The Board believed that the increased rate was appropriate based upon the recommendation of UBS AM, and in light of its ongoing consideration of efforts to reduce the discount to NAV at which the Fund's shares recently had traded as of May 2015. Historically, UBS AM and the Board had sought to maintain distribution rates that were more closely aligned with the Fund's expected earnings. In recent years, however, a general decline in prevailing bond yields and narrowing of spreads have reduced the Fund's earnings levels, which resulted in reductions of the monthly distribution rate, which may have contributed to the discount at which the Fund's shares have traded. UBS AM believed that increasing the annualized distribution rate might help to reduce the Fund's trading discount.In approving the increased distribution rate, the Fund's Board has effectively de-linked the Fund's managed distribution payments from the level of anticipated Fund earnings. To the extent that the aggregate amount distributed by the Fund under the Policy exceeds its current and accumulated earnings and profits, which is an expected result of the increase discussed above, the amount of that excess would constitute a return of capital or net realized capital gains for tax purposes. A return of capital may occur, for example, when some or all of the money that shareholders invested in the Fund is deemed to be paid back to them. A return of capital distribution does not reflect the Fund's investment performance and should not be confused with "yield" or "income." Of course, if the Fund's earnings and profits in any fiscal year should exceed the aggregate amount distributed under the Policy, no return of capital to the Fund's shareholders would occur, and the Fund would make an additional distribution in the amount of that excess near the end of the fiscal year.
During the current fiscal year which ends on November 30, 2016 (or the earlier liquidation of the Fund), the Fund has made three (3) regular monthly distributions from December 1, 2015 to February 29, 2016, which in aggregate equal $0.2052 per share. The sources of the regular distributions paid during the month and current fiscal year are estimated as follows:
|Estimated source of regular monthly distributions|
|Distributions||Net investmentincome||Net realized short-term capital gains||Net realized long-term capital gains||Return ofcapital|
|Current Month||$0.0674||$0.0280 (41%)||$0.0107 (16%)||$0 (0%)||$0.0287 (43%)|
|YTD*||$0.2052||$0.0934 (45%)||$0 (0%)||$0.0283 (14%)||$0.0835 (41%)|
The Fund periodically issues notices to shareholders and press releases estimating the source characteristics of its monthly distributions. The amounts and sources reported in these materials are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for accounting and tax reporting purposes will depend upon the Fund's investment experience during its entire fiscal year and may be subject to retroactive changes based on tax regulations. The Fund sends shareholders a Form 1099-DIV (or a financial intermediary should provide a shareholder with similar information) for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes.If you chose to receive your distributions in cash, a check should have been sent to you or a credit should have been made on your financial intermediary or Fund account statement. If you chose to reinvest your distributions, that statement (or a subsequent one) should indicate the additional shares purchased for your account in full and fractional shares of the Fund's common stock. You should not draw any conclusions about the investment performance of the Fund's portfolio from the amount of the monthly distribution or from the terms of the Fund's Policy. If you would like to change your distribution option, please write or call your broker or, if you hold shares directly with the Fund, the Fund's distribution disbursing agent, BNY Mellon Investment Servicing, at 1-800-331-1710. For more information about the Fund, please contact: UBS Asset Management Closed-End Funds Desk, 888-793 8637. Please find below additional information regarding the Fund's performance. Please note that this information is primarily based on the Fund's net asset value based performance, not its market price based performance. Market price based performance for various periods is included in the Fund's most recent report to shareholders and is different.
|Fund performance and distribution rate information|
|Fiscal year-to-date 12/1/2015 to 1/31/2016|
|Year-to-date Cumulative Net Asset Value Return 1||-1.33%|
|Cumulative Distribution Rate 2||1.54%|
|Preceding five-year period 2/1/2011 to 1/31/2016|
|5 Years Average Annual Total Net Asset Value Return 1||2.28%|
|Average Annual Distribution Rate 3||7.00%|
|Current Annualized Distribution Rate 4||9.03%|
|1||The Fund's net asset value ("NAV") returns assume, for illustration only, that dividends and other distributions, if any, were reinvested at the NAV on the payable dates.|
|2||Cumulative Distribution Rate for the Fund's fiscal period (December 1, 2015 through January 31, 2016) measured on the dollar value of distributions in the year-to-date period as a percentage of the Fund's NAV as of January 31, 2016.|
|3||Average Annual Distribution Rate is the simple arithmetic average of the Annual Distribution Rates for the preceding five-year period. The Annual Distribution Rates are calculated by taking the total distributions paid during the period divided by average daily NAV for the period.|
|4||The Current Annualized Distribution Rate is the monthly distribution rate annualized as a percentage of the Fund's NAV as of January 31, 2016.|
|Fiscal year ending Nov 30||Average daily NAV for period||End of period NAV per share||Change in NAV||Total returns||Distribution rate 2||Net investment income distributions paid||Short-term distributions paid||Long-term distributions paid||Return of capital||Total distributions paid|
|1||Figures are fiscal year to date, December 1, 2015 through January 31, 2016, and this period's final distribution characterization will not be completed until January 2017 or after the earlier liquidation of the Fund.|
|2||Distribution rate calculated by taking the total distributions paid within the period divided by average daily NAV for the period.|
Investing in the Fund entails specific risks, such as interest rate, credit and the risks associated with investing in the securities of non-US issuers, including those located in emerging market countries. The value of the Fund's investments in foreign securities may fall due to adverse political, social and economic developments abroad and due to decreases in foreign currency values relative to the US dollar. Further detailed information regarding the Fund, including a discussion of principal objectives, principal investment strategies and principal risks, may be found in the fund overview located at http://www.ubs.com/closedendfundsinfo . You may also request copies of the fund overview by calling the Closed-End Funds Desk at 888-793-8637.©UBS 2016. All rights reserved. The key symbol and UBS are among the registered and unregistered trademarks of UBS.