The funds arm of UBS AG reported Tuesday that in the second quarter inflows into its institutional equities strategies rose for the first time in over three years, though overall outflows and falling fee income meant profits plunged compared with the year-earlier period.

For the first half, profits were down 96% compared with the first half of 2008. It posted a loss for this year's first quarter.

UBS Global Asset Management's profit before tax was down 77% for the second quarter, to $330.1 million, from a year earlier. Income from management fees fell 33%, to $497 million, but the Zurich firm's operating expenses fell only 2%, to $420.1 million.

Assets under management rose 2.95% from the previous quarter, to $556.1 billion.

Head count fell 4%, to 3,574, over the quarter, primarily in noninvestment areas. The funds arm cut its staff by 7% in the first half of the year.

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