PaineWebber P A C E(specialty trademark)
Personalized Asset Consulting and Evaluation
Going The
Distance
To Meet Your
Financial Needs
Semi-Annual Report
January 31, 1996
This material intended for use only by current PACE investors and must be
preceded or accompanied by the current PACE prospectus.
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Dear PaineWebber PACE(specialty trademark) Shareholder:
PACE is an investment process in which you and your Investment Executive
work together to define your financial objectives and build a portfolio to match
your goals and tolerance for risk. On an ongoing basis, your Investment
Executive helps you monitor your performance and make any necessary adjustments
to ensure that your asset allocation continues to reflect your changing needs.
In addition to the consulting services of your Investment Executive, a
significant part of the added value you receive as a PACE investor is
PaineWebber's ongoing review of the PACE asset allocation recommendations and
the performance of the investment managers. What follows is a summary of the
results of our most recent review of the Program.
ASSET ALLOCATION
The objective of asset allocation is to help you determine a blend of
investments that meets your needs. Therefore, although each of the PACE
Portfolios' performance is important on its own, the performance of your entire
portfolio is emphasized over the performance of any one fund. In light of this,
the ongoing review of the PACE asset allocation recommendations is especially
significant.
As a result of the most recent review of the PACE asset allocation process,
we are currently updating the Recommended Allocations for PACE investors.
Because your allocation is customized to meet your specific needs and
objectives, these changes may or may not apply to your current situation. Your
Investment Executive can advise you about any modifications to the PACE
Recommended Allocations and how they might affect your portfolio.
PERFORMANCE OVERVIEW
After just five months (since inception of the PACE Program), the asset
allocation and style diversification foundation of PACE is showing its value.
Since inception on August 24, 1995, through January 31, 1996, all but one of the
PACE Portfolios have posted positive returns, and seven of the 12 have
outperformed their respective comparative indexes. The specific reasons for each
Portfolio's over-or underperformance relative to its index are discussed in this
letter.
Looking at the Program overall, some of the early results can be attributed
to the position of each style within its respective market cycle at the
inception of the Program. For example:
-- Value stocks generally outperformed growth stocks during the fourth
quarter of 1995. In keeping with this relationship, the PACE value equity
portfolios outperformed their growth equity counterparts.
-- Long duration bonds significantly outperformed intermediate duration
bonds during the fourth quarter of 1995. As a result, PACE Strategic
Fixed Income Investments, the fixed income portfolio with the longest
duration, was the strongest fixed income performer.
-- Managers operating in the small-to-medium capitalization segment were
presented with a challenging market in the fourth quarter of 1995, as
performance of this group peaked, at least temporarily, in the third
quarter. This is evidenced by the performance of the Wilshire Small Cap
Index which, although up 23.66% for the year, returned just 1.08% in the
fourth quarter. In contrast, the Wilshire 5000 Index, which is more
reflective of larger company stocks, was up 4.88% in the fourth quarter
and 36.45% for the full year.
On the following pages you will find a summary of the international and
domestic market environment for the period ending December 31, 1995; detailed
information regarding the performance of each PACE Portfolio since inception;
and brief commentaries from each of the PACE investment
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managers. Please note that the opinions of the managers do not necessarily
represent the opinions of PaineWebber Incorporated or Mitchell Hutchins Asset
Management Inc.
We appreciate the opportunity to help you achieve your financial goals. If
you have any questions, please contact your Investment Executive.
Sincerely,
/s/ Margo Alexander /s/ Bruce A. Bursey
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<S> <C>
Margo Alexander Bruce A. Bursey
President Senior Vice President
Mitchell Hutchins Asset Management Inc. Managed Accounts Consulting Services
PaineWebber Incorporated
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March 27, 1996
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INVESTMENT OVERVIEW--DOMESTIC
By all commonly-accepted standards of measurement, the Federal Reserve Board
can claim success in creating its sought-after "soft landing" for the domestic
economy during 1995 and early 1996. This was achieved through seven short-term
interest rate hikes between February 1994 and February 1995. By reversing course
and lowering the Federal Funds rate by 0.25% on July 6, 1995, the Fed signaled
that inflationary pressures had eased enough to justify an adjustment in
monetary policy. Similar Fed rate cuts in December 1995 and January 1996 brought
the Fed Funds rate down to 5.25%.
While the pace of economic growth for 1995 was lackluster, falling interest
rates and strong corporate profits made for an exceptional investing
environment, especially when contrasted with 1994. Stocks reached
record-breaking highs, as the S&P 500 rose 37.5% for the year and the Dow Jones
Industrial Average advanced past both the 4000 and 5000 point marks. In
November, the Dow posted its fourth-best monthly advance since World War II.
After a dismal 1994, bonds rallied strongly throughout 1995. Soaring bond
prices gave fixed income investors their third-best year since the 1920s,
driving intermediate- and long-term interest rates to their lowest levels in two
years. The rate on the benchmark 30-year U.S. Treasury bond declined nearly two
percentage points.
INVESTMENT OVERVIEW--GLOBAL
The general slowdown in worldwide economic growth during 1995 provided a
benevolent interest rate environment, one that was highlighted by rallies in
world bond markets. As a result, yields fell back to 1993 levels. Efforts in the
U.S. and Europe to reduce government borrowing slowed demand for available
capital and, conversely, were a significant factor in pushing bond valuations
higher.
The U.S. stock market easily outdistanced most overseas markets. Many Asian
stock markets suffered during the year due to tight monetary policies designed
to curb inflation; these efforts to avoid overheating economies were successful
in several Asian countries and should provide the backdrop for market recoveries
going forward.
In general, political problems plagued much of Europe during 1995, with
French markets in particular being battered by investors concerned about social
spending and government deficits. Nineteen ninety-six is a crucial year for
France as the government attempts to cut back on welfare spending; while
unpopular with much of the public, reforms are essential if France is to compete
globally. In contrast to France, the German stock market performed well in 1995,
due in large part to low inflation and falling interest rates.
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PACE MONEY MARKET INVESTMENTS
Managed by Mitchell Hutchins Asset Management Inc., the Portfolio's
investment objective is current income consistent with the preservation of
capital and liquidity through investments in high-quality, U.S.
dollar-denominated money market instruments with maturities of 13 months or
less. The Portfolio maintains a dollar-weighted average portfolio maturity of 90
days or less.
INVESTMENT PROCESS
Mitchell Hutchins' focus is on quality, diversity and liquidity. Investment
considerations include a review of interest rates vis-a-vis the economic
environment, current supply and demand of money market products, and a review of
credit risk. Securities selection follows an approved list of top-tier rated
securities reviewed by the firm's credit analysts.
COMMENTS FROM MITCHELL HUTCHINS ASSET MANAGEMENT INC.
Since its inception on August 24, 1995 through January 31, 1996, the
Portfolio provided investors with a return of 2.31% (exclusive of the PACE
Program Fee), slightly higher than the 2.20% return of 90-day U.S. Treasury
bills. Also, as of January 31, 1996, the Portfolio's 7-day yield was 5.20%. The
Portfolio benefited from falling interest rates by holding a portfolio of
securities with slightly longer maturities than the money market fund average
during this timeframe (73 days v. 63). As of
January 31, 1996, net assets of the Portfolio totaled $5.7 million, and it was
fully invested.
Given signs of a weak economy and the fact that short-term interest rates
are very high in relation to longer-term rates, we believe that the Fed might
continue lowering short-term interest rates in 1996. Therefore, we intend to
keep the Portfolio's average maturity slightly longer than the money market fund
average. The Portfolio should benefit as interest rates decline.
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PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
Managed by Pacific Investment Management Company ("PIMCO"), the Portfolio's
investment objective is current income through investments primarily in U.S.
government and agency securities of varying maturities, as well as
mortgage-backed securities, with a dollar-weighted portfolio duration of between
two and seven years.
INVESTMENT PROCESS
PIMCO's investment process begins with a macroeconomic analysis of secular
and cyclical interest rate trends. The Portfolio's duration is established based
on PIMCO's expectations for changes in interest rates. Then, PIMCO evaluates the
yield curve's potential for steepening or flattening. Individual issues are
chosen for their relative value.
COMMENTS FROM PACIFIC INVESTMENT MANAGEMENT COMPANY
During its first five months of operations, the Portfolio (exclusive of the
PACE Program Fee) outperformed the Lehman Brothers Mortgage Backed Securities
Index by 51 basis points, 5.52% vs. 5.01%. This was achieved by positioning the
Portfolio's duration longer than that of the Index. The Portfolio's performance
also benefited during the period from investments in lower-coupon mortgages and
longer-duration Collateralized Mortgage Obligations ("CMOs"), both of which
performed well in the positive market environment. As of January 31, 1996, net
assets of the Portfolio totaled $31.9 million, and it was fully invested.
We will continue to manage the Portfolio within the context of our bullish
long-term interest rate outlook. Backing up this outlook is the belief that the
economy is in the midst of a long-term secular debt cycle trend that has driven
the yield on the 30-year U.S. Treasury bond from 15% in the mid-1980s to around
the 6.0% level at the end of January. With near-term economic forecasts calling
for slow growth and declining inflation over the coming quarters, we expect
the long bond yield to range between 5% and 7%, with the possibility of
further Fed rate cuts producing declining short- and long-term interest rates.
Looking forward, our strategy will be to target a Portfolio duration of
between 4 and 4.5 years, which should enable the Portfolio to benefit in a
declining interest rate environment.
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PACE INTERMEDIATE FIXED INCOME INVESTMENTS
Managed by Pacific Income Advisors, the Portfolio's investment objective is
current income consistent with reasonable stability of principal through
investments in fixed income securities with a dollar-weighted average portfolio
duration of between two and four and one-half years.
INVESTMENT PROCESS
Pacific Income Advisors focuses on yield curve analysis and active sector
rotation, overweighting or underweighting sectors based on a risk/reward
assessment and anticipation of changing yield curve shapes. The manager utilizes
a proprietary model to identify securities that are undervalued on a
risk-adjusted basis.
COMMENTS FROM PACIFIC INCOME ADVISORS
Since its inception on August 24, 1995 through January 31, 1996, the
Portfolio provided investors with a total return of 4.13% (exclusive of the PACE
Program Fee), below the Lehman Brothers Intermediate Term Government/Corporate
Index return of 5.17%. Continuing economic weakness--as highlighted by poor
retail sales, record consumer debt, increasing credit card bankruptcies and
falling consumer confidence--caused the Fed to lower rates by 0.25% in December
and another 0.25% in January. These anticipated rate cuts, along with a benign
inflation environment, drove long bond yields below the 6% mark during the
period. The Portfolio benefited from the general decline in interest rates;
however, its relative underperformance can primarily be attributed to its
substantial allocation to the mortgage-backed sector, which lagged the overall
bond market during this period. Net assets on January 31, 1996 totaled $23.9
million, and the Portfolio was fully invested.
In order to capitalize on the current environment, the core Portfolio
strategy remains unchanged: to seek to take advantage of differentials in the
yield curve to produce incremental income and enhance total returns for the
Portfolio; to attempt to benefit from changes in yield spreads between sectors,
and to pinpoint temporary market inefficiencies that create opportunities to
achieve relatively high interest income and capital gains potential without
excessive price volatility.
Although the mortgage-backed sector has lagged the market over the last few
months, we believe that it offers value. Therefore, we will maintain a weighting
in mortgage-backed securities going forward. In the Treasury sector, we will
continue to attempt to capitalize on the undervalued portion of the yield curve.
Given our belief that there is currently more downside risk than upside
potential in corporate bonds, new credits will selectively be added as the
risk/reward relationship improves.
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PACE STRATEGIC FIXED INCOME INVESTMENTS
Managed by Pacific Investment Management Company ("PIMCO"), the Portfolio's
investment objective is total return consisting of income and capital
appreciation through investments in fixed income securities of varying
maturities with a dollar-weighted average portfolio duration of between three
and eight years. Portfolio holdings will be invested in areas of the bond market
(based on quality, sector, coupon or maturity) which PIMCO believes to be
relatively undervalued.
INVESTMENT PROCESS
PIMCO's investment process begins with a macroeconomic analysis of secular
and cyclical interest rate trends. The Portfolio's duration is established based
on PIMCO's expectations for changes in interest rates. Then, PIMCO evaluates the
yield curve's potential for steepening or flattening. Individual issues are
chosen for their relative value.
COMMENTS FROM PACIFIC INVESTMENT MANAGEMENT COMPANY
From its inception on August 24, 1995 through January 31, 1996, the
Portfolio's 10.99% return (exclusive of the PACE Program Fee) far outperformed
the Lehman Brothers Government/Corporate Index return of 6.38%. This was
achieved primarily by positioning the Portfolio's duration longer than that of
the Index, as well as through the use of stable-duration Collateralized Mortgage
Obligations ("CMOs") and Federal Housing Administration ("FHA") project loans,
which provided additional yield and consistent value. The Portfolio's
underweighting in Treasury issues and overweighting in corporate bonds also
helped performance, as corporates provided above-average total returns
throughout this period. As of January 31, 1996, the Portfolio had $22.5 million
in net assets, and it was fully invested.
We will continue to manage the Portfolio within the context of our bullish
long-term interest rate outlook. Backing up this outlook is our belief that the
U.S. is in the midst of a long-term secular debt cycle trend that has driven the
yield on the 30-year U.S. Treasury bond from 15% in the mid-1980s to around the
6.0% level at the end of January. With near-term economic forecasts calling for
slow growth and declining inflation over the coming quarters, we expect the long
bond yield to range between 5% and 7% in 1996, with the possibility of further
Fed rate cuts producing declining short- and long-term interest rates.
So that the Portfolio can benefit from falling interest rates, we are
targeting the Portfolio's duration at 0.50 to 0.75 years longer than that of the
Index and will continue to focus on the mortgage sector as the most value-laden
sector of the bond universe. Given tight spreads in the corporate bond sector,
we will underweight corporates going forward. We are also exploiting overseas
investment opportunities with a tactical allocation to currency-hedged foreign
bonds, emphasizing Germany and Canada.
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PACE MUNICIPAL FIXED INCOME INVESTMENTS
Managed by Morgan Grenfell Capital Management, Inc., the Portfolio's
investment objective is high current income exempt from federal income tax
through investment in general obligation, revenue and private activity bonds and
notes, the interest on which is exempt from federal income tax, with a
dollar-weighted average portfolio duration of between three and seven years.
INVESTMENT PROCESS
Morgan Grenfell attempts to provide consistent returns with low volatility
by focusing on optimal issue selection and not attempting to forecast interest
rate moves. The Portfolio is constructed of high-quality securities across all
maturities so that its average duration matches that of its benchmark. Issues
with federal government backing, mortgage collateral and other credit
enhancements are preferred, with a limited investment in revenue and general
obligation issues. Issue size is not as important as the issuer's ability to pay
principal and interest.
COMMENTS FROM MORGAN GRENFELL CAPITAL MANAGEMENT, INC.
From its inception on August 24, 1995 through January 31, 1996, the
Portfolio had a total return of 5.13% (exclusive of the PACE Program Fee), well
ahead of the Lehman Brothers Municipal Five-Year Index return of 3.32%. The
Portfolio benefited from a longer duration than that of the Index as well as
the absence of general obligation bonds which, as a group, underperformed the
overall municipal Index during the period. As of January 31, 1996, the
Portfolio was fully invested and had net assets totaling $9.7 million. Issues
with federal government backing made up 79.2% of the Portfolio's total assets.
For the next several quarters, we believe that municipal bonds present
excellent value relative to U.S. Treasuries. This is because yields on municipal
bonds are currently very high versus Treasury yields, primarily due to concerns
over a proposed flat tax that would strip munis of their relative advantages
over other types of bonds. We believe that much of the potential effect of the
proposed flat tax has already been priced into the municipal market and that any
real tax resolutions likely to come out of Washington will be a compromise of
the proposed flat tax. Therefore, we believe that the municipal market, as a
whole, is undervalued. Additionally, the market should benefit from the
potential supply shortfall, which should eventually cause buyers to pay more for
the limited amount of bonds available.
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PACE GLOBAL FIXED INCOME INVESTMENTS
Managed by Rogge Global Partners plc, the Portfolio's investment objective
is high total return through investment in high-grade fixed income securities
issued by domestic and foreign governments and supranational entities and
private issuers located overseas, with a dollar-weighted average portfolio
duration of between four and eight years.
INVESTMENT PROCESS
Rogge Global Partners believes that, over time, financially healthy
countries produce the highest bond and currency returns. They use a top-down
fundamental approach to identify relative value across countries. Ratings based
on this analysis allow them to forecast expected changes in interest and
exchange rates over a 12-month horizon. An optimization model is then used to
determine country/currency and duration positions.
COMMENTS FROM ROGGE GLOBAL PARTNERS PLC
From its inception on August 24, 1995 through January 31, 1996, the
Portfolio's total return of 5.83% (excluding the PACE Program Fee) outpaced the
Salomon Brothers World Government Index 3.95% return. The Portfolio benefited
from its long duration positions during the fourth quarter of 1995. Also, the
Portfolio was overweighted in the relatively strong performing markets of
Germany, Italy and the Netherlands, while underweighted in sub-par performing
Japan. The Portfolio's net assets as of January 31, 1996 were $24.2 million, and
it was fully invested.
Looking out over the first half of 1996, we believe that the U.S. may well
have the healthiest economy, but growth should not be strong enough to ignite
inflation. We project continued recovery in Japan as the government and the Bank
of Japan combine expansive fiscal policy and aggressive monetary easing to help
revive spending. European fiscal policy should remain tight as the thrust
towards monetary union continues.
Going forward, we expect market action to remain similar to last period's
and, therefore, intend to maintain the Portfolio's above-index allocations to
Germany, Netherlands, Italy and Denmark, while continuing to underweight
Japanese and U.S. bonds.
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PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
Managed by Brinson Partners, Inc., the Portfolio's investment objective is
capital appreciation and dividend income through investment in equity securities
that, in Brinson's opinion, are undervalued. Under normal conditions, at least
65% of the Portfolio's total assets will be invested in common stocks of
companies with total market capitalization of $2.5 billion or greater.
INVESTMENT PROCESS
Brinson Partners' philosophy incorporates both top-down and bottom-up
elements. Brinson Partners looks for undervalued issues in the context of an
overall macroeconomic and market outlook. Fundamental analysis is conducted by
the firm's industry analysts on a universe of 700 stocks. The results of their
growth and cash flow projections are incorporated into a proprietary valuation
model. This model aids in the calculation and ranking of securities. These
quantitative tools, in combination with the judgment of senior investment
professionals, determine which securities are included in the Portfolio.
COMMENTS FROM BRINSON PARTNERS, INC.
From its inception through January 31, 1996, the Portfolio returned 16.22%
(exclusive of the PACE Program Fee), trailing the Wilshire Large Company Value
Index return of 19.23%. During this period, the Portfolio benefited from its
holdings in pharmaceutical and other Non-Cyclical stocks, as well as,
restructuring stocks, such as insurance companies. The Portfolio's
underweighting in Technology also contributed positively to Portfolio
performance, as this sector gave back some of its gains from earlier this year.
During the period, the Portfolio's net assets grew to $43.5 million and, as of
January 31, 1996, the Portfolio was fully invested. The Portfolio's top five
sector allocations on January 31, 1996 were in Financial (non-banks) (10.3% of
Portfolio's net assets), Consumer Non-Durables (10.1%), Healthcare/Drugs
(10.1%), Capital Goods (8.6%) and Services/Miscellaneous (8.1%).
We believe the U.S. economy is slowing and, subsequently, believe that
profit expectations for U.S. companies will decline over the next year. However,
we also believe that the Fed is likely to continue lowering short-term interest
rates. Inflation remains modest, thereby providing a low interest rate
environment. While this is positive, we believe that the U.S. equity market is
overvalued.
Within this environment, we continue to find conventional measures of value
attractive, such as high earnings-to-price and book-to-price ratios, and will
continue to choose stocks accordingly. Consistent with our expectations of a
stronger dollar, we intend to remain underweighted in U.S. corporations with
high foreign earnings exposure. However, volume growth in less developed
countries should be strong, and the Portfolio has exposure to these fast-growing
markets. Additionally, the Portfolio is overweighted in the Insurance sector,
where there are a number of undervalued opportunities due to current
restructuring trends within this industry.
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PACE LARGE COMPANY GROWTH INVESTMENTS
Managed by Chancellor Capital Management, Inc., the Portfolio's investment
objective is capital appreciation through investment in equity securities of
companies that, in Chancellor's opinion, are characterized by an earnings growth
rate faster than that of the S&P 500 Index. Under normal conditions, at least
65% of total assets will be invested in common stocks of companies with total
market capitalization of $2.5 billion or greater.
INVESTMENT PROCESS
Chancellor Capital Management, Inc. seeks to invest in large capitalization
companies which have secure, above-average secular growth profiles and potential
for improving near-term earnings momentum. Stock selection is based on a ranking
system which weighs fundamental research, quantitative and valuation inputs in
40/40/20 proportions. Chancellor purchases stocks for the Portfolio ranked in
the top 30% of the combined stock ranking and builds the Portfolio reflecting
the established industry weights.
COMMENTS FROM CHANCELLOR CAPITAL MANAGEMENT, INC.
From its inception on August 24, 1995 through January 31, 1996, the
Portfolio returned 9.67% (excluding the PACE Program Fee), trailing the Wilshire
Large Company Growth Index return of 14.72%. The sharp correction in Electronics
and underperformance of the Retail sector detracted from the Portfolio's
returns, although it benefited from its significant exposure to Healthcare,
Information Processing and Commodities. As of January 31, 1996, the Portfolio
had net assets of $33.5 million and was fully invested. The Portfolio's top five
sector allocations on January 31, 1996 were in Healthcare (20.0% of Portfolio's
net assets on January 31, 1996), Information Processing (19.0%), Commodities
(9.0%), Growth Staples (8.0%) and Entertainment/Media (7.0%).
While we believe prospects for the equity market overall remain positive, we
also believe 1996 returns are likely to fall well short of 1995's stellar
results. A slowing economy and limited flexibility in further cost reductions
should moderate corporate profit growth in the 5% to 10% range. Additionally,
although there is room for the Fed to ease short-term interest rates in 1996,
rates are unlikely to fall at the same dramatic pace as last year.
We believe that attractive investment opportunities remain in those
large-cap growth companies which continue to exceed expectations. Industries
where this type of company is more prevalent include Healthcare, Software and
Networking, Specialty Retail and Media. Furthermore, special situations in
Aerospace and Commodities remain attractive.
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PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
Managed by Brandywine Asset Management, Inc., the Portfolio's investment
objective is capital appreciation through investment primarily in equity
securities that, in Brandywine's opinion, are undervalued or overlooked in the
marketplace at the time of purchase, which generally have below-market average
price-to-earnings ratios. Under normal conditions, at least 65% of the
Portfolio's total assets will be invested in companies with total market
capitalization of less than $2.5 billion.
INVESTMENT PROCESS
Brandywine first narrows the small company universe to approximately 650
small capitalization value stocks through the use of three quantitative
screening criteria: positive trailing 12-month operating earnings, the lowest
price-to-earnings quartile based on the trailing 12-month operating earnings,
and market cap greater than $10 million but lower than the median capitalization
of the New York Stock Exchange. A hands-on fundamental review of each stock
further narrows the list by excluding stocks for the following: adjustments to
earnings that eliminate non-operating gains thus raising the stock's
price-to-earnings ratio above the lower quartile, strong recent price gains, or
severe or sudden fundamental deterioration.
COMMENTS FROM BRANDYWINE ASSET MANAGEMENT, INC.
Since inception on August 24, 1995 through January 31, 1996, the Portfolio's
0.34% return (exclusive of the PACE Program Fee) was well below the Wilshire
Small Company Value Index return of 11.46%. Several sector and capitalization
differences contributed to the Portfolio's underperformance: the Wilshire Small
Company Value Index has a higher capitalization structure than the Portfolio in
a period where larger cap stocks performed better across the market; the
Wilshire Index was weighted over 20% in Utilities, which performed well in the
favorable interest rate environment, versus the Portfolio's weighting of less
than 5%; Basic Industries, which underperformed on concerns of the economy,
represented 30% of the Portfolio versus approximately 10% of the Index. As of
January 31, 1996, the Portfolio had net assets of $39.3 million, and was fully
invested. The top five sector allocations were in Financials (22.8% of
Portfolio's net assets on January 31, 1996), Consumer Cyclicals (20.1%), Basic
Industries (12.4%), Capital Goods (10.2%) and Consumer Non-Cyclicals (6.4%).
We are optimistic about the small cap value market in the months ahead. We
expect the Fed to remain tilted towards cautious easing while maintaining
inflation at a 3% level; although many investors have incorporated fears of
recession into the valuations of cyclical sectors of the market, these fears are
probably exaggerated. The actions of the Fed, along with controlled inflation
and increased consumer confidence, should provide a stable environment for the
financial markets and small cap value stocks.
Our investment discipline has led to a reduction in sectors whose valuations
have increased significantly, such as Healthcare, Technology and, most recently,
Financials--including banks, insurers and brokerages. Meanwhile, with the market
heavily discounting a slowing economy, the Portfolio's weightings in Basic
Industry and Manufacturing firms have increased. As the market anticipates
economic stabilization and renewed growth, these sectors should perform well.
Such an environment should also boost small cap stocks relative to large cap
stocks.
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PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
Managed by Westfield Capital Management Company, Inc., the Portfolio's
investment objective is capital appreciation through investment primarily in the
common stock of "emerging growth" companies, companies characterized by
above-average growth of earnings rates. Under normal conditions, at least 80% of
the portfolio's total assets will be invested in common stock of issuers with a
total market capitalization of less than $2.5 billion.
INVESTMENT PROCESS
Westfield Capital Management looks for companies exhibiting annual earnings
growth of 25% or more but priced at a modest premium to the S&P's multiple.
Other important factors in the investment process include free cash flow, strong
management with insider ownership and potential for earnings surprises.
Companies are identified using in-depth fundamental, bottom-up analysis.
COMMENTS FROM WESTFIELD CAPITAL MANAGEMENT COMPANY, INC.
From August 24, 1995 to January 31, 1996, the Portfolio's total return was
- -5.30% (exclusive of the PACE Program Fee), while the Wilshire Small Company
Growth Index returned 1.75%. The Portfolio's underperformance was largely due to
its large allocation to the Technology sector which, despite a strong January,
was a poor performer throughout most of the period. While sector allocations,
including those in Financials and Basic Industries, also detracted from
performance, strong stock selection within these sectors cushioned the impact
throughout the Portfolio. Stock selection in the Consumer Non-Cyclical sector
added to performance, as the Portfolio's holdings in this category were entirely
in the top-performing Healthcare group. As of January 31, 1996, the Portfolio
had net assets of $41.1 million and was fully invested. The top five sector
allocations were in Healthcare (12.5% of Portfolio's net assets on January 31,
1996), Data Processing (10.1%), Telecommunications (9.7%), Medical Supply (7.9%)
and Energy (4.2%).
For the year ahead, we expect moderate economic growth and a benign interest
rate/inflation environment, which should enable the equity market to broaden.
Relative valuations and earnings growth, as well as a stronger dollar, favor
small cap growth stocks. We believe that leadership will shift from capital
spending-related technology issues to the Healthcare and Financial Services
categories. Based on this analysis, the Portfolio's holdings in the Healthcare
and Financial Services sectors have been expanded.
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PACE INTERNATIONAL EQUITY INVESTMENTS
Managed by Martin Currie Inc., the Portfolio's investment objective is
capital appreciation through investment in equity securities of companies
domiciled outside the United States. Under normal conditions, at least 65% of
the Portfolio's total assets will be invested in equity securities of companies
domiciled in three or more countries outside the U.S. Up to 10% of the
Portfolio's total assets may be invested in emerging markets.
INVESTMENT PROCESS
Martin Currie looks for companies that exhibit strong fundamentals and
attractive valuations based on estimates of future earnings. Country allocation
decisions are based on criteria that include economic and political stability,
the breadth and liquidity of the market, the nature of the local investor,
currency outlook, settlement system and valuation. Up to 75% of the foreign
currency exposure may be hedged back to the U.S. dollar.
COMMENTS FROM MARTIN CURRIE INC.
Since its August 24, 1995 inception through January 31, 1996, the Portfolio
returned 6.91% (exclusive of the PACE Program Fee), slightly higher than Morgan
Stanley Capital International's Europe, Australia and Far East (MSCI EAFE) Index
return of 6.52%. The Portfolio significantly benefited from its Pharmaceutical
investments in the United Kingdom. The Portfolio's underweighted position and
individual holdings in Japan, as well as select holdings in France, detracted
from results.
As of January 31, 1996, the Portfolio had net assets of $18.6 million and
was fully invested. The top five country allocations were Japan (31.0% of
Portfolio's net assets on January 31, 1996), the U.K. (15.0%), Hong Kong (7.9%),
Germany (4.8%), and France (4.3%). The top five sector allocations were in
Consumer Goods and Services (26.3%) Finance, Insurance and Real Estate (21.3%),
Capital Goods (17.1%), Basic Industries (12.2%), and Energy and Utilities
(7.2%).
The Portfolio has a heavy weighting towards investments in Asia, given that
Hong Kong should be helped by improvements in the Chinese economy and Taiwan's
stock market should recover after the elections. In Latin America, falling
interest rates and improving economic growth should encourage international
investors, especially if governments--particularly in Brazil--remain committed
to their programs of economic reform.
In the United Kingdom, we believe further modest growth in economic activity
in the year ahead, aided by a recovery in consumer spending, is likely. Our
strategy is to overweight the Portfolio in the U.K. consumer and manufacturing
sectors. Fifty percent of the Portfolio's yen exposure is now hedged through a
forward sale for U.S. dollars.
14
<PAGE>
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
Managed by Schroder Capital Management International Inc., the Portfolio's
investment objective is long-term capital appreciation primarily through
investing, under normal conditions, at least 65% of its total assets in equity
securities of issuers domiciled in three or more emerging markets.
INVESTMENT PROCESS
Schroder Capital Management International utilizes an extensive network of
regional specialists and analysts in 11 countries. This local presence supports
an intensive company research program which is essential in emerging markets.
The research compiled is then used to identify companies whose characteristics
fall within Schroder's criteria, including professional management, sustainable
earnings momentum, a high domestic market share, a proprietary niche and
credible accounting standards.
COMMENTS FROM SCHRODER CAPITAL MANAGEMENT INTERNATIONAL INC.
Since its inception on August 24, 1995 through January 31, 1996, the
Portfolio returned 7.65% (exclusive of the PACE Program Fee), outperforming the
MSCI Emerging Markets Free Index return of 4.53%. As of January 31, 1996, the
Portfolio had assets of $13.9 million and was fully invested. The regional
allocations were in East Asia (50.2% of Portfolio's net assets on January 31,
1996), Latin America (23.9%), Europe (10.5%), and Africa (5.3%). The top five
sector allocations were in Services (22.1%), Materials (15.4%), Energy (14.2%),
Finance (14.1%) and Consumer Goods (12.2%).
The strategy of recent months has continued with the regional weighting of
Asia rising at the expense of both Europe and Latin America. We believe Asian
emerging markets provide long-term opportunities for investing. At quarter-end,
prevailing economic outlook and corporate conditions in the region were robust.
The Philippine, Indonesian and Thai markets reflected these strong fundamentals
after weakness the last year.
We are forecasting recovery in Argentina and Brazil, as markets there are
set to benefit from tough measures taken in 1995 that should lead to an economic
recovery. However, congressional cooperation on certain issues is needed in both
countries. In Mexico, the market recovery in recent months should be sustainable
but will still leave the government with a difficult balancing act.
We remain positive about the outlook for Eastern Europe where economic
conditions continue to improve. Turkey remains the greatest unknown in the
remainder of emerging Europe due to the current economic and political
environment there. These factors will need to stabilize before we consider
adding to the Portfolio.
15
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
Portfolios of Investments
January 31, 1996 (unaudited)
- --------------------------------------------------------------------------------
PACE MONEY MARKET INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- ----------
<C> <S> <C> <C> <C>
BANK NOTES--12.83%
DOMESTIC--12.83%
$ 50 Bank of America Illinois.................. 03/14/96 5.700% $ 50,000
200 FCC National Bank......................... 06/05/96 5.500 199,999
150 Huntington National Bank.................. 02/01/96 5.540* 149,988
100 Morgan Guaranty Trust Company............. 01/15/97 5.250 100,085
125 NationsBank of Texas, N.A................. 05/21/96 5.610 125,000
100 Old Kent Bank & Trust Company............. 12/04/96 5.530 99,968
----------
725,040
Total Bank Notes (cost--$725,040).....................
----------
COMMERCIAL PAPER--76.83%
ASSET-BACKED--3.53%
200 Preferred Receivables Funding
Corporation............................. 02/26/96 5.600 199,222
----------
AUTO/TRUCK--2.65%
150 PACCAR Financial Corporation.............. 02/12/96 5.650 149,741
----------
BANKING--15.14%
150 ABN-AMRO North America Finance
Incorporated............................ 04/25/96 5.500 148,075
100 Bankers Trust New York Corporation........ 02/29/96 5.690 99,558
200 Citicorp................................ 02/01/96 5.950 200,000
225 MPS U.S. Commercial Paper Corporation..... 02/23/96 to 04/17/96 5.370 to 5.690 223,432
185 Societe Generale.......................... 02/20/96 5.640 184,449
----------
855,514
----------
BROKER/DEALER--13.77%
100 BT Securities Corporation................. 07/03/96 5.310 97,743
100 Bear Stearns Companies Incorporated....... 05/10/96 5.520 98,482
200 Dean Witter, Discover & Company........... 02/12/96 5.700 199,652
150 Goldman Sachs Group L.P. ................. 04/09/96 5.600 148,413
100 Merrill Lynch & Company Incorporated...... 04/04/96 5.420 99,051
135 Nomura Holding America Incorporated....... 02/01/96 5.900 135,000
----------
778,341
----------
DRUGS & HEALTHCARE--13.99%
250 American Home Food Products
Incorporated............................ 02/09/96 5.520 249,693
200 Lilly (Eli) & Company..................... 04/04/96 to 06/27/96 5.250 to 5.650 196,868
200 Warner-Lambert Company.................... 06/25/96 5.300 195,731
150 Zeneca Wilmington Incorporated............ 04/18/96 5.340 148,287
----------
790,579
----------
</TABLE>
16
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE MONEY MARKET INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------- ----------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER--(CONCLUDED)
FINANCE-CONDUIT--10.99%
$ 100 Commerzbank U.S. Finance Incorporated..... 02/21/96 5.650% $ 99,686
200 MetLife Funding Incorporated.............. 02/01/96 5.620 200,000
100 SBNSW (DE) Incorporated................... 06/10/96 5.350 98,068
225 Svenska Handelsbanken Incorporated........ 02/06/96 to 04/22/96 5.350 to 5.700 223,135
----------
620,889
----------
FINANCE-SUBSIDIARY--3.53%
200 Postipankki U.S. Incorporated............. 02/15/96 5.520 199,571
----------
INSURANCE--1.90%
108 Prudential Funding Corporation............ 03/01/96 5.450 107,526
----------
INSURANCE/PROPERTY & CASUALTY--3.53%
200 AI Credit Corporation..................... 02/13/96 5.480 199,635
----------
MISCELLANEOUS--4.32%
250 Beta Finance Incorporated................. 07/17/96 5.150 244,027
----------
UTILITY-TELEPHONE--3.48%
200 AT&T Corporation.......................... 05/10/96 to 06/10/96 5.230 to 5.470 196,607
----------
4,341,652
Total Commercial Paper (cost--$4,341,652).............
----------
SHORT-TERM CORPORATE OBLIGATIONS--7.78%
BANKING--0.88%
50 NationsBank Corporation................... 08/15/96 4.750 49,734
----------
BROKER/DEALER--2.48%
100 Bear Stearns Companies Incorporated....... 01/09/97 5.330 100,000
40 Merrill Lynch & Company Incorporated...... 02/01/96 5.520* 40,000
----------
140,000
----------
BUSINESS SERVICES--4.42%
250 PHH Corporation........................... 02/01/96 to 02/06/96 5.330 to 5.580* 249,946
----------
Total Short-Term Corporate Obligations
(cost--$439,680)................................... 439,680
Total Investments (cost--$5,506,372)--97.44%.......... ----------
5,506,372
Other assets in excess of liabilities--2.56%.......... 144,868
----------
Net Assets--100.00%................................... $5,651,240
----------
----------
</TABLE>
* 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, 1996 and reset periodically.
Weighted average maturity--73 days
See accompanying notes to financial statements
17
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- --------------------- -------------- ------------
<C> <S> <C> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
CERTIFICATES--10.17%
$ 1,790 GNMA II ARM............................... 06/20/22 7.375% $ 1,833,852
1,380 GNMA II ARM............................... 10/20/24 7.000 1,408,043
Total Government National Mortgage Association
Certificates (cost--$3,233,369)..................... 3,241,895
------------
FEDERAL HOME LOAN MORTGAGE CERTIFICATES--50.79%
9,000 FHLMC Gold TBA............................ TBA 7.500 9,241,875
4,000 FHLMC Gold TBA............................ TBA 7.000 4,038,748
3,000 FHLMC Gold TBA............................ TBA 6.000 2,907,186
------------
Total Federal Home Loan Mortgage Certificates
(cost--$16,105,624).................................. 16,187,809
------------
FEDERAL HOUSING AUTHORITY--6.06%
990 FHA Project Notes......................... 05/01/17 7.880 1,051,711
852 FHA Project Notes......................... 08/01/20 7.430 879,218
------------
Total Federal Housing Authority Certificates
(cost--$1,909,533)................................... 1,930,929
COLLATERALIZED MORTGAGE OBLIGATIONS--18.35% ------------
109 FHLMC Series 1658, Class GZ............... 01/15/24 7.000 98,749
594 FHLMC Series 1808, Class ZK............... 02/15/24 6.800 509,590
1,353 FHLMC Series 1078, Class GZ............... 05/15/21 6.500 1,291,006
387 FHLMC Series 1534, Class Z................ 06/15/23 5.000 270,016
650 FHLMC Series 159, Class H................. 09/15/21 4.500 558,161
316 FHLMC Series 1347, Class HC............... 12/15/21 4.250 274,130
1,088 FHLMC Series 1360, Class PE............... 12/15/17 3.500 978,177
1,228 FNMA REMIC Trust 1993-39, Class Z......... 04/25/23 7.500 1,216,370
52 FNMA 1993--250, Class Z................... 12/25/23 7.000 50,573
165 FNMA REMIC Trust 1992--129, Class L....... 07/25/22 6.000 149,067
463 Prudential Home Mortgage 1993--29, Class A8 08/25/08 6.750 451,710
------------
Total Collateralized Mortgage Obligations
(cost--$5,592,788)................................... 5,847,549
------------
AGENCY BACKED OBLIGATIONS--25.82%
400 Federal Home Loan Bank Consolidated
Discount Notes.......................... 02/22/96 5.360 398,749
3,000 Federal Home Loan Bank Consolidated
Discount Notes.......................... 04/10/96 5.210 2,968,908
100 Federal National Mortgage Association
Discount Notes.......................... 02/13/96 5.550 99,815
700 Federal National Mortgage Association
Discount Notes.......................... 03/12/96 5.370 695,573
2,300 Federal National Mortgage Association
Discount Notes.......................... 03/01/96 5.280 2,290,217
1,800 Federal National Mortgage Association
Discount Notes.......................... 05/03/96 5.140 1,775,104
------------
Total Agency Backed Obligations (cost--$8,231,003).... 8,228,366
------------
</TABLE>
18
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- --------------------- -------------- ------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER--35.27%
$ 1,000 Abbott Labs............................... 02/06/96 5.450% $ 999,243
1,000 American Telephone & Telegraph Company.... 03/18/96 to 04/19/96 5.380 to 5.450 990,599
1,000 Ameritech Corporation..................... 03/28/96 5.405 991,134
200 Coca Cola Company......................... 03/05/96 5.400 199,010
1,000 Ford Motor Credit Company................. 03/11/96 5.450 993,834
500 Hewlett Packard Co........................ 03/12/96 5.530 496,838
1,000 Kimberly Clark Corporation................ 02/12/96 5.500 998,319
1,000 Motorola, Incorporated.................... 02/08/96 5.450 998,940
700 National Rural Utilities Finance
Corporation............................. 02/27/96 5.450 697,245
600 Pitney Bowes Credit Corporation........... 02/09/96 5.470 599,271
400 Southwestern Public Service Company....... 02/29/96 5.380 398,326
1,000 United Parcel Service..................... 04/04/96 5.360 990,492
900 Warner Lambert Company.................... 04/09/96 5.540 890,800
1,000 Wisconsin Electric Power Company.......... 02/09/96 5.500 998,778
------------
Total Commercial Paper (cost--$11,243,608)............ 11,242,829
------------
REPURCHASE AGREEMENT--1.17%
373 Repurchase Agreement dated 01/31/96, with
State
Street Bank & Trust Company,
collateralized by
$386,713 U.S. Treasury Bonds, 9.250%, due
02/15/16; proceeds: $373,052
(cost--$373,000)........................ 02/01/96 5.000 373,000
------------
Total Investments (cost--$46,688,925)--147.63%........ 47,052,377
Liabilities in excess of other assets--(47.63)%....... (15,181,588)
------------
Net Assets--100.00%................................... $ 31,870,789
------------
------------
</TABLE>
- ------------
<TABLE>
<S> <C>
ARM Adjustable Rate Mortgage Securities
REMIC Real Estate Mortgage Investment Conduit
TBA To Be Assigned--Securities are purchased on a forward commitment with an
approximate (generally +/-2.5%) principal amount and no definite maturity date.
The actual principal amount and maturity date will be determined upon settlement
when the specific mortgage pools are assigned.
</TABLE>
See accompanying notes to financial statements
19
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE INTERMEDIATE FIXED INCOME INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- ---------------- -----------
<C> <S> <C> <C> <C>
ASSET-BACKED SECURITIES--0.85%
$ 200 Standard Credit Card Services
(cost--$201,748)..................... 08/07/97 8.500% $ 202,268
-----------
CORPORATE NOTES--9.08%
265 Continental Bank NA Chicago............ 04/01/01 to 07/01/01 11.250 to 12.500 297,938
400 Ford Motor Credit Corporation.......... 11/19/99 7.500 423,944
200 ITT Corporation........................ 03/01/06 8.750 206,100
625 K Mart Corporation MTN................. 08/01/97 to 07/06/99 7.240 to 8.700 438,103
275 Korea Development Bank................. 11/15/02 6.500 279,324
245 New Plan Realty Trust Corporation...... 04/06/05 7.750 267,028
250 Nordstrom Credit Incorporated.......... 02/15/16 9.375 261,604
-----------
2,174,041
Total Corporate Notes (cost--$2,333,155)...........
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
CERTIFICATES--5.19%
1,216 GNMA (cost--$1,234,369)................ 10/20/25 6.500 1,241,437
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION
CERTIFICATES--7.16%
458 FHLMC.................................. 12/01/99 5.500 458,129
1,212 FHLMC 30 Year TBA...................... TBA 8.000 1,256,205
-----------
Total Federal Home Loan Mortgage Corporation 1,714,334
Certificates
(cost--$1,695,017)...............................
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
CERTIFICATES--12.83%
1,676 FNMA................................... 09/01/24 to 12/01/25 6.500 1,658,722
1,370 FNMA................................... 06/01/10 to 09/01/10 7.500 1,410,571
-----------
Total Federal National Mortgage Association
Certificates (cost--$3,034,268)............................... 3,069,293
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS--16.96%
179 FHLMC Series 171, Class G.............. 04/15/04 9.000 182,352
500 FHLMC Series 1497 Class O.............. 10/15/22 7.000 507,500
1,228 FHLMC Series 1494 Class X.............. 04/15/23 7.500 1,220,250
194 FHLMC Series 1588 Class TB............. 06/15/23 6.500 195,393
500 FNMA Series 241 Class PC............... 08/25/19 6.880+ 463,985
282 FNMA REMIC Trust 1991-04, Class E...... 09/25/05 8.250 290,900
675 FNMA REMIC Trust 1993-70, Class C...... 03/25/18 6.900 685,266
504 FNMA REMIC Trust 1990-09, Class D...... 08/25/18 8.500 512,917
-----------
Total Collateralized Mortgage Obligations
(cost--$3,970,920)................................ 4,058,563
-----------
FOREIGN CURRENCY DENOMINATED ISSUES--4.26%
DEM 1500 Federal Republic of Germany (1)
(cost--$1,026,774).................... 01/15/06 6.000 1,019,315
-----------
U.S. GOVERNMENT OBLIGATIONS--39.00%
8,830 U.S. Treasury Notes
(cost--$9,187,051)..................... 08/15/98 to 02/15/05 5.625 to 7.500 9,333,294
-----------
</TABLE>
20
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE INTERMEDIATE FIXED INCOME INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- --------- -------------------- ---------------- -----------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--5.63%
$ 1,347 Repurchase Agreement dated 01/31/96
with State Street Bank & Trust
Company, collateralized by $978,916
U.S. Treasury Bonds, 9.250%, due
02/15/16; proceeds: $1,347,187
(cost--$1,347,000)................... 02/01/96 5.000% $ 1,347,000
-----------
Total Investments (cost--$24,030,302)--100.96%..... 24,159,545
Liabilities in excess of other assets--(0.96)%..... (229,163)
-----------
Net Assets--100.00%................................ $23,930,382
-----------
-----------
</TABLE>
- ------------
<TABLE>
<S> <C>
+ Principal Only--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.
MTN Medium Term Note
TBA To Be Assigned--Securities are purchased on a forward commitment with an approximate
(generally +/-2.5%) principal amount and no definite maturity date. The actual
principal amount and maturity date will be determined upon settlement when the
specific mortgage pools are assigned.
(1) Principal amount denoted in indicated currency: DEM--German Deutschemarks
</TABLE>
See accompanying notes to financial statements
21
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE STRATEGIC FIXED INCOME INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- --------------------- ------------- -----------
<C> <S> <C> <C> <C>
MORTGAGE-BACKED SECURITIES--76.45%
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
CERTIFICATES--4.40%
$ 495 GNMA.................................. 07/20/25 6.000% $ 501,208
482 GNMA.................................. 11/20/23 7.000 488,059
-----------
Total Government National Mortgage Association
Certificates (cost--$988,356)................................. 989,267
-----------
FEDERAL HOUSING ADMINISTRATION CERTIFICATES--8.28%
786 FHA................................... 08/01/20 7.430 811,586
1,006 FHA................................... 12/01/21 7.430 1,047,786
-----------
Total Federal Housing Administration Certificates
(cost--$1,846,586)............................... 1,859,372
-----------
FEDERAL HOME LOAN MORTGAGE ASSOCIATION
CERTIFICATES--4.57%
1,000 FHLMC Gold 30 Year TBA
(cost--$1,024,375).................... TBA 7.500 1,025,625
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
CERTIFICATES--16.95%
2,269 FNMA.................................. 12/01/26 5.116* 2,182,492
552 FNMA.................................. 08/01/28 6.361* 562,266
1,000 FNMA--ARM............................. TBA 6.369* 1,015,000
48 FNMA.................................. 12/01/17 7.375* 49,576
-----------
Total Federal National Mortgage Corporation
Certificates
(cost--$3,798,120)............................... 3,809,334
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS--42.25%
664 Bear Stearns Series 1994-1, Class
3A.................................... 05/25/23 7.322* 676,777
546 California Federal Bank Series 1990
BN1, Class A--ARM..................... 12/25/30 6.824* 547,834
230 FHLMC Series 15, Class PZ............. 07/25/23 7.000 205,385
104 FHLMC Series 23, Class KZ............. 11/25/23 6.500 89,273
41 FHLMC Series 1078, Class GZ........... 05/15/21 6.500 38,730
1,000 FHLMC Series 1278, Class K............ 05/15/22 7.000 1,004,829
100 FHLMC Series 1366, Class H............ 08/15/07 6.000 97,218
29 FHLMC Series 1367, Class KA........... 09/15/22 6.500 27,405
124 FHLMC Series 1502, Class PX........... 04/15/23 7.000 113,887
640 FHLMC Series 1503, Class PZ........... 05/15/23 7.000 602,343
387 FHLMC Series 1534, Class Z............ 06/15/23 5.000 270,016
573 FHLMC Series 1548, Class Z............ 07/15/23 7.000 517,393
730 FHLMC Series 1562, Class Z............ 07/15/23 7.000 678,268
136 FHLMC Series 1611, Class I............ 02/15/23 6.000 133,053
62 FHLMC Series 1614, Class QZ........... 11/15/23 6.500 51,686
599 FHLMC Series 1628, Class KZ........... 12/15/23 6.250 526,881
343 FHLMC Series 1628, Class LZ........... 12/15/23 6.500 296,459
227 FHLMC Series 1694, Class Z............ 03/15/24 6.500 189,634
153 FNMA REMIC Trust 1991-65, Class Z..... 06/25/21 6.500 144,281
75 FNMA REMIC Trust 1992-118, Class K.... 09/25/08 7.500 77,892
160 FNMA REMIC Trust 1992-129, Class L.... 07/25/22 6.000 144,550
</TABLE>
22
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE STRATEGIC FIXED INCOME INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- --------------------- ------------- -----------
<C> <S> <C> <C> <C>
MORTGAGE-BACKED SECURITIES--(CONCLUDED)
COLLATERALIZED MORTGAGE OBLIGATIONS--(CONCLUDED)
$ 279 FNMA REMIC Trust 1993-122, Class L.... 01/25/23 6.500% $ 268,861
5 FNMA REMIC Trust 1993-134, Class EA... 11/25/05 1,159.740+(2) 131,303
76 FNMA REMIC Trust 1993-149, Class L.... 08/25/23 6.000 73,078
113 FNMA REMIC Trust 1993-160, Class ZB... 09/25/23 6.500 97,637
107 FNMA REMIC Trust 1993-163, Class ZA... 09/25/23 7.000 99,274
76 FNMA REMIC Trust 1993-199, Class Z.... 10/25/23 7.000 70,358
1,608 FNMA REMIC Trust 1993-201, Class JA... 09/25/21 6.500+(3) 251,059
63 FNMA REMIC Trust 1993-37, Class PX.... 03/25/23 7.000 56,835
139 FNMA REMIC Trust 1993-56, Class PZ.... 05/25/23 7.000 128,477
61 FNMA REMIC Trust 1993-60, Class Z..... 05/25/23 7.000 55,213
491 FNMA REMIC Trust 1993-65, Class ZZ.... 06/25/13 7.000 488,246
102 FNMA REMIC Trust 1993-70, Class Z..... 05/25/23 6.900 92,492
293 FNMA REMIC Trust 1993-96, Class PZ.... 06/25/23 7.000 273,750
112 FNMA REMIC Trust 1994-23, Class PXZ... 08/25/23 6.000 92,983
75 FNMA REMIC Trust G92-36, Class Z...... 07/25/22 7.000 74,203
300 FNMA REMIC Trust G92-40, Class ZC..... 07/25/22 7.000 293,745
114 FNMA REMIC Trust G93-40, Class Z...... 12/25/23 6.500 94,244
150 Residential Funding Series 1993-530,
Class A9............................ 08/25/23 7.500 150,047
291 U.S. Department of Veteran Affairs
Vendee Mortgage Trust Series 1993-3,
Class 2ZA........................... 06/15/20 6.500 267,829
-----------
Total Collateralized Mortgage Obligations
(cost--$8,856,318)............................... 9,493,428
-----------
Total Mortgage-Backed Securities
(cost--$16,513,755).............................. 17,177,026
-----------
CORPORATE BONDS--18.20%
250 AMR Corporation....................... 01/27/97 7.600 254,534
500 AMR Corporation....................... 02/01/01 10.000 572,483
450 Continental Cablevision, 06/01/07 11.000 505,125
Incorporated........................
300 Gulf States Utilities Company......... 07/01/98 9.720 313,155
500 Niagara Mohawk Power Company.......... 04/01/24 7.875 462,367
300 RJR Nabisco, Incorporated............. 07/15/01 8.000 308,324
1,000 Time Warner, Incorporated............. 06/15/05 7.750 1,040,777
500 United Air Lines Incorporated......... 11/27/12 10.360 632,140
-----------
Total Corporate Bonds (cost--$4,009,105).......... 4,088,905
-----------
FOREIGN CURRENCY DENOMINATED ISSUES--2.56%
CAD 700 Government of Canada (1)
(cost--$580,879).................... 12/01/04 9.000 575,566
-----------
COMMERCIAL PAPER--8.86%
700 Canadian Wheat Board.................. 03/08/96 to 03/11/96 5.550 to 5.580 695,867
100 Ford Motor Credit Company............. 03/11/96 5.450 99,409
200 Ontario Province of Canada............ 02/02/96 5.460 199,970
500 Southwestern Public Service Company... 02/29/96 5.380 497,908
500 Toys R Us Incorporated................ 03/08/96 5.380 497,310
-----------
Total Commercial Paper (cost--$1,990,464)......... 1,990,464
-----------
</TABLE>
23
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE STRATEGIC FIXED INCOME INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- --------------------- ------------- -----------
<C> <S> <C> <C> <C>
OPTIONS--0.38%
DEM 1,300 Call--Bundesrepublic; 7.500% due
11/11/04;
par value DEM 1,300,000; price DEM
100.63; expiring 04/09/96
(cost--$92,323)..................... 04/09/96 -- $ 86,384
-----------
REPURCHASE AGREEMENT--1.75%
$ 393 Repurchase Agreement dated 01/31/96
with State Street Bank & Trust
Company, collateralized by $290,000
U.S. Treasury Bonds, 9.250%, due
02/15/16; proceeds: $393,055
(cost--$393,000).................... 02/01/96 5.000% 393,000
----------
Total Investments (cost--$23,579,526)--108.20%.... 24,311,345
Liabilities in excess of other assets--(8.20)%.... ( 1,841,925)
-----------
Net Assets--100.00%............................... $22,469,420
-----------
-----------
</TABLE>
- ------------
<TABLE>
<S> <C>
* Variable rate security; the rate shown is as of January 31, 1996.
+ Interest Only--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 paid and cause the yield to decrease. Low prepayments would
result in a greater amount of interest being received and cause the yield to
increase.
ARM Adjustable Rate Mortgage
REMIC Real Estate Mortgage Investment Conduit
TBA To Be Assigned--Securities are purchased on a forward commitment with an approximate
(generally +/- 2.5%) principal amount and no definite maturity date. The actual
principal amount and maturity date will be determined upon settlement when the
specific mortgage pools are assigned.
(1) Principal amount denoted in indicated currency: CAD--Canadian Dollars
DEM--German Deutschemarks
(2) Annualized yield at date of purchase was 10.48%
(3) Annualized yield at date of purchase was 8.31%
</TABLE>
See accompanying notes to financial statements
24
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE MUNICIPAL FIXED INCOME INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------ --------------------- ---------------- ----------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--94.03%
ALABAMA--3.83%
$ 175 Birmingham Alabama Medical Clinic
Baptist Medical Center (Escrow to
Maturity)............................ 07/01/08 8.300% $ 214,258
155 Pell City Alabama Industrial
Development Board Revenue Shelby Steel
Fabricators (Letter of
Credit--SouthTrust Bank)*............ 09/01/01 7.700 156,961
----------
371,219
----------
CALIFORNIA--8.10%
70 Inglewood California Residential 08/01/10 7.500 82,145
Rehabiliation (Escrow to Maturity)...
505 Lancaster California Redevelopment 12/01/05 5.250 505,732
Agency Multifamily High Valley
Apartments
(FHA Insured)........................
75 Sacramento California Utility District 03/10/10 6.750 82,428
Electricity (Escrow to Maturity).....
105 Sacramento California Utility District 05/01/10 6.800 115,129
Electricity White Rock Project (Escrow
to Maturity).........................
----------
785,434
----------
COLORADO--4.09%
75 Colorado Health Facilities Authority 09/01/08 7.125 83,492
Rose Medical Center (Escrow to
Maturity)............................
300 Westminister Colorado Multifamily 09/01/15 5.950 312,663
Semper Village Apartments (Mandatory
put 09/01/06 @ par) (AXA)............
----------
396,155
----------
FLORIDA--1.14%
90 Altamonte Springs Florida Health 10/01/09 8.750 110,688
Facilities Authority Revenue (Escrow
to Maturity).........................
----------
GEORGIA--5.34%
500 Marietta Georgia Housing Authority 06/01/25 5.750 517,775
Multifamily Ridge Point Apartments
(Mandatory put 06/01/05 @ par) (FNMA
Collateralized)......................
----------
IDAHO--5.21%
500 Idaho Housing Agency Multifamily 01/01/07 6.000 504,580
Section 8 Assisted Housing...........
----------
ILLINOIS--6.34%
120 Illinois Health Facilities Authority 10/01/10 9.000 149,065
Revenue Methodist Medical Center
(Escrow to Maturity).................
305 Illinois Health Facilities Authority 08/01/06 7.250 345,193
Revenue Ravenswood Hospital (Escrow to
Maturity)............................
120 Illinois Housing Development 02/01/14 3.850(1) 120,396
Residential Mortgage Revenue (Optional
put 02/01/96 @ par)..................
----------
614,654
----------
</TABLE>
25
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE MUNICIPAL FIXED INCOME INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------ --------------------- ---------------- ----------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
INDIANA--1.54%
$ 135 Fort Wayne Indiana Hospital Authority
Revenue Parkview Memorial Hospital
Incorporated (Escrow to Maturity).... 01/01/05 6.500% $ 149,418
----------
LOUISIANA--6.16%
150 Jefferson Parish Louisiana Hospital
Service District No. 001 Hospital
Revenue (Escrow to Maturity)......... 01/01/09 7.250 173,961
350 Louisiana Public Facility Authority
Revenue Multifamily Housing Edgewood
Apartments (Mandatory put 06/01/05 @ par)
(FNMA Collateralized)................ 06/01/25 5.800 364,266
50 Louisiana State Health Education
Authority Alton Ochsner Medical
Foundation (Escrow to Maturity)...... 05/01/05 8.750 59,645
----------
597,872
----------
MICHIGAN--14.06%
665 Detroit Michigan Water Supply System
(Escrow to Maturity)................. 01/01/05 8.875 801,471
40 Michigan State Hospital Finance
Authority Revenue Harper Grace
Hospitals (Escrow to Maturity)....... 05/01/09 7.125 46,202
130 Michigan State Hospital Finance
Authority Revenue Mount Carmel Mercy
Hospital (Escrow to Maturity)........ 08/01/05 7.500 146,648
300 Michigan State Housing Development
Authority*........................... 12/01/12 7.650 319,350
45 Petoskey Michigan Hospital Finance
Authority (Escrow to Maturity)....... 03/01/07 6.700 49,544
----------
1,363,215
----------
MINNESOTA--4.38%
190 Coon Rapids Minnesota Hospital Revenue
Health Central Incorporated (Escrow to
Maturity)............................ 08/01/08 7.625 220,419
200 Eden Prairie Minnesota Multi Family
Housing (GNMA Collateralized)........ 01/20/06 5.500 204,618
----------
425,037
----------
MISSISSIPPI--4.20%
900 Mississippi Home Corporation
Residential Revenue.................. 09/15/16 7.322@ 202,230
200 Mississippi Home Corporation Single
Family (GNMA Collateralized)......... 06/01/16 6.100 204,894
----------
407,124
----------
</TABLE>
26
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE MUNICIPAL FIXED INCOME INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------ --------------------- ---------------- ----------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
NEW JERSEY--5.32%
$ 65 New Jersey Health Care Facilities St.
Barnabas Medical Center (Escrow to
Maturity)............................ 07/01/11 7.000% $ 73,137
290 New Jersey State Highway Garden State
Parkway (Escrow to Maturity)......... 01/01/11 6.500 317,561
65 New Jersey State Highway Garden State
Parkway (Escrow to Maturity)......... 01/01/11 6.600 72,392
45 South Jersey Port Corporation (Escrow
to Maturity)......................... 01/01/11 6.625 52,208
----------
515,298
NEW MEXICO--1.21% ----------
359 Albuquerque New Mexico Collateralized
Mortgage Municipal (FGIC Insured).... 05/15/11 6.250@ 117,203
----------
NORTH CAROLINA--1.55%
150 Vance County North Carolina Industrial
Facilities (Letter of Credit--Centura
Bank) (Optional put 09/01/96 @ par)*... 09/01/00 5.000 150,024
----------
PENNSYLVANIA--2.14%
35 Caln Township Pennsylvania Municipal
Sewer Revenue (Escrow to Maturity)... 01/01/09 5.700 36,650
100 Conneaut Pennsylvania School District
(Escrow to Maturity) (AMBAC
Insured)............................. 05/01/02 9.250 127,036
40 Delaware River Port Authority of
Pennsylvania & New Jersey Delaware
River Bridges Revenue (Escrow to
Maturity)............................ 01/15/11 6.500 43,655
----------
207,341
SOUTH CAROLINA--1.72% ----------
145 Charleston County South Carolina
Hospital Facility Roper Hospital
(Escrow to Maturity)................. 10/01/11 7.000 166,915
----------
TENNESSEE--2.91%
275 La Follette Tennessee Housing
Development Corporation (FHA/MBIA
Insured)............................. 01/01/05 5.400 281,630
----------
TEXAS--5.78%
210 Houston Texas Airport System Revenue
(Escrow to Maturity)................. 07/01/10 7.600 242,590
1,500 Southeast Texas Housing Finance
Corporation.......................... 12/01/16 7.611@ 318,060
----------
560,650
----------
</TABLE>
27
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE MUNICIPAL FIXED INCOME INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------ --------------------- ---------------- ----------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
UTAH--6.13%
$ 95 Salt Lake City Utah Hospital Revenue
Holy Cross Hospital Project (Escrow to
Maturity)............................ 06/01/09 7.350% $ 108,056
200 Salt Lake County Utah Multifamily James
Pointe Apartments (Mandatory put
10/01/05 @ par) (Asset Guaranty
Insurance)........................... 10/01/25 5.500 204,956
275 Utah State Housing Finance Agency
(AMBAC Insured)...................... 07/01/07 5.650 281,475
----------
594,487
----------
VIRGINIA--2.58%
250 King George County Virginia Industrial
Development Elementary School
Project.............................. 08/01/98 4.875 250,213
----------
WEST VIRGINIA--0.30%
25 Kanawha County West Virginia Building
Commission Revenue St. Francis
Hospital (Escrow to Maturity)........ 12/01/07 7.500 28,933
----------
Total Municipal Bonds and Notes
(cost--$8,936,755)............................. 9,115,865
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
- ---------
<C> <S> <C>
MONEY MARKET FUNDS--5.05%
489,512 Seven Seas Money Market Fund* 489,512
(cost--$489,512).....................
----------
Total Investments (cost--$9,426,267)--99.08%...... 9,605,377
Other assets in excess of liabilities--0.92%...... 88,935
----------
Net Assets--100.00%............................... $9,694,312
----------
----------
</TABLE>
- ------------
<TABLE>
<S> <C>
@ Yield to maturity for zero coupon bonds
* Security subject to Alternative Minimum Tax
AMBAC American Municipal Bond Assurance Corporation
AXA Axa Reinsurance Company
FGIC Federal Guaranty Insurance Company
FHA Federal Housing Authority
FNMA Federal National Mortgage Association
GNMA Government National Mortgage Association
MBIA Municipal Bond Investors Assurance
(1) Variable rate demand notes which are payable upon demand. The maturity dates shown
are stated maturities; the interest rates are the current rates as of January 31,
1996.
</TABLE>
See accompanying notes to financial statements
28
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE GLOBAL FIXED INCOME INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)* DATES RATES VALUE
- ----------- -------------------- -------------- -----------
<C> <S> <C> <C> <C>
LONG-TERM DEBT SECURITIES--72.60%
CANADA--4.03%
1,185 Government of Canada.................... 12/01/04 9.000% $ 974,351
-----------
DENMARK--9.89%
13,262 Kingdom of Denmark...................... 12/15/04 to 03/15/06 7.000 to 8.000 2,394,461
-----------
GERMANY--23.46%
7,960 Federal Republic of Germany............. 05/15/00 to 10/14/05 5.875 to 6.875 5,678,203
-----------
IRELAND--2.30%
380 Republic of Ireland..................... 10/18/04 6.250 557,337
-----------
ITALY--5.61%
2,080,000 Republic of Italy....................... 04/01/05 to 09/01/05 10.500 1,356,998
-----------
JAPAN--0.75%
20,000 Export Import Bank...................... 07/28/05 2.875 182,231
-----------
NETHERLANDS--9.24%
3,474 Government of Netherlands............... 06/15/05 to 11/15/05 6.750 to 7.000 2,235,739
-----------
SPAIN--1.61%
47,130 Kingdom of Spain........................ 01/31/06 10.150 390,594
-----------
UNITED KINGDOM--0.54%
80 United Kingdom Gilt..................... 12/07/05 8.500 129,247
-----------
UNITED STATES--15.17%
2,844 U.S. Treasury Notes..................... 08/15/05 6.500 3,028,860
575 U.S. Treasury Bonds..................... 08/15/25 6.875 641,663
-----------
3,670,523
-----------
17,569,684
Total Long-Term Debt Securities
(cost--$17,405,956).................................
-----------
TIME DEPOSITS--8.56%
1,028 German Time Deposit..................... 02/06/96 3.438 690,615
2,209,404 Italian Time Deposit.................... 02/06/96 9.875 1,382,124
-----------
2,072,739
Total Time Deposits (cost--$2,072,739)...............
-----------
REPURCHASE AGREEMENT--16.45%
3,981 Repurchase Agreement dated 01/31/96 with
State Street Bank & Trust Company,
collateralized by $2,886,215 U.S.
Treasury Bonds, 9.250%, due 02/15/16;
proceeds: $3,981,553 (cost--$3,981,000) 02/01/96 5.000 3,981,000
-----------
Total Investments (cost--$23,459,695)--97.61%........ 23,623,423
Other assets in excess of liabilities--2.39%......... 577,691
-----------
Net Assets--100.00%.................................. $24,201,114
-----------
-----------
</TABLE>
- ------------
Note: The Portfolio of Investments is listed by the security issuer's country of
origin.
* In local currency unless otherwise indicated
29
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE GLOBAL FIXED INCOME INVESTMENTS
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
CONTRACT TO IN EXCHANGE MATURITY APPRECIATION
DELIVER FOR DATES (DEPRECIATION)
----------- -------------- -------- --------------
<S> <C> <C> <C> <C>
German Deutschemarks......................... 853,247 U.S.$ 574,031 02/01/96 $ 805
German Deutschemarks......................... 275,482 U.S.$ 190,758 02/16/96 5,523
German Deutschemarks......................... 573,560 U.S.$ 398,029 02/16/96 12,366
German Deutschemarks......................... 2,262,962 U.S.$1,569,322 02/16/96 47,700
German Deutschemarks......................... 168,149 U.S.$ 113,984 03/04/96 (810)
German Deutschemarks......................... 568,655 U.S.$ 383,680 03/04/96 941
German Deutschemarks......................... 1,276,059 U.S.$ 857,682 03/04/96 1,181
German Deutschemarks......................... 3,403,253 U.S.$2,296,392 03/04/96 5,802
Irish Punts.................................. 367,035 U.S.$ 574,210 02/01/96 180
Japanese Yen................................. 20,000,000 U.S.$ 190,758 02/16/96 (3,195)
Japanese Yen................................. 87,772,412 U.S.$ 841,296 02/16/96 (18,155)
Japanese Yen................................. 184,088,431 U.S.$1,756,569 02/16/96 (30,164)
Japanese Yen................................. 41,000,000 U.S.$ 383,680 03/04/96 1,775
Japanese Yen................................. 92,000,000 U.S.$ 857,682 03/04/96 (7,241)
Netherland Guilders.......................... 1,743,132 U.S.$1,055,612 03/04/96 8,623
Spanish Pesetas.............................. 48,880,222 U.S.$ 389,515 02/01/96 (2,170)
-------
$ 23,161
-------
-------
</TABLE>
See accompanying notes to financial statements
30
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--92.89%
AEROSPACE--5.91%
6,900 Boeing Company......................................................... $ 535,613
27,000 Lockheed Martin Corporation............................................ 2,035,125
-----------
2,570,738
-----------
AGRICULTURE--0.88%
6,000 Campbell Soup Company.................................................. 380,250
-----------
BANKS--7.79%
32,700 Citicorp............................................................... 2,415,712
5,200 Comerica Incorporated.................................................. 206,050
3,700 Magna Group Incorporated............................................... 84,637
5,600 State Street Boston Corporation........................................ 254,100
13,000 U.S. Bancorp........................................................... 427,375
-----------
3,387,874
-----------
BEVERAGES--1.15%
19,200 Coca-Cola Enterprises Incorporated..................................... 499,200
-----------
BUSINESS MACHINES--1.09%
8,000 Seagate Technology Incorporated *...................................... 474,000
-----------
CHEMICALS--1.18%
20,800 Lyondell Petrochemical Company......................................... 512,200
-----------
CONTAINERS--0.71%
21,600 Owens Illinois Incorporated*........................................... 307,800
-----------
COSMETICS--3.11%
17,100 Avon Products Incorporated............................................. 1,350,900
-----------
DRUGS, MEDICINE--9.50%
19,500 Allergan Incorporated.................................................. 648,375
15,600 Alza Corporation*...................................................... 440,700
1,800 Biogen Incorporated*................................................... 126,450
12,900 Forest Labratories Incorporated*....................................... 696,600
2,500 Genzyme Corporation*................................................... 189,688
11,800 Pfizer Incorporated.................................................... 811,250
22,500 Schering Plough Corporation............................................ 1,217,813
-----------
4,130,876
-----------
ELECTRIC UTILITIES--3.23%
20,800 CMS Energy Corporation................................................. 647,400
1,700 Centerior Energy Corporation........................................... 15,088
21,000 Entergy Corporation.................................................... 622,125
4,000 Illinova Corporation................................................... 119,500
-----------
1,404,113
-----------
ELECTRONICS--3.23%
24,800 Honeywell Incorporated................................................. 1,261,700
8,200 National Semiconductor Corporation*.................................... 141,450
-----------
1,403,150
-----------
GAS UTILITIES--2.55%
30,000 Enron Corporation...................................................... 1,110,000
-----------
</TABLE>
31
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
HEALTHCARE--3.25%
11,800 Bard C R Incorporated.................................................. $ 413,000
7,600 Beckman Instruments Incorporated New................................... 266,000
6,800 Health Care and Retirement Corporation*................................ 249,050
12,400 Manor Care Incorporated................................................ 486,700
-----------
1,414,750
-----------
HOTELS/RESTAURANTS--0.17%
5,600 Brinker International Incorporated*.................................... 72,100
-----------
IRON & STEEL--1.42%
7,800 Birmingham Steel Corporation........................................... 128,700
11,300 Inland Steel Industries Incorporated................................... 323,463
11,300 LTV Corporation New*................................................... 166,675
-----------
618,838
-----------
LEISURE, LUXURY--2.64%
35,600 Mattel Incorporated.................................................... 1,148,100
-----------
LIFE INSURANCE--1.26%
7,200 Transamerica Corporation............................................... 548,100
-----------
MEDIA--0.19%
2,800 American Mobile Satellite Corporation*................................. 83,300
-----------
MISCELLANEOUS--0.05%
950 Schweitzer Mauduit International Incorporated*......................... 23,631
-----------
MOTOR VEHICLES--1.31%
19,200 Ford Motor Company..................................................... 568,800
-----------
OIL REFINING/DISTRIBUTION--0.87%
3,400 Tosco Corporation...................................................... 142,375
8,300 Ultramar Corporation................................................... 234,475
-----------
376,850
-----------
OIL SERVICES--1.86%
6,400 Cooper Cameron Corporation*............................................ 238,400
8,100 Schlumberger Ltd....................................................... 568,012
-----------
806,412
-----------
OTHER INSURANCE--8.54%
11,700 Aetna Life & Casualty Company.......................................... 871,650
23,800 Aon Corporation........................................................ 1,294,125
9,500 CIGNA Corporation...................................................... 1,126,937
7,400 Old Republic International Corporation................................. 259,925
10,000 USF&G Corporation...................................................... 160,000
-----------
3,712,637
-----------
PAPER--2.97%
14,400 Kimberly Clark Corporation............................................. 1,161,000
4,550 Westvaco Corporation................................................... 131,950
-----------
1,292,950
-----------
POLLUTION CONTROL--1.66%
24,200 WMX Technologies Incorporated.......................................... 722,975
-----------
</TABLE>
32
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
PRODUCERS' GOODS--2.03%
4,600 Boston Technology Incorporated*........................................ $ 62,675
3,100 Comverse Technology Incorporated*...................................... 60,062
2,100 Octel Communications Corporation*...................................... 77,175
4,500 Pentair Incorporated................................................... 236,250
3,400 Raychem Corporation.................................................... 227,375
5,300 Timken Company......................................................... 219,287
-----------
882,824
-----------
PUBLISHING--1.75%
12,000 Gannett Incorporated................................................... 762,000
-----------
RAILROAD--4.10%
21,800 Burlington Northern Sante Fe Incorporated.............................. 1,784,875
-----------
RETAIL (ALL OTHER)--3.67%
27,100 Federated Department Stores Incorporated*.............................. 731,700
18,000 Melville Corporation................................................... 513,000
10,100 Walgreen Company....................................................... 352,237
-----------
1,596,937
-----------
RETAIL (FOOD)--1.29%
31,100 Food Lion Incorporated................................................. 174,938
11,100 Kroger Company*........................................................ 385,725
-----------
560,663
-----------
SERVICES--4.68%
22,400 Automatic Data Processing, Incorporated................................ 893,200
11,560 First Data Corporation................................................. 817,870
7,600 Interpublic Group of Companies, Incorporated........................... 323,000
-----------
2,034,070
-----------
SOAP, HARDWARE--1.33%
18,400 Dial Corporation....................................................... 579,600
-----------
TELEPHONE & TELECOMMUNICATIONS--3.39%
19,100 Nextel Communications Incorporated*.................................... 262,625
28,100 Sprint Corporation..................................................... 1,211,813
-----------
1,474,438
-----------
TIRE & RUBBER--1.53%
13,900 Goodyear Tire and Rubber Company....................................... 665,463
-----------
TOBACCO--2.60%
5,700 Philip Morris Companies Incorporated................................... 530,100
18,500 RJR Nabisco Holdings Corporation....................................... 601,250
-----------
1,131,350
-----------
Total Common Stocks (cost--$36,753,310)............................................ 40,392,764
-----------
PREFERRED STOCKS--0.095%
TOBACCO--0.95%
62,200 RJR Nabisco Holdings Corporation (cost--$394,974)...................... 412,075
-----------
</TABLE>
33
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- --------------- -----------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS--0.16%
$ 70 U.S. Treasury Bills (cost--$68,800)...... 05/30/96 4.860 to 5.340% $ 68,861
-----------
REPURCHASE AGREEMENT--4.67%
2,032 Repurchase Agreement dated 01/31/96 with
State Street Bank & Trust Company,
collateralized by $1,474,215 U.S.
Treasury Bonds, 9.250%, due 02/15/16;
proceeds: $2,032,282 (cost--$2,032,000) 02/01/96 5.000 2,032,000
-----------
Total Investments (cost--$39,249,084)--98.67%........ 42,905,700
577,292
Other assets in excess of liabilities--1.33%......... -----------
$43,482,992
Net Assets--100.00%.................................. -----------
-----------
</TABLE>
- ------------
<TABLE>
<S> <C>
* Non-income producing security
</TABLE>
FUTURES CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF IN EXPIRATION UNREALIZED
CONTRACTS CONTRACTS TO RECEIVE EXCHANGE FOR DATE APPRECIATION
- --------- -------------------------------------- ------------ --------------- ------------
<C> <S> <C> <C> <C>
March 1996 S&P 500 Futures
4 Contracts........................... $ 1,275,900 March 15, 1996 $ 42,575
------------
------------
</TABLE>
See accompanying notes to financial statements
34
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- --------------------------------------------------------------------------------
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS--93.60%
AEROSPACE--2.71%
8,100 Boeing Company........................................................ $ 628,763
3,700 Lockheed Martin Corporation........................................... 278,887
-----------
907,650
-----------
AGRICULTURE, FOODS--4.14%
14,900 Philip Morris Company................................................. 1,385,700
-----------
APPAREL, TEXTILES--4.29%
13,100 Nike, Incorporated.................................................... 913,725
15,500 Sara Lee Corporation.................................................. 523,125
-----------
1,436,850
-----------
BANKS--2.28%
14,900 Bank of New York, Incorporated........................................ 763,625
-----------
BEVERAGES--1.96%
11,000 PepsiCo, Incorporated................................................. 655,875
-----------
BUSINESS MACHINES--11.31%
7,700 ADC Telecommunications, Incorporated*................................. 297,412
12,400 Bay Networks, Incorporated*........................................... 527,000
6,600 Cascade Communications Corporation*................................... 516,450
8,100 Compaq Computer Corporation*.......................................... 381,712
5,300 Fore Systems*......................................................... 290,175
6,400 Hewlett Packard Company............................................... 542,400
6,100 Seagate Technology*................................................... 361,425
19,000 3 Com Corporation*.................................................... 871,625
-----------
3,788,199
-----------
CHEMICALS--8.88%
11,900 Allied Signal, Incorporated........................................... 593,513
9,200 Grace W R & Company................................................... 566,950
11,000 Hercules, Incorporated................................................ 607,750
5,900 Monsanto Company...................................................... 768,475
12,900 Praxair, Incorporated................................................. 438,600
-----------
2,975,288
-----------
COSMETICS--2.33%
9,300 Procter & Gamble Company.............................................. 781,200
-----------
DRUGS, MEDICINE--8.86%
8,600 Johnson & Johnson..................................................... 825,600
14,900 Merck & Company, Incorporated......................................... 1,046,725
12,100 Pfizer Incorporated................................................... 831,875
4,900 Schering Plough Corporation........................................... 265,213
-----------
2,969,413
-----------
</TABLE>
35
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- --------------------------------------------------------------------------------
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
ELECTRONICS--2.20%
8,800 KLA Instruments Corporation*.......................................... $ 259,600
6,400 LSI Logic Corporation*................................................ 180,000
13,500 Teradyne, Incorporated*............................................... 298,688
-----------
738,288
-----------
HEALTH (NON-DRUG)--6.62%
14,900 Biomet, Incorporated*................................................. 279,375
8,200 Boston Scientific Corporation*........................................ 420,250
7,700 Guidant Corporation................................................... 353,237
8,300 Medtronic, Incorporated............................................... 474,138
11,000 United Healthcare Corporation......................................... 691,625
-----------
2,218,625
-----------
HOTELS, RESTAURANTS--2.65%
12,600 Boston Chicken, Incorporated*......................................... 428,400
4,700 Hospitality Franchise Systems, Incorporated*.......................... 390,100
6,000 Host Marriott Corporation*............................................ 69,000
-----------
887,500
-----------
MEDIA--6.96%
31,800 Comcast Corporation, Class A Special.................................. 639,975
16,600 Tele Communications, Incorporated New Common Ser. A*.................. 454,425
32,500 Tele Communications, Incorporated TCI A Group*........................ 686,563
13,300 Time Warner, Incorporated............................................. 551,950
-----------
2,332,913
-----------
MORTGAGE FINANCING--2.19%
21,300 Federal National Mortgage Association................................. 734,850
-----------
OTHER INSURANCE--2.11%
9,500 Aetna Life & Casualty Company......................................... 707,750
-----------
PAPER--1.61%
5,584 Kimberly Clark Corporation............................................ 450,210
4,500 Riverwood International Corporation................................... 88,875
-----------
539,085
-----------
PRODUCERS' GOODS--3.27%
3,700 Emerson Electronics Company........................................... 309,875
4,700 Sundstrand Corporation................................................ 324,300
4,500 United Technologies Corporation....................................... 461,813
-----------
1,095,988
-----------
</TABLE>
36
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
RETAIL (ALL OTHER)--2.60%
11,400 Autozone, Incorporated*............................................... $ 275,025
12,400 Rite Aid Corporation.................................................. 398,350
8,100 Staples, Incorporated*................................................ 199,462
-----------
872,837
-----------
RETAIL (FOOD)--1.03%
15,700 General Nutrition Company, Incorporated*.............................. 343,438
-----------
SERVICES--11.46%
6,400 America Online, Incorporated*......................................... 286,400
12,900 CUC International, Incorporated*...................................... 475,687
9,100 Computer Associates International, Incorporated....................... 622,212
8,640 First Data Corporation................................................ 611,280
4,800 HBO & Company......................................................... 403,200
10,900 Informix Corporation*................................................. 363,787
9,500 Manpower, Incorporated................................................ 255,312
7,700 Peoplesoft, Incorporated*............................................. 365,750
10,500 Service Corporation, International.................................... 455,438
-----------
3,839,066
-----------
SOAPS, HARDWARE--2.21%
13,800 Gillette Company...................................................... 740,025
-----------
TELEPHONE, TELEGRAPH--1.93%
22,600 MCI Communications Corporation........................................ 646,925
-----------
Total Common Stocks (cost--$28,806,501)............................................ 31,361,090
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- --------- -------------------- ---------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--6.27%
$ 2,100 Repurchase Agreement dated 01/31/96 with
State Street Bank & Trust Company,
collateralized by $1,523,550 U.S.
Treasury Bonds, 9.250%, due 02/15/16;
proceeds: $2,100,292 (cost--$2,100,000).. 02/01/96 5.000% 2,100,000
-----------
Total Investments (cost--$30,906,501)--99.87%........ 33,461,090
Other assets in excess of liabilities--0.13%......... 42,805
-----------
Net Assets--100.00%.................................. $33,503,895
-----------
-----------
</TABLE>
- ------------
* Non-income producing security
See accompanying notes to financial statements
37
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--82.90%
AEROSPACE--0.69%
7,700 Thiokol Corporation..................................................... $ 272,387
------------
AGRICULTURE, FOOD--1.39%
1,300 AG Service America, Incorporated*....................................... 13,325
3,500 Cagle's Incorporated.................................................... 61,250
1,800 Chock Full of Nuts Corporation.......................................... 9,675
1,575 ERLY Industries Incorporated*........................................... 11,025
1,900 Hain Food Group Incorporated*........................................... 6,531
7,200 Hudson Foods Incorporated............................................... 119,700
6,500 International Multifoods Incorporated................................... 120,250
1,400 Orange Company, Incorporated New........................................ 12,250
6,800 Pilgrims Pride Corporation.............................................. 51,000
1,900 Sanderson Farms Incorporated............................................ 20,900
2,800 Sylvan, Incorporated*................................................... 34,300
7,700 The Morningstar Group Incorporated*..................................... 63,525
1,300 Thorn Apple Valley Incorporated*........................................ 20,475
------------
544,206
------------
AIR TRANSPORT--0.12%
6,500 Tower Air Incorporated.................................................. 47,938
------------
APPAREL, TEXTILES--2.70%
2,100 Chic By HIS Incorporated*............................................... 9,450
30,500 Collins & Aikman Products Company*...................................... 209,688
750 Conso Products Company.................................................. 13,500
3,500 Crown Crafts, Incorporated.............................................. 35,437
7,600 Culp, Incorporated...................................................... 76,000
2,100 Cyrk Incorporated*...................................................... 26,512
6,200 Deckers Outdoor Corporation*............................................ 38,750
1,000 Decorator Industries, Incorporated...................................... 8,000
6,100 Dyersburg Corporation................................................... 28,212
2,700 ERO Incorporated*....................................................... 16,537
2,100 Fieldcrest Cannon, Incorporated*........................................ 39,375
1,100 Fuqua Enterprises Incorporated*......................................... 20,212
5,100 Galey & Lord Incorporated*.............................................. 48,450
7,200 Guilford Mills, Incorporated............................................ 153,900
700 Hampshire Group, Ltd.................................................... 7,525
1,400 Hyde Athletic Industries, Incorporated*................................. 5,075
3,200 Johnston Industries Incorporated........................................ 26,400
13,700 Justin Industries, Incorporated......................................... 148,987
1,600 K-Swiss Incorporated.................................................... 16,400
700 LAT Sportswear Incorporated*............................................ 1,662
2,300 Maxwell Shoes Incorporated*............................................. 12,075
3,400 Norton McNaughton Incorporated*......................................... 24,650
3,400 Quaker Fabric Corporation New*.......................................... 28,050
500 Rocky Shoes & Boots, Incorporated*...................................... 3,000
2,600 Superior Surgical Manufacturing Company, Incorporated................... 26,000
1,000 Supreme International Corporation*...................................... 12,000
2,600 Tandy Brands Accessories, Incorporated*................................. 14,950
2,000 Worldtex, Incorporated*................................................. 10,250
------------
1,061,047
------------
</TABLE>
38
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
BANKS--4.19%
6,500 1st. Washington Bancorp Incorporated.................................... $ 49,562
500 American Bank Connecticut Waterbury..................................... 13,250
4,000 BancorpSouth Incorporated............................................... 99,000
3,460 CVB Financial Corporation*.............................................. 47,575
4,100 Commerce Bancorp, Incorporated.......................................... 85,075
1,400 First Bank of Illinois Company.......................................... 44,100
2,800 First Citizens Banc Shares, Incorporated*............................... 154,000
3,100 First Commonwealth Financial Corporation*............................... 60,062
1,500 HUBCO, Incorporated..................................................... 33,562
2,300 Hancock Holding Company................................................. 86,250
500 Interchange Financial Services Incorporated............................. 10,687
6,400 Long Island Bancorp Incorporated........................................ 165,200
700 Newmill Bancorp Incorporated............................................ 4,900
4,200 North Fork Bank Corporation............................................. 108,675
7,200 One Valley Bancorp of West Virginia Incorporated........................ 225,000
4,400 Provident Bancorp, Incorporated......................................... 209,000
700 Redwood Empire Bancorp.................................................. 6,300
8,000 Trustmark Corporation................................................... 163,000
1,800 Westamerica Bancorporation.............................................. 80,100
------------
1,645,298
------------
BEVERAGES--0.09%
1,500 National Beverage Corporation*.......................................... 9,750
3,300 Todhunter International Incorporated*................................... 25,575
------------
35,325
------------
BUILDING--0.57%
1,500 Giant Cement Holding, Incorporated...................................... 17,250
6,200 Lone Star Industries, Incorporated...................................... 167,400
2,800 Simpson Manufacturing Incorporated...................................... 39,200
------------
223,850
------------
BUSINESS MACHINES--0.93%
3,500 Ameridata Technologies, Incorporated.................................... 33,687
1,500 Banctec, Incorporated*.................................................. 27,000
2,800 Bell Microproducts, Incorporated........................................ 19,600
5,500 Cherry Corporation*..................................................... 52,250
1,600 Encad Incorporated*..................................................... 29,200
2,000 Genicom Corporation..................................................... 10,000
1,700 Gradco Systems, Incorporated*........................................... 5,525
1,100 Interface Systems Incorporated.......................................... 18,425
500 Pomeroy Computer Resources Incorporated*................................ 7,250
1,000 Printronix Corporation.................................................. 23,000
4,600 Proteon, Incorporated*.................................................. 29,325
1,600 Proxima Corporation*.................................................... 40,000
6,500 Sequoia Systems, Incorporated*.......................................... 29,250
1,000 Software Spectrum, Incorporated*........................................ 19,250
3,600 Southern Electronics Corporation*....................................... 20,700
------------
364,462
------------
</TABLE>
39
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
CHEMICALS--3.14%
1,200 AEP Industries, Incorporated............................................ $ 26,400
2,310 Aceto Corporation....................................................... 37,537
500 American Vanguard Corporation........................................... 2,625
2,700 Applied Extrusion Technologies, Incorporated*........................... 29,700
2,500 Bairnco Corporation..................................................... 17,500
7,700 First Mississippi Corporation........................................... 189,612
8,100 Foamex International Incorporated*...................................... 53,663
14,100 Gencorp Incorporated.................................................... 169,200
9,400 Griffon Corporation*.................................................... 86,950
5,600 Rexene Corporation...................................................... 59,500
4,700 Scotts Liquid Gold Incorporated......................................... 12,337
8,800 Spartech Corporation.................................................... 62,700
5,600 Stepan Chemical Company................................................. 106,400
23,500 Sterling Chemicals, Incorporated*....................................... 279,063
1,000 Total Containment Incorporated*......................................... 4,000
2,500 Triple S Plastics, Incorporated*........................................ 13,750
1,200 Unitil Corporation...................................................... 28,500
2,700 Wynn's International Incorporated....................................... 55,012
------------
1,234,449
------------
COAL AND URANIUM--0.38%
7,100 Ashland Coal Incorporated............................................... 149,987
------------
CONSTRUCTION--2.87%
5,200 American Woodmark Corporation*.......................................... 20,800
1,700 Ameron, Incorporated.................................................... 63,537
200 Baltek Corporation...................................................... 1,700
2,900 Butler Manufacturing Company............................................ 100,412
3,300 Champion Enterprises, Incorporated*..................................... 93,225
900 Drew Industries Incorporated New*....................................... 12,375
1,600 Dycom Industries, Incorporated.......................................... 10,200
1,700 Eljer Industries, Incorporated*......................................... 16,787
3,300 Florida Rock Industries, Incorporated................................... 90,750
3,600 Genlyte Group, Incorporated*............................................ 27,000
2,300 Granite Construction Incorporated....................................... 68,425
2,700 Green AP Industries, Incorporated....................................... 49,950
2,300 ILC Technology Incorporated*............................................ 20,987
1,800 International Aluminum Corporation...................................... 51,750
1,200 Liberty Homes, Incorporated............................................. 12,900
5,400 Lilly Industries, Incorporated.......................................... 69,525
600 Lindal Cedar Homes, Incorporated*....................................... 2,475
6,900 Medusa Corporation...................................................... 192,337
1,400 NCI Building Systems Incorporated*...................................... 39,463
2,300 Shelter Components Corporation.......................................... 32,775
500 Somerset Group, Incorporated............................................ 8,750
6,500 Southdown, Incorporated*................................................ 138,937
1,000 Temtex Industries Incorporated*......................................... 3,937
------------
1,128,997
------------
</TABLE>
40
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
CONSUMER DURABLES--2.09%
3,800 Campo Electronics, Appliances and Computers, Incorporated*.............. $ 11,400
1,400 Chromcraft Revington, Incorporated*..................................... 34,300
500 Craftmade International Incorporated.................................... 3,563
1,200 Creative Technical Services Corporation*................................ 1,200
1,300 Douglas & Lomason Company............................................... 14,950
500 EXX, Incorporated....................................................... 2,656
15,300 Fedders USA Incorporated................................................ 91,800
1,700 HMI Industries Incorporated............................................. 19,550
1,300 Happiness Express, Incorporated......................................... 5,037
2,600 Haverty Furniture Companies, Incorporated............................... 32,175
2,600 Image Industries Incorporated*.......................................... 27,300
1,000 International Jensen Incorporation*..................................... 8,250
1,300 Knape & Vogt Manufacturing Company...................................... 18,037
1,500 Koss Corporation........................................................ 8,812
5,700 Masland Corporation..................................................... 79,087
3,800 Rex Stores Corporation*................................................. 49,400
3,400 Rhodes, Incorporated New*............................................... 31,875
1,400 River Oaks Furniture Incorporated*...................................... 6,387
2,200 Roberds Incorporated*................................................... 17,600
4,000 Rowe Furniture Corporation.............................................. 16,500
1,200 Seaman Furniture Company, Incorporated*................................. 22,050
1,300 Stanley Furniture Company, Incorporated*................................ 11,700
11,700 Sun Television & Appliances, Incorporated............................... 48,262
6,900 The Good Guys, Incorporated*............................................ 61,237
3,400 Toro Company............................................................ 118,150
3,700 Ultimate Electronics Incorporated*...................................... 25,900
2,600 Variflex Incorporated................................................... 20,150
2,100 Virco Manufacturing Corporation......................................... 19,425
2,300 Winsloew Furniture Incorporated......................................... 14,375
------------
821,128
------------
CONSUMER NON-DURABLES--0.04%
1,500 Griffin Gaming & Entertainment, Incorporated............................ 16,687
------------
CONTAINERS--0.14%
600 Holopak Technologies Incorporated....................................... 2,850
3,500 US Can Corporation*..................................................... 51,625
------------
54,475
------------
COSMETICS--0.12%
1,500 Beauticontrol Cosmetics, Incorporated................................... 12,750
3,900 Jean Phillippe Fragrances*.............................................. 30,712
------------
43,462
------------
DOMESTIC PETROLEUM--0.10%
800 Penn Virginia Corporation............................................... 27,200
800 Prima Energy Corporation*............................................... 10,100
------------
37,300
------------
</TABLE>
41
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
DRUGS, MEDICINE--0.47%
2,700 Allou Health & Beauty Care, Incorporated*............................... $ 16,200
4,700 Bindley Western Industries, Incorporated................................ 82,837
2,700 Chattem, Incorporated*.................................................. 13,837
6,000 Herbalife International Incorporated.................................... 65,250
800 Sullivan Dental Products Incorporated*.................................. 8,300
------------
186,424
------------
ELECTRIC UTILITIES--2.52%
6,400 Central Hudson Gas & Electric Corporation............................... 199,200
7,900 Central Vermont Public Service Corporation.............................. 107,637
4,100 Commonwealth Energy Systems*............................................ 191,675
8,800 Eastern Utilities Associates............................................ 209,000
600 Green Mountain Power Corporation........................................ 16,650
500 Maine Public Service Company............................................ 10,625
2,000 Public Service Company of New Mexico*................................... 35,750
5,300 United Illuminating Company............................................. 204,712
800 Upper Peninsula Energy Corporation...................................... 14,600
------------
989,849
------------
ELECTRONICS--1.16%
6,000 Alliance Semiconductor Corporation...................................... 64,500
1,600 Aurora Electronics, Incorporated........................................ 2,800
2,100 Bell Industries, Incorporated*.......................................... 46,725
1,200 CTS Corporation......................................................... 46,200
1,200 Circuit Systems, Incorporated*.......................................... 6,900
1,100 FLIR Systems Incorporated*.............................................. 11,550
4,500 First Alert, Incorporated............................................... 43,312
1,000 HEI, Incorporated*...................................................... 6,000
4,500 Integrated Circuit Systems Incorporated*................................ 46,125
400 M-Wave Incorporated*.................................................... 3,300
4,900 Numerex Corporation N.Y.*............................................... 25,112
4,700 OPTI, Incorporated*..................................................... 44,650
1,100 O.I. Corporation*....................................................... 3,575
6,600 Pioneer Standard Electronics, Incorporated.............................. 77,550
1,600 Quality Semiconductor Incorporated*..................................... 9,400
900 Sigmatron International, Incorporated*.................................. 5,625
1,000 Videonics, Incorporated................................................. 11,125
------------
454,449
------------
ENGINEERING & CONSTRUCTION--0.17%
1,100 American Buildings Company New.......................................... 24,819
1,333 MYR Group, Incorporated................................................. 13,497
2,600 Starrett Corporation.................................................... 26,975
------------
65,291
------------
</TABLE>
42
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
FINANCIAL SERVICES--0.05%
727 Investors Financial Services Corporation*............................... $ 16,448
140 Investors Financial Services Corporation, Class A*...................... 3,165
------------
19,613
------------
FOREST PRODUCTS--0.90%
4,600 ABT Building Products Corporation*...................................... 65,550
6,100 Cameron Ashley Building Incorporated*................................... 61,000
1,300 National Picture & Frame Company*....................................... 12,187
3,000 Patrick Industries Incorporated......................................... 34,500
800 Tranzonic Companies*.................................................... 9,800
7,900 Triangle Pacific Corporation*........................................... 138,250
2,500 Universal Forest Products, Incorporated................................. 20,625
1,000 Varitronic Systems, Incorporated*....................................... 12,750
------------
354,662
------------
GAS UTILITIES--0.37%
1,400 Alatenn Resources, Incorporated......................................... 29,050
500 Chesapeake Utilities Corporation........................................ 7,937
2,000 Connecticut Energy Corporation.......................................... 42,000
2,200 Energen Corporation..................................................... 54,725
800 Providence Energy Corporation........................................... 13,500
------------
147,212
------------
HEALTH (NON-DRUG)--2.42%
2,500 Advanced Medical Incorporated*.......................................... 6,875
1,700 Advocate Services, Incorporated*........................................ 20,825
1,500 Allied Healthcare Products, Incorporated................................ 17,531
600 Customedix Corporation*................................................. 1,162
4,300 Geriatric & Medical Companies, Incorporated*............................ 9,137
2,000 Home Theater Products International Incorporated*....................... 3,750
8,900 Integrated Health Services, Incorporated................................ 222,500
500 Lakeland Industries, Incorporated*...................................... 2,141
1,600 Medical Resources Incorporated.......................................... 8,600
800 Medical Technology Systems Incorporated*................................ 450
700 NMR Of America, Incorporated*........................................... 2,188
19,500 Novacare Incorporated*.................................................. 117,000
3,100 Prime Medical Services, Incorporated*................................... 24,412
7,700 Quantum Health Resources, Incorporated*................................. 82,775
1,000 Sterile Concepts Holdings, Incorporated................................. 12,875
19,900 Sun Healthcare Group Incorporated*...................................... 276,112
4,400 Sunrise Medical, Incorporated*.......................................... 83,050
1,000 Transworld Home Healthcare*............................................. 10,000
2,500 United Wisconsin Services Incorporated.................................. 50,625
------------
952,008
------------
</TABLE>
43
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
HOTELS, RESTAURANTS--1.57%
1,800 Black Hawk Gaming and Development Incorporated*......................... $ 9,450
3,800 Chart House Enterprises Incorporated*................................... 22,325
2,900 Davco Restaurants Incorporated*......................................... 26,462
2,000 ELXSI Corporation*...................................................... 12,000
1,600 El Chico Restaurants, Incorporated*..................................... 13,000
4,600 Hollywood Casino Corporation............................................ 20,700
2,300 Krystal Company*........................................................ 10,925
6,900 Morrison Restaurants Incorporated....................................... 110,400
10,400 Players International, Incorporated*.................................... 94,900
22,600 Ryan's Family Steak Houses, Incorporated*............................... 158,200
2,200 Sholodge, Incorporated*................................................. 25,850
12,700 Shoney's, Incorporated*................................................. 104,775
1,500 Taco Cabana Incorporated*............................................... 9,187
------------
618,174
------------
HOUSEHOLD--0.29%
2,700 Celebrity Incorporated*................................................. 9,745
8,300 Mikasa Incorporated*.................................................... 104,787
------------
114,532
------------
IRON & STEEL--5.65%
2,400 Atchinson Casting Corporation*.......................................... 26,400
4,900 Bayou Steel Corporation*................................................ 19,906
13,800 Birmingham Steel Corporation............................................ 227,700
3,600 Chaparral Steel Company................................................. 56,700
8,000 Cleveland Cliffs Incorporated........................................... 349,000
2,200 Cold Metal Products Incorporated*....................................... 10,725
2,000 Insteel Industries, Incorporated........................................ 14,250
16,200 J&L Specialty Steel Incorporated........................................ 287,550
1,800 Kentucky Electric Steel Incorporated*................................... 13,387
2,100 Laclede Steel Company*.................................................. 13,650
5,200 Lukens, Incorporated.................................................... 142,350
1,000 National Standard Company............................................... 9,500
22,200 National Steel Corporation*............................................. 305,250
1,500 New Jersey Steel Corporation*........................................... 12,375
4,500 Olympic Steel Incorporated*............................................. 41,625
2,300 Roanoke Electric Steel Corporation...................................... 36,225
8,800 Rouge Steel Company..................................................... 209,000
3,200 Schnitzer Steel Industries Incorporated................................. 96,800
4,600 Steel of West Virginia Incorporated..................................... 47,725
3,500 Sudbury, Incorporated*.................................................. 28,437
1,700 Texas Industries, Incorporated.......................................... 95,412
6,300 Titan Wheel International............................................... 103,950
16,400 Weirton Steel Corporation*.............................................. 71,750
------------
2,219,667
------------
</TABLE>
44
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
<CAPTION>
COMMON STOCKS--(CONTINUED)
<C> <S> <C>
LEISURE, LUXURY--1.49%
11,400 Aldila, Incorporated*................................................... $ 57,712
1,000 Baldwin Piano & Organ Company*.......................................... 12,750
3,200 Blount International Incorporated....................................... 89,600
7,700 Casino America Incorporated*............................................ 48,125
1,300 First Team Sports Incorporated*......................................... 18,200
6,800 Fossil Incorporated*.................................................... 45,900
2,100 Johnson Worldwide Associates, Incorporated*............................. 42,787
1,300 Michael Anthony Jewelers, Incorporated*................................. 3,819
800 North American Watch Corporation........................................ 14,900
4,600 Oneida Ltd.............................................................. 71,300
1,800 Oroamerica, Incorporated*............................................... 7,650
7,600 Outboard Marine Corporation............................................. 152,000
2,100 Rawlings Sporting Goods Company*........................................ 16,275
1,200 Swing 'n Slide Corporation*............................................. 6,075
------------
587,093
------------
LIFE INSURANCE--4.29%
3,100 Allied Life Financial Corporation....................................... 53,475
17,000 American Annuity Group Incorporated..................................... 204,000
6,000 American Heritage Life Investment Corporation........................... 138,000
4,400 Amvestors Financial Corporation......................................... 48,400
3,400 Delphi Financial Group, Incorporated*................................... 79,050
6,700 Home Beneficial Corporation............................................. 160,800
12,900 John Alden Financial Corporation........................................ 267,675
14,300 Life Partners Group Incorporated........................................ 187,687
5,500 Life RE Corporation..................................................... 134,062
8,200 Life USA Holdings Incorporated.......................................... 71,750
500 National Western Life Insurance Company*................................ 28,500
5,800 Security-Connecticut Company............................................ 145,000
6,300 Washington National Corporation......................................... 167,737
------------
1,686,136
------------
MACHINES--0.01%
1,200 Stevens International Incorporated*..................................... 4,200
------------
MEDIA--0.65%
1300 All American Communication Incorporation*............................... 14,137
2,000 Applied Signal Technology*.............................................. 8,000
3,200 Carmike Cinemas Incorporated*........................................... 74,400
1,400 Communications Cent Incorporated*....................................... 8,050
400 Datron Systems Incorporated*............................................ 5,400
10,000 Handleman Company....................................................... 63,750
3,300 Image Entertainment Incorporated*....................................... 22,275
2,000 Microdyne Corporation................................................... 14,500
3,300 Quixote Corporation..................................................... 25,575
1,100 Raven Industries, Incorporated.......................................... 21,175
------------
257,262
------------
MISCELLANEOUS FINANCE--2.56%
2,900 Alex Brown, Incorporated................................................ 141,375
600 CTL Credit, Incorporated................................................ 7,650
1,000 Colonial Bancgroup, Incorporated........................................ 32,500
</TABLE>
45
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
MISCELLANEOUS FINANCE--(CONCLUDED)
1,600 Dwyer Group Incorporated*............................................... $ 4,400
3,600 Eaton Vance Corporation................................................. 115,200
1,650 Inter-Regional Financial Group Incorporated............................. 35,887
1,500 Interstate Johnson Lane, Incorporated................................... 17,250
1,000 Jefferies Group, Incorporated........................................... 47,750
3,000 Kaye Group, Incorporated................................................ 23,250
3,500 Morgan Keegan, Incorporated............................................. 44,187
4,500 Piper Jaffray Companies, Incorporated................................... 61,875
2,500 RCBS Financial, Incorporated............................................ 55,000
7,800 Raymond James Financial, Incorporated................................... 171,600
600 Refac Technology Development Corporation*............................... 3,600
900 Ryan Beck & Company..................................................... 6,525
600 Scott & Stringfellow Financial, Incorporated............................ 8,775
4,800 TFC Enterprises, Incorporated........................................... 22,200
600 Trans Leasing International, Incoporation............................... 2,062
2,300 Value Line Incorporated................................................. 89,700
2,200 White River Corporation*................................................ 80,300
2,100 Winthrop Resources Corporation.......................................... 35,700
------------
1,006,786
------------
MISCELLANEOUS MINING & METALS--1.21%
3,200 AFC Cable Systems, Incorporated*........................................ 46,000
2,100 Castech Aluminum Group, Incorporated.................................... 28,612
7,900 Commercial Metals Company............................................... 203,425
800 Davis Water & Waste Industries, Incorporated............................ 11,800
17,300 Envirosource Incorporated*.............................................. 62,712
5,100 Foster LB Company*...................................................... 19,762
2,200 Friedman Industries, Incorporated....................................... 8,112
3,100 Global Industrial Technologies Incorporated*............................ 70,525
700 United States Lime & Minerals, Incorporated............................. 7,087
1,530 Zemex Corporation*...................................................... 14,918
------------
472,953
------------
MORTGAGE FINANCING--0.17%
2,500 North American Mortgage Company......................................... 65,625
------------
MOTOR VEHICLES--4.11%
2,310 Autocam Corporation*.................................................... 27,143
16,300 Breed Technologies, Incorporated........................................ 275,063
4,800 Capco Automotive Products, Incorporated................................. 34,800
3,300 Coachmen Industries, Incorporated....................................... 75,075
2,600 Coast Distribution Systems*............................................. 18,200
2,800 Defiance, Incorporated*................................................. 15,400
2,000 Delfecta Shield Corporation............................................. 7,500
4,600 Excel Industries, Incorporated.......................................... 56,925
1,700 Hayes Wheels International, Incorporated................................ 41,225
1,200 Hilite Industries Incorporated*......................................... 13,200
2,600 Insurance Auto Auctions Incorporated*................................... 27,625
1,200 Lund International Holdings, Incorporated*.............................. 15,900
1,100 Monaco Coach Corporation*............................................... 10,863
1,200 National R.V. Holdings Incorporated*.................................... 13,650
</TABLE>
46
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
MOTOR VEHICLES--(CONCLUDED)
1,200 Oshkosh Truck Corporation............................................... $ 18,000
3,400 R & B Incorporated*..................................................... 24,225
1,700 Republic Automotive Parts, Incorporated*................................ 22,950
400 Rexhall Industries, Incorporated*....................................... 2,000
3,300 Shiloh Industries Incorporated*......................................... 41,250
9,100 Simpson Industries, Incorporated........................................ 80,763
14,200 Smith AO Corporation.................................................... 356,775
5,500 Standard Motor Products Incorporated.................................... 82,500
11,000 Stant Corporation....................................................... 110,000
2,900 Starcraft Industries*................................................... 13,413
2,420 Supreme Industries, Incorporated*....................................... 19,511
10,100 TBC Corporation*........................................................ 71,963
4,000 Thor Industries, Incorporated........................................... 72,500
2,400 Walbro Corporation...................................................... 46,800
7,300 Williams Controls Incorporated*......................................... 18,250
------------
1,613,469
------------
OIL REFINING, DISTRIBUTION--0.48%
1,300 Adams Resources & Energy, Incorporated.................................. 8,938
4,800 KCS Energy Incorporated................................................. 69,000
1,100 Mercury Air Group, Incorporated......................................... 9,488
11,900 Tesoro Petroleum Corporation*........................................... 101,150
------------
188,576
------------
OIL SERVICE--0.14%
1,300 Global Industries Incorporated*......................................... 36,725
2,100 RPC Energy Service, Incorporated*....................................... 19,163
------------
55,888
------------
OTHER INSURANCE--7.57%
1,000 ACMAT Corporation*...................................................... 12,500
4,700 Acceptance Insurance Company, Incorporated*............................. 69,325
5,400 Alfa Corporation........................................................ 72,900
2,600 Allied Group Incorporated............................................... 97,500
3,100 American Eagle Group Incorporated....................................... 29,063
500 American Indemnity Financial Corporation................................ 5,000
2,800 American Travellers Corporation*........................................ 78,050
500 Amwest Insurance Group, Incorporated.................................... 7,438
9,000 Capitol American Financial Corporation.................................. 207,000
6,200 Capital Re Corporation.................................................. 187,550
1,600 Central Reserve Life Corporation........................................ 15,200
10,400 Citizens Corporation.................................................... 193,700
4,900 Commerce Group Incorporated*............................................ 94,938
1,600 Donegal Group Incorporated.............................................. 30,800
2,900 EMC Insurance Group, Incorporated....................................... 36,250
4,100 Enhance Financial Services Group Incorporated........................... 99,425
1,800 First Central Financial Corporation..................................... 11,363
3,000 Foremost Corporation of America......................................... 177,000
2,400 Fremont General Corporation*............................................ 86,400
3,045 Gainsco Incorporated.................................................... 35,398
9,600 Guaranty National Corporation New*...................................... 138,000
3,800 Harleysville Group Incorporated......................................... 114,000
</TABLE>
47
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
OTHER INSURANCE--(CONCLUDED)
1,800 Home State Holdings Incorporated*....................................... $ 17,325
8,100 Integon Corporation..................................................... 171,113
3,300 Intercargo Corporation.................................................. 30,525
1,700 JPE Incorporated*....................................................... 17,213
2,226 MAIC Holdings, Incorporated*............................................ 70,676
1,600 Meridian Insurance Group, Incorporated.................................. 22,800
2,300 Nac Re-Insurance Corporation............................................ 78,200
3,500 Nymagic Incorporated.................................................... 62,125
3,600 Orion Capital Corporation............................................... 161,100
5,900 PXRE Corporation........................................................ 154,875
2,900 Pacific Rim Holdings Company*........................................... 6,525
800 Pioneer Financial Services, Incorporated................................ 14,600
1,200 RLI Corporation......................................................... 30,300
3,100 Transnational Re Corporation............................................ 75,563
900 Trenwick Group Incorporated............................................. 48,825
2,400 UNICO American Healthcare Company....................................... 15,900
8,200 United Insurance Companies, Incorporated*............................... 188,600
1,300 Westbridge Capital Corporation*......................................... 8,450
------------
2,973,515
------------
PAPER--1.03%
23,400 Gaylord Container Corporation*.......................................... 257,400
2,700 Republic Group, Incorporated............................................ 37,800
5,500 Rock Tenn Company....................................................... 89,375
1,700 Specialty Paperboard Incorporated*...................................... 21,463
------------
406,038
------------
POLLUTION CONTROL--0.21%
1,200 GNI Group, Incorporated................................................. 6,750
1,900 Harding Lawson Associates Group Incorporated*........................... 13,538
2,500 Sevenson Environmental Services, Ltd.................................... 45,313
1,300 Smith Environmental Technologies Corporation*........................... 4,550
2,100 TRC Companies, Incorporated*............................................ 13,388
------------
83,539
------------
PRODUCERS' GOODS--6.42%
4,000 AAON Incorporated*...................................................... 21,500
5,500 ACME Metals Incorporated*............................................... 94,188
2,600 AM International, Incorporated New*..................................... 12,188
3,300 Aeroflex, Incorporated*................................................. 12,375
2,200 Allied Products Corporation............................................. 48,950
5,800 Amcast Industrial Corporation........................................... 108,025
2,300 American United Global Incorporated*.................................... 7,906
800 Amistar Corporation*.................................................... 5,200
2,800 Amtrol Incorporated..................................................... 46,200
5,200 Astec Industries, Incorporated*......................................... 52,000
1,300 Aztec Manufacturing Company............................................. 6,013
1,200 BTU International, Incorporated......................................... 6,900
2,800 Barnes Group Incorporated............................................... 116,550
6,900 Brenco Incorporated..................................................... 62,100
7,800 CMI Corporation*........................................................ 39,000
6,200 Cascade Corporation..................................................... 83,700
1,600 Chase Brass Industries, Incorporated.................................... 18,600
4,900 Citation Corporation.................................................... 55,738
</TABLE>
48
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
PRODUCERS' GOODS--(CONCLUDED)
10,400 Commercial Intertech Corporation........................................ $ 192,400
3,800 Core Industries Incorporated............................................ 49,875
10,700 Detroit Diesel Corporation*............................................. 197,950
2,000 Durakon Industries, Incorporated*....................................... 24,000
3,300 ECC International Incorporated*......................................... 33,000
2,900 Electroglas, Incorporated............................................... 59,813
2,700 Ellett Brothers Incorporated............................................ 19,575
3,200 Exide Electronics Group, Incorporated................................... 43,200
1,200 Farr Company*........................................................... 9,750
1,700 Foilmark, Incorporated.................................................. 7,225
2,500 Gasonics International Corporation...................................... 26,875
2,700 Gehl Company*........................................................... 18,900
2,300 Greenbrier Companies, Incorporated...................................... 24,438
525 Hein-Werner Corporation*................................................ 2,363
5,200 IMO Industries Incorporated*............................................ 31,200
700 Krug International Corporation*......................................... 2,800
3,700 Kysor Industrial Corporation............................................ 89,725
4,000 Lamson & Sessions Company*.............................................. 33,500
2,000 Lindberg Corporation.................................................... 16,000
1,100 McClain Industries, Incorporated*....................................... 4,538
500 McRae Industries, Incorporated.......................................... 3,938
3,800 Mestek, Incorporated*................................................... 48,925
3,800 Nacco Industries, Incorporated.......................................... 199,975
4,200 Nortek, Incorporated*................................................... 45,150
700 Pantech Resh & SWV Corporation.......................................... 2,713
5,600 Park Ohio Industries Incorporated*...................................... 78,400
800 Pitt-Des Moines, Incorporated........................................... 33,000
1,200 Portec, Incorporated*................................................... 11,700
1,100 Quad Systems Corporation*............................................... 8,525
6,900 Quanex Corporation...................................................... 142,313
2,600 Raymond Corporation*.................................................... 53,950
4,600 Scotsman Industries, Incorporated....................................... 82,225
800 Secom General Corporation............................................... 2,200
1,000 Speizman Industries, Incorporated*...................................... 2,750
3,400 Starrett LS Company..................................................... 82,025
1,200 Synalloy Corporation.................................................... 18,600
600 Twin Disc, Incorporated................................................. 13,200
500 Valley Forge Corporation................................................ 9,375
------------
2,523,224
------------
PUBLISHING--1.37%
6,500 Bowne & Company Incorporated............................................ 121,875
2,800 Devon Group, Incorporated New........................................... 81,200
1,400 Educational Insights, Incorporated*..................................... 6,300
9,400 Franklin Quest Company.................................................. 225,600
2,800 Graphic Industries, Incorporated........................................ 29,750
2,000 Plenum Publishing Corporation........................................... 73,000
------------
537,725
------------
</TABLE>
49
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
RAILROADS, TRANSIT--0.15%
3,600 Johnstown American Industries Incorporated*............................. $ 16,650
500 Providence & Worchester Railroad Company................................ 3,625
1,600 Varlen Corporation...................................................... 38,800
------------
59,075
------------
REAL PROPERTY--1.04%
1,300 Amrep Corporation*...................................................... 6,988
1,300 Continental Homes Holding Corporation................................... 28,600
2,700 Engle Homes, Incorporated............................................... 26,325
3,900 Fairfield Communities, Incorporated*.................................... 27,300
8,100 M.D.C. Holdings, Incorporated........................................... 57,713
7,000 Schuler Homes Incorporated*............................................. 56,875
2,900 US Home Corporation New*................................................ 81,200
1,000 Washington Homes, Incorporated New*..................................... 5,875
6,200 Webb Delaware Corporation............................................... 116,250
------------
407,126
------------
RETAIL (ALL OTHER)--6.04%
1,600 Advanced Marketing Services, Incorporated*.............................. 16,400
5,300 Ames Department Stores, Incorporated*................................... 8,281
2,600 Barry's Jewelers, Incorporated New*..................................... 8,775
6,300 Best Buy Company, Incorporated.......................................... 96,863
8,000 Big B, Incorporated..................................................... 80,000
5,300 Blair Corporation....................................................... 166,950
7,500 Bon Ton Stores, Incorporated*........................................... 35,625
2,600 Cache, Incorporated*.................................................... 8,775
3,300 Caldor Corporation*..................................................... 10,725
6,800 Carson Pirie Scott & Company*........................................... 121,550
14,700 Cash America International, Incorporated................................ 80,850
5,200 Catherines Stores Corporation*.......................................... 33,150
1,800 Cole National Corporation............................................... 19,350
2,900 DIY Home Warehouse Incorporated*........................................ 13,775
6,000 Designs, Incorporated*.................................................. 34,500
1,400 Elek-Tek, Incorporated*................................................. 4,375
2,500 Fabri-Centers of America, Incorporated*................................. 34,063
4,600 Finish Line, Incorporated*.............................................. 34,500
1,000 First Cash Incorporated*................................................ 3,688
2,000 Gantos Incorporated New*................................................ 4,250
2,860 Genovese Drug Stores, Incorporated...................................... 26,813
2,600 Goodys Family Clothing, Incorporated.................................... 20,150
2,600 Hi-Lo Automotive Incorporated*.......................................... 12,025
4,600 Hills Stores Company*................................................... 47,150
3,000 Inacom Corporation*..................................................... 46,500
500 Information International, Incorporated................................. 5,000
4,200 Intertan Incorporated*.................................................. 22,050
5,300 J. Baker, Incorporated.................................................. 24,181
3,600 Little Switzerland, Incorporated*....................................... 14,850
10,800 MacFrugals Bargains Closeout Incorporated*.............................. 149,850
</TABLE>
50
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
RETAIL (ALL OTHER)--(CONCLUDED)
10,400 Michaels Stores, Incorporated*.......................................... $ 132,600
900 Pamida Holdings Corporation*............................................ 2,531
14,300 Payless Cashways, Incorporated*......................................... 62,563
1,200 Schottenstein Homes Incorporated*....................................... 13,500
37,700 Service Merchandise Company, Incorporated*.............................. 179,075
16,400 Shopko Stores Incorporated.............................................. 192,700
8,300 Sports & Recreation, Incorporated*...................................... 42,538
8,600 Sportmart, Incorporated*................................................ 29,025
1,900 Strober Organization Incorporated....................................... 7,125
2,400 Strouds, Incorporated*.................................................. 10,200
8,500 The Cato Corporation New................................................ 59,500
6,900 The Dress Barn*......................................................... 64,688
2,400 Trak Auto Corporation*.................................................. 35,400
2,200 Travel Ports of America, Incorpotration................................. 5,500
13,900 Waban Incorporated*..................................................... 267,575
800 Wickes Lumber Company*.................................................. 5,200
3,200 Wolohan Lumber Company.................................................. 30,000
2,300 Younkers Incorporated*.................................................. 49,163
------------
2,373,897
------------
RETAIL (FOOD)--0.55%
1,904 Carr Gottstein Foods Company*........................................... 9,521
3,500 Marsh Supermarkets Incorporated*........................................ 45,500
6,100 Smiths Food & Drug Centers, Incorporated................................ 154,788
1,300 Western Beef, Incorporated*............................................. 6,663
------------
216,472
------------
SERVICES--2.92%
1,300 Amplicon Incorporated................................................... 18,525
6,400 CDI Corporation*........................................................ 137,600
1,300 Computer Data Systems, Incorporated*.................................... 19,338
2,300 EA Engineering Science & Technology, Incorporated*...................... 9,488
700 Ecology & Environment, Incorporated..................................... 6,038
500 Heist CH Corporation.................................................... 3,563
8,900 Interpool, Incorporated*................................................ 149,075
2,000 Isomedix Incorporated*.................................................. 30,250
8,400 Kinder-Care Learning Centers, Incorporated*............................. 106,050
5,400 McGrath Rentcorp........................................................ 97,200
1,100 PCA International, Incorporated......................................... 10,725
1,300 PCI Services, Incorporated*............................................. 13,975
2,200 PLM International, Incorporated......................................... 8,113
600 Personnel Management, Incorporated*..................................... 3,600
23,300 Rollins Truck Leasing Corporation....................................... 244,650
5,400 Selective Insurance Group, Incorporated................................. 200,475
1,800 Supercuts, Incorporated................................................. 11,025
3,400 Treadco, Incorporated................................................... 24,225
4,800 Triad Systems Corporation*.............................................. 28,200
1,800 URS Corporation*........................................................ 11,700
1,300 United American Healthcare Company*..................................... 14,300
------------
1,148,115
------------
</TABLE>
51
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
SOAPS, HARDWARE--0.68%
6,200 American Safety Razor Company*.......................................... $ 51,925
400 Dixon Ticonderoga Company*.............................................. 2,800
600 Eastern Company......................................................... 7,425
8,000 Ekco Group Incorporated................................................. 46,000
3,800 Libbey Incorporated..................................................... 77,900
2,300 Lifetime Hoan Corporation............................................... 19,550
4,100 Pentech International, Incorporated*.................................... 8,200
2,400 Sybron Chemicals Incorporated*.......................................... 25,200
2,000 Transtechnology Corporation............................................. 28,000
------------
267,000
------------
TELEPHONE, TELEGRAPH--0.07%
5,300 General Communications, Incorporated*................................... 26,500
------------
THRIFT INSTITUTIONS--2.92%
750 Anchor Bancorp Wisconsin Incorporated*.................................. 26,438
1,300 BMJ Financial Corporation............................................... 17,713
8,800 Bankers Corporation..................................................... 152,900
700 Boston Bancorp.......................................................... 29,225
3,900 Collective Bancorp, Incorporated........................................ 97,988
1,300 D&N Savings Financial Corporation....................................... 16,738
1,100 Eagle Financial Corporation............................................. 26,675
1,700 First Financial Corporation............................................. 37,188
500 Grove Bank of Brighton Massachusetts.................................... 13,000
1,500 Leader Financial Corporation............................................ 56,625
2,300 MAF Bancorp Incorporated................................................ 58,075
5,100 New York Bancorp Incorporated........................................... 110,288
1,000 Pulse Bancorp, Incorporated............................................. 15,750
1,000 Queens County Bancorp................................................... 39,500
8,100 Roosevelt Financial Group, Incorporated................................. 140,738
27,090 Sovereign Bancorp, Incorporated......................................... 269,207
2,400 Sterling Financial Corporation.......................................... 32,400
1,600 Washington Savings Bank FSB............................................. 7,400
------------
1,147,848
------------
TIRE & RUBBER--0.08%
1,600 American Biltrite Incorporated.......................................... 32,800
------------
TRANSPORT BY WATER--0.33%
4,200 American President Companies, Ltd....................................... 87,675
875 International Shipholding Corporation................................... 17,063
2,400 Maritrans Incorporated.................................................. 14,100
300 Oglebay Norton & Company................................................ 11,550
------------
130,388
------------
TRANSPORTATION--0.08%
1,700 MTL, Incorporated*...................................................... 23,588
1,000 PAM Transmission Services, Incorporated................................. 7,750
------------
31,338
------------
TRUCKING, FREIGHT--1.12%
3,200 Allied Holdings, Incorporated*.......................................... 25,600
5,500 Arkansas Best Corporation............................................... 35,063
900 Cannon Express Incorporated*............................................ 8,438
4,900 Landstar Systems Incorporated*.......................................... 122,500
</TABLE>
52
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
TRUCKING, FREIGHT--(CONCLUDED)
800 Marten Transport Ltd.*.................................................. $ 13,400
2,700 Matlock Systems, Incorporated*.......................................... 21,600
500 Morgan Group, Incorporated.............................................. 3,938
1,700 Old Dominion Freight Lines, Incorporated*............................... 15,300
2,000 Sunrise Leasing Corporation............................................. 7,250
9,300 TNT Freightways Corporation............................................. 172,050
2,900 Trism Incorporated*..................................................... 14,500
------------
439,639
------------
WHOLESALE--0.08%
1,900 World Fuel Services Corporation......................................... 32,063
------------
Total Common Stocks (cost--$32,302,237)............................................. 32,577,169
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- --------- -------------------- --------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--14.41%
$5,663 Repurchase Agreement dated 01/31/96 with
State Street Bank & Trust Company,
collateralized by $4,108,505 U.S. Treasury
Bonds, 9.250%, due 02/15/16; proceeds:
$5,663,787 (cost--$5,663,000).............. 02/01/96 5.000% 5,663,000
-----------
Total Investments (cost--$37,965,237)--97.31%.......... 38,240,169
Other assets in excess of liabilities--2.69%........... 1,056,720
-----------
$39,296,889
-----------
Net Assets--100.00%.................................... -----------
</TABLE>
- ------------
* Non-income producing security
See accompanying notes to financial statements
53
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--83.33%
AIR TRANSPORT--1.63%
15,000 Continental Airlines Incorporated Class B*............................. $ 669,375
-----------
BANKS--2.31%
30,000 Charter One Financial Incorporated..................................... 948,750
-----------
BUSINESS MACHINES--2.01%
18,000 3Com Corporation*...................................................... 825,750
-----------
CONSUMER DURABLES--1.00%
27,000 Williams-Sonoma Incorporated*.......................................... 411,750
-----------
CONTAINERS--2.27%
25,000 Aptargroup Incorporated................................................ 931,250
-----------
DATA PROCESSING--2.13%
23,000 Fiserv Incorporated*................................................... 621,000
9,500 Transaction Network Services Incorporated*............................. 256,500
-----------
877,500
-----------
DRUGS, MEDICINE--4.94%
15,000 Cygnus Corporation*.................................................... 313,125
14,000 IDEXX Labs Incorporated*............................................... 703,500
60,000 Quidel Corporation*.................................................... 363,750
35,000 SEQUUS Pharmaceuticals*................................................ 651,875
-----------
2,032,250
-----------
ELECTRONICS--1.69%
70,000 Alpha Industries Incorporated*......................................... 695,625
-----------
HEALTHCARE--2.27%
20,000 CRA Managed Care Incorporated*......................................... 605,000
5,900 HCIA Incorporated*..................................................... 328,925
-----------
933,925
-----------
HEALTH (NON-DRUG)--16.15%
35,000 Apria Healthcare Group Incorporated*................................... 918,750
25,000 Avecor Cardiovascular*................................................. 262,500
15,000 Conmed Corporation*.................................................... 337,500
20,000 Genesis Health Ventures Incorporated*.................................. 842,500
40,000 Horizon CMS Healthcare Corporation*.................................... 1,095,000
20,000 National Surgery Centers Incorporated*................................. 560,000
15,000 Nellcor Puritan Bennett Incorporated*.................................. 930,000
35,000 Quorum Healthcare Group Incorporated*.................................. 890,312
40,000 Summit Care Corporation*............................................... 800,000
-----------
6,636,562
-----------
HOTELS, RESTAURANTS--1.90%
34,000 Quality Dining Incorporated*........................................... 779,875
-----------
LEISURE, LUXURY--0.83%
18,900 Premiere Radio Networks Incorporated*.................................. 340,200
-----------
MEDIA--5.84%
35,000 Sinclair Broadcast Group Incorporated Class A*......................... 630,000
52,000 Spelling Entertainment Group Incorporated.............................. 656,500
10,000 Viacom Incorporated Class B*........................................... 405,000
57,300 Vtel Corporation*...................................................... 709,087
-----------
2,400,587
-----------
</TABLE>
54
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
MEDICAL SERVICES--1.19%
28,000 Mecon Incorporated*.................................................... $ 490,000
-----------
MEDICAL SUPPLIES--1.66%
40,100 Lecroy Corporation*.................................................... 681,700
-----------
MISCELLANEOUS FINANCE--1.09%
35,000 Mercury Finance Company................................................ 446,250
-----------
OIL, GAS EQUIPMENT AND SERVICE--0.80%
8,800 Cooper Cameron Corporation*............................................ 327,800
-----------
OIL SERVICE--3.39%
26,900 Energy Ventures Incorporated*.......................................... 648,963
25,000 Weatherford Enterra Incorporated*...................................... 743,750
-----------
1,392,713
-----------
OTHER INSURANCE--2.94%
27,150 Allmerica Financial Corporation*....................................... 722,869
10,000 Mercury General Corporation............................................ 485,000
-----------
1,207,869
-----------
PRODUCERS' GOODS--4.79%
10,000 Aspect Telecommunications*............................................. 370,000
33,000 DSC Communications Corporation*........................................ 961,125
20,000 Danaher Corporation.................................................... 637,500
-----------
1,968,625
-----------
RETAIL--1.82%
30,000 De Rigo S P A ADR*..................................................... 750,000
-----------
RETAIL (ALL OTHER)--1.35%
20,000 Sunglass Hut International*............................................ 556,250
-----------
SERVICES--12.23%
35,800 AMX Corporation*....................................................... 322,200
15,000 Ceridian Corporation................................................... 675,000
5,000 Computer Sciences Corporation.......................................... 381,250
50,000 Computervision Corporation............................................. 618,750
63,000 Lumisys Incorporated*.................................................. 937,125
15,000 Micro Tec Research Incorporated*....................................... 142,500
19,000 Service Corporation International...................................... 824,125
19,000 Sterling Software Incorporated*........................................ 1,125,750
-----------
5,026,700
-----------
SOAPS, HARDWARES--2.40%
20,000 First Brands Corporation............................................... 987,500
-----------
TELECOM SERVICES & EQUIPMENT--4.70%
35,200 Adtran Incorporated*................................................... 968,000
10,900 U.S. Robotics Corporation*............................................. 961,925
-----------
1,929,925
-----------
Total Common Stocks (cost--$33,025,548)............................................ 34,248,731
-----------
</TABLE>
55
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- ---------- ---------- ---------- -------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--22.02%
$ 9,052 Repurchase Agreement dated 01/31/96 with
State Street Bank & Trust Company,
collateralized by
$6,567,224 U.S. Treasury Bonds, 9.250%,
due 02/15/16; proceeds: $9,053,257
(cost--$9,052,000)....................... 02/01/96 5.000% $ 9,052,000
-----------
Total Investments (cost--$42,077,548)--105.35%...... 43,300,731
Liabilities in excess of other assets--(5.35)%...... (2,197,669)
----------
Net Assets--100.00%................................. $41,103,062
----------
----------
</TABLE>
- ------------
* Non-income producing security
ADR American Depositary Receipt
See accompanying notes to financial statements
56
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE INTERNATIONAL EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- --------- -----------
COMMON STOCKS--90.03%
ARGENTINA--0.66%
ENERGY/UTILITIES--0.66%
8,600 Capex S.A. GDR................................ $ 123,625
-----------
AUSTRALIA--2.68%
BASIC INDUSTRIES--2.68%
26,700 Broken Hill Proprietary Company, Limited...... 376,827
100,000 MIM Holding Limited........................... 123,631
-----------
500,458
-----------
AUSTRIA--1.36%
TRANSPORTATION & STORAGE--1.36%
3,900 Flughafen Wien AG............................. 254,125
-----------
BRAZIL--2.16%
CAPITAL GOODS/BASIC INDUSTRIES--1.58%
3,200 Telecomunicacoes Brasileiras S.A. ADR......... 178,400
10,000 Usiminas USI SD MG ADR........................ 116,250
-----------
294,650
-----------
ENERGY/UTILITIES--0.58%
7,000 Centrais Electricas Brasileiras S.A. ADR ..... 107,625
-----------
Total Brazil Common Stocks................................ 402,275
FRANCE--4.30% -----------
CAPITAL GOODS--2.74%
12,500 Schneider S.A................................. 510,673
-----------
CONSUMER GOODS & SERVICES--1.56%
2,000 Peugeot S.A. ................................. 291,645
-----------
Total France Common Stocks................................ 802,318
-----------
GERMANY--4.77%
BASIC INDUSTRIES--1.74%
1,100 Hoechst AG.................................... 324,790
-----------
FINANCE/INSURANCE/REAL ESTATE--
2,400 Deutsche Bank AG.............................. 119,798
-----------
UTILITIES--2.39%
10,000 Veba AG....................................... 444,945
-----------
Total Germany Common Stocks............................... 889,533
-----------
HONG KONG--7.89%
COMMERCIAL BANKS & OTHER BANKS--2.20%
24,858 HSBC Holdings plc............................. 411,503
-----------
DIVERSIFIED HOLDING COMPANY--2.96%
62,000 Hutchison Whampoa Limited..................... 402,925
17,000 Swire Pacific Limited......................... 148,405
-----------
551,330
-----------
REAL ESTATE--1.65%
253,000 Amoy Properties Limited....................... 307,571
-----------
UTILITIES--1.08%
41,500 China Light & Power Company Limited........... 201,269
-----------
Total Hong Kong Common Stocks............................. 1,471,673
-----------
57
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE INTERNATIONAL EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- --------- -----------
COMMON STOCKS--(CONTINUED)
ITALY--2.03%
CONSUMER GOODS & SERVICES--2.03%
59,000 La Rinascente................................. $ 378,315
-----------
JAPAN--29.96%
CHEMICALS--3.78%
47,000 Asahi Chemical Industry Company, Limited...... 341,714
18,000 Shin-Etsu Chemical Company, Limited........... 363,806
-----------
705,520
-----------
COMPUTERS/OFFICE/TELECOM EQUIPMENT--2.01%
51 DDI Corporation..................................... 375,091
-----------
CONSTRUCTION & BUILDING MATERIALS--1.30%
15,000 Sumitomo Forestry Company, Limited............ 242,818
-----------
ELECTRONICS/CONTROL EQUIPMENT--6.96%
12,000 Cannon, Incorporated.......................... 226,818
6,000 Kyocera Corporation........................... 426,125
5,000 Rohm Company.................................. 276,972
6,000 Sony Corporation.............................. 367,737
-----------
1,297,652
-----------
FABRICATED METAL PRODUCTS--1.71%
27,000 Hitachi, Ltd.*................................ 318,331
-----------
FINANCIAL INTITUTIONS & SERVICES--3.12%
18,000 Sumitomo Trust & Banking Company, Limited..... 242,538
27,000 Tokio Marine & Fire Insurance................. 338,542
-----------
581,080
-----------
HEAVY ENGINEERING/SHIPBUILDING--2.22%
52,000 Mitsubishi Heavy Industries, Limited.......... 413,100
-----------
REAL ESTATE--1.59%
25,000 Mitsui Fudosan Company........................ 297,090
-----------
RETAIL TRADE--1.53%
5,000 Ito-Yokado Company, Limited................... 284,926
-----------
TRANSPORTATION & STORAGE--4.05%
42,000 Kamigumi Company, Limited..................... 408,721
37,000 Nippon Express Corporation, Limited........... 346,215
-----------
754,936
-----------
WHOLESALE TRADE--1.69%
47,000 Itochu Corporation............................ 314,008
-----------
5,584,552
Total Japan Common Stocks.................................
-----------
MALAYSIA--3.04%
CONSUMER GOODS & SERVICES--1.83%
29,000 Edaran Otomobil Nasional...................... 223,103
13,000 Genting Berhad Limited........................ 117,780
-----------
340,883
-----------
FINANCE/INSURANCE/REAL ESTATE--1.21%
20,000 AMMB Holdings Limited......................... 226,501
-----------
567,384
Total Malaysia Common Stocks..............................
-----------
MEXICO--1.95%
BASIC INDUSTRIES--1.09%
39,250 Cementos Apasco, S.A. de C.V.................. 202,990
-----------
58
<PAGE>
Managed Accounts Services Portfolio Trust
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE INTERNATIONAL EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- --------- -----------
COMMON STOCKS--(CONTINUE)
MEXICO--(CONCLUDED)
CAPITAL GOODS--0.86%
29,200 Corporacion Industrial Sanluis, S.A. de C.V... $ 160,453
-----------
Total Mexico Common Stocks................................ 363,443
NETHERLANDS--1.89% -----------
CONSUMER GOODS & SERVICES--1.89%
3,600 Wolters Kluwer N.V............................ 352,772
SINGAPORE--3.84% -----------
CONSUMER GOODS & SERVICES--2.32%
25,879 Jardine Matheson & Company Limited............ 218,678
11,000 Singapore Press Holdings, Limited............ 213,878
-----------
432,556
-----------
FINANCE/INSURANCE/REAL ESTATE--1.52%
20,000 Developement Bank of Singapore, Limited....... 283,198
-----------
Total Singapore Common Stocks............................. 715,754
-----------
SPAIN--3.42%
CONSUMER GOODS & SERVICES--1.67%
15,600 Continente Cent Company....................... 312,025
FINANCE/INSURANCE/REAL ESTATE--1.75% -----------
6,800 Banco de Santander S.A........................ 326,751
-----------
Total Spain Common Stocks................................. 638,776
-----------
SOUTH AFRICA--0.78%
CONSUMER GOODS & SERVICES--0.78%
21,000 Malbak........................................ 145,282
-----------
SWITZERLAND--2.54%
CONSUMER GOODS & SERVICES--2.54%
450 Nestle S.A.-Registered........................ 473,274
-----------
THAILAND--1.75%
FINANCE/INSURANCE/REAL ESTATE--1.75%
59,000 Thai Military Bank Public Company, Limited.... 325,967
-----------
UNITED KINGDOM--15.01%
BANKS--0.99%
38,000 Lloyds TSB Group plc.......................... 185,324
-----------
BUILDING MATERIALS & MERCHANDISE--1.61%
43,000 Wolseley plc.................................. 300,604
-----------
DIVERSIFIED INDUSTRIALS--0.87%
80,000 BTR plc....................................... 78,513
21,000 Wassall plc................................... 83,073
-----------
161,586
-----------
ELECTRICITY--1.63%
29,000 East Midland Electricity plc*................. 303,880
-----------
FOOD MANUFACTURERS--1.65%
15,000 Unilever plc.................................. 307,337
-----------
LEISURE & HOTELS--1.84%
132,000 Ladbroke Group plc............................ 342,805
-----------
OIL, INTEGRATED--0.62%
9,000 Shell Transport & Trading Company............. 115,507
-----------
59
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE INTERNATIONAL EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- --------- -----------
COMMON STOCKS--(CONCLUDED)
UNITED KINGDOM--(CONCLUDED)
PHARMACEUTICALS--1.63%
21,000 Glaxo Wellcome plc........................... $ 304,711
-----------
RETAILERS, FOOD--1.54%
57,000 Argyll Group plc............................. 287,453
-----------
TELECOMMUNICATIONS--0.87%
24,000 Cable & Wireless plc......................... 161,256
-----------
TRANSPORTATION--1.76%
41,000 British Airways plc.......................... 328,099
- ----------- -----------
Total United Kingdom Common Stocks....................... 2,798,562
-----------
-----------
Total Common Stocks (cost--$15,917,610).................. 16,788,088
-----------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES
- --------- ------------ ---------
LONG-TERM DEBT SECURITIES--0.99%
<S> <C> <C> <C> <C>
$ 165 MBL International Finance
(cost--$177,400).......................... 11/30/02 3.000% 183,975
-----------
REPURCHASE AGREEMENT--7.51%
1,400 Repurchase Agreement dated 01/31/96 with
State Street Bank & Trust Company,
collateralized by $1,015,700 U.S. Treasury
Bonds, 9.250%, due 02/15/16; proceeds:
$1,400,194 (cost--$1,400,000)............. 02/01/96 5.000 1,400,000
-----------
Total Investments (cost--$17,495,010)--98.53%......... 18,372,063
Other assets in excess of liabilities--1.47%.......... 273,857
-----------
Net Assets--100.00%................................... $18,645,920
-----------
-----------
</TABLE>
- ------------
* Non-income producing security
ADR American Depositary Receipt
GDR Global Depositary Receipt
FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
CONTRACT TO MATURITY UNREALIZED
DELIVER IN EXCHANGE FOR DATES APPRECIATION
----------- --------------- -------- -------------
<S> <C> <C> <C> <C>
Japanese Yen................................ 100,918,440 U.S.$1,008,000 02/14/96 $ 61,833
Japanese Yen................................ 88,048,660 U.S.$ 838,000 02/14/96 12,493
Japanese Yen................................ 80,669,760 U.S.$ 816,000 02/14/96 59,674
Japanese Yen................................ 20,859,280 U.S.$ 208,000 02/14/96 12,429
-------------
$ 146,429
-------------
-------------
</TABLE>
See accompanying notes to financial statements
60
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- --------- ---------
COMMON STOCKS--79.73%
ARGENTINA--3.50%
AGRICULTURE, FOOD--0.78%
5,100 Buenos Aires Embotelladora......................... $ 108,375
-----------
INTERNATIONAL OIL--0.93%
67,000 Astra Cia Argentina De Petroleo S.A.,
ARA Class B........................................ 129,310
-----------
MISCELLANEOUS INDUSTRY--1.31%
29,000 Naviera Perez Comp Class B......................... 182,990
-----------
TELEPHONE, TELEGRAPH--0.48%1,000
Telefonica de Argentina S.A. .................................. 67,200
-----------
Total Argentina Common Stocks.................................. 487,875
-----------
BRAZIL--0.91%
CONSTRUCTION--0.25%
3,000 Usinas Siderurgicas de Minas Gerais Sponsor ADR.... 34,875
-----------
MEDIA--0.66%
10,000 Aracruz Celulose S.A., ADR......................... 91,250
-----------
Total Brazil Common Stocks..................................... 126,125
-----------
CHILE--3.20%
BANKS--0.80%
8,000 Banco Osorno Y La Union ADS........................ 112,000
-----------
MEDIA--1.78%
3,100 Compania Telecomunicacion ADR...................... 248,387
-----------
RETAIL (ALL OTHER)--0.62%
3,800 Santa Isabel ADS................................... 86,925
-----------
Total Chile Common Stocks...................................... 447,312
-----------
CHINA--3.39%
UTILITIES-ELECTRIC--3.39%
240,000 Guangdong Electric Power Development Class B*...... 141,538
19,000 Huaneng Power International Incorporated ADS....... 330,125
-----------
471,663
-----------
CZECHOSLOVAKIA--0.78%
TELEPHONE, TELEGRAPH--0.78%
1,100 SPT Telecom A.S.................................... 109,119
-----------
GREECE--2.19%
BANKS--0.89%
2,000 Alpha Credit Bank.................................. 123,495
-----------
BEVERAGES--0.82%
3,200 Hellenic Bottling Company.......................... 113,895
-----------
61
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- --------- -----------
COMMON STOCKS--(CONTINUED)
GREECE--(CONCLUDED)
MISCELLANEOUS MINING & METALS--0.48%
3,400 Silver and Baryte Ores Mining................. $ 67,353
-----------
Total Greece Common Stocks................................ 304,743
-----------
HUNGARY--1.48%
HEALTHCARE (NON-DRUG)--0.36%
1,600 Egis Gyogyszergyarszolgaltatasi Resz.......... 49,604
-----------
SERVICES--1.12%
5,300 Gedeon Richter................................ 155,964
-----------
Total Hungary Common Stocks............................... 205,568
-----------
INDIA--7.36%
CONSTRUCTION--1.51%
100 Tata Electric Companies....................... 36,250
13,400 Tata Engineering and Locomotive GDR........... 174,200
-----------
210,450
-----------
DRUGS, MEDICINE--1.55%
9,000 Ranbaxy Labs GDS.............................. 216,000
-----------
HOTELS, RESTAURANTS--1.53%
9,500 The Indian Hotels Company GDR................. 212,800
-----------
MISCELLANEOUS FINANCE--2.77%
22,500 India Fund.................................... 205,312
19,000 Morgan Stanley India Investment Fund*......... 180,500
-----------
385,812
-----------
Total India Common Stocks................................. 1,025,062
-----------
INDONESIA--7.29%
AGRICULTURE, FOOD--1.54%
41,000 Indofood Sukses Makmur........................ 214,660
-----------
CONSTRUCTION--1.32%
46,000 Indocement Turgqal Prakarsa................... 184,140
-----------
MEDIA--2.67%
39,000 Indosat....................................... 156,544
7,000 Perusahaan Listrik Umum ADS................... 215,250
-----------
371,794
-----------
MOTOR VEHICLES--0.48%
30,000 Astra International........................... 65,772
-----------
TOBACCO--1.28%
15,000 Gudang Garam.................................. 178,665
-----------
Total Indonesia Common Stocks............................. 1,015,031
-----------
62
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- --------- -----------
COMMON STOCKS--(CONTINUED)
KOREA--7.95%
BANKS--0.84%
6,000 Shinhan Bank......................................... $ 116,905
-----------
CONSTRUCTION--0.73%
3,500 Lg Industrial Systems................................ 101,624
-----------
IRON & STEEL--0.65%
4,000 Pohang Iron & Steel Limited ADR...................... 90,500
-----------
RETAIL (ALL OTHER)--0.54%
1,022 Shinsegae Department Store........................... 75,487
-----------
TELECOMMUNICATIONS--2.74%
7,000 Korea Mobile Telecommunications GDS.................. 381,500
-----------
UTILITIES-ELECTRIC--2.45%
9,000 Korea Electric Power ADR............................. 234,000
600 Samsung Electronics.................................. 107,354
-----------
341,354
-----------
Total Korea Common Stocks........................................ 1,107,370
-----------
MEXICO--6.23%
BEVERAGES--0.59%
18,000 Empresas La Moderna, S.A. de C.V. Series A*.......... 81,697
-----------
CONSTRUCTION--1.79%
66,000 Cemex*............................................... 248,889
-----------
MISCELLANEOUS METALS & MINING--1.21%
39,000 Industrias Penoles, S.A. de C.V...................... 168,606
-----------
PAPER--0.85%
7,200 Kimberly-Clark de Mexico, S.A. de C.V. .............. 119,758
-----------
SERVICES--1.01%
20,400 Grupo Carso, S.A. de C.V.--Series A*................. 140,396
-----------
TELEPHONE, TELEGRAPH--0.78%
3,200 Telefonos de Mexico, S.A. de C.V.--Series L ADR...... 108,400
-----------
Total Mexico Common Stocks....................................... 867,746
-----------
PHILIPPINES--6.54%
BANKS--1.07%
5,000 Metropolitan Bank & Trust Company.................... 104,079
22,000 Philippine Savings Bank.............................. 45,375
-----------
149,454
-----------
CONSTRUCTION--0.69%
695,000 Southeast Asia Cement*............................... 95,562
-----------
63
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- --------- -----------
COMMON STOCKS--(CONTINUED)
PHILIPPINES--(CONCLUDED)
REAL PROPERTY--2.46%
115,000 Ayala Land Incorporated....................... $ 147,143
150,000 C & P Homes Incorporated...................... 117,447
260,000 SM Prime Holdings............................. 78,451
-----------
343,041
-----------
TELEPHONE, TELEGRAPH--1.14%
2,500 Philippine Long Distance Telephone Company.... 159,461
-----------
UTILITIES-ELECTRIC--1.18%
17,000 Manila Electric Company Class B............... 163,948
-----------
Total Philippines Common Stocks........................... 911,466
-----------
PORTUGAL--2.67%
CONSTRUCTION--0.55%
9,400 Engil Sgps.................................... 76,024
-----------
FOREST PRODUCTS--0.85%
11,000 Semapa de Investimento e Gestao............... 118,502
-----------
RETAIL (OTHER)--1.27%
3,000 Jeronimo Martins & Filho...................... 177,607
-----------
Total Portugal Common Stocks.............................. 372,133
-----------
SOUTH AFRICA--5.27%
BEVERAGES--0.44%
1,658 South African Breweries....................... 61,781
-----------
CHEMICALS--0.87%
30,000 Sentrachem Limited............................ 121,240
-----------
CONSTRUCTION--0.79%
7,000 Barlow Limited................................ 110,280
-----------
MISCELLANEOUS INDUSTRY--1.53%
2,000 Anglo American Industrials.................... 98,088
16,700 Malbak........................................ 115,534
-----------
213,622
-----------
OIL SERVICES--0.71%
11,000 Sasol Limited................................. 98,704
-----------
RETAIL (ALL OTHER)--0.93%
32,500 Waltons Stationery*........................... 129,117
-----------
Total South Africa Common Stocks.......................... 734,744
-----------
64
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- --------- -----------
COMMON STOCKS--(CONTINUED)
TAIWAN--2.74%
CONSTRUCTION--0.19%
. 3,000 Hocheng Group Corporation GDR*...................... $ 27,075
-----------
ELECTRONICS--1.20%
7,000 Advanced Semiconductor Engineering Incorporated GDS*. 84,000
6,000 Siliconware Precision Industries Company GDR*........ 82,500
-----------
166,500
-----------
IRON & STEEL--1.35%
11,500 China Steel Corporation GDR.......................... 188,312
-----------
Total Taiwan Common Stocks....................................... 381,887
-----------
THAILAND--14.89%
BANKS--6.25%
21,000 Bangkok Bank Company, Limited........................ 293,370
66,000 Krung Thai Bank plc.................................. 356,827
85,000 Siam City Bank plc................................... 127,466
8,000 Thai Farmers Bank.................................... 94,081
-----------
871,744
-----------
CONSTRUCTION--1.57%
4,000 Siam Cement Company Limited.......................... 218,469
-----------
PRODUCERS' GOODS--1.36%
46,000 Siam Makro Public Company Limited ................... 188,792
-----------
REAL PROPERTY--1.20%
9,000 Land and House plc................................... 166,930
-----------
SERVICES--0.88%
9,000 United Communication Industry Public Company Limited 122,889
-----------
TELEPHONE, TELEGRAPH--1.09%
48,000 TelecomAsia Corporation Public Company Limited*...... 151,539
-----------
UTILITIES-ELECTRIC--2.54%
83,100 Electricity Generating Public Company................ 354,175
-----------
Total Thailand Common Stocks..................................... 2,074,538
-----------
TURKEY--3.34%
BEVERAGES--0.94%
351,700 Ege Biracilik Ve Malt Sanayii........................ 131,440
-----------
CERAMICS--0.58%
800,000 Eczacibasi Yapi Gerecelri Sanayii ve Ticaret A.S..... 81,425
-----------
CONSTRUCTION--0.52%
538,000 Adana Cimento Sanayii Class A........................ 71,870
-----------
65
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
TURKEY--(CONCLUDED)
RETAIL (ALL OTHER)--1.30%
180,600 Migros Turk T.A.S............................................................... $ 180,945
-----------
Total Turkey Common Stocks.................................................................. 465,680
-----------
Total Common Stocks (cost--$10,103,808)..................................................... 11,108,062
-----------
PREFERRED STOCKS--10.01%
BRAZIL--10.01%
CONSTRUCTION--0.85%
103,000,000 Cia Uniao de Seguros Gerais..................................................... 117,943
-----------
ELECTRONICS--1.65%
215,885 Multibras Electrodomesti........................................................ 229,547
-----------
MISCELLANEOUS INDUSTRY--1.56%
323,000 Investimentos Ita............................................................... 217,953
-----------
PAPER--0.76%
100,000 Industrias Klabin De Papel e Celulose........................................... 106,329
-----------
TELEPHONE, TELEGRAPH--2.44%
6,100,000 Telecomunicacoes Brasileiras S.A.--Telebras*.................................... 339,894
-----------
UTILITIES-ELECTRIC--2.75%
1,269,000 Electrobras (Centrais).......................................................... 382,737
-----------
Total Brazil Preferred Stocks............................................................... 1,394,403
-----------
Total Preferred Stocks (cost--$1,219,096)................................................... 1,394,403
-----------
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES
- --------- -------------------- -------------
<C> <S> <C> <C> <C>
LONG-TERM DEBT SECURITIES--0.39%
$ 20 Acer Incorporated (cost--$59,000).......... 06/10/01 4.000 % 55,000
-----------
REPURCHASE AGREEMENT--7.08%
986 Repurchase Agreement dated 01/31/96 with
State Street Bank & Trust Company,
collateralized by $715,342 U.S. Treasury
Bonds, 9.250%, due 02/15/16; proceeds:
$986,137 (cost--$986,000).................. 02/01/96 5.000 986,000
-----------
Total Investments (cost--$12,367,904)--97.21%.......... 13,543,465
Other assets in excess of liabilities--2.79%........... 389,236
-----------
Net Assets --100.00%................................... $13,932,701
-----------
-----------
</TABLE>
- ------------
* Non-income producing security
ADR American Depositary Receipt
ADS American Depositary Shares
GDR Global Depositary Receipt
GDS Global Depositary Shares
See accompanying notes to financial statements
66
<PAGE>
[This page intentionally left blank.]
67
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
January 31, 1996 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACE
GOVERNMENT PACE PACE
PACE SECURITIES INTERMEDIATE STRATEGIC
MONEY MARKET FIXED INCOME FIXED INCOME FIXED INCOME
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Investments, at value (cost--$5,506,372;
$46,315,925; $22,683,302; $23,186,526;
$9,426,267; $19,478,695; $37,217,084;
$28,806,501; $32,302,237; $33,025,548;
$16,095,010 and $11,381,904, respectively)... $5,506,372 $ 46,679,377 $ 22,812,545 $23,918,345
Repurchase agreements, at value (cost--$0;
$373,000; $1,347,000; $393,000; $0;
$3,981,000; $2,032,000; $2,100,000;
$5,663,000; $9,052,000; $1,400,000 and
$986,000, respectively)...................... -- 373,000 1,347,000 393,000
------------ ------------ ------------ ------------
5,506,372 47,052,377 24,159,545 24,311,345
Cash........................................... 876 581 115 742
Cash denominated in foreign currencies, at
value
(cost--$0; $0; $0; $0; $0 $1,281,666; $0; $0;
$0; $0; $278,302 and $53,177,
respectively)................................ -- -- -- --
Receivable for investments sold................ -- 4,040,312 -- 1,025,781
Receivable for shares of beneficial interest
sold......................................... 170,857 867,590 623,594 602,000
Receivable from investment adviser............. 34,738 -- 1,508 13,687
Receivable for foreign currency sold........... -- -- -- --
Unrealized appreciation of forward foreign
currency contracts........................... -- -- -- --
Dividends and interest receivable.............. 9,091 76,905 330,389 179,379
Deferred organizational costs.................. 86,461 86,461 86,461 86,461
Other assets................................... 13,029 11,957 1,294 13,089
------------ ------------ ------------ ------------
Total assets............................... 5,821,424 52,136,183 25,202,906 26,232,484
------------ ------------ ------------ ------------
LIABILITIES
Payable for shares of beneficial interest
repurchased.................................. 62,476 14,378 6,115 29,097
Dividends payable.............................. 11,306 -- -- --
Payable for investments purchased.............. -- 20,145,625 1,174,118 3,622,807
Unrealized depreciation on forward foreign
currency contracts........................... -- -- -- --
Payable to investment adviser.................. -- 2,811 -- --
Accrued expenses and other liabilities......... 96,402 102,580 92,291 111,160
------------ ------------ ------------ ------------
Total liabilities.......................... 170,184 20,265,394 1,272,524 3,763,064
------------ ------------ ------------ ------------
NET ASSETS
Beneficial interest shares of $0.001 par value
outstanding--(5,651,240; 2,552,919;
1,943,242; 1,716,478; 778,994; 1,936,957;
3,134,767; 2,549,045; 3,273,872; 3,621,933;
1,460,650 and 1,080,363, respectively)
(unlimited amount authorized)................ 5,651,240 31,109,847 23,666,900 21,630,257
Undistributed net investment income and
distributions in excess of net investment
income....................................... -- 117,690 92,790 88,515
Accumulated net realized gains (losses) from
investment transactions...................... -- 279,800 41,460 14,814
Net unrealized appreciation of investments and
other assets and liabilities denominated in
foreign currencies........................... -- 363,452 129,232 735,834
------------ ------------ ------------ ------------
Net assets................................. $5,651,240 $ 31,870,789 $ 23,930,382 $22,469,420
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net asset value, offering price and redemption
value per share.............................. $1.00 $12.48 $12.31 $13.09
----- ------ ------ ------
----- ------ ------ ------
</TABLE>
68
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PACE
PACE SMALL/MEDIUM
PACE PACE PACE PACE SMALL/MEDIUM COMPANY PACE
MUNICIPAL GLOBAL LARGE COMPANY LARGE COMPANY COMPANY GROWTH INTERNATIONAL
FIXED INCOME FIXED INCOME VALUE EQUITY GROWTH EQUITY VALUE EQUITY EQUITY EQUITY
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
9,605,377
$ $ 19,642,423 $40,873,700 $31,361,090 $32,577,169 $34,248,731 $16,972,063
-- 3,981,000 2,032,000 2,100,000 5,663,000 9,052,000 1,400,000
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
9,605,377 23,623,423 42,905,700 33,461,090 38,240,169 43,300,731 18,372,063
532,486 -- 157 -- 841 470 888
-- 1,282,051 -- -- -- -- 278,299
-- 12,186,481 -- 118,594 -- -- --
358,700 660,380 1,343,196 961,338 1,133,479 1,240,837 563,661
19,746 6,297 1,670 3,188 13,008 -- 11,369
-- -- -- -- -- -- 2,920,532
-- 84,896 -- -- -- -- 146,429
115,718 578,900 57,972 23,084 29,081 4,705 18,192
86,461 86,461 86,461 86,461 86,461 86,461 86,461
13,035 13,089 23,974 11,856 12,005 13,035 17,104
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
10,731,523 38,521,978 44,419,130 34,665,611 39,515,044 44,646,239 22,414,998
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
6,852 40,172 47,689 41,593 88,328 87,499 24,027
-- -- -- -- -- -- --
933,183 14,050,485 747,076 990,030 -- 3,336,421 3,614,552
-- 61,735 -- -- -- -- --
-- -- -- -- -- 8,923 --
97,176 168,472 141,373 130,093 129,827 110,334 130,499
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
1,037,211 14,320,864 936,138 1,161,716 218,155 3,543,177 3,769,078
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
9,486,893 23,840,021 39,602,496 31,636,567 38,974,573 42,380,963 17,631,620
31,459 18,316 31,236 10,713 15,098 2,828 (10,703)
)
(3,150 176,201 150,069 (697,974) 32,286 (2,503,912 ) (1,825)
179,110 166,576 3,699,191 2,554,589 274,932 1,223,183 1,026,828
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
$9,694,312 $ 24,201,114 $43,482,992 $33,503,895 $39,296,889 $41,103,062 $18,645,920
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
$12.44 $12.49 $13.87 $13.14 $12.00 $11.35 $12.77
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
<PAGE>
<CAPTION>
PACE
INTERNATIONAL
EMERGING MARKETS
EQUITY
INVESTMENTS
----------------
<C>
$ 12,557,465
986,000
----------------
13,543,465
38,530
53,193
--
380,928
7,354
--
--
8,989
86,461
13,035
----------------
14,131,955
----------------
30,526
--
61,742
--
--
106,986
----------------
199,254
----------------
12,796,050
(14,417)
(24,430)
1,175,498
----------------
$ 13,932,701
----------------
----------------
$12.90
------
------
</TABLE>
See accompanying notes to financial statements
69
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------
Statement of Operations
For the Period August 24, 1995 (commencement of operations) through
January 31, 1996 (unaudited)
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
PACE
GOVERNMENT PACE PACE
PACE SECURITIES INTERMEDIATE STRATEGIC
MONEY MARKET FIXED INCOME FIXED INCOME FIXED INCOME
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding
taxes, if any)........................... $ 88,345 $ 481,912 $405,275 $ 379,712
Dividends (net of foreign withholding
if any)............................... -- -- -- --
------------ ------------ ------------ ------------
88,345 481,912 405,275 379,712
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory and administration
fees ................................. 5,498 57,723 39,183 39,858
Trustees' fees and expenses............. 13,233 13,233 13,233 13,233
Amortization of organizational
expenses............................... 8,372 8,372 8,372 8,372
Transfer agency fees and expenses....... 6,950 8,732 5,804 7,796
accounting.............................. 5,595 8,404 10,642 12,185
Federal and state registration fees..... 5,048 6,116 8,308 9,337
Legal and audit......................... 1,812 2,205 2,294 2,224
Reports and notices to shareholders..... 1,281 3,306 3,291 3,593
Other expenses.......................... 308 240 671 784
------------ ------------ ------------ ------------
48,097 108,331 91,798 97,382
Less: Fee waivers and expense
reimbursements
from investment adviser........... (40,242) (38,240) (36,349) (48,971)
------------ ------------ ------------ ------------
Net expenses............................ 7,855 70,091 55,449 48,411
------------ ------------ ------------ ------------
Net investment income................... 80,490 411,821 349,826 331,301
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT TRANSACTIONS:
Net realized gains (losses) from:
Investment transactions............... -- 301,718 43,065 30,819
Futures contracts..................... -- -- -- --
Foreign currency transactions......... -- -- -- 4
Net change in unrealized
appreciation/depreciation of:
Investments........................... -- 363,452 129,243 731,819
Other assets and liabilities and
forward contracts denominated in
foreign currencies.................... -- -- (11) 4,015
------------ ------------ ------------ ------------
Net realized and unrealized gains
(losses) from investment
transactions.......................... -- 665,170 172,297 766,657
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations............. $ 80,490 $1,076,991 $522,123 $1,097,958
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
70
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
PACE
PACE SMALL/MEDIUM
PACE PACE PACE PACE SMALL/MEDIUM COMPANY PACE
MUNICIPAL GLOBAL LARGE COMPANY LARGE COMPANY COMPANY GROWTH INTERNATIONAL
FIXED INCOME FIXED INCOME VALUE EQUITY GROWTH EQUITY VALUE EQUITY EQUITY EQUITY
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
$153,022 $383,741 $ 62,557 $ 56,249 $ 89,060 $ 146,888 $ 27,433
-- -- 212,272 82,422 138,066 11,987 99,997
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
153,022 383,741 274,829 138,671 227,126 158,875 127,430
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
16,310 51,638 89,295 69,675 84,513 89,874 42,811
13,233 13,233 13,233 13,233 13,233 13,233 13,233
8,372 8,372 8,372 8,372 8,372 8,372 8,372
2,620 6,928 12,087 13,903 14,706 10,341 7,493
8,009 14,301 36,337 25,451 19,591 11,791 27,592
5,151 6,181 16,551 10,892 18,145 7,303 8,975
2,310 2,463 2,024 2,206 730 2,076 2,606
2,295 2,410 3,704 3,706 2,154 4,045 3,678
862 339 487 753 1,500 904 1,405
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
59,162 105,865 182,090 148,191 162,944 147,939 116,165
)
(36,056 (44,662) (70,471) (61,098) (57,303) (35,579) (44,912)
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
23,106 61,203 111,619 87,093 105,641 112,360 71,253
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
129,916 322,538 163,210 51,578 121,485 46,515 56,177
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
(1,512) 182,397 143,504 (697,974) 32,286 (2,503,912) (1,986)
-- -- 58,240 -- -- -- 161
-- (17,143) -- -- -- -- --
179,110 163,728 3,699,191 2,554,589 274,932 1,223,183 877,053
-- 2,848 -- -- -- -- 149,775
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
177,598 331,830 3,900,935 1,856,615 307,218 (1,280,729) 1,025,003
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
$307,514 $654,368 $ 4,064,145 $ 1,908,193 $428,703 $(1,234,214) $ 1,081,180
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
<CAPTION>
PACE
INTERNATIONAL
EMERGING MARKETS
EQUITY
INVESTMENTS
----------------
<C>
$ 27,136
33,260
----------------
60,396
----------------
37,945
13,233
8,372
5,411
18,378
1,390
2,327
1,878
802
----------------
89,736
(39,026)
----------------
50,710
----------------
9,686
----------------
(24,430)
--
(9,603)
1,175,561
(63)
----------------
1,141,465
----------------
$1,151,151
----------------
----------------
</TABLE>
See accompanying notes to financial statements
71
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
For the Period August 24, 1995 (commencement of operations) through
January 31, 1996 (unaudited)
- -------------------------------------------------------------------------------
<TABLE><CAPTION>
PACE
GOVERNMENT PACE PACE
PACE SECURITIES INTERMEDIATE STRATEGIC
MONEY MARKET FIXED INCOME FIXED INCOME FIXED INCOME
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income..................... $ 80,490 $ 411,821 $ 349,826 $ 331,301
Net realized gains (losses) from:
Investment transactions................. -- 301,718 43,065 30,819
Futures contracts....................... -- -- -- --
Foreign currency transactions........... -- -- -- 4
Net change in unrealized
appreciation/depreciation of:
Investments............................ -- 363,452 129,243 731,819
Other assets and liabilities and forward
contracts denominated in foreign
currencies............................ -- -- (11) 4,015
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting
from operations......................... 80,490 1,076,991 522,123 1,097,958
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net investment income..................... (80,490) (294,131) (257,036) (242,790)
Net realized gains from investment
transactions............................ -- (21,918) (1,605) (16,005)
------------ ------------ ------------ ------------
(80,490) (316,049) (258,641) (258,795)
------------ ------------ ------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares...... 6,542,339 33,008,598 24,907,728 22,531,307
Cost of shares repurchased................ (971,392) (2,219,486) (1,504,012) (1,164,617)
Proceeds from dividends reinvested........ 68,293 312,735 255,184 255,567
------------ ------------ ------------ ------------
Net increase in net assets derived from
beneficial interest transactions........ 5,639,240 31,101,847 23,658,900 21,622,257
------------ ------------ ------------ ------------
Net increase in net assets................ 5,639,240 31,862,789 23,922,382 22,461,420
NET ASSETS:
Beginning of period....................... 12,000 8,000 8,000 8,000
------------ ------------ ------------ ------------
End of period............................. $5,651,240 $31,870,789 $23,930,382 $22,469,420
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
72
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
PACE
PACE SMALL/MEDIUM
PACE PACE PACE PACE SMALL/MEDIUM COMPANY PACE
MUNICIPAL GLOBAL LARGE COMPANY LARGE COMPANY COMPANY GROWTH INTERNATIONAL
FIXED INCOME FIXED INCOME VALUE EQUITY GROWTH EQUITY VALUE EQUITY EQUITY EQUITY
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
$ 129,916 $ 322,538 $ 163,210 $ 51,578 $ 121,485 $ 46,515 $ 56,177
(1,512) 182,397 143,504 (697,974) 32,286 (2,503,912 ) (1,986)
-- -- 58,240 -- -- -- 161
-- (17,143 ) -- -- -- -- --
179,110 163,728 3,699,191 2,554,589 274,932 1,223,183 877,053
-- 2,848 -- -- -- -- 149,775
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
307,514 654,368 4,064,145 1,908,193 428,703 (1,234,214 ) 1,081,180
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
(98,457) (287,079 ) (131,974) (40,865) (106,387 ) (43,687 ) (66,880)
(1,638) (6,196 ) (51,675) -- -- -- --
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
(100,095) (293,275 ) (183,649) (40,865) (106,387 ) (43,687 ) (66,880)
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
9,721,111 24,865,691 41,501,160 33,169,594 41,027,531 44,549,648 18,499,447
(340,450) (1,325,167 ) (2,088,849) (1,581,537) (2,166,548 ) (2,220,048 ) (942,281)
98,232 291,497 182,185 40,510 105,590 43,363 66,454
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
9,478,893 23,832,021 39,594,496 31,628,567 38,966,573 42,372,963 17,623,620
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
9,686,312 24,193,114 43,474,992 33,495,895 39,288,889 41,095,062 18,637,920
8,000 8,000 8,000 8,000 8,000 8,000 8,000
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
$9,694,312 $24,201,114 $43,482,992 $33,503,895 $39,296,889 $41,103,062 $ 18,645,920
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
- ------------ ------------ ------------- ------------- ------------ ------------ -------------
<CAPTION>
PACE
INTERNATIONAL
EMERGING MARKETS
EQUITY
INVESTMENTS
----------------
<C>
$ 9,686
(24,430)
--
(9,603)
1,175,561
(63)
----------------
1,151,151
----------------
(14,500)
--
----------------
(14,500)
----------------
13,636,568
(862,934)
14,416
----------------
12,788,050
----------------
13,924,701
8,000
----------------
$ 13,932,701
----------------
----------------
</TABLE>
See accompanying notes to financial statements
73
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Managed Accounts Services Portfolio 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. 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 of shares 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").
All Portfolios are diversified with the exception of PACE Intermediate Fixed
Income Investments and PACE Global Fixed Income Investments. Shares of the
Portfolios currently are available only to participants in the PaineWebber
PACESM Program.
The preparation of financial statements in accordance with generally
accepted accounting principles 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.
Organizational Matters--Prior to June 16, 1995, the Trust had no activities
other than organizational matters and activities related to the initial public
offering and issuance, at net asset value, of 19,337 shares of beneficial
interest of the Trust for a total of $100,000 to Mitchell Hutchins Asset
Management Inc. ("Mitchell Hutchins"), a wholly owned subsidiary of PaineWebber
Incorporated ("PaineWebber"). 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 have been deferred and are being amortized using the
straight-line method over a period of benefit, not to exceed five years,
beginning with the commencement of operations of the Trust.
Valuation of Investments--Securities which are listed on U.S. and foreign
stock exchanges are valued at the last sale price on the day the securities are
being 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 generally valued on the exchange considered by Mitchell Hutchins or the
applicable sub-adviser as the primary market for each Portfolio. Securities
traded in the over-the-counter ("OTC") market and listed on Nasdaq are valued at
the last available trade price on Nasdaq prior to the time of valuation; other
OTC securities are valued at the last bid price available prior to valuation.
The amortized cost method of valuation, which approximates market value, is used
to value debt obligations with sixty days or less remaining to maturity unless
the Trust's board of trustees determines that this does not represent fair
value. Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Trust's board of trustees.
74
<PAGE>
Managed Accounts Services Portfolio Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
All investments quoted in foreign currencies are valued daily in U.S.
dollars on the basis of the foreign currency exchange rates prevailing at the
time such valuation is determined by each Portfolio's custodian, unless the
board of trustees determines that this does not represent fair value. Foreign
currency exchange rates are generally determined prior to the close of trading
on 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 trading on the NYSE, which will not
be reflected in a computation of the Portfolios' net asset value. If events
materially affecting the value of such investments or currency exchange rates
occur during such time period, the securities will be valued at their fair value
as determined in good faith by or under the direction of the Trust's board of
trustees.
Investment Transactions and Investment Income--Investment transactions are
recorded on the trade date. Realized gains and losses from investment
transactions and foreign exchange transactions are calculated on the identified
cost basis. Dividend income and other distributions are 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 becomes aware of such dividends). Interest income is recorded on an
accrual basis. Discounts are accreted and premiums are amortized as adjustments
to interest income and the identified cost of investments.
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.
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.
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 to hedge the U.S. dollar value of
portfolio securities denominated in a particular currency. These 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
Mitchell Hutchins or 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, U.S. government securities or liquid, high-grade debt
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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--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, 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 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 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 are subject to a number of guidelines which
reduce the risk by seeking to ensure that financial futures contracts are used
for hedging purposes or to manage the average duration of a portfolio and not
for leverage. 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.
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.
Repurchase Agreements--Each Portfolio's 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
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Income Investments) occasionally participates in joint repurchase agreement
transactions with other funds managed by Mitchell Hutchins.
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. Dividends and distributions which
exceed net investment income and net realized capital gains for financial
reporting purposes but not for tax purposes are reported as dividends in excess
of net investment income or distributions in excess of net realized capital
gains. To the extent they exceed net investment income and net realized capital
gains for tax purposes, they are reported as distributions of paid-in capital.
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 this Fund
is 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 or region.
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INVESTMENT ADVISER AND ADMINISTRATOR
The Trust has entered into an Investment Advisory and Administration
Contract ("Advisory Contract") with Mitchell Hutchins. In accordance with the
Advisory Contract, each Portfolio pays Mitchell Hutchins an investment advisory
and administration fee, which is accrued daily and payable monthly, in
accordance with the following schedule:
<TABLE>
<CAPTION>
ANNUAL RATE
AS A PERCENTAGE
OF EACH PORTFOLIO'S
PORTFOLIO AVERAGE NET ASSETS
- --------------------------------------------------------------- -------------------
<S> <C>
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%
</TABLE>
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Under separate Sub-Advisory Agreements, with the exception of PACE Money
Market Investments, Mitchell Hutchins (not the Portfolios) pays each Sub-Adviser
a fee, which is accrued daily and paid monthly, in accordance with the following
schedule:
<TABLE>
<CAPTION>
ANNUAL RATE
AS A PERCENTAGE
OF EACH PORTFOLIO'S
PORTFOLIO SUB-ADVISER AVERAGE NET ASSETS
- ----------------------------------------- --------------------------------- -------------------
<S> <C> <C>
PACE Government Securities Fixed Income Pacific Investment Management
Investments Company 0.25%
PACE Intermediate Fixed Income Pacific Income Advisors
Investments 0.20%
PACE Strategic Fixed Income Investments Pacific Investment Management
Company 0.25%
PACE Municipal Fixed Income Investments Morgan Grenfell Capital
Management, Inc. 0.20%
PACE Global Fixed Income Investments Rogge Global Partners plc 0.35%
PACE Large Company Value Equity Brinson Partners, Inc.
Investments 0.30%
PACE Large Company Growth Equity Chancellor Capital Management,
Investments Inc. 0.30%
PACE Small/Medium Company Value Equity Brandywine Asset Management, Inc.
Investments 0.30%
PACE Small/Medium Company Growth Equity Westfield Capital Management
Investments Company, Inc. 0.30%
PACE International Equity Investments Martin Currie Inc. 0.40%
PACE International Emerging Markets Schroder Capital Management
Equity Investments International Inc. 0.50%
</TABLE>
In compliance with applicable state securities laws, Mitchell Hutchins will
reimburse the Portfolios if and to the extent that the aggregate operating
expenses in any fiscal year, exclusive of taxes, distribution fees, interest,
brokerage fees and extraordinary expenses, exceed limitations imposed by various
state regulations. Currently, the most restrictive limitation applicable to the
Portfolios is 2.5% of the first $30 million of average daily net assets, 2.0% of
the next $70 million and 1.5% of any excess over $100 million. In addition,
Mitchell Hutchins has agreed to voluntarily waive all or a portion of its
investment advisory and administration fee and subsidize certain operating
expenses, not otherwise required pursuant to the above limitation, for the
fiscal year ending July 31, 1996, which will lower the overall expenses of each
Portfolio.
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INVESTMENTS IN SECURITIES
At January 31, 1996, the components of net unrealized appreciation of
investments were as follows:
<TABLE>
<CAPTION>
NET
GROSS GROSS UNREALIZED
PORTFOLIO APPRECIATION DEPRECIATION APPRECIATION
- ------------------------------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
PACE Government Securities Fixed Income Investments.... $ 367,086 $ 3,634 $ 363,452
PACE Intermediate Fixed Income Investments............. $ 321,263 $ 192,020 $ 129,243
PACE Strategic Fixed Income Investments................ $ 772,710 $ 40,891 $ 731,819
PACE Municipal Fixed Income Investments................ $ 181,026 $ 1,916 $ 179,110
PACE Global Fixed Income Investments................... $ 286,428 $ 122,700 $ 163,728
PACE Large Company Value Equity Investments............ $ 3,917,248 $ 260,632 $ 3,656,616
PACE Large Company Growth Equity Investments........... $ 3,034,761 $ 480,172 $ 2,554,589
PACE Small/Medium Company Value Equity Investments..... $ 1,981,127 $ 1,706,195 $ 274,932
PACE Small/Medium Company Growth Equity Investments.... $ 2,790,320 $ 1,567,137 $ 1,223,183
PACE International Equity Investments.................. $ 1,168,189 $ 291,136 $ 877,053
PACE International Emerging Markets Equity
Investments............................................ $ 1,416,793 $ 241,232 $ 1,175,561
</TABLE>
For U.S. federal income tax purposes, the cost of securities owned at
January 31, 1996 was substantially the same as the cost of securities for
financial statement purposes.
For the period August 24, 1995 (commencement of operations) to January 31,
1996, aggregate purchases and sales of portfolio securities, excluding
short-term securities were as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
- ----------------------------------------------------------------- ----------- -----------
<S> <C> <C>
PACE Government Securities Fixed Income Investments.............. $62,390,472 $35,898,677
PACE Intermediate Fixed Income Investments....................... $26,253,908 $ 3,352,592
PACE Strategic Fixed Income Investments.......................... $25,297,596 $ 4,201,120
PACE Municipal Fixed Income Investments.......................... $ 9,381,172 $ 451,989
PACE Global Fixed Income Investments............................. $25,900,404 $ 8,632,342
PACE Large Company Value Equity Investments...................... $39,396,832 $ 2,392,051
PACE Large Company Growth Equity Investments..................... $33,851,329 $ 4,178,805
PACE Small/Medium Company Value Equity Investments............... $32,814,627 $ 544,676
PACE Small/Medium Company Growth Equity Investments.............. $44,534,935 $ 9,005,475
PACE International Equity Investments............................ $16,466,840 $ 372,558
PACE International Emerging Markets Equity Investments........... $11,905,910 $ 234,757
</TABLE>
FEDERAL TAX STATUS
Each of the Portfolios intends to distribute substantially all of its
taxable income and to comply with the other 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.
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WRITTEN OPTION ACTIVITY
Written option activity for the period August 24, 1995 (commencement of
operations) to January 31, 1996 for PACE Global Fixed Income Investments was as
follows:
<TABLE>
<CAPTION>
NUMBER OF AMOUNT OF
OPTIONS PREMIUMS
--------- ---------
<S> <C> <C>
Options written during the period ended January 31, 1996............... 1 $ 3,112
Options cancelled in closing purchased transactions.................... -- --
Options expired prior to exercise...................................... (1) (3,112)
Options exercised...................................................... -- --
--------- ---------
Options outstanding at January 31, 1996................................ -- $ --
--------- ---------
--------- ---------
</TABLE>
SHARES OF BENEFICIAL INTEREST
For the period August 24, 1995 (commencement of operations) through January
31, 1996, transactions in shares of beneficial interest for each of the
Portfolios were as follows:
<TABLE>
<CAPTION>
DIVIDENDS
SHARES REINVESTED NET INCREASE
PORTFOLIO SHARES SOLD REPURCHASED IN ADDITIONAL SHARES IN SHARES OUTSTANDING
- ----------------------------------- ----------- ----------- -------------------- ---------------------
<S> <C> <C> <C> <C>
PACE Money Market Investments...... 6,542,339 (971,392) 68,293 5,639,240
PACE Government Securities Fixed
Income Investments................. 2,707,389 (180,580) 25,443 2,552,252
PACE Intermediate Fixed Income
Investments........................ 2,044,576 (122,891) 20,890 1,942,575
PACE Strategic Fixed Income
Investments........................ 1,786,743 (90,834) 19,902 1,715,811
PACE Municipal Fixed Income
Investments........................ 797,986 (27,644) 7,985 778,327
PACE Global Fixed Income
Investments........................ 2,019,443 (106,524) 23,371 1,936,290
PACE Large Company Value Equity
Investments........................ 3,281,804 (161,537) 13,833 3,134,100
PACE Large Company Growth Equity
Investments........................ 2,671,302 (126,119) 3,195 2,548,378
PACE Small/Medium Company Value
Equity Investments................. 3,446,112 (181,780) 8,873 3,273,205
PACE Small/Medium Company Growth
Equity Investments................. 3,809,906 (192,352) 3,712 3,621,266
PACE International Equity
Investments........................ 1,531,576 (76,974) 5,381 1,459,983
PACE International Emerging Markets
Equity Investments................. 1,150,476 (71,999) 1,219 1,079,696
</TABLE>
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Financial Highlights
For the Period August 24, 1995 (commencement of operations) through
January 31, 1996 (unaudited)
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding of each
Portfolio throughout the period is presented below:
<TABLE>
<CAPTION>
PACE
GOVERNMENT PACE PACE
PACE SECURITIES INTERMEDIATE STRATEGIC
MONEY MARKET FIXED INCOME FIXED INCOME FIXED INCOME
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........... $ 1.00 $ 12.00 $ 12.00 $ 12.00
------ ------------ ------------ ------------
Net investment income.......................... 0.02 0.21 0.23 0.26
Net realized and unrealized gains (losses) from
investments, futures contracts and foreign
currency transactions......................... -- 0.45 0.27 1.05
------ ------------ ------------ ------------
Net income (loss) from investment operations... 0.02 0.66 0.50 1.31
------ ------------ ------------ ------------
Dividends from net investment income........... (0.02) (0.17) (0.18) (0.21)
Distributions from net realized gains.......... -- (0.01) (0.01) (0.01)
------ ------------ ------------ ------------
Total dividends and distributions.............. (0.02) (0.18) (0.19) (0.22)
------ ------------ ------------ ------------
Net asset value, end of period................. $ 1.00 $ 12.48 $ 12.31 $ 13.09
------ ------------ ------------ ------------
------ ------------ ------------ ------------
Total investment return (1).................... 2.31% 5.52% 4.13% 10.99%
------ ------------ ------------ ------------
------ ------------ ------------ ------------
Ratios/Supplemental Data:
Net assets, end of period (000's).............. $5,651 $31,871 $23,930 $22,469
Ratio of:
Expenses to average net assets, net of fee
waivers and expense reimbursements.......... 0.50%* 0.85%* 0.85%* 0.85%*
Expenses to average net assets, before fee
waivers and expense reimbursements.......... 3.07%* 1.32%* 1.40%* 1.71%*
Net investment income to average net assets,
net of
fee waivers and expense reimbursements...... 5.13%* 5.00%* 5.35%* 5.83%*
Net investment income (loss) to average net
assets, before fee waivers and expense
reimbursements.............................. 2.56%* 4.53%* 4.80%* 4.97%*
Portfolio turnover............................. -- 223% 24% 33%
</TABLE>
- ------------
<TABLE>
<S> <C>
* Annualized
(1) Total investment return is calculated assuming a $1,000 investment on the first day of
each period reported, reinvestment of all dividends and capital gain distributions, if
any, 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 the PACE Program Fee; results
for each Portfolio would be lower if this fee was included. Total investment returns for
periods of less than one year have not been annualized.
</TABLE>
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<TABLE>
<CAPTION>
PACE PACE
PACE PACE PACE PACE SMALL/MEDIUM INTERNATIONAL
MUNICIPAL GLOBAL LARGE PACE SMALL/MEDIUM COMPANY PACE EMERGING
FIXED FIXED COMPANY LARGE COMPANY COMPANY GROWTH INTERNATIONAL MARKETS
INCOME INCOME VALUE EQUITY GROWTH EQUITY VALUE EQUITY EQUITY EQUITY EQUITY
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
- ----------- ----------- ------------ ------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00
- --------- --------- ---------- ---------- ---------- ---------- ------ ----------
0.21 0.22 0.06 0.02 0.04 0.02 0.05 0.02
0.40 0.48 1.88 1.14 -- (0.65) 0.78 0.90
- --------- --------- ---------- ---------- ---------- ---------- ------ ----------
0.61 0.70 1.94 1.16 0.04 (0.63) 0.83 0.92
- --------- --------- ---------- ---------- ---------- ---------- ------ ----------
(0.17) (0.20) (0.05) (0.02) (0.04) (0.02) (0.06) (0.02)
-- (0.01) (0.02) -- -- -- -- --
- --------- --------- ---------- ---------- ---------- ---------- ------ ----------
(0.17) (0.21) (0.07) (0.02) (0.04) (0.02) (0.06) (0.02)
- --------- --------- ---------- ---------- ---------- ---------- ------ ----------
$ 12.44 $ 12.49 $ 13.87 $ 13.14 $ 12.00 $ 11.35 $ 12.77 $ 12.90
- --------- --------- ---------- ---------- ---------- ---------- ------ ----------
- --------- --------- ---------- ---------- ---------- ---------- ------ ----------
5.13% 5.83% 16.22% 9.67% 0.34% (5.30)% 6.91% 7.65%
- --------- --------- ---------- ---------- ---------- ---------- ------ ----------
- --------- --------- ---------- ---------- ---------- ---------- ------ ----------
$9,694 $24,201 $43,483 $33,504 $39,297 $41,103 $18,646 $13,933
0.85%* 0.95%* 1.00%* 1.00%* 1.00%* 1.00%* 1.50%* 1.50%*
2.18%* 1.64%* 1.64%* 1.70%* 1.54%* 1.32%* 2.45%* 2.61%*
4.79%* 4.99%* 1.48%* 0.59%* 1.15%* 0.41%* 1.18%* 0.28%*
3.46%* 4.30%* 0.84%* (0.11)%* 0.61%* 0.09%* 0.23%* (0.85)%*
8% 77% 10% 23% 3% 44% 4% 3%
</TABLE>
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PaineWebber
(copyright) 1996 PaineWebber Incorporated
960109-012
