http://www.sec.gov/Archives/edgar/data/886244/000160900614000044/ubs497e12182014.htmThe UBS Funds
UBS Emerging Markets Debt Fund
Prospectus Supplement
December 19, 2014
Dear Investor,
The purpose of this supplement to the Prospectus of the UBS Emerging Markets Debt Fund series (the "Fund") of The UBS Funds (the "Trust") dated October 28, 2014, is to notify you that the Board of Trustees (the "Board") of the Trust on December 4, 2014 approved certain actions to liquidate and dissolve the Fund.
Rationale for liquidating the Fund
Based upon information provided by UBS Global Asset Management (Americas) Inc., the Fund's investment advisor, the Board determined that it is in the best interests of the Fund and its shareholders to liquidate and dissolve the Fund pursuant to a Plan of Liquidation (the "Plan"). To arrive at this decision, the Board considered factors that have adversely affected, and will continue to adversely affect, the ability of the Fund to conduct its business and operations in an economically viable manner, including factors such as low asset levels and limited future prospects for growth.
The liquidation is expected to be completed on or about February 24, 2015 (the "Liquidation Date").
Liquidation of the Fund
The Plan provides that: (a) all of the Fund's assets be converted into cash or cash equivalents or be otherwise liquidated and (b) the Fund distribute pro rata to its shareholders all of its existing assets, in a complete liquidation of the Fund. Therefore, on the Liquidation Date, all shareholders will have their accounts liquidated and the proceeds will be delivered to them. For those shareholders with taxable accounts, the liquidation will be considered a taxable transaction, and such shareholders may recognize a gain or loss for Federal income tax purposes. Shareholders should consult their tax advisers regarding the effect of the Fund's liquidation in light of their individual circumstances.
As the Liquidation Date approaches, in preparation for the complete liquidation of the Fund, the Fund's assets may be invested in money market instruments or held in cash. In this regard, the Fund will no longer be investing according to its investment objective.
Closure of Fund to new investments, reinvestments and exchanges
In connection with the liquidation, the Board approved, effective December 24, 2014, the closure of each class of the Fund to new investments, including new investors, additional purchases from existing investors and purchases for exchange from other funds. The Board also approved, effective December 24, 2014, the closure of each class of the Fund to reinvestments of dividends and distributions. Therefore, the Fund will no longer offer shares for purchase. The Fund reserves the right to change this policy at any time. Of course, shareholders will continue to be able to redeem their shares in accordance with the policies in the Prospectus.
Waiver of the investment advisory fee, annual Rule 12b-1 distribution fees and redemption fees, and elimination of contingent deferred sales charges on redemptions
Also in connection with the liquidation, effective December 24, 2014, (a) the investment advisory fee of 0.75% of average net assets is waived; (b) the annual Rule 12b-1 distribution fee of 0.50% of average net
