-----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, Aa1e+SHzy75Fz1i6A6kofOl4aDP1PMo1ZkzOBBV8UI7cGItH+r7kUwdFZ8aWKysF As+dsPobAZzDFPoCtBIG/Q== 0000912057-02-013981.txt : 20020415 0000912057-02-013981.hdr.sgml : 20020415 ACCESSION NUMBER: 0000912057-02-013981 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020131 FILED AS OF DATE: 20020408 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PAINEWEBBER PACE SELECT ADVISORS TRUST CENTRAL INDEX KEY: 0000930007 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-08764 FILM NUMBER: 02604178 BUSINESS ADDRESS: STREET 1: C/O BRINSON ADVISORS, INC. STREET 2: 51 WEST 52ND ST CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2127133269 MAIL ADDRESS: STREET 1: C/O BRINSON ADVISORS, INC. STREET 2: 51 WEST 52ND ST CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: PAINEWEBBER CONSULTING FUND PRODUCT DATE OF NAME CHANGE: 19940914 FORMER COMPANY: FORMER CONFORMED NAME: MANAGED ACCOUNTS SERVICES PORTFOLIO TRUST DATE OF NAME CHANGE: 19941212 N-30D 1 a2072899zn-30d.txt N-30D [LOGO] Going The Distance To Meet Your Financial Needs Semiannual Report January 31, 2002 [LOGO] TABLE OF CONTENTS - ----------------------------------------------------------- Table of Contents............................ i Introduction................................. 1 PACE Money Market Investments................ 2 PACE Government Securities Fixed Income Investments................................. 5 PACE Intermediate Fixed Income Investments... 7 PACE Strategic Fixed Income Investments...... 10 PACE Municipal Fixed Income Investments...... 13 PACE Global Fixed Income Investments......... 16 PACE Large Company Value Equity Investments................................. 20 PACE Large Company Growth Equity Investments................................. 25 PACE Small/Medium Company Value Equity Investments................................. 29 PACE Small/Medium Company Growth Equity Investments................................. 32 PACE International Equity Investments........ 35 PACE International Emerging Markets Equity Investments................................. 39 Financial Statements......................... 43 - -----------------------------------------------------------
PAINEWEBBER PACE SELECT ADVISORS TRUST OFFERS DIFFERENT CLASSES OF SHARES REPRESENTING INTERESTS IN TWELVE SEPARATE PORTFOLIOS. (PACE MONEY MARKET INVESTMENTS OFFERS ONLY ONE SHARE CLASS.) DIFFERENT CLASSES OF SHARES AND/OR PORTFOLIOS ARE OFFERED BY SEPARATE PROSPECTUSES. FOR MORE INFORMATION ON A PORTFOLIO OR CLASS OF SHARES, CONTACT YOUR FINANCIAL ADVISOR. HE OR SHE CAN SEND YOU A CURRENT PROSPECTUS RELATING TO A PORTFOLIO OR CLASS OF SHARES, WHICH INCLUDES A DISCUSSION OF INVESTMENT RISKS, SALES CHARGES, EXPENSES AND OTHER MATTERS OF INTEREST. PLEASE READ CAREFULLY THE PROSPECTUS RELATED TO THE PORTFOLIO AND CLASS OF SHARES IN WHICH YOU ARE INTERESTED BEFORE YOU INVEST. i PAINEWEBBER PACE SELECT ADVISORS TRUST MARCH 15, 2002 INTRODUCTION DEAR PAINEWEBBER PACE-SM- SHAREHOLDER, We present you with the semiannual report for the PACE Portfolios, comprising the PaineWebber PACE Select Advisors Trust. In this report you will find summaries of the performance of each PACE Portfolio and comments from each of the investment advisors covering events for the semiannual period ended January 31, 2002. Please note that the opinions of the advisors do not necessarily represent those of UBS PaineWebber Inc. or Brinson Advisors, Inc. It is important to remember that all markets can be volatile at times, and that investments will fluctuate in value over time. Historically, market downturns have provided opportunities for investors committed to their long-term investment goals. Consequently, in recognition of the needs of investors in today's environment, we remind you of the importance of a well-planned, well-diversified investment program designed for you with the help of your financial advisor. To meet these needs, the PACE Portfolios offer a wide choice of actively managed Portfolios that allow you to take advantage of investment opportunities as they arise. We appreciate the opportunity to help you achieve your financial goals. If you have any questions about the PaineWebber PACE Program or about PACE Select Advisors Trust, please contact your financial advisor. Sincerely,
/s/ Brian M. Storms /s/ Bruce A. Bursey BRIAN M. STORMS BRUCE A. BURSEY President Executive Vice President PaineWebber PACE Select Advisors Trust Investment Consulting Services UBS PaineWebber Inc.
This report is intended to assist investors in understanding how the Portfolios performed during the semiannual period ended January 31, 2002. The views expressed in the Advisor's Comments sections are as of March 2002 and are those of the investment advisors. These views are subject to change at any time in response to changing circumstances in the markets and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally or any Portfolio. The Portfolios are actively managed and their composition will differ over time; any specific securities discussed may or may not be current or future holdings of a Portfolio. We encourage you to consult your financial advisor regarding your personal investment program. 1 PACE MONEY MARKET INVESTMENTS ADVISOR: Brinson Advisors, Inc. PORTFOLIO MANAGER: Susan Ryan OBJECTIVE: Current income consistent with preservation of capital and liquidity INVESTMENT PROCESS: The Portfolio is a money market mutual fund and seeks to maintain a stable price of $1.00 per share, although it is possible to lose money by investing in this fund. The Portfolio invests in a diversified portfolio of high-quality money market instruments of governmental and private issuers. Security selection is based on the assessment of relative values and changes in market and economic conditions. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/02
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION 8/24/95 DEG. - -------------------------------------------------------------------------------------------------------------------------- PACE Money Market Investments Without PACE program fee* 1.30% 3.58% 5.01% 5.03% - -------------------------------------------------------------------------------------------------------------------------- PACE Money Market Investments With PACE program fee* 0.54 2.03 3.44 3.47 - -------------------------------------------------------------------------------------------------------------------------- 90-Day U.S. T-Bill Index+ 1.12 3.13 4.78 4.87 - -------------------------------------------------------------------------------------------------------------------------- Lipper Money Market Funds Median 1.08 3.56 4.77 5.02 - --------------------------------------------------------------------------------------------------------------------------
For PACE Money Market Investments, the 7-day current yield for the period ended January 31, 2002, was 1.70%, without the PACE program fee. With the maximum PACE program fee, the 7-day current yield was 0.20%. The Portfolio's yield quotation more closely reflects the current earnings of the Portfolio than the total return quotation. * The maximum annual PACE program fee is 1.5% of the value of PACE assets. DEG. Inception returns for the Index and Lipper Median are shown as of the nearest month-end of the Fund's inception: August 31, 1995. + 90-Day U.S. T-Bills are promissory notes issued by the U.S. Treasury and sold through competitive bidding, with a short-term maturity date, in this case, three months. This Index is derived from secondary market interest rates as published by the Federal Reserve Bank. Past performance does not predict future performance. Investment returns and yields will vary. Performance results assume reinvestment of all dividends and capital gains distributions. Total returns for periods of one year or less have not been annualized. Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper Median is the return of the fund that places in the middle of the peer group. AN INVESTMENT IN PACE MONEY MARKET INVESTMENTS IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE PORTFOLIO SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE PORTFOLIO. 2 ADVISOR'S COMMENTS For the six months ended January 31, 2002, the Portfolio returned 1.3% (before deducting the maximum PACE program fee; 0.5% after deducting the fee), exceeding gains during the period of both the 90-Day U.S. T-Bill Index and the Lipper Money Market Funds Median (on a pre-PACE program fee basis). The Portfolio's barbell approach, in which we invested in shorter maturities to maintain liquidity while investing in longer maturity paper to take advantage of favorable longer rates, helped performance during the period. Yields fell dramatically during this period as the Federal Reserve (the "Fed") continued to lower the federal funds rate through the calendar year in an attempt to help pull the nation's economy out of recession. The Fed lowered rates 11 times in 2001, bringing the key rate down from 6.50% to 1.75%. As we approached the end of the reporting period and entered the new year, the Fed's easing, in combination with federal monetary stimulus, seems to have quickly yanked the nation's Gross Domestic Product (GDP) back into positive territory. After declining 1.3% during the third quarter, GDP crept back into positive territory at 0.02% for the fourth quarter of 2001 and is expected to be adjusted upwards when revisions are announced. A batch of positive news bolstered the belief that the recession would remain short lived. The nation's unemployment rate fell to 5.6% from 5.8% in January, while consumer spending jumped 6% and the sale of durable goods such as automobiles and appliances rose 2.6% during the fourth quarter of 2001. Productivity also increased 5.2% during the fourth quarter, while new factory orders increased 1.6% in January as inventories were whittled away. Post period, the Institute of Supply Management's manufacturing index also jumped from 49.9 to 54.7, ending 18 consecutive months of readings below 50. Marks below 50 signify contraction while readings above 50 signify expansion. Despite the positive news, business investment still lagged during the period and concerns about corporate credit quality increased in the wake of high-profile corporate bankruptcies and questions about accounting practices. We believe economic growth will continue at a slow to moderate pace, but credit concerns could dampen the strength of the recovery. At period end, spreads between Treasurys and many corporate names had already widened. We hope to take advantage of the yield curve's steepness by selecting high quality, high liquidity debt issues. We also believe that the Fed will take a wait and see stance before deciding to raise interest rates again. 3 PACE MONEY MARKET INVESTMENTS--PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/02 - ------------------------------------------------------- Net Assets (mm) $88.7 Number of Issuers (excl. Govt's) 31 Weighted Average Maturity 77 days - -------------------------------------------------------
PORTFOLIO COMPOSITION* 1/31/02 - --------------------------------------------------------- Commercial Paper 33.6% U.S. Government Agency Obligations 31.4 Bank Obligations 20.3 Short-Term Corporate Obligations 10.1 Money Market Funds 5.4 Liabilities in Excess of Other Assets -0.8 - --------------------------------------------------------- Total 100.0%
TOP 10 HOLDINGS (EXCLUDING U.S. GOV'T AGENCY OBLIGATIONS)* 1/31/02 - -------------------------------------------------------------------- Stellar Funding 4.6% Giro Multi-Funding 4.3 GE Capital 3.9 AIM Liquid Assets 3.5 Dexia Bank 3.4 Koch Industries 3.4 Danske 3.4 Quincy Capital 2.9 Canadian Imperial Bank of Commerce 2.8 Wells Fargo 2.3 - -------------------------------------------------------------------- Total 34.5%
*Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 4 PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS ADVISOR: Pacific Investment Management Company LLC ("PIMCO") PORTFOLIO MANAGER: Scott Mather OBJECTIVE: Current income INVESTMENT PROCESS: The Portfolio invests primarily in mortgage-backed securities along with U.S. government and agency securities of varying maturities. The Portfolio also invests, to a lesser extent, in investment grade bonds of private issuers, including those backed by mortgages or other assets. The Portfolio's dollar-weighted average duration normally ranges between one and seven years. (Duration is a measure of a bond portfolio's sensitivity to interest rate changes.) PIMCO establishes duration targets based on its expectations for changes in interest rates, then positions the Portfolio to take advantage of yield curve shifts. Securities are chosen for their value relative to other similar securities. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/02
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION DEG. - ----------------------------------------------------------------------------------------------------------------- Before Deducting Class A* 2.89% 7.63% N/A 7.61% Maximum Sales Charge Class B** 2.40 6.74 N/A 8.44 or PACE program fee Class C*** 2.62 7.07 N/A 9.48 Class Y+ 3.06 N/A N/A 7.97 Class Pxx 3.06 7.95 7.53% 7.36 - ----------------------------------------------------------------------------------------------------------------- After Deducting Class A* -1.77 2.76 N/A 2.75 Maximum Sales Charge Class B** -2.59 1.74 N/A 4.91 or PACE program fee Class C*** 0.84 5.23 N/A 8.57 Class Y+ 3.06 N/A N/A 7.97 Class Pxx 2.29 6.34 5.93 5.76 - ----------------------------------------------------------------------------------------------------------------- Lehman Brothers Mortgage-Backed Securities Index++ 3.41 7.55 7.53 7.50(since 8/31/95) - ----------------------------------------------------------------------------------------------------------------- Lipper Intermediate U.S. Government Funds Median 2.70 6.34 6.41 6.46(since 8/31/95) - -----------------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2001, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--since inception, 1.99%; Class B--1-year period, 3.46%; since inception, 4.60%; Class C--1-year period, 6.93%; since inception, 8.56%; Class Y--since inception, 7.13%; Class P--1-year period, 8.05%; 5-year period, 5.87%; since inception, 5.73%. DEG. Inception: since commencement of issuance or reissuance on August 24, 1995 for Class P shares, January 31, 2001 for Class A shares, December 18, 2000 for Class B shares, December 4, 2000 for Class C shares and February 2, 2001 for Class Y shares. Inception returns for the Index and Lipper Median are shown as of nearest month-end of the inception of the oldest share class: August 31, 1995. * Maximum sales charge for Class A shares is 4.5% of the public offering price. Class A shares bear ongoing 12b-1 service fees. ** Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum sales charge for Class C shares is 1.75%, consisting of a maximum sales charge of 1.0% imposed on purchases and a maximum contingent deferred sales charge of 0.75%, which is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. + The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. xx Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees but are subject to a maximum annual PACE program fee of 1.5% of the value of PACE Class P shares. ++ The Lehman Brothers Mortgage-Backed Securities Index covers fixed rate securitized issues backed by the mortgage pools of the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association. Graduated Payment Mortgages are included but Graduated Equity Mortgages are not. The average weighted life is approximately eight years. Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gains distributions. Total returns for periods of one year or less have not been annualized. Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper Median is the return of the fund that places in the middle of the peer group. 5 ADVISOR'S COMMENTS For the six months ended January 31, 2002, the Portfolio's Class P shares returned 3.1% before deducting the maximum PACE program fee (2.3% after deducting the fee), lagging the Lehman Brothers Mortgage-Backed Securities Index which returned 3.4%. (Performance for the other Classes is noted on the prior page.) The Treasury market's summer rally continued in early September, driven by weak economic data. Following the terrorist attacks of September 11 and their impact on an already fragile economy, investors fled corporate bonds and scurried to the safe haven of Treasury issues. Securitized issues also held up well in the post-September 11 environment, as is typical for the market in stressful times. The Treasury's surprise announcement on October 31 that it would no longer issue 30-year Treasurys pushed yields down over 30 basis points in one day (a basis point is 1/100th of one percent), although yields quickly returned to prior levels. Rates edged higher toward the end of the year, as the economy began to show signs of improvement in the form of surging consumer confidence, rising home sales and a fall-off in initial unemployment claims. The recent steepness characterizing the yield curve remained, however, with the 30-year Treasury yielding some 240 basis points or 2.4% more than its 2-year counterpart. This differential flattened at the end of the reporting period as the spread declined to 2.3%. Looking forward, we expect business and consumer risk-taking to revive and lead an upturn in the economy. Risk appetites should recover for several reasons: liquidity is abundant now that massive easing by the Federal Reserve Board has pushed the real federal funds rate close to zero; fiscal policy has been stimulated via tax cuts; and consumer income has improved thanks to lower mortgage rates and sharply lower gasoline prices. Not least, corporate profits, while still relatively weak, have room to expand following the fastest inventory cutbacks on record. At the same time, recovery may be slowed by near-record levels of debt and unease about employment security in the consumer sector. In addition, business investment will contribute little or nothing to growth because corporations are still working down a substantial overhang in both capacity and debt built up during the boom years of the late 1990s. In anticipation of rate volatility we are targeting duration about 0.5 years above the benchmark, with most of this duration on the short end of the yield curve. PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS--PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/02 - -------------------------------------------------------- Weighted Average Duration 3.02 yrs. Weighted Average Maturity 3.97 yrs. Average Coupon 5.81% Average Quality AAA Net Assets (mm) $571.1 Number of Securities 352 Bonds 132.9% Liabilities in Excess of Other Assets -32.9% - --------------------------------------------------------
ASSET ALLOCATION* 1/31/02 - --------------------------------------------------------- U.S. Government Agency Mortgage Pass-Throughs 101.6% Collateralized Mortgage Obligations (PAC/TAC) 16.2 U.S. Government Securities 10.5 Asset-Backed 3.1 Stripped Mortgage-Backed Securities 1.4 Municipal Securities 0.1 Liabilities in Excess of Other Assets -32.9 - --------------------------------------------------------- Total 100.0%
*Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 6 PACE INTERMEDIATE FIXED INCOME INVESTMENTS ADVISOR: Metropolitan West Asset Management, LLC ("MWAM") (since October 2000) PORTFOLIO MANAGER: Team OBJECTIVE: Current income consistent with reasonable stability of principal INVESTMENT PROCESS: MWAM decides to buy specific bonds for the Portfolio based on its value added strategies, with the goal of outperforming the Lehman Brothers Intermediate Government/Credit Index while maintaining below average volatility. These strategies are anchored by MWAM's long-term economic outlook and include managing interest rate risk through limited duration shifts, yield curve management, diversifying the Portfolio's investments across all permitted investment sectors while overweighting the most attractive sectors, identifying undervalued securities and aggressive execution. (Duration is a measure of a bond portfolio's sensitivity to interest rate changes.) MWAM generally sells securities when they no longer meet these selection criteria, or it identifies more attractive investment opportunities and adjust the average duration of the Portfolio. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/02
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION DEG. - ------------------------------------------------------------------------------------------------------------------------------ Before Deducting Class A* 1.40% 5.70% N/A 5.69% Maximum Sales Charge Class B** 0.99 4.89 N/A 6.22 or PACE program fee Class C*** 1.13 5.16 N/A 7.14 Class Y+ 1.54 N/A N/A 6.05 Class Pxx 1.54 6.07 6.18% 5.95 - ------------------------------------------------------------------------------------------------------------------------------ After Deducting Class A* -3.16 0.97 N/A 0.97 Maximum Sales Charge Class B** -3.94 -0.10 N/A 2.72 or PACE program fee Class C*** -0.59 3.39 N/A 6.23 Class Y+ 1.54 N/A N/A 6.05 Class Pxx 0.78 4.49 4.60 4.38 - ------------------------------------------------------------------------------------------------------------------------------ Lehman Brothers Intermediate Government/Credit Index++ 0.52 6.02 6.09 8.67(since 8/31/95) - ------------------------------------------------------------------------------------------------------------------------------ Lipper Short-Intermediate Investment Grade Debt Funds Median 2.11 6.12 6.13 6.09(since 8/31/95) - ------------------------------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2001, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--since inception, 0.72%; Class B--1-year period, 1.30%; since inception, 2.77%; Class C--1-year period, 4.77%; since inception, 6.54%; Class Y--since inception, 5.76%; Class P--1-year period, 5.88%; 5-year period, 4.61%; since inception, 4.41%. DEG. Inception: since commencement of issuance or reissuance on August 24, 1995 for Class P shares, January 31, 2001 for Class A shares, December 14, 2000 for Class B shares, December 1, 2000 for Class C shares and February 2, 2001 for Class Y shares. Inception returns for the Index and Lipper Median are shown as of nearest month-end of the inception of the oldest share class: August 31, 1995. * Maximum sales charge for Class A shares is 4.5% of the public offering price. Class A shares bear ongoing 12b-1 service fees. ** Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum sales charge for Class C shares is 1.75%, consisting of a maximum sales charge of 1.0% imposed on purchases and a maximum contingent deferred sales charge of 0.75%, which is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. + The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. xx Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees but are subject to a maximum annual PACE program fee of 1.5% of the value of PACE Class P shares. ++ The Lehman Brothers Intermediate Government/Credit Index is a subset of the Lehman Government/Credit Index covering all investment grade issues with maturities between one and 10 years. The average weighted maturity is typically between four and five years. Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gains distributions. Total returns for periods of one year or less have not been annualized. Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper Median is the return of the fund that places in the middle of the peer group. 7 ADVISOR'S COMMENTS For the six months ended January 31, 2002, the Portfolio's Class P shares returned 1.5% (before deducting the maximum PACE program fee; 0.8% after deducting the fee), outperforming the Lehman Brothers Intermediate Government/Credit Index, which returned 0.5%. (Performance for the other Classes is noted on the prior page.) The market's dynamics changed dramatically during the reporting period. Already in the throes of a profound slowdown, the tragic events of September 11 buffeted the fragile economy and the capital markets. The Federal Reserve Board (the "Fed") responded by continuing its yearlong easing regime. By December, the economy began to show many signs of improvement: surging consumer confidence, rising sales of existing homes and declining initial unemployment claims. Though rates edged higher toward the end of the reporting period, the yield curve continued to display steepness with the 30-year Treasury yielding some 240 basis points more than its 2-year counterpart (a basis point is 1/100th of one percent). The terrorist attacks initially sent investors scurrying to the safe haven of Treasury issues, leaving a wake of volatility among corporate securities, especially airline and insurance issues suffering direct fallout from the attacks. Market volatility placed downward pressure on corporate bond prices. As a result, the Portfolio's overweight to corporate issues and modest concentration on auto credits, relative to the Index, contributed to a performance shortfall. However, this underperformance was partially offset by positive performance in the mortgage and asset-backed markets as demand remained high due to the relative stability and high relative yields of these securities. Additionally, our avoidance of Enron debt obligations and focus on value-oriented credits was a benefit to the Portfolio. We selectively sold securities and redeployed the proceeds in issues of Capital One Bank (2.6%) (a credit card issuer focusing on high quality borrowers) and Citizens Communications (1.1%) (a regional local exchange carrier).* The volatility of the fourth quarter of 2001 also presented opportunities to acquire securities in oversold industries such as enhanced equipment trust certificates of domestic air carriers securitized by newer aircraft. We also adjusted the duration position of the Portfolio slightly (from 0.2 years short of the benchmark to 0.4 years), taking a more defensive stance, in the expectation that the monetary stimulus provided by the Fed's series of interest rate cuts will put economic growth on a trajectory consistent with long-term economic potential. Our modest defensive duration posture subtracted from performance during the first half of the reporting period as rates fell, only to protect the Portfolio during the second half as rates backed up near year-end. The Portfolio's focus on mortgage products enhanced performance, while sector emphasis on corporate issues detracted. Looking forward, we anticipate continued economic recovery. The continued steepness of the yield curve, in conjunction with the Fed's futures rates, foretell an economic revival potentially accompanied by an increase in interest rates. We expect to focus on three areas: corporate securities in hard asset industries, mortgage issues with limited prepayment risk (as the mortgage sector shows promise of good performance), and asset-backed securities with attractive yields. We expect to continue our focus on value and, in terms of duration, we expect to continue our defensive posture, poised for a potential upturn in the market. *Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 8 PACE INTERMEDIATE FIXED INCOME INVESTMENTS--PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/02 - -------------------------------------------------------- Weighted Average Duration 3.25 yrs. Weighted Average Maturity 5.20 yrs. Average Coupon 6.57% Net Assets (mm) $331.7 Number of Securities 98 Bonds 89.8% Cash & Equivalents 10.2% - --------------------------------------------------------
QUALITY DIVERSIFICATION* 1/31/02 - --------------------------------------------------------- AAA 36.3% AA 4.7 A 16.8 BBB and Below 24.1 Not Rated 7.9 Cash & Equivalents 10.2 - --------------------------------------------------------- Total 100.0%
ASSET ALLOCATION* 1/31/02 - --------------------------------------------------------- Corporate Securities 43.8% Asset-Backed Securities 20.5 Mortgage-Backed Securities 14.4 U.S. Government Securities 11.1 Cash Equivalents/Other Assets in Excess of Liabilities 10.2 - --------------------------------------------------------- Total 100.0%
*Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 9 PACE STRATEGIC FIXED INCOME INVESTMENTS ADVISOR: Pacific Investment Management Company LLC ("PIMCO") PORTFOLIO MANAGER: William C. Powers OBJECTIVE: Total return consisting of income and capital appreciation INVESTMENT PROCESS: The Portfolio invests primarily in investment grade bonds of governmental and private issuers in the United States and foreign countries. Its dollar-weighted average duration normally ranges between three and eight years. (Duration is a measure of a bond portfolio's sensitivity to interest rate changes.) PIMCO seeks to invest in those areas of the bond market it considers undervalued, based on such factors as quality, sector, coupon and maturity. PIMCO decides to buy or sell specific bonds based on an analysis of their values relative to other similar bonds. PIMCO monitors the prepayment experience of the Portfolio's mortgage-backed bonds and will also buy and sell securities to adjust the average portfolio duration, credit quality, yield curve, sector and prepayment exposure, as appropriate. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/02
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION DEG. - ----------------------------------------------------------------------------------------------------------------- Before Deducting Class A* 4.02% 8.11% N/A 9.76% Maximum Sales Charge Class B** 3.61 7.30 N/A 8.10 or PACE program fee Class C*** 3.75 7.57 N/A 9.71 Class Y+ 4.16 N/A N/A 8.30 Class Pxx 4.16 8.40 7.23% 7.75 - ----------------------------------------------------------------------------------------------------------------- After Deducting Class A* -0.68 3.26 N/A 5.43 Maximum Sales Charge Class B** -1.39 2.30 N/A 4.12 or PACE program fee Class C*** 1.97 5.74 N/A 8.74 Class Y+ 4.16 N/A N/A 8.30 Class Pxx 3.38 6.79 5.63 6.15 - ----------------------------------------------------------------------------------------------------------------- Lehman Brothers Government/Credit Index++ 3.03 7.50 7.50 8.76(since 8/31/95) - ----------------------------------------------------------------------------------------------------------------- Lipper Intermediate Investment Grade Debt Funds Median 2.60 6.55 6.51 6.77(since 8/31/95) - -----------------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2001, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--1-year period, 3.20%; since inception, 4.52%; Class B--since inception, 1.76%; Class C--1-year period, 5.63%; since inception, 8.14%; Class Y--since inception, 6.81%; Class P--1-year period, 6.77%; 5-year period, 5.41%; since inception, 6.02%. DEG. Inception: since commencement of issuance or reissuance on August 24, 1995 for Class P shares, December 11, 2000 for Class A shares, January 30, 2001 for Class B shares, December 1, 2000 for Class C shares and February 2, 2001 for Class Y shares. Inception returns for the Index and Lipper Median are shown as of nearest month-end of the inception of the oldest share class: August 31, 1995. * Maximum sales charge for Class A shares is 4.5% of the public offering price. Class A shares bear ongoing 12b-1 service fees. ** Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum sales charge for Class C shares is 1.75%, consisting of a maximum sales charge of 1.0% imposed on purchases and a maximum contingent deferred sales charge of 0.75%, which is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. + The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. xx Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees but are subject to a maximum annual PACE program fee of 1.5% of the value of PACE Class P shares. ++ The Lehman Brothers Government/Credit Index is composed of all investment grade bonds that have at least one year to maturity. The index's total return comprises price appreciation/depreciation and income as a percentage of the original investment. The index is rebalanced monthly by market capitalization. Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gains distributions. Total returns for periods of one year or less have not been annualized. Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper Median is the return of the fund that places in the middle of the peer group. 10 ADVISOR'S COMMENTS For the six months ended January 31, 2002, the Portfolio's Class P shares returned 4.2% (before deducting the maximum PACE program fee; 3.4% after deducting the fee), outperforming the 3.0% returned by the Lehman Brothers Government/Credit Index and 2.6% return for the Lipper Intermediate Investment Grade Debt Funds Median. (Performance for the other Classes is noted on the prior page.) The fixed income sector did well during the reporting period against the lackluster performance of the equity markets. As the United States edged into recession, the downturn in the economy was exacerbated by the terrorist attacks of September 11. The Portfolio was well positioned for a relatively weak U.S. economy and the easing monetary policy implemented by the Federal Reserve Board (the "Fed"). As investors fled to quality in the aftermath of the attacks, performance was enhanced by the Portfolio's strong position in U.S. government obligations. As the economy began to show signs of strength, there was heightened volatility in the Treasury sector, spurred by encouraging but still broadly mixed data and varying prospects for fiscal stimulus. The downgrading of Enron issues to "junk" bond status midway through the reporting period rippled through the market, causing spreads to widen and severely affecting the performance of utilities. With the Portfolio's minor exposure to utilities, we were not severely affected. A shift to corporate issues as the corporate sector demonstrated increased strength enhanced performance, and, as the housing market revitalized later in the period, an overweighting in mortgages also bolstered performance. Looking forward, we expect business and consumer risk taking to revive and lead the upturn. We see several reasons for optimism: liquidity is abundant following the massive easing by the Fed; fiscal policy is stimulating the economy; and consumer income has benefited from lower mortgage rates and sharply lower gasoline prices. And corporate profits, while still relatively weak, have room to expand following the fastest inventory reductions on record. There is still some concern regarding near-record levels of debt and unease about job security among consumers, sluggish business investment and the substantial capacity and debt overhang built up during the boom years of the late 1990s. We expect to target duration about 0.5 years above the benchmark, and to continue investing in sectors such as mortgages, corporates and emerging market bonds that offer attractive yield premiums relative to Treasurys. 11 PACE STRATEGIC FIXED INCOME INVESTMENTS--PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/02 - --------------------------------------------------------- Weighted Average Duration 5.90 yrs. Weighted Average Maturity 10.66 yrs. Average Coupon 3.24% Net Assets (mm) $282.0 Bonds 116.7% Cash & Equivalents 2.0% Liabilities in Excess of Other Assets -18.7% - ---------------------------------------------------------
QUALITY DIVERSIFICATION* 1/31/02 - --------------------------------------------------------- U.S. Government Securities 12.4% AAA 72.0 AA 4.7 A 15.6 BBB 10.9 BB 0.7 Nonrated 2.4 Liabilities in Excess of Other Assets -18.7 - --------------------------------------------------------- Total 100.0%
SECTOR ALLOCATION* 1/31/02 - --------------------------------------------------------- Collateralized Mortgage Obligations 38.3% Agency/Mortgage Pass-Throughs 30.1 Corporates 24.9 U.S. Government 12.4 Asset-Backed 4.8 International Government Obligations 3.1 Cash Equivalents 2.0 Commercial Paper 1.3 Call Options 1.8 Liabilities in Excess of Other Assets -18.7 - --------------------------------------------------------- Total 100.0%
*Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 12 PACE MUNICIPAL FIXED INCOME INVESTMENTS ADVISOR: Standish Mellon Asset Management Company LLC ("Standish Mellon") PORTFOLIO MANAGER: Christine H. Todd OBJECTIVE: High current income exempt from Federal income tax INVESTMENT PROCESS: In deciding which securities to buy for the Portfolio, Standish Mellon seeks to identify undervalued sectors or geographical regions of the municipal market or undervalued individual securities. To do this, Standish Mellon uses credit research and valuation analysis and monitors the relationship of the municipal yield curve to the treasury yield curve. Standish Mellon may also make modest duration adjustments based on economic analyses and interest rate forecasts. (Duration is a measure of a bond portfolio's sensitivity to interest rate changes.) Standish Mellon generally sells securities if it identifies more attractive investment opportunities within its investment criteria that may improve the Portfolio's return. Standish Mellon also may sell securities with weakening credit profiles or to adjust the average duration of the Portfolio. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/02
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION DEG. - ------------------------------------------------------------------------------------------------------------ Before Deducting Class A* 1.98% 5.07% N/A 4.78% Maximum Sales Charge Class B** 1.58 N/A N/A 3.93 or PACE program fee Class C*** 1.72 4.45 N/A 6.11 Class Y+ 2.11 N/A N/A 4.89 Class Pxx 2.10 5.24 4.79% 5.34 - ------------------------------------------------------------------------------------------------------------ After Deducting Class A* -2.61 0.38 N/A 0.14 Maximum Sales Charge Class B** -3.41 N/A N/A -1.07 or PACE program fee Class C*** -0.08 2.62 N/A 5.22 Class Y+ 2.11 N/A N/A 4.89 Class Pxx 1.34 3.67 3.23 3.77 - ------------------------------------------------------------------------------------------------------------ Lehman Brothers Municipal Five-Year Index++ 2.81 6.09 5.61 6.62(since 8/31/95) - ------------------------------------------------------------------------------------------------------------ Lipper Intermediate Municipal Debt Funds Median 1.98 4.94 5.13 5.40(since 8/31/95) - ------------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2001, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--since inception, -1.14%; Class B--since inception, -2.33%; Class C--1-year period, 2.25%; since inception, 4.42%; Class Y--since inception, 3.60%; Class P--1-year period, 3.32%; 5-year period, 3.06%; since inception, 3.63%. DEG. Inception: since commencement of issuance on August 24, 1995 for Class P shares, January 23, 2001 for Class A shares, February 23, 2001 for Class B shares, December 4, 2000 for Class C shares and February 23, 2001 for Class Y shares. Inception returns for the Index and Lipper Median are shown as of nearest month-end of the inception of the oldest share class: August 31, 1995. * Maximum sales charge for Class A shares is 4.5% of the public offering price. Class A shares bear ongoing 12b-1 service fees. ** Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum sales charge for Class C shares is 1.75%, consisting of a maximum sales charge of 1.0% imposed on purchases and a maximum contingent deferred sales charge of 0.75%, which is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. + The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. xx Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees but are subject to a maximum annual PACE program fee of 1.5% of the value of PACE Class P shares. ++ The Lehman Brothers Municipal Five-Year Index is a total return performance benchmark for the tax-exempt bond market. The index is a sub-index of the Lehman Brothers Municipal Bond Index and includes all issues rated Aa/AA or higher with an average maturity of five years. 13 Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gains distributions. Total returns for periods of one year or less have not been annualized. Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper Median is the return of the fund that places in the middle of the peer group. ADVISOR'S COMMENTS For the six months ended January 31, 2002, the Portfolio's Class P shares returned 2.1% (before deducting the maximum PACE program fee; 1.3% after deducting the fee), compared to 2.8% for the Lehman Brothers Municipal Five- Year Index and 2.0% for the Lipper Intermediate Municipal Debt Funds Median. (Performance for the other Classes is noted on the prior page.) The most significant event of the reporting period was the terrorist attacks of September 11 and its potential drag on the U.S. economy that was already suffering a slowdown. The events fueled a flight to quality and a sell-off in New York municipal bonds, which resulted in the Portfolio's underweight to New York. California bonds also lost ground after state officials confirmed that a massive electricity revenue bond financing would be postponed into 2002. The Portfolio was underweight in California during the reporting period as well. Toward the end of the period, municipal bond prices were depressed by a burst of supply coupled with lackluster investor demand in the face of recovering equity markets. Heavy issuance did not detract from performance, however, as municipals outperformed Treasurys and corporates on an after-tax basis. Long-maturity bond prices fell on concerns that a resurgent economy would ignite inflation and drive interest rates higher. A substantial position in defensive housing bonds helped protect Portfolio values as rates rose. Our emphasis on health care was also a positive during the reporting period despite a modest pullback at year-end. Credit quality overall suffered in the weak economy. One-quarter of the states were on a negative credit watch as they dipped into reserve funds with lower-than-expected tax receipts stemming from a depressed economy. The Portfolio reduced duration as interest rates declined. Credit quality remains high. Going forward, retail demand should continue to improve as investors in search of higher yields rebalance heavy cash balances into municipal assets. Municipal market volatility is expected to remain high as the timing and magnitude of economic recovery remains uncertain. More insured bonds may be issued if credit quality declines amidst continuing economic downturn. We expect to maintain a high-quality intermediate-term focus and actively manage the Portfolio to incrementally increase yield. Supply is expected to remain heavy as issuers take advantage of low rates. We will opportunistically add to Portfolio holdings in California, New York and health care issues if relative yield levels warrant doing so. With pressure on state and local government cash flows, there may be good investment opportunities to purchase tax-backed bonds at historically cheap levels. 14 PACE MUNICIPAL FIXED INCOME INVESTMENTS-PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/02 - --------------------------------------------------------- Weighted Average Duration 4.42 yrs. Weighted Average Maturity 5.58 yrs. Average Coupon 6.04% Net Assets (mm) $266.7 Bonds 100.0% - ---------------------------------------------------------
TOP 5 SECTORS* 1/31/02 - --------------------------------------------------------- Insured 36.4% Federal Agency-Backed 14.3 Housing 11.8 General Obligation 11.5 Revenue 9.3 - --------------------------------------------------------- Total 83.3%
TOP 5 STATES* 1/31/02 - --------------------------------------------------------- Illinois 10.0% Georgia 8.1 Texas 7.8 Ohio 7.2 Florida 6.6 - --------------------------------------------------------- Total 39.7%
QUALITY DIVERSIFICATION* 1/31/02 - --------------------------------------------------------- AAA and Agency-Backed Securities 64.9% AA 23.4 A 11.7 - --------------------------------------------------------- Total 100.0%
*Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 15 PACE GLOBAL FIXED INCOME INVESTMENTS ADVISOR: Rogge Global Partners plc ("Rogge Global Partners") and Fischer Francis Trees & Watts, Inc. (and affiliates) ("FFTW") PORTFOLIO MANAGERS: Rogge Global Partners: Portfolio management team led by Olaf Rogge; FFTW: Team, with David Marmon as portfolio manager OBJECTIVE: High total return ROGGE GLOBAL PARTNERS' INVESTMENT PROCESS: Rogge Global Partners seeks to invest its portion of the Portfolio assets in bonds of issuers based in financially healthy countries because it believes that these investments produce the highest bond and currency returns over time. In deciding which bonds to buy for the Portfolio, Rogge Global Partners uses top-down analysis to find value across countries and to forecast interest and currency-exchange rates over a one-year horizon in those countries. Rogge Global Partners also uses an optimization model to help determine country, currency and duration positions for the Portfolio. (Duration is a measure of a bond portfolio's sensitivity to interest rate changes.) Rogge Global Partners generally sells securities that no longer meet these selection criteria or when it identifies more attractive investment opportunities; Rogge also may sell securities to adjust the average duration of the Portfolio assets it manages. FFTW'S INVESTMENT PROCESS: FFTW divides the investment universe into three major blocs (Europe, the United States and Japan), plus emerging markets, and analyzes trends in economic growth, inflation, monetary and fiscal policies. FFTW decides which securities to buy for the Portfolio by looking for investment opportunities where its opinions on the current economic environment of a bloc or country differ from those it judges to be reflected in current market valuations. FFTW generally sells securities when it has identified more attractive investment opportunities. Brinson Advisors allocates the Portfolio's assets between the two investment advisors and may change the allocation at any time. The relative values of each investment advisor's share of the Portfolio's assets may also change over time. As of January 31, 2002, Rogge Global Partners managed 51.3% of net assets; FFTW managed 48.7% of net assets. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/02
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION DEG. - ------------------------------------------------------------------------------------------------------------ Before Deducting Class A* -0.56% -2.80% N/A 0.46% Maximum Sales Charge Class B** -0.96 N/A N/A -4.27 or PACE program fee Class C*** -0.82 -3.27 N/A 0.53 Class Y+ -0.43 -2.54 N/A -2.09 Class Pxx -0.43 -2.55 1.66% 2.54 - ------------------------------------------------------------------------------------------------------------ After Deducting Class A* -5.00 -7.21 N/A -3.49 Maximum Sales Charge Class B** -5.83 N/A N/A -8.91 or PACE program fee Class C*** -2.50 -4.95 N/A -0.29 Class Y+ -0.43 -2.54 N/A -2.09 Class Pxx -1.17 -4.01 0.15 1.02 - ------------------------------------------------------------------------------------------------------------ Salomon Smith Barney World Government Bond Index (unhedged)++ 0.68 -2.70 2.33 8.94(since 8/31/95) - ------------------------------------------------------------------------------------------------------------ Lipper Global Income Funds Median 0.65 0.00 2.32 4.41(since 8/31/95) - ------------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2001, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--1-year period, -5.93%; since inception, -2.67%; Class B--since inception, -7.76%; Class C--1-year period, -3.83%; since inception, 0.75%; Class Y--since inception, -1.12%; Class P--1-year period, -2.69%; 5-year period, - -0.17%; since inception, 1.24%. DEG. Inception: since commencement of issuance or reissuance on August 24, 1995 for Class P shares, December 11, 2000 for Class A shares, February 9, 2001 for Class B shares, December 1, 2000 for Class C shares, and January 16, 2001 for Class Y shares. Inception returns for the Index and Lipper Median are shown as of nearest month-end of the inception of the oldest share class: August 31, 1995. * Maximum sales charge for Class A shares is 4.5% of the public offering price. Class A shares bear ongoing 12b-1 service fees. 16 ** Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum sales charge for Class C shares is 1.75%, consisting of a maximum sales charge of 1.0% imposed on purchases and a maximum contingent deferred sales charge of 0.75%, which is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. + The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. xx Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees but are subject to a maximum annual PACE program fee of 1.5% of the value of PACE Class P shares. ++ The Salomon Smith Barney World Government Bond Index (unhedged) is a market capitalization weighted index composed of straight (i.e., not floating rate or index-linked) government bonds with a one year minimum maturity. The average maturity is seven years. The index includes the 18 government bond markets of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, Portugal, Spain, Sweden, Switzerland, the United Kingdom, and the United States. Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemptions of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gains distributions. Total returns for periods of one year or less have not been annualized. Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper Median is the return of the fund that places in the middle of the peer group. For the six months ended January 31, 2002, the Portfolio underperformed both of its benchmarks, the Salomon Smith Barney World Government Bond Index (unhedged) and the Lipper Global Income Funds Median. Two distinct themes dominated the global bond markets in the six months ended January 31, 2002. Despite repeated interest rate cuts in the U.S., Europe and Japan, the economic slowdown that started in 2000 continued throughout 2001. For the first three months, the dominant theme was the U.S. recession, compounded by the economic and geopolitical implications of the September 11 terrorist attacks. Because the U.S. had been the engine of global economic growth in recent years, the slowdown affected capital markets around the world. Equity markets fell during this period but bond markets rallied. The U.S. dollar underperformed other global currencies as the markets discounted the likelihood of capital flowing into the U.S. from abroad. The result was depressed government bond yields on a global basis. As in the U.S., investors' fears about the negative impact the situation in Afghanistan would have on global markets drove confidence and consumption lower. News of rising unemployment throughout the Euro-zone pushed business confidence down to its lowest point since 1993. The depressed global economic and political environment exacerbated the deepening problems in Japan. Although unemployment hit an all-time high, market sentiment suggested that the Japanese economy had still not bottomed out. The second theme, strongly evident in the second half of the reporting period, was one of financial market liquidity and anticipated U.S. economic recovery. Central banks reacted to the global economic slowdown and September 11 attacks by continuing to cut interest rates, thereby injecting cheap funding into the financial system. The European Central Bank was slower than the U.S. Federal Reserve Board in cutting rates in response to the deteriorating economic environment. This liquidity and the associated flow of funds pushed asset prices higher and raised confidence in the possibility of an economic recovery. The U.S. recession appeared to be bottoming out, resulting in funds flowing into equities and emerging markets. The U.S. dollar was supported by the bounce in the equity markets but bond prices were pushed sharply lower. With investors' flight to quality, the U.S. Treasury yield curve steepened dramatically as shorter-term issues outperformed intermediate and long-dated bonds. Investment grade corporate securities underperformed Treasurys but remained one of the top performing U.S. markets for 2001 as the equity market lagged. Mortgages lost ground against government issues as a depressed economic environment with lowered interest rates increased prepayment speeds and volatility. During this period, both Germany and France underperformed the U.S. By the end of the reporting period, signs of economic recovery were becoming evident although there was still negative news as corporations across all industries announced earnings warnings and large-scale layoffs. 17 ADVISORS' COMMENTS ROGGE GLOBAL PARTNERS The combination of bond market strength and dollar weakness resulted in strong total returns for our portion of the Portfolio as we maintained an overweight to non-U.S. currencies, particularly the euro, coupled with longer average security maturity than the benchmark. Bond market weakness and a strong U.S. dollar combined to push down returns for our portion of the Portfolio from November through January. The negative was offset at the end of the reporting period as the U.S. dollar rebounded and our portion maintained an overweight exposure to emerging market bonds. In 2002 we expect to see a gradual recovery in global economic activity, usually termed a U-shaped recovery rather than the sharper V-shaped recovery. Modest economic growth and disinflation are expected to keep central banks from raising interest rates; bond markets appear to be reasonably priced for this eventuality. From a total return point of view, we expect the euro to outperform the U.S. dollar, resulting in strong returns to U.S. investors in euro-denominated assets, as well as the Japanese yen. Investment flows are expected to favor the euro as European investors become more comfortable with their home currency now that it is in circulation. We expect to remain underweight in the Japanese yen, which is likely to continue to struggle in the global currency markets as Japan continues to work itself out of recession. In general, we expect good returns from global bond markets in all sectors: country selection, currency, duration and spreads. Going forward, as in the past year, timing will be the key and we expect that our investment tools and process will identify key turning points. We expect continued opportunity in being overweight Swedish krona versus the euro, as Swedish public opinion moves toward joining the single currency and the krona is cheap relative to expected entry levels. Conversely, the British pound has cheapened on reports of the government's more favorable attitude towards the euro while public opinion in the U.K. remains strongly opposed to monetary union. FFTW Our sensitivity to changing markets and the conviction to make portfolio changes as warranted enhanced the Portfolio's returns. In currencies, we were overweight in U.S. duration in July and September, and overweight in European duration in October. We were underweight in Japan throughout the period, which enhanced relative returns. Within the U.S. bloc, our portion of the Portfolio was overweight Canada versus the U.S. in the 10-year part of the curve, from mid-October to mid-November, also adding to relative returns. After being neutral on mortgages for most of the reporting period, we moved to an overweight position in the sector late in the period. Going forward, we expect high levels of yield volatility in the face of an uncertain economic outlook. This environment is better suited for tactical opportunities in duration and strategic curve positioning. If the recovery materializes as expected, short and intermediate yields are typically at most risk in a tightening environment. With continuing unemployment in Europe, the optimistic view is that firms will be forced to become more competitive, benefiting the global economy. On the downside, however, unemployment coupled with declining consumer confidence could limit consumer spending. On the whole, improving economic figures from the U.S. provide a basis for a quicker European turnaround. Still, the prospects for the euro to appreciate against the dollar are slim. In Japan, industrial production numbers are now lower than during the 1990-1991 recession, unemployment is on the rise and the environment is decidedly deflationary. Rating agencies downgraded Japan's debt rating in the fourth quarter but there is room for further downgrading in the near term. In credit markets, we expect strong performance since bad news is already priced into valuations, leading to a positive outlook and renewed investor confidence due to preliminary signs of a U.S. economic recovery. We most likely will shift our emphasis from financials into more cyclical industries as the likelihood of an economic rebound becomes more imminent. The cloud on the horizon for corporate investors is Enron and its implications for regulators, auditors and rating agencies--all of which could cause continued volatility in the markets. Emerging markets are likely to remain sensitive to headline risk, as Argentina is fresh in investors' memories, but regional selection should still be able to provide sources for generating returns. We expect to remain neutral in U.S. duration with an overweight in 10 years versus five years, overweight in German bonds versus U.K., overweight in the U.S. dollar versus the Japanese yen and the euro, and overweight in both credit and mortgage sectors. 18 PACE GLOBAL FIXED INCOME INVESTMENTS-PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/02 - ------------------------------------------------------- Net Assets (mm) $289.0 Number of Securities 103 - -------------------------------------------------------
QUALITY DIVERSIFICATION* 1/31/02 - ------------------------------------------------------- U.S. Government 8.5% AAA 54.9 AA 18.2 A 14.2 BBB 5.8 BB 3.4 Cash & Equivalents/Liabilities in Excess of Other Assets -5.0 - ------------------------------------------------------- Total 100.0%
TOP 5 COUNTRIES* 1/31/02 - ------------------------------------------------------- United States 60.9% Germany 9.0 United Kingdom 8.9 Japan 6.8 Netherlands 5.1 - ------------------------------------------------------- Total 90.7%
*Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 19 PACE LARGE COMPANY VALUE EQUITY INVESTMENTS UPCOMING INVESTMENT POLICY CHANGE: Effective April 8, 2002, the Portfolio will be investing primarily in stocks of companies that have total market capitalizations of $6.0 billion or greater at the time of purchase. Prior to that date, the Portfolio focused on companies with market capitalizations of $4.0 billion or greater at the time of purchase. ADVISORS: SSgA Funds Management, Inc ("SSgA"), Institutional Capital Corporation ("ICAP") and Westwood Management Corporation ("Westwood") PORTFOLIO MANAGERS: SSgA: Team; ICAP: Team; Westwood: Susan Byrne OBJECTIVE: Capital appreciation and dividend income SSGA INVESTMENT PROCESS: SSgA uses several independent valuation measures to identify investment opportunities within a large cap value universe and combines factors to produce an overall rank. Comprehensive research determines the optimal weighting of these perspectives to arrive at strategies that vary by industry. SSgA constructs the portion of the Portfolio it advises by selecting the highest-ranked stocks from its investable universe and manages deviations from the benchmark to maximize the risk/reward trade-off. The resulting portfolio has characteristics similar to the Russell 1000 Value Index. SSgA generally sells stocks that no longer meet its selection criteria or that it believes otherwise may adversely affect performance relative to the Index. ICAP INVESTMENT PROCESS: ICAP uses its proprietary valuation model to identify large-capitalization companies that ICAP believes offer the best relative values because they sell below the price-to-earnings ratio warranted by their prospects. ICAP looks for companies where a catalyst for a positive change is about to occur with potential to produce stock appreciation of 15% or more relative to the market over a 12 to 18 month period. ICAP also uses internally generated research to evaluate the financial condition and business prospects of every company it considers. ICAP monitors each stock purchased and sells the stock when its target price is achieved, the catalyst becomes inoperative or ICAP identifies another stock with greater opportunity for appreciation. WESTWOOD INVESTMENT PROCESS: Westwood maintains a list of securities that it believes have proven records and potential for above-average earnings growth. It considers purchasing a security on such list if Westwood's forecasted growth rates and earnings estimates exceed Wall Street expectations, or Westwood's forecasted price/earnings ratio is less than the forecasted growth rate. Westwood monitors companies and sells a stock if Westwood expects limited future price appreciation or if the projected price/earnings ratio exceeds the three-year growth rate. Brinson Advisors allocates the Portfolio's assets among the three investment advisors and may change the allocation at any time. The relative values of each investment advisor's share of the Portfolio's assets may also change over time. As of January 31, 2002, SSgA managed 51.0% of net assets; ICAP managed 25.0% of net assets; Westwood managed 24.0% of net assets. 20 AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/02
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION DEG. - ----------------------------------------------------------------------------------------------------------------------------- Before Deducting Class A* -4.28% -5.20% N/A 0.05% Maximum Sales Charge Class B** -4.64 -5.83 N/A -0.56 or PACE program fee Class C*** -4.64 -5.83 N/A -0.56 Class Y+ -4.16 -5.08 N/A -1.91 Class Pxx -4.16 -5.08 5.90% 10.73 - ----------------------------------------------------------------------------------------------------------------------------- After Deducting Class A* -9.55 -10.42 N/A -4.65 Maximum Sales Charge Class B** -9.41 -10.53 N/A -3.94 or PACE program fee Class C*** -6.57 -7.72 N/A -1.40 Class Y+ -4.16 -5.08 N/A -1.91 Class Pxx -4.87 -6.49 4.33 9.09 - ----------------------------------------------------------------------------------------------------------------------------- Russell 1000 Value Index++ -4.92 -6.68 9.91 13.56(since 8/31/95) - ----------------------------------------------------------------------------------------------------------------------------- Lipper Multi-Cap Value Funds Median -4.05 -5.49 9.22 8.91(since 8/31/95) - -----------------------------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2001, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--1-year period, -9.37%; since inception, -4.17%; Class B--1-year period, - -9.42%; since inception, -3.33%; Class C--1-year period, -6.57%; since inception, -0.59%; Class Y--since inception, -1.04%; Class P--1-year period, - -5.33%; 5-year period, 5.28%; since inception, 9.40%. DEG. Inception: since commencement of issuance on August 24, 1995 for Class P shares, November 27, 2000 for Class A, B and C shares and January 19, 2001 for Class Y shares. Inception returns for the Index and Lipper Median are shown as of nearest month-end of the inception of the oldest share class: August 31, 1995. * Maximum sales charge for Class A shares is 5.5% of the public offering price. Class A shares bear ongoing 12b-1 service fees. ** Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum sales charge for Class C shares is 2%, consisting of a maximum sales charge of 1% imposed on purchases and a maximum contingent deferred sales charge of 1%, which is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. + The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. xx Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees but are subject to a maximum annual PACE program fee of 1.5% of the value of PACE Class P shares. ++ The Russell 1000 Value Index measures the performance of a large universe of stocks with lower price-to-book ratios and lower forecasted growth values. Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gains distributions. Total returns for periods of one year or less have not been annualized. Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper Median is the return of the fund that places in the middle of the peer group. For the six months ended January 31, 2002, the Portfolio's Class P shares declined 4.2% before deducting the maximum PACE program fee (4.9% after deducting the fee). The Russell 1000 Value Index declined 4.9% for the same period. (Performance for the other Classes is noted on the prior page.) During the six months ended January 31, 2002, continued economic weakness, coupled with the events of September 11, provided an uncertain backdrop for equity markets. Unemployment rose, corporate capital spending continued to fall off, manufacturing weakened and corporate earnings declined. In this environment, the Federal Reserve Board (the "Fed") continued to cut short-term interest rates in an effort to stimulate economic growth. (During the period, the Fed trimmed the federal funds rate five times, dropping the rate to 1.75%.) After the attacks of September 11, the stock market reopened on September 17 to a significant sell-off, but rebounded with a strong fourth quarter rally. In January 2002 the market declined, due in part to high profile corporate bankruptcies, the Enron scandal and related concerns over the reliability of corporate accounting. Despite the volatility, lower interest rates, a mortgage refinancing boom and aggressive new car financing helped buoy consumer spending. 21 Although the stock market was turbulent during the period, many stocks gained strength; and, in general, value stocks outperformed growth stocks. In the volatile stock market of the past several months, value stocks were attractive to investors because they were lower priced, had good economic fundamentals and were often found in more traditional, less volatile industries. ADVISORS' COMMENTS SSGA During the period, our portion of the Portfolio was broadly diversified, and its sector and industry exposure was similar to that of the Russell 1000 Value Index. During the period, the performance of our portion of the Portfolio was driven primarily by successful stock selection in various economic sectors. Within health care, medical providers and medical services companies benefited performance. We overweighted positions in Wellpoint Health Networks (1.2%), Tenet Healthcare (0.6%) and United Health Group (0.5%).* In the technology sector, investments in the computer software and hardware industries contributed strongly to performance, highlighted by overweighted positions in Storage Technology (0.3%) and Symantec Corp. (0.4%).* Within the consumer discretionary sectors, investments in specialty retailers and media companies aided performance during the period. Many market analysts believe earnings will rise sharply in 2002, as the economy rebounds. However, there are concerns about some market sectors. For example, some consumer-oriented industries, such as the autos and retailing, kept sales strong by slashing prices when economic growth was declining. Now there are concerns that consumers may have satisfied their demand for products and that as prices rise to more normal levels, consumers may sit on the sidelines. A decline in consumer spending could have a negative effect on the economic recovery. Other analysts believe that a tepid economic recovery may be good for stocks, as long as inflation continues to decline. We believe that our portion of the Portfolio is well-positioned for the coming period. We will continue to strive to ensure that it is managed in an objective, risk-controlled manner with a long-term perspective. Our investment process calls for a well-diversified portfolio that maximizes the risk/reward trade-off and remains true to its large-cap value style and capitalization mandates. Our process emphasizes seeking the best stocks within each industry, and our focus continues to be on providing consistent returns. ICAP In managing our portion of the Portfolio, we continued to follow a bottom-up, stock-picking approach. We evaluate each company on its individual merits and in comparison to others in its peer group. Because interest rates were declining to stable, we focused heavily on financial stocks, which tend to perform well in a lower interest-rate environment. In selecting financial companies, which accounted for approximately 25% of net assets in our portion of the Portfolio, we emphasized those with strong balance sheets and high quality consumer and institutional debt in their loan portfolios. When it appeared that economic growth might pick up in subsequent months, we added cyclical stocks to the portfolio. (The performance of cyclical stocks tends to follow the economic cycle. They usually perform well during periods of economic recovery and relatively poorly when the economy is in decline.) Because we believed technology stocks were overvalued, we maintained a relatively small position in the technology sector. Looking ahead, we expect the economy to rebound in the first half of 2002 and believe economic growth is likely to be in the 3 - 4% range for the year. As the economy accelerates, the Fed may consider raising interest rates in the latter part of 2002. In our opinion, the stock market should respond positively to improvements in the economy and corporate profits. We will continue with our team-driven, bottom-up stock picking approach. We will focus on companies that are likely to benefit from a moderate economic recovery and will emphasize high quality stocks. Financial stocks continue to be the largest commitment in our portion of the Portfolio, although the overall position has been reduced slightly from the levels of 2001. We expect to continue to underweight the technology sector in our portion of the Portfolio. WESTWOOD In managing our portion of the Portfolio, we diversified investments among a number of sectors and industries. During the period, we were overweighted to the energy sector, which struggled early in the period but then gained strength. Energy companies, such as Apache, Anadarko (both sold during the period) and Nabors (0.6%), performed *Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 22 relatively well, but as a whole, our overweight position in energy relative to the Russell 1000 Value Index proved to be negative for performance.* Utilities, which are traditionally known for minimizing portfolio volatility, also disappointed. Stock selection and California deregulation issues led to underperformance in this group. Performance in the industrials sector was mixed during the period; performance was poor in the third quarter of 2001, but rebounded strongly in the fourth quarter. Our holdings in this area included United Technologies (1.3%) and Caterpillar (1.0%), which were particularly strong performers.* However, negative news about Tyco in January negatively impacted the stock price, detracting from performance. We remain invested in Tyco (1.1%) and have a favorable opinion of the company regarding its future.* In the transportation area, a concentration in railroad stocks, rather than in airline stocks, was positive. Late in the period, we underweighted our portion of the Portfolio in health care stocks, and this mitigated the negative impact of this sector's declines in our portfolio. Our decision to divest from drug companies such as Merck and Pharmacia proved prudent, as we avoided the weak performance of pharmaceuticals toward the end of 2001. In the technology sector, stock selection--accented by positions in International Business Machines (1.4%), Apple (0.6%), and Compaq (0.7%)--contributed positively to performance. In the second half of the period, we boosted our portion of the Portfolio's technology position.* We believe that the fundamentals for economic growth are in place for 2002 and that monetary and fiscal stimuli will lead to an economic recovery in the first half of the year. To outperform in this environment, we have positioned the portfolio in a "barbell" structure. One end of the barbell focuses on cyclical companies that stand to benefit from an economic recovery. These include investments in the basic materials, producer durables and energy sectors and select technology stocks. The other end of the barbell emphasizes companies that offer attractive dividend yields. These include investments in the financial, utility, food and REIT areas. *Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 23 PACE LARGE COMPANY VALUE EQUITY INVESTMENTS--PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/02 - ------------------------------------------------------- Size of Portfolio (mm) $961.8 Number of Securities 180 Stocks 98.2% Cash Equivalents and Other Assets in Excess of Liabilities 1.8% - -------------------------------------------------------
TOP TEN HOLDINGS* 1/31/02 - ------------------------------------------------------- Citigroup 3.6% ExxonMobil 2.9 Verizon Communications 2.4 MetLife 2.0 Bank of America 2.0 Federal National Mortgage Association 1.9 Sears, Roebuck & Co. 1.6 International Business Machines 1.4 Conoco 1.4 United Technologies 1.4 - ------------------------------------------------------- Total 20.6%
TOP FIVE SECTORS* 1/31/02 - ------------------------------------------------------- Financials 28.8% Consumer Discretionary 13.9 Energy 10.0 Industrials 9.3 Health Care 8.0 - ------------------------------------------------------- Total 70.0%
*Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 24 PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS UPCOMING INVESTMENT POLICY CHANGE: Effective April 8, 2002, the Portfolio will be investing primarily in stocks of companies that have total market capitalizations of $6.0 billion or greater at the time of purchase. Prior to that date, the Portfolio focused on companies with market capitalizations of $4.0 billion or greater at the time of purchase. ADVISORS: Alliance Capital Management L.P. ("Alliance Capital") and SSgA Funds Management, Inc. ("SSgA") PORTFOLIO MANAGERS: Alliance: Jane Mack Gould; SSgA: Team OBJECTIVE: Capital appreciation ALLIANCE CAPITAL INVESTMENT PROCESS: Alliance Capital follows its "disciplined growth" strategy in seeking to identify the best combinations of earnings growth and reasonable valuation in selecting stocks for its portion of the Portfolio. Alliance Capital ranks each stock in the investment universe based on its analysts' assessments and fundamental research that includes six measures of earnings growth and valuation. Alliance Capital normally invests its portion of the Portfolio in stocks that rank in the top 30% of this research universe and generally sells stocks that rank in the bottom half. SSGA INVESTMENT PROCESS: SSgA ranks companies within an investable universe from top to bottom based on their relative attractiveness. SSgA uses several independent valuation measures to identify investment opportunities within a large-cap growth universe and combines factors to produce an overall rank. Comprehensive research determines the optimal weighting of these perspectives to arrive at strategies that vary by industry. SSgA constructs its portion of the Portfolio by selecting the highest-ranked stocks from the universe and manages deviations from the benchmark (the Russell 1000 Growth Index) to maximize the risk/reward trade-off. SSgA generally sells stocks that no longer meet its selection criteria or that it believes otherwise may adversely affect performance relative to the Index. Brinson Advisors allocates the Portfolio's assets between the two investment advisors and may change the allocation at any time. The relative values of each investment advisor's share of the Portfolio's assets may also change over time. As of January 31, 2002, Alliance Capital managed 58.9% of net assets; SSgA managed 41.1% of net assets. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/02
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION DEG. - ------------------------------------------------------------------------------------------------------------------------------- Before Deducting Class A* -9.19% -28.32% N/A -25.31% Maximum Sales Charge Class B** -9.52 -28.74 N/A -25.77 or PACE program fee Class C*** -9.58 -28.74 N/A -25.77 Class Y+ -9.06 N/A N/A -23.28 Class Pxx -9.06 -28.17 4.71% 8.77 - ------------------------------------------------------------------------------------------------------------------------------- After Deducting Class A* -14.18 -32.26 N/A -28.81 Maximum Sales Charge Class B** -14.05 -32.30 N/A -28.29 or PACE program fee Class C*** -11.39 -30.18 N/A -26.40 Class Y+ -9.06 N/A N/A -23.28 Class Pxx -9.74 -29.24 3.15 7.15 - ------------------------------------------------------------------------------------------------------------------------------- Russell 1000 Growth Index++ -6.51 -26.88 6.43 11.13(since 8/31/95) - ------------------------------------------------------------------------------------------------------------------------------- Lipper Large-Cap Growth Funds Median -7.62 -26.34 7.15 1.90(since 8/31/95) - -------------------------------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2001, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--1-year period, -25.96%; since inception, -28.52%; Class B--1-year period, -26.00%; since inception, -27.94%; Class C--1-year period, -23.64%; since inception, -25.89%; Class Y--since inception, -20.73%; Class P--1-year period, -22.65%; 5-year period, 4.97%; since inception, 7.82%. DEG. Inception: since commencement of issuance or reissuance on August 24, 1995 for Class P shares, November 27, 2000 for Class A, B and C shares and February 23, 2001 for Class Y shares. Inception returns for the Index and Lipper Median are shown as of nearest month-end of the inception of the oldest share class: August 31, 1995. * Maximum sales charge for Class A shares is 5.5% of the public offering price. Class A shares bear ongoing 12b-1 service fees. ** Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 distribution and service fees. 25 *** Maximum sales charge for Class C shares is 2%, consisting of a maximum sales charge of 1% imposed on purchases and a maximum contingent deferred sales charge of 1%, which is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. + The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. xx Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees, but are subject to a maximum annual PACE program fee of 1.5% of the value of PACE Class P shares. ++ The Russell 1000 Growth Index measures the performance of a large universe of stocks with higher price-to-book ratios and higher forecasted growth values. Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gains distributions. Total returns for periods of one year or less have not been annualized. Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper Median is the return of the fund that places in the middle of the peer group. For the six months ended January 31, 2002, the Portfolio's Class P shares declined 9.1% before deducting the maximum PACE program fee (9.7% after deducting the fee), lagging the Russell 1000 Growth Index which declined 6.5%. (Performance for the other Classes is noted on the prior page.) During the six months ended January 31, 2002, continued economic weakness, coupled with the events of September 11 provided an uncertain backdrop for equity markets. Unemployment rose, corporate capital spending continued to fall off, manufacturing weakened and corporate earnings declined. In this environment, the Federal Reserve Board (the "Fed") continued to cut short-term interest rates in an effort to stimulate economic growth. (During the period, the Fed trimmed the federal funds rate five times, dropping the rate to 1.75%.) After the attacks of September 11, the stock market reopened on September 17 to a significant sell-off, but rebounded with a strong fourth quarter rally. In January the market declined, due in part to high profile corporate bankruptcies, the Enron scandal and related concerns over the reliability of corporate accounting. Despite the volatility, lower interest rates, a mortgage refinancing boom and aggressive new car financing helped buoy consumer spending. ADVISOR'S COMMENTS ALLIANCE CAPITAL In managing our portion of the Portfolio, we sought investments in companies with superior growth rates, strong management teams and sustainable competitive advantages. At the core of our portion of the Portfolio's holdings are stocks that we believe will achieve strong earnings growth regardless of the economic environment. The semiannual period began in a slumping investment environment marked by weak corporate profits and declining stock prices. During this time, we reduced some of our financial and pharmaceutical positions in favor of defensive stocks, such as makers of personal care products. The performance of such companies tends to remain relatively steady in a weak economic environment. Additions included Johnson & Johnson (2.7%), Cardinal Health (2.2%), Health Management Associates (0.8%) and insurance companies American International Group (3.1%) and AFLAC (0.7%).* This strategy helped performance as defensive growth stocks proved more robust than financial stocks during the initial period. In the aftermath of September 11, when it appeared that the economy was stabilizing, we selectively added technology and cyclical stocks, which we expected to benefit from an economic recovery. (The performance of cyclical stocks tends to follow the economic cycle. They usually perform well during periods of economic recovery and relatively poorly when the economy is in decline.) Additions to our portion of the Portfolio's technology and cyclical holdings included Microsoft (5.1%), Veritas (1.1%), PeopleSoft (0.3%), Intel (3.5%) and Dell (1.6%).* We also added to stocks in a variety of other industries whose fundamentals appeared intact but whose prices were depressed. Kohl's (2.4%), Union Pacific (0.4%), Fannie Mae (0.6%) and Viacom (0.3%) are some examples.* Kohl's (2.4%), Comcast (1.6%), Harley Davidson (2.8%) and Pfizer (6.2%) were our strongest performing stocks during the six months ended January 31, 2002.* Our portion of the Portfolio's underweight position in consumer cyclicals, energy and health care aided performance. However, our underweight to technology offset some of these gains. *Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 26 We are optimistic over the long run. Looking ahead, we expect economic activity and earnings growth to exceed expectations in 2002 although we expect the pace of the economic rebound to be slower than that of past recoveries. Low interest rates are likely to continue to support spending in the housing and consumer durables areas. We believe that government spending will continue apace and that the Fed will keep interest rates unchanged, at least during the first half of 2002. Corporations have already begun to replenish their depleted inventories, and we believe they will benefit from higher revenues and reduced costs in the future. SSGA During the period, our portion of the Portfolio was broadly diversified, and its sector and industry exposure was similar to that of the Russell 1000 Growth Index. For most of 2001, the decline in the Russell 1000 Growth Index was broad-based, with the bulk of the deterioration attributable to the fall of technology stocks. During the period, the performance of our portion of the Portfolio was negatively affected by poor stock selection in the financial and industrial sectors. AmeriCredit (sold during the period) and Metris Companies (0.1%), both consumer financial services companies, significantly detracted from performance.* In the industrial sector, positions in defense/ aerospace and industrial services held back performance; Boeing and Allied Waste (both sold during the period) both detracted during the period, for example. Despite disappointing individual selections, our overweight to the financial sector as a whole contributed positively to performance during the period. An overweight to technology also contributed to performance as we benefited from the fourth quarter tech rally. EMC, Qualcomm (both sold during the period), Sun Microsystems (0.2%) and Symantec (0.6%) were all top performers in our portion of the Portfolio.* Offsetting some of these gains was an underweight to energy and consumer cyclicals and an overweight to transportation during the period. Despite the stock market's volatility, many investors were confident that corporate earnings would rebound. Stock prices generally rise for one of two reasons: investors pay more for corporate earnings (sending price-to-earnings [P/E] ratios higher), or earnings increase. Because P/E ratios for many stocks are at the high end of historical averages, only a significant upturn in earnings is likely to create strong returns. Many market analysts believe earnings will rise sharply in 2002, as the economy rebounds. However, there are concerns about some market sectors. For example, some consumer-oriented industries, such as autos and retailing, kept sales strong by slashing prices when economic growth was declining. Now there are concerns that consumers may have satisfied their demand for products and that as prices rise to more normal levels, consumers may sit on the sidelines. A decline in consumer spending could have a negative effect on the economic recovery. Other analysts believe that a tepid economic recovery may be good for stocks, as long as inflation continues to decline. We believe that our portion of the Portfolio is well-positioned for the coming period. We will continue to strive to manage our portion in an objective, risk-controlled manner with a long-term perspective. Our investment process calls for a well-diversified portfolio that maximizes the risk/reward trade-off and remains true to its large-cap growth style and capitalization mandates. Our process emphasizes seeking the best stocks within each industry, and our focus continues to be on providing consistent returns. *Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 27 PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS--PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/02 - ------------------------------------------------------- Net Assets (mm) $571.5 Number of Securities 118 ADRs 1.3% Stocks 96.8% Cash Equivalents/Liabilities in Excess of Other Assets 1.9% - -------------------------------------------------------
TOP FIVE SECTORS* 1/31/02 - ------------------------------------------------------- Information Technology 27.6% Health Care 22.5 Consumer Discretionary 18.0 Financials 13.2 Industrials 11.9 - ------------------------------------------------------- Total 93.2%
TOP TEN STOCKS* 1/31/02 - ------------------------------------------------------- General Electric 6.3% Pfizer 6.2 Microsoft 5.1 Intel 3.5 Cisco Systems 3.3 American International Group 3.1 Harley Davidson 2.8 Citigroup 2.8 Johnson & Johnson 2.7 AOL Time Warner 2.5 - ------------------------------------------------------- Total 38.3%
*Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 28 PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS UPCOMING INVESTMENT POLICY CHANGE: Effective April 8, 2002, the Portfolio will be investing primarily in stocks of companies that have total market capitalizations of less than $6.0 billion at the time of purchase. Prior to that date, the Portfolio focused on companies with market capitalizations of less than $4.0 billion at the time of purchase. ADVISORS: Ariel Capital Management, Inc. ("Ariel") and ICM Asset Management, Inc. ("ICM") PORTFOLIO MANAGERS: Ariel: Eric T. McKissack; ICM: ICM Management Team OBJECTIVE: Capital appreciation ARIEL INVESTMENT PROCESS: Ariel invests in stocks of companies that it believes are misunderstood or undervalued. It seeks to identify companies in consistent industries with distinct market niches and excellent management teams. It focuses on value stocks, which it defines as stocks with a low P/E ratio based on forward earnings and that trade at a significant discount to the private market value that Ariel calculates for each stock. Ariel generally sells stocks that cease to meet these criteria or that are at risk for fundamental deterioration. ICM INVESTMENT PROCESS: ICM invests primarily in common stocks of companies believed to offer good relative value that have either fallen into disfavor among investors or are under-researched. In deciding which stocks to buy for the Portfolio, ICM uses a top-down analysis to identify broad sectors of the market believed to offer good relative value and then seeks to identify individual companies within those sectors that meet ICM's investment criteria. ICM also performs a bottom-up analysis to attempt to discover inefficiently priced stocks in a broad range of sectors, including those not identified in the top-down analysis. These two approaches are combined in various proportions depending on market conditions. ICM generally sells stocks that meet price objectives, no longer meet its selection criteria, are at risk for fundamental deterioration or when the team identifies more attractive investment opportunities. Brinson Advisors allocates the Portfolio's assets between the two investment advisors and may change the allocation at any time. The relative values of each investment advisor's share of the Portfolio's assets may also change over time. As of January 31, 2002, ICM managed 50.1% of net assets; Ariel managed 49.9% of net assets. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/02
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION DEG. - ----------------------------------------------------------------------------------------------------------------- Before Deducting Class A* 6.56% 13.36% N/A 25.07% Maximum Sales Charge Class B** 6.16 12.68 N/A 24.75 or PACE program fee Class C*** 6.16 12.68 N/A 24.30 Class Y+ 6.73 13.60 N/A 28.79 Class Pxx 6.73 13.61 9.75% 11.48 - ----------------------------------------------------------------------------------------------------------------- After Deducting Class A* 0.69 7.13 N/A 19.21 Maximum Sales Charge Class B** 1.16 7.68 N/A 21.47 or PACE program fee Class C*** 4.11 10.57 N/A 23.25 Class Y+ 6.73 13.60 N/A 28.79 Class Pxx 5.93 11.91 8.11 9.82 - ----------------------------------------------------------------------------------------------------------------- Russell 2500 Value Index++ 3.41 9.22 11.56 13.74(since 8/31/95) - ----------------------------------------------------------------------------------------------------------------- Lipper Small-Cap Value Funds Median 3.97 12.05 10.62 12.92(since 8/31/95) - -----------------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2001, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--1-year period, 14.17%; since inception, 20.18%; Class B--1-year period, 15.11%; since inception, 22.68%; Class C--1-year period, 17.91%; since inception, 24.63%; Class Y--1-year period, 21.11%; since inception, 30.66%; Class P--1-year period, 19.37%; 5-year period, 8.73%; since inception, 9.88%. DEG. Inception: since commencement of issuance on August 24, 1995 for Class P shares, November 27, 2000 for Class A shares, November 28, 2000 for Class B shares, November 27, 2000 for Class C shares and December 20, 2000 for Class Y shares. Inception returns for the Index and Lipper Median are shown as of nearest month-end of the inception of the oldest share class: August 31, 1995. * Maximum sales charge for Class A shares is 5.5% of the public offering price. Class A shares bear ongoing 12b-1 service fees. ** Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum sales charge for Class C shares is 2%, consisting of a maximum sales charge of 1% imposed on purchases and a maximum contingent deferred sales charge of 1%, which is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. 29 + The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. xx Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees but are subject to a maximum annual PACE program fee of 1.5% of the value of PACE Class P shares. ++ The Russell 2500 Value Index measures the performance of a large universe of stocks with lower price-to-book ratios and lower forecasted growth values. Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gains distributions. Total returns for periods of one year or less have not been annualized. Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper Median is the return of the fund that places in the middle of the peer group. For the six months ended January 31, 2002, the Portfolio's Class P shares returned 6.7% before deducting the maximum PACE program fee (5.9% after deducting the fee), outperforming the Russell 2500 Value Index which returned 3.4%. (Performance for the other Classes is noted on the prior page.) Two major events--the tragedy of September 11 and the Enron debacle--shook the markets during the six months ended January 31, 2002. September 11 sent the already weakened markets into a tailspin, but within a relatively short period of time equity prices resumed their pre-September 11 levels. At the end of the calendar year, the Enron scandal dealt the markets another blow, quashing investor confidence in the reliability of corporate accounting. ADVISORS' COMMENTS ARIEL Our portion of the Portfolio's performance was not radically affected by market events during the period. In fact, we believe our conservative and disciplined investment style does well when markets are in flux. We adhered to our policy of investing in financially stable firms with strong products and services, excellent management, and consistent earnings growth. We capitalized on the market downturn to invest in companies that we believed were cheap versus their intrinsic value. We added two new stocks to our portion of the Portfolio during the reporting period: Black & Decker (1.0%), the world's number one producer of power tools, and Jones Apparel Group (0.6%), a diversified apparel company.* We also increased our positions in Cendant Corp. (2.1%), Interpublic Group (1.3%), Toys R Us (1.2%), Waste Management Inc. (0.9%), and Sungard Data System (1.6%).* We sold out of Imagistics, which was spun off from Pitney Bowes, because of its small market capitalization and rich valuation, allowing us to lock in gains. We also eliminated our positions in Bob Evans and PepsiAmericas as both stocks were approaching what we believed to be their full valuations. We felt it best to use the assets to buy securities trading at more value-oriented levels. Our most fruitful sector strategies during the period were underweights to the financials, utility and energy areas. Although we maintained an underweight to the financial sector versus the Russell 2000 Value Index, individual stock selections in that area provided strong returns. XL Capital (1.2%), New Dun & Bradstreet (1.6%) and H&R Block (1.1%) provided the largest contributions from assets held during the period.* We were surprised to see a strong bull market rally during the fourth quarter of 2001, and although we took advantage of opportunities to add to our portion of the Portfolio, we did not think the market ever reached truly "cheap" levels by historical standards. We believe that despite recent strength, the market remains vulnerable, particularly if investors continue to bid up some areas to levels that cannot be supported by the economic climate or by company fundamentals. Even if the economy picks up in 2002, as many economists forecast, we believe that stocks could still be held back by declining earnings multiples resulting from higher interest rates and rising inflation. We are convinced that a disciplined value strategy will help insulate investors from potential near-term threats, while benefiting their overall returns. We intend to continue our investment style of seeking long-term capital appreciation from the common stock of undervalued small- and medium-sized companies, striving to identify quality firms in consistent industries with distinct market niches, excellent management and proven success. We also look for firms that might grow by at least 12-15% annually. *Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 30 ICM Our portion of the Portfolio enjoyed relatively robust pre-September performance as investors favored small- and mid-cap value stocks. The performance of our portion of the Portfolio followed the path of the overall market, dipping in the period immediately following September 11 but rebounding after September 23. This favorable environment combined with numerous successes in individual stocks, as well as beneficial overweights in such niche industries as office superstores, helped to provide strong gains. We avoided major strategy changes during the period, staying instead with a portfolio construction process that melds sector and individual security selection. Sales during the period were based on individual security considerations, rather than on sector bets. In the latter part of the year, we began to build positions in coal producers and coal equipment companies, believing that this sector and many of the individual companies within it could provide a profitable value play. Our most beneficial sector bets were an overweight to technology and underweights to the financial and utility areas. Within technology, Adaptek and Storage Technology (both sold during the period)--computer hardware companies--were strong contributors to overall performance. Going forward, we find ourselves sensitive to the investor expectations that are embodied in equity prices. Equity valuations have gone up rapidly of late, and investors appear to expect improvements to the economy and corporate profitability in the coming months. It may be difficult for these expectations to be realized, and disappointed investors may create a volatile market environment. Rather than position our portion of the Portfolio based on our expectations of future market behavior, we intend to continue focusing on individual sectors and companies. PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS--PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/02 - ------------------------------------------------------- Net Assets (mm) $304.7 Number of Securities 98 Stocks 98.4% Cash & Equivalents/Liabilities in Excess of Other Assets 1.6% - -------------------------------------------------------
TOP FIVE SECTORS* 1/31/02 - ------------------------------------------------------- Industrials 28.3% Consumer Discretionary 23.7 Financials 14.0 Materials 9.1 Information Technology 5.9 - ------------------------------------------------------- Total 81.0%
TOP 10 STOCKS* 1/31/02 - ------------------------------------------------------- Cendant 2.1% Hasbro 1.9 Lee Enterprises 1.8 Superior Energy Services 1.8 MBIA 1.7 Louisiana-Pacific 1.7 Sovereign Bancorp 1.7 CenturyTel 1.7 Rouse 1.7 MBNA 1.6 - ------------------------------------------------------- Total 17.7%
*Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 31 PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS UPCOMING INVESTMENT POLICY CHANGE: Effective April 8, 2002, the Portfolio will be investing primarily in stocks of companies that have total market capitalizations of less than $6.0 billion at the time of purchase. Prior to that date, the Portfolio focused on companies with market capitalizations of less than $4.0 billion at the time of purchase. ADVISOR: Delaware Management Company PORTFOLIO MANAGER: Gerald S. Frey OBJECTIVE: Capital appreciation INVESTMENT PROCESS: The Portfolio invests primarily in stocks of "emerging growth" companies that are believed to have potential for high future earnings growth relative to the overall market with market capitalizations of less than $4.0 billion at the time of purchase. Up to 5% of the total assets may be invested in U.S. dollar-denominated foreign securities. The advisor employs bottom-up, fundamental analysis to identify companies that have substantially above-average earnings growth because of management changes, new products, growth of established products or structural changes in the economy. Delaware Management Company generally sells stocks that no longer meet its selection criteria or are at risk for fundamental deterioration, or when it identifies more attractive investment opportunities. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/02
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION DEG. - ------------------------------------------------------------------------------------------------------------------ Before Deducting Class A* -3.81% -19.35% N/A -20.40% Maximum Sales Charge Class B** -4.19 -19.91 N/A -20.91 or PACE program fee Class C*** -4.19 -19.86 N/A -20.91 Class Y+ -3.80 N/A N/A -11.86 Class Pxx -3.73 -19.21 12.59% 11.25 - ------------------------------------------------------------------------------------------------------------------ After Deducting Class A* -9.07 -23.80 N/A -24.12 Maximum Sales Charge Class B** -8.98 -23.92 N/A -23.60 or PACE program fee Class C*** -6.13 -21.45 N/A -21.57 Class Y+ -3.80 N/A N/A -11.86 Class Pxx -4.45 -20.42 10.91 9.59 - ------------------------------------------------------------------------------------------------------------------ Russell 2500 Growth Index++ -5.11 -19.84 5.05 7.34(since 8/31/95) Lipper Mid-Cap Growth Funds Median -7.57 -25.27 7.40 6.61(since 8/31/95) - ------------------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2001, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--1-year period, -19.26%; since inception, -22.54%; Class B--1-year period, -19.30%; since inception, -21.89%; Class C--1-year period, -16.74%; since inception, -19.65%; Class Y--since inception, -7.70%; Class P--1-year period, -15.68%; 5-year period, 12.77%; since inception, 10.55%. DEG. Inception: since commencement of issuance on August 24, 1995 for Class P shares, November 27, 2000 for Class A, B, and C shares and February 12, 2001 for Class Y shares. Inception returns for the Index and Lipper Median are shown as of nearest month-end of the inception of the oldest share class: August 31, 1995. * Maximum sales charge for Class A shares is 5.5% of the public offering price. Class A shares bear ongoing 12b-1 service fees. ** Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum sales charge for Class C shares is 2%, consisting of a maximum sales charge of 1% imposed on purchases and a maximum contingent deferred sales charge of 1%, which is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. + The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. xx Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees but are subject to a maximum annual PACE program fee of 1.5% of the value of PACE Class P shares. ++ The Russell 2500 Growth Index measures the performance of a large universe of stock with higher price-to-book ratios and higher forecasted growth values. 32 Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gains distributions. Total returns for periods of one year or less have not been annualized. Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper Median is the return of the fund that places in the middle of the peer group. ADVISOR'S COMMENTS For the six months ended January 31, 2002, the Portfolio's Class P shares declined 3.7% before deducting the maximum PACE program fee (4.5% after deducting the fee), outperforming the Russell 2500 Growth Index which declined 5.1%. (Performance for the other Classes is noted on the prior page.) The investment environment during the six months ended January 31, 2002 was challenging. Companies continued to warn of reduced earnings and concern grew that the events of September 11 might throw the country into a severe recession. The period ended on a brighter note, however. The major equity indices produced relatively robust returns in the latter months of the period and indications grew that increased liquidity might stabilize the economic slowdown. Despite overall market weakness, many stocks still posted solid returns for the period. Consumer-oriented stocks performed particularly well, supported by consumer spending that stayed strong throughout the recent volatility. D.R. Horton (2.5%) and KB Home (2.3%), two homebuilders buoyed by positive sales numbers, each were up more than 30% during the period.* Restaurant stocks Sonic Corp. (2.8%) and Ruby Tuesday (1.9%) also posted substantial gains, benefiting from encouraging sales gains.* Performance was strengthened by sector overweights to consumer services and consumer cyclicals during the period. Offsetting some of these gains were missed opportunities in technology which we underweighted. Our individual selections in technology also disappointed. TranSwitch (0.3%), for example, lost more than 50% during the period.* Health care stocks, particularly biotechnology companies, also performed poorly; several companies reported disappointing test results on drugs in development. Inspire Pharmaceuticals (0.1%) lost nearly 75% during the period after the firm reported that its developmental drug for dry eyes did not prove effective in a test situation.* The future economic outlook is still cloudy. Many companies have warned that business growth may not occur until the latter half of the year, while many other companies see earlier evidence of a rebound. We feel that the stock market will continue to reflect this uncertainty, giving investors mixed results in the near future. We will continue to take advantage of short-term price declines by adding to our positions in those companies that we think will be the best performers. *Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 33 PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS--PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/02 - ------------------------------------------------------- Net Assets (mm) $323.4 Number of Securities 69 Stocks 96.1% Cash & Equivalents/Liabilities in Excess of Other Assets 3.9% - -------------------------------------------------------
TOP FIVE SECTORS* 1/31/02 - ------------------------------------------------------- Consumer Discretionary 41.4% Financials 18.1 Information Technology 14.2 Health Care 10.9 Industrials 7.4 - ------------------------------------------------------- Total 92.0%
TOP 10 HOLDINGS* 1/31/02 - ------------------------------------------------------- Radian Group 3.6% Dollar Tree Stores 3.3 PartnerRe 3.0 Krispy Kreme Doughnuts 2.8 Sonic 2.8 Cheesecake Factory 2.7 Neurocrine Biosciences 2.7 D.R. Horton 2.5 Jack Henry & Associates 2.5 KB Home 2.3 - ------------------------------------------------------- Total 28.2%
*Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 34 PACE INTERNATIONAL EQUITY INVESTMENTS ADVISOR: Martin Currie Inc. ("Martin Currie") PORTFOLIO MANAGER: Team led by James Fairweather OBJECTIVE: Capital appreciation INVESTMENT PROCESS: The Portfolio invests primarily in stocks of companies that are domiciled in developed foreign countries and principally traded in Japanese, European, Pacific and Australian securities markets or traded in U.S. securities markets. Up to 10% of the Portfolio may be invested in emerging markets. A large part of the Portfolio's investments are usually denominated in foreign currencies. Martin Currie looks for companies that exhibit strong fundamentals and attractive valuations based on estimates of future earnings. In making country allocation decisions, Martin Currie considers such factors as economic and political stability, breadth and liquidity of the market, the nature of local investors, the currency outlook, valuations and the settlement system. Martin Currie generally sells securities when either the country or the issuer no longer meets these selection criteria or when it identifies more attractive investment opportunities. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/02
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION DEG. - ----------------------------------------------------------------------------------------------------------- Before Deducting Class A* -12.50% -27.49% N/A -24.13% Maximum Sales Charge Class B** -12.85 -28.25 N/A -24.64 or PACE program fee Class C*** -12.88 -28.23 N/A -24.66 Class Y+ -12.41 -27.59 N/A -25.39 Class Pxx -12.42 -27.60 0.42% 2.15 - ----------------------------------------------------------------------------------------------------------- After Deducting Class A* -17.30 -31.46 N/A -27.69 Maximum Sales Charge Class B** -17.21 -31.84 N/A -27.20 or PACE program fee Class C*** -14.64 -29.65 N/A -25.28 Class Y+ -12.41 -27.59 N/A -25.39 Class Pxx -13.07 -28.68 -1.08 0.63 - ----------------------------------------------------------------------------------------------------------- MSCI Europe, Australasia, Far East (EAFE) Index++ -11.22 -25.35 0.78 10.76 (since8/31/95) - ----------------------------------------------------------------------------------------------------------- Lipper International Funds Median -10.18 -26.13 1.03 -0.24 (since8/31/95) - -----------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2001, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--1-year period, -27.55%; since inception, -26.06%; Class B--1-year period, -27.63%; since inception, -25.47%; Class C--1-year period, -25.29%; since inception, -23.29%; Class Y--since inception, -22.29%; Class P--1-year period, -24.28%; 5-year period, -0.38%; since inception, 1.49%. DEG. Inception: since commencement of issuance on August 24, 1995 for Class P shares, November 27, 2000 for Class A, B and C shares and January 17, 2001 for Class Y shares. Inception returns for the Index and Lipper Median are shown as of nearest month-end of the inception of the oldest share class: August 31, 1995. * Maximum sales charge for Class A shares is 5.5% of the public offering price. Class A shares bear ongoing 12b-1 service fees. ** Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum sales charge for Class C shares is 2%, consisting of a maximum sales charge of 1% imposed on purchases and a maximum contingent deferred sales charge of 1%, which is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. + The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. xx Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees but are subject to a maximum annual PACE program fee of 1.5% of the value of PACE Class P shares. ++ The Morgan Stanley Capital International (MSCI) Europe, Australasia, Far East (EAFE) Index is an index of stocks from 21 countries designed to measure the investment returns of developed economies outside of North America. Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gains distributions. Total returns for periods of one year or less have not been annualized. Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper Median is the return of the fund that places in the middle of the peer group. 35 ADVISOR'S COMMENTS For the six months ended January 31, 2002, the Portfolio's Class P shares declined 12.4% before deducting the maximum PACE program fee (13.1% after deducting the fee). The MSCI EAFE Index declined 11.2% and the Lipper Median declined 10.2% for the period. (Performance for the other Classes is noted on the prior page.) A global economic slowdown and the events of September 11 in the United States had a negative effect on overseas stock markets during the six months ended January 31, 2002. For the most part, economic activity overseas reflected that of the United States. Economic growth declined, corporate capital spending and profits fell and unemployment rose. In this environment, central banks followed the lead of the U.S. Federal Reserve and cut interest rates in an effort to boost economic growth. While overseas stocks declined significantly in the aftermath of September 11, they rallied toward the end of 2001. In January 2002, however, many overseas markets reacted negatively to the Enron bankruptcy, as investors grew concerned about the reliability of corporate accounting procedures. During the six months, European economies avoided recession, but economic data, particularly in Germany, was poor. European companies were affected negatively by weak global demand for their goods and services. As a result, their earnings and stock prices generally declined. The European Central Bank cut interest rates four times in 2001, however, many investors believed a more aggressive interest-rate reduction policy (like that of the U.S. Federal Reserve) was needed. While most European stock markets were relatively weak during the period, many rallied briefly in the fourth quarter due to an upturn in technology stocks. Looking ahead, there are reasons for optimism in Europe. Just as Europe followed the United States into an economic slump, it could follow the United States into an economic rebound. Recent data coming from Europe indicate that gross domestic product (GDP) growth is likely to rise in the first and second calendar quarters of 2002. This potential for higher GDP is already being reflected in the better performance of European stock markets. Japan suffered from internal problems as well as from the worldwide economic slowdown. While Japan has instituted some economic reforms to get its economy on track, the country continues to be plagued by a troubled banking system. In recent weeks, positive economic data has led to a rise in Japanese stock prices. However, Japan could lag the rest of the world in recovery unless it develops sound plans to fix the fundamental structure of its economy. In the rest of Asia, market declines reflected the slowdown in worldwide demand for exports, especially to the United States. Asian exports fell off steadily for several months, leading to diminished corporate profits and ultimately, to lower stock prices. South Korea and Taiwan were bright spots in Asia. South Korean stock prices rose significantly, as corporate restructuring, cost cutting and increased productivity made shares attractive to investors. Taiwan benefited from improved financial reforms. As in other regions, the outlook for Asian markets is relatively positive, and stocks have gained strength recently. Because Asian economies rely heavily on exports, they are well positioned to take advantage of economic recoveries in other parts of the world. Latin American emerging markets suffered from global sluggishness, a decline in oil prices, an electricity shortage in Brazil and debt default and political turmoil in Argentina. Mexico however bucked the downward trend, as many investors feel it is influenced more by the U.S. economy than other Latin economies and find it a more attractive place for their allocation to Latin American. As with other emerging areas, Latin American markets could rebound on the strength of a global economic upturn. In managing the Portfolio, we emphasized defensive stocks at the beginning of the period. Defensive companies, such as food and personal care products businesses, tend to do relatively well during economic downturns because demand for their goods and services usually remains steady even in weak economic environments. While our defensive strategy worked well in the third quarter of 2001, we were slow to add more risky European stocks to the portfolio in the fourth quarter. As a result, we did not fully participate in the rally in technology shares. Our strategic decision not to chase the technology rally worked to the Portfolio's advantage in January 2002, when technology stocks declined. We 36 overweighted the Portfolio in the materials sector relative to the Index, which benefited the Fund's return. Stocks in the materials sector included Anglo American Plc (1.6%), a British metals and mining company, Aluminum Corp. of China (sold during the period) and UPM-Kymmene OYJ (1.2%), a Finnish forestry company.* In allocating Portfolio assets, we moved steadily to underweight Japan in favor of European and emerging markets, particularly South Korea and Taiwan. We also hedged the Japanese yen assuming weakness against the dollar, protecting 30% of Japanese assets. This asset allocation strategy was positive for the Portfolio. Looking ahead, we expect markets to remain volatile. We do not question if there will be an economic recovery, but rather how strong the recovery will be. The first quarter earnings season will be a testing period. We are optimistic there will be a U.S. economic recovery of about 2% to 3% in 2002, driven principally by monetary and fiscal stimuli and a turn in the inventory cycle. We are assuming that a low inflation and low interest rate environment will continue in the United States. While we have a positive outlook for equities in 2002, we expect single-digit returns--not the high double-digit returns of the late 1990s. With low valuations and improving fundamentals, emerging markets are our preferred region. While we recognize that Japanese stocks are relatively cheap, we will maintain an underweighted position. We will also maintain our hedge against the yen. Our favored cyclical sectors are industrial cyclicals and materials and select capital goods producers. The performance of cyclical stocks tends to follow the economic cycle. They usually perform well during periods of economic recovery and relatively poorly when the economy is in decline. *Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 37 PACE INTERNATIONAL EQUITY INVESTMENTS--PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/02 - ------------------------------------------------------- Net Assets (mm) $360.6 Number of Securities 108 Equities (common stocks, warrants and rights) 93.6% Convertible Bond 0.7% Cash & Equivalents/Other Assets in Excess of Liabilities 5.7% - ------------------------------------------------------- REGIONAL ALLOCATION* 1/31/02 - ------------------------------------------------------- Europe 65.6% Asia 21.3 Emerging Markets 5.0 Australia 2.4 Cash & Equivalents/Other Assets in Excess of Liabilities 5.7 - ------------------------------------------------------- Total 100.0% TOP FIVE COUNTRIES* 1/31/02 - ------------------------------------------------------- United Kingdom 24.5% Japan 16.3 Netherlands 8.8 France 7.7 Italy 6.2 - ------------------------------------------------------- Total 63.5% TOP FIVE SECTORS* 1/31/02 - ------------------------------------------------------- Financials 24.6% Consumer Discretionary 14.8 Health Care 9.7 Telecommunication Services 9.5 Materials 7.4 - ------------------------------------------------------- Total 66.0% TOP TEN STOCKS* 1/31/02 - ------------------------------------------------------- GlaxoSmithKline 3.9% Vodafone 3.6 Aventis 3.1 Total FINA 2.3 Allianz 2.2 Muenchener Reukversicherungs-Gesellschaft 2.1 Nestle 2.0 Koninklijke (Royal) Philips Electronics 2.0 Diageo 1.8 HSBC 1.8 - ------------------------------------------------------- Total 24.8%
*Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 38 PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS ADVISOR: Schroder Investment Management North America Inc. ("SIMNA") PORTFOLIO MANAGERS: Team OBJECTIVE: Capital Appreciation INVESTMENT PROCESS: SIMNA focuses on companies that it believes have a sustainable competitive advantage and growth potential that is undervalued by other investors. The advisor allocates the Portfolio's assets among emerging market countries based on its assessment of the likelihood that those countries will have favorable long-term business environments. In deciding which securities within a country to buy for the Portfolio, SIMNA analyzes historical growth rates and future growth prospects, management capability and profit margins. The advisor's security evaluation reflects information available from the extensive network of locally based analysts maintained by SIMNA and its affiliates. SIMNA generally sells securities when either the country or the issuer no longer meets these selection criteria or when it identifies more attractive investment opportunities. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/02
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION DEG. - ------------------------------------------------------------------------------------------------------------------ Before Deducting Class A* 7.87% -17.08% N/A -10.60% Maximum Sales Charge Class B** 7.52 -17.58 N/A -5.53 or PACE program fee Class C*** 7.52 -17.58 N/A -5.17 Class Y+ 8.10 N/A N/A -13.30 Class Pxx 8.10 -16.79 -7.96% -4.56 - ------------------------------------------------------------------------------------------------------------------ After Deducting Class A* 1.89 -21.67 N/A -14.91 Maximum Sales Charge Class B** 2.52 -21.70 N/A -8.93 or PACE program fee Class C*** 5.45 -19.27 N/A -5.96 Class Y+ 8.10 N/A N/A -13.30 Class Pxx 7.30 -18.03 -9.33 -5.98 - ------------------------------------------------------------------------------------------------------------------ MSCI Emerging Markets Free (EMF) Index++ 9.54 -11.28 -6.35 11.49(since 8/31/95) - ------------------------------------------------------------------------------------------------------------------ Lipper Emerging Markets Funds Median 7.89 -11.01 -5.46 -2.41(since 8/31/95) - ------------------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2001, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--1-year period, -13.70%; since inception, -17.84%; Class B--1-year period, -13.74%; since inception, -11.58%; Class C--1-year period, -10.89%; since inception, -8.33%; Class Y--since inception, -15.30%; and Class P--1-year period, -9.70%; 5-year period, -8.83%; since inception, -6.39%. DEG. Inception: since commencement of issuance on August 24, 1995 for Class P shares, December 11, 2000 for Class A shares, December 22, 2000 for Class B shares, December 1, 2000 for Class C shares and February 9, 2001 for Class Y shares. Inception returns for the Index and Lipper Median are shown as of nearest month-end of the inception of the oldest share class: August 31, 1995. * Maximum sales charge for Class A shares is 5.5% of the public offering price. Class A shares bear ongoing 12b-1 service fees. ** Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum sales charge for Class C shares is 2.0%, consisting of a maximum sales charge of 1.0% imposed on purchases and a maximum contingent deferred sales charge of 1.0%, which is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. + The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. xx Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees but are subject to a maximum annual PACE program fee of 1.5% of the value of PACE Class P shares. ++ The Morgan Stanley Capital International (MSCI) Emerging Markets Free (EMF) Index is a market capitalization weighted index composed of companies representative of the market structure of 25 Emerging Market countries in Europe, Latin America, and the Pacific Basin. The MSCI EMF Index excludes closed markets and those shares in otherwise free markets that are not purchasable by foreigners. Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gains distributions. Total returns for periods of one year or less have not been annualized. Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper Median is the return of the fund that places in the middle of the peer group. 39 ADVISOR'S COMMENTS For the six months ended January 31, 2002, the Portfolio's Class P shares advanced 8.1% (before deducting the maximum PACE program fee; 7.3% after deducting the fee), compared to the 9.5% advance for the MSCI Emerging Markets Free (EMF) Index and 7.9% advance of the Lipper Emerging Markets Funds Median. (Performance for the other Classes is noted on the prior page.) During the six months ended January 31, 2002, the performance of emerging markets went from significant decline to relative strength, as prospects for a global economic recovery in the months ahead became increasingly likely. Going into the reporting period, the economic and market environment for emerging markets was uncertain. The global economic downturn, a fall-off in exports to the more industrialized countries and financial and political concerns in Argentina, combined with a general aversion to risk on the part of investors, had a negative impact on emerging markets. The events of September 11 exacerbated an already difficult situation, resulting in severe losses for emerging markets. In October, the economic environment in emerging market countries began to change for the better, as lower oil prices, U.S. interest-rate cuts and increased liquidity led to expectations that the U.S. economy would recover in the second half of 2002. As the outlook for the economy brightened, consumer confidence rose and market participants began to increase their tolerance for investment risk. Recently, economic indicators have begun to rise, and investors have become increasingly positive on the long-term prospects for emerging markets. In managing the Portfolio, stock selection was a key factor in the Portfolio's underperformance in South Africa, China and Poland. In South Africa, stocks suffered as the market was affected adversely by a sharp fall in the value of the country's currency, the rand. An underweighting in Anglo-American, a South African platinum company, also limited performance. The Portfolio's overweighted position in the South African financial sector negatively impacted performance; over the period, we reduced exposure to this sector. In general, we reduced the Fund's commitment to South Africa. In China, the Portfolio's telecommunications holdings dampened returns. We reduced the Portfolio's allocation to China by selling the mobile telephone company positions, which became increasingly unattractive because of regulatory concerns. Despite the reduced allocation to telecommunications stocks, the sector's weakness detracted from performance. The losses in Chinese investments were offset partially by overweighted positions and stock selection in Korea, where a rebound in the technology sector led to a strong market rally. We increased the Portfolio's commitment to Korea, where we added to Samsung Electronics (0.7%) and to financial institutions such as Kookmin Bank (2.8%).* The Portfolio's larger weighting in the Korean financial sector was positive for performance, as the sector was strong following the merger between Kookmin Bank and H&CB Bank. We continued to underweight the Portfolio in Taiwan on a country level, but we overweighted the technology sector of the market. We increased the positions in Taiwan Semiconductor Manufacturing Co. (3.4%) and United Microelectronics Corp. (2.0%).* On the other hand, an overweighting in Russia and stock selection in the telecommunications and energy sectors produced positive returns, as oil prices stabilized. We began to add to the Portfolio's position in Turkey, given an improved outlook following support from the International Monetary Fund (IMF) and progress on banking sector reform. The increased weighting in Turkey was positive, as financial and telecommunications stocks produced strong gains toward the end of 2001. We reduced the Portfolio's weighting in Israeli domestic stocks because of increased political tensions and recent currency weakness. In Latin America, we added to the Portfolio's financial stocks in Brazil in anticipation of further interest rate cuts, which should help reduce country risk. In Mexico, despite some sales, the Portfolio remains overweighted in Mexico as anticipation for a U.S. economic recovery is expected to enhance performance in 2002. In Mexico, we sold the Portfolio's holdings in America Movil, a wireless telecommunications company, Femsa, a beverage company, and Telmex, a telephone company. *Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 40 As we look ahead, we believe that the global economy will get stronger over the next 12 months. In the U.S., recent economic data suggest that an economic recovery should take place in the second half of 2002. In an environment of more robust global economic growth, we believe emerging market performance should be strong. We also anticipate that global interest rates will stay relatively low and high interest rate markets, such as Brazil and Turkey, will be favored by investors. We believe that emerging markets continue to be undervalued. Therefore, we expect that they should attract increased investor attention. We have maintained the Portfolio's overweighted positions in markets that we believe should benefit from the U.S. economic recovery. These include South Korea and Mexico. Our focus will continue to be on stocks whose valuations are believed appropriate. In markets like Korea, we are looking closely at valuations, following recent strong performance. However, we remain overweighted as we expect the market to be re-rated as corporate earnings rise. We also expect to be overweighted in markets that have benefited from the decrease in global risk aversion, such as Brazil, Turkey and Russia. Investors have become less averse to risk despite the escalation of the Argentine crisis. We have recently increased the Fund's overweighted positions in cyclical stocks, especially, technology and chemical stocks in Asia. The performance of cyclical stocks tends to follow the economic cycle. They usually perform well during periods of economic recovery and relatively poorly when the economy is in decline. 41 PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS--PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/02 - -------------------------------------------------------- Net Assets (mm) $ 88.6 Number of Securities 151 Equities (common and preferred stocks, warrants and rights) 96.9% Cash Equivalents/Other Assets in Excess of Liabilities 3.1% - --------------------------------------------------------
REGIONAL ALLOCATION* 1/31/02 - --------------------------------------------------------- Asia 46.9% Europe/Middle East/Africa 27.9 Latin America 22.1 Cash Equivalents/Other Assets in Excess of Liabilities 3.1 - --------------------------------------------------------- Total 100.0%
TOP FIVE COUNTRIES* 1/31/02 - --------------------------------------------------------- Korea 20.8% Taiwan 13.9 Mexico 12.4 Brazil 8.8 South Africa 7.5 - --------------------------------------------------------- Total 63.4%
TOP TEN STOCKS* 1/31/02 - --------------------------------------------------------- Samsung Electronics 6.9% Taiwan Semiconductor 3.4 Telefonos de Mexico 3.3 Kookmin Bank 2.8 Sk Telecom 2.2 China Mobil (Hong Kong) 2.1 United Microelectronics 2.0 Surgutneftegaz 1.6 Anglo American Platinum 1.5 Wal-Mart de Mexico 1.5 - --------------------------------------------------------- Total 27.3%
*Weightings represent percentages of net assets as of January 31, 2002. The Portfolio is actively managed and its composition will vary over time. 42 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MONEY MARKET INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2002(UNAUDITED)
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- ---------------- ------------ U.S. GOVERNMENT AGENCY OBLIGATIONS--31.41% $ 104 Federal Farm Credit Bank........................... 03/07/02 4.500%@ $ 103,558 1,000 Federal Home Loan Bank............................. 02/13/02 1.600@ 999,467 12,065 Federal Home Loan Bank............................. 08/08/02 to 02/21/03 2.270 to 3.810 12,064,677 2,020 Federal Home Loan Mortgage Corp.................... 02/27/02 to 07/18/02 2.160 to 3.580 2,001,802 2,685 Federal National Mortgage Association.............. 02/19/02 to 11/07/02 1.650 to 3.620 2,682,888 5,000 Federal National Mortgage Association.............. 02/01/02 1.750 to 1.770* 4,999,834 5,000 Student Loan Marketing Association................. 02/05/02 2.198 to 2.248* 4,999,772 ----------- Total U.S. Government Agency Obligations (cost--$27,851,998)......................................... 27,851,998 ----------- BANK NOTES--2.26% DOMESTIC--2.26% 2,000 Wells Fargo Bank N.A. (cost--$2,000,095)........... 02/01/02 1.805* 2,000,095 ----------- CERTIFICATES OF DEPOSIT--18.04% DOMESTIC--3.38% 3,000 State Street Bank & Trust Co....................... 02/11/02 1.750 3,000,000 ----------- YANKEE--14.66% 1,500 ABN AMRO Bank N.V.................................. 11/05/02 2.260 1,500,000 1,000 Barclays Bank PLC.................................. 02/01/02 1.740* 999,963 2,500 Canadian Imperial Bank of Commerce................. 02/01/02 1.800 to 1.850* 2,499,952 3,000 Dexia Bank......................................... 08/09/02 to 01/06/03 2.485 to 4.000 3,000,316 1,000 National Westminster Bank PLC...................... 06/24/02 4.230 1,000,036 1,000 Royal Bank of Canada............................... 07/05/02 4.105 1,000,021 2,000 Royal Bank of Scotland PLC......................... 09/06/02 to 12/27/02 2.710 to 3.735 1,999,824 1,000 Svenska Handelsbanken.............................. 08/23/02 3.840 1,000,000 ----------- 13,000,112 ----------- Total Certificates of Deposit (cost--$16,000,112)............. 16,000,112 ----------- COMMERCIAL PAPER@--33.58% ASSET BACKED-AUTO & TRUCK--2.25% 2,000 New Center Asset Trust............................. 02/01/02 1.880 2,000,000 ----------- ASSET BACKED-BANKING--6.81% 2,000 Atlantis One Funding Corp.......................... 02/07/02 1.870 1,999,377 4,044 Stellar Funding Group, Inc......................... 02/08/02 to 02/22/02 1.840 to 2.080 4,041,711 ----------- 6,041,088 ----------- ASSET BACKED-MISCELLANEOUS--12.78% 2,000 Asset Securitization Cooperative Corp.............. 02/25/02 1.731* 2,000,000 3,789 Giro Multi-Funding Corp............................ 02/07/02 1.780 3,787,876 1,500 Preferred Receivables Funding Corp................. 02/21/02 1.800 1,498,500 2,557 Quincy Capital Corp................................ 02/12/02 1.775 2,555,613 1,491 Three River Funding Corp........................... 02/25/02 1.820 1,489,191 ----------- 11,331,180 ----------- BANKING-DOMESTIC--4.41% 3,000 Danske Corp........................................ 02/11/02 1.740 2,998,550 909 J.P. Morgan Chase & Co., Inc....................... 02/15/02 1.800 908,364 ----------- 3,906,914 ----------- ENERGY--3.38% 3,000 Koch Industries, Inc............................... 02/01/02 1.900 3,000,000 ----------- FINANCE-DIVERSIFIED--3.95% 3,500 GE Capital Corp.................................... 02/01/02 to 02/11/02 1.760 to 1.910 3,499,022 ----------- Total Commercial Paper (cost--$29,778,204).................... 29,778,204 -----------
43 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MONEY MARKET INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- ---------------- ------------ SHORT-TERM CORPORATE OBLIGATIONS--10.15% ASSET BACKED-FINANCE--5.64% $ 1,000 Beta Finance, Inc.................................. 05/14/02 4.095% $ 999,986 2,000 Beta Finance, Inc.................................. 02/04/02 1.810* 1,999,999 2,000 CC (USA), Inc...................................... 02/06/02 1.820* 2,000,000 ----------- 4,999,985 ----------- BROKER/DEALER--3.38% 2,000 CS First Boston, Inc............................... 02/20/02 1.923* 2,000,000 1,000 Merrill Lynch & Co., Inc........................... 02/01/02 1.880* 1,000,000 ----------- 3,000,000 ----------- FINANCE-INDEPENDENT--1.13% 1,000 National Rural Utilities Cooperative Finance Corp............................................. 02/05/02 1.830* 1,000,000 ----------- Total Short-Term Corporate Obligations (cost--$8,999,985)..... 8,999,985 ----------- NUMBER OF SHARES (000) - ----- MONEY MARKET FUNDS--5.39% 3,060 AIM Liquid Assets Portfolio........................ 02/01/02 1.930+ 3,060,036 583 AIM Prime Portfolio................................ 02/01/02 1.680+ 583,112 1,140 BlackRock Provident Institutional TempFund......... 02/01/02 1.897+ 1,139,887 ----------- 4,783,035 Total Money Market Funds (cost--$4,783,035)................... ----------- 89,413,429 Total Investments (cost--$89,413,429)--100.83%................ (735,383) Liabilities in excess of other assets--(0.83)%................ ----------- Net Assets--100.00%........................................... $88,678,046 ===========
- ----------------- * Variable rate securities--maturity date reflects earlier of reset date or maturity date. The interest rates shown are the current rates as of January 31, 2002, and reset periodically. @ Interest rates shown are discount rates at date of purchase. + Interest rates shown reflect yield at January 31, 2002. Weighted Average Maturity--77 days See accompanying notes to financial statements 44 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2002(UNAUDITED)
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- ----------------- ------------- U.S. GOVERNMENT AND AGENCY OBLIGATIONS--10.47% $10,000 Federal Home Loan Bank (2)............................... 03/08/04 5.350% $ 10,034,800 23,800 U.S. Treasury Bonds...................................... 08/15/13 12.000 33,160,064 15,882 U.S. Treasury Inflation Index Notes (2)++++++............ 07/15/02 to 01/15/10 3.625 to 4.250 16,600,133 ------------- Total U.S. Government and Agency Obligations (cost--$60,682,018).... 59,794,997 ------------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--46.49% 1,484 GNMA..................................................... 05/15/39 7.470 1,599,518 171 GNMA..................................................... 08/15/21 to 09/15/23 7.500 178,839 437 GNMA..................................................... 12/15/07 to 02/15/23 8.000 464,507 3,200 GNMA..................................................... 04/15/19 8.250 3,473,101 4,657 GNMA..................................................... 08/15/09 to 11/20/30 9.000 4,993,328 2,403 GNMA..................................................... 02/15/16 to 09/15/20 10.500 2,745,730 612 GNMA..................................................... 06/15/11 to 02/15/16 11.000 694,658 1,525 GNMA..................................................... 09/15/10 to 05/15/19 11.500 1,750,250 4,672 GNMA ARM................................................. 05/20/30 5.250 4,722,633 28,450 GNMA ARM................................................. 06/20/30 to 07/20/30 5.500 28,860,287 5,733 GNMA ARM................................................. 09/20/30 6.000 5,857,033 16,491 GNMA ARM................................................. 01/20/18 to 04/20/27 6.375 16,794,597 1,164 GNMA ARM................................................. 06/20/30 6.500 1,189,597 3,885 GNMA ARM................................................. 07/20/17 to 09/20/26 6.750 3,987,766 4,720 GNMA ARM................................................. 11/20/21 to 12/20/27 7.625 4,860,361 56 GNMA ARM................................................. 03/15/10 to 09/15/10 11.500 64,671 1,875 GNMA I................................................... 04/15/31 7.500 2,004,366 9,000 GNMA I TBA............................................... TBA 6.000 8,828,460 83,000 GNMA I TBA............................................... TBA 6.500 83,687,020 23,000 GNMA I TBA............................................... TBA 7.000 23,639,630 183 GNMA II.................................................. 01/20/27 6.375 185,705 4,512 GNMA II.................................................. 06/20/17 to 09/20/30 9.000 4,811,893 623 GNMA II ARM.............................................. 04/20/30 5.250 629,990 16,149 GNMA II ARM.............................................. 04/20/30 to 05/20/30 5.500 16,382,290 24,577 GNMA II ARM.............................................. 05/20/30 to 08/20/30 6.000 25,030,914 72 GNMA II ARM.............................................. 02/20/28 6.250 73,352 5,811 GNMA II ARM.............................................. 04/20/18 to 02/20/28 6.375 5,932,575 3,222 GNMA II ARM.............................................. 07/20/30 to 11/20/31 6.500 3,313,391 1,621 GNMA II ARM.............................................. 07/20/27 to 08/20/27 6.750 1,662,376 690 GNMA II ARM.............................................. 10/20/30 7.500 709,882 396 GNMA II ARM.............................................. 10/20/29 7.625 407,590 6,000 GNMA II TBA ARM.......................................... TBA 5.000 6,009,375 ------------- Total Government National Mortgage Association Certificates (cost--$262,814,883).............................................. 265,545,685 ------------- FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--13.87% 18,915 FHLMC.................................................... 03/18/08 6.220 19,640,032 976 FHLMC.................................................... 09/01/04 to 08/01/25 7.000 1,006,110 621 FHLMC.................................................... 05/01/21 7.450 622,053 511 FHLMC.................................................... 10/01/17 7.500 535,968 693 FHLMC.................................................... 03/01/13 to 01/01/23 8.000 737,486 991 FHLMC.................................................... 04/01/04 to 05/01/16 8.500 1,047,785 3,831 FHLMC.................................................... 07/01/09 to 04/01/25 9.000 4,180,488 289 FHLMC.................................................... 11/01/16 9.750 315,408 510 FHLMC.................................................... 06/01/04 to 11/01/20 10.500 560,205 2,962 FHLMC.................................................... 05/01/11 to 12/01/20 11.000 3,365,454 739 FHLMC.................................................... 06/01/04 to 07/01/19 11.500 859,812 3,430 FHLMC ARM................................................ 12/01/29 6.320 3,533,914 1,052 FHLMC ARM................................................ 01/01/28 6.367 1,079,453
45 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- ----------------- ------------- FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--(CONCLUDED) $ 1,908 FHLMC ARM................................................ 11/01/27 6.404% $ 1,957,892 818 FHLMC ARM................................................ 01/01/30 6.552 840,947 2,182 FHLMC ARM................................................ 07/01/24 6.570 2,232,131 1,261 FHLMC ARM................................................ 10/01/23 6.579 1,299,662 4,050 FHLMC ARM................................................ 07/01/28 6.655 4,128,800 6,354 FHLMC ARM................................................ 11/01/29 6.743 6,535,857 4,271 FHLMC ARM................................................ 10/01/27 6.792 4,407,237 1,042 FHLMC ARM................................................ 10/01/29 6.812 1,076,216 3,207 FHLMC ARM................................................ 04/01/29 6.838 3,293,364 3,716 FHLMC ARM................................................ 01/01/29 6.875 3,830,837 4,155 FHLMC ARM................................................ 06/01/28 6.924 4,286,707 3,990 FHLMC ARM................................................ 10/01/27 7.130 4,140,221 3,560 FHLMC ARM................................................ 11/01/25 7.330 3,696,795 ------------- Total Federal Home Loan Mortgage Corporation Certificates (cost--$77,549,806)............................................... 79,210,834 ------------- FEDERAL HOUSING ADMINISTRATION CERTIFICATES--4.09% 1,965 FHA Bradford............................................. 03/01/41 8.800 1,964,622 560 FHA Greystone............................................ 12/01/20 7.430++ 564,913 762 FHA Hilltop.............................................. 08/01/23 7.000 732,732 694 FHA Parker............................................... 10/01/17 7.450 689,497 11,847 FHA Project Notes........................................ 02/21/01 to 01/12/23 7.000 to 7.430++ 12,009,618 2,473 FHA Reilly............................................... 07/01/20 6.896 2,471,805 4,977 FHA Wingate St. Francis.................................. 04/01/31 8.375 4,952,605 ------------- Total Federal Housing Administration Certificates (cost--$23,407,006)............................................... 23,385,792 ------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--37.22% 5,000 FNMA..................................................... 02/27/04 4.450 5,009,015 23,000 FNMA..................................................... 04/15/03 5.750 23,881,544 24,500 FNMA (2)................................................. 10/15/02 6.375 25,219,565 19,490 FNMA (2)................................................. 04/29/09 to 10/01/31 6.500 19,822,832 812 FNMA..................................................... 03/01/04 7.000 834,894 2,944 FNMA..................................................... 05/01/24 to 11/01/26 7.500 3,079,510 1,236 FNMA..................................................... 07/01/25 to 11/01/26 8.000 1,324,385 3,872 FNMA..................................................... 11/01/02 to 06/01/27 8.500 4,201,995 2,259 FNMA..................................................... 02/01/05 to 02/01/26 9.000 2,445,291 1,218 FNMA..................................................... 04/01/10 to 12/01/15 9.250 1,294,294 166 FNMA..................................................... 03/01/06 to 12/01/09 9.500 176,916 851 FNMA..................................................... 08/01/19 10.000 918,571 294 FNMA..................................................... 07/01/10 to 06/01/19 10.250 329,461 604 FNMA..................................................... 02/01/12 to 04/01/22 10.500 683,892 1,160 FNMA..................................................... 07/01/13 to 05/01/20 11.000 1,330,236 7,057 FNMA ARM................................................. 03/01/07 3.820 7,110,234 17,046 FNMA ARM................................................. 10/01/26 4.845 16,849,556 1,485 FNMA ARM................................................. 09/01/15 5.660 1,500,471 1,300 FNMA ARM................................................. 09/01/26 5.720 1,332,791 1,065 FNMA ARM................................................. 07/01/30 6.130 1,101,507 1,249 FNMA ARM................................................. 02/01/29 6.290 1,282,465 754 FNMA ARM................................................. 02/01/26 6.332 776,952 1,575 FNMA ARM................................................. 05/01/30 6.533 1,607,430 1,272 FNMA ARM................................................. 02/01/30 6.574 1,313,736 871 FNMA ARM................................................. 12/01/27 6.617 907,439 143 FNMA ARM................................................. 11/01/23 6.791 145,957 2,953 FNMA ARM................................................. 09/01/21 6.930 3,027,251 1,261 FNMA ARM................................................. 09/01/29 6.948 1,315,760
46 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- ----------------- ------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--(CONCLUDED) $ 2,147 FNMA ARM................................................. 03/01/25 7.245% $ 2,229,146 4,866 FNMA ARM................................................. 07/01/09 7.249 5,291,156 13,000 FNMA TBA................................................. TBA 5.500 12,837,500 23,000 FNMA TBA................................................. TBA 6.000 23,150,880 40,000 FNMA TBA................................................. TBA 6.500 40,237,600 ------------- Total Federal National Mortgage Association Certificates (cost--$210,281,563).............................................. 212,570,232 ------------- COLLATERALIZED MORTGAGE OBLIGATIONS--16.19% 3,257 Farmer Mac., Series 2002 - Class AA1..................... 04/25/11 7.721++ 3,460,433 455 FDIC REMIC, Series 1996-C1, Class 1A..................... 05/25/26 6.750 465,482 149 FHLMC GNMA REMIC, Series 23, Class KZ.................... 11/25/23 6.500 142,977 244 FHLMC REMIC, Series 0159, Class H........................ 09/15/21 4.500 239,686 248 FHLMC REMIC, Series 0185, Class E........................ 08/15/06 9.000 251,997 1,337 FHLMC REMIC, Series 1003, Class H........................ 10/15/20 3.126++ 1,360,485 510 FHLMC REMIC, Series 1322, Class G........................ 02/15/07 7.500 513,796 127 FHLMC REMIC, Series 1347, Class HC....................... 12/15/21 4.250 126,943 51 FHLMC REMIC, Series 1349, Class PS....................... 08/15/22 7.500 52,961 1,228 FHLMC REMIC, Series 1502, Class PX....................... 04/15/23 7.000 1,191,250 652 FHLMC REMIC, Series 1534, Class Z........................ 06/15/23 5.000 532,104 1,810 FHLMC REMIC, Series 1542, Class Z........................ 07/15/23 7.000 1,797,782 199 FHLMC REMIC, Series 1573, Class PZ....................... 09/15/23 7.000 204,074 1,681 FHLMC REMIC, Series 1589, Class Z........................ 09/15/23 6.250 1,677,497 1,750 FHLMC REMIC, Series 1592, Class J........................ 12/15/21 6.300 1,807,960 166 FHLMC REMIC, Series 1658, Class GZ....................... 01/15/24 7.000 166,285 1,102 FHLMC REMIC, Series 1694, Class Z........................ 03/15/24 6.500 1,083,650 14 FHLMC REMIC, Series 1712, Class FA....................... 03/15/08 4.526++ 13,993 125 FHLMC REMIC, Series 1775, Class Z........................ 03/15/25 8.500 135,620 1,480 FHLMC REMIC, Series 1933, Class ZA....................... 02/15/27 8.000 1,594,954 1,151 FHLMC REMIC, Series 2090, Class CG....................... 10/15/28 6.500 1,155,167 258 FHLMC REMIC, Series 2156, Class ZB....................... 05/15/29 6.000 210,596 2,518 FHLMC REMIC, Series 2209, Class TA....................... 01/15/27 7.500 2,565,270 1,792 FHLMC REMIC, Series 2258, Class F........................ 06/15/29 2.875 1,794,614 55 FNMA REMIC, Trust 1992-074, Class Z...................... 05/25/22 8.000 58,054 165 FNMA REMIC, Trust 1992-129, Class L...................... 07/25/22 6.000 161,952 184 FNMA REMIC, Trust 1992-158, Class ZZ..................... 08/25/22 7.750 194,272 1,389 FNMA REMIC, Trust 1993-037, Class PX..................... 03/25/23 7.000 1,413,246 512 FNMA REMIC, Trust 1993-040, Class ZA..................... 12/25/23 6.500 477,932 50 FNMA REMIC, Trust 1993-240, Class Z...................... 12/25/13 6.250 50,066 1,319 FNMA REMIC, Trust 1993-250, Class DZ..................... 12/25/23 7.000 1,363,629 79 FNMA REMIC, Trust 1993-250, Class Z...................... 12/25/23 7.000 83,600 85 FNMA REMIC, Trust 1994-027, Class CZ..................... 02/25/24 6.500 80,966 958 FNMA REMIC, Trust 1999-003, Class CZ..................... 02/25/14 6.000 942,518 119 FNMA REMIC, Trust 1999-043, Class AZ..................... 08/25/29 7.000 119,498 702 FNMA REMIC, Trust G92-040, Class ZC...................... 07/25/22 7.000 710,383 148 FNMA REMIC, Trust G94-006, Class PJ...................... 05/17/24 8.000 159,793 2,442 FNMA REMIC, Trust Series 1987-002, Class Z............... 11/25/17 11.000 2,721,996 1,650 FNMA REMIC, Trust Series 1988-007, Class Z............... 04/25/18 9.250 1,804,803 5,000 FNMA REMIC, Trust Series 1993-163, Class PK.............. 10/25/21 6.250 5,101,400 15,000 FNMA REMIC, Trust Series 1998-036, Class PM.............. 11/18/22 6.250 15,309,600 944 GNMA REMIC, Trust Series 1991-041, Class FD.............. 06/16/26 2.241++ 943,958 608 GNMA REMIC, Trust Series 2000-009, Class FH.............. 02/16/30 2.396++ 611,158 604 ABN AMRO Mortgage Corp., Series 1998-4, Class A11........ 11/25/28 6.750 581,404 100 Bank of America Mortgage Securities, Series 1999-5, Class A22............................... 05/25/29 6.500 98,521
47 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- ----------------- ------------- COLLATERALIZED MORTGAGE OBLIGATIONS--(CONCLUDED) $ 450 Bank of America Mortgage Securities, Series 1999-8, Class A12............................... 08/25/29 6.750% $ 452,142 1,382 Bear Stearns Mortgage Securities, Inc., Series 1996-4, Class AI-11............................. 09/25/27 8.125 1,414,417 1,750 Chase Mortgage Finance Corp., Series 1998-AS1, Class IA-8............................................. 08/25/28 6.750 1,704,196 41 Chase Mortgage Finance Corp., Series 1999-S8, Class A9... 07/25/29 7.000 40,715 1,500 Conseco Finance Securitizations Corp., Series 2000-4, Class A6................................ 05/01/32 8.310 1,576,677 1,000 Countrywide Home Loan, Inc............................... 06/15/04 6.850 1,057,219 3,000 CS First Boston Mortgage Securities Corp., Series 2001, Class S13................................. 08/25/31 3.620++ 3,060,950 1,773 CWMBS, Inc., Series 1994-T, Class B1..................... 11/25/24 8.250 1,833,479 1,500 CWMBS, Inc., Series 1998-15, Class A8.................... 10/25/28 6.750 1,485,567 500 FFCA Secured Lending Corp., Series 2000-1, Class B (3)... 07/18/19 8.180 497,250 1,532 Green Tree Financial Corp., Series 1995-8, Class M1...... 12/15/26 7.300 1,574,136 358 Green Tree Financial Corp., Series 1998-2, Class A5...... 11/01/16 6.240 366,375 3,000 Green Tree Financial Corp., Series 1999-3, Class A8...... 02/01/31 7.060 2,912,577 4,000 Green Tree Financial Corp., Series 1999-5, Class A5...... 04/01/31 7.860 4,116,491 256 Headlands Mortgage Security, Inc. REMIC, Series 1997-1, Class A, II............................. 03/15/12 7.750 261,470 201 Headlands Mortgage Security, Inc. REMIC, Series 1997-2, Class A, II............................. 05/25/12 7.750 204,926 159 Headlands Mortgage Security, Inc. REMIC, Series 1997-4, Class A, II............................. 11/25/12 7.250 161,748 2,137 Impac Secured Assets CMN Owner Trust, Series 1998-1, Class M2................................ 07/25/25 7.770 2,223,218 1,465 Morgan Stanley Capital, Inc., Series 1997-ALIC, Class A1-B................................................... 11/15/02 6.440 1,468,654 300 Norwest Integrated Structured Assets, Inc., Series 1998-3, Class 1A-2.............................. 12/25/28 7.000 308,040 644 PNC Mortgage Securities Corp., Series 1998-4, Class 3A-16.................................................. 05/25/28 6.750 653,127 1,739 PNC Mortgage Securities Corp., Series 2000-8, Class 3A-1................................................... 12/25/30 3.338++ 1,744,592 253 Prudential Home Mortgage Securities REMIC, Series 1993-29, Class A8............................... 08/25/08 6.750 256,098 1,029 Prudential Securities Trust, Series 18, Class E.......... 09/25/20 7.000 1,044,689 1,500 Residential Funding Mortgage Securities, Inc., Series 1998-S12, Class A6.............................. 05/25/28 6.750 1,526,133 120 Residential Funding Mortgage Securities, Inc., Series 1998-S20, Class A10............................. 09/25/28 6.500 118,784 1,118 Ryland Mortgage Acceptance Corp., Series 76, Class B..... 08/01/18 9.000 1,157,355 701 Small Business Administration, Series 1995-10, Class B1..................................................... 03/01/05 7.750 741,755 321 Small Business Administration, Series 1997-P10B, Class B11.................................................... 05/01/07 7.310 345,683 2,434 Small Business Administration, Series 2000-10, Class B1..................................................... 08/01/10 7.449 2,629,547 ------------- Total Collateralized Mortgage Obligations (cost--$89,746,946)....... 92,472,335 ------------- ASSET-BACKED SECURITIES--3.07% 628 Bayview Financial Acquisition Trust, Series 2000-A, Class M1 (3)............................ 02/25/30 3.070++ 626,135 3,785 Bayview Financial Acquisition Trust, Series 2000-C, Class M2..................................................... 07/25/30 3.270++ 3,775,961 482 Beneficial Home Equity Loan Trust........................ 04/28/26 2.656++ 482,734 2,000 Conseco Finance Home Loan Trust.......................... 06/15/24 9.520 2,151,240 350 Conseco Finance Securitizations Corp., Series 1999-F, Class M2................................ 10/15/30 9.300 376,984 1,800 Conseco Finance Securitizations Corp., Series 1999-H, Class MF2............................... 12/15/29 9.290 1,942,543 1,000 Conseco Finance Securitizations Corp., Series 2000-5, Class M1................................ 02/01/32 8.400 1,062,324
48 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- ----------------- ------------- ASSET-BACKED SECURITIES--(CONCLUDED) $ 1,638 Embarcadero Aircraft Securitization Trust, Series 2000-A, Class B (3)............................. 08/15/25 3.180%++ $ 1,228,542 3,839 GE Capital Mortgage Services, Inc., Series 1999-HE1, Class B1.............................. 04/25/29 7.200 3,834,747 2,000 NPF XII, Inc., Series 2000-2, Class B (3)................ 10/01/03 3.408++ 1,993,750 35 Student Loan Marketing Association, Series 1996-2, Class A1..................................................... 10/25/04 2.599++ 35,085 ------------- Total Asset-Backed Securities (cost--$17,287,833)................... 17,510,045 ------------- STRIPPED MORTGAGE-BACKED SECURITIES--1.39% 800 FHLMC REMIC, Series 0013, Class B (1)+++................. 06/25/23 7.000 335,363 357 FHLMC REMIC, Series 0015, Class WA (1)+++................ 03/25/22 7.000 39,248 250 FHLMC REMIC, Series 1554, Class 1 (1)+++................. 08/15/08 6.500* 20,825 5,000 FHLMC REMIC, Series 1627, Class PN (1)+++................ 09/15/22 6.000 749,035 1,000 FHLMC REMIC, Series 2110, Class PT (1)+++................ 07/15/23 6.000 226,912 721 FHLMC REMIC, Series 2136, Class GD (1)+++................ 03/15/29 7.000 113,686 1,453 FHLMC REMIC, Series 2143, Class IB (1)+++................ 12/15/24 6.000 203,006 2,928 FHLMC REMIC, Series 2178, Class PI (1)+++................ 08/15/29 7.500 428,531 4 FNMA REMIC, Trust 1992-142, Class KB (1)+++.............. 08/25/07 11.977 74,546 4 FNMA REMIC, Trust 1992-157, Class JA (1)+++.............. 09/25/07 10.146 78,176 430 FNMA REMIC, Trust 1992-207, Class U (1)+++............... 10/25/07 7.500 61,234 2,115 FNMA REMIC, Trust 1993-116, Class H (1)+++............... 07/25/22 7.000 271,452 2,511 FNMA REMIC, Trust 1993-138, Class JC (1)+++.............. 11/25/22 7.000 387,404 124 FNMA REMIC, Trust 1993-161, Class GC (1)**............... 02/25/23 0.010* 110,331 186 FNMA REMIC, Trust 1994-007, Class PK (1)+++.............. 05/25/08 6.500* 5,181 673 FNMA REMIC, Trust 1994-030, Class IA (1)+++.............. 11/25/22 6.500* 63,759 2,432 FNMA REMIC, Trust 1998-013, Class PI (1)+++.............. 07/18/19 7.000 19,657 2,020 FNMA REMIC, Trust 1998-024, Class OK (1)+++.............. 11/18/21 7.000 102,160 1,388 FNMA REMIC, Trust 1998-044, Class IG (1)+++.............. 07/18/16 6.500 77,295 1,979 FNMA REMIC, Trust Series 1999-034, Class PI (1)+++....... 09/25/21 7.000 113,271 5,240 GNMA REMIC, Trust Series 1998-001, Class PG (1)+++....... 07/20/24 7.000 258,802 2,568 Chase Mortgage Finance Corp., Series 1998-S2, Class A4 (1)+++........................ 07/25/28 6.750 205,407 3,723 CMC Securities Corp. IV, Series 1994-H2, Class AIO (1)+++................................................. 01/25/10 0.452* 11,634 10,090 CWMBS, Inc., Series 1998-14, Class A2 (1)+++............. 12/25/13 0.500* 94,594 85,763 Hilton Hotel Pool Trust, Series 2000-HLTA, Class X (3) +++.................................................... 10/01/16 0.632* 3,698,514 11,500 Option One Mortgage Loan Trust, Series 2000-2, Class S (1)+++.......................... 06/25/30 3.500++ 107,813 10 Residential Funding Mortgage Securities, Inc., Series 1993-S15, Class A9 (1)+++....................... 04/25/08 7.721++ 34,922 670 Residential Funding Mortgage Securities, Inc., Series 1998-S20, Class A19 (1)+++...................... 09/25/28 6.750 31,809 ------------- Total Stripped Mortgage-Backed Securities (cost--$8,692,289)........ 7,924,567 ------------- MUNICIPAL SECURITY--0.06% 360 Pennsylvania Housing Finance Agency, Taxable Single-Family Mortgage, Series 54, Class B (cost--$356,617)....................................... 10/01/07 6.950 365,825 -------------
49 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS SHORT-TERM U.S. GOVERNMENT AGENCY OBLIGATION--0.02%
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATE RATE VALUE - --------- -------------------- ----------------- ------------- $ 100 Federal Home Loan Mortgage Corp. Discount Notes (cost--$99,324)........................................ 06/20/02 1.750%@ $ 99,324 ------------- 758,879,636 Total Investments (cost--$750,918,285)--132.87%..................... (187,740,803) Liabilities in excess of other assets--(32.87)%..................... ------------- Net Assets--100.00%................................................. $ 571,138,833 =============
- ----------------- ++ Floating rate securities. The interest rates shown are the current rates as of January 31, 2002. * Rate reflects annualized yield at date of purchase. ** Principal Only Security. This security entitles the holder to receive principal payments from an underlying pool of mortgages. High prepayments return principal faster than expected and cause the yield to increase. Low prepayments return principal more slowly than expected and cause the yield to decrease. +++ Interest Only Security. This security entitles the holder to receive interest payments from an underlying pool of mortgages. The risk associated with this security is related to the speed of the principal paydowns. High prepayments would result in a smaller amount of interest being received and cause the yield to decrease. Low prepayments would result in a greater amount of interest being received and cause the yield to increase. ++++++ Entire or partial amount pledged as collateral for futures and options transactions. @ Interest rate shown is discount rate at date of purchase. (1) Illiquid securities representing 0.74% of net assets. (2) Security, or portion thereof, was on loan at January 31, 2002. (3) Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. ARM Adjustable Rate Mortgage--The interest rates shown are the current rates as of January 31, 2002. REMIC Real Estate Mortgage Investment Conduit. TBA (To Be Assigned) Securities are purchased on a forward commitment with an approximate principal amount (generally +/- 1.0%) and no definite maturity date. The actual principal amount and maturity date will be determined upon settlement when the specific mortgage pools are assigned.
NOTIONAL AMOUNT PAYMENTS EXPIRATION (000) RECEIVED DATES VALUE - -------- -------- ----------------- ------------ WRITTEN OPTIONS CALL OPTIONS WRITTEN Interest Rate Swaps 33,700 5.130%................................................... 3 Month LIBOR(1) 11/10/03 $ 366,619 8,000 5.970%................................................... 3 Month LIBOR(1) 10/04/04 213,304 ----------- 579,923 ----------- PUT OPTIONS WRITTEN Interest Rate Swaps 8,000 5.970%................................................... 3 Month LIBOR(1) 10/04/04 434,510 33,700 6.130%................................................... 3 Month LIBOR(1) 11/10/03 1,919,656 ----------- 2,354,166 ----------- $ 2,934,089 Total Written Options (premiums received $2,869,970)............... ===========
- --------------- (1) 3 Month LIBOR (London Interbank Offered Rate) at January 31, 2002 was 1.880%. FUTURES CONTRACTS
NUMBER OF IN EXPIRATION UNREALIZED CONTRACTS CONTRACTS TO RECEIVE EXCHANGE FOR DATE APPRECIATION - --------- --------------------------------------------------------- ------------ ----------------- ------------ 73 10 Year U.S. Treasury Note Futures....................... $7,687,813 March 2002 $ 41,063 ===========
See accompanying notes to financial statements 50 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERMEDIATE FIXED INCOME INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2002(UNAUDITED)
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- ----------- ------------ U.S. GOVERNMENT OBLIGATIONS--11.09% 5.625 to $34,414 U.S. Treasury Notes (1) (cost--$36,852,455)........ 07/15/06 to 08/15/10 7.000% $ 36,801,898 ------------ GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--1.06% 536 GNMA............................................... 11/15/26 to 12/15/26 7.750 568,285 2,352 GNMA............................................... 06/15/17 to 11/15/17 8.000 2,526,791 86 GNMA............................................... 07/15/04 to 09/15/04 9.500 90,853 6.625 to 313 GNMA ARM........................................... 10/20/27 to 11/20/27 7.625 322,376 ------------ Total Government National Mortgage Association Certificates (cost--$3,247,002).......................................... 3,508,305 ------------ FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--0.00% 5 FHLMC (cost--$5,117)............................... 06/01/02 8.000 5,113 ------------ FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--1.30% 1,069 FNMA............................................... 09/01/25 7.000 1,100,233 2,659 FNMA............................................... 06/01/10 to 10/01/31 7.500 2,773,988 379 FNMA............................................... 03/01/04 8.000 386,770 46 FNMA............................................... 09/01/07 13.000 52,394 ------------ Total Federal National Mortgage Association Certificates (cost--$4,264,230).......................................... 4,313,385 ------------ COLLATERALIZED MORTGAGE OBLIGATIONS--12.02% 385 FDIC REMIC Trust, Series 1996-C1, Class 1A......... 05/25/26 6.750 393,106 2,739 FHLMC, Series 2210, Class AB....................... 10/15/26 7.200 2,769,869 26,680 FHLMC, Series 2334, Class SB+...................... 07/15/31 6.280 1,707,208 4,622 FNMA REMIC Trust, Series 1992-185, Class K......... 04/25/22 7.000 4,714,393 7,325 GNMA REMIC, Series 2001-2, Class PB................ 07/20/30 7.000 7,514,794 1,163 BA Mortgage Securities, Inc., Series 1997-2, Class IA5........................................ 10/25/27 7.250 1,203,744 5,000 CS First Boston Mortgage Securities Corp., Series 1998-C2, Class A2......................... 11/11/30 6.300 5,109,151 457 DLJ Mortgage Acceptance Corp., Series 1997-CF1, Class A1A (2)................... 05/15/30 7.400 477,114 623 Drexel Burnham Lambert, Series H, Class 4.......... 04/01/17 8.500 623,494 751 Enterprise Mortgage Acceptance Co., Series 1998-1, Class A1 (2)...................... 01/15/25 6.110 753,996 678 GE Capital Mortgage Services, Inc., Series 1998-12, Class 2A5........................ 06/25/28 29.800* 694,297 1,366 GMAC Commercial Mortgage Security, Inc., Series 1997-C2, Class A1......................... 04/16/29 6.451 1,398,970 1,315 Impac Secured Assets Corp., Series 1998-2, Class A7......................................... 07/25/28 6.850 1,321,498 9,450 Impac Secured Assets Corp., Series 2000-5, Class A2......................................... 08/25/26 6.730 9,509,062 843 LB Commercial Conduit Mortgage Trust, Series 1995-C2, Class A.......................... 09/25/25 7.222 857,116 347 Salomon Brothers Mortgage Securities Inc., VII, Series 1997-LB6, Class A4........................ 12/25/27 6.910 350,721 487 Structured Asset Securities Corp., Series 1995-C4, Class A2 ARM..................... 06/25/26 2.310 486,584 ------------ Total Collateralized Mortgage Obligations (cost--$39,273,604)......................................... 39,885,117 ------------
51 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERMEDIATE FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- ----------- ------------ CORPORATE NOTES--43.82% AEROSPACE & DEFENSE--4.21% $ 3,401 Air 2 US, Series C (2)............................. 10/01/20 10.127% $ 3,085,772 10,434 BAE Systems, Series B (2).......................... 12/15/11 7.156 10,885,761 ------------ 13,971,533 ------------ AIRLINES--3.80% 143 Continental Airlines, Series 1997-4, Class 4C...... 07/02/07 6.800 118,447 1,410 Continental Airlines, Series 1998-3, Class 2C...... 11/01/05 7.250 1,128,184 3,365 Continental Airlines, Inc., Series 2000-2, Class B.......................................... 04/02/21 7.707 3,158,947 3,424 Continental Airlines, Inc., Series 2001-1, Class B.......................................... 06/15/21 6.703 3,220,588 4,850 Northwest Airlines, Series 2000-1, Class G......... 10/01/19 8.072 4,991,331 ------------ 12,617,497 ------------ AUTOMOTIVE--6.93% 1,990 DaimlerChrysler NA Holding Corp. MTN............... 02/15/02 6.670 1,992,346 6.500 to 12,960 Ford Motor Credit Co............................... 02/28/02 to 10/25/11 7.375 12,794,089 1,225 Ford Motor Credit Co. MTN.......................... 12/30/14 9.140 1,325,468 7,000 General Motors Acceptance Corp..................... 09/15/11 6.875 6,871,844 ------------ 22,983,747 ------------ ENERGY--2.36% 1,090 Noram Energy Corp.................................. 11/01/03 6.375 1,110,994 6,600 NRG Energy, Inc. (2)............................... 03/15/05 8.700 6,720,100 ------------ 7,831,094 ------------ FINANCIAL SERVICES--8.13% 6.500 to 8,350 Capital One Bank................................... 07/30/04 to 06/15/05 8.250 8,556,973 2,000 Cendant Corp....................................... 12/01/03 7.750 2,035,288 2,355 CIT Group, Inc..................................... 03/15/03 7.375 2,436,116 1,420 Heller Financial, Inc. MTN......................... 07/22/02 6.500 1,448,678 2,000 Household Netherlands BV........................... 12/01/03 6.200 2,069,074 6,000 Ios Capital, Inc................................... 06/15/04 9.750 6,012,720 4,500 Zions Bancorporation............................... 10/15/11 6.500 4,399,821 ------------ 26,958,670 ------------ INFORMATION & COMPUTER SERVICES--0.34% 1,400 Comdisco, Inc...................................... 04/30/02 5.950 1,120,000 ------------ INSURANCE--3.76% 700 Ace Ina Holding, Inc............................... 08/15/06 8.300 768,191 955 Aetna Services, Inc................................ 08/15/06 7.125 1,013,347 910 CNA Financial Corp................................. 04/15/05 6.500 839,747 4,500 Lumbermens Mutual Casualty (2)..................... 07/01/26 9.150 4,184,766 3,300 Principal Financial Group (2)...................... 08/15/09 8.200 3,603,263 2,000 Zurich Capital Trust (2)........................... 06/01/37 8.376 2,048,240 ------------ 12,457,554 ------------ METALS & MINING--0.06% 200 BHP Finance USA Ltd................................ 12/01/02 7.875 205,767 ------------ RAILROADS--0.14% 297 Consolidated Rail Corp............................. 04/01/05 7.070 313,726 147 CSX Transportation, Inc., Series A................. 03/01/06 8.410 160,369 ------------ 474,095 ------------ REAL ESTATE INVESTMENT TRUSTS--5.69% 7.050 to 2,650 Corporate Property Investment Trust (2)............ 04/01/03 to 08/15/04 7.750 2,763,820 1,245 EOP Operating LP................................... 03/15/06 8.375 1,359,480
52 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERMEDIATE FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- ----------- ------------ $ 410 Health Care Property Investments, Inc.............. 02/15/06 6.500% $ 407,016 1,000 Highwoods Properties, Inc.......................... 06/15/04 7.190 1,033,119 1,600 HRPT Properties Trust, Class A..................... 12/18/02 6.750 1,635,918 6.500 to 1,645 Kimco Realty Corp.................................. 10/01/03 to 11/14/05 6.830 1,702,578 950 New Plan Realty Trust Corp......................... 04/06/05 7.750 1,006,249 1,355 Prologis Trust..................................... 07/15/06 7.050 1,401,405 400 Rouse Co........................................... 01/15/03 8.500 414,688 6,900 Simon Property Group, Inc.......................... 02/09/04 6.750 7,141,969 ------------ 18,866,242 ------------ RETAIL--0.03% 100 Wal-Mart Stores, Inc............................... 06/29/11 8.875 101,851 ------------ SECURED ASSETS--2.05% 10,000 CHYPS CBO Ltd., Series 1997-1A, Class A2A (2)...... 01/15/10 6.720 6,812,500 ------------ TELECOMMUNICATIONS--3.24% 1,600 Citizens Communications Co......................... 06/01/06 7.600 1,648,619 2,000 Citizens Communications Co. (2).................... 08/15/08 7.625 2,050,996 7.550 to 1,320 MCI WorldCom, Inc.................................. 04/01/04 to 05/15/06 8.000 1,358,670 7.650 to 3,565 Metronet Communications Corp....................... 09/15/06 to 08/15/07 12.000 1,190,086 2,605 Qwest Communications International, Inc., Series B......................................... 11/01/08 7.250 2,611,862 2,000 U.S. West Capital Funding.......................... 07/15/08 6.375 1,891,332 ------------ 10,751,565 ------------ UTILITIES--3.07% 700 New York State Electric & Gas Corp. ............... 05/01/20 9.875 729,721 780 Southern Investments PLC........................... 12/01/06 6.800 783,960 550 Virginia Electric & Power Co. ..................... 03/01/25 8.250 597,983 8,500 WCG Note Trust (2)................................. 03/15/04 8.250 8,061,901 ------------ 10,173,565 ------------ Total Corporate Notes (cost--$148,361,574).................... 145,325,680 ------------ ASSET-BACKED SECURITIES--20.47% 720 Aames Mortgage Trust, Series 1996-D, Class A1G..... 03/15/29 7.320 747,952 162 Amresco Residential Securities Mortgage Loan Trust, Series 1996-3, Class A6.......................... 11/25/24 7.875 165,042 677 California Infrastructure, Series 1997-1, Class A5......................................... 06/25/04 6.250 683,292 5,000 Conseco Finance, Series 2000-F, Class MF2.......... 03/15/24 8.930 5,304,536 10,500 Conseco Finance, Series 2001-A, Class IIA2......... 03/15/32 6.520 10,858,321 5,000 Conseco Finance, Series 2001-D, Class A4........... 11/15/32 5.530 4,983,037 8,000 Conseco Finance, Series 2002-A, Class A5........... 04/15/32 7.150 8,000,000 1,920 FMAC Loan Receivable Trust, Series 1998-DA, Class A3 (2)..................................... 12/15/19 6.729 1,851,436 126 Green Tree Financial Corp., Series 1996-3, Class A4......................................... 05/15/27 7.100 126,672 313 Ikon Receivables LLC, Series 1999-1, Class A3...... 05/15/05 5.990 314,705 5,000 Lehman ABS Manufactured Housing Contract, Series 2001-B, Class A5.......................... 05/15/22 5.873 4,858,146 1,500 Master Financial Asset Securitization Trust, Series 1997-1, Class A8.......................... 01/20/29 7.500 1,574,064 4,033 Mid-State Trust, Series-4, Class A................. 04/01/30 8.330 4,346,430 5,432 Oakwood Mortgage Investors, Inc., Series 1999-D, Class A1......................................... 11/15/29 7.840 5,763,849 4,200 Polaris Trust, Series 2001-1, Class A1 ++ (2)...... 07/15/09 0.010xx 3,108,000 7,945 Saxon Asset Securities Trust, Series 1998-4, Class MF1........................................ 01/25/30 6.870 8,205,776 600 UCFC Loan Trust, Series 1996-B1, Class A7.......... 09/15/27 8.200 627,146 6,200 UCFC Loan Trust, Series 1998-D, Class BF1.......... 04/15/30 8.965 6,379,829 ------------ Total Asset-Backed Securities (cost--$67,131,672)............. 67,898,233 ------------
53 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERMEDIATE FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- ----------- ------------ SHORT-TERM U.S. GOVERNMENT AGENCY OBLIGATIONS--5.42% 1.605 to $17,975 FHLMC, Series RB (cost--$17,964,555)............... 02/05/02 to 02/19/02 1.685%@ $ 17,964,555 ------------ REPURCHASE AGREEMENT--3.96% 13,123 Repurchase Agreement dated 01/31/02 with State Street Bank & Trust Co., collateralized by $12,771,565 U.S. Treasury Notes, 5.500% to 5.750%, due 11/30/02 to 05/31/03; (value--$13,385,987); proceeds: $13,123,649 (cost--$13,123,000) ............................. 02/01/02 1.780 13,123,000 ------------ Total Investments (cost--$330,223,209)--99.14%................ 328,825,286 Other assets in excess of liabilities--0.86%.................. 2,843,722 ------------ Net Assets--100.00%........................................... $331,669,008 ============
- ----------------- ARM Adjustable Rate Mortgage--The interest rate shown is the current rate as of January 31, 2002. MTN Medium Term Notes. REMIC Real Estate Mortgage Investment Conduit. (1) Security, or portion thereof, was on loan at January 31, 2002. (2) Securities exempt from registration under Rule 144A of the Securities Act of 1933. + Interest Only Security. This security entitles the holder to receive interest payments from an underlying pool of mortgages. The risk associated with this security is related to the speed of the principal paydowns. High prepayments would result in a smaller amount of interest being received and cause the yield to decrease. Low prepayments would result in a greater amount of interest being received and cause the yield to increase. ++ Principal Only Security. This security entitles the holder to receive principal payments from an underlying pool of assets. High prepayments return principal faster than expected and cause the yield to increase. Low prepayments return principal more slowly than expected and cause the yield to decrease. * Floating rate security. The interest rate shown is the current rate as of January 31, 2002. xx Rate reflects annualized yield at date of purchase. @ Interest rate shown is discount rate at date of purchase. See accompanying notes to financial statements 54 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE STRATEGIC FIXED INCOME INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2002(UNAUDITED)
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- --------------------------- ------------ U.S. GOVERNMENT OBLIGATIONS--12.43% $27,533 U.S. Treasury Inflation Index Notes ++++++........ 07/15/02 to 01/15/09 3.625 to 3.875% $ 28,272,254 21,650 U.S. Treasury Stripped Principal Payment Bonds.... 11/15/21 8.000@ 6,759,152 ------------ Total U.S. Government Obligations (cost--$35,894,260)........ 35,031,406 ------------ GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--1.22% 872 GNMA ARM.......................................... 11/20/23 to 05/20/26 7.544 to 8.158 890,277 2,375 GNMA I............................................ 06/15/17 to 11/15/17 8.000 2,552,115 ------------ Total Government National Mortgage Association Certificates (cost--$3,386,538)......................................... 3,442,392 ------------ FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--19.44% 51,371 FHLMC............................................. 09/15/10 to 01/01/30 5.500 to 6.875 53,060,663 1,662 FHLMC ARM......................................... 05/01/25 8.065 1,762,524 ------------ Total Federal Home Loan Mortgage Corporation Certificates (cost--$54,319,877)........................................ 54,823,187 ------------ FEDERAL HOUSING ADMINISTRATION CERTIFICATES--1.12% 3,163 FHA Project Notes (cost--$3,253,623).............. 08/01/20 to 07/01/25 7.430 3,168,786 ------------ FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--8.34% 10,606 FNMA.............................................. 05/15/31 to 09/25/31 6.000 to 6.500 9,679,552 526 FNMA ARM.......................................... 09/25/30 2.380 525,695 1,575 FNMA ARM.......................................... 05/01/30 6.533 1,607,430 3,837 FNMA ARM.......................................... 12/01/09 6.970 4,072,028 265 FNMA ARM.......................................... 04/01/27 7.329 272,252 480 FNMA ARM.......................................... 05/01/27 7.969 496,964 868 FNMA ARM COFI..................................... 11/01/26 4.500 868,024 6,000 FNMA TBA.......................................... TBA 5.500 to 6.000 5,985,925 ------------ Total Federal National Mortgage Association Certificates (cost--$22,883,356)........................................ 23,507,870 ------------ COLLATERALIZED MORTGAGE OBLIGATIONS--38.29% 1,000 FHLMC REMIC, Series 1278, Class K................. 05/15/22 7.000 1,018,565 64 FHLMC REMIC, Series 1366, Class H................. 08/15/07 6.000 65,493 29 FHLMC REMIC, Series 1367, Class KA................ 09/15/22 6.500 30,035 1,367 FHLMC REMIC, Series 1502, Class PX-Z.............. 04/15/23 7.000 1,325,199 972 FHLMC REMIC, Series 1503, Class PZ................ 05/15/23 7.000 978,656 522 FHLMC REMIC, Series 1534, Class Z................. 06/15/23 5.000 425,683 871 FHLMC REMIC, Series 1548, Class Z................. 07/15/23 7.000 880,895 1,269 FHLMC REMIC, Series 1562, Class Z................. 07/15/23 7.000 1,276,490 205 FHLMC REMIC, Series 1601, Class PB................ 11/15/23 6.500 201,845 136 FHLMC REMIC, Series 1611, Class I................. 02/15/23 6.000 141,311 871 FHLMC REMIC, Series 1628, Class KZ................ 12/15/23 6.250 867,900 336 FHLMC REMIC, Series 1694, Class Z................. 03/15/24 6.500 330,162 2,841 FHLMC REMIC, Series 1870, Class Z................. 01/15/24 6.500 2,673,960 2,523 FHLMC REMIC, Series 2061, Class ZB................ 06/15/28 6.500 2,433,005 3,636 FHLMC REMIC, Series 2106, Class ZB................ 12/15/28 6.250 3,315,606 494 FHLMC REMIC, Series G15, Class PZ................. 07/25/23 7.000 473,253 340 FHLMC REMIC, Series G23, Class KZ................. 11/25/23 6.500 324,946 1,698 FHLMC REMIC, Series G24, Class ZA................. 11/25/23 6.500 1,563,978 171 FNMA REMIC, Trust Series 1991-065, Class Z........ 06/25/21 6.500 174,512 75 FNMA REMIC, Trust Series 1992-118, Class K........ 09/25/08 7.500 77,987 160 FNMA REMIC, Trust Series 1992-129, Class L........ 07/25/22 6.000 157,045 352 FNMA REMIC, Trust Series 1992-G40, Class ZC....... 07/25/22 7.000 356,227 96 FNMA REMIC, Trust Series 1993-037, Class PX....... 03/25/23 7.000 97,985 390 FNMA REMIC, Trust Series 1993-060, Class Z........ 05/25/23 7.000 393,553 847 FNMA REMIC, Trust Series 1993-065, Class ZZ....... 06/25/13 7.000 874,024
55 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE STRATEGIC FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- --------------------------- ------------ $ 154 FNMA REMIC, Trust Series 1993-070, Class Z........ 05/25/23 6.900% $ 154,078 446 FNMA REMIC, Trust Series 1993-096, Class Z........ 06/25/23 7.000 452,042 279 FNMA REMIC, Trust Series 1993-122, Class L........ 01/25/23 6.500 288,402 76 FNMA REMIC, Trust Series 1993-149, Class L........ 08/25/23 6.000 77,674 166 FNMA REMIC, Trust Series 1993-160, Class ZB....... 09/25/23 6.500 164,934 163 FNMA REMIC, Trust Series 1993-163, Class ZA....... 09/25/23 7.000 167,522 101 FNMA REMIC, Trust Series 1993-199, Class Z........ 10/25/23 7.000 100,565 103 FNMA REMIC, Trust Series 1993-G10, Class G........ 05/25/22 5.000 104,058 169 FNMA REMIC, Trust Series 1993-G40, Class Z........ 12/25/23 6.500 157,733 329 FNMA REMIC, Trust Series 1994-023, Class PX....... 08/25/23 6.000 305,896 3,766 FNMA REMIC, Trust Series 1998-63, Class ZA........ 11/25/28 6.000 3,324,193 4,000 FNMA REMIC, Trust Series 1998-M, Class B.......... 09/25/07 6.270 4,112,842 1,865 FNMA REMIC, Trust Series 1998-M7, Class Z......... 05/25/36 6.390 1,689,913 6,041 FNMA REMIC, Trust Series 1999-10, Class MZ........ 09/17/38 6.500 5,736,769 2,500 FNMA REMIC, Trust Series 1999-W4, Class A9........ 02/25/29 6.250 2,356,157 10,000 FNMA REMIC, Trust Series 2000-012, Class PG....... 04/25/30 7.500 10,633,785 2,445 GNMA REMIC, Trust Series 2000-009, Class FG....... 02/16/30 7.199++ 2,471,263 730 GNMA REMIC, Trust Series 2000-009, Class FH....... 02/16/30 7.199++ 733,389 2,000 BA Mortgage Securities, Inc., Series 1998-4, Class 1A-12..................................... 08/25/28 6.750 2,028,700 149 Bear Stearns Mortgage Securities, Inc. REMIC, Series 1994-1, Class 3A......................... 05/25/23 6.971++ 149,311 515 Bear Stearns Mortgage Securities, Inc. REMIC, Series 2000-1, Class 1A......................... 12/25/30 7.477++ 525,749 1,014 Bear Stearns Mortgage Securities, Inc. REMIC, Series 2000-1, Class 2A......................... 12/25/30 7.490++ 1,030,455 4,004 Bear Stearns Mortgage Securities, Inc. REMIC, Series 2001-9, Class 1A......................... 01/25/32 6.299++ 4,050,783 107 California Federal Bank REMIC, Series 1990-BN1, Class A......................................... 08/12/30 6.040++ 109,622 274 Capital Asset Research Funding, Series 1998-A, Class A (2)..................................... 12/15/05 5.905++ 277,693 67 Chase Mortgage Finance Corp., Series 1995-A, Class A......................................... 04/25/25 7.425++ 67,213 3,325 GMAC Mortgage Corp. Loan Trust, Series 2000-J3, Class A2........................................ 10/25/30 7.750 3,467,563 2,512 Housing Security, Inc., Series 1992-8, Class B.... 06/25/24 6.417++ 2,498,678 1,467 HPSC Equipment Receivables LLC, Series 2000-1A, Class A (2)..................... 11/22/07 2.233++ 1,462,008 953 J.P. Morgan Commercial Mortgage Finance Corp., Series 2000-FL1, Class A (2).................... 04/15/10 2.176++ 952,284 1,795 LTC Commercial Mortgage Certificates, Series 1998-1, Class A (2)...................... 05/28/30 6.029++ 1,821,416 498 Norwest Asset Securities Corp., Series 1998-17, Class A2........................................ 08/25/28 6.250 501,867 2,460 Oakwood Mortgage Investors, Inc., Series 1999-B, Class A2........................................ 12/15/13 6.190 2,513,505 300 PNC Mortgage Securities Corp., Series 2000-8, Class 4A-1...................................... 12/25/30 2.380++ 300,036 150 Residential Funding Mortgage Securities I, Inc., Series 1993-S30, Class A9....................... 08/25/23 7.500 149,063 2,831 Residential Funding Mortgage Securities I, Inc., Series 1997-S7, Class A5........................ 05/25/27 7.500 2,906,067 260 Residential Funding Mortgage Securities I, Inc., Series 2000-S14, Class A1....................... 11/25/30 7.500 260,888 408 Salomon Brothers Mortgage Securities, Inc. VII, Series 1999-NC4, Class A........................ 09/25/29 2.330++ 409,471 411 Salomon Brothers Mortgage Securities, Inc. VII, Series 2000-BOA1, Class A....................... 08/25/30 7.600 418,911 3,387 Salomon Brothers Mortgage Securities, Inc. VII REMIC, Series 1993-3, Class A7-MZ............... 08/25/23 7.200 3,477,305 2,950 Small Business Administration, Series 1999-20K.... 11/01/19 7.060 3,114,375 2,864 Small Business Administration, Series 2000-20K.... 11/01/20 7.220 3,038,591 7,930 Small Business Administration, Series 2001-P10B... 08/10/11 6.344 8,039,371 400 Sovereign Dealer Floor Plan Master LLC, Series 2000-1A, Class A (2)..................... 10/15/07 2.146++ 397,760 4,500 Structured Asset Securities Corp., Series 1997-4, Class 2A-9...................................... 12/25/27 7.000 4,653,855 429 U.S. Department of Veteran Affairs Vendee Mortgage Trust, Series 1993-3, Class 2ZA................. 06/15/20 6.500 439,679
56 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE STRATEGIC FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- --------------------------- ------------ $ 5,352 Wells Fargo Mortgage Backed Securities Trust, Series 2001-25, Class IIA....................... 10/25/31 6.634%++ $ 5,417,145 ------------ Total Collateralized Mortgage Obligations (cost--$103,428,530)....................................... 107,968,894 ------------ ASSET-BACKED SECURITIES--4.80% 741 Airplanes Pass-Through Trust, Series 1, Class D......................................... 03/15/19 10.875 222,031 5 American Residential Mortgage Loan Trust, Series 1998-001, Class 1........................ 05/25/29 2.250++ 4,645 520 Arcadia Automobile Receivables Trust, Series 1999-C, Class A2......................... 12/15/03 6.900 525,290 3,200 Bayview Financial Acquisition Trust, 2000-D, Class A (2)..................................... 11/25/30 2.320++ 3,211,000 494 C-Bass Trust, Series 2000-CB4, Class A1-A......... 02/25/30 2.420++ 494,287 516 CS First Boston Mortgage Securities Corp., Series 2000-HE1, Class A2....................... 12/15/30 2.155++ 516,091 257 Dealer Auto Receivables Trust, Series 2000-1, Class A2........................................ 04/15/03 7.010 258,004 1,878 Delta Funding Home Equity Loan Trust, Series 1999-003, Class A1-A..................... 09/15/29 2.306++ 1,885,535 960 Keystone Owner Trust, Series 1998-P2, Class A4 (2)............................................. 12/25/18 6.840 983,350 2,798 Metropolitan Asset Funding, Inc., Series 2000-A, Class A3 (2).................................... 12/25/23 8.115 2,972,875 1,475 Mid-State Trust, Series 4, Class A................ 04/01/30 8.330 1,590,157 862 SLMA Student Loan Trust, Series 1998-1, Class A1........................................ 01/25/07 3.723++ 864,082 ------------ Total Asset-Backed Securities (cost--$13,812,999)............ 13,527,347 ------------ STRIPPED MORTGAGE-BACKED SECURITIES+--0.02% 21 FHLMC, Series 1625, Class GA+++................... 01/15/08 6.000(1) 367 236 FNMA REMIC, Trust Series 1993-201, Class JB+++.... 09/25/21 6.500(1) 18,694 1,249 FNMA REMIC, Trust Series 1993-201, Class JC+++.... 05/25/19 6.500(1) 40,435 ------------ Total Stripped Mortgage-Backed Securities (cost--$60,788).... 59,496 ------------ CORPORATE NOTES--24.86% AIRLINE--0.14% 500 United Air Lines, Inc............................. 11/27/12 10.360 387,755 ------------ AUTOMOTIVE--1.74% 1,800 DaimlerChrysler N.A. Holdings Corp................ 08/16/04 2.341++ 1,744,916 3,400 Ford Motor Co..................................... 07/16/31 7.450 3,176,556 ------------ 4,921,472 ------------ BANKS--0.53% 1,500 MBNA American Bank................................ 12/10/02 6.495++ 1,496,625 ------------ ENERGY--0.77% 2,200 NRG Energy, Inc................................... 11/01/03 8.000 2,177,032 ------------ FINANCIAL SERVICES--6.76% 1,400 Devon Financing Corp. (2)......................... 09/30/31 7.875 1,436,046 5,500 Ford Motor Credit Co., MTN........................ 06/30/05 to 07/18/05 2.156 to 2.359++ 5,200,862 3,600 General Motors Acceptance Corp.................... 05/16/03 2.521++ 3,553,304 1,500 General Motors Acceptance Corp.................... 09/15/11 6.875 1,472,538 400 General Motors Acceptance Corp., MTN.............. 01/20/04 3.110++ 392,929 300 Household Finance Corp............................ 10/15/11 6.375 290,502 4,000 Infrastructure Finance Corp....................... 03/26/09 5.058++ 3,960,000 66 Midland Funding Corp.............................. 07/23/02 10.330 66,196 700 PEMEX Master Trust (2)............................ 11/15/11 8.000 700,875 2,000 Textron Financial Corp. (2)....................... 05/28/02 2.506++ 1,993,098 ------------ 19,066,350 ------------ MEDIA--1.48% 2,000 Cox Enterprises, Inc. (2)......................... 02/15/07 8.000 2,162,248
57 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE STRATEGIC FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- --------------------------- ------------ $ 2,000 Walt Disney Co. .................................. 02/06/02 2.740% $ 1,999,239 ------------ 4,161,487 ------------ MEDICAL PROVIDERS--0.75% 1,700 Columbia HCA Health Care Corp..................... 07/15/45 6.630 1,710,014 400 HCA, Inc.......................................... 03/19/02 3.401++ 400,214 ------------ 2,110,228 ------------ SECURITIES & ASSET MANAGEMENT--0.60% 500 Bear Stearns Co., Inc............................. 09/21/04 2.293++ 496,427 1,200 Morgan Stanley Dean Witter & Co................... 04/22/02 2.020++ 1,196,263 ------------ 1,692,690 ------------ TELECOMMUNICATIONS--8.25% 5,500 AT&T Corp. (2).................................... 11/15/11 7.300 5,623,750 4,500 British Telecommunications PLC.................... 12/15/03 to 12/15/05 3.165 to 7.625 4,776,407 5,300 France Telecom SA (2)............................. 03/01/11 to 03/01/31 7.750 to 8.500 5,793,701 3,000 Sprint Capital Corp., MTN......................... 06/24/02 2.253++ 3,002,181 4,100 Verizon Wireless, Inc............................. 12/15/06 5.375 4,060,566 ------------ 23,256,605 ------------ UTILITIES--1.57% 1,663 Niagara Mohawk Power Co........................... 10/01/02 7.250 1,705,466 1,400 PSEG Power LLC (2)................................ 04/15/11 7.750 1,483,429 1,400 South Point Energy Center LLC (2)................. 05/30/12 8.400 1,232,000 ------------ 4,420,895 ------------ YANKEE--2.27% 2,500 Compagnie Financiere de CIC et de l'Union Europeenne...................................... 10/29/49 3.906++ 2,468,750 1,000 Mexico Credit Link+(2)............................ 02/25/02 13.310++ 1,004,473 2,900 Nacional Financiera............................... 05/08/03 5.935++ 2,938,242 ------------ 6,411,465 ------------ Total Corporate Notes (cost--$69,757,131).................... 70,102,604 ------------ INTERNATIONAL GOVERNMENT OBLIGATIONS--3.05% EUR 850 Federal Republic of Germany....................... 07/04/27 to 01/04/30 4.750 to 6.500 798,108 PLZ 4,140 Government of Poland.............................. 06/12/04 10.000 1,003,438 GBP 1,265 United Kingdom Treasury Bonds..................... 12/07/03 6.500 1,842,575 1,000 United Mexican States (2)......................... 04/07/04 5.626++ 1,007,800 4,000 United Mexican States............................. 08/15/31 8.300 3,952,000 ------------ Total International Government Obligations (cost--$8,833,619)......................................... 8,603,921 ------------
NOTIONAL AMOUNT PAYMENTS EXPIRATION (000) RECEIVED DATES - -------- -------------------- --------------------------- CALL OPTIONS PURCHASED--1.81% INTEREST RATES SWAPS--1.81% 69,100 6.000%+........................................... 3 Month LIBOR(3) 06/17/02 1,693,916 180,000 6.000%+........................................... 3 Month LIBOR(3) 12/18/03 3,007,386 16,900 6.000%+........................................... 3 Month LIBOR(3) 06/17/22 370,181 1,700 6.000%+........................................... 3 Month LIBOR(3) 06/15/31 17,823 2,500 6.000%+........................................... 3 Month LIBOR(3) 12/17/31 26,527 ------------ Total Call Options Purchased (cost--$5,359,795)............. 5,115,833 ------------
58 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE STRATEGIC FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- --------------------------- ------------ COMMERCIAL PAPER@--1.31% TELECOMMUNICATIONS--0.42% $ 1,200 Sprint Corp....................................... 04/22/02 2.940% $ 1,192,160 ------------ UTILITIES--0.89% 2,500 American Electric Power Co., Inc.................. 02/13/02 2.990 2,497,508 ------------ Total Commercial Paper (cost--$3,689,668).................... 3,689,668 ------------ REPURCHASE AGREEMENT--2.02% 5,687 Repurchase Agreement dated 01/31/02 with State Street Bank & Trust Co., collateralized by $5,535,000 U.S. Treasury Notes, 5.500%, due 05/31/03; (value--$5,804,831); proceeds: $5,687,281 (cost--$5,687,000).............................. 02/01/02 1.780 5,687,000 ------------ Total Investments (cost--$330,367,184)--118.71%.............. 334,728,404 Liabilities in excess of other assets--(18.71)%.............. (52,771,716) ------------ Net Assets--100.00%.......................................... $281,956,688 ============
- ----------------- ++ Floating rate securities. The interest rates shown are the current rates as of January 31, 2002. + Illiquid securities representing 2.19% of net assets. +++ Interest Only Security. This security entitles the holder to receive interest payments from an underlying pool of mortgages. The risk associated with this security is related to the speed of the principal paydowns. High prepayments would result in a smaller amount of interest being received and cause the yield to decrease. Low prepayments would result in a greater amount of interest being received and cause the yield to increase. ++++++ Entire or partial amount pledged as collateral for futures and options transactions. @ Interest rate shown is discount rate at date of purchase. ARM Adjustable Rate Mortgage--The interest rates shown are the current rates as of January 31, 2002. COFI Cost of Funds Index. MTN Medium Term Notes. REMIC Real Estate Mortgage Investment Conduit. TBA (To Be Assigned) Securities are purchased on a forward commitment with an approximate principal amount (generally +/- 1.0%) and no definite maturity date. The actual principal amount and maturity date will be determined upon settlement when the specific mortgage pools are assigned. EUR Euro Dollars. PLZ Polish Zloty. GBP British Pounds. (1) Annualized yield at date of purchase. (2) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. (3) 3 month LIBOR (London Interbank Offered Rate) at January 31, 2002 was 1.880%. 59 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE STRATEGIC FIXED INCOME INVESTMENTS
NOTIONAL AMOUNT PAYMENTS EXPIRATION (000) RECEIVED DATES VALUE - -------- -------------------- --------------------------- ------------ WRITTEN OPTIONS CALL OPTIONS WRITTEN Interest Rate Swaps 20,700 5.000%............................................ 6 Month LIBOR(1) 03/18/03 $ (9,684) 23,000 6.000%............................................ 3 Month LIBOR(2) 12/17/03 1,110,879 8,200 6.650%............................................ 3 Month LIBOR(2) 01/07/05 322,453 400 6.000%............................................ 6 Month LIBOR(1) 06/15/06 3,456 ------------ 1,427,104 ------------ PUT OPTION WRITTEN Interest Rate Swaps 8,200 6.650%............................................ 3 Month LIBOR(2) 01/07/05 363,011 ------------ Total Written Options (premiums received--$1,938,532)....... $ 1,790,115 ============
FUTURES CONTRACTS
UNREALIZED NUMBER OF IN EXPIRATION APPRECIATION CONTRACTS CONTRACTS TO DELIVER EXCHANGE FOR DATES (DEPRECIATION) - --------- ------------------------------------------------------------ ------------ --------------- -------------- 87 90 Day Euro Dollar Futures.................................. $ 211,084 September 2002 $ 426,300 52 90 Day Euro Dollar Futures.................................. 125,405 December 2002 11,700 99 90 Day Pound Sterling LIBOR Future.......................... 8,339,386 September 2002 2,597 99 90 Day Pound Sterling LIBOR Future.......................... 8,305,209 December 2002 3,572 148 U.S. Treasury Notes 5 Year Future........................... 156,996 March 2002 (138,750) 121 U.S. Treasury Bonds 30 Year Future.......................... 124,441 March 2002 (147,469) --------- $ 157,950 =========
FORWARD FOREIGN CURRENCY CONTRACTS
UNREALIZED CONTRACTS TO IN MATURITY APPRECIATION DELIVER EXCHANGE FOR DATES (DEPRECIATION) ------------ --------------- -------- -------------- Euro Dollars................................................ 1,191,000 USD 1,058,799 04/11/02 $(38,383) U.S. Dollars................................................ 608,000 GBP 869,440 03/19/02 13,245 -------- $(25,138) ========
- --------------------- (1) 6 month LIBOR (GBP on Interbank Offered Rate) at January 31, 2002 was 4.181%. (2) 3 month LIBOR at January 31, 2002 was 1.880%. LIBOR London Interbank Offered Rate GBP British Pounds USD U.S. Dollars
See accompanying notes to financial statements 60 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2002(UNAUDITED)
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - ------------ -------------------- ---------------- ------------ MUNICIPAL BONDS AND NOTES--100.02% ALABAMA--0.42% $ 85 Birmingham Medical Clinic Board Revenue Bapist Medical Centers (Escrow to Maturity)............ 07/01/05 7.300% $ 92,426 1,000 Courtland Industrial Development Board Industrial Development Revenue Refunding Champion International Corp. Series A.................... 12/01/13 7.200 1,036,550 ------------ 1,128,976 ------------ ALASKA--1.99% 2,055 Alaska Student Loan Corp. Revenue, Series A (AMBAC Insured)*....................................... 07/01/06 to 07/01/09 5.350 to 5.550 2,166,759 3,000 Northern Tobacco Securitization Corp. Revenue Alaska Tobacco Settlement....................... 06/01/22 6.200 3,142,680 ------------ 5,309,439 ------------ ARIZONA--0.69% 1,000 Arizona Transportation Board Highway Revenue Series B........................................ 07/01/06 8.000 1,188,940 55 Pima County Hospital Revenue St. Joseph Hospital Project (Escrow to Maturity).................... 01/01/09 7.500 62,488 570 Show Low Industrial Development Authority Revenue Navapache Regional Medical Center Series A (ACA Insured)........................................ 12/01/06 5.125 594,031 ------------ 1,845,459 ------------ ARKANSAS--0.05% 30 Arkansas State Development Finance Authority (MBIA Insured)........................................ 10/01/16 5.100 30,013 35 Pulaski County Residential Housing Single-Family (Escrow to Maturity)............................ 06/01/10 7.250 39,879 62 Springdale Residential Housing Mortgage Series A (FNMA Collateralized)........................... 09/01/11 7.650 68,352 ------------ 138,244 ------------ CALIFORNIA--4.26% 130 California Pollution Control Financing Kaiser Steel Corp. Project (Escrow to Maturity)........ 10/01/08 7.250 146,869 135 Inglewood Residential Rehabilitation (Escrow to Maturity)....................................... 08/01/10 7.500 156,211 230 Los Angeles Community Redevelopment Agency Refunding Monterey Hills Redevelopment Project B............................................... 12/01/22 8.650 245,097 170 Los Angeles Multi-Family Revenue Housing Earthquake Rehabilitation Project Series C (FNMA Collateralized)*................................ 07/01/07 5.150 172,477 4,500 Los Angeles Water & Power Revenue Power Systems Series A-1...................................... 07/01/06 5.500 4,981,635 980 Sacramento Utility District Electric Revenue White Rock Project (Escrow to Maturity)............... 03/01/10 to 05/01/10 6.750 to 6.800 1,116,801 3,500 Tobacco Securitization Authority Tobacco Settlement Asset Backed Bonds Series A.......... 06/01/27 5.250 3,530,310 975 Vista Multi-Family Housing Pepperwood Apartments (Mandatory Put 06/01/05 @ 100) (FNMA Collateralized)................................. 06/01/25 5.700 1,006,795 ------------ 11,356,195 ------------ COLORADO--1.90% 1,500 Colorado Department Transportation Revenue Anticipation Notes Series A (MBIA Insured)...... 06/15/07 5.500 1,638,015 140 Colorado Housing & Finance Authority Single-Family Program Subordinated*........................... 11/01/04 5.750 140,267 2,000 Colorado Springs Utilities Revenue (Escrow to Maturity)....................................... 11/15/10 5.800 2,194,560 1,000 Northwest Parkway Public Highway Authority Revenue Senior Series A (FSA Insured)................... 06/15/09 5.500 1,088,250 ------------ 5,061,092 ------------
61 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - ------------ -------------------- ---------------- ------------ DISTRICT OF COLUMBIA--0.97% $ 450 District of Columbia Housing Finance Authority Certificates of Participation (Asset Guaranty Insured)........................................ 06/01/08 4.850% $ 455,873 515 District of Columbia Prerefunded 2001 Series A (MBIA Insured).................................. 06/01/08 5.250 556,658 500 District of Columbia Revenue Refunding Howard University Project (MBIA Insured)............... 10/01/02 5.250 512,245 985 District of Columbia Unrefunded Balance 2001 Series A (MBIA Insured)......................... 06/01/08 5.250 1,054,364 ------------ 2,579,140 ------------ FLORIDA--6.59% 250 Alachua County Health Facilities Authority Shands Hospital at The University of Florida (MBIA Insured)........................................ 12/01/05 6.100 259,288 2,800 Bay County Housing & Finance Authority Single-Family Mortgage Revenue Series A (FNMA/GNMA Collateralized)...................... 12/01/20 4.550 2,789,304 1,000 Florida State Board of Education Capital Outlay Public Education Series B....................... 06/01/06 6.000 1,106,140 2,900 Florida State Division Board of Finance Department General Services Revenues Department of Environmental Preservation Series 2000-A (AMBAC Insured)........................................ 07/01/06 5.500 3,169,787 3,505 Hialeah Housing Authority Municipal Housing Revenue (Escrow to Maturity).................... 11/01/21 9.500 4,521,730 2,625 Lakeland Electric & Water Revenue Refunding First Lien Series B (FSA Insured)..................... 10/01/07 6.550 3,001,399 1,915 Leon County Educational Facilities Authority Certificates of Participation................... 09/01/14 9.000 2,613,918 110 Palm Beach County Solid Waste Authority Revenue (Escrow to Maturity) (MBIA Insured)............. 12/01/04 10.000 124,447 ------------ 17,586,013 ------------ GEORGIA--8.13% 5,000 Conyers Water & Sewage Revenue Series A (AMBAC Insured)........................................ 07/01/15 6.600 5,525,650 1,150 Downtown Smyrna Development Authority Revenue (MBIA Insured).................................. 02/01/16 6.700 1,294,727 5,405 Georgia State Series D............................ 08/01/08 to 10/01/10 6.000 to 7.400 6,226,322 100 Gwinnett County Water & Sewer Authority Revenue (Escrow to Maturity)............................ 10/01/04 9.600 111,517 5,000 Hall County School District (AMBAC Insured)....... 12/01/14 6.700 5,665,850 1,090 Metropolitan Atlanta Rapid Transportation Authority Sales Tax Revenue Refunding Series N............................................... 07/01/07 6.000 1,205,235 1,500 Metropolitan Atlanta Rapid Transportation Authority Sales Tax Revenue Refunding Second Indenture Series A (MBIA Insured)............... 07/01/05 6.250 1,656,630 ------------ 21,685,931 ------------ HAWAII--0.40% 1,000 Hawaii State Department Budget & Finance Special Purpose Revenue Hawaiian Electric Co., Inc. Series A (MBIA Insured)......................... 05/01/26 6.200 1,075,300 ------------ IDAHO--1.02% 665 Idaho Housing Agency Single-Family Mortgage Series B (FHA/VA Insured).............................. 07/01/24 7.500 678,832 760 Idaho Housing & Finance Association Single-Family Mortgage Revenue Series D-3*.................... 07/01/13 5.150 750,500 1,250 Idaho Housing & Finance Association Single-Family Mortgage Series G-2, Class III.................. 07/01/19 5.950 1,296,450 ------------ 2,725,782 ------------
62 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - ------------ -------------------- ---------------- ------------ MUNICIPAL BONDS AND NOTES--(CONTINUED) IDAHO--(CONCLUDED) ILLINOIS--9.96% $ 275 Belleville St. Clair County (Escrow to Maturity)....................................... 11/01/09 7.250% $ 316,773 2,500 Chicago Illinois Refunding Series A-2 (AMBAC Insured)........................................ 01/01/15 6.250 2,874,525 350 Greater Peoria Airport Authority (AMBAC Insured)*....................................... 12/01/07 6.700 374,286 3,060 Hodgkins Illinois Enviromental Improvement Revenue MBM Project..................................... 11/01/04 to 11/01/05 5.500 3,219,318 1,625 Illinois Development Finance Authority Revenue Refunding Community Rehabilitation Providers Series A........................................ 07/01/09 5.900 1,662,765 2,000 Illinois Educational Facilities Authority Revenues University of Chicago Series B.................. 07/01/25 4.400 2,078,520 5,990 Illinois Health Facilities Authority Revenue Advocate Network Health Care.................... 11/15/10 6.000 6,549,406 2,100 Illinois Health Facilities Authority Revenue Elmhurst Memorial Health Series A............... 01/01/28 2.600 2,100,000 660 Illinois Health Facilities Authority Revenue Evangelical Series A (Escrow to Maturity)....... 04/15/17 6.750 769,256 540 Illinois Health Facilities Authority Revenue Ravenswood Hospital Medical Center (Escrow to Maturity)....................................... 08/01/06 7.250 596,014 2,975 Illinois Housing Development Authority Revenue Homeowner Mortgage Series A, Subseries A-3...... 02/01/22 4.750 3,010,878 1,170 Northern Illinois University Revenues............. 04/01/13 10.400 1,585,210 1,000 Regional Transportation Authority Series D (FGIC Insured)........................................ 06/01/14 7.100 1,124,100 285 St. Clair County Certificates of Participation Series A (FSA Insured).......................... 10/01/08 5.000 300,020 ------------ 26,561,071 ------------ INDIANA--2.30% 3,000 Indiana Health Facility Finance Authority Hospital Revenue Refunding Methodist Hospital of Indiana Series A (Escrow to Maturity)................... 09/01/15 5.750 3,316,680 1,345 Indiana Health Facility Finance Authority Revenue Health Systems Sisters of St. Francis........... 11/01/08 5.500 1,435,344 405 Indianapolis Economic Development Revenue Knob In The Woods Project (Mandatory Put 12/01/04 @ 100) (FNMA Collateralized)*.......................... 12/01/24 6.375 423,796 50 Indianapolis Economic Development Revenue Refunding Bethany Series A (GNMA Collateralized)*................................ 04/20/17 5.350 50,161 825 Wawasee Community School Corp. Revenue In New Element & Remodeling Building Corp. First Mortgage........................................ 07/15/13 5.750 900,487 ------------ 6,126,468 ------------ KANSAS--2.07% 500 Burlington Pollution Control Revenue Refunding Kansas Gas & Electric Co. Project (MBIA Insured)........................................ 06/01/31 7.000 516,550 4,800 Kansas State Department Transportation Highway Revenue......................................... 03/01/13 5.375 4,956,912 45 Wichita Hospital Revenue St. Francis Hospital & Nursing Series A (Escrow to Maturity)........... 10/01/07 6.750 49,470 ------------ 5,522,932 ------------ KENTUCKY--1.35% 3,315 Kentucky State Property & Buildings Refunding Project No. 69 Series C (FSA Insured)........... 08/01/07 5.500 3,607,449 ------------ LOUISIANA--1.69% 2,000 De Soto Parish Pollution Control Revenue Refunding Southwestern Electric Power Co. Project (MBIA/IBC Insured).............................. 01/01/19 7.600 2,132,800
63 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - ------------ -------------------- ---------------- ------------ MUNICIPAL BONDS AND NOTES--(CONTINUED) LOUISIANA--(CONCLUDED) $ 340 East Baton Rouge Parish Womans Hospital Foundation (Escrow to Maturity)............................ 10/01/08 7.200% $ 382,333 60 East Baton Rouge Single-Family Mortgage Series C (GNMA/FNMA Collateralized)...................... 04/01/32 7.000 61,283 460 Jefferson Parish Home Mortgage Authority Single-Family Housing Revenue Refunding Series D-1 (Mandatory Put 06/01/02 @ 100) (FNMA/GNMA Collateralized)................................. 06/01/10 5.600 471,652 430 Jefferson Parish Home Mortgage Authority Single-Family Housing Revenue Refunding Series G-1 (GNMA Collateralized)....................... 12/01/10 5.125 444,947 540 Louisiana Public Facilities Authority and Health Education A1 (Mandatory Put 06/01/02 @ 100) (AMBAC Insured)................................. 12/01/15 5.000 543,893 432 Louisiana State Health Education Authority Alton Ochsner Medical Foundation (Escrow to Maturity)....................................... 05/01/05 8.750 476,436 ------------ 4,513,344 ------------ MAINE--0.60% 1,580 Maine State Housing Authority Mortgage Purchase Series D-1...................................... 11/15/16 5.050 1,590,523 ------------ MASSACHUSETTS--0.23% 600 Massachusetts State Development Finance Agency Biomedical Research Series C.................... 08/01/02 5.500 609,552 ------------ MICHIGAN--3.01% 5,020 Michigan Municipal Bond Authority Revenue Refunding Local Government Qualified Schools Series A........................................ 05/01/05 6.375 5,298,911 2,270 Michigan State Building Authority Revenue State Police Communications III....................... 10/01/08 5.500 2,482,676 80 Michigan State Hospital Finance Authority Revenue St. Joseph's Mercy Hospital (Escrow to Maturity)....................................... 07/01/03 9.250 85,095 140 Michigan State Strategic Limited Obligation (Escrow to Maturity)............................ 08/15/05 7.875 152,600 ------------ 8,019,282 ------------ MINNESOTA--1.06% 315 Coon Rapids Hospital Revenue Health Central, Inc. (Escrow to Maturity)............................ 08/01/08 7.625 355,367 93 Eden Prairie Multi-Family Housing (GNMA Collateralized)................................. 01/20/06 5.500 95,123 2,200 Minnesota State General Obligation Bonds.......... 08/01/09 5.300 2,308,438 55 Moorhead Residential Mortgage (Escrow to Maturity)....................................... 08/01/11 7.100 63,295 ------------ 2,822,223 ------------ MISSOURI--1.25% 3,000 St. Louis Airport Revenue Airport Development Program Series A (MBIA Insured)................. 07/01/09 5.500 3,246,210 85 St. Louis County Single-Family Housing (AMBAC Insured)........................................ 10/01/16 9.250 89,392 ------------ 3,335,602 ------------ NEBRASKA--0.50% 250 Nebraska Investment Finance Authority Multi-Family Housing Series A (FNMA Collateralized)*......... 12/01/15 6.000 255,642 1,075 Nebraska Investment Finance Authority Single-Family Housing Revenue Series A (GNMA/FNMA Collateralized)...................... 03/01/21 5.200 1,081,719 ------------ 1,337,361 ------------ NEVADA--1.59% 3,000 Clark County Industrial Development Revenue Refunding Nevada Power Co. Project Series C (AMBAC/TCRs Insured)............................ 10/01/22 7.200 3,155,190
64 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - ------------ -------------------- ---------------- ------------ MUNICIPAL BONDS AND NOTES--(CONTINUED) NEVADA--(CONCLUDED) $1,000 Truckee Meadows Water Authority Revenue Series A (FSA Insured)................................... 07/01/07 5.500% $ 1,088,610 ------------ 4,243,800 ------------ NEW JERSEY--5.80% 1,890 New Jersey State Housing Finance Agency General Resolution Section 8 Series A................... 11/01/04 6.700 1,929,577 1,940 New Jersey State Housing & Mortgage Finance Agency Revenue Home Buyer Series G (MBIA Insured)...... 04/01/15 4.625 1,947,682 5,000 New Jersey State Refunding Series D............... 02/15/11 6.000 5,658,950 5,000 New Jersey State Turnpike Authority Revenue Series C (MBIA/ IBC Insured)........................... 01/01/16 6.500 5,922,800 ------------ 15,459,009 ------------ NEW YORK--3.06% 2,750 New York City Transitional Finance Authority Revenue Future Tax Secured Series A............. 02/15/11 5.500 3,001,570 795 New York State Energy Research & Development Authority Electric Facilities Revenue Unrefunded Balance Series B................................ 09/01/19 to 02/01/22 7.150 821,879 2,400 New York State Environmental Facilities Corp. Pollution Control Revenue Unrefunded Balance Series E........................................ 06/15/14 6.875 2,657,736 1,645 New York State Mortgage Agency Revenue Homeowner Mortgage Series 63.............................. 10/01/18 5.150 1,685,763 ------------ 8,166,948 ------------ NORTH CAROLINA--1.09% 2,650 North Carolina Municipal Power Agency No. 1 Catawba Electric Revenue Series A (MBIA Insured)........................................ 01/01/09 5.750 2,905,911 ------------ NORTH DAKOTA--0.59% 1,240 Grand Forks Hospital Facilities Revenue United Hospital Obligation Group Project............... 12/01/16 2.900 1,240,000 315 North Dakota State Housing Finance Agency Revenue Housing Finance Home Mortgage Series D.......... 07/01/16 6.300 331,509 ------------ 1,571,509 ------------ OHIO--7.22% 1,145 Butler County Transportation Improvement District Series A (FSA Insured).......................... 04/01/11 6.000 1,267,652 2,490 Cleveland Parking Facilities Revenue Refunding (MBIA Insured).................................. 09/15/07 6.000 2,785,688 4,750 Columbus Ohio Series 1............................ 11/15/09 5.500 5,222,482 140 Dayton Hospital Revenue Good Samaritan (Escrow to Maturity)....................................... 12/01/05 6.000 148,082 5,735 Hamilton County Sales Tax Subordinated Series B (AMBAC Insured)................................. 12/01/09 5.500 6,288,083 2,000 Ohio State Higher Education Capital Facility Series A........................................ 02/01/07 5.500 2,170,560 1,250 Ohio State Turnpike Commission Turnpike Revenue Series A (MBIA Insured)......................... 02/15/26 5.500 1,378,088 ------------ 19,260,635 ------------ OKLAHOMA--1.62% 335 Comanche County Hospital Authority Revenue Series A (Connie Lee Insured).......................... 07/01/06 5.100 348,286 425 McAlester Public Works Authority Revenue (FSA Insured) (Escrow to Maturity)................... 12/01/04 8.250 491,207 2,675 Oklahoma Housing Finance Agency Single-Family Revenue Mortgage Homeownership Loan Series A-1............................................. 09/01/12 4.400 2,710,390
65 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - ------------ -------------------- ---------------- ------------ MUNICIPAL BONDS AND NOTES--(CONTINUED) OKLAHOMA--(CONCLUDED) $ 765 Tulsa Metropolitan Utility Authority Revenue...... 02/01/03 7.000% $ 772,321 ------------ 4,322,204 ------------ PENNSYLVANIA--1.23% 400 Blair County Hospital Authority Revenue Hospital Altoona Hospital Project A (AMBAC Insured)...... 07/01/06 5.375 429,924 535 Chester County Health & Education Jefferson Health Systems Series B (AMBAC Insured)................ 05/15/12 5.000 549,942 45 Chester County Hospital Authority Revenue (Escrow to Maturity).................................... 07/01/09 7.500 51,079 30 Conneaut School District (Escrow to Maturity) (AMBAC Insured)................................. 05/01/02 9.250 30,576 70 Lancaster Sewer Authority (Escrow to Maturity).... 04/01/12 6.000 77,566 100 Lehigh County General Purpose Authority Hospital Revenue Lehigh Valley Hospital Series A (AMBAC Insured)........................................ 07/01/28 1.460 100,000 1,460 Lewisburg Area School District (MBIA Insured)..... 06/01/15 6.250 1,483,068 400 Luzerne County Industrial Development Authority Pennsylvania Gas & Water Series B*.............. 12/01/22 7.125 413,892 125 Philadelphia Hospital & Higher Education Health Systems Jefferson Health Systems A (MBIA Insured)........................................ 05/15/07 5.250 133,480 ------------ 3,269,527 ------------ RHODE ISLAND--0.22% 570 Rhode Island Housing & Mortgage Finance Corp. Homeownership Opportunity-9-D *................. 10/01/12 5.150 590,144 ------------ SOUTH CAROLINA--2.22% 195 Charleston County Hospital Facility Roper Hospital (Escrow to Maturity)............................ 10/01/11 7.000 222,986 5,070 South Carolina Transportation Infrastructure Bank Revenue Series A (MBIA Insured)................. 10/01/09 6.000 5,708,567 ------------ 5,931,553 ------------ SOUTH DAKOTA--2.91% 3,040 Sioux Falls Sales Tax Revenue Series B (AMBAC Insured)........................................ 11/15/06 5.500 3,322,598 3,280 South Dakota Health & Educational Facitities Authority Revenue Refunding Prairie Lakes Healthcare (ACA/CBI Insured).................... 04/01/13 5.450 3,340,287 655 South Dakota Housing Development Authority Revenue Homeownership Mortgage Series A................. 05/01/06 5.500 697,935 360 South Dakota State Health & Educational Revenue St. Lukes Hospital Project (Escrow to Maturity)....................................... 10/01/07 6.800 395,820 ------------ 7,756,640 ------------ TENNESSEE--4.43% 180 Knox County Health Educational & Housing Facility St. Mary's Medical Center (Escrow to Maturity)....................................... 08/01/03 7.250 189,385 115 La Follette Housing Development Corp. (FHA/MBIA Insured)........................................ 01/01/05 5.400 116,633 7,300 Metropolitan Government Nashville & Davidson County Water Sewer Revenue Cab Converter Refunding (FGIC/TCRs)........................... 01/01/12 7.700 9,128,650 165 Metropolitan Government Nashville Health & Education Southern Advantist Hospital Health Systems (Escrow to Maturity).................... 10/01/09 8.700 198,381 2,000 Tennessee State Refunding Series B................ 05/01/05 6.000 2,185,480 ------------ 11,818,529 ------------ TEXAS--7.75% 3,400 Austin Texas Utility Systems Revenue Refunding (AMBAC Insured)................................. 11/15/09 6.750 3,978,000 5,000 Brazos River Authority Pollution Control Revenue Refunding TXU Electric Co. Project Series A..... 10/01/30 4.950 5,065,250
66 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - ------------ -------------------- ---------------- ------------ MUNICIPAL BONDS AND NOTES--(CONTINUED) TEXAS--(CONCLUDED) $2,480 Fort Bend Independent School District (PSF/GTD Insured)........................................ 08/15/07 7.000% $ 2,876,751 220 Galveston County Housing Finance Corp. Single-Family Mortgage Revenue.................. 04/01/15 9.750 236,753 2,170 Harlingen Housing Finance Corp. Single-Family Mortgage Revenue Series A (GNMA/FNMA Collateralized)................................. 09/01/22 5.250 2,239,657 710 Harris County Toll Road Unrefunded Balance Series A (AMBAC Insured)............................... 08/15/17 6.500 742,035 230 Houston Texas Airport Systems Revenue (Escrow to Maturity)....................................... 07/01/10 7.600 268,624 505 McKinney Independent School District School Building Revenue (PSF/GTD Insured).............. 02/15/04 6.000 540,173 1,285 Mission Consolidated Independent School District Revenue......................................... 02/15/04 6.500 1,386,399 1,005 South Plains Finance Corp. Refunding Mortgage Series C (FNMA/ GNMA Collateralized)............ 03/01/21 7.400 1,116,857 1,500 Southeast Housing Finance Corp. Series B (Pre-refunded to 12/01/02 at $36.127)........... 12/01/16 7.625# 533,400 355 Texas State Prerefunded Water Development Board... 08/01/18 5.750 387,702 180 Texas State Public Property Finance Corp. Revenue Mental Health Retardation....................... 09/01/03 5.400 179,894 1,085 Texas State Water Development Board Unrefunded Balance......................................... 08/01/18 5.750 1,115,391 ------------ 20,666,886 ------------ UTAH--1.38% 40 Salt Lake County Water Conservation (Escrow to Maturity) (MBIA Insured).................................. 10/01/02 10.875 42,430 1,000 Utah Associated Municipal Power Systems Revenue San Juan Project (MBIA Insured)................. 06/01/22 6.375 1,108,240 215 Utah State Housing Finance Agency Single-Family Mortgage Senior Issue Series D-2 (FHA/VA Insured)........................................ 01/01/11 6.450 221,076 1,900 Utah State Housing Finance Agency Single-Family Mortgage Series G-3, Class III.................. 07/01/15 5.700 1,969,635 260 Utah State Housing Finance Agency Single-Family Mortgage Subseries A-1 (AMBAC Insured).......... 07/01/08 5.900 277,839 45 Utah State Housing Finance Agency Single-Family Mortgage Subseries G (AMBAC Insured)............ 07/01/07 5.650 47,776 25 Utah State Housing Finance Agency Single-Family Mortgage Subseries H-1 (AMBAC Insured).......... 07/01/07 5.650 26,543 ------------ 3,693,539 ------------ VIRGINIA--0.67% 1,650 Virginia Public Building Authority Revenue Refunding (Escrow to Maturity).................. 03/01/04 6.250 1,779,245 ------------ WASHINGTON--4.59% 3,605 Energy Northwest Electric Revenue Refunding Project No. 3 Series A (FSA Insured)............ 07/01/10 5.500 3,899,709 20 Washington State Prerefunded Series 93-A.......... 10/01/12 5.750 22,422 6,000 Washington State Public Power Supply Systems Nuclear Project Number 1 Revenue Refunding Series A........................................ 07/01/08 6.000 6,669,420 1,480 Washington State Unrefunded Balance Series 93-A (FSA Insured)................................... 10/01/12 5.750 1,648,543 ------------ 12,240,094 ------------ WEST VIRGINIA--1.15% 2,675 Kanawha County Residential Mortgage Revenue (Escrow to Maturity)............................ 09/01/10 7.375 3,062,822 ------------
67 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - ------------ -------------------- ---------------- ------------ MUNICIPAL BONDS AND NOTES--(CONTINUED) WEST VIRGINIA--(CONCLUDED) MUNICIPAL BONDS AND NOTES--(CONCLUDED) WISCONSIN--0.43% $1,000 Wisconsin Housing & Economic Development Authority Housing Revenue Series B........................ 11/01/03 5.100% $ 1,035,580 100 Wisconsin Housing & Economic Development Homeownership Revenue Series G*................. 03/01/04 5.250 104,474 ------------ 1,140,054 ------------ WYOMING--1.63% 4,000 Sweetwater County Wyoming Solid Waste Disposal Revenue FMC Corp. Project Series A.............. 06/01/24 7.000 4,036,520 295 Teton County Hospital District Refunding Improvement (ACA Insured)....................... 12/01/09 5.100 302,056 ------------ 4,338,576 ------------ Total Municipal Bonds and Notes (cost--$257,871,611)............ 266,755,003 ------------ NUMBER OF SHARES (000) - ---------------------------------------------------------------------------------------------------------------------- TAX-FREE MONEY MARKET FUND--0.04% 99 Seven Seas Money Market Fund (cost--$99,288)...... 02/01/02 1.090+ 99,288 ------------ Total Investments (cost--$257,970,899)--100.06%................. 266,854,291 (161,753) Liabilities in excess of other assets--(0.06)%.................. ------------ Net Assets--100.00%............................................. $266,692,538 ============
- ----------------- # Zero coupon bond; rate represents annualized yield at date of purchase. * Security subject to Alternative Minimum Tax. + Interest rate shown reflects yield at January 31, 2002. ACA American Capital Access. AMBAC American Municipal Bond Assurance Corporation. CBI Certificates of Bond Insurance. FGIC Federal Guaranty Insurance Corporation. FHA Federal Housing Authority. FNMA Federal National Mortgage Association. FSA Financial Security Assurance. GNMA Government National Mortgage Association. GTD Guaranteed. IBC Insured Bond Certificate. MBIA Municipal Bond Investors Assurance. PSF Permanent School Fund. TCRs Transferable Custodial Receipts. VA Veterans Association. See accompanying notes to financial statements 68 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GLOBAL FIXED INCOME INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2002(UNAUDITED)
PRINCIPAL AMOUNT MATURITY INTEREST (000)** DATES RATES VALUE - ------------- ------------------------ --------------- ------------ LONG-TERM GLOBAL DEBT SECURITIES--104.36% AUSTRALIA--0.14% USD 360 National Australia Bank Ltd....................... 05/19/10 8.600% $ 411,507 ------------ AUSTRIA--4.83% 15,500 Republic of Austria............................... 07/15/06 5.875 13,965,128 ------------ BELGIUM--1.54% 4,957 Kingdom of Belgium................................ 09/28/10 5.750 4,448,520 ------------ CANADA--0.72% USD 610 CP Railway Ltd.................................... 10/15/11 6.250 605,868 2,300 Government of Canada.............................. 06/01/10 to 06/01/11 5.500 to 6.000 1,484,974 ------------ 2,090,842 ------------ DENMARK--0.48% 11,311 Kingdom of Denmark (1)............................ 11/15/07 to 11/15/11 6.000 to 7.000 1,391,036 ------------ FRANCE--0.94% 2,250 Republic of France................................ 10/25/10 to 10/25/32 5.500 to 5.750 2,049,461 750 Vivendi Environnement............................. 06/27/08 5.875 652,883 ------------ 2,702,344 ------------ GERMANY--9.02% 29,542 Federal Republic of Germany....................... 02/17/06 to 01/04/31 4.125 to 5.500 26,051,467 ------------ ITALY--1.45% USD 1,500 Republic of Italy................................. 10/25/06 4.375 1,462,050 JPY 80,000 Republic of Italy................................. 05/12/02 0.375 597,128 1,760 Sanpaolo IMI SpA.................................. 04/06/10 6.375 1,596,002 600 UniCredito Italiano SpA........................... 03/16/11 6.000 521,806 ------------ 4,176,986 ------------ JAPAN--6.77% 100,000 Export-Import Bank of Japan....................... 10/01/03 4.375 798,396 2,381,000 Japan Government Bonds............................ 06/21/10 to 06/20/11 1.200 to 1.900 18,041,596 100,000 Primus Financial Services......................... 12/16/02 0.790 738,743 ------------ 19,578,735 ------------ MALAYSIA--0.50% USD 1,385 Republic of Malaysia.............................. 07/15/11 7.500 1,449,708 ------------ MEXICO--0.48% USD 1,400 PEMEX Master Trust................................ 02/01/22 8.625 1,384,264 ------------ NETHERLANDS--5.08% USD 290 Deutsche Telekom International Finance BV......... 06/15/10 8.000 317,039 1,600 Deutsche Telekom International Finance BV......... 07/11/06 5.875 1,383,817 13,936 Government of the Netherlands..................... 07/15/08 to 01/15/28 5.250 to 5.500 12,301,645 800 ING Verzekeringen NV.............................. 06/21/21 6.250+ 690,324 ------------ 14,692,825 ------------ NORWAY--0.22% EUR 700 Norsk Hydro ASA................................... 01/15/10 6.250 621,759 ------------ PERU--0.57% USD 2,095 Republic of Peru.................................. 03/07/17 4.500 1,655,050 ------------
69 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GLOBAL FIXED INCOME INVESTMENTS PHILIPPINES--2.36%
PRINCIPAL AMOUNT MATURITY INTEREST (000)** DATES RATES VALUE - ------------- ------------------------ --------------- ------------ 8.875 to USD 6,968 Republic of Philippines........................... 04/15/08 to 03/16/25 10.625% $ 6,830,745 ------------ SPAIN--1.25% 4,137 Kingdom of Spain.................................. 07/30/05 4.950 3,599,677 ------------ SUPRANATIONAL--0.26% JPY 100,000 Inter-American Development Bank................... 02/05/02 2.250 745,851 ------------ SWEDEN--4.02% EUR 900 Assa Abloy AB..................................... 12/04/06 5.125 761,305 84,200 Kingdom of Sweden................................. 08/15/07 to 03/15/11 5.250 to 8.000 8,215,532 EUR 1,800 Nordbanken AB..................................... 12/13/10 5.491+ 1,599,948 EUR 1,200 Svenska Handelsbanken AB.......................... 03/07/11 5.500 1,048,380 ------------ 11,625,165 ------------ UNITED KINGDOM--8.60% EUR 2,200 Barclays Bank PLC................................. 03/08/11 5.750 1,929,214 EUR 1,500 British Telecom PLC............................... 02/15/11 6.875 1,367,318 USD 1,000 Glaxo Wellcome PLC................................ 01/25/06 6.125 1,044,850 EUR 1,500 J Sainsbury PLC................................... 07/11/08 5.625 1,304,546 EUR 1,000 Marks & Spenser PLC............................... 11/07/06 5.125 852,855 EUR 1,000 NGG Finance PLC................................... 08/23/11 6.125 872,104 EUR 400 Standard Chartered PLC............................ 05/06/09 5.375 336,055 EUR 820 TI Group PLC...................................... 07/18/05 6.375 730,627 9,910 United Kingdom Treasury Bonds..................... 08/27/02 to 06/07/32 4.250 to 9.750 15,092,045 EUR 1,600 United Utilities Water PLC........................ 03/18/09 4.875 1,318,452 ------------ 24,848,066 ------------ UNITED STATES--55.13% EUR 900 Ahold Finance U.S.A., Inc......................... 03/14/12 5.875 769,116 1,390 American Electric Power, Inc...................... 05/15/06 6.125 1,398,833 EUR 1,000 AT&T Corp......................................... 11/21/06 6.000 850,320 2,750 Bank of America Corp.............................. 02/01/07 5.250 2,738,989 2,430 Bank One Corp..................................... 02/01/06 to 11/15/11 5.900 to 6.500 2,526,692 2,609 Bayview Financial Acquistion Asset Trust Series 2001-BA, Class M2 (2).................... 07/25/31 2.660+ 2,602,409 JPY 107,000 BMW US Capital Corp............................... 12/20/02 0.700 800,960 4,000 Centex Home Equity Loan Trust, Series 2001-B, Class A3......................... 11/25/27 5.770 4,073,472 5,155 Chase Funding Mortgage Loan....................... 12/26/24 6.860 5,293,306 1,590 Cingular Wireless (2)............................. 12/15/11 to 12/15/31 6.500 to 7.125 1,614,350 3,000 Citibank Credit Card Master Trust I, Series 1999-7, Class A.......................... 11/15/06 6.650 3,191,223 4,520 Citigroup, Inc. (1)............................... 08/09/06 to 01/18/11 5.500 to 6.500 4,636,807 880 Countrywide Home Loans, Inc....................... 02/01/07 5.500 877,272 3,840 CS First Boston, Inc.............................. 08/01/06 to 01/15/12 5.875 to 6.500 3,882,446 1,210 DaimlerChrysler N.A. Holding Corp................. 01/15/12 7.300 1,229,081 240 Delhaize America, Inc. (2)........................ 04/15/06 7.375 254,712 1,150 Discover Card Master Trust I, Series 2001-5, Class A............................................... 11/16/06 5.300 1,184,873 4,250 EQCC Home Equity Loan Trust, Series 1999-03, Class A3F....................... 11/25/24 7.067 4,426,675 8,913 Federal Home Loan Mortgage Corp................... 06/15/11 to 03/15/29 6.000 to 7.500 9,103,991 15,000 Federal Home Loan Mortgage Corp................... TBA 6.000 to 6.500 14,917,188 5,000 Federal National Mortgage Association............. TBA 6.000 4,912,500 2,625 Federal National Mortgage Association............. 08/15/02 to 02/01/31 6.000 to 7.500 2,709,743 1,062 Federal National Mortgage Association............. 05/18/27 2.250+ 1,070,800 340 FirstEnergy Corp.................................. 11/15/11 6.450 339,154 900 Ford Credit Auto Owner Trust, Series 2002-A, Class A2B........................ 05/15/04 1.841+ 896,811
70 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GLOBAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000)** DATES RATES VALUE - ------------- ------------------------ --------------- ------------ LONG-TERM GLOBAL DEBT SECURITIES--(CONCLUDED) UNITED STATES--(CONCLUDED) 1,200 Ford Motor Credit Co.............................. 02/01/06 6.875% $ 1,204,264 5,197 General Motors Acceptance Corp.................... 03/12/03 to 02/01/07 5.750 to 6.125 5,286,484 1,310 Goldman Sachs Group, Inc.......................... 01/15/12 6.600 1,318,465 3,608 Government National Mortgage Association.......... 12/16/22 to 10/15/31 2.450 to 7.500 3,706,144 5,000 Government National Mortgage Association.......... TBA 7.500 5,212,500 290 Heller Financial, Inc............................. 08/23/02 7.500 298,561 7,200 Honda Auto Receivables Owner Trust, Series 2001-3, Class A2......................... 02/18/04 2.760 7,210,988 EUR 1,000 International Business Machines Corp.............. 09/26/02 3.464+ 859,572 1,360 J.P. Morgan Chase & Co............................ 02/01/11 6.750 1,384,986 290 John Hancock Financial Services, Inc.............. 12/01/08 5.625 286,494 460 KeySpan Corp...................................... 11/15/10 7.625 499,641 1,500 Kraft Foods, Inc.................................. 11/01/06 4.625 1,475,729 250 MBNA Corp......................................... 01/17/07 6.250 247,005 20 Mellon Funding Corp............................... 05/14/11 6.400 20,264 5,000 Option One Trust.................................. 02/01/05 5.000 5,000,000 140 Peoples Energy Corp............................... 01/15/11 6.900 140,640 1,710 PNC Funding Corp.................................. 08/01/06 5.750 1,722,213 1,600 Powergen US Funding LLC........................... 10/15/04 4.500 1,585,554 440 PPL Energy Supply LLC (2)......................... 11/01/11 6.400 416,690 1,090 Progress Energy, Inc.............................. 03/01/04 to 03/01/11 6.550 to 7.100 1,149,117 1,440 Qwest Capital Funding, Inc........................ 08/03/04 5.875 1,416,152 700 Reed Elsevier Capital, Inc........................ 08/01/06 6.125 712,086 1,000 Sprint Capital Corp............................... 01/30/11 7.625 1,035,311 1,824 Structured Asset Securities Corp.................. 04/25/29 4.125 1,827,325 3,000 Toyota Auto Receivables Owner Trust............... 03/15/05 3.910 2,999,986 JPY 200,000 Toyota Motor Credit Corp.......................... 05/23/03 0.625 1,499,774 1,720 U.S. Treasury Bonds++............................. 02/15/31 5.375 1,704,950 22,476 U.S. Treasury Notes (1)........................... 11/30/03 to 08/15/11 3.000 to 5.750 22,701,552 260 Union Pacific Corp................................ 01/15/12 6.125 255,642 1,570 US Bank, N.A...................................... 08/01/11 6.375 1,595,666 1,780 Verizon Wireless, Inc............................. 12/15/06 5.375 1,762,880 160 Virginia Electric & Power Co...................... 02/01/07 5.375 159,684 1,500 Wal-Mart Stores, Inc.............................. 08/01/06 5.450 1,531,308 4,690 Wells Fargo Bank N.A.............................. 02/01/11 6.450 4,809,421 ------------ 159,338,771 ------------ Total Long-Term Global Debt Securities (cost--$308,921,117)...... 301,608,446 ------------ NUMBER OF RIGHTS (000) - -------------------------------------------------------------------------------------------------------------------------- RIGHTS--0.01% MEXICO--0.01% 4,518 United Mexican States (cost--$0).................. 06/30/03 0.000 19,427 ------------ PRINCIPAL AMOUNT (000)** - ------------- SHORT-TERM GLOBAL DEBT SECURITIES--0.59% UNITED KINGDOM--0.26% JPY 100,000 Bank of Scotland Treasury Services PLC............ 07/24/02 0.105+ 745,699 ------------
71 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GLOBAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000)** DATES RATES VALUE - ------------- ------------------------ --------------- ------------ SHORT-TERM GLOBAL DEBT SECURITIES--(CONCLUDED) UNITED KINGDOM--(CONCLUDED) UNITED STATES--0.33% JPY 131,000 General Motors Acceptance Corp.................... 07/26/02 0.176%+ $ 970,633 ------------ Total Short-Term Global Debt Securities (cost--$2,054,578)....... 1,716,332 ------------ SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--0.07% 200 U.S. Treasury Bills++ (cost--$199,402)............ 02/28/02 to 03/28/02 0.010 to 2.305@ 199,524 ------------ REPURCHASE AGREEMENTS--5.33% 4,522 Repurchase Agreement dated 01/31/02 with Societe Generale, collateralized by $4,805,000 U.S. Treasury Bonds, 5.250% due 11/15/28; (value--$4,612,800); proceeds: $4,522,236............................ 02/01/02 1.880 4,522,000 10,885 Repurchase Agreement dated 01/31/02 with State Street Bank & Trust Co., collateralized by $10,593,499 U.S. Treasury Notes, 5.500% to 5.750% due 11/30/02 to 05/31/03; (value--$11,103,137); proceeds: $10,885,538..... 02/01/02 1.780 10,885,000 ------------ Total Repurchase Agreements (cost--$15,407,000).................. 15,407,000 ------------ Total Investments (cost--$326,582,097)--110.36%.................. 318,950,729 (29,931,633) Liabilities in excess of other assets--(10.36)%.................. ------------ Net Assets--100.00%.............................................. $289,019,096 ============
- ----------------- Note: The Portfolio of Investments is listed by the issuer's country of origin. ** In local currency unless otherwise indicated. + Floating rate securities. The interest rates shown are the current rates as of January 31, 2002. ++ Entire or partial amount pledged as collateral for futures transactions. @ Interest rate shown is discount rate at date of purchase. (1) Security, or portion thereof, was on loan at January 31, 2002. (2) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. EUR Euro Dollars. JPY Japanese Yen. USD U.S. Dollars. TBA (To Be Assigned) Securities are purchased on a forward commitment with an approximate principal amount (generally +/- 1.0%) and no definite maturity date. The actual principal amount and maturity date will be determined upon settlement when the specific mortgage pools are assigned. FUTURES CONTRACTS
NUMBER OF IN CONTRACTS CONTRACTS TO DELIVER EXCHANGE FOR EXPIRATION DATES - --------------------- ------------------------------------------------------------ ------------ ---------------- 120 EURO 10 Year Bond........................................... $111,148 March 2002 147 EURO 5 Year Note............................................ 133,911 March 2002 9 Japan 10 Year Bond.......................................... 90,981 March 2002 30 Gilt 10 Year Futures........................................ 48,548 March 2002 49 U.S. 2 Year Treasury Note................................... 102,594 March 2002 265 U.S. 5 Year Treasury Note................................... 281,107 March 2002 165 U.S. 10 Year Treasury Note.................................. 174,694 March 2002 68 U.S. 30 Year Treasury Bond.................................. 69,934 March 2002 UNREALIZED NUMBER OF APPRECIATION CONTRACTS (DEPRECIATION) - --------------------- -------------- 120 $(131,625) 147 (32,614) 9 (101,484) 30 (7,191) 49 18,375 265 (81,359) 165 (13,203) 68 99,938 --------- $(249,164) =========
72 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GLOBAL FIXED INCOME INVESTMENTS FORWARD FOREIGN CURRENCY CONTRACTS
UNREALIZED CONTRACTS TO IN APPRECIATION DELIVER EXCHANGE FOR MATURITY DATES (DEPRECIATION) -------------- -------------- -------------- -------------- Austrailian Dollar....................................... 4,150,000 JPY 2,175,845 05/28/02 $ (85,809) Austrailian Dollar....................................... 282,853,210 JPY 2,175,845 05/28/02 53,022 Austrailian Dollar....................................... 1,100,000 USD 567,011 02/25/02 (9,568) Austrailian Dollar....................................... 4,598,365 USD 2,390,000 02/25/02 (59,703) British Pounds........................................... 3,000,000 EUR 2,703,493 02/25/02 128,136 British Pounds........................................... 1,877,100 EUR 2,703,493 02/25/02 (56,402) British Pounds........................................... 4,270,000 EUR 3,690,816 03/27/02 30,187 British Pounds........................................... 2,611,212 EUR 3,690,816 03/27/02 (15,435) British Pounds........................................... 8,464,919 EUR 7,475,002 03/27/02 218,110 British Pounds........................................... 5,200,000 EUR 7,475,002 03/27/02 (155,801) British Pounds........................................... 378,000 JPY 549,536 02/25/02 (16,480) British Pounds........................................... 71,695,260 JPY 549,536 02/25/02 14,170 British Pounds........................................... 1,818,882 USD 2,621,800 02/25/02 (56,809) British Pounds........................................... 450,000 USD 642,803 05/28/02 (11,727) Canadian Dollar.......................................... 2,063,523 USD 1,308,844 02/25/02 (12,854) Canadian Dollar.......................................... 2,144,607 USD 1,339,019 02/25/02 7,895 Canadian Dollar.......................................... 4,369,904 USD 2,740,955 02/25/02 3,550 Canadian Dollar.......................................... 6,132,795 USD 3,850,323 03/27/02 560 Canadian Dollar.......................................... 7,136,864 USD 4,480,000 03/27/02 1,354 Canadian Dollar.......................................... 14,413,952 USD 8,960,000 03/27/02 90,758 Euro Dollar.............................................. 3,000,000 CHF 1,827,839 02/25/02 82,271 Euro Dollar.............................................. 2,040,455 CHF 1,827,839 02/25/02 (76,206) Euro Dollar.............................................. 4,300,000 CHF 2,605,327 02/25/02 103,346 Euro Dollar.............................................. 2,934,753 CHF 2,605,327 02/25/02 (85,982) Euro Dollar.............................................. 2,364,523 GBP 2,089,292 05/28/02 (67,089) Euro Dollar.............................................. 1,470,000 GBP 2,089,292 05/28/02 27,780 Euro Dollar.............................................. 3,684,981 GBP 3,256,049 03/27/02 (96,951) Euro Dollar.............................................. 2,288,668 GBP 3,256,049 03/27/02 34,660 Euro Dollar.............................................. 2,017,000 JPY 1,795,433 02/25/02 (63,935) Euro Dollar.............................................. 234,287,055 JPY 1,795,433 02/25/02 45,956 Euro Dollar.............................................. 3,668,768 SEK 3,222,096 03/27/02 (76,897) Euro Dollar.............................................. 33,926,752 SEK 3,222,096 03/27/02 50,612 Euro Dollar.............................................. 6,547,667 USD 5,893,653 02/25/02 (272,794) Euro Dollar.............................................. 1,541,148 USD 1,393,198 02/25/02 (70,196) Euro Dollar.............................................. 1,048,183 USD 930,000 02/25/02 (30,185) Euro Dollar.............................................. 13,760,500 USD 12,343,168 02/25/02 (530,436) Euro Dollar.............................................. 2,370,712 USD 2,100,000 02/25/02 (64,857) Euro Dollar.............................................. 2,831,423 USD 2,504,394 02/25/02 (73,752) Euro Dollar.............................................. 4,298,059 USD 3,830,000 02/25/02 (140,322) Euro Dollar.............................................. 4,270,000 USD 3,695,429 03/27/02 (34,800) Euro Dollar.............................................. 5,120,000 USD 4,428,416 03/27/02 (39,091) Euro Dollar.............................................. 6,041,493 USD 5,230,000 03/27/02 (50,687) Euro Dollar.............................................. 2,900,000 USD 2,501,395 05/28/02 (21,238) Euro Dollar.............................................. 1,486,420 USD 1,315,957 05/28/02 (44,732) Japanese Yen............................................. 3,008,307,704 USD 24,867,185 02/25/02 (2,403,434) Japanese Yen............................................. 375,921,000 USD 3,150,000 02/25/02 (342,909) Japanese Yen............................................. 429,354,000 USD 3,600,000 02/25/02 (393,912) Japanese Yen............................................. 599,056,640 USD 4,480,000 03/27/02 580 Japanese Yen............................................. 1,337,739,181 USD 10,216,507 03/27/02 (211,030) Japanese Yen............................................. 111,837,900 USD 850,000 05/28/02 (10,653) Swedish Krona............................................ 2,802,691 EUR 2,467,134 03/27/02 64,414 Swedish Krona............................................ 25,972,257 EUR 2,467,134 03/27/02 (39,239) Swedish Krona............................................ 5,120,000 EUR 4,430,574 03/27/02 41,249 Swedish Krona............................................ 47,241,216 EUR 4,430,574 03/27/02 (14,450) Swedish Krona............................................ 17,031,360 USD 1,595,653 02/25/02 (713) Swedish Krona............................................ 21,976,479 USD 2,093,237 03/27/02 (38,869) Swiss Franc.............................................. 7,157,740 EUR 4,308,777 05/28/02 (141,600) Swiss Franc.............................................. 4,880,000 EUR 4,308,777 05/28/02 135,271
73 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GLOBAL FIXED INCOME INVESTMENTS
FORWARD FOREIGN CURRENCY CONTRACTS--(CONCLUDED) UNREALIZED CONTRACTS TO IN APPRECIATION DELIVER EXCHANGE FOR MATURITY DATES (DEPRECIATION) -------------- -------------- -------------- -------------- Swiss Franc.............................................. 7,300,000 USD 4,271,504 02/25/02 $ (23,953) U.S. Dollar.............................................. 8,127,672 CAD 5,189,057 02/25/02 84,497 U.S. Dollar.............................................. 7,207,021 CAD 4,480,000 03/27/02 (45,407) U.S. Dollar.............................................. 7,300,000 CHF 4,273,579 05/28/02 23,580 U.S. Dollar.............................................. 9,682,132 DKK 1,165,343 02/25/02 46,553 U.S. Dollar.............................................. 1,062,389 EUR 949,776 02/25/02 37,766 U.S. Dollar.............................................. 1,800,000 EUR 1,612,566 02/25/02 67,352 U.S. Dollar.............................................. 2,050,000 EUR 1,827,780 02/25/02 67,953 U.S. Dollar.............................................. 2,230,000 EUR 1,987,644 02/25/02 73,295 U.S. Dollar.............................................. 4,450,000 EUR 3,955,360 02/25/02 135,248 U.S. Dollar.............................................. 6,086,144 EUR 5,230,000 03/27/02 12,409 U.S. Dollar.............................................. 5,940,000 EUR 5,230,259 03/27/02 137,956 U.S. Dollar.............................................. 5,940,000 EUR 5,231,506 03/27/02 139,203 U.S. Dollar.............................................. 11,111,303 EUR 9,777,947 03/27/02 252,336 U.S. Dollar.............................................. 2,750,000 EUR 2,356,008 05/28/02 4,134 U.S. Dollar.............................................. 3,950,000 EUR 3,488,403 05/28/02 110,258 U.S. Dollar.............................................. 1,805,499 EUR 1,581,798 05/28/02 37,687 U.S. Dollar.............................................. 1,859,672 EUR 1,603,037 05/28/02 12,596 U.S. Dollar.............................................. 958,135 GBP 1,388,625 02/25/02 37,461 U.S. Dollar.............................................. 2,623,104 GBP 3,695,429 03/27/02 3,309 U.S. Dollar.............................................. 1,450,000 GBP 2,065,916 05/28/02 32,452 U.S. Dollar.............................................. 240,606,000 JPY 2,000,000 02/25/02 203,338 U.S. Dollar.............................................. 261,257,250 JPY 2,150,000 02/25/02 199,130 U.S. Dollar.............................................. 332,134,440 JPY 2,600,000 02/25/02 119,874 U.S. Dollar.............................................. 198,487,815 JPY 1,564,000 02/25/02 81,844 U.S. Dollar.............................................. 594,944,000 JPY 4,480,000 03/27/02 30,180 U.S. Dollar.............................................. 164,487,500 JPY 1,250,000 05/28/02 15,516 U.S. Dollar.............................................. 47,395,565 SEK 4,428,416 03/27/02 (2,137) U.S. Dollar.............................................. 255,565,000 USD 2,000,000 02/25/02 91,635 U.S. Dollar.............................................. 16,906,414 USD 14,810,018 05/28/02 351,204 ----------- $(2,446,397) ===========
CURRENCY TYPE ABBREVIATIONS: CAD Canadian Dollars CHF Swiss Franc DKK Danish Krone EUR Euro Dollars GBP British Pounds JPY Japanese Yen SEK Swedish Krona USD U.S. Dollars INVESTMENTS BY TYPE OF ISSUER
PERCENT OF PORTFOLIO ASSETS ---------------------------- LONG-TERM SHORT-TERM --------- ---------- Government and other public issuers ........................ 57.90% 0.06% Repurchase Agreements ...................................... -- 4.83 Bank and other financial institutions ...................... 29.40 0.54 Industrial ................................................. 7.27 -- ----- ---- 94.57% 5.43% ===== ====
See accompanying notes to financial statements 74 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY VALUE EQUITY INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2002(UNAUDITED)
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--98.22% AEROSPACE & DEFENSE--3.78% 39,600 Boeing Co...................................................................... $ 1,621,620 85,200 General Dynamics Corp.......................................................... 7,630,512 63,600 Honeywell International, Inc................................................... 2,137,596 11,000 L-3 Communications Holdings, Inc.*............................................. 1,127,720 117,000 Lockheed Martin Corp........................................................... 6,197,490 42,400 Northrop Grumman Corp.......................................................... 4,732,264 188,399 United Technologies Corp....................................................... 12,948,663 ------------ 36,395,865 ------------ AUTO COMPONENTS--0.78% 61,000 ArvinMeritor, Inc.............................................................. 1,467,050 35,000 Borg Warner, Inc............................................................... 1,939,000 101,000 Lear Corp.*.................................................................... 4,056,160 ------------ 7,462,210 ------------ AUTOMOBILES--1.14% 167,900 Ford Motor Co.................................................................. 2,568,870 164,250 General Motors Corp............................................................ 8,399,745 ------------ 10,968,615 ------------ BANKS--10.96% 104,000 Amsouth Bancorp................................................................ 2,168,400 48,000 Associated Banc-Corp........................................................... 1,662,720 120,600 Astoria Financial Corp......................................................... 3,498,606 301,100 Bank of America Corp........................................................... 18,978,333 281,550 Bank One Corp.................................................................. 10,558,125 82,000 Banknorth Group, Inc........................................................... 1,940,120 74,600 Charter One Financial, Inc..................................................... 2,221,588 221,100 FleetBoston Financial Corp..................................................... 7,433,382 120,600 Golden State Bancorp, Inc...................................................... 3,429,864 89,800 GreenPoint Financial Corp...................................................... 3,852,420 245,900 KeyCorp........................................................................ 6,051,599 109,900 National City Corp............................................................. 3,090,388 94,000 SouthTrust Corp................................................................ 2,316,160 304,500 U.S. Bancorp, Inc.............................................................. 6,339,690 81,000 Union Planters Corp. (1)....................................................... 3,625,560 134,000 Wachovia Corp.................................................................. 4,455,500 286,200 Washington Mutual, Inc......................................................... 9,822,384 60,000 Webster Financial Corp......................................................... 1,995,000 259,250 Wells Fargo & Co............................................................... 12,026,607 ------------ 105,466,446 ------------ BEVERAGES--0.88% 137,900 Diageo PLC, ADR (1)............................................................ 6,461,994 40,000 PepsiCo, Inc................................................................... 2,003,600 ------------ 8,465,594 ------------ CHEMICALS--0.76% 36,300 Albemarle Corp................................................................. 851,235 38,100 Dow Chemical Co................................................................ 1,125,474 53,900 E.I. du Pont de Nemours & Co................................................... 2,380,763 89,200 Lubrizol Corp.................................................................. 2,974,820 ------------ 7,332,292 ------------ COMMERCIAL SERVICES & SUPPLIES--1.61% 215,000 Cendant Corp.*................................................................. 3,758,200
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--(CONTINUED) COMMERCIAL SERVICES & SUPPLIES--(CONCLUDED) 24,100 First Data Corp................................................................ $ 1,993,793 112,800 Fiserv, Inc. (1)*.............................................................. 4,787,232 108,000 R. R. Donnelley & Sons Co...................................................... 3,137,400 106,800 Republic Services, Inc.*....................................................... 1,858,320 ------------ 15,534,945 ------------ COMMUNICATIONS EQUIPMENT--0.33% 15,100 Motorola, Inc.................................................................. 200,981 84,700 Polycom, Inc.*................................................................. 2,962,806 ------------ 3,163,787 ------------ COMPUTERS & PERIPHERALS--3.27% 241,000 Apple Computer*................................................................ 5,957,520 508,850 Compaq Computer Corp........................................................... 6,284,297 98,300 Hewlett-Packard Co............................................................. 2,173,413 128,575 International Business Machines Corp........................................... 13,871,957 127,700 Storage Technology Corp.*...................................................... 3,124,819 ------------ 31,412,006 ------------ CONTAINERS & PACKAGING--1.08% 171,500 Packaging Corp. of America*.................................................... 3,076,710 240,000 Pactiv Corp.*.................................................................. 4,320,000 112,000 Sonoco Products Co............................................................. 2,973,600 ------------ 10,370,310 ------------ DIVERSIFIED FINANCIALS--10.67% 21,300 Affiliated Managers Group, Inc. (1)*........................................... 1,465,014 206,581 American Express Co............................................................ 7,405,929 33,900 Bear Stearns Cos., Inc......................................................... 1,971,285 734,760 Citigroup, Inc................................................................. 34,827,624 64,000 Federal Home Loan Mortgage Corp................................................ 4,295,680 224,925 Federal National Mortgage Association.......................................... 18,207,679 211,000 Household International, Inc................................................... 10,811,640 143,000 J.P. Morgan Chase & Co......................................................... 4,869,150 27,000 Lehman Brothers Holdings, Inc.................................................. 1,748,790 226,400 Merrill Lynch & Co., Inc....................................................... 11,541,872 72,500 Moody's Corp................................................................... 2,720,200 49,500 Morgan Stanley Dean Witter & Co................................................ 2,722,500 ------------ 102,587,363 ------------ DIVERSIFIED TELECOMMUNICATION SERVICES--5.69% 17,500 ALLTEL Corp.................................................................... 970,900 249,800 AT&T Corp...................................................................... 4,421,460 311,400 BellSouth Corp................................................................. 12,456,000 280,000 MCI WorldCom, Inc.............................................................. 2,814,000 298,300 SBC Communications, Inc........................................................ 11,171,335 493,289 Verizon Communications......................................................... 22,863,945 ------------ 54,697,640 ------------ ELECTRIC UTILITIES--4.62% 120,650 American Electric Power Co., Inc............................................... 5,035,931 98,500 Dominion Resources, Inc........................................................ 5,798,695 113,000 Duke Energy Corp............................................................... 3,940,310 96,650 Entergy Corp................................................................... 3,980,047 309,200 FirstEnergy Corp............................................................... 11,502,240 104,000 PNM Resources, Inc............................................................. 2,809,040
75 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--(CONTINUED) ELECTRIC UTILITIES--(CONCLUDED) 74,000 Potomac Electric Power Co...................................................... $ 1,653,160 222,031 Progress Energy, Inc. (1)...................................................... 9,702,755 ------------ 44,422,178 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS--1.01% 49,700 Arrow Electronics, Inc.*....................................................... 1,528,772 60,000 Fisher Scientific International, Inc.*......................................... 1,641,000 152,600 Sanmina-SCI Corp.*............................................................. 2,240,168 255,400 Solectron Corp.*............................................................... 2,993,288 26,900 Tech Data Corp.*............................................................... 1,358,988 ------------ 9,762,216 ------------ ENERGY EQUIPMENT & SERVICES--0.91% 176,700 Nabors Industries, Inc.*....................................................... 5,532,477 106,100 Transocean Sedco Forex, Inc.................................................... 3,250,904 ------------ 8,783,381 ------------ FOOD & DRUG RETAILING--0.39% 152,800 SUPERVALU, Inc. (1)............................................................ 3,771,104 ------------ FOOD PRODUCTS--1.99% 237,400 ConAgra Foods, Inc............................................................. 5,887,520 93,700 Dole Food Co., Inc............................................................. 2,623,600 141,950 Heinz, H.J. & Co............................................................... 5,876,730 145,200 Smithfield Foods, Inc.*........................................................ 3,223,440 118,500 Tyson Foods, Inc............................................................... 1,495,470 ------------ 19,106,760 ------------ GAS UTILITIES--0.22% 51,100 NICOR, Inc..................................................................... 2,076,704 ------------ HEALTH CARE EQUIPMENT & SUPPLIES--1.00% 15,600 Becton, Dickinson and Co....................................................... 565,032 131,000 Henry Schein, Inc.*............................................................ 6,011,590 28,000 St. Jude Medical, Inc.*........................................................ 2,220,400 20,300 Varian Medical Systems, Inc.*.................................................. 799,820 ------------ 9,596,842 ------------ HEALTH CARE PROVIDERS & SERVICES--3.64% 58,800 Anthem, Inc.*.................................................................. 3,128,160 165,800 DaVita, Inc.*.................................................................. 4,045,520 140,600 HCA, Inc....................................................................... 5,975,500 89,000 Tenet Healthcare Corp.*........................................................ 5,677,310 67,000 UnitedHealth Group, Inc........................................................ 4,981,450 88,550 Wellpoint Health Networks, Inc. (1)*........................................... 11,236,109 ------------ 35,044,049 ------------ HOTELS, RESTAURANTS & LEISURE--0.90% 64,700 Darden Restaurants, Inc........................................................ 2,665,640 220,900 McDonald's Corp................................................................ 6,004,062 ------------ 8,669,702 ------------ HOUSEHOLD DURABLES--1.76% 216,774 Koninklijke (Royal) Philips Electronics N.V., ADR.............................. 5,928,769
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--(CONTINUED) HOUSEHOLD DURABLES--(CONCLUDED) 96,000 Lennar Corp. (1)............................................................... $ 5,323,200 53,200 Mohawk Industries, Inc. (1)*................................................... 2,923,872 38,400 Whirlpool Corp................................................................. 2,791,680 ------------ 16,967,521 ------------ HOUSEHOLD PRODUCTS--1.53% 94,600 Kimberly Clark Corp............................................................ 5,704,380 110,200 Procter & Gamble Co............................................................ 9,001,136 ------------ 14,705,516 ------------ INDUSTRIAL CONGLOMERATES--1.27% 82,925 CP Railway Ltd................................................................. 1,617,038 301,800 Tyco International Ltd......................................................... 10,608,270 ------------ 12,225,308 ------------ INSURANCE--6.64% 45,900 American International Group, Inc.............................................. 3,403,485 91,550 Hartford Financial Services Group, Inc......................................... 6,059,694 111,900 John Hancock Financial Services................................................ 4,294,722 101,700 Loews Corp..................................................................... 6,147,765 642,350 MetLife, Inc. (1).............................................................. 19,514,593 134,600 Old Republic International Corp................................................ 3,970,700 34,400 Progressive Corp............................................................... 5,086,040 130,400 Protective Life Corp........................................................... 3,755,520 184,000 Prudential Financial, Inc. (1)*................................................ 5,713,200 115,600 StanCorp Financial Group, Inc.................................................. 5,878,260 ------------ 63,823,979 ------------ IT CONSULTING & SERVICES--0.85% 78,000 Accenture Ltd., Class A*....................................................... 2,010,840 99,050 Electronic Data Systems Corp................................................... 6,201,521 ------------ 8,212,361 ------------ MACHINERY--1.43% 189,600 Caterpillar, Inc. (1).......................................................... 9,533,088 37,200 Dover Corp..................................................................... 1,420,668 24,350 SPX Corp.*..................................................................... 2,779,796 ------------ 13,733,552 ------------ MEDIA--4.73% 183,775 AOL Time Warner, Inc.*......................................................... 4,835,120 94,719 Gannett Co., Inc............................................................... 6,388,797 260,600 General Motors Corp., Class H*................................................. 4,091,420 562,050 Liberty Media Corp.*........................................................... 7,306,650 64,800 McGraw-Hill Cos., Inc.......................................................... 4,152,384 47,100 New York Times Co.............................................................. 1,984,323 139,443 News Corp. Ltd., ADR........................................................... 3,281,094 48,700 Scholastic Corp.*.............................................................. 2,415,033 35,100 Viacom, Inc., Class B*......................................................... 1,403,649 457,600 Walt Disney Co................................................................. 9,637,056 ------------ 45,495,526 ------------ METALS & MINING--0.66% 177,494 Alcoa, Inc..................................................................... 6,363,160 ------------
76 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--(CONTINUED) METALS & MINING--(CONCLUDED) COMMON STOCKS--(CONCLUDED) MULTI-LINE RETAIL--2.91% 88,700 Federated Department Stores, Inc.*............................................. $ 3,691,694 43,000 Ross Stores, Inc............................................................... 1,562,190 295,700 Sears, Roebuck & Co............................................................ 15,624,788 160,275 Target Corp.................................................................... 7,117,813 ------------ 27,996,485 ------------ OIL & GAS--9.07% 101,800 Anadarko Petroleum Corp. (1)................................................... 5,001,434 119,020 Apache Corp. (1)............................................................... 5,771,280 135,200 ChevronTexaco Corp............................................................. 11,329,760 479,475 Conoco, Inc.................................................................... 13,502,016 712,762 ExxonMobil Corp................................................................ 27,833,356 64,000 Kerr-McGee Corp................................................................ 3,388,800 144,500 Occidental Petroleum Corp...................................................... 3,749,775 137,820 PanCanadian Energy Corp. (1)................................................... 3,666,012 130,040 Phillips Petroleum Co.......................................................... 7,603,439 85,000 Sunoco, Inc. (1)............................................................... 3,277,600 45,400 Valero Energy Corp............................................................. 2,085,676 ------------ 87,209,148 ------------ PAPER & FOREST PRODUCTS--1.06% 155,300 MeadWestvaco Corp.............................................................. 5,013,084 89,350 Weyerhaeuser Co................................................................ 5,210,892 ------------ 10,223,976 ------------ PERSONAL PRODUCTS--0.20% 58,500 Estee Lauder Cos., Inc., Class A............................................... 1,889,550 ------------ PHARMACEUTICALS--3.37% 134,100 Abbott Laboratories............................................................ 7,737,570 125,520 Bristol-Myers Squibb Co........................................................ 5,694,842 132,000 Johnson & Johnson.............................................................. 7,591,320 159,200 Mylan Laboratories, Inc. (1)................................................... 5,363,448 185,300 Schering-Plough Corp........................................................... 6,000,014 ------------ 32,387,194 ------------
REAL ESTATE--0.48%
NUMBER OF SHARES VALUE - --------- ------------ 85,500 Kimco Realty Corp.............................................................. 2,609,460 COMMON STOCKS--(CONCLUDED) REAL ESTATE--(CONCLUDED) 47,900 Vornado Realty Trust........................................................... $ 2,043,414 ------------ 4,652,874 ------------ ROAD & RAIL--0.97% 123,000 Burlington Northern Santa Fe, Inc.............................................. 3,473,520 94,100 Union Pacific Corp............................................................. 5,838,905 ------------ 9,312,425 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS--0.59% 253,900 Flextronics International Ltd.*................................................ 5,636,580 ------------ SOFTWARE--1.16% 141,000 Computer Associates International, Inc......................................... 4,858,860 195,700 Compuware Corp.*............................................................... 2,661,520 46,100 Symantec Corp.*................................................................ 3,626,226 ------------ 11,146,606 ------------ SPECIALTY RETAIL--1.71% 139,900 AutoNation, Inc.*.............................................................. 1,776,730 60,000 AutoZone, Inc.*................................................................ 4,059,000 148,500 Blockbuster, Inc. (1).......................................................... 2,895,750 253,000 Office Depot, Inc.(1)*......................................................... 4,161,850 126,800 Sherwin-Williams Co. (1)....................................................... 3,514,896 ------------ 16,408,226 ------------ TOBACCO--1.59% 246,100 Philip Morris Cos., Inc........................................................ 12,332,071 86,100 UST, Inc. (1).................................................................. 3,009,195 ------------ 15,341,266 ------------ TRADING COMPANIES & DISTRIBUTORS--0.21% 38,000 W.W. Grainger, Inc. (1)........................................................ 2,063,400 ------------ WIRELESS TELECOMMUNICATION SERVICES--0.40% 334,800 AT&T Wireless Services, Inc.*.................................................. 3,850,200 ------------ Total Common Stocks (cost--$892,707,614).................................................. 944,734,862 ------------
77 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- -------------- ------------ REPURCHASE AGREEMENTS--1.78% $ 8,021 Repurchase Agreement dated 01/31/02 with Dresdner Bank AG, collateralized by $5,991,000 U.S. Treasury Bonds, 8.125% to 9.875%, due 11/15/15 to 08/15/19; (value--$8,182,424); proceeds: $8,021,419............................ 02/01/02 1.880% $ 8,021,000 9,076 Repurchase Agreement dated 01/31/02 with State Street Bank & Trust Co., collateralized by $8,832,944 U.S. Treasury Notes, 5.500% to 5.750%, due 11/30/02 to 05/31/03; (value-- $9,257,885); proceeds: $9,076,449..... 02/01/02 1.780 9,076,000 ------------ Total Repurchase Agreements (cost--$17,097,000).... 17,097,000 ------------ Total Investments (cost--$909,804,614)--100.00%.... 961,831,862 Liabilities in excess of other assets--(0.00)%..... (1,575) ------------ Net Assets--100.00%................................ $961,830,287 ============
- ----------------- * Non-Income producing security. ADR American Depositary Receipt. (1) Security, or portion thereof, was on loan at January 31, 2002. See accompanying notes to financial statements 78 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2002(UNAUDITED)
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--98.08% AEROSPACE & DEFENSE--0.48% 40,000 United Technologies Corp....................................................... $ 2,749,200 ------------ BANKS--0.85% 128,800 Bank One Corp.................................................................. 4,830,000 ------------ BEVERAGES--0.96% 49,800 Coca-Cola Co................................................................... 2,178,750 77,600 Pepsi Bottling Group, Inc...................................................... 1,788,680 30,500 PepsiCo, Inc................................................................... 1,527,745 ------------ 5,495,175 ------------ BIOTECHNOLOGY--1.85% 66,900 Amgen, Inc.*................................................................... 3,712,950 48,100 Chiron Corp.*.................................................................. 2,037,997 26,300 Genentech, Inc.*............................................................... 1,300,535 10,600 Genzyme Corp.*................................................................. 483,466 27,500 IDEC Pharmaceuticals Corp.*.................................................... 1,635,150 26,300 Invitrogen Corp.*.............................................................. 1,408,891 ------------ 10,578,989 ------------ COMMERCIAL SERVICES & SUPPLIES--1.85% 52,050 Apollo Group, Inc., Class A (1)*............................................... 2,428,133 43,200 First Data Corp................................................................ 3,573,936 65,900 Fiserv, Inc.*.................................................................. 2,796,796 38,400 H&R Block, Inc................................................................. 1,776,384 ------------ 10,575,249 ------------ COMMUNICATIONS EQUIPMENT--5.31% 955,300 Cisco Systems, Inc.*........................................................... 18,914,940 170,000 Juniper Networks, Inc. (1)*.................................................... 2,604,400 305,700 Nokia Corp., ADR............................................................... 7,168,665 21,800 Polycom, Inc.*................................................................. 762,564 33,200 Scientific-Atlanta, Inc........................................................ 879,136 ------------ 30,329,705 ------------ COMPUTERS & PERIPHERALS--2.38% 338,700 Dell Computer Corp.*........................................................... 9,310,863 27,800 International Business Machines Corp........................................... 2,999,342 119,300 Sun Microsystems, Inc.*........................................................ 1,283,668 ------------ 13,593,873 ------------ DIVERSIFIED FINANCIALS--8.49% 336,649 Citigroup, Inc................................................................. 15,957,163 142,000 E*TRADE Group, Inc.*........................................................... 1,273,740 43,000 Fannie Mae..................................................................... 3,480,850 43,500 Freddie Mac.................................................................... 2,919,720 30,400 Household International, Inc................................................... 1,557,696 148,300 J.P. Morgan Chase & Co......................................................... 5,049,615 310,780 MBNA Corp...................................................................... 10,877,300 41,500 Metris Cos., Inc. (1).......................................................... 591,375 124,400 Morgan Stanley Dean Witter & Co................................................ 6,842,000 ------------ 48,549,459 ------------ DIVERSIFIED TELECOMMUNICATION SERVICES--0.11% 16,500 SBC Communications, Inc........................................................ 617,925 ------------
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--(CONCLUDED) DIVERSIFIED TELECOMMUNICATION SERVICES--(CONCLUDED) ELECTRIC UTILITIES--0.50% 212,600 AES Corp.*..................................................................... $ 2,880,730 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS--2.16% 33,400 Intersil Corp., Class A*....................................................... 992,648 209,060 Sanmina-SCI Corp.*............................................................. 3,069,001 505,400 Solectron Corp.*............................................................... 5,923,288 47,000 Tech Data Corp. (1)*........................................................... 2,374,440 ------------ 12,359,377 ------------ ENERGY EQUIPMENT & SERVICES--0.81% 132,000 Baker Hughes, Inc. (1)......................................................... 4,646,400 ------------ FOOD PRODUCTS--0.21% 53,100 Smithfield Foods, Inc.*........................................................ 1,178,820 ------------ HEALTH CARE EQUIPMENT & SUPPLIES--1.89% 45,600 Guidant Corp.*................................................................. 2,191,080 108,500 Medtronic, Inc................................................................. 5,345,795 41,500 St. Jude Medical, Inc.*........................................................ 3,290,950 ------------ 10,827,825 ------------ HEALTH CARE PROVIDERS & SERVICES--5.67% 188,850 Cardinal Health, Inc........................................................... 12,447,103 91,000 DaVita, Inc.*.................................................................. 2,220,400 246,400 Health Management Associates, Inc., Class A*................................... 4,787,552 44,200 Pharmaceutical Product Development, Inc.*........................................................... 1,434,290 20,800 Quest Diagnostics, Inc.*....................................................... 1,441,232 90,200 Tenet Healthcare Corp.*........................................................ 5,753,858 32,000 UnitedHealth Group, Inc........................................................ 2,379,200 15,500 Wellpoint Health Networks, Inc.*............................................... 1,966,795 ------------ 32,430,430 ------------ HOTELS, RESTAURANTS & LEISURE--0.39% 21,300 Darden Restaurants, Inc........................................................ 877,560 20,300 International Game Technology*................................................. 1,335,740 ------------ 2,213,300 ------------ HOUSEHOLD DURABLES--0.44% 10,400 NVR, Inc.*..................................................................... 2,495,688 ------------ HOUSEHOLD PRODUCTS--1.44% 102,800 Colgate-Palmolive Co........................................................... 5,875,020 28,600 Procter & Gamble Co............................................................ 2,336,048 ------------ 8,211,068 ------------ INDUSTRIAL CONGLOMERATES--8.31% 966,000 General Electric Co............................................................ 35,886,900 330,332 Tyco International Ltd......................................................... 11,611,170 ------------ 47,498,070 ------------ INSURANCE--3.83% 157,000 AFLAC, Inc..................................................................... 4,100,840 239,500 American International Group, Inc.............................................. 17,758,925 ------------ 21,859,765 ------------
79 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--(CONCLUDED) INSURANCE--(CONCLUDED) INTERNET SOFTWARE & SERVICES--0.83% 20,000 Check Point Software Technologies Ltd.*........................................................... $ 730,000 19,300 Expedia, Inc., Class A (1)*.................................................... 1,086,590 36,000 Overture Services, Inc.*....................................................... 1,316,880 5,700 Retek, Inc.*................................................................... 137,655 26,000 Travelocity.com, Inc. (1)*..................................................... 668,720 104,100 WebMD Corp.*................................................................... 822,390 ------------ 4,762,235 ------------ INTERNET & CATALOG RETAIL--0.14% 130,300 Priceline.com, Inc.*........................................................... 820,890 ------------ LEISURE EQUIPMENT & PRODUCTS--3.04% 33,750 Direct Focus, Inc. (1)*........................................................ 1,205,212 283,500 Harley Davidson, Inc. (1)...................................................... 16,159,500 ------------ 17,364,712 ------------ MACHINERY--0.86% 77,500 Danaher Corp................................................................... 4,939,850 ------------ MEDIA--5.77% 533,800 AOL Time Warner, Inc.*......................................................... 14,044,278 256,300 Comcast Corp., Class A*........................................................ 9,093,524 570,600 Liberty Media Corp., Class A*.................................................. 7,417,800 31,900 PanAmSat Corp.*................................................................ 695,420 43,000 Viacom, Inc., Class B*......................................................... 1,719,570 ------------ 32,970,592 ------------ MISCELLANEOUS--0.00% 49,905 Capesuccess LLC* (2)........................................................... 0 13,056 Immedient Corp.* (2)........................................................... 0 ------------ 0 ------------ MULTI-LINE RETAIL--4.22% 208,600 Kohl's Corp.*.................................................................. 13,828,094 171,300 Wal-Mart Stores, Inc........................................................... 10,274,574 ------------ 24,102,668 ------------ PHARMACEUTICALS--13.12% 25,100 Allergan, Inc.................................................................. 1,675,425 121,000 American Home Products Corp.................................................... 7,823,860 18,000 Barr Laboratories, Inc.*....................................................... 1,314,000 42,400 Forest Laboratories, Inc.*..................................................... 3,514,960 269,450 Johnson & Johnson.............................................................. 15,496,070 70,466 King Pharmaceuticals, Inc.*.................................................... 2,564,962 22,800 Medicis Pharmaceutical Corp., Class A*......................................... 1,321,488 43,700 Merck & Co., Inc............................................................... 2,586,166
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--(CONCLUDED) PHARMACEUTICALS--(CONCLUDED) 855,100 Pfizer, Inc.................................................................... 35,632,017 94,500 Schering-Plough Corp........................................................... $ 3,059,910 ------------ 74,988,858 ------------ ROAD & RAIL--0.40% 37,000 Union Pacific Corp............................................................. 2,295,850 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS--7.97% 253,150 Altera Corp.*.................................................................. 6,359,128 15,500 Analog Devices, Inc.*.......................................................... 678,900 45,000 Applied Materials, Inc.*....................................................... 1,964,250 22,800 Cabot Microelectronics Corp. (1)*.............................................. 1,511,184 333,800 Flextronics International Ltd.*................................................ 7,410,360 570,500 Intel Corp..................................................................... 19,990,320 22,800 KLA-Tencor Corp.*.............................................................. 1,305,984 24,700 Linear Technology Corp......................................................... 1,021,839 40,600 Maxim Integrated Products, Inc.*............................................... 2,252,894 33,700 Micron Technology, Inc.*....................................................... 1,137,375 19,200 Semtech Corp.*................................................................. 664,512 40,600 Texas Instruments, Inc......................................................... 1,267,126 ------------ 45,563,872 ------------ SOFTWARE--8.89% 34,570 Amdocs Ltd.*................................................................... 1,253,163 96,550 BEA Systems, Inc.*............................................................. 1,750,451 78,000 Citrix Systems, Inc. (1)*...................................................... 1,343,940 63,000 Computer Associates International, Inc......................................... 2,170,980 458,550 Microsoft Corp.*............................................................... 29,214,220 26,000 NVIDIA Corp.*.................................................................. 1,709,240 100,000 Oracle Systems Corp.*.......................................................... 1,726,000 57,000 PeopleSoft, Inc.*.............................................................. 1,851,930 44,000 Symantec Corp.*................................................................ 3,461,040 149,000 VERITAS Software Co.*.......................................................... 6,339,950 ------------ 50,820,914 ------------ SPECIALTY RETAIL--3.98% 46,900 AutoZone, Inc.*................................................................ 3,172,785 52,700 Best Buy Co., Inc.*............................................................ 3,899,800 263,100 Home Depot, Inc................................................................ 13,178,679 69,300 Tiffany & Co. (1).............................................................. 2,474,010 ------------ 22,725,274 ------------ TOBACCO--0.29% 33,000 Philip Morris Cos., Inc........................................................ 1,653,630 ------------ WIRELESS TELECOMMUNICATION SERVICES--0.64% 317,000 AT&T Wireless Services, Inc.*.................................................. 3,645,500 ------------ Total Common Stocks (cost--$539,376,033).................................................. 560,575,893 ------------
80 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - --------- -------------------- -------------- ------------ REPURCHASE AGREEMENTS--2.21% $ 6,401 Repurchase Agreement dated 01/31/02 with Dresdner Bank AG, collateralized by $6,096,000 U.S. Treasury Bonds, 6.000%, due 02/15/26; (value--$6,529,957); proceeds: $6,401,334... 02/01/02 1.880% $ 6,401,000 6,224 Repurchase Agreement dated 01/31/02 with State Street Bank & Trust Co., collateralized by $6,057,321 U.S. Treasury Notes, 5.500% to 5.750%, due 11/30/02 to 05/31/03; (value--$6,348,730); proceeds: $6,224,308....... 02/01/02 1.780 6,224,000 ------------ Total Repurchase Agreements (cost--$12,625,000)........................ 12,625,000 ------------ Total Investments (cost--$552,001,033)--100.29%........................ 573,200,893 Liabilities in excess of other assets--(0.29)%......................... (1,674,117) ------------ Net Assets--100.00%.................................................... $571,526,776 ============
- ----------------- * Non-Income producing security. ADR American Depositary Receipt (1) Security, or portion thereof, was on loan at January 31, 2002. (2) Illiquid Securities. See accompanying notes to financial statements 81 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2002(UNAUDITED)
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--98.37% AEROSPACE & DEFENSE--3.05% 195,500 BE Aerospace, Inc.*................................................................................ $ 1,564,000 137,850 B.F. Goodrich Co. (1).............................................................................. 3,834,987 333,300 Hexcel Corp. (1)*.................................................................................. 823,251 110,000 Precision Castparts Corp. ......................................................................... 3,086,600 ------------ 9,308,838 ------------ BANKS--4.62% 217,500 Colonial BancGroup, Inc............................................................................ 3,068,925 150,000 Compass Bancshares, Inc............................................................................ 4,339,500 50,000 Regions Financial Corp............................................................................. 1,563,500 399,150 Sovereign Bancorp, Inc. (1)........................................................................ 5,117,103 ------------ 14,089,028 ------------ CHEMICALS--4.44% 100,000 Cabot Corp. ....................................................................................... 3,357,000 160,000 Engelhard Corp. ................................................................................... 4,457,600 339,850 IMC Global, Inc. .................................................................................. 4,604,967 126,400 Solutia, Inc. ..................................................................................... 1,123,696 ------------ 13,543,263 ------------ COMMERCIAL SERVICES & SUPPLIES--15.29% 63,500 Avery Dennison Corp................................................................................ 3,778,250 367,700 Cendant Corp.*..................................................................................... 6,427,396 49,150 Certegy, Inc.*..................................................................................... 1,705,013 162,300 Equifax, Inc....................................................................................... 4,086,714 72,600 H&R Block, Inc. ................................................................................... 3,358,476 190,100 Herman Miller, Inc................................................................................. 4,722,084 169,100 John H. Harland Co. ............................................................................... 4,134,495 139,100 New Dun & Bradstreet Corp.*........................................................................ 4,785,040 97,500 Pitney Bowes, Inc. ................................................................................ 4,077,450 249,700 ServiceMaster Co. ................................................................................. 3,550,734 205,600 Steelcase, Inc., Class A........................................................................... 3,229,976 94,900 Waste Management, Inc. ............................................................................ 2,735,018 ------------ 46,590,646 ------------ COMMUNICATIONS EQUIPMENT--1.98% 201,200 Adaptec, Inc. ..................................................................................... 3,571,300 222,150 Enterasys Networks, Inc.*.......................................................................... 2,448,093 ------------ 6,019,393 ------------ CONSTRUCTION & ENGINEERING--1.38% 339,750 McDermott International, Inc.*..................................................................... 4,202,708 ------------ CONTAINERS & PACKAGING--1.53% 259,850 Pactiv Corp.*...................................................................................... 4,677,300 ------------ DIVERSIFIED FINANCIALS--3.36% 76,400 Franklin Resources, Inc. .......................................................................... 2,861,180 142,000 MBNA Corp.......................................................................................... 4,970,000 64,100 T. Rowe Price & Associates, Inc. .................................................................. 2,408,878 ------------ 10,240,058 ------------ DIVERSIFIED TELECOMMUNICATION SERVICES--1.68% 166,100 CenturyTel, Inc. .................................................................................. 5,112,558 ------------ ELECTRICAL EQUIPMENT--2.90% 36,000 Brady Corp., Class A............................................................................... 1,324,800 127,600 Energizer Holdings, Inc.*.......................................................................... 2,615,800 27,100 Littelfuse, Inc.*.................................................................................. 660,698 256,500 Paxar Corp.*....................................................................................... 4,232,250 ------------ 8,833,548 ------------
NUMBER OF SHARES VALUE - --------- ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS--1.18% COMMON STOCKS--(CONCLUDED) ELECTRONIC EQUIPMENT & INSTRUMENTS--(CONCLUDED) 200,000 Ingram Micro, Inc., Class A*....................................................................... $ 3,600,000 ------------ ENERGY EQUIPMENT & SERVICES--3.72% 61,900 Diamond Offshore Drilling, Inc. ................................................................... 1,781,482 259,450 Input/Output, Inc.*................................................................................ 2,244,242 583,600 Superior Energy Services, Inc.*.................................................................... 5,369,120 118,350 Veritas DGC, Inc. (1)*............................................................................. 1,927,922 ------------ 11,322,766 ------------ FOOD & DRUG RETAILING--1.50% 301,800 Casey's General Stores, Inc. ...................................................................... 4,566,234 ------------ FOOD PRODUCTS--1.41% 882,000 Creative Bakeries, Inc. (2)*....................................................................... 141,120 93,800 McCormick & Co., Inc............................................................................... 4,145,960 ------------ 4,287,080 ------------ HEALTH CARE EQUIPMENT & SUPPLIES--2.92% 184,500 Apogent Technologies, Inc. (1)*.................................................................... 4,627,260 54,800 Bausch & Lomb, Inc. ............................................................................... 2,068,700 19,000 Invacare Corp. .................................................................................... 643,150 80,499 Sybron Dental Specialties, Inc.*................................................................... 1,568,121 ------------ 8,907,231 ------------ HEALTH CARE PROVIDERS & SERVICES--2.45% 562,800 Beverly Enterprises, Inc.*......................................................................... 3,950,856 231,250 HEALTHSOUTH Corp.*................................................................................. 2,705,625 40,000 Manor Care, Inc.*.................................................................................. 796,000 ------------ 7,452,481 ------------ HOTELS, RESTAURANTS & LEISURE--2.82% 106,300 Carnival Corp. (1) ................................................................................ 2,874,352 126,000 Hilton Hotels Corp................................................................................. 1,512,000 32,800 International Game Technology*..................................................................... 2,158,240 136,150 Six Flags, Inc.*................................................................................... 2,047,696 ------------ 8,592,288 ------------ HOUSEHOLD DURABLES--4.91% 365,000 American Greetings Corp., Class A (1).............................................................. 4,547,900 73,500 Black & Decker Corp................................................................................ 3,025,260 64,700 Fortune Brands, Inc. .............................................................................. 2,635,231 309,950 Interface, Inc. ................................................................................... 1,673,730 127,000 Leggett & Platt, Inc. ............................................................................. 3,077,210 ------------ 14,959,331 ------------ HOUSEHOLD PRODUCTS--1.33% 99,400 Clorox Co. ........................................................................................ 4,053,532 ------------ INSURANCE--3.70% 47,200 HCC Insurance Holdings, Inc. (1)................................................................... 1,234,280 53,600 Horace Mann Educators Corp. ....................................................................... 1,072,536 98,900 MBIA, Inc.......................................................................................... 5,328,732 41,300 XL Capital Ltd., Class A .......................................................................... 3,639,356 ------------ 11,274,904 ------------ IT CONSULTING & SERVICES--1.58% 160,100 SunGard Data Systems, Inc.*........................................................................ 4,801,399 ------------ LEISURE EQUIPMENT & PRODUCTS--1.88% 348,000 Hasbro, Inc. (1) .................................................................................. 5,742,000 ------------
82 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--(CONCLUDED) LEISURE EQUIPMENT & PRODUCTS--(CONCLUDED) MACHINERY--5.78% 236,250 AGCO Corp. ........................................................................................ $ 3,546,112 50,000 Astec Industries, Inc.*............................................................................ 635,500 35,000 Calgon Carbon Corp................................................................................. 278,250 55,500 Harsco Corp........................................................................................ 1,954,155 31,100 IDEX Corp. ........................................................................................ 1,057,400 174,450 JLG Industries, Inc. .............................................................................. 1,985,241 220,200 Joy Global, Inc.*.................................................................................. 3,864,510 255,400 Terex Corp.*....................................................................................... 4,277,950 ------------ 17,599,118 ------------ MEDIA--7.47% 1,915 Grey Global Group, Inc. ........................................................................... 1,239,962 157,800 Harte-Hanks Co. ................................................................................... 4,536,750 141,800 Interpublic Group Cos., Inc........................................................................ 4,093,766 157,800 Lee Enterprises, Inc. (1).......................................................................... 5,382,558 89,500 McClatchy Co., Class A ............................................................................ 4,528,700 80,600 Tribune Co. ....................................................................................... 2,995,902 ------------ 22,777,638 ------------ METALS & MINING--1.37% 150,000 AK Steel Holding Corp.............................................................................. 2,067,000 141,200 Massey Energy Co. ................................................................................. 2,093,996 ------------ 4,160,996 ------------ MULTI-LINE RETAIL--1.90% 69,500 Neiman Marcus Group, Inc., Class A*................................................................ 2,466,555 91,550 Ross Stores, Inc. (1) ............................................................................. 3,326,012 ------------ 5,792,567 ------------ MULTI-UTILITIES--0.82% 183,200 Avista Corp........................................................................................ 2,508,008 ------------ OIL & GAS--1.57% 345,300 Pennzoil-Quaker State Co. ......................................................................... 4,778,952 ------------
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--(CONCLUDED) OIL & GAS--(CONCLUDED) PAPER & FOREST PRODUCTS--1.71% 602,400 Louisiana-Pacific Corp. ........................................................................... $ 5,204,736 ------------ REAL ESTATE--2.26% 76,200 Bedford Property Investors, Inc. .................................................................. 1,844,040 176,800 Rouse Co. ......................................................................................... 5,056,480 ------------ 6,900,520 ------------ SOFTWARE--1.19% 1,482 CareCentric, Inc.*................................................................................. 1,260 384,200 Systems & Computer Technology Corp.*............................................................... 3,626,848 ------------ 3,628,108 ------------ SPECIALTY RETAIL--4.08% 717,200 Charming Shoppes, Inc.*............................................................................ 4,224,308 268,700 Office Depot, Inc. (1)*............................................................................ 4,420,115 193,300 Toys R Us, Inc. (1)*............................................................................... 3,780,948 ------------ 12,425,371 ------------ TEXTILES & APPAREL--0.59% 54,200 Jones Apparel Group, Inc.*......................................................................... 1,797,814 ------------ Total Common Stocks (cost--$241,202,459)...................................................................... 299,750,414 ------------ NUMBER OF WARRANTS - --------- WARRANTS--0.00% DIVERSIFIED FINANCIALS--0.00% 4,914 Imperial Credit Industries, Inc., expiring 01/31/08* (cost--$0).................................... 642 ------------
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATE RATE - --------- -------------------- -------------- REPURCHASE AGREEMENT--2.96% $ 9,030 Repurchase Agreement dated 01/31/02 with State Street Bank & Trust Co., collateralized by $8,788,176 U.S. Treasury Notes, 5.500% to 5.750% due 11/30/02 to 05/31/03; (value--$9,210,962); proceeds: $9,030,446 (cost--$9,030,000)........................................ 02/01/02 1.780% 9,030,000 ------------ Total Investments (cost--$250,232,459)--101.33%........................ 308,781,056 Liabilities in excess of other assets--(1.33)%......................... (4,056,522) ------------ Net Assets--100.00%.................................................... $304,724,534 ============
- ----------------- * Non-Income producing security. (1) Security, or portion thereof, was on loan at January 31, 2002. (2) Illiquid security representing 0.05% of net assets. See accompanying notes to financial statements 83 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2002(UNAUDITED)
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--96.14% AUTO COMPONENTS--1.98% 214,900 Gentex Corp.*............................................... $ 6,395,424 ------------ BANKS--8.29% 119,900 City National Corp.......................................... 5,913,468 170,200 Cullen/Frost Bankers, Inc................................... 5,352,790 152,300 Doral Financial Corp........................................ 5,391,420 113,100 Downey Financial Corp....................................... 5,202,600 148,400 Webster Financial Corp...................................... 4,934,300 ------------ 26,794,578 ------------ BIOTECHNOLOGY--5.48% 204,200 Cubist Pharmaceuticals, Inc.*............................... 3,661,306 74,300 CV Therapeutics, Inc.*...................................... 3,175,582 175,100 Exelixis, Inc. (1)*......................................... 2,144,975 209,700 Neurocrine Biosciences, Inc. (1)*........................... 8,725,617 ------------ 17,707,480 ------------ COMMERCIAL SERVICES & SUPPLIES--5.90% 134,500 Bright Horizons Family Solutions*........................... 3,766,000 112,700 Corporate Executive Board Co.*.............................. 3,627,813 43,600 Edison Schools, Inc.*....................................... 725,940 165,000 Resources Connection, Inc.*................................. 4,323,000 264,700 West Corp.*................................................. 6,625,441 ------------ 19,068,194 ------------ COMMUNICATIONS EQUIPMENT--5.98% 358,800 Advanced Fibre Communications, Inc.*........................ 6,225,180 44,400 Emulex Corp.*............................................... 2,042,844 364,200 Finisar Corp. (1)*.......................................... 4,286,634 356,800 ONI Systems Corp.*.......................................... 2,023,056 336,800 Tekelec*.................................................... 4,775,824 ------------ 19,353,538 ------------ COMPUTERS & PERIPHERALS--0.51% 91,100 Network Appliance, Inc.*.................................... 1,635,245 ------------ DIVERSIFIED TELECOMMUNICATION SERVICES--0.35% 377,400 Western Multiplex Corp., Class A (1)*....................... 1,139,748 ------------ ENERGY EQUIPMENT & SERVICES--0.52% 127,900 Pride International, Inc.*.................................. 1,669,095 ------------ FOOD & DRUG RETAILING--1.11% 124,000 Duane Reade, Inc. (1)*...................................... 3,589,800 ------------ FOOD PRODUCTS--1.51% 119,200 American Italian Pasta Co.*................................. 4,887,200 ------------ HEALTH CARE EQUIPMENT & SUPPLIES--1.86% 445,300 Inhale Therapeutic Systems, Inc.*........................... 6,029,362 ------------ HEALTH CARE PROVIDERS & SERVICES--0.39% 101,100 Humana, Inc.*............................................... 1,258,695 ------------ HOTELS, RESTAURANTS & LEISURE--12.69% 71,100 CEC Entertainment, Inc.*.................................... 3,195,945
245,537 Cheesecake Factory, Inc.*................................... 8,814,778
NUMBER OF SHARES VALUE - --------- ------------ 296,100 Extended Stay America, Inc.*................................ 4,782,015 229,800 Krispy Kreme Doughnuts, Inc. (1)*........................... $ 9,157,530 239,300 Ruby Tuesday, Inc........................................... 6,042,325 237,975 Sonic Corp.*................................................ 9,043,050 ------------ 41,035,643 ------------ HOUSEHOLD DURABLES--4.80% 218,700 D.R. Horton, Inc............................................ 8,188,128 170,000 KB Home (1)................................................. 7,320,200 ------------ 15,508,328 ------------ INSURANCE--9.84% 97,800 Everest Re Group Ltd........................................ 6,718,860 19,800 Markel Corp.*............................................... 3,819,420 190,000 PartnerRe Ltd............................................... 9,688,100 258,400 Radian Group, Inc........................................... 11,602,160 ------------ 31,828,540 ------------ INTERNET SOFTWARE & SERVICES--0.92% 119,100 WebEx Communications, Inc. (1)*............................. 2,976,309 ------------ MACHINERY--0.57% 63,800 CoorsTek, Inc.*............................................. 1,840,630 ------------ MEDIA--8.14% 80,200 Cumulus Media, Inc., Class A*............................... 1,283,200 263,500 Getty Images, Inc.*......................................... 5,343,780 199,400 Hispanic Broadcasting Corp.*................................ 4,693,876 360,200 Mediacom Communications Corp., Class A*..................... 6,469,192 257,000 Radio One, Inc., Class A*................................... 4,530,910 129,500 Westwood One, Inc.*......................................... 4,001,550 ------------ 26,322,508 ------------ MULTI-LINE RETAIL--4.33% 327,175 Dollar Tree Stores, Inc.*................................... 10,800,047 160,200 MSC Industrial Direct Co., Inc., Class A*.................................................. 3,210,408 ------------ 14,010,455 ------------ PHARMACEUTICALS--3.16% 111,400 Cima Labs, Inc.*............................................ 2,907,540 120,500 Inspire Pharmaceuticals, Inc.*.............................. 425,365 190,400 Trimeris, Inc.*............................................. 6,873,440 ------------ 10,206,345 ------------ ROAD & RAIL--0.93% 99,600 Arkansas Best Corp.*........................................ 3,006,924 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS--3.63% 159,900 Applied Micro Circuits Corp.*............................... 1,626,183 242,200 Micrel, Inc.*............................................... 5,715,920 234,600 TranSwitch Corp.*........................................... 917,286 276,400 Vitesse Semiconductor Corp.*................................ 3,496,460 ------------ 11,755,849 ------------
84 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
NUMBER OF SHARES VALUE - --------- ------------ COMMON STOCKS--(CONCLUDED) SEMICONDUCTOR EQUIPMENT & PRODUCTS--(CONCLUDED) SOFTWARE--3.79% 364,200 Jack Henry & Associates, Inc................................ $ 7,932,276 62,100 NetIQ Corp.*................................................ 1,863,000 67,700 Peregrine Systems, Inc.*.................................... 540,923 80,700 Quest Software, Inc.*....................................... 1,923,081 ------------ 12,259,280 ------------ SPECIALTY RETAIL--7.37% 149,900 American Eagle Outfitters, Inc. (1)*........................ 3,813,456
90,000 Bed, Bath & Beyond, Inc.*................................... 3,112,200
NUMBER OF SHARES VALUE - --------- ------------ 173,100 Cost Plus, Inc.*............................................ 4,673,700 49,900 Linens 'n Things, Inc.*..................................... 1,439,615 30,000 Lowe's Cos., Inc............................................ $ 1,382,100 161,800 Too, Inc.*.................................................. 4,404,196 177,100 Tweeter Home Entertainment Group, Inc.*.............................................. 5,011,930 ------------ 23,837,197 ------------ TEXTILES & APPAREL--2.09% 146,300 Coach, Inc.*................................................ 6,751,745 ------------ Total Common Stocks (cost--$288,900,956)............................... 310,868,112 ------------
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATE RATE - --------- -------------------- -------------- REPURCHASE AGREEMENT--4.10% $13,276 Repurchase Agreement dated 01/31/02 with State Street Bank & Trust Co., collateralized by $12,920,468 U.S. Treasury Notes, 5.500% to 5.750%, due 11/30/02 to 05/31/03; (value--$13,542,053); proceeds: $13,276,656 (cost--$13,276,000)....................................... 02/01/02 1.780% 13,276,000 ------------ Total Investments (cost--$302,176,956)--100.24%........................ 324,144,112 Liabilities in excess of other assets--(0.24)%......................... (792,172) ------------ Net Assets--100.00%.................................................... $323,351,940 ============
- ----------------- * Non-Income producing security. (1) Security, or portion thereof, was on loan at January 31, 2002. See accompanying notes to financial statements 85 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EQUITY INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2002(UNAUDITED)
NUMBER OF SHARES VALUE - --------------- --------------- COMMON STOCKS--93.36% AUSTRALIA--2.40% INSURANCE--0.37% 135,000 AMP Ltd......................................................................... $ 1,327,218 ------------ MEDIA--0.80% 415,000 News Corp. Ltd.................................................................. 2,885,676 ------------ METALS & MINING--1.23% 784,092 BHP Billiton Ltd. (1)........................................................... 4,449,259 ------------ Total Australia Common Stocks...................................................................... 8,662,153 ------------ BRAZIL--0.32% BANKS--0.15% 24,000 Unibanco--Uniao de Bancos Brasileiros S.A., GDR................................. 548,640 ------------ PAPER & FOREST PRODUCTS--0.17% 35,000 Aracruz Celulose S.A., ADR...................................................... 610,918 ------------ Total Brazil Common Stocks......................................................................... 1,159,558 ------------ DENMARK--0.64% PHARMACEUTICALS--0.64% 64,000 Novo Nordisk AS................................................................. 2,287,711 ------------ FINLAND--2.76% COMMUNICATIONS EQUIPMENT--1.61% 252,411 Nokia (AB) OY................................................................... 5,797,650 ------------ PAPER & FOREST PRODUCTS--1.15% 121,343 UPM-Kymmene OYJ................................................................. 4,140,563 ------------ Total Finland Common Stocks........................................................................ 9,938,213 ------------ FRANCE--7.66% AUTOMOBILES--0.80% 73,272 PSA Peugeot Citroen............................................................. 2,885,577 ------------ MULTI-UTILITIES--0.62% 79,376 Suez Lyonnaise des Eaux S.A..................................................... 2,250,857 ------------ OIL & GAS--2.33% 59,995 Total FINA S.A., Series B....................................................... 8,398,098 ------------ PHARMACEUTICALS--3.91% 163,435 Aventis S.A..................................................................... 11,326,461 41,165 Sanofi-Synthelabo S.A........................................................... 2,752,026 ------------ 14,078,487 ------------ Total France Common Stocks......................................................................... 27,613,019 ------------ GERMANY--4.34% INSURANCE--4.34% 35,256 Allianz AG...................................................................... 7,922,268 32,599 Muenchener Rueckversicherungs-Gesellschaft AG................................... 7,731,400 ------------ 15,653,668 ------------ HONG KONG--2.42% AIRLINE--0.45% 1,100,000 Cathay Pacific Airways Ltd...................................................... 1,621,920 ------------
NUMBER OF SHARES VALUE - --------------- --------------- DIVERSIFIED FINANCIALS--0.98% 1,286,000 Hong Kong Exchanges & Clearing Ltd.............................................. $ 1,879,683 766,000 Wharf (Holdings) Ltd............................................................ 1,659,794 ------------ 3,539,477 ------------ INDUSTRIAL CONGLOMERATES--0.52% 201,300 Hutchison Whampoa Ltd........................................................... 1,864,749 ------------ REAL ESTATE--0.47% 176,000 Cheung Kong (Holdings) Ltd...................................................... 1,681,155 ------------ Total Hong Kong Common Stocks...................................................................... 8,707,301 ------------ HUNGARY--0.25% BANKS--0.25% 13,000 OTP Bank Rt., ADR............................................................... 908,050 ------------ INDONESIA--0.51% DIVERSIFIED TELECOMMUNICATION SERVICES--0.51% 5,087,000 PT Telekomunikasi Indonesia, Series B*.......................................... 1,824,712 ------------ IRELAND--2.09% BANKS--1.24% 473,937 Bank of Ireland................................................................. 4,459,432 ------------ CONSTRUCTION MATERIALS--0.85% 201,742 CRH PLC......................................................................... 3,085,752 ------------ Total Ireland Common Stocks........................................................................ 7,545,184 ------------ ISRAEL--0.40% INTERNET SOFTWARE & SERVICES--0.30% 29,200 Check Point Software Technologies Ltd.*......................................... 1,065,800 ------------ PHARMACEUTICALS--0.10% 6,000 Teva Pharmaceutical Industries Ltd., ADR........................................ 372,000 ------------ Total Israel Common Stocks......................................................................... 1,437,800 ------------ ITALY--6.23% DIVERSIFIED TELECOMMUNICATION SERVICES--1.31% 938,356 Telecom Italia SPA.............................................................. 4,717,026 ------------ INSURANCE--1.40% 218,378 Alleanza Assicurazioni.......................................................... 2,148,618 261,089 Riunione Adriatica di Sicurta SPA............................................... 2,905,381 ------------ 5,053,999 ------------ OIL & GAS--1.47% 407,230 ENI SPA......................................................................... 5,287,483 ------------ TRANSPORTATION INFRASTRUCTURE--1.09% 559,395 Autostrade--Concessioni e Costruzioni Autostrade SPA............................ 3,951,256 ------------
86 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EQUITY INVESTMENTS
NUMBER OF SHARES VALUE - --------------- --------------- COMMON STOCKS--(CONTINUED) ITALY--(CONCLUDED) TRANSPORTATION INFRASTRUCTURE--(CONCLUDED) WIRELESS TELECOMMUNICATION SERVICES--0.96% 699,534 Telecom Italia Mobilare SPA..................................................... $ 3,462,391 ------------ Total Italy Common Stocks.......................................................................... 22,472,155 ------------ JAPAN--16.34% AUTOMOBILES--1.06% 61,000 Honda Motor Co. Ltd............................................................. 2,420,436 55,000 Toyota Motor Corp............................................................... 1,415,253 ------------ 3,835,689 ------------ AUTO COMPONENTS--1.05% 143,000 Bridgestone Corp................................................................ 1,546,523 158,600 Denso Corp...................................................................... 2,247,548 ------------ 3,794,071 ------------ BANKS--0.18% 348 UFJ Holdings, Inc. (1)*......................................................... 654,082 ------------ CHEMICALS--1.31% 511,000 Asahi Chemical Industries Co. Ltd............................................... 1,448,294 61,900 Shin Etsu Chemical Co. Ltd...................................................... 2,040,634 229,000 Sumitomo Bakelite Co. Ltd....................................................... 1,251,963 ------------ 4,740,891 ------------ COMMERCIAL SERVICES & SUPPLIES--0.61% 49,000 Secom Co. Ltd................................................................... 2,214,731 ------------ DIVERSIFIED FINANCIALS--1.20% 22,400 Aiful Corp...................................................................... 1,336,565 73,000 Credit Saison Co. Ltd........................................................... 1,279,508 155,000 Nomura Securities Co. Ltd....................................................... 1,695,954 ------------ 4,312,027 ------------ DIVERSIFIED TELECOMMUNICATION SERVICES--0.34% 405 Nippon Telephone & Telegraph Corp. (NTT)........................................ 1,220,362 ------------ ELECTRICAL EQUIPMENT--1.04% 27,700 Mabuchi Motor Co. Ltd........................................................... 2,208,562 249,000 Sumitomo Electric Industries Ltd................................................ 1,541,451 ------------ 3,750,013 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS--0.49% 281,000 Hitachi Ltd..................................................................... 1,758,411 ------------ FOOD & DRUG RETAILING--0.31% 73,000 Familymart Co. Ltd. (1)......................................................... 1,116,166 ------------ GAS UTILITIES--0.33% 530,000 Osaka Gas Co. Ltd............................................................... 1,174,044 ------------ HOTELS, RESTAURANTS & LEISURE--0.44% 92,000 Namco Ltd....................................................................... 1,578,221 ------------ HOUSEHOLD DURABLES--0.41% 33,400 Sony Corp....................................................................... 1,462,301 ------------
NUMBER OF SHARES VALUE - --------------- --------------- HOUSEHOLD PRODUCTS--0.77% 151,000 Kao Corp........................................................................ 2,770,539 ------------ LEISURE EQUIPMENT & PRODUCTS--0.69% 78,000 Fuji Photo Film Co. Ltd......................................................... $ 2,478,315 ------------ MACHINERY--0.43% 594,000 Mitsubishi Heavy Industries Ltd................................................. 1,546,194 ------------ MEDIA--0.42% 195,000 Toppan Printing Co.............................................................. 1,519,858 ------------ MULTI-LINE RETAIL--1.32% 48,000 Aeon Co. Ltd. (1)............................................................... 914,712 45,000 Ito-Yokado Co. Ltd.............................................................. 1,664,740 203,000 Marui Co. Ltd. (1).............................................................. 2,198,441 ------------ 4,777,893 ------------ OFFICE ELECTRONICS--1.03% 114,000 Canon, Inc...................................................................... 3,732,687 ------------ PHARMACEUTICALS--1.17% 104,000 Taisho Pharmaceutical Co........................................................ 1,528,100 112,000 Yamanouchi Pharmaceutical Co.................................................... 2,706,545 ------------ 4,234,645 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS--0.60% 16,500 Rohm Co. Ltd.................................................................... 2,152,415 ------------ SOFTWARE--0.33% 164,000 Sorun Corp...................................................................... 1,190,170 ------------ TRADING COMPANIES & DISTRIBUTORS--0.28% 216,000 Sumitomo Corp................................................................... 997,233 ------------ WIRELESS TELECOMMUNICATION SERVICES--0.53% 182 NTT Mobile Communication Network................................................ 1,900,429 ------------ Total Japan Common Stocks.......................................................................... 58,911,387 ------------ KOREA--2.55% AUTOMOBILES--0.58% 91,100 Hyundai Motor Co. Ltd........................................................... 2,104,609 ------------ BANKS--0.45% 36,204 Kookmin Bank, ADR (1)........................................................... 1,612,526 ------------ HOUSEHOLD DURABLES--0.43% 66,060 LG Electronics, Inc............................................................. 1,548,833 ------------ INDUSTRIAL CONGLOMERATES--0.45% 140,000 Hyundai Motor Co. Ltd., GDR..................................................... 1,617,000 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS--0.64% 10,040 Samsung Electronics Co. Ltd..................................................... 2,304,124 ------------ Total Korea Common Stocks.......................................................................... 9,187,092 ------------ MEXICO--0.59% WIRELESS TELECOMMUNICATION SERVICES--0.59% 108,000 America Movil S.A. de C.V., ADR, Series L....................................... 2,138,400 ------------
87 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EQUITY INVESTMENTS
NUMBER OF SHARES VALUE - --------------- --------------- COMMON STOCKS--(CONTINUED) MEXICO--(CONCLUDED) WIRELESS TELECOMMUNICATION SERVICES--(CONCLUDED) COMMON STOCKS--(CONCLUDED) NETHERLANDS--8.12% AIR FREIGHT & COURIERS--1.19% 206,879 TPG N.V......................................................................... $ 4,278,951 ------------ CHEMICALS--0.86% 72,278 Akzo Nobel N.V.*................................................................ 3,094,866 ------------ DIVERSIFIED FINANCIALS--1.73% 249,784 ING Groep N.V................................................................... 6,246,006 ------------ FOOD & DRUG RETAILING--1.09% 153,851 Koninklijke Ahold N.V........................................................... 3,939,684 ------------ HOUSEHOLD DURABLES--2.00% 265,077 Koninklijke (Royal) Philips Electronics N.V..................................... 7,193,313 ------------ MEDIA--1.25% 146,305 VNU N.V.*....................................................................... 4,519,629 ------------ Total Netherlands Common Stocks.................................................................... 29,272,449 ------------ POLAND--0.17% OIL & GAS--0.17% 58,000 Polski Koncern Naftowy Orlen S.A., GDR+......................................... 623,500 ------------ PORTUGAL--0.75% DIVERSIFIED TELECOMMUNICATION SERVICES--0.75% 365,912 Portugal Telecom, SGPS, S.A.*................................................... 2,719,804 ------------ SINGAPORE--1.54% BANKS--1.54% 365,000 Overseas Chinese Banking Corp. Ltd.............................................. 2,564,612 370,000 United Overseas Bank Ltd........................................................ 3,002,805 ------------ 5,567,417 ------------ SOUTH AFRICA--0.22% METALS & MINING--0.22% 20,655 Anglo American Platinum Corp.................................................... 799,082 ------------ SPAIN--3.85% BANKS--1.62% 516,051 Banco Bilbao Vizcaya Argenta.................................................... 5,853,442 ------------ COMMERCIAL SERVICES & SUPPLIES--0.61% 345,277 Amadeus Global Travel Distribution S.A., Series A*.............................. 2,183,686 ------------ DIVERSIFIED TELECOMMUNICATION SERVICES--0.85% 260,557 Telefonica S.A.*................................................................ 3,056,189 ------------ ELECTRIC UTILITIES--0.77% 192,914 Endesa S.A. .................................................................... 2,793,241 ------------ Total Spain Common Stocks.......................................................................... 13,886,558 ------------
NUMBER OF SHARES VALUE - --------------- --------------- SWEDEN--0.44% MACHINERY--0.44% 74,500 Sandvik AB...................................................................... 1,592,761 ------------ SWITZERLAND--3.75% BANKS--1.72% 162,000 Credit Suisse Group S.A.*....................................................... $ 6,196,696 ------------ FOOD PRODUCTS--2.03% 34,000 Nestle S.A.*.................................................................... 7,338,414 ------------ Total Switzerland Common Stocks.................................................................... 13,535,110 ------------ THAILAND--0.48% BANKS--0.48% 1,200,000 Bangkok Bank Public Co. Ltd. (1)*............................................... 1,730,442 ------------ UNITED KINGDOM--24.54% BANKS--4.45% 103,000 Barclays PLC.................................................................... 3,247,817 579,000 HSBC Holdings................................................................... 6,483,616 251,000 Royal Bank of Scotland Group PLC................................................ 6,326,703 ------------ 16,058,136 ------------ BEVERAGES--1.81% 562,000 Diageo PLC...................................................................... 6,539,267 ------------ DIVERSIFIED FINANCIALS--1.72% 573,000 3I Group PLC.................................................................... 6,197,962 ------------ GAS UTILITIES--0.68% 750,000 Centrica PLC*................................................................... 2,430,578 ------------ INTERNET & CATALOG RETAIL--0.99% 380,000 GUS PLC*........................................................................ 3,549,596 ------------ MEDIA--2.56% 326,363 British Sky Broadcasting Group PLC*............................................. 3,087,744 630,000 WPP Group PLC................................................................... 6,138,400 ------------ 9,226,144 ------------ METALS & MINING--1.63% 359,160 Anglo American PLC.............................................................. 5,891,733 ------------ OIL & GAS--3.21% 755,832 BP Amoco PLC.................................................................... 5,848,862 844,000 Shell Transportation & Trading Co............................................... 5,726,660 ------------ 11,575,522 ------------ PHARMACEUTICALS--3.89% 587,876 GlaxoSmithKline PLC............................................................. 14,021,062 ------------ WIRELESS TELECOMMUNICATION SERVICES--3.60% 6,041,578 Vodafone Group PLC.............................................................. 12,988,926 ------------ Total United Kingdom Common Stocks................................................................. 88,478,926 ------------ Total Common Stocks (cost--$393,261,964)........................................................... 336,652,452 ------------
88 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EQUITY INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE - ----------- ------------ -------- ------------ CONVERTIBLE BOND--0.66% NETHERLANDS--0.66% SEMICONDUCTOR EQUIPMENT & PRODUCTS--0.66% $ 2,400 STMicroelectronics N.V. (cost--$2,523,071)............................. 09/22/09 0.000%# $ 2,382,000 ------------
NUMBER OF WARRANTS - --------------- WARRANTS--0.29% GERMANY--0.29% BANKS--0.29% 103,365 Deutsche Bank, expiring 10/22/02* (cost--$1,080,783)............................ NUMBER OF RIGHTS - --------------- RIGHTS--0.02% SPAIN--0.02% DIVERSIFIED TELECOMMUNICATION SERVICES--0.02% 223,346 Telefonica S.A.* (cost--$61,003)................................................ WARRANTS--0.29% GERMANY--0.29% BANKS--0.29% 103,365 1,043,627 ------------ RIGHTS--0.02% SPAIN--0.02% DIVERSIFIED TEL 223,346 58,725 ------------
PRINCIPAL AMOUNT (000) - ----------- REPURCHASE AGREEMENT--5.22% $ 18,826 Repurchase Agreement dated 01/31/02 with State Street Bank & Trust Co., collateralized by $18,321,838 U.S. Treasury Notes, 5.500% to 5.750%, due 11/30/02 to 05/31/03; (value--$19,203,276); proceeds: $18,826,931 (cost--$18,826,000).................................................. 02/01/02 1.780 18,826,000 ------------ 358,962,804 Total Investments (cost--$415,752,821)--99.55%...................................... 1,610,472 Other assets in excess of liabilities--0.45%........................................ ------------ Net Assets--100.00%................................................................. $360,573,276 ============
- ----------------- # Zero coupon bond. * Non-Income producing security. + Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified Institutional buyers. ADR American Depositary Receipt. GDR Global Depositary Receipt. (1) Security, or portion thereof, was on loan at January 31, 2002. FORWARD FOREIGN CURRENCY CONTRACTS
CONTRACTS TO IN MATURITY UNREALIZED DELIVER EXCHANGE FOR DATE APPRECIATION ------------- -------------- --------- ------------ Japanese Yen................................................ 2,471,179,780 USD 19,697,000 03/04/02 $1,235,989 ==========
CURRENCY TYPE ABBREVIATIONS: USD U.S. Dollars See accompanying notes to financial statements 89 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2002(UNAUDITED)
NUMBER OF SHARES VALUE - --------------- --------------- COMMON STOCKS--91.54% BRAZIL--3.96% BANKS--0.41% 15,900 Unibanco--Uniao de Bancos Brasileiros S.A., GDR............................ $ 363,474 ----------- DIVERSIFIED TELECOMMUNICATION SERVICES--1.23% 2,670 Brasil Telecom Participacoes S.A., ADR..................................... 93,873 74,613 Tele Norte Leste Participacoes, ADR (1).................................... 998,322 5,300 Telecomunicacoes Brasileiras S.A. (Telebras), ADR*......................... 0 ----------- 1,092,195 ----------- ELECTRIC UTILITIES--0.34% 45,300 Companhia Paranaense de Energia--Copel, ADR................................ 296,262 ----------- FOOD & DRUG RETAILING--0.34% 13,900 Pao de Acucar, CBD, ADR*................................................... 305,105 ----------- METALS & MINING--0.02% 1,400 Gerdau S.A., ADR........................................................... 13,468 ----------- OIL & GAS--1.41% 61,435 Petroleo Brasileiro S.A.--Petrobras, ADR................................... 1,252,045 ----------- PAPER & FOREST PRODUCTS--0.06% 3,500 Votorantim Celulose de Papel S.A., ADR..................................... 56,000 ----------- WIRELESS TELECOMMUNICATION SERVICES--0.15% 22,800 Tele Centro Oeste Celular Participacoes S.A., ADR*......................... 131,282 ----------- Total Brazil Common Stocks.................................................................... 3,509,831 ----------- CHILE--0.88% BANKS--0.23% 12,000 Banco Santander Chile, ADR................................................. 200,464 ----------- DIVERSIFIED TELECOMMUNICATION SERVICES--0.31% 20,015 Compania de Telecomunicaciones de Chile S.A., ADR*......................... 276,207 ----------- ELECTRIC UTILITIES--0.34% 31,850 Empresa Nacional de Electricidad S.A. (Endesa-Chile), ADR.................. 302,575 ----------- Total Chile Common Stocks..................................................................... 779,246 ----------- CHINA--1.37% AUTOMOBILES--0.20% 1,064,000 Qingling Motors Co. Ltd., Class H.......................................... 180,075 ----------- COMMUNICATIONS EQUIPMENT--0.20% 6,900 UTStarcom, Inc.*........................................................... 178,848 ----------- METALS & MINING--0.21% 1,290,000 Angang New Steel Co. Ltd., Class H......................................... 185,245 -----------
NUMBER OF SHARES VALUE - --------------- --------------- COMMON STOCKS--(CONTINUED) CHINA--(CONCLUDED) METALS & MINING--(CONCLUDED) OIL & GAS--0.76% 2,442,000 China Petroleum & Chemical Corp. (Sinopec), Class H........................ $ 366,328 1,646,000 PetroChina Co. Ltd., Class H............................................... 303,901 ----------- 670,229 ----------- Total China Common Stocks..................................................................... 1,214,397 ----------- CZECH REPUBLIC--0.28% BANKS--0.28% 7,360 Komercni Banka A.S.*....................................................... 252,938 2 Komercni Banka A.S., GDR*.................................................. 23 ----------- 252,961 ----------- HONG KONG--3.44% COMPUTERS & PERIPHERALS--0.71% 1,367,000 Legend Holdings Ltd........................................................ 630,972 ----------- DIVERSIFIED FINANCIALS--0.25% 152,000 Hong Kong Exchanges & Clearing Ltd......................................... 222,171 ----------- INDUSTRIAL CONGLOMERATES--0.43% 282,000 China Insurance International Holdings Co. Ltd............................. 162,705 296,000 China Merchants Holdings International Co. Ltd............................. 214,426 ----------- 377,131 ----------- WIRELESS TELECOMMUNICATION SERVICES--2.05% 635,000 China Mobile (Hong Kong) Ltd.*............................................. 1,819,659 ----------- Total Hong Kong Common Stocks................................................................. 3,049,933 ----------- HUNGARY--1.78% DIVERSIFIED FINANCIALS--0.47% 5,911 OTP Bank, GDR.............................................................. 412,883 ----------- DIVERSIFIED TELECOMMUNICATION SERVICES--0.67% 32,460 Matav RT, ADS, Series B.................................................... 598,887 ----------- OIL & GAS--0.31% 14,250 Magyar Olaj-es Gazipari Reszvenytar, GDR................................... 272,175 ----------- PHARMACEUTICALS--0.33% 4,560 Gedeon Richter Ltd., GDS................................................... 295,488 ----------- Total Hungary Common Stocks................................................................... 1,579,433 ----------- INDIA--5.94% AUTOMOBILES--0.20% 19,500 Bajaj Auto Ltd............................................................. 175,966 ----------- BANKS--0.30% 60,200 State Bank of India........................................................ 260,420 ----------- CHEMICALS--0.70% 100,500 Reliance Industries Ltd.................................................... 620,693 -----------
90 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
NUMBER OF SHARES VALUE - --------------- --------------- COMMON STOCKS--(CONTINUED) INDIA--(CONCLUDED) CHEMICALS--(CONCLUDED) DIVERSIFIED FINANCIALS--0.56% 38,000 Housing Development Finance Corp. Ltd................................................................ $ 495,073 ----------- HOUSEHOLD PRODUCTS--0.64% 125,200 Hindustan Lever Ltd........................................................ 569,607 ----------- INDUSTRIAL CONGLOMERATES--0.00% 2 Gesco Corp. Ltd............................................................ 1 ----------- IT CONSULTING & SERVICES--1.18% 9,200 Infosys Technologies....................................................... 737,621 54,500 Satyam Computer Services Ltd............................................... 308,845 ----------- 1,046,466 ----------- MARINE--0.00% 90 Great Eastern Shipping Co.................................................. 47 ----------- METALS & MINING--0.42% 179,200 Tata Iron & Steel Co. Ltd.*................................................ 371,255 ----------- PHARMACEUTICALS--1.33% 26,500 Dr. Reddy's Laboratories Ltd............................................... 505,609 45,300 Ranbaxy Laboratories Ltd................................................... 674,037 ----------- 1,179,646 ----------- TOBACCO--0.61% 38,000 ITC Ltd.................................................................... 544,032 ----------- Total India Common Stocks..................................................................... 5,263,206 ----------- INDONESIA--1.59% DIVERSIFIED TELECOMMUNICATION SERVICES--1.40% 3,467,660 PT Telekomunikasi Indonesia, Series B*..................................... 1,243,853 ----------- TOBACCO--0.19% 400,500 PT Hanjaya Mandala Sampoerna TBK*.......................................... 167,926 ----------- Total Indonesia Common Stocks................................................................. 1,411,779 ----------- ISRAEL--2.86% DIVERSIFIED TELECOMMUNICATION SERVICES--0.28% 193,000 Bezeq Israeli Telecommunication Corp. Ltd.*................................ 247,242 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS--0.14% 4,790 Orbotech Ltd.*............................................................. 126,312 ----------- INTERNET SOFTWARE & SERVICES--1.44% 35,015 Check Point Software Technologies Ltd.*....................................................... 1,278,048 ----------- PHARMACEUTICALS--1.00% 14,210 Teva Pharmaceutical Industries Ltd., ADR (1)............................... 881,020 ----------- Total Israel Common Stocks.................................................................... 2,532,622 -----------
NUMBER OF SHARES VALUE - --------------- --------------- KOREA--20.57% AUTOMOBILES--0.85% 32,740 Hyundai Motor Co. Ltd...................................................... $ 756,366 ----------- BANKS--4.15% 56,238 Kookmin Bank............................................................... 2,478,183 67,340 Koram Bank*................................................................ 650,566 41,010 Shinhan Financial Group Co. Ltd.*.......................................... 552,792 ----------- 3,681,541 ----------- COMMUNICATIONS EQUIPMENT--0.57% 25,800 Korea Telecom Corp., ADR (1)*.............................................. 506,454 ----------- CONSTRUCTION & ENGINEERING--0.32% 94,360 Hyundai Engineering & Construction Co. Ltd.*............................... 281,048 ----------- DIVERSIFIED FINANCIALS--2.34% 81,500 Daewoo Securities Co. Ltd.*................................................ 589,434 84,800 Good Morning Securities Co. Ltd.*.......................................... 371,089 60,250 Hyundai Securities Co.*.................................................... 536,057 16,760 Samsung Securities Co. Ltd.*............................................... 581,749 ----------- 2,078,329 ----------- ELECTRIC UTILITIES--0.99% 52,920 Korea Electric Power Corp.................................................. 881,057 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS--0.43% 9,200 Samsung SDI Co. Ltd........................................................ 379,410 ----------- HOUSEHOLD DURABLES--0.66% 24,900 LG Electronics, Inc........................................................ 583,802 ----------- METALS & MINING--1.13% 5,200 Pohang Iron & Steel Co. Ltd. (POSCO)....................................... 510,310 19,820 Pohang Iron & Steel Co. Ltd. (POSCO), ADR............................................................. 487,968 ----------- 998,278 ----------- SEMICONDUCTOR EQUIPMENT & PRODUCTS--6.91% 26,678 Samsung Electronics Co..................................................... 6,122,452 ----------- WIRELESS TELECOMMUNICATION SERVICES--2.22% 10,050 SK Telecom Co. Ltd......................................................... 1,964,869 ----------- Total Korea Common Stocks..................................................................... 18,233,606 ----------- MALAYSIA--3.40% BANKS--1.14% 273,800 Malayan Banking Berhad..................................................... 644,871 461,000 Public Bank Berhad......................................................... 361,521 ----------- 1,006,392 ----------- DIVERSIFIED TELECOMMUNICATION SERVICES--0.63% 217,000 Telekom Malaysia Berhad.................................................... 562,487 ----------- ELECTRIC UTILITIES--0.39% 120,100 Tenaga Nasional Berhad..................................................... 344,497 -----------
91 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
NUMBER OF SHARES VALUE - --------------- --------------- COMMON STOCKS--(CONTINUED) MALAYSIA--(CONCLUDED) ELECTRIC UTILITIES--(CONCLUDED) HOTELS, RESTAURANTS & LEISURE--1.24% 57,000 Genting Berhad............................................................. $ 184,500 436,000 Resorts World Berhad....................................................... 917,895 ----------- 1,102,395 ----------- Total Malaysia Common Stocks.................................................................. 3,015,771 ----------- MEXICO--12.37% BANKS--1.71% 125,000 Grupo Financiero Banorte S.A. de C.V., Series O*........................... 280,010 1,130,750 Grupo Financiero BBVA Bancomer S.A. de C.V. (GFB), Series O* (1)........... 1,233,725 ----------- 1,513,735 ----------- BEVERAGES--1.96% 16,730 Coca-Cola Femsa, S.A. de C.V., ADR......................................... 388,973 109,300 Fomento Economico Mexica S.A. de C.V., Series B and Series D............... 443,079 374,150 Grupo Modelo S.A. de C.V., Series C (1).................................... 908,071 ----------- 1,740,123 ----------- CONSTRUCTION MATERIALS--0.64% 107,553 Cemex S.A.................................................................. 569,336 ----------- DIVERSIFIED TELECOMMUNICATION SERVICES--3.63% 112,800 Carso Global Telecom (1)*.................................................. 275,125 76,660 Telefonos de Mexico S.A. de C.V., ADR (1).................................. 2,943,744 ----------- 3,218,869 ----------- MACHINERY--0.14% 12,500 Tubos de Acero de Mexico S.A. (TAMSA), ADR................................. 124,375 ----------- MEDIA--1.54% 21,600 Grupo Televisa S.A. de C.V., GDS* (1)...................................... 963,360 50,600 TV Azteca S.A. de C.V., ADR (1)............................................ 399,234 ----------- 1,362,594 ----------- MULTI-LINE RETAIL--1.50% 529,650 Wal-Mart de Mexico S.A. de C.V., Series C.................................. 1,331,797 ----------- WIRELESS TELECOMMUNICATION SERVICES--1.25% 54,660 America Movil S.A. de C.V., ADR, Series L.................................. 1,082,268 4,874 Grupo Iusacell S.A. de C.V., ADR, Series V*................................ 20,757 ----------- 1,103,025 ----------- Total Mexico Common Stocks.................................................................... 10,963,854 -----------
NUMBER OF SHARES VALUE - --------------- --------------- PHILIPPINES--0.33% REAL ESTATE--0.33% 2,365,000 Ayala Land, Inc............................................................ 295,481 ----------- POLAND--1.29% DIVERSIFIED FINANCIALS--0.47% 13,390 Bank Przemyslowo-Handlowy PBK S.A., GDR*................................... $ 413,082 ----------- DIVERSIFIED TELECOMMUNICATION SERVICES--0.46% 107,910 Telekomunikacja Polska S.A., GDR*.......................................... 410,921 ----------- INDUSTRIAL CONGLOMERATES--0.36% 12,860 Bank Pekao*................................................................ 320,600 ----------- Total Poland Common Stocks.................................................................... 1,144,603 ----------- RUSSIA--4.87% ELECTRIC UTILITIES--0.90% 49,190 RAO Unified Energy System (UES), GDR....................................... 794,419 ----------- INDUSTRIAL CONGLOMERATES--1.54% 70,500 Gazprom, ADR*.............................................................. 874,200 18,890 JSC Mining & Smelting Co. Norilsk Nickel, ADR*............................. 299,799 2,000 YUKOS, ADR*................................................................ 187,515 ----------- 1,361,514 ----------- OIL & GAS--2.43% 12,955 Lukoil Holding, ADR........................................................ 722,241 87,090 Surgutneftegaz, ADR........................................................ 1,436,985 ----------- 2,159,226 ----------- Total Russia Common Stocks.................................................................... 4,315,159 ----------- SOUTH AFRICA--7.52% BANKS--0.57% 69,000 ABSA Group Ltd............................................................. 157,930 608,500 FirstRand Ltd.............................................................. 348,856 ----------- 506,786 ----------- DIVERSIFIED FINANCIALS--0.31% 416,400 African Bank Investments Ltd............................................... 275,170 ----------- FOOD & DRUG RETAILING--0.00% 11,471 Metro Cash & Carry Ltd.*................................................... 2,209 ----------- INDUSTRIAL CONGLOMERATES--0.70% 127,100 Barloworld Ltd.*........................................................... 617,422 ----------- INSURANCE--0.48% 566,083 Sanlam Ltd................................................................. 426,111 ----------- IT CONSULTING & SERVICES--0.18% 147,640 Dimension Data Holdings PLC*............................................... 160,240 ----------- MEDIA--0.16% 96,000 Naspers Ltd................................................................ 138,643 -----------
92 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
NUMBER OF SHARES VALUE - --------------- --------------- COMMON STOCKS--(CONCLUDED) COMMON STOCKS--(CONCLUDED) SOUTH AFRICA--(CONCLUDED) METALS & MINING--3.07% 35,160 Anglo American Platinum.................................................... $ 1,360,238 40,900 Anglo American PLC......................................................... 662,276 16,700 AngloGold Ltd.............................................................. 694,311 ----------- 2,716,825 ----------- MULTI-LINE RETAIL--0.02% 147,032 LA Group Ltd............................................................... 16,087 ----------- OIL & GAS--1.41% 136,335 Sasol Ltd.................................................................. 1,252,969 ----------- PAPER & FOREST PRODUCTS--0.60% 46,200 Sappi...................................................................... 528,924 ----------- SPECIALTY RETAIL--0.02% 1,555,053 Profurn*................................................................... 20,416 ----------- Total South Africa Common Stocks.............................................................. 6,661,802 ----------- TAIWAN--13.54% BANKS--0.50% 550,000 Taipei Bank................................................................ 440,756 ----------- COMPUTERS & PERIPHERALS--2.55% 241,750 Asustek Computer, Inc...................................................... 1,183,149 508,000 Compal Electronics, Inc.................................................... 703,698 412,000 Inventec Co. Ltd........................................................... 373,795 ----------- 2,260,642 ----------- DIVERSIFIED FINANCIALS--1.19% 587,000 Fubon Financial Holding Co. Ltd.*.......................................... 598,088 993,000 Polaris Securities Co. Ltd.*............................................... 460,406 ----------- 1,058,494 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS--2.00% 150,000 Au Optronics Corp.*........................................................ 212,078 238,000 Hon Hai Precision Industry Co. Ltd......................................... 1,205,667 285,000 KYE Systems Corp........................................................... 358,901 ----------- 1,776,646 ----------- INDUSTRIAL CONGLOMERATES--0.33% 716,000 Far Eastern Textile Ltd.................................................... 289,966 ----------- MARINE--0.54% 1,120,000 Evergreen Marine Corp., GDR................................................ 474,413 ----------- OFFICE ELECTRONICS--0.49% 589,000 Kinpo Electronics, Inc.*................................................... 434,923 ----------- SEMICONDUCTOR EQUIPMENT & PRODUCTS--5.94% 28,000 MediaTek, Inc.............................................................. 524,900 1,202,040 Taiwan Semiconductor Manufacturing Co......................................................... 3,010,260 1,298,180 United Microelectronics Corp............................................... 1,731,402 ----------- 5,266,562 ----------- Total Taiwan Common Stocks.................................................................... 12,002,402 -----------
NUMBER OF SHARES VALUE - --------------- --------------- THAILAND--2.19% BANKS--0.66% 99,000 Bangkok Bank Public Co. Ltd.* (1).......................................... $ 142,762 465,000 Siam Commercial Bank Public Co. Ltd.*................................................................ 235,483 322,000 Thai Farmers Bank Public Co. Ltd.* (1)............................................................ 204,746 ----------- 582,991 ----------- CONSTRUCTION MATERIALS--0.41% 22,400 Siam Cement Co.*........................................................... 368,289 ----------- HOUSEHOLD DURABLES--0.29% 214,000 Land & Houses Public Co. Ltd.*............................................. 257,568 ----------- WIRELESS TELECOMMUNICATION SERVICES--0.83% 738,800 Advanced Information Services Public Co. Ltd.*......................................................... 734,018 ----------- Total Thailand Common Stocks.................................................................. 1,942,866 ----------- TURKEY--3.36% BANKS--1.72% 49,600,000 Turk Ekonomi Bankasi A.S. (TEB)*........................................... 132,620 129,649,000 Turkiye Garanti Bankasi A.S................................................ 292,181 117,244,874 Turkiye Is Bankasi (Isbank)................................................ 716,546 121,834,858 Yapi Ve Kredi Bankasi A.S.................................................. 386,260 ----------- 1,527,607 ----------- BEVERAGES--0.53% 20,831,724 Anadolu Efes Biracilik ve Malt Sanayii A.S.............................................................. 469,470 ----------- DIVERSIFIED FINANCIALS--0.10% 3,170,000 Koc Holding A.S............................................................ 85,970 ----------- FOOD & DRUG RETAILING--0.32% 3,367,076 Migros Turk T.A.S.......................................................... 282,948 ----------- WIRELESS TELECOMMUNICATION SERVICES--0.69% 76,658,472 Turkcell Iletisim.......................................................... 614,908 ----------- Total Turkey Common Stocks.................................................................... 2,980,903 ----------- Total Common Stocks (cost--$75,844,045)....................................................... 81,149,855 ----------- PREFERRED STOCKS--4.81% BRAZIL--4.81% BANKS--1.51% 126,184,572 Banco Bradesco S.A......................................................... 631,447 9,989,000 Banco Itau S.A............................................................. 703,046 ----------- 1,334,493 ----------- BEVERAGES--0.71% 3,280,300 Companhia de Bebidas das Americas (AmBev).................................. 630,150 ----------- DIVERSIFIED TELECOMMUNICATION SERVICES--0.34% 42,973,000 Brasil Telecom Participacoes S.A........................................... 302,667 ----------- ELECTRIC UTILITIES--0.03% 987,030 Eletropaulo Electricidade Sao Paulo........................................ 28,492 -----------
93 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
NUMBER OF SHARES VALUE - --------------- --------------- PREFERRED STOCKS--(CONCLUDED) BRAZIL--(CONCLUDED) ELECTRIC UTILITIES--(CONCLUDED) METALS & MINING--1.03% 27,000 Companhia Vale do Rio Doce "A"............................................. $ 599,988 32,571,001 Gerdau S.A................................................................. 315,024 ----------- 915,012 ----------- OIL & GAS--1.19% 52,690 Petrol Brasileiro-Petrobras................................................ 1,052,487 ----------- Total Preferred Stocks (cost--$4,494,522)..................................................... 4,263,301 ----------- NUMBER OF WARRANTS - --------------- WARRANTS--0.51% KOREA--0.19% TOBACCO--0.19% 13,000 Korea Tobacco & Ginseng Corp., expiring 04/02/02*.......................... 169,891 ----------- MEXICO--0.01% CONSTRUCTION MATERIALS--0.01% 13,000 Cemex S.A., expiring 12/21/04*............................................. 7,817 ----------- TAIWAN--0.31% SEMICONDUCTOR EQUIPMENT & PRODUCTS--0.31% 78,600 Taiwan Semiconductor Manufacturing, Inc., expiring 02/28/02*............... 273,049 ----------- Total Warrants (cost--$453,084)............................................................... 450,757 -----------
NUMBER OF RIGHTS VALUE - --------------- --------------- RIGHTS--0.00% BRAZIL--0.00% BANKS/RETAIL--0.00% 20,100 Companhia Vale do Rio Doce (cost--$0)............................................................... $ 0 ----------- Total Investments (cost--$80,791,651)--96.86%................................................. 85,863,913 Other assets in excess of liabilities--3.14%.................................................. 2,784,839 ----------- Net Assets--100.00%........................................................................... $88,648,752 ===========
- --------------- * Non-Income producing security. ADR American Depositary Receipt. ADS American Depositary Shares. GDR Global Depositary Receipt. GDS Global Depositary Shares. (1) Security, or portion thereof, was on loan at January 31, 2002. FORWARD FOREIGN CURRENCY CONTRACTS
UNREALIZED CONTRACTS TO IN MATURITY APPRECIATION DELIVER EXCHANGE FOR DATES (DEPRECIATION) ------------ ------------- ---------- -------------- Brazilian Reals............................................. 316,578 USD 130,065 02/04/2002 $ (1,404) Malaysian Ringgits.......................................... 337,728 USD 88,817 02/04/2002 184 Mexican Pesos............................................... 21,580,000 USD 243,752 02/05/2002 (61,406) U.S. Dollars................................................ 9,025 THB 397,302 02/04/2002 (6) U.S. Dollars................................................ 80,894 THB 3,554,463 05/23/2002 (199) -------- $(62,831) ========
CURRENCY TYPE ABBREVIATIONS: THB Thailand Baht USD U.S. Dollars See accompanying notes to financial statements 94 (This page has been left blank intentionally.) 95 PAINEWEBBER PACE SELECT ADVISORS TRUST STATEMENTS OF ASSETS AND LIABILITIES JANUARY 31, 2002(UNAUDITED)
PACE GOVERNMENT PACE PACE PACE SECURITIES INTERMEDIATE STRATEGIC MONEY MARKET FIXED INCOME FIXED INCOME FIXED INCOME INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS ------------ ------------ ------------ ------------ ASSETS Investment, at value (cost--$89,413,429; $750,918,285; $330,223,209; $330,367,184; $257,970,899; $326,582,097; $909,804,614; $552,001,033; $250,232,459; $302,176,956; $415,752,821; $80,791,651, respectively)............ $89,413,429 $758,879,636 $328,825,286 $334,728,404 Investments of cash collateral received for securities loaned, at value (cost--$0; $49,945,625; $8,983,083; $0; $0; $14,731,872; $48,055,160; $15,864,350; $27,625,300; $19,278,961; $9,480,622; $7,194,970, respectively)......................... -- 49,945,625 8,983,083 -- Cash (including cash denominated in foreign currencies, at value)......... -- -- 23 2,293,029 Receivable for investments sold......... -- 50,655,397 11,075,190 94,602,813 Dividends and interest receivable....... 329,732 9,257,639 4,300,580 2,417,043 Receivable for shares of beneficial interest sold......................... 356,139 494,137 305,718 320,670 Unrealized appreciation of forward foreign currency contracts............ -- -- -- 13,245 Variation margin receivable............. -- -- -- -- Receivable from investment manager...... 57,066 -- -- -- Other assets............................ 217,369 170,291 294,537 180,812 ----------- ------------ ------------ ------------ Total assets............................ 90,373,735 869,402,725 353,784,417 434,556,016 ----------- ------------ ------------ ------------ LIABILITIES Payable for investments purchased....... 1,000,000 243,307,255 12,540,758 150,133,112 Payable for shares of beneficial interest repurchased.................. 605,399 535,019 335,262 366,105 Dividends payable to shareholders....... 70,379 -- -- -- Payable to custodian.................... -- 1,050,212 -- -- Payable for cash collateral for securities loaned..................... -- 49,945,625 8,983,083 -- Payable to affiliates................... -- 340,553 176,706 152,374 Outstanding options written, at value (premium received--$0; $2,869,970; $0; $1,938,532; $0; $0; $0; $0; $0; $0; $0; $0, respectively)................. -- 2,934,089 -- 1,790,115 Variation margin payable................ -- 30,799 -- 47,254 Unrealized depreciation of forward foreign currency contracts............ -- -- -- 38,383 Accrued expenses and other liabilities........................... 19,911 120,340 79,600 71,985 ----------- ------------ ------------ ------------ Total liabilities....................... 1,695,689 298,263,892 22,115,409 152,599,328 ----------- ------------ ------------ ------------ NET ASSETS Beneficial interest shares of $0.001 par value (unlimited amount authorized)... 88,678,266 557,168,804 332,797,495 279,261,469 Accumulated undistributed (distributions in excess of) net investment income (loss)................................ -- (63,360) (32,429) (373,720) Accumulated net realized gains (losses) from investments, futures, swaps, options, forward foreign currency contracts and foreign currency transactions.......................... (220) 6,095,094 301,870 (1,506,536) Net unrealized appreciation (depreciation) of investments, other assets and liabilities, futures, options and forward foreign currency contracts............................. -- 7,938,295 (1,397,928) 4,575,475 ----------- ------------ ------------ ------------ Net assets.............................. $88,678,046 $571,138,833 $331,669,008 $281,956,688 =========== ============ ============ ============
96
PACE PACE PACE PACE PACE SMALL/MEDIUM MUNICIPAL GLOBAL FIXED LARGE COMPANY LARGE COMPANY COMPANY FIXED INCOME INCOME VALUE EQUITY GROWTH EQUITY VALUE EQUITY INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS ------------ ------------ -------------- ------------- ------------ ASSETS Investment, at value (cost--$89,413,429; $750,918,285; $330,223,209; $330,367,184; $257,970,899; $326,582,097; $909,804,614; $552,001,033; $250,232,459; $302,176,956; $415,752,821; $80,791,651, respectively)............ $266,854,291 $318,950,729 $ 961,831,862 $573,200,893 $308,781,056 Investments of cash collateral received for securities loaned, at value (cost--$0; $49,945,625; $8,983,083; $0; $0; $14,731,872; $48,055,160; $15,864,350; $27,625,300; $19,278,961; $9,480,622; $7,194,970, respectively)......................... -- 14,731,872 48,055,160 15,864,350 27,625,300 Cash (including cash denominated in foreign currencies, at value)......... -- 3,228,471 2,077 550 1,084 Receivable for investments sold......... -- 8,267,722 6,503,347 1,793,176 -- Dividends and interest receivable....... 3,538,993 4,516,181 1,362,122 137,724 164,394 Receivable for shares of beneficial interest sold......................... 34,661 112,146 708,369 599,010 305,486 Unrealized appreciation of forward foreign currency contracts............ -- 3,542,647 -- -- -- Variation margin receivable............. -- 124,767 -- -- -- Receivable from investment manager...... -- -- -- -- -- Other assets............................ 265,573 211,806 387,586 362,045 208,305 ------------ ------------ -------------- ------------ ------------ Total assets............................ 270,693,518 353,686,341 1,018,850,523 591,957,748 337,085,625 ------------ ------------ -------------- ------------ ------------ LIABILITIES Payable for investments purchased....... 3,235,529 43,313,120 6,956,080 3,676,532 4,258,849 Payable for shares of beneficial interest repurchased.................. 567,886 330,881 1,188,488 483,102 241,144 Dividends payable to shareholders....... -- -- -- -- -- Payable to custodian.................... -- -- -- -- -- Payable for cash collateral for securities loaned..................... -- 14,731,872 48,055,160 15,864,350 27,625,300 Payable to affiliates................... 152,582 179,241 763,001 374,354 219,111 Outstanding options written, at value (premium received--$0; $2,869,970; $0; $1,938,532; $0; $0; $0; $0; $0; $0; $0; $0, respectively)................. -- -- -- -- -- Variation margin payable................ -- -- -- -- -- Unrealized depreciation of forward foreign currency contracts............ -- 5,989,044 -- -- -- Accrued expenses and other liabilities........................... 44,983 123,087 57,507 32,634 16,687 ------------ ------------ -------------- ------------ ------------ Total liabilities....................... 4,000,980 64,667,245 57,020,236 20,430,972 32,361,091 ------------ ------------ -------------- ------------ ------------ NET ASSETS Beneficial interest shares of $0.001 par value (unlimited amount authorized)... 257,894,530 316,136,143 975,903,222 672,691,387 234,173,167 Accumulated undistributed (distributions in excess of) net investment income (loss)................................ (32,093) (9,523,696) 949,166 (1,248,135) (159,355) Accumulated net realized gains (losses) from investments, futures, swaps, options, forward foreign currency contracts and foreign currency transactions.......................... (53,291) (7,172,650) (67,049,349) (121,116,336) 12,162,125 Net unrealized appreciation (depreciation) of investments, other assets and liabilities, futures, options and forward foreign currency contracts............................. 8,883,392 (10,420,701) 52,027,248 21,199,860 58,548,597 ------------ ------------ -------------- ------------ ------------ Net assets.............................. $266,692,538 $289,019,096 $ 961,830,287 $571,526,776 $304,724,534 ============ ============ ============== ============ ============ PACE PACE SMALL/MEDIUM PACE INTERNATIONAL COMPANY INTERNATIONAL EMERGING MARKETS GROWTH EQUITY EQUITY EQUITY INVESTMENTS INVESTMENTS INVESTMENTS ------------- ------------- ---------------- ASSETS Investment, at value (cost--$89,413,429; $750,918,285; $330,223,209; $330,367,184; $257,970,899; $326,582,097; $909,804,614; $552,001,033; $250,232,459; $302,176,956; $415,752,821; $80,791,651, respectively)............ $324,144,112 $358,962,804 $ 85,863,913 Investments of cash collateral received for securities loaned, at value (cost--$0; $49,945,625; $8,983,083; $0; $0; $14,731,872; $48,055,160; $15,864,350; $27,625,300; $19,278,961; $9,480,622; $7,194,970, respectively)......................... 19,278,961 9,480,622 7,194,970 Cash (including cash denominated in foreign currencies, at value)......... 338 735,770 1,409,332 Receivable for investments sold......... 2,339,683 2,739,706 3,034,956 Dividends and interest receivable....... 6,641 512,832 110,942 Receivable for shares of beneficial interest sold......................... 225,324 373,126 104,159 Unrealized appreciation of forward foreign currency contracts............ -- 1,235,989 184 Variation margin receivable............. -- -- -- Receivable from investment manager...... -- -- -- Other assets............................ 249,774 303,697 114,997 ------------ ------------ ------------ Total assets............................ 346,244,833 374,344,546 97,833,453 ------------ ------------ ------------ LIABILITIES Payable for investments purchased....... 2,772,713 3,746,304 1,776,525 Payable for shares of beneficial interest repurchased.................. 486,135 225,607 84,044 Dividends payable to shareholders....... -- -- -- Payable to custodian.................... -- -- -- Payable for cash collateral for securities loaned..................... 19,278,961 9,480,622 7,194,970 Payable to affiliates................... 243,714 290,500 42,976 Outstanding options written, at value (premium received--$0; $2,869,970; $0; $1,938,532; $0; $0; $0; $0; $0; $0; $0; $0, respectively)................. -- -- -- Variation margin payable................ -- -- -- Unrealized depreciation of forward foreign currency contracts............ -- -- 63,015 Accrued expenses and other liabilities........................... 111,370 28,237 23,171 ------------ ------------ ------------ Total liabilities....................... 22,892,893 13,771,270 9,184,701 ------------ ------------ ------------ NET ASSETS Beneficial interest shares of $0.001 par value (unlimited amount authorized)... 322,688,748 483,689,888 114,937,331 Accumulated undistributed (distributions in excess of) net investment income (loss)................................ (1,087,507) (663,546) (781,239) Accumulated net realized gains (losses) from investments, futures, swaps, options, forward foreign currency contracts and foreign currency transactions.......................... (20,216,457) (66,886,025) (30,455,347) Net unrealized appreciation (depreciation) of investments, other assets and liabilities, futures, options and forward foreign currency contracts............................. 21,967,156 (55,567,041) 4,948,007 ------------ ------------ ------------ Net assets.............................. $323,351,940 $360,573,276 $ 88,648,752 ============ ============ ============
See accompanying notes to financial statements 97 PAINEWEBBER PACE SELECT ADVISORS TRUST STATEMENTS OF ASSETS AND LIABILITIES(CONCLUDED) JANUARY 31, 2002(UNAUDITED)
PACE GOVERNMENT PACE PACE PACE SECURITIES INTERMEDIATE STRATEGIC MONEY MARKET FIXED INCOME FIXED INCOME FIXED INCOME INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS ------------ ------------ ------------ ------------ CLASS A: Net assets.............................. $ -- $213,604,033 $150,905,306 $ 26,537,241 ----------- ------------ ------------ ------------ Shares outstanding...................... -- 16,654,290 12,439,833 2,020,615 ----------- ------------ ------------ ------------ Net asset value per share............... $ -- $ 12.83 $ 12.13 $ 13.13 ----------- ------------ ------------ ------------ Maximum offering price per share........ $ -- $ 13.43 $ 12.70 $ 13.75 =========== ============ ============ ============ CLASS B: Net assets.............................. $ -- $ 13,623,007 $ 12,854,365 $ 15,375,121 ----------- ------------ ------------ ------------ Shares outstanding...................... -- 1,062,258 1,058,668 1,171,061 ----------- ------------ ------------ ------------ Net asset value and offering price per share................................. $ -- $ 12.82 $ 12.14 $ 13.13 =========== ============ ============ ============ CLASS C: Net assets.............................. $ -- $ 58,087,348 $ 18,453,910 $ 13,588,205 ----------- ------------ ------------ ------------ Shares outstanding...................... -- 4,527,208 1,519,637 1,034,682 ----------- ------------ ------------ ------------ Net asset value per share............... $ -- $ 12.83 $ 12.14 $ 13.13 ----------- ------------ ------------ ------------ Maximum offering price per share........ $ -- $ 12.96 $ 12.26 $ 13.26 =========== ============ ============ ============ CLASS Y: Net assets.............................. $ -- $ 98,218,040 $ 3,133,807 $ 416,070 ----------- ------------ ------------ ------------ Shares outstanding...................... -- 7,656,646 258,155 31,685 ----------- ------------ ------------ ------------ Net asset value, offering price and redemption value per share............ $ -- $ 12.83 $ 12.14 $ 13.13 =========== ============ ============ ============ CLASS P: Net assets.............................. $88,678,046 $187,606,405 $146,321,620 $226,040,051 ----------- ------------ ------------ ------------ Shares outstanding...................... 88,678,266 14,621,529 12,054,647 17,214,618 ----------- ------------ ------------ ------------ Net asset value, offering price and redemption value per share............ $ 1.00 $ 12.83 $ 12.14 $ 13.13 =========== ============ ============ ============
98
PACE PACE PACE PACE PACE PACE SMALL/MEDIUM SMALL/MEDIUM MUNICIPAL GLOBAL LARGE COMPANY LARGE COMPANY COMPANY COMPANY FIXED INCOME FIXED INCOME VALUE EQUITY GROWTH EQUITY VALUE EQUITY GROWTH EQUITY INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS ------------ ------------ ------------- ------------- ------------ ------------- CLASS A: Net assets.............................. $170,947,699 $172,971,093 $401,062,162 $174,212,387 $54,667,487 $ 82,313,071 ------------ ------------ ------------ ------------ ------------ ------------ Shares outstanding...................... 13,663,517 17,258,293 24,057,767 11,378,306 3,028,131 6,270,587 ------------ ------------ ------------ ------------ ------------ ------------ Net asset value per share............... $ 12.51 $ 10.02 $ 16.67 $ 15.31 $ 18.05 $ 13.13 ------------ ------------ ------------ ------------ ------------ ------------ Maximum offering price per share........ $ 13.10 $ 10.49 $ 17.64 $ 16.20 $ 19.10 $ 13.89 ============ ============ ============ ============ ============ ============ CLASS B: Net assets.............................. $ 10,267,373 $ 1,670,961 $ 99,844,222 $ 20,560,948 $13,065,491 $ 9,548,892 ------------ ------------ ------------ ------------ ------------ ------------ Shares outstanding...................... 820,617 166,537 5,997,176 1,352,872 727,564 732,963 ------------ ------------ ------------ ------------ ------------ ------------ Net asset value and offering price per share................................. $ 12.51 $ 10.03 $ 16.65 $ 15.20 $ 17.96 $ 13.03 ============ ============ ============ ============ ============ ============ CLASS C: Net assets.............................. $ 31,678,346 $ 12,638,059 $ 66,136,319 $ 21,413,526 $14,425,091 $ 12,195,397 ------------ ------------ ------------ ------------ ------------ ------------ Shares outstanding...................... 2,532,295 1,261,188 3,972,075 1,408,674 803,199 935,855 ------------ ------------ ------------ ------------ ------------ ------------ Net asset value per share............... $ 12.51 $ 10.02 $ 16.65 $ 15.20 $ 17.96 $ 13.03 ------------ ------------ ------------ ------------ ------------ ------------ Maximum offering price per share........ $ 12.64 $ 10.12 $ 16.82 $ 15.35 $ 18.14 $ 13.16 ============ ============ ============ ============ ============ ============ CLASS Y: Net assets.............................. $ 391,853 $ 5,195,728 $ 40,954,184 $ 27,258,803 $ 1,907,923 $ 427,043 ------------ ------------ ------------ ------------ ------------ ------------ Shares outstanding...................... 31,315 518,499 2,456,107 1,775,221 105,591 32,454 ------------ ------------ ------------ ------------ ------------ ------------ Net asset value, offering price and redemption value per share............ $ 12.51 $ 10.02 $ 16.67 $ 15.36 $ 18.07 $ 13.16 ============ ============ ============ ============ ============ ============ CLASS P: Net assets.............................. $ 53,407,267 $ 96,543,255 $353,833,400 $328,081,112 $220,658,542 $218,867,537 ------------ ------------ ------------ ------------ ------------ ------------ Shares outstanding...................... 4,268,588 9,631,475 21,223,048 21,374,335 12,210,684 16,632,488 ------------ ------------ ------------ ------------ ------------ ------------ Net asset value, offering price and redemption value per share............ $ 12.51 $ 10.02 $ 16.67 $ 15.35 $ 18.07 $ 13.16 ============ ============ ============ ============ ============ ============ PACE PACE INTERNATIONAL INTERNATIONAL EMERGING MARKETS EQUITY EQUITY INVESTMENTS INVESTMENTS ------------- ---------------- CLASS A: Net assets.............................. $111,371,894 $ 7,915,194 ------------ ----------- Shares outstanding...................... 10,219,578 915,714 ------------ ----------- Net asset value per share............... $ 10.90 $ 8.64 ------------ ----------- Maximum offering price per share........ $ 11.53 $ 9.14 ============ =========== CLASS B: Net assets.............................. $ 2,259,078 $ 6,871,963 ------------ ----------- Shares outstanding...................... 206,908 800,808 ------------ ----------- Net asset value and offering price per share................................. $ 10.92 $ 8.58 ============ =========== CLASS C: Net assets.............................. $ 10,520,059 $ 4,073,550 ------------ ----------- Shares outstanding...................... 964,744 474,565 ------------ ----------- Net asset value per share............... $ 10.90 $ 8.58 ------------ ----------- Maximum offering price per share........ $ 11.01 $ 8.67 ============ =========== CLASS Y: Net assets.............................. $ 41,068,078 $ 607,534 ------------ ----------- Shares outstanding...................... 3,769,666 70,087 ------------ ----------- Net asset value, offering price and redemption value per share............ $ 10.89 $ 8.67 ============ =========== CLASS P: Net assets.............................. $195,354,167 $69,180,511 ------------ ----------- Shares outstanding...................... 17,935,921 7,978,729 ------------ ----------- Net asset value, offering price and redemption value per share............ $ 10.89 $ 8.67 ============ ===========
See accompanying notes to financial statements 99 PAINEWEBBER PACE SELECT ADVISORS TRUST STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JANUARY 31, 2002(UNAUDITED)
PACE GOVERNMENT PACE PACE PACE SECURITIES INTERMEDIATE STRATEGIC MONEY MARKET FIXED INCOME FIXED INCOME FIXED INCOME INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS ------------ ------------ ------------ ------------ INVESTMENT INCOME: Interest (net of foreign withholding taxes, $0; $0; $5,780; $20,957; $0; $7,527; $0; $0; $0; $0; $0; $6, respectively)......................... $1,331,279 $18,802,859 $11,219,697 $ 7,701,395 Dividends (net of foreign withholding taxes, $0; $0; $0; $0; $0; $0; $7,314; $0; $0; $3,354; $201,553; $66,328, respectively)......................... -- -- -- -- ---------- ----------- ----------- ----------- 1,331,279 18,802,859 11,219,697 7,701,395 ---------- ----------- ----------- ----------- EXPENSES: Investment management and administration fees.................................. 153,770 2,192,289 989,390 977,248 Service fees--Class A................... -- 277,188 198,027 36,352 Service and distribution fees--Class B..................................... -- 69,524 71,200 84,650 Service and distribution fees--Class C..................................... -- 220,898 71,975 61,192 Transfer agency and related services fees.................................. 294,500 237,455 147,628 158,958 Reports and notices to shareholders..... 47,223 29,475 28,328 27,466 Professional fees....................... 23,384 29,492 32,498 32,390 Federal and state registration fees..... 11,528 13,980 11,397 7,668 Trustees' fees.......................... 7,225 9,427 7,630 4,778 Custody and accounting.................. 4,393 187,910 98,939 83,795 Interest expense........................ -- -- -- -- Other expenses.......................... 1,012 5,410 2,863 2,858 ---------- ----------- ----------- ----------- 543,035 3,273,048 1,659,875 1,477,355 Less: Fee waivers and reimbursements from investment manager............... (323,358) (553,430) (136,424) (101,798) ---------- ----------- ----------- ----------- Net expenses............................ 219,677 2,719,618 1,523,451 1,375,557 ---------- ----------- ----------- ----------- Net investment income (loss)............ 1,111,602 16,083,241 9,696,246 6,325,838 ---------- ----------- ----------- ----------- REALIZED AND UNREALIZED GAINS (LOSSES) FROM INVESTMENT ACTIVITIES: Net realized gains (losses) from: Investments........................... 1 6,904,272 1,611,828 4,765,122 Futures............................... -- 744,396 -- 3,398,385 Swaps................................. -- -- -- 1,783,642 Forward foreign currency contracts and foreign currency transactions........ -- -- -- 273,333 Net change in unrealized appreciation/depreciation of: Investments........................... -- (5,931,793) (6,704,997) (3,576,630) Futures............................... -- 41,063 -- (1,356,844) Options............................... -- (64,119) -- 148,417 Swaps................................. -- -- -- (297,942) Other assets, liabilities and forward foreign currency contracts........... -- -- -- (377,590) ---------- ----------- ----------- ----------- Net realized and unrealized gains (losses) from investment activities... 1 1,693,819 (5,093,169) 4,759,893 ---------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations............. $1,111,603 $17,777,060 $ 4,603,077 $11,085,731 ========== =========== =========== ===========
100
PACE PACE PACE PACE PACE PACE SMALL/MEDIUM SMALL/MEDIUM MUNICIPAL GLOBAL FIXED LARGE COMPANY LARGE COMPANY COMPANY COMPANY FIXED INCOME INCOME VALUE EQUITY GROWTH EQUITY VALUE EQUITY GROWTH EQUITY INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS ------------ ------------ ------------- ------------- ------------ ------------- INVESTMENT INCOME: Interest (net of foreign withholding taxes, $0; $0; $5,780; $20,957; $0; $7,527; $0; $0; $0; $0; $0; $6, respectively)......................... $6,671,137 $ 7,652,400 $ 218,957 $ 63,278 $ 181,225 $ 344,791 Dividends (net of foreign withholding taxes, $0; $0; $0; $0; $0; $0; $7,314; $0; $0; $3,354; $201,553; $66,328, respectively)......................... -- 22,812 9,011,731 1,631,531 1,739,886 432,408 ---------- ----------- ------------ ------------ ----------- ------------ 6,671,137 7,675,212 9,230,688 1,694,809 1,921,111 777,199 ---------- ----------- ------------ ------------ ----------- ------------ EXPENSES: Investment management and administration fees.................................. 817,516 1,226,273 3,872,434 2,276,030 1,218,239 1,342,655 Service fees--Class A................... 220,895 235,616 515,147 229,135 67,154 102,124 Service and distribution fees--Class B..................................... 59,388 10,808 567,536 122,772 62,996 63,973 Service and distribution fees--Class C..................................... 121,431 51,480 346,211 111,502 68,282 61,989 Transfer agency and related services fees.................................. 63,109 225,172 469,502 320,500 194,550 215,422 Reports and notices to shareholders..... 22,507 44,773 74,265 45,485 38,158 35,682 Professional fees....................... 37,701 37,460 50,961 53,305 34,703 43,610 Federal and state registration fees..... 43,928 13,322 18,819 17,651 27,161 21,619 Trustees' fees.......................... 6,374 5,889 6,815 5,133 4,372 5,487 Custody and accounting.................. 81,752 229,926 290,439 170,697 91,368 100,699 Interest expense........................ -- -- -- 887 -- -- Other expenses.......................... 12,375 6,760 6,694 2,065 1,430 1,931 ---------- ----------- ------------ ------------ ----------- ------------ 1,486,976 2,087,479 6,218,823 3,355,162 1,808,413 1,995,191 Less: Fee waivers and reimbursements from investment manager............... (222,030) (317,102) (519,299) (412,218) (77,930) (130,485) ---------- ----------- ------------ ------------ ----------- ------------ Net expenses............................ 1,264,946 1,770,377 5,699,524 2,942,944 1,730,483 1,864,706 ---------- ----------- ------------ ------------ ----------- ------------ Net investment income (loss)............ 5,406,191 5,904,835 3,531,164 (1,248,135) 190,628 (1,087,507) ---------- ----------- ------------ ------------ ----------- ------------ REALIZED AND UNREALIZED GAINS (LOSSES) FROM INVESTMENT ACTIVITIES: Net realized gains (losses) from: Investments........................... 59,100 1,808,688 (34,050,209) (36,548,627) 19,334,923 (781,037) Futures............................... -- (507,695) -- -- -- -- Swaps................................. -- -- -- -- -- -- Forward foreign currency contracts and foreign currency transactions........ -- (7,303,036) (4,464) -- -- -- Net change in unrealized appreciation/depreciation of: Investments........................... (126,637) (356,398) (15,040,641) (19,542,060) (349,697) (12,351,494) Futures............................... -- 412,164 -- -- -- -- Options............................... -- -- -- -- -- -- Swaps................................. -- -- -- -- -- -- Other assets, liabilities and forward foreign currency contracts........... -- (995,351) -- -- -- -- ---------- ----------- ------------ ------------ ----------- ------------ Net realized and unrealized gains (losses) from investment activities... (67,537) (6,941,628) (49,095,314) (56,090,687) 18,985,226 (13,132,531) ---------- ----------- ------------ ------------ ----------- ------------ Net increase (decrease) in net assets resulting from operations............. $5,338,654 $(1,036,793) $(45,564,150) $(57,338,822) $19,175,854 $(14,220,038) ========== =========== ============ ============ =========== ============ PACE PACE INTERNATIONAL INTERNATIONAL EMERGING MARKETS EQUITY EQUITY INVESTMENTS INVESTMENTS ------------- ---------------- INVESTMENT INCOME: Interest (net of foreign withholding taxes, $0; $0; $5,780; $20,957; $0; $7,527; $0; $0; $0; $0; $0; $6, respectively)......................... $ 94,840 $ 48,374 Dividends (net of foreign withholding taxes, $0; $0; $0; $0; $0; $0; $7,314; $0; $0; $3,354; $201,553; $66,328, respectively)......................... 1,765,141 458,152 ------------ ----------- 1,859,981 506,526 ------------ ----------- EXPENSES: Investment management and administration fees.................................. 1,662,858 460,601 Service fees--Class A................... 158,524 9,998 Service and distribution fees--Class B..................................... 17,659 32,957 Service and distribution fees--Class C..................................... 58,925 19,706 Transfer agency and related services fees.................................. 238,244 153,547 Reports and notices to shareholders..... 38,510 38,257 Professional fees....................... 32,589 44,099 Federal and state registration fees..... 19,202 13,259 Trustees' fees.......................... 7,357 7,228 Custody and accounting.................. 277,174 146,555 Interest expense........................ 2,739 -- Other expenses.......................... 36,420 4,763 ------------ ----------- 2,550,201 930,970 Less: Fee waivers and reimbursements from investment manager............... (26,967) (235,410) ------------ ----------- Net expenses............................ 2,523,234 695,560 ------------ ----------- Net investment income (loss)............ (663,253) (189,034) ------------ ----------- REALIZED AND UNREALIZED GAINS (LOSSES) FROM INVESTMENT ACTIVITIES: Net realized gains (losses) from: Investments........................... (40,147,199) (8,260,126) Futures............................... -- -- Swaps................................. -- -- Forward foreign currency contracts and foreign currency transactions........ (8,864,020) (3,800,376) Net change in unrealized appreciation/depreciation of: Investments........................... 617,718 18,741,316 Futures............................... -- -- Options............................... -- -- Swaps................................. -- -- Other assets, liabilities and forward foreign currency contracts........... 1,245,728 (101,336) ------------ ----------- Net realized and unrealized gains (losses) from investment activities... (47,147,773) 6,579,478 ------------ ----------- Net increase (decrease) in net assets resulting from operations............. $(47,811,026) $ 6,390,444 ============ ===========
See accompanying notes to financial statements 101 PAINEWEBBER PACE SELECT ADVISORS TRUST STATEMENTS OF CHANGES IN NET ASSETS
PACE PACE MONEY MARKET GOVERNMENT SECURITIES INVESTMENTS FIXED INCOME INVESTMENTS -------------------------------- -------------------------------- FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE JANUARY 31, 2002 YEAR ENDED JANUARY 31, 2002 YEAR ENDED (UNAUDITED) JULY 31, 2001 (UNAUDITED) JULY 31, 2001 ---------------- ------------- ---------------- ------------- FROM OPERATIONS: Net investment income................. $ 1,111,602 $ 3,941,424 $ 16,083,241 $ 26,071,874 Net realized gains (losses) from: Investments, futures, options and swaps.............................. 1 342 7,648,668 10,007,414 Forward foreign currency contracts and foreign currency transactions....................... -- -- -- Net change in unrealized appreciation/depreciation of: Investments, futures, options and swaps.............................. -- -- (5,954,849) 9,677,871 Other assets, liabilities and forward foreign currency contracts.......................... -- -- -- ------------ ------------ ------------- ------------- Net increase (decrease) in net assets resulting from operations............ 1,111,603 3,941,766 17,777,060 45,757,159 ------------ ------------ ------------- ------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income--Class A........ -- -- (5,604,906) (6,803,275) Net investment income--Class B........ -- -- (296,889) (326,521) Net investment income--Class C........ -- -- (1,333,563) (1,629,374) Net investment income--Class Y........ -- -- (3,601,299) (4,115,394) Net investment income--Class P........ (1,111,602) (3,941,424) (5,309,944) (14,426,947) Net realized gains from investment activities--Class A.................. -- -- (815,272) -- Net realized gains from investment activities--Class B.................. -- -- (51,316) -- Net realized gains from investment activities--Class C.................. -- -- (220,474) -- Net realized gains from investment activities--Class Y.................. -- -- (527,155) -- Net realized gains from investment activities--Class P.................. -- -- (755,348) -- Paid in capital--Class P.............. -- -- -- -- ------------ ------------ ------------- ------------- (1,111,602) (3,941,424) (18,516,166) (27,301,511) ------------ ------------ ------------- ------------- FROM BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from the sale of shares............................... 62,592,569 98,573,006 53,983,748 236,805,805 Cost of shares repurchased............ (51,697,861) (91,327,283) (122,478,345) (281,096,273) Proceeds from dividends reinvested.... 1,125,962 3,890,553 15,419,611 23,922,471 Shares issued in connection with fund mergers.............................. -- -- -- 427,947,253 ------------ ------------ ------------- ------------- Net increase (decrease) in net assets from beneficial interest transactions......................... 12,020,670 11,136,276 (53,074,986) 407,579,256 ------------ ------------ ------------- ------------- Contribution to capital from Sub-Advisor.......................... -- -- -- -- ------------ ------------ ------------- ------------- Net increase (decrease) in net assets............................... 12,020,671 11,136,618 (53,814,092) 426,034,904 NET ASSETS: Beginning of period................... 76,657,375 65,520,757 624,952,925 198,918,021 ------------ ------------ ------------- ------------- End of period......................... $ 88,678,046 $ 76,657,375 $ 571,138,833 $ 624,952,925 ============ ============ ============= ============= Accumulated undistributed net investment income.................... $ -- $ -- $ -- $ -- ============ ============ ============= =============
102
PACE PACE INTERMEDIATE FIXED INCOME STRATEGIC FIXED INCOME INVESTMENTS INVESTMENTS -------------------------------- -------------------------------- FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE JANUARY 31, 2002 YEAR ENDED JANUARY 31, 2002 YEAR ENDED (UNAUDITED) JULY 31, 2001 (UNAUDITED) JULY 31, 2001 ---------------- ------------- ---------------- ------------- FROM OPERATIONS: Net investment income................. $ 9,696,246 $ 13,537,956 $ 6,325,838 $ 15,430,556 Net realized gains (losses) from: Investments, futures, options and swaps.............................. 1,611,828 1,979,886 9,947,149 324,561 Forward foreign currency contracts and foreign currency transactions....................... -- -- 273,333 (989,473) Net change in unrealized appreciation/depreciation of: Investments, futures, options and swaps.............................. (6,704,997) 7,051,854 (5,082,999) 14,679,968 Other assets, liabilities and forward foreign currency contracts.......................... -- (5) (377,590) 430,469 ------------ ------------- ------------ ------------- Net increase (decrease) in net assets resulting from operations............ 4,603,077 22,569,691 11,085,731 29,876,081 ------------ ------------- ------------ ------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income--Class A........ (4,621,660) (4,637,665) (640,511) (813,413) Net investment income--Class B........ (356,448) (392,491) (307,273) (386,914) Net investment income--Class C........ (507,349) (517,622) (322,250) (414,536) Net investment income--Class Y........ (103,190) (103,076) (15,401) (16,368) Net investment income--Class P........ (4,140,028) (8,569,251) (5,136,840) (14,679,785) Net realized gains from investment activities--Class A.................. -- -- -- -- Net realized gains from investment activities--Class B.................. -- -- -- -- Net realized gains from investment activities--Class C.................. -- -- -- -- Net realized gains from investment activities--Class Y.................. -- -- -- -- Net realized gains from investment activities--Class P.................. -- -- -- -- Paid in capital--Class P.............. -- -- -- -- ------------ ------------- ------------ ------------- (9,728,675) (14,220,105) (6,422,275) (16,311,016) ------------ ------------- ------------ ------------- FROM BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from the sale of shares............................... 65,683,405 146,674,280 38,718,396 47,195,730 Cost of shares repurchased............ (59,895,229) (183,787,495) (42,133,266) (103,456,158) Proceeds from dividends reinvested.... 7,636,715 11,856,341 5,931,390 15,576,871 Shares issued in connection with fund mergers.............................. -- 206,174,644 -- 66,851,983 ------------ ------------- ------------ ------------- Net increase (decrease) in net assets from beneficial interest transactions......................... 13,424,891 180,917,770 2,516,520 26,168,426 ------------ ------------- ------------ ------------- Contribution to capital from Sub-Advisor.......................... -- -- -- 295,496 ------------ ------------- ------------ ------------- Net increase (decrease) in net assets............................... 8,299,293 189,267,356 7,179,976 40,028,987 NET ASSETS: Beginning of period................... 323,369,715 134,102,359 274,776,712 234,747,725 ------------ ------------- ------------ ------------- End of period......................... $331,669,008 $ 323,369,715 $281,956,688 $ 274,776,712 ============ ============= ============ ============= Accumulated undistributed net investment income.................... $ -- $ -- $ -- $ -- ============ ============= ============ ============= PACE PACE MUNICIPAL FIXED INCOME GLOBAL FIXED INCOME INVESTMENTS INVESTMENTS -------------------------------- -------------------------------- FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE JANUARY 31, 2002 YEAR ENDED JANUARY 31, 2002 YEAR ENDED (UNAUDITED) JULY 31, 2001 (UNAUDITED) JULY 31, 2001 ---------------- ------------- ---------------- ------------- FROM OPERATIONS: Net investment income................. $ 5,406,191 $ 6,268,091 $ 5,904,835 $ 9,021,250 Net realized gains (losses) from: Investments, futures, options and swaps.............................. 59,100 1,444,214 1,300,993 2,113,283 Forward foreign currency contracts and foreign currency transactions....................... -- -- (7,303,036) (15,378,121) Net change in unrealized appreciation/depreciation of: Investments, futures, options and swaps.............................. (126,637) 2,084,079 55,766 1,514,409 Other assets, liabilities and forward foreign currency contracts.......................... -- -- (995,351) (1,524,751) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations............ 5,338,654 9,796,384 (1,036,793) (4,253,930) ------------ ------------ ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income--Class A........ (3,568,626) (3,258,317) (3,555,729) -- Net investment income--Class B........ (192,204) (225,549) (32,201) -- Net investment income--Class C........ (572,008) (519,719) (223,979) -- Net investment income--Class Y........ (8,536) (7,667) (105,576) -- Net investment income--Class P........ (1,096,910) (2,480,140) (1,965,687) -- Net realized gains from investment activities--Class A.................. -- -- -- -- Net realized gains from investment activities--Class B.................. -- -- -- -- Net realized gains from investment activities--Class C.................. -- -- -- -- Net realized gains from investment activities--Class Y.................. -- -- -- -- Net realized gains from investment activities--Class P.................. -- -- -- -- Paid in capital--Class P.............. -- -- -- (9,117,729) ------------ ------------ ------------ ------------ (5,438,284) (6,491,392) (5,883,172) (9,117,729) ------------ ------------ ------------ ------------ FROM BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from the sale of shares............................... 18,699,177 35,506,781 16,920,284 25,344,900 Cost of shares repurchased............ (30,234,631) (59,204,613) (31,327,533) (57,651,961) Proceeds from dividends reinvested.... 3,926,826 5,001,052 4,585,033 7,506,398 Shares issued in connection with fund mergers.............................. -- 236,198,303 -- 243,102,617 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets from beneficial interest transactions......................... (7,608,628) 217,501,523 (9,822,216) 218,301,954 ------------ ------------ ------------ ------------ Contribution to capital from Sub-Advisor.......................... -- -- -- -- ------------ ------------ ------------ ------------ Net increase (decrease) in net assets............................... (7,708,258) 220,806,515 (16,742,181) 204,930,295 NET ASSETS: Beginning of period................... 274,400,796 53,594,281 305,761,277 100,830,982 ------------ ------------ ------------ ------------ End of period......................... $266,692,538 $274,400,796 $289,019,096 $305,761,277 ============ ============ ============ ============ Accumulated undistributed net investment income.................... $ -- $ -- $ -- $ -- ============ ============ ============ ============
See accompanying notes to financial statements 103 PAINEWEBBER PACE SELECT ADVISORS TRUST STATEMENTS OF CHANGES IN NET ASSETS(CONCLUDED)
PACE PACE LARGE COMPANY VALUE LARGE COMPANY GROWTH EQUITY INVESTMENTS EQUITY INVESTMENTS -------------------------------- ------------------------------- FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE JANUARY 31, 2002 YEAR ENDED JANUARY 31, 2002 YEAR ENDED (UNAUDITED) JULY 31, 2001 (UNAUDITED) JULY 31, 2001 ---------------- -------------- ---------------- ------------- FROM OPERATIONS: Net investment income (loss).......... $ 3,531,164 $ 4,585,885 $ (1,248,135) $ (2,197,580) Net realized gains (losses) from: Investments and futures............. (34,050,209) (20,826,592) (36,548,627) (78,339,751) Forward foreign currency contracts and foreign currency transactions....................... (4,464) 2,686 -- -- Net change in unrealized appreciation/depreciation of: Investments and futures............. (15,040,641) 55,702,261 (19,542,060) (93,359,892) Other assets, liabilities and forward foreign currency contracts.......................... -- -- -- -- -------------- -------------- ------------ ------------- Net increase (decrease) in net assets resulting from operations............ (45,564,150) 39,464,240 (57,338,822) (173,897,223) -------------- -------------- ------------ ------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income--Class A........ (2,415,292) -- -- -- Net investment income--Class C........ -- -- -- -- Net investment income--Class Y........ (330,121) -- -- -- Net investment income--Class P........ (2,793,384) (3,348,036) -- -- Net realized gains from investment activities--Class A.................. -- -- -- -- Net realized gains from investment activities--Class B.................. -- -- -- -- Net realized gains from investment activities--Class C.................. -- -- -- -- Net realized gains from investment activities--Class Y.................. -- -- -- -- Net realized gains from investment activities--Class P.................. -- -- -- (49,053,172) -------------- -------------- ------------ ------------- (5,538,797) (3,348,036) -- (49,053,172) -------------- -------------- ------------ ------------- FROM BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from the sale of shares............................... 71,070,024 162,802,960 65,705,296 227,414,067 Cost of shares repurchased............ (107,280,368) (233,076,308) (62,397,507) (205,043,112) Proceeds from dividends reinvested.... 5,300,057 3,302,990 -- 48,373,474 Shares issued in connection with fund mergers.............................. -- 739,403,265 -- 340,957,666 -------------- -------------- ------------ ------------- Net increase (decrease) in net assets from beneficial interest transactions......................... (30,910,287) 672,432,907 3,307,789 411,702,095 -------------- -------------- ------------ ------------- Contribution to capital from Sub-Advisor.......................... -- -- -- -- -------------- -------------- ------------ ------------- Net increase (decrease) in net assets............................... (82,013,234) 708,549,111 (54,031,033) 188,751,700 NET ASSETS: Beginning of period................... 1,043,843,521 335,294,410 625,557,809 436,806,109 -------------- -------------- ------------ ------------- End of period......................... $ 961,830,287 $1,043,843,521 $571,526,776 $ 625,557,809 ============== ============== ============ ============= Accumulated undistributed net investment income.................... $ 949,166 $ 2,956,799 $ -- $ -- ============== ============== ============ =============
104
PACE PACE SMALL/MEDIUM COMPANY VALUE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS EQUITY INVESTMENTS ------------------------------- ------------------------------- FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE JANUARY 31, 2002 YEAR ENDED JANUARY 31, 2002 YEAR ENDED (UNAUDITED) JULY 31, 2001 (UNAUDITED) JULY 31, 2001 ---------------- ------------- ---------------- ------------- FROM OPERATIONS: Net investment income (loss).......... $ 190,628 $ 2,232,093 $ (1,087,507) $ (1,753,436) Net realized gains (losses) from: Investments and futures............. 19,334,923 (5,402,303) (781,037) (11,341,423) Forward foreign currency contracts and foreign currency transactions....................... -- -- -- 214 Net change in unrealized appreciation/depreciation of: Investments and futures............. (349,697) 63,662,703 (12,351,494) (96,959,700) Other assets, liabilities and forward foreign currency contracts.......................... -- -- -- -- ------------ ------------- ------------ ------------- Net increase (decrease) in net assets resulting from operations............ 19,175,854 60,492,493 (14,220,038) (110,054,345) ------------ ------------- ------------ ------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income--Class A........ (130,373) -- -- -- Net investment income--Class C........ -- -- -- -- Net investment income--Class Y........ (7,351) -- -- -- Net investment income--Class P........ (904,284) (2,609,034) -- -- Net realized gains from investment activities--Class A.................. (78,290) -- -- (88,042,617) Net realized gains from investment activities--Class B.................. (17,000) -- -- -- Net realized gains from investment activities--Class C.................. (18,908) -- -- -- Net realized gains from investment activities--Class Y.................. (2,522) -- -- -- Net realized gains from investment activities--Class P.................. (308,844) -- -- -- ------------ ------------- ------------ ------------- (1,467,572) (2,609,034) -- (88,042,617) ------------ ------------- ------------ ------------- FROM BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from the sale of shares............................... 48,282,537 60,012,494 53,711,535 120,997,410 Cost of shares repurchased............ (61,191,960) (108,255,756) (80,333,398) (111,716,200) Proceeds from dividends reinvested.... 1,407,369 2,586,923 -- 87,137,949 Shares issued in connection with fund mergers.............................. -- 72,542,317 -- 146,300,173 ------------ ------------- ------------ ------------- Net increase (decrease) in net assets from beneficial interest transactions......................... (11,502,054) 26,885,978 (26,621,863) 242,719,332 ------------ ------------- ------------ ------------- Contribution to capital from Sub-Advisor.......................... -- -- -- -- ------------ ------------- ------------ ------------- Net increase (decrease) in net assets............................... 6,206,228 84,769,437 (40,841,901) 44,622,370 NET ASSETS: Beginning of period................... 298,518,306 213,748,869 364,193,841 319,571,471 ------------ ------------- ------------ ------------- End of period......................... $304,724,534 $ 298,518,306 $323,351,940 $ 364,193,841 ============ ============= ============ ============= Accumulated undistributed net investment income.................... $ -- $ 692,025 $ -- $ -- ============ ============= ============ ============= PACE PACE INTERNATIONAL EMERGING INTERNATIONAL EQUITY INVESTMENTS MARKETS EQUITY INVESTMENTS --------------------------------- ------------------------------- FOR THE SIX FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED FOR THE JANUARY 31, 2002 YEAR ENDED JANUARY 31, 2002 YEAR ENDED (UNAUDITED) JULY 31, 2001 (UNAUDITED) JULY 31, 2001 ---------------- --------------- ---------------- ------------- FROM OPERATIONS: Net investment income (loss).......... $ (663,253) $ 1,827,802 $ (189,029) $ 222,108 Net realized gains (losses) from: Investments and futures............. (40,147,199) (16,348,781) (8,260,126) (17,320,901) Forward foreign currency contracts and foreign currency transactions....................... (8,864,020) 2,284,268 (3,800,376) (680,102) Net change in unrealized appreciation/depreciation of: Investments and futures............. 617,718 (85,068,083) 18,741,316 (16,984,865) Other assets, liabilities and forward foreign currency contracts.......................... 1,245,728 25,264 (101,336) 20,107 ------------- ------------- ------------ ------------ Net increase (decrease) in net assets resulting from operations............ (47,811,026) (97,279,530) 6,390,449 (34,743,653) ------------- ------------- ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income--Class A........ (1,148,436) -- -- -- Net investment income--Class C........ (16,338) -- -- -- Net investment income--Class Y........ (504,990) -- -- -- Net investment income--Class P........ (2,261,373) (495,130) -- -- Net realized gains from investment activities--Class A.................. -- -- -- -- Net realized gains from investment activities--Class B.................. -- -- -- -- Net realized gains from investment activities--Class C.................. -- -- -- -- Net realized gains from investment activities--Class Y.................. -- -- -- -- Net realized gains from investment activities--Class P.................. -- (16,406,729) -- -- ------------- ------------- ------------ ------------ (3,931,137) (16,901,859) -- -- ------------- ------------- ------------ ------------ FROM BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from the sale of shares............................... 193,584,087 606,536,530 26,485,147 42,994,558 Cost of shares repurchased............ (190,216,907) (585,985,353) (30,112,468) (31,808,331) Proceeds from dividends reinvested.... 3,794,175 16,604,127 -- -- Shares issued in connection with fund mergers.............................. -- 235,594,979 -- 27,264,537 ------------- ------------- ------------ ------------ Net increase (decrease) in net assets from beneficial interest transactions......................... 7,161,355 272,750,283 (3,627,321) 38,450,764 ------------- ------------- ------------ ------------ Contribution to capital from Sub-Advisor.......................... -- 133,232 -- -- ------------- ------------- ------------ ------------ Net increase (decrease) in net assets............................... (44,580,808) 158,702,126 2,763,128 3,707,111 NET ASSETS: Beginning of period................... 405,154,084 246,451,958 85,885,624 82,178,513 ------------- ------------- ------------ ------------ End of period......................... $ 360,573,276 $ 405,154,084 $ 88,648,752 $ 85,885,624 ============= ============= ============ ============ Accumulated undistributed net investment income.................... $ -- $ 3,930,844 $ -- $ -- ============= ============= ============ ============
See accompanying notes to financial statements 105 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES PaineWebber PACE Select Advisors Trust (the "Trust") is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended, as an open-end management investment company currently composed of twelve separate investment portfolios and was organized as a Delaware business trust under the laws of the State of Delaware by Certificate of Trust dated September 9, 1994, as amended June 9, 1995 and thereafter. The trustees of the Trust have authority to issue an unlimited number of shares of beneficial interest, par value $0.001 per share. The Trust has twelve Portfolios available for investment, each having its own investment objectives and policies: PACE Money Market Investments, PACE Government Securities Fixed Income Investments, PACE Intermediate Fixed Income Investments, PACE Strategic Fixed Income Investments, PACE Municipal Fixed Income Investments, PACE Global Fixed Income Investments, PACE Large Company Value Equity Investments, PACE Large Company Growth Equity Investments, PACE Small/Medium Company Value Equity Investments, PACE Small/Medium Company Growth Equity Investments, PACE International Equity Investments and PACE International Emerging Markets Equity Investments (collectively, the "Portfolios"). The Portfolios are diversified with the exception of PACE Intermediate Fixed Income Investments and PACE Global Fixed Income Investments. With the exception of PACE Money Market Investments (which currently offers Class P shares only), each Portfolio currently offers Class A, Class B, Class C, Class Y and Class P shares. Each class represents interests in the same assets of the applicable Portfolio and the classes are identical except for differences in their sales charge structures, ongoing service and distribution charges and certain transfer agency and related services expenses. In addition, Class B shares and all corresponding reinvested dividend shares automatically convert to Class A shares within a certain number of years after issuance which varies depending upon the amount invested. All classes of shares have equal voting privileges except that each class has exclusive voting rights with respect to its service and/or distribution plan, if any. Class Y and Class P shares have no service or distribution plan. The Portfolios' Class P shares currently are available only to participants in the PaineWebber PACE-SM- Select Advisors Program and the PaineWebber PACE-SM- Multi Advisor Program. The Trust incurred costs of approximately $1,138,000 in connection with the organization of the Trust and the registration of its shares. Such costs were deferred and were amortized using the straight-line method over the period of benefit, not to exceed five years, beginning with the commencement of operations of the Trust. Such costs have been fully amortized at July 31, 2001. The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires the Trust's management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies: VALUATION OF INVESTMENTS--Each Portfolio (except PACE Money Market Investments) calculates its net asset value based on the current market value for its portfolio securities. The Portfolios normally obtain market values for their 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 Brinson Advisors, Inc. ("Brinson Advisors"), the investment manager and administrator of the Portfolios, or by the Portfolios' investment advisor. Brinson Advisors is an indirect wholly owned 106 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) asset management subsidiary of UBS AG, an internationally diversified organization with headquarters in Zurich, Switzerland and operations in many areas of the financial services industry. 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 Trust'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. Investments of the PACE Money Market Investments are valued using the amortized cost method of valuation. 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 Portfolios' 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 Portfolios' 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 fair value as determined in good faith by or under the direction of the Board. REPURCHASE AGREEMENTS--The Portfolios' custodian or a triparty custodian takes possession of the collateral pledged for investments in repurchase agreements. The underlying collateral is valued daily on a mark-to-market basis to ensure that the value, including accrued interest, is at least equal to the repurchase price. In the event of default of the obligation to repurchase, the Portfolios have the right to liquidate the collateral and apply the proceeds in satisfaction of the obligations. Under certain circumstances, in the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. Each Portfolio (with the exception of PACE Municipal Fixed Income Investments) may participate in joint repurchase agreement transactions with other funds managed, advised or sub-advised by Brinson Advisors. INVESTMENT TRANSACTIONS AND INVESTMENT INCOME--Investment transactions are recorded on the trade date. Realized gains and losses from investment transactions and foreign exchange transactions are calculated using the identified cost method. Dividend income is recorded on the ex-dividend date ("ex-date") (except in the case of certain dividends from foreign securities which are recorded as soon after the ex-date as the respective Portfolio, using reasonable diligence, becomes aware of such dividends). Interest income is recorded on an accrual basis. Discounts are accreted and premiums are amortized as adjustments to interest income and the identified cost of investments. Income, expenses (excluding class-specific expenses) and realized/unrealized gains/losses are allocated proportionately to each class of shares based upon the relative net asset value of outstanding shares (or the value of dividend- eligible shares, as appropriate) of each class at the beginning of the day (after adjusting for current capital share activity of the respective classes). Class-specific expenses are charged directly to the applicable class of shares. FOREIGN CURRENCY TRANSLATION--The books and records of the Portfolios are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows: (1) the foreign currency market value of investment securities and other assets and liabilities stated in foreign currencies are translated at the exchange rates prevailing at the end of the period; and (2) purchases, sales, income and expenses are translated at the rate of exchange prevailing on the respective dates of such transactions. The resulting exchange gains and losses are included in the Statement of Operations. The Portfolios do not generally isolate the effects of fluctuations in foreign exchange rates from the effects of fluctuations in the market prices of securities. However, the Portfolios do isolate the effect of fluctuations in foreign exchange rates when determining the realized gain or loss upon the sale or maturity of foreign currency-denominated 107 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) debt obligations pursuant to U.S. federal income tax regulations; such amount is categorized as foreign exchange gain or loss for both financial reporting and income tax purposes. Net realized foreign currency gain (loss) is treated as ordinary income (loss) for income tax reporting purposes. FORWARD FOREIGN CURRENCY CONTRACTS--Certain Portfolios may enter into forward foreign currency contracts ("forward contracts") in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Portfolios may also engage in cross-hedging by using forward contracts in one currency to hedge fluctuations in the value of securities denominated in a different currency if the applicable sub-advisor anticipates that there is a correlation between the two currencies. Forward contracts may also be used to shift a Portfolio's exposure to foreign currency fluctuations from one country to another. The Portfolios have no specific limitation on the percentage of assets which may be committed to such contracts; however, the value of all forward contracts will not exceed the total market value of a Portfolio's total assets. The Portfolios may enter into forward contracts or maintain a net exposure to forward contracts only if (1) the consummation of the contracts would not obligate the Portfolios to deliver an amount of foreign currency in excess of the value of the positions being hedged by such contracts or (2) the Portfolios maintain cash or liquid securities in a segregated account in an amount not less than the value of a Portfolio's total assets committed to the consummation of the forward contracts and not covered as provided in (1) above, as marked-to-market daily. Risks may arise upon entering into forward contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar. Fluctuations in the value of open forward contracts are recorded for book purposes as unrealized gains or losses by the Portfolios. Realized gains and losses include net gains or losses recognized by the Portfolios on contracts which have matured. OPTION WRITING--Certain Portfolios may write (sell) put and call options on securities or derivative instruments in order to gain exposure to or protect against changes in the markets. When a Portfolio writes a call or a put option, an amount equal to the premium received by the Portfolio is included in the Portfolio's Statement of Assets and Liabilities as an asset and as an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. If an option which the Portfolio has written either expires on its stipulated expiration date or the Portfolio enters into a closing purchase transaction, the Portfolio realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security or derivative instrument, and the liability related to such option is extinguished. If a call option which the Portfolio has written is exercised, the Portfolio realizes a capital gain or loss (long-term or short-term, depending on the holding period of the underlying security) from the sale of the underlying security or derivative instrument and the proceeds from the sale are increased by the premium originally received. If a put option which the Portfolio has written is exercised, the amount of the premium originally received reduces the cost of the security or derivative instrument which the Portfolio purchases upon exercise of the option. FUTURES CONTRACTS--Certain Portfolios may use financial futures contracts for hedging purposes and to adjust exposure to U.S. and foreign equity markets in connection with a reallocation of the Portfolios' assets or to manage the average duration of a Portfolio. However, imperfect correlations between futures contracts and the related securities or markets, or market disruptions, do not normally permit full control of these risks at all times. Using financial futures contracts involves various market risks. The maximum amount at risk from the purchase of a futures contract is the contract value. Upon entering into a financial futures contract, a Portfolio is required to pledge to a broker an amount of cash and/ or government securities equal to a certain percentage of the contract amount. This amount is known as the "initial margin". Subsequent payments, known as "variation margin", are made or received by the Portfolio each day, depending 108 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) on the daily fluctuations in the value of the underlying financial futures contracts. Such variation margin is recorded for financial statement purposes on a daily basis as an unrealized gain or loss until the financial futures contract is closed, at which time the net gain or loss is reclassified to realized gain or loss. REVERSE REPURCHASE AGREEMENTS--Certain Portfolios may enter into reverse repurchase agreements with qualified third party broker-dealers as determined by, and under the direction of, the Board. Interest on the value of reverse repurchase agreements issued and outstanding is based upon competitive market rates at the time of issuance. At the time the Portfolio enters into reverse repurchase agreements, the Portfolio establishes and maintains a segregated account with the Portfolio's custodian containing liquid securities having a value not less than the repurchase price, including accrued interest, of the reverse repurchase agreement. The Portfolios did not enter into any reverse repurchase agreements during the six months ended January 31, 2002. INTEREST RATE SWAP AGREEMENTS--Certain Portfolios may enter into interest rate swap agreements to protect themselves from interest rate fluctuations. This type of swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to a specified interest rate(s) for a specified amount. The payment flows are usually netted against each other, with the difference being paid by one party to the other. Risks may arise as a result of the failure of the counterparty to the swap contract to comply with the terms of the contract. The loss incurred by the failure of a counterparty is generally limited to the net interest payment to be received by the Portfolio. Therefore, the Portfolio considers the creditworthiness of the counterparty to a swap contract in evaluating potential credit risk. The Portfolio records a net receivable or payable on a daily basis for the net interest income or expense expected to be received or paid in the interest period. Net interest received or paid on these contracts is recorded as interest income (or as an offset to interest income). Fluctuations in the value of swap contracts are recorded for financial statement purposes as unrealized appreciation or depreciation of swaps. DIVIDENDS AND DISTRIBUTIONS--Dividends and distributions to shareholders are recorded on the ex-date. The amounts of dividends and distributions are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification. CONCENTRATION OF RISK Investing in securities of foreign issuers and currency transactions may involve certain considerations and risks not typically associated with investments in the United States. These risks include revaluation of currencies, adverse fluctuations in foreign currency values and possible adverse political, social and economic developments, including those particular to a specific industry, country or region, which could cause the securities and their markets to be less liquid and prices more volatile than those of comparable U.S. companies and U.S. government securities. These risks are greater with respect to securities of issuers located in emerging market countries in which the PACE Global Fixed Income Investments, PACE International Equity Investments and PACE International Emerging Markets Equity Investments Portfolios are authorized to invest. Small capitalization ("small cap") companies may be more vulnerable than larger capitalization companies to adverse business or economic developments. Small cap companies may also have limited product lines, markets or financial resources, and may be dependent on a relatively small management group. Securities of such companies may be less liquid and more volatile than securities of larger capitalization companies or the market averages in general and therefore may involve greater risk than investing in larger capitalization companies. In addition, small cap 109 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) companies may not be well-known to the investing public, may not have institutional ownership and may have only cyclical, static or moderate growth prospects. These risks are greater with respect to the securities in which the PACE Small/Medium Company Value Equity Investments and PACE Small/Medium Company Growth Equity Investments Portfolios tend to invest. The ability of the issuers of debt securities held by the Portfolios to meet their obligations may be affected by economic and political developments particular to a specific industry, country, state or region. REORGANIZATIONS INVOLVING PAINEWEBBER FUNDS During the period ended July 31, 2001, the Portfolios acquired all of the assets and assumed all of the stated liabilities of the PaineWebber funds described in the table that follows. The acquisitions were accomplished by a tax-free exchange of shares of the Portfolios for shares of the indicated PaineWebber funds outstanding on the reorganization dates. Each PaineWebber fund's net assets as of that date, including net unrealized appreciation (depreciation) of investments, were combined with those of the indicated Portfolio. All shares were exchanged at net asset value. Accordingly, no shareholder had any gain or loss as a result of the exchange.
PAINEWEBBER PACE NET UNREALIZED REORGANIZATION FUND SHARES SHARES APPRECIATION DATE FUND ACQUIRED EXCHANGED ISSUED NET ASSETS (DEPRECIATION) -------------- ------------- ----------- ------ ---------- -------------- PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS 02/02/01 PaineWebber U.S. Government Income Fund $233,931,971 $ 4,208,613 Class A 22,425,909 15,829,918 Class B 832,788 587,944 Class C 1,708,194 1,204,352 Class Y 1,232,152 868,779 PaineWebber Low Duration U.S. Government Income Fund 194,015,282 2,556,782 Class A 60,758,876 11,342,701 Class B 1,727,315 321,812 Class C 19,370,621 3,613,449 Class Y 307,686 57,547 PACE INTERMEDIATE FIXED INCOME INVESTMENTS 02/02/01 PaineWebber Investment Grade Income Fund 206,174,644 861,533 Class A 17,155,704 13,572,291 Class B 1,732,178 1,368,906 Class C 2,168,966 1,714,190 Class Y 381,198 301,552 PACE STRATEGIC FIXED INCOME INVESTMENTS 02/02/01 PaineWebber Strategic Income Fund 66,851,983 (2,174,246) Class A 4,074,838 2,469,404 Class B 2,175,519 1,317,030 Class C 2,319,738 1,404,172 Class Y 71,310 43,193 PACE MUNICIPAL FIXED INCOME INVESTMENTS 02/23/01 PaineWebber National Tax-Free Income Fund 236,198,303 7,293,877 Class A 16,676,854 14,949,505 Class B 1,465,481 1,313,324 Class C 3,032,972 2,718,677 Class Y 37,432 33,568
110 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) PACE GLOBAL FIXED INCOME INVESTMENTS
PAINEWEBBER PACE NET UNREALIZED REORGANIZATION FUND SHARES SHARES APPRECIATION DATE FUND ACQUIRED EXCHANGED ISSUED NET ASSETS (DEPRECIATION) -------------- ------------- ----------- ------ ---------- -------------- 02/09/01 PaineWebber Global Income Fund $243,102,617 $ (3,430,141) Class A 22,944,195 20,331,222 Class B 423,280 372,848 Class C 1,630,174 1,443,639 Class Y 628,454 556,432 PACE LARGE COMPANY VALUE EQUITY INVESTMENTS 02/23/01 PaineWebber Growth and Income Fund 704,160,365 18,581,843 Class A 21,534,521 27,184,960 Class B 6,099,624 7,487,923 Class C 3,458,770 4,259,634 Class Y 1,582,514 2,008,036 PaineWebber Tax-Managed Equity Fund 35,242,900 1,895,069 Class A 780,203 581,433 Class B 1,366,491 1,004,132 Class C 622,616 457,565 Class Y 7,976 5,923 PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS 02/23/01 PaineWebber Growth Fund 340,957,666 2,577,034 Class A 14,789,093 13,496,005 Class B 2,703,076 2,082,667 Class C 1,963,861 1,544,375 Class Y 1,814,515 1,753,537 PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS 02/09/01 PaineWebber Small Cap Fund 72,542,317 11,891,013 Class A 3,383,468 2,833,522 Class B 945,304 729,945 Class C 1,085,028 838,349 Class Y 118,511 100,651 PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS 02/16/01 PaineWebber Mid Cap Fund 146,300,173 17,218,816 Class A 11,657,967 7,125,090 Class B 2,647,419 1,580,529 Class C 2,035,950 1,067,737 Class Y 42,157 25,993 PACE INTERNATIONAL EQUITY INVESTMENTS 02/16/01 PaineWebber Global Equity Fund 235,594,979 (12,067,133) Class A 16,938,543 13,194,385 Class B 584,019 408,808 Class C 1,707,562 1,198,216 Class Y 1,917,607 1,552,287
111 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
PAINEWEBBER PACE NET UNREALIZED REORGANIZATION FUND SHARES SHARES APPRECIATION DATE FUND ACQUIRED EXCHANGED ISSUED NET ASSETS (DEPRECIATION) -------------- ------------- ----------- ------ ---------- -------------- 02/09/01 PaineWebber Asia Pacific Growth Fund $ 22,082,657 $ 220,621 Class A 890,101 832,708 Class B 1,033,747 939,051 Class C 464,369 422,391 Class Y 15,436 14,446 PaineWebber Emerging Markets Equity Fund 5,181,880 (247,866) Class A 368,346 281,577 Class B 85,134 62,525 Class C 169,219 123,010 Class Y 65,944 51,150
INVESTMENT MANAGER AND ADMINISTRATOR The Trust has entered into an Investment Management and Administration Contract ("Management Contract") with Brinson Advisors. In accordance with the Management Contract, each Portfolio pays Brinson Advisors investment management and administration fees, which are accrued daily and paid monthly, in accordance with the following schedule:
ANNUAL RATE AS A PERCENTAGE OF EACH PORTFOLIO'S PORTFOLIO AVERAGE DAILY NET ASSETS - ------------------------------------------------------------ ------------------------ PACE Money Market Investments............................... 0.35% PACE Government Securities Fixed Income Investments......... 0.70% PACE Intermediate Fixed Income Investments.................. 0.60% PACE Strategic Fixed Income Investments..................... 0.70% PACE Municipal Fixed Income Investments..................... 0.60% PACE Global Fixed Income Investments........................ 0.80% PACE Large Company Value Equity Investments................. 0.80% PACE Large Company Growth Equity Investments................ 0.80% PACE Small/Medium Company Value Equity Investments.......... 0.80% PACE Small/Medium Company Growth Equity Investments......... 0.80% PACE International Equity Investments....................... 0.90% PACE International Emerging Markets Equity Investments...... 1.10%
Under separate Sub-Advisory Agreements, with the exception of PACE Money Market Investments, Brinson Advisors (not the Portfolios) pays each investment sub-advisor a fee from the investment management fee which Brinson Advisors receives, which is accrued daily and paid monthly, in accordance with the following schedule:
ANNUAL RATE AS A PERCENTAGE OF EACH PORTFOLIO'S PORTFOLIO INVESTMENT SUB-ADVISOR AVERAGE DAILY NET ASSETS - ----------------------------------- ----------------------------------- ------------------------ PACE Government Securities Fixed Income Investments Pacific Investment Management Company LLC 0.225% PACE Intermediate Fixed Income Metropolitan West Asset Management, Investments LLC 0.200% up to $200 million 0.120% above $200 million PACE Strategic Fixed Income Pacific Investment Management Investments Company LLC 0.250% PACE Municipal Fixed Income Standish Mellon Asset Management Investments Company LLC 0.200% up to $60 million 0.150% above $60 million
112 NOTES TO FINANCIAL STATEMENTS(UNAUDITED)
ANNUAL RATE AS A PERCENTAGE OF EACH PORTFOLIO'S PORTFOLIO INVESTMENT SUB-ADVISOR AVERAGE DAILY NET ASSETS - ----------------------------------- ----------------------------------- ------------------------ PACE Global Fixed Income Rogge Global Partners plc 0.250% Investments Fischer Francis Trees & Watts, Inc. (and affiliates) 0.250% up to $400 million 0.200% above $400 million PACE Large Company Value Equity Institutional Capital Corp. 0.300% Investments Westwood Management Corp. 0.300% SSgA Funds Management, Inc. 0.150% PACE Large Company Growth Equity Alliance Capital Management L.P. 0.300% Investments SSgA Funds Management, Inc. 0.150% PACE Small/Medium Company Value Equity Investments ICM Asset Management, Inc. 0.300% Ariel Capital Management, Inc. 0.300% PACE Small/Medium Company Growth Equity Investments Delaware Management Company 0.400% PACE International Equity Martin Currie Inc. 0.350% up to $150 million Investments 0.300% above $150 million up to $250 million 0.250% above $250 million up to $350 million 0.200% above $350 million PACE International Emerging Markets Equity Investments Schroder Investment Management North America Inc. 0.500%
At January 31, 2002, certain Portfolios owed Brinson Advisors for investment management and administration fees as follows:
AMOUNTS PORTFOLIO OWED - ------------------------------------------------------------ -------- PACE Government Securities Fixed Income Investments......... $346,317 PACE Intermediate Fixed Income Investments.................. 166,250 PACE Strategic Fixed Income Investments..................... 163,802 PACE Municipal Fixed Income Investments..................... 135,720 PACE Global Fixed Income Investments........................ 198,381 PACE Large Company Value Equity Investments................. 652,718 PACE Large Company Growth Equity Investments................ 391,488 PACE Small/Medium Company Value Equity Investments.......... 213,730 PACE Small/Medium Company Growth Equity Investments......... 233,747 PACE International Equity Investments....................... 271,042 PACE International Emerging Markets Equity Investments...... 84,732
Brinson Advisors agreed to waive all or a portion of its investment management and administration fee and reimburse certain operating expenses for the six months ended January 31, 2002, which will lower the overall expenses of certain Portfolios. 113 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) At January 31, 2002, Brinson Advisors owed certain Portfolios for fee waivers and reimbursement as follows:
AMOUNTS PORTFOLIO DUE - ------------------------------------------------------------ ----------- PACE Government Securities Fixed Income Investments......... $104,634 PACE Intermediate Fixed Income Investments.................. 45,789 PACE Strategic Fixed Income Investments..................... 39,360 PACE Municipal Fixed Income Investments..................... 48,647 PACE Global Fixed Income Investments........................ 69,462 PACE Large Company Value Equity Investments................. 123,609 PACE Large Company Growth Equity Investments................ 93,617 PACE Small/Medium Company Value Equity Investments.......... 31,185 PACE Small/Medium Company Growth Equity Investments......... 31,694 PACE International Equity Investments....................... 17,095 PACE International Emerging Markets Equity Investments...... 53,917
For the six months ended January 31, 2002, Brinson Advisors had the following fee waivers and reimbursements:
FEE WAIVERS AND PORTFOLIO REIMBURSEMENTS - ------------------------------------------------------------ -------------- PACE Money Market Investments............................... $323,358 PACE Government Securities Fixed Income Investments......... 553,430 PACE Intermediate Fixed Income Investments.................. 136,424 PACE Strategic Fixed Income Investments..................... 101,798 PACE Municipal Fixed Income Investments..................... 222,030 PACE Global Fixed Income Investments........................ 317,102 PACE Large Company Value Equity Investments................. 519,299 PACE Large Company Growth Equity Investments................ 412,218 PACE Small/Medium Company Value Equity Investments.......... 77,930 PACE Small/Medium Company Growth Equity Investments......... 130,485 PACE International Equity Investments....................... 26,967 PACE International Emerging Markets Equity Investments...... 235,410
During the six months ended January 31, 2002, the Portfolios did not pay any brokerage commissions to UBS PaineWebber, Inc. ("UBS PaineWebber-SM-*"), an indirect wholly owned subsidiary of UBS AG, or any other affiliated broker-dealer for transactions executed on behalf of the Portfolios. SERVICE AND DISTRIBUTION PLANS Brinson Advisors is the principal underwriter of each Portfolios' shares. Under separate plans of service and/or distribution pertaining to Class A, Class B and Class C shares, certain Portfolios pay Brinson Advisors monthly service fees at the annual rate of 0.25% of the average daily net assets of Class A, Class B and Class C shares and monthly distribution fees (1) at the annual rate of 0.75% of the average daily net assets on Class B and Class C shares for PACE Large Company Value Equity Investments, PACE Large Company Growth Equity Investments, PACE Small/Medium Company Value Equity Investments, PACE Small/Medium Company Growth Equity Investments, PACE International - ------------- * UBS PaineWebber is a service mark of UBS AG. 114 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) Equity Investments and PACE International Emerging Markets Equity Investments Portfolios and (2) at the annual rate of 0.75% and 0.50% of the average daily net assets of Class B and Class C shares, respectively, for PACE Government Securities Fixed Income Investments, PACE Intermediate Fixed Income Investments, PACE Strategic Fixed Income Investments, PACE Municipal Fixed Income Investments and PACE Global Fixed Income Investments Portfolios. Brinson Advisors also receives the proceeds of the initial sales charges paid upon the purchase of Class A and Class C shares and the contingent deferred sales charges paid by shareholders upon certain redemptions of Class A, Class B and Class C shares. At January 31, 2002, certain Portfolios owed Brinson Advisors service and distribution fees, and for the six months ended January 31, 2002, certain Portfolios were informed by Brinson Advisors that it had earned sales charges as follows:
SERVICE AND SALES CHARGES DISTRIBUTION FEES EARNED FOR THE OWED MANAGER SIX MONTHS ENDED AT JANUARY 31, JANUARY 31, PORTFOLIO 2002 2002 - ------------------------------------------------------------ ----------------- ---------------- PACE Government Securities Fixed Income Investments......... $ 94,232 $ 66,607 PACE Intermediate Fixed Income Investments.................. 55,275 77,998 PACE Strategic Fixed Income Investments..................... 27,570 37,591 PACE Municipal Fixed Income Investments..................... 65,509 110,502 PACE Global Fixed Income Investments........................ 47,181 5,581 PACE Large Company Value Equity Investments................. 228,696 205,915 PACE Large Company Growth Equity Investments................ 75,050 45,916 PACE Small/Medium Company Value Equity Investments.......... 34,575 28,442 PACE Small/Medium Company Growth Equity Investments......... 37,131 28,794 PACE International Equity Investments....................... 35,741 11,103 PACE International Emerging Markets Equity Investments...... 11,056 10,978
TRANSFER AGENCY AND RELATED SERVICES FEES UBS PaineWebber provides transfer agency and related services to each Portfolio pursuant to a delegation of authority from PFPC, Inc., ("PFPC") each Portfolio's transfer agent, and is compensated for these services by PFPC, not the Portfolios. For the six months ended January 31, 2002, UBS PaineWebber received from PFPC, not the Portfolios, an approximate percentage of the total transfer agency and related services fees paid by a Portfolio to PFPC as follows:
PORTFOLIO - ------------------------------------------------------------ PACE Government Securities Fixed Income Investments......... 56% PACE Intermediate Fixed Income Investments.................. 52% PACE Strategic Fixed Income Investments..................... 53% PACE Municipal Fixed Income Investments..................... 50% PACE Global Fixed Income Investments........................ 58% PACE Large Company Value Equity Investments................. 54% PACE Large Company Growth Equity Investments................ 56% PACE Small/Medium Company Value Equity Investments.......... 58% PACE Small/Medium Company Growth Equity Investments......... 58% PACE International Equity Investments....................... 56% PACE International Emerging Markets Equity Investments...... 58%
115 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) SECURITIES LENDING Each Portfolio may lend securities up to 33 1/3% of its total assets to qualified broker-dealers or institutional investors. The loans are secured at all times by cash or U.S. government securities in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. The Portfolios will regain record ownership of loaned securities to exercise certain beneficial rights; however, the Portfolios may bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower fail financially. The Portfolios receive compensation, which is included in interest income, for lending their securities from interest or dividends earned on the cash invested or U.S. government securities held as collateral, net of fee rebates paid to the borrower plus reasonable administrative and custody fees. UBS PaineWebber, which is the Portfolios' lending agent, received compensation from certain Portfolios for the six months ended January 31, 2002 as follows:
PORTFOLIO COMPENSATION - ------------------------------------------------------------ ------------ PACE Government Securities Fixed Income Investments......... $19,126 PACE Intermediate Fixed Income Investments.................. 6,506 PACE Strategic Fixed Income Investments..................... 1,376 PACE Global Fixed Income Investments........................ 23,407 PACE Large Company Value Equity Investments................. 28,339 PACE Large Company Growth Equity Investments................ 13,463 PACE Small/Medium Company Value Equity Investments.......... 7,092 PACE Small/Medium Company Growth Equity Investments......... 40,653 PACE International Equity Investments....................... 9,425 PACE International Emerging Markets Equity Investments...... 6,940
For the six months ended January 31, 2002, certain Portfolios earned compensation from securities lending transactions net of fees, rebates and expenses as follows:
PORTFOLIO COMPENSATION - ------------------------------------------------------------ ------------ PACE Government Securities Fixed Income Investments......... $ 57,482 PACE Intermediate Fixed Income Investments.................. 19,542 PACE Strategic Fixed Income Investments..................... 3,948 PACE Global Fixed Income Investments........................ 68,295 PACE Large Company Value Equity Investments................. 81,242 PACE Large Company Growth Equity Investments................ 38,511 PACE Small/Medium Company Value Equity Investments.......... 20,175 PACE Small/Medium Company Growth Equity Investments......... 119,249 PACE International Equity Investments....................... 26,994 PACE International Emerging Markets Equity Investments...... 20,180
116 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) At January 31, 2002, certain Portfolios owed UBS PaineWebber for security lending fees as follows:
AMOUNTS PORTFOLIO OWED - ------------------------------------------------------------ --------- PACE Government Securities Fixed Income Investments......... $4,638 PACE Intermediate Fixed Income Investments.................. 970 PACE Strategic Fixed Income Investments..................... 362 PACE Global Fixed Income Investments........................ 3,141 PACE Large Company Value Equity Investments................. 5,196 PACE Large Company Growth Equity Investments................ 1,433 PACE Small/Medium Company Value Equity Investments.......... 1,991 PACE Small/Medium Company Growth Equity Investments......... 4,530 PACE International Equity Investments....................... 812 PACE International Emerging Markets Equity Investments...... 1,105
At January 31, 2002, certain Portfolios held cash as collateral for market values of securities loaned as follows:
COLLATERAL MARKET VALUE FOR SECURITIES OF SECURITIES PORTFOLIO LOANED LOANED - ------------------------------------------------------------ -------------- ------------- PACE Government Securities Fixed Income Investments......... $49,945,625 $48,096,285 PACE Intermediate Fixed Income Investments.................. 8,983,083 8,516,138 PACE Global Fixed Income Investments........................ 14,731,872 14,024,398 PACE Large Company Value Equity Investments................. 48,055,160 43,390,299 PACE Large Company Growth Equity Investments................ 15,864,350 15,709,086 PACE Small/Medium Company Value Equity Investments.......... 27,625,300 26,553,193 PACE Small/Medium Company Growth Equity Investments......... 19,278,961 18,272,487 PACE International Equity Investments....................... 9,480,622 7,219,473 PACE International Emerging Markets Equity Investments...... 7,194,970 6,919,133
At January 31, 2002, the Portfolios invested the collateral in the following money market funds:
NUMBER OF SHARES VALUE - --------------------- ----------- PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS: 17,361 AIM Liquid Assets Portfolio................................. $ 17,361 19,138,952 BlackRock Provident Institutional TempFund.................. 19,138,952 695,990 Brinson Private Money Market Fund LLC....................... 695,990 30,000,000 Dreyfus Cash Management Fund................................ 30,000,000 93,322 Scudder Institutional Fund, Inc............................. 93,322 ----------- Total investments of cash collateral for securities loaned (cost--$49,945,625)....................................... $49,945,625 =========== PACE INTERMEDIATE FIXED INCOME INVESTMENTS: 16,474 AIM Liquid Assets Portfolio................................. $ 16,474 45 AIM Prime Portfolio......................................... 45 2,640,629 BlackRock Provident Institutional TempFund.................. 2,640,629 294,754 Brinson Private Money Market Fund LLC....................... 294,754 31,181 Scudder Institutional Fund, Inc............................. 31,181 6,000,000 Scudder Money Market Fund................................... 6,000,000 ----------- Total investments of cash collateral for securities loaned (cost--$8,983,083)........................................ $ 8,983,083 ===========
117 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) PACE GLOBAL FIXED INCOME INVESTMENTS:
NUMBER OF SHARES VALUE - --------------------- ----------- 5,011,414 AIM Liquid Assets Portfolio................................. $ 5,011,414 16 AIM Prime Portfolio......................................... 16 7,430,089 BlackRock Provident Institutional TempFund.................. 7,430,089 1,772,229 Brinson Private Money Market Fund LLC....................... 1,772,229 518,124 Scudder Institutional Fund, Inc............................. 518,124 ----------- Total investments of cash collateral for securities loaned (cost--$14,731,872)....................................... $14,731,872 =========== PACE LARGE COMPANY VALUE EQUITY INVESTMENTS: 2,793,179 AIM Liquid Assets Portfolio................................. $ 2,793,179 21 AIM Prime Portfolio......................................... 21 28,907,796 BlackRock Provident Institutional TempFund.................. 28,907,796 1,020,660 Brinson Private Money Market Fund LLC....................... 1,020,660 15,000,000 Dreyfus Cash Management Fund................................ 15,000,000 333,504 Scudder Institutional Fund, Inc............................. 333,504 ----------- Total investments of cash collateral for securities loaned (cost--$48,055,160)....................................... $48,055,160 =========== PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS: 24,150 AIM Liquid Assets Portfolio................................. $ 24,150 91 AIM Prime Portfolio......................................... 91 12,330,128 BlackRock Provident Institutional TempFund.................. 12,330,128 3,491,591 Brinson Private Money Market Fund LLC....................... 3,491,591 18,390 Scudder Institutional Fund, Inc............................. 18,390 ----------- Total investments of cash collateral for securities loaned (cost--$15,864,350)....................................... $15,864,350 =========== PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS: 53,523 AIM Liquid Assets Portfolio................................. $ 53,523 11 AIM Prime Portfolio......................................... 11 14,472,043 BlackRock Provident Institutional TempFund.................. 14,472,043 769,428 Brinson Private Money Market Fund LLC....................... 769,428 12,296,500 Dreyfus Cash Management Fund................................ 12,296,500 33,795 Scudder Institutional Fund, Inc............................. 33,795 ----------- Total investments of cash collateral for securities loaned (cost--$27,625,300)....................................... $27,625,300 =========== PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS: 4,744 AIM Liquid Assets Portfolio................................. $ 4,744 5 AIM Prime Portfolio......................................... 5 13,141,567 BlackRock Provident Institutional TempFund.................. 13,141,567 2,041,064 Brinson Private Money Market Fund LLC....................... 2,041,064 4,057,000 Dreyfus Cash Management Fund................................ 4,057,000 34,581 Scudder Institutional Fund, Inc............................. 34,581 ----------- Total investments of cash collateral for securities loaned (cost--$19,278,961)....................................... $19,278,961 =========== PACE INTERNATIONAL EQUITY INVESTMENTS: 29,079 AIM Liquid Assets Portfolio................................. $ 29,079 37 AIM Prime Portfolio......................................... 37 2,353,832 Brinson Private Money Market Fund LLC....................... 2,353,832 7,000,000 Dreyfus Cash Management Fund................................ 7,000,000 97,674 Scudder Institutional Fund, Inc............................. 97,674 ----------- Total investments of cash collateral for securities loaned (cost--$9,480,622)........................................ $ 9,480,622 ===========
118 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS:
NUMBER OF SHARES VALUE - --------------------- ----------- 89,080 AIM Liquid Assets Portfolio................................. $ 89,080 182 AIM Prime Portfolio......................................... 182 35,500 BlackRock Provident Institutional TempFund.................. 35,500 5,291,308 Brinson Private Money Market Fund LLC....................... 5,291,308 1,778,900 Dreyfus Cash Management Fund................................ 1,778,900 ----------- Total investments of cash collateral for securities loaned (cost--$7,194,970)........................................ $ 7,194,970 ===========
BANK LINE OF CREDIT Each of the Portfolios, with the exception of PACE Money Market Investments, may participate with other funds managed, advised or sub-advised by Brinson Advisors in a $300 million committed credit facility ("Facility") with UBS AG, Stamford Branch, to be utilized for temporary financing until the settlement of sales or purchases of portfolio securities, the repurchase or redemption of shares of the Portfolios at the request of the shareholders or other temporary or emergency purposes. In connection therewith, the Portfolios have agreed to pay commitment fees, pro rata, based on the relative asset size of the funds in the Facility. Interest is charged to the Portfolios at rates based on prevailing market rates in effect at the time of borrowings. For the six months ended January 31, 2002, PACE Large Company Growth Equity Investments and PACE International Equity Investments were the only Portfolios to borrow under the Facility. The Portfolios had average daily amounts of borrowing outstanding under the Facility of $3,864,500 and $6,968,200, respectively, with related weighted average annualized interest rates of 2.02% and 2.83%, respectively. WRITTEN OPTION ACTIVITY Written option activity for the six months ended January 31, 2002, for PACE Government Securities Fixed Income Investments and PACE Strategic Fixed Income Investments was as follows:
PACE GOVERNMENT SECURITIES FIXED INCOME PACE STRATEGIC FIXED INVESTMENTS INCOME INVESTMENTS ------------------------ --------------------- AMOUNT OF AMOUNT OF NUMBER OF PREMIUMS NUMBER OF PREMIUMS OPTIONS RECEIVED OPTIONS RECEIVED --------- --------- --------- --------- Options outstanding at July 31, 2001............... -- -- -- -- Options written.................................... 83,400 $2,869,970 60,500 $1,938,532 ------ ---------- ------ ---------- Options outstanding at January 31, 2002............ 83,400 $2,869,970 60,500 $1,938,532 ====== ========== ====== ==========
119 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) INVESTMENTS IN SECURITIES At January 31, 2002, the components of net unrealized appreciation (depreciation) of investments were as follows:
NET UNREALIZED GROSS GROSS APPRECIATION PORTFOLIO APPRECIATION DEPRECIATION (DEPRECIATION) - -------------------------------------------------------- ------------ ------------ -------------- PACE Government Securities Fixed Income Investments..... $11,291,433 $ (3,330,082) $ 7,961,351 PACE Intermediate Fixed Income Investments.............. 4,543,169 (5,941,092) (1,397,923) PACE Strategic Fixed Income Investments................. 8,597,761 (4,236,541) 4,361,220 PACE Municipal Fixed Income Investments................. 9,429,742 (546,350) 8,883,392 PACE Global Fixed Income Investments.................... 1,371,511 (9,002,879) (7,631,368) PACE Large Company Value Equity Investments............. 92,956,196 (40,928,948) 52,027,248 PACE Large Company Growth Equity Investments............ 79,171,034 (57,971,174) 21,199,860 PACE Small/Medium Company Value Equity Investments...... 67,688,696 (9,140,099) 58,548,597 PACE Small/Medium Company Growth Equity Investments..... 52,837,801 (30,870,645) 21,967,156 PACE International Equity Investments................... 8,903,665 (65,693,682) (56,790,017) PACE International Emerging Markets Equity Investments........................................... 11,210,892 (6,138,630) 5,072,262
For U.S. federal income tax purposes, the cost of securities owned at January 31, 2002, was substantially the same as the cost of securities for financial statement purposes. For the six months ended January 31, 2002, aggregate purchases and sales of portfolio securities, excluding short-term securities, were as follows:
PORTFOLIO PURCHASES SALES - ------------------------------------------------------------ -------------- -------------- PACE Government Securities Fixed Income Investments......... $1,463,824,107 $1,708,830,833 PACE Intermediate Fixed Income Investments.................. 136,096,351 140,440,333 PACE Strategic Fixed Income Investments..................... 721,723,819 712,058,670 PACE Municipal Fixed Income Investments..................... 11,459,046 16,078,022 PACE Global Fixed Income Investments........................ 534,451,404 546,646,881 PACE Large Company Value Equity Investments................. 389,513,604 424,932,998 PACE Large Company Growth Equity Investments................ 134,824,733 147,444,230 PACE Small/Medium Company Value Equity Investments.......... 58,859,672 65,995,802 PACE Small/Medium Company Growth Equity Investments......... 75,953,993 97,528,020 PACE International Equity Investments....................... 178,299,870 184,122,226 PACE International Emerging Markets Equity Investments...... 56,440,522 60,406,146
FEDERAL TAX STATUS Each of the Portfolios intends to distribute substantially all of its taxable income and to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies. Accordingly, no provision for federal income taxes is required. In addition, by distributing during each calendar year, substantially all of its net investment income, capital gains and certain other amounts, if any, each Portfolio intends not to be subject to a Federal excise tax. 120 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) At July 31, 2001, the following Portfolios had net capital loss carryforwards available as reductions, to the extent provided in the regulations, of future net realized capital gains. These losses expire as follows:
PACE PACE GOVERNMENT PACE PACE PACE PACE PACE SMALL/MEDIUM SECURITIES INTERMEDIATE STRATEGIC MUNICIPAL GLOBAL LARGE COMPANY COMPANY FISCAL YEAR FIXED INCOME FIXED INCOME FIXED INCOME FIXED INCOME FIXED INCOME VALUE EQUITY VALUE EQUITY ENDING INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS ------ ------------ ------------ ------------ ------------ ------------ ------------- ------------ 2002 $ 302,075 -- $ 2,265,088 -- $ 835,205 -- -- 2003 4,443,904 -- 1,525,852 -- 15,753,815 -- -- 2004 -- -- -- -- -- -- -- 2005 -- -- 407,534 -- -- -- -- 2006 10,253,012 $ 2,424,478 1,756,663 -- -- -- -- 2007 9,662,399 19,336,984 12,477,372 -- 4,356,224 -- -- 2008 -- 3,620,638 6,984,062 $7,131,740 1,235,105 -- -- 2009 -- -- -- -- 257,133 $17,502,071 $5,827,520 ----------- ----------- ----------- ---------- ----------- ----------- ---------- TOTAL $24,661,390 $25,382,100 $25,416,571 $7,131,740 $22,437,482 $17,502,071 $5,827,520 =========== =========== =========== ========== =========== =========== ========== PACE PACE SMALL/MEDIUM PACE INTERNATIONAL COMPANY INTERNATIONAL EMERGING MARKETS FISCAL YEAR GROWTH EQUITY EQUITY EQUITY ENDING INVESTMENTS INVESTMENTS INVESTMENTS ------ ------------- ------------- ---------------- 2002 -- -- $ 2,285,302 2003 -- -- 5,437,965 2004 -- -- -- 2005 -- -- 24,763,817 2006 -- -- 308,374 2007 -- -- 16,232 2008 $653,027 $6,944,492 246,412 2009 -- -- 2,996,509 -------- ---------- ----------- TOTAL $653,027 $6,944,492 $36,054,611 ======== ========== ===========
Except for PACE Large Company Value Equity Investments, the capital loss carryforwards for the other Portfolios include capital losses from the acquisition of certain PaineWebber funds. These losses are subject to annual limitations imposed by the Internal Revenue Code. In accordance with U.S. Treasury regulations, the following Portfolios have elected to defer realized capital losses and foreign currency losses arising after October 31, 2000. Such losses are treated for tax purposes as arising on August 1, 2001:
FOREIGN CAPITAL CURRENCY PORTFOLIO LOSSES LOSSES - ------------------------------------------------------------ ----------- ----------- PACE Government Securities Fixed Income Investments......... $ 1,187,232 -- PACE Strategic Fixed Income Investments..................... 2,906,162 -- PACE Global Fixed Income Investments........................ -- $11,083,757 PACE Large Company Value Equity Investments................. 6,516,015 -- PACE Large Company Growth Equity Investments................ 74,678,410 -- PACE Small/Medium Company Growth Equity Investments......... 16,709,434 -- PACE International Equity Investments....................... 16,513,785 -- PACE International Emerging Markets Equity Investments...... 10,205,791 647,428
MONEY MARKET FUND INSURANCE BONDS At January 31, 2002, PACE Money Market Investments had insurance bonds that provided limited coverage for certain loss events involving certain money market instruments held by the Portfolio. These loss events include non-payment of principal or interest or a bankruptcy or insolvency of the issuer or credit enhancement provider (if any). The insurance bonds provided for coverage up to $200 million for a number of funds with a deductible of 30 basis points (0.30%) of the total assets of the Portfolio for First Tier Securities, determined as of the close of business on the first business day prior to the loss event. In the event of a loss covered under the insurance bonds, the Portfolio would have expected to retain the security in its portfolio, rather than having to sell it at its current market value, until the date of payment of the loss, which would generally be no later than the maturity of the security. While the insurance bonds were intended to provide some protection against credit risk and to help the Portfolio maintain a constant price per share of $1.00, there was no guarantee that the insurance bonds would have done so. For the six months ended January 31, 2002, PACE Money Market Investments did not use these insurance bonds. CAPITAL CONTRIBUTIONS FROM SUB-ADVISOR On July 27, 2001, PACE International Equity Investments recorded a capital contribution from Martin Currie Inc., the Portfolio's sub-advisor, in the amount of $133,232. This amount was paid by the sub-advisor in connection with unrealized appreciation on investments related to a foreign currency transaction. On May 4, 2001, PACE Strategic Fixed 121 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) Income Investments recorded a capital contribution from Pacific Investment Management Company LLC, the Portfolio's sub-advisor, in the amount of $295,496. This amount was paid by the sub-advisor in connection with losses incurred due to disposition of non-investment grade securities. SHARES OF BENEFICIAL INTEREST There is an unlimited amount of $0.001 par value shares of beneficial interest authorized. Transactions in shares of beneficial interest for each of the Portfolios, except PACE Money Market Investments about which similar information is provided elsewhere herein, were as follows: PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2002
CLASS A CLASS B CLASS C CLASS Y ------------------------- ---------------------- ---------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ -------- ----------- -------- ----------- ---------- ------------ Shares sold........... 732,496 $ 9,485,407 314,297 $ 4,064,441 413,371 $ 5,351,644 547,960 $ 7,076,622 Shares repurchased.... (1,981,716) (25,596,485) (219,197) (2,831,073) (472,966) (6,105,166) (3,622,681) (46,142,571) Shares converted from Class B to Class A............. 78,920 1,023,138 (78,916) (1,023,138) -- -- -- -- Dividends reinvested.......... 307,694 3,957,039 19,522 251,023 89,436 1,150,354 320,586 4,123,547 ---------- ------------ -------- ----------- -------- ----------- ---------- ------------ Net increase (decrease).......... (862,606) $(11,130,901) 35,706 $ 461,253 29,841 $ 396,832 (2,754,135) $(34,942,402) ========== ============ ======== =========== ======== =========== ========== ============ CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 2,170,001 $ 28,005,634 Shares repurchased.... (3,238,593) (41,803,050) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 461,698 5,937,648 ---------- ------------ Net increase (decrease).......... (606,894) $ (7,859,768) ========== ============
FOR THE YEAR ENDED JULY 31, 2001 CLASS A(A) CLASS B(B) CLASS C(C) CLASS Y(D) --------------------------- ----------------------- ----------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ------------- --------- ----------- --------- ----------- ---------- ------------ Shares sold........... 4,899,460 $ 62,228,936 287,723 $ 3,652,298 152,124 $ 1,932,129 9,995,560 $126,562,300 Shares repurchased.... (14,919,156) (189,077,995) (156,110) (1,981,050) (569,061) (7,232,765) (835,190) (10,587,350) Shares converted from Class B to Class A............. 32,939 419,264 (32,939) (419,264) -- -- -- -- Dividends reinvested.......... 331,034 4,197,530 18,122 229,902 96,503 1,224,436 324,085 4,111,072 Shares issued in connection with fund mergers............. 27,172,619 343,755,388 909,756 11,509,461 4,817,801 60,961,180 926,326 11,721,224 ----------- ------------- --------- ----------- --------- ----------- ---------- ------------ Net increase (decrease).......... 17,516,896 $ 221,523,123 1,026,552 $12,991,347 4,497,367 $56,884,980 10,410,781 $131,807,246 =========== ============= ========= =========== ========= =========== ========== ============ FOR THE YEAR ENDED JUL CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 3,384,672 $ 42,430,142 Shares repurchased.... (5,750,233) (72,217,113) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 1,135,128 14,159,531 Shares issued in connection with fund mergers............. -- -- ---------- ------------ Net increase (decrease).......... (1,230,433) $(15,627,440) ========== ============
- ----------------- (a) For the period January 18, 2001 (commencement of issuance) through July 31, 2001. (b) For the period December 18, 2000 (commencement of issuance) through July 31, 2001. (c) For the period December 4, 2000 (commencement of issuance) through July 31, 2001. (d) For the period February 2, 2001 (commencement of issuance) through July 31, 2001. 122 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) PACE INTERMEDIATE FIXED INCOME INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2002
CLASS A CLASS B CLASS C CLASS Y ------------------------- ---------------------- ---------------------- -------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ -------- ----------- -------- ----------- -------- --------- Shares sold........... 2,313,858 $ 29,535,226 79,902 $ 982,011 58,873 $ 722,697 6,258 $ 77,147 Shares repurchased.... (3,073,875) (37,836,500) (82,689) (2,020,912) (145,324) (1,786,027) (49,403) (607,069) Shares converted from Class B to Class A............. 188,188 1,311,719 (188,249) (1,311,719) -- -- -- -- Dividends reinvested.......... 243,072 2,973,621 19,559 239,574 22,540 276,047 8,266 101,242 ---------- ------------ -------- ----------- -------- ----------- ------- --------- Net increase (decrease).......... (328,757) $ (4,015,934) (171,477) $(2,111,046) (63,911) $ (787,283) (34,879) $(428,680) ========== ============ ======== =========== ======== =========== ======= ========= CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 2,801,567 $ 34,366,324 Shares repurchased.... (1,436,895) (17,644,721) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 330,588 4,046,231 ---------- ------------ Net increase (decrease).......... 1,695,260 $ 20,767,834 ========== ============
FOR THE YEAR ENDED JULY 31, 2001 CLASS A(A) CLASS B(B) CLASS C(C) CLASS Y(D) --------------------------- ----------------------- ----------------------- --------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ------------- --------- ----------- --------- ----------- -------- ---------- Shares sold........... 9,183,696 $ 111,990,347 76,789 $ 937,050 82,137 $ 1,001,924 30,676 $ 374,045 Shares repurchased.... (10,287,115) (125,427,064) (169,188) (2,062,223) (234,920) (2,868,980) (47,410) (578,997) Shares converted from Class B to Class A............. 65,383 798,054 (65,332) (798,054) -- -- -- -- Dividends reinvested.......... 234,335 2,853,524 18,970 231,212 22,141 269,828 8,216 100,104 Shares issued in connection with fund mergers............. 13,572,291 164,992,088 1,368,906 16,655,762 1,714,190 20,858,848 301,552 3,667,946 ----------- ------------- --------- ----------- --------- ----------- ------- ---------- Net increase (decrease).......... 12,768,590 $ 155,206,949 1,230,145 $14,963,747 1,583,548 $19,261,620 293,034 $3,563,098 =========== ============= ========= =========== ========= =========== ======= ========== FOR THE YEAR ENDED JUL CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 2,673,403 $ 32,370,914 Shares repurchased.... (4,358,866) (52,850,231) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 697,388 8,401,673 Shares issued in connection with fund mergers............. -- -- ---------- ------------ Net increase (decrease).......... (988,075) $(12,077,644) ========== ============
- ----------------- (a) For the period December 13, 2000 (commencement of issuance) through July 31, 2001. (b) For the period December 14, 2000 (commencement of issuance) through July 31, 2001. (c) For the period December 1, 2000 (commencement of issuance) through July 31, 2001. (d) For the period February 2, 2001 (commencement of issuance) through July 31, 2001. PACE STRATEGIC FIXED INCOME INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2002
CLASS A CLASS B CLASS C CLASS Y ---------------------- ---------------------- ---------------------- -------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT -------- ----------- -------- ----------- -------- ----------- -------- --------- Shares sold........... 143,243 $ 1,868,582 113,202 $ 1,484,448 62,346 $ 819,180 19,433 $ 255,022 Shares repurchased.... (517,589) (6,817,997) (230,679) (3,003,365) (343,205) (4,444,362) (36,348) (474,429) Shares converted from Class B to Class A............. 47,856 631,662 (47,888) (631,662) -- -- -- -- Dividends reinvested.......... 31,947 417,320 13,556 177,078 18,984 247,945 1,146 14,986 -------- ----------- -------- ----------- -------- ----------- ------- --------- Net increase (decrease).......... (294,543) $(3,900,433) (151,809) $(1,973,501) (261,875) $(3,377,237) (15,769) $(204,421) ======== =========== ======== =========== ======== =========== ======= ========= CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 2,613,753 $ 34,291,164 Shares repurchased.... (2,086,158) (27,393,113) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 388,481 5,074,061 ---------- ------------ Net increase (decrease).......... 916,076 $ 11,972,112 ========== ============
FOR THE YEAR ENDED JULY 31, 2001 CLASS A(A) CLASS B(B) CLASS C(C) CLASS Y(D) ----------------------- ----------------------- ----------------------- -------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT --------- ----------- --------- ----------- --------- ----------- -------- --------- Shares sold........... 306,514 $ 3,898,872 178,574 $ 2,264,759 50,279 $ 640,274 19,770 $ 253,093 Shares repurchased.... (538,792) (6,856,045) (151,226) (1,923,557) (182,949) (2,332,784) (16,787) (213,989) Shares converted from Class B to Class A............. 37,637 480,788 (37,637) (480,788) -- -- -- -- Dividends reinvested.......... 40,395 514,721 16,129 205,505 25,055 319,337 1,278 16,281 Shares issued in connection with fund mergers............. 2,469,404 31,540,331 1,317,030 16,821,735 1,404,172 17,938,197 43,193 551,720 --------- ----------- --------- ----------- --------- ----------- ------- --------- Net increase (decrease).......... 2,315,158 $29,578,667 1,322,870 $16,887,654 1,296,557 $16,565,024 47,454 $ 607,105 ========= =========== ========= =========== ========= =========== ======= ========= FOR THE YEAR ENDED JUL CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 3,189,316 $ 40,138,732 Shares repurchased.... (7,278,518) (92,129,783) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 1,157,681 14,521,027 Shares issued in connection with fund mergers............. -- -- ---------- ------------ Net increase (decrease).......... (2,931,521) $(37,470,024) ========== ============
- ----------------- (a) For the period December 11, 2000 (commencement of issuance) through July 31, 2001. (b) For the period December 29, 2000 (commencement of issuance) through July 31, 2001. (c) For the period December 1, 2000 (commencement of issuance) through July 31, 2001. (d) For the period February 2, 2001 (commencement of issuance) through July 31, 2001. 123 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) PACE MUNICIPAL FIXED INCOME INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2002
CLASS A CLASS B CLASS C CLASS Y ------------------------- ---------------------- ---------------------- ------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ -------- ----------- -------- ----------- -------- -------- Shares sold........... 708,698 $ 8,962,369 77,253 $ 976,030 69,897 $ 876,473 -- -- Shares repurchased.... (1,580,584) (19,916,259) (316,872) (3,977,338) (136,162) (1,705,592) (1,225) $(15,411) Shares converted from Class B to Class A............. 106,294 1,331,088 (106.294) (1,331,088) -- -- -- -- Dividends reinvested.......... 185,611 2,328,882 6,669 83,731 35,947 450,985 662 8,312 ---------- ------------ -------- ----------- -------- ----------- ------ -------- Net increase (decrease).......... (579,981) $ (7,293,920) (339,244) $(4,248,665) (30,318) $ (378,134) (563) $ (7,099) ========== ============ ======== =========== ======== =========== ====== ======== CLASS P ---------------------- SHARES AMOUNT -------- ----------- Shares sold........... 629,020 $ 7,884,305 Shares repurchased.... (367,591) (4,620,031) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 84,087 1,054,916 -------- ----------- Net increase (decrease).......... 345,516 $ 4,319,190 ======== ===========
FOR THE YEAR ENDED JULY 31, 2001 CLASS A(A) CLASS B(C) CLASS C(B) CLASS Y(C) ------------------------- ----------------------- ----------------------- ------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ --------- ----------- --------- ----------- -------- -------- Shares sold........... 1,754,056 $ 21,796,583 76,959 $ 958,033 17,312 $ 215,475 40 $ 488 Shares repurchased.... (2,727,473) (33,896,883) (140,198) (1,740,447) (205,949) (2,556,635) (2,332) (29,067) Shares converted from Class B to Class A............. 97,123 1,204,704 (97,146) (1,204,704) -- -- -- -- Dividends reinvested.......... 170,287 2,113,779 6,922 85,953 32,573 404,338 602 7,474 Shares issued in connection with fund mergers............. 14,949,505 185,697,266 1,313,324 16,313,635 2,718,677 33,770,430 33,568 416,972 ---------- ------------ --------- ----------- --------- ----------- ------ -------- Net increase (decrease).......... 14,243,498 $176,915,449 1,159,861 $14,412,470 2,562,613 $31,833,608 31,878 $395,867 ========== ============ ========= =========== ========= =========== ====== ======== FOR THE YEAR ENDED JUL CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 1,013,695 $ 12,536,202 Shares repurchased.... (1,694,777) (20,981,581) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 194,060 2,389,508 Shares issued in connection with fund mergers............. -- -- ---------- ------------ Net increase (decrease).......... (487,022) $ (6,055,871) ========== ============
- ----------------- (a) For the period January 23, 2001 (commencement of issuance) through July 31, 2001. (b) For the period December 4, 2000 (commencement of issuance) through July 31, 2001. (c) For the period February 23, 2001 (commencement of issuance) through July 31, 2001. PACE GLOBAL FIXED INCOME INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2002
CLASS A CLASS B CLASS C CLASS Y ------------------------- -------------------- -------------------- ---------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ -------- --------- -------- --------- -------- ----------- Shares sold........... 73,441 $ 775,631 5,216 $ 54,999 8,381 $ 87,669 175,495 $ 1,827,140 Shares repurchased.... (1,682,721) (17,554,987) (10,582) (111,000) (91,317) (951,636) (136,740) (1,418,866) Shares converted from Class B to Class A............. 62,182 641,705 (61,323) (641,705) -- -- -- -- Dividends reinvested.......... 225,932 2,357,828 1,660 17,393 16,703 174,328 9,890 103,061 ---------- ------------ ------- --------- ------- --------- -------- ----------- Net increase (decrease).......... (1,321,166) $(13,779,823) (65,029) $(680,313) (66,233) $(689,639) 48,645 $ 511,335 ========== ============ ======= ========= ======= ========= ======== =========== CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 1,369,760 $ 14,174,845 Shares repurchased.... (1,083,027) (11,291,044) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 185,271 1,932,423 ---------- ------------ Net increase (decrease).......... 472,004 $ 4,816,224 ========== ============
FOR THE YEAR ENDED JULY 31, 2001 CLASS A(A) CLASS B(B) CLASS C(C) CLASS Y(D) ------------------------- ---------------------- ----------------------- ---------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ -------- ----------- --------- ----------- -------- ----------- Shares sold........... 33,798 $ 351,786 9,332 $ 96,683 15,912 $ 166,039 85,389 $ 898,611 Shares repurchased.... (2,184,709) (22,627,927) (23,529) (243,372) (152,528) (1,574,881) (183,453) (1,896,564) Shares converted from Class B to Class A............. 129,631 1,368,427 (129,619) (1,368,427) -- -- -- -- Dividends reinvested.......... 269,517 2,787,807 2,534 26,326 20,398 211,049 11,486 118,886 Shares issued in connection with fund mergers............. 20,331,222 217,694,954 372,848 3,992,174 1,443,639 15,457,461 556,432 5,958,028 ---------- ------------ -------- ----------- --------- ----------- -------- ----------- Net increase (decrease).......... 18,579,459 $199,575,047 231,566 $ 2,503,384 1,327,421 $14,259,668 469,854 $ 5,078,961 ========== ============ ======== =========== ========= =========== ======== =========== FOR THE YEAR ENDED JUL CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 2,282,178 $ 23,831,781 Shares repurchased.... (2,987,763) (31,309,217) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 419,966 4,362,330 Shares issued in connection with fund mergers............. -- -- ---------- ------------ Net increase (decrease).......... (285,619) $ (3,115,106) ========== ============
- ----------------- (a) For the period December 11, 2000 (commencement of issuance) through July 31, 2001. (b) For the period February 5, 2001 (commencement of issuance) through July 31, 2001. (c) For the period December 1, 2000 (commencement of issuance) through July 31, 2001. (d) For the period January 16, 2001 (commencement of issuance) through July 31, 2001. 124 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) PACE LARGE COMPANY VALUE EQUITY INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2002
CLASS A CLASS B CLASS C CLASS Y ------------------------- ------------------------- ----------------------- ---------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ ---------- ------------ -------- ------------ -------- ----------- Shares sold........... 309,925 $ 5,095,396 90,908 $ 1,489,942 296,647 $ 4,813,977 333,104 $ 5,481,427 Shares repurchased.... (2,741,258) (45,089,494) (825,554) (13,553,207) (733,766) (12,022,470) (155,507) (2,550,879) Shares converted from Class B to Class A............. 807,447 13,279,949 (811,996) (13,279,949) -- -- -- -- Dividends reinvested.......... 136,180 2,227,887 -- -- -- -- 19,922 325,929 ---------- ------------ ---------- ------------ -------- ------------ -------- ----------- Net increase (decrease).......... (1,487,706) $(24,486,262) (1,546,642) $(25,343,214) (437,119) $ (7,208,493) 197,519 $ 3,256,477 ========== ============ ========== ============ ======== ============ ======== =========== CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 3,288,145 $ 54,189,282 Shares repurchased.... (2,079,617) (34,064,318) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 167,966 2,746,241 ---------- ------------ Net increase (decrease).......... 1,376,494 $ 22,871,205 ========== ============
FOR THE YEAR ENDED JULY 31, 2001 CLASS A(A) CLASS B(A) CLASS C(A) CLASS Y(B) ------------------------- ------------------------- ------------------------- ----------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ ---------- ------------ ---------- ------------ --------- ----------- Shares sold........... 1,384,836 $ 24,105,738 337,784 $ 5,844,433 870,996 $ 15,186,602 637,243 $11,042,897 Shares repurchased.... (3,832,651) (66,568,959) (1,059,019) (18,343,142) (1,179,001) (20,499,163) (392,614) (6,740,374) Shares converted from Class B to Class A............. 226,895 3,943,114 (227,002) (3,943,114) -- -- -- -- Dividends reinvested.......... -- -- -- -- -- -- -- -- Shares issued in connection with fund mergers............. 27,766,393 477,570,208 8,492,055 146,059,839 4,717,199 81,133,940 2,013,959 34,639,278 ---------- ------------ ---------- ------------ ---------- ------------ --------- ----------- Net increase (decrease).......... 25,545,473 $439,050,101 7,543,818 $129,618,016 4,409,194 $ 75,821,379 2,258,588 $38,941,801 ========== ============ ========== ============ ========== ============ ========= =========== FOR THE YEAR ENDED JUL CLASS P -------------------------- SHARES AMOUNT ---------- ------------- Shares sold........... 6,149,144 $ 106,623,290 Shares repurchased.... (7,007,219) (120,924,670) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 196,958 3,302,990 Shares issued in connection with fund mergers............. -- -- ---------- ------------- Net increase (decrease).......... (661,117) $ (10,998,390) ========== =============
- ----------------- (a) For the period November 27, 2000 (commencement of issuance) through July 31, 2001. (b) For the period January 19, 2001 (commencement of issuance) through July 31, 2001. PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2002
CLASS A CLASS B CLASS C CLASS Y ------------------------- ---------------------- ---------------------- ---------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ -------- ----------- -------- ----------- -------- ----------- Shares sold........... 211,937 $ 3,143,063 78,687 $ 1,217,361 79,413 $ 1,222,275 177,846 $ 2,730,586 Shares repurchased.... (1,439,859) (22,007,033) (234,459) (3,553,630) (158,659) (2,429,585) (157,823) (2,459,815) Shares converted from Class B to Class A............. 264,074 4,129,313 (265,566) (4,129,313) -- -- -- -- Dividends reinvested.......... -- -- -- -- -- -- -- -- ---------- ------------ -------- ----------- -------- ----------- -------- ----------- Net increase (decrease).......... (963,848) $(14,734,657) (421,338) $(6,465,582) (79,246) $(1,207,310) 20,023 $ 270,771 ========== ============ ======== =========== ======== =========== ======== =========== CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 3,747,250 $ 57,392,011 Shares repurchased.... (2,100,983) (31,947,444) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... -- -- ---------- ------------ Net increase (decrease).......... 1,646,267 $ 25,444,567 ========== ============
FOR THE YEAR ENDED JULY 31, 2001 CLASS A(A) CLASS B(A) CLASS C(A) CLASS Y(B) ------------------------- ----------------------- ----------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ --------- ----------- --------- ----------- ---------- ------------ Shares sold........... 348,172 $ 6,038,436 129,043 $ 2,249,763 117,131 $ 2,044,700 4,326,410 $ 70,913,351 Shares repurchased.... (1,664,894) (28,291,301) (274,558) (4,648,691) (173,586) (2,959,448) (4,324,749) (70,618,521) Shares converted from Class B to Class A............. 162,871 2,837,720 (162,942) (2,837,720) -- -- -- -- Dividends reinvested.......... -- -- -- -- -- -- -- -- Shares issued in connection with fund mergers............. 13,496,005 243,770,916 2,082,667 37,618,205 1,544,375 27,895,329 1,753,537 31,673,216 ---------- ------------ --------- ----------- --------- ----------- ---------- ------------ Net increase.......... 12,342,154 $224,355,771 1,774,210 $32,381,557 1,487,920 $26,980,581 1,755,198 $ 31,968,046 ========== ============ ========= =========== ========= =========== ========== ============ FOR THE YEAR ENDED JUL CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 7,560,758 $146,167,817 Shares repurchased.... (4,838,339) (98,525,151) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 2,300,213 48,373,474 Shares issued in connection with fund mergers............. -- -- ---------- ------------ Net increase.......... 5,022,632 $ 96,016,140 ========== ============
- ----------------- (a) For the period November 27, 2000 (commencement of issuance) through July 31, 2001. (b) For the period February 15, 2001 (commencement of issuance) through July 31, 2001. 125 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2002
CLASS A CLASS B CLASS C CLASS Y ------------------------- --------------------- -------------------- -------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ -------- ---------- -------- --------- -------- --------- Shares sold........... 1,347,096 $ 23,076,172 74,303 $1,268,407 43,539 $ 741,253 29,586 $ 511,612 Shares repurchased.... (1,101,501) (18,894,482) (50,898) (838,345) (52,653) (890,867) (24,360) (390,525) Shares converted from Class B to Class A............. 52,814 901,360 (53,158) (901,360) -- -- -- -- Dividends reinvested.......... 9,422 164,893 890 15,489 1,048 18,261 551 9,643 ---------- ------------ -------- ---------- -------- --------- ------- --------- Net increase (decrease).......... 307,831 $ 5,247,943 (28,863) $ (455,809) (8,066) $(131,353) 5,777 $ 130,730 ========== ============ ======== ========== ======== ========= ======= ========= CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 1,337,748 $ 22,685,093 Shares repurchased.... (2,357,520) (40,177,741) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 68,480 1,199,083 ---------- ------------ Net increase (decrease).......... (951,292) $(16,293,565) ========== ============
FOR THE YEAR ENDED JULY 31, 2001 CLASS A(A) CLASS B(B) CLASS C(A) CLASS Y(C) ----------------------- ---------------------- ---------------------- --------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT --------- ----------- -------- ----------- -------- ----------- -------- ---------- Shares sold........... 165,290 $ 2,678,481 130,655 $ 2,082,967 386,041 $ 6,124,752 17,327 $ 278,022 Shares repurchased.... (300,539) (4,857,587) (82,115) (1,306,976) (413,125) (6,592,085) (18,164) (292,199) Shares converted from Class B to Class A............. 22,027 348,222 (22,058) (348,222) -- -- -- -- Dividends reinvested.......... -- -- -- -- -- -- -- -- Shares issued in connection with fund mergers............. 2,833,522 45,663,272 729,945 11,750,430 838,349 13,506,940 100,651 1,621,675 --------- ----------- ------- ----------- -------- ----------- ------- ---------- Net increase (decrease).......... 2,720,300 $43,832,388 756,427 $12,178,199 811,265 $13,039,607 99,814 $1,607,498 ========= =========== ======= =========== ======== =========== ======= ========== FOR THE YEAR ENDED JUL CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 3,261,474 $ 48,848,272 Shares repurchased.... (6,320,938) (95,206,909) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 186,647 2,586,923 Shares issued in connection with fund mergers............. -- -- ---------- ------------ Net increase (decrease).......... (2,872,817) $(43,771,714) ========== ============
- ----------------- (a) For the period November 27, 2000 (commencement of issuance) through July 31, 2001. (b) For the period November 28, 2000 (commencement of issuance) through July 31, 2001. (c) For the period December 20, 2000 (commencement of issuance) through July 31, 2001. PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2002
CLASS A CLASS B CLASS C CLASS Y ------------------------- ---------------------- ---------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ -------- ----------- -------- ----------- ---------- ------------ Shares sold........... 712,920 $ 8,558,923 23,206 $ 296,862 25,245 $ 315,639 1,568,428 $ 20,582,937 Shares repurchased.... (1,340,062) (16,570,285) (152,845) (1,902,770) (93,093) (1,165,046) (1,564,486) (21,052,437) Shares converted from Class B to Class A............. 357,058 4,569,926 (359,229) (4,569,926) -- -- -- -- Dividends reinvested.......... -- -- -- -- -- -- -- -- ---------- ------------ -------- ----------- ------- ----------- ---------- ------------ Net increase (decrease).......... (270,084) $ (3,441,436) (488,868) $(6,175,834) (67,848) $ (849,407) 3,942 $ (469,500) ========== ============ ======== =========== ======= =========== ========== ============ CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 1,885,883 $ 23,957,174 Shares repurchased.... (3,126,576) (39,642,860) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... -- -- ---------- ------------ Net increase (decrease).......... (1,240,693) $(15,685,686) ========== ============
FOR THE YEAR ENDED JULY 31, 2001 CLASS A(A) CLASS B(A) CLASS C(A) CLASS Y(B) ------------------------- ----------------------- ----------------------- ---------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ --------- ----------- --------- ----------- -------- ----------- Shares sold........... 1,497,899 $ 19,517,544 77,721 $ 1,059,970 285,995 $ 3,833,064 362,935 $ 4,194,101 Shares repurchased.... (2,268,197) (29,668,523) (250,430) (3,301,621) (350,029) (4,636,469) (360,416) (4,272,501) Shares converted from Class B to Class A............. 185,879 2,428,129 (185,989) (2,428,129) -- -- -- -- Dividends reinvested.......... -- -- -- -- -- -- -- -- Shares issued in connection with fund mergers............. 7,125,090 106,375,288 1,580,529 23,596,201 1,067,737 15,940,610 25,993 388,074 ---------- ------------ --------- ----------- --------- ----------- -------- ----------- Net increase.......... 6,540,671 $ 98,652,438 1,221,831 $18,926,421 1,003,703 $15,137,205 28,512 $ 309,674 ========== ============ ========= =========== ========= =========== ======== =========== FOR THE YEAR ENDED JUL CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 5,937,730 $ 92,392,731 Shares repurchased.... (4,070,362) (69,837,086) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 5,449,528 87,137,949 Shares issued in connection with fund mergers............. -- -- ---------- ------------ Net increase.......... 7,316,896 $109,693,594 ========== ============
- ----------------- (a) For the period November 27, 2000 (commencement of issuance) through July 31, 2001. (b) For the period February 12, 2001 (commencement of issuance) through July 31, 2001. 126 NOTES TO FINANCIAL STATEMENTS(UNAUDITED) PACE INTERNATIONAL EQUITY INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2002
CLASS A CLASS B CLASS C CLASS Y -------------------------- ---------------------- ---------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------- -------- ----------- -------- ----------- ---------- ------------ Shares sold........... 8,545,672 $ 96,631,311 38,463 $ 467,798 249,176 $ 2,805,722 4,466,053 $ 50,894,183 Shares repurchased.... (9,917,158) (114,076,884) (82,976) (992,921) (347,288) (3,957,319) (4,347,619) (50,201,590) Shares converted from Class B to Class A............. 117,343 1,342,550 (118,021) (1,342,550) -- -- -- -- Dividends reinvested.......... 93,559 1,056,278 -- -- 1,393 15,756 44,685 504,043 ---------- ------------- -------- ----------- -------- ----------- ---------- ------------ Net increase (decrease).......... (1,160,584) $ (15,046,745) (162,534) $(1,867,673) (96,719) $(1,135,841) 163,119 $ 1,196,636 ========== ============= ======== =========== ======== =========== ========== ============ CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 3,798,900 $ 42,785,073 Shares repurchased.... (1,835,645) (20,988,193) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... 196,640 2,218,098 ---------- ------------ Net increase (decrease).......... 2,159,895 $ 24,014,978 ========== ============
FOR THE YEAR ENDED JULY 31, 2001 CLASS A(A) CLASS B(A) CLASS C(A) CLASS Y(B) --------------------------- ---------------------- ------------------------- ---------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES ----------- ------------- -------- ----------- ---------- ------------ ---------- Shares sold........... 33,769,533 $ 451,377,133 158,579 $ 2,120,778 1,427,721 $ 19,020,255 3,999,661 Shares repurchased.... (35,633,796) (478,683,025) (147,877) (1,986,617) (1,564,474) (20,890,977) (1,945,401) Shares converted from Class B to Class A............. 50,040 683,276 (50,068) (683,276) -- -- -- Dividends reinvested.......... -- -- -- -- -- -- -- Shares issued in connection with fund mergers............. 13,194,385 190,081,350 408,808 5,889,377 1,198,216 17,261,791 1,552,287 ----------- ------------- -------- ----------- ---------- ------------ ---------- Net increase.......... 11,380,162 $ 163,458,734 369,442 $ 5,340,262 1,061,463 $ 15,391,069 3,606,547 =========== ============= ======== =========== ========== ============ ========== FOR THE YEAR ENDED JUL CLASS Y(B) ------------ ------------------------- AMOUNT SHARES AMOUNT ------------ ---------- ------------ Shares sold........... $ 53,360,200 5,478,152 $ 80,658,164 Shares repurchased.... (25,480,132) (4,005,678) (58,944,602) Shares converted from Class B to Class A............. -- -- -- Dividends reinvested.......... -- 1,099,611 16,604,127 Shares issued in connection with fund mergers............. 22,362,461 -- -- ------------ ---------- ------------ Net increase.......... $ 50,242,529 2,572,085 $ 38,317,689 ============ ========== ============
- ----------------- (a) For the period November 27, 2000 (commencement of issuance) through July 31, 2001. (b) For the period January 17, 2001 (commencement of issuance) through July 31, 2001. PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2002
CLASS A CLASS B CLASS C CLASS Y ------------------------- -------------------- ---------------------- ------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ---------- ------------ -------- --------- -------- ----------- -------- -------- Shares sold........... 1,954,020 $ 14,289,228 9,207 $ 72,980 492,870 $ 3,498,928 5,718 $ 41,553 Shares repurchased.... (2,078,140) (14,841,600) (110,722) (854,574) (532,733) (3,844,284) (4,125) (33,088) Shares converted from Class B to Class A............. 13,661 109,016 (13,747) (109,016) -- -- -- -- Dividends reinvested.......... -- -- -- -- -- -- -- -- ---------- ------------ -------- --------- -------- ----------- ------ -------- Net increase (decrease).......... (110,459) $ (443,356) (115,262) $(890,610) (39,863) $ (345,356) 1,593 $ 8,465 ========== ============ ======== ========= ======== =========== ====== ======== CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 1,110,147 $ 8,582,458 Shares repurchased.... (1,324,084) (10,538,922) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... -- -- ---------- ------------ Net increase (decrease).......... (213,937) $ (1,956,464) ========== ============
FOR THE YEAR ENDED JULY 31, 2001 CLASS A(A) CLASS B(B) CLASS C(C) CLASS Y(D) ----------------------- ---------------------- ---------------------- ------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT --------- ----------- --------- ---------- -------- ----------- -------- -------- Shares sold........... 494,089 $ 4,408,777 12,009 $ 111,660 545,186 $ 4,727,557 10,624 $ 95,819 Shares repurchased.... (583,797) (5,199,743) (95,918) (836,962) (576,159) (5,023,988) (7,726) (68,395) Shares converted from Class B to Class A............. 1,596 14,518 (1,597) (14,518) -- -- -- -- Dividends reinvested.......... -- -- -- -- -- -- -- -- Shares issued in connection with fund mergers............. 1,114,285 11,141,275 1,001,576 10,014,178 545,401 5,453,213 65,596 655,871 --------- ----------- --------- ---------- -------- ----------- ------ -------- Net increase.......... 1,026,173 $10,364,827 916,070 $9,274,358 514,428 $ 5,156,782 68,494 $683,295 ========= =========== ========= ========== ======== =========== ====== ======== FOR THE YEAR ENDED JUL CLASS P ------------------------- SHARES AMOUNT ---------- ------------ Shares sold........... 3,497,445 $ 33,650,746 Shares repurchased.... (2,174,200) (20,679,243) Shares converted from Class B to Class A............. -- -- Dividends reinvested.......... -- -- Shares issued in connection with fund mergers............. -- -- ---------- ------------ Net increase.......... 1,323,245 $ 12,971,503 ========== ============
- ----------------- (a) For the period December 11, 2000 (commencement of issuance) through July 31, 2001. (b) For the period December 22, 2000 (commencement of issuance) through July 31, 2001. (c) For the period December 1, 2000 (commencement of issuance) through July 31, 2001. (d) For the period February 9, 2001 (commencement of issuance) through July 31, 2001. 127 (This page has been left blank intentionally.) 128 PAINEWEBBER PACE SELECT ADVISORS TRUST FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout each period is presented below:
PACE MONEY MARKET INVESTMENTS -------------------------------------------------------- FOR THE SIX MONTHS ENDED JANUARY 31, FOR THE YEARS ENDED JULY 31, 2002 ------------------------------------------- (UNAUDITED) 2001 2000 1999 1998 1997 ----------- ------- ------- ------- ------- ------- Net asset value, beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------- ------- ------- ------- ------- ------- Net investment income................... 0.01 0.05 0.05 0.05 0.05 0.05 ------- ------- ------- ------- ------- ------- Dividends from net investment income.... (0.01) (0.05) (0.05) (0.05) (0.05) (0.05) ------- ------- ------- ------- ------- ------- Net asset value, end of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======= ======= ======= ======= ======= ======= Total investment return (1)............. 1.30% 5.44% 5.53% 4.85% 5.32% 5.13% ======= ======= ======= ======= ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $88,678 $76,657 $65,521 $47,174 $25,493 $16,070 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.50%* 0.50% 0.50% 0.50% 0.50% 0.50% Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.24%* 1.00% 0.95% 1.07% 1.20% 1.89% Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 2.53%* 5.26% 5.46% 4.70% 5.20% 5.04% Net investment income to average net assets, before fee waivers and expense reimbursements........................ 1.79%* 4.76% 5.01% 4.13% 4.50% 3.65%
- ----------------- * Annualized. (1) Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include program fees; results would be lower if this fee was included. Total investment return for period less than one year has not been annualized. 129 PAINEWEBBER PACE SELECT ADVISORS TRUST FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout each period is presented below:
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS -------------------------------------------------- CLASS A CLASS B --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(A) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 12.84 $ 12.65 $ 12.83 -------- -------- ------- Net investment income................... 0.33 0.39 0.28 Net realized and unrealized gains (losses) from investment activities, options and futures................... 0.04 0.18 0.04 -------- -------- ------- Net increase from investment operations............................ 0.37 0.57 0.32 -------- -------- ------- Dividends from net investment income.... (0.33) (0.38) (0.28) Distributions from net realized gains from investment activities............ (0.05) -- (0.05) -------- -------- ------- Total dividends and distributions....... (0.38) (0.38) (0.33) -------- -------- ------- Net asset value, end of period.......... $ 12.83 $ 12.84 $ 12.82 ======== ======== ======= Total investment return (1)............. 2.89% 4.61% 2.40% ======== ======== ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $213,604 $224,837 $13,623 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.97%* 0.98%++++* 1.74%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.12%* 1.14%++++* 1.84%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 5.04%* 6.09%* 4.25%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 4.89%* 5.93%* 4.15%* Portfolio turnover...................... 181% 631% 181% PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS --------------------------------------------------- CLASS B CLASS C ---------------- --------------------------------- FOR THE SIX MONTHS ENDED FOR THE PERIOD JANUARY 31, FOR THE PERIOD ENDED 2002 ENDED JULY 31, 2001(B) (UNAUDITED) JULY 31, 2001(C) ---------------- --------------- ---------------- Net asset value, beginning of period.... $ 12.47 $ 12.84 $ 12.33 ------- ------- ------- Net investment income................... 0.47 0.30 0.49 Net realized and unrealized gains (losses) from investment activities, options and futures................... 0.37 0.04 0.51 ------- ------- ------- Net increase from investment operations............................ 0.84 0.34 1.00 ------- ------- ------- Dividends from net investment income.... (0.48) (0.30) (0.49) Distributions from net realized gains from investment activities............ -- (0.05) -- ------- ------- ------- Total dividends and distributions....... (0.48) (0.35) (0.49) ------- ------- ------- Net asset value, end of period.......... $ 12.83 $ 12.83 $ 12.84 ======= ======= ======= Total investment return (1)............. 6.96% 2.62% 8.26% ======= ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $13,175 $58,087 $57,745 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.75%++++* 1.48%* 1.49%++++* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.90%++++* 1.68%* 1.70%++++* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 5.31%* 4.51%* 5.59%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 5.16%* 4.31%* 5.38%* Portfolio turnover...................... 631% 181% 631%
- ----------------- * Annualized. ++ Includes 0.03%, 0.02%, 0.01% and 0.72% of interest expense related to reverse repurchase agreements during the years ended July 31, 2001, July 31, 2000, July 31, 1999, and July 31, 1997, respectively. ++++ Includes 0.01% of interest expense related to reverse repurchase agreements during the period ended July 31, 2001. (1) Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges or program fees; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. (a) For the period January 31, 2001 (reissuance of shares) through July 31, 2001. (b) For the period December 18, 2000 (commencement of issuance) through July 31, 2001. (c) For the period December 4, 2000 (commencement of issuance) through July 31, 2001. (d) For the period February 2, 2001 (commencement of issuance) through July 31, 2001.
130 PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS -------------------------------------------------- CLASS Y CLASS P --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(D) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 12.84 $ 12.65 $ 12.84 ------- -------- -------- Net investment income................... 0.35 0.39 0.35 Net realized and unrealized gains (losses) from investment activities, options and futures................... 0.04 0.20 0.04 ------- -------- -------- Net increase from investment operations............................ 0.39 0.59 0.39 ------- -------- -------- Dividends from net investment income.... (0.35) (0.40) (0.35) Distributions from net realized gains from investment activities............ (0.05) -- (0.05) ------- -------- -------- Total dividends and distributions....... (0.40) (0.40) (0.40) ------- -------- -------- Net asset value, end of period.......... $ 12.83 $ 12.84 $ 12.83 ======= ======== ======== Total investment return (1)............. 3.06% 4.77% 3.06% ======= ======== ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $98,218 $133,649 $187,606 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.65%* 0.66%++++* 0.66%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.81%* 0.84%++++* 0.88%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 5.37%* 6.50%* 5.34%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 5.21%* 6.32%* 5.12%* Portfolio turnover...................... 181% 631% 181% PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS ------------------------------------------------ CLASS P ------------------------------------------------ FOR THE YEARS ENDED JULY 31, ------------------------------------------------ 2001 2000 1999 1998 1997 -------- -------- -------- -------- -------- Net asset value, beginning of period.... $ 12.09 $ 12.10 $ 12.59 $ 12.61 $ 12.07 -------- -------- -------- -------- -------- Net investment income................... 0.84 0.73 0.68 0.72 0.64 Net realized and unrealized gains (losses) from investment activities, options and futures................... 0.82 0.01 (0.43) 0.18 0.58 -------- -------- -------- -------- -------- Net increase from investment operations............................ 1.66 0.74 0.25 0.90 1.22 -------- -------- -------- -------- -------- Dividends from net investment income.... (0.91) (0.75) (0.71) (0.72) (0.63) Distributions from net realized gains from investment activities............ -- -- (0.03) (0.20) (0.05) -------- -------- -------- -------- -------- Total dividends and distributions....... (0.91) (0.75) (0.74) (0.92) (0.68) -------- -------- -------- -------- -------- Net asset value, end of period.......... $ 12.84 $ 12.09 $ 12.10 $ 12.59 $ 12.61 ======== ======== ======== ======== ======== Total investment return (1)............. 14.21% 6.36% 2.02% 7.39% 10.42% ======== ======== ======== ======== ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $195,546 $198,918 $191,719 $162,119 $101,606 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.78%++ 0.87%++ 0.87%++ 0.85% 1.57%++ Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.87%++ 0.91%++ 0.93%++ 0.95% 1.70%++ Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 6.69% 6.12% 5.49% 5.90% 5.44% Net investment income to average net assets, before fee waivers and expense reimbursements........................ 6.60% 6.08% 5.43% 5.80% 5.31% Portfolio turnover...................... 631% 585% 418% 353% 712%
131 PAINEWEBBER PACE SELECT ADVISORS TRUST FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout each period is presented below:
PACE INTERMEDIATE FIXED INCOME INVESTMENTS -------------------------------------------------- CLASS A CLASS B --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(A) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 12.32 $ 12.16 $ 12.33 -------- -------- ------- Net investment income................... 0.36 0.35 0.31 Net realized and unrealized gains (losses) from investment activities... (0.19) 0.16 (0.19) -------- -------- ------- Net increase from investment operations............................ 0.17 0.51 0.12 -------- -------- ------- Dividends from net investment income.... (0.36) (0.35) (0.31) Distributions from net realized gains from investment activities............ -- -- -- -------- -------- ------- Total dividends and distributions....... (0.36) (0.35) (0.31) -------- -------- ------- Net asset value, end of period.......... $ 12.13 $ 12.32 $ 12.14 ======== ======== ======= Total investment return (1)............. 1.40% 4.24% 0.99% ======== ======== ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $150,905 $157,341 $12,854 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.97%* 0.97%* 1.74%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.05%* 1.03%* 1.80%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 5.83%* 5.77%* 5.05%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 5.75%* 5.71%* 4.99%* Portfolio turnover...................... 45% 82% 45% PACE INTERMEDIATE FIXED INCOME INVESTMENTS --------------------------------------------------- CLASS B CLASS C ---------------- --------------------------------- FOR THE SIX MONTHS ENDED FOR THE PERIOD JANUARY 31, FOR THE PERIOD ENDED 2002 ENDED JULY 31, 2001(B) (UNAUDITED) JULY 31, 2001(C) ---------------- --------------- ---------------- Net asset value, beginning of period.... $ 12.03 $ 12.33 $ 11.92 ------- ------- ------- Net investment income................... 0.41 0.33 0.44 Net realized and unrealized gains (losses) from investment activities... 0.30 (0.19) 0.41 ------- ------- ------- Net increase from investment operations............................ 0.71 0.14 0.85 ------- ------- ------- Dividends from net investment income.... (0.41) (0.33) (0.44) Distributions from net realized gains from investment activities............ -- -- -- ------- ------- ------- Total dividends and distributions....... (0.41) (0.33) (0.44) ------- ------- ------- Net asset value, end of period.......... $ 12.33 $ 12.14 $ 12.33 ======= ======= ======= Total investment return (1)............. 6.04% 1.13% 7.20% ======= ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $15,168 $18,454 $19,529 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.74%* 1.48%* 1.48%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.78%* 1.55%* 1.54%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 4.99%* 5.32%* 5.26%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 4.95%* 5.25%* 5.20%* Portfolio turnover...................... 82% 45% 82%
- ----------------- ++ The Portfolio made a distribution of less than ($0.005) during the period. * Annualized. # Investment advisory functions for this portfolio were transferred from Pacific Income Advisors, Inc. to Metropolitan West Asset Management, LLC on October 10, 2000. (1) Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges or program fees; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. (a) For the period January 31, 2001 (reissuance of shares) through July 31, 2001. (b) For the period December 14, 2000 (commencement of issuance) through July 31, 2001. (c) For the period December 1, 2000 (commencement of issuance) through July 31, 2001. (d) For the period February 2, 2001 (commencement of issuance) through July 31, 2001.
132 PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERMEDIATE FIXED INCOME INVESTMENTS -------------------------------------------------- CLASS Y CLASS P --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(D) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 12.33 $12.16 $ 12.33 ------- ------ -------- Net investment income................... 0.38 0.36 0.38 Net realized and unrealized gains (losses) from investment activities... (0.19) 0.17 (0.19) ------- ------ -------- Net increase from investment operations............................ 0.19 0.53 0.19 ------- ------ -------- Dividends from net investment income.... (0.38) (0.36) (0.38) Distributions from net realized gains from investment activities............ -- -- -- ------- ------ -------- Total dividends and distributions....... (0.38) (0.36) (0.38) ------- ------ -------- Net asset value, end of period.......... $ 12.14 $12.33 $ 12.14 ======= ====== ======== Total investment return (1)............. 1.54% 4.45% 1.54% ======= ====== ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $ 3,134 $3,613 $146,322 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.71%* 0.71%* 0.71%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.80%* 0.79%* 0.80%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 6.09%* 5.96%* 6.10%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 6.00%* 5.88%* 6.01%* Portfolio turnover...................... 45% 82% 45% PACE INTERMEDIATE FIXED INCOME INVESTMENTS ------------------------------------------------ CLASS P ------------------------------------------------ FOR THE YEARS ENDED JULY 31, ------------------------------------------------ 2001# 2000 1999 1998 1997 -------- -------- -------- -------- -------- Net asset value, beginning of period.... $ 11.82 $ 11.98 $ 12.35 $ 12.23 $ 11.95 -------- -------- -------- ------- ------- Net investment income................... 0.74 0.70 0.63 0.67 0.66 Net realized and unrealized gains (losses) from investment activities... 0.56 (0.16) (0.28) 0.09 0.28 -------- -------- -------- ------- ------- Net increase from investment operations............................ 1.30 0.54 0.35 0.76 0.94 -------- -------- -------- ------- ------- Dividends from net investment income.... (0.79) (0.70) (0.64) (0.64) (0.66) Distributions from net realized gains from investment activities............ -- 0.00++ (0.08) -- -- -------- -------- -------- ------- ------- Total dividends and distributions....... (0.79) (0.70) (0.72) (0.64) (0.66) -------- -------- -------- ------- ------- Net asset value, end of period.......... $ 12.33 $ 11.82 $ 11.98 $ 12.35 $ 12.23 ======== ======== ======== ======= ======= Total investment return (1)............. 11.39% 4.74% 2.81% 6.41% 8.14% ======== ======== ======== ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $127,718 $134,102 $139,043 $99,690 $66,751 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.75% 0.78% 0.80% 0.84% 0.85% Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.77% 0.79% 0.80% 0.84% 0.99% Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 6.07% 5.95% 5.26% 5.60% 5.70% Net investment income to average net assets, before fee waivers and expense reimbursements........................ 6.05% 5.94% 5.26% 5.60% 5.56% Portfolio turnover...................... 82% 88% 89% 111% 67%
133 PAINEWEBBER PACE SELECT ADVISORS TRUST FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout each period is presented below:
PACE STRATEGIC FIXED INCOME INVESTMENTS -------------------------------------------------- CLASS A CLASS B --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(A) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 12.91 $ 12.53 $ 12.91 ------- ------- ------- Net investment income................... 0.30 0.47 0.25 Net realized and unrealized gains (losses) from investment activities, futures, swaps, options and foreign currency.............................. 0.21 0.38 0.21 ------- ------- ------- Net increase from investment operations............................ 0.51 0.85 0.46 ------- ------- ------- Dividends from net investment income.... (0.29) (0.47) (0.24) Distributions from net realized gains from investment activities............ -- -- -- ------- ------- ------- Total dividends and distributions....... (0.29) (0.47) (0.24) ------- ------- ------- Net asset value, end of period.......... $ 13.13 $ 12.91 $ 13.13 ======= ======= ======= Total investment return (1)............. 4.02% 6.93% 3.61% ======= ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $26,538 $29,899 $15,375 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.11%* 1.14%++++* 1.88%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.20%* 1.21%++++* 1.91%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 4.40%* 5.52%* 3.63%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 4.31%* 5.45%* 3.60%* Portfolio turnover...................... 229% 519% 229% PACE STRATEGIC FIXED INCOME INVESTMENTS --------------------------------------------------- CLASS B CLASS C ---------------- --------------------------------- FOR THE SIX MONTHS ENDED FOR THE PERIOD JANUARY 31, FOR THE PERIOD ENDED 2002 ENDED JULY 31, 2001(B) (UNAUDITED) JULY 31, 2001(C) ---------------- --------------- ---------------- Net asset value, beginning of period.... $ 12.66 $ 12.91 $ 12.43 ------- ------- ------- Net investment income................... 0.30 0.27 0.43 Net realized and unrealized gains (losses) from investment activities, futures, swaps, options and foreign currency.............................. 0.25 0.21 0.48 ------- ------- ------- Net increase from investment operations............................ 0.55 0.48 0.91 ------- ------- ------- Dividends from net investment income.... (0.30) (0.26) (0.43) Distributions from net realized gains from investment activities............ -- -- -- ------- ------- ------- Total dividends and distributions....... (0.30) (0.26) (0.43) ------- ------- ------- Net asset value, end of period.......... $ 12.91 $ 13.13 $ 12.91 ======= ======= ======= Total investment return (1)............. 4.38% 3.75% 7.43% ======= ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $17,078 $13,588 $16,743 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.91%++++* 1.62%* 1.65%++++* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.96%++++* 1.67%* 1.71%++++* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 4.73%* 3.89%* 5.00%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 4.68%* 3.84%* 4.94%* Portfolio turnover...................... 519% 229% 519%
- ----------------- * Annualized. ++ Includes 0.06% and 0.03% of interest expense related to reverse repurchase agreements during the years ended July 31, 2001 and July 31, 1999, respectively. ++++ Includes 0.03% of interest expense related to reverse repurchase agreements during the period ended July 31, 2001. (1) Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges or program fees; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. (a) For the period December 11, 2000 (commencement of issuance) through July 31, 2001. (b) For the period January 30, 2001 (reissuance of shares) through July 31, 2001. (c) For the period December 1, 2000 (commencement of issuance) through July 31, 2001. (d) For the period February 2, 2001 (commencement of issuance) through July 31, 2001.
134 PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE STRATEGIC FIXED INCOME INVESTMENTS -------------------------------------------------- CLASS Y CLASS P --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(D) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 12.91 $12.77 $ 12.91 ------- ------ -------- Net investment income................... 0.31 0.36 0.31 Net realized and unrealized gains (losses) from investment activities, futures, swaps, options and foreign currency.............................. 0.22 0.14 0.22 ------- ------ -------- Net increase from investment operations............................ 0.53 0.50 0.53 ------- ------ -------- Dividends from net investment income.... (0.31) (0.36) (0.31) Distributions from net realized gains from investment activities............ -- -- -- ------- ------ -------- Total dividends and distributions....... (0.31) (0.36) (0.31) ------- ------ -------- Net asset value, end of period.......... $ 13.13 $12.91 $ 13.13 ======= ====== ======== Total investment return (1)............. 4.16% 3.98% 4.16% ======= ====== ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $ 416 $ 613 $226,040 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.85%* 0.88%++++* 0.85%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.91%* 0.97%++++* 0.93%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 4.64%* 5.74%* 4.66%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 4.58%* 5.65%* 4.58%* Portfolio turnover...................... 229% 519% 229% PACE STRATEGIC FIXED INCOME INVESTMENTS ------------------------------------------------ CLASS P ------------------------------------------------ FOR THE YEARS ENDED JULY 31, ------------------------------------------------ 2001 2000 1999 1998 1997 -------- -------- -------- -------- -------- Net asset value, beginning of period.... $ 12.21 $ 12.33 $ 13.32 $ 13.04 $ 12.44 -------- -------- -------- -------- ------- Net investment income................... 0.73 0.73 0.69 0.69 0.67 Net realized and unrealized gains (losses) from investment activities, futures, swaps, options and foreign currency.............................. 0.78 (0.13) (0.64) 0.40 0.70 -------- -------- -------- -------- ------- Net increase from investment operations............................ 1.51 0.60 0.05 1.09 1.37 -------- -------- -------- -------- ------- Dividends from net investment income.... (0.81) (0.72) (0.70) (0.69) (0.67) Distributions from net realized gains from investment activities............ -- -- (0.34) (0.12) (0.10) -------- -------- -------- -------- ------- Total dividends and distributions....... (0.81) (0.72) (1.04) (0.81) (0.77) -------- -------- -------- -------- ------- Net asset value, end of period.......... $ 12.91 $ 12.21 $ 12.33 $ 13.32 $ 13.04 ======== ======== ======== ======== ======= Total investment return (1)............. 12.74% 5.08% 0.21% 8.66% 11.35% ======== ======== ======== ======== ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $210,444 $234,748 $222,214 $126,880 $75,174 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.91%++ 0.85% 0.88%++ 0.85% 0.85% Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.93%++ 0.89% 0.92%++ 0.94% 1.10% Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 6.09% 6.04% 5.51% 5.49% 5.69% Net investment income to average net assets, before fee waivers and expense reimbursements........................ 6.07% 6.00% 5.47% 5.40% 5.44% Portfolio turnover...................... 519% 391% 202% 234% 357%
135 PAINEWEBBER PACE SELECT ADVISORS TRUST FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout each period is presented below:
PACE MUNICIPAL FIXED INCOME INVESTMENTS -------------------------------------------------- CLASS A CLASS B --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(A) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 12.52 $ 12.43 $ 12.52 -------- -------- ------- Net investment income................... 0.26 0.26 0.21 Net realized and unrealized gains (losses) from investment activities... (0.01) 0.09 (0.01) -------- -------- ------- Net increase from investment operations............................ 0.25 0.35 0.20 -------- -------- ------- Dividends from net investment income.... (0.26) (0.26) (0.21) Distributions from net realized gains from investment activities............ -- -- -- -------- -------- ------- Total dividends and distributions....... (0.26) (0.26) (0.21) -------- -------- ------- Net asset value, end of period.......... $ 12.51 $ 12.52 $ 12.51 ======== ======== ======= Total investment return (1)............. 1.98% 2.86% 1.58% ======== ======== ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $170,948 $178,299 $10,267 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.88%* 0.88%* 1.63%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.04%* 1.01%* 1.80%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 4.02%* 4.16%* 3.26%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 3.86%* 4.03%* 3.09%* Portfolio turnover...................... 4% 68% 4% PACE MUNICIPAL FIXED INCOME INVESTMENTS --------------------------------------------------- CLASS B CLASS C ---------------- --------------------------------- FOR THE SIX MONTHS ENDED FOR THE PERIOD JANUARY 31, FOR THE PERIOD ENDED 2002 ENDED JULY 31, 2001(C) (UNAUDITED) JULY 31, 2001(B) ---------------- --------------- ---------------- Net asset value, beginning of period.... $ 12.42 $ 12.52 $ 12.19 ------- ------- ------- Net investment income................... 0.19 0.22 0.31 Net realized and unrealized gains (losses) from investment activities... 0.10 (0.01) 0.33 ------- ------- ------- Net increase from investment operations............................ 0.29 0.21 0.64 ------- ------- ------- Dividends from net investment income.... (0.19) (0.22) (0.31) Distributions from net realized gains from investment activities............ -- -- -- ------- ------- ------- Total dividends and distributions....... (0.19) (0.22) (0.31) ------- ------- ------- Net asset value, end of period.......... $ 12.52 $ 12.51 $ 12.52 ======= ======= ======= Total investment return (1)............. 2.32% 1.72% 5.33% ======= ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $14,518 $31,678 $32,075 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.63%* 1.40%* 1.40%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.76%* 1.55%* 1.53%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 3.41%* 3.50%* 3.65%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 3.28%* 3.35%* 3.52%* Portfolio turnover...................... 68% 4% 68%
- ----------------- * Annualized. # Investment advisory functions for this portfolio were transferred from Deutsche Asset Management, Inc. to Standish Mellon Asset Management Company LLC's predecessor on June 1, 2000. (1) Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges or program fees; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. (a) For the period January 23, 2001 (commencement of issuance) through July 31, 2001. (b) For the period December 4, 2000 (commencement of issuance) through July 31, 2001. (c) For the period February 23, 2001 (commencement of issuance) through July 31, 2001.
136 PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MUNICIPAL FIXED INCOME INVESTMENTS -------------------------------------------------- CLASS Y CLASS P --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(C) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 12.52 $12.42 $ 12.52 ------- ------ ------- Net investment income................... 0.27 0.24 0.27 Net realized and unrealized gains (losses) from investment activities... (0.01) 0.10 (0.01) ------- ------ ------- Net increase from investment operations............................ 0.26 0.34 0.26 ------- ------ ------- Dividends from net investment income.... (0.27) (0.24) (0.27) Distributions from net realized gains from investment activities............ -- -- -- ------- ------ ------- Total dividends and distributions....... (0.27) (0.24) (0.27) ------- ------ ------- Net asset value, end of period.......... $ 12.51 $12.52 $ 12.51 ======= ====== ======= Total investment return (1)............. 2.11% 2.72% 2.10% ======= ====== ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $ 392 $ 399 $53,407 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.64%* 0.64%* 0.64%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.83%* 0.83%* 0.82%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 4.26%* 4.40%* 4.26%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 4.07%* 4.21%* 4.08%* Portfolio turnover...................... 4% 68% 4% PACE MUNICIPAL FIXED INCOME INVESTMENTS ------------------------------------------------ CLASS P ------------------------------------------------ FOR THE YEARS ENDED JULY 31, ------------------------------------------------ 2001 2000# 1999 1998 1997 -------- -------- -------- -------- -------- Net asset value, beginning of period.... $ 12.15 $ 12.44 $ 12.70 $ 12.67 $ 12.32 ------- ------- ------- ------- ------- Net investment income................... 0.55 0.57 0.56 0.58 0.61 Net realized and unrealized gains (losses) from investment activities... 0.42 (0.29) (0.26) 0.02 0.38 ------- ------- ------- ------- ------- Net increase from investment operations............................ 0.97 0.28 0.30 0.60 0.99 ------- ------- ------- ------- ------- Dividends from net investment income.... (0.60) (0.57) (0.56) (0.57) (0.61) Distributions from net realized gains from investment activities............ -- -- -- -- (0.03) ------- ------- ------- ------- ------- Total dividends and distributions....... (0.60) (0.57) (0.56) (0.57) (0.64) ------- ------- ------- ------- ------- Net asset value, end of period.......... $ 12.52 $ 12.15 $ 12.44 $ 12.70 $ 12.67 ======= ======= ======= ======= ======= Total investment return (1)............. 8.20% 2.37% 2.34% 4.87% 8.30% ======= ======= ======= ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $49,110 $53,594 $56,659 $51,638 $34,292 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.76% 0.85% 0.85% 0.85% 0.85% Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.82% 0.89% 0.89% 0.93% 1.40% Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 4.44% 4.68% 4.42% 4.67% 5.08% Net investment income to average net assets, before fee waivers and expense reimbursements........................ 4.38% 4.64% 4.38% 4.59% 4.53% Portfolio turnover...................... 68% 33% 11% 34% 15%
137 PAINEWEBBER PACE SELECT ADVISORS TRUST FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout each period is presented below:
PACE GLOBAL FIXED INCOME INVESTMENTS -------------------------------------------------------------------- CLASS A CLASS B --------------------------------- --------------------------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, FOR THE PERIOD 2002 ENDED 2002 ENDED (UNAUDITED) JULY 31, 2001(A) (UNAUDITED) JULY 31, 2001(B) --------------- ---------------- --------------- ---------------- Net asset value, beginning of period.... $ 10.27 $ 10.45 $10.28 $10.81 -------- -------- ------ ------ Net investment income................... 0.20@ 0.30 0.16@ 0.18 Net realized and unrealized gains (losses) from investment activities, futures and foreign currency.......... (0.25)@ (0.18) (0.25)@ (0.54) -------- -------- ------ ------ Net increase (decrease) from investment operations............................ (0.05) 0.12 (0.09) (0.36) -------- -------- ------ ------ Dividends from net investment income.... (0.20) (0.30) (0.16) (0.17) Distributions from net realized gains from investment activities............ -- -- -- -- Dividends from paid in capital.......... -- -- -- -- -------- -------- ------ ------ Total dividends and distributions....... (0.20) (0.30) (0.16) (0.17) -------- -------- ------ ------ Net asset value, end of period.......... $ 10.02 $ 10.27 $10.03 $10.28 ======== ======== ====== ====== Total investment return (1)............. (0.56)% 1.09% (0.96)% (3.34)% ======== ======== ====== ====== Ratios/Supplemental Data: Net assets, end of period (000's)....... $172,971 $190,838 $1,671 $2,381 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.21%* 1.21%* 1.98%* 1.98%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.40%* 1.41%* 2.22%* 2.55%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 3.79%* 4.42%* 3.03%* 3.61%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 3.60%* 4.22%* 2.79%* 3.04%* Portfolio turnover...................... 180% 270% 180% 270% PACE GLOBAL FIXED INCOME INVESTMENTS --------------------------------- CLASS C --------------------------------- FOR THE SIX MONTHS ENDED JANUARY 31, FOR THE PERIOD 2002 ENDED (UNAUDITED) JULY 31, 2001(C) --------------- ---------------- Net asset value, beginning of period.... $ 10.27 $ 10.38 ------- ------- Net investment income................... 0.17@ 0.26 Net realized and unrealized gains (losses) from investment activities, futures and foreign currency.......... (0.25)@ (0.11) ------- ------- Net increase (decrease) from investment operations............................ (0.08) 0.15 ------- ------- Dividends from net investment income.... (0.17) (0.26) Distributions from net realized gains from investment activities............ -- -- Dividends from paid in capital.......... -- -- ------- ------- Total dividends and distributions....... (0.17) (0.26) ------- ------- Net asset value, end of period.......... $ 10.02 $ 10.27 ======= ======= Total investment return (1)............. (0.82)% 1.45% ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $12,638 $13,632 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.72%* 1.72%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.87%* 1.90%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 3.28%* 3.91%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 3.13%* 3.73%* Portfolio turnover...................... 180% 270%
- ----------------- * Annualized. # A portion of the investment advisory function for this portfolio was transferred from Rogge Global Partners plc to Fischer Francis Trees & Watts, Inc. (and its affiliates) on October 10, 2000. @ Calculated using the average monthly shares outstanding for the period. (1) Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges or program fees; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. (a) For the period December 11, 2000 (commencement of issuance) through July 31, 2001. (b) For the period February 9, 2001 (reissuance of shares) through July 31, 2001. (c) For the period December 1, 2000 (commencement of issuance) through July 31, 2001. (d) For the period January 16, 2001 (commencement of issuance) through July 31, 2001.
138 PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GLOBAL FIXED INCOME INVESTMENTS -------------------------------------------------- CLASS Y CLASS P --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(D) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 10.27 $10.73 $ 10.27 ------- ------ ------- Net investment income................... 0.21@ 0.27 0.21@ Net realized and unrealized gains (losses) from investment activities, futures and foreign currency.......... (0.25)@ (0.46) (0.25)@ ------- ------ ------- Net increase (decrease) from investment operations............................ (0.04) (0.19) (0.04) ------- ------ ------- Dividends from net investment income.... (0.21) (0.27) (0.21) Distributions from net realized gains from investment activities............ -- -- -- Dividends from paid in capital.......... -- -- -- ------- ------ ------- Total dividends and distributions....... (0.21) (0.27) (0.21) ------- ------ ------- Net asset value, end of period.......... $ 10.02 $10.27 $ 10.02 ======= ====== ======= Total investment return (1)............. (0.43)% (1.76)% (0.43)% ======= ====== ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $ 5,196 $4,825 $96,543 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.95%* 0.95%* 0.95%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.07%* 1.08%* 1.22%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 4.05%* 4.69%* 4.06%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ 3.93%* 4.56%* 3.79%* Portfolio turnover...................... 180% 270% 180% PACE GLOBAL FIXED INCOME INVESTMENTS ------------------------------------------------ CLASS P ------------------------------------------------ FOR THE YEARS ENDED JULY 31, ------------------------------------------------ 2001# 2000 1999 1998 1997 -------- -------- -------- -------- -------- Net asset value, beginning of period.... $ 10.68 $ 11.82 $ 12.25 $ 12.17 $ 12.33 ------- -------- -------- ------- ------- Net investment income................... 0.43 0.53 0.65 0.62 0.64 Net realized and unrealized gains (losses) from investment activities, futures and foreign currency.......... (0.35) (1.10) 0.20 (0.03) (0.21) ------- -------- -------- ------- ------- Net increase (decrease) from investment operations............................ 0.08 (0.57) 0.85 0.59 0.43 ------- -------- -------- ------- ------- Dividends from net investment income.... (0.49) (0.42) (0.81) (0.40) (0.51) Distributions from net realized gains from investment activities............ -- (0.09) (0.47) (0.11) (0.08) Dividends from paid in capital.......... -- (0.06) -- -- -- ------- -------- -------- ------- ------- Total dividends and distributions....... (0.49) (0.57) (1.28) (0.51) (0.59) ------- -------- -------- ------- ------- Net asset value, end of period.......... $ 10.27 $ 10.68 $ 11.82 $ 12.25 $ 12.17 ======= ======== ======== ======= ======= Total investment return (1)............. 0.71% (4.97)% 6.49% 4.88% 3.54% ======= ======== ======== ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $94,085 $100,831 $101,143 $88,838 $60,729 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.95% 0.95% 0.95% 0.95% 0.95% Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.17% 1.18% 1.17% 1.23% 1.29% Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 4.23% 4.50% 4.57% 5.10% 5.36% Net investment income to average net assets, before fee waivers and expense reimbursements........................ 4.01% 4.27% 4.35% 4.82% 5.02% Portfolio turnover...................... 270% 170% 226% 125% 270%
139 PAINEWEBBER PACE SELECT ADVISORS TRUST FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout each period is presented below:
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS -------------------------------------------------- CLASS A CLASS B --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(A) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 17.52 $ 16.76 $ 17.46 -------- -------- ------- Net investment income (loss)............ 0.07 0.04 (0.01) Net realized and unrealized gains (losses) from investment activities and futures........................... (0.82) 0.72 (0.80) -------- -------- ------- Net increase (decrease) from investment operations............................ (0.75) 0.76 (0.81) -------- -------- ------- Dividends from net investment income.... (0.10) -- -- Distributions from net realized gains from investment activities............ -- -- -- -------- -------- ------- Total dividends and distributions....... (0.10) -- -- -------- -------- ------- Net asset value, end of period.......... $ 16.67 $ 17.52 $ 16.65 ======== ======== ======= Total investment return (1)............. (4.28)% 4.53% (4.64)% ======== ======== ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $401,062 $447,486 $99,844 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.14%* 1.13%* 1.92%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.24%* 1.25%* 2.02%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ 0.77%* 0.54%* (0.01)%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ 0.67%* 0.42%* (0.11)%* Portfolio turnover...................... 41% 148% 41% PACE LARGE COMPANY VALUE EQUITY INVESTMENTS --------------------------------------------------- CLASS B CLASS C ---------------- --------------------------------- FOR THE SIX MONTHS ENDED FOR THE PERIOD JANUARY 31, FOR THE PERIOD ENDED 2002 ENDED JULY 31, 2001(A) (UNAUDITED) JULY 31, 2001(A) ---------------- --------------- ---------------- Net asset value, beginning of period.... $ 16.76 $ 17.46 $ 16.76 -------- ------- ------- Net investment income (loss)............ (0.02) (0.00)+ (0.02) Net realized and unrealized gains (losses) from investment activities and futures........................... 0.72 (0.81) 0.72 -------- ------- ------- Net increase (decrease) from investment operations............................ 0.70 (0.81) 0.70 -------- ------- ------- Dividends from net investment income.... -- -- -- Distributions from net realized gains from investment activities............ -- -- -- -------- ------- ------- Total dividends and distributions....... -- -- -- -------- ------- ------- Net asset value, end of period.......... $ 17.46 $ 16.65 $ 17.46 ======== ======= ======= Total investment return (1)............. 4.18% (4.64)% 4.18% ======== ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $131,700 $66,136 $76,977 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.90%* 1.91%* 1.89%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 2.04%* 2.02%* 2.04%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ (0.22)%* (0.00)%* (0.21)%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (0.38)%* (0.11)%* (0.38)%* Portfolio turnover...................... 148% 41% 148%
- ----------------- + Amount is less than $0.005 per share. * Annualized. # Investment advisory functions for this portfolio were transferred from Brinson Partners, Inc. to Institutional Capital Corp. and Westwood Management Corp. on July 1, 2000. SSgA Funds Management, Inc. assumed investment advisory functions with respect to a portion of the portfolio on October 10, 2000. (1) Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges or program fees; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. (a) For the period November 27, 2000 (commencement of issuance) through July 31, 2001. (b) For the period January 19, 2001 (commencement of issuance) through July 31, 2001.
140 PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS -------------------------------------------------- CLASS Y CLASS P --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(B) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 17.54 $ 17.15 $ 17.54 ------- ------- -------- Net investment income (loss)............ 0.08 0.06 0.08 Net realized and unrealized gains (losses) from investment activities and futures........................... (0.81) 0.33 (0.81) ------- ------- -------- Net increase (decrease) from investment operations............................ (0.73) 0.39 (0.73) ------- ------- -------- Dividends from net investment income.... (0.14) -- (0.14) Distributions from net realized gains from investment activities............ -- -- -- ------- ------- -------- Total dividends and distributions....... (0.14) -- (0.14) ------- ------- -------- Net asset value, end of period.......... $ 16.67 $ 17.54 $ 16.67 ======= ======= ======== Total investment return (1)............. (4.16)% 2.27% (4.16)% ======= ======= ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $40,954 $39,612 $353,834 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.85%* 0.85%* 0.86%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.92%* 0.93%* 0.98%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ 1.05%* 0.80%* 1.05%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ 0.98%* 0.72%* 0.93%* Portfolio turnover...................... 41% 148% 41% PACE LARGE COMPANY VALUE EQUITY INVESTMENTS ------------------------------------------------ CLASS P ------------------------------------------------ FOR THE YEARS ENDED JULY 31, ------------------------------------------------ 2001# 2000# 1999 1998 1997 -------- -------- -------- -------- -------- Net asset value, beginning of period.... $ 16.35 $ 21.14 $ 20.27 $ 20.03 $ 14.07 -------- -------- -------- -------- -------- Net investment income (loss)............ 0.17 0.15 0.13 0.14 0.11 Net realized and unrealized gains (losses) from investment activities and futures........................... 1.18 (3.17) 2.34 1.63 6.61 -------- -------- -------- -------- -------- Net increase (decrease) from investment operations............................ 1.35 (3.02) 2.47 1.77 6.72 -------- -------- -------- -------- -------- Dividends from net investment income.... (0.16) (0.14) (0.14) (0.14) (0.11) Distributions from net realized gains from investment activities............ -- (1.63) (1.46) (1.39) (0.65) -------- -------- -------- -------- -------- Total dividends and distributions....... (0.16) (1.77) (1.60) (1.53) (0.76) -------- -------- -------- -------- -------- Net asset value, end of period.......... $ 17.54 $ 16.35 $ 21.14 $ 20.27 $ 20.03 ======== ======== ======== ======== ======== Total investment return (1)............. 8.32% (14.74)% 12.82% 9.89% 49.13% ======== ======== ======== ======== ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $348,068 $335,294 $375,465 $266,354 $180,807 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.88% 0.96% 0.96% 0.98% 1.00% Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.94% 0.96% 0.96% 0.98% 1.06% Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ 0.99% 0.85% 0.71% 0.82% 0.81% Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ 0.93% 0.85% 0.71% 0.82% 0.75% Portfolio turnover...................... 148% 195% 40% 34% 46%
141 PAINEWEBBER PACE SELECT ADVISORS TRUST FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout each period is presented below:
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS -------------------------------------------------- CLASS A CLASS B --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(A) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 16.86 $ 21.61 $ 16.80 -------- -------- ------- Net investment income (loss)............ (0.04) (0.05) (0.10) Net realized and unrealized gains (losses) from investment activities... (1.51) (4.70) (1.50) -------- -------- ------- Net increase (decrease) from investment operations............................ (1.55) (4.75) (1.60) -------- -------- ------- Dividends from net investment income.... -- -- -- Distributions from net realized gains from investment activities............ -- -- -- -------- -------- ------- Total dividends and distributions....... -- -- -- -------- -------- ------- Net asset value, end of period.......... $ 15.31 $ 16.86 $ 15.20 ======== ======== ======= Total investment return (1)............. (9.19)% (21.98)% (9.52)% ======== ======== ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $174,212 $208,102 $20,561 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.13%* 1.11%* 1.92%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.26%* 1.25%* 2.08%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ (0.54)%* (0.54)%* (1.33)%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (0.67)%* (0.68)%* (1.49)%* Portfolio turnover...................... 24% 64% 24% PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS --------------------------------------------------- CLASS B CLASS C ---------------- --------------------------------- FOR THE SIX MONTHS ENDED FOR THE PERIOD JANUARY 31, FOR THE PERIOD ENDED 2002 ENDED JULY 31, 2001(A) (UNAUDITED) JULY 31, 2001(A) ---------------- --------------- ---------------- Net asset value, beginning of period.... $ 21.61 $ 16.81 $ 21.61 ------- ------- ------- Net investment income (loss)............ (0.15) (0.11) (0.14) Net realized and unrealized gains (losses) from investment activities... (4.66) (1.50) (4.66) ------- ------- ------- Net increase (decrease) from investment operations............................ (4.81) (1.61) (4.80) ------- ------- ------- Dividends from net investment income.... -- -- -- Distributions from net realized gains from investment activities............ -- -- -- ------- ------- ------- Total dividends and distributions....... -- -- -- ------- ------- ------- Net asset value, end of period.......... $ 16.80 $ 15.20 $ 16.81 ======= ======= ======= Total investment return (1)............. (22.26)% (9.58)% (22.21)% ======= ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $29,814 $21,414 $25,005 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.88%* 1.90%* 1.87%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 2.09%* 2.06%* 2.07%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ (1.32)%* (1.31)%* (1.31)%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (1.53)%* (1.47)%* (1.51)%* Portfolio turnover...................... 64% 24% 64%
- ----------------- * Annualized. # Investment advisory functions for this portfolio were transferred from Chancellor LGT Asset Management, Inc. to Alliance Capital Management L.P. on November 10, 1997. + A portion of the investment advisory function for this portfolio was transferred from Alliance Capital Management L.P. to SSgA Funds Management, Inc. on October 10, 2000. (1) Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges or program fees; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. (a) For the period November 27, 2000 (commencement of issuance) through July 31, 2001. (b) For the period February 23, 2001 (reissuance of shares) through July 31, 2001.
142 PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS -------------------------------------------------- CLASS Y CLASS P --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(B) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 16.88 $ 20.02 $ 16.88 ------- ------- -------- Net investment income (loss)............ (0.02) (0.02) (0.02) Net realized and unrealized gains (losses) from investment activities... (1.50) (3.12) (1.51) ------- ------- -------- Net increase (decrease) from investment operations............................ (1.52) (3.14) (1.53) ------- ------- -------- Dividends from net investment income.... -- -- -- Distributions from net realized gains from investment activities............ -- -- -- ------- ------- -------- Total dividends and distributions....... -- -- -- ------- ------- -------- Net asset value, end of period.......... $ 15.36 $ 16.88 $ 15.35 ======= ======= ======== Total investment return (1)............. (9.06)% (15.63)% (9.06)% ======= ======= ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $27,259 $29,634 $328,081 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.85%* 0.85%* 0.86%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.93%* 0.91%* 1.02%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ (0.26)%* (0.27)%* (0.26)%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (0.34)%* (0.33)%* (0.42)%* Portfolio turnover...................... 24% 64% 24% PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS ------------------------------------------------ CLASS P ------------------------------------------------ FOR THE YEARS ENDED JULY 31, ------------------------------------------------ 2001+ 2000 1999 1998# 1997 -------- -------- -------- -------- -------- Net asset value, beginning of period.... $ 29.70 $ 25.88 $ 22.99 $ 19.28 $ 13.27 -------- -------- -------- -------- -------- Net investment income (loss)............ (0.07) (0.12) (0.05) (0.03) 0.03 Net realized and unrealized gains (losses) from investment activities... (9.42) 4.69 4.44 4.79 6.01 -------- -------- -------- -------- -------- Net increase (decrease) from investment operations............................ (9.49) 4.57 4.39 4.76 6.04 -------- -------- -------- -------- -------- Dividends from net investment income.... -- -- -- (0.01) (0.03) Distributions from net realized gains from investment activities............ (3.33) (0.75) (1.50) (1.04) -- -------- -------- -------- -------- -------- Total dividends and distributions....... (3.33) (0.75) (1.50) (1.05) (0.03) -------- -------- -------- -------- -------- Net asset value, end of period.......... $ 16.88 $ 29.70 $ 25.88 $ 22.99 $ 19.28 ======== ======== ======== ======== ======== Total investment return (1)............. (34.17)% 17.76% 19.66% 26.40% 45.61% ======== ======== ======== ======== ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $333,003 $436,806 $379,988 $275,461 $160,334 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.89% 0.94% 0.97% 1.00% 1.00% Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.94% 0.94% 0.97% 1.02% 1.05% Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ (0.36)% (0.42)% (0.24)% (0.14)% 0.22% Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (0.41)% (0.42)% (0.24)% (0.16)% 0.17% Portfolio turnover...................... 64% 59% 43% 102% 73%
143 PAINEWEBBER PACE SELECT ADVISORS TRUST FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout each period is presented below:
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS -------------------------------------------------- CLASS A CLASS B --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(A) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 17.00 $ 13.91 $ 16.94 ------- ------- ------- Net investment income (loss)............ (0.01) 0.03 (0.07) Net realized and unrealized gains (losses) from investment activities... 1.12 3.06 1.11 ------- ------- ------- Net increase (decrease) from investment operations............................ 1.11 3.09 1.04 ------- ------- ------- Dividends from net investment income.... (0.04) -- -- Distributions from net realized gains from investment activities............ (0.02) -- (0.02) ------- ------- ------- Total dividends and distributions....... (0.06) -- (0.02) ------- ------- ------- Net asset value, end of period.......... $ 18.05 $ 17.00 $ 17.96 ======= ======= ======= Total investment return (1)............. 6.56% 22.21% 6.16% ======= ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $54,667 $46,241 $13,065 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.27%* 1.26%* 2.04%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.28%* 1.28%* 2.08%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ (0.00)%*@ 0.41%* (0.78)%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (0.01)%* 0.39%* (0.82)%* Portfolio turnover...................... 20% 72% 20% PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS --------------------------------------------------- CLASS B CLASS C ---------------- --------------------------------- FOR THE SIX MONTHS ENDED FOR THE PERIOD JANUARY 31, FOR THE PERIOD ENDED 2002 ENDED JULY 31, 2001(B) (UNAUDITED) JULY 31, 2001(A) ---------------- --------------- ---------------- Net asset value, beginning of period.... $ 13.86 $ 16.94 $ 13.91 ------- ------- ------- Net investment income (loss)............ (0.03) (0.07) (0.03) Net realized and unrealized gains (losses) from investment activities... 3.11 1.11 3.06 ------- ------- ------- Net increase (decrease) from investment operations............................ 3.08 1.04 3.03 ------- ------- ------- Dividends from net investment income.... -- -- -- Distributions from net realized gains from investment activities............ -- (0.02) -- ------- ------- ------- Total dividends and distributions....... -- (0.02) -- ------- ------- ------- Net asset value, end of period.......... $ 16.94 $ 17.96 $ 16.94 ======= ======= ======= Total investment return (1)............. 22.22% 6.16% 21.78% ======= ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $12,811 $14,425 $13,741 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 2.03%* 2.03%* 2.02%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 2.05%* 2.07%* 2.06%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ (0.37)%* (0.77)%* (0.36)%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (0.39)%* (0.81)%* (0.40)%* Portfolio turnover...................... 72% 20% 72%
- ----------------- * Annualized. @ Ratio is less than 0.005%. # Prior to October 4, 1999, Brandywine Asset Management, Inc. ("Brandywine") served as investment advisor. From October 4, 1999 to October 9, 2000, Brandywine and Ariel Capital Management, Inc. ("Ariel") served as investment advisors. On October 10, 2000, ICM Asset Management, Inc. joined Ariel as an investment advisor, replacing Brandywine. (1) Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges or program fees; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. (a) For the period November 27, 2000 (commencement of issuance) through July 31, 2001. (b) For the period November 28, 2000 (commencement of issuance) through July 31, 2001. (c) For the period December 20, 2000 (commencement of issuance) through July 31, 2001.
144 PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS -------------------------------------------------- CLASS Y CLASS P --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(C) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 17.02 $13.69 $ 17.02 ------- ------ -------- Net investment income (loss)............ 0.02 0.05 0.02 Net realized and unrealized gains (losses) from investment activities... 1.12 3.28 1.12 ------- ------ -------- Net increase (decrease) from investment operations............................ 1.14 3.33 1.14 ------- ------ -------- Dividends from net investment income.... (0.07) -- (0.07) Distributions from net realized gains from investment activities............ (0.02) -- (0.02) ------- ------ -------- Total dividends and distributions....... (0.09) -- (0.09) ------- ------ -------- Net asset value, end of period.......... $ 18.07 $17.02 $ 18.07 ======= ====== ======== Total investment return (1)............. 6.73% 24.32% 6.73% ======= ====== ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $ 1,908 $1,699 $220,659 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.01%* 1.00%* 1.00%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.04%* 1.03%* 1.06%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ 0.28%* 0.67%* 0.26%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ 0.25%* 0.64%* 0.20%* Portfolio turnover...................... 20% 72% 20% PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS ------------------------------------------------ CLASS P ------------------------------------------------ FOR THE YEARS ENDED JULY 31, ------------------------------------------------ 2001# 2000# 1999 1998 1997 -------- -------- -------- -------- -------- Net asset value, beginning of period.... $ 13.33 $ 15.75 $ 17.39 $ 17.52 $ 12.29 -------- -------- -------- -------- -------- Net investment income (loss)............ 0.14 0.10 0.06 0.10 0.12 Net realized and unrealized gains (losses) from investment activities... 3.71 (1.79) (0.06) 1.14 5.55 -------- -------- -------- -------- -------- Net increase (decrease) from investment operations............................ 3.85 (1.69) 0.00 1.24 5.67 -------- -------- -------- -------- -------- Dividends from net investment income.... (0.16) (0.06) (0.09) (0.13) (0.10) Distributions from net realized gains from investment activities............ -- (0.67) (1.55) (1.24) (0.34) -------- -------- -------- -------- -------- Total dividends and distributions....... (0.16) (0.73) (1.64) (1.37) (0.44) -------- -------- -------- -------- -------- Net asset value, end of period.......... $ 17.02 $ 13.33 $ 15.75 $ 17.39 $ 17.52 ======== ======== ======== ======== ======== Total investment return (1)............. 29.20% (10.59)% 1.16% 6.97% 46.99% ======== ======== ======== ======== ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $224,026 $213,749 $206,131 $183,558 $135,047 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.97% 1.00% 1.00% 0.99% 1.00% Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.99% 1.01% 1.01% 1.00% 1.12% Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ 0.98% 0.77% 0.42% 0.61% 1.00% Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ 0.96% 0.76% 0.41% 0.60% 0.88% Portfolio turnover...................... 72% 83% 57% 42% 39%
145 PAINEWEBBER PACE SELECT ADVISORS TRUST FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout each period is presented below:
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS -------------------------------------------------- CLASS A CLASS B --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(A) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 13.65 $ 17.19 $13.60 ------- ------- ------ Net investment loss..................... (0.05)@ (0.04) (0.09)@ Net realized and unrealized gains (losses) from investment activities... (0.47)@ (3.50) (0.48)@ ------- ------- ------ Net increase (decrease) from investment operations............................ (0.52) (3.54) (0.57) ------- ------- ------ Distributions from net realized gains from investment activities............ -- -- -- ------- ------- ------ Net asset value, end of period.......... $ 13.13 $ 13.65 $13.03 ======= ======= ====== Total investment return (1)............. (3.81)% (20.59)% (4.19)% ======= ======= ====== Ratios/Supplemental Data: Net assets, end of period (000's)....... $82,313 $89,283 $9,549 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.24%* 1.21%* 2.01%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.29%* 1.29%* 2.14%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ (0.78)%* (0.56)%* (1.51)%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (0.83)%* (0.64)%* (1.64)%* Portfolio turnover...................... 24% 68% 24% PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS --------------------------------------------------- CLASS B CLASS C ---------------- --------------------------------- FOR THE SIX MONTHS ENDED FOR THE PERIOD JANUARY 31, FOR THE PERIOD ENDED 2002 ENDED JULY 31, 2001(A) (UNAUDITED) JULY 31, 2001(A) ---------------- --------------- ---------------- Net asset value, beginning of period.... $ 17.19 $ 13.60 $ 17.19 ------- ------- ------- Net investment loss..................... (0.09) (0.10)@ (0.09) Net realized and unrealized gains (losses) from investment activities... (3.50) (0.47)@ (3.50) ------- ------- ------- Net increase (decrease) from investment operations............................ (3.59) (0.57) (3.59) ------- ------- ------- Distributions from net realized gains from investment activities............ -- -- -- ------- ------- ------- Net asset value, end of period.......... $ 13.60 $ 13.03 $ 13.60 ======= ======= ======= Total investment return (1)............. (20.88)% (4.19)% (20.88)% ======= ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $16,620 $12,195 $13,654 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.98%* 2.00%* 1.97%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 2.12%* 2.08%* 2.09%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ (1.24)%* (1.54)%* (1.24)%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (1.38)%* (1.62)%* (1.36)%* Portfolio turnover...................... 68% 24% 68%
- ----------------- * Annualized. # Investment advisory functions for this portfolio were transferred from Westfield Capital Management Company, Inc. to Delaware Management Company on December 17, 1996. @ Calculated using the average monthly shares outstanding for the period. (1) Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges or program fees; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. (a) For the period November 27, 2000 (commencement of issuance) through July 31, 2001. (b) For the period February 12, 2001 (commencement of issuance) through July 31, 2001.
146 PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS -------------------------------------------------- CLASS Y CLASS P --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(B) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 13.68 $14.93 $ 13.67 ------- ------ -------- Net investment loss..................... (0.03)@ (0.02) (0.03)@ Net realized and unrealized gains (losses) from investment activities... (0.49)@ (1.23) (0.48)@ ------- ------ -------- Net increase (decrease) from investment operations............................ (0.52) (1.25) (0.51) ------- ------ -------- Distributions from net realized gains from investment activities............ -- -- -- ------- ------ -------- Net asset value, end of period.......... $ 13.16 $13.68 $ 13.16 ======= ====== ======== Total investment return (1)............. (3.80)% (8.37)% (3.73)% ======= ====== ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $ 427 $ 390 $218,868 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.98%* 0.95%* 0.97%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.88%* 1.13%* 1.05%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ (0.04)%* (0.26)%* (0.51)%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ 0.06%* (0.44)%* (0.59)%* Portfolio turnover...................... 24% 68% 24% PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS ------------------------------------------------ CLASS P ------------------------------------------------ FOR THE YEARS ENDED JULY 31, ------------------------------------------------ 2001 2000 1999 1998 1997# -------- -------- -------- -------- -------- Net asset value, beginning of period.... $ 30.27 $ 20.62 $ 15.80 $ 14.44 $ 11.20 -------- -------- -------- -------- -------- Net investment loss..................... (0.07) (0.19) (0.08) (0.03) (0.02) Net realized and unrealized gains (losses) from investment activities... (8.06) 12.58 5.28 2.03 3.26 -------- -------- -------- -------- -------- Net increase (decrease) from investment operations............................ (8.13) 12.39 5.20 2.00 3.24 -------- -------- -------- -------- -------- Distributions from net realized gains from investment activities............ (8.47) (2.74) (0.38) (0.64) -- -------- -------- -------- -------- -------- Net asset value, end of period.......... $ 13.67 $ 30.27 $ 20.62 $ 15.80 $ 14.44 ======== ======== ======== ======== ======== Total investment return (1)............. (30.93)% 62.30% 33.62% 14.44% 28.93% ======== ======== ======== ======== ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $244,247 $319,571 $265,405 $198,855 $125,609 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 0.94% 0.95% 1.00% 1.00% 1.00% Expenses to average net assets, before fee waivers and expense reimbursements........................ 0.97% 0.96% 1.01% 1.03% 1.08% Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ (0.48)% (0.64)% (0.48)% (0.20)% (0.21)% Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (0.51)% (0.65)% (0.49)% (0.23)% (0.29)% Portfolio turnover...................... 68% 81% 102% 131% 247%
147 PAINEWEBBER PACE SELECT ADVISORS TRUST FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout each period is presented below:
PACE INTERNATIONAL EQUITY INVESTMENTS -------------------------------------------------------------------- CLASS A CLASS B --------------------------------- --------------------------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, FOR THE PERIOD 2002 ENDED 2002 ENDED (UNAUDITED) JULY 31, 2001(A) (UNAUDITED) JULY 31, 2001(A) --------------- ---------------- --------------- ---------------- Net asset value, beginning of period.... $ 12.58 $ 15.25 $12.53 $15.25 -------- -------- ------ ------ Net investment income (loss)............ (0.01) 0.08 (0.07) 0.02 Net realized and unrealized gains (losses) from investment activities and foreign currency.................. (1.56) (2.75) (1.54) (2.74) -------- -------- ------ ------ Net increase (decrease) from investment operations............................ (1.57) (2.67) (1.61) (2.72) -------- -------- ------ ------ Dividends from net investment income.... (0.11) -- -- -- Distributions from net realized gains from investment activities............ -- -- -- -- -------- -------- ------ ------ Total dividends and distributions....... (0.11) -- -- -- -------- -------- ------ ------ Capital contribution from Sub-Advisor... -- -- -- -- -------- -------- ------ ------ Net asset value, end of period.......... $ 10.90 $ 12.58 $10.92 $12.53 ======== ======== ====== ====== Total investment return (1)............. (12.50)% (17.51)% (12.85)% (17.84)% ======== ======== ====== ====== Ratios/Supplemental Data: Net assets, end of period (000's)....... $111,372 $143,163 $2,259 $4,630 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.50%* 1.40%* 2.27%* 2.17%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.52%* 1.50%* 2.45%* 2.43%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ (0.47)%* 1.10%* (1.18)%* 0.29%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ (0.49)%* 1.00%* (1.36)%* 0.03%* Portfolio turnover...................... 50% 60% 50% 60% PACE INTERNATIONAL EQUITY INVESTMENTS --------------------------------- CLASS C --------------------------------- FOR THE SIX MONTHS ENDED JANUARY 31, FOR THE PERIOD 2002 ENDED (UNAUDITED) JULY 31, 2001(A) --------------- ---------------- Net asset value, beginning of period.... $ 12.53 $ 15.25 ------- ------- Net investment income (loss)............ (0.07) 0.02 Net realized and unrealized gains (losses) from investment activities and foreign currency.................. (1.54) (2.74) ------- ------- Net increase (decrease) from investment operations............................ (1.61) (2.72) ------- ------- Dividends from net investment income.... (0.02) -- Distributions from net realized gains from investment activities............ -- -- ------- ------- Total dividends and distributions....... (0.02) -- ------- ------- Capital contribution from Sub-Advisor... -- -- ------- ------- Net asset value, end of period.......... $ 10.90 $ 12.53 ======= ======= Total investment return (1)............. (12.88)% (17.84)% ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $10,520 $13,304 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 2.26%* 2.16%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 2.33%* 2.31%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ (1.24)%* 0.34%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ (1.31)%* 0.19%* Portfolio turnover...................... 50% 60%
- ----------------- * Annualized. @ Amount is less than $0.005 per share. (1) Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges or program fees; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. If not for the sub-advisor's capital contribution of approximately $0.05 per share, Class P's total return for the year ended July 31, 2000 would have been 14.60%. (a) For the period November 27, 2000 (commencement of issuance) through July 31, 2001. (b) For the period January 17, 2001 (commencement of issuance) through July 31, 2001.
148 PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS -------------------------------------------------- CLASS Y CLASS P --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(B) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 12.59 $ 14.96 $ 12.59 ------- ------- -------- Net investment income (loss)............ (0.00)@ 0.04 (0.01) Net realized and unrealized gains (losses) from investment activities and foreign currency.................. (1.56) (2.41) (1.55) ------- ------- -------- Net increase (decrease) from investment operations............................ (1.56) (2.37) (1.56) ------- ------- -------- Dividends from net investment income.... (0.14) -- (0.14) Distributions from net realized gains from investment activities............ -- -- -- ------- ------- -------- Total dividends and distributions....... (0.14) -- (0.14) ------- ------- -------- Capital contribution from Sub-Advisor... -- -- -- ------- ------- -------- Net asset value, end of period.......... $ 10.89 $ 12.59 $ 10.89 ======= ======= ======== Total investment return (1)............. (12.41)% (15.84)% (12.42)% ======= ======= ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $41,068 $45,414 $195,354 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.18%* 1.14%* 1.24%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.14%* 1.19%* 1.25%* Net investment income to average net assets, net of fee waivers and expense reimbursements........................ (0.19)%* 1.11%* (0.25)%* Net investment income to average net assets, before fee waivers and expense reimbursements........................ (0.15)%* 1.06%* (0.26)%* Portfolio turnover...................... 50% 60% 50% PACE INTERNATIONAL EQUITY INVESTMENTS ------------------------------------------------ CLASS P ------------------------------------------------ FOR THE YEARS ENDED JULY 31, ------------------------------------------------ 2001 2000 1999 1998 1997 -------- -------- -------- -------- -------- Net asset value, beginning of period.... $ 18.67 $ 17.18 $ 16.54 $ 15.66 $ 12.79 -------- -------- -------- -------- -------- Net investment income (loss)............ 0.06 0.07 0.07 0.16 0.10 Net realized and unrealized gains (losses) from investment activities and foreign currency.................. (4.88) 2.51 1.10 1.20 2.97 -------- -------- -------- -------- -------- Net increase (decrease) from investment operations............................ (4.82) 2.58 1.17 1.36 3.07 -------- -------- -------- -------- -------- Dividends from net investment income.... (0.04) (0.12) (0.19) (0.16) (0.13) Distributions from net realized gains from investment activities............ (1.22) (1.02) (0.34) (0.32) (0.07) -------- -------- -------- -------- -------- Total dividends and distributions....... (1.26) (1.14) (0.53) (0.48) (0.20) -------- -------- -------- -------- -------- Capital contribution from Sub-Advisor... 0.00@ 0.05 -- -- -- -------- -------- -------- -------- -------- Net asset value, end of period.......... $ 12.59 $ 18.67 $ 17.18 $ 16.54 $ 15.66 ======== ======== ======== ======== ======== Total investment return (1)............. (26.97)% 14.91% 7.33% 9.27% 24.30% ======== ======== ======== ======== ======== Ratios/Supplemental Data: Net assets, end of period (000's)....... $198,643 $246,452 $214,017 $164,477 $102,979 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.13% 1.16% 1.22% 1.21% 1.35% Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.17% 1.16% 1.22% 1.21% 1.35% Net investment income to average net assets, net of fee waivers and expense reimbursements........................ 0.36% 0.37% 0.53% 1.14% 0.95% Net investment income to average net assets, before fee waivers and expense reimbursements........................ 0.32% 0.37% 0.53% 1.14% 0.95% Portfolio turnover...................... 60% 72% 89% 56% 55%
149 PAINEWEBBER PACE SELECT ADVISORS TRUST FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout each period is presented below:
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS -------------------------------------------------- CLASS A CLASS B --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(A) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 8.01 $ 9.82 $ 7.98 ------- ------ ------ Net investment income (loss)............ (0.03) 0.04 (0.06) Net realized and unrealized gains (losses) from investment activities and foreign currency.................. 0.66 (1.85) 0.66 ------- ------ ------ Net increase (decrease) from investment operations............................ 0.63 (1.81) 0.60 ------- ------ ------ Dividends from net investment income.... -- -- -- ------- ------ ------ Net asset value, end of period.......... $ 8.64 $ 8.01 $ 8.58 ======= ====== ====== Total investment return (1)............. 7.87% (18.43)% 7.52% ======= ====== ====== Ratios/Supplemental Data: Net assets, end of period (000's)....... $ 7,915 $8,219 $6,872 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.78%* 1.76%* 2.55%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 2.22%* 2.06%* 3.02%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ (0.53)%* 0.87%* (1.34)%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (0.97)%* 0.57%* (1.81)%* Portfolio turnover...................... 71% 121% 71% PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS --------------------------------------------------- CLASS B CLASS C ---------------- --------------------------------- FOR THE SIX MONTHS ENDED FOR THE PERIOD JANUARY 31, FOR THE PERIOD ENDED 2002 ENDED JULY 31, 2001(B) (UNAUDITED) JULY 31, 2001(C) ---------------- --------------- ---------------- Net asset value, beginning of period.... $ 9.14 $ 7.98 $ 9.13 ------ ------ ------ Net investment income (loss)............ 0.01 (0.06) 0.01 Net realized and unrealized gains (losses) from investment activities and foreign currency.................. (1.17) 0.66 (1.16) ------ ------ ------ Net increase (decrease) from investment operations............................ (1.16) 0.60 (1.15) ------ ------ ------ Dividends from net investment income.... -- -- -- ------ ------ ------ Net asset value, end of period.......... $ 7.98 $ 8.58 $ 7.98 ====== ====== ====== Total investment return (1)............. (12.69)% 7.52% (12.60)% ====== ====== ====== Ratios/Supplemental Data: Net assets, end of period (000's)....... $7,310 $4,074 $4,105 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 2.53%* 2.54%* 2.52%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 2.85%* 3.02%* 2.92%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ 0.11%* (1.34)%* 0.16%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (0.21)%* (1.82)%* (0.24)%* Portfolio turnover...................... 121% 71% 121%
- ----------------- * Annualized. (1) Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges or program fees; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. (a) For the period December 11, 2000 (commencement of issuance) through July 31, 2001. (b) For the period December 22, 2000 (commencement of issuance) through July 31, 2001. (c) For the period December 1, 2000 (commencement of issuance) through July 31, 2001. (d) For the period February 9, 2001 (commencement of issuance) through July 31, 2001.
150 PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS -------------------------------------------------- CLASS Y CLASS P --------------------------------- --------------- FOR THE FOR THE SIX MONTHS SIX MONTHS ENDED ENDED JANUARY 31, FOR THE PERIOD JANUARY 31, 2002 ENDED 2002 (UNAUDITED) JULY 31, 2001(D) (UNAUDITED) --------------- ---------------- --------------- Net asset value, beginning of period.... $ 8.02 $10.00 $ 8.02 ------- ------ ------- Net investment income (loss)............ (0.01) 0.05 (0.01) Net realized and unrealized gains (losses) from investment activities and foreign currency.................. 0.66 (2.03) 0.66 ------- ------ ------- Net increase (decrease) from investment operations............................ 0.65 (1.98) 0.65 ------- ------ ------- Dividends from net investment income.... -- -- -- ------- ------ ------- Net asset value, end of period.......... $ 8.67 $ 8.02 $ 8.67 ======= ====== ======= Total investment return (1)............. 8.10% (19.80)% 8.10% ======= ====== ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $ 608 $ 549 $69,181 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.52%* 1.50%* 1.50%* Expenses to average net assets, before fee waivers and expense reimbursements........................ 2.00%* 1.93%* 2.09%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ (0.33)%* 1.11%* (0.30)%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (0.81)%* 0.68%* (0.89)%* Portfolio turnover...................... 71% 121% 71% PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS ------------------------------------------------ CLASS P ------------------------------------------------ FOR THE YEARS ENDED JULY 31, ------------------------------------------------ 2001 2000 1999 1998 1997 -------- -------- -------- -------- -------- Net asset value, beginning of period.... $ 11.96 $ 12.05 $ 10.41 $ 15.60 $ 12.49 ------- ------- ------- ------- ------- Net investment income (loss)............ 0.02 (0.01) 0.09 0.09 0.06 Net realized and unrealized gains (losses) from investment activities and foreign currency.................. (3.96) 0.02 1.62 (5.23) 3.09 ------- ------- ------- ------- ------- Net increase (decrease) from investment operations............................ (3.94) 0.01 1.71 (5.14) 3.15 ------- ------- ------- ------- ------- Dividends from net investment income.... -- (0.10) (0.07) (0.05) (0.04) ------- ------- ------- ------- ------- Net asset value, end of period.......... $ 8.02 $ 11.96 $ 12.05 $ 10.41 $ 15.60 ======= ======= ======= ======= ======= Total investment return (1)............. (32.94)% (0.02)% 16.66% (32.99)% 25.31% ======= ======= ======= ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's)....... $65,703 $82,179 $88,497 $62,237 $54,759 Expenses to average net assets, net of fee waivers and expense reimbursements........................ 1.50% 1.50% 1.50% 1.50% 1.50% Expenses to average net assets, before fee waivers and expense reimbursements........................ 1.82% 1.75% 1.79% 1.79% 2.09% Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements................ 0.24% (0.08)% 1.05% 0.98% 0.63% Net investment income (loss) to average net assets, before fee waivers and expense reimbursements................ (0.08)% (0.33)% 0.76% 0.69% 0.04% Portfolio turnover...................... 121% 115% 66% 51% 39%
151 PAINEWEBBER PACE SELECT ADVISORS TRUST SUPPLEMENTAL INFORMATION (UNAUDITED) SHAREHOLDER MEETING RESULTS A special meeting of shareholders of the Trust was held on August 22, 2001. At the meeting, Margo N. Alexander, Richard Q. Armstrong, David J. Beaubien, E. Garrett Bewkes, Jr., Richard R. Burt, Meyer Feldberg, George W. Gowen, William W. Hewitt, Jr., Morton L. Janklow, Frederic V. Malek, Carl W. Schafer and William D. White were elected members of the Board of Trustees of the Trust to serve indefinite terms, beginning in September 2001, until their successors are duly elected and qualified or until their earlier resignation or removal. At the meeting, the shareholders of the Trust voted as follows with respect to the election of each nominee:
SHARES SHARES VOTED WITHHELD SHARES FOR AUTHORITY ABSTAIN --------------- ------------- -------- Margo N. Alexander........................................ 137,030,850.059 3,472,641.943 535.630 Richard Q. Armstrong...................................... 136,925,499.755 3,578,527.877 0.000 David J. Beaubien......................................... 137,070,046.909 3,433,980.723 0.000 E. Garrett Bewkes, Jr..................................... 136,746,225.651 3,757,801.981 0.000 Richard R. Burt........................................... 136,978,282.784 3,525,744.848 0.000 Meyer Feldberg............................................ 136,960,088.513 3,543,939.119 0.000 George W. Gowen........................................... 136,738,485.619 3,765,542.013 0.000 William W. Hewitt, Jr. ................................... 136,816,697.582 3,687,330.050 0.000 Morton L. Janklow......................................... 136,778,041.305 3,725,986.327 0.000 Frederic V. Malek......................................... 136,911,965.938 3,592,061.694 0.000 Carl W. Schafer........................................... 137,000,644.378 3,503,383.254 0.000 William D. White.......................................... 136,952,285.023 3,551,742.609 0.000
Messrs. M. Cabell Woodward, Jr. and Brian M. Storms, who had served as Trustees of the Trust prior to the Shareholder meeting, did not stand for reelection to the Board at the meeting and resigned from the Board in September 2001, as had been expected. 152 [LOGO] -C-2002 UBS PaineWebber Inc. All Rights Reserved Member SIPC UBS PaineWebber is a service mark of UBS AG. -----END PRIVACY-ENHANCED MESSAGE-----