OutlookWe maintain our positive outlook for emerging markets debt. Within this asset class, we believe that local currencies will be the main contributor to performance in 2013, and that they will be supported by superior growth rates verses their developed country counterparts. In addition, it's likely that the Fed and ECB will continue to pursue their highly accommodative monetary policies for the foreseeable future. In contrast, many emerging market central banks appear closer to ending their easing cycles. Against this backdrop, the yield difference between local emerging and developed country currencies should remain stable or increase, which should be beneficial for local currencies. Elsewhere, we feel that US dollar-denominated spreads are now fairly valued and, therefore, we pared our allocation in December. We have a more neutral outlook for local bonds in 2013. 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.