-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EITLoHxDQTHJf5GXb0KrL3Pr7960RLp2AB+nZ0bbHqLJbCnmwxtzv5GvG/pkq3I8 k21LElgUCLD/Y4uwvV+apw== 0000912057-01-002286.txt : 20010123 0000912057-01-002286.hdr.sgml : 20010123 ACCESSION NUMBER: 0000912057-01-002286 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20010122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PAINEWEBBER PACE SELECT ADVISORS TRUST CENTRAL INDEX KEY: 0000930007 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 497 SEC ACT: SEC FILE NUMBER: 333-51130 FILM NUMBER: 1512239 BUSINESS ADDRESS: STREET 1: C/O MITCHELL HUTCHINS STREET 2: 51 WEST 52ND ST CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2127133269 MAIL ADDRESS: STREET 1: C/O MITCHELL HUTCHINS STREET 2: 51 WEST 52ND ST CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: MANAGED ACCOUNTS SERVICES PORTFOLIO TRUST DATE OF NAME CHANGE: 19941212 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER CONSULTING FUND PRODUCT DATE OF NAME CHANGE: 19940914 497 1 a2035285z497.txt 497 PAINEWEBBER PACE SELECT ADVISORS TRUST (ON BEHALF OF PACE INTERNATIONAL EQUITY INVESTMENTS) PAINEWEBBER INVESTMENT TRUST (ON BEHALF OF PAINEWEBBER GLOBAL EQUITY FUND) 51 WEST 52ND STREET NEW YORK, NEW YORK 10019-6114 STATEMENT OF ADDITIONAL INFORMATION This Statement of Additional Information relates specifically to the proposed Reorganization whereby PACE International Equity Investments ("PACE International Equity Fund"), a series of PaineWebber PACE Select Advisors Trust ("PACE Trust"), would acquire all of the assets of PaineWebber Global Equity Fund ("Global Equity Fund"), a series of PaineWebber Investment Trust ("Investment Trust"), in exchange solely for shares of PACE International Equity Fund and the assumption by PACE International Equity Fund of all of Global Equity Fund's stated liabilities. This Statement of Additional Information consists of this cover page, the PRO FORMA financial statements of PACE International Equity Fund (giving effect to the Reorganization) for the year ended July 31, 2000, and the following described documents, each of which is incorporated by reference herein and accompanies this Statement of Additional Information: (1) The combined Statement of Additional Information of PACE Trust, dated November 27, 2000, which includes information relating to PACE International Equity Fund and is incorporated by reference from PACE Trust's Statement of Additional Information filed on January 8, 2001 under Rule 497, SEC File Numbers 033-87254 and 811-08764, accession number 0000898432-01-000012; (2) The combined Annual Report to Shareholders of PACE Trust for the fiscal year ended July 31, 2000, which includes information relating to PACE International Equity Fund and is incorporated by reference from PACE Trust's Form N-30D, SEC File Number 811-08764, filed on October 6, 2000, accession number 0000912057-00-043979; (3) The Semi-Annual Report to Shareholders of Global Equity Fund, dated April 30, 2000, which is incorporated by reference from Investment Trust's Form N-30D, SEC File Number 811-06292, filed on July 7, 2000, accession number 0000912057-00-031151; and (4) The Annual Report to Shareholders of Global Equity Fund for the fiscal year ended October 31, 1999, which is incorporated by reference from Investment Trust's Form N-30D, SEC File Number 811-06292, filed on January 6, 2000, accession number 0000912057-00-000341. This Statement of Additional Information is not a prospectus and should be read only in conjunction with the Combined Proxy Statement/Prospectus dated December 22, 2000 relating to the proposed Reorganization. A copy of the Combined Proxy Statement/Prospectus may be obtained without charge by calling toll-free 1-800-647-1568. This Statement of Additional Information is dated December 22, 2000. PRO FORMA FINANCIAL STATEMENTS (UNAUDITED) The following tables set forth the unaudited PRO FORMA condensed Statement of Assets and Liabilities as of July 31, 2000, the unaudited PRO FORMA condensed Statement of Operations for the twelve month period ended July 31, 2000 and the unaudited PRO FORMA Portfolio of Investments as of July 31, 2000 for Global Equity Fund and PACE International Equity Fund as adjusted giving effect to the Reorganization. The PRO FORMA Portfolio of Investments contains information about the securities holdings of the Funds as of July 31, 2000. The holdings of both Funds have changed since that date. In particular, Global Equity Fund's holdings have changed substantially since that date because its portfolio of foreign investments was realigned by its new sub-adviser after October 10, 2000 to reflect its proprietary investment style and strategies, and its portfolio of U.S. investments was realigned to track the performance of the S&P 500 Index through use of futures contracts and other derivatives. Other changes in the two Funds' holdings are due to normal portfolio turnover in response to changes in market conditions. As of November 30, 2000, none of Global Equity Fund's foreign holdings was incompatible with PACE International Equity Fund's holdings or would have to be sold if Global Equity Fund's shareholders approve the Reorganization. It is expected, however, that if Global Equity Fund's shareholders approve the Reorganization, most of its U.S. investments (other than ADRs) would be sold in an orderly manner and the proceeds of these sales held in temporary investments pending reinvestment in assets that are consistent with the holdings of PACE International Equity Fund. As of November 30, 2000, Global Equity Fund's U.S. investments represented approximately 40% of its total portfolio. The relative portion of Global Equity Fund's assets represented by U.S. investments may change depending on changes in market conditions and on Mitchell Hutchins' continuing assessment of the appropriate allocation of the Fund's investments between U.S. and foreign markets. The need for Global Equity Fund to dispose of its U.S. investments in connection with the Reorganization may result in its selling securities at a disadvantageous time and could result in its realizing gains (or losses) that would not otherwise have been realized. PACE INTERNATIONAL EQUITY INVESTMENTS PAINEWEBBER GLOBAL EQUITY FUND PRO FORMA STATEMENT OF ASSETS AND LIABILITIES FOR THE YEAR ENDED JULY 31, 2000 (UNAUDITED)
PACE INTERNATIONAL PW GLOBAL EQUITY INVESTMENTS EQUITY FUND ADJUSTMENTS -------------------- ------------- ------------- ASSETS Investments in securities, at value (cost - $201,742,081, $312,333,041 and $514,075,122, respectively) $ 241,469,562 $ 344,527,935 $ - Investment of cash collateral for securities loaned (cost - $5,729,750, $16,388,086 and $22,117,836, respectively) 5,729,750 16,388,086 - Cash (including cash denominated in foreign currencies, at value) 3,515,630 22,798 - Receivable for investments sold 2,201,468 1,147,935 - Receivable for shares of beneficial interests sold 171,835 54,058 - Dividends and interest receivable 476,283 994,436 - Deferred organizational expenses 1,025 - - Other assets 50,567 722,585 - -------------------- -------------- -------------- Total assets 253,616,120 363,857,833 - -------------------- -------------- -------------- LIABILITIES Payable for cash collateral for securities loaned 5,729,750 16,388,086 - Payable for investments purchased 1,044,522 368,984 - Payable for shares of beneficial interest repurchased 60,860 408,548 - Unrealized depreciation of forward foreign currency contracts - 33,377 - Payable to affiliates 196,714 - - Accrued expenses and other liabilities 132,316 734,292 - -------------------- -------------- -------------- Total liabilities 7,164,162 17,933,287 - -------------------- -------------- -------------- NET ASSETS Beneficial interest shares of $0.001 par value outstanding - 13,203,941, 20,581,676 and 31,737,239, respectively 190,876,988 225,013,950 - Accumulated undistributed (distributions in excess of) net investment income (loss) 264,006 (89,902) - Accumulated net realized gains from investment transactions 15,631,499 88,805,604 - Net unrealized appreciation of investments 39,679,465 32,194,894 - -------------------- -------------- -------------- Net assets applicable to shares outstanding $ 246,451,958 $ 345,924,546 $ - ==================== ============== ============== CLASS P: Net assets $ 246,451,958 $ - $ - -------------------- -------------- -------------- Shares Outstanding 13,203,941 - - -------------------- -------------- -------------- Net asset and redemption value per share $ 18.67 $ - $ - ==================== ============== ============== CLASS A: Net assets $ - $ 255,698,237 $ - -------------------- -------------- -------------- Shares outstanding - 15,155,922 (1,456,601) -------------------- -------------- -------------- Net asset and redemption value per share $ - $ 16.87 $ - ==================== ============== ============== Maximum offering price per share (net asset value plus sales charge of 4.5% of offering price) $ - $ 17.66 $ - ==================== ============== ============== CLASS B: Net assets $ - $ 10,017,066 $ - -------------------- -------------- -------------- Shares outstanding - 642,620 (105,944) -------------------- -------------- -------------- Net asset value and offering price per share $ - $ 15.59 $ - ==================== ============== ============== CLASS C: Net assets $ - $ 27,465,322 $ - -------------------- -------------- -------------- Shares outstanding - 1,754,527 (283,041) -------------------- -------------- -------------- Net asset value and offering price per share $ - $ 15.65 $ - ==================== ============== ============== CLASS Y: Net assets $ - $ 52,743,921 $ - -------------------- -------------- -------------- Shares outstanding - 3,028,607 (202,792) -------------------- -------------- -------------- Net asset value and offering price per share $ - $ 17.42 $ - ==================== ============== ============== PRO FORMA COMBINED PACE INTERNATIONAL EQUITY INVESTMENTS -------------------- ASSETS Investments in securities, at value (cost - $201,742,081, $312,333,041 and $514,075,122, respectively) $ 585,997,497 Investment of cash collateral for securities loaned (cost - $5,729,750, $16,388,086 and $22,117,836, respectively) 22,117,836 Cash (including cash denominated in foreign currencies, at value) 3,538,428 Receivable for investments sold 3,349,403 Receivable for shares of beneficial interests sold 225,893 Dividends and interest receivable 1,470,719 Deferred organizational expenses 1,025 Other assets 773,152 -------------------- Total assets 617,473,953 -------------------- LIABILITIES Payable for cash collateral for securities loaned 22,117,836 Payable for investments purchased 1,413,506 Payable for shares of beneficial interest repurchased 469,408 Unrealized depreciation of forward foreign currency contracts 33,377 Payable to affiliates 196,714 Accrued expenses and other liabilities 866,608 -------------------- Total liabilities 25,097,449 -------------------- NET ASSETS Beneficial interest shares of $0.001 par value outstanding - 13,203,941, 20,581,676 and 31,737,238, respectively 415,890,938 Accumulated undistributed (distributions in excess of) net investment income (loss) 174,104 Accumulated net realized gains from investment transactions 104,437,103 Net unrealized appreciation of investments 71,874,359 -------------------- Net assets applicable to shares outstanding $ 592,376,504 ==================== CLASS P: Net assets $ 246,451,958 -------------------- Shares Outstanding 13,203,941 -------------------- Net asset and redemption value per share $ 18.67 ==================== CLASS A: Net assets $ 255,698,237 -------------------- Shares outstanding 13,699,321 -------------------- Net asset and redemption value per share $ 18.67 ==================== Maximum offering price per share (net asset value plus sales charge of 4.5% of offering price) $ 19.55 ==================== CLASS B: Net assets $ 10,017,066 -------------------- Shares outstanding 536,676 -------------------- Net asset value and offering price per share $ 18.67 ==================== CLASS C: Net assets $ 27,465,322 -------------------- Shares outstanding 1,471,486 -------------------- Net asset value and offering price per share $ 18.67 ==================== CLASS Y: Net assets $ 52,743,921 -------------------- Shares outstanding 2,825,815 -------------------- Net asset value and offering price per share $ 18.67 ====================
See accompanying notes to pro forma financial statements PACE INTERNATIONAL EQUITY INVESTMENTS PAINEWEBBER GLOBAL EQUITY FUND PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED JULY 31, 2000 (UNAUDITED)
PACE INTERNATIONAL PW GLOBAL EQUITY INVESTMENTS EQUITY FUND ADJUSTMENTS -------------------- ------------- ------------- INVESTMENT INCOME: Interest $ 878,820 1,168,088 - Dividends 2,901,895 5,327,049 - -------------------- ------------- ------------- 3,780,715 6,495,137 - -------------------- ------------- ------------- EXPENSES: Investment advisory and administration 2,227,716 3,132,238 184,251 (a) Shareholder distribution and servicing fees - 1,180,564 - Transfer agency and service 111,468 381,402 - Trustees' fees 26,250 13,500 (13,500) (b) Legal and audit 47,330 135,708 (135,708) (b) Amortization of organizational expenses 19,032 - - Reports and notices to shareholders 42,612 208,712 (166,970) (b) Federal and state registration fees 33,082 64,800 (51,840) (b) Custody and accounting 351,286 921,247 - Interest expense - 606,493 - Other expenses 10,070 36,090 - -------------------- ------------- ------------- 2,868,846 6,680,753 (183,766) Less: fee waivers and reimbursements from adviser (7,642) (13,275) - -------------------- ------------- ------------- Net expenses 2,861,204 6,667,478 (183,766) -------------------- ------------- ------------- Net investment income (loss) 919,511 (172,340) 183,766 -------------------- ------------- ------------- REALIZED AND UNREALIZED GAINS FROM INVESTMENT TRANSACTIONS: Net realized gains from investment transactions 15,442,127 92,429,256 - Net change in unrealized appreciation of investments 16,381,190 29,361,359 - -------------------- ------------- ------------- Net realized and unrealized gains from investment activities 31,823,317 121,790,615 - -------------------- ------------- ------------- Net increase in net assets resulting from operations $ 32,742,828 121,618,275 183,766 ==================== ============= ============= PRO FORMA COMBINED PACE INTERNATIONAL EQUITY INVESTMENTS -------------------- INVESTMENT INCOME: Interest 2,046,908 Dividends 8,228,944 -------------------- 10,275,852 -------------------- EXPENSES: Investment advisory and administration 5,544,205 Shareholder distribution and servicing fees 1,180,564 Transfer agency and service 492,870 Trustees' fees 26,250 Legal and audit 47,330 Amortization of organizational expenses 19,032 Reports and notices to shareholders 84,354 Federal and state registration fees 46,042 Custody and accounting 1,272,533 Interest expense 606,493 Other expenses 46,160 -------------------- 9,365,833 Less: fee waivers and reimbursements from adviser (20,917) -------------------- Net expenses 9,344,915 -------------------- Net investment income (loss) 930,937 -------------------- REALIZED AND UNREALIZED GAINS FROM INVESTMENT TRANSACTIONS: Net realized gains from investment transactions 107,871,383 Net change in unrealized appreciation of investments 45,742,549 -------------------- Net realized and unrealized gains from investment activities 153,613,932 -------------------- Net increase in net assets resulting from operations 154,544,869 ====================
- -------------- (a) Reflects increase in fees resulting from higher fee schedule of PACE International Equity Investments. (b) Reflects the anticipated savings of the merger. See accompanying notes to pro forma financial statements PACE INTERNATIONAL EQUITY INVESTMENTS PAINEWEBBER GLOBAL EQUITY FUND PRO FORMA PORTFOLIO OF INVESTMENTS FOR THE YEAR ENDED JULY 31, 2000 (UNAUDITED)
PRO FORMA COMBINED COMBINED PACE NUMBER OF PACE INTERNATIONAL PW GLOBAL INTERNATIONAL EQUITY SHARES EQUITY INVESTMENTS EQUITY FUND INVESTMENTS - ----------- -------------------- ------------- -------------------- COMMON STOCKS - 91.51% AUSTRALIA - 1.47% BANKS - 0.16% 66,140 National Australia Bank, Ltd. $ - $ 948,595 $ 948,595 -------------------- ------------- -------------------- LIFE ASSURANCE - 0.27% 162,500 AMP Ltd. 1,628,417 - 1,628,417 -------------------- ------------- -------------------- MEDIA & PHOTOGRAPHY - 0.86% 400,000 John Fairfax Holdings Ltd. 1,100,575 - 1,100,575 199,840 News Corp. Ltd. ADR(1) 858,339 3,144,120 4,002,459 -------------------- ------------- -------------------- 1,958,914 3,144,120 5,103,034 -------------------- ------------- -------------------- TRANSPORTATION - 0.18% 35,800 Brambles Industries Ltd. 1,038,931 - 1,038,931 -------------------- ------------- -------------------- TOTAL AUSTRALIA COMMON STOCKS 4,626,262 4,092,715 8,718,977 -------------------- ------------- -------------------- AUSTRIA - 0.19% ENERGY SOURCES - 0.19% 15,500 OMV AG - 1,134,744 1,134,744 -------------------- ------------- -------------------- TOTAL AUSTRIA COMMON STOCKS - 1,134,744 1,134,744 -------------------- ------------- -------------------- BRAZIL - 0.21% OIL & GAS - 0.21% 48,000 Petroleo Brasileiro S.A. ADR 1,254,960 - 1,254,960 -------------------- ------------- -------------------- TOTAL BRAZIL COMMON STOCKS 1,254,960 - 1,254,960 -------------------- ------------- -------------------- CANADA - 0.46% BANKS - 0.16% 18,080 Royal Bank of Canada - 964,153 964,153 -------------------- ------------- -------------------- MINING & METALS - 0.30% 33,200 Potash Corp. of Saskatchewan Inc. - 1,782,425 1,782,425 -------------------- ------------- -------------------- TOTAL CANADA COMMON STOCK - 2,746,578 2,746,578 -------------------- ------------- -------------------- CZECH REPUBLIC - 0.10% TELECOMMUNICATIONS -SERVICES - 0.10% 13,000 Cseke Radio KomuniKace A.S. GDR ** 585,000 - 585,000 -------------------- ------------- -------------------- TOTAL CZECH REPUBLIC COMMON STOCK 585,000 - 585,000 -------------------- ------------- -------------------- FINLAND - 1.70% COMPUTER SOFTWARE & SERVICES - 0.14% Page 1 PRO FORMA COMBINED COMBINED PACE NUMBER OF PACE INTERNATIONAL PW GLOBAL INTERNATIONAL EQUITY SHARES EQUITY INVESTMENTS EQUITY FUND INVESTMENTS - ----------- -------------------- ------------- -------------------- 23,300 Tieto Corp 825,898 - 825,898 -------------------- ------------- -------------------- LONG DISTANCE & PHONE COMPANIES - 0.15% 20,759 Elisa Communications - 883,975 883,975 -------------------- ------------- -------------------- TELECOMMUNICATIONS-SERVICES - 1.42% 189,238 Nokia (AB) OY 4,718,981 3,665,307 8,384,288 -------------------- ------------- -------------------- TOTAL FINLAND COMMON STOCKS 5,544,879 4,549,282 10,094,161 -------------------- ------------- -------------------- FRANCE - 13.60% BANKS - 0.97% 40,760 Societe Generale * 2,530,743 - 2,530,743 32,550 National Banque de Paris - 3,212,475 3,212,475 -------------------- ------------- -------------------- 2,530,743 3,212,475 5,743,218 -------------------- ------------- -------------------- BUILDING MATERIALS & COMPONENTS - 0.26% 19,700 Lafarge - 1,526,201 1,526,201 -------------------- ------------- -------------------- CHEMICALS - 1.12% 69,190 Aventis S.A. 5,328,236 - 5,328,236 86,000 Rhodia Inc. S.A. - 1,295,063 1,295,063 -------------------- ------------- -------------------- 5,328,236 1,295,063 6,623,299 -------------------- ------------- -------------------- COMPUTER-BUSINESS SERVICES - 0.76% 23,049 Cap Gemini S.A. 3,212,379 1,313,700 4,526,079 -------------------- ------------- -------------------- DIVERSIFIED INDUSTRIALS - 1.67% 36,178 Vivendi Environment 1,126,479 - 1,126,479 109,466 Vivendi SA 5,836,624 2,907,688 8,744,312 -------------------- ------------- -------------------- 6,963,103 2,907,688 9,870,791 -------------------- ------------- -------------------- ENERGY SOURCES - 0.81% 32,575 Total Fina Elf S.A.(1) - 4,826,941 4,826,941 -------------------- ------------- -------------------- ENGINEERING & MACHINERY - 0.18% 42,609 Alstom 1,044,793 - 1,044,793 -------------------- ------------- -------------------- FINANCIAL SERVICES - 0.39% 14,000 Lyonnaise Des Eaux - 2,289,875 2,289,875 -------------------- ------------- -------------------- FOOD & DRUG RETAILERS - 0.79% 63,417 Carrefour 4,666,221 - 4,666,221 -------------------- ------------- -------------------- HEALTH & PERSONAL CARE - 1.27% 97,320 Rhone Poulenc S.A. * - 7,494,493 7,494,493 -------------------- ------------- -------------------- Page 2 PRO FORMA COMBINED COMBINED PACE NUMBER OF PACE INTERNATIONAL PW GLOBAL INTERNATIONAL EQUITY SHARES EQUITY INVESTMENTS EQUITY FUND INVESTMENTS - ----------- -------------------- ------------- -------------------- LIFE ASSURANCE - 1.77% 69,083 AXA 5,467,133 5,032,017 10,499,150 -------------------- ------------- -------------------- OIL & GAS - 0.92% 36,744 Total FINA S.A., Series B (1) 5,444,701 - 5,444,701 -------------------- ------------- -------------------- SUPPORT SERVICES - 0.24% 9,190 Sodexho Alliance 1,446,932 - 1,446,932 -------------------- ------------- -------------------- TELECOMMUNICATION - SERVICES - 1.77% 141,903 Alcatel * 4,949,874 5,517,645 10,467,519 -------------------- ------------- -------------------- WATER - 0.69% 25,073 Suez Lyonnaise des Eaux 4,101,003 - 4,101,003 -------------------- ------------- -------------------- TOTAL FRANCE COMMON STOCKS 45,155,118 35,416,098 80,571,216 -------------------- ------------- -------------------- GERMANY - 2.06% BANKS - 1.38% 10,511 Allianz AG 3,896,314 - 3,896,314 30,100 Deutsche Bank AG - 2,684,765 2,684,765 34,910 Dresdner Bank AG - 1,602,997 1,602,997 -------------------- ------------- -------------------- 3,896,314 4,287,762 8,184,076 -------------------- ------------- -------------------- DIVERSIFIED INDUSTRIALS - 0.68% 26,100 Siemens AG - 4,040,754 4,040,754 -------------------- ------------- -------------------- TOTAL GERMANY COMMON STOCKS 3,896,314 8,328,516 12,224,830 -------------------- ------------- -------------------- GREECE - 0.32% TELECOMMUNICATIONS-SERVICES - 0.10% 26,100 Hellenic Telecom 586,630 - 586,630 -------------------- ------------- -------------------- WIRELESS TELECOMMUNICATIONS - 0.22% 118,700 Hellenic Telecommunications ADR - 1,298,281 1,298,281 -------------------- ------------- -------------------- TOTAL GREECE COMMON STOCKS 586,630 1,298,281 1,884,911 -------------------- ------------- -------------------- HONG KONG - 1.32% BANKS - 0.21% 537,000 Bank of East Asia, Ltd. 1,215,384 - 1,215,384 -------------------- ------------- -------------------- DIVERSIFIED INDUSTRIALS - 0.30% 127,300 Hutchison Whampoa Ltd. 1,771,139 - 1,771,139 -------------------- ------------- -------------------- REAL ESTATE - 0.41% 125,000 Cheung Kong (Holdings) Ltd. 1,470,654 - 1,470,654 120,000 Sun Hung Kai Properties Ltd. 942,501 - 942,501 -------------------- ------------- -------------------- 2,413,155 - 2,413,155 -------------------- ------------- -------------------- TELECOMMUNICATIONS-SERVICES - 0.41% 159,000 China Telecom Ltd.* 1,264,106 - 1,264,106 49,860 China Unicom Ltd. ADR * 1,174,826 - 1,174,826 Page 3 PRO FORMA COMBINED COMBINED PACE NUMBER OF PACE INTERNATIONAL PW GLOBAL INTERNATIONAL EQUITY SHARES EQUITY INVESTMENTS EQUITY FUND INVESTMENTS - ----------- -------------------- ------------- -------------------- 2,438,932 - 2,438,932 -------------------- ------------- -------------------- TOTAL HONG KONG COMMON STOCKS 7,838,610 - 7,838,610 -------------------- ------------- -------------------- INDIA - 0.14% TELECOMMUNICATIONS-SERVICES - 0.14% 77,000 Videsh Sanchar Nigam Ltd. GDR 835,450 - 835,450 -------------------- ------------- -------------------- TOTAL INDIA COMMON STOCKS 835,450 - 835,450 -------------------- ------------- -------------------- IRELAND - 0.49% BANKS - 0.40% 386,551 Bank of Ireland - 2,374,975 2,374,975 -------------------- ------------- -------------------- PHARMACEUTICALS - 0.09% 9,600 Elan Corp. PLC ADR* 506,758 - 506,758 -------------------- ------------- -------------------- TOTAL IRELAND COMMON STOCKS 506,758 2,374,975 2,881,733 -------------------- ------------- -------------------- ISRAEL - 0.39% BANKS - 0.09% 194,000 Bank Hapoalim Ltd. 552,117 - 552,117 -------------------- ------------- -------------------- ELECTRICAL EQUIPMENT - 0.21% 14,981 Orbotech Ltd. * - 1,234,060 1,234,060 -------------------- ------------- -------------------- INFORMATION TECHNOLOGY HARDWARE - 0.09% 7,400 Nice System Ltd. ADR* 542,050 - 542,050 -------------------- ------------- -------------------- TOTAL ISRAEL COMMON STOCKS 1,094,167 1,234,060 2,328,227 -------------------- ------------- -------------------- ITALY - 2.30% BANKS - 0.87% 303,706 San Palo-IMI SPA 2,818,622 2,331,809 5,150,431 -------------------- ------------- -------------------- INFORMATION TECHNOLOGY HARDWARE - 0.34% 155,766 Telecom Italia SPA 2,003,555 - 2,003,555 -------------------- ------------- -------------------- INSURANCE - 0.16% 86,300 Ras - 975,685 975,685 -------------------- ------------- -------------------- LIFE ASSURANCE - 0.25% 117,399 Alleanza Assicurazioni (1) 1,463,275 - 1,463,275 -------------------- ------------- -------------------- TELECOMMUNICATIONS-SERVICES - 0.68% 427,441 Telecom Italia Mobilare SPA 4,040,317 - 4,040,317 -------------------- ------------- -------------------- TOTAL ITALY COMMON STOCKS 10,325,769 3,307,494 13,633,263 -------------------- ------------- -------------------- JAPAN - 13.65% APPAREL, RETAIL - 0.16% 2,700 Fast Retailing Co - 972,330 972,330 -------------------- ------------- -------------------- AUTOMOBILES - 0.56% 74,000 Bridgestone Corp. 1,696,768 - 1,696,768 Page 4 PRO FORMA COMBINED COMBINED PACE NUMBER OF PACE INTERNATIONAL PW GLOBAL INTERNATIONAL EQUITY SHARES EQUITY INVESTMENTS EQUITY FUND INVESTMENTS - ----------- -------------------- ------------- -------------------- 45,000 Honda Motor Company Ltd. 1,641,063 - 1,641,063 -------------------- ------------- -------------------- 3,337,831 - 3,337,831 -------------------- ------------- -------------------- BANKS - 0.16% 121,000 Sanwa Bank - 970,780 970,780 -------------------- ------------- -------------------- CHEMICALS - 1.37% 238,000 Asahi Chemical Industries Company Ltd. 1,514,555 - 1,514,555 79,000 Shin Etsu Chemical Ltd. 3,961,344 - 3,961,344 222,000 Sumiomo Bakelite Company Ltd. (1) 2,651,411 - 2,651,411 -------------------- ------------- -------------------- 8,127,310 - 8,127,310 -------------------- ------------- -------------------- COMPUTER HARDWARE - 0.55% 122,000 NEC Corp. - 3,247,846 3,247,846 -------------------- ------------- -------------------- CONSTRUCTION & BUILDING MATERIALS - 0.14% 128,000 Daiwa House Industry Co 811,050 - 811,050 -------------------- ------------- -------------------- DATA PROCESSING & REPRODUCTION - 0.33% 44,000 Canon Inc. - 1,957,606 1,957,606 -------------------- ------------- -------------------- DRUGS & MEDICINE - 0.17% 30,000 Taisho Pharmaceutical Co. - 1,009,254 1,009,254 -------------------- ------------- -------------------- ELECTRONIC & ELECTRICAL EQUIPMENT - 2.04% 87,000 Canon Inc. (1) 3,603,774 - 3,603,774 12,800 Mabuchi Motor Co 1,799,891 - 1,799,891 5,000 Murata Manufacturing Co., Ltd. - 592,606 592,606 44,500 Sony Corp 2,175,858 1,909,614 4,085,472 124,000 Sumitomo Electric Industries Ltd. 2,005,525 - 2,005,525 -------------------- ------------- -------------------- 9,585,048 2,502,220 12,087,268 -------------------- ------------- -------------------- ELECTRONIC COMPONENTS - 0.47% 313,000 Toshiba Corp. - 2,753,749 2,753,749 -------------------- ------------- -------------------- FINANCIAL SERVICES - 0.27% 5,500 Acom Co - 416,192 416,192 158,000 Nikko Securities Co., Ltd. - 1,208,570 1,208,570 -------------------- ------------- -------------------- - 1,624,762 1,624,762 -------------------- ------------- -------------------- FOOD & DRUG RETAILERS - 0.14% 26,000 Familymart Company Ltd. 853,353 - 853,353 -------------------- ------------- -------------------- GENERAL RETAILERS - 0.47% 23,000 Ito-Yokado Company Ltd. 1,369,285 - 1,369,285 88,000 Marui Company Ltd. 1,442,531 - 1,442,531 -------------------- ------------- -------------------- 2,811,816 - 2,811,816 -------------------- ------------- -------------------- HEALTH & PERSONAL CARE - 0.21% 21,000 Takeda Chemical Industries - 1,244,473 1,244,473 -------------------- ------------- -------------------- INFORMATION TECHNOLOGY HARDWARE - 2.20% 171,000 Fujitsu Ltd. 2,948,443 1,853,307 4,801,750 188,000 Hitachi Ltd. 2,245,339 - 2,245,339 17,300 Matsuchita Communication Industrial Co. Ltd. 2,003,100 - 2,003,100 15,200 Rohm Company Ltd. 3,984,137 - 3,984,137 -------------------- ------------- -------------------- 11,181,019 1,853,307 13,034,326 -------------------- ------------- -------------------- INSURANCE - 0.09% 120,000 Mitsui Marine & Fire 533,892 - 533,892 -------------------- ------------- -------------------- Page 5 PRO FORMA COMBINED COMBINED PACE NUMBER OF PACE INTERNATIONAL PW GLOBAL INTERNATIONAL EQUITY SHARES EQUITY INVESTMENTS EQUITY FUND INVESTMENTS - ----------- -------------------- ------------- -------------------- LEISURE, ENTERTAINMENT & HOTELS - 0.18% 38,000 Namco Ltd. 1,077,449 - 1,077,449 -------------------- ------------- -------------------- LONG DISTANCE & PHONE COMPANIES - 0.36% 157 DDI Corp. - 1,216,666 1,216,666 79 Nippon Telephone & Telegraph Co. - 943,520 943,520 -------------------- ------------- -------------------- - 2,160,186 2,160,186 -------------------- ------------- -------------------- MEDIA & PHOTOGRAPHY - 0.58% 34,000 Fuji Photo Film Company Ltd. 1,261,613 - 1,261,613 216,000 Toppan Printing Co 2,185,896 - 2,185,896 -------------------- ------------- -------------------- 3,447,509 - 3,447,509 -------------------- ------------- -------------------- MERCHANDISING - 0.32% 24,400 Yamada Denki Co.(1) - 1,890,869 1,890,869 -------------------- ------------- -------------------- PERSONAL CARE & HOUSEHOLD PRODUCTS - 0.43% 87,000 Kao Corp 2,569,905 - 2,569,905 -------------------- ------------- -------------------- PHARMACEUTICALS - 0.81% 47,000 Taisho Pharmaceutical Co 1,581,164 - 1,581,164 69,000 Yamanouchi Pharmaceutical Co 3,233,442 - 3,233,442 -------------------- ------------- -------------------- 4,814,606 - 4,814,606 -------------------- ------------- -------------------- SOFTWARE & COMPUTER SERVICES - 0.32% 61,000 MKC-STAT Corp. 1,018,289 - 1,018,289 7,000 Trend Micro Inc. 855,176 - 855,176 -------------------- ------------- -------------------- 1,873,465 - 1,873,465 -------------------- ------------- -------------------- SUPPORT SERVICES - 0.40% 15,800 Benesse Corp 792,269 - 792,269 25,000 Secom Company Ltd. 1,556,730 - 1,556,730 -------------------- ------------- -------------------- 2,348,999 - 2,348,999 -------------------- ------------- -------------------- TELECOMMUNICATION SERVICES - 0.89% 211 NTT Mobile Communication Network 4,161,918 1,128,231 5,290,149 -------------------- ------------- -------------------- TOTAL JAPAN COMMON STOCKS 57,535,170 23,315,613 80,850,783 -------------------- ------------- -------------------- KOREA - 0.62% ELECTRONIC & ELECTRICAL EQUIPMENT - 0.45% 4,800 Samsung Electronics - 1,267,965 1,267,965 9,600 Samsung Electronics GDR ** 1,375,200 - 1,375,200 -------------------- ------------- -------------------- 1,375,200 1,267,965 2,643,165 -------------------- ------------- -------------------- WIRELESS TELECOMMUNICATIONS - 0.17% 27,200 Korea Telecom - 1,016,600 1,016,600 -------------------- ------------- -------------------- TOTAL KOREA COMMON STOCKS 1,375,200 2,284,565 3,659,765 -------------------- ------------- -------------------- MEXICO - 0.82% DIVERSIFIED INDUSTRIAL - 0.05% 124,000 Alfa, S.A. de C.V. Series A 325,689 - 325,689 -------------------- ------------- -------------------- GENERAL RETAILERS - 0.13% 336,000 Cifra S.A. de C.V. Series V*(1) 774,888 - 774,888 -------------------- ------------- -------------------- MEDIA & PHOTOGRAPHY - 0.12% 11,300 Grupo Televisa S.A. de C.V. ADR* 730,262 - 730,262 -------------------- ------------- -------------------- Page 6 PRO FORMA COMBINED COMBINED PACE NUMBER OF PACE INTERNATIONAL PW GLOBAL INTERNATIONAL EQUITY SHARES EQUITY INVESTMENTS EQUITY FUND INVESTMENTS - ----------- -------------------- ------------- -------------------- SPECIALTY & OTHER FINANCE - 0.14% 170,000 Grupo Financiero Banamex 814,969 - 814,969 -------------------- ------------- -------------------- TELECOMMUNICATION SERVICES - 0.37% 41,800 Telefonos de Mexico, S.A. de C.V. ADR (1) 2,199,725 - 2,199,725 -------------------- ------------- -------------------- TOTAL MEXICO COMMON STOCKS 4,845,533 - 4,845,533 -------------------- ------------- -------------------- NETHERLANDS - 5.93% BANKS - 1.26% 111,695 ING Groep N.V. 1,606,791 5,860,258 7,467,049 -------------------- ------------- -------------------- COMPUTER-BUSINESS SERVICES - 0.54% 189,700 Getronics N.V. - 3,199,468 3,199,468 -------------------- ------------- -------------------- FOOD & HOUSEHOLD PRODUCTS - 0.13% 17,380 Unilever NV - 761,816 761,816 -------------------- ------------- -------------------- FOOD RETAIL - 0.24% 30,434 Numico Kon N.V. - 1,428,491 1,428,491 -------------------- ------------- -------------------- FOREST PRODUCTS, PAPER - 0.48% 93,600 Buhrmann N.V. - 2,845,043 2,845,043 -------------------- ------------- -------------------- MEDIA & PHOTOGRAPHY - 1.90% 268,340 Elsevier N.V. 2,971,614 - 2,971,614 151,301 VNU N.V. 6,807,129 1,465,298 8,272,427 -------------------- ------------- -------------------- 9,778,743 1,465,298 11,244,041 -------------------- ------------- -------------------- SEMICONDUCTOR - 0.94% 122,608 Koninklijke Philips Electronics N.V. - 5,553,786 5,553,786 -------------------- ------------- -------------------- WIRELESS TELECOMMUNICATIONS - 0.45% 73,200 Kon KPN N.V. - 2,646,221 2,646,221 -------------------- ------------- -------------------- TOTAL NETHERLANDS COMMON STOCKS 11,385,534 23,760,381 35,145,915 -------------------- ------------- -------------------- NEW ZEALAND - 0.21% WIRELESS TELECOMMUNICATIONS - 0.21% 389,400 Telecom Corp. of New Zealand Ltd. - 1,258,866 1,258,866 -------------------- ------------- -------------------- TOTAL NEW ZEALAND COMMON STOCKS - 1,258,866 1,258,866 -------------------- ------------- -------------------- NORWAY - 0.25% OIL SERVICES - 0.25% 88,480 Petroleum Geo Services ASA - 1,453,079 1,453,079 -------------------- ------------- -------------------- TOTAL NORWAY COMMON STOCKS - 1,453,079 1,453,079 -------------------- ------------- -------------------- POLAND - 0.11% OIL & GAS - 0.11% 71,000 Polski Koncern Naftowy Orlen S.A. GDR ** 670,950 - 670,950 -------------------- ------------- -------------------- Page 7 PRO FORMA COMBINED COMBINED PACE NUMBER OF PACE INTERNATIONAL PW GLOBAL INTERNATIONAL EQUITY SHARES EQUITY INVESTMENTS EQUITY FUND INVESTMENTS - ----------- -------------------- ------------- -------------------- TOTAL POLAND COMMON STOCKS 670,950 - 670,950 -------------------- ------------- -------------------- PORTUGAL - 0.44% RAILROADS - 0.44% 289,400 Brisa Auto Estrada - 2,617,505 2,617,505 -------------------- ------------- -------------------- TOTAL PORTUGAL COMMON STOCKS - 2,617,505 2,617,505 -------------------- ------------- -------------------- SINGAPORE - 0.47% BANKS - 0.37% 90,000 DBS Group Holdings Ltd. 1,084,994 - 1,084,994 260,000 Overseas Union Bank Ltd. 1,094,800 - 1,094,800 -------------------- ------------- -------------------- 2,179,794 - 2,179,794 -------------------- ------------- -------------------- TELECOMMUNICATIONS - SERVICES - 0.10% 426,500 Singapore Telecommunication Ltd. 590,431 - 590,431 -------------------- ------------- -------------------- TOTAL SINGAPORE COMMON STOCKS 2,770,225 - 2,770,225 -------------------- ------------- -------------------- SOUTH AFRICA - 0.10% BANKS - 0.04% 375,100 BoE Ltd. 210,185 - 210,185 -------------------- ------------- -------------------- SOFTWARE & COMPUTER SERVICES - 0.06% 480,000 Softline Ltd* 362,069 - 362,069 -------------------- ------------- -------------------- TOTAL SOUTH AFRICA COMMON STOCKS 572,254 - 572,254 -------------------- ------------- -------------------- SPAIN - 2.19% BANKS - 1.00% 204,939 Banco Bilbao Vizcaya Argenta 2,962,704 - 2,962,704 286,698 Banco Santander Central Hispanormer 2,959,709 - 2,959,709 -------------------- ------------- -------------------- 5,922,413 - 5,922,413 -------------------- ------------- -------------------- LONG DISTANCE & PHONE COMPANIES - 0.08% 23,300 Telefonica SA - 490,141 490,141 -------------------- ------------- -------------------- SOFTWARE & COMPUTER SERVICES - 0.28% 151,389 Amadeus Global Travel Distribution S.A. * 1,679,297 - 1,679,297 -------------------- ------------- -------------------- TELECOMMUNICATIONS-SERVICES - 0.82% 231,655 Telefonica S.A.* 4,873,115 - 4,873,115 -------------------- ------------- -------------------- TOTAL SPAIN COMMON STOCKS 12,474,825 490,141 12,964,966 -------------------- ------------- -------------------- SWEDEN - 4.09% BANKS - 0.92% 124,000 Forenings Sparbanken AB 1,893,130 - 1,893,130 503,206 Nordbanken Holding - 3,539,453 3,539,453 -------------------- ------------- -------------------- 1,893,130 3,539,453 5,432,583 -------------------- ------------- -------------------- FINANCIAL SERVICES - 0.54% 218,800 Investor AB - 3,173,435 3,173,435 -------------------- ------------- -------------------- Page 8 PRO FORMA COMBINED COMBINED PACE NUMBER OF PACE INTERNATIONAL PW GLOBAL INTERNATIONAL EQUITY SHARES EQUITY INVESTMENTS EQUITY FUND INVESTMENTS - ----------- -------------------- ------------- -------------------- INFORMATION TECHNOLOGY HARDWARE - 2.19% 666,188 Ericsson LM B Shares 7,300,545 5,703,561 13,004,106 -------------------- ------------- -------------------- SUPPORT SERVICES - 0.21% 57,000 Securitas AB 1,243,184 - 1,243,184 -------------------- ------------- -------------------- TOBACCO - 0.24% 439,686 Swedish Match AB(1) - 1,395,296 1,395,296 -------------------- ------------- -------------------- TOTAL SWEDEN COMMON STOCKS 10,436,859 13,811,745 24,248,604 -------------------- ------------- -------------------- SWITZERLAND - 1.83% BANKS - 0.45% 18,350 UBS AG - 2,645,313 2,645,313 -------------------- ------------- -------------------- CONSTRUCTION AND BUILDING MATERIALS - 0.34% 1,740 Holderbank Financiere Glarus AG 2,023,377 - 2,023,377 -------------------- ------------- -------------------- HEALTH & PERSONAL CARE - 0.45% 1,743 Novartis Ltd. - 2,692,388 2,692,388 -------------------- ------------- -------------------- INSURANCE - 0.59% 6,488 Zurich Allied AG(1) - 3,500,090 3,500,090 -------------------- ------------- -------------------- TOTAL SWITZERLAND COMMON STOCKS 2,023,377 8,837,791 10,861,168 -------------------- ------------- -------------------- TAIWAN - 0.04% ELECTRONIC & ELECTRICAL EQUIPMENT - 0.04% 20,761 Compal Electronics Inc. GDR 243,942 - 243,942 -------------------- ------------- -------------------- TOTAL TAIWAN COMMON STOCKS 243,942 - 243,942 -------------------- ------------- -------------------- UNITED KINGDOM - 15.13% AEROSPACE & DEFENSE - 0.48% 102,771 Smiths Industries PLC 1,409,216 - 1,409,216 412,200 Rolls Royce - 1,445,473 1,445,473 -------------------- ------------- -------------------- 1,409,216 1,445,473 2,854,689 -------------------- ------------- -------------------- AUTOMOBILES - 0.21% 95,000 GKN PLC 1,216,527 - 1,216,527 -------------------- ------------- -------------------- BANKS - 0.47% 204,000 HSBC Holdings 2,762,132 - 2,762,132 -------------------- ------------- -------------------- BEVERAGES & TOBACCO - 0.73% 495,600 Diageo PLC - 4,352,261 4,352,261 -------------------- ------------- -------------------- BROADCASTING & PUBLISHING - 0.40% 184,880 United News & Media PLC - 2,355,022 2,355,022 -------------------- ------------- -------------------- BUILDING MATERIALS & COMPONENTS - 0.20% 105,500 RMC Group - 1,176,282 1,176,282 -------------------- ------------- -------------------- BUSINESS & PUBLIC SERVICES - 0.22% Page 9 PRO FORMA COMBINED COMBINED PACE NUMBER OF PACE INTERNATIONAL PW GLOBAL INTERNATIONAL EQUITY SHARES EQUITY INVESTMENTS EQUITY FUND INVESTMENTS - ----------- -------------------- ------------- -------------------- 97,400 WPP Group PLC - 1,321,702 1,321,702 -------------------- ------------- -------------------- ELECTRIC COMPONENT - 0.23% 178,760 Spirent PLC - 1,334,761 1,334,761 -------------------- ------------- -------------------- FINANCIAL SERVICE - 0.61% 203,800 Amvescap PLC - 3,634,437 3,634,437 -------------------- ------------- -------------------- FOOD & HOUSEHOLD PRODUCTS - 0.48% 174,200 Reckitt & Colman PLC - 1,986,639 1,986,639 142,000 Unilever - 849,077 849,077 -------------------- ------------- -------------------- - 2,835,716 2,835,716 -------------------- ------------- -------------------- INFORMATION TECHNOLOGY HARDWARE - 0.64% 235,000 Marconi PLC 3,794,645 - 3,794,645 -------------------- ------------- -------------------- INSURANCE - 0.39% 384,000 Royal & Sun Alliance - 2,330,624 2,330,624 -------------------- ------------- -------------------- LEISURE & ENTERTAINMENT - 0.42% 321,000 Hilton Group PLC 1,082,365 - 1,082,365 1,429,211 Carlton Communications PLC - 1,429,211 1,429,211 -------------------- ------------- -------------------- 1,082,365 1,429,211 2,511,576 -------------------- ------------- -------------------- LIFE ASSURANCE - 0.46% 200,000 Prudential PLC 2,730,451 - 2,730,451 -------------------- ------------- -------------------- MEDIA - 0.54% 100,000 WPP Group PLC 1,356,983 - 1,356,983 525,580 Aegis Group - 1,433,495 1,433,495 21,400 Emap - 379,068 379,068 -------------------- ------------- -------------------- 1,356,983 1,812,563 3,169,546 -------------------- ------------- -------------------- OIL & GAS - 1.64% 714,600 BP Amoco PLC 1,479,059 4,774,998 6,254,057 296,000 Shell Transportation & Trading Co 2,377,621 - 2,377,621 163,650 BG Group - 1,078,470 1,078,470 -------------------- ------------- -------------------- 3,856,680 5,853,468 9,710,148 -------------------- ------------- -------------------- PHARMACEUTICAL - 2.09% 60,086 AstraZeneca Group PLC 1,465,392 1,126,506 2,591,898 287,390 Glaxo Wellcome PLC 5,011,742 3,265,985 8,277,727 119,000 Smithkline Beecham 1,533,668 - 1,533,668 -------------------- ------------- -------------------- 8,010,802 4,392,491 12,403,293 -------------------- ------------- -------------------- SEMICONDUCTOR - 0.19% 71,060 Marconi - 1,147,436 1,147,436 -------------------- ------------- -------------------- SOFTWARE & COMPUTER SERVICES - 0.66% 325,000 Sage Group PLC 2,722,583 - 2,722,583 80,000 Sema Group PLC 1,209,671 - 1,209,671 -------------------- ------------- -------------------- 3,932,254 - 3,932,254 -------------------- ------------- -------------------- SOFTWARE & COMPUTER SERVICES - 0.58% 1,610,000 3I Group PLC 3,426,102 - 3,426,102 -------------------- ------------- -------------------- TELECOMMUNICATIONS SERVICES - 3.48% 198,400 British Telecommunication PLC - 2,622,384 2,622,384 292,176 Cable & Wireless PLC 2,350,856 2,737,022 5,087,878 2,919,918 Vodafone Group PLC 9,382,264 3,526,323 12,908,587 -------------------- ------------- -------------------- 11,733,120 8,885,729 20,618,849 -------------------- ------------- -------------------- Page 10 PRO FORMA COMBINED COMBINED PACE NUMBER OF PACE INTERNATIONAL PW GLOBAL INTERNATIONAL EQUITY SHARES EQUITY INVESTMENTS EQUITY FUND INVESTMENTS - ----------- -------------------- ------------- -------------------- TOTAL UNITED KINGDOM COMMON STOCKS 45,311,277 44,307,176 89,618,453 -------------------- ------------- -------------------- UNITED STATES - 20.86% (2) AIRLINES - 0.10% 17,600 AMR Corp - 581,900 581,900 -------------------- ------------- -------------------- BANKS - 1.52% 90,900 Chase Manhattan Corp - 4,516,594 4,516,594 43,400 Citigroup Inc - 3,062,412 3,062,412 39,800 FleetBoston Financial Corp - 1,425,338 1,425,338 -------------------- ------------- -------------------- - 9,004,344 9,004,344 -------------------- ------------- -------------------- CHEMICALS - 0.15% 31,900 Dow Chemical Co - 917,125 917,125 -------------------- ------------- -------------------- COMPUTER HARDWARE - 2.28% 151,600 Cisco Systems Inc - 9,920,325 9,920,325 82,000 Dell Computer Corp - 3,602,875 3,602,875 -------------------- ------------- -------------------- - 13,523,200 13,523,200 -------------------- ------------- -------------------- COMPUTER SOFTWARE - 1.10% 30,700 International Business Machines Corp - 3,451,831 3,451,831 43,800 Microsoft Corp - 3,057,788 3,057,788 -------------------- ------------- -------------------- - 6,509,619 6,509,619 -------------------- ------------- -------------------- CONSUMER DURABLES - 0.15% 20,200 Whirlpool Corp - 872,388 872,388 -------------------- ------------- -------------------- DEFENSE & AEROSPACE - 0.49% 40,800 Boeing Co - 1,999,200 1,999,200 19,800 TRW Inc - 889,762 889,762 -------------------- ------------- -------------------- - 2,888,962 2,888,962 -------------------- ------------- -------------------- DIVERSIFIED RETAIL - 0.87% 63,000 Federated Department Stores Inc - 1,515,937 1,515,937 125,200 Target Corp - 3,630,800 3,630,800 -------------------- ------------- -------------------- - 5,146,737 5,146,737 -------------------- ------------- -------------------- DRUG & MEDICINE - 1.12% 78,775 Pfizer Inc - 3,397,172 3,397,172 74,900 Schering Plough Corp - 3,234,744 3,234,744 -------------------- ------------- -------------------- - 6,631,916 6,631,916 -------------------- ------------- -------------------- ELECTRIC UTILITIES - 0.23% 7,900 Duke Energy Corp - 487,331 487,331 46,400 Energy East Corp - 875,800 875,800 -------------------- ------------- -------------------- - 1,363,131 1,363,131 -------------------- ------------- -------------------- ELECTRICITY EQUIPMENT - 0.81% 32,100 Honeywell Inc - 1,079,362 1,079,362 16,243 Johnson Controls Inc - 843,621 843,621 87,100 Motorola Inc - 2,879,744 2,879,744 -------------------- ------------- -------------------- - 4,802,727 4,802,727 -------------------- ------------- -------------------- ELECTRICAL POWER - 0.20% 19,000 Emerson Electric Co - 1,160,188 1,160,188 -------------------- ------------- -------------------- ENERGY RESERVES & PRODUCTION - 2.08% 33,300 Chevron Corp - 2,630,700 2,630,700 53,491 Exxon Mobil Corp.(1) - 4,279,280 4,279,280 25,600 Phillips Petroleum Co. - 1,300,800 1,300,800 57,800 Royal Dutch Petroleum Co ADR - 3,366,850 3,366,850 Page 11 PRO FORMA COMBINED COMBINED PACE NUMBER OF PACE INTERNATIONAL PW GLOBAL INTERNATIONAL EQUITY SHARES EQUITY INVESTMENTS EQUITY FUND INVESTMENTS - ----------- -------------------- ------------- -------------------- 28,500 Tosco Corp - 755,250 755,250 -------------------- ------------- -------------------- - 12,332,880 12,332,880 -------------------- ------------- -------------------- ENTERTAINMENT - 0.51% 45,700 Viacom Inc Class B - 3,030,481 3,030,481 -------------------- ------------- -------------------- FINANCIAL SERVICE - 0.63% 27,900 Federal Home Loan Mortgage Corp - 1,100,306 1,100,306 49,000 MBNA Corp - 1,635,375 1,635,375 9,601 Providian Financial Corp - 978,702 978,702 -------------------- ------------- -------------------- - 3,714,383 3,714,383 -------------------- ------------- -------------------- FOREST PRODUCTS, PAPER - 0.26% 18,500 International Paper Co - 629,000 629,000 20,200 Weyerhaeuser Co - 922,888 922,888 -------------------- ------------- -------------------- - 1,551,888 1,551,888 -------------------- ------------- -------------------- GAS UTILITY - 0.35% 43,100 El Paso Energy Corp - 2,084,963 2,084,963 -------------------- ------------- -------------------- INDUSTRIAL PARTS - 1.25% 32,900 Ingersoll Rand Co - 1,291,325 1,291,325 51,000 Mettler Toledo International Inc ADR - 2,065,500 2,065,500 68,900 United Technologies Corp - 4,022,037 4,022,037 -------------------- ------------- -------------------- - 7,378,862 7,378,862 -------------------- ------------- -------------------- INDUSTRIAL SERVICES & SUPPLIES - 0.42% 46,800 Tyco International Ltd. - 2,503,800 2,503,800 -------------------- ------------- -------------------- INFORMATION & COMPUTER SERVICES - 0.10% 10,600 American Online Inc - 565,113 565,113 -------------------- ------------- -------------------- LONG DISTANCE & PHONE COMPANIES - 0.90% 67,700 MCI Worldcom Inc - 2,644,531 2,644,531 42,378 Telefonica S A ADR - 2,683,057 2,683,057 -------------------- ------------- -------------------- - 5,327,588 5,327,588 -------------------- ------------- -------------------- MEDIA - 0.10% 17,100 Comcast Corp Class A - 581,667 581,667 -------------------- ------------- -------------------- MEDIA PRODUCTS - 0.26% 19,600 Baxter International - 1,523,900 1,523,900 -------------------- ------------- -------------------- MINING & METALS - 0.13% 25,100 ALCOA Inc - 759,275 759,275 -------------------- ------------- -------------------- MOTOR VEHICLES - 0.74% 43,300 Borg Warner Automotive Inc - 1,469,494 1,469,494 62,600 Ford Motor Co - 2,914,812 2,914,812 -------------------- ------------- -------------------- - 4,384,306 4,384,306 -------------------- ------------- -------------------- OIL REFINING - 0.10% 26,300 Conoco - 606,544 606,544 -------------------- ------------- -------------------- OIL SERVICES - 0.52% 50,300 Halliburton Co - 2,320,087 2,320,087 15,700 Transocean Sedco Forex Inc - 777,150 777,150 -------------------- ------------- -------------------- - 3,097,237 3,097,237 -------------------- ------------- -------------------- OTHER INSURANCE - 0.40% 37,000 AMBAC Financial Group Inc - 2,384,188 2,384,188 -------------------- ------------- -------------------- PUBLISHING - 0.41% 46,500 Knight Ridder Inc - 2,423,812 2,423,812 -------------------- ------------- -------------------- Page 12 PRO FORMA COMBINED COMBINED PACE NUMBER OF PACE INTERNATIONAL PW GLOBAL INTERNATIONAL EQUITY SHARES EQUITY INVESTMENTS EQUITY FUND INVESTMENTS - ------------ -------------------- ------------- -------------------- SECURITIES & ASSET MANAGEMENT - 0.88% 10,600 AXA Financial Inc - 405,450 405,450 52,600 Morgan Stanley Dean Witter & Co - 4,799,750 4,799,750 -------------------- ------------- -------------------- - 5,205,200 5,205,200 -------------------- ------------- -------------------- SEMICONDUCTOR - 1.66% 53,900 Applied Materials Inc - 4,089,662 4,089,662 33,300 Atmel Corp - 996,919 996,919 24,900 JDS Uniphase Corp - 2,941,312 2,941,312 17,700 Texas Instruments Inc - 1,038,769 1,038,769 12,700 Vitesse Semconductor Corp.(1) - 757,238 757,238 -------------------- ------------- -------------------- - 9,823,900 9,823,900 -------------------- ------------- -------------------- WIRELESS TELECOMMUNICATION - 0.15% 15,500 Nextel Communications Inc - 867,031 867,031 -------------------- ------------- -------------------- TOTAL UNITED STATES COMMON STOCKS - 123,549,255 123,549,255 -------------------- ------------- -------------------- TOTAL COMMON STOCKS (COST---$469,488,007) 231,895,063 310,168,860 542,063,923 -------------------- ------------- -------------------- PREFERRED STOCKS - 0.40% BRAZIL - 0.18% TELECOMMUNICATIONS-SERVICES - 0.18% 50,000 Embratel Participacoes SA ADR 1,075,000 - 1,075,000 -------------------- ------------- -------------------- JAPAN - 0.22% BANKS - 0.22% 150,000,000 Sanwa International Finance 1,285,499 - 1,285,499 -------------------- ------------- -------------------- TOTAL PREFERRED STOCKS (COST---$2,499,342) 2,360,499 - 2,360,499 -------------------- ------------- --------------------
COMBINED PRINCIPAL MATURITY INTEREST PACE INTERNATIONAL PW GLOBAL AMOUNT DATES RATES EQUITY INVESTMENTS EQUITY FUND - ----------- --------------------------------------------- ----------------- U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 3.36% $ 16,000 Federal Home Loan Bank Consolidated Dsc Note 8/11/00 6.380%@ - 15,971,644 4,000 United States Treasury Bills 10/26/00 5.920@ - 3,943,431 -------------------- ----------------- Total U.S. Government and Agency Obligations (cost---$19,915,075) - 19,915,075 -------------------- ----------------- REPURCHASE AGREEMENTS - 3.66% 7,214 Repurchase Agreement dated 7/31/00 with State Street Bank & Trust Co., collateralized by $2,122,183 U.S. Treasury Notes, 6.625% due 03/31/02 (value--$2,175,237); and $4,030,928 U.S. Treasury Bonds, 8.125% due 08/15/19 (value--$5,184,782); proceeds: $7,215,052 8/1/00 6.500 7,214,000 - 14,444 Repurchase Agreement dated 7/31/00 with SG Cowen Securities Group, collateralized by $11,099,000 U.S. Treasury Bonds, 8.875% due 8/15/17 (value - $14,733,923); proceeds: $14,446,608 08/01/00 6.500 - 14,444,000 -------------------- ----------------- Total Repurchase Agreements (cost - $21,658,000) 7,214,000 14,444,000 -------------------- ----------------- TOTAL INVESTMENTS (COST--$514,075,122) - 98.92% 241,469,562 344,527,935 OTHER ASSETS IN EXCESS OF LIABILITIES - 1.08% 4,982,396 1,396,611 -------------------- ----------------- NET ASSETS - 100% $ 246,451,958 $ 345,924,546 -------------------- ----------------- PRO FORMA COMBINED COMBINED PACE PRINCIPAL INTERNATIONAL EQUITY AMOUNT INVESTMENTS - ----------- ---------------------- U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 3.36% $ 16,000 Federal Home Loan Bank Consolidated Dsc Note 15,971,644 4,000 United States Treasury Bills 3,943,431 ---------------------- Total U.S. Government and Agency Obligations (cost---$19,915,075) 19,915,075 ---------------------- REPURCHASE AGREEMENTS - 3.66% 7,214 Repurchase Agreement dated 7/31/00 with State Street Bank & Trust Co., collateralized by $2,122,183 U.S. Treasury Notes, 6.625% due 03/31/02 (value--$2,175,237); and $4,030,928 U.S. Treasury Bonds, 8.125% due 08/15/19 (value--$5,184,782); proceeds: $7,215,052 7,214,000 14,444 Repurchase Agreement dated 7/31/00 with SG Cowen Securities Group, collateralized by $11,099,000 U.S. Treasury Bonds, 8.875% due 8/15/17 (value - $14,733,923); proceeds: $14,446,608 14,444,000 ---------------------- Total Repurchase Agreements (cost - $21,658,000) 21,658,000 ---------------------- TOTAL INVESTMENTS (COST--$514,075,122) - 98.92% 585,997,497 OTHER ASSETS IN EXCESS OF LIABILITIES - 1.08% 6,379,007 ---------------------- NET ASSETS - 100% $ 592,376,504 ----------------------
Page 13 ---------------------------------------------------------- * Non-income producing security. ** Security exempt from registration under 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. @ Interest rate shown is discount rate at date of purchase. (1) Security, or portion thereof, was on loan at July 31, 2000. (2) Global Equity Fund still held U.S. investments at November 30, 2000, although it no longer held the specific stocks identified in this PRO FORMA Portfolio of Investments. These investments (other than ADRs) are not compatible with the holdings of PACE International Equity Fund. If Global Equity Fund's shareholders approve the Reorganization, these securities must be sold before the Reorganization is effected. ADR American Depositary Receipt. GDR Global Depositary Receipt. See accompanying notes to pro forma financial statements. Page 14 PACE International Equity Investments PaineWebber Global Equity Fund Notes to PRO FORMA Financial Statements For the year ended July 31, 2000 (unaudited) Basis of Presentation: Subject to the approval of the Agreement and Plan of Reorganization and Termination ("Plan") by the shareholders of PaineWebber Global Equity Fund ("Global Equity"), PACE International Equity Investments ("International Equity") would acquire the assets of Global Equity in exchange solely for the assumption by International Equity of Global Equity's assets and stated liabilities and shares of International Equity that correspond to the outstanding shares of Global Equity. The number of shares to be received would be based on the relative net asset value of International Equity's shares on the effective date of the Plan and Global Equity will be terminated as soon as practicable thereafter. The PRO FORMA financial statements reflect the financial position of International Equity and Global Equity at July 31, 2000 and the combined results of operations of International Equity and Global Equity (each a "Fund" and, together, the "Funds") for the year ended July 31, 2000. As a result of the Plan, the investment management and administration fee will increase due to the higher fee schedule of International Equity. However, after anticipated savings in other expenses of the Fund, the shareholders of Global Equity will not experience an increase in total expenses. Global Equity currently pays Rule 12b-1 distribution or service fees; as of July 31, 2000, International Equity does not. Other fixed expenses will be reduced due to the elimination of duplicative expenses. In addition, the PRO FORMA statement of assets and liabilities has not been adjusted as a result of the proposed transaction because such adjustment would not be material. The costs of approximately $216,000 associated with the Reorganization will be paid by Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins"), a wholly owned asset management subsidiary of PaineWebber Incorporated (a wholly owned indirect subsidiary of UBS AG), so that each Fund bears no expenses in connection with the Reorganization. These costs are not included in the PRO FORMA statement of operations. The PRO FORMA financial statements are presented for the information of the reader and may not necessarily be representative of what the actual combined financial statements would have been had the Reorganization occurred on August 1, 1999. The PRO FORMA financial statements should be read in conjunction with the historical financial statements of the constituent Funds included in or incorporated by reference in the applicable statement of additional information. Significant Accounting Policies: The Funds' financial statements are prepared in accordance with generally accepted accounting principles that require the use of management accruals and estimates. These unaudited financial statements reflect all adjustments, which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented. The following is a summary of significant accounting policies followed by the Funds. VALUATION OF INVESTMENTS - Each Fund calculates its net asset value based on the current market value for its portfolio securities. Each Fund normally obtains market values for its securities from independent pricing sources. Independent pricing sources may use reported last sale prices, current market quotations or valuations from computerized "matrix" systems that derive values based on comparable securities. Securities traded in the over-the-counter ("OTC") market and listed on The Nasdaq Stock Market, Inc. ("Nasdaq") normally are valued at the last sale price on Nasdaq prior to valuation. Other OTC securities are valued at the last bid price available prior to valuation. Securities which are listed on U.S. and foreign stock exchanges normally are valued at the last sale price on the day the securities are valued or, lacking any sales on such day, at the last available bid price. In cases where securities are traded on more than one exchange, the securities are valued on the exchange designated as the primary market by each Fund's sub-adviser. If a market value is not available from an independent pricing source for a particular security, that security is valued at fair value as determined in good faith by or under the direction of the Fund's board of trustees (the "board"). The amortized cost method of valuation, which approximates market value, generally is used to value short-term debt instruments with sixty days or less remaining to maturity, unless the board determines that this does not represent fair value. All investments quoted in foreign currencies will be valued daily in U.S. dollars on the basis of the foreign currency exchange rates prevailing at the time such valuation is determined by the Fund's custodian. Foreign currency exchange rates are generally determined prior to the close of the New York Stock Exchange ("NYSE"). Occasionally, events affecting the value of foreign investments and such exchange rates occur between the time at which they are determined and the close of the NYSE, which will not be reflected in the computation of the Fund's net asset value. If events materially affecting the value of such securities or currency exchange rates occur during such time periods, the securities will be valued at their value as determined in good faith by or under the direction of the board. -----END PRIVACY-ENHANCED MESSAGE-----