.48 4.10


Total Transferable securities and money market instruments not listed on an official stock exchange and not traded on another regulated market 18 114 292.43 5.97

Recently issued transferable securities and money market instruments


USD

USD LIBERTY MEDIA CORP-144A 2.12500% 18-31.03.48 3 204 000.00 2 621 133.50 0.86USD WESTERN DIGITAL CORP-144A 1.50000% 18-01.02.24 3 513 000.00 2 489 738.68 0.82Total USD 5 110 872.18 1.68


Total Recently issued transferable securities and money market instruments 5 110 872.18 1.68


Forward Foreign Exchange contracts

Forward Foreign Exchange contracts (Purchase/Sale)

EUR 6 273 000.00 KRW 8 200 000 000.00 1.2.2019 -152 144.63 -0.05EUR 33 546 410.90 JPY 4 310 000 000.00 1.2.2019 -811 031.12 -0.27EUR 108 440 736.00 USD 123 000 000.00 18.1.2019 989 588.53 0.33EUR 2 326 809.00 JPY 300 000 000.00 1.2.2019 -64 660.28 -0.02EUR 1 837 107.30 USD 2 100 000.00 18.1.2019 2 575.51 0.00EUR 19 008 885.99 HKD 169 500 000.00 15.3.2019 146 766.63 0.05NOK 7 900 000.00 EUR 815 045.37 15.3.2019 -19 335.10 -0.01EUR 1 252 474.30 CAD 1 900 000.00 15.3.2019 41 006.25 0.01EUR 16 114 464.00 GBP 14 400 000.00 15.3.2019 113 391.37 0.04MXN 36 000 000.00 EUR 1 514 988.36 15.3.2019 56 299.85 0.02EUR 1 339 848.30 AUD 2 100 000.00 15.3.2019 52 943.67 0.02EUR 5 922 980.90 CHF 6 700 000.00 15.3.2019 -26 900.80 -0.01SEK 8 000 000.00 EUR 783 528.64 15.3.2019 5 577.89 0.00EUR 2 363 185.50 NZD 3 900 000.00 15.3.2019 86 694.47 0.03




Forward Foreign Exchange contracts (Continued)


EUR 1 017 540.56 CNH 8 000 000.00 15.3.2019 5 414.93 0.00USD 2 600 000.00 EUR 2 281 442.80 18.1.2019 -10 117.73 0.00CHF 245 089 900.00 EUR 216 875 483.92 18.1.2019 646 272.95 0.21EUR 50 637 190.00 USD 58 000 000.00 15.2.2019 91 654.14 0.03USD 1 500 000.00 EUR 1 310 152.50 18.1.2019 227.35 0.00EUR 3 578 446.36 CHF 4 052 700.00 18.1.2019 -18 398.81 -0.01USD 1 900 000.00 EUR 1 654 470.60 18.1.2019 5 343.87 0.00USD 1 700 000.00 EUR 1 490 055.10 18.1.2019 -4 957.94 0.00USD 1 600 000.00 EUR 1 401 739.20 18.1.2019 -4 000.70 0.00EUR 3 433 673.32 CHF 3 865 900.00 18.1.2019 2 616.55 0.00EUR 2 962 902.80 USD 3 400 000.00 18.1.2019 -7 291.52 0.00CHF 2 714 000.00 EUR 2 408 924.20 18.1.2019 -199.69 0.00Total Forward Foreign Exchange contracts (Purchase/Sale) 1 127 335.64 0.37


Total net assets 303 186 515.64 100.00



UBS (Lux) Institutional Fund – Key Selection European EquityAnnual Report as of 31 December 2018


ISIN 31.12.2018 31.12.2017 31.12.2016Net assets in EUR 63 468 279.15 62 665 442.13 59 676 657.84Class AA LU0154869704Units outstanding 3 266.7040 3 266.7040 3 366.8070Net asset value per unit in EUR 256.39 285.27 251.37Issue and redemption price per unit in EUR1 256.39 285.27 251.37Class AD-T2 LU0154876311Units outstanding 301 982.5840 289 632.2180 296 382.0870Net asset value per unit in EUR 123.39 141.79 127.10Issue and redemption price per unit in EUR1 123.39 141.79 127.10Class BA LU0154870629Units outstanding 88 070.0000 64 970.0000 76 058.1970Net asset value per unit in EUR 288.05 318.08 278.20Issue and redemption price per unit in EUR1 288.05 318.08 278.20

1 See note 1

UBS (Lux) Institutional Fund– Key Selection European Equity


During the financial year from 1 January 2018 to 31 December 2018, European market returns were neg-ative. The year started the continuation of the uptrend that characterized 2017, however, sentiment turned negative towards the end of the year as a combina-tion of increased trade protectionism in the US, slowing Chinese economy and political developments in Europe (namely Italy and the ongoing Brexit negotiations) hurt investor confidence about the outlook for global eco-nomic growth. Volatility increased substantially from low levels in the previous year as investors feared the end of the cycle. However, fundamentals remained solid, with declining unemployment and strong consumer confi-dence. In this scenario, defensive sectors outperformed cyclicals.

The subfund posted a negative performance during the financial year. This was mainly driven by our holdings in Consumer Discretionary, such as Valeo and Faurecia, as they were impacted by strong headwinds in the auto industry. Additionally, our holdings in Financials, such as BNP Paribas and Barclays, were also affected as rate hike expectations decreased during the financial year. The IT sector also detracted from performance. Conversely, the Health Care and Communication Services sectors contributed positively to performance as our holdings in these sectors benefitted from a risk-on, defensive environment. Within Health Care, our position in Shire benefited following the agreed merger with Takeda Pharmaceutical.


Geographical Breakdown as a % of net assetsUnited Kingdom 34.92France 15.53Germany 10.33The Netherlands 7.74Switzerland 5.09Norway 4.01Belgium 3.64Italy 3.00Finland 2.92Denmark 2.88Jersey 2.20Spain 1.73Austria 1.00Sweden 0.93Ireland 0.62Total 96.54

Economic Breakdown as a % of net assetsPharmaceuticals, cosmetics & medical products 15.54Banks & credit institutions 15.25Petroleum 9.48Telecommunications 7.64Insurance 6.69Retail trade, department stores 6.43Vehicles 4.73Non-ferrous metals 4.38Internet, software & IT services 4.19Tobacco & alcohol 2.77Miscellaneous consumer goods 2.68Mechanical engineering & industrial equipment 2.20Miscellaneous trading companies 2.20Energy & water supply 1.93Finance & holding companies 1.79Aerospace industry 1.75Chemicals 1.56Miscellaneous unclassified companies 1.26Graphic design, publishing & media 1.26Agriculture & fishery 1.12Traffic & transportation 1.00Electronics & semiconductors 0.69Total 96.54



Statement of Net Assets EURAssets 31.12.2018Investments in securities, cost 64 883 266.52Investments in securities, unrealized appreciation (depreciation) -3 609 571.35Total investments in securities (Note 1) 61 273 695.17Cash at banks, deposits on demand and deposit accounts 1 336 844.89Receivable on subscriptions 786 710.84Receivable on dividends 91 611.97Other receivables 2 356.31Total Assets 63 491 219.18



Statement of Operations EURIncome 1.1.2018-31.12.2018Interest on liquid assets 241.66Dividends 1 887 867.20Income on securities lending (Note 10) 72 388.28Other income (Note 2, 4) 35 542.48Total income 1 996 039.62



Realized gain (loss) (Note 1)Realized gain (loss) on market-priced securities without options 2 767 907.83Realized gain (loss) on forward foreign exchange contracts -8 074.78Realized gain (loss) on foreign exchange 17 749.16Total realized gain (loss) 2 777 582.21


Changes in unrealized appreciation (depreciation) (Note 1)Unrealized appreciation (depreciation) on market-priced securities without options -10 758 986.37Total changes in unrealized appreciation (depreciation) -10 758 986.37




Statement of Changes in Net Assets EUR 1.1.2018-31.12.2018Net assets at the beginning of the financial year 62 665 442.13Subscriptions 10 957 223.62Redemptions -2 472 108.23Total net subscriptions (redemptions) 8 485 115.39Dividend paid -1 409 643.07Net income (loss) on investments 1 708 768.86Total realized gain (loss) 2 777 582.21Total changes in unrealized appreciation (depreciation) -10 758 986.37Net increase (decrease) in net assets as a result of operations -6 272 635.30Net assets at the end of the financial year 63 468 279.15


1.1.2018-31.12.2018Class AANumber of units outstanding at the beginning of the financial year 3 266.7040Number of units issued 0.0000Number of units redeemed 0.0000Number of units outstanding at the end of the financial year 3 266.7040Class AD-T2Number of units outstanding at the beginning of the financial year 289 632.2180Number of units issued 27 908.2770Number of units redeemed -15 557.9110Number of units outstanding at the end of the financial year 301 982.5840Class BANumber of units outstanding at the beginning of the financial year 64 970.0000Number of units issued 24 100.0000Number of units redeemed -1 000.0000Number of units outstanding at the end of the financial year 88 070.0000

Annual Distribution

UBS (Lux) Institutional Fund – Key Selection European Equity Ex-Date Pay-Date Currency Amount per unitAD-T2 1.3.2018 6.3.2018 EUR 4.84






Bearer shares

Austria

EUR ERSTE GROUP BK AG NPV 21 832.00 634 219.60 1.00Total Austria 634 219.60 1.00

Belgium

EUR ANHEUSER-BUSCH IN NPV 13 797.00 796 086.90 1.25EUR EURONAV NPV 38 222.00 237 740.84 0.38Total Belgium 1 033 827.74 1.63

France

EUR BNP PARIBAS EUR2 43 480.00 1 716 373.00 2.70EUR CREDIT AGRICOLE SA EUR3 29 014.00 273 602.02 0.43EUR FAURECIA EUR7 23 030.00 761 602.10 1.20EUR PEUGEOT SA EUR1 49 876.00 929 938.02 1.47EUR PUBLICIS GROUPE SA EUR0.40 15 950.00 798 776.00 1.26EUR SANOFI EUR2 38 998.00 2 950 588.68 4.65EUR THALES EUR3 10 911.00 1 112 922.00 1.75EUR VALEO EUR1 (POST SUBD) 51 452.00 1 312 540.52 2.07Total France 9 856 342.34 15.53

Germany

EUR DWS GROUP SE NPV 31 424.00 734 378.88 1.16EUR FRESENIUS SE & CO. KGAA NPV 12 619.00 534 793.22 0.84EUR LANXESS AG NPV 24 667.00 991 613.40 1.56EUR SAP AG ORD NPV 11 475.00 997 521.75 1.57Total Germany 3 258 307.25 5.13

Ireland

EUR RYANAIR LTD ORD EUR0.006 36 854.00 396 180.50 0.62Total Ireland 396 180.50 0.62

Italy

EUR BANCA MEDIOLANUM NPV 120 639.00 614 052.51 0.97Total Italy 614 052.51 0.97

Jersey

GBP GLENCORE XSTRATA ORD USD0.01 429 321.00 1 393 564.21 2.20Total Jersey 1 393 564.21 2.20

The Netherlands

EUR ASR NEDERLAND N.V. EUR0.16 27 424.00 948 321.92 1.50EUR FLOW TRADERS NV EUR0.10 14 398.00 400 840.32 0.63EUR KONINKLIJKE AHOLD EUR0.01 98 968.00 2 184 718.60 3.44Total The Netherlands 3 533 880.84 5.57

Norway

NOK YARA INTERNATIONAL NOK1.7 21 172.00 713 311.52 1.12Total Norway 713 311.52 1.12

Sweden

SEK SWEDBANK AB SER’A’NPV 30 367.00 592 508.77 0.93Total Sweden 592 508.77 0.93

United Kingdom

GBP ANGLO AMERICAN USD0.54945 73 761.00 1 436 310.59 2.26GBP BABCOCK INTL GROUP ORD GBP0.60 136 721.00 745 315.70 1.17GBP BARCLAYS ORD GBP0.25 1 205 253.00 2 021 167.29 3.18GBP BP ORD USD0.25 591 080.00 3 265 983.52 5.15GBP BRIT AMER TOBACCO ORD GBP0.25 34 547.00 962 232.85 1.52GBP BT GROUP ORD GBP0.05 538 121.00 1 427 477.15 2.25GBP CENTRICA ORD GBP0.061728395 816 432.00 1 227 048.70 1.93GBP GLAXOSMITHKLINE ORD GBP0.25 79 323.00 1 317 846.59 2.08GBP ITV ORD GBP0.10 570 446.00 793 474.39 1.25GBP PREMIER OIL ORD GBP0.125 509 002.00 377 396.07 0.60GBP RECKITT BENCK GRP ORD GBP0.10 4 845.00 324 574.81 0.51GBP ROYAL MAIL PLC ORD GBP0.01 (WI) 263 968.00 800 220.47 1.26GBP SAGE GROUP GBP0.01051948 183 903.00 1 232 202.45 1.94GBP SPECTRIS ORD GBP0.05 17 235.00 437 608.19 0.69GBP TULLOW OIL ORD GBP0.10 271 894.00 542 531.60 0.86Total United Kingdom 16 911 390.37 26.65


Other shares

Switzerland

CHF ROCHE HLDGS AG GENUSSCHEINE NPV 7 223.00 1 560 077.43 2.46Total Switzerland 1 560 077.43 2.46

Total Other shares 1 560 077.43 2.46



Registered shares

Belgium

EUR KBC GROUP NV NPV 22 528.00 1 276 887.04 2.01Total Belgium 1 276 887.04 2.01

Denmark

DKK NOVO-NORDISK AS DKK0.2 SER’B’ 45 765.00 1 826 938.51 2.88Total Denmark 1 826 938.51 2.88

Finland

SEK NORDEA HOLDING ABP NPV 125 798.00 925 704.80 1.46EUR SAMPO OYJ SER’A’NPV 24 171.00 928 408.11 1.46Total Finland 1 854 112.91 2.92

Germany

EUR DEUTSCHE TELEKOM NPV(REGD) 125 371.00 1 857 998.22 2.93EUR MUENCHENER RUECKVE NPV(REGD) 5 327.00 1 015 059.85 1.60EUR UNITED INTERNET AG NPV(REGD) 11 165.00 426 503.00 0.67Total Germany 3 299 561.07 5.20

Italy

EUR INTESA SANPAOLO NPV 269 321.00 522 428.88 0.82EUR PRYSMIAN SPA EUR0.10 45 524.00 767 989.88 1.21Total Italy 1 290 418.76 2.03

The Netherlands

EUR UNILEVER NV CVA EUR0.16 29 079.00 1 378 926.18 2.17Total The Netherlands 1 378 926.18 2.17

Norway

NOK EQUINOR ASA NOK2.50 98 674.00 1 831 688.41 2.89Total Norway 1 831 688.41 2.89

Spain

EUR BBVA(BILB-VIZ-ARG) EUR0.49 237 527.00 1 101 056.41 1.73Total Spain 1 101 056.41 1.73

Switzerland

CHF NOVARTIS AG CHF0.50(REGD) 22 395.00 1 670 110.00 2.63Total Switzerland 1 670 110.00 2.63

United Kingdom

GBP ASHTEAD GROUP ORD GBP0.10 35 626.00 649 748.93 1.02GBP PRUDENTIAL ORD GBP0.05 86 779.00 1 355 478.04 2.14GBP RIO TINTO ORD GBP0.10 32 379.00 1 345 556.98 2.12GBP TESCO ORD GBP0.05 895 000.00 1 895 548.85 2.99Total United Kingdom 5 246 332.80 8.27

Total Registered shares 20 776 032.09 32.73



Cash at banks, deposits on demand and deposit accounts and other liquid assets 1 336 844.89 2.11Other assets and liabilities 857 739.09 1.35

Total net assets 63 468 279.15 100.00



UBS (Lux) Institutional Fund – Key Selection Global EquityAnnual Report as of 31 December 2018


ISIN 31.12.2018 31.12.2017 31.12.2016Net assets in USD 1 425 489 532.04 1 834 109 001.93 1 641 976 458.42Class AA (EUR) LU0155225690Units outstanding 21 251.7550 21 251.8080 27 561.8500Net asset value per unit in EUR 249.51 269.76 249.91Issue and redemption price per unit in EUR1 249.51 269.76 249.91Class AA (USD)2 LU0154864812Units outstanding - - 7 689.0300Net asset value per unit in USD - - 157.42Issue and redemption price per unit in USD1 - - 157.42Class BA (EUR) LU0155226235Units outstanding 110 598.7200 109 558.7910 156 669.9880Net asset value per unit in EUR 263.62 282.87 260.11Issue and redemption price per unit in EUR1 263.62 282.87 260.11Class FA (USD) LU0225530384Units outstanding 63 748.3960 73 866.9340 81 845.0000Net asset value per unit in USD 20 093.51 22 629.45 18 265.19Issue and redemption price per unit in USD1 20 093.51 22 629.45 18 265.19Class XA (USD) LU0176377546Units outstanding 412 284.3870 412 284.3870 412 284.3870Net asset value per unit in USD 255.09 287.28 231.89Issue and redemption price per unit in USD1 255.09 287.28 231.89

1 See note 12 The unit class AA (USD) was in circulation until 1.3.2017

UBS (Lux) Institutional Fund– Key Selection Global Equity




During the financial year from 1 January 2018 to 31 December 2018, global equity markets had a neg-ative return but equity markets strengthened. The year started the continuation of the uptrend that character-ized 2017, however, sentiment turned negative towards the end of the year as a combination of increased trade protectionism in the US, slowing Chinese economy and political developments in Europe (namely Italy and the ongoing Brexit negotiations) hurt investor confidence about the outlook for global economic growth. Volatil-ity increased substantially from low levels in the previous year as in vestors feared the end of the cycle. However, fundamentals remained solid, with declining unemploy-ment and strong consumer confidence. In this scenario, defensive sectors outperformed cyclicals.

The subfund delivered a negative performance during the financial year. This underperformance was mainly due to weak stock selection in the Health Care, IT and Industri-als sectors. On the other hand, our positions in Materi-als, Real Estate, Communication Services and Consumer Discretionary contributed positively to performance. In this regard, the top contributors were our holdings in Amazon, the off-price retailer TJX Cos, Mastercard, Sony and Sanofi. Conversely, the main detractors were our positions in British American Tobacco, the industrial company LKQ Corp, Gardner Denver Holdings, the semi-conductor company Western Digital and the specialty chemicals company Lanxess.


Geographical Breakdown as a % of net assetsUnited States 51.19United Kingdom 11.00Japan 10.09Ireland 6.09The Netherlands 4.30France 3.93Canada 2.23Germany 1.90Hong Kong 1.44Austria 1.16Luxembourg 1.03Italy 1.01Spain 0.72Bermuda 0.66Finland 0.57Total 97.32

Economic Breakdown as a % of net assetsBanks & credit institutions 12.81Pharmaceuticals, cosmetics & medical products 9.63Internet, software & IT services 9.08Finance & holding companies 7.86Electronics & semiconductors 6.57Retail trade, department stores 6.41Investment funds 6.01Insurance 4.99Mechanical engineering & industrial equipment 4.31Petroleum 4.02Telecommunications 2.88Food & soft drinks 2.72Vehicles 2.23Graphic design, publishing & media 2.18Aerospace industry 2.00Non-ferrous metals 1.62Energy & water supply 1.52Miscellaneous consumer goods 1.37Real Estate 1.36Biotechnology 1.09Tobacco & alcohol 0.94Traffic & transportation 0.89Healthcare & social services 0.88Miscellaneous trading companies 0.84Chemicals 0.82Electrical devices & components 0.68Miscellaneous unclassified companies 0.60Environmental services & recycling 0.51Computer hardware & network equipment providers 0.50Total 97.32



Statement of Net Assets USDAssets 31.12.2018Investments in securities, cost 1 367 418 330.87Investments in securities, unrealized appreciation (depreciation) 19 935 224.46Total investments in securities (Note 1) 1 387 353 555.33Cash at banks, deposits on demand and deposit accounts 29 302 895.12Other liquid assets (Margins) 4 909 127.00Receivable on securities sales (Note 1) 48 234.15Receivable on subscriptions 258 502.62Interest receivable on liquid assets 4 055.63Receivable on dividends 1 654 406.96Other receivables 41 818.24Unrealized gain (loss) on financial futures (Note 1) -1 773 320.00Unrealized gain (loss) on forward foreign exchange contracts (Note 1) 3 830 921.79Total Assets 1 425 630 196.84


Net assets at the end of the financial year 1 425 489 532.04

Statement of Operations USDIncome 1.1.2018-31.12.2018Interest on liquid assets 202 621.92Dividends 28 840 883.95Income on securities lending (Note 10) 949 300.65Other income (Note 2, 4) 243 661.94Total income 30 236 468.46



Realized gain (loss) (Note 1)Realized gain (loss) on market-priced securities without options 75 617 641.67Realized gain (loss) on financial futures -3 835 260.66Realized gain (loss) on forward foreign exchange contracts 7 625 766.60Realized gain (loss) on foreign exchange -1 654 670.97Total realized gain (loss) 77 753 476.64


Changes in unrealized appreciation (depreciation) (Note 1)Unrealized appreciation (depreciation) on market-priced securities without options -282 254 138.09Unrealized appreciation (depreciation) on financial futures -2 440 220.00Unrealized appreciation (depreciation) on forward foreign exchange contracts 8 836 410.96Total changes in unrealized appreciation (depreciation) -275 857 947.13




Statement of Changes in Net Assets USD 1.1.2018-31.12.2018Net assets at the beginning of the financial year 1 834 109 001.93Subscriptions 56 326 438.98Redemptions -296 144 757.18Total net subscriptions (redemptions) -239 818 318.20Net income (loss) on investments 29 303 318.80Total realized gain (loss) 77 753 476.64Total changes in unrealized appreciation (depreciation) -275 857 947.13Net increase (decrease) in net assets as a result of operations -168 801 151.69Net assets at the end of the financial year 1 425 489 532.04


1.1.2018-31.12.2018Class AA (EUR)Number of units outstanding at the beginning of the financial year 21 251.8080Number of units issued 0.0000Number of units redeemed -0.0530Number of units outstanding at the end of the financial year 21 251.7550Class BA (EUR)Number of units outstanding at the beginning of the financial year 109 558.7910Number of units issued 1 833.8280Number of units redeemed -793.8990Number of units outstanding at the end of the financial year 110 598.7200Class FA (USD)Number of units outstanding at the beginning of the financial year 73 866.9340Number of units issued 2 504.0000Number of units redeemed -12 622.5380Number of units outstanding at the end of the financial year 63 748.3960Class XA (USD)Number of units outstanding at the beginning of the financial year 412 284.3870Number of units issued 0.0000Number of units redeemed 0.0000Number of units outstanding at the end of the financial year 412 284.3870






Bearer shares

Austria

EUR ERSTE GROUP BK AG NPV 497 298.00 16 514 524.36 1.16Total Austria 16 514 524.36 1.16

Bermuda

USD MARVELL TECH GROUP COM USD0.002 583 633.00 9 449 018.27 0.66Total Bermuda 9 449 018.27 0.66

Canada

CAD ENERPLUS CORP COM NPV 488 705.00 3 800 005.19 0.27GBP ENTERTAINMENT ONE ORD NPV 1 324 356.00 6 014 771.50 0.42CAD HUSKY ENERGY INC COM 814 934.00 8 419 035.54 0.59Total Canada 18 233 812.23 1.28

France

EUR PUBLICIS GROUPE SA EUR0.40 152 868.00 8 751 532.80 0.61EUR SANOFI EUR2 370 315.00 32 028 814.31 2.25EUR THALES EUR3 131 282.00 15 307 651.87 1.07Total France 56 087 998.98 3.93

Germany

EUR LANXESS AG NPV 253 649.00 11 656 345.95 0.82Total Germany 11 656 345.95 0.82

Hong Kong

HKD AIA GROUP LTD NPV 2 471 300.00 20 516 965.00 1.44Total Hong Kong 20 516 965.00 1.44

Ireland

USD ALLEGION PLC CIM USD0.01 107 400.00 8 560 854.00 0.60Total Ireland 8 560 854.00 0.60

Italy

EUR BANCA MEDIOLANUM NPV 2 471 520.00 14 380 869.07 1.01Total Italy 14 380 869.07 1.01

Japan

JPY MAKITA CORP NPV 274 100.00 9 755 826.47 0.68JPY MINEBEA MITSUMI INC 845 600.00 12 254 513.98 0.86JPY NABTESCO CORP NPV 357 400.00 7 805 043.98 0.55JPY TOYOTA INDUSTRIES NPV 186 100.00 8 633 723.74 0.61Total Japan 38 449 108.17 2.70

The Netherlands

EUR ASR NEDERLAND N.V. EUR0.16 478 630.00 18 920 304.69 1.33USD NXP SEMICONDUCTORS EUR0.20 141 232.00 10 349 480.96 0.72Total The Netherlands 29 269 785.65 2.05

United Kingdom

GBP ANGLO AMERICAN USD0.54945 1 038 909.00 23 126 094.39 1.62GBP BABCOCK INTL GROUP ORD GBP0.60 1 093 290.00 6 813 082.41 0.48GBP BP ORD USD0.25 3 251 944.00 20 540 641.52 1.44GBP BRIT AMER TOBACCO ORD GBP0.25 420 037.00 13 373 978.08 0.94GBP CENTRICA ORD GBP0.061728395 12 635 355.00 21 708 631.59 1.52USD LIVANOVA PLC ORD GBP1.00 (DI) 136 600.00 12 494 802.00 0.88GBP SAGE GROUP GBP0.01051948 2 560 830.00 19 614 499.15 1.37GBP SPECTRIS ORD GBP0.05 322 184.00 9 351 501.43 0.66Total United Kingdom 127 023 230.57 8.91

United States

USD ALNYLAM PHARMACEUTICALS INC COM 66 973.00 4 883 001.43 0.34USD ASHLAND GLOBAL HLD COM USD0.01 221 226.00 15 698 196.96 1.10USD BIO RAD LABS INC CL A 43 498.00 10 101 105.56 0.71USD CIRRUS LOGIC INC COM 260 579.00 8 646 011.22 0.61USD COHERUS BIOSCIENCE COM USD0.0001 83 727.00 757 729.35 0.05USD DELTA AIRLINES INC COM USD0.0001 254 375.00 12 693 312.50 0.89USD GARDNER DENVER HLD COM USD0.01 841 494.00 17 208 552.30 1.21USD HESS CORPORATION COM USD1 269 470.00 10 913 535.00 0.77USD INCYTE CORPORATION COM USD0.001 232 518.00 14 785 819.62 1.04USD IRONWOOD PHARMACEU COM CL A USD0.001 789 508.00 8 179 302.88 0.57USD JOHNSON & JOHNSON COM USD1 224 423.00 28 961 788.15 2.03USD JP MORGAN CHASE & COM USD1 230 345.00 22 486 278.90 1.58USD MARSH & MCLENNAN COM USD1 151 156.00 12 054 691.00 0.85USD METLIFE INC COM USD0.01 282 510.00 11 599 860.60 0.81USD MONDELEZ INTL INC COM USD0.01 542 609.00 21 720 638.27 1.52USD PEPSICO INC CAP USD0.016666 154 002.00 17 014 140.96 1.19USD PLAINS GP HLDGS LP LTD PARTNER INT CL A NEW IN 770 907.00 15 495 230.70 1.09USD SIMON PROP GROUP COM USD0.0001 115 341.00 19 376 134.59 1.36USD SYNCHRONY FINANCIA COM USD0.001 561 903.00 13 182 244.38 0.93USD UNIVERSAL DISPLAY COM USD0.01 62 656.00 5 862 721.92 0.41USD WABTEC CORP COM 123 284.00 8 660 701.00 0.61USD WORLDPAY INC COM USD0.00001 CL A 215 177.00 16 445 978.11 1.15Total United States 296 726 975.40 20.82




Registered shares

Canada

CAD CANADIAN NAT RES LTD COM 565 283.00 13 633 344.57 0.95Total Canada 13 633 344.57 0.95

Finland

EUR SAMPO OYJ SER’A’NPV 184 360.00 8 094 951.06 0.57Total Finland 8 094 951.06 0.57

Germany

EUR DEUTSCHE TELEKOM NPV(REGD) 906 384.00 15 355 489.13 1.08Total Germany 15 355 489.13 1.08

Ireland

USD APTIV PLC COM USD0.01 117 726.00 7 248 389.82 0.51Total Ireland 7 248 389.82 0.51

Japan

JPY INPEX CORPORATION NPV 439 500.00 3 932 526.55 0.27JPY ITOCHU CORP NPV 701 900.00 11 944 103.37 0.84JPY NINTENDO CO LTD NPV 33 300.00 8 888 397.22 0.62JPY ORIX CORP NPV 1 166 200.00 17 065 434.09 1.20JPY OTSUKA HLDGS CO NPV 407 800.00 16 700 044.68 1.17JPY SONY CORP NPV 611 100.00 29 665 210.79 2.08JPY TAKEDA PHARMACEUTI NPV 509 500.00 17 205 464.17 1.21Total Japan 105 401 180.87 7.39

The Netherlands

EUR UNILEVER NV CVA EUR0.16 360 695.00 19 552 616.96 1.37Total The Netherlands 19 552 616.96 1.37

Spain

EUR BBVA(BILB-VIZ-ARG) EUR0.49 1 932 146.00 10 238 580.42 0.72Total Spain 10 238 580.42 0.72

United Kingdom

GBP ASHTEAD GROUP ORD GBP0.10 571 997.00 11 925 469.36 0.83GBP TESCO ORD GBP0.05 7 402 247.00 17 921 680.89 1.26Total United Kingdom 29 847 150.25 2.09

United States

USD AGCO CORP COM USD0.01 250 328.00 13 935 759.76 0.98USD AMAZON COM INC COM USD0.01 28 791.00 43 243 218.27 3.03USD BK OF AMERICA CORP COM USD0.01 962 156.00 23 707 523.84 1.66USD CIGNA CORP COM USD0.25 73 905.00 14 036 037.60 0.98USD COMCAST CORP COM CLS’A’ USD0.01 656 892.00 22 367 172.60 1.57USD EXPEDIA GROUP INC COM USD0.001 106 967.00 12 049 832.55 0.85USD FACEBOOK INC COM USD0.000006 CL ‘A’ 228 904.00 30 007 025.36 2.11USD GODADDY INC COM CL A USD0.001 167 444.00 10 987 675.28 0.77USD LAB CORP AMER HLDG COM USD0.1 151 960.00 19 201 665.60 1.35USD LKQ CORP COM 672 174.00 15 950 689.02 1.12USD MASTERCARD INC COM USD0.0001 CLASS ‘A’ 169 896.00 32 050 880.40 2.25USD MICRON TECHNOLOGY COM USD0.10 359 267.00 11 399 541.91 0.80USD MICROSOFT CORP COM USD0.0000125 396 594.00 40 282 052.58 2.83USD SPIRIT AEROSYSTEMS COM STK USD0.01 CLASS ‘A’ 184 081.00 13 270 399.29 0.93USD STERICYCLE INC COM 199 823.00 7 331 505.87 0.51USD T-MOBILE US INC COM USD0.0001 310 405.00 19 744 862.05 1.39USD TJX COS INC COM USD1 673 614.00 30 137 490.36 2.11USD WALGREENS BOOTS AL COM USD0.01 188 142.00 12 855 742.86 0.90USD WALT DISNEY CO. DISNEY COM USD0.01 178 487.00 19 571 099.55 1.37USD WELLS FARGO & CO COM USD1 2/3 729 188.00 33 600 983.04 2.36USD WESTERN DIGITAL CORP COM 193 569.00 7 156 245.93 0.50Total United States 432 887 403.72 30.37

Total Registered shares 642 259 106.80 45.05

Depository receipts

The Netherlands

EUR ABN AMRO GROUP NV DR EACH REP SHS 531 972.00 12 490 862.68 0.88Total The Netherlands 12 490 862.68 0.88

Total Depository receipts 12 490 862.68 0.88

Total Transferable securities and money market instruments listed on an official stock exchange 1 301 619 457.13 91.31

UCITS/Other UCIs in accordance with Article 41 (1) e) of the amended Luxembourg law of 17 December 2010

Investment funds, open end

Ireland

EUR UBS(IRL)INVESTOR SELECTION PLC-GLOBAL EQUITY LNG SHT-I-B-CAP 6 251.59 997 794.41 0.07EUR UBS(IRL)INVESTOR SELECTION PLC-GLOBAL EQUITY LNG SHT-U-B-CAP 596.80 70 078 597.79 4.91Total Ireland 71 076 392.20 4.98




Luxembourg

USD UBS-ETF MSCI WORLD-A 77 554.00 14 657 706.00 1.03Total Luxembourg 14 657 706.00 1.03

Total Investment funds, open end 85 734 098.20 6.01

Total UCITS/Other UCIs in accordance with Article 41 (1) e) of the amended Luxembourg law of 17 December 2010 85 734 098.20 6.01

Total investments in securities 1 387 353 555.33 97.32

Derivative instruments

Derivative instruments listed on an official stock exchange

Financial Futures on Indices

USD MSCI WORLD INDEX NET TOTAL RETURN INDEX FUTURE 15.03.19 1 031.00 -1 773 320.00 -0.12Total Financial Futures on Indices -1 773 320.00 -0.12

Total Derivative instruments listed on an official stock exchange -1 773 320.00 -0.12

Total Derivative instruments -1 773 320.00 -0.12

Forward Foreign Exchange contracts


USD 39 023 978.54 KRW 43 925 000 000.00 15.1.2019 -391 257.45 -0.03AUD 21 900 000.00 USD 15 759 599.16 15.1.2019 -338 386.22 -0.02USD 50 703 139.29 NZD 74 830 000.00 15.1.2019 514 846.62 0.04NOK 173 600 000.00 USD 20 428 988.28 15.1.2019 -370 499.72 -0.03USD 106 857 011.95 EUR 94 250 000.00 15.1.2019 -984 558.17 -0.07CHF 37 715 000.00 USD 37 599 981.66 15.1.2019 698 366.00 0.05SEK 292 180 000.00 USD 32 247 811.53 15.1.2019 738 618.70 0.05CAD 3 270 000.00 USD 2 473 089.08 15.1.2019 -78 209.87 -0.01SGD 10 400 000.00 USD 7 536 557.38 15.1.2019 95 522.55 0.01USD 92 542 584.13 GBP 71 095 000.00 15.1.2019 1 946 126.24 0.14JPY 2 024 500 000.00 USD 17 879 900.41 15.1.2019 589 910.15 0.04MXN 647 470 000.00 USD 31 433 123.42 15.1.2019 1 393 104.84 0.10EUR 7 680 000.00 USD 8 811 064.32 15.1.2019 -23 549.64 0.00COP 8 449 920 000.00 USD 2 560 000.00 15.1.2019 40 887.76 0.00Total Forward Foreign Exchange contracts (Purchase/Sale) 3 830 921.79 0.27


Total net assets 1 425 489 532.04 100.00




Note 1 – Summary of significant accounting policies

The financial statements have been prepared in accor-dance with the generally accepted accounting principles for investment funds in Luxembourg. The significant accounting policies are summarised as follows:

a) Calculation of the Net Asset ValueThe net asset value and the issue and redemption price per unit of the different classes of any subfund are expressed in the currency of account of the subfund or the unit class concerned and are calculated every bank business day by dividing the overall net assets of the subfund to which the respective unit class is assigned by the number of units in circulation in the relevant class of this subfund.

However, the net asset value of a unit may also be calcu-lated on days on which no units are issued or redeemed in accordance with the preceding section. Such net asset value may be published but may only be used for performance calculations and statistics or fee calculations, but in no case as a basis for subscription and redemption orders.

The percentage of the overall net asset value to be assigned to a subfund’s unit class is determined of the relationship between the units in circulation in each class and the total number of units in circulation of the subfund. This per-centage rate changes in accordance with distributions made and the issue and redemption of units as follows: – Each time a distribution is made on units of the follow-ing classes “AD-T2”, the net asset value and issue and redemption price of units in this class are reduced by the amount of the distribution (which leads to a reduc-tion in the percentage of the net asset value attributed to the class concerned). Meanwhile the net asset value of the other unit classes remains the same (leading to an increase in the percentage of the net asset value attributed to these classes).

– Each time units are issued or redeemed, the net asset value attributable to the unit class concerned is increased or reduced by the amount received or paid out.

If the total subscriptions or redemptions affecting all the unit classes of a subfund on a single trading day results to a net capital inflow or outflow, the net asset value of the subfund may be increased or decreased respec-tively (Single Swing Pricing, “SSP”). The maximum adjustment amounts to 2% of the net asset value. Estimated transaction costs and tax charges that may be

incurred by the subfund as well as the estimated bid/ offer spread of the assets in which the Fund invests may be taken into account. The adjustment leads to an increase in net asset value if the net movements result in a rise in all units of the affected subfund. It results in a reduction of net asset value if the net movements bring about a fall in the number of units. This consists in the net movement on a trading day in relation to the net fund assets of the subfund concerned. The net asset value would be adjusted only if this threshold were to be passed on a trading day. When deciding about the introduction of SSP, the Board of Directors shall decide which subfunds will be affected. Subfunds for which SSP is introduced will not have transaction fees payable and vice versa.

b) Valuation of the securities’ portfolio – The value of any cash – either in hand or on deposit – as well as bills and demand notes and accounts receivable, prepaid expenses, cash dividends and interest declared or accrued as aforesaid and not yet received is deemed to be the full amount thereof, unless in any case the same is unlikely to be paid or received in full, in which case the value thereof is arrived at after making such discount as may be considered appropriate in such case to reflect the true value thereof.

– Securities, derivatives and other investments listed on an official stock exchange are valued at the last known market prices. If the same security, derivative or other investment is quoted on several stock exchanges, the last available quotation on the stock exchange that rep-resents the major market for this investment will apply.

In the case of securities, derivatives and otherinvestments where trading of these assets on the stock exchange is thin but which are traded between securitiesdealers on a secondary market using standard market price formation methods, the Management Company can use the prices on this secondary market as the basis for their valuation of these securities and other investments. Securities, derivatives and other investmentsthat are not listed on a stock exchange, but that are traded on another regulated market which is recognised, open to the public and operates regularly, in a due and orderly fashion, are valued at the last available price on this market.

– Securities and other investments that are not listed on a stock exchange or traded on any other regulated mar-ket, and for which no reliable and appropriate price can be obtained, will be valued by the Management Company according to other principles chosen by it in good faith on the basis of the likely sales prices.

Notes to the Financial Statements



– Units or shares of other undertakings for collective investment in transferable securities (UCITS) and/or undertakings for collective investment (UCI) will be val-ued at their last net asset value. Certain units or shares of other UCITS and/or UCI may be valued based on an estimate of the value provided by a reliable price pro-vider independent from the target fund’s investment manager or investment adviser (Estimated Pricing).

– The valuation of derivatives that are not listed on a stock exchange (OTC derivatives) is made by reference to independent pricing sources. In case only one independent pricing source of a derivative is available, the plausibility of the valuation price obtained will be verified by employing methods of calculation recog-nised by the Management Company and the Auditor, based on the market value of the underlying instrument from which the derivative has been derived.

– Securities, money market instruments, derivatives and other investments that are denominated in a currency other than the reference currency of account of the relevant subfund and which are not hedged by means of currency transactions are valued at the middle currency rate (midway between the bid and offer rate) known in Luxembourg or, if not available, on the most representative market for this currency.

– The value of swap transactions is calculated by an exter-nal service provider, and a second independent valuation is made available by another external service provider. The calculation is based on the net present value of all cash flows, both inflows and outflows. In some specific cases, internal calculations based on models and market data available from Bloomberg and/or broker statement valuations may be used. The valuation methods depend on the respective security and are determined pursuant to the applicable UBS Valuation Policy.

– Time deposits and fiduciary investments are valued at their nominal value plus accrued interest.

– The value of money market instruments which are not listed on a stock exchange or traded on another regu-lated market open to the public is based on the appro-priate curves. The valuation based on the curves refers to the interest rate and credit spread components. The following principles are applied in this process: for each money market instrument, the interest rates nearest the residual maturity are interpolated. The interest rate calculated in this way is converted into a market price by adding a credit spread that reflects the underlying borrower. This credit spread is adjusted if there is a significant change in the credit rating of the borrower.

In the case of extraordinary circumstances, additional valuations, which will affect the prices of the units to be subsequently issued or redeemed, may be carried out within one day.

c) Valuation of forward foreign exchange contractsThe unrealized gain (loss) of outstanding forward foreign exchange contracts is valued on the basis of the forward exchange rates prevailing at valuation date.

d) Valuation of financial futures contractsFinancial futures contracts are valued based on the latest available published price applicable on the valuation date. Realized gains and losses and the changes in unreal-ized gains and losses are recorded in the statement of operations. The realized gains and losses are calculated in accordance with the FIFO method, i.e. the first contracts acquired are regarded as the first to be sold.

e) Net realized profit (loss) on sales of securitiesThe realized profits or losses on the sales of securities are calculated on the basis of the average cost of the securities sold.

f) SwapsThe Fund may enter into interest rate swap contracts, forward rate agreements on interest rates swaptions and credit default swaps, if they are executed with first-class financial institutions that specialize in transactions of this kind.

Changes in unrealized profits and losses are reflected in the statement of operations under “Unrealized apprecia-tion (depreciation) on Swaps”.

Gains or losses on swaps incurred when closed-out or matured are recorded as “Realized gain (loss) on Swaps” in the statement of operations.

The Management Company is authorised to apply other generally recognised and auditable valuation criteria in good faith in order to achieve an appropriate determi-nation of the valuation of the net asset value if, due to extraordinary circumstances, a valuation in accordance with the aforementioned regulations proves to be unfea-sible or inaccurate.

g) Conversion of foreign currenciesBank accounts, other net assets and the valuation of the investments in securities, derivatives and other investmentsheld denominated in currencies other than the reference currency of the different subfunds are converted at the mid closing spot rates prevailing on the valuation date. Income and expenses denominated in currencies other than the currency of the different subfunds are con-verted at the mid closing spot rates prevailing at payment date. Profit or loss on foreign exchange is included in the statement of operations.

The cost of securities denominated in currencies other than the reference currency of the different subfunds is converted at the mid closing spot rate prevailing on the day of acquisition.

h) Accounting for securities’ portfolio transactionsThe securities’ portfolio transactions are accounted for the bank business day following the transaction date.



i) Consolidated financial statementsThe consolidated financial statements are expressed in EUR. The various items of the consolidated statement of net assets and the consolidated statement of operations at 31 December 2018 of the investment company are equal to the sum of the corresponding items in the financial statements of each subfund con-verted into EUR at the following exchange rate.

The following exchange rate was used for the conver-sion of the consolidated financial statements as of 31 December 2018:

Exchange rate

EUR 1 = USD 1.143150

j) Receivable on securities sales,Payable on securities purchasesThe account ”Receivable on securities sales” can also include receivables from foreign currency transactions. The account ”Payable on securities purchases” can also include payables from foreign currency transactions.

k) Income recognitionDividends, net of withholding taxes, are recognized as income on the date upon which the relevant securities are first listed as “ex-dividend”. Interest income is accrued on a daily basis.

Note 2 – Expenses paid by the Fund

For the management, administration, portfolio management and distribution of the Fund (if applicable), as well as for all the tasks of the Depositary, such as the safekeeping and supervision of the Fund’s assets, the handling of payment transactions and all other tasks listed in the section “Deposi-tary and main paying agent” of the sales prospectus, a max-imum flat fee based on the net asset value of the Fund is charged to the Fund in accordance with the following provi-sions: this fee is charged to the Fund’s assets on a pro rata basis upon every calculation of net asset value and paid on a monthly basis (maximum flat fee). The relevant maximum flat fee will only be charged upon launch of the correspond-ing unit classes.

MaximumUBS (Lux) Institutional Fund Unit classes flat fee p.a.4)

– Emerging Markets Equity AA1) and AA-T11) max. 0.85% BA2) max. 0.18% FA3) and XA3) None AD-T21) max. 0.70%

– Euro Bonds AA1) and AA-T11) max. 0.465% BA2) max. 0.065% FA3) and XA3) None AD-T21) max. 0.365%

– Euro Corporate Bonds CA1), AA1) and AA-T11) max. 0.615% DA2) and BA2) max. 0.065% YA3), FA3) and XA3) None AD-T21) max. 0.465%

– Global Convertible Bonds AA1), CA1), CA-T11) and AA-T11) max. 0.665% BA2) and DA2) max. 0.065% FA3), YA3) and XA3) None AD-T21) max. 0.515%

MaximumUBS (Lux) Institutional Fund Unit classes flat fee p.a.4)

– Key Selection European Equity AA1) and AA-T11) max. 0.815% BA2) max. 0.065% FA3) and XA3) None AD-T21) max. 0.515%

– Key Selection Global Equity AA and AA-T11) max. 0.815% BA max. 0.065% FA3) and XA3) None AD-T21) max. 0.565%

1) For this unit class, the portfolio management and distribution fees are charged at the subfund’s level, in addition to operational and administrative expenses, calculated on the average net assets attribut-able to class AA units and payable monthly.

2) For this unit class, the portfolio management and distribution fees are charged outside the Fund, directly at the level of the agreement concluded by the investor with UBS Asset Management or one of its authorised delegates. Unit class BA only bears operational and administrative expenses. If a unitholder terminates the agreement with UBS Asset Management or one of its authorised delegates, the net asset value of the units will be redeemed to the unitholder.

3) For these unit classes, the fees for portfolio management, custody and administration and distribution are charged outside the fund, directly at the level of the agreement concluded by the investor with UBS Asset Management or one of its authorised delegates. If a unitholder terminates the agreement with UBS Asset Management or one of its authorised delegates, the net asset value of the units will be redeemed to the unitholder.

4) Calculated on the average total net assets of the subfund and paid monthly.

The maximum flat fee does not include the following fees and additional expenses, which are also charged to the Fund’s assets:a) all additional expenses related to management of the

Fund’s assets for the sale and purchase of assets (bid/offer spread, brokerage fees in line with the market, commissions, fees, taxes, levies etc.). These expenses are generally calculated upon the purchase or sale of the respective assets. In derogation hereto, these addi-tional expenses, which arise through the sale and pur-chase of assets in connection with the settlement of the issue and redemption of units, are covered by the application of the Single Swing Pricing principle pur-suant to the sections “Net asset value, issue, redemp-tion and conversion price” and “Conditions for the issue and redemption of units”;

b) fees of the supervisory authority for the establishment, amendment, liquidation and merger of the Fund, as well as all fees of the supervisory authorities and any stock exchanges on which the subfunds are listed;

c) auditor’s fees for the annual audit and certification in connection with the establishment, amendment, liquidation and merger of the Fund, as well as any other fees paid to the auditor for the services it pro-vides in relation to the administration of the Fund and as permissible by law;

d) fees for legal and tax advisers, as well as notaries, in connection with the establishment, registration in distribution countries, amendment, liquidation and merger of the Fund, as well as for the general safe-guarding of the interests of the Fund and its investors, insofar as this is not expressly prohibited by law;

e) costs for the publication of the Fund’s net asset value and all costs for notices to investors, including transla-tion costs;

f) costs for the Fund’s legal documents (prospectuses, KIID, annual and semi-annual reports, as well as all other documents legally required in the countries of domiciliation and distribution);

g) costs for the Fund’s registration with any foreign supervisory authorities, if applicable, including fees, translation costs and fees for the foreign representa-tive or paying agent;



h) expenses incurred through use of voting or creditors’ rights by the Fund, including fees for external advisers;

i) costs and fees related to any intellectual property reg-istered in Fund’s name;

j) all expenses arising in connection with any extraordi-nary measures taken by the Management Company, Portfolio Manager(s) or Depositary for protecting the interests of the investors;

k) if the Management Company participates in class-action suits in the interests of investors, it may charge the Fund’s assets for the expenses arising in connec-tion with third parties (e.g. legal and Depositary costs). Furthermore, the Management Company may charge for all administrative costs, provided these are verifi-able and disclosed, and taken into account in the disclosure of the Fund’s total expense ratio.

The Management Company may pay retrocessions in order to cover the distribution activities of the Fund.

All taxes levied on the income and assets of the Fund, particularly the taxe d’abonnement, will also be borne by the Fund.

Operational and administrative expenses are allocated among the subfunds, the categories and the classes of units pro rata to their respective net assets (or in a fair and reasonable manner as determined by the Management Company).

When investing in shares of Funds which are managed by UBS AG or a company it controls, no issue or redemption commission is chargeable on subscription to or redemption of these shares. The upper limit for management fees of target funds in which the subfunds’ assets are invested amounts to a maximum of 3%, taking into account any trail fees.

If a subfund invests in funds which refund either entirely or partly the fees charged to their assets by means of payment, such payments will be added in full to the assets of the subfunds concerned.

The details of expenses paid by the relevant subfund are disclosed in the KIID.

Note 3 – Taxe d’abonnement

The Fund is subject to Luxembourg legislation. In con-formity with current legislation in the Grand Duchy of Luxembourg, the Fund is not subject to any Luxembourg withholding, income, capital gains or wealth taxes. The Fund is, however, subject to the Grand Duchy of Luxembourg’s “taxe d’abonnement” of 0.01% p.a. on total net assets which is payable at the end of every quarter. This tax is calculated on the net assets of each subfund at the end of every quarter.

Note 4 – Other income

Other income mainly consist of income resulting from Single Swing Pricing.

Note 5 – Income Distribution

In accordance with article 10 of the Management Regulations, once the annual accounts are closed the Management Company will decide whether and to what extent distributions are to be paid out by each subfund. The payment of distributions must not result in the net assets of the Fund falling below the minimum amount of Fund assets prescribed by law. If a distribution is made, payment will be effected no later than four months after the end of the financial year.

The Management Company is authorized to pay interim dividends and to suspend the payment of distributions.

Distributions are made upon submission of the relevant coupons. The Management Company determines the method of payment.

Note 6 – Commitments on Financial Futures

Commitments on Financial Futures per subfund and respective currency as of 31 December 2018 can be summarised as follows:

Financial Futures Financial Futures on bonds on bondsUBS (Lux) Institutional Fund (bought) (sold)

– Euro Bonds - EUR 12 719 000.00 EUR

Financial Futures Financial Futures on Indices on IndicesUBS (Lux) Institutional Fund (bought) (sold)

– Key Selection Global Equity 56 034 850.00 USD - USD

The commitments on Financial Futures on bonds or index (if any) are calculated based on the market value of the Financial Futures (Number of contracts*notional contract size*market price of the futures).

Note 7 – Total Expense Ratio (TER)

This ratio was calculated in accordance with the Swiss Funds and Asset Management Association (SFAMA) “Guidelines on the calculation and disclosure of the TER” in the current version and expresses the sum of all costs and commissions charged on an ongoing basis to the net assets (operating expenses) taken retrospectively as a percentage of the net assets.



TER for the last 12 months:

UBS (Lux) Institutional Fund Total Expense Ratio (TER)

– Emerging Markets Equity AA 0.94%

– Emerging Markets Equity BA 0.21%

– Emerging Markets Equity FA 0.03%

– Emerging Markets Equity XA 0.03%

– Euro Bonds AA 0.49%

– Euro Bonds AD-T2 0.39%

– Euro Bonds BA 0.09%

– Euro Bonds XA 0.03%

– Euro Corporate Bonds AA 0.64%

– Euro Corporate Bonds BA 0.09%

– Euro Corporate Bonds XA 0.03%

– Global Convertible Bonds AA (EUR) 0.70%

– Global Convertible Bonds AD-T2 (EUR) 0.54%

– Global Convertible Bonds BA (EUR) 0.09%

– Global Convertible Bonds CA (CHF) 0.70%

– Global Convertible Bonds DA (CHF) 0.09%

– Global Convertible Bonds YA (CHF) 0.03%

– Key Selection European Equity AA 0.85%

– Key Selection European Equity AD-T2 0.54%

– Key Selection European Equity BA 0.09%

– Key Selection Global Equity AA (EUR) 0.86%

– Key Selection Global Equity BA (EUR) 0.11%

– Key Selection Global Equity FA (USD) 0.03%

– Key Selection Global Equity XA (USD) 0.03%

Transaction costs and any other costs incurred in connection with currency hedging are not included in the TER.

The TER for classes of units which were active less than a 12 month period are annualised.

Note 8 – Transaction costs

Transaction costs include brokerage fees, stamp duty, local taxes and other foreign charges if incurred during the fiscal year. Transaction fees are included in the cost of securities purchased and sold.

For the financial year ended on 31 December 2018, the fund incurred transaction costs relating to purchase or sale of investments in securities and similar transactions as follows:

UBS (Lux) Institutional Fund Transaction costs

– Emerging Markets Equity 131 690.91 USD

– Euro Bonds 2 311.50 EUR

– Euro Corporate Bonds 209.30 EUR

– Global Convertible Bonds 1 451.74 EUR

– Key Selection European Equity 65 869.74 EUR

– Key Selection Global Equity 662 608.73 USD

Not all transaction costs are separately identifiable. For fixed income investments, forward currency contracts and other derivative contracts, transaction costs will be included in the purchase and sale price of the investment. Whilst not separately identifiable these transaction costs will be captured within the performance of each fund.

Note 9 – Applicable law, place of performance and authoritative language

The Luxembourg District Court is the place of performance for all legal disputes between the unitholders, the Management Company and the Depositary. Luxembourg law applies. However, in matters concerning the claims of investors from other countries, the Management Company and/or the Depositary can elect to make them-selves and the fund subject to the jurisdiction of the countries in which the fund units were bought and sold.

The English version of these financial statements is the authoritative version and only this version was audited from the independent auditor. However, in the case of units sold to investors from the other countries in which Fund units can be bought and sold, the Management Company and the Depositary may recognize approved translations (i.e. approved by the Management Company and the Depositary) into the languages concerned as binding upon themselves and the Fund.



Note 10 – OTC-Derivatives and Securities Lending

If the Fund enters into OTC transactions, it may be exposed to risks related to the creditworthiness of the OTC counterparties: when the Fund enters into futures contracts, options and swap transactions or uses other derivative techniques it is subject to the risk that an OTC counterparty may not meet (or cannot meet) its obligations under a specific or multiple contracts. Counterparty risk can be reduced by depositing a security. If the Fund is owed a security pursuant to an applicable agreement, such security shall be held in custody by the Depositary in favour of the Fund. Bankruptcy and insolvency events or other credit events with the OTC counterparty, the Depositary or within their subdepositary/correspondent bank network may result in the rights or recognition of the Fund in connection with the security to be delayed, restricted or even eliminated, which would force the Fund to fulfill its obligations in the framework of the OTC transaction, in spite of any security that had previously been made available to cover any such obligation.

The Fund may lend portions of its securities portfolio to third parties. In general, lendings may only be effected via recognized clearing houses such as Clearstream International or Euroclear, or through the intermediary of prime financial institutions that specialise in such activities and in the modus specified by them. Collateral is received in relation to securities lent. Collateral is composed of high quality securities in an amount typically at least equal to the market value of the securities loaned.

UBS Europe SE, Luxembourg Branch acts as securities lending agent.

OTC-Derivatives*

Subfund Unrealized gain CollateralCounterparty (loss) received

UBS (Lux) Institutional Fund – Global Convertible Bonds

Citibank 646 272.95 EUR 0.00 EUR

Goldman Sachs -15 782.26 EUR 0.00 EUR

Morgan Stanley -199.69 EUR 0.00 EUR

UBS AG 497 044.64 EUR 0.00 EUR

UBS (Lux) Institutional Fund – Key Selection Global Equity

Goldman Sachs 779 506.46 USD 0.00 USD

HSBC 336 430.14 USD 0.00 USD

JP Morgan 2 499 019.81 USD 0.00 USD

State Street 294 175.25 USD 0.00 USD

UBS AG -78 209.87 USD 0.00 USD

* Derivatives traded on an official exchange are not included in this table as they are guaranteed by a clearing house. In the event of a counterparty default the clearing house assumes the risk of loss.

Securities Lending

Counterparty Exposure fromSecurities Lending as of 31 December 2018

Collateral Breakdown(Weight in %) as of 31 December 2018

UBS (Lux) Institutional Fund Market value ofsecurities lent

Collateral(UBS Switzerland AG) Equities Bonds Cash

– Emerging Markets Equity 8 739 748.34 USD 9 230 650.67 USD 27.50 72.50 0.00– Euro Bonds 46 329 673.50 EUR 48 931 961.79 EUR 27.50 72.50 0.00– Global Convertible Bonds 6 534 812.31 EUR 6 901 865.74 EUR 27.50 72.50 0.00– Key Selection European Equity 8 955 114.44 EUR 9 458 113.66 EUR 27.50 72.50 0.00– Key Selection Global Equity 244 859 569.63 USD 258 613 070.23 USD 27.50 72.50 0.00

52


Unaudited Information

1) Global Exposure

Risk managementRisk management in accordance with the commitment approach and the value-at-risk approach is applied pur-suant to the applicable laws and regulatory provisions.

LeverageLeverage is defined pursuant to the applicable ESMA directives as the total of the notional values of the deriva-tives used by the respective subfund. According to this definition, leverage may result in artificially increased leverage amounts, as some derivatives that can be used for hedging purposes may be included in the calcula-tion. Consequently, this information does not necessarily reflect the precise actual leverage risk that the investor is exposed to.

UBS (Lux) Institutional Fund Global risk calculation method

– Emerging Markets Equity Commitment approach

– Euro Bonds Commitment approach

– Euro Corporate Bonds Commitment approach

– Global Convertible Bonds Commitment approach

– Key Selection European Equity Commitment approach

– Key Selection Global Equity Commitment approach

2) Remuneration Policy and quantitative disclosure

The Board of Directors of UBS Fund Management ( Luxembourg) S.A. has updated the remuneration policy (the “Policy”) on 7 December 2018, whose objectives are on one hand; to ensure that the remuneration frame-work is in line with the applicable laws and regulations, and more specifically with provisions defined under (i) the Articles 111bis and 111ter of the Luxembourg Law of 17 December 2010 on Undertakings for Collective Invest-ment in Transferable Securities as amended from time to time (the UCITS Law) transposing the UCITS Directive 2014/91/EU (the UCITS V Directive), (ii) the Alternative Investment Fund Managers (AIFM) Directive 2011/61/EU, transposed into the Luxembourg AIFM Law dated from 12 July 2013, as amended from time to time, (iii) the ESMA’s guidelines on sound remuneration policies under the UCITS Directive - ESMA/2016/575 published on 14 October 2016 and ESMA’s guidelines on sound remu-neration policies under the AIFMD - ESMA/2016/579 published on 14 October 2016 amending the ESMA’s guidelines on sound remuneration policies under the

UCITS Directive and AIFMD published on 31 March 2016 - ESMA/2016/411 (the ESMA Guidelines) and (iv) the CSSF Circular 10/437 on Guidelines concerning the remuneration policies in the financial sector issued on 1 February 2010; (v) the Directive 2014/65/EU on mar-kets in financial instruments (MiFID II); (vi) the Commis-sion Delegated Regulation 2017/565/EC of 25 April 2016 supplementing Directive 2014/65/EU (MiFID II Level 2); (vii) the CSSF Circular 14/585, transposing the ESMA Guidelines 2013/606 on remuneration policies and prac-tices (MiFID ESMA Guidelines); and on the other hand, to comply with the UBS AG Remuneration policy frame-work. The Policy is meant not to encourage excessive risk taking, to contain measures to avoid conflicts of interest, to be consistent with, and promote, sound and effec-tive risk management and to be consistent with the UBS Group business strategy, objectives and values.

Further information in relation to UBS AG Remuneration Policy is available in the UBS Group AG Annual Report and in the Compensation report. More details about the remuneration policy of the Management Company, which describes, but not limited to, how remuneration and bene-fits are determined, are available at http://www.ubs.com/lu/en/asset_management/investor_information.html.

Application of the requirements and remuneration disclosure

In accordance with the Article 151 of the UCITS Law, the Management Company is required to disclose at least annually certain information concerning its remuneration policy and the practices for its identified staff.

The Management Company complies with the afore-mentioned regulatory provisions in a way and to the extent that is appropriate to its size, internal organization and the nature, scope and complexity of its activities.

Considering the total size of funds under management, both UCITs and AIFs although a significant portion is not complex or risky investment, UBS Fund Management (Luxembourg) S.A. judges that the proportionality princi-ple may not be applicable at the level of the company but at the level of the Identified staff.

By application of the proportionality principle for the Identified staff, the following requirements on pay-out processes for Identified staff are not applied:

53



• The payment of variable remuneration in instruments related mainly to the funds in relation to which they perform their activities;

• Deferral requirements;• Retention periods;• Incorporation of ex-post risk factors (i.e. malus or

clawback arrangements).

The deferral requirements remain however applica-ble when the employee’s total annual compensation is exceeding the threshold defined under the UBS Group Compensation Framework; the variable compensation will be treated in line with the plan rules defined under the UBS Group Compensation Framework.

There is no remuneration paid to identified staff of delegates from the Management Company.

Remuneration disclosure

For the fiscal year ending 31 December 2018, the aggre-gate total remuneration paid by UBS Fund Management (Luxembourg) S.A. to all its staff amounted to EUR 60 832, of which EUR 4 139 represented the variable remunera-tion. The Management Company employed an average of 34.7 staff (full time equivalent) during this period.

The aggregate total remuneration paid by the Management Company to its Identified Staff amounted to EUR 11 700.

Please further note that due to the roles of Management Company staff, this remuneration was calculated in proportion of the net assets of the Fund out of the net assets of all the funds under the governance of UBS Fund Management (Luxembourg) S.A. (including both AIF and UCITS funds).

54


3) Collateral – Securities Lending

UBS (Lux) Institutional Fund – Emerging

Markets Equity (in %)


(in %)

UBS (Lux) Institutional Fund – Global

Convertible Bonds (in %)

UBS (Lux) Institutional Fund – Key Selection

European Equity (in %)

UBS (Lux) Institutional Fund – Key Selection Global Equity (in %)

by Country:– Australia 0.83 0.83 0.83 0.83 0.83– Austria 0.91 0.91 0.91 0.91 0.91– Belgium 1.18 1.18 1.18 1.18 1.18– British Virgin Islands 0.05 0.05 0.05 0.05 0.05– Canada 2.93 2.93 2.93 2.93 2.93– Cayman Islands 0.08 0.08 0.08 0.08 0.08– China 1.70 1.70 1.70 1.70 1.70– Curacao 0.00 0.00 0.00 0.00 0.00– Denmark 0.43 0.43 0.43 0.43 0.43– Finland 0.42 0.42 0.42 0.42 0.42– France 14.41 14.41 14.41 14.41 14.41– Germany 5.10 5.10 5.10 5.10 5.10– Hong Kong 0.72 0.72 0.72 0.72 0.72– Ivory Coast 0.31 0.31 0.31 0.31 0.31– Japan 20.02 20.02 20.02 20.02 20.02– Kuwait 0.00 0.00 0.00 0.00 0.00– Luxembourg 0.43 0.43 0.43 0.43 0.43– New Zealand 0.22 0.22 0.22 0.22 0.22– Norway 0.86 0.86 0.86 0.86 0.86– Singapore 0.48 0.48 0.48 0.48 0.48– South Korea 0.02 0.02 0.02 0.02 0.02– Supranationals 1.99 1.99 1.99 1.99 1.99– Sweden 2.00 2.00 2.00 2.00 2.00– Switzerland 8.62 8.62 8.62 8.62 8.62– The Netherlands 3.55 3.55 3.55 3.55 3.55– United Arab Emirates 0.01 0.01 0.01 0.01 0.01– United Kingdom 10.65 10.65 10.65 10.65 10.65– United States of America 22.08 22.08 22.08 22.08 22.08– Venezuela 0.00 0.00 0.00 0.00 0.00Total 100.00 100.00 100.00 100.00 100.00

by Credit Rating (Bonds):

– Rating > AA- 56.46 56.46 56.46 56.46 56.46

– Rating <= AA- 29.97 29.97 29.97 29.97 29.97

– without Rating 13.57 13.57 13.57 13.57 13.57

Total 100.00 100.00 100.00 100.00 100.00

Securities Lending

Assets and Revenues / Ratios

Average Invested Assets (1) 70 970 507.69 USD 126 458 817.69 EUR 328 899 010.44 EUR 62 176 709.05 EUR 1 717 228 891.18 USD

Average Securities Lent (2) 10 614 298.50 USD 52 410 744.83 EUR 8 509 206.10 EUR 11 240 501.95 EUR 348 931 275.46 USD

Average Collateral Ratio 103.47% 103.47% 103.47% 103.47% 103.47%

Average Securities Lending Ratio (2)/(1) 14.96% 41.44% 2.59% 18.08% 20.32%

Securities Lending revenues 19 408.50 USD 80 498.35 EUR 114 671.20 EUR 72 388.28 EUR 949 300.65 USD

Securities Lending costs 7 763.40 USD 32 199.34 EUR 45 868.48 EUR 28 955.31 EUR 379 720.26 USD

Net Securities Lendingrevenues 11 645.10 USD 48 299.01 EUR 68 802.72 EUR 43 432.97 EUR 569 580.39 USD


55



4) Facts and conditions

Valid as at 31 December 2018

All information subject to change at any time.

Keys to and explanations of the tables can be found on the following pages.

Flat fee

The flat fee covers all costs incurred in connection with asset management, distribution and fund administration (including fund management company, administrator and Depositary), with the exception of the costs specified below, which are additionally charged to the subfunds. TTC (transaction and tax costs) and Other costs.

TTC (transaction and tax costs)

Estimated transaction and tax costs of transactions not created through subscriptions and redemptions. These costs also include well-founded estimates of implicit costs (e.g. bid/ask – difference).

Other costs

Costs charged directly to the subfunds (e.g. audit costs, supervisory fees, licence fees).

TER target funds

Total expense ratio (TER) of the underlying target funds as defined by the SFAMA.

Audited TER

Total expense ratio (TER) as defined by the SFAMA.

S / R method

Method used in subscriptions and redemptions of subfund units.

1) NAV Issue price = redemption price = NAV (NAV = net asset value).

2) Dil. protection = Protection against dilution - Issue price = NAV plus protection against dilution - Redemption price = NAV minus protection against dilution - Difference with NAV (= protection against dilu-tion) always in favour of the subfund, in full, i.e. in favour of performance for investors.

3) SSP (single swinging pricing) - Issue price = redemption price = NAV plus swing factor if net subscriptions on the day of trading - Issue price = redemption price = NAV minus swing factor if net redemptions on the day of trading - Difference with NAV always in favour of the subfund, in full, i.e. in favour of performance for investors. - The swing factors are geared to the brokerage charged by third-party brokers, taxes and duties as well as the difference calculated between the bid/ask rates of transactions resulting in subscrip-tions or redemptions. A UBS committee compri-sing financial experts monitors the market on an ongoing basis and adjusts the swing factors where necessary. If the swing factors for net subscriptions and net redemptions are different, the mean is used.

S / R - In basis points

Difference between the issue (= subscription) price or redemption price and the NAV as a percentage of the NAV (application of dilution protection or swing factor).

Cut-off time

Point at which subscription and redemption of units close.

56


Forward pricing method

Forward Pricing 1 (FP 1) Forward Pricing 2 (FP 2)

Order entry day X (e.g. Monday) day X (e.g. Monday)

Closing prices on stock exchange day X (Monday) day X + 1 (Tuesday)

Price fixing and settlement day X + 1 (Tuesday) day X + 2 (Tuesday)Value date day X + 3 (Thursday) day X + 4 (Friday)

Other TER Audited S / R Forward Flat fee costs target funds TER TTC Total fees S / R in basis Cut-off pricingClass ISIN in % p.a. in % p.a. in % p.a. in % p.a. in % p.a. in % p.a. method points time method

UBS (Lux) Institutional Fund – Emerging Markets Equity Benchmark: MSCI EMMA Index

AA LU0200130796 0.8500 0.09 0.00 0.94 0.21 1.1500 SSP 18 / 22 15.00h Forward Pricing 2BA LU0200131414 0.1800 0.03 0.00 0.21 0.21 0.4200 SSP 18 / 22 15.00h Forward Pricing 2FA LU0225528644 0.0000 0.03 0.00 0.03 0.21 0.2400 SSP 18 / 22 15.00h Forward Pricing 2XA LU0200132651 0.0000 0.03 0.00 0.03 0.21 0.2400 SSP 18 / 22 15.00h Forward Pricing 2

UBS (Lux) Institutional Fund – Euro Bonds Benchmark: Barclays Euro Aggregate 500 Mio+ TR Index

AA LU0093640489 0.4650 0.03 0.00 0.49 0.05 0.5400 SSP 16 / 5 14.00h Forward Pricing 1AD-T2 LU0157015289 0.3650 0.03 0.00 0.39 0.05 0.4400 SSP 16 / 5 14.00h Forward Pricing 1BA LU0093640562 0.0650 0.03 0.00 0.09 0.05 0.1400 SSP 16 / 5 14.00h Forward Pricing 1XA LU0176375417 0.0000 0.03 0.00 0.03 0.05 0.0800 SSP 16 / 5 14.00h Forward Pricing 1

UBS (Lux) Institutional Fund – Euro Corporate Bonds Benchmark: Barclays Euro Aggregate Corporate 500 Mio. TR Index

AA LU0130421521 0.6150 0.03 0.00 0.64 0.09 0.7300 SSP 24 / 8 15.00h Forward Pricing 1BA LU0130422412 0.0650 0.03 0.00 0.09 0.09 0.1800 SSP 24 / 8 15.00h Forward Pricing 1XA LU0176376811 0.0000 0.03 0.00 0.03 0.09 0.1200 SSP 24 / 8 15.00h Forward Pricing 1

UBS (Lux) Institutional Fund – Global Convertible Bonds Benchmark: UBS Global Convertible Index – Global Vanilla hedged (EUR)

AA (EUR) LU0251252234 0.6650 0.03 0.00 0.70 0.31 1.0100 SSP 31 / 31 15.00h Forward Pricing 1AD-T2 (EUR) LU0251255765 0.5150 0.03 0.00 0.54 0.31 0.8500 SSP 31 / 31 15.00h Forward Pricing 1BA (EUR) LU0251253554 0.0650 0.03 0.00 0.09 0.31 0.4000 SSP 31 / 31 15.00h Forward Pricing 1CA (CHF) LU0251472279 0.6650 0.03 0.00 0.70 0.31 1.0100 SSP 31 / 31 15.00h Forward Pricing 1DA (CHF) LU0262434755 0.0650 0.03 0.00 0.09 0.31 0.4000 SSP 31 / 31 15.00h Forward Pricing 1YA (CHF) LU0251487541 0.0000 0.03 0.00 0.03 0.31 0.3400 SSP 31 / 31 15.00h Forward Pricing 1

UBS (Lux) Institutional Fund – Key Selection European Equity Benchmark: MSCI Europe Index

AA LU0154869704 0.8150 0.04 0.00 0.85 0.08 0.9300 SSP 29 / 5 14.00h Forward Pricing 1AD-T2 LU0154876311 0.5150 0.03 0.00 0.54 0.08 0.6200 SSP 29 / 5 14.00h Forward Pricing 1BA LU0154870629 0.0650 0.03 0.00 0.09 0.08 0.1700 SSP 29 / 5 14.00h Forward Pricing 1

UBS (Lux) Institutional Fund – Key Selection Global Equity Benchmark: MSCI World Index

AA (EUR) LU0155225690 0.8150 0.05 0.00 0.86 0.05 0.9100 SSP 13 / 7 14.00h Forward Pricing 1BA (EUR) LU0155226235 0.0650 0.05 0.00 0.11 0.05 0.1600 SSP 13 / 7 14.00h Forward Pricing 1FA (USD) LU0225530384 0.0000 0.03 0.00 0.03 0.05 0.0800 SSP 13 / 7 14.00h Forward Pricing 1XA (USD) LU0176377546 0.0000 0.03 0.00 0.03 0.05 0.0800 SSP 13 / 7 14.00h Forward Pricing 1


57



5) Securities Financing Transaction Regulation (SFTR)

The Fund engages in Securities Financing Transactions (hereafter “SFT”) (as defined in Article 3 of Regulation (EU) 2015/2365). Securities Financing transactions include repurchase transactions, securities or commodities lending and securities or commodities borrowing, buy-sell back transactions or sell-buy back transactions and margin lending transactions through its exposure on reverse repurchase agreements during the year. In accordance with Article 13 of the Regulation, information on securities lendings are detailed below:

Global Data

The following table details the value of securities lending as a proportion of the subfund’s Net Assets Value as well as a proportion of the total lendable securities, as at 31 December 2018.

UBS (Lux) Institutional Fund Securities lent in % of Net Assets

Securities lent in % of Total Lendable

Securities

– Emerging Markets Equity 14.06% 14.19%

– Euro Bonds 41.40% 42.40%

– Global Convertible Bonds 2.16% 2.33%

– Key Selection European Equity 14.11% 14.61%

– Key Selection Global Equity 17.18% 17.65%

The total amount (absolute value) of the securities lent is disclosed in Note 10 – OTC-Derivatives and Securities Lending.

Data on collateral reused

Amount of collateral reused, compared with the maximum amount disclosed to investors: None

Cash collateral reinvestment income to the Fund: None

Concentration Data

Ten largest collateral issuers of SFTs per subfund:

UBS (Lux) InstitutionalFund – Emerging Markets

Equity (USD)


(EUR)

UBS (Lux) InstitutionalFund – Global

Convertible Bonds (EUR)


European Equity (EUR)

UBS (Lux) Institutional Fund – Key Selection Global Equity (USD)

Japan Government Ten 1 550 770.60 8 220 682.45 1 159 529.36 1 588 984.91 43 447 592.33

French Republic 1 043 901.87 5 533 755.75 780 537.67 1 069 625.84 29 246 764.54

United Kingdom 782 953.97 4 150 462.98 585 423.87 802 247.63 21 935 845.92

United States 657 594.72 3 485 929.76 491 691.28 673 799.26 18 423 683.91

Novartis AG 234 687.12 1 244 083.62 175 478.31 240 470.32 6 575 176.48

Federal Republic of Germany 169 738.51 899 789.03 126 915.47 173 921.23 4 755 525.74

Nestle SA 140 813.97 746 459.15 105 288.25 144 283.92 3 945 153.32

European Investment Bank 119 171.16 631 729.98 89 105.68 122 107.79 3 338 791.72

Philip Morris International Inc 101 116.54 536 021.85 75 606.02 103 608.26 2 832 959.30

Kommuninvest I Sverige AB 89 307.65 473 422.57 66 776.37 91 508.38 2 502 112.32

58



The ten largest issuers of SFTs

All SFTs of the subfunds of this Fund are held with one counterparty being UBS Switzerland AG.

Safekeeping of collateral received by the Fund as part of SFTs

100% held by UBS Switzerland AG

Safekeeping of collateral granted by the Fund through SFTs

None

Aggregate transaction data separately broken down for each type of SFTs

Type and quality of collateral:

The information on– Type of collateral is available in Note 10 “OTC-Derivatives and Securities Lending”.– Quality of collateral is available in Unaudited Information 3) Collateral – Securities Lending “by Credit Rating (Bonds)”.

Maturity tenor of collateral

UBS (Lux) InstitutionalFund – Emerging

Markets Equity (USD)


(EUR)






Global Equity (USD)

Up to 1 day - - - - -

1 day to 1 week - - - - -

1 week to 1 month 169 504.59 898 549.03 126 740.57 173 681.55 4 748 972.14

1 month to 3 months 184 729.23 979 255.31 138 124.21 189 281.35 5 175 517.43

3 months to 1 year 1 082 088.54 5 736 184.46 809 090.29 1 108 753.51 30 316 631.91

Above 1 year 5 255 655.96 27 860 393.13 3 929 715.59 5 385 166.57 147 246 534.60

Unlimited 2 538 672.35 13 457 579.86 1 898 195.08 2 601 230.68 71 125 414.15

Currency of collateral:

Currency of collateral Percentage

USD 28.56%EUR 24.26%JPY 18.82%GBP 11.30%CHF 10.24%CAD 2.03%HKD 1.99%SEK 1.55%NOK 0.36%DKK 0.35%SGD 0.21%AUD 0.18%NZD 0.13%TRY 0.02%IDR 0.00%INR 0.00%MXN 0.00%RUB 0.00%CNH 0.00%ITL 0.00%PLN 0.00%ZAR 0.00%Total 100.00%

59



Maturity tenor of SFTs broken down by maturity buckets:

UBS (Lux) InstitutionalFund – Emerging

Markets Equity (USD)


(EUR)






Global Equity (USD)

Up to 1 day 8 739 748.34 46 329 673.50 6 534 812.31 8 955 114.44 244 859 569.63

1 day to 1 week - - - - -

1 week to 1 month - - - - -

1 month to 3 months - - - - -

3 months to 1 year - - - - -

Above 1 year - - - - -

Unlimited - - - - -

Country in which the counterparties of the SFTs are established:

100% Switzerland (UBS Switzerland AG)

Settlement and clearing of trade

UBS (Lux) InstitutionalFund – Emerging Markets

EquitySecurities Lending

UBS (Lux) Institutional Fund – Euro BondsSecurities Lending


Convertible BondsSecurities Lending


European EquitySecurities Lending


Global EquitySecurities Lending

Settlement and clearing of tradeCentral counterparty - - - - -

Bilateral - - - - -

Tri-party 8 739 748.34 USD 46 329 673.50 EUR 6 534 812.31 EUR 8 955 114.44 EUR 244 859 569.63 USD

Data on income and expense for each type of SFT

All expenses related to the execution of securities lending transactions including collateralization are borne by the Counterparties and the Depositary. The breakdown of the income on securities lending disclosed in the statement of operations is as follows:

– 60% payable to the Fund– 40% payable to the Securities Lending Agent

Income-Ratio (Fund)

UBS (Lux) Institutional Fund Percentage

– Emerging Markets Equity 0.22%

– Euro Bonds 0.17%

– Global Convertible Bonds 1.75%

– Key Selection European Equity 0.81%

– Key Selection Global Equity 0.39%

Expense-Ratio (Securities Lending Agent)

UBS (Lux) Institutional Fund Percentage

– Emerging Markets Equity 0.09%

– Euro Bonds 0.07%

– Global Convertible Bonds 0.70%

– Key Selection European Equity 0.32%

– Key Selection Global Equity 0.16%

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