Model Portfolio Series: Conservative Growth

Following is the conservative growth model portfolio's quarterly updated information. During the next 2 months, we'll update the equity income and aggressive growth portfolios. During the past quarter, Best Buy Co, Clorox Co, Corning, Cox Radio, E.I. DuPont De Nemours & Co (DuPont), ING Group NV, and Pacer International were replaced with ArvinMeritor Inc, Colgate-Palmolive Co, IBM, MDS Inc, MFA Mortgage Investments Inc, Oracle Corp, Providian Financial Corp, and Solectron Corp in the portfolio. As of October 15, 2004, the portfolio consisted of 16 stocks selected based on the following analyst ratings: B=buy; N=neutral; R=reduce; NR=not rated; and the following predictability levels: 1=higher; 2=lower. These ratings translate into the following stock movements: B1/B2=buy; N1/N2=hold; R1/R2=sell. Since the data may have changed, contact 800-316-7015 or paul.namm@ubs.com for updates.

Since this portfolio is hypothetical, it does not contain any investor assets. The decisions were not made under the same conditions as those for an actual account. There can be no assurance that the author would have made the same decisions or achieved the same level of performance if managing an actual account. The hypothetical performance of this model may be of limited value in evaluating the author's past or future performance. The author manages other hypothetical accounts, as well as actual taxable and tax-exempt accounts, and recommends the purchase or sale of securities for individuals and institutions. The performance of his actual accounts may be materially better or worse than that of the model portfolio.