OutlookWe maintain our positive long-term outlook for the emerging markets debt asset class. However, we could see periods of volatility in the coming months, given the previously mentioned unresolved macro issues, slowing growth in China and the US “fiscal cliff” situation. Against this backdrop, we reduced certain holdings during the third quarter to capture profits and reduce the Fund's overall risk exposure. Should spreads widen from current levels, we would look to add to our risk exposure. 3 While we have maintained our local currency exposure, we have become more cautious in terms of local duration exposure given our outlook for 2013. Exceptions to this are our long duration exposures in Brazil, Mexico and India, based on country-specific events and opportunities. Looking ahead, we feel the gap between growth rates between emerging and developed counties will remain in place in 2013. We feel this should be supportive for the emerging markets debt asset class over the longer-term. Disclaimers Regarding Fund Commentary - The Fund Commentary is intended to assist shareholders in understanding how the Fund performed during the period noted. Views and opinions were current as of the date of this press release. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and the Fund and UBS Global AM reserve the right to change views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund’s future investment intent. Past performance does not predict future performance. The return and value of an investment will fluctuate so that an investor's shares, when sold, may be worth more or less than their original cost. Any Fund net asset value ("NAV") returns cited in a Fund Commentary assume, for illustration only, that dividends and other distributions, if any, were reinvested at the NAV on the payable dates. Any Fund market price returns cited in a Fund Commentary assume that all dividends and other distributions, if any, were reinvested at prices obtained under the Fund's Dividend Reinvestment Plan. Returns for periods of less than one year have not been annualized. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and other distributions, if any, or on the sale of Fund shares.
1 Global High Income Fund Index is an unmanaged index compiled by the advisor, currently constructed as follows: 50% J.P. Morgan Emerging Markets Bond Index Global (EMBI Global) and 50% J.P. Morgan Government Bond Index-Emerging Markets Global Diversified (GBI-EM Global Diversified). Investors should note that indices do not reflect the deduction of fees and expenses. 2 Quasi-sovereign bonds are securities issued by entities supported by the local government. 3 “Spreads” refers to differences between the yield paid on US Treasury bonds and other types of debt, such as emerging markets bonds.