N-30D 1 c19866-n30d.txt PaineWebber PACE(SM) Going The Distance To Meet Your Financial Needs Semiannual Report January 31, 2001 PaineWebber PACE(SM) TABLE OF CONTENTS -------------------------------------------------------------------------------- Table of Contents ...................................................... i Introduction ........................................................... 1 PACE Money Market Investments .......................................... 2 PACE Government Securities Fixed Income Investments .................... 4 PACE Intermediate Fixed Income Investments ............................. 6 PACE Strategic Fixed Income Investments ................................ 8 PACE Municipal Fixed Income Investments ................................ 10 PACE Global Fixed Income Investments ................................... 12 PACE Large Company Value Equity Investments ............................ 15 PACE Large Company Growth Equity Investments ........................... 19 PACE Small/Medium Company Value Equity Investments ..................... 22 PACE Small/Medium Company Growth Equity Investments .................... 24 PACE International Equity Investments .................................. 26 PACE International Emerging Markets Equity Investments ................. 28 Financial Statements ................................................... 30 -------------------------------------------------------------------------------- The financial information included herein is taken from the records of the funds without examination by independent auditors who do not express an opinion thereon. PAINEWEBBER PACE SELECT ADVISORS TRUST OFFERS DIFFERENT CLASSES OF SHARES REPRESENTING INTERESTS IN TWELVE SEPARATE PORTFOLIOS. 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 THE RELEVANT PROSPECTUS CAREFULLY BEFORE YOU INVEST. i [This page intentionally left blank] 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 six-month period ended January 31, 2001. Please note that the opinions of the advisors do not necessarily represent those of UBS PaineWebber Inc. or Mitchell Hutchins Asset Management 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 and Chief Executive Officer Executive Vice President Mitchell Hutchins Asset Management Inc. Investment Consulting Services UBS PaineWebber Inc. This report is intended to assist investors in understanding how the Portfolios performed during the six-month period ended January 31, 2001. The views expressed in the Advisor's Comments sections are as of March 2001 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: Mitchell Hutchins Asset Management 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 may be 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 1/31/01
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION 8/24/95 ---------------------------------------------------------------------------------------------- PACE Money Market Investments With PACE program fee* 2.35% 4.54% 3.73% 3.73% PACE Money Market Investments Without PACE program fee 3.12 6.12 5.30 5.30 90-Day U.S. T-Bill Index+ 2.98 5.97 5.18 5.20 Lipper Money Market Funds Median 2.99 5.85 5.09 5.11 ----------------------------------------------------------------------------------------------
For PACE Money Market Investments, the 7-day current yield for the period ended January 31, 2001, was 5.60%, without PACE program fee. With the maximum PACE program fee, the 7-day current yield was 4.10%. 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. + 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. The table depicts the performance of PACE Money Market Investments versus the 90-Day U.S. Treasury Bill Index and the Lipper Money Market Funds Median. It is important to note that PACE Money Market Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustrative purposes only. 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. ADVISOR'S COMMENTS The six-month period ended January 31, 2001 marked a reversal of economic events that dominated the months preceding this reporting period, as inflation and economic growth slowed while interest rates reversed course. Aggressive rate hikes by the Federal Reserve (the Fed") during the first five months of 2000 helped to dramatically slow growth-- so much so that in January 2001, the Fed cut the Fed Funds rate twice by a total of 1%. These rate cuts helped to temporarily stimulate the stock markets, but an economy that has slowed to forecasts of negligible growth must overcome a number of recent negatives. They include sagging consumer confidence, a startling drop in the National Association of Purchasing Managers confidence index and a surge of new unemployment claims, all of which dimmed some of the brief optimism sparked by the Fed's recent actions. Uncertainty and bearish tendencies in the equity markets was a positive for fixed income assets. Relatively stable investments such as money market funds enjoyed their highest returns in years, combined with strong cash inflows from investors seeking relative safety. For the six-month period ended January 31, 2001, the Portfolio returned 3.12% (before the deduction of the maximum PACE program fee; 2.35% after the deduction of the maximum PACE program fee), compared to the 90-Day U.S. T-Bill Index return of 2.98%, and the Lipper Money Market Funds Median return of 2.99% for the same period. With forecasts of both inflation and real Gross Domestic Product (GDP) under 3% for 2001, the question remains whether the economy will fall into a recession or rebound during the second half of the year to achieve sustainable, 2 although lower, growth. We believe the risks to the U.S. economy remain real, and we expect further rate reductions from the Fed. By the second half of this year, we expect the economy will begin to show signs of a recovery. PACE MONEY MARKET INVESTMENTS--PORTFOLIO STATISTICS CHARACTERISTICS* 1/31/01 ----------------------------------------------------------------------- Net Assets ($mm) $74.4 Number of Issuers (excl Govts) 45 Weighted Average Maturity 61 days ----------------------------------------------------------------------- PORTFOLIO COMPOSITION* 1/31/01 ----------------------------------------------------------------------- Commercial Paper 61.3% U.S. Government Agency Obligations 15.3 Short-Term Corporate Obligations 14.4 Bank Obligations 10.1 Money Market Funds 2.7 Liabilities in Excess of Other Assets -3.8 ----------------------------------------------------------------------- Total 100.0% TOP 10 HOLDINGS (EXCLUDING U.S. GOV'T AGENCY OBLIGATIONS)* 1/31/01 ----------------------------------------------------------------------- Receivables Capital 4.3% Giro Funding 4.1 Motorola 3.9 Merrill Lynch 3.6 Delaware Funding 3.2 Banco Bilboa Vizcaya 2.7 Atlantis One Funding 2.7 CC (USA) 2.7 Morgan Stanley Dean Witter 2.7 Beta Finance 2.7 ----------------------------------------------------------------------- Total 32.6% * Weightings represent percentages of net assets as of January 31, 2001. The Portfolio is actively managed and all holdings are subject to change. 3 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'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 1/31/01
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION(o) --------------------------------------------------------------------------------------------------- Before Deducting Class B* N/A N/A N/A 2.62% Maximum Sales Charge Class C** N/A N/A N/A 3.76 or PACE program fee Class P# 9.03% 14.65% 6.77% 7.25 After Deducting Class B* N/A N/A N/A -2.38 Maximum Sales Charge Class C** N/A N/A N/A 3.01 or PACE program fee Class P# 8.22 12.95 5.18 5.65 Lehman Brothers Mortgage-Backed Securities Index++ 8.21 13.88 7.08 7.49 Lipper Intermediate U.S. Government Funds Median 7.56 12.57 5.57 6.22 ---------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2000, after deduction of the maximum sales charge or PACE program fee, were as follows: Class B--since inception -4.69%; Class C--since inception 0.63%; and Class P-- 1-year period, 9.83%; 5-year period 4.80%; and since inception 5.30%. (o)Inception: since commencement of issuance on August 24, 1995 for Class P shares, December 18, 2000 for Class B shares and December 4, 2000 for Class C shares. Inception returns for Index and Lipper Median are shown as of nearest month-end of the inception of the oldest share class: August 31, 1995. * Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after six years. Class B shares bear ongoing 12b-1 distribution and service fees. ** Maximum contingent deferred sales charge for Class C shares is 0.75% and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. # 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. 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. The table depicts the performance of PACE Government Securities Fixed Income Investments versus the Lehman Brothers Mortgage- Backed Securities Index and the Lipper Intermediate U.S. Government Funds Median. It is important to note that PACE Government Securities Fixed Income Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustrative purposes only. 4 ADVISOR'S COMMENTS For the six months ended January 31, 2001, the Portfolio's Class P shares outperformed the benchmarks. For the period, the Portfolio's Class P shares returned 9.03% (before the deduction of the PACE program fee; 8.22% after the deduction of the maximum PACE program fee), compared to the Lehman Brothers Mortgage-Backed Securities Index return of 8.21% and the Lipper Intermediate U.S. Government Funds Median return of 7.56%. The Portfolio's extended duration (a measure of price sensitivity to changes in interest rates) positively affected performance. Generally strong performance in the U.S. debt markets during the period was largely attributable to a downward shift in the yield curve, which was sparked by clear signs of slower economic growth. The Portfolio benefited from its overweight of GNMA securities. Investors sought the security of their AAA credit rating backed by the full faith and credit" of the United States, especially as the supply of Treasury securities continued to shrink. Although mortgage-backed securities suffered from lower interest rates later in the period, the Portfolio's mortgage-backed exposure continues to emphasize well-structured securities with stable cash flows. PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS--PORTFOLIO STATISTICS CHARACTERISTICS* 1/31/01 --------------------------------------------------------------- Weighted Average Duration 2.79 yrs Weighted Average Maturity 4.96 yrs Average Coupon 6.43% Average Quality AAA Net Assets ($mm) $200.8 Number of Securities 203 Bonds and Cash Equivalents 200.9% Liabilities in Excess of Other Assets -100.9% --------------------------------------------------------------- ASSET ALLOCATION* 1/31/01 --------------------------------------------------------------- Agency Mortgage Pass-Throughs 127.9% CMOs (PAC/TAC) 33.5 U.S. Government Securities 27.7 Cash & Equivalents 3.6 Corporate Obligations 0.1 Asset-Backed 8.1 Liabilities in Excess of Other Assets -100.9 --------------------------------------------------------------- Total 100.0% *Weightings represent percentages of net assets as of January 31, 2001. The Portfolio is actively managed and all holdings are subject to change. 5 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. The Portfolio invests in bonds of varying maturities, but normally limits its overall duration (duration is a measure of the Portfolio's exposure to interest rate risk) to between two and four and one-half years. MWAM generally sells securities that no longer meet these selection criteria or when it identifies more attractive investment opportunities and may also sell securities to adjust the average duration of the Portfolio. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/01
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION(o) --------------------------------------------------------------------------------------------------- Before Deducting Class B* N/A N/A N/A 2.10% Maximum Sales Charge Class C** N/A N/A N/A 3.09 or PACE program fee Class P# 6.63% 11.26% 5.62% 5.93 After Deducting Class B* N/A N/A N/A -2.90 Maximum Sales Charge Class C** N/A N/A N/A 2.34 or PACE program fee Class P# 5.84 9.60 4.05 4.36 Lehman Brothers Intermediate Government/Credit Index++ 7.61 12.34 6.28 6.77 Lipper Short-Intermediate Investment Grade Debt Funds Median 6.35 10.45 5.54 6.07 ---------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2000, after deduction of the maximum sales charge or PACE program fee, were as follows: Class B--since inception -4.44%; Class C--since inception 0.77%; and Class P-- 1-year period, 7.40%; 5-year period 3.75%; and since inception 4.14%. (o) Inception: since commencement of issuance on August 24, 1995 for Class P shares, December 14, 2000 for Class B shares and December 1, 2000 for Class C shares. Inception returns for Index and Lipper Median are shown as of nearest month-end of the inception of the oldest share class: August 31, 1995. * Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after six years. Class B shares bear ongoing 12b-1 distribution and service fees. ** Maximum contingent deferred sales charge for Class C shares is 0.75% and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. # 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 (investment grade bonds with at least one year to maturity) covering all 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. 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. The table depicts the performance of PACE Intermediate Fixed Income Investments versus the Lehman Brothers Intermediate Government/Credit Index and the Lipper Short-Intermediate Investment Grade Debt Funds Median. It is important to note that PACE Intermediate Fixed Income Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustrative purposes only. 6 ADVISOR'S COMMENTS For the six months ended January 31, 2001, the Portfolio's Class P shares returned 6.63% (before the deduction of the PACE program fee; 5.84% after the deduction of the maximum PACE program fee) underperforming the Lehman Brothers Intermediate Government/Credit Index, which returned 7.61%. As of October 10, 2000, MWAM assumed responsibility for managing the Portfolio. As part of the transition from the previous investment advisor, Treasury issues were sold to establish the desired duration target while making cash available for investment in issues offering the potential for higher return, notably corporate issues. Portfolio duration, a measure of sensitivity to interest rates, remained neutral or slightly defensive to the benchmark for the reporting period, moving toward a longer duration as the period drew to a close. The two 50 basis point reductions by the Federal Reserve Board in January served to resuscitate a moribund market for spread product, particularly corporate bonds down the quality spectrum. Among corporate issues, we continue to focus on financial issuers, including banks, broker/dealers, insurers, and real estate investment trusts. The Portfolio's mortgage-backed and asset-backed exposure continues to emphasize well-structured securities with stable cash flow. PACE INTERMEDIATE FIXED INCOME INVESTMENTS--PORTFOLIO STATISTICS CHARACTERISTICS* 1/31/01 -------------------------------------------------------------- Weighted Average Duration 3.22 yrs Weighted Average Maturity 5.26 yrs Average Coupon 7.19% Net Assets ($mm) 133.5 Number of Securities 110 Bonds 98.3% Cash & Equivalents 1.7% -------------------------------------------------------------- QUALITY DIVERSIFICATION* 1/31/01 -------------------------------------------------------------- AAA 38.3% AA 10.5 A 28.2 BBB and below 22.6 Cash 0.4 -------------------------------------------------------------- Total 100.0% ASSET ALLOCATION* 1/31/01 -------------------------------------------------------------- Corporate Securities 57.2% Mortgage-Backed Securities 28.1 U.S. Government/Agency Securities 6.7 Asset-Backed Securities 6.3 Cash & Equivalents 1.7 -------------------------------------------------------------- Total 100.0% *Weightings represent percentages of net assets as of January 31, 2001. The Portfolio is actively managed and all holdings are subject to change. 7 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 (a measure of sensitivity to interest rate changes) normally ranges between three and eight years. 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, yield curve, sector and prepayment exposure, as appropriate. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/01
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION(o) ----------------------------------------------------------------------------------------------------- Before Deducting Class A* N/A N/A N/A 2.88% Maximum Sales Charge Class C** N/A N/A N/A 3.61 or PACE program fee Class P# 8.33% 13.78% 6.11% 7.63 After Deducting Class A* N/A N/A N/A -1.22 Maximum Sales Charge Class C** N/A N/A N/A 2.86 or PACE program fee Class P# 7.52 12.08 4.52 6.03 Lehman Brothers Government/Credit Index++ 8.02 13.76 6.46 7.16 Lipper Intermediate Investment Grade Debt Funds Median 7.65 12.32 5.69 6.43 -----------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2000, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--since inception -2.54%; Class C--since inception 1.61%; and Class P-- 1-year period, 9.92%; 5-year period 4.38%; and since inception 5.88%. (o) Inception: since commencement of issuance on August 24, 1995 for Class P shares, December 11, 2000 for Class A shares and December 1, 2000 for Class C shares. Inception returns for 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% of the public offering price. Class A shares bear ongoing 12b-1 service fees. ** Maximum contingent deferred sales charge for Class C shares is 0.75% and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. # 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. 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. The table depicts the performance of PACE Strategic Fixed Income Investments versus the Lehman Brothers Government/Credit Index and the Lipper Intermediate Investment Grade Debt Funds Median. It is important to note that PACE Strategic Fixed Income Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustrative purposes only. ADVISOR'S COMMENTS The Portfolio's Class P shares outperformed the Index for the six months ended January 31, 2001 (before deducting PACE program fee). For the period, the Portfolio's Class P shares returned 8.33% (before the deduction of the PACE 8 program fee; 7.52% after the deduction of the maximum PACE program fee), compared to 8.02% and 7.65% for the Lehman Brothers Government/Credit Index and the Lipper Intermediate Investment Grade Debt Funds Median, respectively. Performance was helped by a gradual lengthening of the Portfolio's duration (a measure of sensitivity to interest rates) in response to falling interest rates. The two 50 basis point reductions (a basis point equals 1/100th of one percent) by the Federal Reserve Board in January served to resuscitate a moribund market for spread product, particularly corporate bonds down the quality spectrum. Although mortgage-backed securities can be expected to suffer from lower interest rates, the Portfolio's mortgage-backed exposure continues to emphasize well-structured securities with stable cash flow. U.S. Treasurys did well throughout most of the period. The euro rallied as investors shifted assets into Europe in expectation of a relatively benign slowdown compared to the U.S. We maintained exposure to emerging markets that have stabilized in response to funding packages from the International Monetary Fund. Looking forward, we intend to position the Portfolio defensively to protect against the impact of a slowing economy. We expect to maintain duration longer than the Lehman Brothers Government/Credit Index. Our yield curve positioning focuses on intermediate term assets while retaining long-end exposure to benefit from debt buybacks. We expect to continue to underweight corporates to protect against widening yield premiums arising from potential economic weakness. We are also limiting below-investment grade holdings to select upper-tier securities as credit quality remains a concern. PACE STRATEGIC FIXED INCOME INVESTMENTS--PORTFOLIO STATISTICS CHARACTERISTICS* 1/31/01 -------------------------------------------------------------- Weighted Average Duration 6.17 yrs Weighted Average Maturity 9.70 yrs Average Coupon 6.89% Net Assets ($mm) $231.4 Bonds 157.0% Cash & Equivalents 5.8% Liabilities in Excess of Other Assets -62.8% -------------------------------------------------------------- QUALITY DIVERSIFICATION* 1/31/01 -------------------------------------------------------------- AAA 127.5% AA 4.0 A 18.1 BBB 7.4 BB & B 5.8 Liabilities in Excess of Other Assets -62.8 -------------------------------------------------------------- Total 100.0% SECTOR ALLOCATION* 1/31/01 -------------------------------------------------------------- Agency/Mortgage Pass-Throughs 53.3% CMOs, ARMs Strips 40.4 Corporates 28.9 U.S. Government 24.8 Asset-Backed 8.4 Cash & Equivalents 5.8 Foreign 0.8 Municipal Securities 0.4 Liabilities in Excess of Other Assets -62.8 -------------------------------------------------------------- Total 100.0% *Weightings represent percentages of net assets as of January 31, 2001. The Portfolio is actively managed and all holdings are subject to change. 9 PACE MUNICIPAL FIXED INCOME INVESTMENTS ADVISOR: Standish, Ayer & Wood, Inc. (Standish") 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 seeks to identify undervalued sectors or geographical regions of the municipal market or undervalued individual securities. To do this, Standish uses credit research and valuation analysis and monitors the relationship of the municipal yield curve to the treasury yield curve. Standish may also make modest duration adjustments based on economic analyses and interest rate forecasts. Standish generally sells securities if it identifies more attractive investment opportunities within its investment criteria and doing so may improve the Portfolio's return. Standish also may sell securities with weakening credit profiles or to adjust the average duration of the Portfolio. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/01
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION(o) ------------------------------------------------------------------------------------------------------ Before Deducting Class A* N/A N/A N/A -0.16% Maximum Sales Charge Class C** N/A N/A N/A 2.57 or PACE program fee Class P# 4.97% 10.06% 4.80% 5.36 After Deducting Class A* N/A N/A N/A -4.17 Maximum Sales Charge Class C** N/A N/A N/A 1.82 or PACE program fee Class P# 4.19 8.42 3.24 3.79 Lehman Brothers Municipal Five-Year Index++ 5.48 9.62 5.10 5.33 Lipper Intermediate Municipal Debt Funds Median 5.42 10.13 4.78 5.17 ------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2000, after deduction of the maximum sales charge or PACE program fee, were as follows: Class C--since inception 0.98%; and Class P--1-year period, 6.66%; 5-year period 3.05%; and since inception 3.69%. (o) Inception: since commencement of issuance on August 24, 1995 for Class P shares, January 23, 2001 for Class A shares and December 4, 2000 for Class C shares. Inception returns for 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% of the public offering price. Class A shares bear ongoing 12b-1 service fees. ** Maximum contingent deferred sales charge for Class C shares is 0.75% and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. # 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. Past performance does not predict future performance. 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. The table depicts the performance of PACE Municipal Fixed Income Investments versus the Lehman Brothers Municipal Five-Year Index and the Lipper Intermediate Municipal Debt Funds Median. It is important to note that PACE Municipal Fixed Income Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustrative purposes only. ADVISOR'S COMMENTS For the six-month period ended January 31, 2001, the Portfolio's Class P shares returned 4.97% (before the deduction of the PACE program fee; 4.19% after the deduction of the maximum PACE program fee), compared to 5.48% for the Lehman Brothers Municipal Five-Year Index, and 5.42% for the Lipper Intermediate Municipal Debt Funds Median. The Portfolio's Class P shares underperformed for the period as a whole, but the Portfolio was negatively affected by the 10 unprecedented interest rate moves by the Federal Reserve (the Fed"). In January 2001, the Fed took the market by surprise with two rate reductions of 50 basis points each. (A basis point equals 1/100th of one percent.) The municipal yield curve steepened dramatically, and the Portfolio was not positioned to take advantage of the yield curve twist. The municipal market also suffered from poor liquidity during the reporting period, as institutions pulled back from participation. Duration was generally positive for the Portfolio's performance, as it held just slightly longer than the Index. In addition, the Portfolio's focus on high quality, including escrowed-to-maturity (ETM) and insured bonds was a definite plus, as was exposure to the high-performing states of California, Illinois and Washington, D.C. The Portfolio was insulated from the current utility crisis in California. However, because a continuing crisis and a state bailout could have a negative impact on California issues, the Portfolio plans to lower its market weighting of these obligations. For the coming months, we anticipate a flattening of the yield curve so that it more closely resembles the Treasury curve. Also, as the Fed action and the slowing U.S. economy are reflected in the municipal curve, the long end will probably show declining yields. We expect to continue to focus on sector rotation and security selection, utilizing our fundamental and quantitative analysis. Duration should continue to be slightly longer, but close to the benchmark. We expect to continue to overweight in the high quality, low volatility and high-yielding housing and sinking fund ETM bonds. We plan to also overweight revenue bonds, as this sector offers more yield and high quality in place of the risk of lower taxes that exists in the general obligation market. PACE MUNICIPAL FIXED INCOME INVESTMENTS--PORTFOLIO STATISTICS CHARACTERISTICS* 1/31/01 --------------------------------------------------------------- Duration 4.55 yrs Maturity 5.69 yrs Average Coupon 6.23% Net Assets ($mm) $49.5 Bonds 98.2% Other Assets in Excess of Liabilities 1.8% --------------------------------------------------------------- TOP 5 SECTORS* 1/31/01 --------------------------------------------------------------- Insured 30.2% Federal Agency-Backed 20.0 Housing 17.7 General Obligation 17.2 Revenue 9.4 --------------------------------------------------------------- Total 94.5% TOP 5 STATES* 1/31/01 --------------------------------------------------------------- Texas 11.0% California 9.1 Washington, D.C. 7.0 Washington 5.5 Alaska 5.4 --------------------------------------------------------------- Total 38.0% QUALITY DIVERSIFICATION** 1/31/01 --------------------------------------------------------------- AAA and Agency-Backed Securities 67.7% AA 21.1 A 11.2 --------------------------------------------------------------- Total 100.0% *Weightings represent percentages of net assets as of January 31, 2001. The Portfolio is actively managed and all holdings are subject to change. **Weightings represent percentages of portfolio assets as of January 31, 2001. The Portfolio is actively managed and all holdings are subject to change. 11 PACE GLOBAL FIXED INCOME INVESTMENTS ADVISORS: Rogge Global Partners plc (Rogge Global Partners") and Fischer Francis Trees & Watts, Inc. (and affiliates) (FFTW") PORTFOLIO MANAGER: Rogge Global Partners: 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 the Portfolio assets it manages in bonds of issuers 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 a 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. Rogge Global Partners generally sells securities that no longer meet these selection criteria or when it identifies more attractive investment opportunities and may also sell securities to adjust the average duration of the Portfolio assets it manages. FFTW INVESTMENT PROCESS: FFTW divides the investment universe into three major blocs (Europe, the United States and Japan) and analyzes in each bloc 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. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/01
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION(o) ------------------------------------------------------------------------------------------------------ Before Deducting Class A* N/A N/A N/A 3.42% Maximum Sales Charge Class C** N/A N/A N/A 4.02 or PACE program fee Class Y+ N/A N/A N/A 0.37 Class P# 2.91% 3.00% 2.66% 3.51 After Deducting Class A* N/A N/A N/A -0.76 Maximum Sales Charge Class C** N/A N/A N/A 3.27 or PACE program fee Class Y+ N/A N/A N/A 0.37 Class P# 2.14 1.46 1.13 1.97 Salomon Smith Barney World Government Bond Index (unhedged)++ 3.18 3.67 3.33 3.81 Lipper Global Income Funds Median 4.65 5.72 3.53 4.19 ------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2000, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--since inception -0.92%; Class C--since inception 3.24%; and Class P-- 1-year period, -2.74%; 5-year period 0.98%; and since inception 1.99%. (o) Inception: since commencement of issuance on August 24, 1995 for Class P shares, December 11, 2000 for Class A shares, December 1, 2000 for Class C shares, and January 16, 2001 for Class Y shares. Inception returns for 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% of the public offering price. Class A shares bear ongoing 12b-1 service fees. ** Maximum contingent deferred sales charge for Class C shares is 0.75% and 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 participants in certain investment programs that are sponsored by UBS PaineWebber and that may invest in UBS PaineWebber mutual funds, as well as the trustee of the UBS PaineWebber 401(k) Plus Plan. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. # 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 reflects 18 developed government bond markets. The performance is quoted in U.S. dollar terms (currency unhedged). Past performance does not predict future performance. 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. 12 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. The table depicts the performance of PACE Global Fixed Income Investments versus the Salomon Smith Barney World Government Bond Index (unhedged) and the Lipper Global Income Funds Median. It is important to note that PACE Global Fixed Income Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustrative purposes only. ADVISORS' COMMENTS ROGGE GLOBAL PARTNERS The slowdown in the U.S. economy in the third and fourth quarters of 2000 was one of the sharpest retrenchments in recent years -- affecting both the new and old economies. With the decline in the stock market that started in April 2000, the economy could find no levers to maintain its footing as orders dropped off steeply. This environment was positive for global bonds and negative for the U.S. dollar as compared with European currencies. The U.S. dollar gained strength against the Japanese Yen as the Japanese economy slowed almost as quickly as the American. The third quarter of 2000 started poorly for our portion of the Portfolio as we favored European currencies, and the euro tracked lower as the U.S. economy remained strong even in the face of a declining stock market. However, by the end of fourth quarter, our portion had regained its losses on the back of a stronger euro and lower global interest rates. During the period, we increased the duration of the portion of the Portfolio that we advise to capture the decline in bond yields in the U.S. and Europe. We maintained our large underweight position in Japanese bonds while decreasing our weight in the Japanese Yen. We maintained our long position in European currencies and increased our weighting in European bonds. We reduced our Emerging Markets exposure as we felt that economic conditions were becoming difficult for the Emerging Markets. We decreased our corporate bond exposure as we felt that the economic slowdown would hurt corporate creditworthiness. Looking forward, we believe that the risks to the U.S. economy remain real, with dislocations that cannot be solved by interest rate cuts alone. As a result, we are moving to underweight the U.S. bond market. Because the Japanese economy continues to stagnate, we remain underweight in the yen and in Japanese Government Bonds. However, European economies continue to be resilient in the face of economic slowdown elsewhere, with timely tax cuts and healthy financials that should attract foreign investors and support the euro. The euro remains well above its lows of last year and looks set to hold these gains. We favor European assets and, in particular, we favor countries offering a spread over the core German market. These countries include Norway, Greece and Poland. We still see downside risks for the global economy. As most developed countries have steep yield curves, we favor longer duration bonds. Over time, however, we will monitor global growth for signs of a pickup and shift our duration accordingly. FFTW As of October 10, 2000, FFTW assumed responsibility for managing a portion of the Portfolio. As the global economy slowed down in the latter half of 2000, the portion of the Portfolio that we advise was able to take advantage of opportunities both in directional risk and currency positions. This period proved to be a difficult environment for spread product, with spreads widening significantly during the fourth quarter. In January, the U.S. economy enjoyed a brief resurgence with strong equity markets and more positive consumption data. Also, the new administration's proposal of a large tax cut, combined with the 1.00% rate cut by the Fed, convinced many market participants that the slowdown would be a brief one, and that there would be an aggressive and coordinated effort from fiscal and monetary policies to prevent a recession. The positive turn that the U.S. took in January helped spread product globally, and the dollar was able to regain some of the ground it lost versus the euro in the final quarter of 2000. In the beginning of the third quarter, our portion was overweight in the U.S. market, with an overweight exposure concentrated in the longer end of the yield curve (10 and 30 year bonds). The position hurt incremental performance and both positions were moved to neutral; however, negative increment was netted out by the positive performance in Europe. We shifted from a neutral European duration position to an overweight position, which added to returns. In addition, within the European bloc, country selection had a positive impact on performance. In currencies, the negative impact of the short euro versus Swiss franc position was offset by the positive value of the short Swiss franc versus sterling position. With Japanese government bonds continuing to trade in a very narrow range, the overweight position in Japanese duration did not significantly affect performance. 13 In currencies, our portion of the Portfolio moved from an underweight to an overweight euro versus U.S. dollar; this shift had a positive impact. In addition, a short yen versus dollar allocation late in the fourth quarter added to incremental return. In credit markets, a brief overweight in U.S. mortgages detracted from December's performance, yet, even as the corporate market underperformed Treasurys, security and sector selection added to incremental return. Our portion began 2001 with an overweight in U.S. and European duration positions. Both of these positions detracted from return as yields rallied during Fed Chairman Alan Greenspan's senate testimony. Japan was cautiously neutral with a bullish bias as the market waited to hear more economic data from that region. In currencies, our portion of the Portfolio cut its short yen versus dollar as Japan stabilized. The euro versus dollar position was reversed in January to overweight the dollar against the faltering European currency and this position added to incremental performance. In spread sectors, an overweight in high grade corporates in the banking and finance sectors was added in addition to the overweight in U.S. agencies. PACE GLOBAL FIXED INCOME INVESTMENTS--PORTFOLIO STATISTICS CHARACTERISTICS* 1/31/01 --------------------------------------------------------------- Net Assets ($mm) $98.7 Number of Securities 52 QUALITY DIVERSIFICATION* 1/31/01 --------------------------------------------------------------- Cash & Equivalents 10.8% U.S. Government 12.5 AAA 36.3 AA 27.9 A 11.1 BBB 0.4 BB 1.0 --------------------------------------------------------------- Total 100.0% TOP 5 COUNTRIES* 1/31/01 --------------------------------------------------------------- United States 42.6% Germany 17.2 Japan 18.6 Canada 3.1 Netherlands 6.3 --------------------------------------------------------------- Total 87.8% *Weightings represent percentages of net assets as of January 31, 2001. The Portfolio is actively managed and all holdings are subject to change. 14 PACE LARGE COMPANY VALUE EQUITY INVESTMENTS ADVISORS: State Street Global Advisors (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 positive change is about to occur with potential to produce stock appreciation of 20% 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 forecast for growth rates and earnings estimates exceeds Wall Street expectations, or Westwood's forecasted price/earnings ratio is less than the forecasted growth rate. Westwood monitors the issuing companies and will sell a stock if Westwood expects limited future price appreciation or the projected price/earnings ratio exceeds the three-year growth rate. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/01
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION(o) ------------------------------------------------------------------------------------------------------ Before Deducting Class A* N/A N/A N/A 5.55% Maximum Sales Charge Class B** N/A N/A N/A 5.49 or PACE program fee Class C*** N/A N/A N/A 5.49 Class Y+ N/A N/A N/A 3.27 Class P# 9.37% 10.18% 11.83% 13.91 After Deducting Class A* N/A N/A N/A 0.80 Maximum Sales Charge Class B** N/A N/A N/A 0.49 or PACE program fee Class C*** N/A N/A N/A 4.49 Class Y+ N/A N/A N/A 3.27 Class P# 8.55 8.54 10.16 12.22 Russell 1000 Value Index++ 10.79 11.05 16.29 17.75 Lipper Multi-Cap Value Funds Median 11.22 17.03 13.60 13.63 ------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2000, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--since inception 0.57%; Class B--since inception 0.25%; Class C--since inception 4.25%; and Class P--1-year period, 0.95%; 5-year period 10.98%; and since inception 12.39%. (o) 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 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 six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum contingent deferred sales charge for Class C shares is 1% and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. 15 + The Portfolio offers Class Y shares to a limited group of eligible investors, including participants in certain investment programs that are sponsored by UBS PaineWebber and that may invest in UBS PaineWebber mutual funds, as well as the trustee of the UBS PaineWebber 401(k) Plus Plan. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. # 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. 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. The table depicts the performance of PACE Large Company Value Equity Investments versus the Russell 1000 Value Index and the Lipper Multi-Cap Value Funds Median. It is important to note that PACE Large Company Value Equity Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustrative purposes only. ADVISORS' COMMENTS SSGA As of October 10, 2000, SSgA assumed responsibility for managing a portion of the Portfolio. The Federal Reserve Board's (the Fed") monetary policy had a great influence on the stock market during 2000 and into 2001. The Fed raised interest rates three times from January 2000 through May 2000. These three interest-rate hikes came on the heels of three rate raises in 1999. The Fed's tight monetary policy slowed the pace of economic growth; and in January 2001, the Fed began cutting interest rates. The slowdown in the rate of economic growth had a direct impact on businesses. Over the last four to five months, companies have reported lower-than-expected earnings and have warned of reduced profits and sales. The market's reaction to this situation was swift and severe, and valuations, which rose to unrealistic levels early in 2000, declined precipitously. As investors began to focus on real earnings and cash flow, many stocks were found wanting. As a result, returns on U.S. equities for 2000 were disappointing in the fourth quarter. However, returns on value stocks outpaced those of growth stocks in 2000, although this situation reversed course a bit in January 2001. Market volatility in the fourth quarter of 2000 was intense. Some valuations spiked to near record levels. This contrasted sharply with the lows of August. Market breadth, the number of companies participating in the stock market's activity, continued to improve in the fourth quarter compared with the extreme narrow market breadth of early 2000. Our stock evaluation process focuses on stocks that we believe have attractive earnings growth prospects and that are good values compared to their industry peers. During the period, the portion of the Portfolio we advise tightened its risk controls in areas where the recent earnings cycle has been particularly harsh (high technology manufacturing, semiconductors, software and hardware). This is a short-term modification that is likely to be reversed when conditions in these sectors change. These changes were made toward the end of the reporting period. As a result, it is too soon to determine the impact they will have on our portion of the Portfolio. The value-growth cycle should be less extreme in the future, but it is likely that volatility will continue to be high over the short term, as there is high sensitivity in the market to earnings short-falls. We believe that our portion is well positioned for the coming months. As always, our portion will continue to try to purchase securities that we believe are undervalued relative to their industry peers and that have improving earnings growth prospects. Controlling risk will continue to be a large part of our investment process. ICAP The equity market had a very difficult year in 2000. Stocks in the technology, media and telecommunications sectors led the market's weakness. Economic growth in the United States and around the world slowed considerably. In comparison to the beginning of 2000, market dynamics at the beginning of 2001 were dramatically changed. In January 2001, the Federal Reserve Board lowered interest rates in an attempt to stimulate U.S. economic growth. We expect continued interest-rate declines over the next several months. The slight increase in retail and auto sales that took place in January 2001 appears to have reversed course. In managing our portion of the Portfolio, we established several strategic investment themes, one of which is targeting the targets." This strategy focuses on companies that meet all of our portion's financial criteria and, at the 16 same time, are candidates for acquisition by larger competitors. Targeting the targets was positive for performance, as several companies in our portion were acquired by larger companies. Associates First Capital was acquired by Citigroup (3.92%),* Seagram was taken over by Vivendi (sold during the period), Litton Industries by Northrup Grumman (0.61%)* and Texaco by Chevron (0.27%).* Going forward in 2001 we expect that there will be continued Fed interest-rate cuts, as well as interest-rate declines by central banks around the world. Growth in the first half of 2001 is likely to be minimal but is expected to build in the second half of the year. Corporate profits may continue to be weak and unemployment may rise slightly in the U.S. There is a strong possibility that there will be a federal income tax reduction, and this should stimulate economic growth. It is likely that consumer and business confidence will continue to decline in the first half of the year. Commodity prices have begun to fall and the rate of inflation may also drop. We will continue our team-driven, bottom-up stock picking process, which focuses on companies that meet our financial criteria but whose stocks we believe are undervalued in the marketplace. We will continue to follow our investment theme of targeting the targets. In addition, we have implemented an additional investment theme called picking up the pieces." This theme takes advantage of selected quality stocks in the technology, media and telecommunications sectors that have suffered extreme price declines but whose potential and financial strength appear intact. WESTWOOD Uncertainty about the outcome of the Presidential election, fears of a recession rather than a relatively modest economic slowdown and round after round of negative earnings announcements dominated market sentiment during the fourth quarter of 2000. As a result, the stock market was weak. Technology stocks, which had been in decline for most of the year, continued to lose ground. Toward the end of 2000, expectations for Federal Reserve Board interest-rate cuts led to gains in old economy" stocks. The Fed trimmed rates twice in January, each time by 0.5%. As we moved into 2001, the market was buoyed by annual cash flows from year-end bonuses into IRAs and 401(k) plans. As investors began to look forward to a rebound in economic growth in the second half of 2001, technology and communications stocks returned to favor. The financial, energy and utility sectors of the market were our portion of the Portfolio's largest areas of investment. Financial stocks were strong performers, because declining interest rates are generally positive for the profits of banks and other financial institutions. Investments in the capital goods sector, such as Deere (0.62%),* and in the basic materials area, such as Alcoa (0.65%),* helped our portion of the Portfolio participate in the relatively strong performance of old economy stocks. Our portion's low weighting in the technology sector was positive for performance because technology stocks struggled for most of the period. In managing our portion, we reversed our negative outlook on financial stocks. We believe there will be a soft landing for the economy (a slowdown in economic growth but no recession) and lower interest rates. Such an environment should be favorable for financial companies. As a result, we increased financial positions. We purchased Bank of America (0.98%),* KeyCorp (1.10%)* and Sun Trust Bank (0.67%).* These companies were strong contributors to performance during the period. While we were cautious about technology, the downturn in technology stock prices led to reasonable valuations by the end of the period. Therefore, we added Apple (0.24%)* and Motorola (0.31%).* These stocks allowed us to participate in the advances technology stocks made in January. While our portion of the Portfolio was overweighted in the energy sector for most of the period, we reduced exposure to energy stocks in January. The overweighting in energy held back performance, as stocks in this sector underperformed the broader market. Looking ahead, we expect economic activity in the United States to slow in response to restrained consumer spending and lower capital expenditures by businesses. We believe manufacturing and housing activity will shift to lower levels. Although productivity gains have been responsible for the performance of many stocks in recent years, in the future we expect that productivity gains will fail to offset rising labor costs. This situation could lead to lower corporate profits. We believe energy prices are likely to decline but remain at relatively high levels. This situation should be positive for energy stocks. We expect multinational corporations to benefit from a weaker dollar, especially in relation to the euro, and for the Fed to lower interest rates incrementally throughout the year. *Weightings represent percentages of net assets as of January 31, 2001. The Portfolio is actively managed and its weightings will vary over time. 17 We have a long-term outlook for our segment of the Portfolio and believe the current positions reflect the areas that should perform well over the next 12 months. We will make adjustments to our portion in response to new research or to control risk. PACE LARGE COMPANY VALUE EQUITY INVESTMENTS--PORTFOLIO STATISTICS CHARACTERISTICS* 1/31/01 --------------------------------------------------------------- Size of Portfolio ($mm) $373.0 Number of Securities 168 Stocks 97.6% Cash & Equivalents and Liabilities in Excess of Other Assets 2.4% --------------------------------------------------------------- TOP TEN HOLDINGS* 1/31/01 --------------------------------------------------------------- Citigroup 3.9% Exxon Mobil 3.0 Verizon Communications 2.8 SBC Communications 2.0 Merck 1.9 IBM 1.7 Fannie Mae 1.7 Bristol-Myers Squibb 1.6 Sears Roebuck & Co 1.4 Conoco 1.2 --------------------------------------------------------------- Total 21.2% TOP FIVE SECTORS* 1/31/01 --------------------------------------------------------------- Financials 29.0% Utilities 12.9 Consumer Cyclicals 10.5 Energy 10.1 Healthcare 8.0 --------------------------------------------------------------- Total 70.5% *Weightings represent percentages of net assets as of January 31, 2001. The Portfolio is actively managed and all holdings are subject to change. 18 PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS ADVISORS: Alliance Capital Management L.P. (Alliance Capital") and State Street Global Advisors (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 Portfolo. Alliance Capital ranks each stock in its investment universe based on its analysts' assessments and fundamental research that includes six measures of earnings growth and valuation. Alliance normally invests 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 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 ranks all companies within the investable universe from top to bottom based on their relative attractiveness. 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. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/01
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION(o) ----------------------------------------------------------------------------------------------------- Before Deducting Class A* N/A N/A N/A -1.16% Maximum Sales Charge Class B** N/A N/A N/A -1.30 or PACE program fee Class C*** N/A N/A N/A -1.30 Class P# -16.66% -11.22% 16.89% 17.38 After Deducting Class A* N/A N/A N/A -5.61 Maximum Sales Charge Class B** N/A N/A N/A -6.23 or PACE program fee Class C*** N/A N/A N/A -2.28 Class P# -17.28 -12.54 15.15 15.64 Russell 1000 Growth Index++ -16.97 -12.98 18.95 20.06 Lipper Large-Cap Growth Funds Median -14.96 -10.47 17.93 14.65 -----------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2000, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--since inception -10.74%; Class B--since inception -11.29%; Class C--since inception -7.55%; and Class P--1-year period, -21.26%; 5-year period 14.50%; and since inception 14.72%. (o) Inception: since commencement of issuance on August 24, 1995 for Class P shares and November 27, 2000 for Class A, B and C shares. Inception returns for 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 six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum contingent deferred sales charge for Class C shares is 1% and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. # 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. 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. The table depicts the performance of PACE Large Company Growth Equity Investments versus the Russell 1000 Growth Index and the Lipper Large-Cap Growth Funds Median. It is important to note that PACE Large Company Growth Equity Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustrative purposes only. 19 ADVISORS' COMMENTS ALLIANCE CAPITAL The tone of the U.S. equity markets changed dramatically during the six-month period ending January 31, 2001. The pace of economic growth decelerated rapidly, precipitating a similar decline in the rate of growth for corporate profits. Technology stocks led the market lower, exacerbating the deterioration in consumer confidence that had already been fueled by the contentious presidential election and slowing economic growth. The 50 basis point Fed Funds rate reduction on January 3rd - almost a month before the Federal Reserve Board's (the Fed") regularly scheduled meeting - surprised the market and produced a strong month for equities. Although the January rally mitigated the damage, the Russell 1000 Growth Index fell 16.97% during the six-month period and the S&P 500 lost 3.98%. For the six months ended January 31, 2001, the Portfolio's Class P shares declined 16.66% (before the deduction of PACE program fee; -17.28% after the deduction of the maximum PACE program fee), compared to the Russell 1000 Growth Index return of -16.97% and the Lipper Large-Cap Growth Funds Median return of -14.96%. Although we were underweight in technology versus the benchmark in the portion of the Portfolio that we manage, our technology holdings caused most of the absolute decline in our portion of the Portfolio. Our overweight in financials enhanced performance, as did individual holdings such as Tyco (2.93%),* Harley Davidson (1.40%),* Colgate-Palmolive (1.10%),* Schering-Plough (1.94%),* Pfizer (5.15%),* and Kohl's (2.66%).* We used this period of extreme volatility to add to leadership companies with sustainable competitive advantages, companies that should produce superior earnings growth over the next several years. Our portion of the Portfolio is currently underweighted in technology, healthcare, consumer staples, energy, and utilities. It is overweighted in consumer services, financials, and industrial companies. In the near term, we believe that the markets will be characterized by unusual volatility, sluggish economic and profit growth, and subdued inflation. We believe the Fed will lower rates aggressively, leading to accelerating growth late in 2001. This environment should be favorable to growth stock investing. Longer-term, stock prices should track earnings growth, and we believe we have positioned our portion of the Portfolio in companies with superior and sustainable growth. SSGA As of October 10, 2000, SSgA assumed responsibility for managing a portion of the Portfolio. The Federal Reserve Board's (the Fed") monetary policy had a great influence on the stock market during 2000 and into 2001. The Fed raised interest rates three times from January 2000 through May 2000. These three interest-rate hikes came on the heels of three rate raises in 1999. The Fed's tight monetary policy slowed the pace of economic growth; and in January 2001, the Fed began cutting interest rates. The slowdown in the rate of economic growth had a direct impact on businesses. Over the last four to five months, companies have reported lower-than-expected earnings and have warned of reduced profits and sales. The market's reaction to this situation was swift and severe; and valuations, which rose to unrealistic levels early in 2000, declined precipitously. As investors began to focus on real earnings and cash flow, many stocks were found wanting. The performance of large cap growth stocks was weak over the past several months, as market activity was influenced significantly by sales and profit warnings in a variety of businesses. Market volatility in the fourth quarter of 2000 was intense. Some valuations spiked to near record levels, contrasting sharply with the lows reached in August. Market breadth, the number of companies participating in the stock market's activity, continued to improve in the fourth quarter compared with the extreme narrow market breadth of early 2000. Our stock evaluation process focuses on stocks that have attractive earnings growth prospects and that are good values compared to their industry peers. Recent market volatility has caused us to tighten our risk controls in areas where the recent earnings cycle has been particularly harsh (high technology manufacturing, semiconductors, software and hardware). This is a short-term modification that is likely to be reversed when conditions in these sectors change. These changes were made toward the end of the reporting period. As a result, it is too soon to determine the impact they will have on our portion of the Portfolio. The value-growth cycles should be less extreme going forward, but it is likely *The percentages represent the Portfolio weightings as of January 31, 2001. The Portfolio is actively managed and its composition will vary over time. 20 that volatility will continue to be high over the short term, as there is high sensitivity in the market to earnings short-falls. We believe that our portion is well positioned for the coming months. As always, our portion will continue to purchase securities that we believe are undervalued relative to their industry peers and that have improving earnings growth prospects. Controlling risk will continue to be a large part of the investment process. PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS--PORTFOLIO STATISTICS CHARACTERISTICS* 1/31/01 --------------------------------------------------------------- Net Assets ($mm) $384.0 Number of Securities 122 ADRs, % of Portfolio 1.2% Stocks 98.4% Cash & Equivalents 1.6% --------------------------------------------------------------- TOP FIVE SECTORS* 1/31/01 --------------------------------------------------------------- Technology 32.0% Consumer Cyclicals 17.8 Healthcare 16.7 Financials 16.6 Utilities 5.9 --------------------------------------------------------------- Total 89.0% TOP TEN STOCKS* 1/31/01 --------------------------------------------------------------- General Electric 5.8% Cisco Systems 5.2 Pfizer 5.2 AOL Time Warner 3.8 Intel 3.1 Tyco International 2.9 Solectron 2.9 Citigroup 2.8 Kohl's 2.7 Oracle 2.6 --------------------------------------------------------------- Total 37.0% *Weightings represent percentages of net assets as of January 31, 2001. The Portfolio is actively managed and its weightings will vary over time. 21 PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS ADVISORS: Ariel Capital Management, Inc. (Ariel") and ICM Asset Management, Inc. (ICM") PORTFOLIO MANAGERS: Ariel: Eric T. McKissack; ICM: Kevin A. Jones, CFA and the ICM Investment 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 that have 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 underresearched. In deciding which stocks to buy for its portion of 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. Regardless of which approach is used to identify stock candidates, ICM then applies fundamental research analysis. ICM generally sells stocks that meet price objectives, no longer meet its selection criteria, are at risk for fundamental deterioration or when it identifies more attractive investment opportunities. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/01
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION(o) ------------------------------------------------------------------------------------------------------ Before Deducting Class A* N/A N/A N/A 14.88% Maximum Sales Charge Class B** N/A N/A N/A 15.15 or PACE program fee Class C*** N/A N/A N/A 14.74 Class Y+ N/A N/A N/A 16.80 Class P# 21.38% 27.00% 12.07% 11.10 After Deducting Class A* N/A N/A N/A 9.68 Maximum Sales Charge Class B** N/A N/A N/A 10.15 or PACE program fee Class C*** N/A N/A N/A 13.74 Class Y+ N/A N/A N/A 16.80 Class P# 20.47 25.11 10.40 9.44 Russell 2500 Value Index++ 15.21 27.80 14.41 14.60 Lipper Small-Cap Value Funds Median 15.49 27.36 12.94 12.32 -----------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2000, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--since inception 2.26%; Class B--since inception 2.43%; Class C--since inception 6.05%; Class Y--since inception 8.84%; and Class P--1-year period, 10.10%; 5-year period 8.94%; and since inception 8.19%. (o) 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 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 six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum contingent deferred sales charge for Class C shares is 1% and 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 participants in certain investment programs that are sponsored by UBS PaineWebber and that may invest in UBS PaineWebber mutual funds, as well as the trustee of the UBS PaineWebber 401(k) Plus Plan. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. # 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. 22 Past performance does not predict future performance. 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. The table depicts the performance of PACE Small/Medium Company Value Equity Investments versus the Russell 2500 Value Index and the Lipper Small-Cap Value Funds Median. It is important to note that PACE Small/Medium Company Value Equity Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustrative purposes only. ADVISORS' COMMENTS ARIEL AND ICM As of October 10, 2000, ICM assumed responsibility for managing a portion of the Portfolio. During the period, volatility in the equity markets and the slowdown in the rate of economic growth had a direct impact on businesses. Over the last four to five months, many companies reported lower-than-expected earnings and have warned of reduced profits and sales. The market's reaction to this situation was swift and severe; and valuations, which rose to unrealistic levels early in 2000, declined precipitously. As investors began to focus on real earnings and cash flow, many stocks were found wanting. In the last two quarters of 2000, value stocks made a potent comeback after a long and difficult spell. Small and mid-sized issues -- the stocks that had been the most scorned and therefore the cheapest -- most benefited from a newfound investor sensitivity to price. For the six-month period ended January 31, 2001, the Portfolio's Class P shares returned 21.38% (before the deduction of the PACE program fee; 20.47% after the deduction of the maximum PACE program fee), compared to the Lipper Small-Cap Value Funds Median return of 15.49% and the Russell 2500 Value Index return of 15.21%. The Portfolio benefited from its value stance and also from strong stock selection. Stocks making particularly noteworthy contributions to the Portfolio's robust six-month return included CenturyTel and International Game Technology. We are cautious that both the economy and corporate earnings will continue to disappoint negatively, thus leading to continued volatility. Earnings growth for small companies should be superior to that of larger companies. This, coupled with continued low historical valuations, makes us optimistic about the prospects for our style. PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS--PORTFOLIO STATISTICS CHARACTERISTICS* 1/31/01 TOP FIVE SECTORS* 1/31/01 -------------------------------------------------------------------------------- Price/Earnings Ratio 15.0x Consumer Cyclicals 30.2% Price/Book Ratio 2.0x Financials 16.7 Dividend Yield 1.5% Technology 10.9 Net Assets ($mm) 231.4 Basic Materials 8.8 Number of Securities 78 Capital Goods 7.8 Stocks 93.1% ---- Cash & Equivalents 6.9% Total 74.4% -------------------------------------------------------------------------------- TOP 10 STOCKS* 1/31/01 ------------------------------------------- Leggett & Platt 2.9% MBIA 2.3 McDermott Intl 2.0 Rouse 2.0 Office Depot 1.9 CenturyTel 1.9 Herman Miller 1.9 Louisiana-Pacific 1.9 Hasbro 1.8 International Game Technology 1.8 ------------------------------------------- Total 20.4% *Weightings represent percentages of net assets as of January 31, 2001. The Portfolio is actively managed and all holdings are subject to change. 23 PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS 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 and that have 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 a 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, are at risk for fundamental deterioration or when it identifies more attractive investment opportunities. AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 1/31/01
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION(o) ----------------------------------------------------------------------------------------------------- Before Deducting Class A* N/A N/A N/A -5.29% Maximum Sales Charge Class B** N/A N/A N/A -5.35 or PACE program fee Class C*** N/A N/A N/A -5.41 Class P# -17.70% -3.77% 21.05% 17.98 After Deducting Class A* N/A N/A N/A -9.56 Maximum Sales Charge Class B** N/A N/A N/A -10.08 or PACE program fee Class C*** N/A N/A N/A -6.36 Class P# -18.31 -5.20 19.24 16.23 Russell 2500 Growth Index++ -9.21 -10.15 13.52 13.29 Lipper Mid-Cap Growth Funds Median -10.82 -8.79 16.89 13.41 -----------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2000, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--since inception -10.61%; Class B--since inception -11.13%; Class C--since inception -7.39%; and Class P--1-year period, -9.46%; 5-year period 18.00%; and since inception 16.28%. (o) Inception: since commencement of issuance on August 24, 1995 for Class P shares and November 27, 2000 for Class A, B and C shares. Inception returns for 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 six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum contingent deferred sales charge for Class C shares is 1% and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. # 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 Class P shares. ++ The Russell 2500 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. 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. The table depicts the performance of PACE Small/Medium Company Growth Equity Investments versus the Russell 2500 Growth Index and the Lipper Mid-Cap Growth Funds Median. It is important to note that PACE Small/Medium Company Growth Equity Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustrative purposes only. ADVISOR'S COMMENTS Concerns about future economic growth resulted in negative returns for many major indices in the six-month period ended January 31, 2001. Growth stocks were particularly hard hit as investors' concerns heightened over growth companies' ability to deliver continued increases in sales and earnings in the face of a weakening overall economy. The Nasdaq Composite Index was down almost 30% during the period, and was at one point off more than 50% from its all-time high set in March 2000. (More than 65% of the Portfolio's stocks are traded on the Nasdaq exchange.) 24 The performance of the Portfolio's Class P shares generally followed the movement of the overall market, losing 17.70% (before the deduction of the PACE program fee; -18.31% after the deduction of maximum PACE program fee) for the six-month period. The Portfolio's Class P shares underperformed the benchmark Russell 2500 Growth Index, which lost 9.21% during the period. Over the longer term, however, the Portfolio's Class P shares have enjoyed strong performance - with an annualized return of 21.05% (before the deduction of PACE program fee; 19.24% after the deduction of maximum PACE program fee) over the five years ended January 31, 2001. By comparison, the Russell 2500 Growth Index's five year annualized return was 13.52%. Technology holdings represented the Portfolio's largest weighting during the period. Many of the technology holdings that contributed to the positive performance over the longer term were the issues hardest hit during the semiannual period, with the overall sector losing 28% as measured by the Nasdaq 100 Index. Tut Systems and New Era of Networks (both sold during the period) were two of our worst performing issues during the period, as both issued warnings about future growth prospects. We have exited from both positions because of these reduced expectations. Despite overall market weakness, there were still some companies that posted sizable gains during the period. Manugistics Group (1.04%)* and NetIQ (2.45%)* were each up significantly during the period, with expectations for continuing earnings and revenue growth. As the market began to anticipate an overall economic slowdown, stocks in other sectors were also affected. Radio One (sold during the period) was down substantially during the period, a drop that was based on forecasts of a slowing of radio advertising revenues, and retailers such as Tweeter Home Entertainment (0.50%)* and Dollar Tree Stores (2.16%)* also dropped on the announcement that they probably would not see previously expected sales numbers. Financial stocks, such as Doral Financial Corp. (1.17%)* and Dime Bancorp (1.49%),* were among the best performing holdings during the period. These stocks rose on the expectation of future Federal Reserve interest rate cuts. We increased our financial services weightings over the course of the period. We think the recent signs of a slowing economy will prove to be correct. Near-term growth is expected to fall short of the levels posted in recent years. Even in a slowing economy, however, some companies should continue to post gains in sales and earnings. We plan to maintain our focus on those companies most likely to deliver these gains. PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS--PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/01 TOP FIVE SECTORS* 1/31/01 ---------------------------------------------------------------------------------------------- Price/Earnings Ratio (weighted average) 28.93x Technology 34.0% Price/Book Ratio (weighted average) 5.13x Consumer Cyclicals 33.2 Net Assets ($mm) 274.1 Financials 8.2 Number of Securities 76 Healthcare 7.7 Stocks 90.5% Utilities 5.2 Cash and Other Assets ---- in Excess of Liabilities 9.5% Total 88.3% ----------------------------------------------------------------------------------------------
TOP 10 HOLDINGS* 1/31/01 ------------------------------------------------------ Applied Micro Circuits 3.7% Micrel 3.6 Veritas Software 3.2 Jack Henry & Associates 2.9 CEC Entertainment 2.6 Mettler-Toledo International 2.5 NetIQ 2.5 Network Appliance 2.4 XO Communications 2.3 Cheesecake Factory 2.2 ------------------------------------------------------ Total 27.9% *Weightings represent percentages of net assets as of January 31, 2001. The Portfolio is actively managed and all holdings are subject to change. 25 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. The advisor looks for companies that exhibit strong fundamentals and attractive valuations based on estimates of future earnings. In making country allocation decisions, the advisor considers such factors as economic and political stability, breadth and liquidity of the market, the nature of local investors, the currency outlook, valuation 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 1/31/01
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION(o) ------------------------------------------------------------------------------------------------------ Before Deducting Class A* N/A N/A N/A -0.46% Maximum Sales Charge Class B** N/A N/A N/A -0.20 or PACE program fee Class C*** N/A N/A N/A -0.26 Class Y+ N/A N/A N/A 1.80 Class P# -11.66% -14.50% 8.19% 8.82 After Deducting Class A* N/A N/A N/A -4.95 Maximum Sales Charge Class B** N/A N/A N/A -5.19 or PACE program fee Class C*** N/A N/A N/A -1.26 Class Y+ N/A N/A N/A 1.80 Class P# -12.32 -15.77 6.57 7.20 MSCI Europe, Australasia, Far East (EAFE) Index++ -6.47 -8.09 7.34 8.04 Lipper International Funds Median -8.70 -10.98 8.24 7.13 ------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2000, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--since inception -5.32%; Class B--since inception -5.87%; Class C--since inception -1.91%; and Class P--1-year period, -21.52%; 5-year period 7.09%; and since inception 7.18%. (o) 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 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 six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum contingent deferred sales charge for Class C shares is 1% and 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 participants in certain investment programs that are sponsored by UBS PaineWebber and that may invest in UBS PaineWebber mutual funds, as well as the trustee of the UBS PaineWebber 401(k) Plus Plan. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 distribution and service fees. # 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. 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. The table depicts the performance of PACE International Equity Investments versus the MSCI EAFE Index and the Lipper International Funds Median. It is important to note that PACE International Equity Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustrative purposes only. 26 ADVISOR'S COMMENTS Concerns about the prospects of a recession in the United States and of a global economic downturn dominated international markets during the six-month period ended January 31, 2001. As a result, equity markets were volatile. For the six months ended January 31, 2001, the Portfolio's Class P shares underperformed its benchmark, the MSCI EAFE Index. During the period, we built up the Portfolio's weighting in Japan and reduced its weighting in Europe. This strategy held back the Portfolio's return, as disappointing economic news in Japan triggered an aggressive stock market sell-off and a downturn in the value of the yen in December. In contrast, European markets and the euro moved ahead. When selecting stocks for the Portfolio, we favored growth companies. During the period, global technology and media companies accounted for the Portfolio's top 20 holdings. This sector emphasis had a negative impact on performance. Over the period, Japanese stocks such as NTT (1.75%),* Canon (1.38%),* Sony (0.66%),* Secom (1.03%),* Takefuji (0.60%),* Fujitsu (0.58%)* and Hitachi (0.98%)* declined sharply. The Portfolio's European holdings also suffered from weakness in technology-related stocks, such as Ericsson (2.27%)* and Marconi (0.78%),* and from disappointing results from software manufacturers Sage (0.88%)* and Sema (sold during the period). The downturn in technology stocks also had a negative effect on the Portfolio's smaller markets. Technology stocks in Israel (Nice Systems [0.10%]),* South Africa (Softline [sold during the period])* and China (Hong Kong) (Unicom [0.67%])* mirrored the hard-hit Nasdaq stocks. Over the period, we broadened the Portfolio's sector bias and reduced its exposure to technology companies. In the months ahead, the crosswinds of slower global growth and improving liquidity are likely to dominate the financial markets. Further Fed interest-rate cuts are expected, but if the economic downturn in the United States continues beyond the summer, the financial markets are likely to continue to be volatile. While a technical recession may be likely in the United States, we believe it will be short-lived. We believe recovery will be evident by year-end, even though it may be mild and may not generate substantial corporate earnings growth. We have positioned the Portfolio to benefit from an improving economy. Our focus, within a broadly neutral sector strategy, is on careful stock selection. PACE INTERNATIONAL EQUITY INVESTMENTS--PORTFOLIO STATISTICS
CHARACTERISTICS* 1/31/01 REGIONAL ALLOCATION* 1/31/01 -------------------------------------------------------------------------------- Net Assets ($mm) $237.2 Europe 61.1% Number of Securities 109 Asia 24.4 Equities 92.4% Emerging Markets 7.4 Cash & Equivalents 7.1% Cash & Equivalents 7.1 Preferred Stock 0.5% ----- Total 100.0% -------------------------------------------------------------------------------- TOP FIVE COUNTRIES* 1/31/01 TOP FIVE SECTORS* 1/31/01 Japan 22.8% Consumer Cyclicals 42.6% United Kingdom 18.2 Financials 24.5 France 14.5 Technology 13.4 Netherlands 7.0 Capital Goods 7.8 Spain 4.7 Basic Materials 5.7 -------------------------------------------------------------------------------- Total 67.2% Total 94.0%
TOP TEN STOCKS* 1/31/01 ---------------------------------------- Vodafone 3.6% GlaxoSmithKline 3.2 VNU 2.7 Total Fina Elf 2.4 Aventis 2.4 AXA 2.3 Vivendi Universal 2.3 Ericsson 2.3 Suez Lyonnaise des Eaux 2.1 Telefonica 2.0 ---------------------------------------- Total 25.3% *Weightings represent percentages of net assets as of January 31, 2001. The Portfolio is actively managed and all holdings are subject to change. 27 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. SIMNA allocates the Portfolio's assets among emerging market countries based on its assesment 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. SIMNA's evaluation of securities 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 1/31/01
6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION(o) ------------------------------------------------------------------------------------------------------ Before Deducting Class A* N/A N/A N/A 6.11% Maximum Sales Charge Class B** N/A N/A N/A 13.89 or PACE program fee Class C*** N/A N/A N/A 14.02 Class P# -12.88% -27.13% -3.75% -2.13 After Deducting Class A* N/A N/A N/A 1.36 Maximum Sales Charge Class B** N/A N/A N/A 8.89 or PACE program fee Class C*** N/A N/A N/A 13.02 Class P# -13.53 -28.22 -5.18 -3.59 MSCI Emerging Markets Free (EMF) Index++ -9.58 -21.55 -3.01 -1.88 Lipper Emerging Markets Funds Median -11.46 -22.08 -1.76 -2.23 ------------------------------------------------------------------------------------------------------
Average annual total returns for periods ended December 31, 2000, after deduction of the maximum sales charge or PACE program fee, were as follows: Class A--since inception -10.12%; Class B--since inception -3.91%; Class C--since inception 0.65%; and Class P--1-year period, -37.40%; 5-year period -5.70%; and since inception -5.76%. (o) 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 and December 1, 2000 for Class C shares. Inception returns for 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 six years. Class B shares bear ongoing 12b-1 distribution and service fees. *** Maximum contingent deferred sales charge for Class C shares is 1% and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 distribution and service fees. # 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. 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. The table depicts the performance of PACE International Emerging Markets Equity Investments versus the MSCI EMF Index and the Lipper Emerging Markets Funds Median. It is important to note that PACE International Emerging Markets Equity Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustrative purposes only. ADVISOR'S COMMENTS Concerns about slower global economic growth, higher energy prices and weak corporate profit forecasts dominated international markets over the six-month period ended January 31, 2001. Emerging markets remained volatile and 28 constrained throughout the period due to continued uncertainty about the global economy and a continuing concern about the possibility of a U.S. recession. For the period, the Portfolio's Class P shares slid 12.88% (before the deduction of the PACE program fee; -13.53% after the deduction of the maximum PACE program fee), compared to a loss of 9.58% for its benchmark, the MSCI Emerging Markets Index. In the Europe, Middle East and Africa region (EMEA) we were generally cautious. Earlier in the period we benefited from positions in Russia's oil sector, although by December we reduced our positions following declines in the price of oil. We continued to reduce our holdings in Israel due to the economic slowdown, in part caused by the disintegration of the peace process. Our positions in Turkey were generally positive as they benefited from the government's commitment to stabilization and the containment of inflation. Political concerns, weakness in the technology sector and disappointment about the pace of economic reforms weighed heavily on the Asian markets. Nevertheless, there were some compelling investments in the region. In China, we emphasized telecommunications stocks, and in Hong Kong and Singapore we favored the property markets. We reduced investments in Taiwan and Thailand and increased the Portfolio's position in India, where earnings forecasts are relatively strong. In Latin America, we favored Brazil which has been benefiting from strong economic recovery and broad earnings support. Argentina's troubles over the impact of a possible devaluation and default have been cause for concern and for most of the period we were underweight. In December, though, details of an International Monetary Fund (IMF) support package were unveiled. The Portfolio also began increasing exposure to Mexico, where valuations reflect much of the short-term concerns about U.S. economic growth. The two 50 basis point (a basis point equals 1/100 of one percent) cuts by the Federal Reserve (the Fed") in January 2001 are expected to help the U.S. economy to recover in the second half of 2001, which would be positive for emerging markets. However, in the short term, we expect markets to be constrained by investors' continuing concerns about the possibility of a U.S. recession. PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS--PORTFOLIO STATISTICS CHARACTERISTICS* 1/31/01 REGIONAL ALLOCATION* 1/31/01 ------------------------------------------------------------------------------- Net Assets ($mm) $83.9 Asia 46.3% Number of Securities 154 Latin America 25.7 Equities (common and preferred Europe/Mid East/Africa 22.4 stocks, warrants and rights) 94.4% Cash & Equivalents 5.6 Cash & Equivalents 5.6% ----- Total 100.0% ------------------------------------------------------------------------------- TOP FIVE COUNTRIES* 1/31/01 -------------------------------------------------- Brazil 13.5% Korea 12.5 Taiwan 11.7 Mexico 9.2 South Africa 7.8 -------------------------------------------------- Total 54.7% TOP TEN STOCKS* 1/31/01 -------------------------------------------------- Samsung Electronics 4.1% Telefonos de Mexico 3.5 Taiwan Semiconductor Manufacturing 2.8 China Mobile 2.7 Infosys Technologies 2.7 China Unicom 2.6 Check Point Software Technologies 2.3 Korea Telecom 1.9 SK Telecom 1.6 Korea Electric Power Corporation 1.6 -------------------------------------------------- Total 25.8% *Weightings represent percentages of net assets as of January 31, 2001. The Portfolio is actively managed and all holdings are subject to change. 29 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MONEY MARKET INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2001 (UNAUDITED)
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- U.S. GOVERNMENT AGENCY OBLIGATIONS--15.31% $2,000 Federal Home Loan Bank ............................... 01/29/02 5.110% $ 1,998,215 1,000 Federal Home Loan Mortgage Corp. ..................... 01/03/02 5.180 951,653 1,500 Federal National Mortgage Association ................ 11/16/01 to 01/11/02 5.035 to 6.600 1,451,888 7,000 Student Loan Marketing Association ................... 02/06/01 5.564 to 5.614* 6,998,626 ----------- Total U.S. Government Agency Obligations (cost--$11,400,382) .. 11,400,382 ----------- CERTIFICATES OF DEPOSIT--10.08% YANKEE--10.08% 2,000 Banco Bilbao Vizcaya Argentaria, S.A. ................ 04/04/01 5.560 2,000,034 1,500 Commerzbank AG ....................................... 06/22/01 to 07/23/01 7.075 to 7.090 1,499,937 1,000 Dexia Bank S.A. ...................................... 09/21/01 6.690 999,759 1,500 Svenska Handelsbanken ................................ 05/02/01 to 06/20/01 6.995 to 7.100 1,500,152 500 Union Bank of Switzerland AG ......................... 07/19/01 7.030 499,956 1,000 Westpac Banking Corp. ................................ 05/14/01 6.815 1,000,000 ----------- Total Certificates of Deposit (cost--$7,499,838) .............. 7,499,838 ----------- COMMERCIAL PAPER@--61.31% ASSET BACKED-BANKING--2.69% 2,000 Atlantis One Funding Corp. ........................... 02/01/01 5.880 to 6.030 2,000,000 ----------- ASSET BACKED-MISCELLANEOUS--19.05% 2,000 Asset Securitization Cooperative Corp. ............... 04/12/01 5.450 1,978,806 2,440 Delaware Funding Corp. ............................... 03/26/01 to 04/23/01 5.450 to 5.620 2,418,057 3,087 Giro Funding U.S. Corp. .............................. 02/22/01 to 03/20/01 5.690 to 6.260 3,071,151 1,558 Parthenon Receivables Funding LLC .................... 04/12/01 to 04/25/01 5.550 to 6.450 1,539,171 1,000 Preferred Receivables Funding Corp. .................. 02/06/01 6.500 999,097 3,182 Receivables Capital Corp. ............................ 02/01/01 to 02/08/01 6.010 to 6.520 3,179,464 1,000 Triple A One Funding Corp. ........................... 03/07/01 5.690 994,626 ----------- 4,180,372 ----------- AUTO & TRUCK--1.33% 1,000 Ford Motor Credit Corp. .............................. 03/22/01 5.650 992,310 ----------- BANKING - DOMESTIC--8.05% 1,000 ABN AMRO North America Finance Inc. .................. 07/09/01 5.180 977,266 1,190 BBL North America Funding Corp. ...................... 02/08/01 6.450 1,188,507 1,000 Dexia CLF Finance Co. ................................ 04/12/01 5.450 989,403 760 J.P. Morgan Chase & Co., Inc. ........................ 03/13/01 to 03/20/01 5.700 to 5.750 754,871 600 Societe Generale North America, Inc. ................. 04/16/01 5.500 593,216 1,500 Westpac Capital Corp. ................................ 02/27/01 6.460 1,493,002 ----------- 5,996,265 ----------- BANKING - FOREIGN--2.65% 1,000 Alliance & Leicester PLC ............................. 04/23/01 6.405 985,589 1,000 Banque et Caisse d'Epargne de L'Etat ................. 04/11/01 5.470 989,516 ----------- 1,975,105 -----------
30 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MONEY MARKET INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- COMMERCIAL PAPER@--(CONCLUDED) BROKER - DEALER--2.67% $2,000 Salomon Smith Barney Holdings, Inc. .................. 03/01/01 6.510% $ 1,989,873 ----------- ELECTRONICS--3.87% 1,900 Motorola Credit Corp. ................................ 03/08/01 6.360 1,888,252 1,000 Motorola, Inc. ....................................... 03/30/01 6.190 990,199 ----------- 2,878,451 ----------- FINANCE - CONDUIT--2.02% 1,264 MetLife Funding, Inc. ................................ 02/14/01 5.770 1,261,366 250 Svenska Handelsbanken, Inc. .......................... 06/29/01 5.400 244,450 ----------- 1,505,816 ----------- FINANCE - CONSUMER--4.00% 1,000 Household Finance Corp. .............................. 04/04/01 6.040 989,598 2,000 Transamerica Finance Corp. ........................... 03/27/01 5.550 1,983,350 ----------- 2,972,948 ----------- FINANCE - DIVERSIFIED--1.99% 500 Associates Corp. of North America .................... 02/09/01 6.530 499,275 1,000 General Electric Capital Corp. ....................... 06/06/01 6.050 978,993 ----------- 1,478,268 ----------- FINANCE - SUBSIDIARY--3.26% 2,000 Deutsche Bank Financial, Inc. ........................ 03/05/01 6.390 1,988,640 437 Dresdner U.S. Finance, Inc. .......................... 02/28/01 5.700 435,132 ----------- 2,423,772 ----------- FOOD, BEVERAGE & TOBACCO--0.24% 175 Philip Morris Companies, Inc. ........................ 02/08/01 5.900 174,799 ----------- INSURANCE--2.67% 2,000 Prudential Funding LLC ............................... 03/13/01 5.620 1,987,511 ----------- MINING & METALS--1.33% 1,000 Rio Tinto America, Inc. .............................. 03/20/01 6.330 991,736 ----------- PRINTING & PUBLISHING--0.75% 559 Gannett Co. .......................................... 02/08/01 5.820 558,367 ----------- TELECOMMUNICATIONS--4.75% 1,845 Bellsouth Capital Funding Corp. ...................... 02/15/01 to 03/07/01 5.680 to 5.850 1,839,103 1,700 Verizon Global Funding, Inc. ......................... 02/06/01 6.520 1,698,461 ----------- 3,537,564 ----------- Total Commercial Paper (cost--$45,643,157) .................... 45,643,157 -----------
31 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MONEY MARKET INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- SHORT-TERM CORPORATE OBLIGATIONS--14.37% ASSET BACKED-FINANCE--5.37% $2,000 Beta Finance, Inc. ................................... 02/02/01 N/A* $ 1,999,800 2,000 CC (USA), Inc. ....................................... 02/06/01 N/A* 2,000,000 ----------- 3,999,800 ----------- BROKER - DEALER--7.66% 1,000 Bear Stearns Companies, Inc. ......................... 02/01/01 7.009%* 1,001,030 1,000 Merrill Lynch & Co., Inc. ............................ 02/06/01 6.010* 999,991 1,700 Merrill Lynch & Co., Inc. ............................ 02/07/01 to 10/02/01 6.705 to 6.740 1,699,932 2,000 Morgan Stanley, Dean Witter & Co. .................... 02/15/01 5.906* 2,000,000 ----------- 5,700,953 ----------- FINANCE - INDEPENDENT--1.34% 1,000 National Rural Utilities Cooperative Finance Corp. ... 04/20/01 5.619* 1,000,000 ----------- Total Short-Term Corporate Obligations (cost--$10,700,753) .... 10,700,753 ----------- MONEY MARKET FUNDS--2.72% 1,571 AIM Liquid Assets Portfolio .......................... 1,571,499 456 AIM Prime Portfolio .................................. 455,701 ----------- Total Money Market Funds (cost--$2,027,200) ................... 2,027,200 ----------- Total Investments (cost--$77,271,330)--103.79% ................ 77,271,330 Liabilities in excess of other assets--(3.79)% ................ (2,821,974) ----------- Net Assets--100.00% ........................................... $74,449,356 ===========
------------- * 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, 2001 and reset periodically. @ Interest rates shown are discount rates at date of purchase. N/A Rate not available until first reset date which is when the trade settles. Weighted Average Maturity--61 days See accompanying notes to financial statements 32 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2001 (UNAUDITED)
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- U.S. GOVERNMENT OBLIGATIONS--27.67% $51,387 U.S. Treasury Inflation Index Notes++ ................ 07/15/02 to 01/15/08 3.625% $ 51,984,324 7,000 U.S. Treasury Stripped Interest Payment Bonds ........ 05/15/13 5.600@ 3,590,153 ------------- Total U.S. Government Obligations (cost--$55,444,473) ......... 55,574,477 ------------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--61.69% 127 GNMA ................................................. 09/20/25 6.750 129,979 5,199 GNMA ................................................. 11/20/27 7.000 5,240,475 3,599 GNMA ................................................. 11/20/21 to 12/20/27 7.125 3,633,386 2,457 GNMA ................................................. 06/16/26 7.199+ 2,446,101 4,359 GNMA ................................................. 01/20/18 to 02/20/27 7.375 4,418,837 1,491 GNMA ................................................. 05/15/39 7.470 1,524,975 1,958 GNMA ................................................. 07/15/02 to 09/15/23 7.500 1,988,103 654 GNMA ................................................. 08/20/25 to 09/20/26 7.750 669,331 497 GNMA ................................................. 12/15/07 to 08/15/09 8.000 516,683 2,156 GNMA ................................................. 06/20/16 8.500 2,187,858 3,931 GNMA ARM ............................................. 05/20/30 6.000 3,948,619 20,000 GNMA I TBA ........................................... TBA 7.000 20,300,000 15,000 GNMA I TBA ........................................... TBA 8.500 15,651,600 2,893 GNMA II .............................................. 07/20/30 9.000 3,014,561 15,896 GNMA II ARM .......................................... 10/20/29 to 05/20/30 7.000 16,047,230 277 GNMA II ARM .......................................... 04/20/18 to 01/20/28 7.375 280,918 1,421 GNMA II ARM .......................................... 07/20/30 7.500 1,447,626 40,000 GNMA II TBA .......................................... TBA 6.500 40,437,500 ------------- Total Government National Mortgage Association Certificates (cost--$123,183,822) ....................................... 123,883,782 ------------- FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--11.17% 7,000 FHLMC ................................................ 04/26/01 5.320 6,913,107 192 FHLMC ................................................ 08/01/01 6.500 192,111 1,678 FHLMC ................................................ 09/01/04 7.000 1,699,176 974 FHLMC ................................................ 05/01/21 7.450 963,966 771 FHLMC ................................................ 10/01/17 to 11/01/24 7.500 793,309 852 FHLMC ................................................ 03/01/13 8.000 890,651 162 FHLMC ................................................ 04/01/04 8.500 162,229 1,673 FHLMC ARM ............................................ 01/01/28 6.371 1,707,010 1,371 FHLMC ARM ............................................ 01/01/30 6.467 1,409,253 1,616 FHLMC ARM ............................................ 12/01/29 6.646 1,667,481 987 FHLMC ARM ............................................ 10/01/29 6.906 1,016,457 1,612 FHLMC ARM ............................................ 07/01/24 8.031 1,648,870 3,280 FHLMC ARM ............................................ 04/01/29 8.114 3,362,549 ------------- Total Federal Home Loan Mortgage Corporation Certificates (cost--$22,231,734) ........................................ 22,426,169 ------------- FEDERAL HOUSING ADMINISTRATION CERTIFICATES--8.89% 18,018 FHA Project Notes (cost--$18,156,632) ............... 05/01/17 to 02/01/29 6.896# to 8.500 17,861,573 ------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--46.21% 1,818 FNMA ................................................. 05/01/30 6.420 1,824,859 959 FNMA ................................................. 07/01/30 6.521 961,772 1,365 FNMA ................................................. 03/01/04 7.000 1,385,515 1,729 FNMA ................................................. 04/01/07 7.250 1,739,602 2,182 FNMA ................................................. 10/01/26 to 11/01/26 7.500 2,245,387
33 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) $ 3,598 FNMA ................................................. 01/01/07 7.820% $ 3,620,653 1,489 FNMA ................................................. 07/01/25 to 11/01/26 8.000 1,554,306 1,945 FNMA ................................................. 11/01/02 to 06/01/27 8.500 2,048,562 1,042 FNMA ................................................. 10/01/19 to 02/01/26 9.000 1,108,955 1,635 FNMA ARM ............................................. 12/01/27 6.624 1,674,320 1,003 FNMA ARM ............................................. 02/01/29 6.800 1,028,617 3,175 FNMA ARM ............................................. 03/01/07 7.036 3,205,167 4,931 FNMA ARM ............................................. 07/01/09 7.249 5,258,000 1,152 FNMA ARM ............................................. 02/01/30 7.541 1,184,274 1,549 FNMA ARM ............................................. 03/01/25 8.018 1,583,030 26,000 FNMA TBA ............................................. TBA 7.000 26,276,380 35,000 FNMA TBA ............................................. TBA 8.000 36,093,750 ------------- Total Federal National Mortgage Association Certificates (cost--$91,931,701) ........................................ 92,793,149 ------------- COLLATERALIZED MORTGAGE OBLIGATIONS--27.44% 140 FHLMC GNMA REMIC, Series 23, Class KZ ................ 11/25/23 6.500 128,234 366 FHLMC REMIC, Series 0159, Class H .................... 09/15/21 4.500 350,965 440 FHLMC REMIC, Series 0185, Class E .................... 08/15/06 9.000 448,736 1,867 FHLMC REMIC, Series 1003, Class H .................... 10/15/20 7.500# 1,885,873 2,777 FHLMC REMIC, Series 1188, Class H .................... 12/15/20 7.500 2,788,845 1,545 FHLMC REMIC, Series 1322, Class G .................... 02/15/07 7.500 1,561,316 269 FHLMC REMIC, Series 1347, Class HC ................... 12/15/21 4.250 261,379 47 FHLMC REMIC, Series 1349, Class PS ................... 08/15/22 7.500 48,372 610 FHLMC REMIC, Series 1361, Class D .................... 11/15/05 6.000 608,487 1,146 FHLMC REMIC, Series 1502, Class PX ................... 04/15/23 7.000 1,121,993 620 FHLMC REMIC, Series 1534, Class Z .................... 06/15/23 5.000 463,859 1,688 FHLMC REMIC, Series 1542, Class Z .................... 07/15/23 7.000 1,637,172 185 FHLMC REMIC, Series 1573, Class PZ ................... 09/15/23 7.000 185,679 190 FHLMC REMIC, Series 1640, Class F .................... 10/15/07 7.150# 190,387 155 FHLMC REMIC, Series 1658, Class GZ ................... 01/15/24 7.000 154,849 4 FHLMC REMIC, Series 1661, Class PE ................... 11/15/06 6.000 4,455 1,033 FHLMC REMIC, Series 1694, Class Z .................... 03/15/24 6.500 975,283 115 FHLMC REMIC, Series 1775, Class Z .................... 03/15/25 8.500 122,458 1,367 FHLMC REMIC, Series 1933, Class ZA ................... 02/15/27 8.000 1,435,714 111 FHLMC REMIC, Series 2020, Class Z .................... 01/15/28 7.000 110,576 2,376 FHLMC REMIC, Series 2090, Class CG ................... 10/15/28 6.500 2,332,298 243 FHLMC REMIC, Series 2156, Class ZB ................... 05/15/29 6.000 189,598 445 FHLMC REMIC, Series 2176, Class ZL ................... 06/15/28 7.500 456,122 83 FNMA REMIC, Trust 1992-074, Class Z .................. 05/25/22 8.000 84,712 165 FNMA REMIC, Trust 1992-129, Class L .................. 07/25/22 6.000 156,277 171 FNMA REMIC, Trust 1992-158, Class ZZ ................. 08/25/22 7.750 171,670 1,296 FNMA REMIC, Trust 1993-037, Class PX ................. 03/25/23 7.000 1,286,795 480 FNMA REMIC, Trust 1993-040, Class ZA ................. 12/25/23 6.500 440,100 24 FNMA REMIC, Trust 1993-162, Class C .................. 08/25/23 3.000@ 24,108 47 FNMA REMIC, Trust 1993-240, Class Z .................. 12/25/13 6.250 45,885 1,230 FNMA REMIC, Trust 1993-250, Class DZ ................. 12/25/23 7.000 1,205,046 74 FNMA REMIC, Trust 1993-250, Class Z .................. 12/25/23 7.000 74,501 80 FNMA REMIC, Trust 1994-027, Class CZ ................. 02/25/24 6.500 77,142 903 FNMA REMIC, Trust 1999-003, Class CZ ................. 02/25/14 6.000 833,668 111 FNMA REMIC, Trust 1999-043, Class AZ ................. 08/25/29 7.000 110,083 107 FNMA REMIC, Trust 2000-017, Class CZ ................. 07/25/30 8.000 106,600 1,010 FNMA REMIC, Trust G92-040, Class ZC .................. 07/25/22 7.000 1,005,105 148 FNMA REMIC, Trust G94-006, Class PJ .................. 05/17/24 8.000 153,961 618 FNMA REMIC, Trust Series 1999-38, Class Z ............ 08/25/29 7.750 627,750
34 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- COLLATERALIZED MORTGAGE OBLIGATIONS--(CONCLUDED) $ 834 GNMA REMIC, Trust Series 2000-009, Class FH ................ 02/16/30 7.199##% $ 838,118 564 ABN AMRO Mortgage Corp., Series 1998-4 ..................... 11/25/28 6.750 446,359 100 Bank of America Mortgage Securities, Series 1999-5, Class A-22 ................................ 05/25/29 6.500 95,897 450 Bank of America Mortgage Securities, Series 1999-8, Class A-12 ................................ 08/25/29 6.750 438,278 57 Bear Stearns Mortgage Securities, Inc., Series 1993-8, Class A-5 ................................. 08/25/24 6.350 57,070 2,379 Bear Stearns Mortgage Securities, Inc., Series 1996-4, Class AI-1 ................................ 09/25/27 8.125 2,397,384 1,750 Chase Mortgage Finance Corp., Series 1998, Class IA-8 .................................. 08/25/28 6.750 1,663,564 100 Chase Mortgage Finance Corp., Series 1999-S8, Class A9 ................................. 07/25/29 7.000 93,837 1,500 Conseco Finance Securitizations Corp., Series 2000-4, Class A6 .................................. 05/01/32 8.310 1,609,916 1,000 Countrywide Home Loan, Inc. ................................ 06/15/04 6.850 1,013,301 1,816 CWMBS, Inc., Series 1994-T, Class B1 ....................... 11/25/24 8.250 1,848,910 1,500 CWMBS, Inc., Series 1998-15, Class A8 ...................... 10/25/28 6.750 1,405,634 3,382 Farmer Mac., Series 2002 - Class AA1 ....................... 04/25/11 7.723# 3,555,601 500 FFCA Secured Lending Corp., Series 2000-1, Class B ......... 07/18/19 8.180 513,359 1,564 Green Tree Financial Corp., Series 1995-8, Class M1 ........ 12/15/26 7.300 1,569,228 530 Green Tree Financial Corp., Series 1998, Class 2 ........... 11/01/16 6.240 534,821 2,000 Green Tree Financial Corp., Series 1999-3, Class A8 ........ 02/01/31 7.060 1,906,135 612 Headlands Mortgage Security, Inc. REMIC, Series 1997-1, Class A, II ............................... 03/15/12 7.750 620,170 446 Headlands Mortgage Security, Inc. REMIC, Series 1997-2, Class A, II ............................... 05/25/12 7.750 451,480 339 Headlands Mortgage Security, Inc. REMIC, Series 1997-4, Class A, II ............................... 11/25/12 7.250 341,699 1,000 Impac Secured Assets CMN Owner Trust, Series 1998-1, Class M2 .................................. 07/25/25 7.770 1,015,376 210 Merrill Lynch Mortgage Investors, Inc., Series 1999, Class H1 .................................... 03/20/17 6.210# 209,241 1,516 Morgan Stanley Capital, Inc., Series 1998-HF1, Class A1 .... 01/15/07 6.190# 1,533,569 300 Norwest Integrated Structured Assets, Inc., Series 1998-3, Class 1A2 ................................. 12/25/28 7.000 288,744 432 Prudential Home Mortgage REMIC, Series 1993-29, Class A8 ................................. 08/25/08 6.750 434,822 1,456 Prudential Home Mortgage REMIC, Series 1993-54, Class A19 ................................ 01/25/24 6.500 1,304,254 1,500 Residential Funding Mortgage Securities, Inc., Series 1998-S12, Class A6 ................................ 05/25/28 6.750 1,462,933 120 Residential Funding Mortgage Securities I, Inc., Series 1998-S20, Class A10 ............................... 09/25/28 6.500 107,038 869 Small Business Administration, Series 1995-10, Class I ..... 03/01/05 7.750 891,161 2,499 Small Business Administration, Series 2000-10, Class B ..... 08/01/10 7.449 2,599,685 ------------- Total Collateralized Mortgage Obligations (cost--$53,843,164) ....... 55,113,637 ------------- ASSET BACKED SECURITIES--8.07% 1,000 Advanta Business Card Master Trust, Series 2000-C, Class B ................................... 04/20/08 7.319# 1,011,996 850 Bayview Financial Acquisition Trust, Series 2000-A, Class M1 .................................. 02/25/30 7.298# 845,060
35 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- ASSET BACKED SECURITIES--(CONCLUDED) $ 2,000 Bayview Financial Acquisition Trust, Series 2000-D, Class M1 ................................. 11/25/30 7.398#% $ 2,020,625 723 Beneficial Home Equity Loan Trust ......................... 04/28/26 6.926# 723,638 350 Conseco Finance Securitizations Corp., Series 1999-F, Class M2 ................................. 10/15/30 9.300 369,553 800 Conseco Finance Securitizations Corp., Series 1999-H, Class MF2 ................................ 12/15/29 9.290 841,987 2,000 Conseco Finance Securitizations Corp., Series 2000-F, Class MV2 ................................ 06/15/06 7.230# 2,023,775 1,000 Conseco Finance Securitizations Corp., Series 2000-5, Class M1 ................................. 02/01/32 8.400 1,059,378 2,000 Conseco Finance Home Loan Trust ........................... 06/15/24 9.520 2,096,915 969 Embarcadero Aircraft Securitization Trust, Series 2000-A, Class B .................................. 08/15/25 7.810# 962,285 1,951 GE Capital Mortgage Services, Inc., Series 1999-HE1, Class B1 ............................... 04/25/29 7.200 1,876,866 2,000 NPF XII, Inc., Series 2000-2, Class B (1) ................. 10/01/03 6.283# 2,010,000 372 Student Loan Marketing Association, Series 1996-2, Class A1 ................................. 10/25/04 6.581# 371,028 ------------- Total Asset Backed Securities (cost--$15,851,988) .................. 16,213,106 ------------- STRIPPED MORTGAGE-BACKED SECURITIES--6.02% 810 FHLMC REMIC, Series 0013, Class B (1)+++ .................. 06/25/23 7.000 368,701 594 FHLMC REMIC, Series 1554, Class 1 (1)+++ .................. 08/15/08 6.500* 44,161 5,000 FHLMC REMIC, Series 1627, Class PN (1)+++ ................. 09/15/22 6.000 977,879 2,997 FHLMC REMIC, Series 1993-138, Class CL (1)+++ ............. 11/25/22 7.000 537,396 4,541 FHLMC REMIC, Series 2059, Class PI (1)+++ ................. 07/15/26 6.500 972,731 1,000 FHLMC REMIC, Series 2110, Class PT (1)+++ ................. 07/15/23 6.000 262,319 865 FHLMC REMIC, Series 2136, Class GD (1)+++ ................. 03/15/29 7.000 177,223 3,516 FHLMC REMIC, Series 2178, Class PI (1)+++ ................. 08/15/29 7.500 744,583 5 FNMA REMIC, Trust 1992-142, Class KB (1)+++ ............... 08/25/07 11.977 121,107 6 FNMA REMIC, Trust 1992-157, Class JA (1)+++ ............... 09/25/07 10.146 122,386 557 FNMA REMIC, Trust 1992-207, Class U (1)+++ ................ 10/25/07 7.500 86,769 2,661 FNMA REMIC, Trust 1993-116, Class H (1)+++ ................ 07/25/22 7.000 391,468 186 FNMA REMIC, Trust 1993-161, Class GC (1)** ................ 02/25/23 0.010* 152,607 481 FNMA REMIC, Trust 1994-007, Class PK (1)+++ ............... 05/25/08 6.500* 23,693 978 FNMA REMIC, Trust 1994-030, Class IA (1)+++ ............... 11/25/22 6.500* 111,698 5,958 FNMA REMIC, Trust 1998-013, Class PI (1)+++ ............... 07/18/19 7.000 442,788 2,865 FNMA REMIC, Trust 1998-024, Class OK (1)+++ ............... 11/18/21 7.000 298,989 3,157 FNMA REMIC, Trust Series 1998-24, Class PK (1)+++ ......... 11/18/21 7.000 312,211 1,388 FNMA REMIC, Trust 1998-044, Class IG (1)+++ ............... 07/18/16 6.500 156,515 6,291 GNMA REMIC, Trust Series 1998-001, Class PG (1)+++ ........ 07/20/24 7.000 815,784 3,797 Chase Mortgage Finance Corp., Series 1998-S2, Class A4 (1)+++ ......................... 07/25/28 6.750 426,006 16,000 Conseco Finance Securitizations (1)+++ .................... 12/15/29 7.000 555,000 13,876 CWMBS, Inc., Series 1998-14, Class A2 (1)+++ .............. 12/25/13 0.500* 169,109 43,417 Hilton Hotel Pool Trust, Series 2000-HLTA, Class X (1)+++ . 10/01/16 0.634* 3,168,053 11,500 Option One Mortgage Loan Trust, Series 2000-2, Class S (1)+++ ........................... 06/25/30 3.500# 370,156 10 Residential Funding Mortgage Securities, Inc., Series 1993-S15, Class A9 (1)+++ ........................ 04/25/08 7.721# 73,697 1,284 Residential Funding Mortgage Securities, Inc., Series 1998-S20, Class A19 (1)+++ ....................... 09/25/28 6.750 206,991 ------------- Total Stripped Mortgage-Backed Securities (cost--$10,672,824) ...... 12,090,020 -------------
36 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- CORPORATE OBLIGATION--0.13% $ 257 River Valley (cost--$251,622) ............................. 09/30/29 7.500% $ 253,307 ------------- COMMERCIAL PAPER--2.47% 5,000 Verizon Global Funding Corp. (cost--$4,960,103) ........... 03/26/01 5.420@ 4,960,103 ------------- SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--0.05% 95 U.S. Treasury Bills++ (cost--$95,000) ..................... 02/01/01 5.925@ 95,000 ------------- REPURCHASE AGREEMENT--1.13% 2,274 Repurchase Agreement dated 01/31/01 with State Street Bank & Trust Co., collateralized by $2,275,000 U.S. Treasury Note, 6.250% due 07/31/02 (value--$2,323,344); proceeds: $2,274,351 (cost--$2,274,000) ...................................... 02/01/01 5.560 2,274,000 ------------- Total Investments (cost--$398,897,063)--200.94% .................... 403,538,323 Liabilities in excess of other assets--(100.94)% ................... (202,713,849) ------------- Net Assets--100.00% ................................................ $200,824,474 =============
------------ # Floating rate securities. The interest rates shown are the current rates as of January 31, 2001. * 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 amount pledged as collateral for futures transactions. + Estimated yield to maturity at January 31, 2001. @ Interest rate shown is discount rate at date of purchase. (1) Illiquid securities representing 7.02% of net assets. ARM Adjustable Rate Mortgage--The interest rates shown are the current rates as of January 31, 2001. 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. FUTURES CONTRACTS
NUMBER OF IN EXPIRATION UNREALIZED CONTRACTS EXCHANGE FOR DATES DEPRECIATION --------- -------------- ------------ -------------- 150 Contracts to receive--U.S. 5 Year Treasury Note ....... $15,215,625 March 2001 $(398,438) 48 Contracts to deliver--U.S. 10 Year Treasury Note ...... 5,062,500 March 2001 (12,000) ---------- $(410,438) ==========
See accompanying notes to financial statements 37 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERMEDIATE FIXED INCOME INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2001 (UNAUDITED)
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- U.S. GOVERNMENT OBLIGATIONS--6.73% $ 5,200 U.S. Treasury Bonds (1) ............................... 08/15/29 6.125% $ 5,611,122 3,166 U.S. Treasury Notes (1) ............................... 11/15/04 to 05/15/09 5.500 to 7.875 3,371,533 ------------- Total U.S. Government Obligations (cost--$8,602,282) ........... 8,982,655 ------------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--1.29% 813 GNMA .................................................. 11/15/26 to 12/15/26 7.750 838,603 9 GNMA .................................................. 11/20/01 8.500 9,172 55 GNMA .................................................. 01/15/02 9.000 56,588 123 GNMA .................................................. 07/15/04 to 09/15/04 9.500 129,327 681 GNMA ARM .............................................. 10/20/27 to 11/20/27 7.125 687,709 ------------- Total Government National Mortgage Association Certificates (cost--$1,699,400) .......................................... 1,721,399 ------------- FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--0.04% 56 FHLMC (cost--$56,471) ................................. 06/01/02 8.000 56,570 ------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--16.55% 1,309 FNMA .................................................. 09/01/25 7.000 1,329,426 9,147 FNMA .................................................. 06/01/10 to 09/01/29 7.500 9,372,876 10,982 FNMA .................................................. 03/01/04 to 09/01/30 8.000 11,321,102 55 FNMA .................................................. 09/01/07 13.000 61,686 ------------- Total Federal National Mortgage Association Certificates (cost--$21,653,200) ......................................... 22,085,090 ------------- COLLATERALIZED MORTGAGE OBLIGATIONS--10.17% 735 FDIC REMIC Trust, Series 1996-C1, Class 1A ............ 05/25/26 6.750 740,722 119 FHLMC, Series 1497, Class O ........................... 10/15/22 7.000 120,871 50 FHLMC, Series 1588, Class TB .......................... 06/15/23 6.500 49,590 150 FNMA REMIC Trust, Series 1993-70, Class C ............. 03/25/18 6.900 149,613 540 Amresco Residential Securities Mortgage Loan Trust, Series 1996-3, Class A6 ............................. 11/25/24 7.875 553,663 1,521 GMAC Commercial Mortgage Security Inc., Series 1997-C2, Class A1 ............................ 12/15/04 6.451 1,545,867 1,177 BA Mortgage Securities Inc., Series 1997-2, Class 1A5 . 10/25/27 7.250 1,197,621 519 CWMBS Inc., Series 1997-10, Class A4 .................. 02/25/28 6.613 519,383 864 DLJ Mortgage Acceptance Corp., Series 1997-CF1, Class A1A .......................... 05/15/06 7.400 895,236 796 Drexel Burnham Lambert, Series H, Class 4 ............. 04/01/17 8.500 816,864 1,175 LB Commercial Conduit Mortgage Trust, Series 1995-C2, Class A ............................. 08/25/04 7.220 1,196,267 116 Norwest Asset Securities Corp., Series 1997-5, Class A2 ............................................ 04/25/12 7.000 115,389 19 Residential Asset Security Mortgage, Series 1997 Class A ............................................. 03/25/27 7.000 19,009 1,353 Resolution Trust Corp., Series 1995-C2, Class D ....... 05/25/27 7.000 1,349,913 2,270 SASCO Commercial Mortgage Trust, Series 1998-C3A, Class E ............................ 06/25/01 7.400 2,267,845 1,000 Salomon Brothers Mortgage Securities VII Inc., Series 1997-LB6, Class A4 ........................... 12/25/27 6.910 1,010,410 619 Structured Asset Securities Corp., Series 1995-C4, Class A2 ARM ........................ 06/25/26 7.198 618,763
38 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERMEDIATE FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- COLLATERALIZED MORTGAGE OBLIGATIONS--(CONCLUDED) $ 414 Structured Asset Securities Corp., Series 1995-C4, Class D ........................... 06/25/26 7.000% $ 413,246 ------------- Total Collateralized Mortgage Obligations (cost--$13,459,566) .. 13,580,272 ------------- CORPORATE NOTES--57.20% AIRLINES--1.19% 167 Continental Airlines Trust, Series 1997-4, Class 4C ... 07/02/07 6.800 166,154 1,410 Continental Airlines Trust, Series 1998-3, Class 2C ... 11/01/05 7.250 1,422,098 ------------- 1,588,252 ------------- AUTOMOTIVE--3.82% 3,665 Ford Motor Credit Corp. (1) ........................... 02/28/02 to 03/15/05 6.500 to 7.500 3,778,351 1,225 Ford Motor Credit Corp. MTN ........................... 12/30/14 9.140 1,325,806 ------------- 5,104,157 ------------- BANKS--8.65% 895 ABN Amro Bank NV ...................................... 05/31/05 7.250 931,396 910 BankBoston NA MTN ..................................... 03/25/08 6.375 897,838 258 Continental Bank NA ................................... 04/01/01 12.500 260,616 740 First Bank Systems Inc. ............................... 05/01/05 7.625 778,326 1,430 First Union Corp. ..................................... 11/01/04 6.950 1,462,268 735 First USA Bank MTN .................................... 12/03/01 6.625 743,275 490 Mellon Bank NA ........................................ 06/01/03 6.750 502,454 1,125 PNC Bank, NA .......................................... 04/15/05 7.875 1,183,924 900 Security Pacific Corp. MTN ............................ 07/01/03 9.800 978,486 500 Sovran Financial Corp. ................................ 06/15/06 9.250 559,341 600 United States Bancorp MTN ............................. 05/15/04 6.000 599,607 1,050 Washington Mutual Inc. ................................ 08/15/06 7.500 1,095,390 1,510 Wells Fargo & Co. ..................................... 07/15/04 6.625 1,545,281 ------------- 11,538,202 ------------- CHEMICALS--0.71% 960 Eastman Chemical Co. .................................. 01/15/04 6.375 950,352 ------------- COMMERCIAL SERVICES--1.49% 2,000 Cendant Corp. ......................................... 12/01/03 7.750 1,989,860 ------------- COMPUTER SOFTWARE & SERVICES--0.66% 900 Computer Associates International Inc. ................ 04/15/03 6.250 883,739 ------------- ELECTRIC COMPANIES--0.94% 1,180 Constellation Energy Group Inc. ....................... 04/01/05 7.875 1,252,543 ------------- ENERGY--0.81% 1,090 Noram Energy Corp. .................................... 11/01/03 6.375 1,086,762 ------------- FINANCIAL SERVICES--7.84% 1,240 American Express Credit Corp. ......................... 08/10/05 6.250 1,300,118 1,400 Aristar Inc. .......................................... 09/01/04 7.375 1,442,304 625 Associates Corp. NA ................................... 11/01/03 5.750 624,081 1,400 Bellsouth Capital Funding Corp. ....................... 02/15/30 7.875 1,551,368
39 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERMEDIATE FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- CORPORATE NOTES--(CONTINUED) FINANCIAL SERVICES--(CONCLUDED) $ 870 Beneficial Corp. ...................................... 12/15/04 6.810% $ 882,939 635 Countrywide Funding Corp. MTN ......................... 09/16/03 7.450 654,056 1,420 Heller Financial Inc. MTN ............................. 07/22/02 6.500 1,430,780 2,000 J. P. Morgan & Co., Inc. MTN .......................... 01/15/09 6.000 1,926,160 650 Mellon Financial Co. .................................. 11/15/03 5.750 648,553 ------------- 10,460,359 ------------- HOTELS & LODGING--0.76% 1,000 Marriott International Inc. ........................... 11/15/03 6.625 1,009,022 ------------- INFORMATION & COMPUTER SERVICES--1.16% 1,400 Comdisco Inc. ......................................... 04/30/02 5.950 1,176,000 371 First Data Corp. ...................................... 04/01/03 6.625 376,313 ------------- 1,552,313 ------------- INSURANCE--3.49% 700 Ace Ina Holding Inc. .................................. 08/15/06 8.300 755,409 955 Aetna Services Inc. ................................... 08/15/06 7.125 989,678 1,000 Allstate Financial Global Funding ..................... 09/26/05 7.125 1,043,195 910 CNA Financial Corp. ................................... 04/15/05 6.500 875,568 1,010 Conseco Inc. .......................................... 06/15/01 6.400 989,800 ------------- 4,653,650 ------------- LEISURE--0.34% 430 Time Warner Entertainment Co. LP ...................... 09/01/08 7.250 448,291 ------------- MINING & METALS--0.15% 200 BHP Finance USA Ltd. .................................. 12/01/02 7.875 204,936 ------------- RAILROADS--0.37% 297 Consolidated Rail Corp. ............................... 04/01/05 7.070 307,599 164 CSX Transportation Inc. ............................... 03/01/06 8.410 178,987 ------------- 486,586 ------------- REAL ESTATE INVESTMENT TRUSTS--13.88% 2,855 American Health Properties, Inc. ...................... 01/15/02 7.050 2,842,210 1,150 Corporate Property Investment Trust ................... 04/01/03 to 08/15/04 7.050 to 7.750 1,172,685 3,200 Franchise Finance Corp. MTN ........................... 01/14/02 8.430 3,279,395 410 Health Care Property Investments Inc. ................. 02/15/06 6.500 388,029 1,000 Highwoods Properties, Inc. ............................ 06/15/04 7.190 987,034 1,600 HRPT Properties Trust ................................. 12/18/02 6.750 1,585,232 1,645 Kimco Realty Corp. .................................... 10/01/03 to 11/14/05 6.500 to 6.830 1,651,745 1,000 Nationwide Health Property Inc. ....................... 09/18/01 7.000 1,006,567 950 New Plan Realty Trust Corp. ........................... 04/06/05 7.750 965,194 1,355 Prologis Trust ........................................ 07/15/06 7.050 1,348,115 400 Rouse Co. ............................................. 01/15/03 8.500 416,203 2,900 Simon Property Group, Inc. ............................ 02/09/04 6.750 2,876,177 ------------- 18,518,586 ------------- RETAIL--0.81% 980 Sears Roebuck Acceptance Corp. ........................ 03/20/03 6.000 977,361 100 Wal-Mart Stores Inc. .................................. 06/29/11 8.875 102,072 ------------- 1,079,433 -------------
40 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERMEDIATE FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- CORPORATE NOTES--(CONCLUDED) SECURITIES & ASSET MANAGEMENT--3.16% $ 2,000 Goldman Sachs Group, Inc. MTN ......................... 10/01/09 7.350% $ 2,130,000 2,000 Lehman Brothers Holdings, Inc. ........................ 01/15/05 7.750 2,092,714 ------------- 4,222,714 ------------- TELECOMMUNICATIONS--4.56% 1,180 AT&T Corp. ............................................ 03/15/04 5.625 1,157,246 450 Carolina Telephone & Telegraph Co. .................... 05/01/03 6.125 450,099 715 Telephone & Data Systems, Inc. MTN .................... 11/15/21 9.550 743,212 2,210 Vodafone AirTouch PLC ................................. 02/15/10 7.750 2,369,027 1,320 WorldCom Inc. ......................................... 04/01/04 to 05/15/06 7.550 to 8.000 1,371,227 ------------- 6,090,811 ------------- UTILITIES--2.41% 700 New York State Electric & Gas Corp. ................... 05/01/20 9.875 731,100 780 Southern Investments PLC .............................. 12/01/06 6.800 755,575 1,075 TXU Eastern Funding Co. ............................... 05/15/05 6.450 1,060,438 650 Virginia Electric & Power Co. ......................... 04/01/21 to 03/01/25 8.250 to 8.750 671,944 ------------- 3,219,057 ------------- Total Corporate Notes (cost--$75,013,031) 76,339,625 ------------- ASSET BACKED SECURITIES--6.27% 720 Aames Mortgage Trust, Series 1996-D, Class A1G ........ 03/15/29 7.320 738,003 1,970 California Infrastructure, Series 1997-1, Class A5 .... 06/25/04 6.250 1,985,287 1,036 EMAC Trust, Series 1998-1, Class 1A ................... 07/15/03 6.110 1,041,134 416 Green Tree Financial Corp., Series 1996-3, Class A4 ... 05/15/27 7.100 420,294 757 Ikon Receivables LLC, Series 1999-1, Class A3 ......... 05/15/05 5.990 766,034 1,500 Master Financial Asset Securitization Trust, Series 1997-1, Class A8 ............................. 01/20/29 7.500 1,558,594 61 Money Store Home Equity Trust, Series 1996-D, Class A6 ............................................ 06/15/21 6.830 60,729 134 Money Store Home Equity Trust, Series 1997-A, Class A6 ............................................ 10/15/21 7.210 134,389 98 Money Store Home Equity Trust, Series 1997-C, Class AH5 ........................................... 02/15/15 6.590 98,040 955 Team Fleet Financing Corp., Series 1998-2, Class A .... 07/25/02 6.070 953,508 600 UCFC Loan Trust, Series 1996-B1, Class A7 ............. 09/15/27 8.200 615,708 ------------- Total Asset Backed Securities (cost--$8,297,017) ............... 8,371,720 ------------- REPURCHASE AGREEMENT--0.36% 479 Repurchase Agreement dated 01/31/01 with State Street Bank & Trust Co., collateralized by $476,126 U.S. Treasury Notes, 6.375% due 06/30/02; (value--$488,624); proceeds: $479,074 (cost--$479,000) ................. 02/01/01 5.560 479,000 ------------- Total Investments (cost--$129,259,967)--98.61% ................. 131,616,331 Other assets in excess of liabilities--1.39% ................... 1,856,224 ------------- Net Assets--100.00% ............................................ $133,472,555 =============
------------ ARM Adjustable Rate Mortgage--The interest rates shown are the current rate as of January 31, 2001. MTN Medium Term Notes. REMIC Real Estate Mortgage Investment Conduit. (1) Security, or portion thereof, was on loan at January 31, 2001. See accompanying notes to financial statements 41 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE STRATEGIC FIXED INCOME INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2001 (UNAUDITED)
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- U.S. GOVERNMENT OBLIGATIONS--24.70% $14,753 U.S. Treasury Bonds ................................... 02/15/16 to 04/15/28 3.625 to 9.250% $ 17,943,311 25,269 U.S. Treasury Inflation Index Notes### ................ 07/15/02 to 01/15/08 3.375 to 3.625 25,333,811 37,600 U.S. Treasury Stripped Principal Payment Bonds ........ 02/15/15 to 11/15/21 5.910 to 11.250@ 13,880,861 ------------- Total U.S. Government Obligations (cost--$56,690,679) .......... 57,157,983 ------------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--26.19% 567 GNMA ARM .............................................. 11/20/23 to 01/20/26 7.125 to 7.375 573,757 622 GNMA ARM .............................................. 05/20/26 7.375 631,507 7,700 GNMA I TBA ............................................ TBA 7.000 7,815,500 42,000 GNMA I TBA ............................................ TBA 7.500 43,089,480 8,200 GNMA I TBA ............................................ TBA 8.000 8,479,292 ------------- Total Government National Mortgage Association Certificates (cost--$60,389,955) .......................................... 60,589,536 ------------- FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--11.65% 13,500 FHLMC ................................................. 09/15/10 to 01/01/31 5.500 to 6.875 13,973,187 1,686 FHLMC ARM ............................................. 05/01/25 7.645 1,857,739 11,000 FHLMC TBA ............................................. TBA 7.000 11,123,750 ------------- Total Federal Home Loan Mortgage Corporation Certificates (cost--$26,393,830) .......................................... 26,954,676 ------------- FEDERAL HOUSING ADMINISTRATION CERTIFICATES--1.77% 4,092 FHA Project Notes (cost--$4,185,756) ................. 08/01/20 to 07/01/25 7.430 4,088,713 ------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--13.63% 3,869 FNMA ARM .............................................. 12/01/09 7.202 4,023,965 720 FNMA ARM .............................................. 05/01/27 8.072 742,800 472 FNMA ARM .............................................. 04/01/27 8.286 486,014 1,076 FNMA ARM COFI ......................................... 11/01/26 4.500 1,006,269 25,000 FNMA TBA .............................................. TBA 7.000 25,265,750 ------------- Total Federal National Mortgage Association Certificates (cost--$31,374,479) .......................................... 31,524,798 ------------- COLLATERALIZED MORTGAGE OBLIGATIONS--40.30% 1,000 FHLMC REMIC, Series 1278, Class K ..................... 05/15/22 7.000 982,863 97 FHLMC REMIC, Series 1366, Class H ..................... 08/15/07 6.000 97,246 29 FHLMC REMIC, Series 1367, Class KA .................... 09/15/22 6.500 28,193 1,274 FHLMC REMIC, Series 1502, Class PX-Z .................. 04/15/23 7.000 1,248,154 907 FHLMC REMIC, Series 1503, Class PZ .................... 05/15/23 7.000 906,963 496 FHLMC REMIC, Series 1534, Class Z ..................... 06/15/23 5.000 371,088 812 FHLMC REMIC, Series 1548, Class Z ..................... 07/15/23 7.000 813,641 1,183 FHLMC REMIC, Series 1562, Class Z ..................... 07/15/23 7.000 1,173,411 193 FHLMC REMIC, Series 1601, Class PB .................... 11/15/23 6.500 180,806 136 FHLMC REMIC, Series 1611, Class I ..................... 02/15/23 6.000 135,559 818 FHLMC REMIC, Series 1628, Class KZ .................... 12/15/23 6.250 769,173 315 FHLMC REMIC, Series 1694, Class Z ..................... 03/15/24 6.500 297,145 2,663 FHLMC REMIC, Series 1870, Class Z ..................... 01/15/24 6.500 2,533,330 2,365 FHLMC REMIC, Series 2061, Class ZB .................... 06/15/28 6.500 2,152,504 3,416 FHLMC REMIC, Series 2106, Class ZB .................... 12/15/28 6.250 3,013,619 461 FHLMC REMIC, Series G15, Class PZ ..................... 07/25/23 7.000 436,809 318 FHLMC REMIC, Series G23, Class KZ ..................... 11/25/23 6.500 291,441 1,591 FHLMC REMIC, Series G24, Class ZA ..................... 11/25/23 6.500 1,470,653
42 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE STRATEGIC FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- COLLATERALIZED MORTGAGE OBLIGATIONS--(CONCLUDED) $ 212 FNMA REMIC, Trust Series 1991-065, Class Z .................. 06/25/21 6.500% $ 212,377 75 FNMA REMIC, Trust Series 1992-118, Class K .................. 09/25/08 7.500 76,827 160 FNMA REMIC, Trust Series 1992-129, Class L .................. 07/25/22 6.000 151,541 506 FNMA REMIC, Trust Series 1992-G40, Class ZC ................. 07/25/22 7.000 504,017 90 FNMA REMIC, Trust Series 1993-037, Class PX ................. 03/25/23 7.000 89,218 191 FNMA REMIC, Trust Series 1993-056, Class PZ ................. 05/25/23 7.000 189,519 364 FNMA REMIC, Trust Series 1993-060, Class Z .................. 05/25/23 7.000 369,520 789 FNMA REMIC, Trust Series 1993-065, Class ZZ ................. 06/25/13 7.000 801,033 144 FNMA REMIC, Trust Series 1993-070, Class Z .................. 05/25/23 6.900 141,235 416 FNMA REMIC, Trust Series 1993-096, Class Z .................. 06/25/23 7.000 418,012 279 FNMA REMIC, Trust Series 1993-122, Class L .................. 01/25/23 6.500 273,076 76 FNMA REMIC, Trust Series 1993-149, Class L .................. 08/25/23 6.000 73,585 156 FNMA REMIC, Trust Series 1993-160, Class ZB ................. 09/25/23 6.500 149,149 152 FNMA REMIC, Trust Series 1993-163, Class ZA ................. 09/25/23 7.000 150,781 108 FNMA REMIC, Trust Series 1993-199, Class Z .................. 10/25/23 7.000 105,923 234 FNMA REMIC, Trust Series 1993-G10, Class G .................. 05/25/22 5.000 232,420 158 FNMA REMIC, Trust Series 1993-G40, Class Z .................. 12/25/23 6.500 145,248 310 FNMA REMIC, Trust Series 1994-023, Class PX ................. 08/25/23 6.000 289,967 3,547 FNMA REMIC, Trust Series 1998-063, Class ZA ................. 11/25/28 6.000 2,879,333 4,000 FNMA REMIC, Trust Series 1998-M, Class B .................... 09/25/07 6.270 3,997,862 1,750 FNMA REMIC, Trust Series 1998-M7, Class Z ................... 05/25/36 6.390 1,621,849 5,661 FNMA REMIC, Trust Series 1999-010, Class MZ ................. 09/17/38 6.500 5,284,798 2,500 FNMA REMIC, Trust Series 1999-W4, Class A9 .................. 02/25/29 6.250 2,323,598 10,000 FNMA REMIC, Trust Series 2000-012, Class PG ................. 04/25/30 7.500 10,139,095 3,703 GNMA REMIC, Trust Series 2000-009, Class FG ................. 02/16/30 7.199# 3,723,012 1,000 GNMA REMIC, Trust Series 2000-009, Class FH ................. 02/16/30 7.199# 1,005,742 3,097 Small Business Administration, Series 1999-20K, Class 1 ..... 11/01/19 7.060 3,147,445 402 U.S. Department of Veteran Affairs Vendee Mortgage Trust, Series 1993-3, Class 2ZA .................................. 06/15/20 6.500 400,395 2,000 BA Mortgage Securities, Inc., Series 1998-4, Class 1A-12 .... 06/25/28 6.750 1,994,780 199 Bear Stearns Mortgage Securities, Inc. REMIC, Series 1994-1, Class 3A ................................... 05/25/23 7.100# 198,533 170 California Federal Bank REMIC, Series 1990- BN1, Class A .... 08/25/30 7.196# 170,205 415 Capital Asset Research Funding, Series 1998-A, Class A ...... 12/15/05 5.905# 415,108 1,070 Chase Mortgage Finance Corp., Series 1995-A, Class A ........ 04/25/25 7.372# 1,084,871 5,000 Citicorp Mortgage Securities, Inc. REMIC, Series 1998-9, Class A5 ................................... 10/25/28 6.500 4,828,150 3,659 Community Program Loan Trust, Series 1987-A, Class A4 ....... 10/01/18 4.500 3,374,551 4,398 GMAC Commercial Mortgage Security, Inc., Series 1998-C1, Class A1 .................................. 11/15/07 6.411# 4,466,009 3,404 Housing Security, Inc., Series 1992-8, Class B .............. 06/25/24 7.012# 3,375,029 1,846 LTC Commercial Mortgage Certificates, Series 1998-1, Class A .................................... 05/28/30 6.029# 1,862,032 2,972 Oakwood Mortgage Investors, Inc., Series 1999-B, Class A2 ... 12/15/13 6.190 2,989,282 150 Residential Funding Mortgage Securities I, Inc. Series 1993-S30, Class A9 ................................. 08/25/23 7.500 148,406 2,628 Residential Funding Mortgage Securities I, Inc., Series 1997-S7, Class A5 .................................. 05/25/27 7.500 2,601,165 2,213 Salomon Brothers Mortgage Securities, Inc. VII, Series 2000-BOA1, Class A ................................. 08/25/30 7.600 2,239,312 3,152 Salomon Brothers Mortgage Securities, Inc. VII REMIC, Series 1993-3, Class A7-MZ ................................ 08/25/23 7.200 3,167,745 4,500 Structured Asset Securities Corp., Series 1997-4, Class 2A-9 ................................................ 12/25/27 7.000 4,519,755 ------------- Total Collateralized Mortgage Obligations (cost--$90,652,680) ........ 93,234,108 -------------
43 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE STRATEGIC FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- ASSET BACKED SECURITIES--8.44% $ 262 American Residential Mortgage Loan Trust, Series 1998-001, Class 1 .................................. 05/25/29 6.828#% $ 261,834 1,450 Arcadia Automobile Receivables Trust, Series 1999-C, Class A2 .................................................. 12/15/03 6.900 1,470,095 2,400 Bayview Financial Acquisition Trust, 2000-D, Class A ........ 11/25/30 7.038# 2,398,125 2,000 Dealer Auto Recievables Trust, Series 2000-1, Class A2 ...... 04/15/03 7.010 2,019,698 2,918 Delta Funding Home Equity Loan Trust, Series 1999-003, Class A1-A ............................... 09/15/29 7.030# 2,928,810 1,236 First Security Auto Owner Trust, Series 1999-1, Class A3 .... 06/15/03 5.580 1,237,319 2,500 Keystone Owner Trust, Series 1998-P2, Class A4 .............. 12/25/18 6.840 2,542,525 2,798 Metropolitan Asset Funding, Inc., Series 2000-A, Class A3 ... 12/25/23 8.115 2,916,915 1,551 Mid-State Trust, Series 4, Class A .......................... 04/01/30 8.330 1,663,821 319 Money Store Home Equity Trust, Series 1997-D, Class AF3 ..... 11/15/21 6.345# 319,075 284 Money Store Home Equity Trust, Series 1998-A, Class AV ...... 06/15/29 6.890# 283,966 1,494 SLMA Student Loan Trust, Series 1998-1, Class A1 ............ 01/25/07 6.948# 1,494,501 ------------- Total Asset Backed Securities (cost--$19,260,466) .................... 19,536,684 ------------- STRIPPED MORTGAGE-BACKED SECURITIES+--0.08% 66 FHLMC, Series 1625, Class GA+++ ............................. 01/15/08 6.000(1) 2,600 361 FNMA REMIC, Trust Series 1993-201, Class JB+++ .............. 09/25/21 6.500(1) 35,581 2,416 FNMA REMIC, Trust Series 1993-201, Class JC+++ .............. 05/25/19 6.500(1) 149,742 ------------- Total Stripped Mortgage-Backed Securities (cost--$187,141) ........... 187,923 ------------- CORPORATE BONDS--28.93% AEROSPACE & DEFENSE--1.08% 2,500 Raytheon Co., MTN ........................................... 08/10/01 7.089# 2,502,118 ------------- AIRLINES--0.45% 500 AMR Corp. ................................................... 02/01/01 10.000 500,000 500 United Air Lines, Inc. ...................................... 11/27/12 10.360 550,430 ------------- 1,050,430 ------------- AUTOMOTIVE--0.77% 1,800 DaimlerChrysler NA Holdings Corp. ........................... 08/16/04 7.078# 1,770,451 ------------- BANKS--0.64% 1,500 MBNA American Bank .......................................... 12/10/02 6.495# 1,472,172 ------------- ENERGY--0.98% 2,200 NRG Energy, Inc. ............................................ 11/01/03 8.000 2,256,896 ------------- FINANCIAL SERVICES--5.83% 3,700 AT&T Capital Corp. .......................................... 04/23/02 7.030# 3,706,664 3,600 General Motors Acceptance Corp. ............................. 08/06/01 6.951# 3,604,057 4,000 Infrastructure Finance Corp. ................................ 03/26/09 5.059# 3,997,500 180 Midland Funding Corp. ....................................... 07/23/02 10.330 184,481 2,000 Textron Financial Corp. ..................................... 05/28/02 7.099# 2,003,064 ------------- 13,495,766 -------------
44 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE STRATEGIC FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- CORPORATE BONDS--(CONCLUDED) MEDIA--0.91% $2,000 Cox Enterprises, Inc. ................................ 02/15/07 8.000% $ 2,097,276 ------------- MEDICAL PROVIDERS--0.73% 1,700 Columbia HCA Health Care Corp. ....................... 07/15/45 6.630 1,688,911 ------------- OTHER INSURANCE--0.44% 1,000 Alpha Wind Reinsurance ............................... 05/23/01 11.320 1,020,000 ------------- SECURITIES & ASSET MANAGEMENT--4.87% 4,500 Bear Stearns Cos., Inc. .............................. 09/21/04 6.910# 4,501,534 3,250 Goldman Sachs Group, Inc. ............................ 03/19/01 6.669# 3,254,040 2,300 Lehman Brothers Holdings, Inc. ....................... 04/02/02 7.301# 2,318,402 1,200 Morgan Stanley Dean Witter & Co. ..................... 04/22/04 5.899# 1,199,909 ------------- 11,273,885 ------------- TELECOMMUNICATIONS--3.94% 3,500 British Telecommunications PLC ....................... 12/15/05 7.625 3,612,262 EUR 2,700 Koninklijke (Royal) KPN NV ........................... 06/13/01 to 06/13/02 5.217 to 5.467# 2,505,009 3,000 Sprint Capital Corp., MTN ............................ 06/24/02 6.850# 3,004,941 ------------- 9,122,212 ------------- UTILITIES--1.60% 1,663 Niagara Mohawk Power Co. ............................. 10/01/02 7.250 1,695,120 2,000 TXU Corp ............................................. 06/25/01 7.014# 2,002,052 ------------- 3,697,172 ------------- YANKEE--6.69% 2,500 Compagnie Financiere de CIC et de l'Union Europeenne.. 10/29/49 6.379# 2,387,500 1,000 Mexico Credit Link+ .................................. 02/25/02 11.976# 1,039,986 2,900 Nacional Financiera .................................. 05/08/03 8.634# 2,963,261 1,000 National Power Corp. ................................. 05/15/28 9.625 701,945 2,300 Nordbanken AB ........................................ 11/29/49 8.950# 2,469,917 1,400 Petroleos Mexicanos .................................. 09/15/27 9.500 1,470,000 4,400 Residential Reinsurance .............................. 06/01/01 10.836 to 10.926 4,444,000 ------------- 15,476,609 ------------- Total Corporate Bonds (cost--$66,147,884) ...................... 66,923,898 ------------- INTERNATIONAL GOVERNMENT OBLIGATIONS--0.80% EUR 790 Federal Republic of Germany .......................... 01/04/24 to 01/04/30 6.250 to 6.500 836,565 $ 1,000 United Mexican States ................................ 04/07/04 9.616# 1,025,000 ------------- Total International Government Obligations (cost--$1,838,963) .. 1,861,565 ------------- MUNICIPAL SECURITIES--0.41% 1,000 Massachusetts State Turnpike Authority, Metropolitan Highway System Revenue Series A (MBIA Insured) (cost--$868,968) .................................... 01/01/37 5.000 947,400 -------------
45 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE STRATEGIC FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- COMMERCIAL PAPER@--5.14% $ 2,000 Campbell Soup Co. ........................................ 04/16/01 5.440% $ 1,977,636 3,000 Gillette Co. ............................................. 04/17/01 5.430 2,966,062 7,000 Verizon Global Funding Corp. ............................. 03/26/01 5.420 6,944,144 ------------- Total Commercial Paper (cost--$11,887,842) 11,887,842 ------------- SHORT-TERM U.S. GOVERNMENT OBLIGATIONS@--0.13% 300 U.S. Treasury Bills### (cost--$300,000) .................. 02/01/01 6.020 to 6.190 300,000 ------------- NOTIONAL AMOUNT (000) -------- OPTIONS--0.01% CALL OPTIONS PURCHASED--0.01% 8,500 U.S. Treasury Bonds, expires 03/01 (cost--$121,431) ...... 30,685 ------------- PUT OPTIONS PURCHASED--0.00% 70,000 Euro Futures Puts, expires 02/01 ......................... 0 2,000 GNMA, expires 03/01 ...................................... 313 ------------- Total Put Options Purchased (cost--$520) .......................... 313 ------------- PRINCIPAL AMOUNT (000) --------- REPURCHASE AGREEMENT--0.61% 1,404 Repurchase Agreement dated 01/31/01 with State Street Bank & Trust Co., collateralized by $1,405,000 U.S. Treasury Bonds,6.250% due 07/31/02; (value--$1,434,856);proceeds: $1,404,217 (cost--$1,404,000) ..................................... 02/01/01 5.560 1,404,000 ------------- Total Investments (cost--$371,704,594)--162.79% ................... 376,630,124 Liabilities in excess of other assets--(62.79)% ................... (145,264,082) ------------- Net Assets--100.00% ............................................... $231,366,042 =============
----------------- # Floating rate securities. The interest rates shown are the current rates as of January 31, 2001. + Illiquid securities represent 0.53% 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 the discount rate at date of purchase. ARM Adjustable Rate Mortgage--The interest rates shown are the current rates as of January 31, 2001. COFI Cost of Funds Index. REMIC Real Estate Mortgage Investment Conduit. MBIA Municipal Bond Investors Assurance. MTN Medium Term Note. 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. (1) Annualized yield at date of purchase. 46 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE STRATEGIC FIXED INCOME INVESTMENTS
NUMBER OF STRIKE EXPIRATION CONTRACTS PRICE DATES VALUE --------- -------- ------------- ------- WRITTEN OPTIONS 4 Euro Futures Calls ........................... $ 93.25 March 2001 $ 16,000 94 Euro Futures Calls ........................... 92.75 March 2001 1,175 36 U.S. Treasury Notes Futures Puts ............. 103.00 February 2001 2,250 90 U.S. Treasury Notes Futures Puts ............. 100.00 February 2001 1,406 13 U.S. Treasury Notes Futures Puts ............. 100.00 February 2001 406 1,700 U.S. Treasury Notes Futures Puts ............. 106.74 March 2001 38,080 12 U.S. Treasury Notes Futures Calls ............ 104.00 February 2001 3,750 101 U.S. Treasury Notes Futures Calls ............ 105.00 February 2001 74,172 ---------- $137,239 ==========
FUTURES CONTRACTS
UNREALIZED IN EXPIRATION APPRECIATION CONTRACTS TO RECEIVE EXCHANGE FOR DATES (DEPRECIATION) -------------------- ------------ ---------- -------------- 124 Eurobond Futures ............................. $13,371,700 March 2001 $ 118,030 62 Eurobond Futures ............................. 6,697,160 June 2001 27,688 2 Municipal Bond Futures ....................... 204,156 March 2001 2,906 125 2 Year U.S. Treasury Note Futures ............ 25,398,438 March 2001 (179,688) 55 10 Year U.S. Treasury Note Futures ........... 5,618,593 March 2001 (168,438) 3 U.S. Long Bond Treasury Note ................. 309,281 March 2001 2,906 ---------- $(196,596) ==========
FORWARD FOREIGN CURRENCY CONTRACTS
CONTRACTS IN TO EXCHANGE MATURITY APPRECIATION DELIVER FOR DATES (DEPRECIATION) --------- -------- -------- -------------- Euro ................................................ 12,320,000 USD 10,986,422 02/13/01 $(486,432) Japanese Yen ........................................ 70,000,000 USD 595,517 03/06/01 (8,787) Swiss Franc ......................................... 12,963,000 USD 7,407,429 02/13/01 (492,203) U.S. Dollars ........................................ 690,000 EUR 594,062 02/13/01 48,492 U.S. Dollars ........................................ 8,490,000 EUR 7,335,190 02/13/01 571,022 U.S. Dollars ........................................ 496,000 EUR 436,510 02/13/01 25,384 U.S. Dollars ........................................ 6,593,000 EUR 5,651,091 02/13/01 521,319 ---------- $ 178,795 ==========
CURRENCY TYPE ABBREVIATIONS: EUR Euro. USD U.S. Dollars. See accompanying notes to financial statements 47 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2001 (UNAUDITED)
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- MUNICIPAL BONDS AND NOTES--98.24% ALABAMA--0.23% $ 105 Birmingham Medical Clinic Board Revenue Baptist Medical Centers (Escrow to Maturity) ................ 07/01/05 7.300% $ 113,366 ----------- ALASKA--5.40% 2,055 Alaska Student Loan Corp. Revenue, Series A (AMBAC Insured)* ........................... 07/01/06 to 07/01/09 5.350 to 5.550 2,165,994 500 Northern Tobacco Securitization Corp. Revenue Alaska Tobacco Settlement ................... 06/01/22 6.200 507,730 ----------- 2,673,724 ----------- ARIZONA--4.80% 1,000 Arizona Transportation Board Highway Revenue Series B ............................................ 07/01/06 8.000 1,193,020 490 Peoria Water & Sewer Revenue (FGIC Insured)* .......... 07/01/04 7.500 548,472 60 Pima County Hospital Revenue St. Joseph Hospital Project (Escrow to Maturity) ............... 01/01/09 7.500 67,834 570 Show Low Industrial Development Authority Revenue Navapache Regional Medical Center Series A (ACA Insured) .............................. 12/01/06 5.125 567,828 ----------- 2,377,154 ----------- ARKANSAS--0.34% 40 Arkansas State Development Finance Authority (MBIA Insured) ...................................... 10/01/16 5.100 40,337 35 Pulaski County Residential Housing Single-Family (Escrow to Maturity) ................................ 06/01/10 7.250 39,754 80 Springdale Residential Housing Mortgage Series A (FNMA Collateralized) ...................... 09/01/11 7.650 88,278 ----------- 168,369 ----------- CALIFORNIA--9.08% 150 California Pollution Control Financing Kaiser Steel Corp. Project (Escrow to Maturity) ............ 10/01/08 7.250 166,101 1,000 California State Refunding Revenue .................... 10/01/10 5.750 1,130,530 140 Inglewood Residential Rehabilitation (Escrow to Maturity) ................................ 08/01/10 7.500 161,064 395 Los Angeles Community Redevelopment Agency Refunding Monterey Hills Redevelopment Project B .... 12/01/22 8.650 439,611 265 Los Angeles Multi-Family Revenue Housing Earthquake Rehabilitation Project Series C (FNMA Collateralized)* .............................. 07/01/07 5.150 269,473 100 Los Angeles Regional Airport Improvement Corp. Lease Revenue American Airlines, Inc. (Letter of Credit) .. 12/01/24 4.250 100,000 20 Sacramento Utility District Electric Revenue (Escrow to Maturity) ................................ 02/01/11 5.500 21,260 1,055 Sacramento Utility District Electric Revenue, White Rock Project (Escrow to Maturity) ............. 03/01/10 to 05/01/10 6.750 to 6.800 1,178,591 990 Vista Multi-Family Housing Pepperwood Apartments (Mandatory Put 06/01/05 @ 100) (FNMA Collateralized) ............................... 06/01/25 5.700 1,025,195 ----------- 4,491,825 ----------- COLORADO--2.75% 265 Colorado Housing Finance Authority Single-Family Program Subordinated* ............................... 11/01/04 5.750 265,681 1,000 Colorado Springs Utilities Revenue (Escrow to Maturity) ................................ 11/15/10 5.800 1,094,200 ----------- 1,359,881 -----------
48 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- MUNICIPAL BONDS AND NOTES--(CONTINUED) DISTRICT OF COLUMBIA--7.04% $ 505 District of Columbia Housing Finance Authority Certificate of Participation (Asset Guaranty Insured) ..... 06/01/08 4.850% $ 512,100 1,340 District of Columbia Revenue Refunding Howard University Project (MBIA Insured) .................. 10/01/02 5.250 1,374,840 1,500 District of Columbia Series A (MBIA Insured) ................ 06/01/08 5.250 1,594,545 ----------- 3,481,485 ----------- FLORIDA--2.28% 250 Alachua County Health Facilities Authority Shands Hospital at The University of Florida (MBIA Insured) ............... 12/01/05 6.100 260,110 50 Clearwater Housing Development Corp. Revenue Refunding Clearwater Apartments Series A (FHA Insured) .............. 07/01/01 6.200 50,228 505 Hialeah Housing Authority Municipal Housing Revenue (Escrow to Maturity) ...................................... 11/01/06 9.500 656,894 140 Palm Beach County Solid Waste Authority Revenue (Escrow to Maturity) (MBIA Insured) ....................... 12/01/04 10.000 159,744 ----------- 1,126,976 ----------- GEORGIA--3.24% 1,250 Georgia State Series C ...................................... 08/01/13 6.250 1,458,712 130 Gwinnett County Water & Sewer Authority (Escrow to Maturity) ...................................... 10/01/04 9.600 145,785 ----------- 1,604,497 ----------- IDAHO--1.62% 830 Idaho Housing & Finance Association Single-Family Mortgage Revenue Series D-3* .............................. 07/01/13 5.150 803,349 ----------- ILLINOIS--4.39% 295 Belleville St. Clair County (Escrow to Maturity) ............ 11/01/09 7.250 336,680 350 Greater Peoria Airport Authority (AMBAC Insured)* ........... 12/01/07 6.700 380,065 500 Illinois Educational Facilities Authority Revenues Refunding Northwestern Medical Facility Foundation (MBIA Insured) ............................................ 11/15/28 5.125 474,845 630 Illinois Health Facilities Authority Revenue Ravenswood Hospital (Escrow to Maturity) ............................. 08/01/06 7.250 685,434 285 St. Clair County Certificates Participation Series A (FSA Insured) .................................... 10/01/08 5.000 297,138 ----------- 2,174,162 ----------- INDIANA--3.93% 20 Fort Wayne Hospital Authority Revenue Lutheran Hospital Project (Escrow to Maturity) .............................. 01/01/02 6.875 20,022 410 Indianapolis Economic Development Revenue Knob In The Woods Project (Mandatory Put 12/01/04 @ 100) (FNMA Collateralized)* .................................... 12/01/24 6.375 432,771 585 Indianapolis Economic Development Revenue Refunding Bethany Series A (GNMA Collateralized)* ......... 04/20/17 5.350 589,183 825 Wawasee Community School Corp. Revenue In New Element & Remodeling Building Corp. First Mortgage ................ 07/15/13 5.750 900,364 ----------- 1,942,340 -----------
49 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- MUNICIPAL BONDS AND NOTES--(CONTINUED) KANSAS--1.15% $ 500 Burlington Pollution Control Revenue Refunding Kansas Gas & Electric Co. Project (MBIA Insured) ............................................ 06/01/31 7.000% $ 515,650 50 Wichita Hospital Revenue St. Francis Hospital & Nursing Senior A (Escrow to Maturity) ..................... 10/01/07 6.750 54,476 ----------- 570,126 ----------- LOUISIANA--4.34% 375 East Baton Rouge Parish Womans Hospital Foundation (Escrow to Maturity) ...................................... 10/01/08 7.200 419,797 70 East Baton Rouge Single-Family Mortgage Series C (GNMA/FNMA Collateralized) ....................... 04/01/32 7.000 72,148 500 Jefferson Parish Home Mortgage Single-Family Housing Revenue Series D-1 (Mandatory Put 08/01/01 @ 100) (FNMA/GNMA Collateralized) ................................ 06/01/10 5.600 513,855 540 Louisiana Public Facilities Authority and Health Education A1 (Mandatory Put 06/01/02 @ 100) (AMBAC Insured) ............ 12/01/15 5.000 549,234 540 Louisiana State Health Education Authority Alton Ochsner Medical Foundation (Escrow to Maturity) ................... 05/01/05 8.750 592,780 ----------- 2,147,814 ----------- MASSACHUSETTS--3.06% 600 Massachusetts State Development Finance Agency Biomedical Research Series C .............................. 08/01/02 5.500 610,464 1,005 Massachusetts State Development Finance Agency Curry College Series A (ACA Insured) ...................... 03/01/19 5.375 901,455 ----------- 1,511,919 ----------- MICHIGAN--2.92% 115 Michigan State Hospital Finance Authority Revenue St. Joseph's Mercy Hospital (Escrow to Maturity) .. 07/01/03 9.250 123,428 105 Michigan State Housing Development Authority Series B* ....................................... 12/01/12 7.650 106,311 170 Michigan State Strategic Limited Obligation (Escrow to Maturity) ...................................... 08/15/05 7.875 184,559 1,000 Western Townships Utilities Authority Revenue Sewage Disposal Systems Refunding (FSA) ........... 01/01/15 6.750 1,027,930 ----------- 1,442,228 ----------- MINNESOTA--1.57% 350 Coon Rapids Hospital Revenue Health Central, Inc. (Escrow to Maturity) ...................................... 08/01/08 7.625 392,795 113 Eden Prairie Multi-Family Housing (GNMA Collateralized) ..... 01/20/06 5.500 116,157 200 Edina Refunding Tax Increment Series B ...................... 02/01/06 5.800 200,000 60 Moorhead Residential Mortgage (Escrow to Maturity) ......... 08/01/11 7.100 68,772 ----------- 777,724 ----------- MISSOURI--0.22% 105 St. Louis County Single-Family Housing (AMBAC Insured) ...... 10/01/16 9.250 109,226 -----------
50 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- MUNICIPAL BONDS AND NOTES--(CONTINUED) NEBRASKA--0.52% $ 250 Nebraska Investment Finance Authority Multi-Family Housing Series A (FNMA Collateralized)* ................... 12/01/15 6.000% $ 256,303 ----------- NEW JERSEY--1.11% 500 New Jersey Transit Corp. CTFS Federal Transit Administration Grants Series B (AMBAC) ................................... 09/15/12 5.500 549,120 ----------- OHIO--0.36% 170 Dayton Hospital Revenue Good Samaritan (Escrow to Maturity) ...................................... 12/01/05 6.000 178,675 ----------- OKLAHOMA--4.44% 335 Comanche County Hospital Authority Revenue Series A (Connie Lee Insured) ............................. 07/01/06 5.100 348,122 425 McAlester Public Works Authority Revenue (FSA Insured) (Escrow to Maturity) ........................ 12/01/04 8.250 492,562 1,330 Tulsa Metropolitan Utility Authority Revenue ................ 02/01/03 7.000 1,357,239 ----------- 2,197,923 ----------- PENNSYLVANIA--4.80% 400 Blair County Hospital Authority Revenue Hospital Altoona Hospital Project A (AMBAC Insured) ........................ 07/01/06 5.375 424,136 535 Chester County Health & Education Jefferson Health Systems Series B (AMBAC Insured) .................................. 05/15/12 5.000 546,529 45 Chester County Hospital Authority Revenue (Escrow to Maturity) ...................................... 07/01/09 7.500 50,651 60 Conneaut School District (Escrow to Maturity) (AMBAC Insured) ........................................... 05/01/02 9.250 62,526 75 Lancaster Sewer Authority (Escrow to Maturity) .............. 04/01/12 6.000 82,448 400 Luzerne County Industrial Development Authority Pennsylvania Gas & Water Series B* ........................ 12/01/22 7.125 425,252 600 Pennsylvania State Finance Authority Revenue (Investment Agreement - Sun America) ...................... 11/01/09 6.600 650,136 125 Philadelphia Hospital & Higher Education Health Systems Jefferson Health Systems A (MBIA Insured) ................. 05/15/07 5.250 132,464 ----------- 2,374,142 ----------- RHODE ISLAND--1.42% 690 Rhode Island Housing & Mortgage Finance Corp. Homeownership Opportunity-9-D* ............................ 10/01/12 5.150 701,778 ----------- SOUTH CAROLINA--0.49% 210 Charleston County Hospital Facility Roper Hospital (Escrow to Maturity) ...................................... 10/01/11 7.000 240,458 ----------- SOUTH DAKOTA--3.03% 1,000 South Dakota Housing Development Authority Revenue Homeownership Mortgage Series A ................... 05/01/06 5.500 1,055,310 410 South Dakota State Health & Educational Revenue St. Lukes Hospital Project (Escrow to Maturity) ... 10/01/07 6.800 444,489 ----------- 1,499,799 -----------
51 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- MUNICIPAL BONDS AND NOTES--(CONTINUED) TENNESSEE--3.05% $ 300 Knox County Health Educational & Housing Facility St. Mary's Medical Center (Escrow to Maturity) ........... 08/01/03 7.250% $ 315,324 150 La Follette Housing Development Corp. (FHA/MBIA Insured) ....................................... 01/01/05 5.400 152,798 655 Metropolitan Government Nashville & Davidson County Water Sewer Revenue Cab Converter Refunding (FGIC/TCRs) .............................................. 01/01/12 7.700 824,265 180 Metropolitan Government Nashville Health & Education Southern Advantist Hospital Health Systems (Escrow to Maturity) ..................................... 10/01/09 8.700 218,068 ----------- 1,510,455 ----------- TEXAS--10.97% 240 Galveston County Housing Finance Corp. Single-Family Mortgage Revenue ......................................... 04/01/15 9.750 258,590 245 Houston Texas Airport Systems Revenue (Escrow to Maturity) ..................................... 07/01/10 7.600 286,427 200 Lone Star Airport Improvement Authority American Airlines, Inc. (Letter of Credit) ........................ 12/01/14 4.250 200,000 505 Mckinney Independent School District School Building Revenue .................................. 02/15/04 6.000 536,295 1,285 Mission Consolidated Independent School District Revenue ... 02/15/04 6.500 1,382,904 1,015 South Plains Finance Corp. Refunding Mortgage Series C (FMNA/GNMA Collateralized) ...................... 03/01/21 7.400 1,166,408 1,500 Southeast Housing Finance Corp. Series B (Pre-refunded to 12/01/02 @ 36.127) ............. 12/01/16 7.625# 505,095 1,040 Texas State Refunding Series A ............................. 10/01/03 5.700 1,092,572 ----------- 5,428,291 ----------- UTAH--3.32% 75 Salt Lake County Water Conservation (Escrow to Maturity) (MBIA Insured) ...................... 10/01/02 10.875 81,362 1,000 Utah Associated Municipal Power Systems Revenue San Juan Project (MBIA Insured) .................. 06/01/04 6.375 1,098,710 325 Utah State Housing Finance Agency Single-Family Mortgage Sub A1 (AMBAC Insured) .......................... 07/01/08 5.900 349,151 65 Utah State Housing Finance Agency Single-Family Mortgage Sub G (AMBAC Insured) ........................... 07/01/07 5.650 68,560 40 Utah State Housing Finance Agency Single-Family Mortgage Sub H1 (AMBAC Insured) .......................... 07/01/07 5.650 42,191 ----------- 1,639,974 ----------- WASHINGTON--5.47% 1,000 King County Sewer Revenue Series A ......................... 01/01/03 5.800 1,038,660 20 Washington State Prerefunded Series 93A .................... 10/01/12 5.750 22,256 1,480 Washington State Unrefunded Balance Series 93A ............. 10/01/12 5.750 1,646,396 ----------- 2,707,312 ----------- WEST VIRGINIA--0.13% 55 Kanawha County Residential Mortgage Revenue (Escrow to Maturity) ..................................... 09/01/10 7.375 63,169 -----------
52 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE MUNICIPAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ----- ----------- --------- ------- MUNICIPAL BONDS AND NOTES--(CONCLUDED) WISCONSIN--0.21% $ 100 Wisconsin Housing & Economic Development Series G* ........ 03/01/04 5.250% $ 102,858 WYOMING--0.56% 295 Teton County Hospital District Refunding Improvement (ACA Insured) ............................................ 12/01/09 5.100 278,132 ----------- Total Municipal Bonds and Notes (cost--$47,463,609) ................. 48,604,554 ----------- TAX-FREE MONEY MARKET FUND--0.09% 46 Seven Seas Money Market Fund (cost--$45,694) .............. 45,694 ----------- Total Investments (cost--$47,509,303)--98.33% ....................... 48,650,248 Other assets in excess of liabilities--1.67% ........................ 826,963 ----------- Net Assets--100.00% ................................................. $49,477,211 ===========
-------------- # Zero coupon bond: rate represents annualized yield at date of purchase. * Security subject to Alternative Minimum Tax. ACA American Capital Access. AMBAC American Municipal Bond Assurance Corporation. FGIC Federal Guaranty Insurance Corporation. FHA Federal Housing Authority. FNMA Federal National Mortgage Association. FSA Financial Security Assurance. GNMA Government National Mortgage Association. MBIA Municipal Bond Investors Assurance. TCRs Transferable Custodial Receipts. See accompanying notes to financial statements 53 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GLOBAL FIXED INCOME INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2001 (UNAUDITED)
PRINCIPAL AMOUNT MATURITY INTEREST (000)** DATES RATES VALUE ----- ----------- --------- ------- LONG-TERM GLOBAL DEBT SECURITIES--89.37% AUSTRALIA--0.11% USD 100 National Australia Bank Ltd. ....................... 05/19/10 8.600% $ 112,348 ----------- CANADA--3.05% 4,432 Government of Canada ............................... 06/01/10 to 06/01/11 5.500 to 6.000 3,013,178 ----------- DENMARK--5.30% 39,286 Kingdom of Denmark ................................. 03/15/02 to 11/15/11 4.000 to 8.000 5,226,333 ----------- FRANCE--2.56% 2,600 Republic of France ................................. 10/25/10 5.500 2,523,690 ----------- GERMANY--17.21% 17,620 Federal Republic of Germany ........................ 01/04/08 to 01/04/30 4.500 to 6.250 16,976,904 ----------- ITALY--6.64% JPY 80,000 Republic of Italy .................................. 05/12/02 0.375 687,369 6,160 Republic of Italy .................................. 05/01/08 to 11/01/10 5.000 to 5.500 5,860,605 ----------- 6,547,974 ----------- JAPAN--9.09% 100,000 Export-Import Bank of Japan ........................ 10/01/03 4.375 948,060 700,000 Government of Japan ................................ 06/20/08 to 06/22/20 1.800 to 2.200 6,280,905 100,000 Inter-American Development Bank .................... 02/05/02 2.250 876,361 100,000 Primus Financial Services .......................... 12/16/02 0.790 858,755 ----------- 8,964,081 ----------- KOREA--0.46% JPY 34,000 Korea Development Bank ............................. 08/16/02 2.700 293,564 JPY 20,000 Korea Industrial Leasing Corp. ..................... 08/07/02 2.200 165,715 ----------- 459,279 ----------- MEXICO--1.03% EUR 1,100 United Mexican States # ............................ 03/08/10 7.500 1,012,835 ----------- NETHERLANDS--6.30% 6,683 Government of the Netherlands ...................... 02/15/07 to 07/15/09 3.750 to 5.750 6,212,786 ----------- NORWAY--2.43% 21,300 Kingdom of Norway .................................. 11/30/04 to 05/15/09 5.500 to 6.750 2,397,721 ----------- UNITED KINGDOM--1.02% USD 1,000 Glaxo Wellcome PLC ................................. 01/25/06 6.125 1,010,412 ----------- UNITED STATES--34.17% 570 Bank One Corp. ..................................... 02/01/06 6.500 572,748 JPY 107,000 BMW US Capital Corp. ............................... 12/20/02 0.700 918,946 1,250 Chase Commercial Mortgage Securities Corp. ......... 06/15/10 7.631 1,346,984
54 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) 1,500 Chase Funding Mortgage Loan++ ...................... 12/26/26 6.860% $ 1,524,903 1,620 Citigroup, Inc.++ .................................. 12/01/05 to 01/18/11 6.500 to 7.250 1,666,350 500 European Investment Bank++ ......................... 01/24/06 5.625 501,875 3,020 Federal Home Loan Mortgage Corp.++ ................. 03/15/10 to 11/25/16 6.276 to 7.000 3,148,997 30 Federal National Mortgage Association .............. 06/15/10 7.125 32,744 440 Ford Motor Credit Co. .............................. 02/01/06 to 02/01/11 6.875 to 7.375 449,122 600 General Motors Corp.++ ............................. 01/15/11 7.200 606,102 1,250 GMAC Commercial Mortgage Securities, Inc.++ ........ 12/15/09 7.724+ 1,352,125 370 Goldman Sachs Group, Inc. .......................... 01/15/11 6.875 374,515 1,250 GRMT II LLC++ ...................................... 06/20/32 7.409+ 1,276,953 150 Household Finance Corp. ............................ 01/24/06 6.500 150,738 500 Inter-American Development Bank .................... 01/15/10 7.375 552,752 1,200 International Bank for Reconstruction & Development ...................................... 01/27/05 7.000 1,267,530 JPY 100,000 International Business Machines Corp. .............. 04/14/03 0.900+ 862,054 EUR 1,000 International Business Machines Corp. .............. 09/26/02 4.936+ 934,343 630 J.P. Morgan Chase & Co. ............................ 02/01/11 6.750 625,811 150 Peoples Energy Corp. ............................... 01/15/11 6.900 149,049 JPY 200,000 Toyota Motor Credit Corp. .......................... 05/23/03 0.625 1,720,668 800 Unilever Capital Corp.++ ........................... 11/01/10 7.125 849,186 4,720 United States Treasury Bonds++ ..................... 08/15/19 to 05/15/30 6.125 to 8.125 5,325,456 6,678 United States Treasury Notes (1) ................... 11/30/02 to 08/15/10 5.625 to 6.750 7,007,121 500 Wells Fargo Bank N.A. .............................. 02/01/11 6.450 92,690 ----------- 33,709,762 ----------- Total Long-Term Global Debt Securities (cost--$90,674,210) ..... 88,167,303 ----------- SHORT-TERM GLOBAL DEBT SECURITIES--5.23% JPY 100,000 Bank of Scotland Treasury Services PLC ............. 04/24/01 0.520+ 857,671 JPY 100,000 Diageo PLC ......................................... 03/27/01 0.270 858,358 EUR 455 Federal Republic of Germany ........................ 06/15/01 3.000 420,979 JPY 131,000 General Motors Acceptance Corp. .................... 04/26/01 0.574+ 1,125,529 JPY 120,000 Republic of Italy .................................. 06/20/01 3.500 1,043,433 JPY 100,000 Westpac Banking Corp. .............................. 09/24/01 0.129+ 859,131 ----------- Total Short-Term Global Debt Securities (cost--$3,552,927) ..... 5,165,101 ----------- SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--0.10% 100 United States Treasury Bills++ (cost--$98,579) ..... 04/26/01 6.090@ 98,579 -----------
55 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GLOBAL FIXED INCOME INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000)** DATES RATES VALUE ----- ----------- --------- ------- REPURCHASE AGREEMENTS--10.77% 6,985 Repurchase Agreement dated 01/31/01 with State Street Bank & Trust Co., collateralized by $6,943,090 U.S. Treasury Notes, 6.25% to 6.375% due 03/30/02 to 07/31/02; (value--$7,118,596); proceeds: $6,986,079 (cost--$6,985,000) ........................................ 02/01/01 5.560% $ 6,985,000 3,642 Repurchase Agreement dated 01/31/01 with Dresdner Bank, collateralized by $3,592,000 U.S. Treasury Notes, 4.75% due 04/30/03; (value--$3,715,349); proceeds: $3,642,575 (cost--$3,642,000) ............................. 02/01/01 5.680 3,642,000 ----------- Total Repurchase Agreements (cost--$10,627,000) ...................... 10,627,000 ----------- Total Investments (cost--$104,952,716)--105.47% ...................... 104,057,983 Liabilities in excess of other assets--(5.47)% ....................... (5,397,674) ----------- Net Assets--100.00% .................................................. $98,660,309 ===========
-------------- Note: The Portfolio of Investments is listed by the issuer's country of origin. ** In local currency unless otherwise indicated. # Security represents a unit which is composed of the stated bond with attached rights. + Floating rate securities. The interest rates shown are the current rates as of January 31, 2001. ++ 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, 2001. EUR Euro Dollars. JPY Japanese Yen. USD U.S. Dollars. FUTURES CONTRACTS
NUMBER UNREALIZED OF IN EXPIRATION APPRECIATION CONTRACTS CONTRACTS TO RECEIVE EXCHANGE FOR DATES (DEPRECIATION) --------- -------------------- ------------ --------- -------------- 80 U.S. 5 Year Treasury Note ....................... $8,299,875 March 2001 $ 27,625 41 U.S. 10 Year Treasury Note ...................... 4,280,672 March 2001 (33,297) 34 U.S. Long Bond Treasury Note .................... 3,508,438 March 2001 (29,687) -------- $(35,359) ========
FORWARD FOREIGN CURRENCY CONTRACTS
UNREALIZED CONTRACTS TO IN MATURITY APPRECIATION DELIVER EXCHANGE FOR DATES (DEPRECIATION) ------------ ------------ -------- -------------- British Pounds ....................... 500,000 USD 714,950 02/26/01 $ (15,691) Canadian Dollar ...................... 2,472,525 USD 1,597,238 02/26/01 (51,943) Canadian Dollar ...................... 1,206,667 USD 802,839 03/26/01 (2,112) Danish Krone ......................... 34,152,000 USD 3,872,109 02/26/01 (391,347) Euro ................................. 750,000 GBP 452,850 02/26/01 (36,866) Euro ................................. 50,000 USD 44,416 02/26/01 (2,158) Euro ................................. 2,550,000 USD 2,245,219 02/26/01 (130,046) Euro ................................. 1,341,738 USD 1,177,576 02/26/01 (72,221) Euro ................................. 3,975,041 USD 3,775,494 02/26/01 72,836 Euro ................................. 4,117,807 USD 3,891,986 03/26/01 54,081 Euro ................................. 4,111,969 USD 3,875,489 03/26/01 43,025 Euro ................................. 7,066,539 USD 6,656,679 03/26/01 70,478 Euro ................................. 939,794 USD 884,346 03/26/01 8,443 Euro ................................. 850,000 USD 796,110 05/22/01 3,143
56 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE GLOBAL FIXED INCOME INVESTMENTS FORWARD FOREIGN CURRENCY CONTRACTS--(CONCLUDED)
UNREALIZED CONTRACTS TO IN MATURITY APPRECIATION DELIVER EXCHANGE FOR DATES (DEPRECIATION) ------------ ------------ -------- -------------- Euro ................................. 500,000 USD 469,150 05/22/01 $ 2,699 Euro ................................. 800,000 USD 754,200 05/22/01 7,879 Euro ................................. 500,000 USD 465,030 05/22/01 (1,421) Euro ................................. 550,000 USD 509,003 05/22/01 (4,093) Euro ................................. 500,000 USD 462,425 05/22/01 (4,026) Japanese Yen ......................... 36,781,500 USD 350,000 02/26/01 32,893 Japanese Yen ......................... 231,249,600 USD 2,160,000 02/26/01 166,316 Japanese Yen ......................... 173,505,000 USD 1,500,000 02/26/01 4,152 Japanese Yen ......................... 355,014,491 USD 3,017,291 03/26/01 (55,880) Japanese Yen ......................... 207,462,243 USD 1,774,410 03/26/01 (21,480) Norwegian Krone ...................... 11,345,165 USD 1,297,332 03/26/01 15,818 U.S. Dollars ......................... 1,883,504 CAD 2,821,489 02/26/01 (1,563) U.S. Dollars ......................... 180,886 DKK 1,595,775 02/26/01 18,327 U.S. Dollars ......................... 1,760,977 DKK 13,848,320 02/26/01 (32,185) U.S. Dollars ......................... 4,785,550 EUR 5,650,000 02/26/01 477,292 U.S. Dollars ......................... 611,048 EUR 700,000 02/26/01 40,986 U.S. Dollars ......................... 1,221,360 EUR 1,400,000 02/26/01 82,707 U.S. Dollars ......................... 447,400 EUR 500,000 02/26/01 18,338 U.S. Dollars ......................... 934,962 EUR 1,050,000 02/26/01 43,088 U.S. Dollars ......................... 630,977 EUR 700,000 02/26/01 21,057 U.S. Dollars ......................... 2,897,981 EUR 3,065,187 02/26/01 (42,832) U.S. Dollars ......................... 330,295 EUR 350,000 02/26/01 (4,278) U.S. Dollars ......................... 4,796,764 EUR 5,088,325 03/26/01 (54,310) U.S. Dollars ......................... 1,095,633 EUR 1,158,578 03/26/01 (15,807) U.S. Dollars ......................... 1,774,410 EUR 1,900,000 03/26/01 (3,560) U.S. Dollars ......................... 1,576,852 EUR 1,700,000 O3/26/01 7,593 U.S. Dollars ......................... 2,257,517 EUR 2,454,036 05/22/01 31,857 U.S. Dollars ......................... 350,000 EUR 377,827 05/22/01 2,475 U.S. Dollars ......................... 743,424 EUR 800,000 05/22/01 2,897 U.S. Dollars ......................... 1,761,668 GBP 1,240,000 02/26/01 50,321 U.S. Dollars ......................... 156,444 JPY 17,944,088 02/26/01 (1,741) U.S. Dollars ......................... 600,000 JPY 70,435,200 02/26/01 7,246 U.S. Dollars ......................... 875,576 JPY 95,000,000 02/26/01 (56,548) U.S. Dollars ......................... 4,167,670 JPY 451,358,630 02/26/01 276,349) U.S. Dollars ......................... 2,585,808 JPY 301,582,805 03/26/01 24,833 U.S. Dollars ......................... 4,959,858 JPY 581,295,363 03/26/01 72,106 U.S. Dollars ......................... 1,297,556 NOK 11,332,854 03/26/01 (17,433) --------- $ 86,996 =========
CURRENCY TYPE ABBREVIATIONS: CAD Canadian Dollar. DKK Danish Krone. EUR Euro. GBP British Pounds. JPY Japanese Yen. NOK Norwegian Krone. USD U.S. Dollars. INVESTMENTS BY TYPE OF ISSUER
PERCENT OF PORTFOLIO ASSETS ------------------------------- LONG-TERM SHORT-TERM --------- ---------- Government and other public issuers ................. 64.44% 1.50% Repurchase agreements ............................... -- 10.21 Bank and other financial institutions ............... 13.94 3.56 Industrial .......................................... 6.35 -- ----- ----- 84.73% 15.27% ===== =====
See accompanying notes to financial statements 57 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY VALUE EQUITY INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2001 (UNAUDITED) NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--97.58% AGRICULTURE, FOOD & BEVERAGE--0.57% 48,750 H. J. Heinz Co. ............................... $ 2,134,763 ----------- AIRLINES--0.74% 45,800 Delta Air Lines, Inc. ......................... 2,162,676 23,800 Northwest Airlines Corp.* ..................... 590,538 ----------- 2,753,214 ----------- ALCOHOL--0.63% 54,400 Anheuser-Busch Companies, Inc. ................ 2,358,784 ----------- APPAREL--0.17% 23,700 Reebok International Ltd.* .................... 645,588 ----------- BANKS--13.25% 118,000 AmSouth Bancorp ............................... 2,044,940 32,700 Astoria Financial Corp. ....................... 1,706,531 67,900 Bank of America Corp. ......................... 3,654,378 42,200 Bank One Corp. ................................ 1,654,240 261,010 Citigroup, Inc. ............................... 14,608,730 51,500 Dime Bancorp, Inc. ............................ 1,426,035 27,700 Fifth Third Bancorp ........................... 1,641,225 70,550 First Union Corp. ............................. 2,393,762 30,300 FleetBoston Financial Corp. ................... 1,313,202 65,340 J. P. Morgan Chase & Co. ...................... 3,593,047 153,600 KeyCorp ....................................... 4,094,976 33,200 National City Corp. ........................... 937,900 31,200 PNC Bank Corp. ................................ 2,309,424 37,400 SunTrust Banks, Inc. .......................... 2,502,060 57,500 UnionBanCal Corp. ............................. 1,715,800 74,150 Wells Fargo and Co. ........................... 3,819,466 ----------- 49,415,716 ----------- CHEMICALS--1.07% 31,100 Air Products & Chemicals, Inc. ................ 1,174,647 23,600 Carlisle Co., Inc. ............................ 948,720 11,600 Eastman Chemical Co. .......................... 541,836 84,300 IMC Global, Inc. .............................. 1,333,626 ----------- 3,998,829 ----------- COMPUTER HARDWARE--1.05% 40,600 Apple Computer, Inc.* ......................... 877,975 128,450 Compaq Computer Corp.(1) ...................... 3,045,549 ----------- 3,923,524 ----------- COMPUTER SOFTWARE--2.43% 14,400 i2 Technologies, Inc.* ........................ 729,000 57,475 International Business Machines Corp. ......... 6,437,200 20,100 VERITAS Software Corp.* ....................... 1,906,987 ----------- 9,073,187 ----------- CONSUMER DURABLE--0.71% 35,000 Pier 1 Imports, Inc. .......................... 388,850 43,000 Whirlpool Corp.(1) ............................ 2,257,070 ----------- 2,645,920 ----------- DEFENSE / AEROSPACE--2.87% 54,200 Boeing Co. .................................... 3,170,700 56,600 General Dynamics Corp. ........................ 4,017,468 26,450 Northrop Grumman Corp. ........................ 2,292,686 33,650 TRW, Inc. ..................................... 1,223,514 ----------- 10,704,368 ----------- DEPARTMENT STORE--1.38% 132,400 Sears, Roebuck & Co. .......................... 5,130,500 ----------- DIVERSIFIED RETAIL--0.56% 54,475 Target Corp. .................................. 2,068,961 ----------- DRUGS & MEDICINE--5.06% 51,700 ALZA Corp.* ................................... 2,140,380 93,375 Bristol-Myers Squibb Co. ...................... 5,778,979 83,800 Merck & Co., Inc. ............................. 6,886,684 72,900 Pharmacia Corp. ............................... 4,083,858 ----------- 18,889,901 ----------- ELECTRIC UTILITIES--5.29% 42,300 Allegheny Energy, Inc. ........................ 1,930,149 39,900 American Electric Power Co., Inc. ............. 1,725,675 54,500 Cinergy Corp. ................................. 1,654,075 66,000 Duke Energy Corp. ............................. 2,413,620 43,500 Energy East Corp. ............................. 806,925 20,400 Exelon Corp. .................................. 1,234,404 46,300 FirstEnergy Corp. ............................. 1,289,455 41,650 FPL Group, Inc. ............................... 2,415,700 97,815 Progress Energy, Inc. ......................... 2,285,878 105,500 Reliant Energy, Inc. .......................... 3,977,350 ----------- 19,733,231 ----------- ELECTRICAL EQUIPMENT--1.58% 30,200 Danaher Corp. ................................. 1,947,296 44,100 Dover Corp. ................................... 1,825,740 50,300 Motorola, Inc. ................................ 1,147,343 32,350 Thermo Electron Corp.* ........................ 959,177 ----------- 5,879,556 ----------- ENERGY RESERVES & PRODUCTION--0.38% 18,600 Apache Corp. .................................. 1,071,360 13,100 Xcel Energy, Inc. ............................. 333,657 ----------- 1,405,017 ----------- 58 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY VALUE EQUITY INVESTMENTS NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--(CONTINUED) ENERGY RESOURCES--2.72% 14,900 Amerada Hess Corp. .............................. $ 1,034,060 37,800 Anadarko Petroleum Corp. ........................ 2,150,820 12,200 Chevron Corp. ................................... 1,016,016 40,250 Devon Energy Corp.(1) ........................... 2,205,700 15,300 Kerr-McGee Corp. ................................ 989,298 50,300 Occidental Petroleum Corp. ...................... 1,142,313 36,900 Tosco Corp. ..................................... 1,246,851 18,500 Vintage Petroleum, Inc. ......................... 342,435 ----------- 10,127,493 ----------- ENERGY SOURCES--3.00% 133,075 Exxon Mobil Corp. ............................... 11,198,261 ----------- FINANCIAL SERVICES--4.72% 16,700 American Express Co. ............................ 786,570 120,500 Comdisco, Inc. .................................. 1,960,535 34,400 Federal Home Loan Mortgage Corp. ................ 2,098,400 83,975 Federal National Mortgage Association ........... 6,229,265 16,300 General Electric Co. ............................ 749,800 80,050 Household International, Inc. ................... 4,601,274 59,000 Security Capital Group, Inc., Class B* .......... 1,168,200 ----------- 7,594,044 ----------- FOOD & BEVERAGE--0.85% 57,200 PepsiCo, Inc. ................................... 2,520,804 47,300 Tyson Foods Inc. ................................ 643,280 ----------- 3,164,084 ----------- FOREST PRODUCTS, PAPER--2.79% 71,500 Georgia-Pacific Group(1) ........................ 2,210,065 57,600 Kimberly Clark Corp. ............................ 3,729,600 11,800 Packaging Corp. of America* ..................... 166,380 44,100 Sonoco Products Co. ............................. 1,022,238 62,600 Weyerhaeuser Co. ................................ 3,286,500 ----------- 10,414,783 ----------- FREIGHT, AIR, SEA & LAND--0.68% 41,200 United Parcel Service, Inc.(1) .................. 2,550,280 ----------- GAS UTILITY--0.26% 26,100 KeySpan Corp. ................................... 986,580 ----------- GROCERY--0.22% 34,000 Kroger Co.* ..................................... 834,700 ----------- HEAVY ELECTRIC--0.28% 900 Cummins Engine Co., Inc. ........................ 33,768 21,300 Rockwell International Corp. .................... 1,004,934 ----------- 1,038,702 ----------- HEAVY MACHINERY--0.62% 53,650 Deere & Co. ..................................... 2,302,658 ----------- HOTELS--0.30% 28,800 Starwood Hotels & Resorts Worldwide, Inc. ....... 1,108,800 ----------- HOUSEHOLD PRODUCTS--1.12% 59,000 Avon Products, Inc. ............................. 2,495,700 23,400 Procter & Gamble Co. ............................ 1,681,056 ----------- 4,176,756 ----------- INDUSTRIAL SERVICES & SUPPLIES--1.89% 21,100 American Standard Co., Inc.* .................... 1,088,971 20,000 FMC Corp.* ...................................... 1,407,200 32,750 Tyco International Ltd. ......................... 2,017,400 33,700 United Technologies Corp. ....................... 2,526,826 ----------- 7,040,397 ----------- INFORMATION & COMPUTER SERVICES--1.77% 30,150 Electronic Data Systems Corp. ................... 1,677,847 54,700 First Data Corp. ................................ 3,326,307 66,900 Viad Corp. ...................................... 1,588,875 ----------- 6,593,029 ----------- INTERNET--0.28% 19,000 Ariba, Inc.*(1) ................................. 708,938 4,300 VeriSign, Inc.* ................................. 316,050 ----------- 1,024,988 ----------- LEISURE--0.65% 30,000 Harman International Industries, Inc. ........... 1,057,800 28,600 International Game Technology* .................. 1,369,082 ----------- 2,426,882 ----------- LIFE INSURANCE--2.82% 59,000 Aetna, Inc.*(1) ................................. 2,255,570 17,900 CIGNA Corp. ..................................... 1,989,585 148,150 MetLife, Inc.(1) ................................ 4,862,283 24,800 UnitedHealth Group, Inc.* ....................... 1,398,968 ----------- 10,506,406 ----------- LONG DISTANCE & PHONE COMPANIES--6.65% 59,700 AT&T Corp. ...................................... 1,432,203 69,000 BellSouth Corp. ................................. 2,908,350 88,000 MCI WorldCom, Inc. .............................. 1,897,500 15,000 Qwest Communications International, Inc.* ....... 631,800 154,200 SBC Communications, Inc. ........................ 7,455,570 190,851 Verizon Communications .......................... 10,487,262 ----------- 24,812,685 ----------- MEDIA--3.95% 500 Gannett Co., Inc. ............................... 31,700 50,525 AOL Time Warner, Inc.* .......................... 2,655,594 90,500 AT&T Corp.- Liberty Media Corp.* ................ 1,529,450 9,332 Clear Channel Communications, Inc.*(1) .......... 608,540 71,500 General Motors Corp., Class H* .................. 2,000,570 57,500 News Corp. Ltd., ADR ............................ 1,990,650 11,200 Viacom, Inc.* ................................... 618,240 152,400 Walt Disney Co. ................................. 4,640,580 29,000 Westwood One, Inc.* ............................. 650,470 ----------- 14,725,794 ----------- 59 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY VALUE EQUITY INVESTMENTS NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--(CONCLUDED) MEDICAL PRODUCTS--1.97% 41,900 Abbott Laboratories .............................. $ 1,879,634 24,525 Bausch & Lomb, Inc. .............................. 1,148,260 29,450 Becton, Dickinson & Co. .......................... 1,012,491 35,700 Johnson & Johnson ................................ 3,324,741 ------------ 7,365,126 ------------ MEDICAL PROVIDERS--1.68% 51,600 Tenet Healthcare Corp. ........................... 2,250,792 41,550 Wellpoint Health Networks, Inc.*(1) .............. 4,008,328 ------------ 6,259,120 ------------ MINING & METALS--0.65% 66,150 Alcoa, Inc. ...................................... 2,430,351 ------------ MOTOR VEHICLES--0.71% 82,500 Ford Motor Co. ................................... 2,325,675 5,825 General Motors Corp.* ............................ 312,803 ------------ 2,638,478 ------------ OIL REFINING--4.02% 174,975 Conoco, Inc. ..................................... 4,934,295 49,300 Texaco, Inc. ..................................... 3,027,020 38,700 Ultramar Diamond Shamrock Corp. .................. 1,106,046 98,800 USX-Marathon Group ............................... 2,703,168 26,900 Valero Energy Corp. .............................. 929,395 59,000 Williams Companies, Inc. ......................... 2,308,670 ------------ 15,008,594 ------------ PROPERTY INSURANCE--5.68% 75,600 Allstate Corp. ................................... 2,939,328 36,200 American International Group, Inc. ............... 3,077,724 38,450 Hartford Financial Services Group, Inc. .......... 2,364,675 45,650 Loews Corp. ...................................... 4,437,180 32,700 MGIC Investment Corp. ............................ 1,879,923 76,000 Old Republic International Corp. ................. 2,088,480 27,800 PMI Group, Inc. .................................. 1,570,422 28,000 Radian Group, Inc. ............................... 1,739,920 23,000 St. Paul Cos., Inc. .............................. 1,104,460 ------------ 21,202,112 ------------ PUBLISHING--1.00% 40,950 Knight-Ridder, Inc. .............................. 2,383,700 30,800 New York Times Co. ............................... 1,342,572 ------------ 3,726,272 ------------ RAILROADS--0.94% 91,400 Burlington Northern Santa Fe, Inc. ............... 2,797,754 22,900 Canadian Pacific Ltd. ............................ 709,213 ------------ 3,506,967 ------------ REAL PROPERTY--0.57% 25,200 Kimco Realty Corp. ............................... 1,107,540 27,500 Vornado Realty Trust ............................. 1,001,000 ------------ 2,108,540 ------------ RESTAURANTS--0.51% 18,750 Brinker International, Inc.* .............. 486,750 39,275 Tricon Global Restaurants, Inc.* .......... 1,414,686 ------------ 1,901,436 ------------ SECURITIES & ASSET MANAGEMENT--1.51% 17,600 Bear Stearns Co., Inc. ........................... 1,085,920 27,200 John Hancock Financial Services, Inc. ............ 947,920 28,000 Merrill Lynch & Co., Inc. ........................ 2,030,000 18,500 Morgan Stanley Dean Witter & Co. ................. 1,567,875 ------------ 5,631,715 ------------ SEMICONDUCTOR--0.80% 77,594 Koninklijke (Royal) Philips Electronics N.V., ADR* ........................ 2,964,091 ------------ SPECIALTY RETAIL--0.39% 24,700 CVS Corp. ........................................ 1,462,240 ------------ THRIFTS--1.91% 13,900 Downey Financial Corp. ........................... 633,840 56,400 Golden State Bancorp, Inc. ....................... 1,522,800 24,000 Golden West Financial Corp. ...................... 1,284,960 38,600 Greenpoint Financial Corp. ....................... 1,360,650 48,400 Washington Mutual, Inc.(1) ....................... 2,335,300 ------------ 7,137,550 ------------ TOBACCO--1.06% 76,000 Philip Morris Co., Inc. .......................... 3,344,000 24,000 UST, Inc. ........................................ 612,000 ------------ 3,956,000 ------------ WIRELESS TELECOMMUNICATIONS--0.87% 38,500 AT&T Wireless Group*(1) .......................... 999,845 64,200 Vodafone Group PLC, ADR .......................... 2,245,074 ------------ 3,244,919 ------------ Total Common Stocks (cost--$334,267,766) ....................... 363,931,892 ------------ NUMBER OF WARRANTS --------- WARRANTS--0.00% BANKS--0.00% 51,500 Dime Bancorp* (cost--$0) ......................... 12,875 ------------ 60 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ------- ----------- --------- ------- REPURCHASE AGREEMENTS--2.81% $ 4,192 Repurchase Agreement dated 01/31/01 with SG Cowen Securities Group, collateralized by $4,460,000 U.S. Treasury Bonds, 5.25% due 11/15/28; (value--$4,276,025); proceeds: $4,192,658 (cost--$4,192,000) ........................ 02/01/01 5.650% $ 4,192,000 4,077 Repurchase Agreement dated 01/31/01 with State Street Bank & Trust Co., collateralized by $4,052,538 U.S. Treasury Notes, 6.375% due 06/30/02; (value--$4,158,917); proceeds: $4,077,630 (cost--$4,077,000) ........................ 02/01/01 5.560 4,077,000 2,228 Repurchase Agreement dated 01/31/01 with Dresdner Bank, collateralized by $2,078,000 U.S. Treasury Notes, 6.625% due 05/15/07; (value--$2,273,523); proceeds: $2,228,352 (cost--$2,228,000) ............................................. 02/01/01 5.680 2,228,000 ------------ Total Repurchase Agreements (cost--$10,497,000) ........................... 10,497,000 ------------ Total Investments (cost--$344,764,766)--100.39% ........................... 374,441,767 Liabilities in excess of other assets--(0.39)% ............................ (1,469,905) ------------ Net Assets--100.00% ....................................................... $372,971,862 ============
--------------------- * Non-Income producing security. ADR American Depositary Receipt. (1) Security, or portion thereof, was on loan at January 31, 2001. See accompanying notes to financial statements 61 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2001 (UNAUDITED) NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--98.36% AGRICULTURE, FOOD & BEVERAGE--0.60% 21,300 Coca-Cola Co. ................................. $ 1,235,400 27,400 Pepsi Bottling Group, Inc. .................... 1,068,600 ------------ 2,304,000 ------------ AIRLINES--0.21% 32,200 Northwest Airlines Corp.* ..................... 798,963 ------------ BANKS--5.05% 29,000 Bank One Corp. ................................ 1,136,800 194,099 Citigroup, Inc. ............................... 10,863,721 21,000 Fifth Third Bancorp ........................... 1,244,250 50,300 Firstar Corp. ................................. 1,187,080 90,000 J.P. Morgan Chase & Co. ....................... 4,949,100 ------------ 19,380,951 ------------ BIOTECHNOLOGY--1.01% 17,600 Amgen, Inc.* .................................. 1,237,500 18,100 Chiron Corp.* ................................. 759,069 18,100 Quest Diagnostics, Inc.* ...................... 1,873,350 ------------ 3,869,919 ------------ COMMUNICATION EQUIPMENT--1.55% 12,400 Comverse Technology, Inc.* .................... 1,405,075 24,000 Corning, Inc. ................................. 1,361,040 11,600 L-3 Communications Holdings, Inc.*(1) ......... 930,436 20,700 Polycom, Inc.* ................................ 583,481 20,500 Scientific-Atlanta, Inc. ...................... 1,230,000 2,200 SDL, Inc.* .................................... 443,850 ------------ 5,953,882 ------------ COMPUTER HARDWARE--7.76% 14,800 Brocade Communications Systems, Inc.* ......... 1,336,625 529,400 Cisco Systems, Inc.* .......................... 19,819,412 21,200 Emulex Corp.*(1) .............................. 1,971,600 16,800 International Business Machines Corp. ......... 1,881,600 156,600 Sun Microsystems, Inc.* ....................... 4,786,088 ------------ 29,795,325 ------------ COMPUTER SOFTWARE--10.91% 41,800 Adobe Systems, Inc. ........................... 1,826,138 36,850 BEA Systems, Inc.* ............................ 2,429,797 114,300 EMC Corp.* .................................... 8,685,657 135,700 Microsoft Corp.* .............................. 8,286,181 340,700 Oracle Corp.* ................................. 9,922,887 32,000 Rational Software Corp.* ...................... 1,662,000 18,100 SERENA Software, Inc.* ........................ 615,400 26,700 Siebel Systems, Inc.* ......................... 1,770,544 61,900 VERITAS Software Corp.* ....................... 5,872,762 27,900 Verity, Inc.* ................................. 830,025 ------------ 41,901,391 ------------ DEFENSE & AEROSPACE--0.23% 15,100 Boeing Co. .................................... 883,350 ------------ DIVERSIFIED RETAIL--3.28% 143,900 Kohl's Corp.*(1) .............................. 10,216,900 41,700 Wal-Mart Stores, Inc. ......................... 2,368,560 ------------ 12,585,460 ------------ DRUGS & MEDICINE--11.67% 44,800 ALZA Corp.* ................................... 1,854,720 14,100 Andrx Group* .................................. 928,837 20,100 Bristol-Myers Squibb Co. ...................... 1,243,989 35,400 Forest Laboratories, Inc.* .................... 2,370,384 47,500 King Pharmaceuticals, Inc.* ................... 2,152,225 10,800 Lilly (Eli) & Co. ............................. 851,040 53,100 Merck & Co., Inc.(1) .......................... 4,363,758 437,900 Pfizer, Inc. .................................. 19,771,185 68,000 Pharmacia Corp. ............................... 3,809,360 148,100 Schering-Plough Corp. ......................... 7,464,240 ------------ 44,809,738 ------------ EDUCATION--0.36% 25,000 Apollo Group, Inc., Class A*(1) ............... 1,367,188 ------------ ELECTRIC UTILITIES--1.54% 85,400 AES Corp.* .................................... 4,921,602 39,700 NRG Energy, Inc. .............................. 1,009,968 ------------ 5,931,570 ------------ ELECTRICAL EQUIPMENT--4.97% 158,800 Flextronics International Ltd.*(1) ............ 6,054,250 26,000 Sawtek, Inc.* ................................. 719,875 281,700 Solectron Corp.* .............................. 11,225,745 50,700 Vishay Intertechnology, Inc.* ................. 1,105,260 ------------ 19,105,130 ------------ FINANCIAL SERVICES--7.76% 28,000 AmeriCredit Corp.* ............................ 989,800 486,400 General Electric Co.(1) ....................... 22,374,400 141,000 MBNA Corp. .................................... 5,102,790 30,000 Metris Cos., Inc. ............................. 792,000 9,400 Providian Financial Corp. ..................... 548,490 ------------ 29,807,480 ------------ FOOD RETAIL--0.48% 75,000 Kroger Co.*(1) ................................ 1,841,250 ------------ HOUSEHOLD PRODUCTS--1.33% 70,400 Colgate-Palmolive Co. ......................... 4,229,632 24,700 Maytag Corp. .................................. 864,500 ------------ 5,094,132 ------------ INDUSTRIAL SERVICES & SUPPLIES--3.06% 24,300 Dycom Industries, Inc.* ....................... 515,646 182,400 Tyco International Ltd. ....................... 11,235,840 ------------ 11,751,486 ------------ 62 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--(CONCLUDED) INFORMATION & COMPUTER SERVICES--2.63% 25,000 Ariba, Inc.*(1) ............................... $ 932,813 56,400 Comdisco, Inc. ................................ 917,628 20,000 Computer Sciences Corp.* ...................... 1,292,000 19,000 First Data Corp. .............................. 1,155,390 23,000 i2 Technologies, Inc.* ........................ 1,164,375 29,000 Juniper Networks, Inc.*(1) .................... 3,072,187 46,300 Lucent Technologies, Inc. ..................... 861,180 9,800 VeriSign, Inc.* ............................... 720,300 ------------ 10,115,873 ------------ LEISURE--1.70% 118,500 Harley Davidson Inc. .......................... 5,378,715 23,900 International Game Technology* ................ 1,144,093 ------------ 6,522,808 ------------ MEDIA--7.78% 280,250 AOL Time Warner, Inc.* ........................ 14,729,940 480,600 AT&T Corp. - Liberty Media Corp., Class A* .... 8,122,140 85,000 Comcast Corp., Class A* ....................... 3,639,062 30,400 Infinity Broadcasting Corp., Class A* ......... 995,600 26,000 Omnicom Group, Inc. ........................... 2,373,800 ------------ 29,860,542 ------------ MEDICAL PRODUCTS--3.41% 12,600 Allergan, Inc. ................................ 1,030,050 9,500 Genzyme Corp.* ................................ 822,344 48,200 Guidant Corp.* ................................ 2,385,900 11,000 Invitrogen Corp.* ............................. 819,500 22,600 Johnson & Johnson ............................. 2,104,738 79,800 Medtronic, Inc. ............................... 4,309,200 12,800 Patterson Dental Co.* ......................... 387,200 20,000 St. Jude Medical, Inc.* ....................... 1,220,000 ------------ 13,078,932 ------------ MEDICAL PROVIDERS--0.62% 44,000 Oxford Health Plans, Inc.* .................... 1,372,250 14,200 UnitedHealth Group, Inc.* ..................... 801,022 2,800 Universal Health Services, Inc., Class B* ..... 229,320 ------------ 2,402,592 ------------ OIL SERVICES--1.31% 11,200 Devon Energy Corp. ............................ 613,760 37,100 Dynegy, Inc., Class A ......................... 1,806,770 23,500 EOG Resources, Inc. ........................... 1,027,890 12,700 Murphy Oil Corp. .............................. 735,838 30,800 USX-Marathon Group ............................ 842,688 ------------ 5,026,946 ------------ OTHER INSURANCE--1.48% 67,100 American International Group, Inc. ............ 5,704,842 ------------ SECURITIES & ASSET MANAGEMENT--2.26% 102,400 Morgan Stanley Dean Witter & Co. .............. 8,678,400 ------------ SEMICONDUCTOR--9.11% 185,300 Altera Corp.* ................................. 5,605,325 3,400 Applied Materials, Inc.* ...................... 171,063 65,300 Applied Micro Circuits Corp.* ................. 4,799,550 12,800 Broadcom Corp.* ............................... 1,407,200 31,500 DDi Corp.* .................................... 958,781 17,300 Integrated Device Technology, Inc.* ........... 846,348 322,600 Intel Corp. ................................... 11,936,200 26,000 Intersil Holding Corp.* ....................... 770,250 31,400 JDS Uniphase Corp.* ........................... 1,721,112 24,500 Linear Technology Corp. ....................... 1,534,313 16,700 PMC-Sierra, Inc.* ............................. 1,261,894 15,000 QLogic Corp* .................................. 1,320,000 25,600 Texas Instruments, Inc. ....................... 1,121,280 13,200 TranSwitch Corp.* ............................. 650,100 24,700 TriQuint Semiconductor, Inc.* ................. 870,675 ------------ 34,974,091 ------------ SPECIALTY RETAIL--1.94% 31,100 CVS Corp. ..................................... 1,841,120 116,400 Home Depot, Inc. .............................. 5,610,480 ------------ 7,451,600 ------------ TELECOMMUNICATIONS - SERVICES--0.39% 14,000 Inet Technologies, Inc.* ...................... 560,875 22,100 Qwest Communications International, Inc.* ..... 930,852 ------------ 1,491,727 ------------ WIRELESS TELECOMMUNICATIONS--3.96% 68,000 Amdocs Ltd.* .................................. 5,325,080 161,000 AT&T Wireless Group*(1) ....................... 4,181,170 129,700 Nokia Corp., ADR .............................. 4,455,195 6,800 QUALCOMM, Inc.* ............................... 571,625 10,000 United States Cellular Corp.*(1) .............. 666,500 ------------ 15,199,570 ------------ Total Common Stocks (cost--$322,677,618) ...................... 377,689,138 ------------ 63 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATES RATES VALUE ------- ----------- --------- ------- SHORT-TERM U.S. GOVERNMENT OBLIGATIONS@--0.18% $ 700 U.S. Treasury Bills (cost--$695,852) .................................. 03/15/01 5.080% $ 695,852 ------------ REPURCHASE AGREEMENTS--1.64% 2,897 Repurchase Agreement dated 01/31/01 with State Street Bank & Trust Co., collateralized by $2,879,618 U.S. Treasury Notes, 6.375% due 06/30/02; (value--$2,955,208); proceeds: $2,897,447 (cost--$2,897,000) ....................................... 02/01/01 5.560 2,897,000 3,390 Repurchase Agreement dated 01/31/01 with Dresdner Bank, collateralized by $3,148,000 U.S. Treasury Bonds, 6.250% due 08/15/23; (value--$3,458,223); proceeds: $3,390,535 (cost--$3,390,000) .................................................. 02/01/01 5.690 3,390,000 ------------ Total Repurchase Agreements (cost--$6,287,000) ................................. 6,287,000 ------------ Total Investments (cost--$329,660,470)--100.18% ................................ 384,671,990 Liabilities in excess of other assets--(0.18)% ................................. (692,304) ------------ Net Assets--100.00% ............................................................ $383,979,686 ============
--------------- * Non-Income producing security. @ Interest rate shown is discount rate at date of purchase. (1) Security, or portion thereof, was on loan at January 31, 2001. ADR American Depository Receipt See accompanying notes to financial statements 64 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2001 (UNAUDITED) NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--93.09% AGRICULTURE, FOOD & BEVERAGE--2.64% 114,900 McCormick & Co., Inc. .......................... $ 4,188,105 119,500 PepsiAmericas, Inc.* ........................... 1,909,610 ------------ 6,097,715 ------------ APPAREL, RETAIL--1.48% 150,000 Ross Stores, Inc. .............................. 3,431,250 ------------ BANKS--4.27% 81,700 Colonial BancGroup, Inc. ....................... 1,019,616 150,000 Compass Bancshares, Inc. ....................... 3,440,625 56,700 SouthTrust Corp. ............................... 2,516,063 350,000 Sovereign Bancorp, Inc. ........................ 2,898,437 ------------ 9,874,741 ------------ CHEMICALS--5.55% 52,200 Avery Dennison Corp. ........................... 2,830,284 100,000 Cabot Corp. .................................... 3,225,000 60,000 Engelhard Corp. ................................ 1,353,000 250,000 Pennzoil-Quaker State Co. ...................... 3,012,500 295,200 PolyOne Corp. .................................. 2,420,640 ------------ 12,841,424 ------------ COMPUTER HARDWARE--2.11% 125,000 Adaptec Inc.* .................................. 1,828,125 87,600 Pitney Bowes, Inc. ............................. 3,063,372 ------------ 4,891,497 ------------ CONSTRUCTION--3.44% 168,900 Rouse Co. ...................................... 4,558,611 320,000 Washington Group International, Inc.* .......... 3,392,000 ------------ 7,950,611 ------------ CONSUMER DURABLES--7.02% 75,000 Black & Decker Corp. (1) ....................... 3,356,250 156,700 Herman Miller, Inc. ............................ 4,485,537 179,450 Interface, Inc. ................................ 1,772,069 316,300 Leggett & Platt, Inc. (1) ...................... 6,642,300 ------------ 16,256,156 ------------ DEFENSE & AEROSPACE--0.39% 25,000 B.F. Goodrich Co. .............................. 900,000 ------------ ENTERTAINMENT--1.45% 104,100 Carnival Corp. ................................. 3,358,266 ------------ ENVIRONMENTAL SERVICES--1.87% 218,700 ServiceMaster Co. .............................. 2,512,863 74,300 Waste Management, Inc. ......................... 1,812,920 ------------ 4,325,783 ------------ FINANCIAL SERVICES--5.87% 162,600 AmSouth Bancorpation ........................... 2,817,858 61,200 H&R Block, Inc. ................................ 2,653,020 75,450 MBNA Corp. ..................................... 2,730,536 101,500 New Dun & Bradstreet Corp. (1)* ................ 2,547,650 50,000 Regions Financial Corp. ........................ 1,487,500 34,600 Securities & Asset Management .................. 1,349,400 ------------ 13,585,964 ------------ FOREST PRODUCTS, PAPER--1.93% 400,000 Louisiana-Pacific Corp. ........................ 4,460,000 ------------ HEAVY MACHINERY--2.17% 162,500 AGCO Corp. ..................................... 1,948,375 169,700 Terex Corp.* ................................... 3,078,358 ------------ 5,026,733 ------------ HOUSEHOLD PRODUCTS--2.60% 66,800 Clorox Co. ..................................... 2,254,500 68,800 Fortune Brands, Inc. ........................... 2,202,288 57,100 Newell Rubbermaid, Inc. (1) .................... 1,553,120 ------------ 6,009,908 ------------ INDUSTRIAL SERVICES & SUPPLIES--5.31% 238,600 Cendant Corp. (1)* ............................. 3,056,466 106,100 Harte-Hanks Co. ................................ 2,335,261 200,000 Ingram Micro, Inc. Class A(1)* ................. 3,292,000 300,000 Input/Output, Inc.* ............................ 3,600,000 ------------ 12,283,727 ------------ INFORMATION & COMPUTER SERVICES--7.33% 137,500 Equifax, Inc. .................................. 4,076,875 225,000 John H. Harland Co. ............................ 3,487,500 450,000 Loral Space & Communications Ltd.* ............. 2,655,000 1,482 Simione Central Holdings, Inc. ................. 6,623 82,000 Storage Technology Corp.* ...................... 1,069,280 54,300 Sun Guard Data Systems* ........................ 2,712,285 230,000 Systems & Computer Technology Corp.* ........... 2,961,250 ------------ 16,968,813 ------------ LEISURE--3.67% 358,800 Hasbro, Inc. ................................... 4,262,544 88,500 International Game Technology* ................. 4,236,495 ------------ 8,499,039 ------------ LONG DISTANCE & PHONE COMPANIES--1.94% 143,000 CenturyTel, Inc. ............................... 4,487,340 ------------ MANUFACTURING - GENERAL--4.48% 48,800 Energizer Holdings, Inc.* ...................... 1,200,480 325,000 McDermott International, Inc. .................. 4,582,500 94,800 Milacron, Inc. ................................. 1,743,372 240,000 Pactiv Corp.* .................................. 2,836,800 ------------ 10,363,152 ------------ 65 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--(CONCLUDED) MANUFACTURING - HIGH TECHNOLOGY--0.67% 133,300 Hexcel Corp.* .................................. $ 1,559,610 ------------ MEDIA--1.21% 69,200 Tribune Co.(1) ................................. 2,789,452 ------------ MEDICAL PRODUCTS--4.90% 161,800 Apogent Technologies, Inc.* .................... 3,413,980 72,000 Bausch & Lomb, Inc.(1) ......................... 3,371,040 250,000 Covance, Inc.* ................................. 3,437,500 57,733 Sybron Dental Specialties, Inc.* ............... 1,105,587 ------------ 11,328,107 ------------ MEDICAL PROVIDERS--2.87% 100,000 Bergen Brunswig Corp., Class A ................. 1,820,000 460,200 Beverly Enterprises, Inc.* ..................... 3,446,898 40,000 Manor Care, Inc.* .............................. 770,000 30,000 Omnicare, Inc. ................................. 613,500 ------------ 6,650,398 ------------ MINING & METALS--1.42% 100,000 AK Steel Holding Corp. ......................... 936,000 59,000 Ball Corp. ..................................... 2,357,640 ------------ 3,293,640 ------------ OIL SERVICES--1.37% 303,600 Superior Energy Services, Inc.* ................ 3,168,825 ------------ OTHER INSURANCE--3.92% 73,500 MBIA, Inc. ..................................... 5,268,480 51,400 Xl Capital Ltd.(1) ............................. 3,812,852 ------------ 9,081,332 ------------ PUBLISHING--4.50% 84,800 Houghton Mifflin Co. ........................... 3,575,168 125,600 Lee Enterprises, Inc. .......................... 3,943,840 71,400 McClatchy Co. .................................. 2,894,556 ------------ 10,413,564 ------------ RESTAURANTS--0.57% 70,100 Bob Evans Farms, Inc. .......................... 1,318,756 ------------ SECURITIES & ASSET MANAGEMENT--1.33% 65,800 Franklin Resources, Inc. ....................... 3,076,808 ------------ SPECIALTY RETAIL--4.81% 250,000 American Greetings Corp., Class A .............. 3,137,500 100,000 Casey's General Stores, Inc. ................... 1,200,000 93,400 Longs Drug Stores Corp. ........................ 2,290,168 450,000 Office Depot, Inc.* ............................ 4,509,000 ------------ 11,136,668 ------------ Total Common Stocks (cost--$175,349,312) ....................... 215,429,279 ------------
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATE RATE ------- ----------- --------- REPURCHASE AGREEMENT--5.75% $ 13,298 Repurchase Agreement dated 01/31/01 with State Street Bank & Trust Co., collateralized by $13,218,212 U.S. Treasury Notes, 6.375% due 06/30/02; (value--$13,565,190); proceeds: $13,300,054 (cost--$13,298,000) .............................. 02/01/01 5.560% 13,298,000 ------------ Total Investments (cost--$188,647,312)--98.84% .................................... 228,727,279 Other assets in excess of liabilities--1.16% ...................................... 2,688,215 ------------ Net Assets--100.00% ............................................................... $231,415,494 ============
-------------- * Non-Income producing security. (1) Security, or portion thereof, was on loan at January 31, 2001. See accompanying notes to financial statements 66 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2001 (UNAUDITED) NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--90.52% BANKS--3.68% 147,300 Dime Bancorp, Inc. ............................. $ 4,078,737 128,500 Doral Financial Corp. .......................... 3,204,469 99,400 Webster Financial Corp. ........................ 2,814,262 ------------ 10,097,468 ------------ BUSINESS & PUBLIC SERVICES--3.14% 59,700 Agile Software Corp.* .......................... 2,940,225 89,700 Bright Horizons Family Solutions* .............. 2,320,987 101,400 Corporate Executive Board Co.* ................. 3,346,200 ------------ 8,607,412 ------------ COMPUTER - BUSINESS SERVICES--4.00% 102,800 Bisys Group, Inc.* ............................. 4,651,700 73,600 Espeed, Inc.* .................................. 2,125,200 158,500 West Corp.* .................................... 4,190,344 ------------ 10,967,244 ------------ COMPUTER HARDWARE--2.63% 38,900 CacheFlow Inc. (1)* ............................ 700,200 121,300 Network Appliance, Inc.* ....................... 6,504,712 ------------ 7,204,912 ------------ COMPUTER SOFTWARE--15.36% 305,500 Broadbase Software, Inc. (1)* .................. 1,756,625 115,170 i2 Technologies, Inc. (1)* ..................... 5,830,481 172,100 Jack Henry & Associates, Inc. .................. 7,852,062 56,000 Manugistics Group, Inc. (1)* ................... 2,842,875 85,500 NetIQ Corp.* ................................... 6,711,750 93,500 Onyx Software Corp.* ........................... 1,496,000 161,500 Peregrine Systems, Inc. (1)* ................... 4,945,938 93,275 VERITAS Software Corp. (1)* .................... 8,849,466 100,200 WebEx Communications, Inc. (1)* ................ 1,828,650 ------------ 42,113,847 ------------ CONSTRUCTION--1.96% 2,100 D.R. Horton, Inc. .............................. 49,413 191,550 Dycom Industries, Inc. (1)* .................... 4,064,691 39,400 KB HOME* ....................................... 1,261,194 ------------ 5,375,298 ------------ DIVERSIFIED RETAIL--1.37% 150,600 Cost Plus, Inc. (1)* ........................... 3,755,588 ------------ DRUGS & MEDICINE--4.79% 29,400 Cima Labs, Inc.* ............................... 1,901,812 86,200 Cubist Pharmaceuticals, Inc.* .................. 2,860,762 67,700 Esperion Therapeutics, Inc.* ................... 677,000 95,700 Inhale Therapeutic Systems, Inc. (1)* .......... 3,666,506 91,500 Inspire Pharmaceuticals, Inc.* ................. 1,223,813 137,100 IntraBiotics Pharmaceuticals, Inc. (1)* ........ 1,311,019 26,600 QLT, Inc.* ..................................... 714,875 48,700 United Therapeutics Corp.* ..................... 779,200 ------------ 13,134,987 ------------ ELECTRICAL EQUIPMENT--0.74% 125,600 Western Multiplex Corp., Class A* .............. 2,025,300 ------------ FINANCIAL SERVICES--2.20% 63,000 AmeriCredit Corp.* ............................. 2,227,050 31,400 GATX Corp. ..................................... 1,447,854 89,100 Metris Co., Inc. (1) ........................... 2,352,240 ------------ 6,027,144 ------------ FOOD RETAIL--0.89% 73,600 American Italian Pasta Co.* .................... 2,447,200 ------------ HOTELS--1.63% 181,900 Extended Stay America, Inc.* ................... 3,155,965 18,500 Four Seasons Hotels, Inc. ...................... 1,301,475 ------------ 4,457,440 ------------ HUMAN RESOURCES--0.60% 59,600 Hall, Kinion & Associates, Inc.* ............... 1,251,600 17,000 Resources Connection, Inc.* .................... 401,625 ------------ 1,653,225 ------------ INDUSTRIAL PARTS--2.52% 133,400 Mettler-Toledo International, Inc.* ............ 6,910,120 ------------ INDUSTRIAL SERVICES & SUPPLIES--0.45% 76,600 MSC Industrial Direct Co., Inc., Class A* ...... 1,237,090 ------------ INSURANCE--2.33% 16,400 Everest Re Group Ltd. .......................... 941,360 17,300 Fidelity National Financial, Inc. .............. 575,225 42,100 PartnerRe Ltd. ................................. 2,064,584 45,200 Radian Group, Inc. ............................. 2,808,728 ------------ 6,389,897 ------------ MEDIA--5.29% 81,800 Gemstar-TV Guide International, Inc. (1)* ...... 4,238,262 143,700 Getty Images, Inc. (1)* ........................ 4,194,244 92,600 Mediacom Communications Corp.* ................. 2,042,988 57,700 True North Communications, Inc. ................ 2,355,891 74,400 Westwood One, Inc.* ............................ 1,668,792 ------------ 14,500,177 ------------ MEDICAL - BIMEDICAL & GENETICS--2.90% 116,500 Neurocrine Biosciences, Inc.* .................. 3,800,813 83,100 Trimeris, Inc.* ................................ 4,144,612 ------------ 7,945,425 ------------ RESTAURANTS--8.60% 43,500 California Pizza Kitchen, Inc. (1)* ............ 1,198,969 194,900 CEC Entertainment, Inc.* ....................... 7,160,626 140,925 Cheesecake Factory, Inc.* ...................... 6,112,622 34,100 Morrison Management Specialists, Inc. .......... 1,120,185 189,400 Ruby Tuesday, Inc. ............................. 2,894,032 220,575 Sonic Corp.* ................................... 5,087,011 ------------ 23,573,445 ------------ 67 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--(CONCLUDED) SEMICONDUCTOR--10.11% 136,700 Applied Micro Circuits Corp.* .................. $ 10,047,450 213,200 Micrel, Inc.* .................................. 9,807,200 49,700 PMC Sierra, Inc.* .............................. 3,755,456 83,100 TranSwitch Corp.* .............................. 4,092,675 ------------ 27,702,781 ------------ SPECIALTY RETAIL--8.21% 78,500 American Eagle Outfitters, Inc. (1)* ........... 4,543,188 194,375 Dollar Tree Stores, Inc.* ...................... 5,916,289 130,600 Duane Reade, Inc. (1)* ......................... 4,283,680 122,000 Linens `N Things, Inc.* ........................ 4,362,720 106,600 Too, Inc.* ..................................... 2,008,344 69,600 Tweeter Home Entertainment Group, Inc.* ........ 1,378,950 ------------ 22,493,171 ------------ TELECOMMUNICATIONS--2.29% 255,200 XO Communications, Inc., Class A (1)* .......... 6,284,300 ------------ TELECOMMUNICATIONS - EQUIPMENT--1.88% 8,200 Advanced Fibre Communications, Inc.* ........... 203,463 176,300 Tekelec (1)* ................................... 4,936,400 ------------ 5,139,863 ------------ WIRELESS TELECOMMUNICATIONS--2.95% 48,200 Leap Wireless International, Inc.* ............. 2,030,425 133,800 SBA Communications Corp.* ...................... 6,062,812 ------------ 8,093,237 ------------ Total Common Stocks (cost--$184,382,739) ....................... 248,136,571 ------------
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATE RATE ------- ----------- --------- REPURCHASE AGREEMENT--9.67% $26,518 Repurchase Agreement dated 01/31/01 with State Street Bank & Trust Co., collateralized by $26,358,892 U.S. Treasury Notes, 6.375% due 06/30/02; (value--$27,050,813); proceeds: $26,522,096 (cost--$26,518,000) ....................................... 02/01/01 5.560% 26,518,000 Total Investments (cost--$210,900,739)--100.19% .................................. 274,654,571 ------------ Liabilities in excess of other assets--(0.19)% ................................... (526,332) ------------ Net Assets--100.00% .............................................................. $274,128,239 ============
------------ * Non-Income producing security. (1) Security, or portion thereof, was on loan at January 31, 2001. See accompanying notes to financial statements 68 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EQUITY INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2001 (UNAUDITED) NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--92.36% AUSTRALIA--1.67% ALCOHOLIC BEVERAGES--0.51% 480,000 Foster's Brewing Group Ltd. .................... $ 1,216,852 ------------ MEDIA & PHOTOGRAPHY--0.68% 166,900 News Corp. Ltd. ................................ 1,620,516 ------------ TRANSPORTATION--0.48% 41,800 Brambles Industries Ltd. ....................... 1,122,925 ------------ Total Australia Common Stocks .................................. 3,960,293 ------------ BRAZIL--1.49% AEROSPACE & DEFENSE--0.45% 25,500 Embraer--Empresa Brasileira de Aeronautica S.A., ADR ............................... 1,058,505 ------------ OIL & GAS--0.68% 58,000 Petroleo Brasileiro S.A., ADR .................. 1,624,000 ------------ TELECOMMUNICATIONS - SERVICES--0.36% 13,500 Brasil Telecom Participacoes S.A., ADR ......... 858,600 ------------ Total Brazil Common Stocks ..................................... 3,541,105 ------------ DENMARK--0.95% PHARMACEUTICALS--0.95% 11,300 Novo Nordisk AS ................................ 2,256,784 ------------ FINLAND--1.17% TELECOMMUNICATIONS - SERVICES--1.17% 79,015 Nokia (AB) OY .................................. 2,780,680 ------------ FRANCE--14.53% CHEMICALS--2.36% 70,899 Aventis S.A .................................... 5,607,291 ------------ DIVERSIFIED INDUSTRIALS--2.94% 36,178 Vivendi Environnement* ......................... 1,436,188 73,066 Vivendi Universal S.A .......................... 5,526,986 ------------ 6,963,174 ------------ FOOD PROCESSING--0.66% 11,882 Groupe Danone .................................. 1,570,824 ------------ LIFE INSURANCE--2.34% 40,278 AXA ............................................ $ 5,542,324 ------------ OIL & GAS--2.40% 38,576 Total FINA S.A., Series B ...................... 5,692,409 ------------ PHARMACEUTICALS--0.88% 36,198 Sanofi-Synthelabo S.A .......................... 2,086,051 ------------ TELECOMMUNICATIONS - SERVICES--0.87% 34,655 Alcatel ........................................ 2,056,817 ------------ WATER--2.08% 30,454 Suez Lyonnaise des Eaux S.A .................... 4,933,365 ------------ Total France Common Stocks ..................................... 34,452,255 ------------ GERMANY--4.16% BANKS--1.99% 13,765 Allianz AG ..................................... 4,728,173 ------------ INSURANCE--1.36% 21,962 Ergo Versicherungs Gruppe AG ................... 3,222,387 ------------ TRANSPORTATION SERVICES--0.81% 88,786 Deutsche Post AG* .............................. 1,909,440 ------------ Total Germany Common Stocks .................................... 9,860,000 ------------ GREECE--0.22% BANKS--0.22% 14,000 National Bank of Greece S.A .................... 521,099 ------------ HONG KONG--3.73% DIVERSIFIED INDUSTRIALS--0.57% 102,300 Hutchison Whampoa Ltd. ......................... 1,344,465 ------------ FINANCIAL SERVICES--0.57% 556,000 Hong Kong Exchanges & Clearing Ltd. ............ 1,354,498 ------------ REAL ESTATE--1.40% 92,000 Cheung Kong (Holdings) Ltd. .................... 1,220,894 202,000 Sun Hung Kai Properties Ltd. ................... 2,097,908 ------------ 3,318,802 ------------ 69 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EQUITY INVESTMENTS NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--(CONTINUED) HONG KONG--(CONCLUDED) TELECOMMUNICATIONS--SERVICES--1.19% 93,860 China Unicom Ltd., ADR* ........................ $ 1,550,567 2,217,000 Pacific Century CyberWorks Ltd.* ............... 1,286,276 ------------ 2,836,843 ------------ Total Hong Kong Common Stocks .................................. 8,854,608 ------------ IRELAND--0.98% PHARMACEUTICALS--0.98% 46,100 Elan Corp. PLC, ADR*(1) ........................ 2,314,220 ------------ ISRAEL--0.46% ELECTRONICS--0.21% 9,750 Orbotech Ltd. .................................. 484,453 ------------ INFORMATION TECHNOLOGY HARDWARE--0.25% 2,400 Check Point Software Technologies Ltd.* ........ 366,000 11,000 Nice Systems Ltd., ADR*(1) ..................... 231,000 ------------ 597,000 ------------ Total Israel Common Stocks ..................................... 1,081,453 ------------ ITALY--3.68% BANKS--0.92% 129,899 San Paolo - IMI SPA(1) ......................... 2,173,219 ------------ INFORMATION TECHNOLOGY HARDWARE--0.83% 155,766 Telecom Italia SPA(1) .......................... 1,967,896 ------------ LIFE ASSURANCE--0.77% 117,399 Alleanza Assicurazioni ......................... 1,824,191 ------------ TELECOMMUNICATIONS--SERVICES--0.56% 165,524 Telecom Italia Mobilare SPA(1) ................. 1,326,826 ------------ TRANSPORTATION SERVICES--0.60% 211,307 Autostrade - Concessioni e Costruzioni Autostrade SPA ...................................... 1,426,269 ------------ Total Italy Common Stocks ...................................... 8,718,401 ------------ JAPAN--22.21% AUTOMOBILES--1.12% 86,000 Bridgestone Corp. .............................. 811,342 48,000 Honda Motor Co. Ltd. ........................... 1,839,412 ------------ 2,650,754 ------------ CHEMICALS--2.06% 335,000 Asahi Chemical Industries Co. Ltd. ............. 1,623,405 58,000 Shin Etsu Chemical Co. Ltd. .................... 2,207,673 115,000 Sumitomo Bakelite Co. Ltd. (1) ................. 1,047,386 ------------ 4,878,464 ------------ CONSTRUCTION & BUILDING MATERIALS--0.06% 24,000 Daiwa House Industry Co. ....................... 141,461 ------------ ELECTRONIC & ELECTRICAL EQUIPMENT--3.72% 88,000 Canon Inc. ..................................... 3,281,523 8,600 Kyocera Corp. .................................. 935,481 14,700 Mabuchi Motor Co. Ltd. ......................... 1,532,079 21,400 Sony Corp. ..................................... 1,553,723 101,000 Sumitomo Electric Industries Ltd. .............. 1,518,666 ------------ 8,821,472 ------------ FINANCIAL SERVICES--1.23% 80,000 Nomura Securities Co. Ltd. ..................... 1,484,727 19,500 Takefuji Corp. ................................. 1,425,828 ------------ 2,910,555 ------------ FOOD & DRUG RETAILERS--0.35% 36,000 Familymart Co. Ltd. ............................ 825,880 ------------ GENERAL RETAILERS--1.42% 43,000 Ito-Yokado Co. Ltd. ............................ 2,142,888 90,000 Marui Co. Ltd. ................................. 1,225,673 ------------ 3,368,561 ------------ INFORMATION TECHNOLOGY HARDWARE--3.27% 81,000 Fujitsu Ltd. ................................... 1,366,181 248,000 Hitachi Ltd. ................................... 2,333,290 12,800 Matsushita Communication Industrial Co. Ltd. ... 1,649,697 12,100 Rohm Co. Ltd. .................................. 2,411,995 ------------ 7,761,163 ------------ INSURANCE--0.27% 122,000 Mitsui Marine & Fire ........................... 644,671 ------------ LEISURE, ENTERTAINMENT & HOTELS--0.32% 45,000 Namco Ltd. ..................................... 771,749 ------------ MACHINERY--0.84% 475,000 Mitsubishi Heavy Industries Ltd. ............... 1,987,584 ------------ MEDIA & PHOTOGRAPHY--0.89% 32,000 Fuji Photo Film Co. Ltd. ....................... 1,275,766 103,000 Toppan Printing Co. ............................ 831,894 ------------ 2,107,660 ------------ 70 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EQUITY INVESTMENTS NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--(CONTINUED) JAPAN--(CONCLUDED) PERSONAL CARE & HOUSEHOLD PRODUCTS--0.93% 88,000 Kao Corp.(1) ................................... $ 2,207,845 ------------ PHARMACEUTICALS--1.84% 74,000 Taisho Pharmaceutical Co. ...................... 1,710,358 72,000 Yamanouchi Pharmaceutical Co. .................. 2,647,764 ------------ 4,358,122 ------------ SOFTWARE & COMPUTER SERVICES--0.85% 74,000 MKC-STAT Corp. ................................. 960,089 10,000 Trend Micro, Inc. .............................. 1,069,726 ------------ 2,029,815 ------------ SUPPORT SERVICES--1.29% 15,800 Benesse Corp.(1) ............................... 610,903 38,000 Secom Co. Ltd. ................................. 2,452,034 ------------ 3,062,937 ------------ TELECOMMUNICATIONS--SERVICES--1.75% 244 Nippon Telephone and Telegraph Corp. (NTT) 1,698,157 127 NTT Mobile Communication Network ............... 2,444,301 ------------ 4,142,458 ------------ Total Japan Common Stocks ...................................... 52,671,151 ------------ MEXICO--1.03% GENERAL RETAILERS--0.28% 286,000 Cifra S.A. de C.V., Series V* .................. 672,889 ------------ MEDIA & PHOTOGRAPHY--0.31% 13,800 Grupo Televisa S.A. de C.V., ADR* .............. 738,300 ------------ TELECOMMUNICATIONS - SERVICES--0.44% 19,100 Telefonos de Mexico S.A. de C.V., ADR .......... 1,036,557 ------------ Total Mexico Common Stocks ..................................... 2,447,746 ------------ NETHERLANDS--7.05% BANKS--1.23% 38,288 ING Groep N.V .................................. 2,928,685 ------------ ELECTRONICS--1.63% 71,254 ASM Lithography Holding N.V.* .................. 2,035,897 47,560 Koninklijke (Royal) Philips Electronics N.V .... 1,831,353 ------------ 3,867,250 ------------ MEDIA & PHOTOGRAPHY--3.63% 154,328 Elsevier N.V ................................... $ 2,155,190 124,740 VNU N.V ........................................ 6,445,378 ------------ 8,600,568 ------------ TELECOMMUNICATIONS--SERVICES--0.56% 79,300 Koninklijke (Royal) KPN N.V .................... 1,317,835 ------------ Total Netherlands Common Stocks ................................ 16,714,338 ------------ POLAND--0.32% OIL & GAS--0.32% 71,000 Polski Koncern Naftowy Orlen S.A., GDR ......... 749,050 ------------ SINGAPORE--1.47% BANKS--0.91% 112,000 DBS Group Holdings Ltd. ........................ 1,259,004 198,000 Overseas Union Bank Ltd. ....................... 914,143 ------------ 2,173,147 ------------ FINANCIAL SERVICES--0.56% 180,000 Overseas Chinese Banking Corp. Ltd. ............ 1,321,404 ------------ Total Singapore Common Stocks .................................. 3,494,551 ------------ SOUTH AFRICA--0.35% DIVERSIFIED INDUSTRIES--0.17% 60,000 Barloworld Ltd. ................................ 397,039 ------------ MINING & METALS--0.18% 9,500 Anglo American Platinum Corp. .................. 442,742 ------------ Total South Africa Common Stocks ............................... 839,781 ------------ SPAIN--4.71% BANKS--2.19% 235,678 Banco Bilbao Vizcaya Argenta ................... 3,773,958 129,223 Banco Santander Central Hispanormer ............ 1,419,618 ------------ 5,193,576 ------------ SOFTWARE & COMPUTER SERVICES--0.52% 151,389 Amadeus Global Travel Distribution S.A ......... 1,240,300 ------------ TELECOMMUNICATIONS - SERVICES--2.00% 252,331 Telefonica S.A ................................. 4,737,569 ------------ Total Spain Common Stocks ...................................... 11,171,445 ------------ 71 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EQUITY INVESTMENTS NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--(CONCLUDED) SWEDEN--3.28% BANKS--1.01% 125,830 Nordea AB (NDA) ................................ $ 1,018,280 110,000 Skandinaviska Enskilda Banken (SEB) ............ 1,375,723 ------------ 2,394,003 ------------ INFORMATION TECHNOLOGY HARDWARE--2.27% 446,000 Ericsson LM B Shares ........................... 5,390,437 ------------ Total Sweden Common Stocks ..................................... 7,784,440 ------------ SWITZERLAND--0.66% CHEMICALS--0.66% 26,000 Syngenta AG* ................................... 1,567,505 ------------ UNITED KINGDOM--18.24% BANKS--1.86% 284,000 HSBC Holdings .................................. 4,416,454 ------------ ELECTRONICS--0.61% 167,000 Scottish and Southern Energy PLC ............... 1,432,743 ------------ INFORMATION TECHNOLOGY HARDWARE--0.78% 183,000 Marconi PLC .................................... 1,858,873 ------------ LIFE ASSURANCE--1.47% 232,000 Prudential PLC ................................. 3,495,911 ------------ MEDIA & PHOTOGRAPHY--0.54% 100,000 WPP Group PLC .................................. 1,289,087 ------------ OIL & GAS--1.77% 169,000 BP Amoco PLC ................................... 1,453,607 332,000 Shell Transportation & Trading Co. ............. 2,736,723 ------------ 4,190,330 ------------ PHARMACEUTICALS--3.19% 288,516 GlaxoSmithKline PLC* ........................... 7,569,168 ------------ RETAIL - MERCHANDISE--0.58% 206,000 Kingfisher PLC ................................. 1,369,911 ------------ SOFTWARE & COMPUTER SERVICES--0.88% 375,000 Sage Group PLC ................................. $ 2,086,820 ------------ SPECIALTY & OTHER FINANCE--1.54% 173,000 3I Group PLC ................................... 3,656,185 ------------ TELECOMMUNICATIONS - SERVICES--5.02% 135,000 Cable & Wireless PLC ........................... 1,793,541 200,000 Energis PLC .................................... 1,645,706 2,392,265 Vodafone Group PLC ............................. 8,461,326 ------------ 11,900,573 ------------ Total United Kingdom Common Stocks ............................. 43,266,055 ------------ Total Common Stocks (cost--$209,789,535) ....................... 219,046,960 ------------ PREFERRED STOCK--0.55% JAPAN--0.55% BANKS--0.55% 150,000,000 Sanwa International Finance (cost--$1,292,109) .............................. 1,312,991 ------------ 72 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EQUITY INVESTMENTS
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATE RATE ------- ----------- --------- REPURCHASE AGREEMENT--5.96% $14,134 Repurchase Agreement dated 01/31/01 with State Street Bank & Trust Co., collateralized by $14,049,196 U.S. Treasury Notes, 6.375% due 06/30/02; (value--$14,417,987); proceeds: $14,136,183 (cost--$14,134,000) .............................. 02/01/01 5.560% $ 14,134,000 ------------ Total Investments (cost--$225,215,644)--98.87% .................................... 234,493,951 Other assets in excess of liabilities--1.13% ...................................... 2,686,028 ------------ Net Assets--100.00% ............................................................... $237,179,979 ============
--------------- * 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, 2001. FORWARD FOREIGN CURRENCY CONTRACTS CONTRACTS TO IN MATURITY UNREALIZED DELIVER EXCHANGE FOR DATE APPRECIATION ------------- -------------- -------- ------------ Japanese Yen ........... 1,591,653,790 USD 13,819,000 04/10/01 $ 15,242 CURRENCY TYPE ABBREVIATIONS: USD U.S. Dollars. See accompanying notes to financial statements 73 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS PORTFOLIO OF INVESTMENTS JANUARY 31, 2001 (UNAUDITED) NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--86.91% ARGENTINA--0.49% ALCOHOLIC BEVERAGES--0.21% 15,400 Quilmes Industrial Quinsa S.A., ADR ............ $ 174,020 ------------ TELECOMMUNICATIONS--0.28% 10,700 Telecom Argentina Stet-Fran Telecom S.A., Class B ........................ 238,396 ------------ Total Argentina Common Stocks .................................. 412,416 ------------ BRAZIL--6.35% BANKS--0.10% 2,800 Unibanco - Uniao de Bancos Brasileiros S.A., GDR ........................ 85,120 ------------ BASIC MATERIALS--0.43% 24,800 Aracruz Celulose S.A., ADR(1) .................. 363,320 ------------ FOOD STORES--0.99% 23,200 Pao de Acuar ................................... 828,240 ------------ OIL & GAS--0.82% 17,800 Petroleo Brasileiro S.A., ADR* ................. 503,384 18,300 Ultrapar Participacoes S.A ..................... 183,915 ------------ 687,299 ------------ STEEL--0.24% 18,400 Gerdau S.A., ADR ............................... 200,560 ------------ TELECOMMUNICATIONS--3.77% 10,600 Brasil Telecom Participacoes S.A., ADR(1) ...... 674,160 54,100 Embratel Participacoes S.A., ADR ............... 902,929 45,755 Tele Norte Leste Participacoes, ADR ............ 1,132,436 5,000 Telecomunicacoes Brasileiras S.A. (Telebras), ADR* ............................. 0 20,800 Telesp Celular Participacoes S.A., ADR ......... 452,760 ------------ 3,162,285 ------------ Total Brazil Common Stocks ..................................... 5,326,824 ------------ CHILE--2.38% BANKS--0.48% 18,700 Banco Santiago ................................. 406,725 ------------ BREWERIES, PUBS & RESTAURANTS--0.43% 13,700 Compania Cervecerias Unidas S.A., ADS .......... 358,255 ------------ ELECTRICITY--0.38% 16,047 Enersis S.A., GDR* ............................. 319,335 ------------ RETAILERS, FOOD--0.38% 18,800 Distribucion Y Servicio D&S, ADS(1) ............ 317,720 ------------ TELECOMMUNICATIONS--0.71% 37,450 Compania de Telecomunicaciones de Chile S.A., ADR .............................. 594,706 ------------ Total Chile Common Stocks ...................................... 1,996,741 ------------ CHINA--0.44% OIL & GAS--0.44% 2,545,000 China Petroleum and Chemical Corp. (Sinopec), Class H* .......................... 365,473 ------------ CZECH REPUBLIC--0.62% BANKS--0.00% 1 Komercni Banka A.S.* ........................... 9 ------------ UTILITIES--0.62% 71,300 Cez* ........................................... 204,009 22,400 Cesky Telecom* ................................. 318,962 ------------ 522,971 ------------ Total Czech Republic Common Stocks ............................. 522,980 ------------ EGYPT--0.32% TELECOMMUNICATIONS--0.32% 13,500 Egypt Mobile Phone ............................. 272,093 ------------ GREECE--1.10% BANKS--0.46% 12,036 Alpha Bank AE .................................. 389,952 ------------ TELECOMMUNICATIONS--0.64% 15,000 Cosmote Mobile Telecommunications* ............. 127,920 24,880 Hellenic Telecom Organization .................. 405,357 ------------ 533,277 ------------ Total Greece Common Stocks ..................................... 923,229 ------------ HONG KONG--7.31% ELECTRICAL APPLIANCES--0.34% 313,000 Legend Holdings Ltd.(1) ........................ 284,939 ------------ 74 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--(CONTINUED) HONG KONG--(CONCLUDED) FINANCIAL SERVICES--1.20% 421,000 China Everbright Ltd. .......................... $ 429,140 237,000 Hong Kong Exchanges & Clearing Ltd. ............ 577,367 ------------ 1,006,507 ------------ REAL ESTATE--0.42% 66,000 Henderson Land Developement Co. Ltd. ........... 350,344 ------------ TELECOMMUNICATIONS--5.35% 360,000 China Mobile (Hong Kong) Ltd.* ................. 2,298,697 1,324,000 China Unicom Ltd.*(1) .......................... 2,189,917 ------------ 4,488,614 ------------ Total Hong Kong Common Stocks .................................. 6,130,404 ------------ HUNGARY--1.64% BANKS--0.57% 8,464 OTP Bank, GDS .................................. 473,984 ------------ OIL--0.20% 9,150 Magyar Olaj-Es Gazipare Reszvnytaras Ag., Series A ..................................... 168,818 ------------ TELECOMMUNICATIONS--0.87% 31,710 Matav RT, ADS, Series B ........................ 729,964 ------------ Total Hungary Common Stocks .................................... 1,372,766 ------------ INDIA--6.79% BANKS--0.31% 47,000 HDFC Bank ...................................... 257,846 ------------ COMPUTER SOFTWARE & SERVICES--0.86% 80,500 Satyam Computer Services Ltd. .................. 721,446 ------------ FINANCIAL SERVICES--0.12% 49,000 ICICI Ltd. ..................................... 98,127 ------------ HOUSEHOLD GOODS & TEXTILES--1.22% 91,000 Hindustan Lever Ltd. ........................... 405,959 75,000 Reliance Industries Ltd. ....................... 621,066 ------------ 1,027,025 ------------ PHARMACEUTICALS--0.33% 19,100 Ranbaxy Laboratories Ltd. ...................... 272,687 ------------ SUPPORT SERVICES--2.70% 15,500 Infosys Technologies ........................... 2,267,581 ------------ TELECOMMUNICATIONS--1.25% 145,000 Mahanagar Tele Nigam ........................... 608,568 39,000 Videsh Sanchar Nigam Ltd. ...................... 297,733 9,750 Videsh Sanchar Nigam Ltd., GDR* ................ 143,813 ------------ 1,050,114 ------------ TRANSPORTATION--0.00% 90 Great Eastern Ship ............................. 64 ------------ Total India Common Stocks ...................................... 5,694,890 ------------ INDONESIA--0.75% FOODS--0.53% 286,000 HM Sampoerna ................................... 443,141 ------------ TELECOMMUNICATIONS--0.22% 691,620 Telekomunikasi Indonesia ....................... 184,700 ------------ Total Indonesia Common Stocks .................................. 627,841 ------------ ISRAEL--4.96% BANKS--1.00% 225,680 Bank Hapoalim B.M .............................. 590,885 111,330 BkLeumiLe-Israel B.M ........................... 247,430 ------------ 838,315 ------------ COMPUTER SOFTWARE--2.32% 12,770 Check Point Software Tech Ltd.*(1) ............. 1,947,425 ------------ ELECTRICAL EQUIPMENT--0.18% 3,000 Orbotech Ltd.* ................................. 149,063 ------------ ELECTRONIC & ELECTRICAL EQUIPMENT--0.10% 3,790 Nice Systems Ltd.* ............................. 79,590 ------------ PHARMACEUTICALS--0.89% 13,910 Teva Pharmaceutical Industries Ltd., ADR ....... 749,401 ------------ TELECOMMUNICATIONS--0.47% 51,900 Bezeq Israeli Telecommunication Corp. Ltd. ..... 241,841 10,380 ECI Telecommunications Ltd. .................... 155,051 ------------ 396,892 ------------ Total Israel Common Stocks ..................................... 4,160,686 ------------ KOREA--12.48% BANKS--2.15% 66,309 Kookmin Bank ................................... 962,720 75 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--(CONTINUED) KOREA--(CONCLUDED) BANKS--(CONCLUDED) 77,210 Shinhan Bank ................................... $ 841,509 ------------ 1,804,229 ------------ COMMUNICATIONS--1.64% 6,500 SK Telecom Co. Ltd. ............................ 1,370,326 ------------ ELECTRICAL APPLIANCES--4.08% 19,558 Samsung Electronics Co. ........................ 3,423,039 ------------ ELECTRICITY & GAS--1.57% 63,520 Korea Electric Power Corp. ..................... 1,318,912 ------------ FINANCIAL SERVICES--0.19% 5,730 Samsung Securities Co. Ltd. .................... 158,863 ------------ STEEL--0.97% 10,475 Pohang Iron & Steel Co. Ltd. (POSCO) ........... 808,333 ------------ TELECOMMUNICATIONS--1.88% 26,300 Korea Telecom .................................. 1,577,582 ------------ Total Korea Common Stocks ...................................... 10,461,284 ------------ MALAYSIA--1.64% BANKS--0.16% 38,000 Malayan Banking Berhad ......................... 135,000 ------------ COMMUNICATIONS--0.16% 88,000 Digi.com Berhad* ............................... 136,632 ------------ ELECTRICITY & GAS--0.26% 65,000 Tenaga Nasional Berhad ......................... 215,526 ------------ SERVICES--0.81% 108,000 Genting Berhad ................................. 295,579 197,000 Resorts World Berhad ........................... 381,040 ------------ 676,619 ------------ TELECOMMUNICATIONS--0.25% 65,000 Telekom Malaysia Berhad ........................ 212,105 ------------ Total Malaysia Common Stocks ................................... 1,375,882 ------------ MEXICO--9.24% ALCOHOLIC BEVERAGES--0.64% 194,100 Grupo Modelo S.A. de CV ........................ 535,490 ------------ BREWERIES, PUBS & RESTAURANTS--0.29% 76,100 Fomento Economico Mexica S.A. de C.V., Series B and 4 Series D ............. $ 241,400 ------------ CONSTRUCTION / BUILDING MATERIALS--0.39% 76,920 Cemex S.A ...................................... 329,839 ------------ FINANCIAL SERVICES--1.66% 470,300 Grupo Financiero Banamex Accival S.A. de C.V. (Banacci) ............................ 908,722 742,300 Grupo Financiero BBVA Bancomer S.A. de C.V. (GFB), Series O* ..................... 485,509 ------------ 1,394,231 ------------ MEDIA--1.37% 21,450 Grupo Televisa, S.A. de C.V., GDS* ............. 1,147,575 ------------ PAPER, PACKAGING & PRINTING--0.26% 81,750 Kimberly-Clark de Mexico S.A. de C.V ........... 216,328 ------------ RETAILERS, GENERAL--1.10% 427,000 Wal-Mart de Mexico S.A. de C.V., Series C* ..... 926,534 ------------ TELECOMMUNICATIONS--3.53% 54,500 Telefonos de Mexico S.A. de C.V., ADR(1) ....... 2,957,715 ------------ Total Mexico Common Stocks ..................................... 7,749,112 ------------ PERU--0.10% MINING--0.10% 5,100 Compania De Minas Buenaventura S.A., ADS ....... 79,611 ------------ PHILIPPINES--0.81% REAL ESTATE--0.24% 1,412,000 Ayala Land, Inc. ............................... 196,251 ------------ TELECOMMUNICATIONS--0.57% 25,580 Philippine Long Distance Telephone Co. ......... 478,400 ------------ Total Philippines Common Stocks ................................ 674,651 ------------ POLAND--1.89% BANKS--0.39% 11,440 Powszechny Bank Kredytowy S.A., GDR ............ 324,324 ------------ DIVERSIFIED HOLDINGS COMPANIES--0.29% 21,400 Elektrim* ...................................... 244,796 ------------ 76 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--(CONTINUED) POLAND--(CONCLUDED) MINING & METALS--0.34% 23,720 KGHM Polska Miedz GDR* ......................... $ 288,198 ------------ OIL & GAS--0.31% 24,700 Polski Koncern Naftowy Orlen S.A., GDR ......... 260,585 ------------ TELECOMMUNICATIONS--0.56% 73,300 Telekomunikacja Polska S.A., GDR ............... 465,455 ------------ Total Poland Common Stocks ..................................... 1,583,358 ------------ RUSSIA--2.93% OIL & GAS--1.82% 23,615 Lukoil Holding, ADR(1) ......................... 954,046 43,530 Surgutneftegaz, ADR ............................ 571,767 ------------ 1,525,813 ------------ TELECOMMUNICATIONS--0.56% 13,329 Mobile Telesystems, ADR*(1) .................... 394,538 11,600 Rostelecom, ADR ................................ 73,080 ------------ 467,618 ------------ UTILITIES--0.55% 42,380 Unified Energy Systems ......................... 466,180 ------------ Total Russia Common Stocks ..................................... 2,459,611 ------------ SOUTH AFRICA--7.77 % APPAREL & FOOTWEAR--0.02% 131,964 LA Group Ltd.* ................................. 15,800 ------------ BANKS--0.55% 521,500 African Bank Investments Ltd.* ................. 463,257 ------------ DISTRIBUTORS--0.44% 2,144,853 Metro Cash & Carry Ltd. ........................ 367,255 ------------ FINANCIAL SERVICES--0.76% 575,075 FirstRand Ltd. ................................. 636,710 ------------ HOUSEHOLD GOODS & TEXTILES--0.59% 1,043,391 Profurn ........................................ 494,326 ------------ INSURANCE--0.79% 526,765 Sanlam Ltd. .................................... 661,212 ------------ MACHINERY - INDUSTRIAL--0.48% 12,280 De Beers ....................................... 404,090 ------------ MEDIA--0.26% 43,700 Naspers Ltd. ................................... 222,227 ------------ MINING--1.52% 27,370 Anglo American Platinum ........................ 1,275,564 ------------ NETWORKING--0.89% 96,725 Dimension Data Holdings PLC* ................... 747,152 ------------ OIL EXPLORATION & PRODUCTION--0.84% 95,560 Sasol Ltd. ..................................... 701,245 ------------ PAPER, PACKAGING & PRINTING--0.63% 69,200 Sappi .......................................... 525,626 ------------ Total South Africa Common Stocks ............................... 6,514,464 ------------ TAIWAN--11.73% COMPUTERS--0.57% 256,000 Compal Electronics, Inc. ....................... 479,356 ------------ ELECTRICAL APPLIANCES--6.90% 132,200 Compeq Manufacturing Co. Ltd. .................. 621,925 147,000 Delta Electronics, Inc. ........................ 557,335 67,000 Realtek Semiconductor Corp. .................... 264,392 715,600 Taiwan Semiconductor Manufacturing Co. ......... 2,336,608 624,200 United Microelectronics Corp. .................. 1,149,486 24,000 United Microelectronics Corp., ADR* ............ 283,680 46,500 Via Technologies Inc. .......................... 395,775 131,000 Winbond Electronics Corp. ...................... 177,181 ------------ 5,786,382 ------------ ELECTRONICS--0.53% 90,000 Sunplus Technology Co. Ltd. .................... 445,683 ------------ FINANCIAL SERVICES--1.02% 403,000 China Development Industrial Bank .............. 451,520 484,000 Chinatrust Commercial Bank ..................... 401,461 ------------ 852,981 ------------ INSURANCE--0.70% 277,000 Cathay Life Insurance .......................... 582,977 ------------ MACHINERY/ENGINE SERVICES--0.46% 59,300 Hon Hai Precision .............................. 389,093 ------------ MISCELLANEOUS MANUFACTURING--0.28% 43,287 Ambit Microsystems Corp. ....................... 231,775 ------------ 77 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS--(CONCLUDED) TAIWAN--(CONCLUDED) TELECOMMUNICATIONS--0.57% 285,000 Taiwan Cellular Corp.* ......................... $ 480,734 ------------ TEXTILES--0.70% 733,000 Far Eastern Textile Ltd. ....................... 589,848 ------------ Total Taiwan Common Stocks ..................................... 9,838,829 ------------ THAILAND--1.35% COMMUNICATIONS--0.37% 477,000 TelecomAsia Corporation Public Co. Ltd.*(1) .... 308,720 ------------ CONSTRUCTION--0.33% 25,900 Siam Cement Co.* ............................... 276,738 ------------ TELECOMMUNICATIONS--0.65% 44,000 Advanced Info Services Public Co. Ltd.* ........ 542,622 ------------ Total Thailand Common Stocks ................................... 1,128,080 ------------ TURKEY--3.41% BANKS--2.35% 36,856,800 Turkiye Is Bankasi (Isbank) .................... 735,512 68,385,150 Turkyie Garanti Bankasi* ....................... 510,495 99,304,421 Yapi Ve Kredi Bankasi A.S ...................... 719,289 ------------ 1,965,296 ------------ BREWERIES, PUBS & RESTAURANTS--0.26% 3,929,161 Anadolu Efes Biracilik ve Malt Sanayii A.S.* ... 220,710 ------------ ELECTRICAL EQUIPMENT--0.11% 20,667,500 Vestel Electronic Sanayi ve Ticaret ............ 90,126 ------------ HOUSEHOLD GOODS & TEXTILES--0.12% 5,182,500 Arcelik A.S .................................... 103,422 ------------ MEDIA--0.19% 19,338,225 Dogan Yayin Holding A.S ........................ 157,224 ------------ RETAIL TRADE--0.19% 1,430,406 Migros Turk T.A.S .............................. 160,698 ------------ STEEL & OTHER MATERIALS--0.06% 2,710,100 Eregli Demir Celik* ............................ 50,076 ------------ TELECOMMUNICATIONS--0.13% 3,415,600 Turkcell Iletisim* ............................. $ 109,816 ------------ Total Turkey Common Stocks ..................................... 2,857,368 ------------ ZIMBABWE--0.41% TELECOMMUNICATIONS--0.41% 1,092,000 Econet Wireless Holding* ....................... 347,139 ------------ Total Common Stocks (cost--$74,820,333) ........................ 72,875,732 ------------ PREFERRED STOCKS--7.15% BRAZIL--7.15% BANKS--2.73% 81,665,597 Banco Bradesco S.A ............................. 561,425 7,200,000 Banco Itau S.A ................................. 681,279 39,000 Companhia Vale Do Rio Doce A" .................. 1,044,551 ------------ 2,287,255 ------------ ELECTRICITY--0.94% 60,000 Companhia Paranaense de Energia Copel, ADR ..... 600,000 3,309,030 Eletropaulo Electricidade Sao Paulo ............ 191,390 ------------ 791,390 ------------ FOOD & BEVERAGE--1.18% 3,497,000 Companhia de Bebidas das Americas (AmBev) ...... 991,438 ------------ FOOD STORES--0.23% 5,260,000 Pao de Acuar-Cia Brasileria Astri .............. 188,410 ------------ OIL EXPLORATION & PRODUCTION--1.15% 29,290 Petrol Brasileiro-Petrobras .................... 810,044 5,600 Petrol Brasileiro .............................. 155,698 ------------ 965,742 ------------ TELECOMMUNICATIONS--0.92% 29,588,000 Brasil Telecom Participacoes, ADR .............. 379,795 35,672,528 Telesp Cellular Participacoes .................. 389,303 1 Telecomunicacoes de Sao Paulo .................. 0 ------------ 769,098 ------------ Total Preferred Stocks (cost--$4,493,120) ...................... 5,993,333 ------------ 78 PAINEWEBBER PACE SELECT ADVISORS TRUST PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS NUMBER OF SHARES VALUE --------- ----- WARRANTS--0.30% KOREA--0.23% BANKS--0.23% 3,000 Korea Telecom Warrants, expiring 11/7/01 ....... $ 188,040 ------------ MEXICO--0.00% CONSTRUCTION & BUILDING MATERIALS--0.00% 12,000 Cemex Appreciation Warrants, expiring 12/13/02* 2,467 ------------ SOUTH AFRICA--0.07% DISTRIBUTORS--0.07% 633,971 Metro Cash and Carry Ltd.* ..................... $ 57,133 ------------ Total Warrants (cost--$195,991) ................................ 247,640 ------------
PRINCIPAL AMOUNT MATURITY INTEREST (000) DATE RATES ------- ----------- --------- REPURCHASE AGREEMENT--5.00% $ 4,191 Repurchase Agreement dated 01/31/01 with State Street Bank & Trust Co., collateralized by $4,165,854 U.S. Treasury Notes, 6.375% due 06/30/02; (value--$4,275,208); proceeds: $4,191,647 (cost--$4,191,000) .................... 02/01/01 5.560% $ 4,191,000 ------------ Total Investments (cost--$83,700,444)--99.36% ......................... 83,307,705 Other assets in excess of liabilities--0.64% .......................... 539,463 ------------ Net Assets--100.00% ................................................... $ 83,847,168 ============
------------- * 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, 2001. FORWARD FOREIGN CURRENCY CONTRACTS UNREALIZED CONTRACTS TO IN MATURITY APPRECIATION DELIVER EXCHANGE FOR DATES (DEPRECIATION) --------- -------------- -------- ------------ Brazilian Real ........ 26,559 USD 13,515 02/23/01 $ (39) Mexican Peso .......... 9,153,000 USD 944,114 03/07/01 53,311 Mexican Peso .......... 11,991,000 USD 1,207,906 05/24/01 40,898 -------- $ 94,170 ======== CURRENCY TYPE ABBREVIATIONS: USD U.S. Dollars. See accompanying notes to financial statements 79 PAINEWEBBER PACE SELECT ADVISORS TRUST STATEMENTS OF ASSETS AND LIABILITIES JANUARY 31, 2001 (UNAUDITED)
PACE GOVERNMENT PACE PACE PACE SECURITIES INTERMEDIATE STRATEGIC MONEY MARKET FIXED INCOME FIXED INCOME FIXED INCOME INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS ----------- ------------ ------------ ------------ ASSETS Investments, at value (cost--$77,271,330; $398,897,063; $129,259,967; $371,704,594; $47,509,303; $104,952,716; $344,764,766; $329,660,470; $188,647,312; $210,900,739; $225,215,644; $83,700,444, respectively) ............................. $77,271,330 $403,538,323 $131,616,331 $376,630,124 Investments of cash collateral received for securities loaned, at value (cost--$0; $0; $9,927,868; $0; $0; $2,509,147; $15,077,200; $20,548,746; $14,662,284; $52,565,015; $9,645,004; $4,963,091, respectively) ................... -- -- 9,927,868 -- Cash (including cash denominated in foreign currencies, at value) ............................................................ -- -- 206 1,882,121 Receivable for investments sold ........................................ -- 4,057,362 -- 3,995,726 Receivable for shares of beneficial interest sold ...................... 1,405,059 175,106 140,276 275,261 Unrealized appreciation of forward foreign currency contracts ................................................... -- -- -- 1,166,217 Dividends and interest receivable ...................................... 459,748 2,105,533 1,844,622 2,534,733 Receivable from investment adviser ..................................... 803 -- -- -- Other assets ........................................................... 78,623 63,493 53,935 52,456 ----------- ------------ ------------ ------------ Total assets ........................................................... 79,215,563 409,939,817 143,583,238 386,536,638 ----------- ------------ ------------ ------------ LIABILITIES Payable for investments purchased ...................................... 3,999,800 194,234,983 -- 145,754,719 Payable for shares of beneficial interest repurchased .................. 544,331 131,769 53,591 1,184,052 Dividends payable to shareholders ...................................... 154,367 -- -- -- Payable to custodian ................................................... 65,816 20,389 -- -- Payable for cash collateral for securities loaned ...................... -- -- 9,927,868 -- Payable for reverse repurchase agreements .............................. -- 14,488,000 -- 6,492,147 Unrealized depreciation of forward foreign currency contracts ................................................... -- -- -- 987,422 Outstanding options written, at value (premium received--$0; $0; $0; $291,900; $0; $0; $0; $0; $0; $0; $0; $0, respectively) .................................... -- -- -- 137,239 Variation margin payable ............................................... -- 23,531 -- 44,456 Unrealized depreciation on interest rate swaps ......................... -- -- -- 371,432 Payable to affiliates .................................................. -- 121,074 69,010 139,598 Accrued expenses and other liabilities ................................. 1,893 95,597 60,214 59,531 ----------- ------------ ------------ ------------ Total liabilities ...................................................... 4,766,207 209,115,343 10,110,683 155,170,596 ----------- ------------ ------------ ------------ NET ASSETS Beneficial interest shares of $0.001 par value (unlimited amount authorized) ........................................ 74,449,576 196,364,284 134,444,833 234,639,923 Accumulated undistributed (distributions in excess of) net investment income (loss) ......................................... -- (448) (20,522) (448,589) Accumulated net realized gains (losses) from investments, other assets, liabilities, futures, swaps, options and forward contracts denominated in foreign currency transactions ................................................ (220) 229,816 (3,308,116) (7,496,080) Net unrealized appreciation (depreciation) of investments, other assets, liabilities, futures, swaps, options written and forward contracts denominated in foreign currencies .............. -- 4,230,822 2,356,360 4,670,788 ----------- ------------ ------------ ------------ Net assets ............................................................. $74,449,356 $200,824,474 $133,472,555 $231,366,042 =========== ============ ============ ============
80
PACE PACE PACE INTERNATIONAL PACE PACE PACE PACE SMALL/MEDIUM SMALL/MEDIUM PACE EMERGING MUNICIPAL GLOBAL FIXED LARGE COMPANY LARGE COMPANY COMPANY COMPANY INTERNATIONAL MARKETS FIXED INCOME INCOME VALUE EQUITY GROWTH EQUITY VALUE EQUITY GROWTH EQUITY EQUITY EQUITY INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- $48,650,248 $104,057,983 $374,441,767 $384,671,990 $228,727,279 $274,654,571 $234,493,951 $83,307,705 -- 2,509,147 15,077,200 20,548,746 14,662,284 52,565,015 9,645,004 4,963,091 -- 283,163 1,508 1,310 1,001 217 1,557,509 2,665,380 -- 3,028,154 3,975,195 4,580,315 2,945,376 99,683 6,037,538 1,220,817 90,693 201,574 583,379 611,992 266,784 334,037 345,962 103,697 -- 1,382,886 -- -- -- -- 15,242 94,209 728,949 1,451,626 499,542 59,041 53,650 8,357 384,446 150,044 -- -- -- -- -- -- -- -- 53,124 48,462 65,247 83,736 143,475 93,853 77,521 79,735 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- 49,523,014 112,962,995 394,643,838 410,557,130 246,799,849 327,755,733 252,557,173 92,584,678 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- -- 9,993,513 6,080,684 5,512,257 140,654 612,301 5,334,958 3,437,452 5,280 186,897 206,043 195,015 269,916 196,118 174,876 137,903 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 2,509,147 15,077,200 20,548,746 14,662,284 52,565,015 9,645,004 4,963,091 -- -- -- -- -- -- -- -- -- 1,295,890 -- -- -- -- -- 39 -- -- -- -- -- -- -- -- -- 202,625 -- -- -- -- -- -- -- -- -- -- -- -- -- -- 25,797 48,431 252,745 231,120 159,219 179,708 172,882 70,043 14,726 66,183 55,304 90,306 152,282 74,352 49,474 128,982 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- 45,803 14,302,686 21,671,976 26,577,444 15,384,355 53,627,494 15,377,194 8,737,510 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- 49,908,886 112,389,264 364,326,220 319,000,729 207,045,331 196,076,648 227,289,650 91,762,043 (9,430) (5,566,833) 282,211 (840,348) (89,911) (937,169) (632,644) (314,028) (1,563,190) (7,264,630) (21,313,570) 10,807,785 (15,619,893) 15,234,928 1,222,936 (7,264,474) 1,140,945 (897,492) 29,677,001 55,011,520 40,079,967 63,753,832 9,300,037 (336,373) ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- $49,477,211 $ 98,660,309 $372,971,862 $383,979,686 $231,415,494 $274,128,239 $237,179,979 $83,847,168 =========== ============ ============ ============ ============ ============ ============ ===========
See accompanying notes to financial statements 81 PAINEWEBBER PACE SELECT ADVISORS TRUST STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) JANUARY 31, 2001 (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 ............................................................. $ -- $ -- $ -- $ 20,570 ----------- ------------ ------------ ------------ Shares outstanding ..................................................... -- -- -- 1,612 ----------- ------------ ------------ ------------ Net asset value and redemption value per share ......................... $ -- $ -- $ -- $ 12.76 ----------- ------------ ------------ ------------ Maximum offering price per share ....................................... $ -- $ -- $ -- $ 13.29 =========== ============ ============ ============ CLASS B: Net assets ............................................................. $ -- $ 20,233 $ 5,061 $ -- ----------- ------------ ------------ ------------ Shares outstanding ..................................................... -- 1,599 416 ----------- ------------ ------------ ------------ Net asset value and offering price per share ........................... $ -- $ 12.65 $ 12.17 $ -- =========== ============ ============ ============ CLASS C: Net assets ............................................................. $ -- $ 42,962 $ 70,904 $ 41,333 ----------- ------------ ------------ ------------ Shares outstanding ..................................................... -- 3,395 5,826 ----------- ------------ ------------ ------------ Net asset value and offering price per share ........................... $ -- $ 12.65 $ 12.17 $ 12.76 =========== ============ ============ ============ CLASS Y: Net assets ............................................................. $ -- $ -- $ -- $ -- ----------- ------------ ------------ ------------ Shares outstanding ..................................................... -- -- -- -- ----------- ------------ ------------ ------------ Net asset value, offering price and redemption value per share ......... $ -- $ -- $ -- $ -- =========== ============ ============ ============ CLASS P: Net assets ............................................................. $74,449,356 $200,761,279 $133,396,590 $231,304,139 ----------- ------------ ------------ ------------ Shares outstanding ..................................................... 74,449,576 15,865,663 10,967,437 18,131,901 ----------- ------------ ------------ ------------ Net asset value, offering price and redemption value per share ......... $1.00 $12.65 $12.16 $12.76 =========== ============ ============ ============
82
PACE PACE PACE INTERNATIONAL PACE PACE PACE PACE SMALL/MEDIUM SMALL/MEDIUM PACE EMERGING MUNICIPAL GLOBAL FIXED LARGE COMPANY LARGE COMPANY COMPANY COMPANY INTERNATIONAL MARKETS FIXED INCOME INCOME VALUE EQUITY GROWTH EQUITY VALUE EQUITY GROWTH EQUITY EQUITY EQUITY INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- $ 993 $ 6,545 $ 174,433 $ 247,342 $ 173,336 $ 417,950 $ 3,015,609 $ 12,601 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- 80 610 9,858 11,577 10,849 25,664 198,661 1,210 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- $ 12.41 $ 10.73 $ 17.69 $ 21.36 $ 15.98 $ 16.28 $ 15.18 $ 10.42 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- $ 12.93 $ 11.18 $ 18.52 $ 22.37 $ 16.73 $ 17.05 $ 15.90 $ 10.91 =========== ============ ============ ============ ============ ============ ============ =========== $ -- $ -- $ 235,778 $ 211,721 $ 140,784 $ 173,984 $ 75,972 $ 35,728 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- $ -- -- -- 13,339 9,9268,820 10,697 4,993 3,432 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- $ -- $ -- $ 17.68 $ 21.33 $ 15.96 $ 16.27 $ 15.22 $ 10.41 =========== ============ ============ ============ ============ ============ ============ =========== $ 1,031 $ 54,990 $ 221,889 $ 184,672 $ 210,819 $ 257,190 $ 175,329 $ 30,871 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- 3,239 83 5,124 12,554 8,657 13,210 15,813 11,527 2,966 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- $ 12.42 $ 10.73 $ 17.68 $ 21.33 $ 15.96 $ 16.26 $ 15.21 $ 10.41 =========== ============ ============ ============ ============ ============ ============ =========== $ -- $ 1,405 $ 15,235 $ -- $ 34,540 $ -- $ 33,071 $ -- ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- -- 131 860 -- 2,160 -- 2,172 -- ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- $ -- $ 10.73 $ 17.71 $ -- $ 15.99 $ -- $ 15.23 $ -- =========== ============ ============ ============ ============ ============ ============ =========== $49,475,187 $ 98,597,369 $372,324,527 $383,335,951 $230,856,015 $273,279,115 $233,879,998 $83,767,968 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- 3,985,110 9,190,817 21,026,502 17,939,400 14,440,905 16,771,083 15,356,156 8,038,420 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- $12.42 $10.73 $17.71 $21.37 $15.99 $16.29 $15.23 $10.42 =========== ============ ============ ============ ============ ============ ============ ===========
See accompanying notes to financial statements 83 PAINEWEBBER PACE SELECT ADVISORS TRUST STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JANUARY 31, 2001 (UNAUDITED)
PACE GOVERNMENT PACE PACE PACE SECURITIES INTERMEDIATE STRATEGIC MONEY MARKET FIXED INCOME FIXED INCOME FIXED INCOME INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS ----------- ------------ ------------ ------------ INVESTMENT INCOME: Interest ............................................................... $ 2,356,364 $ 8,036,088 $ 4,695,506 $ 8,734,687 Dividends (net of foreign withholding taxes, $0; $0; $0; $0; $0; $0; $8,334; $343; $0; $2,707; $84,779; $42,351, respectively) ............................................... -- -- -- -- ----------- ------------ ------------ ------------ 2,356,364 8,036,088 4,695,506 8,734,687 ----------- ------------ ------------ ------------ EXPENSES: Investment management and administration fees .......................... 124,746 714,549 407,266 838,412 Service fees -- Class A ................................................ -- 61 200 6 Service and distribution fees -- Class B ............................... -- 23 6 -- Service and distribution fees -- Class C ............................... -- 42 43 39 Transfer agency and related services fees .............................. 92,920 29,161 17,086 42,893 Reports and notices to shareholders .................................... 38,456 13,832 16,552 13,250 Professional fees ...................................................... 28,520 19,400 35,201 27,660 Trustees' fees ......................................................... 13,125 13,125 13,125 13,125 Federal and state registration fees .................................... 10,911 4,819 10,626 8,673 Custody and accounting ................................................. 3,564 61,247 41,631 64,869 Amortization of organizational expenses ................................ 1,025 1,025 1,025 1,025 Interest expense ....................................................... -- 35,556 -- 113,147 Other expenses ......................................................... 9,467 2,090 2,125 2,089 ----------- ------------ ------------ ------------ 322,734 894,930 544,637 1,125,188 Less: Fee waivers and reimbursements from manager ...................... (144,473) (1,011) (2,548) (2,525) ----------- ------------ ------------ ------------ Net expenses ........................................................... 178,261 893,919 542,089 1,122,663 ----------- ------------ ------------ ------------ Net investment income (loss) ........................................... 2,178,103 7,142,169 4,153,417 7,612,024 ----------- ------------ ------------ ------------ REALIZED AND UNREALIZED GAINS (LOSSES) FROM INVESTMENT ACTIVITIES: Net realized gains (losses) from: Investment transactions ............................................... 343 3,783,720 (398,382) 4,323,034 Futures ............................................................... -- (121,607) -- 549,786 Options ............................................................... -- 84,375 -- (122,926) Foreign currency transactions ......................................... -- -- -- (794,560) Swaps ................................................................. -- -- -- (145,024) Net change in unrealized apprecation/depreciation of: Investments ........................................................... -- 7,198,057 4,962,677 8,241,204 Futures ............................................................... -- (410,438) -- (318,512) Options written ....................................................... -- (6,675) -- 30,896 Swaps ................................................................. -- -- -- (686,289) Other assets, liabilities and forward contracts denominated in foreign currencies ................................... -- -- (4) 303,616 ----------- ------------ ------------ ------------ Net realized and unrealized gains (losses) from investment activities .. 343 10,527,432 4,564,291 11,381,225 ----------- ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ........ $ 2,178,446 $ 17,669,601 $ 8,717,708 $ 18,993,249 =========== ============ ============ ============
84
PACE PACE PACE INTERNATIONAL PACE PACE PACE PACE SMALL/MEDIUM SMALL/MEDIUM PACE EMERGING MUNICIPAL GLOBAL FIXED LARGE COMPANY LARGE COMPANY COMPANY COMPANY INTERNATIONAL MARKETS FIXED INCOME INCOME VALUE EQUITY GROWTH EQUITY VALUE EQUITY GROWTH EQUITY EQUITY EQUITY INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- $ 1,410,115 $ 2,425,114 $ 300,164 $ 177,435 $ 889,643 $ 323,838 $ 241,536 $ 83,584 -- 6,476 3,235,867 821,569 1,672,236 155,783 685,080 300,741 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- 1,410,115 2,431,590 3,536,031 999,004 2,561,879 479,621 926,616 384,325 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- 159,366 396,105 1,428,814 1,608,887 901,603 1,198,534 1,052,998 413,576 -- 2 37 51 27 109 208 4 -- -- 213 168 60 120 61 21 2 55 197 196 130 231 183 27 12,400 46,140 50,060 62,654 58,584 60,684 45,536 50,767 8,158 15,321 18,898 20,674 21,552 19,305 17,381 13,134 13,011 34,909 18,866 35,419 28,765 30,599 19,947 30,330 13,125 13,125 13,125 13,125 13,125 13,125 13,125 13,125 4,650 14,879 20,057 16,061 17,766 12,197 12,124 12,072 17,019 76,069 107,161 120,701 68,080 90,587 166,694 146,521 1,025 1,025 1,025 1,025 1,025 1,025 1,025 1,025 -- -- -- -- -- -- -- -- 378 6,222 9,140 2,663 3,971 801 1,100 3,031 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- 229,134 603,852 1,667,593 1,881,624 1,114,688 1,427,318 1,330,382 683,633 (4,693) (134,114) (45,545) (41,141) (2,966) (9,397) (2,245) (119,487) ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- 224,441 469,738 1,622,048 1,840,483 1,111,722 1,417,921 1,328,137 564,146 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- 1,185,674 1,961,852 1,913,983 (841,479) 1,450,157 (938,300) (401,521) (179,821) ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- (161,234) 876,675 (9,260,123) 4,549,750 (7,695,389) (4,659,642) 6,382,857 (4,180,698) -- (167,266) 114,637 16,385 (6,579,573) -- -- -- -- -- -- -- -- -- -- -- -- (4,989,554) -- -- -- -- (4,384,692) (2,206,611) -- -- -- -- -- -- -- -- 1,508,872 5,125,833 38,788,285 (76,513,258) 56,735,389 (50,305,702) (30,449,175) (3,735,795) -- (35,359) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 52,667 -- -- -- -- 69,747 99,392 ----------- ------------ ------------ ------------ ------------ ------------ ------------ ----------- 1,347,638 862,996 29,642,799 (71,947,123) 42,460,427 (54,965,344) (28,381,263) (10,023,712) ----------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 2,533,312 $ 2,824,848 $ 31,556,782 $(72,788,602) $ 43,910,584 $(55,903,644) $(28,782,784) $(10,203,533) =========== ============ ============ ============ ============ ============ ============ ============
See accompanying notes to financial statements 85 PAINEWEBBER PACE SELECT ADVISORS TRUST STATEMENT OF CHANGES IN NET ASSETS
PACE PACE GOVERNMENT SECURITIES MONEY MARKET INVESTMENTS FIXED INCOME INVESTMENTS ----------------------------- ------------------------------ FOR THE FOR THE SIX MONTHS FOR THE SIX MONTHS FOR THE ENDED YEAR ENDED YEAR JANUARY 31, 2001 ENDED JANUARY 31, 2001 ENDED (UNAUDITED) JULY 31, 2000 (UNAUDITED) JULY 31, 2000 ----------- ------------ ------------ ------------ FROM OPERATIONS: Net investment income .................................... $ 2,178,103 $ 3,275,065 $ 7,142,169 $ 12,058,028 Net realized gains (losses) from: Investment, futures, swaps, and options transactions ... 343 66 3,746,488 15,206 Foreign currency transactions .......................... -- -- -- -- Net change in unrealized appreciation/depreciation of: Investments, futures, options written and swaps ........ -- -- 6,780,944 114,103 Other assets, liabilities and forward contracts denominated in foreign currencies .................... -- -- -- -- ----------- ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ......................................... 2,178,446 3,275,131 17,669,601 12,187,337 ----------- ------------ ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income-- Class A .......................... -- -- -- -- Net investment income-- Class B .......................... -- -- (228) -- Net investment income-- Class C .......................... -- -- (394) -- Net investment income-- Class Y .......................... -- -- -- -- Net investment income-- Class P .......................... (2,178,103) (3,275,065) (8,323,547) (12,319,000) Net realized gains from investment transactions -- Class P -- -- -- -- Paid in capital-- Class P ................................ -- -- -- -- ----------- ------------ ------------ ------------ (2,178,103) (3,275,065) (8,324,169) (12,319,000) ----------- ------------ ------------ ------------ FROM BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from the sale of shares ..................... 48,321,534 95,347,054 20,259,366 62,815,799 Cost of shares repurchased ............................... (41,532,010) (80,153,026) (35,875,270) (67,554,961) Proceeds from dividends reinvested ....................... 2,138,732 3,153,036 8,176,925 12,069,998 ----------- ------------ ------------ ------------ Net increase (decrease) in net assets from beneficial interest transactions .................................. 8,928,256 18,347,064 (7,438,979) 7,330,836 ----------- ------------ ------------ ------------ Net increase (decrease) in net assets .................... 8,928,599 18,347,130 1,906,453 7,199,173 NET ASSETS: Beginning of period ...................................... 65,520,757 47,173,627 198,918,021 191,718,848 ----------- ------------ ------------ ------------ End of period ............................................ $74,449,356 $ 65,520,757 $200,824,474 $198,918,021 =========== ============ ============ ============ Undistributed net investment income ...................... $ -- $ -- $ -- $ 1,181,552 =========== ============ ============ ============
86
PACE PACE PACE PACE INTERMEDIATE FIXED INCOME STRATEGIC FIXED INCOME MUNICIPAL FIXED INCOME GLOBAL FIXED INCOME INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS ---------------------------- ----------------------------- ----------------------------- ----------------------------- FOR THE FOR THE FOR THE FOR THE SIX MONTHS FOR THE SIX MONTHS FOR THE SIX MONTHS FOR THE SIX MONTHS FOR THE ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR JANUARY 31, 2001 ENDED JANUARY 31, 2001 ENDED JANUARY 31, 2001 ENDED JANUARY 31, 2001 ENDED (UNAUDITED) JULY 31, 2000 (UNAUDITED) JULY 31, 2000 (UNAUDITED) JULY 31, 2000 (UNAUDITED) JULY 31, 2000 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 4,153,417 $ 8,210,576 $ 7,612,024 $ 13,773,860 $ 1,185,674 2,569,474 $ 1,961,852 $ 4,729,790 (398,382) (2,315,802) 4,604,870 (4,705,796) (161,234) (1,121,348) 709,409 (2,984,485) -- -- (794,560) (829,229) -- -- (4,989,554) (4,448,096) 4,962,677 387,836 7,267,299 3,289,955 1,508,872 (233,014) 5,090,474 (1,873,645) (4) -- 303,616 (139,495) -- -- 52,667 (730,710) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 8,717,708 6,282,610 18,993,249 11,389,295 2,533,312 1,215,112 2,824,848 (5,307,146) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (15,730) -- (162) -- -- -- (37) -- (46) -- -- -- -- -- -- -- (324) -- (316) -- (7) -- (320) -- -- -- -- -- -- -- (5) -- (4,799,978) (8,211,628) (8,535,287) (13,546,286) (1,395,757) (2,581,602) (2,346,848) (3,785,353) -- (35,975) -- -- -- -- -- (781,420) -- -- -- -- -- -- -- (586,535) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (4,816,078) (8,247,603) (8,535,765) (13,546,286) (1,395,764) (2,581,602) (2,347,210) (5,153,308) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 20,734,039 40,293,964 19,468,774 64,108,891 5,905,935 16,187,372 11,999,909 39,653,457 (29,977,120) (51,337,322) (41,754,698) (62,812,383) (12,504,574) (20,370,295) (16,956,333) (34,559,600) 4,711,647 8,067,808 8,446,757 13,393,884 1,344,021 2,484,786 2,308,113 5,054,468 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (4,531,434) (2,975,550) (13,839,167) 14,690,392 (5,254,618) (1,698,137) (2,648,311) 10,148,325 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (629,804) (4,940,543) (3,381,683) 12,533,401 (4,117,070) (3,064,627) (2,170,673) (312,129) 134,102,359 139,042,902 234,747,725 222,214,324 53,594,281 56,658,908 100,830,982 101,143,111 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $133,472,555 $134,102,359 $231,366,042 $234,747,725 $ 49,477,211 $ 53,594,281 $ 98,660,309 $100,830,982 ============ ============ ============ ============ ============ ============ ============ ============ $ -- $ 642,139 $ -- $ 475,152 $ -- $ 200,660 $ -- $ -- ============ ============ ============ ============ ============ ============ ============ ============
See accompanying notes to financial statements 87 PAINEWEBBER PACE SELECT ADVISORS TRUST STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
PACE PACE LARGE COMPANY VALUE LARGE COMPANY GROWTH EQUITY INVESTMENTS EQUITY INVESTMENTS ----------------------------- ----------------------------- FOR THE FOR THE SIX MONTHS FOR THE SIX MONTHS FOR THE ENDED YEAR ENDED YEAR JANUARY 31, 2001 ENDED JANUARY 31, 2001 ENDED (UNAUDITED) JULY 31, 2000 (UNAUDITED) JULY 31, 2000 ------------ ------------ ------------ ------------ FROM OPERATIONS: Net investment income (loss) ................................ $ 1,913,983 $ 2,980,537 $ (841,479) $ (1,753,775) Net realized gains (losses) from: Investment and futures transactions ....................... (9,145,486) (4,441,250) 4,566,135 56,955,344 Foreign currency transactions ............................. -- -- -- -- Net change in unrealized appreciation/depreciation of: Investments, futures and options .......................... 38,788,285 (56,910,128) (76,513,258) 14,949,193 Other assets, liabilities and forward contracts denominated in foreign currencies ....................... -- -- -- -- ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ........................................... 31,556,782 (58,370,841) (72,788,602) 70,150,762 ------------ ------------ ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income-- Class P ............................. (3,348,036) (2,495,534) -- -- Net realized gains from investment transactions -- Class P ................................... -- (30,040,611) (49,053,172) (11,567,261) ------------ ------------ ------------ ------------ (3,348,036) (32,536,145) (49,053,172) (11,567,261) ------------ ------------ ------------ ------------ FROM BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from the sale of shares ........................ 64,278,819 147,357,307 69,492,732 135,593,185 Cost of shares repurchased .................................. (58,113,340) (128,553,245) (48,850,855) (148,736,983) Proceeds from dividends reinvested .......................... 3,303,227 31,932,335 48,373,474 11,378,823 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets from beneficial interest transactions ..................................... 9,468,706 50,736,397 69,015,351 (1,764,975) ------------ ------------ ------------ ------------ Contribution to capital from Sub-Adviser .................... -- -- -- -- ------------ ------------ ------------ ------------ Net increase (decrease) in net assets ....................... 37,677,452 (40,170,589) (52,826,423) 56,818,526 NET ASSETS: Beginning of period ......................................... 335,294,410 375,464,999 436,806,109 379,987,583 ------------ ------------ ------------ ------------ End of period ............................................... $372,971,862 $335,294,410 $383,979,686 $436,806,109 ============ ============ ============ ============ Undistributed net investment income ........................... $ 282,211 $ 1,716,264 $ -- $ 1,131 ============ ============ ============ ============
88
PACE PACE PACE PACE SMALL/MEDIUM COMPANY VALUE SMALL/MEDIUM COMPANY GROWTH INTERNATIONAL INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS EQUITY INVESTMENTS EQUITY INVESTMENTS EQUITY INVESTMENTS ----------------------------- ----------------------------- ----------------------------- --------------------------- FOR THE FOR THE FOR THE FOR THE SIX MONTHS FOR THE SIX MONTHS FOR THE SIX MONTHS FOR THE SIX MONTHS FOR THE ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR JANUARY 31, 2001 ENDED JANUARY 31, 2001 ENDED JANUARY 31, 2001 ENDED JANUARY 31, 2001 ENDED (UNAUDITED) JULY 31, 2000 (UNAUDITED) JULY 31, 2000 (UNAUDITED) JULY 31, 2000 (UNAUDITED) JULY 31, 2000 ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- $ 1,450,157 $ 1,518,247 $ (938,300) $ (2,011,759) $ (401,521) $ 919,511 $ (179,821) $ (72,957) (14,274,962) 2,717,494 (4,659,642) 128,087,825 6,382,857 16,408,727 (4,180,698) 9,997,594 -- -- -- -- (4,384,692) (966,600) (2,206,611) (242,500) 56,735,389 (25,897,124) (50,305,702) 30,703,199 (30,449,175) 16,466,174 (3,735,795) (8,406,705) -- -- -- -- 69,747 (84,984) 99,392 256,660 ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- 43,910,584 (21,661,383) (55,903,644) 156,779,265 (28,782,784) 32,742,828 (10,203,533) 1,532,092 ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- (2,609,034) (832,372) -- -- (495,129) (1,491,665) -- (724,583) -- (9,001,354) (88,042,617) (33,399,940) (16,406,728) (13,070,076) -- -- ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- (2,609,034) (9,833,726) (88,042,617) (33,399,940) (16,901,857) (14,561,741) -- (724,583) ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- 26,298,662 83,666,072 49,189,377 71,190,367 53,851,034 73,257,178 21,307,784 30,492,713 (52,520,673) (54,265,656) (37,825,687) (173,407,222) (34,042,499) (73,965,090) (9,435,596) (38,335,487) 2,587,086 9,712,297 87,139,339 33,003,540 16,604,127 14,268,026 -- 716,496 ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- (23,634,925) 39,112,713 98,503,029 (69,213,315) 36,412,662 13,560,114 11,872,188 (7,126,278) ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- -- -- -- -- -- 694,257 -- -- ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- 17,666,625 7,617,604 (45,443,232) 54,166,010 (9,271,979) 32,435,458 1,668,655 (6,318,769) 213,748,869 206,131,265 319,571,471 265,405,461 246,451,958 214,016,500 82,178,513 88,497,282 ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- $231,415,494 $213,748,869 $274,128,239 $319,571,471 $237,179,979 $246,451,958 $83,847,168 $82,178,513 ============ ============ ============ ============ ============ ============ =========== =========== $ -- $ 1,068,966 $ -- $ 1,131 $ -- $ 264,006 $ -- $ -- ============ ============ ============ ============ ============ ============ =========== ===========
See accompanying notes to financial statements 89 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 referred to as 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 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 approximately six years after issuance. 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. The Portfolio's Class P shares currently are available only to participants in the UBS PaineWebber PACE(SM) Programs. 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. 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 Mitchell Hutchins Asset Management Inc. (Mitchell Hutchins"), the manager and administrator of the Portfolios, or by the Portfolio's investment adviser. Mitchell Hutchins is a wholly owned asset management subsidiary of UBS PaineWebber Inc. (UBS PaineWebber"), an indirect wholly owned subsidiary of UBS AG. 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 90 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 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 Portfolio's custodian. Foreign currency exchange rates are generally determined prior to the close of the New York Stock Exchange (NYSE"). Occasionally, events affecting the value of foreign investments and such exchange rates occur between the time at which they are determined and the close of the NYSE, which will not be reflected in the computation of the Portfolio's net asset value. If events materially affecting the value of such securities or currency exchange rates occur during such time periods, the securities will be valued at their fair value as determined in good faith by or under the direction of the board. REPURCHASE AGREEMENTS--The Portfolios' 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) occasionally participates in joint repurchase agreement transactions with other funds managed by Mitchell Hutchins. INVESTMENT TRANSACTIONS AND INVESTMENT INCOME--Investment transactions are recorded on a trade date basis. 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 for certain dividends from foreign securities that 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 (with the exception of PACE Global Fixed Income Investments) as adjustments to interest income and the identified cost of investments. In November 2000 the American Institute of Certified Public Accountants (AICPA) issued a revised version of the AICPA Audit and Accounting Guide for Investment Companies (the Guide). The revised version of the Guide is effective for annual financial statements issued for fiscal years beginning after December 15, 2000 and will require investment companies to amortize premiums and discounts on fixed income securities. PACE Global Fixed Income Investments currently does not amortize premiums on fixed income securities. Upon adoption, PACE Global Fixed Income Investments will be required to record a cumulative effect adjustment to reflect the amortization of premiums. The adjustment will reduce net investment income and increase unrealized appreciation on securities and therefore will not impact total net assets. At this time, PACE Global Fixed Income Investments has not completed its analysis of the impact of this accounting change. 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 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. 91 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) The Portfolios do not generally isolate the effect of fluctuations in foreign exchange rates from the effects of fluctuations in the market price of investment 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 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 exchange 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-adviser 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 Portfolio 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 the 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 Portfolio 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--Using financial futures contracts involves various market risks. The maximum amount at risk from the purchase of a futures contract is the contract value. The Portfolios primarily use financial futures contracts for hedging purposes or to manage the average duration of a portfolio. However, imperfect correlations between futures contracts and the portfolio securities being hedged, or market disruptions, do not normally permit full control of these risks at all times. 92 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Upon entering into a financial futures contract, a Portfolio is required to pledge to a broker an amount 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 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. REVERSE REPURCHASE AGREEMENTS--The Trust 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 Trust enters into a reverse repurchase agreement, it establishes and maintains a segregated account with the Trust's custodian containing liquid securities having a value not less than the repurchase price, including accrued interest, of the reverse repurchase agreement. For the six months ended January 31, 2001, the PACE Government Securities Fixed Income Portfolio and the PACE Strategic Fixed Income Portfolio were the only Portfolio's which engaged in reverse repurchase agreements. The weighted average daily balance of reverse repurchase agreements outstanding during the six months ended January 31, 2001 was $14,488,000 and $6,379,000, respectively, at a weighted average interest rate of 5.89% and 6.45%, respectively. 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 investments. For the six months ended January 31, 2001, PACE Strategic Fixed Income Investments was the only Portfolio that had outstanding interest rate swap contracts with the following terms: RATE TYPE ----------------------------------- NOTIONAL TERMINATION PAYMENTS MADE PAYMENTS RECEIVED UNREALIZED AMOUNT DATE BY THE FUND BY THE FUND DEPRECIATION ---------- ----------- ------------- ----------------- ------------ $4,000,000 8/17/05 7.005% 4.903%+ $(218,288) 1,100,000 8/25/30 5.930 5.344++ (153,144) --------- $(371,432) ========= ---------- + Rate based on LIBOR (USD Interbank Offered Rate). ++ Rate based on LIBOR (GBP Interbank Offered Rate). 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 generally accepted accounting principles. 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. 93 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 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 cap companies may be more vulnerable than larger 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 companies or the market averages in general and, therefore, may involve greater risk than investing in larger companies. In addition, small cap 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. 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. INVESTMENT MANAGER AND ADMINISTRATOR The Trust has entered into an Investment Management and Administration Contract (Management Contract") with Mitchell Hutchins. In accordance with the Management Contract, each Portfolio pays Mitchell Hutchins 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 AVERAGE DAILY PORTFOLIO 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% 94 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Under separate Sub-Advisory Agreements, with the exception of PACE Money Market Investments, Mitchell Hutchins (not the Portfolios) pays each investment adviser a fee from the investment management fee which Mitchell Hutchins 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 ADVISER AVERAGE DAILY NET ASSETS ------------------------------------------ --------------------------------------- ------------------------- PACE Government Securities Fixed Income Investments Pacific Investment Management Company LLC 0.225% PACE Intermediate Fixed Income Investments Metropolitan West Asset Management, LLC 0.200% up to $200 million 0.120% above $200 million PACE Strategic Fixed Income Investments Pacific Investment Management Company LLC 0.250% PACE Municipal Fixed Income Investments Standish, Ayer & Wood, Inc. 0.200% up to $60 million 0.150% above $60 million PACE Global Fixed Income Investments Rogge Global Partners plc 0.250% Fischer Francis Trees & Watts, Inc. 0.250% up to $400 million (and affiliates) 0.200% above $400 million PACE Large Company Value Equity Investments Institutional Capital Corp. 0.300% Westwood Management Corp. 0.300% State Street Global Advisors 0.150% PACE Large Company Growth Equity Investments Alliance Capital Management L.P. 0.300% State Street Global Advisors 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 Investments Martin Currie Inc. 0.350% up to $150 million 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 Schroder Investment Management 0.500% Equity Investments North America Inc.
As of January 31, 2001 the Portfolios owed Mitchell Hutchins for investment management and administration fees as follows: AMOUNTS PORTFOLIO OWED ----------------------------------------------------------- -------- PACE Government Securities Fixed Income Investments ....... $120,972 PACE Intermediate Fixed Income Investments ................ $ 68,297 PACE Strategic Fixed Income Investments ................... $139,570 PACE Municipal Fixed Income Investments ................... $ 25,796 PACE Global Fixed Income Investments ...................... $ 46,792 PACE Large Company Value Equity Investments ............... $251,696 PACE Large Company Growth Equity Investments .............. $229,268 PACE Small/Medium Company Value Equity Investments ........ $158,154 PACE Small/Medium Company Growth Equity Investments ....... $173,104 PACE International Equity Investments ..................... $170,923 PACE International Emerging Markets Equity Investments .... $ 69,450 95 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Mitchell Hutchins 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, 2001, which will lower the overall expenses of certain Portfolios. Additionally, Mitchell Hutchins waived a portion of its investment management and administration fees in connection with the Portfolio investments of cash collateral from securities lending transactions in the Mitchell Hutchins Private Money Market Fund LLC. For the six months ended January 31, 2001, Mitchell Hutchins had the following expense reimbursements and waivers: WAIVERS AND EXPENSE PORTFOLIO REIMBURSEMENTS ------------------------------------------------------- -------------- PACE Money Market Investments ......................... $144,473 PACE Government Securities Fixed Income Investments ... 1,011 PACE Intermediate Fixed Income Investments ............ 2,548 PACE Strategic Fixed Income Investments ............... 2,525 PACE Municipal Fixed Income Investments ............... 4,693 PACE Global Fixed Income Investments .................. 134,114 PACE Large Company Value Equity Investments ........... 45,545 PACE Large Company Growth Equity Investments .......... 41,141 PACE Small/Medium Company Value Equity Investments .... 2,966 PACE Small/Medium Company Growth Equity Investments ... 9,397 PACE International Equity Investments ................. 2,245 PACE International Emerging Markets Equity Investments .................................. 119,487 During the six months ended January 31, 2001, the Portfolios did not pay any brokerage commissions to UBS PaineWebber. DISTRIBUTION PLANS Mitchell Hutchins is the distributor of each Portfolio's shares, and has appointed UBS PaineWebber as dealer for the sale of those shares. Under separate plans of service and/or distribution pertaining to Class A, Class B and Class C shares, the Portfolios pay Mitchell Hutchins 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 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. 96 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Mitchell Hutchins also receives the proceeds of the initial sales charges paid upon the purchase of Class A 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, 2001, the Portfolios owed Mitchell Hutchins service and distribution fees, and for the six months ended January 31, 2001, the Portfolios were informed by Mitchell Hutchins that it had earned sales charges as follows: SERVICE AND SALES CHARGES DISTRIBUTION FEES EARNED FOR THE OWED MANAGER PERIOD ENDED AT JANUARY 31, JANUARY 31, PORTFOLIO 2001 2001 --------------------------------------- ---- ------- PACE Government Securities Fixed Income Investments ............ $102 $ 0 PACE Intermediate Fixed Income Investments .................. 150 0 PACE Strategic Fixed Income Investments .................. 28 2 PACE Municipal Fixed Income Investments .................. 1 0 PACE Global Fixed Income Investments .................. 35 0 PACE Large Company Value Equity Investments .................. 299 2,589 PACE Large Company Growth Equity Investments .................. 284 3,735 PACE Small/Medium Company Value Equity Investments ............ 217 4,052 PACE Small/Medium Company Growth Equity Investments ........... 321 10,066 PACE International Equity Investments .................. 296 0 PACE International Emerging Markets Equity Investments .......... 43 0 SECURITIES LENDING Each Portfolio may lend securities up to 33 1/3% of its total assets to qualified institutions. 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 on interest earned on the cash 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 Portfolio's lending agent, received compensation from the Portfolios for the six months ended January 31, 2001 as follows: PORTFOLIO COMPENSATION --------------------------------------------------------- ------------ PACE Government Securities Fixed Income Investments ..... $ 3 PACE Intermediate Fixed Income Investments .............. $ 7,098 PACE Strategic Fixed Income Investments ................. $ 500 PACE Global Fixed Income Investments .................... $ 5,936 PACE Large Company Value Equity Investments ............. $ 2,876 PACE Large Company Growth Equity Investments ............ $11,079 PACE Small/Medium Company Value Equity Investments ...... $ 3,374 PACE Small/Medium Company Growth Equity Investments ..... $33,797 PACE International Equity Investments ................... $ 7,355 PACE International Emerging Markets Equity Investments .. $ 1,685 97 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) For the six months ended January 31, 2001 the Portfolios earned compensation from securities lending transactions net of fees, rebates and expenses as follows: PORTFOLIO COMPENSATION --------------------------------------------------------- ------------ PACE Government Securities Fixed Income Investments ..... $ 9 PACE Intermediate Fixed Income Investments .............. $20,632 PACE Strategic Fixed Income Investments ................. $ 1,296 PACE Global Fixed Income Investments .................... $17,474 PACE Large Company Value Equity Investments ............. $ 7,667 PACE Large Company Growth Equity Investments ............ $31,277 PACE Small/Medium Company Value Equity Investments ...... $ 9,584 PACE Small/Medium Company Growth Equity Investments ..... $97,590 PACE International Equity Investments ................... $21,171 PACE International Emerging Markets Equity Investments .. $ 4,820 As of January 31, 2001 the Portfolios owed UBS PaineWebber for security lending fees as follows: AMOUNTS PORTFOLIO OWED ------------------------------------------------------------ ------- PACE Intermediate Fixed Income Investments ................. $ 563 PACE Global Fixed Income Investments ....................... $1,604 PACE Large Company Value Equity Investments ................ $ 750 PACE Large Company Growth Equity Investments ............... $1,568 PACE Small/Medium Company Value Equity Investments ......... $ 848 PACE Small/Medium Company Growth Equity Investments ........ $6,283 PACE International Equity Investments ...................... $1,663 PACE International Emerging Markets Equity Investments ..... $ 550 As of January 31, 2001 the Portfolios held cash as collateral for market values of securities loaned as follows: COLLATERAL MARKET VALUE OF FOR SECURITIES SECURITIES PORTFOLIO LOANED LOANED ---------------------------------- ----------- ----------- PACE Intermediate Fixed Income Investments ............. $ 9,927,868 $ 9,418,758 PACE Global Fixed Income Investments .................... $ 2,509,147 $ 2,390,632 PACE Large Company Value Equity Investments ............. $15,077,200 $14,627,859 PACE Large Company Growth Equity Investments ............. $20,548,746 $19,509,768 PACE Small/Medium Company Value Equity Investments ....... $14,662,284 $14,279,397 PACE Small/Medium Company Growth Equity Investments ...... $52,565,015 $45,511,036 PACE International Equity Investments .................... $ 9,645,004 $ 9,162,856 PACE International Emerging Markets Equity Investments ..... $ 4,963,091 $ 4,640,905 98 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) As of January 31, 2001 the Portfolios invested the collateral in the following money market funds: NUMBER OF SHARES VALUE ----- ------------ PACE INTERMEDIATE FIXED INCOME INVESTMENTS: 31,279 AIM Liquid Assets Portfolio ....................... $ 31,279 25,056 AIM Prime Portfolio ............................... 25,056 4,599,007 Mitchell Hutchins Private Money Market Fund LLC ... 4,599,007 3,652,960 Provident Temporary Cash Portfolio ................ 3,652,960 1,619,566 Scudder Institutional Fund ........................ 1,619,566 ------------ Total investments of cash collateral for securities loaned (cost--$9,927,868) ............ $ 9,927,868 ============ PACE GLOBAL FIXED INCOME INVESTMENTS: 1,983,071 Mitchell Hutchins Private Money Market Fund LLC ... $ 1,983,071 526,076 Scudder Institutional Fund ........................ 526,076 ------------ Total investments of cash collateral for securities loaned (cost--$2,509,147) ........ $ 2,509,147 ============ PACE LARGE COMPANY VALUE EQUITY INVESTMENTS: 2,122 AIM Liquid Assets Portfolio ....................... $ 2,122 6,720 AIM Prime Portfolio ............................... 6,720 9,418,170 Mitchell Hutchins Private Money Market Fund LLC ... 9,418,170 4,301,741 Provident Temporary Cash Portfolio ................ 4,301,741 1,348,447 Scudder Institutional Fund ........................ 1,348,447 ------------ Total investments of cash collateral for securities loaned (cost--$15,077,200) ....... $ 15,077,200 ============ PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS: 93 AIM Liquid Assets Portfolio ....................... $ 93 79 AIM Prime Portfolio ............................... 79 3,528,762 Mitchell Hutchins Private Money Market Fund LLC ... 3,528,762 9,370,412 Provident Temporary Cash Portfolio ................ 9,370,412 7,649,400 Scudder Institutional Fund ........................ 7,649,400 ------------ Total investments of cash collateral for securities loaned (cost--$20,548,746) ....... $ 20,548,746 ============ PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS: 5,578 AIM Liquid Assets Portfolio ....................... $ 5,578 5,801,116 Mitchell Hutchins Private Money Market Fund LLC ... 5,801,116 8,855,590 Provident Temporary Cash Portfolio ................ 8,855,590 ------------ Total investments of cash collateral for securities loaned (cost--$14,662,284) ....... $ 14,662,284 ============ PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS: 883 AIM Prime Portfolio ............................... $ 883 13,064 AIM Liquid Assets Portfolio ....................... 13,064 26,855,446 Mitchell Hutchins Private Money Market Fund LLC ... 26,855,446 14,851,130 Provident Temporary Cash Portfolio ................ 14,851,130 10,844,492 Scudder Institutional Fund ........................ 10,844,492 ------------ Total investments of cash collateral for securities loaned (cost--$52,565,015) ....... $ 52,565,015 ============ 99 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) NUMBER OF SHARES VALUE ----- ------------ PACE INTERNATIONAL EQUITY INVESTMENTS: 30,201 AIM Liquid Assets Portfolio ....................... $ 30,201 3,006 AIM Prime Portfolio ............................... 3,006 2,744,357 Mitchell Hutchins Private Money Market Fund LLC ... 2,744,357 6,653,738 Provident Temporary Cash Portfolio ................ 6,653,738 213,702 Scudder Institutional Fund ........................ 213,702 ------------ Total investments of cash collateral for securities loaned (cost--$9,645,004) ........ $ 9,645,004 ============ PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS: 9,148 AIM Liquid Assets Portfolio ....................... $ 9,148 49,902 AIM Prime Portfolio ............................... 49,902 4,904,041 Mitchell Hutchins Private Money Market Fund LLC ... 4,904,041 ------------ Total investments of cash collateral for securities loaned (cost--$4,963,091) ........ $ 4,963,091 ============ BANK LINE OF CREDIT Each of the Portfolios, with the exception of PACE Money Market Investments, may participate with other funds managed by Mitchell Hutchins in a $200 million committed credit facility (Facility") 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 and 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, 2001, PACE Large Company Growth Equity Investments was the only Portfolio to borrow under the Facility. The Portfolio had an amount outstanding under the Facility of $2,000,000 with an interest rate of 6.96% on December 15, 2000. The Portfolio did not borrow under the Facility at any other time for the six months ended January 31, 2001. WRITTEN OPTION ACTIVITY Written option activity for the six months ended January 31, 2001 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, 2000 ..................... 300 $ 84,375 9,850 $ 275,159 Options written ..................... 0 0 2,787 369,796 Options terminated in closing purchase transactions ............. 0 0 (1,979) (112,597) Options expired prior to exercise ... (300) (84,375) (8,608) (240,458) ---- -------- ------ --------- Options outstanding at January 31, 2001 .................. -- -- 2,050 $ 291,900 ==== ======== ====== ========= 100 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) INVESTMENTS IN SECURITIES At January 31, 2001, 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 ..... $ 5,606,573 $ (965,313) $ 4,641,260 PACE Intermediate Fixed Income Investments .............. 2,879,820 (523,456) 2,356,364 PACE Strategic Fixed Income Investments ................. 6,365,966 (1,440,436) 4,925,530 PACE Municipal Fixed Income Investments ................. 1,320,017 (179,072) 1,140,945 PACE Global Fixed Income Investments .................... 2,243,459 (3,138,262) (894,733) PACE Large Company Value Equity Investments ............. 36,391,865 (6,714,864) 29,677,001 PACE Large Company Growth Equity Investments ............ 74,983,304 (19,971,784) 55,011,520 PACE Small/Medium Company Value Equity Investments ...... 43,812,764 (3,732,797) 40,079,967 PACE Small/Medium Company Growth Equity Investments ..... 82,141,576 (18,387,744) 63,753,832 PACE International Equity Investments ................... 22,617,075 (13,335,768) 9,278,307 PACE International Emerging Markets Equity Investments .. 8,074,957 (8,467,696) (392,739)
For U.S. federal income tax purposes, the cost of securities owned at January 31, 2001 was substantially the same as the cost of securities for financial statement purposes. For the six months ended January 31, 2001, aggregate purchases and sales of portfolio securities, excluding short-term securities, were as follows:
PORTFOLIO PURCHASES SALES --------------------------------------------------------- -------------- -------------- PACE Government Securities Fixed Income Investments ..... $1,270,927,512 $1,189,561,939 PACE Intermediate Fixed Income Investments .............. $ 46,603,931 $ 45,355,772 PACE Strategic Fixed Income Investments ................. $ 841,443,385 $ 763,270,255 PACE Municipal Fixed Income Investments ................. $ 14,855,887 $ 21,266,903 PACE Global Fixed Income Investments .................... $ 180,151,458 $ 185,974,921 PACE Large Company Value Equity Investments ............. $ 502,776,757 $ 496,536,384 PACE Large Company Growth Equity Investments ............ $ 473,707,342 $ 460,455,935 PACE Small/Medium Company Value Equity Investments ...... $ 134,690,893 $ 169,886,224 PACE Small/Medium Company Growth Equity Investments ..... $ 88,776,581 $ 89,297,862 PACE International Equity Investments ................... $ 83,292,940 $ 68,870,386 PACE International Emerging Markets Equity Investments .. $ 48,039,390 $ 38,367,243
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. At July 31, 2000, PACE Government Securities Fixed Income Investments, PACE Intermediate Fixed Income Investments, PACE Strategic Fixed Income Investments, PACE Municipal Fixed Income Investment, PACE Global Fixed Income 101 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) investments and PACE International Emerging Markets Equity Investments had net capital loss carryforwards of $3,236,735, $1,704,933, $7,758,393, $283,909, $1,235,105 and $16,232, respectively. These carryforward losses are available to reduce future net capital gains to the extent provided in the regulations and will expire between July 31, 2007 and July 31, 2008. To the extent that such losses are used to offset future capital gains, the gains so offset will not be distributed to shareholders. 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, 1999. Such losses are treated for tax purposes as arising on August 1, 2000: FOREIGN CAPITAL CURRENCY PORTFOLIO LOSSES LOSSES ---------------------------------------------------- ----------- ---------- PACE Government Securities Fixed Income Investments .................................. $ 262,707 -- PACE Intermediate Fixed Income Investments .......... 1,144,008 -- PACE Strategic Fixed Income Investments ............. 3,230,806 $ 953,305 PACE Municipal Fixed Income Investments ............. 1,079,383 -- PACE Global Fixed Income Investments ................ 1,652,908 5,204,347 PACE Large Company Value Equity Investments ......... 10,795,193 -- PACE Small/Medium Company Value Equity Investments .. 1,341,159 -- PACE International Emerging Markets Equity Investments .................................. -- 135,338 MONEY MARKET FUND BOND PACE Money Market Investments has an insurance bond that provides 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 bond provides for coverage up to $200 million for a number of funds with a deductible of 10 basis points (0.10%) of the total assets of the Portfolio for First Tier Securities and 50 basis points (0.50%) of the total assets of the Portfolio for Second Tier Securities, in each case 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 bond, the Portfolio would expect 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 is generally no later than the maturity of the security. While the policy is intended to provide some protection against credit risk and to help the Portfolio maintain a constant price per share of $1.00, there is no guarantee that the insurance will do so. For the six months ended January 31, 2001, PACE Money Market Investments did not use this insurance bond. CAPITAL CONTRIBUTIONS FROM SUB-ADVISER On January 31, 2000, PACE International Equity Investments recorded a capital contribution from Martin Currie Inc., the Portfolio's Sub-Adviser, in the amount of $694,257. This amount was paid by the Sub-Adviser in connection with unrealized appreciation on investments related to a corporate action. 102 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 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 were as follows: PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2001
CLASS A(a) CLASS B(b) CLASS C(c) CLASS P ---------------------- ------------------ ------------------ ---------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------ ------- ------ ------- ---------- ------------ Shares sold ............... 71,372 $ 900,000 1,581 $19,713 3,363 $41,677 1,565,391 $ 19,297,976 Shares repurchased ........ (71,372) (896,432) -- -- -- -- (2,822,238) (34,978,838) Dividends reinvested ...... -- -- 18 228 32 394 663,654 8,176,303 ------- --------- ----- ------- ----- ------- ---------- ------------ Net increase (decrease) ... -- $ 3,568 1,599 $19,941 3,395 $42,071 (593,193) $ (7,504,559) ======= ========= ===== ======= ===== ======= ========== ============
FOR THE YEAR ENDED JULY 31, 2000 CLASS P ---------------------------- SHARES AMOUNT ---------- ------------ Shares sold ............... 5,225,679 $ 62,815,799 Shares repurchased ........ (5,620,351) (67,554,961) Dividends reinvested ...... 1,003,705 12,069,998 ---------- ------------ Net increase .............. 609,033 $ 7,330,836 ========== ============ (a) For the period January 18, 2001 (commencement of issuance) through January 31, 2001. (b) For the period December 18, 2000 (commencement of issuance) through January 31, 2001. (c) For the period December 4, 2000 (commencement of issuance) through January 31, 2001. PACE INTERMEDIATE FIXED INCOME INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2001
CLASS A(a) CLASS B(b) CLASS C(c) CLASS P ---------------------- ------------------ ------------------ ---------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------ ------- ------ ------- ---------- ------------ Shares sold ............... 586,950 $7,094,073 416 $ 5,000 10,235 $123,351 1,128,549 $ 13,511,615 Shares repurchased ........ (586,950) (7,100,522) -- -- (4,436) (53,653) (1,903,013) (22,822,945) Dividends reinvested ...... -- -- -- -- 27 324 394,439 4,711,323 ------- --------- ----- ------- ----- ------- ---------- ------------ Net increase (decrease) ... -- $ (6,449) 416 $ 5,000 5,826 $70,022 (380,025) $ (4,600,007) ======= ========= ===== ======= ===== ======= ========== ============
FOR THE YEAR ENDED JULY 31, 2000 CLASS P ---------------------------- SHARES AMOUNT ---------- ------------ Shares sold ............... 3,406,841 $ 40,293,964 Shares repurchased ........ (4,351,976) (51,337,322) Dividends reinvested ...... 683,852 8,067,808 ---------- ------------ Net decrease .............. (261,283) $ (2,975,550) ========== ============ (a) For the period December 13, 2000 (commencement of issuance) through January 31, 2001. (b) For the period December 14, 2000 (commencement of issuance) through January 31, 2001. (c) For the period December 1, 2000 (commencement of issuance) through January 31, 2001. PACE STRATEGIC FIXED INCOME INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2001
CLASS A(a) CLASS B(b) CLASS C(c) CLASS P ---------------------- ------------------ ------------------ ---------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------ ------- ------ ------- ---------- ------------ Shares sold ............... 2,863 $ 36,170 102 $ 1,311 3,214 $40,263 1,562,465 $ 19,391,030 Shares repurchased ........ (1,264) (16,023) (102) (1,297) -- -- (3,341,690) (41,737,378) Dividends reinvested ...... 13 162 -- -- 25 315 681,063 8,446,280 ------- --------- ----- ------- ----- ------- ---------- ------------ Net increase (decrease) ... 1,612 $ 20,309 -- $ 14 3,239 $40,578 (1,098,162) $(13,900,068) ======= ========= ===== ======= ===== ======= ========== ============
FOR THE YEAR ENDED JULY 31, 2000 CLASS P ---------------------------- SHARES AMOUNT ---------- ------------ Shares sold ............... 5,274,527 $ 64,108,891 Shares repurchased ........ (5,165,373) (62,812,383) Dividends reinvested ...... 1,101,655 13,393,884 ---------- ------------ Net increase .............. 1,210,809 $ 14,690,392 ========== ============ (a) For the period December 11, 2000 (commencement of issuance) through January 31, 2001. (b) For the period December 29, 2000 (commencement of issuance) through January 31, 2001. (c) For the period December 1, 2000 (commencement of issuance) through January 31, 2001. 103 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) PACE MUNICIPAL FIXED INCOME INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2001
CLASS A(a) CLASS B(b) CLASS C(b) CLASS P ---------------------- ------------------ ------------------ ---------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------ ------- ------ ------- ---------- ------------ Shares sold ............... 80 $ 1,000 244 $ 3,000 82 $ 1,000 479,474 $ 5,900,935 Shares repurchased ........ -- -- (244) (3,005) -- -- (1,014,302) (12,501,569) Dividends reinvested ...... -- -- -- -- 1 7 109,844 1,344,014 ------- --------- ----- ------- ----- ------- ---------- ------------ Net increase (decrease) ... 80 $1,000 -- $ (5) 83 $ 1,007 (424,984) $ (5,256,620) ======= ========= ===== ======= ===== ======= ========== ============
FOR THE YEAR ENDED JULY 31, 2000 CLASS P ---------------------------- SHARES AMOUNT ---------- ------------ Shares sold ............... 1,343,384 $ 16,187,372 Shares repurchased ........ (1,693,153) (20,370,295) Dividends reinvested ...... 206,211 2,484,786 ---------- ------------ Net decrease .............. (143,558) $ (1,698,137) ========== ============ (a) For the period January 23, 2001 (commencement of issuance) through January 31, 2001. (b) For the period December 4, 2000 (commencement of issuance) through January 31, 2001. PACE GLOBAL FIXED INCOME INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2001
CLASS A(a) CLASS C(b) CLASS Y(c) CLASS P ---------------------- ------------------ ------------------ ---------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------ ------- ------ ------- ---------- ------------ Shares sold ............... 1,054 $ 11,229 5,094 $53,602 130 $ 1,400 1,134,607 $ 11,933,678 Shares repurchased ........ (448) (4,829) -- -- -- -- (1,610,114) (16,951,504) Dividends reinvested ...... 4 37 30 320 1 5 221,234 2,307,751 ------- --------- ----- ------- ----- ------- ---------- ------------ Net increase (decrease) ... 610 $ 6,437 5,124 $53,922 131 $ 1,405 (254,273) $ (2,710,075) ======= ========= ===== ======= ===== ======= ========== ============
FOR THE YEAR ENDED JULY 31, 2000 CLASS P ---------------------------- SHARES AMOUNT ---------- ------------ Shares sold ............... 3,522,223 $ 39,653,457 Shares repurchased ........ (3,085,947) (34,559,600) Dividends reinvested ...... 450,430 5,054,468 ---------- ------------ Net increase .............. 886,706 $ 10,148,325 ========== ============ (a) For the period December 11, 2000 (commencement of issuance) through January 31, 2001. (b) For the period December 1, 2000 (commencement of issuance) through January 31, 2001. (c) For the period January 16, 2001 (commencement of issuance) through January 31, 2001. PACE LARGE COMPANY VALUE EQUITY INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2001
CLASS A(a) CLASS B(a) CLASS C(a) CLASS Y(b) CLASS P ------------------- ---------------- ------------------- ---------------- ------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------ -------- ------- --------- ------- ------- ---------- ------------ Shares sold ............ 10,722 $ 184,705 13,339 $229,536 12,574 $ 216,637 860 $14,832 3,712,420 $ 63,633,109 Shares repurchased ..... (864) (15,007) -- -- (20) (351) -- -- (3,390,561) (58,097,982) Dividends reinvested ... -- -- -- -- -- -- -- -- 196,972 3,303,227 ------- --------- ------ -------- ------- --------- ------- ------- ---------- ------------ Net increase ........... 9,858 $ 169,698 13,339 $229,536 12,554 $ 216,286 860 $14,832 518,831 $ 8,838,354 ======= ========= ====== ======== ======= ========= ======= ======= ========== ============
FOR THE YEAR ENDED JULY 31, 2000 CLASS P ---------------------------- SHARES AMOUNT ---------- ------------ Shares sold ............... 8,384,382 $147,357,307 Shares repurchased ........ (7,492,649) (128,553,245) Dividends reinvested ...... 1,856,529 31,932,335 ---------- ------------ Net increase .............. 2,748,262 $ 50,736,397 ========== ============ (a) For the period November 27, 2000 (commencement of issuance) through January 31, 2001. (b) For the period January 19, 2001 (commencement of issuance) through January 31, 2001. 104 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2001
CLASS A(a) CLASS B(a) CLASS C(a) CLASS P ---------------------- ------------------ ------------------ ---------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------ ------- ------ ------- ---------- ------------ Shares sold ............... 11,577 $ 249,100 10,295 $215,074 9,026 $191,033 2,908,317 $ 68,837,525 Shares repurchased ........ -- -- (369) (7,000) (369) (7,299) (1,974,566) (48,836,556) Dividends reinvested ...... -- -- -- -- -- -- 2,300,213 48,373,474 ------- --------- ----- ------- ----- ------- ---------- ------------ Net increase .............. 11,577 $ 249,100 9,926 $208,074 8,657 $183,734 3,233,964 $ 68,374,443 ======= ========= ===== ======= ===== ======= ========== ============
FOR THE YEAR ENDED JULY 31, 2000 CLASS P ---------------------------- SHARES AMOUNT ---------- ------------ Shares sold ............... 4,839,099 $135,593,185 Shares repurchased ........ (5,209,986) (148,736,983) Dividends reinvested ...... 395,237 11,378,823 ---------- ------------ Net increase (decrease) ... 24,350 $ (1,764,975) ========== ============ (a) For the period November 27, 2000 (commencement of issuance) through January 31, 2001. PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2001
CLASS A(a) CLASS B(b) CLASS C(a) CLASS Y(c) CLASS P ------------------- ---------------- ------------------- ---------------- ------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------ -------- ------- --------- ------- ------- ---------- ------------ Shares sold ............ 11,982 $ 178,155 8,820 $132,833 14,226 $ 208,982 2,160 $32,825 1,821,729 $ 25,745,867 Shares repurchased ..... (1,133) (16,574) -- -- (1,016) (15,326) -- -- (3,602,275) (52,488,773) Dividends reinvested ... -- -- -- -- -- -- -- -- 186,658 2,587,086 ------- --------- ------ -------- ------- --------- ------- ------- ---------- ------------ Net increase (decrease) 10,849 $ 161,581 8,820 $132,833 13,210 $ 193,656 2,160 $32,825 (1,593,888) $(24,155,820) ======= ========= ====== ======== ======= ========= ======= ======= ========== ============
FOR THE YEAR ENDED JULY 31, 2000 CLASS P ---------------------------- SHARES AMOUNT ---------- ------------ Shares sold ............... 6,289,247 $ 83,666,072 Shares repurchased ........ (4,082,962) (54,265,656) Dividends reinvested ...... 743,098 9,712,297 ---------- ------------ Net increase .............. 2,949,383 $ 39,112,713 ========== ============ (a) For the period November 27, 2000 (commencement of issuance) through January 31, 2001. (b) For the period November 28, 2000 (commencement of issuance) through January 31, 2001. (c) For the period December 20, 2000 (commencement of issuance) through January 31, 2001. PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2001
CLASS A(a) CLASS B(a) CLASS C(a) CLASS Y(a) CLASS P ------------------- ---------------- ------------------- ---------------- ------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------ -------- ------- --------- ------- ------- ---------- ------------ Shares sold ............ 26,752 $ 437,329 11,174 $179,063 16,314 $ 264,428 3,100 $50,000 2,472,069 $ 48,258,557 Shares repurchased ..... (1,088) (17,646) (477) (7,000) (501) (7,409) (3,100) (51,643) (1,706,886) (37,741,989) Dividends reinvested ... -- -- -- -- -- -- -- -- 5,449,615 87,139,339 ------- --------- ------ -------- ------- --------- ------- ------- ---------- ------------ Net increase ........... 25,664 $ 419,683 10,697 $172,063 15,813 $ 257,019 -- $(1,643) 6,214,798 $ 97,655,907 ======= ========= ====== ======== ======= ========= ======= ======= ========== ============
FOR THE YEAR ENDED JULY 31, 2000 CLASS P ---------------------------- SHARES AMOUNT ---------- ------------ Shares sold ............... 2,700,975 $ 71,190,367 Shares repurchased ........ (6,287,182) (173,407,222) Dividends reinvested ...... 1,273,777 33,003,540 ---------- ------------ Net decrease .............. (2,312,430) $(69,213,315) ========== ============ (a) For the period November 27, 2000 (commencement of issuance) through January 31, 2001. 105 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) PACE INTERNATIONAL EQUITY INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2001
CLASS A(a) CLASS B(a) CLASS C(a) CLASS Y(b) CLASS P ------------------- ---------------- ------------------- ---------------- ------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------ -------- ------- --------- ------- ------- ---------- ------------ Shares sold ............ 668,769 $10,038,213 5,326 $ 80,053 11,861 $ 180,635 2,172 $32,617 2,689,406 $ 43,519,516 Shares repurchased ..... (470,108) (7,092,913) (333) (5,000) (334) (5,027) -- -- (1,636,802) (26,939,559) Dividends reinvested ... -- -- -- -- -- -- -- -- 1,099,611 16,604,127 ------- ---------- ------ -------- ------- --------- ------- ------- ---------- ------------ Net increase ........... 198,661 $ 2,945,300 4,993 $ 75,053 11,527 $ 175,608 2,172 $32,617 2,152,215 $ 33,184,084 ======= =========== ====== ======== ======= ========= ======= ======= ========== ============
FOR THE YEAR ENDED JULY 31, 2000 CLASS P ---------------------------- SHARES AMOUNT ---------- ------------ Shares sold ............... 3,850,099 $ 73,257,178 Shares repurchased ........ (3,823,316) (73,965,090) Dividends reinvested ...... 722,799 14,268,026 ---------- ------------ Net increase .............. 749,582 $ 13,560,114 ========== ============ (a) For the period November 27, 2000 (commencement of issuance) through January 31, 2001. (b) For the period January 17, 2001 (commencement of issuance) through January 31, 2001. PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2001
CLASS A(a) CLASS B(b) CLASS C(c) CLASS P ---------------------- ------------------ ------------------ ---------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------ ------- ------ ------- ---------- ------------ Shares sold ............... 2,151 $ 20,254 3,432 $32,833 2,966 $28,214 2,076,835 $ 21,226,483 Shares repurchased ........ (941) (8,694) -- -- -- -- (907,836) (9,426,902) ------- --------- ----- ------- ----- ------- ---------- ------------ Net increase .............. 1,210 $ 11,560 3,432 $32,833 2,966 $28,214 1,168,999 $ 11,799,581 ======= ========= ===== ======= ===== ======= ========== ============
FOR THE YEAR ENDED JULY 31, 2000 CLASS P ---------------------------- SHARES AMOUNT ---------- ------------ Shares sold ............... 2,298,222 $ 30,492,713 Shares repurchased ........ (2,822,474) (38,335,487) Dividends reinvested ...... 51,436 716,496 ---------- ------------ Net decrease .............. (472,816) $ (7,126,278) ========== ============ (a) For the period December 11, 2000 (commencement of issuance) through January 31, 2001. (b) For the period December 22, 2000 (commencement of issuance) through January 31, 2001. (c) For the period December 1, 2000 (commencement of issuance) through January 31, 2001. 106 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) SUBSEQUENT EVENTS Subsequent to January 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 REALIZED REORGANIZATION FUND SHARES SHARES APPRECIATION DATE FUND ACQUIRED EXCHANGED ISSUED NET ASSETS (DEPRECIATION) ------------ ------------- ----------- --------- --------- ------------------ 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 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 STRATEGIC FIXED INCOME INVESTMENTS 02/02/01 PaineWebber Strategic Income Fund 66,851,983 (1,874,246) 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 INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS 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
107 NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
PAINEWEBBER PACE NET REALIZED REORGANIZATION FUND SHARES SHARES APPRECIATION DATE FUND ACQUIRED EXCHANGED ISSUED NET ASSETS (DEPRECIATION) ------------ ------------- ----------- --------- --------- ------------------ PACE GLOBAL FIXED INCOME INVESTMENTS 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 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 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 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 LARGE COMPANY VALUE EQUITY INVESTMENTS 02/23/01 PaineWebber Growth & 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
108 NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
PAINEWEBBER PACE REORGANIZATION FUND SHARES SHARES NET REALIZED DATE FUND ACQUIRED EXCHANGED ISSUED NET ASSETS APPRECIATION ------------ ------------- ----------- --------- --------- ------------------ 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 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
109 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 FOR THE YEARS ENDED JULY 31, FOR THE PERIOD JANUARY 31, 2001 ----------------------------------- ENDED (UNAUDITED) 2000 1999 1998 1997 JULY 31, 1996+ ------ ------ ------ ----- ----- ----- Net asset value, beginning of period ................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- ----- Net investment income ................................ 0.03 0.05 0.05 0.05 0.05 0.05 ----- ----- ----- ----- ----- ----- Dividends from net investment income ................. (0.03) (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) .......................... 3.12% 5.53% 4.85% 5.32% 5.13% 4.75% ===== ===== ===== ===== ===== ===== Net assets, end of period (000's) .................... $74,449 $65,521 $47,174 $25,493 $16,070 $10,221 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 ............................. 0.90%* 0.95% 1.07% 1.20% 1.89% 2.40%* Net investment income to average net assets, net of fee waivers and expense reimbursements ............................. 6.10%* 5.46% 4.70% 5.20% 5.04% 4.93%* Net investment income to average net assets, before fee waivers and expense reimbursements ............................. 5.70%* 5.01% 4.13% 4.50% 3.65% 3.03%*
-------------- + For the period August 24, 1995 (commencement of operations) through July 31, 1996. * 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 payable 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 periods of less than one year has not been annualized. 110 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 B CLASS C CLASS P --------- -------- ---------------------------------------------------------------------- FOR THE FOR THE FOR THE PERIOD PERIOD SIX MONTHS ENDED ENDED ENDED JANUARY 31, JANUARY 31, JANUARY 31, FOR THE YEARS ENDED JULY 31, FOR THE PERIOD 2001(a) 2001(b) 2001 -------------------------------------- ENDED (UNAUDITED)(UNAUDITED) (UNAUDITED) 2000 1999 1998 1997 JULY 31, 1996(c) ------ ------- ------- ------ ------ ------ ------- ------- Net asset value, beginning of period ..................... $12.47 $12.33 $12.09 $12.10 $12.59 $12.61 $12.07 $12.00 ------ ------ ------ ------ ------ ------ ------ ------ Net investment income ......... 0.08 0.12 0.44 0.73 0.68 0.72 0.64 0.49 Net realized and unrealized gains (losses) from investments, options and futures ....................... 0.24 0.34 0.63 0.01 (0.43) 0.18 0.58 0.03 ------ ------ ------ ------ ------ ------ ------ ------ Net increase from investment operations ......... 0.32 0.46 1.07 0.74 0.25 0.90 1.22 0.52 ------ ------ ------ ------ ------ ------ ------ ------ Dividends from net investment income ............. (0.14) (0.14) (0.51) (0.75) (0.71) (0.72) (0.63) (0.44) Distributions from net realized gains from investments ................... -- -- -- -- (0.03) (0.20) (0.05) (0.01) ------ ------ ------ ------ ------ ------ ------ ------ Total dividends and distributions ................. (0.14) (0.14) (0.51) (0.75) (0.74) (0.92) (0.68) (0.45) ------ ------ ------ ------ ------ ------ ------ ------ Net asset value, end of period......................... $12.65 $12.65 $12.65 $12.09 $12.10 $12.59 $12.61 12.07 ====== ====== ====== ====== ====== ====== ====== ====== Total investment return (1) ... 2.62% 3.76% 9.03% 6.36% 2.02% 7.39% 10.42% 4.35% ====== ====== ====== ====== ====== ====== ====== ====== Ratios/Supplemental Data: Net assets, end of period (000's) ....................... $20 $43 $200,761 198,918 $191,719 $162,119 $101,606 $58,752 Expenses to average net assets, net of fee waivers and expense reimbursements ........ 1.91%++* 1.65%+++* 0.88%+* 0.87%+ 0.87%+ 0.85% 1.57%+ 0.85%* Expenses to average net assets, before fee waivers and expense reimbursements ........ 1.92%++* 1.66%+++* 0.89%+* 0.91%+ 0.93%+ 0.95% 1.70%+ 1.15%* Net investment income to average net assets, net of fee waivers and expense reimbursements ................ 5.37%++* 5.63%+++* 6.97%+* 6.12%+ 5.49%+ 5.90% 5.44%+ 5.09%* Net investment income to average net assets, before fee waivers and expense reimbursements ............... 5.36%++* 5.62%+++* 6.96%+* 6.08%+ 5.43%+ 5.80% 5.31%+ 4.79%* Portfolio turnover ............ 339% 339% 339% 585% 418% 353% 712% 978%
----------- * Annualized. a + Includes 0.03%, 0.02%, 0.01%, and 0.72% of interest expense related to the reverse repurchase agreements during the periods ended January 31, 2001, July 31, 2000, July 31, 1999, and July 31, 1997, respectively. ++ Includes 0.15% of interest expense related to the reverse repurchase agreement during the period ended January 31, 2001. +++ Includes 0.12% of interest expense related to the reverse repurchase agreement during the period ended January 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 peiod reported. The figures do not include any applicable sales charge 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 18, 2000 (commencement of issuance) through January 31, 2001. (b) (b) For the period December 4, 2000 (commencement of issuance) through January 31, 2001. (c) For the period August 24, 1995 (commencement of operations) through July 31, 1996. 111 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 B CLASS C CLASS P --------- -------- ---------------------------------------------------------------------- FOR THE FOR THE FOR THE PERIOD PERIOD SIX MONTHS ENDED ENDED ENDED JANUARY 31, JANUARY 31, JANUARY 31, FOR THE YEARS ENDED JULY 31, FOR THE PERIOD 2001(a) 2001(b) 2001 -------------------------------------- ENDED (UNAUDITED)#(UNAUDITED)# (UNAUDITED)# 2000 1999 1998 1997 JULY 31, 1996(C) ------ ------- ------- ------ ------ ------ ------- ------- Net asset value, beginning of period ...................... $12.03 $11.92 $11.82 $ 11.98 $12.35 $12.23 $11.95 $ 12.00 ------ ------ ------ ------- ------ ------ ------ ------- Net investment income ........... 0.11 0.12 0.43 0.70 0.63 0.67 0.66 0.53 Net realized and unrealized gains (losses) from investments and foreign currency ............... 0.14 0.25 0.34 (0.16) (0.28) 0.09 0.28 (0.09) ------ ------ ------ ------- ------ ------ ------ ------- Net increase from investment operations ........... 0.25 0.37 0.77 0.54 0.35 0.76 0.94 0.44 ------ ------ ------ ------- ------ ------ ------ ------- Dividends from net investment income .............. (0.11) (0.12) (0.43) (0.70) (0.64) (0.64) (0.66) (0.48) Distributions from net realized gains from investments.................... -- -- -- 0.00+ (0.08) -- -- (0.01) ------ ------ ------ ------- ------ ------ ------ ------- Total dividends and distributions ................... (0.11) (0.12) (0.43) (0.70) (0.72) (0.64) (0.66) (0.49) ------ ------ ------ ------- ------ ------ ------ ------- Net asset value, end of period.......................... $12.17 $12.17 $12.16 $ 11.82 $11.98 $ 12.35 $ 12.23 $ 11.95 ====== ====== ====== ======= ====== ======= ======= ======= Total investment return (1) 2.10% 3.09% 6.63% 4.74% 2.81% 6.41% 8.14% 3.59% ====== ====== ====== ======= ====== ======= ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's) ........................ $ 5 $71 $133,397 $134,102 $139,043 $99,690 $66,751 $41,273 Expenses to average net assets, net of fee waivers and expense reimbursements.......... 1.81%* 1.55%* 0.78%* 0.78% 0.80% 0.84% 0.85% 0.85%* Expenses to average net assets, before fee waivers and expense reimbursements.......... 1.81%* 1.55%* 0.78%* 0.79% 0.80% 0.84% 0.99% 1.23%* Net investment income to average net assets, net of fee waivers and expense reimbursements ................. 4.86%* 5.12%* 6.12%* 5.95% 5.26% 5.60% 5.70% 5.56%* Net investment income to average net assets, before fee waivers and expense reimbursements ................. 4.86%* 5.12%* 6.12%* 5.94% 5.26% 5.60% 5.56% 5.18%* Portfolio turnover ............... 35% 35% 35% 88% 89% 111% 67% 36%
-------------- + 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 charge 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 14, 2000 (commencement of issuance) through January 31, 2001. (b) For the period December 1, 2000 (commencement of issuance) through January 31, 2001. (c) For the period August 24, 1995 (commencement of operations) through July 31, 1996. 112 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 B CLASS C CLASS P --------- -------- ---------------------------------------------------------------------- FOR THE FOR THE FOR THE PERIOD PERIOD SIX MONTHS ENDED ENDED ENDED JANUARY 31, JANUARY 31, JANUARY 31, FOR THE YEARS ENDED JULY 31, FOR THE PERIOD 2001(a) 2001(b) 2001 -------------------------------------- ENDED (UNAUDITED) (UNAUDITED) (UNAUDITED) 2000 1999 1998 1997 JULY 31, 1996(c) --------- --------- --------- ----- ------ ------ ------- ---------------- Net asset value, beginning of period ...................... $ 12.53 $12.43 $12.21 $ 12.33 $13.32 $ 13.04 $ 12.44 $ 12.00 ------- ------ ------ ------- ------ ------- ------- -------- Net investment income ............ 0.12 0.10 0.40 0.73 0.69 0.69 0.67 0.59 Net realized and unrealized gains (losses) from investments, futures, swaps, options and foreign currency 0.24 0.35 0.60 (0.13) (0.64) 0.40 0.70 0.38 ------- ------ ------ ------- ------ ------- ------- -------- Net increase from investment operations ........... 0.36 0.45 1.00 0.60 0.05 1.09 1.37 0.97 ------- ------ ------ ------- ------ ------- ------- -------- Dividends from net investment income .......................... (0.13) (0.12) (0.45) (0.72) (0.70) (0.69) (0.67) (0.52) Distributions from net realized gains from investments .......... -- -- -- -- (0.34) (0.12) (0.10) (0.01) ------- ------ ------ ------- ------ ------- ------- -------- Total dividends and distributions ................... (0.13) (0.12) (0.45) (0.72) (1.04) (0.81) (0.77) (0.53) ------- ------ ------ ------- ------ ------- ------- -------- Net asset value, end of period.... $ 12.76 $12.76 $12.76 $12.21 $ 12.33 $13.32 $ 13.04 $ 12.44 ======= ====== ====== ====== ======= ====== ======= ======= Total investment return (1)....... 2.88% 3.61% 8.33% 5.08% 0.21% 8.66% 11.35% 8.15% ======= ====== ====== ====== ======= ====== ======= ======= Ratios/Supplemental Data: Net assets, end of period (000's) ......................... $ 21 $41 $231,304 $234,748 $222,214 $126,880 $75,174 $42,550 Expenses to average net assets, net of fee waivers and expense reimbursements.................. 1.23%++* 1.74%+++* 0.97%+* 0.85%* 0.88%+ 0.85% 0.85% 0.85%* Expenses to average net assets, before fee waivers and expense reimbursements................... 1.24%++* 1.75%+++* 0.98%+* 0.89% 0.92%+ 0.94% 1.10% 1.40%* Net investment income to average net assets, net of fee waivers and expense reimbursements .................. 5.66%++* 5.15+++* 6.30%+* 6.04% 5.51%+ 5.49% 5.69% 5.85%* Net investment income to average net assets, before fee waivers and expense reimbursements .................. 5.65%++* 5.14%+++* 6.29%+* 6.00% 5.47% 5.40% 5.44% 5.30%* Portfolio turnover ............... 234% 234% 234% 391% 202% 234% 357% 166%
-------------- + Includes 0.09% and 0.03% of interest expense related to the reverse repurchase agreements during the periods ended January 31, 2001 and July 31, 1999, respectively. ++ Includes 0.18% of interest expense related to the reverse repurchase agreement during the period ended January 31, 2001. +++ Includes 0.18% of interest expense related to the reverse repurchase agreement during the period ended January 31, 2001. * 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 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 January 31, 2001. (b) For the period December 1, 2000 (commencement of issuance) through January 31, 2001. (c) For the period August 24, 1995 (commencement of operations) through July 31, 1996. 113 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 C CLASS P --------- -------- ---------------------------------------------------------------------- FOR THE FOR THE FOR THE PERIOD PERIOD SIX MONTHS ENDED ENDED ENDED JANUARY 31, JANUARY 31, JANUARY 31, FOR THE YEARS ENDED JULY 31, FOR THE PERIOD 2001(a) 2001(b) 2001 --------------------------------------- ENDED (UNAUDITED) (UNAUDITED) (UNAUDITED) 2000# 1999 1998 1997 JULY 31, 1996(c) --------- --------- --------- ------ ------ ------ ------- --------------- Net asset value, beginning of period ....................... $12.43 $12.19 $12.15 $12.44 $12.70 $12.67 $12.32 $12.00 ------ ------ ------ ------ ------ ------ ------ ------ Net investment income ............ 0.01 0.07 0.33 0.57 0.56 0.58 0.61 0.49 Net realized and unrealized gains (losses) from investments ..................... (0.03) 0.24 0.27 (0.29) (0.26) 0.02 0.38 0.27 ------ ------ ------ ------ ------ ------ ------ ------ Net increase (decrease) from investment operations ........... (0.02) 0.31 0.60 0.28 0.30 0.60 0.99 0.76 ------ ------ ------ ------ ------ ------ ------ ------ Dividends from net investment income .............. -- (0.08) (0.33) (0.57) (0.56) (0.57) (0.61) (0.43) Distributions from net realized gains from investments .................... -- -- -- -- -- -- (0.03) (0.01) ------ ------ ------ ------ ------ ------ ------ ------ Total dividends and distributions .................. -- (0.08) (0.33) (0.57) (0.56) (0.57) (0.64) (0.44) ------ ------ ------ ------ ------ ------ ------ ------ Net asset value, end of period.... $12.41 $12.42 $12.42 $12.15 $12.44 $12.70 $12.67 $12.32 ====== ====== ====== ====== ====== ====== ====== ====== Total investment return (1)...... (0.16)% 2.57% 4.97% 2.37% 2.34% 4.87% 8.30% 6.38% ====== ====== ====== ====== ====== ====== ====== ====== Ratios/Supplemental Data: Net assets, end of period (000's) ......................... $ 1 $ 1 $49,475 $53,594 $56,659 $51,638 $34,292 $17,765 Expenses to average net assets, net of fee waivers and expense reimbursements 1.11%* 1.62%* 0.85%* 0.85% 0.85% 0.85% 0.85% 0.85%* Expenses to average net assets, before fee waivers and expense reimbursements ................. 1.11%* 1.62%* 0.87%* 0.89% 0.89% 0.93% 1.40% 1.74%* Net investment income to average net assets, net of fee waivers and expense reimbursements ................. 4.20%* 3.69%* 4.46%* 4.68% 4.42% 4.67% 5.08% 4.95%* Net investment income to average net assets, before fee waivers and expense reimbursements ................. 4.20%* 3.69%* 4.44%* 4.64% 4.38% 4.59% 4.53% 4.07%* Portfolio turnover ........ 29% 29% 29% 33% 11% 34% 15% 78%
------------- * Annualized. # Investment advisory functions for this portfolio were transferred from Deutsche Asset Management, Inc. to Standish, Ayer & Wood, Inc. 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 January 31, 2001. (b) For the period December 4, 2000 (commencement of issuance) through January 31, 2001. (c) For the period August 24, 1995 (commencement of operations) through July 31, 1996. 114 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 C CLASS Y CLASS P --------- -------- ---------- -------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE PERIOD PERIOD PERIOD SIX MONTHS FOR THE ENDED ENDED ENDED ENDED PERIOD JANUARY 31, JANUARY 31, JANUARY 31. JANUARY 31, FOR THE YEARS ENDED JULY 31, ENDED 2001(a) 2001(b) 2001(c) 2001 -------------------------------------- JULY 31, (UNAUDITED)# (UNAUDITED)# (UNAUDITED)# (UNAUDITED)# 2000 1999 1998 1997 1996(d) ---------- --------- ------- ------ ------ ------ ------- ------- ------- Net asset value, beginning of period...... $10.45 $10.38 $10.73 $ 10.68 $11.82 $ 12.25 $12.17 $12.33 $12.00 ------ ------ ------ ------- ------ ------- ------ ------ ------ Net investment income....... 0.07 0.06 0.02 0.19 0.53 0.65 0.62 0.64 0.53 Net realized and unrealized gains (losses) from investments and foreign currency................... 0.29 0.36 0.02 0.11 (1.10) 0.20 (0.03) (0.21) 0.27 ------ ------ ------ ------- ------ ------- ------ ------ ------ Net increase (decrease) from investment operations................. 0.36 0.42 0.04 0.30 (0.57) 0.85 0.59 0.43 0.80 ------ ------ ------ ------- ------ ------- ------ ------ ------ Dividends from net investment income......... (0.08) (0.07) (0.04) (0.25) (0.42) (0.81) (0.40) (0.51) (0.46) Distributions from net realized gains from investments................ -- -- -- -- (0.09) (0.47) (0.11) (0.08) (0.01) Dividends from paid in capital -- -- -- -- (0.06) -- -- -- -- ------ ------ ------ ------- ------ ------- ------ ------ ------ Total dividends and distributions.............. (0.08) (0.07) (0.04) (0.25) (0.57) (1.28) (0.51) (0.59) (0.47) ------ ------ ------ ------- ------ ------- ------ ------ ------ Net asset value, end of period.................... $10.73 $10.73 $10.73 $ 10.73 $ 10.68 $ 11.82 $12.25 $ 12.17 $12.33 ====== ====== ====== ======- ======= ======= ====== ======= ====== Total investment return (1) 3.42% 4.02% 0.37% 2.91% (4.97)% 6.49% 4.88% 3.54% 6.68% ====== ====== ====== ======= ======= ====== ====== ======= ====== Ratios/Supplemental Data: Net assets, end of period (000's).............. $ 7 $55 $ 1 $98,597 $100,831 $101,143 $88,838 $60,279 $38,296 Expenses to average net assets, net of fee waivers and expense reimbursements............ 1.21%* 1.72%* 0.95%* 0.95%* 0.95% 0.95% 0.95% 0.95% 0.95%* Expenses to average net assets, before fee waivers and expense reimbursements............. 1.48%* 1.99%* 1.22%* 1.22%* 1.18% 1.17% 1.23% 1.29% 1.61%* Net investment income to average net assets, net of fee waivers and expense reimbursements............ 3.92%* 3.41%* 3.66%* 3.96%* 4.50% 4.57% 5.10% 5.36% 5.24%* Net investment income to average net assets, before fee waivers and expense reimbursements....... 3.65%* 3.14%* 3.39%* 3.69%* 4.27% 4.35% 4.82% 5.02% 4.58%* Portfolio turnover..... 190% 190% 190% 190% 170% 226% 125% 270% 197%
---------------- * 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. (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 charge 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 January 31, 2001. (b) For the period December 1, 2000 (commencement of issuance) through January 31, 2001. (c) For the period January 16, 2001 (commencement of issuance) through January 31, 2001. (d) For the period August 24, 1995 (commencement of operations) through July 31, 1996. 115 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 CLASS C CLASS Y CLASS P --------- --------- -------- ---------- ------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE PERIOD PERIOD PERIOD PERIOD SIX MONTHS FOR THE ENDED ENDED ENDED ENDED ENDED PERIOD JANUARY 31, JANUARY 31, JANUARY 31, JANUARY 31. JANUARY 31, FOR THE YEARS ENDED JULY 31, ENDED 2001(a) 2001(a) 2001(a) 2001(b) 2001 -------------------------------------- JULY 31, (UNAUDITED)# (UNAUDITED)# (UNAUDITED)# (UNAUDITED)# (UNAUDITED)# 2000# 1999 1998 1997 1996(c) ---------- --------- ------- ------ ------ ------ ------- ------- ------- ---------- Net asset value, beginning of period........... $16.76 $16.76 $16.76 $17.15 $16.35 $21.14 $20.27 $20.03 $14.07 $12.00 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net investment income......... . 0.01 --** --** --@ 0.09 0.15 0.13 0.14 0.11 0.12 Net realized and unrealized gains (losses) from investments and futures...... 0.92 0.92 0.92 0.56 1.43 (3.17) 2.34 1.63 6.61 2.02 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net increase (decrease) from investment operations........ 0.93 0.92 0.92 0.56 1.52 (3.02) 2.47 1.77 6.72 2.14 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Dividends from net investment income........... -- -- -- -- (0.16) (0.14) (0.14) (0.14) (0.11) (0.05) Distributions from net realized gains from investments.... . -- -- -- -- -- (1.63) (1.46) (1.39) (0.65) (0.02) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total dividends and distributions... . -- -- -- -- (0.16) (1.77) (1.60) (1.53) (0.76) (0.07) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net asset value, end of period... . $17.69 $17.68 $17.68 $17.71 $ 17.71 $16.35 $21.14 $20.27 $20.03 $14.07 ====== ====== ====== ====== ======= ====== ====== ====== ====== ====== Total investment return (1)..... . 5.55% 5.49% 5.49% 3.27% 9.37% (14.74)% 12.82% 9.89% 49.13% 17.90% ====== ====== ====== ====== ======= ====== ====== ====== ====== ====== Ratios/Supplemental Data: Net assets, end of period (000's).... $ 174 $ 236 $ 222 $15 $372,325 $335,294 $375,465 $266,354 $180,807 $80,897 Expenses to average net assets, net of fee waivers and expense reimbursements.... 1.20%* 1.97%* 1.96%* 0.94%* 0.94%* 0.96% 0.96% 0.98% 1.00% 1.00%* Expenses to average net assets, before fee waivers and expense reimbursements... 1.27%* 2.04%* 2.03%* 1.01%* 0.96%* 0.96% 0.96% 0.98% 1.06% 1.40%* Net investment income to average net assets, net of fee waivers and expense reimbursements.... 0.85%* 0.08%* 0.09%* 1.11%* 1.07%* 0.85% 0.71% 0.82% 0.81% 1.22%* Net investment income to average net assets, before fee waivers and expense reimbursements... 0.83%* 0.06%* 0.07%* 1.09%* 1.05%* 0.85% 0.71% 0.82% 0.75% 0.82%* Portfolio turnover.. 142% 142% 142% 142% 142% 195% 40% 34% 46% 38%
------------- * 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. State Street Global Advisors 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. ** Amount is less than ($0.005) per share. @ Amount is less than $0.005 per share. (a) For the period November 27, 2000 (commencement of issuance) through January 31, 2001. (b) For the period January 19, 2001 (commencement of issuance) through January 31, 2001. (c) For the period August 24, 1995 (commencement of operations) through July 31, 1996. 116 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 CLASS C CLASS P --------- -------- ---------- -------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE PERIOD PERIOD PERIOD SIX MONTHS FOR THE ENDED ENDED ENDED ENDED PERIOD JANUARY 31, JANUARY 31, JANUARY 31. JANUARY 31, FOR THE YEARS ENDED JULY 31, ENDED 2001(a) 2001(a) 2001(a) 2001 -------------------------------------- JULY 31, (UNAUDITED)+ (UNAUDITED)+ (UNAUDITED)+ (UNAUDITED)+ 2000 1999 1998# 1997 1996(b) ---------- --------- ------- ------ ------ ------ ------- ------- ------- Net asset value, beginning of period ................. $21.61 $21.61 $21.61 $29.70 $25.88 $22.99 $19.28 $13.27 $12.00 ------ ------ ------ ------ ------ ------ ------ ------ ------ Net investment income (loss)..................... (0.01) (0.02) (0.03) (0.05) (0.12) (0.05) (0.03) 0.03 0.03 Net realized and unrealized gains (losses) from investments ................ (0.24) (0.26) (0.28) (4.95) 4.69 4.44 4.79 6.01 1.26 ------ ------ ------ ------ ------ ------ ------ ------ ------ Net increase (decrease) from investment operations ...... (0.25) (0.28) (0.28) (5.00) 4.57 4.39 4.76 6.04 1.29 ------ ------ ------ ------ ------ ------ ------ ------ ------ Dividends from net investment income .......... -- -- -- -- -- -- (0.01) (0.03) (0.02) Distributions from net realized gains from investments .... -- -- -- (3.33) (0.75) (1.50) (1.04) -- -- ------ ------ ------ ------ ------ ------ ------ ------ ------ Total dividends and distributions .............. -- -- -- (3.33) (0.75) (1.50) (1.05) (0.03) (0.02) Net asset value, end of period.................... $21.36 $21.33 $21.33 $21.37 $29.70 $25.88 22.99 $19.28 $13.27 ====== ====== ====== ====== ====== ====== ====== ====== ====== Total investment return (1)................ (1.16)% (1.30)% (1.30)% (16.66)% 17.76% 19.66% 26.40% 45.61% 10.76% ====== ====== ====== ====== ====== ====== ====== ======= ====== Ratios/Supplemental Data: Net assets, end of period (000's) .................... $247 $212 $185 $383,336 $436,806 $379,988 $275,461 $160,334 $69,248 Expenses to average net assets, net of fee waivers and expense reimbursements ............ 1.17%* 1.94%* 1.92%* 0.95%* 0.94% 0.97% 1.00% 1.00% 1.00%* Expenses to average net assets, before fee waivers and expense reimbursements ........... 1.23%* 2.00%* 1.98%* 0.97%* 0.94% 0.97% 1.02% 1.05% 1.33%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements ............ (0.66)% (1.32)% (1.33)% (0.43)% (0.42) (0.24) (0.14) 0.22% 0.33%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements .... (0.72)% (1.38)% (1.39)% (0.46)% (0.42) (0.24) (0.16) 0.17% (0.01)%* Portfolio turnover ......... 116% 116% 116% 116% 59% 43% 102% 73% 65%
------------- * 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 State Street Global Advisors on October 10, 2000. (1) Total investment return is calculated assuming $10,000 invetsment 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 January 31, 2001. (b) For the period August 24, 1995 (commencement of operations) through July 31, 1996. 117 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 CLASS C CLASS Y CLASS P --------- --------- -------- ---------- ------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE PERIOD PERIOD PERIOD PERIOD SIX MONTHS FOR THE ENDED ENDED ENDED ENDED ENDED PERIOD JANUARY 31, JANUARY 31, JANUARY 31, JANUARY 31. JANUARY 31, FOR THE YEARS ENDED JULY 31, ENDED 2001(a) 2001(b) 2001(a) 2001(c) 2001 -------------------------------------- JULY 31, (UNAUDITED)# (UNAUDITED)# (UNAUDITED)# (UNAUDITED)# (UNAUDITED)# 2000# 1999 1998 1997 1996(d) ---------- --------- ------- ------ ------ ------ ------- ------- ------- --------- Net asset value, beginning of period........ $13.91 $13.86 $13.91 $13.69 $13.33 $15.75 $17.39 $17.52 $12.29 $12.00 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net investment income (loss)........ 0.00@ (0.01) (0.01) 0.00@ 0.09 0.10 0.06 0.10 0.12 0.10 Net realized and unrealized gains (losses) from investments... 2.07 2.11 2.06 2.30 2.73 (1.79) (0.06) 1.14 5.55 0.23 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net increase (decrease) from investment operations... 2.07 2.10 2.05 2.30 2.82 (1.69) 0.00 1.24 5.67 0.33 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Dividends from net investment income........ -- -- -- -- (0.16) (0.06) (0.09) (0.13) (0.10) (0.04) Distributions from net realized gains from investments... -- -- -- -- -- (0.67) (1.55) (1.24) (0.34) -- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total dividends and distributions -- -- -- -- (0.16) (0.73) (1.64) (1.37) (0.44) (0.04) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net asset value end of period.. $15.98 $15.96 $15.96 $15.99 $15.99 $13.33 $15.75 $17.39 $17.52 $12.29 ====== ======= ====== ====== ====== ====== ====== ====== ====== ====== Total investment return (1)..... 14.88% 15.15% 14.74% 16.80% 21.38% (10.59)% 1.16% 6.97% 46.99% 2.76% ====== ======= ====== ====== ====== ====== ====== ====== ====== ====== Ratios/Supplemental Data: Net assets, end of period (000's).. $ 173 $141 $211 $ 35 $230,856 $213,749 $206,131 $183,558 $135,047 $63,894 Expenses to average net assets, net of fee waivers and expense reimbursements... 1.25%* 2.02%* 2.01%* 0.99%* 0.99%* 1.00% 1.00% 0.99% 1.00% 1.00%* Expenses to average net assets, before fee waivers and expense reimbursements.... 1.25%* 2.02%* 2.01%* 0.99%* 0.99%* 1.01% 1.01% 1.00% 1.12% 1.51%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements... (0.19)%* (0.96)%* (0.95)%* 0.07%* 1.29%* 0.77% 0.42% 0.61% 1.00% 1.07%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements.... (0.19)% *(0.96)%* (0.95)%* 0.07%* 1.29%* 0.76% 0.41% 0.95% 0.88% 0.56%* Portfolio turnover.......... 66% 66% 66% 66% 66% 83% 57% 42% 39% 30%
------------- * Annualized. # Prior to October 4, 1999, Brandywine Asset Management, Inc. (Brandywine") served as investment adviser. From October 4, 1999 to October 9, 2000, Brandywine and Ariel Capital Management, Inc. (Ariel") served as investment advisers. On October 10, 2000, ICM Asset Management, Inc. joined Ariel as an investment adviser, 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. @ Amount is less than $0.005 per share. (a) For the period November 27, 2000 (commencement of issuance) through January 31, 2001. (b) For the period November 28, 2000 (commencement of issuance) through January 31, 2001. (c) For the period December 20, 2000 (commencement of issuance) through January 31, 2001. (d) For the period August 24, 1995 (commencement of operations) through July 31, 1996. 118 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 CLASS C CLASS P --------- -------- ---------- -------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE PERIOD PERIOD PERIOD SIX MONTHS FOR THE ENDED ENDED ENDED ENDED PERIOD JANUARY 31, JANUARY 31, JANUARY 31. JANUARY 31, FOR THE YEARS ENDED JULY 31, ENDED 2001(a) 2001(a) 2001(a) 2001 -------------------------------------- JULY 31, (UNAUDITED)+ (UNAUDITED)+ (UNAUDITED)+ (UNAUDITED)+ 2000 1999 1998 1997# 1996(b) ---------- --------- ------- ------ ------ ------ ------- ------- ------- Net asset value, beginning of period.................. $17.19 $17.19 $17.19 $ 30.27 $20.62 $15.80 $14.44 $ 11.20 $12.00 ------ ------ ------ ------- ------- ------- ------ ------- ------ Net investment loss......... (0.03) (0.02) (0.02) (0.06) (0.19) (0.08) (0.03) (0.02) 0.00** Net realized and unrealized gains (losses) from investments .............. (0.88) (0.90) (0.91) (5.46) 12.58 5.28 2.03 3.26 (0.78) ------ ------ ------ ------- ------- ------- ------ ------- ------ Net increase (decrease) from investment operations...... (0.91) (0.92) (0.93) (5.52) 12.39 5.20 2.00 3.24 (0.78) ------ ------ ------ ------- ------- ------- ------ ------- ------ Dividends from net investment income............. -- -- -- -- -- -- -- -- (0.02) Distributions from net realized gains from investments........ -- -- -- (8.46) (2.74) (0.38) (0.64) -- -- ------ ------ ------ ------- ------- ------- ------ ------- ------ Total dividends and distributions................. -- -- -- (8.46) (2.74) (0.38) (0.64) -- (0.02) ------ ------ ------ ------- ------- ------- ------ ------- ------ Net asset value, end of period.. $16.28 $16.27 $16.26 $ 16.29 $30.27 $20.62 $15.80 $14.44 $11.20 ====== ====== ====== ======= ======== ======= ====== ======== ====== Total investment return (1) (5.29)% (5.35)% (5.41)% (17.70)% 62.30% 33.62% 14.44% 28.93% (6.55)% ====== ====== ====== ======= ======== ======= ====== ======== ====== Ratios/Supplemental Data: Net assets, end of period (000's)....................... $418 $174 $ 257 $273,279 $319,571 $265,405 $198,855 $125,609 $63,364 Expenses to average net assets, net of fee waivers and expense reimbursements................ 1.21%* 1.98%* 1.97%* 0.95%* 0.95% 1.00% 1.00% 1.00% 1.00%* Expenses to average net assets, before fee waivers and expense reimbursements................ 1.22%* 1.99%* 1.98%* 0.96%* 0.96% 1.01% 1.03% 1.08% 1.27%* Net investment loss to average net assets, net of fee waivers and expense reimbursements........ (1.48)%* (2.25)%* (2.24)%* (0.63)%* (0.64)% (0.48)% (0.20)% (0.21)% (0.14)%* Net investment loss to average net assets, before fee waivers and expense reimbursements........ (1.49)%* (2.26)%* (2.25)%* (0.63)%* (0.65)% (0.49)% (0.23)% (0.29)% (0.41)%* Portfolio turnover.............. 31% 31% 31% 31% 81% 102% 131% 247% 115%
---------------- * Annualized. ** Amount is less than ($0.005) per share # Investment advisory functions for this portfolio were transferred from Westfield Capital Management Company, Inc. to Deleware Investment Advisors, Inc. on December 17, 1996 (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 January 31, 2001. (b) For the period August 24, 1995 (commencement of operations) through July 31, 1996. 119 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 CLASS C CLASS Y CLASS P --------- --------- -------- ---------- ------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE PERIOD PERIOD PERIOD PERIOD SIX MONTHS FOR THE ENDED ENDED ENDED ENDED ENDED PERIOD JANUARY 31, JANUARY 31, JANUARY 31, JANUARY 31. JANUARY 31, FOR THE YEARS ENDED JULY 31, ENDED 2001(a) 2001(a) 2001(a) 2001(b) 2001 -------------------------------------- JULY 31, (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) 2000 1999 1998 1997 1996(c) --------- --------- --------- --------- --------- ------ ------- ------- ------- --------- Net asset value, beginning of period........... $15.25 $15.25 $15.25 $14.96 $18.67 $17.18 $16.54 $15.66 $12.79 $12.00 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net investment income (loss).... 0.00@ (0.02) (0.02) 0.00@ (0.02) 0.07 0.07 0.16 0.10 0.12 Net realized and unrealized gains (losses) from investments and foreign currency.. (0.07) (0.01) (0.02) 0.27 (2.16) 2.51 1.10 1.20 2.97 0.73 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net increase (decrease) from investment operations........ (0.07) (0.03) (0.04) 0.27 (2.18) 2.58 1.17 1.36 3.07 0.85 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Dividends from net investment income. ........ -- -- -- -- (0.04) (0.12) (0.19) (0.16) (0.13) (0.06) Distributions from net realized gains from investments....... -- -- -- -- (1.22) (1.02) (0.34) (0.32) (0.07) -- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total dividends and distributions.. -- -- -- -- (1.26) (1.14) (0.53) (0.48) (0.20) (0.06) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Capital contribution from Sub-Adviser... -- -- -- -- -- 0.05 -- -- -- -- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net asset value, end of period... $15.18 $15.22 $15.21 $15.23 $15.23 $18.67 $17.18 $16.54 $15.66 $12.79 ====== ====== ====== ======= ====== ====== ====== ====== ====== ====== Total investment return (1)........ (0.46)% (0.20)% (0.26)% 1.80% (11.66)% 14.91% 7.33% 9.27% 24.30% 7.08% ====== ====== ====== ======= ====== ====== ====== ====== ====== ====== Ratios/Supplemental Data: Net assets, end of period (000's).... $3,016 $ 76 $ 175 $33 $233,880 $246,452 $214,017 $164,477 $102,979 $45,331 Expenses to average net assets, net of fee waivers and expense reimbursements.... 1.42%* 2.19%* 2.18%* 1.16%* 1.16%* 1.16% 1.22% 1.21% 1.35% 1.50%* Expenses to average net assets, before fee waivers and expense reimbursements.... 1.42%* 2.19%* 2.18%* 1.16%* 1.16%* 1.16% 1.22% 1.21% 1.35% 1.81%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements.... (0.77)%* (1.54)%* (1.53)%* (0.51)%* (0.35)%* 0.37% 0.53% 1.14% 0.95% 1.35%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements.... (0.77)%* (1.54)%* (1.53)%* (0.51)%* (0.35)% * 0.37% 0.53% 1.14% 0.95% 1.04%* Portfolio turnover.. 31% 31% 31% 31% 31% 72% 89% 56% 55% 25%
------------ * 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. If not for the sub-advisor's capital contribution of approximately $0.05 per share, the total return for the year ended July 31, 2000 would have been 14.60%. @ Amount is less than $0.005 per share. (a) For the period November 27, 2000 (commencement of issuance) through January 31, 2001. (b) For the period January 17, 2001 (commencement of issuance) through January 31, 2001. (c) For the period August 24, 1995 (commencement of operations) through July 31, 1996. 120 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 CLASS Y CLASS P --------- -------- ---------- -------------------------------------------------------------- FOR THE FOR THE FOR THE FOR THE PERIOD PERIOD PERIOD SIX MONTHS FOR THE ENDED ENDED ENDED ENDED PERIOD JANUARY 31, JANUARY 31, JANUARY 31. JANUARY 31, FOR THE YEARS ENDED JULY 31, ENDED 2001(a) 2001(b) 2001(c) 2001 -------------------------------------- JULY 31, (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) 2000 1999 1998 1997 1996(d) ---------- --------- ------- ------ ------ ------ ------- ------- ------- Net asset value, beginning of period............ $ 9.82 $ 9.14 $ 9.13 $ 11.96 $ 12.05 $ 10.41 $ 15.60 $ 12.49 $ 12.00 ------ ------ ------ ------- ------- ------- ------- ------- ------- Net investment income (loss)............... (0.01) (0.01) (0.02) (0.02) (0.01) 0.09 0.09 0.06 0.07 Net realized and unrealized gains (losses) from investments and foreign currency............. 0.61 1.28 1.30 (1.52) 0.02 1.62 (5.23) 3.09 0.44 ------ ------ ------ ------- ------- ------- ------- ------- ------- Net increase (decrease) from investment operations........... 0.60 1.27 1.28 (1.54) 0.01 1.71 (5.14) 3.15 0.51 ------ ------ ------ ------- ------- ------- ------- ------- ------- Dividends from net investment income............... -- -- -- -- (0.10) (0.07) (0.05) (0.04) (0.02) ------ ------ ------ ------- ------- ------- ------- ------- ------- Net asset value, end of period................ $10.42 $10.41 $10.41 $ 10.42 $ 11.96 $ 12.05 $ 10.41 $ 15.60. 12.49 ====== ======= ======= ======= ======= ======= ======= ======= ===== Total investment return (1)........... 6.11% 13.89% 14.02% (12.88)% (0.02)% 16.66% (32.99)% 25.31% 4.23% ====== ======= ======= ======= ======= ======= ======= ======= ===== Ratios/Supplemental Data: Net assets, end of period (000's).............. $13 $36 $31 $83,768 $82,179 $88,497 $63,237 $54,759 $25,481 Expenses to average net assets, net of fee waivers and expense reimbursements....... 1.76%* 2.53%* 2.52%* 1.50%* 1.50% 1.50% 1.50% 1.50% 1.50%* Expenses to average net assets, before fee waivers and expense reimbursements....... 2.08%* 2.85%* 2.84%* 1.82%* 1.75% 1.79% 1.79% 2.09% 2.35%* Net investment income (loss) to average net assets, net of fee waivers and expense reimbursements....... (0.50)%* (1.27)%* (1.26)%* (0.48)%* (0.08)% 1.05% 0.98% 0.63% 0.94%* Net investment income (loss) to average net assets, before fee waivers and expense reimbursements....... (0.82)%* (1.59)%* (1.58)%* (0.80)%* (0.33)% 0.76% 0.69% 0.04% 0.08%* Portfolio turnover..... 53% 53% 53% 53% 115% 66% 51% 39% 22%
------------- * 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 January 31, 2001. (b) For the period December 22, 2000 (commencement of issuance) through January 31, 2001. (c) For the period December 1, 2000 (commencement of issuance) through January 31, 2001. (d) For the period August 24, 1995 (commencement of operations) through July 31, 1996. 121 [This page intentionally left blank.] [Graphic Omitted] UBS|PaineWebber (c)2001 UBS PaineWebber Inc. All Rights Reserved Member SIPC UBS PaineWebber is a service mark of UBS AG.