<PAGE>
PAINEWEBBER P A C E-SM-
Personalized Asset Consulting and Evaluation
Going The
Distance
To Meet Your
Financial Needs
Annual Report
July 31, 1998
This material is intended for use only by current PACE investors and must be
preceded or accompanied by the current PACE prospectus.
<PAGE>
DEAR PAINEWEBBER PACE-SM- SHAREHOLDER:
We are pleased to present you with the annual report for the PACE Portfolios,
comprising the PaineWebber PACE Select Advisors Trust.
In this report you will find Mitchell Hutchins' summaries of the domestic and
international markets for the six months ended July 31, 1998, covering events
since the semiannual report this past January. We then summarize the performance
of each PACE Portfolio and present comments from each of the investment
advisers. Please note that the opinions of the advisers do not necessarily
represent those of PaineWebber Incorporated or Mitchell Hutchins Asset
Management Inc.
We are pleased with the overall performance of the PACE Portfolios over the
past fiscal year. We recognize the far-ranging needs of today's investors and
the importance of well-planned, well-diversified portfolios. To meet these
needs, the PACE Portfolios offer a wide choice of actively managed funds that
allow you to take advantage of investment opportunities as they arise.
We appreciate the opportunity to help you achieve your financial goals. If you
have any questions about the PaineWebber PACE Program or about PACE Select
Advisors Trust, please contact your investment executive.
Sincerely,
<TABLE>
<CAPTION>
[SIG] [SIG]
<S> <C>
MARGO ALEXANDER BRUCE A. BURSEY
President Senior Vice President
Mitchell Hutchins Asset Management Inc. Managed Accounts Consulting Services
PaineWebber Incorporated
</TABLE>
September 15, 1998
This letter is intended to assist shareholders in understanding how the
portfolios performed during the fiscal year ended July 31, 1998, and reflects
both our views and the sub-advisers' views at the time of writing this report.
Of course, these views may change in response to changing circumstances. We
encourage you to consult your investment executive regarding your personal
investment program.
NOTE: SINCE JULY 31, 1998 (THE PORTFOLIOS' FISCAL YEAR-END), WORLD FINANCIAL
MARKETS HAVE EXPERIENCED SIGNIFICANT VOLATILITY. THE MARKET AND PORTFOLIO
PERFORMANCE CITED IN THIS REPORT DO NOT TAKE INTO ACCOUNT THIS VOLATILITY; THE
NEXT SEMIANNUAL REPORT, WHICH WILL COVER THE SIX MONTHS ENDING JANUARY 31, 1999,
WILL ADDRESS THIS PERIOD.
1
<PAGE>
INVESTMENT OVERVIEW--DOMESTIC
STOCKS
The stock market seesawed throughout the fiscal year ended July 31, 1998.
During the first six months investors worried about inflation heating up, and
record market highs often led to steep sell-offs. Yet economic activity
continued at a healthy pace through most of the fiscal year, and inflation
remained low. High employment buoyed consumer confidence and, coupled with low
interest rates, continued to support the economy. After slowing toward the end
of 1997, the stock market began to take off in early 1998.
The market environment remained choppy, though, as round two of the Asian
crisis loomed and investors began to worry about its impact on corporate
earnings. There was a lot of movement but no clear trend. Money shifted from
sector to sector as investors reacted each day to news from Asia. This sector
rotation caused rolling corrections and produced shorter periods of growth. The
bull market slowed but the S&P 500 Index still returned 19.31% for the year
ended July 31, 1998.(1)
The market moved ahead despite the drag of lower-than-expected earnings,
fueled by cash flows into equity mutual funds and the appeal of the United
States over unsettled markets in Asia and Latin America. Investors favored
large-capitalization growth stocks, attracted by their consistent earnings, high
liquidity and low vulnerability to the Asian financial crisis.
BONDS
U.S. bond market yields fell over the year, reflecting investor demand for
high-quality securities and diminishing concern over inflation. The bond market
traded in tandem with the dollar and the Federal Funds rate of 5.5% placed a
limit on the appreciation of shorter-maturity securities. The yield curve
flattened as long-term rates fell more than short-term rates. Rates briefly rose
in April of this year when the Federal Reserve announced it had shifted to a
tightening bias, but dropped at month-end on good employment and inflation news.
In May, the bond market reacted favorably to signs of a slowing U.S. economy.
More important, labor tensions in South Korea and escalating economic problems
in Russia led cautious investors to move into high-quality U.S. government
securities. The 30-year Treasury yield fell to 5.71% by July 31, one of its
lowest levels in the last decade.(2) Corporates and mortgage-backed securities
underperformed Treasurys, the former due to Asian fears and the latter due to
higher prepayments as interest rates declined.
Interest rates did not change in the municipal bond market, in contrast to the
steady rate decline in the Treasury market. Municipal bond yields did not fall
because a massive supply of new issues came to market and had to be priced
attractively to sell. As a result, the ratio of long-term municipal bond yields
to U.S. Treasury bond yields rose to 91%, up from 82% one year ago.
INVESTMENT OVERVIEW--GLOBAL
STOCKS
The European equity markets turned in the strongest performance for the year,
boosted by persistent fund inflows, bond convergence, domestic capital and
corporate activity. The other major regions lost ground. U.K. stocks suffered
from the impact of a strong sterling and an interest-rate increase. The U.S.
market proved resilient despite the Asia threat and a host of earnings
downgrades.
By the end of the fiscal year, Asia had lost its earlier gains and had caused
smaller markets around the globe to weaken. Japan had announced ever-larger
fiscal stimulus packages yet failed to reassure investors. The Japanese stock
market and the yen continued to decline, threatening a second round of Asian
currency devaluations. Hong Kong was particularly weak as fears of a Chinese
devaluation grew. South Africa became a casualty of emerging-markets turmoil
when it was forced to raise interest rates in June, delaying any pickup in
growth until late 1999.
(1) Source: Lipper Analytical Services, Inc.
(2) Source: Bloomberg Inc.
2
<PAGE>
BONDS
Global interest rates fell over the year in response to the spreading impact
of the Asian financial crisis. Virtually all major markets produced solid
returns in local currency terms, and currency appreciation against the U.S.
dollar added to gains in the continental European markets. Currency changes hurt
the returns of Australian, Canadian and Japanese bonds.
The emerging markets suffered losses as concerns grew over the depth of
economic contraction in Asia. Falling oil prices and fears of another correction
dragged Latin America down. Russia went into a tailspin as capital exited the
local Treasury bill market during July. Indonesian unrest led to the resignation
of President Suharto and the nuclear tests by India and Pakistan aroused global
concern.
3
<PAGE>
PACE MONEY MARKET INVESTMENTS
ADVISER: Mitchell Hutchins Asset Management Inc.
OBJECTIVE: Current income consistent with preservation of capital and liquidity
INVESTMENT PROCESS: The Portfolio invests in high-quality, U.S.
dollar-denominated money market instruments with maturities of 13 months or
less, and maintains a dollar-weighted average maturity of 90 days or less.
Security selection follows an approved list reviewed by the firm's credit
analysts.
ADVISER'S COMMENTS
For the fiscal year ended July 31, 1998, the Portfolio provided investors with
a return of 5.32% (before deducting the PACE Program fee). This return surpassed
the 5.16% return of the 90-day U.S. Treasury bill over the same period. For the
seven days ended July 31, 1998, the portfolio's yield was 5.3% and its
dollar-weighted average maturity was 77 days. Net assets totaled $25.5 million.
We remained somewhat bullish on the fixed income markets over the six months
ended July 31, 1998. Since we expected interest rates to remain the same or fall
slightly, we kept the Portfolio's dollar-weighted average maturity slightly
above its peer group. Our expectations remain the same going forward, so we
intend to maintain the Portfolio's dollar-weighted average maturity slightly
above its peer group.
4
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5
<PAGE>
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
ADVISER: Pacific Investment Management Company (PIMCO)
OBJECTIVE: Current income
INVESTMENT PROCESS: The Portfolio invests primarily in U.S. government and
agency securities of varying maturities, as well as mortgage-backed securities.
Its dollar-weighted average duration ranges between two and seven years. PIMCO
establishes duration targets based on its expectations for changes in interest
rates, then positions the Portfolio to take advantage of yield curve shifts.
Securities are chosen for their value relative to other equivalent securities.
ADVISER'S COMMENTS
For the one-year period covered by this report--August 1, 1997 through July
31, 1998--the Portfolio returned 7.39% before deducting the PACE Program fee.
The Portfolio slightly underperformed the Lehman Brothers Mortgage Backed
Securities Index (the "Index") return of 7.46%. Portfolio net assets totaled
$162.1 million as of July 31, 1998.
The Portfolio's above-benchmark duration (a measure of its sensitivity to
interest rate changes) contributed to performance as rates fell toward the end
of the fiscal year. Falling rates caused the mortgage sector to lag the market
as prepayments rose. The Portfolio's current-coupon, discount and collateralized
mortgages, which faced less prepayment pressure, performed better than
premium-coupon mortgages.
We expect to maintain Portfolio duration at about 0.5 years above its
benchmark to capture the price gains from lower-than-expected long-term rates.
We intend to focus the Portfolio more on the intermediate segment of the yield
curve in anticipation of an economic slowdown and potential curve steepening. We
believe mortgages will continue to be the most prudent way to enhance yield
without adding undue risk. We will focus on discount coupon, seasoned and other
prepayment-protected mortgages, which tend to perform better in a declining rate
environment.
PORTFOLIO STATISTICS, 7/31/98*
<TABLE>
<S> <C>
ASSET ALLOCATION
- ---------------------------------------------
Agency mortgage pass-throughs................ 58.2%
Collateralized mortgages..................... 28.4
U.S. government and agency................... 6.2
Asset backed................................. 5.2
Cash equivalents............................. 1.2
Stripped mortgage-backed..................... 0.8
WEIGHTED AVERAGES
- ---------------------------------------------
Maturity..................................... 3.39 years
Duration..................................... 2.69 years
</TABLE>
* Percent of Portfolio assets; all statistics subject to change
6
<PAGE>
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO
AND THE LEHMAN BROTHERS MORTGAGE BACKED SECURITIES INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio- Portfolio- Lehman Mortgage
Without Fee With Fee* Backed Securities Index
<S> <C> <C> <C>
8/24/95 $10,000 $10,000 $10,000
10/95 $10,219 $10,190 $10,178
1/96 $10,552 $10,483 $10,501
4/96 $10,297 $10,191 $10,347
7/96 $10,435 $10,289 $10,498
10/96 $10,837 $10,645 $10,883
1/97 $10,993 $10,758 $11,062
4/97 $11,090 $10,813 $11,169
7/97 $11,522 $11,192 $11,625
10/97 $11,771 $11,391 $11,875
1/98 $12,034 $11,601 $12,141
4/98 $12,156 $11,676 $12,288
7/98 $12,374 $11,840 $12,491
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Government Securities Fixed Income
Investments versus the Lehman Brothers Mortgage Backed Securities Index. It is
important to note that PACE Government Securities Fixed Income Investments is a
professionally managed portfolio while the Index is not available for investment
and is unmanaged. The comparison is shown for illustrative purposes only.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
ONE YEAR ENDED INCEPTION THROUGH
7/31/98 7/31/98**
---------------- ------------------
<S> <C> <C>
Without PACE program fee..................... 7.39 % 7.52 %
With PACE program fee........................ 5.79 5.91
</TABLE>
** Inception = August 24, 1995
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
7
<PAGE>
PACE INTERMEDIATE FIXED INCOME INVESTMENTS
ADVISER: Pacific Income Advisers, Inc.
OBJECTIVE: Current income consistent with reasonable stability of principal
INVESTMENT PROCESS: The Portfolio invests in fixed income securities rated at
least BBB; its dollar-weighted average duration (a measure of sensitivity to
interest rate changes) ranges between two and four and one half years. The
adviser focuses on anticipating yield curve shifts and actively rotating among
fixed income sectors based on its assessment of the risks and reward of each
sector. Pacific Income Advisers uses a proprietary risk-adjustment model to
identify undervalued securities.
ADVISER'S COMMENTS
For the one-year period covered by this report--August 1, 1997 through July
31, 1998--the Portfolio returned 6.41% before deducting the PACE Program fee.
The Portfolio slightly underperformed the Lehman Brothers Intermediate-Term
Government/Corporate Index (the "Index") return of 6.75%. Portfolio net assets
totaled $99.7 million as of July 31, 1998.
As the mortgage sector's risk/reward profile deteriorated, we reduced the
Portfolio's mortgage allocation to 16.3% of portfolio assets as of July 31,
1998. We remain cautious about prepayment risk in the mortgage market. We
increased the allocation to corporate bonds as corporate yield spreads to
Treasurys widened and the risk-adjusted valuations of select issuers improved.
We lengthened Portfolio duration beyond the benchmark in early April and kept it
long through July 31, in accordance with our tactical allocation process. The
Portfolio's longer duration helped it outperform its Lipper median in a period
of declining interest rates.
We remain constructive on the fixed income market in the long run; continuing
uncertainty in Asia and Russia, combined with the U.S. dollar's strength, should
keep inflation at low levels. In the short run we believe it would take another
major event to cause Treasurys to move higher; most likely, near term they will
trade within a tight range.
PORTFOLIO STATISTICS, 7/31/98*
<TABLE>
<S> <C>
ASSET ALLOCATION
- ---------------------------------------------
U.S. government.............................. 45.3%
Corporate & asset-backed..................... 37.6
Mortgage backed.............................. 16.3
Cash equivalents............................. 0.8
CREDIT QUALITY
- ---------------------------------------------
Government................................... 52.5%
AAA.......................................... 10.8
AA........................................... 3.7
A............................................ 23.4
BBB.......................................... 8.3
High yield................................... 0.5
Cash equivalents............................. 0.8
</TABLE>
* Percent of Portfolio assets; all statistics subject to change
8
<PAGE>
PACE INTERMEDIATE FIXED INCOME INVESTMENTS
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO
AND THE LEHMAN BROTHERS INTERMEDIATE-TERM GOVERNMENT/CORPORATE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio- Portfolio- Lehman Intermediate
Without Fee With Fee* Gov't/Corp. Index
<S> <C> <C> <C>
8/24/95 $10,000 $10,000 $10,000
10/95 $10,232 $10,203 $10,184
1/96 $10,413 $10,344 $10,515
4/96 $10,227 $10,122 $10,303
7/96 $10,359 $10,214 $10,435
10/96 $10,662 $10,474 $10,776
1/97 $10,758 $10,528 $10,891
4/97 $10,825 $10,554 $10,963
7/97 $11,202 $10,881 $11,381
10/97 $11,401 $11,032 $11,582
1/98 $11,671 $11,251 $11,854
4/98 $11,712 $11,249 $11,942
7/98 $11,920 $11,406 $12,148
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Intermediate Fixed Income
Investments versus the Lehman Brothers Intermediate-Term Government/Corporate
Index. It is important to note that PACE Intermediate Fixed Income Investments
is a professionally managed portfolio while the Index is not available for
investment and is unmanaged. The comparison is shown for illustrative purposes
only.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
ONE YEAR ENDED INCEPTION THROUGH
7/31/98 7/31/98**
---------------- ------------------
<S> <C> <C>
Without PACE program fee..................... 6.41 % 6.16 %
With PACE program fee........................ 4.82 4.58
</TABLE>
** Inception = August 24, 1995
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
9
<PAGE>
PACE STRATEGIC FIXED INCOME INVESTMENTS
ADVISER: Pacific Investment Management Company (PIMCO)
OBJECTIVE: Total return consisting of income and capital appreciation
INVESTMENT PROCESS: The Portfolio invests primarily in fixed income securities
of varying maturities. Its dollar-weighted average duration (a measure of
sensitivity to interest rate changes) ranges between three and eight years.
PIMCO invests in those areas of the bond market it considers undervalued, based
on such factors as quality, sector, coupon and maturity.
ADVISER'S COMMENTS
For the one-year period covered by this report--August 1, 1997 through July
31, 1998--the Portfolio returned 8.66% before deducting the PACE Program fee.
The Portfolio outperformed the Lehman Brothers Government/Corporate Bond Index
(the "Index") return of 8.06%. Portfolio net assets totaled $126.9 million as of
July 31, 1998.
As interest rates fell during the period the Portfolio's duration, which was
longer than the Index, contributed to performance. The mortgage sector lagged
the market as rates fell and prepayments rose. The Portfolio's current-coupon,
discount and collateralized mortgages, which faced less prepayment pressure,
fared better than its premium-coupon mortgages. A below-Index weighting in the
corporate sector boosted returns as corporate profits waned and yield spreads
versus U.S. Treasurys widened. The Portfolio's small emerging market position
(2.0% as of July 31, 1998) hurt performance.
We expect to maintain Portfolio duration at about 0.5 years above its
benchmark to capture price gains from lower-than-expected long-term rates. We
intend to focus the Portfolio more on the intermediate segment of the yield
curve in anticipation of an economic slowdown and potential curve steepening. We
believe discount-coupon mortgages will continue to be the most prudent way to
enhance yield without adding undue risk.
We expect corporate profits to slow, and will continue to underweight
investment-grade corporate debt. We will selectively hold small allocations of
lower-rated corporate and emerging-market issues that pass stringent credit
analysis.
PORTFOLIO STATISTICS, 7/31/98*
<TABLE>
<S> <C>
ASSET ALLOCATION
- ---------------------------------------------
Agency mortgage pass-throughs................ 31.3%
Collateralized mortgages..................... 28.8
Corporate & asset-backed..................... 18.9
U.S. government.............................. 15.0
Cash equivalents............................. 3.3
Emerging markets............................. 2.0
Stripped mortgage backed..................... 0.7
CREDIT QUALITY
- ---------------------------------------------
AAA.......................................... 78.2%
AA/A......................................... 7.7
BBB.......................................... 9.5
BB........................................... 4.6
</TABLE>
* Percent of Portfolio assets; all statistics subject to change
10
<PAGE>
PACE STRATEGIC FIXED INCOME INVESTMENTS
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO
AND THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio- Portfolio- Lehman
Without Fee With Fee* Gov't/Corp. Bond Index
<S> <C> <C> <C>
8/24/95 $10,000 $10,000 $10,000
10/95 $10,660 $10,630 $10,251
1/96 $11,099 $11,026 $10,638
4/96 $10,679 $10,569 $10,254
7/96 $10,815 $10,663 $10,397
10/96 $11,278 $11,079 $10,801
1/97 $11,413 $11,169 $10,891
4/97 $11,459 $11,172 $10,941
7/97 $12,042 $11,697 $11,518
10/97 $12,303 $11,905 $11,752
1/98 $12,728 $12,271 $12,107
4/98 $12,770 $12,265 $12,181
7/98 $13,085 $12,521 $12,447
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Strategic Fixed Income Investments
versus the Lehman Brothers Government/Corporate Bond Index. It is important to
note that PACE Strategic Fixed Income Investments is a professionally managed
portfolio while the Index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
ONE YEAR ENDED INCEPTION THROUGH
7/31/98 7/31/98**
---------------- ------------------
<S> <C> <C>
Without PACE program fee..................... 8.66 % 9.58 %
With PACE program fee........................ 7.04 7.95
</TABLE>
** Inception = August 24, 1995
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
11
<PAGE>
PACE MUNICIPAL FIXED INCOME INVESTMENTS
ADVISER: Morgan Grenfell Capital Management, Incorporated
OBJECTIVE: High current income exempt from Federal income tax
INVESTMENT PROCESS: The Portfolio invests in general obligation, revenue and
private activity bonds and notes, the interest on which is exempt from Federal
income tax. Its dollar-weighted average duration (a measure of sensitivity to
interest rate changes) ranges between three and seven years. Morgan Grenfell
seeks to provide consistent returns with low volatility by selecting
high-quality securities across all maturities and keeping Portfolio duration
close to its benchmark index. Emphasis is placed on issues with enhancements--
such as government backing or collateral-- that reduce credit risk.
ADVISER'S COMMENTS
For the one-year period covered by this report--August 1, 1997 through July
31, 1998--the Portfolio returned 4.87% before deducting the PACE Program fee.
The Portfolio slightly outperformed the Lehman Brothers Municipal Five-Year
Index (the "Index") return of 4.79%. Portfolio net assets totaled $51.6 million
as of July 31, 1998.
During the period, the unusually high ratio of yields on municipal bonds
relative to U.S. Treasury bonds called for some extension of maturities to
capture a profit opportunity. We increased the Portfolio's duration from 5.35
years to 6.11 years on March 31 and kept it there through July 31. We do not
believe this duration increase will commensurately increase price risk, since a
more normal yield relationship between the two markets seems likely to return.
We believe municipal bonds represent excellent value relative to U.S. Treasury
bonds given the current yield relationship between the two sectors. If, as we
anticipate, the volume of new municipal bonds brought to market subsides later
this year, municipal bond prices should rally as investors bid up a smaller
supply of available bonds.
PORTFOLIO STATISTICS, 7/31/98*
<TABLE>
<CAPTION>
TOP FIVE STATES
- ---------------------------------------------
<S> <C>
Texas........................................ 12.9 %
Pennsylvania................................. 8.8
California................................... 8.6
Illinois..................................... 8.4
Indiana...................................... 7.3
<CAPTION>
TOP FIVE SECTORS
- ---------------------------------------------
<S> <C>
Housing...................................... 32.6 %
Healthcare................................... 19.6
Industrial products & services............... 14.5
Education.................................... 10.8
Transportation............................... 4.6
</TABLE>
* Percent of Portfolio assets; all statistics subject to change
12
<PAGE>
PACE MUNICIPAL FIXED INCOME INVESTMENTS
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO
AND THE LEHMAN BROTHERS MUNICIPAL FIVE-YEAR INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio-Without
Fee Portfolio-With Fee* Lehman Muni 5-Year Index
8/24/95 $10,000 $10,000 $10,000
<S> <C> <C> <C>
10/95 $10,199 $10,170 $10,086
1/96 $10,513 $10,444 $10,333
4/96 $10,381 $10,274 $10,231
7/96 $10,638 $10,489 $10,363
10/96 $10,899 $10,706 $10,549
1/97 $11,068 $10,831 $10,702
4/97 $11,092 $10,815 $10,708
7/97 $11,522 $11,191 $11,115
10/97 $11,649 $11,272 $11,214
1/98 $11,861 $11,435 $11,449
4/98 $11,884 $11,434 $11,430
7/98 $12,083 $11,562 $11,647
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Municipal Fixed Income Investments
versus the Lehman Brothers Municipal Five-Year Index. It is important to note
that PACE Municipal Fixed Income Investments is a professionally managed
portfolio while the Index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
ONE YEAR ENDED INCEPTION THROUGH
7/31/98 7/31/98**
---------------- ------------------
<S> <C> <C>
Without PACE program fee..................... 4.87 % 6.65 %
With PACE program fee........................ 3.31 5.06
</TABLE>
** Inception = August 24, 1995
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
13
<PAGE>
PACE GLOBAL FIXED INCOME INVESTMENTS
ADVISER: Rogge Global Partners plc
OBJECTIVE: High total return
INVESTMENT PROCESS: The Portfolio invests in high-grade fixed income securities
issued by U.S. and foreign governments, supranational entities and overseas
private issuers. Its dollar-weighted average duration (a measure of sensitivity
to interest rate changes) ranges between four and eight years. The adviser
believes that financially healthy countries produce the highest bond and
currency returns over time. They use a top-down analysis to find value across
countries and to forecast interest and currency-exchange rates over a one-year
horizon. An optimization model helps determine country, currency and duration
positions.
ADVISER'S COMMENTS
For the one-year period covered by this report--August 1, 1997 through July
31, 1998--the Portfolio returned 4.88% before deducting the PACE Program fee.
The Portfolio lagged the Salomon Brothers World Government Bond Index (the
"Index") return of 5.27%. Portfolio net assets totaled $88.8 million as of July
31, 1998.
Over the past year the Portfolio benefited from our country selections: we
overweighted some of the best-performing markets, including the United Kingdom
and Sweden; and underweighted Japan, which was one of the worst performers. The
Portfolio maintained a longer duration than its benchmark and benefited from the
general decline in interest rates over the year. The positive impact of these
positions was offset by our currency positions, including an underweighting in
the U.S. dollar and a slight overweighting in the yen. Our emerging markets
position (5.8% of portfolio assets as of July 31, 1998) also hurt performance.
The most notable change in the Portfolio during the past 12 months was the
reduction of dollar bloc holdings in favor of German bonds. As part of this
reduction we eliminated the Portfolio's Canadian holdings. We also moved from a
neutral currency allocation in core European countries to a large overweighting
in deutschemarks (41% of net assets as of July 31, 1998).
We believe that the volatility we have seen in the past few weeks will remain
a feature of all markets. The global capital markets will continue to exert
pressure on those countries whose financial health is suspect. We expect more
uncertainty in the markets, with the Russian situation unresolved, Latin
American countries running large current account deficits and Hong Kong and
China still under pressure from international investors. While we believe that
the global economy is sound enough to avoid a severe downturn, we think
investors will keep selling overvalued markets in pursuit of risk reduction.
Under this scenario, global bonds will continue to be an attractive investment
vehicle.
PORTFOLIO STATISTICS, 7/31/98*
<TABLE>
<CAPTION>
ASSET ALLOCATION
- ---------------------------------------------
<S> <C>
Europe....................................... 55.0%
U.S. Treasurys/government agencies........... 29.6
Emerging markets............................. 5.8
Cash equivalents............................. 5.2
U.S. corporates.............................. 1.9
Japan........................................ 1.5
Canada....................................... 1.0
<CAPTION>
CREDIT QUALITY
- ---------------------------------------------
<S> <C>
AAA.......................................... 89.5%
AA........................................... 0.2
A............................................ 2.4
BBB.......................................... 5.0
BB........................................... 2.9
</TABLE>
* Percent of Portfolio assets; all statistics subject to change
14
<PAGE>
PACE GLOBAL FIXED INCOME INVESTMENTS
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO
AND THE SALOMON BROTHERS WORLD GOVERNMENT BOND INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio-Without
Fee Portfolio-With Fee* SB World Gov't Bond Index
8/24/95 $10,000 $10,000 $10,000
<S> <C> <C> <C>
10/95 $10,360 $10,331 $10,300
1/96 $10,583 $10,514 $10,395
4/96 $10,482 $10,374 $10,286
7/96 $10,668 $10,519 $10,569
10/96 $11,042 $10,847 $10,852
1/97 $10,828 $10,597 $10,615
4/97 $10,551 $10,287 $10,364
7/97 $11,046 $10,729 $10,688
10/97 $11,431 $11,061 $11,136
1/98 $11,400 $10,990 $11,039
4/98 $11,576 $11,118 $11,195
7/98 $11,586 $11,086 $11,252
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Global Fixed Income Investments
versus the Salomon Brothers World Government Bond Index. It is important to note
that PACE Global Fixed Income Investments is a professionally managed portfolio
while the Index is not available for investment and is unmanaged. The comparison
is shown for illustrative purposes only.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
ONE YEAR ENDED INCEPTION THROUGH
7/31/98 7/31/98**
---------------- ------------------
<S> <C> <C>
Without PACE program fee..................... 4.88 % 5.13 %
With PACE program fee........................ 3.32 3.57
</TABLE>
** Inception = August 24, 1995
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
15
<PAGE>
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
ADVISER: Brinson Partners, Inc.
OBJECTIVE: Capital appreciation and dividend income
INVESTMENT PROCESS: The Portfolio invests in equity securities that the adviser
considers undervalued. Normally, at least 65% of the Portfolio is invested in
common stocks of companies with market capitalization of at least $2.5 billion
when purchased. The adviser looks for undervalued issues within the context of
its macroeconomic and market outlooks. The firm's analysts conduct fundamental
research on a universe of 700 stocks to develop growth and cash flow
projections. These projections are factored into a proprietary ranking model
that helps senior investment professionals select stocks.
ADVISER'S COMMENTS
For the one-year period covered by this report--August 1, 1997 through July
31, 1998--the Portfolio returned 9.89% before deducting the PACE Program fee.
The Portfolio lagged the Russell 1000 Value Index (the "Index") return of
17.71%. Portfolio net assets totaled $266.4 million as of July 31, 1998.
The Portfolio's low weighting in consumer-related stocks relative to the Index
dragged down performance. On the other hand, the Portfolio's underweighting in
banks and thrifts (10.7% below the Index as of July 31, 1998) helped results, as
did its overweighting in drug stocks (6.4% above the Index). For the year ended
July 31, 1998, value stocks as measured by the Russell 1000 lagged the broader
market, as measured by the S&P 500 Index, which returned 19.31%.
We believe the U.S. stock market is overvalued and market analysts'
expectations for future earnings growth are overoptimistic. Consistent with our
belief that investors are insufficiently focused on the riskiness of the stock
market, the Portfolio is maintaining a low exposure to the largest stocks in the
market.
PORTFOLIO STATISTICS, 7/31/98*
<TABLE>
<CAPTION>
TOP FIVE SECTORS
- ---------------------------------------------
<S> <C>
Health....................................... 13.6%
Services+.................................... 9.3
Transportation............................... 9.1
Consumer nondurables......................... 9.1
Technology................................... 9.0
</TABLE>
+ Includes financial services, computer services, data processing and
entertainment.
<TABLE>
<CAPTION>
TOP TEN STOCKS
- ---------------------------------------------
<S> <C>
Xerox Corp. ................................. 4.9%
Burlington Northern Santa Fe Inc. ........... 4.5
Lockheed Martin Corp. ....................... 4.4
Philip Morris Co. Inc. ...................... 3.5
AON Corp. ................................... 3.2
Federal Express Corp. ....................... 3.0
Baxter International Inc. ................... 2.6
Raytheon Co. ................................ 2.4
Automatic Data Processing Inc. .............. 2.3
Goodyear Tire & Rubber Co. .................. 2.3
</TABLE>
* Percent of Portfolio assets; all statistics subject to change
16
<PAGE>
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
PORTFOLIO AND THE RUSSELL 1000 VALUE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio-Without Russell 1000 Value
Fee Portfolio-With Fee* Index
8/24/95 $10,000 $10,000 $10,000
<S> <C> <C> <C>
10/95 $10,408 $10,379 $10,259
1/96 $11,622 $11,546 $11,395
4/96 $12,242 $12,116 $11,721
7/96 $11,790 $11,625 $11,428
10/96 $13,072 $12,840 $12,696
1/97 $14,483 $14,174 $14,094
4/97 $14,527 $14,163 $14,365
7/97 $17,581 $17,077 $17,009
10/97 $16,669 $16,130 $16,909
1/98 $17,557 $16,926 $17,914
4/98 $19,977 $19,187 $20,425
7/98 $19,320 $18,486 $20,020
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Large Company Value Equity
Investments versus the Russell 1000 Value Index. It is important to note that
PACE Large Company Value Equity Investments is a professionally managed
portfolio while the Index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
ONE YEAR ENDED INCEPTION THROUGH
7/31/98 7/31/98**
---------------- ------------------
<S> <C> <C>
Without PACE program fee..................... 9.89 % 25.11 %
With PACE program fee........................ 8.25 23.25
</TABLE>
** Inception = August 24, 1995
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
17
<PAGE>
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
ADVISER: Alliance Capital Management L.P., since November 11, 1997
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: The Portfolio invests in companies that the adviser believes
have faster rates of earnings growth than the average rate of the companies that
comprise the S&P 500 Index. Normally, at least 65% of the Portfolio is invested
in common stocks of companies with market capitalization of at least $2.5
billion at time of purchase. Alliance chooses stocks by identifying the best
combinations of earnings growth and reasonable valuation. Each stock in the
adviser's research universe is ranked based on analysts' assessments and six
measures of earnings growth and valuation. The Portfolio normally invests in
stocks that rank within the resulting top 30% of the universe.
ADVISER'S COMMENTS
For the one-year period covered by this report--August 1, 1997 through July
31, 1998--the Portfolio returned 26.40% before deducting the PACE Program fee.
The Portfolio surpassed its benchmark, the Russell 1000 Growth Index (the
"Index") return of 19.91%. Portfolio net assets totaled $275.5 million as of
July 31, 1998.
Outperforming sectors--consumer services, financial services, healthcare and
technology--represented more than 70% of the Portfolio and remain its largest
positions. Our focus has not changed since the last report and we do not expect
to change it much for the foreseeable future.
Intense price competition from Asia means companies must rely on unit growth
and margin expansion rather than price increases for earnings growth. We
therefore favor companies that are benefiting from new product introductions and
market leadership. We see attractive stocks in the healthcare, consumer staples
and technology sectors. Within technology, we have underweighted semiconductors
and overweighted telecommunications. We are reviewing our earnings estimates for
all portfolio holdings to avoid surprises.
PORTFOLIO STATISTICS, 7/31/98*
<TABLE>
<CAPTION>
TOP FIVE SECTORS
- ---------------------------------------------
<S> <C>
Technology................................... 20.8%
Finance...................................... 20.4
Consumer services............................ 15.1
Healthcare................................... 14.6
Consumer staples............................. 12.9
<CAPTION>
TOP TEN STOCKS
- ---------------------------------------------
<S> <C>
Cisco Systems................................ 4.5%
Dell Computer................................ 3.8
Schering Plough.............................. 3.8
Travelers Group.............................. 3.8
Bristol-Myers Squibb Co...................... 3.7
Tyco International Ltd....................... 3.1
Nationsbank Corp. ........................... 3.0
Solectron.................................... 2.9
Merck & Co. Inc.............................. 2.8
Worldcom..................................... 2.5
</TABLE>
* Percent of Portfolio assets; all statistics subject to change
18
<PAGE>
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
PORTFOLIO AND THE RUSSELL 1000 GROWTH INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio-Without
Fee Portfolio-With Fee* Russell 1000 Growth Index
8/24/95 $10,000 $10,000 $10,000
<S> <C> <C> <C>
10/95 $10,400 $10,371 $10,468
1/96 $10,967 $10,895 $11,304
4/96 $11,485 $11,367 $11,829
7/96 $11,076 $10,921 $11,540
10/96 $12,662 $12,438 $12,776
1/97 $13,660 $13,368 $14,411
4/97 $13,208 $12,878 $14,437
7/97 $16,128 $15,665 $17,522
10/97 $15,567 $15,064 $16,668
1/98 $16,475 $15,883 $18,096
4/98 $19,100 $18,344 $20,512
7/98 $20,385 $19,506 $21,011
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Large Company Growth Equity
Investments versus the Russell 1000 Growth Index. It is important to note that
PACE Large Company Growth Equity Investments is a professionally managed
portfolio while the Index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
ONE YEAR ENDED INCEPTION THROUGH
7/31/98 7/31/98**
---------------- ------------------
<S> <C> <C>
Without PACE program fee..................... 26.40 % 27.44 %
With PACE program fee........................ 24.52 25.54
</TABLE>
** Inception = August 24, 1995
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
19
<PAGE>
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
ADVISER: Brandywine Asset Management, Inc.
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: The Portfolio invests in equity securities that the adviser
believes are undervalued or overlooked in the market. Such equities usually have
price-to-earnings (P/E) ratios below the market average. Normally, at least 65%
of the Portfolio is invested in common stocks of companies with market
capitalization of less than $2.5 billion at the time of purchase.
The adviser narrows the small company universe to about 650 stocks using three
quantitative screens: positive trailing 12-month operating earnings, lowest P/E
quartile based on trailing 12-month operating earnings, and market cap over $10
million but below the median cap of the New York Stock Exchange. Fundamental
review further narrows the universe by excluding stocks for: earnings
adjustments that raise P/E above the lowest quartile, pre-announced earnings
changes that when formally reported will raise P/E, strong recent price gains
and severe or sudden fundamental deterioration.
ADVISER'S COMMENTS
For the one-year period covered by this report--August 1, 1997 through July
31, 1998--the Portfolio returned 6.97% before deducting the PACE Program fee.
The Portfolio underperformed the Russell 2500 Value Index (the "Index") return
of 8.41%. Portfolio net assets totaled $183.6 million as of July 31, 1998.
Steel and aluminum stocks helped Portfolio performance over the last six
months of the fiscal year. We took profits in this group ahead of mild price
declines. The worst-performing sectors in the Portfolio were technology and
process industries, including chemicals and textiles, the hardest hit by the
Asian crisis. Our continued selling of appreciated financial stocks has reduced
the Portfolio's holdings below the Index's 30.2% weighting. These reductions
have been balanced by small increases in producer manufacturing, process
industries and transportation. We have also begun to reduce the utility
weighting, which played a defensive role toward the end of the year.
Our positive outlook for small-cap stocks rests on the following observations:
- They have less exposure to global weakness than large caps.
- As the economy slows, smaller companies are likely to sustain earnings
growth better than large companies.
- Small caps are trading at their deepest discount to large caps since 1990,
suggesting potential for gains.
PORTFOLIO STATISTICS, 7/31/98*
<TABLE>
<CAPTION>
TOP FIVE SECTORS
- ---------------------------------------------
<S> <C>
Financial services........................... 19.7%
Producer manufacturing....................... 14.8
Utilities.................................... 10.3
Consumer durables............................ 9.6
Non-energy minerals.......................... 8.3
<CAPTION>
TOP TEN STOCKS
- ---------------------------------------------
<S> <C>
Centex Construction Products Inc. ........... 0.9%
Polaris Industries Inc. ..................... 0.9
Toll Brothers Inc. .......................... 0.8
Public Service Co. .......................... 0.8
NAC Reinsurance Corp. ....................... 0.8
Alliant Techsystem Inc. ..................... 0.8
Capital Re Corp. ............................ 0.8
American Annuity Group Inc. ................. 0.8
Lone Star Industries, Inc. .................. 0.7
Mascotech Inc. .............................. 0.7
</TABLE>
* Percent of Portfolio assets; all statistics subject to change
20
<PAGE>
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
PORTFOLIO AND THE RUSSELL 2500 VALUE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio-Without Russell 2500 Value
Fee Portfolio-With Fee* Index
8/24/95 $10,000 $10,000 $10,000
<S> <C> <C> <C>
10/95 $9,617 $9,589 $9,886
1/96 $10,034 $9,968 $10,668
4/96 $10,711 $10,601 $11,242
7/96 $10,276 $10,132 $10,816
10/96 $11,246 $11,047 $11,910
1/97 $12,656 $12,386 $13,217
4/97 $12,389 $12,079 $13,242
7/97 $15,105 $14,672 $15,642
10/97 $16,165 $15,643 $16,184
1/98 $16,511 $15,918 $16,857
4/98 $18,592 $17,857 $18,775
7/98 $16,158 $15,461 $16,956
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Small/Medium Company Value Equity
Investments versus the Russell 2500 Value Index. It is important to note that
PACE Small/Medium Company Value Equity Investments is a professionally managed
portfolio while the Index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
ONE YEAR ENDED INCEPTION THROUGH
7/31/98 7/31/98**
---------------- ------------------
<S> <C> <C>
Without PACE program fee..................... 6.97 % 17.73 %
With PACE program fee........................ 5.38 15.98
</TABLE>
** Inception = August 24, 1995
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
21
<PAGE>
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
ADVISER: Delaware Management Company, Inc.
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: The Portfolio invests primarily in the common stock of
"emerging growth" companies, which feature above-average rates of earnings
growth. Normally, at least 65% of the Portfolio is invested in common stocks of
companies with market capitalization of less than $2.5 billion. Up to 5% of
total assets may be invested in foreign securities, including ADRs.
Delaware employs bottom-up, fundamental analysis to identify companies with
annual earnings growth of at least 25% and priced at a modest premium to the
earnings multiple of the S&P 500 Index. Important criteria include: free cash
flow, strength of management, degree of insider ownership and potential for
upside surprises.
ADVISER'S COMMENTS
For the one-year period covered by this report--August 1, 1997 through July
31, 1998--the Portfolio returned 14.44% before deducting the PACE Program fee.
The Portfolio strongly outperformed the Russell 2500 Growth Index (the "Index"),
which lost 1.29%. Portfolio net assets totaled $198.9 million as of July 31,
1998.
The Portfolio suffered through a difficult May but rebounded with an
exceptional June. Technology stocks helped performance, particularly Gemstar
International Group Ltd. (2.1% of Portfolio assets as of July 31, 1998), Aspect
Development (1.2%) and EMC Corp. (2.4%). Consumer stocks such as Staples Inc.
(2.3%) and Dollar Tree Stores Inc. (2.2%) also did exceptionally well. Financial
stocks were weak as investors paused after a three-year run to look elsewhere.
However, excellent prospects have led us to continue to emphasize financials in
the Portfolio.
We continue to look for companies with outstanding growth opportunities while
remaining on guard to protect against earnings disappointments. We believe small
caps are more attractive than their larger-cap counterparts in terms of 1998
consensus estimates of 4% earnings growth for the S&P 500, compared to more than
20% for the Russell 2000 Index.
PORTFOLIO STATISTICS, 7/31/98*
<TABLE>
<CAPTION>
TOP FIVE SECTORS
- ---------------------------------------------
<S> <C>
Technology................................... 24.2%
Business services............................ 14.8
Financial services........................... 11.3
Consumer nondurables......................... 11.3
Consumer services............................ 10.1
<CAPTION>
TOP TEN STOCKS
- ---------------------------------------------
<S> <C>
Chancellor Media............................. 3.3%
First American Corp. Tennessee............... 3.2
Platinum Technology.......................... 3.1
EMC Corp. ................................... 2.4
Staples Inc. ................................ 2.3
Dollar Tree Stores Inc. ..................... 2.2
Veritas Software Co. ........................ 2.1
Geotel Communications........................ 2.1
Gemstar International Group Ltd. ............ 2.1
Consolidated Graphics........................ 2.1
</TABLE>
* Percent of Portfolio assets; all statistics subject to change
22
<PAGE>
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
PORTFOLIO AND THE RUSSELL 2500 GROWTH INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio- Portfolio- Russell 2500
Without Fee With Fee* Growth Index
<S> <C> <C> <C>
8/24/95 $10,000 $10,000 $10,000
10/95 $9,575 $9,548 $9,853
1/96 $9,470 $9,408 $10,425
4/96 $10,881 $10,769 $11,882
7/96 $9,345 $9,215 $10,527
10/96 $10,088 $9,910 $11,482
1/97 $10,989 $10,754 $12,319
4/97 $9,571 $9,331 $11,054
7/97 $12,049 $11,703 $13,606
10/97 $12,917 $12,199 $13,992
1/98 $12,706 $12,250 $13,549
4/98 $14,207 $13,645 $15,397
7/98 $13,788 $13,193 $13,434
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Small/Medium Company Growth Equity
Investments versus the Russell 2500 Growth Index. It is important to note that
PACE Small/Medium Company Growth Equity Investments is a professionally managed
portfolio while the Index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
ONE YEAR ENDED INCEPTION THROUGH
7/31/98 7/31/98**
---------------- ------------------
<S> <C> <C>
Without PACE program fee..................... 14.44 % 11.55 %
With PACE program fee........................ 12.73 9.89
</TABLE>
** Inception = August 24, 1995
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
23
<PAGE>
PACE INTERNATIONAL EQUITY INVESTMENTS
ADVISER: Martin Currie Inc.
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: Normally at least 65% of the Portfolio is invested in equity
securities of companies domiciled in three or more countries outside the United
States. Up to 10% of the Portfolio may be invested in emerging markets. A
significant portion of currency exposure may be hedged back to the U.S. dollar.
The adviser looks for companies that exhibit strong fundamentals and attractive
valuations based on estimates of future earnings. In making country allocation
decisions, the adviser considers such factors as economic and political
stability, breadth and liquidity of the market, the nature of local investors,
the currency outlook, valuation and the settlement system.
ADVISER'S COMMENTS
For the one-year period covered by this report--August 1, 1997 through July
31, 1998--the Portfolio returned 9.27% before deducting the PACE Program fee.
The Portfolio outperformed Morgan Stanley Capital International's Europe,
Australia and Far East (MSCI EAFE) Index return of 5.75%. Portfolio net assets
totaled $164.5 million as of July 31, 1998.
Being overweighted in Europe and underweighted in Asia, coupled with good
overall stock selection, added value against a dull index. In the Portfolio's
Europe component we added to the financial sector, where the merger mania
continues. Purchases included Societe Generale (2.2% of net assets as of July
31, 1998), and Banco de Santander (2.1%). The mobile telecommunications market
also was strong; the Portfolio holds Mannesmann (2.3%). In the face of a weaker
U.K. economy we sold the Portfolio's shares of Granada and slightly reduced its
market exposure.
We remain underweighted and defensive in our approach to Japan. We hedged 50%
of yen assets against a strong dollar (133.8/$1) in April; this hedge added
value during the period. Our Asia Pacific position consists of Australia, Hong
Kong, Taiwan and India. Smaller markets continue to suffer in Asia's wake. A
flight of capital has hit Latin America hard. We have some exposure to Greece
and Israel, which have bucked the trend.
PORTFOLIO STATISTICS, 7/31/98*
<TABLE>
<CAPTION>
TOP FIVE SECTORS
- ---------------------------------------------
<S> <C>
Finance/insurance/real estate................ 35.5%
Consumer goods & services.................... 27.3
Capital goods................................ 15.0
Utilities.................................... 9.6
Energy....................................... 6.0
<CAPTION>
TOP TEN COUNTRIES
- ---------------------------------------------
<S> <C>
United Kingdom............................... 19.3%
Germany...................................... 14.6
Japan........................................ 14.6
France....................................... 13.8
Switzerland.................................. 7.1
Italy........................................ 6.4
Sweden....................................... 3.7
Spain........................................ 3.5
Finland...................................... 2.0
Hong Kong.................................... 1.8
</TABLE>
* Percent of Portfolio assets; all statistics subject to change
24
<PAGE>
PACE INTERNATIONAL EQUITY INVESTMENTS
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
PORTFOLIO AND THE MSCI EAFE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio- Portfolio- MSCI
Without Fee With Fee* EAFE Index
<S> <C> <C> <C>
8/24/95 $10,000 $10,000 $10,000
Oct-95 $9,875 $9,847 $9,921
Jan-96 $10,691 $10,621 $10,651
Apr-96 $11,118 $11,004 $11,231
Jul-96 $10,708 $10,558 $10,763
Oct-96 $10,884 $10,691 $10,960
Jan-97 $11,236 $10,996 $10,856
Apr-97 $11,542 $11,253 $11,132
Jul-97 $13,310 $12,928 $12,713
Oct-97 $12,018 $11,630 $11,467
Jan-98 $12,706 $12,249 $11,971
Apr-98 $14,112 $13,554 $13,237
Jul-98 $14,543 $13,916 $13,406
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE International Equity Investments
versus the MSCI EAFE Index. It is important to note that PACE International
Equity Investments is a professionally managed portfolio while the Index is not
available for investment and is unmanaged. The comparison is shown for
illustrative purposes only.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
ONE YEAR ENDED INCEPTION THROUGH
7/31/98 7/31/98**
---------------- ------------------
<S> <C> <C>
Without PACE program fee..................... 9.27 % 13.60 %
With PACE program fee........................ 7.64 11.91
</TABLE>
** Inception = August 24, 1995
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
25
<PAGE>
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
ADVISER: Schroder Capital Management International Inc.
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: Normally at least 65% of the Portfolio is invested in equity
securities of issuers in three or more emerging-market countries. The adviser's
network of regional specialists and analysts in 11 countries supports an
intensive program of proprietary emerging-markets research. Schroder uses its
research to identify companies with professional management, sustainable
earnings growth, high domestic market share and credible accounting standards.
ADVISER'S COMMENTS
For the one-year period covered by this report--August 1, 1997 through July
31, 1998--the Portfolio lost 32.99% before deducting the PACE Program fee. The
Portfolio slightly outperformed its benchmark, the Morgan Stanley Capital
International Emerging Markets Free (MSCI EMF) ex-Malaysia Index, which lost
33.41%. Portfolio net assets totaled $63.2 million as of July 31, 1998.
Emerging markets suffered dramatic reversals over the last year. A financial
crisis hit Southeast Asia in the latter half of 1997 and its effects then spread
to other emerging economies in 1998. During the year we made several key changes
to the Portfolio:
- - Reduced exposure to Latin America in the second half of the fiscal year
- - Reduced exposure to Asia, though we remain positive on Korea, India and China,
with a focus on infrastructure stocks in the latter two markets
- - Increased European exposure, particularly to Portugal and Israel. We reduced
Hungarian and Polish stocks that had exposure to the Russian market
- - Maintained an underweighting in Russia
Since the Portfolio's fiscal year-end, the Russian crisis and pressure on the
Brazilian currency have considerably worsened the near-term outlook for emerging
markets. Both debt and equity markets have been weakened by the flight of
short-term investors to the safe haven of U.S. Treasury bonds. Turmoil in the
developed equity markets has arisen due to uncertainties over profits and the
slowing global economy.
Our near-term strategy is to overweight cash. We may further underweight Latin
America if Brazil continues to look vulnerable and erode confidence in the
region. A key decision remains when to rebuild the Portfolio's holdings in
emerging Asia. As Latin America comes under further pressure, we expect to move
to a neutral position in emerging Asia, which should perform better than its
post-crisis lows.
PORTFOLIO STATISTICS, 7/31/98*
<TABLE>
<CAPTION>
REGIONAL ALLOCATION
- ---------------------------------------------
<S> <C>
Europe/Africa................................ 35.6%
Latin America................................ 34.2
Asia......................................... 22.1
Cash......................................... 8.1
<CAPTION>
TOP TEN STOCKS
- ---------------------------------------------
<S> <C>
Telecomunicacoes Brasileiras S.A.
(Telebras).................................. 4.2%
Telefonos de Mexico.......................... 2.3
Petroleo Brasileiros S.A. (Petrobras)........ 1.8
Samsung Electronics Co....................... 1.5
ECI Telecommunications Ltd. ................. 1.3
Alpha Credit Bank............................ 1.3
Elektrim Spolka Akcyjna S.A. ................ 1.3
Cemex........................................ 1.3
Hellenic Bottling Co. ....................... 1.3
Hellenic Telecom Org. ....................... 1.2
</TABLE>
* Percent of Portfolio assets; all statistics subject to change
26
<PAGE>
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
PORTFOLIO AND THE MSCI EMF EX-MALAYSIA INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio- Portfolio- MSCI Emerg.
Without Fee With Fee* EMF ex-Malaysia index
<S> <C> <C> <C>
8/24/95 $10,000 $10,000 $10,000
10/95 $9,516 $9,436 $9,633
1/96 $10,764 $10,694 $10,581
4/96 $10,965 $10,853 $10,648
7/96 $10,423 $10,277 $10,001
10/96 $10,106 $9,927 $9,904
1/97 $11,202 $10,963 $10,849
4/97 $11,629 $11,338 $11,326
7/97 $13,061 $12,686 $12,827
10/97 $10,206 $9,876 $10,010
1/98 $9,609 $9,264 $9,280
4/98 $10,660 $10,238 $10,525
7/98 $8,752 $8,374 $8,541
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE International Emerging Markets
Equity Investments versus the MSCI EMF ex-Malaysia Index. It is important to
note that PACE International Emerging Markets Equity Investments is a
professionally managed portfolio while the Index is not available for investment
and is unmanaged. The comparison is shown for illustrative purposes only.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
ONE YEAR ENDED INCEPTION THROUGH
7/31/98 7/31/98**
---------------- ------------------
<S> <C> <C>
Without PACE program fee..................... -32.99 % -4.43 %
With PACE program fee........................ -33.99 -5.86
</TABLE>
** Inception = August 24, 1995
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
27
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MONEY MARKET INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- ---------------------------------------- --------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS--3.14%
$ 500 Federal Home Loan Bank............................. 03/23/99 to 03/30/99 5.650 to 5.710% $ 500,000
300 Federal Home Loan Bank............................. 08/05/98 5.488* 299,912
--------------
Total U.S. Government Agency Obligations (cost--$799,912).... 799,912
--------------
BANK NOTES (DOMESTIC)--3.14%
200 FCC National Bank.................................. 01/07/99 5.700 199,975
200 Huntington National Bank........................... 10/02/98 5.870 199,988
400 PNC Bank N.A. ..................................... 08/03/98 5.600* 399,961
--------------
Total Bank Notes (cost--$799,924)............................ 799,924
--------------
CERTIFICATES OF DEPOSIT--13.72%
DOMESTIC--3.13%
300 Bankers Trust Co. ................................. 05/29/99 5.770 299,906
500 Bankers Trust Co. ................................. 08/03/98 5.570 to 5.680* 499,846
--------------
799,752
--------------
YANKEE--10.59%
200 Bayerische Vereinsbank AG.......................... 10/06/98 5.710 199,920
700 Credit Agricole Indosuez........................... 09/30/98 to 05/19/99 5.750 to 5.830 699,682
500 Credit Suisse First Boston......................... 08/04/98 5.573* 500,000
200 National Bank of Canada............................ 11/19/98 5.920 200,005
500 Royal Bank of Canada............................... 10/01/98 to 06/23/99 5.695 to 5.800 499,906
600 Societe Generale................................... 12/17/98 to 07/02/99 5.730 to 5.850 599,849
--------------
2,699,362
--------------
Total Certificates of Deposit (cost--$3,499,114)............. 3,499,114
--------------
COMMERCIAL [email protected]%
ASSET-BACKED--22.88%
835 Atlantis One Funding............................... 08/12/98 to 08/17/98 5.380 to 5.600 833,367
616 Delaware Funding Corp. ............................ 09/30/98 5.550 610,302
1,000 Falcon Asset Securitization Corp. ................. 08/21/98 5.540 996,922
1,192 New Center Asset Trust............................. 08/03/98 5.680 1,191,624
1,000 Receivables Capital Corp. ......................... 08/13/98 5.560 998,147
1,204 Triple-A One Funding Corp. ........................ 08/11/98 5.550 1,202,144
--------------
5,832,506
--------------
AUTO & TRUCK--3.75%
959 Ford Motor Credit Corp. ........................... 08/18/98 5.520 956,500
--------------
BANKING--0.57%
150 Bankers Trust Corp. ............................... 03/16/99 5.508 144,791
--------------
BROKER-DEALER--5.84%
400 Bear Stearns Co. Inc. ............................. 09/25/98 5.530 396,621
500 Goldman Sachs Group L.P. .......................... 09/25/98 5.580 495,737
200 Lehman Brothers Holdings Inc. ..................... 11/16/98 5.540 196,707
400 Morgan Stanley, Dean Witter & Co. ................. 08/12/98 5.530 399,324
--------------
1,488,389
--------------
BUSINESS SERVICES--3.89%
1,000 Block Financial Corp. ............................. 09/24/98 5.530 991,705
--------------
ELECTRONICS--4.46%
250 Emerson Electric Co. .............................. 08/03/98 5.520 249,923
887 Motorola Inc. ..................................... 08/03/98 5.550 886,727
--------------
1,136,650
--------------
ENERGY--3.92%
1,000 Chevron USA Inc. .................................. 08/04/98 5.520 999,540
--------------
FINANCE-CONDUIT--1.95%
500 UBS Finance (DE) Inc. ............................. 09/08/98 5.510 497,092
--------------
</TABLE>
28
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MONEY MARKET INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- ---------------------------------------- --------------
<C> <S> <C> <C> <C>
</TABLE>
COMMERCIAL PAPER@--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
FINANCE-CONSUMER--3.04%
$ 775 Household Finance Corp. ........................... 08/06/98 5.530% $ 774,405
--------------
FINANCE-DIVERSIFIED--1.96%
500 Barclays U.S. Funding Corp. ....................... 08/03/98 5.540 499,846
--------------
FINANCE-SUBSIDIARY--3.13%
800 Deutsche Bank Financial Inc. ...................... 08/12/98 5.535 798,647
--------------
INSURANCE--1.19%
305 USAA Capital Corp. ................................ 08/21/98 5.520 304,064
--------------
MANUFACTURING-DIVERSIFIED--6.03%
336 Allied-Signal Inc. ................................ 08/06/98 5.530 335,742
1,203 BTR Dunlop Finance Inc. ........................... 08/10/98 5.530 1,201,337
--------------
1,537,079
--------------
METALS & MINING--1.96%
500 Rio Tinto America Inc. ............................ 08/13/98 5.520 499,080
--------------
Total Commercial Paper (cost--$16,460,294)................... 16,460,294
--------------
SHORT-TERM CORPORATE OBLIGATIONS--15.49%
BANKING--0.79%
200 Bankers Trust Corp. ............................... 08/19/98 5.679* 199,989
--------------
BROKER-DEALER--8.43%
200 Bear Stearns Co. Inc. ............................. 06/14/99 5.800 200,000
450 Bear Stearns Co. Inc. ............................. 08/04/98 to 08/20/98 5.453 to 5.626* 450,000
500 Credit Suisse First Boston Inc. ................... 08/04/98 5.633* 500,000
400 Lehman Brothers Holdings Inc. ..................... 08/03/98 5.720* 400,000
200 Merrill Lynch & Co. Inc. .......................... 10/09/98 5.960 200,000
200 Merrill Lynch & Co. Inc. .......................... 08/04/98 5.650* 200,000
200 Morgan Stanley, Dean Witter & Co. ................. 08/03/98 5.770* 200,000
--------------
2,150,000
--------------
COMPUTERS--2.35%
600 IBM Credit Corp. .................................. 08/04/98 to 09/23/98 5.538 to 5.653* 599,954
--------------
INSURANCE--3.92%
1,000 Prudential Funding Corp. .......................... 08/04/98 5.553 to 5.716* 1,000,000
--------------
3,949,943
Total Short-Term Corporate Obligations (cost--$3,949,943)....
--------------
25,509,187
Total Investments (cost--$25,509,187)--100.06%...............
(15,806)
Liabilities in excess of other assets--(0.06)%...............
--------------
Net Assets--100.00%.......................................... $ 25,493,381
--------------
--------------
</TABLE>
- -----------------
* Variable rate security--Maturity dates reflect earlier of reset date or
maturity date. The interest rates shown are current rates as of July 31,
1998 and reset periodically.
@ Interest rates shown are discount rates at date of purchase.
Weighted average maturity--77 days
See accompanying notes to financial statements
29
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- ------------------ -------------
<C> <S> <C> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--10.66%
$ 6,965 GNMA............................................... 04/20/24 to 02/20/27 6.875% $ 7,124,849
5,659 GNMA............................................... 12/20/24 to 10/20/26 7.000 5,783,696
1,500 GNMA............................................... 01/15/00 7.470 1,512,960
342 GNMA............................................... 08/15/21 to 09/15/23 7.500 351,593
2,012 GNMA II ARM........................................ 01/20/18 to 06/20/22 6.875 2,062,608
440 GNMA II ARM........................................ 09/20/26 7.000 448,982
-------------
Total Government National Mortgage Association Certificates
(cost--$17,192,194).......................................... 17,284,688
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--50.29%
10,681 FHLMC Giant (1).................................... 04/01/28 to 06/01/28 6.000 10,385,640
1,916 FHLMC.............................................. 11/01/02 7.000 1,943,034
1,915 FHLMC.............................................. 07/01/01 7.500 1,942,103
9,985 FHLMC.............................................. 03/01/13 to 06/01/27 8.000 10,332,688
1,070 FHLMC.............................................. 04/01/04 8.500 1,099,507
19,600 FHLMC TBA.......................................... TBA 6.000 19,053,633
25,500 FHLMC TBA.......................................... TBA 7.500 26,166,255
10,250 FHLMC TBA.......................................... TBA 8.000 10,602,343
-------------
Total Federal Home Loan Mortgage Corporation Certificates
(cost--$81,473,923).......................................... 81,525,203
-------------
FEDERAL HOUSING ADMINISTRATION CERTIFICATES--5.00%
7,873 FHA Project Notes (cost--$8,060,763)............... 05/01/17 to 02/01/29 7.000 to 7.880 8,102,529
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--12.87%
6,576 FNMA............................................... 06/01/01 to 11/01/26 7.500 6,710,785
2,255 FNMA............................................... 07/01/25 to 11/01/26 8.000 2,341,898
9,226 FNMA............................................... 02/01/25 to 09/01/27 8.500 9,615,713
2,060 FNMA............................................... 10/01/19 to 02/01/26 9.000 2,203,701
-------------
Total Federal National Mortgage Association Certificates
(cost--$20,763,144).......................................... 20,872,097
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS--38.43%
603 FHLMC GNMA REMIC Series 21, Class C................ 12/25/11 5.150 600,324
119 FHLMC GNMA REMIC Series 23, Class KZ............... 11/25/23 6.500 115,085
650 FHLMC REMIC Series 159, Class H.................... 09/15/21 4.500 604,247
1,511 FHLMC REMIC Series 1198, Class G................... 07/15/05 6.750 1,513,668
316 FHLMC REMIC Series 1347, Class HC.................. 12/15/21 4.250++ 289,535
167 FHLMC REMIC Series 1384, Class B................... 11/15/20 7.000 167,517
329 FHLMC REMIC Series 1386, Class B................... 12/15/05 6.000 328,784
654 FHLMC REMIC Series 1425, Class E................... 08/15/05 6.500 657,236
1,513 FHLMC REMIC Series 1443, Class E................... 05/15/18 6.000 1,512,895
3,083 FHLMC REMIC Series 1484, Class E................... 03/15/17 6.000 3,080,091
1,516 FHLMC REMIC Series 1489, Class F................... 07/15/05 5.500 1,510,690
921 FHLMC REMIC Series 1491, Class E................... 02/15/17 5.000 914,582
806 FHLMC REMIC Series 1500, Class E................... 08/15/16 6.000 806,413
926 FHLMC REMIC Series 1502, Class PX.................. 04/15/23 7.000 958,863
515 FHLMC REMIC Series 1534, Class Z................... 06/15/23 5.000 399,499
1,418 FHLMC REMIC Series 1542, Class Z................... 07/15/23 7.000 1,437,097
156 FHLMC REMIC Series 1573, Class PZ.................. 09/15/23 7.000 163,865
1,839 FHLMC REMIC Series 1590, Class D................... 06/15/13 5.500 1,835,276
1,392 FHLMC REMIC Series 1595, Class A................... 06/15/11 5.600 1,383,940
178 FHLMC REMIC Series 1602, Class PD.................. 01/15/15 5.200 177,755
886 FHLMC REMIC Series 1606, Class D................... 08/15/04 5.250 883,665
147 FHLMC REMIC Series 1629, Class D................... 10/15/12 5.400 147,193
447 FHLMC REMIC Series 1638, Class BC.................. 09/15/15 5.250 445,767
653 FHLMC REMIC Series 1640, Class F................... 10/15/07 6.150 655,184
130 FHLMC REMIC Series 1658, Class GZ.................. 01/15/24 7.000 130,624
303 FHLMC REMIC Series 1693, Class D................... 12/15/04 5.350 302,225
878 FHLMC REMIC Series 1694, Class Z................... 03/15/24 6.500 870,606
</TABLE>
30
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- ------------------ -------------
<C> <S> <C> <C> <C>
</TABLE>
COLLATERALIZED MORTGAGE OBLIGATIONS--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 1,039 FHLMC REMIC Series 1708, Class A................... 04/15/06 6.000% $ 1,039,752
93 FHLMC REMIC Series 1775, Class Z................... 03/15/25 8.500 105,074
751 FHLMC REMIC Series 1779, Class H................... 01/15/00 8.500 762,037
3,085 FHLMC REMIC Series 1869, Class J................... 12/15/24 8.000 3,205,433
1,120 FHLMC REMIC Series 1933, Class ZA.................. 02/15/27 8.000 1,217,872
82 FNMA REMIC Trust 1992-74, Class Z.................. 05/25/22 8.000 86,905
165 FNMA REMIC Trust 1992-129, Class L................. 07/25/22 6.000 158,617
124 FNMA REMIC Trust 1992-201, Class A................. 12/25/19 6.250 124,029
669 FNMA REMIC Trust 1992-216, Class E................. 03/25/13 7.000 672,076
1,088 FNMA REMIC Trust 1993-37, Class PX................. 03/25/23 7.000 1,086,885
104 FNMA REMIC Trust 1993-38, Class G.................. 01/25/15 5.000 103,932
408 FNMA REMIC Trust 1993-40, Class ZA................. 12/25/23 6.500 390,184
3,614 FNMA REMIC Trust 1993-49, Class C.................. 04/25/10 6.000 3,609,705
1,170 FNMA REMIC Trust 1993-53, Class E.................. 04/25/17 5.750 1,164,352
213 FNMA REMIC Trust 1993-162, Class C................. 08/25/23 3.000 206,310
74 FNMA REMIC Trust 1993-168, Class PD................ 07/25/14 5.600 73,819
149 FNMA REMIC Trust 1993-171, Class C................. 08/25/11 5.600 148,177
274 FNMA REMIC Trust 1993-188, Class E................. 07/25/03 5.400 273,305
131 FNMA REMIC Trust 1993-192, Class C................. 01/25/04 5.750 130,928
1,250 FNMA REMIC Trust 1993-201, Class E................. 12/25/15 5.500 1,241,488
1,065 FNMA REMIC Trust 1993-214, Class D................. 08/25/04 5.250 1,061,038
40 FNMA REMIC Trust 1993-240, Class Z................. 12/25/13 6.250 39,086
62 FNMA REMIC Trust 1993-250, Class Z................. 12/25/23 7.000 64,342
68 FNMA REMIC Trust 1994-27, Class CZ................. 02/25/24 6.500 65,771
33 FNMA REMIC Trust 1994-90, Class PC................. 07/25/01 6.500 33,204
1,999 FNMA REMIC Trust 1996-2, Class B................... 10/22/09 7.500 2,012,877
527 FNMA REMIC Trust 1997-35, Class PL................. 05/18/13 6.500 527,760
684 FNMA REMIC Trust 1997-81, Class A.................. 12/18/04 6.875 687,863
944 FNMA REMIC Trust G92-40, Class ZC.................. 07/25/22 7.000 946,931
1,098 FNMA REMIC Trust G92-44, Class FC.................. 08/25/20 5.703 1,090,259
148 FNMA REMIC Trust G94-6, Class PJ................... 05/17/24 8.000 167,193
989 CMC Securities Corp. III REMIC Series 1998-1, Class
3A............................................... 04/25/28 6.889* 993,821
2,196 Headlands Mortgage Security Inc. REMIC Series
1997-1, Class AII................................ 03/15/12 7.750 2,229,857
1,458 Headlands Mortgage Security Inc. REMIC Series
1997-2, Class AII................................ 05/25/12 7.750 1,482,662
1,121 Headlands Mortgage Security Inc. REMIC Series
1997-4, Class AII................................ 11/25/12 7.250 1,134,407
1,351 Independent National Mortgage Corp. Series 1994-Q,
Class A5......................................... 09/25/14 7.500 1,356,164
1,807 Norwest Asset Securities Corp. REMIC Series 1997-1,
Class A1......................................... 02/25/12 6.500 1,807,883
2,963 Norwest Asset Securities Corp. REMIC Series 1997-2,
Class A8......................................... 03/25/27 7.500 3,051,087
463 Prudential Home Mortgage REMIC 1993-29, Class A8... 08/25/08 6.750 456,643
78 Prudential Home Mortgage REMIC 1993-43, Class A1... 10/25/23 5.400 77,288
1,238 Prudential Home Mortgage REMIC 1993-54, Class
A19.............................................. 01/25/24 6.500 1,168,305
2,000 Residential Funding Mortgage Securities Inc. Series
1997-S14, Class A6............................... 10/25/27 7.250 2,044,523
1,500 Residential Funding Mortgage Securities Inc. Series
1998-S12, Class A6............................... 05/25/28 6.750 1,476,954
501 Resolution Trust Corp. REMIC Series 1992-3, Class
A2 ARM........................................... 09/25/19 6.750 498,837
126 Resolution Trust Corp. REMIC Series 1995-C1, Class
A3 ARM........................................... 02/25/27 6.200 126,158
-------------
Total Collateralized Mortgage Obligations
(cost--$61,044,799).......................................... 62,294,419
-------------
STRIPPED MORTGAGE-BACKED [email protected]%
183 FHLMC REMIC Series 173, Class F**.................. 06/15/21 6.099+ 178,827
1,446 FHLMC REMIC Series 1554, Class I***................ 08/15/08 6.500(2) 188,393
232 FHLMC REMIC Series 1700, Class D**................. 02/15/24 6.601+ 224,266
4,759 FNMA REMIC Trust 1993-131, Class JB***............. 05/25/05 7.000(3) 180,662
2,556 FNMA REMIC Trust 1993-137, Class PN***............. 12/25/16 7.000(4) 131,872
</TABLE>
31
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- ------------------ -------------
<C> <S> <C> <C> <C>
</TABLE>
STRIPPED MORTGAGE-BACKED SECURITIES@--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 195 FNMA REMIC Trust 1993-161, Class GC**.............. 02/25/23 4.851%+ $ 143,331
148 FNMA REMIC Trust 1993-177, Class B**............... 08/25/22 7.899+ 145,852
2,766 FNMA REMIC Trust 1994-7, Class PK***............... 05/25/08 6.500(5) 236,526
2,295 FNMA REMIC Trust 1994-30, Class IA***.............. 11/25/22 6.500(6) 323,945
-------------
Total Stripped Mortgage-Backed Securities (cost--$1,665,555)... 1,753,674
-------------
ASSET-BACKED SECURITIES--7.08%
905 Chase Manhattan Grantor Trust Series 1995-B, Class
A................................................ 11/15/01 5.900 905,511
379 Contimortgage Home Equity Loan Series 1996-4, Class
A3............................................... 10/15/11 6.190 378,337
904 Contimortgage Home Equity Loan Series 1997-5, Class
A7............................................... 10/15/12 5.856* 905,264
531 EQCC Home Equity Loan Trust Series 1997-1, Class
A1............................................... 05/15/05 6.310 532,403
93 Olympic Automobile Receivables Trust Series 1994-A,
Class A.......................................... 01/15/01 5.650 93,258
1,281 Premier Auto Trust Series 1995-3, Class A5......... 03/06/00 6.150 1,282,946
28 Premier Auto Trust Series 1993-6, Class A2......... 11/02/99 4.650 28,183
940 Student Loan Marketing Association Series 95-1,
Class A1......................................... 04/25/04 5.762* 940,981
1,658 Student Loan Marketing Association Series 96-2,
Class A1......................................... 10/25/04 5.697* 1,657,167
3,039 Student Loan Marketing Association Series 97-2,
Class A1......................................... 10/25/05 5.727* 3,036,839
1,727 Student Loan Marketing Association Series 97-3,
Class A1......................................... 04/25/06 5.787* 1,719,874
-------------
Total Asset-Backed Securities (cost--$11,469,338).............. 11,480,763
-------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS--8.37%
4,000 Student Loan Marketing Association................. 06/30/00 6.080* 3,999,720
9,627 U.S. Treasury Inflation Index Notes................ 07/15/02 3.625 9,570,274
-------------
Total Long-Term U.S. Government and Agency Obligations
(cost--$13,553,832).......................................... 13,569,994
-------------
REPURCHASE AGREEMENT--1.59%
2,579 Repurchase Agreement dated 07/31/98 with State
Street Bank & Trust Company, collateralized by
$2,455,000 U.S. Treasury Notes, 7.500% due
11/15/01 (value--$2,632,988) proceeds: $2,580,075
(cost--$2,579,000)............................... 08/03/98 5.000 2,579,000
-------------
219,462,367
Total Investments (cost--$217,802,548)--135.37%................
(57,343,160)
Liabilities in excess of other assets--(35.37)%................
-------------
Net Assets--100.00%............................................ $162,119,207
-------------
-------------
</TABLE>
- -----------------
* Floating rate securities--The interest rates shown are the current rates
as of July 31, 1998.
** Principal Only Security--This security entitles the holder to receive
principal payments from an underlying pool of mortgages. High prepayments
return principal faster than expected and cause the yield to increase.
Low prepayments return principal more slowly than expected and cause the
yield to decrease.
*** Interest Only Security--This security entitles the holder to receive
interest payments from an underlying pool of mortgages. The risk
associated with this security is related to the speed of the principal
paydowns. High prepayments would result in a smaller amount of interest
being received and cause the yield to decrease. Low prepayments would
result in a greater amount of interest being received and cause the yield
to increase.
+ Estimated yield to maturity at July 31, 1998.
++ Interest rate shown is discount rate at date of purchase.
@ Illiquid securities representing 1.08% of net assets.
ARM Adjustable Rate Mortgage--The interest rates shown are the current rates
as of July 31, 1998.
COFI Cost of Funds Index
REMIC Real Estate Mortgage Investment Conduit
TBA To Be Assigned--Securities are purchased on a forward commitment with an
approximate (generally +/- 1.0%) 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) Security, or a portion thereof, was on loan at July 31, 1998.
(2) Annualized yield at date of purchase was 8.19%.
(3) Annualized yield at date of purchase was 6.82%.
(4) Annualized yield at date of purchase was 6.87%.
(5) Annualized yield at date of purchase was 7.20%.
(6) Annualized yield at date of purchase was 6.82%.
See accompanying notes to financial statements
32
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERMEDIATE FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- ----------- -------------------- ------------------ ------------
<C> <S> <C> <C> <C>
U. S. GOVERNMENT OBLIGATIONS--44.59%
$ 43,945 U.S. Treasury Notes (1) (cost--$44,066,190)............ 11/30/00 to 02/15/08 5.500 to 7.500% $44,449,620
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--2.84%
1,898 GNMA................................................... 10/20/27 to 11/20/27 6.000 1,917,493
25 GNMA................................................... 02/15/24 7.500 25,877
77 GNMA................................................... 11/20/01 8.500 78,633
473 GNMA................................................... 12/15/01 to 01/15/02 9.000 489,521
304 GNMA................................................... 07/15/04 to 09/15/04 9.500 319,293
------------
Total Government National Mortgage Association Certificates
(cost--$2,824,955)............................................... 2,830,817
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--0.73%
181 FHLMC.................................................. 12/01/99 5.500 180,633
266 FHLMC.................................................. 03/01/00 7.000 268,846
270 FHLMC.................................................. 06/01/02 8.000 274,674
------------
Total Federal Home Loan Mortgage Corporation Certificates
(cost--$719,095)................................................. 724,153
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--1.64%
787 FNMA................................................... 06/01/10 to 09/01/10 7.500 809,389
810 FNMA................................................... 03/01/04 8.000 826,056
------------
Total Federal National Mortgage Association Certificates
(cost--$1,637,141)............................................... 1,635,445
------------
COLLATERALIZED MORTGAGE OBLIGATIONS--10.89%
588 Aetna Commercial Mortgage Corp......................... 12/26/30 6.590 590,346
84 American Southwest Financial Co. ...................... 03/01/18 9.000 85,357
1,226 EMAC Trust Series 1998-1, Class 1A..................... 07/15/03 6.110 1,226,382
662 FDIC REMIC Trust Series 1994-C1, Class 2A2............. 09/25/25 7.850 668,259
1,437 FDIC REMIC Trust Series 1996-C1, Class 1A.............. 05/25/26 6.750 1,451,897
334 FHLMC Series 1497, Class O............................. 10/15/22 7.000 335,786
194 FHLMC Series 1588, Class TB............................ 06/15/23 6.500 194,790
387 FHLMC Series 1865, Class VA............................ 12/15/10 7.500 393,659
80 FNMA REMIC Trust 1991-04, Class E...................... 09/25/05 8.250 81,405
675 FNMA REMIC Trust 1993-70, Class C...................... 03/25/18 6.900 682,440
191 FNMA REMIC Trust 1996-41, Class A...................... 06/25/20 7.750 192,884
400 Merrill Lynch Trust Series 32, Class H................. 08/01/18 9.450 406,350
904 Norwest Asset Securities Corp. Series 1997-5, Class
A2................................................... 04/25/12 7.000 911,317
658 Resolution Trust Corp. Series 1995-C1, Class A2C....... 02/25/27 6.900 667,875
1,473 Resolution Trust Corp. Series 1995-C2, Class D......... 05/25/27 7.000 1,482,970
474 Structured Asset Securities Corp. Series 1996-CFL,
Class A1C............................................ 02/25/28 5.944 471,685
1,000 Westam Mortgage Financial Corp. Series 7, Class G...... 12/01/18 9.400 1,011,083
------------
Total Collateralized Mortgage Obligations (cost--$10,830,782)...... 10,854,485
------------
ASSET-BACKED SECURITIES--3.59%
1,970 California Infrastructure, Class A5.................... 06/25/04 6.250 1,998,821
955 Team Fleet Financing Corp., Class A ................... 07/25/02 6.070 955,298
600 UCFC Loan Trust, Class A7.............................. 11/15/27 8.200 620,438
------------
Total Asset-Backed Securities (cost--$3,524,366)................... 3,574,557
------------
</TABLE>
33
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERMEDIATE FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- ----------- -------------------- ------------------ ------------
<C> <S> <C> <C> <C>
CORPORATE NOTES--33.44%
$ 895 ABN Amro Bank NV....................................... 05/31/05 7.250% $ 939,498
435 AON Corp............................................... 10/01/99 6.875 438,934
955 Aetna Services Inc..................................... 08/15/06 7.125 986,102
950 Ahmanson (H.F.) & Companies Inc........................ 10/01/02 8.250 1,018,564
201 Anheuser-Busch Companies Inc. ......................... 03/01/17 8.500 208,051
1,155 BankAmerica Corp....................................... 11/15/04 8.950 1,188,481
910 BankBoston NA MTN...................................... 03/25/08 6.375 909,614
870 Beneficial Corp........................................ 12/15/04 6.810 893,034
910 CNA Financial Corp..................................... 04/15/05 6.500 909,725
965 Carnival Corp.......................................... 04/15/08 6.150 950,891
270 Chubb Corp............................................. 11/15/99 8.750 275,044
900 Computer Associates International Inc.................. 04/15/03 6.250 892,180
258 Continental Bank NA.................................... 04/01/01 12.500 297,188
150 Continental Corp....................................... 04/15/99 8.250 152,035
635 Countrywide Funding Corp. MTN.......................... 09/16/03 7.450 666,636
278 Dexter Corp............................................ 12/15/16 9.250 290,065
960 Eastman Chemical Co. .................................. 01/15/04 6.375 961,734
740 First Bank Systems Inc. ............................... 05/01/05 7.625 798,485
371 First Data Corp. ...................................... 04/01/03 6.625 379,243
1,000 First Union Corp. ..................................... 11/15/04 8.770 1,028,909
735 First USA Bank MTN..................................... 12/03/01 6.625 751,052
1,150 Ford Motor Credit Corp. ............................... 11/19/99 to 02/28/02 6.500 to 7.500 1,167,456
1,225 Ford Motor Credit Corp. MTN............................ 12/30/14 9.140 1,416,274
990 Frontier Corp.......................................... 05/15/04 7.250 1,040,622
400 General Motors Acceptance Corp......................... 01/15/99 7.750 403,262
410 Health Care Properties Investments Inc................. 02/15/06 6.500 401,345
1,200 Household Finance Corp................................. 06/30/00 6.375 1,208,621
200 ITT Corp. ............................................. 03/01/06 8.750 198,352
500 K Mart Corp. MTN....................................... 07/06/99 7.240 500,630
1,645 Kimco Realty Corp...................................... 10/01/03 to 11/14/05 6.500 to 6.830 1,649,307
900 Lockheed Martin Corp. ................................. 05/15/06 7.250 951,828
305 Lucent Technologies Inc. .............................. 07/15/06 7.250 327,532
490 Mellon Bank............................................ 06/01/03 6.750 502,344
160 Mobil Oil Corp. ....................................... 02/29/00 9.170 165,001
950 New Plan Realty Trust Corp. ........................... 04/06/05 7.750 1,026,720
700 New York State Electric & Gas Corp..................... 05/01/20 9.875 763,231
780 Oracle Corp............................................ 02/15/04 6.720 794,820
885 JC Penney Inc. ........................................ 04/01/07 7.600 955,726
1,125 PNC Bank NA ........................................... 04/15/05 7.875 1,220,455
980 Sears Roebuck Acceptance Corp. ........................ 03/20/03 6.000 975,367
500 Sovran Financial Corp. ................................ 06/15/06 9.250 587,348
430 Time Warner Entertainment Company LP................... 09/01/08 7.250 452,794
550 Virginia Electric & Power Co........................... 03/01/25 8.250 613,837
100 Wal Mart Stores Inc. .................................. 06/29/11 8.875 103,926
920 Worldcom Inc. ......................................... 04/01/04 7.550 974,494
------------
Total Corporate Notes (cost--$33,048,437).......................... 33,336,757
------------
</TABLE>
34
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERMEDIATE FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- ----------- -------------------- ------------------ ------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--0.75%
$ 754 Repurchase Agreement dated 07/31/98 with State Street
Bank & Trust Company, collateralized by $730,768
U.S. Treasury Notes, 7.125% due 02/29/00
(value--$769,133) proceeds: $754,314
(cost--$754,000)..................................... 08/03/98 5.000% $ 754,000
------------
Total Investments (cost--$97,404,966)--98.47%...................... 98,159,834
1,529,680
Other assets in excess of other liabilities--1.53%.................
------------
Net Assets--100.00%................................................ $99,689,514
------------
------------
</TABLE>
- -----------------
MTN Medium Term Notes
REMIC Real Estate Mortgage Investment Conduit
(1) Security, or portion thereof, was on loan at July 31, 1998.
See accompanying notes to financial statements
35
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE STRATEGIC FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- ---------------- -------------
U. S. GOVERNMENT OBLIGATIONS--17.44%
<C> <S> <C> <C> <C>
$12,350 U.S. Treasury Bonds................................ 02/15/26 to 02/15/27 6.000 to 6.750% $ 13,600,426
2,533 U.S. Treasury Inflation Index Notes................ 07/15/02 3.625 2,518,796
5,700 U.S. Treasury Notes................................ 08/15/05 6.500 6,008,159
-------------
Total U. S. Government Obligations (cost--$21,768,459)......... 22,127,381
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--4.25%
2,711 GNMA............................................... 07/20/25 to 05/20/26 7.000 2,766,974
2,573 GNMA ARM........................................... 11/20/23 to 01/20/26 6.875 to 7.000 2,628,016
-------------
Total Government National Mortgage Association Certificates
(cost--$5,346,848)........................................... 5,394,990
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--14.39%
12,592 FHLMC.............................................. 01/15/24 to 06/15/28 6.000 to 6.500 12,233,795
6,200 FHLMC Gold 30 Year TBA............................. TBA 6.000 6,025,625
-------------
Total Federal Home Loan Mortgage Corporation Certificates
(cost--$18,140,973).......................................... 18,259,420
-------------
FEDERAL HOUSING ADMINISTRATION CERTIFICATES--3.94%
4,822 FHA Project Notes (cost--$4,930,279)............... 08/01/20 to 07/01/25 7.430 4,994,098
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--14.08%
9,929 FNMA ARM........................................... 07/02/07 to 11/01/35 6.153 to 7.656 10,296,989
1,640 FNMA COFI ARM...................................... 11/01/26 5.116 1,535,173
6,000 FNMA ARM 30 Year TBA............................... TBA 6.167 6,030,000
-------------
Total Federal National Mortgage Association Certificates
(cost--$17,828,443).......................................... 17,862,162
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS--33.88%
274 FHLMC GNMA REMIC Series 15, Class PZ............... 07/25/23 7.000 275,651
271 FHLMC REMIC Series G23, Class KZ................... 11/25/23 6.500 261,558
1,353 FHLMC REMIC Series G24, Class ZA................... 11/25/23 6.500 1,296,415
1,000 FHLMC REMIC Series 1278, Class K................... 05/15/22 7.000 1,033,892
100 FHLMC REMIC Series 1366, Class H................... 08/15/07 6.000 99,125
29 FHLMC REMIC Series 1367, Class KA.................. 09/15/22 6.500 28,664
1,070 FHLMC REMIC Series 1502, Class PX-Z................ 04/15/23 7.000 1,108,218
762 FHLMC REMIC Series 1503, Class PZ.................. 05/15/23 7.000 797,993
438 FHLMC REMIC Series 1534, Class Z................... 06/15/23 5.000 339,574
682 FHLMC REMIC Series 1548, Class Z................... 07/15/23 7.000 699,777
994 FHLMC REMIC Series 1562, Class Z................... 07/15/23 7.000 1,021,679
164 FHLMC REMIC Series 1601, Class PB.................. 11/15/23 6.500 160,635
136 FHLMC REMIC Series 1611, Class I................... 02/15/23 6.000 134,028
700 FHLMC REMIC Series 1628, Class KZ.................. 12/15/23 6.250 673,465
268 FHLMC REMIC Series 1694, Class Z................... 03/15/24 6.500 265,252
1,000 FHLMC REMIC Series 2080, Class Z................... 08/28/28 6.500 949,844
180 FNMA REMIC Trust 1991-65, Class Z.................. 06/25/21 6.500 178,236
75 FNMA REMIC Trust 1992-118, Class K................. 09/25/08 7.500 77,563
160 FNMA REMIC Trust 1992-129, Class L................. 07/25/22 6.000 153,810
523 FNMA REMIC Trust 1992-G36, Class Z................. 07/25/22 7.000 524,548
75 FNMA REMIC Trust 1993-037, Class PX................ 03/25/23 7.000 75,357
161 FNMA REMIC Trust 1993-056, Class PZ................ 05/25/23 7.000 168,332
284 FNMA REMIC Trust 1993-060, Class Z................. 05/25/23 7.000 292,226
</TABLE>
36
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE STRATEGIC FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- ---------------- -------------
<C> <S> <C> <C> <C>
</TABLE>
COLLATERALIZED MORTGAGE OBLIGATIONS--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 121 FNMA REMIC Trust 1993-070, Class Z................. 05/25/23 6.900% $ 123,061
349 FNMA REMIC Trust 1993-096, Class Z................. 06/25/23 7.000 368,018
279 FNMA REMIC Trust 1993-122, Class L................. 01/25/23 6.500 276,229
76 FNMA REMIC Trust 1993-149, Class L................. 08/25/23 6.000 73,864
133 FNMA REMIC Trust 1993-160, Class ZB................ 09/25/23 6.500 129,532
128 FNMA REMIC Trust 1993-163, Class ZA................ 09/25/23 7.000 131,248
90 FNMA REMIC Trust 1993-199, Class Z................. 10/25/23 7.000 89,204
663 FNMA REMIC Trust 1993-65, Class ZZ................. 06/25/13 7.000 690,803
500 FNMA REMIC Trust 1993-G10, Class G................. 05/25/22 5.000 478,439
135 FNMA REMIC Trust 1993-G40, Class Z................. 12/25/23 6.500 128,774
267 FNMA REMIC Trust 1994-23, Class PX................. 08/25/23 6.000 248,001
3,800 AMAC, Series 1998-3, Class A3...................... 06/25/28 6.750 3,784,420
2,400 American Residential Mortgage Loan Trust, Series
1998-1, Class 1.................................. 05/25/29 5.840* 2,399,625
3,000 Contimortgage Home Equity Loan Trust, Series
1998-1, Class A2................................. 07/15/12 6.180 2,999,430
5,000 GE Capital Mortgage Services Inc., Series 1998-12,
Class A4......................................... 07/25/28 6.750 5,003,906
1,991 LTC Commercial Mortgage Certificates, Series
1998-1, Class A(5)............................... 05/28/30 6.029 1,947,797
1,993 Mid-State Trust, Series 4, Class A................. 04/01/30 8.330 2,166,206
1,000 Residential Funding Mortgage Securities Inc.,
Series 1997-S14, Class A6........................ 10/25/27 7.250 1,022,261
2,182 Residential Funding Mortgage Securities Inc.,
Series 1997-S7, Class A5......................... 05/25/27 7.500 2,193,603
2,855 SLMA Student Loan Trust, Series 1998-1, Class A1... 01/25/07 5.842* 2,857,463
2,000 The Money Store Home Equity Trust, Series 1997-D,
Class AF3........................................ 11/15/21 6.345 2,007,500
950 The Money Store Home Equity Trust, Series 1998-A,
Class AV......................................... 06/15/29 5.831* 950,539
434 Bear Stearns Mortgage Securities Inc. REMIC Series
94-1 Class 3A ARM................................ 05/25/23 7.207 439,890
345 California Federal Bank REMIC Series 1990-BN1,
Class A-ARM...................................... 08/25/30 6.603 346,535
150 Residential Funding Mortgage Series 1993-S30 Class
A9............................................... 08/25/23 7.500 155,250
1,000 Resolution Trust Corp. Mortgage Series 92-C1 Class
B ARM............................................ 08/25/23 7.668 1,017,578
342 U.S. Department of Veteran Affairs Vendee Mortgage
Trust Series 1993-3, Class 2ZA................... 06/15/20 6.500 340,492
-------------
Total Collateralized Mortgage Obligations
(cost--$41,316,931).......................................... 42,985,510
-------------
STRIPPED MORTGAGE-BACKED SECURITIES(5)--0.88%
378 FHLMC Series 1625, Class GA***..................... 01/15/08 6.000(1) 28,105
367 FHLMC Series 173, Class F**........................ 06/15/21 7.779+ 357,654
3 FNMA REMIC Trust 1993-134, Class EA***............. 11/25/05 1159.74 (2) 36,714
816 FNMA REMIC Trust 1993-201, Class JA***............. 09/25/21 6.500(3) 112,134
3,227 FNMA REMIC Trust 1993-201, Class JC***............. 05/25/19 6.500(4) 582,176
-------------
Total Stripped Mortgage-Backed Securities (cost--$1,101,756)... 1,116,783
-------------
CORPORATE BONDS--22.17%
500 AMR Corp........................................... 02/01/01 10.000 544,632
2,500 AT&T Capital Corp. ................................ 02/16/99 5.950 2,499,950
450 Continental Cablevision Inc. ...................... 06/01/07 11.000 487,629
3,250 Goldman Sachs Group(5)............................. 03/19/01 5.808 3,248,615
2,000 Heller Financial Inc. ............................. 04/13/00 5.978* 2,000,946
3,300 Lehman Brothers Holdings........................... 11/06/00 to 06/03/02 5.988 to 6.000* 3,299,202
1,500 MBNA American Bank................................. 12/10/02 6.063 1,500,300
381 Midland Funding Corp. ............................. 07/23/02 10.330 411,165
1,000 National Power Corp. .............................. 05/15/28 9.625 915,286
500 Niagara Mohawk Power Co............................ 04/01/24 7.875 525,516
</TABLE>
37
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE STRATEGIC FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- ---------------- -------------
<C> <S> <C> <C> <C>
</TABLE>
CORPORATE BONDS--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 1,500 Philip Morris Co................................... 07/15/05 7.000% $ 1,536,016
3,300 RJR Nabisco Inc. .................................. 12/01/02 to 09/15/03 7.625 to 8.625 3,350,590
475 Terra Industries................................... 06/15/05 10.500 511,813
500 United Air Lines Inc............................... 11/27/12 10.360 624,655
2,000 Westpoint Stevens Inc.(5) ......................... 06/15/05 7.875 2,045,000
2,000 Williams Cos Inc. ................................. 01/30/00 5.999* 2,001,504
2,500 Worldcom Inc....................................... 01/15/04 9.375 2,625,000
-------------
Total Corporate Bonds (cost--$27,961,083)...................... 28,127,819
-------------
FOREIGN GOVERNMENT OBLIGATIONS--2.34%
1,188 Republic of Argentina.............................. 03/31/05 6.625* 1,074,687
1,107 Republic of Brazil................................. 01/01/01 6.750 1,064,934
1,000 United Mexican States.............................. 12/31/19 6.250 827,500
-------------
Total Foreign Government Obligations
(cost--$2,995,067)........................................... 2,967,121
-------------
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS++--0.19%
245 U.S. Treasury Bills (cost--$242,785)............... 08/20/98 to 12/03/98 4.980 to 5.055@ 242,769
-------------
REPURCHASE AGREEMENTS--3.84%
4,000 Repurchase Agreement dated 07/31/98 with Daiwa
Securities America Incorporated, collateralized
by $3,991,000 U.S. Treasury Bonds, 5.50% due
02/29/00 (value--$4,082,262); proceeds:
$4,001,827 (cost--$4,000,000).................... 08/03/98 5.480 4,000,000
876 Repurchase Agreement dated 07/31/98 with State
Street Bank & Trust Company, collateralized by
$835,000 U.S. Treasury Bonds, 7.50% due 11/15/01
(value--$895,538); proceeds: $876,365
(cost--$876,000)................................. 08/03/98 5.000 876,000
-------------
Total Repurchase Agreements (cost--$4,876,000)................. 4,876,000
-------------
Total Investments (cost--$146,508,624)--117.40%................ 148,954,053
(22,074,357)
Liabilities in excess of other assets--(17.40)%................
-------------
Net Assets--100.00%............................................ $126,879,696
-------------
-------------
</TABLE>
- -----------------
* Floating rate securities--The interest rates shown are the current rates
as of July 31, 1998.
** Principal Only Security--This security entitles the holder to receive
principal payments from an underlying pool of mortgages. High prepayments
return principal faster than expected and cause the yield to increase.
Low prepayments return principal more slowly than expected and cause the
yield to decrease.
*** Interest Only Security--This security entitles the holder to receive
interest payments from an underlying pool of mortgages. The risk
associated with this security is related to the speed of the principal
paydowns. High prepayments would result in a smaller amount of interest
being received and cause the yield to decrease. Low prepayments would
result in a greater amount of interest being received and cause the yield
to increase.
+ Estimated yield to maturity at July 31, 1998.
++ Entire or partial amount pledged as collateral for futures transactions.
@ Interest rates shown are discount rates at date of purchase.
ARM Adjustable Rate Mortgage--The interest rates shown are the current rates
as of July 31, 1998.
REMIC Real Estate Mortgage Investment Conduit
TBA To Be Assigned--Securities are purchased on a forward commitment with an
approximate (generally +/- 1.0%) 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) Annualized yield at date of purchase was 7.70%.
(2) Annualized yield at date of purchase was 10.48%.
(3) Annualized yield at date of purchase was 8.31%.
(4) Annualized yield at date of purchase was 8.00%.
(5) Illiquid securities represent 6.59% of net assets.
38
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE STRATEGIC FIXED INCOME INVESTMENTS
FUTURES CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF IN EXPIRATION UNREALIZED
CONTRACTS CONTRACTS TO RECEIVE EXCHANGE FOR DATE (DEPRECIATION)
- ------------- ---------------------------------------------------------------------- ------------ --------------- -------------
<C> <S> <C> <C> <C>
130 5 year U.S. Treasury Notes............................................ $14,277,656 September 1998 $ (44,688)
20 5 year U.S. Treasury Notes............................................ 2,196,552 December 1998 (5,926)
58 10 year U.S. Treasury Notes........................................... 6,599,313 December 1998 (12,688)
8 90 day Eurodollar..................................................... 1,884,200 September 2000 (1,400)
8 90 day Eurodollar..................................................... 1,882,800 December 2000 (1,400)
8 90 day Eurodollar..................................................... 1,883,750 March 2001 (1,550)
8 90 day Eurodollar..................................................... 1,883,350 June 2001 (1,550)
-------------
$ (69,202)
-------------
-------------
</TABLE>
See accompanying notes to financial statements
39
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MUNICIPAL FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------------ -------------------- --------------- ------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--97.75%
ALABAMA--0.43%
$ 60 Birmingham Alabama Medical Clinic Board
Revenue Bapist Medical Centers (Escrow
to Maturity).......................... 07/01/05 7.300% $ 67,039
155 Pell City Alabama Industrial Development
Board Revenue Shelby Steel Fabricators
(Letter of Credit--South Trust
Bank)*................................ 09/01/01 7.700 155,497
------------
222,536
------------
ARIZONA--3.23%
70 Pima County Arizona Hospital Revenue St.
Joseph Hospital Project (Escrow to
Maturity)............................. 01/01/09 7.500 80,811
1,000 Santa Cruz County Arizona Industrial
Development Authority Industrial
Development Revenue (Optional Put
08/01/07 @ 100)....................... 08/01/20 4.750 1,000,000
570 Show Low Arizona Industrial Development
Authority Revenue Navapache Regional
Med Center Series A (ACA Insured)..... 12/01/06 5.125 585,715
------------
1,666,526
------------
ARKANSAS--0.64%
100 Arkansas State Development Finance
Authority (MBIA Insured).............. 10/01/16 5.100 101,611
30 Pulaski County Arkansas Residental
Housing Single Family (Escrow to
Maturity)............................. 06/01/10 7.250 34,708
177 Springdale Arkansas Residential Housing
Mortgage Series A (FNMA
Collateralized)....................... 09/01/11 7.650 194,741
------------
331,060
------------
CALIFORNIA--8.49%
135 California Pollution Control Financing
Kaiser Steel Corporation Project
(Escrow to Maturity).................. 10/01/08 7.250 153,016
135 California Statewide Community Housing
Senior Lien (FHA Insured)............. 09/01/00 5.000 137,155
130 Inglewood California Residential
Rehabilitation (Escrow to Maturity)... 08/01/10 7.500 150,331
460 Lancaster California Redevelopment
Agency Multi Family Housing Refunding
FHA High Valley Apartments Project
Series A (FHA Insured)................ 12/01/05 5.250 469,218
700 Los Angeles California Community
Redevelopment Agency Refunding
Monterey Hills Redevelopment Project
B..................................... 12/01/22 8.650 808,136
300 Los Angeles California Multi Family
Revenue Housing Earthquake
Rehabilitation Project Series C (FNMA
Collateralized)*...................... 07/01/07 5.150 308,847
90 Palmdale California Residential Mortgage
(Escrow to Maturity).................. 11/01/12 9.250 118,822
1,030 Sacramento California Utility District
Electric (Escrow to Maturity)......... 03/01/10 to 02/01/11 5.500 to 6.800 1,160,164
1,025 Vista California Multi Family Housing
Pepperwood Apartments (Mandatory put
06/01/05 @ 100) (FNMA
Collateralized)....................... 06/01/25 5.700 1,079,345
------------
4,385,034
------------
COLORADO--1.98%
570 Colorado Housing Finance Authority
Single Family Progam Subordinated*.... 11/01/04 5.750 581,924
410 Lakewood Company Multi Family Housing
FHA Loan.............................. 10/01/15 6.550 439,717
------------
1,021,641
------------
DISTRICT OF COLUMBIA--4.18%
600 District Columbia Housing Finance
Authority Certificate of Participation
(Asset Guaranty Insured).............. 06/01/08 4.850 602,382
</TABLE>
40
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MUNICIPAL FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------------ -------------------- --------------- ------------
<C> <S> <C> <C> <C>
</TABLE>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
DISTRICT OF COLUMBIA--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 1,500 District Columbia Series A (MBIA
Insured).............................. 06/01/08 5.250% $ 1,555,890
------------
2,158,272
------------
FLORIDA--1.84%
145 Clearwater Florida Housing Development
Corporation Revenue Refunding
Clearwater Apartments Series A (FHA
Insured).............................. 07/01/01 6.200 150,417
100 Dade County Florida Educational
Facilities Authority Revenue (Letter
of Credit--Sun Bank).................. 01/01/02 5.150 103,087
175 Palm Beach County Florida Solid Waste
Authority Revenue (Escrow to Maturity)
(MBIA Insured)........................ 12/01/04 10.000 208,792
240 Pasco County Florida Housing Finance
Authority Refunding Oak Trail
Apartments Project Series B (Mandatory
Put
06/01/08 @ 100) (AXA Insured)......... 06/01/27 5.500 249,593
220 Pasco County Florida MBIA West Pasco
Water and Sewer Unit (Escrow to
Maturity) (MBIA Insured).............. 08/01/08 6.375 238,557
------------
950,446
------------
GEORGIA--2.05%
350 Canton Georgia Housing Authority Multi
Housing Canterbury Ridge Apartmentss
Project (FNMA Collateralized)*........ 03/01/08 4.900 350,252
65 Gwinnett County Georgia Water & Sewer
Authority (Escrow to Maturity)........ 10/01/04 9.600 79,264
600 Marietta Georgia Housing Authority Multi
Family Housing Refunding Ridge Part
Apartments Project A (Mandatory put
06/01/05 @ 100) (FNMA
Collateralized)....................... 06/01/25 5.700 629,676
------------
1,059,192
------------
ILLINOIS--8.28%
185 Belleville St. Clair County (Escrow to
Maturity)............................. 11/01/09 7.250 213,664
350 Greater Peoria Airport Authority (AMBAC
Insured)*............................. 12/01/07 6.700 392,406
500 Illinois Educational Facilities
Authority Revenues Refunding
Northwestern Medical Facility
Foundation (MBIA Insured)............. 11/15/28 5.125 485,370
780 Illinois Health Facilities Authority
Revenue Ravenswood Hospital (Escrow to
Maturity)............................. 08/01/06 7.250 870,597
1,475 Illinois Health Facilities Authority
Revenue Series B (Partial Pre-Refunded
04/01/99 @ 102)....................... 04/01/08 7.375 1,537,451
250 Palatine Village Housing Revenue
Illinois Clover Ridge (Mandatory put
12/15/02 @ 100) (Letter of
Credit--Lasalle National Bank)........ 12/15/07 4.750 253,930
225 St. Clair County Illinois Certificates
of Participation Series A (FSA
Insured).............................. 10/01/07 4.900 228,978
285 St. Clair County Illinois Certificates
of Participation Series A (FSA
Insured).............................. 10/01/08 5.000 291,367
------------
4,273,763
------------
INDIANA--7.23%
660 Fort Wayne Indiana Hospital Authority
Revenue Parkview Memorial Hospital
(Escrow to Maturity).................. 01/01/02 to 01/01/07 6.500 to 6.875 704,998
915 Indiana Health Facility Hospital Revenue
Kings Daughters Hospital (Asset
Guaranty Insured)..................... 02/15/04 to 02/15/05 5.000 937,583
600 Indianapolis In Economic Development
Revenue Refunding Bethany Independent
Series A (GNMA Collateralized)*....... 04/20/17 5.350 600,672
430 Indianapolis Indiana Economic
Development Revenue Knob In The Woods
Project (Mandatory put 12/01/04 @ 100)
(FNMA Collateralized)................. 12/01/24 6.375 474,965
</TABLE>
41
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MUNICIPAL FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------------ -------------------- --------------- ------------
<C> <S> <C> <C> <C>
</TABLE>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
INDIANA--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 1,000 New Castle Indiana Economic Development
Revenue Refunding FHA Raintree Square
Project A............................. 04/01/19 5.550% $ 1,013,580
------------
3,731,798
------------
IOWA--0.41%
140 Iowa Finance Authority Multi Family
Revenue Refunding Housing Forest Glen
Apartments Project A (FNMA
Collateralized)....................... 11/01/03 4.700 141,249
70 Iowa Finance Authority Multi Family
Revenue Refunding Housing Hillcrest C
(FNMA Collateralized)................. 11/01/02 4.600 70,619
------------
211,868
------------
KANSAS--0.04%
20 Wichita Kansas Hospital Revenue St.
Francis Hospital & Nursing Senior A... 10/01/07 6.750 22,049
------------
KENTUCKY--0.27%
55 Kentucky State Revenue Turnpike
Authority Resources Recovery Road
Revenue (Escrow to Maturity).......... 07/01/09 7.200 64,054
70 Kentucky State Revenue Turnpike
Authority Toll Road (Escrow to
Maturity)............................. 07/01/08 5.875 74,106
------------
138,160
------------
LOUISIANA--4.19%
120 East Baton Rouge Louisiana Single Family
Mortgage Series C (GNMA/FNMA
Collateralized)....................... 04/01/32 7.000 126,466
370 East Baton Rouge Parish Louisiana Womans
Hospital Foundation (Escrow to
Maturity)............................. 10/01/08 7.200 417,789
800 Louisiana Public Facilities Authority
Revenue and Education A1 (Mandatory
put 06/01/02 @ 100) (AMBAC Insured)... 12/01/15 5.000 816,152
700 Louisiana State Health Education
Authority Alton Ochsner Medical
Foundation (Escrow to Maturity)....... 05/01/05 8.750 803,873
------------
2,164,280
------------
MAINE--0.10%
50 Maine Health & High Educational
Facilities Hospital St. Marys General
Hospital (Pre-Refunded 07/01/99 @
102).................................. 07/01/09 8.500 53,094
------------
MASSACHUSETTS--1.01%
520 Massachusetts Bay Transport Authority
General Transportation Systems Series
B (FSA Insured)....................... 03/01/26 5.250 520,364
------------
MICHIGAN--2.53%
615 Michigan Municipal Bond Authority
Revenue Wayne County Project (Escrow
to Maturity) (MBIA Insured)........... 12/01/02 7.400 675,571
110 Michigan State Hospital Finance
Authority Revenue St. Joseph's mercy
Hospital (Escrow to Maturity)......... 07/01/03 9.250 124,916
245 Michigan State Housing Development
Authority Series B.................... 12/01/12 7.650 254,830
220 Michigan State Strategic Limited
Obligation............................ 08/15/05 7.875 249,803
------------
1,305,120
------------
MINNESOTA--1.11%
300 Coon Rapids Minnesota Hospital Revenue
Health Central Incorporated (Escrow to
Maturity)............................. 08/01/08 7.625 344,379
160 Eden Prairie Minnesota Multi Family
Housing Series A (GNMA
Collateralized)....................... 01/20/06 5.500 167,161
</TABLE>
42
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MUNICIPAL FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------------ -------------------- --------------- ------------
<C> <S> <C> <C> <C>
</TABLE>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
MINNESOTA--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 55 Moorhead Minnesota Residential Mortgage
(Escrow to Maturity).................. 08/01/11 7.100% $ 63,782
------------
575,322
------------
MISSISSIPI--0.86%
450 Corinth Alcorn County Mississippi
Hospital Refunding Magnolia Registered
Health Center A....................... 10/01/08 5.000 445,379
------------
MISSOURI--3.34%
1,500 Missouri State Development Finance Board
Recreation YMCA Greater St. Louis
Project Series A (Letter of
Credit--Nations Bank)................. 09/01/06 to 09/01/08 4.600 to 4.800 1,492,710
215 St. Louis County Missouri Single Family
Housing (AMBAC Insured)............... 10/01/16 9.250 229,702
------------
1,722,412
------------
NEBRASKA--1.83%
900 Nebhelp Incorporated Nebraska Revenue
Junior Subordinated Lien Series A-6
(MBIA Insured)*....................... 12/01/02 6.700 947,421
------------
NEW JERSEY--0.33%
150 New Jersey Health Care Facilities
Financing St. Barnabas Medical Center
(Escrow to Maturity).................. 07/01/11 7.000 169,319
------------
NEW MEXICO--0.48%
245 Taos County New Mexico Hospital Series B
(Asset Guaranty Insured).............. 05/15/02 5.000 245,421
------------
NEW YORK--1.01%
200 New York City Housing Authority
Refunding Security Assisted Series
A..................................... 07/01/05 5.250 205,592
300 New York City Housing Authority
Refunding Security Assisted Series A
(AMBAC Insured)....................... 07/01/08 5.450 313,785
------------
519,377
------------
NORTH CAROLINA--0.75%
375 Asheville North Carolina Housing
Authority Multi Family Housing
Woodridge Apartments (GNMA
Collateralized)*...................... 11/20/19 5.700 385,991
------------
OHIO--0.50%
160 Dayton Ohio Hospital Revenue Good
Samaritan First Mortgage Revenue
(Escrow to Maturity).................. 12/01/05 6.000 169,094
85 Ohio Housing Finance Agency Single
Family Mortgage Series C (GNMA
Collateralized)*...................... 09/01/21 7.850 89,773
------------
258,867
------------
OKLAHOMA--1.66%
335 Comanche County Oklahoma Hospital
Authority Revenue Series A (Connie Lee
Insured).............................. 07/01/06 5.100 344,615
425 McAlester Oklahoma Public Works
Authority Revenue (FSA Insured)....... 12/01/04 8.250 510,595
------------
855,210
------------
PENNSYLVANIA--8.69%
125 Allegheny County Pennsylvania Industrial
Commercial Development MPB
Association........................... 12/01/04 6.750 129,487
30 Caln Township Pennsylvania Municipal
Sewer Revenue (Escrow to Maturity).... 01/01/09 5.700 31,621
</TABLE>
43
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MUNICIPAL FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------------ -------------------- --------------- ------------
<C> <S> <C> <C> <C>
</TABLE>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
PENNSYLVANIA--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 535 Chester County Pennsylvania Health &
Education Jefferson Health Systems
Series B (AMBAC Insured).............. 05/15/12 5.000% $ 530,752
50 Chester County Pennsylvania Hospital
Authority Revenue (Escrow to
Maturity)............................. 07/01/09 7.500 57,836
80 Conneaut Pennsylvania School District
(Escrow to Maturity) (AMBAC
Insured).............................. 05/01/02 9.250 89,060
145 Lancaster County Pennsylvania Hospital
Authority Lancaster General Hospital
Project (AMBAC Insured)............... 07/01/11 4.750 142,931
5 Lancaster Penn Area Sewer Authority
(Escrow to Maturity).................. 04/01/12 6.000 5,455
400 Luzerne County Pennsylvania Industrial
Development Exempt Series B*.......... 12/01/22 7.125 440,572
70 Montgomery County Pennsylvania Higher
Education Beaver College (Escrow to
Maturity)............................. 10/01/00 6.750 71,759
600 Pennsylvania State Finance Authority
Revenue (Investment Agreement--Sun
America).............................. 11/01/09 6.600 663,618
500 Pennsylvania State Higher Education
Facilities Temple University First
Series................................ 04/01/29 5.000 483,230
125 Philadelphia Hospital & High Education
Health Systems Jefferson Health
Systems A (MBIA Insured).............. 05/15/07 5.250 130,995
500 Philadelphia Hospitals & Higher Friends
Hospital (ACA Insured)................ 05/01/11 6.200 533,170
1,180 Suacon Valley School District
Pennsylvania (AMBAC Insured).......... 10/15/09 4.650 1,177,062
------------
4,487,548
------------
RHODE ISLAND--2.25%
155 Rhode Island Housing and Mortgage
Finance*.............................. 04/01/22 8.050 162,268
1,000 Rhode Island State Turnpike & Bridge
Refunding............................. 12/01/17 5.350 1,001,520
------------
1,163,788
------------
SOUTH CAROLINA--1.12%
240 Charleston County South Carolina
Hospital Facility Roper Hospital
(Escrow to Maturity).................. 10/01/11 7.000 274,762
295 South Carolina State Housing Multi
Family (FHA Insured).................. 07/01/27 6.050 304,782
------------
579,544
------------
SOUTH DAKOTA--0.99%
465 South Dakota State Health & Educational
Revenue St. Lukes Hospital Project
(Escrow to Maturity).................. 10/01/07 6.800 512,988
------------
TENNESSEE--4.54%
1,000 Bristol Tennessee Industrial Development
Board Refunding Shelby Heights
Apartments Project.................... 03/01/22 6.200 1,045,480
370 Knox County Tennessee Health Educational
& Hospital Facility St. Mary's Medical
Center (Escrow to Maturity)........... 08/01/03 7.250 397,539
230 La Follette Tennessee Housing
Development Corportion (FHA/ MBIA
Insured).............................. 01/01/05 5.400 239,724
195 Metropolitan Government Nashville
Tennessee Health & Education Southern
Advantist Hospital Advantist Health
Systems (Escrow to Maturity).......... 10/01/09 8.700 240,094
420 Oak Ridge Tennessee Industrial
Development Board Refunding The
Gardens Series A (GNMA
Collateralized)....................... 08/20/13 5.125 420,349
------------
2,343,186
------------
TEXAS--12.74%
1,000 De Soto Texas Housing Finance
Corporation Multi Refunding The
Colonies Apartments Project (Mandatory
put 10/01/07 @ 100) (FNMA
Collateralized)....................... 10/01/27 5.125 1,024,550
</TABLE>
44
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MUNICIPAL FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------------ -------------------- --------------- ------------
<C> <S> <C> <C> <C>
</TABLE>
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
TEXAS--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 380 Galveston County Texas Housing Finance
Corporation Single Family Mortgage
Revenue............................... 04/01/15 9.750% $ 418,954
275 Hidalgo County Texas Health Services
Corporation Mission Hospital Project
(Pre-Refunded to 08/01/00 @ 103)...... 02/01/25 10.250 314,754
260 Houston Texas Airport Systems Revenue
(Escrow to Maturity).................. 07/01/10 7.600 307,128
1,000 Lewisville Texas Housing Finance
Corporation Housing Lewisville Limited
Project (FSA Insured)................. 12/01/08 5.000 1,020,120
645 Odessa Texas Junior College District
Revenue Refunding & Imot Series A
(MBIA Insured)........................ 12/01/09 4.750 644,961
1,500 Southeast Texas Housing Finance
Corporation Series B.................. 12/01/16 7.625# 398,610
450 Tarrant County Texas Health Facilities
Development Mortgage South Central
Nursing A (FHA/MBIA Insured).......... 01/01/37 6.000 490,486
1,100 Tarrant County Texas Housing Finance
Corporation Refunding Multi Family
Housing Summit Project (Mandatory Put
09/01/07 @ 100) (FNMA
Collateralized)....................... 09/01/27 5.080 1,121,131
800 Texas State Department Housing and
Community Housing Senior Dallas/Fort
Worth Series A........................ 07/01/06 6.000 839,472
------------
6,580,166
------------
UTAH--3.59%
285 Salt Lake City Utah Hospital Revenue
(Escrow to Maturity).................. 06/01/09 7.350 324,356
590 Salt Lake County Utah Multi Family
Housing James Pointe Apartment
(Mandatory put 10/01/05 @ 100) (Asset
Guaranty Insurance)................... 10/01/25 5.500 613,305
165 Salt Lake County Utah Water Conservation
(Escrow to Maturity) (MBIA Insured)... 10/01/02 10.875 193,152
695 Utah State Housing Finance Agency (AMBAC
Insured).............................. 07/01/07 to 07/01/08 5.650 to 5.900 723,923
------------
1,854,736
------------
VIRGINIA--2.27%
620 Henrico County Virginia Industrial
Development Authority Refunding
Industrial Development Regency 64
(Optional put 03/01/99 @ 100) (Letter
of Credit--Signet Bank)*.............. 03/01/16 4.550 620,149
250 King George County Virginia Industrial
Development Elementary School
Project............................... 08/01/98 4.875 250,000
300 Preston County West Virginia Pollution
Control Refunding County Commission
Monongahhela C........................ 03/01/03 4.500 300,606
------------
1,170,755
------------
WASHINGTON--0.52%
270 Washington State Housing Finance
Commission Single Family PG Series 3A
(FNMA/GNMA Collateralized)*........... 12/01/10 5.200 270,203
------------
WEST VIRGINIA--0.08%
35 Kanawha County West Virginia Residential
Mortgage Revenue (Escrow to
Maturity)............................. 09/01/10 7.375 41,158
------------
WISCONSIN--1.61%
735 Wisconsin Housing & Economic Development
Series B*............................. 09/01/08 4.850 730,921
100 Wisconsin Housing & Economic Development
Series G*............................. 03/01/04 5.250 102,620
------------
833,541
------------
WYOMING--0.58%
295 Teton County Wyoming Hospital District
Refunding Improvement (ACA Insured)... 12/01/09 5.100 297,457
------------
Total Municipal Bonds and Notes (cost--$49,469,733)... 50,474,992
------------
</TABLE>
45
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MUNICIPAL FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------------ -------------------- --------------- ------------
<C> <S> <C> <C> <C>
TAX EXEMPT COLLATERALIZED MORTGAGE OBLIGATIONS--0.76%
$ 392 FHA Insured Trust 1996-01, Class A1 (FHA
Insured) (1) (cost--$392,035)......... 11/01/06 6.100% $ 392,524
------------
TAX FREE MONEY MARKET FUND--0.16%
82 MuniCash Portfolio (cost--$82,045)...... 08/03/98 3.580 82,045
------------
Total Investments (cost--$49,943,813)--98.67%......... 50,949,561
688,139
Other assets in excess of liabilities--1.33%..........
------------
Net Assets--100.00%................................... $51,637,700
------------
------------
</TABLE>
- -----------------
# Zero coupon bond; rate represents annualized yield at date of purchase on
zero coupon bond.
* Security subject to Alternative Minimum Tax
ACA American Capital Access
AMBAC American Municipal Bond Assurance Corporation
FHA Federal Housing Authority
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GNMA Government National Mortgage Association
MBIA Municipal Bond Investors Assurance
(1) Illiquid security representing 0.76% of net assets
See accompanying notes to financial statements
46
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GLOBAL FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------------- ------------------- ------------------- -------------------
<C> <S> <C> <C> <C>
LONG-TERM GLOBAL DEBT SECURITIES--94.03%
BELGIUM--1.49%
JPY 180,000 Kingdom of Belgium................................. 12/17/99 5.000% $ 1,320,473
-------------------
CANADA--0.99%
DEM 1,566 Government of Canada............................... 07/07/08 4.875 880,184
-------------------
CHILE--0.43%
USD 400 Celulosa Arauco Constitucion....................... 12/15/03 6.750 379,322
-------------------
DENMARK--1.75%
9,135 Kingdom of Denmark................................. 11/15/07 7.000 1,553,156
-------------------
GERMANY--17.90%
07/15/03 to
25,673 Federal Republic of Germany........................ 01/04/28 5.625 to 6.500 15,905,880
-------------------
GREECE--0.89%
218,000 Republic of Greece................................. 06/19/07 8.800 788,944
-------------------
JAPAN--1.51%
185,000 Japan Development Bank............................. 10/01/99 5.000 1,344,135
-------------------
MALAYSIA--1.11%
USD 1,150 Petroliam Nasional Berhad.......................... 10/18/06 7.125 987,562
-------------------
NETHERLANDS--1.57%
2,684 Government of the Netherlands...................... 07/15/08 5.250 1,391,476
-------------------
PHILIPPINES--1.38%
USD 1,390 Republic of Philippines (1)........................ 12/01/17 6.500 1,229,571
-------------------
POLAND--2.89%
3,000 Government of Poland............................... 10/12/03 12.000 828,327
USD 1,900 Government of Poland, PDI.......................... 10/27/14 4.000# 1,740,090
-------------------
2,568,417
-------------------
SOUTH KOREA--2.86%
USD 2,700 Republic of Korea (1).............................. 04/15/08 8.875 2,543,400
-------------------
SWEDEN--7.47%
10/25/06 to
45,300 Kingdom of Sweden.................................. 05/05/08 6.500 to 8.000 6,637,167
-------------------
UNITED KINGDOM--20.57%
12/07/07 to
9,715 United Kingdom Gilt................................ 06/07/21 7.250 to 8.000 18,271,557
-------------------
UNITED STATES--31.22%
350 Cajun Electrical Power Corp........................ 03/15/19 9.520 367,526
JPY 210,000 Federal National Mortgage Association.............. 12/20/99 2.000 1,480,941
500 Rowan Companies Inc................................ 07/01/10 6.940 517,525
180 Statoil............................................ 05/01/16 7.375 196,814
11/15/26 to
8,494 U.S. Treasury Bonds (1)............................ 08/15/27 6.375 to 6.625 9,321,843
02/15/01 to
15,232 U.S. Treasury Notes (1)............................ 05/15/04 5.375 to 7.250 15,296,483
550 Xerox Corp. MTN.................................... 06/15/37 5.875 557,148
-------------------
27,738,280
-------------------
Total Long-Term Global Debt Securities (cost--$82,319,559)........ 83,539,524
-------------------
</TABLE>
47
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GLOBAL FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------------- ------------------- ------------------- -------------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENTS--5.18%
$4,000 Repurchase Agreement dated 07/31/98 with Deutsche
Bank, collateralized by $3,919,000 U.S. Treasury
Notes, 7.750% due 11/30/99 (value--$4,080,463)
proceeds: $4,001,867............................. 08/03/98 5.600% $ 4,000,000
600 Repurchase Agreement dated 07/31/98 with State
Street Bank & Trust Company, collateralized by
$570,690 U.S.Treasury Notes, 7.500% due 11/15/01
(value--$612,065) proceeds: $600,250............. 08/03/98 5.000 600,000
-------------------
Total Repurchase Agreements (cost--$4,600,000).................... 4,600,000
-------------------
Total Investments (cost--$86,919,559)--99.21%..................... 88,139,524
698,384
Other assets in excess of liabilities--0.79%......................
-------------------
Net Assets--100.00%............................................... $ 88,837,908
-------------------
-------------------
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
CONTRACT TO IN MATURITY APPRECIATION
DELIVER EXCHANGE FOR DATES (DEPRECIATION)
------------- ---------------- --------- -------------
<S> <C> <C> <C> <C>
German Deutschemarks................................................. 28,276,150 USD 15,829,731 08/14/98 $ 79,637
German Deutschemarks................................................. 4,600,811 USD 2,590,000 08/14/98 (1,387)
German Deutschemarks................................................. 7,905,254 USD 4,318,159 08/14/98 129,674
Japanese Yen......................................................... 1,064,203,529 USD 7,661,652 08/14/98 (287,912)
Japanese Yen......................................................... 387,053,940 USD 2,730,000 08/14/98 (48,149)
Japanese Yen......................................................... 272,044,800 USD 1,920,000 08/14/98 (35,034)
Japanese Yen......................................................... 406,916,448 USD 2,872,000 08/14/98 (52,524)
Japanese Yen......................................................... 408,453,000 USD 2,907,760 08/14/98 (77,636)
U.S. Dollars......................................................... 2,907,760 DEM 5,190,000 08/14/98 (12,355)
U.S. Dollars......................................................... 4,368,159 GBP 2,660,000 08/14/98 (23,543)
U.S. Dollars......................................................... 4,242,603 GBP 2,660,000 08/14/98 (99,098)
U.S. Dollars......................................................... 5,270,000 JPY 740,150,420 08/14/98 141,585
U.S. Dollars......................................................... 1,920,000 JPY 268,320,000 08/14/98 60,842
U.S. Dollars......................................................... 1,920,000 JPY 267,327,360 08/14/98 67,720
-------------
$ (158,180)
-------------
-------------
</TABLE>
- ---------------
Note: The Portfolio of Investments is listed by the issuers country of origin.
* In local currency unless otherwise indicated
# Reflects rate at July 31, 1998 on step up coupon rate instrument.
DEM German Deutschemarks
GBP British Pounds
JPY Japanese Yen
MTN Medium Term Notes
PDI Past Due Interest Bond
USD U.S. Dollars
(1) Security, or portion thereof, was on loan at July 31, 1998.
INVESTMENTS BY TYPE OF ISSUER
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
---------------------
LONG-TERM SHORT-TERM
--------- ---------
<S> <C> <C>
Government and other public issuers......................... 89.13% --
Repurchase agreements....................................... -- 5.18%
Bank and other financial institutions....................... 1.51 --
Industrial.................................................. 3.39 --
Other....................................................... -- 0.79
--------- ---------
94.03% 5.97%
--------- ---------
--------- ---------
</TABLE>
See accompanying notes to financial statements
48
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1998
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--97.11%
AGRICULTURE, FOOD & BEVERAGE--3.37%
61,200 Bestfoods Co. ................................................................. $ 3,404,250
71,200 Nabisco Holdings Corp. ........................................................ 2,536,500
139,800 Tyson Foods Inc. .............................................................. 3,023,175
------------
8,963,925
------------
BANKS--7.26%
69,800 Bank of Boston Corp. .......................................................... 3,376,575
28,800 Comerica, Inc. ................................................................ 1,940,400
18,300 First American Corp. of Tennessee.............................................. 860,100
34,625 First Security Corp. .......................................................... 760,668
42,800 Fleet Financial Group, Inc. ................................................... 3,678,125
38,800 Hibernia Corp. ................................................................ 732,350
18,000 Regions Financial Corp. ....................................................... 729,000
89,658 US Bancorp..................................................................... 4,124,268
8,800 Wells Fargo and Co. ........................................................... 3,131,700
------------
19,333,186
------------
CHEMICALS--4.07%
38,500 Eastman Chemical Co. .......................................................... 2,184,875
19,300 Geon Co. ...................................................................... 433,044
18,700 Great Lakes Chemical Corp. .................................................... 737,481
37,300 IMC Global Inc. ............................................................... 953,481
100,500 Lyondell Petrochemical Co. .................................................... 2,462,250
64,700 Praxair, Inc. ................................................................. 3,186,475
36,800 Witco Corp. ................................................................... 887,800
------------
10,845,406
------------
COMPUTER HARDWARE--6.56%
62,200 EMC Corp.*..................................................................... 3,047,800
55,900 Seagate Technology, Inc.*...................................................... 1,271,725
124,500 Xerox Corp. ................................................................... 13,142,531
------------
17,462,056
------------
COMPUTER SOFTWARE--0.09%
37,200 Informix Corp.*................................................................ 242,963
------------
DEFENSE/AEROSPACE--6.76%
117,066 Lockheed Martin Corp.(1) ...................................................... 11,670,017
114,700 Raytheon Co. .................................................................. 6,344,344
------------
18,014,361
------------
DIVERSIFIED RETAIL--1.37%
72,100 Sears Roebuck & Co. ........................................................... 3,659,075
------------
DRUGS & MEDICINE--7.28%
68,600 Allergan, Inc. ................................................................ 3,584,350
69,900 Alza Corp.*.................................................................... 2,717,362
69,100 American Home Products Corp. .................................................. 3,558,650
27,400 Biogen Inc.*................................................................... 1,524,125
35,175 Covance Inc.*.................................................................. 842,002
29,300 Forest Labs Inc.*.............................................................. 1,098,750
28,200 Genzyme Corp.*................................................................. 887,419
53,600 Schering-Plough Corp. ......................................................... 5,185,800
------------
19,398,458
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
ELECTRIC UTILITIES--5.93%
90,200 CMS Energy Corp. .............................................................. $ 3,805,312
215,000 Entergy Corp. ................................................................. 5,885,625
14,200 Firstenergy Corp. ............................................................. 391,388
190,500 PECO Energy Co. ............................................................... 5,703,094
------------
15,785,419
------------
ELECTRICAL EQUIPMENT--0.73%
31,920 Comverse Technology Inc.*...................................................... 1,629,915
5,800 Johnson Controls, Inc. ........................................................ 303,413
------------
1,933,328
------------
ELECTRONIC COMPONENTS--0.45%
49,200 Commscope Inc.*................................................................ 861,000
36,125 General Semiconductor Inc.*.................................................... 338,672
------------
1,199,672
------------
FINANCIAL SERVICES--3.19%
125,050 AON Corp. ..................................................................... 8,503,400
------------
FOREST PRODUCTS, PAPER--4.06%
34,800 Champion International Corp. .................................................. 1,476,825
89,800 Fort James Corp. .............................................................. 3,030,750
130,900 Kimberly Clark Corp. .......................................................... 5,882,319
16,750 Westvaco Corp. ................................................................ 419,797
------------
10,809,691
------------
FOOD RETAIL--0.83%
25,300 American Stores Co. ........................................................... 586,644
145,200 Food Lion Inc. ................................................................ 1,615,350
------------
2,201,994
------------
FREIGHT, AIR, SEA & LAND--3.05%
133,900 Federal Express Corp.*......................................................... 8,126,056
------------
HEAVY MACHINERY--0.46%
48,800 Harnischfeger Industries Inc. ................................................. 1,213,900
------------
HOUSEHOLD PRODUCTS--1.19%
36,100 Dial Corp. .................................................................... 861,888
13,700 National Services Industries, Inc. ............................................ 711,544
66,300 Viad Corp. .................................................................... 1,595,344
------------
3,168,776
------------
INDUSTRIAL PARTS--1.51%
7,400 American Standard Companies Inc.*.............................................. 352,425
37,000 Pentair Inc. .................................................................. 1,470,750
12,300 Timken Co. .................................................................... 289,819
43,500 York International Corp. ...................................................... 1,916,718
------------
4,029,712
------------
INFORMATION & COMPUTER SERVICES--4.90%
91,600 Automatic Data Processing Inc. ................................................ 6,200,175
169,020 First Data Corp. .............................................................. 4,891,016
29,150 Interpublic Group Companies, Inc. ............................................. 1,756,287
12,600 Reynolds & Reynolds Co. ....................................................... 211,838
------------
13,059,316
------------
</TABLE>
49
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONCLUDED)
<TABLE>
<C> <S> <C>
LIFE INSURANCE--1.15%
44,300 Aetna Life & Casualty Company.................................................. $ 3,070,544
------------
MEDICAL PRODUCTS--3.65%
114,200 Baxter International Inc. ..................................................... 6,823,450
30,300 Beckman Coulter Inc. .......................................................... 1,821,787
35,200 St. Jude Medical, Inc.* ....................................................... 1,073,600
------------
9,718,837
------------
MEDICAL PROVIDERS--2.70%
141,500 Corning, Inc. ................................................................. 4,342,281
31,500 Health Care & Retirement Corp.*................................................ 1,189,125
35,800 Manor Care Inc. ............................................................... 1,335,788
74,100 Vencor Inc. New*............................................................... 333,450
------------
7,200,644
------------
MINING & METALS--1.00%
28,100 Birmingham Steel Corp. ........................................................ 293,294
33,200 Crown Cork & Seal, Inc. ....................................................... 1,365,350
20,460 Martin Marietta Inc. .......................................................... 1,012,770
------------
2,671,414
------------
MOTOR VEHICLES--2.90%
100,400 Goodyear Tire & Rubber Co.(1).................................................. 6,118,125
30,100 Lear Corp.*.................................................................... 1,597,181
------------
7,715,306
------------
OIL REFINING--2.32%
77,200 Enron Corp. ................................................................... 4,086,775
79,516 Ultramar Diamond Shamrock...................................................... 2,082,325
------------
6,169,100
------------
OTHER INSURANCE--2.21%
89,000 CIGNA Corp. ................................................................... 5,879,562
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
PUBLISHING--0.58%
24,000 Gannett Inc. .................................................................. $ 1,534,500
------------
RAILROADS--5.79%
116,600 Burlington Northern Santa Fe Inc. ............................................. 12,002,512
114,900 Norfolk Southern Corp. ........................................................ 3,432,638
------------
15,435,150
------------
REAL PROPERTY--3.03%
15,000 Champion Enterprise Inc.*...................................................... 397,500
20,300 Lafarge Corp. ................................................................. 791,700
163,000 Masco Corp. ................................................................... 4,655,688
21,764 Southdown, Inc. ............................................................... 1,361,610
73,900 Ventas Inc. ................................................................... 863,706
------------
8,070,204
------------
SPECIALTY RETAIL--2.31%
83,600 Circuit City Stores, Inc. ..................................................... 4,326,300
54,500 Consolidated Stores Corp.*..................................................... 1,832,562
------------
6,158,862
------------
THRIFT--0.32%
21,700 Greenpoint Financial Corp. .................................................... 861,219
------------
TOBACCO--3.49%
212,400 Phillip Morris Co. Inc. ....................................................... 9,305,775
------------
WIRELESS TELECOMMUNICATIONS--2.60%
159,300 General Instrument Corp.*...................................................... 4,321,012
97,600 Nextel Communications Inc.*(1)................................................. 2,613,850
------------
6,934,862
------------
Total Common Stocks (cost--$224,985,575).................................................. 258,676,673
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- --------- -------------------- --------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS--0.14%
$ 370 U.S. Treasury Bills+ (cost--$363,785)... 11/27/98 5.125%@ 363,936
------------
</TABLE>
50
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- --------- -------------------- -------------- ------------
REPURCHASE AGREEMENT--2.81%
<C> <S> <C> <C> <C>
$ 7,480 Repurchase Agreement dated 07/31/98 with
State Street Bank & Trust Company,
collateralized by $7,249,526 U.S.
Treasury Bonds, 7.125% due 2/29/00;
(value--$7,630,126)
proceeds: $7,483,117
(cost--$7,480,000).................... 08/03/98 5.000% $ 7,480,000
------------
Total Investments (cost--$232,829,360)--100.06%.... 266,520,609
Liabilities in excess of other assets--(0.06)%..... (166,530)
------------
Net Assets--100.00%................................ $266,354,079
------------
------------
</TABLE>
- -----------------
* Non-Income producing security
+ Entire or partial amount pledged as collateral for futures transactions.
@ Interest rate shown is discount rate at date of purchase.
(1) Security, or portion thereof, was on loan at July 31, 1998.
FUTURES CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF IN EXPIRATION UNREALIZED
CONTRACTS CONTRACTS TO RECEIVE EXCHANGE FOR DATE (DEPRECIATION)
- --------- ---------------------------------------- -------------------- -------------- ------------
<C> <S> <C> <C> <C>
25 S&P 500................................. $ 7,018,750 September 1998 $ (264,525)
------------
------------
</TABLE>
See accompanying notes to financial statements
51
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1998
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
COMMON STOCKS--99.05%
AGRICULTURE, FOOD & BEVERAGE--2.80%
53,900 Campbell Soup Co. ............................................................. $ 2,910,600
59,400 The Coca-Cola Co. ............................................................. 4,792,837
------------
7,703,437
------------
BANKS--5.27%
83,200 The Chase Manhattan Corp. ..................................................... 6,292,000
103,200 NationsBank Corp.(1) .......................................................... 8,230,200
------------
14,522,200
------------
COMPUTER HARDWARE--10.59%
129,250 Cisco Systems, Inc.*........................................................... 12,375,688
194,400 Compaq Computer Corp........................................................... 6,390,900
95,800 Dell Computer Corp.*........................................................... 10,403,281
------------
29,169,869
------------
COMPUTER SOFTWARE--1.55%
38,800 Microsoft Corp.*............................................................... 4,272,850
------------
DEFENSE/AEROSPACE--2.20%
139,000 Allied-Signal, Inc. ........................................................... 6,046,500
------------
DIVERSIFIED RETAIL--5.00%
85,200 Dayton Hudson Corp. ........................................................... 4,073,625
107,400 Kohls Corp.*................................................................... 5,262,600
70,300 Wal Mart Stores, Inc. ......................................................... 4,437,687
------------
13,773,912
------------
DRUGS & MEDICINE--11.56%
90,200 Bristol-Myers Squibb Co. ...................................................... 10,277,162
63,600 Merck & Co., Inc. ............................................................. 7,842,675
29,000 Pfizer, Inc. .................................................................. 3,190,000
109,000 Schering-Plough Corp. ......................................................... 10,545,750
------------
31,855,587
------------
ELECTRIC UTILITIES--0.99%
59,500 AES Corp.*..................................................................... 2,725,844
------------
ELECTRICAL EQUIPMENT--6.76%
66,500 Lucent Technologies Inc. ...................................................... 6,147,093
167,500 Solectron Corp.*(1)............................................................ 8,040,000
59,000 Tellabs, Inc.*(1).............................................................. 4,441,594
------------
18,628,687
------------
ENTERTAINMENT--3.31%
122,600 Carnival Corp. ................................................................ 4,528,538
133,100 Walt Disney Co. ............................................................... 4,583,631
------------
9,112,169
------------
ENVIRONMENTAL SERVICES--2.27%
113,600 Waste Management Inc.*(1)...................................................... 6,262,200
------------
FINANCIAL SERVICES--3.51%
66,000 Associates First Capital Corp. ................................................ 5,127,375
135,900 MBNA Corp. .................................................................... 4,552,650
------------
9,680,025
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
FOOD RETAIL--1.60%
93,000 Kroger Co.*.................................................................... $ 4,400,063
------------
HOUSEHOLD PRODUCTS--6.85%
44,000 Avon Products Inc. ............................................................ 3,806,000
64,300 Colgate-Palmolive Co. ......................................................... 5,943,731
126,000 Gillette Co. .................................................................. 6,599,250
31,900 Procter & Gamble Co. .......................................................... 2,532,063
------------
18,881,044
------------
INDUSTRIAL PARTS--1.31%
37,600 United Technologies Corp. ..................................................... 3,602,550
------------
INFORMATION & COMPUTER SERVICES--0.26%
24,100 HBO & Co. ..................................................................... 710,197
------------
LEISURE--1.75%
121,800 Harley Davidson Inc.(1) ....................................................... 4,826,325
------------
LONG DISTANCE & PHONE COMPANIES--2.52%
131,300 WorldCom, Inc.*................................................................ 6,942,487
------------
MEDIA--2.01%
140,050 Liberty Media Group, Series A*................................................. 5,523,222
------------
MEDICAL PRODUCTS--4.45%
60,000 Medtronic, Inc.(1) ............................................................ 3,716,250
137,700 Tyco International Ltd. ....................................................... 8,528,794
------------
12,245,044
------------
MEDICAL PROVIDERS--1.63%
79,600 United Healthcare Corp.(1) .................................................... 4,497,400
------------
OIL SERVICES--3.02%
91,000 BJ Services Co.*............................................................... 1,916,688
97,200 Halliburton Co. ............................................................... 3,529,575
152,900 Noble Drilling Corp.* ......................................................... 2,885,987
------------
8,332,250
------------
OTHER INSURANCE--3.42%
35,000 American International Group Inc. ............................................. 5,278,437
96,000 Travelers Property Casualty Corp. ............................................. 4,152,000
------------
9,430,437
------------
PUBLISHING--1.06%
68,500 R.R. Donnelley & Sons Co. ..................................................... 2,911,250
------------
SECURITIES & ASSET MANAGEMENT--8.11%
59,500 Merrill Lynch & Co., Inc. ..................................................... 5,801,250
68,000 Morgan Stanley, Dean Witter, Discover & Co. ................................... 5,920,250
158,449 Travelers Group Inc. .......................................................... 10,616,083
------------
22,337,583
------------
SEMICONDUCTOR--1.62%
42,000 Altera Corp.* ................................................................. 1,531,688
34,700 Intel Corp. ................................................................... 2,929,981
------------
4,461,669
------------
</TABLE>
52
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
SPECIALTY RETAIL--1.99%
130,600 Home Depot, Inc. .............................................................. $ 5,468,875
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
TOBACCO--1.64%
103,000 Philip Morris Co. Inc. ........................................................ $ 4,512,688
------------
Total Common Stocks (cost--$208,261,312)................................................... 272,836,364
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- ---------- -------- -------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--1.34%
$ 3,687 Repurchase Agreement dated 07/31/98 with State Street Bank
& Trust Company, collateralized by $3,573,396 U.S.
Treasury Bonds, 7.125% due 02/29/00
(value--$3,761,000); proceeds: $3,688,536
(cost--$3,687,000)...................................... 08/03/98 5.000% 3,687,000
------------
Total Investments (cost--$211,948,312)--100.39%....................... 276,523,364
Liabilities in excess of other assets--(0.39)%........................ (1,061,873)
------------
Net Assets--100.00%................................................... $275,461,491
------------
------------
</TABLE>
- -----------------
* Non-Income producing security
(1) Security, or a portion thereof, was on loan at July 31, 1998.
See accompanying notes to financial statements
53
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1998
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--95.26%
AGRICULTURE, FOOD & BEVERAGE--0.77%
17,300 Chock Full of Nuts Corp.*........................................... $ 109,206
54,000 Fleming Companies Inc. ............................................. 826,875
19,500 Nash Finch Co. ..................................................... 290,062
6,300 Sanfilippo John B & Son Inc.*....................................... 30,713
6,900 Suprema Specialties Inc.*........................................... 25,875
9,300 Sylvan, Inc.*....................................................... 128,456
-----------
1,411,187
-----------
AIRLINES--1.27%
25,400 Alaska Air Group Inc.*.............................................. 1,063,625
51,500 America West Holding Corp.*......................................... 1,239,219
14,600 World Airways Inc. New*............................................. 31,937
-----------
2,334,781
-----------
ALCOHOL--0.04%
2,300 Lion Brewery Inc.* ................................................. 8,913
6,700 Todhunter International Inc.*....................................... 63,650
-----------
72,563
-----------
APPAREL, RETAIL--0.38%
11,800 Cache Inc.*......................................................... 63,425
1,700 Concord Fabrics Inc.*............................................... 14,025
7,700 Haskel International Inc. .......................................... 75,075
7,800 Paul Harris Stores Inc.*............................................ 80,438
5,300 S & K Famous Brands Inc.*........................................... 74,200
28,500 Syms Corp.*......................................................... 386,531
-----------
693,694
-----------
APPAREL, TEXTILES--3.27%
1,800 Barry R G Corp. Ohio*............................................... 26,438
81,800 Burlington Industries Inc.*......................................... 853,787
105,900 Collins & Aikman Corp.*............................................. 661,875
12,725 Conso Products Co.*................................................. 90,666
14,000 Culp, Inc. ......................................................... 128,625
1,900 Deckers Outdoor Corp.* ............................................. 10,925
4,833 Decorator Industries, Inc. ......................................... 51,345
16,800 Dixie Group Inc. ................................................... 134,400
22,600 Dyersburg Corp. .................................................... 110,175
7,700 G-III Apparel Group Ltd.*........................................... 32,244
8,000 Galey & Lord Inc.*.................................................. 99,000
6,700 Garan Inc. ......................................................... 168,337
41,500 Guilford Mills, Inc. ............................................... 739,219
22,700 Gymboree Corp.* .................................................... 272,400
4,600 Hampshire Group, Ltd.*.............................................. 82,800
36,500 Justin Industries Inc. ............................................. 497,312
7,100 Lacrosse Footwear Inc. ............................................. 73,662
5,500 Marisa Christina Inc.*.............................................. 16,500
5,800 Maxwell Shoe Inc.*.................................................. 112,375
35,400 Nine West Group, Inc.*.............................................. 789,862
6,100 Oxford Inds Inc. ................................................... 183,381
4,900 Rocky Shoes and Boots*.............................................. 50,838
3,000 Span America Med Systems Inc. ...................................... 22,500
5,200 Sport Haley Inc.* .................................................. 61,100
11,200 Supreme International Corp.*........................................ 197,400
1,900 Tandy Brands Accessories Inc.* ..................................... 34,913
5,600 Tarrant Apparel Group*.............................................. 128,800
18,200 Vans Inc.*.......................................................... 175,175
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
APPAREL, TEXTILES--(CONCLUDED)
<TABLE>
<C> <S> <C>
3,600 Weyco Group Inc. ................................................... $ 96,750
20,100 Worldtex, Inc.*..................................................... 104,269
-----------
6,007,073
-----------
BANKS--1.37%
5,200 American Bank Inc. ................................................. 140,400
16,900 Corus Bank Shares Inc. ............................................. 642,200
4,500 CPB Inc. ........................................................... 82,125
4,100 First Citizens Bancshares, Inc. .................................... 411,025
7,500 First Western Bancorp Inc. ......................................... 212,813
9,123 HUBCO Inc. ......................................................... 295,927
680 Interchange Financial Services Inc. ................................ 13,515
13,000 One Valley Bancorp West Virginia Inc. .............................. 439,562
4,500 United Bank Shares Inc. ............................................ 124,875
1,900 U.S. Bancorp Inc. .................................................. 145,825
-----------
2,508,267
-----------
CHEMICALS--4.36%
11,865 Aceto Corp. ........................................................ 180,941
4,100 American Biltrite Inc. ............................................. 119,413
3,300 American Vanguard Corp. ............................................ 22,275
6,500 Ameron, Inc. ....................................................... 323,781
14,500 Bairnco Corp. ...................................................... 98,781
12,200 Congoleum Corp. New*................................................ 106,750
18,000 Dexter Corp. ....................................................... 492,750
6,800 Environmental Technologies*......................................... 24,650
119,300 Ethyl Corp. ........................................................ 626,325
43,200 Foamex International Inc. .......................................... 745,200
12,600 Furon Co. .......................................................... 223,650
31,800 Gencorp Inc. ....................................................... 733,387
21,100 General Chemical Group Inc. ........................................ 540,687
2,200 General Magnaplate Corp. ........................................... 10,725
32,700 Georgia Gulf Corp. ................................................. 719,400
15,000 Hanna M.A. Co. ..................................................... 222,188
9,135 Hawkins Chemical Inc. .............................................. 97,059
12,000 High Plains Corp.*.................................................. 23,250
8,100 Lydall Inc.* ....................................................... 114,919
4,800 Martin Color-Fi Inc.*............................................... 12,600
4,800 Maxco Inc.*......................................................... 37,200
47,109 Mississippi Chemical Corp. ......................................... 765,521
2,600 NCH Corp. .......................................................... 171,600
7,500 Quaker Chemical..................................................... 134,063
4,900 Raven Industries Inc. .............................................. 94,019
21,500 Schulman A Inc. .................................................... 385,656
15,700 Stepan Chemical Co. ................................................ 451,375
74,300 Terra Industries Inc. .............................................. 510,813
1,100 Uniflex Inc.* ...................................................... 6,669
-----------
7,995,647
-----------
COMPUTER HARDWARE--1.76%
6,800 Alphanet Solutions Inc.* ........................................... 50,150
19,000 Amplicon Inc. ...................................................... 270,750
37,100 Banctec, Inc.*...................................................... 595,919
54,700 Compucom Systems Inc.*.............................................. 369,225
4,500 Dataram Corp.*...................................................... 51,187
6,900 En Pointe Technologies Inc.*........................................ 62,100
7,300 Gradco Systems Inc.*................................................ 35,588
</TABLE>
54
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
COMPUTER HARDWARE--(CONCLUDED)
<TABLE>
<C> <S> <C>
36,200 HMT Technology Corp.* .............................................. $ 328,062
8,400 Kentek Information Systems Inc. .................................... 61,950
8,500 Lumisys Inc.*....................................................... 27,094
4,300 McRae Industries Inc. .............................................. 30,100
8,900 Microdyne Corp.* ................................................... 31,706
10,200 Miltope Group Inc.*................................................. 21,675
4,000 Radisys Corp.* ..................................................... 65,000
3,900 Rainbow Technologies Inc.*.......................................... 58,012
1,700 SBE Inc.* .......................................................... 6,588
7,900 Scan Optics Inc.* .................................................. 39,006
16,800 SED International Holdings Inc.*.................................... 98,700
10,800 STB Systems Inc. ................................................... 85,050
31,400 Stratus Computer Inc.*.............................................. 902,750
6,700 Transact Technologies Inc.* ........................................ 38,525
-----------
3,229,137
-----------
COMPUTER SOFTWARE--0.17%
7,900 3Do Co.*............................................................ 25,181
15,500 Elcom International Inc. ........................................... 53,766
21,900 MacNeal Schwendler Corp.*........................................... 173,831
7,600 Programmers Paradise Inc.*.......................................... 52,250
-----------
305,028
-----------
CONSUMER DURABLES--1.38%
13,200 Chromcraft Revington Inc.*.......................................... 242,550
1,800 CHS Electronics Inc.*............................................... 30,825
2,900 Flexsteel Industries Inc. .......................................... 34,800
7,500 Home Products International Inc.*................................... 75,938
8,500 Middleby Corp.*..................................................... 51,000
29,600 Mikasa Inc. ........................................................ 390,350
18,800 O'Sullivan Industries*.............................................. 207,975
5,700 Ocal Inc.*.......................................................... 11,756
2,100 Pulaski Furniture Corp. ............................................ 53,813
9,200 Rival Co. .......................................................... 123,050
14,300 Royal Appliance Manufacturing Co.*.................................. 84,012
1,746 Samsonite Corp. New*................................................ 13,368
11,000 Shelby Williams Industries Inc. .................................... 165,000
10,200 Stanley Furniture Co., Inc.*........................................ 226,950
3,800 Tab Products Co. ................................................... 44,650
20,500 Toro Co. ........................................................... 556,062
5,610 Virco Manufacturing Corp. .......................................... 114,304
4,800 Winsloew Furniture Inc.*............................................ 114,000
-----------
2,540,403
-----------
DEFENSE/AEROSPACE--1.15%
23,000 Alliant Techsystems Inc.*........................................... 1,496,437
6,600 Allied Research Corp.*.............................................. 66,000
4,900 Curtiss Wright Corp. ............................................... 207,944
8,300 Edo Corp. .......................................................... 78,850
2,100 First Aviation Services Inc.*....................................... 8,859
5,800 GRC International Inc.*............................................. 42,775
6,200 Herley Industries Inc.*............................................. 61,613
5,700 Safety Components International Inc.*............................... 91,913
5,600 United Industrial Corp. ............................................ 66,150
-----------
2,120,541
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
DIVERSIFIED RETAIL--0.20%
16,900 Ames Department Stores Inc.*........................................ $ 361,238
-----------
DRUGS & MEDICINE--0.48%
49,599 Herbalife International Inc. ....................................... 881,999
-----------
ELECTRIC UTILITIES--6.98%
25,100 Black Hills Corp. .................................................. 602,400
31,000 Central Hudson Gas & Electric Corp. ................................ 1,336,875
19,300 Central Vermont Public Service Corp. ............................... 240,044
38,500 Cleco Corp. ........................................................ 1,142,969
34,700 Commonwealth Energy Systems......................................... 1,231,850
30,100 Eastern Utilities Associates........................................ 756,262
82,700 El Paso Electric Co.*............................................... 754,637
3,000 Florida Public Utilities Co. ....................................... 45,000
7,100 Green Mountain Power Corp. ......................................... 89,638
7,400 Madison Gas & Electric Co. ......................................... 164,650
11,700 Orange & Rockland Utilities Inc. ................................... 628,875
13,300 Otter Tail Power Co. ............................................... 478,800
71,400 Public Service Co. ................................................. 1,535,100
14,000 Rochester Gas & Electric Corp. ..................................... 421,750
10,900 Saint Joseph Light & Power Co. ..................................... 203,694
4,700 Sierra Pacific Resources............................................ 166,262
18,200 Sig Corp Inc. ...................................................... 550,550
21,200 TNP Enterprises Inc. ............................................... 683,700
55,000 Unisource Energy Corp.* ............................................ 783,750
14,800 United Illuminating Co. ............................................ 754,800
6,400 Unitil Corp. ....................................................... 149,600
3,400 Upper Peninsula Energy Corp. ....................................... 91,375
-----------
12,812,581
-----------
ELECTRICAL EQUIPMENT--2.49%
12,400 ADE Corp. Massachusetts*............................................ 158,100
4,800 Adflex Solutions Inc.* ............................................. 30,900
1,600 Airport Systems International Inc.*................................. 7,600
74,300 Ampex Corp.*........................................................ 125,381
8,800 Bel Fuse Inc.* ..................................................... 153,450
12,700 Belden, Inc. ....................................................... 334,962
8,400 Ceradyne Inc. California*........................................... 35,700
19,500 Cherry Corp.*....................................................... 287,625
4,600 Circuit Systems, Inc.*.............................................. 13,225
1,600 Cobra Electronics Corp.* ........................................... 7,200
11,100 CTS Corp. .......................................................... 325,369
3,300 EIS International Inc.* ............................................ 16,088
9,900 Excel Technology Inc. .............................................. 77,963
5,100 Jaco Electronics Inc.*.............................................. 25,181
52,700 Kemet Corp.*........................................................ 652,162
7,700 Louisiana Barge Inc.*............................................... 29,838
38,600 Methode Electronics Inc. ........................................... 560,906
1,000 Moore Products Co.* ................................................ 27,500
17,500 Mosaix Inc.*........................................................ 122,500
2,200 Nortech Systems Inc.*............................................... 10,863
6,200 O.I. Corp.*......................................................... 29,450
13,500 Park Electrochemical Corp. ......................................... 256,500
38,400 Pioneer Standard Electronics, Inc. ................................. 343,200
1,900 Quad Systems Corp.*................................................. 4,156
19,600 Read Rite Corp.*.................................................... 134,750
5,100 RF Monolithics Inc. ................................................ 53,231
</TABLE>
55
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
ELECTRICAL EQUIPMENT--(CONCLUDED)
<TABLE>
<C> <S> <C>
14,500 Richey Electronics Inc.*............................................ $ 108,750
16,000 Smart Modular Technologies Inc. .................................... 306,000
6,600 Spectran Corp.* .................................................... 34,031
8,600 Spectrum Control Inc.*.............................................. 45,150
4,300 Speizman Industries Inc.*........................................... 18,813
11,000 Teltrend Inc.*...................................................... 156,750
1,900 Vertex Communications Corp. ........................................ 41,800
4,000 Video Display Corp.*................................................ 38,250
-----------
4,573,344
-----------
ELECTRICAL POWER--0.49%
1,600 Aztec Manufacturing Co. ............................................ 16,000
14,100 Carbide/Graphite Group Inc.*........................................ 310,200
12,400 Hughes Supply Inc. ................................................. 380,525
4,500 SL Industries Inc. ................................................. 66,094
10,000 Woodhead Industries................................................. 135,000
-----------
907,819
-----------
ELECTRONIC COMPONENTS--0.04%
1,300 Axsys Technologies Inc. ............................................ 22,588
6,400 CP Clare Corp. ..................................................... 60,000
-----------
82,588
-----------
ENERGY RESERVES & PRODUCTION--0.55%
8,800 American Sts Water Co. ............................................. 217,800
8,400 California Water Service Group...................................... 196,875
3,440 Columbus Energy Corp.*.............................................. 25,155
2,700 Prima Energy Corp.*................................................. 47,587
26,300 Swift Energy Co. (1)................................................ 295,875
7,500 Vintage Petroleum Inc. ............................................. 107,344
5,000 Williams Clayton Energy Inc.*....................................... 38,125
12,518 Wilshire Oil Co. ................................................... 76,673
-----------
1,005,434
-----------
ENTERTAINMENT--0.17%
5,800 Funco Inc.* ........................................................ 98,600
6,000 Intrav Inc. ........................................................ 132,750
9,000 Rentrak Corp.*...................................................... 44,438
4,700 Vaughns Inc.*....................................................... 34,075
-----------
309,863
-----------
ENVIRONMENTAL SERVICES--0.30%
7,100 Exponent Inc.* ..................................................... 55,025
9,600 Layne Christensen Co.*.............................................. 109,200
7,400 MFRI Inc.*.......................................................... 55,500
16,200 Schnitzer Steel Industries Inc. .................................... 324,000
-----------
543,725
-----------
FINANCIAL SERVICES--2.62%
11,900 Advanta Corp. ...................................................... 199,325
26,200 Arcadia Financial Ltd.* (1)......................................... 144,100
7,650 Dain Rauscher Corp. ................................................ 413,100
3,800 Dewolfe Cos Inc.*................................................... 26,600
3,000 First Cash Inc.*.................................................... 40,875
5,600 Firstcity Financial Corp. .......................................... 158,200
3,000 Frontier Adjusters America Inc. .................................... 8,813
27,200 Gallagher Arthur J & Co. ........................................... 1,065,900
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
FINANCIAL SERVICES--(CONCLUDED)
<TABLE>
<C> <S> <C>
8,000 IMC Mortgage Co. ................................................... $ 78,000
9,200 Kaye Group Inc. .................................................... 66,700
16,700 National Discount Brokers Group*.................................... 183,700
2,400 Pacific Crest Capital Inc.*......................................... 44,400
5,300 Refac Technology Development Corp. ................................. 70,225
24,150 Resource Bank Shares Mortgage Group Inc. ........................... 469,416
27,000 Southern Pacific Funding Corp. (1).................................. 406,687
6,600 Strattec Security Corp.*............................................ 184,800
17,800 Student Loan Corp. ................................................. 845,500
33,000 WFS Financial Inc.*................................................. 224,812
30,400 World Acceptance Corp.*............................................. 172,900
-----------
4,804,053
-----------
FOREST PRODUCTS, PAPER--1.51%
18,200 ABT Building Products Corp.*........................................ 247,975
3,100 BCT International Inc.*............................................. 8,331
15,400 Caraustar Industries Inc. .......................................... 420,612
12,250 Fibermark Inc.*..................................................... 161,547
33,400 Glatfelter PH Co. .................................................. 517,700
1,000 Quipp Inc.*......................................................... 16,625
13,490 Republic Group Inc. ................................................ 268,957
18,200 Rock-Tennessee Co. ................................................. 237,738
19,200 Schweitzer Mauduit International Inc. .............................. 466,800
18,700 Shorewood Packaging Corp.*.......................................... 250,112
700 Tufco Technologies Inc. ............................................ 4,900
6,800 Universal Forest Products, Inc. .................................... 107,950
4,480 Wausau Mosinee Paper Corp. ......................................... 72,800
-----------
2,782,047
-----------
FOOD RETAIL--0.61%
17,700 Eagle Food Centers Inc.*............................................ 53,100
24,900 Ingles Markets Inc. ................................................ 301,912
26,000 M & F Worldwide Corp.*.............................................. 284,375
8,700 Marsh Supermarkets Inc. ............................................ 150,075
7,650 Schultz Sav O Stores Inc. .......................................... 118,575
7,500 Seaway Food Town Inc. .............................................. 143,438
8,200 Western Beef, Inc.*................................................. 76,875
-----------
1,128,350
-----------
FREIGHT, AIR, SEA & LAND--1.69%
3,000 Arkansas Best Corp.* ............................................... 23,438
25,600 Arnold Industries Inc. ............................................. 345,600
2,800 Boyd Brothers Transportation Inc.* ................................. 22,050
13,200 Consolidated Freightways Corp. ..................................... 153,450
1,400 Genesee & Wyoming Inc. ............................................. 28,000
15,200 Hvide Marine Inc. .................................................. 167,200
3,100 Kitty Hawk Inc.* ................................................... 56,962
11,600 Landstar Systems Inc.*.............................................. 406,000
8,300 Maritrans Inc. ..................................................... 75,219
5,600 Old Dominion Freight Lines Inc.*.................................... 86,800
3,300 PAM Transportation Services Inc.*................................... 26,813
28,400 Roadway Express Inc. Delaware....................................... 386,950
10,500 Transport Corp. of America*......................................... 149,625
17,000 Trico Marine Services Inc.* ........................................ 188,062
23,100 U.S. Freightways Corp. ............................................. 577,500
</TABLE>
56
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
FREIGHT, AIR, SEA & LAND--(CONCLUDED)
<TABLE>
<C> <S> <C>
25,900 Yellow Corp.* ...................................................... $ 414,400
-----------
3,108,069
-----------
GAS UTILITY--2.68%
7,000 Aquarion Co. ....................................................... 244,125
3,100 Atrion Corp. ....................................................... 27,125
3,800 Berkshire Gas Co. .................................................. 85,500
7,200 Chesapeake Utilities Corp. ......................................... 125,100
9,700 Colonial Gas Co. ................................................... 278,875
11,900 Connecticut Energy Corp. ........................................... 304,938
4,500 Connecticut Water Service Inc. ..................................... 150,750
12,427 CTG Resources Inc. ................................................. 288,151
10,000 Energen Corp. ...................................................... 171,875
4,800 Energynorth Inc. ................................................... 127,200
5,550 Energysouth Inc. ................................................... 114,469
10,900 Indiana Energy Inc. ................................................ 299,750
30,200 Laclede Gas Co. .................................................... 704,037
2,000 Middlesex Water Co. ................................................ 43,125
14,850 North Carolina Natural Gas Corp. ................................... 371,250
23,400 Northwest Natural Gas Co. .......................................... 614,250
12,200 NUI Corp. .......................................................... 269,925
9,400 Providence Energy Corp. ............................................ 186,825
1,000 Roanoke Gas Co. .................................................... 20,000
2,400 SJW Corp. .......................................................... 134,700
5,800 Valley Resources Inc. .............................................. 67,425
11,900 Yankee Energy Systems Inc. ......................................... 286,344
-----------
4,915,739
-----------
HEAVY MACHINERY--0.80%
12,600 Alamo Group Inc. ................................................... 220,500
9,150 Allied Products Corp. .............................................. 152,691
16,100 Cascade Corp. ...................................................... 263,637
4,200 Foilmark Inc.* ..................................................... 11,025
4,700 Gehl Co.*........................................................... 89,006
4,200 Gencor Industries Inc. ............................................. 71,400
8,200 Gradall Inds Inc.* ................................................. 136,325
6,100 Printware Inc. ..................................................... 17,538
1,300 Richton International Corp.*........................................ 14,463
6,900 Tennant Co. ........................................................ 302,737
11,500 Titan International Inc. ........................................... 161,000
4,000 Western Power & Equipment Corp.*.................................... 23,000
-----------
1,463,322
-----------
HOTELS--0.72%
23,000 Ameristar Casinos Inc.*............................................. 97,750
70,800 Grand Casinos Inc.*................................................. 880,575
12,400 NPC International Inc.*............................................. 127,100
6,784 Playcore Inc.* ..................................................... 27,984
14,200 Sholodge, Inc.*..................................................... 106,500
6,900 Supertel Hospitality*............................................... 89,700
-----------
1,329,609
-----------
HOUSEHOLD PRODUCTS--0.74%
7,100 Align Rite International Inc.*...................................... 98,512
8,600 Allou Health & Beauty Care, Inc.*................................... 68,800
14,200 American Safety Razor Co.*.......................................... 173,950
11,600 CCA Industries Inc.*................................................ 27,550
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
HOUSEHOLD PRODUCTS--(CONCLUDED)
<TABLE>
<C> <S> <C>
12,300 CPAC Inc.*.......................................................... $ 119,925
4,400 Dixon Ticonderoga Co.*.............................................. 54,450
1,000 Jason Inc.* ........................................................ 7,000
11,400 Jean Phillippe Fragrances Inc.*..................................... 87,638
8,600 Kimball International Inc. ......................................... 152,650
7,300 Libbey Inc. ........................................................ 253,675
20,200 Lifetime Hoan Corp. ................................................ 207,050
10,600 Scotts Liquid Gold Inc. ............................................ 25,838
6,300 Stephan Co. ........................................................ 80,325
-----------
1,357,363
-----------
INDUSTRIAL PARTS--6.28%
12,864 Albany International Corp. ......................................... 265,320
14,900 Amcast Industrial Corp. ............................................ 283,100
5,200 Amistar Corp.*...................................................... 14,300
15,500 Ampco Pittsburgh Corp. ............................................. 242,187
32,100 Aviall Inc.*........................................................ 447,394
16,600 Baldwin Technology Inc.*............................................ 96,487
32,800 Barnes Group Inc. .................................................. 918,400
6,600 Bridgeport Machines Inc.*........................................... 70,950
37,400 Cincinnati Milacron Inc. ........................................... 818,125
22,500 Commercial Intertech Corp. ......................................... 510,469
15,800 DT Industries Inc. ................................................. 314,025
16,600 Esterline Technologies Corp.*....................................... 292,575
8,250 Farr Co.*........................................................... 90,750
7,000 Farrel Corp. ....................................................... 22,750
17,000 Genlyte Group Inc.*................................................. 405,875
9,600 Gleason Corp. ...................................................... 240,000
35,400 Global Industrial Technologies Inc.*................................ 475,687
7,600 Gorman Rupp Co. .................................................... 135,850
1,700 Graham Corp.*....................................................... 27,413
15,750 Hardinge Brothers Inc. ............................................. 397,687
9,100 Hirsch International Group.......................................... 46,638
10,700 Hurco Co. Inc.*..................................................... 74,900
17,400 Intevac Inc.*....................................................... 160,950
4,200 K Tron International Inc.*.......................................... 74,550
6,100 Kaman Corp. ........................................................ 102,175
7,600 Knape & Vogt Manufacturing Co. ..................................... 165,300
14,200 Lawson Products Inc. ............................................... 323,937
5,900 Lufkin Inds Inc. ................................................... 174,419
29,800 Magnetek Inc.* ..................................................... 435,825
3,700 Measurement Specialties Inc.* ...................................... 10,638
7,600 Mestek, Inc.*....................................................... 164,825
4,200 Nortek, Inc.*....................................................... 134,925
2,500 P & F Industries Inc.*.............................................. 26,250
1,000 Peerless Manufacturing Co. ......................................... 12,625
3,300 Penn Engineering Manufacturing Corp. ............................... 70,744
17,000 Powell Industries Inc.*............................................. 216,750
26,100 Quanex Corp. ....................................................... 711,225
4,600 Scotsman Industries, Inc. .......................................... 124,775
24,900 Specialty Equipment Cos Inc.*....................................... 560,250
20,800 Standex International Corp. ........................................ 582,400
11,000 Starrett LS Co. .................................................... 413,875
4,100 Summa Industries Inc.*.............................................. 41,000
6,700 Transtechnology Corp. .............................................. 170,850
9,000 Trident International Inc.*......................................... 140,625
4,200 Twin Discount, Inc. ................................................ 114,187
</TABLE>
57
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
INDUSTRIAL PARTS--(CONCLUDED)
<TABLE>
<C> <S> <C>
19,800 Watts Industries Inc. .............................................. $ 398,475
-----------
11,522,457
-----------
INDUSTRIAL SERVICES/SUPPLIES--1.18%
2,200 Etown Corp. ........................................................ 89,238
18,000 Flowserve Corp. .................................................... 392,625
11,900 Healthcare Services Group Inc.*..................................... 203,044
44,050 Interpool Inc. ..................................................... 729,578
3,700 Leasing Solutions Inc.*............................................. 114,931
7,900 McGrath Rentcorp. .................................................. 153,062
13,335 Monro Muffler Brake Inc.*........................................... 169,188
10,400 PLM International Inc. ............................................. 66,950
13,100 Sunrise Leasing Corp.*.............................................. 55,675
7,600 Superior Energy Services Inc. ...................................... 32,300
8,400 Superior Surgical Manufacturing Inc. ............................... 126,000
7,946 Travel Ports America Inc.*.......................................... 23,838
680 Zimmerman Sign Co.*................................................. 2,720
-----------
2,159,149
-----------
INFORMATION & COMPUTER SERVICES--0.53%
2,400 American Physicians Service Group................................... 16,200
4,375 Corrpro Cos Inc. ................................................... 49,492
31,000 Dames & Moore Inc. ................................................. 387,500
6,900 Right Management Consultants Inc.*.................................. 87,975
1,000 Transport Lux Corp. ................................................ 10,625
10,500 Transpro Inc. ...................................................... 72,844
1,000 Unidigital Inc. .................................................... 6,938
14,600 URS Corp. New*...................................................... 249,112
2,300 Value Line Inc. .................................................... 84,812
-----------
965,498
-----------
LEISURE--2.81%
46,600 Arctic Cat Inc. .................................................... 442,700
5,300 Boston Acoustics Inc. .............................................. 212,000
14,900 Cannondale Corp.*................................................... 163,900
9,700 Compdent Corp.* .................................................... 162,475
24,100 Department 56 Inc.*................................................. 840,487
200 Ellett Brothers Inc. ............................................... 850
3,800 First Commonwealth Inc.* ........................................... 53,200
8,700 Go Video Inc.* ..................................................... 33,713
10,900 GT Bicycles Inc.*................................................... 81,750
12,800 Harman International Industries Inc. ............................... 504,800
4,700 Harveys Casino Resorts.............................................. 127,487
2,700 Health Power Inc.* ................................................. 11,138
3,700 ILX Inc.* .......................................................... 17,575
6,300 Inland Entertainment Corp. ......................................... 30,713
5,500 Jackpot Enterprises Inc. ........................................... 64,625
7,100 K2 Inc. ............................................................ 134,900
5,400 Koss Corp.*......................................................... 62,438
26,600 Midway Games Inc.* ................................................. 394,012
11,100 Play By Play Toys & Novelties*...................................... 111,000
41,600 Polaris Industries Inc. ............................................ 1,586,000
27,500 Quintel Entertainment Inc.*......................................... 73,906
4,100 Shuffle Master Inc.*................................................ 31,775
4,500 Sportsmans Guide Inc.* ............................................. 21,375
-----------
5,162,819
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
LIFE INSURANCE--2.87%
7,500 Allied Life Financial Corp. ........................................ $ 215,625
60,800 American Annuity Group Inc. ........................................ 1,390,800
7,000 American Heritage Life Investment Corp. ............................ 168,875
6,724 Amerus Life Holdings Inc. .......................................... 209,705
2,812 Cotton States Life Insurance Co. ................................... 39,544
7,115 Delphi Financial Group, Inc.*....................................... 399,329
5,800 Independence Holding Co. New........................................ 78,300
23,000 Liberty Corp. ...................................................... 1,128,437
22,500 Life USA Holdings Inc.*............................................. 254,531
4,000 National Western Life Insurance Co.*................................ 486,000
38,100 PennCorp Financial Group, Inc.(1) .................................. 404,813
21,200 Presidential Life Corp. ............................................ 447,850
5,000 Standard Management Corp.*.......................................... 36,875
-----------
5,260,684
-----------
MANUFACTURING--GENERAL--0.10%
6,900 Alltrista Corp.* ................................................... 179,400
100 Asahi / America Inc.* .............................................. 594
1,514 Axiohm Transaction Solutions*....................................... 13,626
-----------
193,620
-----------
MANUFACTURING--HIGH TECHNOLOGY--0.30%
4,800 Blonder Tongue Labs Inc.* .......................................... 46,800
9,000 C&D Technologies.................................................... 237,937
7,700 Channell Commercial Corp.*.......................................... 70,263
2,600 DSP Technology Inc.*................................................ 21,450
2,800 Percon Acquisition Inc.*............................................ 18,200
10,600 Scott Technologies Inc.*............................................ 152,375
1,100 Thermwood Corp.*.................................................... 9,213
-----------
556,238
-----------
MEDICAL PRODUCTS--0.66%
5,900 American Dental Technologies*....................................... 29,869
9,500 BMC Industries Inc. ................................................ 66,500
17,400 CNS Inc.* .......................................................... 75,038
9,800 Coherent Inc.*...................................................... 102,900
7,700 Empi Inc.* ......................................................... 131,862
7,100 Maxxim Medical Inc.*................................................ 180,162
3,400 Medstone International Inc. New*.................................... 28,900
3,600 Mesa Labs Inc.* .................................................... 18,000
6,800 Selas Corp. America................................................. 57,800
11,000 Utah Medical Products Inc.*......................................... 79,063
15,300 Vital Signs Inc. ................................................... 294,525
5,000 West Inc. .......................................................... 139,062
-----------
1,203,681
-----------
MEDICAL PROVIDERS--1.04%
4,500 Advanced Health Corp.(1) ........................................... 18,000
10,100 Advocat Services, Inc.*............................................. 60,600
3,000 Caretenders Healthcorp*............................................. 12,375
25,200 Mariner Health Group Inc.*.......................................... 300,825
18,087 Medical Assurance Inc.*............................................. 488,349
31,600 Phymatrix Corp.* ................................................... 195,525
14,300 Raytel Medical Corp.*............................................... 67,925
4,500 Safeguard Health Enterprises........................................ 25,312
7,800 Sierra Health Services Inc. ........................................ 140,400
</TABLE>
58
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
MEDICAL PROVIDERS--(CONCLUDED)
<TABLE>
<C> <S> <C>
4,200 Staff Builders Inc.*................................................ $ 3,938
6,700 Star Multi Care Services Inc. ...................................... 10,887
40,200 Sun Healthcare Group Inc.* (1)...................................... 587,925
-----------
1,912,061
-----------
MINING & METALS--8.23%
30,500 Alaska Steel Holding Corp. ......................................... 486,094
174,000 Armco Inc.*......................................................... 967,875
13,200 Atchinson Casting Corp.*............................................ 205,425
12,200 Bayou Steel Corp.*.................................................. 57,950
17,400 Brush Wellman Inc. ................................................. 276,225
6,600 BWAY Corp.*......................................................... 126,225
26,900 Carpenter Technology Corp. ......................................... 1,165,106
5,700 Castle A M & Co. ................................................... 110,794
15,600 Chase Industries Inc.*.............................................. 265,200
28,700 Citation Corp.*..................................................... 398,213
21,900 Cleveland Cliffs Inc. .............................................. 1,058,044
9,400 Cold Metal Products Inc.*........................................... 45,825
26,900 Commercial Metals Co. .............................................. 749,837
13,700 Donnelly Corp. ..................................................... 243,175
11,500 Foster LB Co.*...................................................... 60,375
25,800 Friedmans Industries Inc. .......................................... 306,375
43,700 Intermet Corp. ..................................................... 846,687
74,900 Kaiser Aluminum Corp. .............................................. 678,781
11,700 Keystone Consolidated Industries Inc.*.............................. 119,925
5,500 Lindberg Corp. ..................................................... 92,125
15,600 Lone Star Technologies Inc. ........................................ 197,925
8,400 Maxxam Inc.*........................................................ 492,450
14,200 Mueller Industries Inc.*............................................ 485,462
69,800 National Steel Corp. ............................................... 680,550
2,000 Northern Technologies International................................. 14,250
6,000 Northwest Pipe Co.* ................................................ 132,000
18,700 NS Group Inc.* ..................................................... 142,588
2,600 Oglebay Norton Co. ................................................. 95,550
3,500 Olympic Steel Inc.*................................................. 39,813
7,200 Park Ohio Holdings Corp.* .......................................... 135,450
7,900 Pitt Desmoines Inc. ................................................ 213,300
27,500 Pittston Co. ....................................................... 328,281
20,400 RMI Titanium Co.*................................................... 427,125
8,850 Roanoke Electric Steel Corp. ....................................... 150,450
28,400 Rouge Industries Inc. .............................................. 298,200
11,600 Special Metals Corp.*............................................... 175,450
11,800 Steel Technologies Inc. ............................................ 110,625
9,100 Steel West Virginia Inc.*........................................... 77,350
7,000 Texas Industries Inc. .............................................. 260,750
37,600 Titanium Metals Corp.(1)............................................ 700,300
10,100 Universal Stainless & Alloy*........................................ 89,006
25,100 Wolverine Tube Inc.*................................................ 872,225
45,100 Zeigler Coal Holding Co. ........................................... 721,600
1,042 Zemex Corp.*........................................................ 8,857
-----------
15,109,813
-----------
MOTOR VEHICLES--4.41%
27,800 Arvin Industries Inc. .............................................. 1,080,725
6,919 Autocam Corp. ...................................................... 121,947
7,400 Bandag Inc. ........................................................ 253,912
6,900 Cross Continent Auto Retailers*..................................... 50,025
8,300 Defiance, Inc. ..................................................... 59,138
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
MOTOR VEHICLES--(CONCLUDED)
<TABLE>
<C> <S> <C>
6,000 Edelbrock Corp.*.................................................... $ 90,000
20,000 Excel Industries, Inc. ............................................. 262,500
500 Global Motorsport Group Inc.*....................................... 10,063
4,100 Hilite Industries Inc. ............................................. 35,363
62,000 Mascotech Inc. ..................................................... 1,367,875
16,400 Modine Manufacturing Co. ........................................... 547,350
6,750 Monaco Coach Corp.*................................................. 164,531
5,700 Motorcar Parts & Accesories Inc.*................................... 86,925
11,300 Oshkosh Truck Corp. ................................................ 274,025
14,600 R & B Inc.*......................................................... 140,525
19,400 Shiloh Industries Inc.*............................................. 346,775
31,000 Simpson Industries, Inc. ........................................... 370,062
6,800 SMC Corp.*.......................................................... 42,075
28,700 Standard Products Co. .............................................. 762,344
39,600 Superior Industries International Inc. ............................. 1,032,075
6,852 Supreme Industries, Inc.*........................................... 72,374
36,500 TBC Corp.*.......................................................... 228,125
13,800 Thor Industries, Inc. .............................................. 345,862
3,025 Valley Forge Corp. ................................................. 43,863
9,690 Varlen Corp. ....................................................... 301,601
-----------
8,090,060
-----------
OIL REFINING--0.62%
3,500 Adams Resources & Energy Inc. ...................................... 33,250
4,400 Castle Energy Corp. ................................................ 75,350
2,500 Crown Central Petroleum Co.*........................................ 30,313
13,900 Giant Industries Inc. .............................................. 226,744
9,400 Holly Corp. ........................................................ 226,775
7,762 Mercury Air Group, Inc.*............................................ 62,096
10,500 Petroleum Development Corp.* ....................................... 50,531
20,700 Tesoro Petroleum Corp.*............................................. 329,906
6,600 World Fuel Services Corp. .......................................... 112,200
-----------
1,147,165
-----------
OIL SERVICES--0.57%
6,300 Dawson Geophysical Co. ............................................. 106,313
20,700 Offshore Logistics Inc. ............................................ 225,112
6,200 Pool Energy Services Co. ........................................... 55,800
12,500 Seacor Smit Inc. ................................................... 650,781
1,200 TMBR / Sharp Drilling Inc. ......................................... 9,300
-----------
1,047,306
-----------
OTHER INSURANCE--9.45%
24,400 Acceptance Insurance Co.*........................................... 539,850
5,200 ACMAT Corp.*........................................................ 81,900
2,300 Alfa Corp. ......................................................... 46,288
24,525 Allied Group Inc. .................................................. 1,155,741
1,980 Amwest Insurance Group, Inc. ....................................... 27,720
1,900 Argonaut Group, Inc. ............................................... 58,188
10,200 Atlantic American Corp.*............................................ 51,000
5,600 Bancinsurance Corp.*................................................ 33,600
43,400 Capital Re Corp. ................................................... 1,432,200
19,000 Centris Group Inc. ................................................. 213,750
13,900 Chartwell Re Corp. ................................................. 401,362
23,800 Citizens Corp. ..................................................... 685,737
9,333 Donegal Group Inc. ................................................. 167,994
13,900 EMC Insurance Group Inc. ........................................... 185,044
</TABLE>
59
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
OTHER INSURANCE--(CONCLUDED)
<TABLE>
<C> <S> <C>
19,600 Enhance Financial Services Group Inc.(1) ........................... $ 614,950
17,721 Fidelity National Financial Inc. ................................... 667,860
50,400 First American Financial Corp. ..................................... 1,335,600
19,000 Foremost Corp. of America........................................... 393,063
60,170 Frontier Insurance Group Inc. ...................................... 1,068,017
35,145 Gainsco Inc. ....................................................... 215,263
46,200 Harleysville Group Inc. ............................................ 1,079,925
2,200 Investors Title Insurance Co. ...................................... 55,550
10,500 Landamerica Financial Group Inc. ................................... 576,187
27,800 MMI Companies Inc. ................................................. 559,475
11,565 Mobile America Corp. Florida........................................ 104,085
29,500 NAC Reinsurance Corp. .............................................. 1,517,406
5,200 National Information Group.......................................... 46,800
10,900 Navigators Group Inc.*.............................................. 197,563
11,100 Nymagic Inc. ....................................................... 310,800
3,080 Professionals Insurance Co. Management Group*....................... 101,255
25,878 PXRE Corp. ......................................................... 698,706
15,875 RLI Corp. .......................................................... 671,711
5,000 RTW Inc.*........................................................... 29,063
44,500 Selective Insurance Group Inc. ..................................... 862,187
7,600 Stewart Information Services Corp. ................................. 356,250
20,150 Trenwick Group Inc. ................................................ 700,212
7,000 UNICO American Healthcare Co. ...................................... 101,500
-----------
17,343,802
-----------
PUBLISHING--2.00%
29,400 Bowne & Co. Inc. ................................................... 1,302,787
3,000 Courier Corp. ...................................................... 82,313
5,000 Educational Development Corp. ...................................... 17,500
37,300 Franklin Quest Co.*................................................. 736,675
12,800 Merrill Corp. ...................................................... 304,000
10,400 Primesource Corp. .................................................. 92,300
20,300 Scientific Games Holdings Corp.*.................................... 403,463
20,300 Standard Register................................................... 733,337
-----------
3,672,375
-----------
RAILROADS--0.23%
7,900 Railtex Inc.*....................................................... 112,575
14,000 Westinghouse Air Brake Co. New...................................... 306,250
-----------
418,825
-----------
REAL PROPERTY--7.63%
7,000 American Buildings Co. New*......................................... 210,875
5,200 American Woodmark Corp. ............................................ 144,300
5,800 Apogee Enterprises Inc. ............................................ 75,219
9,300 Beazer Homes USA Inc.*.............................................. 227,269
9,300 Butler Manufacturing Co. ........................................... 286,556
16,700 Cameron Ashley Building Products, Inc.*............................. 270,331
5,100 Catalina Lighting Inc.*............................................. 18,488
18,520 Cavalier Homes Inc. ................................................ 195,618
38,000 Centex Construction Products Inc. .................................. 1,653,000
16,650 D.R. Horton Inc. ................................................... 360,056
6,100 Dominion Homes Inc.*................................................ 79,681
17,000 Dravo Corp.*........................................................ 161,500
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
REAL PROPERTY--(CONCLUDED)
<TABLE>
<C> <S> <C>
12,000 Drew Industries Inc. New*........................................... $ 168,000
11,100 Engle Homes Inc. ................................................... 172,050
27,200 Florida Rock Industries, Inc. ...................................... 744,600
10,800 Fortress Group Inc. ................................................ 60,750
16,200 Giant Cement Holding, Inc.*......................................... 441,450
43,500 Griffon Corp.*...................................................... 489,375
34,600 Hovnanian Enterprises Inc.*......................................... 337,350
2,000 Interlake Corp.* ................................................... 7,375
1,100 International Aluminum Corp. ....................................... 32,381
3,000 Jacobs Engineering Group Inc.*...................................... 88,125
11,700 Juno Lighting Inc. ................................................. 245,700
18,900 Lone Star Industries, Inc. ......................................... 1,374,975
19,900 M.D.C. Holdings, Inc. .............................................. 409,194
6,288 MYR Group, Inc. .................................................... 100,215
2,800 NCI Building Systems Inc.*.......................................... 64,750
15,100 NVR Inc.*........................................................... 594,563
10,100 Patrick Industries Inc. ............................................ 151,500
8,100 Perini Corp.*....................................................... 54,675
11,400 Robertson Ceco Corp.*............................................... 113,288
4,800 Ryland Group Inc. .................................................. 108,900
7,900 Schottenstein Homes Inc. ........................................... 188,119
12,700 Skyline Corp. ...................................................... 408,781
10,472 Southdown, Inc. .................................................... 655,154
25,600 Southern Energy Homes Inc.*......................................... 243,200
59,000 Toll Brothers Inc.*................................................. 1,545,062
18,600 United States Home Corp. New*....................................... 696,337
10,400 Washington Homes Inc. New*.......................................... 57,850
28,500 Webb Delaware Corp. ................................................ 708,937
7,500 Zaring Homes Inc.* ................................................. 60,000
-----------
14,005,549
-----------
RESTAURANTS--1.64%
2,600 Arkansas Restaurants Corp.* ........................................ 31,200
3,500 Benihana Inc.*...................................................... 29,750
13,100 Blimpie International Inc. ......................................... 43,394
13,300 Cooker Restaurant Corp. ............................................ 112,219
5,400 ELXSI Corp.*........................................................ 58,725
60,500 Lone Star Steakhouse & Saloon*...................................... 690,078
41,100 Lubys Cafeterias Inc. .............................................. 670,443
6,900 Max & Ermas Restaurants Inc.*....................................... 50,025
16,200 Piccadilly Cafeterias Inc. ......................................... 204,525
80,000 Ryan's Family Steak Houses, Inc.*................................... 870,000
10,000 Sbarro Inc. ........................................................ 245,625
-----------
3,005,984
-----------
SECURITIES & ASSET MANAGEMENT--0.72%
4,000 Interstate Johnson Lane, Inc. ...................................... 126,750
4,000 Jefferies Group, Inc. .............................................. 176,000
28,050 Morgan Keegan, Inc. ................................................ 664,435
4,075 Raymond James Financial, Inc. ...................................... 104,422
7,970 Southwest Securities Group Inc. .................................... 170,846
5,565 Stifel Financial Corp. ............................................. 77,214
-----------
1,319,667
-----------
SEMICONDUCTOR--1.30%
21,900 Audiovox Corp. ..................................................... 101,287
15,004 Bell Industries, Inc.*.............................................. 157,542
</TABLE>
60
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONCLUDED)
SEMICONDUCTOR--(CONCLUDED)
<TABLE>
<C> <S> <C>
2,500 Cohu Inc. .......................................................... $ 49,063
39,500 Ess Technology Inc.*................................................ 139,484
11,700 Integrated Circuit Systems Inc.*.................................... 149,175
6,000 Katy Industris Inc. ................................................ 111,000
22,900 Marshall Industries*................................................ 535,287
13,500 Micro Linear Corp.*................................................. 67,500
4,700 Microsemi Corp.*.................................................... 44,063
15,000 Nu Horizons Electronics Corp.*...................................... 75,937
11,700 Oak Technology*..................................................... 38,025
4,200 Optek Technology Inc.*.............................................. 84,000
37,900 Pilgrims Pride Corp. ............................................... 712,994
5,700 Semex Corp. ........................................................ 27,075
11,200 Taitron Components Inc.*............................................ 22,400
15,300 Trident Microsystems Inc.*.......................................... 66,938
-----------
2,381,770
-----------
SPECIALTY RETAIL--2.13%
8,200 Advanced Marketing Services, Inc.................................... 135,300
13,500 Blair Corp. ........................................................ 441,281
17,200 Books A Million Inc. ............................................... 84,925
13,700 Building Materials Holding Corp.*................................... 169,537
13,100 D I Y Home Warehouse Inc.*.......................................... 21,288
8,400 Damark International Inc.*.......................................... 67,200
19,200 Discount Auto Parts Inc.*........................................... 489,600
8,800 Duckwall Alto Stores Inc. New*...................................... 149,600
4,600 Finlay Enterprises Inc.*............................................ 105,800
5,995 Friedman Industries, Inc.*.......................................... 37,469
35,000 Global Directmail Corp.*............................................ 463,750
15,200 Haverty Furniture Companies Inc. ................................... 326,800
6,400 Holiday RV Superstores Inc.*........................................ 12,800
13,700 Inacom Corp.*....................................................... 370,756
11,900 Jan Bell Marketing Inc.*............................................ 84,787
11,200 Rex Stores Corp.*................................................... 126,700
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
SPECIALTY RETAIL--(CONCLUDED)
<TABLE>
<C> <S> <C>
148,800 Service Merchandise Co., Inc.*...................................... $ 241,800
16,600 Tandycrafts Inc.*................................................... 63,288
11,500 Tractor Supply Co.*................................................. 281,750
2,800 Trend Lines Inc. ................................................... 11,375
9,400 Wolohan Lumber Co. ................................................. 121,025
6,000 York Group Inc. .................................................... 100,500
-----------
3,907,331
-----------
THRIFT--0.75%
23,000 Bankatlantic Bancorp Inc. (1)....................................... 235,750
10,450 D & N Savings Financial Corp. ...................................... 266,475
15,100 Metrowest Bank...................................................... 113,250
2,656 Parkvale Financial Corp. ........................................... 90,968
3,300 Saint Francis Capital Corp. ........................................ 132,000
1,600 Washington Savings Bank FSB......................................... 10,000
34,500 Westcorp Inc. ...................................................... 396,750
6,362 York Financial Corp. ............................................... 129,626
-----------
1,374,819
-----------
TOBACCO--0.66%
37,700 Consolidated Cigar Holdings Inc. ................................... 369,931
62,500 Dimon Inc. ......................................................... 679,688
16,700 Standard Commercial Corp............................................ 167,000
-----------
1,216,619
-----------
WIRELESS TELECOMMUNICATIONS--0.16%
1,100 Amerilink Corp.* ................................................... 11,000
54,000 Rohn Inds Inc. ..................................................... 185,625
16,200 Symmetricom Inc.*................................................... 97,200
-----------
293,825
-----------
Total Common Stocks (cost--$162,616,236)....................................... 174,856,581
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- --------- ---------- ------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--4.64%
$ 8,520 Repurchase Agreement dated 07/31/98 with State
Street Bank & Trust Company collateralized by
$8,257,482 U.S. Treasury Bonds, 7.125% due
2/29/00 (value--$8,691,000) proceeds:
$8,523,550 (cost--$8,520,000).................. 08/03/98 5.000% 8,520,000
------------
Total Investments (cost--$171,136,236)--99.90%............. 183,376,581
181,679
Other assets in excess of liabilities--0.10%...............
------------
Net Assets--100.00%........................................ $183,558,260
------------
------------
</TABLE>
- -----------------
* Non-Income producing security
(1) Security, or portion thereof, was on loan at July 31, 1998.
See accompanying notes to financial statements
61
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1998
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
COMMON STOCKS--93.07%
BANKS--5.08%
134,000 First American Corp. of Tennessee ............................................. $ 6,298,000
14,700 SIS Bancorp Inc. .............................................................. 723,975
41,600 Webster Financial Corp. ....................................................... 1,261,000
44,100 Western Bancorp ............................................................... 1,819,125
------------
10,102,100
------------
COMPUTER HARDWARE--5.74%
96,900 EMC Corp.* .................................................................... 4,748,100
80,300 Henry Jack & Associates Inc. .................................................. 3,257,168
18,000 Maxtor Corp.* ................................................................. 126,000
33,600 MMC Networks Inc.* ............................................................ 722,400
39,900 Network Appliance Inc.* ....................................................... 1,665,825
36,500 Xylan Corp.* (1) .............................................................. 901,094
------------
11,420,587
------------
COMPUTER SOFTWARE--11.10%
41,000 Aspect Development Inc.* ...................................................... 2,501,000
28,600 Bindview Development Corp.* ................................................... 411,125
36,000 Brio Technology Inc.* ......................................................... 396,000
85,400 Edwards J D & Co.* ............................................................ 3,191,825
132,400 Flexiinternational Software* .................................................. 761,300
61,000 Hyperion Software Corp.* ...................................................... 1,631,750
147,300 Peerless Systems Corp.* ....................................................... 2,872,350
192,300 Platinum Technology Inc.* (1) ................................................. 6,075,478
75,500 Veritas Software Co.* ......................................................... 4,237,438
------------
22,078,266
------------
CONSTRUCTION--0.97%
91,500 National Equipment Services Inc.* (1).......................................... 1,189,500
58,800 Neff Corp.* ................................................................... 735,000
------------
1,924,500
------------
DEFENSE/AEROSPACE--1.78%
72,600 AAR Corp ...................................................................... 1,837,688
45,000 Kellstrom Industries Inc.* .................................................... 1,327,500
38,700 LMI Aerospace Inc. ............................................................ 377,325
------------
3,542,513
------------
DIVERSIFIED RETAIL--2.63%
108,300 Cost Plus Inc.* ............................................................... 3,194,850
58,300 Hibbett Sporting Goods Inc.* .................................................. 2,025,925
------------
5,220,775
------------
ELECTRIC UTILITIES--1.19%
51,772 AES Corp.* (1) ................................................................ 2,371,805
------------
ELECTRICAL EQUIPMENT--2.07%
110,600 Gemstar International Group Ltd.* ............................................. 4,119,850
------------
ELECTRONIC COMPONENTS--0.71%
71,600 Burr Brown .................................................................... 1,400,675
------------
ENVIRONMENTAL SERVICES--0.44%
31,300 Superior Services Inc.* ....................................................... 880,313
------------
FINANCIAL SERVICES--4.23%
85,600 Capital Trust ................................................................. 754,350
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
FINANCIAL SERVICES--(CONCLUDED)
<TABLE>
<C> <S> <C>
34,200 First Sierra Financial Inc. ................................................... $ 1,043,100
123,200 Nova Corp.* ................................................................... 4,027,100
112,700 PMT Services Inc.* ............................................................ 2,585,056
------------
8,409,606
------------
FOOD RETAIL--0.01%
1,500 Schultz Sav-O Stores Inc. ..................................................... 23,250
------------
INDUSTRIAL SERVICES/SUPPLIES--5.90%
156,900 Comfort Systems USA Inc.* ..................................................... 3,500,831
52,200 G & K Services Inc.* .......................................................... 2,596,950
50,100 Intergrated Electrical Services* .............................................. 961,294
16,300 Pittston Brinks Group ......................................................... 581,706
99,800 Profit Recovery Group International Inc.* ..................................... 2,719,550
117,900 Protection One Inc. ........................................................... 1,377,956
------------
11,738,287
------------
INFORMATION & COMPUTER SERVICES--4.17%
48,000 Answerthink Consulting Group* ................................................. 1,038,000
18,400 Axent Technologies Inc.* ...................................................... 443,900
58,300 Snyder Communications Inc.* ................................................... 2,619,856
51,300 SPR Inc.* ..................................................................... 1,705,725
69,500 Sun Guard Data Systems* ....................................................... 2,475,938
------------
8,283,419
------------
LEISURE--2.31%
103,800 Brookdale Living Community Inc.* .............................................. 2,199,262
18,700 Family Golf Centers Inc.* (1) ................................................. 462,825
46,800 Marinemax Inc.* ............................................................... 503,100
19,200 Royal Caribbean Cruises Ltd.* ................................................. 1,426,800
------------
4,591,987
------------
MANUFACTURING--GENERAL--1.92%
180,800 Mettler Toledo International Inc.* ............................................ 3,819,400
------------
MEDIA--6.51%
135,900 Chancellor Media Corp.* ....................................................... 6,557,175
46,200 Emmis Communications Corp.* ................................................... 1,975,050
29,700 Metro Networks Inc.* .......................................................... 1,136,025
14,300 TCA Cable TV Inc.* ............................................................ 823,144
83,800 USA Networks Inc.* ............................................................ 2,451,150
------------
12,942,544
------------
MEDICAL PRODUCTS--1.61%
69,800 Coulter Pharmaceutical Inc.* .................................................. 1,823,525
33,800 Renal Care Group Inc.* ........................................................ 1,385,800
------------
3,209,325
------------
MEDICAL PROVIDERS--2.76%
64,800 Alternative Living Services Inc.* (1) ......................................... 1,842,750
18,300 Province Healthcare Co.* ...................................................... 507,825
103,400 Sunrise Assisted Living Inc.* ................................................. 3,140,775
------------
5,491,350
------------
</TABLE>
62
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONCLUDED)
<TABLE>
<C> <S> <C>
MINING & METALS--0.14%
18,100 Metals USA Inc.* .............................................................. $ 266,975
------------
OTHER INSURANCE--3.53%
32,300 ACE Ltd. ...................................................................... 1,185,006
55,000 Ambac Inc. .................................................................... 3,203,750
77,600 Capital Re Corp. .............................................................. 2,560,800
5,500 Centris Group Inc. ............................................................ 61,875
------------
7,011,431
------------
PUBLISHING--3.27%
69,400 Consolidated Graphics Inc.* ................................................... 4,081,587
75,800 Petersen Co. Inc.* ............................................................ 2,425,600
------------
6,507,187
------------
REAL PROPERTY--3.82%
186,300 Capital Automotive REIT ....................................................... 2,549,981
118,900 Indy Mac Mortgage Holdings Inc. ............................................... 2,504,331
57,400 Resource Asset Investment Trust ............................................... 1,061,900
61,800 Wilmar Industries Inc.* ....................................................... 1,483,200
------------
7,599,412
------------
RESTAURANTS--2.38%
101,050 Cheesecake Factory Inc.* ...................................................... 1,970,475
92,700 Dave & Busters Inc.* .......................................................... 2,039,400
36,150 Sonic Corp.* .................................................................. 713,963
------------
4,723,838
------------
SEMICONDUCTOR--3.20%
134,300 Applied Micro Circuits Corp.* ................................................. 3,046,931
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
SEMICONDUCTOR--(CONCLUDED)
<TABLE>
<C> <S> <C>
76,100 Micrel Inc.* .................................................................. $ 2,283,000
64,300 VLSI Technology Inc.* ......................................................... 1,028,800
------------
6,358,731
------------
SPECIALTY RETAIL--11.06%
73,900 Barnett Inc.* ................................................................. 1,579,613
89,200 COMPUSA Inc.* ................................................................. 1,689,225
33,400 Concepts Direct Inc.* ......................................................... 480,125
95,650 Dollar Tree Stores Inc.* ...................................................... 4,340,119
134,500 Linens 'N Things Inc.* ........................................................ 3,782,812
84,300 MSC Industrial Direct Inc., Class A* .......................................... 2,518,462
31,900 Piercing Pagoda Inc.* ......................................................... 1,140,425
38,400 Restoration Hardware Inc.* .................................................... 1,214,400
137,650 Staples, Inc.* ................................................................ 4,525,244
91,500 Sunglass Hut International Inc.* .............................................. 732,000
------------
22,002,425
------------
TRANSPORTATION--0.46%
24,600 Coach USA Inc. ................................................................ 917,888
------------
WIRELESS TELECOMMUNICATIONS--4.08%
2,700 Carrier Access Corp.* ......................................................... 32,400
42,500 Concord Communications Inc.* .................................................. 1,466,250
93,400 Geotel Communications Corp.* .................................................. 4,156,300
66,200 Nextlink Communications Inc.* (1) ............................................. 2,457,675
------------
8,112,625
------------
Total Common Stocks (cost--$155,896,950)................................................... 185,071,064
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- ---------- -------------------- ----------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--7.90%
$ 15,716 Repurchase Agreement dated 07/31/98 with
State Street Bank & Trust Co.
collateralized by $15,231,759 U.S.
Treasury Notes, 7.125% due 02/29/00
(value--$16,031,426) proceeds:
$15,722,548 (cost-$15,716,000).......... 08/03/98 5.000% 15,716,000
------------
Total Investments (cost--$171,612,950)--100.97%..... 200,787,064
Liabilities in excess of other assets--(0.97)%...... (1,931,637)
------------
Net Assets--100.00%................................. $198,855,427
------------
------------
</TABLE>
- -----------------
* Non-Income producing security
REIT Real estate investment trust
(1) Security, or a portion thereof, was on loan at July 31, 1998.
See accompanying notes to financial statements
63
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1998
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
COMMON STOCKS--94.29%
ARGENTINA--0.23%
OIL & GAS--0.23%
13,000 YPF Sociedad Anonima Series D ADR....................................................... $ 380,250
------------
AUSTRALIA--1.10%
BANKS--0.17%
44,000 Westpac Banking Corp. .................................................................. 278,328
------------
FINANCE--0.40%
30,700 Lend Lease Corp. ....................................................................... 660,382
------------
OIL & GAS--0.18%
60,600 Woodside Petroleum Ltd. ................................................................ 292,747
------------
TRANSPORTATION--0.35%
98,500 Mayne Nickless Ltd. .................................................................... 577,587
------------
Total Australia Common Stocks....................................................................... 1,809,044
------------
BRAZIL--0.57%
OIL & GAS--0.37%
27,000 Petroleo Brasileiro S.A. Petro(1)....................................................... 604,125
------------
UTILITIES--0.20%
21,000 Centrais Eletricas Brasileiras S.A. ADR(1).............................................. 320,250
2,100 Centrais Geradoras Sul Do Bras ADR...................................................... 17,850
------------
338,100
------------
Total Brazil Common Stocks.......................................................................... 942,225
------------
CHILE--0.15%
TELECOMMUNICATIONS--0.15%
10,951 Compania de Telefonos de Chile S.A. ADR................................................. 241,606
------------
DENMARK--0.62%
BANKS--0.62%
10,400 Unidanmark A/S.......................................................................... 1,021,729
------------
EGYPT--0.46%
CONSTRUCTION--0.46%
44,000 Suez Cement Company S.A.E. ADR.......................................................... 750,200
------------
FINLAND--2.07%
TELECOMMUNICATIONS--2.07%
38,800 Nokia Corp. ............................................................................ 3,408,166
------------
FRANCE--13.94%
BANKS--2.24%
15,300 Societe Generale........................................................................ 3,682,977
------------
BASIC INDUSTRIES--2.33%
9,900 Air Liquide S.A. ....................................................................... 1,593,161
40,800 Rhone-Poulenc S.A. ..................................................................... 2,233,040
------------
3,826,201
------------
CONSUMER GOODS--1.65%
4,400 Promodes................................................................................ 2,721,649
------------
DIVERSIFIED INDUSTRIES--0.48%
26,900 Alstom.................................................................................. 795,885
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
FRANCE--(CONCLUDED)
<TABLE>
<C> <S> <C>
ENERGY--1.87%
23,700 Elf Aquitaine........................................................................... $ 3,071,008
------------
FINANCE--2.49%
29,900 AXP-UAP................................................................................. 4,094,929
------------
UTILITIES--2.88%
21,659 Compania Generale des Eaux.............................................................. 4,734,446
------------
Total France Common Stocks.......................................................................... 22,927,095
------------
GERMANY--14.80%
AUTOMOTIVE MANUFACTURING--1.14%
1,944 Bayerische Motoren Werke AG............................................................. 1,872,348
------------
BANKS--3.23%
35,000 Bayerische Vereinsbank AG............................................................... 3,305,414
25,500 Deutsche Bank AG........................................................................ 2,006,858
------------
5,312,272
------------
COMPUTER-BUSINESS SERVICES--1.35%
30,000 Siemens AG.............................................................................. 2,227,781
------------
COMPUTER SOFTWARE & SERVICES--1.66%
3,700 SAP AG.................................................................................. 2,735,117
------------
ENGINEERING SERVICES--2.31%
35,700 Mannesman AG............................................................................ 3,802,996
------------
INSURANCE--2.34%
10,720 Allianz AG.............................................................................. 3,844,713
------------
METALS & MINING--1.33%
5,700 Preussag AG............................................................................. 2,178,875
------------
UTILITIES--1.44%
40,200 Veba AG................................................................................. 2,372,815
------------
Total Germany Common Stocks......................................................................... 24,346,917
------------
GREECE--0.42%
BANKS--0.42%
6,800 Alpha Credit Bank....................................................................... 684,760
------------
HONG KONG--1.77%
DIVERSIFIED HOLDING COMPANIES--0.31%
160,000 Swire Pacific Ltd. ..................................................................... 513,131
------------
FINANCE--0.75%
257,000 Hutchison Whampoa Ltd. ................................................................. 1,233,839
------------
REAL ESTATE--0.19%
237,000 New World Development Ltd. ............................................................. 315,042
------------
UTILITIES--0.52%
290,000 China Telecom Ltd.(1)................................................................... 424,792
97,000 CLP Holdings............................................................................ 433,142
------------
857,934
------------
Total Hong Kong Common Stocks....................................................................... 2,919,946
------------
INDIA--0.90%
UTILITIES--0.90%
47,000 Mahanagar Telephone Nigam Ltd.(1)....................................................... 552,250
</TABLE>
64
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
INDIA--(CONCLUDED)
UTILITIES--(CONCLUDED)
<TABLE>
<C> <S> <C>
83,000 Videsh Sanchar Nigam Ltd. .............................................................. $ 933,750
------------
Total India Common Stocks........................................................................... 1,486,000
------------
ISRAEL--0.53%
HEALTHCARE--0.53%
25,000 Teva Pharmaceutical Industries Ltd. ADS................................................. 865,625
------------
ITALY--6.48%
BANKS--2.21%
198,200 IMI SPA................................................................................. 3,627,846
------------
ENERGY--1.26%
319,483 ENI..................................................................................... 2,077,199
------------
INSURANCE--1.59%
825,000 INA(1).................................................................................. 2,620,911
------------
UTILITIES--1.42%
350,000 Telecom Italia Mobile................................................................... 2,333,400
------------
Total Italy Common Stocks........................................................................... 10,659,356
------------
JAPAN--13.03%
AUTO MANAFACTURER--1.47%
45,000 Honda Motor Co. Ltd. ................................................................... 1,677,154
30,000 Toyota Motor Corp. ..................................................................... 736,413
------------
2,413,567
------------
BASIC INDUSTRIES--0.63%
62,000 Shin Etsu Chemical Company Ltd. ........................................................ 1,028,903
------------
CAPITAL GOODS--4.53%
62,000 Canon Inc. ............................................................................. 1,414,742
132,000 Hitachi Ltd. ........................................................................... 825,114
11,000 Mabuchi Motor Co. ...................................................................... 722,583
7,000 Riso Kagaku Corp. ...................................................................... 416,263
18,000 Rohm Company Ltd. ...................................................................... 1,940,396
25,200 Sony Corp. ............................................................................. 2,141,530
------------
7,460,628
------------
CHEMICALS--0.94%
124,000 Asahi Chemical Industries............................................................... 437,284
68,000 Kao Corp. .............................................................................. 1,119,070
------------
1,556,354
------------
CONSUMER DURABLES--2.19%
28,000 Ito Yokado Company Ltd. ................................................................ 1,349,468
54,000 Marui Company Ltd. ..................................................................... 797,193
18,000 Secom Company Ltd. ..................................................................... 1,050,477
24,000 Shimachu Company Ltd. .................................................................. 404,923
------------
3,602,061
------------
ENTERTAINMENT--0.58%
26,000 Fuji Photo Film Co. Ltd. ............................................................... 958,235
------------
FINANCE--0.61%
54,000 Mitsui Fudosan Company Ltd. ............................................................ 423,054
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
JAPAN--(CONCLUDED)
FINANCE--(CONCLUDED)
<TABLE>
<C> <S> <C>
12,000 Promise Co. Ltd. ....................................................................... $ 574,194
------------
997,248
------------
FOREST PRODUCTS--0.86%
122,000 Toppan Printing Co. .................................................................... 1,410,483
------------
HEALTHCARE--1.22%
40,000 Taisho Pharmaceutical Co. .............................................................. 802,102
58,000 Yamanouchi Pharmaceutical Co. .......................................................... 1,201,148
------------
2,003,250
------------
Total Japan Common Stocks........................................................................... 21,430,729
------------
MEXICO--0.92%
BANKS--0.41%
67,000 Grupo Carso, S.A. de C.V. * (Series A).................................................. 285,586
192,000 Grupo Financiero Banamex................................................................ 384,215
------------
669,801
------------
RETAIL--0.21%
235,000 Cifra S.A. de C.V. Series C............................................................. 342,681
------------
UTILITIES--0.30%
9,900 Telefonos de Mexico, S.A. de C.V. ADR................................................... 495,000
------------
Total Mexico Common Stocks.......................................................................... 1,507,482
------------
NETHERLANDS--1.14%
MEDIA--1.14%
44,000 VNU N.V. ............................................................................... 1,871,127
------------
NEW ZEALAND--0.24%
UTILITIES--0.24%
90,000 Telecom Corporation of New Zealand Ltd. ................................................ 403,543
------------
SINGAPORE--0.25%
BANKS--0.25%
76,700 Development Bank of Singapore Ltd....................................................... 410,933
------------
SOUTH AFRICA--0.50%
LIFE INSURANCE--0.50%
45,000 Liberty Life Assoc. of Africa .......................................................... 822,731
------------
SPAIN--3.52%
BANKS--3.52%
61,700 Banco Central Hispanormer............................................................... 2,323,141
122,600 Banco de Santander S.A. ................................................................ 3,464,148
------------
Total Spain Common Stocks........................................................................... 5,787,289
------------
SWEDEN--3.72%
BANKS--2.48%
112,000 Incentive AB............................................................................ 1,923,043
300,000 Nordbanken Holding AB................................................................... 2,150,970
------------
4,074,013
------------
</TABLE>
65
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONCLUDED)
SWEDEN--(CONCLUDED)
<TABLE>
<C> <S> <C>
HEALTHCARE--1.24%
106,000 Astra AB................................................................................ $ 2,040,026
------------
Total Sweden Common Stocks.......................................................................... 6,114,039
------------
SWITZERLAND--7.21%
BANKS--1.71%
6,462 UBS AG.................................................................................. 2,804,841
------------
CONSUMER DURABLES--2.45%
2,390 Novartis AG............................................................................. 4,031,171
------------
DIVERSIFIED INDUSTRIES--2.32%
15,100 Credit Suisse Group..................................................................... 3,819,322
------------
FOOD PRODUCTS--0.73%
580 Nestle S.A. ............................................................................ 1,204,750
------------
Total Switzerland Common Stocks..................................................................... 11,860,084
------------
TAIWAN--0.19%
TRANSPORTATION--0.19%
44,290 Evergreen Marine Corp. GDR(1)........................................................... 310,030
------------
UNITED KINGDOM--19.53%
BANKS--3.13%
137,000 Lloyds TSB Group PLC.................................................................... 1,870,882
98,000 National Westminster Bank PLC........................................................... 1,696,881
98,831 Royal Bank of Scotland Group PLC........................................................ 1,582,117
------------
5,149,880
------------
DIVERSIFIED INDUSTRIES--1.12%
109,071 Wassall PLC............................................................................. 510,450
171,000 General Electric Co. PLC................................................................ 1,326,812
------------
1,837,262
------------
ENGINEERING SERVICES--2.07%
134,000 GKN PLC................................................................................. 1,608,835
90,000 McKechnie PLC........................................................................... 595,411
102,732 Smiths Industries PLC................................................................... 1,193,149
------------
3,397,395
------------
HOUSEHOLD PRODUCTS--1.28%
110,600 Reckitt & Colman PLC.................................................................... 2,110,170
------------
LEISURE & ENTERTAINMENT--0.98%
350,000 Ladbroke Group PLC...................................................................... 1,617,983
------------
MANUFACTURING--1.13%
188,000 Unilever PLC............................................................................ 1,848,731
------------
OIL & GAS--1.88%
348,000 LASMO PLC............................................................................... 1,196,605
297,000 Shell Transportation & Trading Co. ..................................................... 1,901,787
------------
3,098,392
------------
PHARMACEUTICALS--2.23%
77,000 Glaxo Wellcome PLC...................................................................... 2,374,719
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
UNITED KINGDOM--(CONCLUDED)
PHARMACEUTICALS--(CONCLUDED)
<TABLE>
<C> <S> <C>
34,000 Zeneca Group............................................................................ $ 1,289,061
------------
3,663,780
------------
REAL ESTATE--0.86%
103,000 Land Securities PLC..................................................................... 1,418,353
------------
RETAIL--0.58%
162,193 Safeway PLC............................................................................. 956,442
------------
RETAIL (ALL OTHER)--1.01%
199,000 Marks & Spencer PLC..................................................................... 1,657,840
------------
TELECOMMUNICATIONS--1.38%
176,000 Cable & Wireless PLC.................................................................... 2,268,345
------------
TRANSPORTATION--0.59%
425,000 NFC PLC................................................................................. 971,933
------------
UTILITIES--1.29%
219,000 Scottish Power PLC...................................................................... 2,123,168
------------
32,119,674
Total United Kingdom Common Stocks..................................................................
------------
Total Common Stocks (cost--$132,244,238)............................................................ 155,080,580
------------
PREFERRED STOCKS--0.58%
JAPAN--0.58%
BANKS--0.58%
36,000 Sakura Finance.......................................................................... 161,803
114,000 Sanwa International Finance............................................................. 800,097
------------
Total Preferred Stocks (cost--$1,180,045)........................................................... 961,900
------------
<CAPTION>
NUMBER
OF
WARRANTS
- ----------
<C> <S> <C>
WARRANTS--0.00%
PHILIPPINES--0.00%
REAL ESTATE--0.00%
780,000 Belle Corp., warrants expiring 12/31/2000 (cost--$0).................................... 889
------------
<CAPTION>
NUMBER
OF
RIGHTS
- ----------
<C> <S> <C>
RIGHTS--0.05%
GREECE--0.05%
BANKS--0.05%
800 Alpha Credit............................................................................ 80,560
------------
SPAIN--0.00%
BANKS--0.00%
122,600 Banco de Santander S.A. ................................................................ 0
------------
Total Rights (cost--$52,073)........................................................................ 80,560
------------
</TABLE>
66
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)* DATES RATES VALUE
- ---------- ------------ ------- ------------
<C> <S> <C> <C> <C>
CONVERTIBLE BONDS--1.13%
JAPAN--1.13%
ELECTRONICS--0.37%
79,000 Nitto Denko Corp .................................. 03/31/99 2.200% $ 609,079
------------
FINANCE--0.76%
1,294 MBL International Finance.......................... 11/30/02 3.000 1,242,240
------------
Total Convertible Bonds (cost--$2,094,628)..................... 1,851,319
------------
REPURCHASE AGREEMENT--5.19%
$ 8,537 Repurchase Agreement dated 07/31/98 with State
Street Bank & Trust Co., collateralized by
$8,273,958 U.S. Treasury Notes, 7.125% due
02/29/00 (value-$8,708,341); proceeds: $8,540,557
(cost--$8,537,000)............................... 08/03/98 5.000 8,537,000
------------
Total Investments (cost--$144,107,984)--101.24%................ 166,512,248
Liabilities in excess of other assets--(1.24)%................. (2,034,914)
------------
Net Assets--100.00%............................................ $164,477,334
------------
------------
</TABLE>
- -----------------
* In local currency unless otherwise denoted.
ADR American Depositary Receipt
ADS American Depositary Security
GDR Global Depositary Receipt
(1) Security, or a portion thereof, was on loan at July 31, 1998.
FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
CONTRACT TO IN MATURITY UNREALIZED
DELIVER EXCHANGE FOR DATES (DEPRECIATION)
-------------- --------------- --------- -------------
<S> <C> <C> <C> <C>
Australian Dollar.................................................... 188,936 US$ 114,552 08/04/98 $ (255)
French Franc......................................................... 1,569,890 US$ 263,061 08/04/98 (110)
Japanese Yen......................................................... 920,123,680 US$ 6,632,000 10/08/98 (205,441)
Turkish Lira......................................................... 96,485,565,910 US$ 355,380 08/04/98 (262)
-------------
$ (206,068)
-------------
-------------
</TABLE>
See accompanying notes to financial statements
67
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1998
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--81.69%
ARGENTINA--3.53%
ALCOHOLIC BEVERAGES--0.25%
13,700 Quilmes Industrial Quinsa S.A. ADR ....................................................... $ 155,838
-----------
BANKS--0.48%
8,240 Banco de Galicia y Buenos Aires S.A. de C.V. ADR.......................................... 168,920
35,700 IRSA Inversiones y Representaciones S.A. Class B.......................................... 132,157
-----------
301,077
-----------
DIVERSIFIED INDUSTRIALS--0.33%
36,447 Compania Naviera Perez Companc S.A. Class B............................................... 211,499
-----------
OIL EXPLORATION & PRODUCTION--1.10%
56,780 Astra Cia Argentina de Petroleo S.A. Class B.............................................. 86,917
20,900 YPF Sociedad Anonima Series D ADR......................................................... 611,325
-----------
698,242
-----------
PROPERTY--0.16%
5,500 Cresud S.A. C.I.F.Y.A. ADR................................................................ 99,000
-----------
RETAILERS, GENERAL--0.20%
7,700 Importadora & Exportadora de la Patagonia-Series B........................................ 127,114
-----------
TELECOMMUNICATIONS--1.01%
40,600 Telecom Argentina Stet-Fran Tel S.A. Class B.............................................. 277,032
94,100 Telefonica de Argentina S.A. ............................................................. 337,519
700 Telefonica de Argentina S.A. Class B ADR.................................................. 25,331
-----------
639,882
-----------
Total Argentina Common Stocks........................................................................ 2,232,652
-----------
BOTSWANA--0.35%
BREWERIES, PUBS, & RESTAURANTS--0.35%
172,000 Sechaba Breweries Ltd. ................................................................... 218,689
-----------
BRAZIL--5.95%
ELECTRICITY--1.73%
17,860,000 Centrais Electricas Brasilieras S.A. (Electrobras)........................................ 545,144
4,320,000 Companhia Paulista de Forca e Luz......................................................... 546,013
-----------
1,091,157
-----------
TELECOMMUNICATIONS--4.22%
22,050 Telecomunicacoes Brasileiras S.A. (Telebras) ADR.......................................... 2,669,428
-----------
Total Brazil Common Stocks........................................................................... 3,760,585
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
CHILE--3.18%
BANKS, RETAIL--0.46%
20,600 Banco Santander Chile Series A ADR........................................................ $ 292,262
-----------
BREWERIES, PUBS, & RESTAURANTS--0.26%
7,500 Compania Cervecerias Unidas S.A. ADS...................................................... 164,063
-----------
CHEMICALS--0.19%
6,400 Administradora de Fondas de Pensiones Providia S.A. ADR................................... 117,200
-----------
DIVERSIFIED INDUSTRIALS--0.17%
11,200 Quinenco S.A. ADR......................................................................... 107,800
-----------
ELECTRICITY--1.00%
15,300 Chilectra ADR+............................................................................ 369,112
13,741 Gener S.A. Spon ADR....................................................................... 261,079
-----------
630,191
-----------
EXTRACTIVE INDUSTRIES--0.14%
2,600 Sociedad Quimica Y Minera de Chile S.A. Series B ADR...................................... 91,000
-----------
RETAILERS, FOOD--0.20%
8,000 Distribucion y Servicio D&S ADS........................................................... 125,000
-----------
TELECOMMUNICATIONS--0.76%
21,850 Compania de Telecomunicaciones de Chile S.A. ADR.......................................... 482,066
-----------
Total Chile Common Stocks............................................................................ 2,009,582
-----------
CHINA--0.53%
ELECTRICAL APPLIANCES--0.13%
127,000 Guangdong Kelon Electrical 'H' Shares..................................................... 80,313
-----------
ELECTRICITY & GAS--0.32%
18,300 Huaneng Power International Inc. ADR*..................................................... 200,156
-----------
LAND TRANSPORTATION--0.08%
266,000 Qingling Motors Company (Class H)......................................................... 54,240
-----------
Total China Common Stocks............................................................................ 334,709
-----------
CROATIA--0.33%
HEALTH/PERSONAL CARE--0.33%
13,950 Pliva D.D. GDR*........................................................................... 205,763
-----------
CZECH REPUBLIC--1.01%
HEAVY ENGINEERING/SHIPBUILDING--0.07%
3,620 Skoda Koncern Plzen A.S. ................................................................. 44,678
-----------
UTILITIES--0.94%
38,104 SPT Telecom A.S.*......................................................................... 594,412
-----------
Total Czech Republic Common Stocks................................................................... 639,090
-----------
</TABLE>
68
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
<TABLE>
<C> <S> <C>
EGYPT--0.33%
BANKS--0.21%
13,800 Commercial International Bank GDR*........................................................ $ 133,860
-----------
OTHER FINANCIAL--0.12%
6,160 EFG Hermes Holding S A E GDS.............................................................. 72,380
-----------
Total Egypt Common Stocks............................................................................ 206,240
-----------
GREECE--5.29%
BANKS--2.28%
8,200 Alpha Credit Bank......................................................................... 825,740
3,270 National Bank of Greece................................................................... 617,555
-----------
1,443,295
-----------
BEVERAGE/TOBACCO MANUFACTURING--1.32%
25,030 Hellenic Bottling Company S.A. ........................................................... 833,684
-----------
FOOD/GROCERY PRODUCTS--0.48%
11,600 Chipita................................................................................... 303,601
-----------
UTILITIES--1.21%
26,977 Hellenic Telecom Organization............................................................. 766,263
-----------
Total Greece Common Stocks........................................................................... 3,346,843
-----------
HONG KONG--1.57%
COMMERCE/INDUSTRIAL--0.17%
454,000 Beijing Datang Power Generation Company Ltd. ............................................. 107,223
-----------
COMMUNICATIONS--0.31%
134,000 China Telecom............................................................................. 196,283
-----------
CONSTRUCTION--0.21%
39,000 Anhui Expressway Co. Ltd. ................................................................ 2,768
84,000 Cheung Kong Infrastucture Holdings........................................................ 131,716
-----------
134,484
-----------
ELECTRICAL APPLIANCES--0.17%
268,400 Founder Hong Kong Ltd. ................................................................... 73,608
144,000 Legend Holdings Ltd. ..................................................................... 32,336
-----------
105,944
-----------
FOODS--0.08%
68,000 Ng Fung Hong Ltd. ........................................................................ 47,390
-----------
MINING--0.23%
1,016,000 Yanzhou Coal Mining Co. Ltd. ............................................................. 145,546
-----------
REAL ESTATE--0.26%
411,000 China Resources Beijing Land.............................................................. 77,442
97,000 New World Infrastructure*................................................................. 89,508
-----------
166,950
-----------
SHIPPING--0.03%
76,000 Cosco Pacific Ltd. Ord ................................................................... 21,088
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
HONG KONG--(CONCLUDED)
<TABLE>
<C> <S> <C>
TRANSPORTATION EQUIPMENT--0.07%
307,000 Zhejiang Expressway Co. Ltd. ............................................................. $ 45,960
-----------
WHOLESALE--0.04%
98,000 Guangnan Holdings......................................................................... 25,295
-----------
Total Hong Kong Common Stocks........................................................................ 996,163
-----------
HUNGARY--3.07%
BANKS--0.69%
8,080 OTP Bank GDR.............................................................................. 436,320
-----------
CHEMICALS--0.05%
910 Borsodchem RT GDR......................................................................... 29,802
-----------
CONSTRUCTION/BUILDING MATERIALS--0.25%
3,325 Pannonplast Muanuagipari.................................................................. 155,474
-----------
HEALTH/PERSONAL CARE--0.42%
1,280 Egis Gyogyszergyar........................................................................ 47,827
2,750 Gedeon Richter RT GDS..................................................................... 217,937
-----------
265,764
-----------
OIL--0.63%
13,170 Magyar Olaj-Es Gazipare Reszvnytaras Ag. ................................................. 400,368
-----------
UTILITIES--1.03%
20,420 Matav RT ADS.............................................................................. 653,440
-----------
Total Hungary Common Stocks.......................................................................... 1,941,168
-----------
INDIA--6.49%
BANKS--0.75%
96,700 State Bank of India....................................................................... 477,478
-----------
BUILDING MATERIALS & MERCHANTS--0.31%
6,500 Associated Cement......................................................................... 197,711
-----------
ELECTRICITY & GAS--0.33%
28,600 BSES Ltd. Ord*............................................................................ 98,806
52,000 Tata Power Company........................................................................ 107,544
-----------
206,350
-----------
ELECTRONIC & ELECTRICAL EQUIPMENT--0.46%
58,000 Bharat Heavy Electricals Ltd. ............................................................ 293,749
-----------
ENGINEERING, VEHICLES--0.40%
12,500 Bajaj Auto Ltd. .......................................................................... 195,065
16,000 Mahindra & Mahindra Ltd. ................................................................. 58,096
-----------
253,161
-----------
HOUSEHOLD GOODS & TEXTILES--0.54%
3,000 Hindustan Lever Ltd. ..................................................................... 120,493
69,000 Reliance Industries Ltd. ................................................................. 220,541
-----------
341,034
-----------
</TABLE>
69
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
INDIA--(CONCLUDED)
<TABLE>
<C> <S> <C>
OIL, INTEGRATED--1.11%
64,000 Bharat Petroleum Corporation Ltd. ........................................................ $ 480,564
30,000 Hindustan Petroleum Corp. Ltd. ........................................................... 223,326
-----------
703,890
-----------
PHARMACEUTICALS--0.40%
18,000 Ranbaxy Laboratories Ltd. ................................................................ 250,646
-----------
TELECOMMUNICATIONS--1.47%
152,000 Mahanagar Telephone Nigam Ltd. ........................................................... 752,320
9,000 Videsh Sanchar Nigam Ltd. ................................................................ 175,135
-----------
927,455
-----------
TOBACCO--0.51%
21,500 ITC Ltd. ................................................................................. 320,352
-----------
TRANSPORTATION--0.21%
199,300 Great Eastern Shipping Co. ............................................................... 131,618
-----------
Total India Common Stocks............................................................................ 4,103,444
-----------
INDONESIA--0.54%
FOODS--0.21%
743,000 P.T. Indofoods Sukses Makmur.............................................................. 134,192
-----------
MISCELLANEOUS MANUFACTURING--0.05%
40,000 P.T. Gudang Garam......................................................................... 27,072
-----------
OILS--0.12%
8,000 P.T. Gulf Indonesia Resources Ltd. ....................................................... 77,000
-----------
TELECOMMUNICATIONS--0.16%
43,000 P.T. Indosat.............................................................................. 47,660
167,000 P.T. Telekomunikasi Indonesia............................................................. 55,243
-----------
102,903
-----------
Total Indonesia Common Stocks........................................................................ 341,167
-----------
ISRAEL--4.77%
BANKS--1.86%
152,500 Bank Hapoalim Ltd. ....................................................................... 447,453
374,040 Bank Leumi................................................................................ 727,208
-----------
1,174,661
-----------
PHARMACEUTICALS--0.50%
9,120 Teva Pharmaceutical Industries Ltd., ADR.................................................. 315,780
-----------
RETAIL TRADE--0.67%
130,340 Supersol Ltd. ............................................................................ 427,110
-----------
RETAILERS, FOOD--0.44%
18,134 Blue Square-Israel Ltd ADR................................................................ 278,810
-----------
TELECOMMUNICATIONS--1.30%
24,070 ECI Telecommunications Ltd. .............................................................. 821,389
-----------
Total Israel Common Stocks........................................................................... 3,017,750
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
KOREA--4.70%
CAPITAL EQUIPMENT--0.49%
43,000 Daewoo Heavy Industries................................................................... $ 193,596
17,000 Samsung Heavy Industries.................................................................. 117,432
-----------
311,028
-----------
ELECTRICAL APPLIANCES--2.52%
47,330 L.G. Electronics.......................................................................... 488,493
3,984 Samsung Display Devices Co. .............................................................. 132,261
26,287 Samsung Electronics Co. .................................................................. 972,010
-----------
1,592,764
-----------
ELECTRICITY & GAS--0.29%
13,100 Korea Electric Power Corp. ............................................................... 186,306
-----------
FINANCIAL--0.53%
41,506 Kookmin Bank.............................................................................. 195,640
35,000 Shinhan Bank.............................................................................. 137,525
-----------
333,165
-----------
IRON & STEEL--0.32%
4,450 Pohang Iron & Steel Co. Ltd. ............................................................. 203,127
-----------
TELECOMMUNICATIONS--0.55%
608 SK Telecom Company Ltd. .................................................................. 348,198
-----------
Total Korea Common Stocks............................................................................ 2,974,588
-----------
MALAYSIA--0.31%
ELECTRICITY & GAS--0.11%
79,000 Tenaga Nasional Berhad.................................................................... 66,784
-----------
SERVICES--0.20%
67,000 Resorts World Berhad...................................................................... 78,648
40,000 Tanjong PLC............................................................................... 48,307
-----------
126,955
-----------
Total Malaysia Common Stocks......................................................................... 193,739
-----------
MAURITIUS--0.42%
OTHER FINANCIAL--0.42%
301,000 State Bank of Mauritius Ltd. ............................................................. 267,417
-----------
MEXICO--10.49%
BANKS--0.31%
96,700 Grupo Financiero Banamex Accivl Series 'B'................................................ 193,508
-----------
BREWERIES, PUBS, & RESTAURANTS--1.20%
247,400 Fomento Economico Mexica S.A. de C.V. Series B*........................................... 758,989
-----------
BUILDING MATERIALS & MERCHANTS--1.26%
215,682 Cemex S.A. de C.V. ....................................................................... 795,955
-----------
CONSTRUCTION--1.19%
64,000 Consorico ARA S.A. de C.V. ............................................................... 204,958
</TABLE>
70
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
MEXICO--(CONCLUDED)
CONSTRUCTION--(CONCLUDED)
<TABLE>
<C> <S> <C>
21,800 Empresas Ica Sociedad Controladora, S.A. de C.V. ADR...................................... $ 200,288
82,700 Grupo Industrial Saltillo, S.A. de C.V. .................................................. 262,525
29,800 Hylsamex S.A. de C.V. .................................................................... 86,575
-----------
754,346
-----------
DIVERSIFIED INDUSTRIALS--0.56%
83,600 Grupo Carso, S.A. de C.V. Series A*....................................................... 356,343
-----------
FOOD PRODUCERS--0.78%
203,204 Grupo Industrial Bimbo S.A. de C.V. Series 'A' NPV........................................ 414,842
88,000 Sistema Argos, S.A. de C.V. Series B...................................................... 75,414
-----------
490,256
-----------
MEDIA--1.08%
212,700 Controladora Commercial Mexicana.......................................................... 178,940
14,300 Grupo Televisa, S.A. de C.V. GDS.......................................................... 504,075
-----------
683,015
-----------
METALS--0.14%
9,000 Tubos de Acero de Mexico S.A. de C.V. ADR*................................................ 88,313
-----------
PAPER, PACKAGING & PRINTING--0.31%
66,750 Kimberly-Clark de Mexico S.A. de C.V. .................................................... 194,672
-----------
RETAILERS, GENERAL--0.95%
413,800 Cifra S.A. de C.V. Series C*.............................................................. 603,410
-----------
TELECOMMUNICATIONS--2.71%
28,800 Telefonos de Mexico, S.A. de C.V. ADR..................................................... 1,440,000
21,700 TV Azteca S.A. de C.V. ADR................................................................ 276,675
-----------
1,716,675
-----------
Total Mexico Common Stocks........................................................................... 6,635,482
-----------
PAKISTAN--0.33%
CHEMICALS--0.07%
14,950 Engro Chemicals Ord....................................................................... 18,739
25,000 Fauji Fertilizer Ltd. .................................................................... 21,969
-----------
40,708
-----------
ELECTRICITY--0.09%
232,000 Hub Power Co. Ltd. ....................................................................... 58,027
-----------
TELECOMMUNICATIONS--0.17%
292,000 Pakistan Telecommunications Corp. Ord. A.................................................. 108,025
-----------
Total Pakistan Common Stocks......................................................................... 206,760
-----------
PERU--1.53%
BANKS--0.25%
230,000 Banco Continental......................................................................... 160,949
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
PERU--(CONCLUDED)
<TABLE>
<C> <S> <C>
ELECTRICITY--0.27%
200,000 Luz Del Sur S.A. Class B.................................................................. $ 170,678
-----------
TELECOMMUNICATIONS--1.01%
30,000 Telefonica Del Peru ADS................................................................... 637,500
-----------
Total Peru Common Stocks............................................................................. 969,127
-----------
PHILIPPINES--1.21%
ELECTRICITY & GAS--0.30%
79,520 Manila Electric Co. Class B............................................................... 192,661
-----------
REAL ESTATE--0.22%
531,820 Ayala Land Inc. Class B................................................................... 135,797
-----------
TELECOMMUNICATIONS--0.69%
2,524,000 Digital Telecommunications Philippines.................................................... 68,346
16,880 Philippine Long Distance Telephone Co. ................................................... 370,879
-----------
439,225
-----------
Total Philippines Common Stocks...................................................................... 767,683
-----------
POLAND--2.61%
AUTO COMPONENTS--0.21%
20,950 Stomil Olsztyn S.A. ...................................................................... 134,846
-----------
BANKS--0.69%
4,820 Bank Przemslawa-Handlowy S.A. ............................................................ 435,183
-----------
CONSTRUCTION/BUILDING MATERIALS--0.18%
7,000 Gorazdze S.A. ............................................................................ 116,208
-----------
DIVERSIFIED HOLDINGS COMPANIES--1.28%
56,500 Elektrim Spolka Akcyjna S.A. ............................................................. 809,611
-----------
ELECTRICAL EQUIPMENT--0.25%
30,700 Bydgoska Fabryka Kabli S.A. .............................................................. 154,685
-----------
Total Poland Common Stocks........................................................................... 1,650,533
-----------
PORTUGAL--3.39%
BANKS--0.24%
4,280 Banco Espirito Santo e Comercial de Lisboa................................................ 154,515
-----------
FINANCIAL INSTITUTIONS/SERVICES--0.36%
7,440 Compania de Seguros Mundial Confianca..................................................... 225,702
-----------
FORESTRY/PAPER PRODUCTS--0.79%
19,300 Semapa-Sociedade de Investimento e Gestao SGPS S.A. ...................................... 502,197
-----------
RETAIL TRADE--0.76%
9,160 Estabelecimentos Jeronimo Martins & Filho................................................. 482,280
-----------
UTILITIES--1.24%
7,850 Portugal Telecom S.A. .................................................................... 450,376
</TABLE>
71
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
PORTUGAL--(CONCLUDED)
UTILITIES--(CONCLUDED)
<TABLE>
<C> <S> <C>
1,900 Telecel-Comunicacaoes Pessoais Ord........................................................ $ 330,707
-----------
781,083
-----------
Total Portugal Common Stocks......................................................................... 2,145,777
-----------
RUSSIA--1.50%
MACHINERY/ENGINE SERVICES--0.45%
20,340 Unified Energy System..................................................................... 284,760
-----------
OIL--0.92%
3,000 Gazprom ADR*.............................................................................. 31,950
5,240 Lukoil Holding............................................................................ 174,230
68,090 Surgutneftegaz ADR........................................................................ 374,495
-----------
580,675
-----------
OIL, INTEGRATED--0.13%
14,000 Ao Mosenergo ADR.......................................................................... 80,500
-----------
Total Russia Common Stocks........................................................................... 945,935
-----------
SOUTH AFRICA--8.76%
BANKS, RETAIL--0.74%
85,300 Amalgamated Bank of South Africa.......................................................... 467,302
-----------
BREWERIES, PUBS, & RESTAURANTS--0.77%
24,573 South African Breweries Ltd. ............................................................. 487,040
-----------
DIVERSIFIED INDUSTRIALS--1.96%
8,825 Anglo American Industrial Corp. .......................................................... 158,460
110,332 Barlow Limited............................................................................ 546,698
234,275 Malbak Ltd. .............................................................................. 114,935
66,700 Rembrandt Group Ltd. ..................................................................... 419,943
-----------
1,240,036
-----------
ELECTRICITY--0.40%
89,200 Energy Africa Ltd. ....................................................................... 251,627
-----------
EXTRACTIVE INDUSTRIES--0.71%
12,700 Anglo American Corporation of South Africa Ltd. .......................................... 452,756
-----------
FINANCIAL SERVICES--0.90%
358,975 First Rand Ltd. .......................................................................... 569,429
-----------
OIL EXPLORATION & PRODUCTION--0.86%
86,760 Sasol Ltd. ............................................................................... 542,693
-----------
OTHER FINANCIAL--0.43%
24,600 Fedsure Holdings Ltd. .................................................................... 270,741
-----------
PAPER, PACKAGING & PRINTING--0.74%
98,000 Nampak Ltd. .............................................................................. 160,262
68,000 Sappi..................................................................................... 309,141
-----------
469,403
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
SOUTH AFRICA--(CONCLUDED)
<TABLE>
<C> <S> <C>
PHARMACEUTICALS--0.41%
48,567 South African Druggist Ltd. .............................................................. $ 258,918
-----------
RETAILERS, GENERAL--0.84%
41,815 Ellerine Holdings Ltd. ................................................................... 182,919
59,619 LA Retail Stores Ltd. .................................................................... 120,895
321,000 Metro Cash And Carry...................................................................... 225,724
-----------
529,538
-----------
Total South Africa Common Stocks..................................................................... 5,539,483
-----------
TAIWAN--4.68%
BANKS--0.29%
376,000 Bank Sinopac.............................................................................. 180,533
-----------
COMMERCE/INDUSTRIAL--0.53%
41,250 Asustek Computer Inc. .................................................................... 338,250
-----------
ELECTRICAL APPLIANCES--2.31%
6,125 Acer Inc. GDR............................................................................. 33,075
76,000 D-Link Ord................................................................................ 194,617
49,000 Phoenixtec Power Company.................................................................. 122,625
241,000 Siliconware Precision Industries Co. ..................................................... 413,764
6,408 Siliconware Precision Industries Co. GDR*................................................. 61,837
281,000 Taiwan Semiconductor Manufacturing Co. ................................................... 637,800
-----------
1,463,718
-----------
INSURANCE--0.11%
6,000 Fubon Insurance Co. Ltd. GDS.............................................................. 69,000
-----------
MISCELLANEOUS FINANCIAL--0.53%
49,000 ROC Taiwan Fund*.......................................................................... 333,812
-----------
MISCELLANEOUS MANUFACTURING--0.06%
4,125 Teco Electric & Machinery Ltd. GDR........................................................ 35,681
-----------
REAL ESTATE--0.57%
153,000 Delpha Construction Corp. ................................................................ 178,088
147,000 Kindom Company............................................................................ 181,798
-----------
359,886
-----------
TEXTILES--0.28%
78,000 Nien Hsing Textile Company Ltd. .......................................................... 177,041
-----------
Total Taiwan Common Stocks........................................................................... 2,957,921
-----------
THAILAND--1.18%
BANKS--0.19%
161,000 Thai Farmers Bank Public Company Ltd. .................................................... 122,328
-----------
ELECTRICITY & GAS--0.26%
93,500 Electricity Generating Public Company Ltd. ............................................... 160,417
-----------
</TABLE>
72
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONCLUDED)
THAILAND--(CONCLUDED)
<TABLE>
<C> <S> <C>
MINING--0.48%
36,200 PTT Exploration & Production Public Company Ltd. ......................................... $ 303,441
-----------
TELECOMMUNICATIONS--0.25%
30,000 Advanced Info Services Public Company Ltd. ............................................... 158,824
-----------
Total Thailand Common Stocks......................................................................... 745,010
-----------
TURKEY--2.99%
BANKS--1.23%
6,971,750 Akbank T.A.S. ............................................................................ 210,720
18,300,710 Yapi Ve Kredi Bankasi..................................................................... 566,627
-----------
777,347
-----------
ELECTRICAL EQUIPMENT--0.15%
607,480 Vestel Electronic Sanayi ve Ticaret....................................................... 97,403
-----------
FINANCIAL INSTITUTIONS/SERVICES--0.34%
3,303,290 Haci Omer Sabanci......................................................................... 216,120
-----------
MEDIA--0.34%
16,078,260 Dogan Yayin Holdings...................................................................... 213,350
-----------
RETAIL TRADE--0.77%
474,404 Migros Turk T.A.S. ....................................................................... 489,617
-----------
UTILITIES--0.16%
1,638,380 Northern Elektrik Telekomvaskayson A.S. .................................................. 98,134
-----------
Total Turkey Common Stocks........................................................................... 1,891,971
-----------
VENEZUELA--0.40%
ELECTRICITY--0.21%
272,521 Electricidad de Caracas................................................................... 133,161
-----------
TELECOMMUNICATIONS--0.19%
5,200 Compania Anonima National Telecom de Venezuela (CANTV) ADR................................ 117,650
-----------
Total Venezuela Common Stocks........................................................................ 250,811
-----------
ZIMBABWE--0.25%
EXTRACTIVE INDUSTRIES--0.10%
64,300 Meikles Africa Ltd. ...................................................................... 64,300
-----------
OTHER FINANCIAL--0.15%
192,000 NMBZ Holdings Ltd. ....................................................................... 96,000
-----------
Total Zimbabwe Common Stocks......................................................................... 160,300
-----------
Total Common Stocks (cost--$57,607,416).............................................................. 51,656,382
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
PREFERRED STOCKS--9.14%
BRAZIL--9.14%
BANKS--1.89%
19,965,876 Banco Bradesco S.A. ...................................................................... $ 168,235
29,000 Companhia Vale Rio Doce................................................................... 598,427
6,000,000 Uniao de Bancos Brasilieros S.A. (Unibanco)............................................... 428,184
-----------
1,194,846
-----------
BREWERIES, PUBS, & RESTAURANTS--0.51%
452,000 Companhia Cervejaria Brahma............................................................... 324,509
-----------
BUILDING MATERIALS & MERCHANTS--0.36%
1,286,300 Companhia Cimento Portland Itau (CIA)..................................................... 226,724
-----------
ELECTRICITY--1.34%
18,240,000 Centrais Electricas Brasileiras S.A. (Electrobras)........................................ 580,111
24,300 Companhia Paranaense de Energia Copel ADR................................................. 264,262
-----------
844,373
-----------
ELECTRONIC & ELECTRICAL EQUIPMENT--0.96%
336,806 Multibras S.A. Eletrodomesticos........................................................... 144,794
3,437,478 Telecomunicacoes do Rio de Janiero S.A. (Telerj).......................................... 242,062
3,437,478 Telesp Cellular S.A. Pref B .............................................................. 218,712
-----------
605,568
-----------
ENGINEERING--0.57%
66,050 Usinas Siderurgicas de Minas Gerais S.A. (Usiminas)....................................... 357,779
-----------
OIL EXPLORATION & PRODUCTION--1.76%
5,085,000 Petroleo Brasileiros S.A. (Petrobras)..................................................... 1,114,892
-----------
SUPPORT SERVICES--0.83%
15,541,879 Companhia Energetica de Minas Gerais...................................................... 527,840
-----------
TELECOMMUNICATIONS--0.92%
1,526,423 Telecomunicacoes de Sao Paulo S.A. (Telesp)............................................... 377,993
1,971,423 Telesp Celular S.A........................................................................ 202,558
-----------
580,551
-----------
Total Preferred Stocks (cost--$5,902,246)............................................................ 5,777,082
-----------
<CAPTION>
NUMBER OF
WARRANTS
- ---------
<C> <S> <C>
WARRANTS--0.01%
ISRAEL--0.01%
BANKS--0.01%
20,000 Bank Leumi, warrants expiring 08/10/98 (cost--$4,177)..................................... 6,433
-----------
</TABLE>
73
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
RIGHTS VALUE
- --------- -----------
<C> <S> <C>
RIGHTS--0.72%
BRAZIL--0.00%
BANKS, RETAIL--0.00%
549,020 Banco Bradesco S.A., rights expiring 09/14/98 ............................................ $ 1,227
11,000 Companhia Vale do Rio Doce, rights expiring 12/31/99...................................... 0
-----------
1,227
-----------
CHILE--0.00%
TELECOMMUNICATIONS--0.00%
1,382 Compania de Telecommunicacion de Chile S.A., rights expiring 08/17/98..................... 475
-----------
GREECE--0.11%
BANKS--0.11%
661 Alpha Credit Bank, rights expiring 08/19/98............................................... 66,563
-----------
<CAPTION>
NUMBER OF
RIGHTS VALUE
- --------- -----------
<C> <S> <C>
TAIWAN--0.00%
BANKS--0.00%
376,000 Bank Sinopac, rights expiring 09/14/98.................................................... $ 2,052
-----------
TURKEY--0.61%
UTILITIES--0.61%
1,638,380 Netas Telekomunik, rights expiring 08/10/98............................................... 386,798
-----------
Total Rights (cost--$43,026)......................................................................... 457,115
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)** DATES RATES
- --------- -------------------- ----------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--7.28%
$ 4,605 Repurchase Agreement dated 07/31/98 with State
Street Bank & Trust Co., collateralized by
$4,463,111 U.S. Treasury Notes, 7.125% due
02/29/00 (value--$4,697,424) proceeds: $4,606,919
(cost--$4,605,000)................................ 08/03/98 5.000% 4,605,000
-----------
SHORT-TERM INVESTMENTS--0.33%
INDONESIA--0.33%
2,800,000 Sertifikat Bank Indonesia (cost--$187,410)........ 08/11/98 65.160# 209,867
-----------
62,711,879
Total Investments (cost--$68,349,275)--99.17%................
525,241
Other assets in excess of liabilities--0.83%.................
-----------
Net Assets--100.00%.......................................... $63,237,120
-----------
-----------
</TABLE>
- -----------------
* Non-income producing security
** In local currency unless otherwise indicated.
+ Security exempt from registration under 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
# Zero coupon bond; rate represents annualized yield at date of purchase.
ADR American Depositary Receipt
ADS American Depositary Shares
GDR Global Depositary Receipt
GDS Global Depositary Shares
(1) Security, or a portion thereof, was on loan at July 31, 1998.
See accompanying notes to financial statements
74
<PAGE>
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75
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1998
<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--$25,509,187; $217,802,548;
$97,404,966; $146,508,624;
$49,943,813; $86,919,559;
$232,829,360; $211,948,312;
$171,136,236; $171,612,950;
$144,107,984 and $68,349,275,
respectively)......................... $25,509,187 $219,462,367 $98,159,834 $148,954,053
Investments of cash collateral received
for securities loaned, at value
(cost--$0; $7,600,000; $12,540,000;
$0; $0; $23,713,450; $10,709,799;
$30,801,800; $2,819,800; $8,754,500;
$3,895,700 and $2,900,016,
respectively)......................... -- 7,600,000 12,540,000 --
Cash (including cash denominated in
foreign currencies)................... 807 2,906,917 -- --
Receivable for investments sold......... -- 23,352,706 -- 54,971
Receivable for shares of beneficial
interests sold........................ 44,533 139,870 88,651 126,009
Receivable from adviser................. 9,295 -- -- --
Unrealized appreciation of forward
foreign currency contracts............ -- -- -- --
Dividends and interest receivable....... 130,976 1,012,124 1,550,103 1,340,502
Deferred organizational costs........... 39,037 39,037 39,037 39,037
Other assets............................ 42,180 29,153 42,039 16,076
------------ ------------ ------------ ------------
Total assets............................ 25,776,015 254,542,174 112,419,664 150,530,648
------------ ------------ ------------ ------------
LIABILITIES
Payable for shares of beneficial
interest repurchased.................. 116,203 75,000 28,003 68,930
Dividends payable....................... 60,384 -- -- --
Payable for investments purchased....... -- 84,535,582 -- 23,355,952
Collateral for securities loaned........ -- 7,600,000 12,540,000 --
Unrealized depreciation of forward
foreign currency contracts............ -- -- -- --
Variation margin payable................ -- -- -- 2,651
Payable to affiliates................... -- 84,831 52,012 67,677
Accrued expenses and other
liabilities........................... 106,047 127,554 110,135 155,742
------------ ------------ ------------ ------------
Total liabilities....................... 282,634 92,422,967 12,730,150 23,650,952
------------ ------------ ------------ ------------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--25,494,175;
12,874,176; 8,070,583; 9,523,092;
4,065,750; 7,253,425; 13,141,905;
11,980,887; 10,553,904; 12,585,674;
9,944,672 and 6,072,578, respectively
(unlimited number authorized)......... 25,494,175 159,178,650 98,106,633 122,165,070
Accumulated net investment income
(loss)................................ -- 827,906 473,206 637,680
Accumulated net realized gains (losses)
from investment, future, option
transactions.......................... (794) 452,832 354,807 1,700,719
Net unrealized appreciation
(depreciation) of investments,
futures, options and other assets and
liabilities denominated in foreign
currencies............................ -- 1,659,819 754,868 2,376,227
------------ ------------ ------------ ------------
Net assets.............................. $25,493,381 $162,119,207 $99,689,514 $126,879,696
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net asset value, offering price and
redemption value per share............ $1.00 $12.59 $12.35 $13.32
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
76
<PAGE>
<TABLE>
<CAPTION>
PACE
PACE PACE PACE PACE SMALL/MEDIUM
MUNICIPAL GLOBAL FIXED LARGE COMPANY LARGE COMPANY COMPANY
FIXED INCOME INCOME VALUE EQUITY GROWTH EQUITY VALUE EQUITY
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
------------ ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at value
(cost--$25,509,187; $217,802,548;
$97,404,966; $146,508,624;
$49,943,813; $86,919,559;
$232,829,360; $211,948,312;
$171,136,236; $171,612,950;
$144,107,984 and $68,349,275,
respectively)......................... $50,949,561 $ 88,139,524 $266,520,609 $276,523,364 $183,376,581
Investments of cash collateral received
for securities loaned, at value
(cost--$0; $7,600,000; $12,540,000;
$0; $0; $23,713,450; $10,709,799;
$30,801,800; $2,819,800; $8,754,500;
$3,895,700 and $2,900,016,
respectively)......................... -- 23,713,450 10,709,799 30,801,800 2,819,800
Cash (including cash denominated in
foreign currencies)................... -- 354,022 279 -- --
Receivable for investments sold......... -- 5,492,499 310,437 425,233 6,095
Receivable for shares of beneficial
interests sold........................ 58,725 61,132 341,809 376,385 272,032
Receivable from adviser................. -- -- -- -- --
Unrealized appreciation of forward
foreign currency contracts............ -- 479,458 -- -- --
Dividends and interest receivable....... 740,027 1,551,161 147,124 128,745 181,891
Deferred organizational costs........... 39,037 39,037 39,037 39,037 39,037
Other assets............................ 20,292 43,028 20,459 29,806 51,614
------------ ------------ ------------- ------------- -------------
Total assets............................ 51,807,642 119,873,311 278,089,553 308,324,370 186,747,050
------------ ------------ ------------- ------------- -------------
LIABILITIES
Payable for shares of beneficial
interest repurchased.................. 38,251 33,681 101,131 83,514 66,536
Dividends payable....................... -- -- -- -- --
Payable for investments purchased....... 5,746 6,498,035 406,667 1,693,746 --
Collateral for securities loaned........ -- 23,713,450 10,709,799 30,801,800 2,819,800
Unrealized depreciation of forward
foreign currency contracts............ -- 637,638 -- -- --
Variation margin payable................ -- -- 141,223 -- --
Payable to affiliates................... 24,727 45,392 185,638 189,655 132,738
Accrued expenses and other
liabilities........................... 101,218 107,207 191,016 94,164 169,716
------------ ------------ ------------- ------------- -------------
Total liabilities....................... 169,942 31,035,403 11,735,474 32,862,879 3,188,790
------------ ------------ ------------- ------------- -------------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--25,494,175;
12,874,176; 8,070,583; 9,523,092;
4,065,750; 7,253,425; 13,141,905;
11,980,887; 10,553,904; 12,585,674;
9,944,672 and 6,072,578, respectively
(unlimited number authorized)......... 50,612,874 89,028,911 210,654,041 188,535,334 151,336,239
Accumulated net investment income
(loss)................................ 187,378 (2,152,690) 1,067,148 1,132 626,559
Accumulated net realized gains (losses)
from investment, future, option
transactions.......................... (168,300) 920,953 21,206,166 22,349,973 19,355,117
Net unrealized appreciation
(depreciation) of investments,
futures, options and other assets and
liabilities denominated in foreign
currencies............................ 1,005,748 1,040,734 33,426,724 64,575,052 12,240,345
------------ ------------ ------------- ------------- -------------
Net assets.............................. $51,637,700 $ 88,837,908 $266,354,079 $275,461,491 $183,558,260
------------ ------------ ------------- ------------- -------------
------------ ------------ ------------- ------------- -------------
Net asset value, offering price and
redemption value per share............ $12.70 $12.25 $20.27 $22.99 $17.39
------------ ------------ ------------- ------------- -------------
------------ ------------ ------------- ------------- -------------
<CAPTION>
PACE
PACE INTERNATIONAL
SMALL/MEDIUM PACE EMERGING
COMPANY INTERNATIONAL MARKETS
GROWTH EQUITY EQUITY EQUITY
INVESTMENTS INVESTMENTS INVESTMENTS
------------- ------------- ------------
<S> <C> <C> <C>
ASSETS
Investments, at value
(cost--$25,509,187; $217,802,548;
$97,404,966; $146,508,624;
$49,943,813; $86,919,559;
$232,829,360; $211,948,312;
$171,136,236; $171,612,950;
$144,107,984 and $68,349,275,
respectively)......................... $200,787,064 $ 166,512,248 $62,711,879
Investments of cash collateral received
for securities loaned, at value
(cost--$0; $7,600,000; $12,540,000;
$0; $0; $23,713,450; $10,709,799;
$30,801,800; $2,819,800; $8,754,500;
$3,895,700 and $2,900,016,
respectively)......................... 8,754,500 3,895,700 2,900,016
Cash (including cash denominated in
foreign currencies)................... 667,538 1,767,904 496,700
Receivable for investments sold......... 792,148 76,054 971,448
Receivable for shares of beneficial
interests sold........................ 304,195 172,198 84,465
Receivable from adviser................. -- -- --
Unrealized appreciation of forward
foreign currency contracts............ -- -- --
Dividends and interest receivable....... 88,790 514,389 197,377
Deferred organizational costs........... 39,037 39,037 39,037
Other assets............................ 17,967 32,880 28,913
------------- ------------- ------------
Total assets............................ 211,451,239 173,010,410 67,429,835
------------- ------------- ------------
LIABILITIES
Payable for shares of beneficial
interest repurchased.................. 60,259 87,110 19,609
Dividends payable....................... -- -- --
Payable for investments purchased....... 3,562,643 4,132,186 1,098,797
Collateral for securities loaned........ 8,754,500 3,895,700 2,900,016
Unrealized depreciation of forward
foreign currency contracts............ -- 206,068 --
Variation margin payable................ -- -- --
Payable to affiliates................... 139,734 125,135 45,647
Accrued expenses and other
liabilities........................... 78,676 86,877 128,646
------------- ------------- ------------
Total liabilities....................... 12,595,812 8,533,076 4,192,715
------------- ------------- ------------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--25,494,175;
12,874,176; 8,070,583; 9,523,092;
4,065,750; 7,253,425; 13,141,905;
11,980,887; 10,553,904; 12,585,674;
9,944,672 and 6,072,578, respectively
(unlimited number authorized)......... 164,846,870 137,034,802 76,016,308
Accumulated net investment income
(loss)................................ 1,131 1,664,182 337,692
Accumulated net realized gains (losses)
from investment, future, option
transactions.......................... 4,833,312 3,589,227 (7,478,415)
Net unrealized appreciation
(depreciation) of investments,
futures, options and other assets and
liabilities denominated in foreign
currencies............................ 29,174,114 22,189,123 (5,638,465)
------------- ------------- ------------
Net assets.............................. $198,855,427 $ 164,477,334 $63,237,120
------------- ------------- ------------
------------- ------------- ------------
Net asset value, offering price and
redemption value per share............ $15.80 $16.54 $10.41
------------- ------------- ------------
------------- ------------- ------------
</TABLE>
See accompanying notes to financial statements
77
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 1998
<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)........................ $ 1,241,043 $ 8,851,870 $ 5,408,970 $ 6,314,066
Dividends (net of foreign withholding
taxes, if any)........................ -- -- -- --
------------ ------------ ------------ ------------
1,241,043 8,851,870 5,408,970 6,314,066
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory and administration
fees.................................. 76,176 916,670 504,134 697,639
Transfer agency fees and expenses....... 88,800 69,462 32,556 61,876
Trustees' fees.......................... 26,250 26,250 26,250 26,250
Legal and audit......................... 20,950 50,143 30,534 32,355
Amortization of organizational
expenses.............................. 18,980 18,980 18,980 18,980
Reports and notices to shareholders..... 17,386 39,449 21,846 20,082
Federal and state registration fees..... 7,580 30,643 13,764 17,814
Custody and accounting.................. 2,158 80,477 52,340 61,654
Other expenses.......................... 3,500 17,500 5,104 2,993
------------ ------------ ------------ ------------
261,780 1,249,574 705,508 939,643
Less: Fee waivers and expense
reimbursements from investment
adviser............................... (153,019) (135,366) (5,372) (91,847)
------------ ------------ ------------ ------------
Net expenses............................ 108,761 1,114,208 700,136 847,796
------------ ------------ ------------ ------------
Net investment income (loss)............ 1,132,282 7,737,662 4,708,834 5,466,270
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT TRANSACTIONS:
Net realized gains (losses) from:
Investment, future and option
transactions...................... (794) 1,768,979 694,295 2,535,815
Foreign currency transactions....... -- -- (156,977) 3,871
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... -- (219,247) (131) 380,806
Other assets, liabilities and
forward contracts denominated in
foreign currencies................ -- -- 10,844 (17)
------------ ------------ ------------ ------------
Net realized and unrealized gains
(losses) from investment
transactions.......................... (794) 1,549,732 548,031 2,920,475
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations............. $ 1,131,488 $ 9,287,394 $ 5,256,865 $ 8,386,745
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
78
<PAGE>
<TABLE>
<CAPTION>
PACE PACE
PACE LARGE PACE SMALL/MEDIUM
PACE PACE LARGE COMPANY SMALL/MEDIUM COMPANY
MUNICIPAL GLOBAL FIXED COMPANY GROWTH COMPANY GROWTH
FIXED INCOME INCOME VALUE EQUITY EQUITY VALUE EQUITY EQUITY
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding
taxes, if any)........................ $ 2,386,551 $ 4,541,355 $ 316,515 $ 207,187 $ 507,403 $ 814,588
Dividends (net of foreign withholding
taxes, if any)........................ -- -- 3,694,242 1,582,769 2,271,355 517,153
------------ ------------ ------------ ------------ ------------ ------------
2,386,551 4,541,355 4,010,757 1,789,956 2,778,758 1,331,741
------------ ------------ ------------ ------------ ------------ ------------
EXPENSES:
Investment advisory and administration
fees.................................. 259,431 599,606 1,786,641 1,672,807 1,384,807 1,328,874
Transfer agency fees and expenses....... 24,000 78,056 93,707 97,865 90,636 90,144
Trustees' fees.......................... 26,250 26,250 26,250 26,250 26,250 26,250
Legal and audit......................... 23,341 29,890 44,601 68,497 42,555 52,616
Amortization of organizational
expenses.............................. 18,980 18,980 18,980 18,980 18,980 18,980
Reports and notices to shareholders..... 13,994 23,910 40,466 69,350 37,722 43,838
Federal and state registration fees..... 4,568 20,444 31,562 31,453 23,800 32,067
Custody and accounting.................. 27,898 114,536 133,998 128,374 104,861 101,695
Other expenses.......................... 5,049 11,041 9,124 17,345 9,252 10,111
------------ ------------ ------------ ------------ ------------ ------------
403,511 922,713 2,185,329 2,130,921 1,738,863 1,704,575
Less: Fee waivers and expense
reimbursements from investment
adviser............................... (35,977) (209,982) -- (45,136) (11,273) (43,813)
------------ ------------ ------------ ------------ ------------ ------------
Net expenses............................ 367,534 712,731 2,185,329 2,085,785 1,727,590 1,660,762
------------ ------------ ------------ ------------ ------------ ------------
Net investment income (loss)............ 2,019,017 3,828,624 1,825,428 (295,829) 1,051,168 (329,021)
------------ ------------ ------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT TRANSACTIONS:
Net realized gains (losses) from:
Investment, future and option
transactions...................... (13,397) 2,109,651 25,588,461 30,303,857 22,462,701 8,732,887
Foreign currency transactions....... -- (3,629,877) -- -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... 85,256 863,281 (5,835,473) 23,781,478 (15,463,480) 12,043,636
Other assets, liabilities and
forward contracts denominated in
foreign currencies................ -- 236,923 -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net realized and unrealized gains
(losses) from investment
transactions.......................... 71,859 (420,022) 19,752,988 54,085,335 6,999,221 20,776,523
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations............. $ 2,090,876 $ 3,408,602 $21,578,416 $53,789,506 $ 8,050,389 $20,447,502
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
<CAPTION>
PACE
INTERNATIONAL
PACE EMERGING
INTERNATIONAL MARKETS
EQUITY EQUITY
INVESTMENTS INVESTMENTS
------------ -------------
<S> <C> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding
taxes, if any)........................ $ 541,034 $ 311,579
Dividends (net of foreign withholding
taxes, if any)........................ 2,489,802 1,095,606
------------ -------------
3,030,836 1,407,185
------------ -------------
EXPENSES:
Investment advisory and administration
fees.................................. 1,163,135 623,343
Transfer agency fees and expenses....... 86,062 76,902
Trustees' fees.......................... 26,250 26,250
Legal and audit......................... 39,219 30,520
Amortization of organizational
expenses.............................. 18,980 18,980
Reports and notices to shareholders..... 25,457 19,118
Federal and state registration fees..... 8,966 11,694
Custody and accounting.................. 176,748 200,817
Other expenses.......................... 16,037 4,262
------------ -------------
1,560,854 1,011,886
Less: Fee waivers and expense
reimbursements from investment
adviser............................... -- (161,872)
------------ -------------
Net expenses............................ 1,560,854 850,014
------------ -------------
Net investment income (loss)............ 1,469,982 557,171
------------ -------------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT TRANSACTIONS:
Net realized gains (losses) from:
Investment, future and option
transactions...................... 5,057,201 (7,304,773)
Foreign currency transactions....... 326,095 (179,557)
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... 7,689,825 (15,705,030)
Other assets, liabilities and
forward contracts denominated in
foreign currencies................ (207,538) 243,360
------------ -------------
Net realized and unrealized gains
(losses) from investment
transactions.......................... 12,865,583 (22,946,000)
------------ -------------
Net increase (decrease) in net assets
resulting from operations............. $ 14,335,565 $(22,388,829)
------------ -------------
------------ -------------
</TABLE>
See accompanying notes to financial statements
79
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PACE
PACE GOVERNMENT SECURITIES
MONEY MARKET INVESTMENTS FIXED INCOME INVESTMENTS
--------------------------- ---------------------------
FOR THE YEARS ENDED JULY FOR THE YEARS ENDED JULY
31, 31,
--------------------------- ---------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 1,132,282 $ 669,007 $ 7,737,662 $ 4,314,719
Net realized gains (losses) from:
Investment, future and option
transactions....................... (794) 360 1,768,979 1,571,072
Foreign currency transactions....... -- -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... -- -- (219,247) 2,036,731
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- -- -- (10)
------------ ------------ ------------ ------------
Net increase in net assets resulting
from operations...................... 1,131,488 669,367 9,287,394 7,922,512
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (1,132,282) (669,007) (7,404,245) (4,069,911)
Net realized gains from investment
transactions......................... -- (619) (1,983,939) (336,399)
------------ ------------ ------------ ------------
(1,132,282) (669,626) (9,388,184) (4,406,310)
------------ ------------ ------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 23,490,598 14,140,218 74,953,404 51,021,900
Cost of shares repurchased............ (15,154,011) (8,937,847) (23,558,064) (16,027,909)
Proceeds from dividends reinvested.... 1,087,530 646,822 9,218,788 4,343,399
------------ ------------ ------------ ------------
Net increase in net assets derived
from beneficial
interest transactions................ 9,424,117 5,849,193 60,614,128 39,337,390
------------ ------------ ------------ ------------
Net increase in net assets............ 9,423,323 5,848,934 60,513,338 42,853,592
NET ASSETS:
Beginning of year..................... 16,070,058 10,221,124 101,605,869 58,752,277
------------ ------------ ------------ ------------
End of year........................... $ 25,493,381 $ 16,070,058 $162,119,207 $101,605,869
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net investment income... $ -- $ -- $ 827,906 $ 494,489
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
80
<PAGE>
<TABLE>
<CAPTION>
PACE PACE PACE
INTERMEDIATE FIXED INCOME STRATEGIC FIXED INCOME MUNICIPAL FIXED INCOME
INVESTMENTS INVESTMENTS INVESTMENTS
--------------------------- --------------------------- ---------------------------
FOR THE YEARS ENDED JULY FOR THE YEARS ENDED JULY FOR THE YEARS ENDED JULY
31, 31, 31,
--------------------------- --------------------------- ---------------------------
1998 1997 1998 1997 1998 1997
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 4,708,834 $ 3,026,315 $ 5,466,270 $ 3,183,558 $ 2,019,017 $ 1,213,887
Net realized gains (losses) from:
Investment, future and option
transactions....................... 694,295 (272,058) 2,535,815 804,905 (13,397) (117,168)
Foreign currency transactions....... (156,977) (2,307) 3,871 -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... (131) 1,470,929 380,806 2,393,323 85,256 850,557
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. 10,844 (11,478) (17) 47 -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting
from operations...................... 5,256,865 4,211,401 8,386,745 6,381,833 2,090,876 1,947,276
------------ ------------ ------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (4,386,424) (2,918,801) (5,206,415) (3,066,213) (1,949,614) (1,168,430)
Net realized gains from investment
transactions......................... -- -- (882,227) (433,240) -- (58,851)
------------ ------------ ------------ ------------ ------------ ------------
(4,386,424) (2,918,801) (6,088,642) (3,499,453) (1,949,614) (1,227,281)
------------ ------------ ------------ ------------ ------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 47,167,401 34,600,315 61,068,745 38,094,747 26,084,535 19,365,469
Cost of shares repurchased............ (19,400,214) (13,278,515) (17,663,041) (11,807,997) (10,769,886) (4,749,932)
Proceeds from dividends reinvested.... 4,301,281 2,863,582 6,001,405 3,455,539 1,889,649 1,191,557
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets derived
from beneficial
interest transactions................ 32,068,468 24,185,382 49,407,109 29,742,289 17,204,298 15,807,094
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets............ 32,938,909 25,477,982 51,705,212 32,624,669 17,345,560 16,527,089
NET ASSETS:
Beginning of year..................... 66,750,605 41,272,623 75,174,484 42,549,815 34,292,140 17,765,051
------------ ------------ ------------ ------------ ------------ ------------
End of year........................... $ 99,689,514 $ 66,750,605 $126,879,696 $ 75,174,484 $ 51,637,700 $ 34,292,140
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
Undistributed net investment income... $ 473,206 $ 300,192 $ 637,680 $ 326,087 $ 187,378 $ 117,975
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
<CAPTION>
PACE
GLOBAL FIXED INCOME
INVESTMENTS
---------------------------
FOR THE YEARS ENDED JULY
31,
---------------------------
1998 1997
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 3,828,624 $ 2,608,277
Net realized gains (losses) from:
Investment, future and option
transactions....................... 2,109,651 990,587
Foreign currency transactions....... (3,629,877) (1,500,518)
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... 863,281 1,235
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. 236,923 (444,857)
------------ ------------
Net increase in net assets resulting
from operations...................... 3,408,602 1,654,724
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (2,451,594) (2,001,376)
Net realized gains from investment
transactions......................... (621,114) (320,299)
------------ ------------
(3,072,708) (2,321,675)
------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 40,175,161 30,873,266
Cost of shares repurchased............ (14,974,347) (10,515,151)
Proceeds from dividends reinvested.... 3,021,988 2,292,365
------------ ------------
Net increase in net assets derived
from beneficial
interest transactions................ 28,222,802 22,650,480
------------ ------------
Net increase in net assets............ 28,558,696 21,983,529
NET ASSETS:
Beginning of year..................... 60,279,212 38,295,683
------------ ------------
End of year........................... $ 88,837,908 $ 60,279,212
------------ ------------
------------ ------------
Undistributed net investment income... $ -- $ --
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements
81
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PACE PACE
LARGE COMPANY VALUE LARGE COMPANY GROWTH
EQUITY INVESTMENTS EQUITY INVESTMENTS
--------------------------- ---------------------------
FOR THE YEARS ENDED JULY FOR THE YEARS ENDED JULY
31, 31,
--------------------------- ---------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss).......... $ 1,825,428 $ 1,022,857 $ (295,829) $ 242,099
Net realized gains (losses) from:
Investment, future and option
transactions....................... 25,588,461 12,582,167 30,303,857 3,415,324
Foreign currency transactions....... -- -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... (5,835,473) 38,091,574 23,781,478 38,776,128
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- 186 -- --
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations............ 21,578,416 51,696,784 53,789,506 42,433,551
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (1,408,413) (775,005) (89,237) (226,897)
Net realized gains from investment
transactions......................... (14,337,107) (4,599,545) (10,121,657) --
------------ ------------ ------------ ------------
(15,745,520) (5,374,550) (10,210,894) (226,897)
------------ ------------ ------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 112,692,706 76,627,397 106,725,695 71,324,987
Cost of shares repurchased............ (48,536,702) (28,358,191) (45,303,487) (22,670,755)
Proceeds from dividends reinvested.... 15,558,619 5,318,346 10,126,809 224,739
------------ ------------ ------------ ------------
Net increase in net assets derived
from beneficial
interest transactions................ 79,714,623 53,587,552 71,549,017 48,878,971
------------ ------------ ------------ ------------
Net increase in net assets............ 85,547,519 99,909,786 115,127,629 91,085,625
NET ASSETS:
Beginning of year..................... 180,806,560 80,896,774 160,333,862 69,248,237
------------ ------------ ------------ ------------
End of year........................... $266,354,079 $180,806,560 $275,461,491 $160,333,862
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net investment income... $ 1,067,148 $ 650,133 $ 1,132 $ 90,317
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
82
<PAGE>
<TABLE>
<CAPTION>
PACE PACE PACE
SMALL/MEDIUM COMPANY SMALL/MEDIUM COMPANY GROWTH INTERNATIONAL EQUITY
VALUE EQUITY INVESTMENTS EQUITY INVESTMENTS INVESTMENTS
--------------------------- --------------------------- ---------------------------
FOR THE YEARS ENDED JULY FOR THE YEARS ENDED JULY FOR THE YEARS ENDED JULY
31, 31, 31,
--------------------------- --------------------------- ---------------------------
1998 1997 1998 1997 1998 1997
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss).......... $ 1,051,168 $ 963,437 $ (329,021) $ (187,269) $ 1,469,982 $ 670,093
Net realized gains (losses) from:
Investment, future and option
transactions....................... 22,462,701 8,345,595 8,732,887 4,458,445 5,057,201 1,296,752
Foreign currency transactions....... -- -- -- -- 326,095 597,617
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... (15,463,480) 28,544,660 12,043,636 19,755,079 7,689,825 14,945,764
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- -- -- -- (207,538) (201,997)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations............ 8,050,389 37,853,692 20,447,502 24,026,255 14,335,565 17,308,229
------------ ------------ ------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (1,076,984) (607,087) -- -- (1,289,475) (592,454)
Net realized gains from investment
transactions......................... (10,697,586) (2,130,756) (6,433,649) -- (2,560,448) (355,947)
------------ ------------ ------------ ------------ ------------ ------------
(11,774,570) (2,737,843) (6,433,649) -- (3,849,923) (948,401)
------------ ------------ ------------ ------------ ------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 80,270,327 53,611,026 84,765,291 56,184,647 71,453,827 52,799,774
Cost of shares repurchased............ (39,712,671) (20,290,061) (31,908,469) (17,966,629) (24,249,999) (12,452,231)
Proceeds from dividends reinvested.... 11,677,703 2,715,942 6,376,127 -- 3,808,818 941,111
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets derived
from beneficial
interest transactions................ 52,235,359 36,036,907 59,232,949 38,218,018 51,012,646 41,288,654
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets............ 48,511,178 71,152,756 73,246,802 62,244,273 61,498,288 57,648,482
NET ASSETS:
Beginning of year..................... 135,047,082 63,894,326 125,608,625 63,364,352 102,979,046 45,330,564
------------ ------------ ------------ ------------ ------------ ------------
End of year........................... $183,558,260 $135,047,082 $198,855,427 $125,608,625 $164,477,334 $102,979,046
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
Undistributed net investment income... $ 626,559 $ 652,375 $ 1,131 $ 1,131 $ 1,664,182 $ 1,151,662
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
<CAPTION>
PACE
INTERNATIONAL EMERGING
MARKETS EQUITY INVESTMENTS
---------------------------
FOR THE YEARS ENDED JULY
31,
---------------------------
1998 1997
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss).......... $ 557,171 $ 240,541
Net realized gains (losses) from:
Investment, future and option
transactions....................... (7,304,773) (17,754)
Foreign currency transactions....... (179,557) (46,206)
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... (15,705,030) 9,730,201
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. 243,360 (209,093)
------------ ------------
Net increase (decrease) in net assets
resulting from operations............ (22,388,829) 9,697,689
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (208,975) (106,808)
Net realized gains from investment
transactions......................... -- --
------------ ------------
(208,975) (106,808)
------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 43,340,509 26,529,694
Cost of shares repurchased............ (12,471,626) (6,948,586)
Proceeds from dividends reinvested.... 206,708 105,920
------------ ------------
Net increase in net assets derived
from beneficial
interest transactions................ 31,075,591 19,687,028
------------ ------------
Net increase in net assets............ 8,477,787 29,277,909
NET ASSETS:
Beginning of year..................... 54,759,333 25,481,424
------------ ------------
End of year........................... $ 63,237,120 $ 54,759,333
------------ ------------
------------ ------------
Undistributed net investment income... $ 337,692 $ 169,054
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements
83
<PAGE>
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber PACE Select Advisors Trust (the "Trust") is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended, as an open-end management investment company currently composed of
twelve separate investment portfolios and was organized as a Delaware business
trust under the laws of the State of Delaware by Certificate of Trust dated
September 9, 1994, as amended June 9, 1995. 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
PACE-SM- Program.
The Trust incurred costs of approximately $1,138,000 in connection with the
organization of the Trust and the registration of its shares. Such costs have
been deferred and are being amortized using the straight-line method over the
period of benefit, not to exceed five years, beginning with the commencement of
operations of the Trust.
The preparation of financial statements in accordance with 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. The following is a
summary of significant accounting policies:
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 designated by Mitchell Hutchins Asset
Management Inc. ("Mitchell Hutchins") or by the applicable sub-adviser as the
primary market for each Portfolio. Securities traded in the over-the-counter
("OTC") market and listed on The Nasdaq Stock Market, Inc. ("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. When market quotations are unavailable, valuations are based upon
appraisals received from a pricing service using a computerized matrix system or
appraisals derived from information concerning the security or similar
securities received from recognized dealers in those securities. 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. Investments of the PACE Money Market Investments are valued
at amortized cost which approximates market value.
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 the Portfolios' custodian. 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 the
valuation of such securities is determined and the close of trading on the NYSE,
which will not be reflected
84
<PAGE>
NOTES TO FINANCIAL STATEMENTS
in the 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.
REPURCHASE AGREEMENTS--The Portfolios' custodian takes possession of the
collateral pledged for investments in repurchase agreements. The underlying
collateral is valued daily on a mark-to-market basis to ensure that the value,
including accrued interest, is at least equal to the repurchase price. In the
event of default of the obligation to repurchase, the Portfolios have the right
to liquidate the collateral and apply the proceeds in satisfaction of the
obligations. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings. Each Portfolio (with the
exception of PACE Municipal Fixed Income Investments) occasionally participates
in joint repurchase agreement transactions with other funds managed by Mitchell
Hutchins.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME--Investment transactions are
recorded on the trade date. Realized gains and losses from investment
transactions and foreign exchange transactions are calculated using the
identified cost basis. Dividend income is recorded on the ex-dividend date
("ex-date") (except for certain dividends from foreign securities that are
recorded as soon after the ex-date as the respective Portfolio, using reasonable
diligence, becomes aware of such dividends). Interest income is recorded on an
accrual basis. Discounts are accreted and premiums are amortized 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. Net realized foreign currency gain (loss) is treated as ordinary
income for income tax reporting purposes.
FORWARD FOREIGN CURRENCY CONTRACTS--Certain Portfolios may enter into forward
foreign currency exchange contracts ("forward contracts") in connection with
planned purchases or sales of securities or to hedge the U.S. dollar value of
portfolio securities denominated in a particular currency. 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
the applicable sub-adviser anticipates that there is a correlation between the
two currencies. Forward contracts may also be used to shift a Portfolio's
exposure to foreign currency fluctuations from one country to another.
The Portfolios have no specific limitation on the percentage of assets which
may be committed to such contracts; however, the value of all forward contracts
will not exceed the total market value of a Portfolio's total assets. The
Portfolios may enter into forward contracts or maintain a net exposure to
forward contracts only if (1) the consummation of the contracts would not
obligate the Portfolio to deliver an amount of foreign currency in excess of the
value of the positions being hedged by such contracts or (2) the Portfolios
maintain cash or liquid securities in a segregated account in an amount not less
than the value of the Portfolio's total assets committed to the consummation of
the forward contracts and not covered as provided in (1) above, as
marked-to-market daily.
Risks may arise upon entering into forward contracts from the potential
inability of counterparties to meet the terms of their contracts and from
unanticipated movements in the value of foreign currencies relative to the U.S.
dollar.
85
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Fluctuations in the value of open forward contracts are recorded for book
purposes as unrealized gains or losses by the Portfolios. Realized gains and
losses include net gains or losses recognized by the Portfolio on contracts
which have matured.
OPTION WRITING--Certain Portfolios may write (sell) put and call options in
order to gain exposure to or protect against changes in the markets. When a
Portfolio writes a call or a put option, an amount equal to the premium received
by the Portfolio is included in the Portfolio's Statement of Assets and
Liabilities as an asset and as an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option written. If an option which the Portfolio has written either
expires on its stipulated expiration date or the Portfolio enters into a closing
purchase transaction, the Portfolio realizes a gain (or loss if the cost of a
closing purchase transaction exceeds the premium received when the option was
written) without regard to any unrealized gain or loss on the underlying
security, 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.
REVERSE REPURCHASE AGREEMENTS--The Trust may enter into reverse repurchase
agreements with qualified third party broker-dealers as determined by, and under
the direction of, the Trust's board of trustees. Interest on the value of
reverse repurchase agreements issued and outstanding is based upon competitive
market rates at the time of issuance. At the time the Trust enters into a
reverse repurchase agreement, it establishes and maintains a segregated account
with the Trust's custodian containing liquid securities having a value not less
than the repurchase price, including accrued interest, of the reverse repurchase
agreement. For the year ended July 31, 1998, the Portfolios entered into no
reverse repurchase agreements.
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.
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
86
<PAGE>
NOTES TO FINANCIAL STATEMENTS
particular to a specific industry, country or region, which could cause the
securities and their markets to be less liquid and prices more volatile than
those of comparable U.S. companies and U.S. government securities. These risks
are greater with respect to securities of issuers located in emerging market
countries in which the PACE Global Fixed Income Investments, PACE International
Equity Investments and PACE International Emerging Markets Equity Investments
Portfolios are authorized to invest.
Small cap companies may be more vulnerable than larger companies to adverse
business or economic developments. Small cap companies may also have limited
product lines, markets or financial resources, and may be dependent on a
relatively small management group. Securities of such companies may be less
liquid and more volatile than securities of larger companies or the market
averages in general and, therefore, may involve greater risk than investing in
larger companies. In addition, small cap companies may not be well-known to the
investing public, may not have institutional ownership and may have only
cyclical, static or moderate growth prospects.
The ability of the issuers of debt securities held by the Portfolios to meet
their obligations may be affected by economic and political developments
particular to a specific industry, country, state or region.
INVESTMENT 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 paid monthly, in accordance with
the following schedule:
<TABLE>
<CAPTION>
ANNUAL RATE
AS A PERCENTAGE OF
EACH PORTFOLIO'S
PORTFOLIO AVERAGE DAILY 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>
87
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 DAILY NET ASSETS
- --------------------------------------------------- --------------------------------------------------- --------------------------
<S> <C> <C>
PACE Government Securities Fixed Income Investments Pacific Investment Management Company 0.25%
PACE Intermediate Fixed Income Investments Pacific Income Advisors, Inc. 0.20%
PACE Strategic Fixed Income Investments Pacific Investment Management Company 0.25%
PACE Municipal Fixed Income Investments Morgan Grenfell Capital Management, Incorporated 0.20%
PACE Global Fixed Income Investments Rogge Global Partners plc 0.35%
PACE Large Company Value Equity Investments Brinson Partners, Inc. 0.30%
PACE Large Company Growth Equity Investments Alliance Capital Management L.P. 0.30%
PACE Small/Medium Company Value Equity Investments Brandywine Asset Management, Inc. 0.30%
PACE Small/Medium Company Growth Equity Investments Delaware Management Company, Inc. 0.40%
PACE International Equity Investments Martin Currie Inc. 0.40%
PACE International Emerging Markets Equity Schroder Capital Management International Inc. 0.50%
Investments
</TABLE>
Prior to November 10, 1997, Chancellor LGT Asset Management, Inc. served as
the PACE Large Company Growth Equity Investments' sub-adviser pursuant to a
sub-advisory contract with Mitchell Hutchins. Mitchell Hutchins (not the
Portfolio) paid Chancellor LGT Asset Management, Inc. a fee, computed daily and
paid monthly, at an annual rate of 0.30% of the Portfolio's average daily net
assets.
On January 16, 1998, Brandywine Asset Management, Inc. became a wholly owned
subsidiary of Legg Mason, Inc. There have been no changes in Brandywine Asset
Management, Inc.'s general method of operation or where it conducts its business
as a result of the transaction. Furthermore, the same persons who were
responsible for the investments of the Portfolio prior to the transaction
continue to have those responsibilities.
Mitchell Hutchins has agreed to voluntarily waive all or a portion of its
investment advisory and administration fee and reimburse certain operating
expenses for the year ended July 31, 1998, which lower the overall expenses of
some Portfolios.
During the year ended July 31, 1998, the Portfolios did not pay any brokerage
commissions to PaineWebber for transactions executed on behalf of the
Portfolios.
SECURITIES LENDING
Each Portfolio may lend securities up to 33 1/3% of its total assets to
qualified institutions. The loans are secured at all times by cash or U.S.
government securities in an amount at least equal to the market value of the
securities loaned, plus accrued interest and dividends, determined on a daily
basis and adjusted accordingly. The Portfolios will regain record ownership of
loaned securities to exercise certain beneficial rights, however, the Portfolios
may bear the risk of delay in recovery of, or even loss of rights in, the
securities loaned should the borrower fail financially. The Portfolios receive
compensation, which is included in interest income, for lending their securities
on interest earned on
88
<PAGE>
NOTES TO FINANCIAL STATEMENTS
the cash or U.S. government securities held as collateral, net of fee rebates
paid to the borrower plus reasonable administrative and custody fees.
PaineWebber, which is the Portfolio's lending agent, received compensation from
the Portfolios for the year ended July 31, 1998 as follows:
<TABLE>
<CAPTION>
PORTFOLIO COMPENSATION
- --------------------------------------------------------------------------------------------- -------------
<S> <C>
PACE Intermediate Fixed Income Investments................................................... $ 31,626
PACE Global Fixed Income Investments......................................................... $ 10,430
PACE Large Company Value Equity Investments.................................................. $ 13,396
PACE Large Company Growth Equity Investments................................................. $ 9,553
PACE Small/Medium Company Value Equity Investments........................................... $ 15,681
PACE Small/Medium Company Growth Equity Investments.......................................... $ 25,124
PACE International Equity Investments........................................................ $ 8,267
PACE International Emerging Markets Equity Investments....................................... $ 21,460
</TABLE>
As of July 31, 1998 the Portfolios held cash as collateral for market values
of securities loaned as follows:
<TABLE>
<CAPTION>
COLLATERAL MARKET VALUE
FOR OF
SECURITIES SECURITIES
PORTFOLIO LOANED LOANED
- ------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
PACE Government Securities Fixed Income........................................ $8,468,096 $8,228,110
PACE Intermediate Fixed Income Investments..................................... $12,540,000 $11,943,756
PACE Global Fixed Income Investments........................................... $23,713,450 $22,571,971
PACE Large Company Value Equity Investments.................................... $10,709,799 $10,566,875
PACE Large Company Growth Equity Investments................................... $30,801,800 $29,856,856
PACE Small/Medium Company Value Equity Investments............................. $2,819,800 $2,557,606
PACE Small/Medium Company Growth Equity Investments............................ $8,754,500 $8,460,182
PACE International Equity Investments.......................................... $3,895,700 $3,793,052
PACE International Emerging Markets Equity Investments......................... $2,900,016 $2,350,546
</TABLE>
89
<PAGE>
NOTES TO FINANCIAL STATEMENTS
As of July 31, 1998 the Funds invested the above collateral in the following
money market funds and repurchase agreements:
<TABLE>
<CAPTION>
NUMBER OF
SHARES/
PRINCIPAL
AMOUNT VALUE
- ------------- -----------
<C> <S> <C>
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS:
7,600,000 Repurchase Agreement with Daiwa Securities America dated 07/31/98, 5.480% due 08/03/98
(collateralized by $7,752,000 U.S. Treasury Notes, 5.875% due 01/31/99, value $7,752,000)
(cost--$7,600,000)................................................................................ $ 7,600,000
-----------
-----------
PACE INTERMEDIATE FIXED INCOME INVESTMENTS:
4,656,568 Liquid Assets Portfolio............................................................................. $ 4,656,568
4,744,520 Prime Portfolio..................................................................................... 4,744,520
2,912 TempFund Portfolio.................................................................................. 2,912
3,136,000 Repurchase Agreement with SG Warburg dated 07/31/98, 5.620% due 08/03/98 (collateralized by
$2,764,000 U.S. Treasury Bonds, 6.750% due 08/15/26, value $3,199,330)............................ 3,136,000
-----------
Total Investments of Cash Collateral for Securities Loaned (cost--$12,540,000)...................... $12,540,000
-----------
-----------
PACE GLOBAL FIXED INCOME INVESTMENTS:
4,929,701 Liquid Assets Portfolio............................................................................. $ 4,929,701
4,783,749 Prime Portfolio..................................................................................... 4,783,749
4,000,000 Repurchase Agreement with Citibank dated 07/31/98, 5.600% due 08/03/98 (collateralized by $3,665,000
U.S. Treasury Bonds, 6.375% due 08/15/27, value $4,081,894)....................................... 4,000,000
5,000,000 Repurchase Agreement with Societe Generale dated 07/31/98, 5.620% due 08/03/98 (collateralized by
$4,407,000 U.S. Treasury Notes, 6.750% due 08/15/26, value $5,100,893)............................ 5,000,000
5,000,000 Repurchase Agreement with SG Warburg dated 07/31/98, 5.620% due 08/03/98 (collateralized by
$4,407,000 U.S. Treasury Bonds, 6.750% due 08/15/26, value $5,101,103)............................ 5,000,000
-----------
Total Investments of Cash Collateral for Securities Loaned (cost--$23,713,450)...................... $23,713,450
-----------
-----------
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS:
7,690,510 Liquid Assets Portfolio............................................................................. $ 7,690,510
2,524,717 Prime Portfolio..................................................................................... 2,524,717
567 TempCash Portfolio.................................................................................. 567
494,005 TempFund Portfolio.................................................................................. 494,005
-----------
Total Investments of Cash Collateral for Securities Loaned (cost--$10,709,799)...................... $10,709,799
-----------
-----------
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS:
13,933,332 Liquid Assets Portfolio............................................................................. $13,933,332
12,816,973 Prime Portfolio..................................................................................... 12,816,973
51,495 TempFund Portfolio.................................................................................. 51,495
4,000,000 Repurchase Agreement with Societe Generale dated 07/31/98, 5.620%, due 08/03/98, (collateralized by
$2,910,000 U.S. Treasury Bonds, 8.875% due 02/15/19, value $4,081,275)............................ 4,000,000
-----------
Total Investments of Cash Collateral for Securities Loaned (cost--$30,801,800)...................... $30,801,800
-----------
-----------
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS:
2,818,934 Liquid Assets Portfolio............................................................................. $ 2,818,934
173 TempCashPortfolio................................................................................... 173
693 TempFund Portfolio.................................................................................. 693
-----------
Total Investments of Cash Collateral for Securities Loaned (cost--$2,819,800)....................... $ 2,819,800
-----------
-----------
</TABLE>
90
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES/
PRINCIPAL
AMOUNT VALUE
- ------------- -----------
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS:
<C> <S> <C>
6,431,412 Liquid Assets Portfolio............................................................................. $ 6,431,412
2,322,686 Prime Portfolio..................................................................................... 2,322,686
377 TempFund Portfolio.................................................................................. 377
25 TempCash Portfolio.................................................................................. 25
-----------
Total Investments of Cash Collateral for Securities Loaned (cost--$8,754,500)....................... $ 8,754,500
-----------
-----------
PACE INTERNATIONAL EQUITY INVESTMENTS:
3,281,300 Liquid Assets Portfolio............................................................................. $ 3,281,300
526 Prime Portfolio..................................................................................... 526
17,249 TempCash Portfolio.................................................................................. 17,249
596,625 TempFund Portfolio.................................................................................. 596,625
-----------
Total Investments of Cash Collateral for Securities Loaned (cost--$3,895,700)....................... $ 3,895,700
-----------
-----------
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS:
2,567,411 Liquid Assets Portfolio............................................................................. 2,567,411
330,977 TempFund Portfolio.................................................................................. 330,977
1,225 Prime Portfolio..................................................................................... 1,225
403 TempCash Portfolio.................................................................................. 403
-----------
Total Investments of Cash Collateral for Securities Loaned (cost--$2,900,016)....................... $ 2,900,016
-----------
-----------
</TABLE>
BANK LINE OF CREDIT
Each of the Portfolios, with the exception of PACE Money Market Investments,
may participate with other funds managed by Mitchell Hutchins in a $200 million
committed credit facility ("Facility") to be utilized for temporary financing
until the settlement of sales or purchases of portfolio securities, the
repurchase or redemption of shares of the Portfolios at the request of the
shareholders and other temporary or emergency purposes. In connection therewith,
the Portfolios have agreed to pay commitment fees, pro rata, based on the
relative asset size of the funds in the Facility. Interest is charged to the
Portfolios at rates based on prevailing market rates in effect at the time of
borrowings. For the year ended July 31, 1998, the Portfolios did not borrow
under the Facility.
WRITTEN OPTION ACTIVITY
Written option activity for the year ended July 31, 1998 for PACE Strategic
Fixed Income Investments was as follows:
<TABLE>
<CAPTION>
NUMBER OF AMOUNT OF
OPTIONS PREMIUMS
--------------- -----------
<S> <C> <C>
Options outstanding at July 31, 1997................................................ 10 $ 8,771
Options written..................................................................... -- --
Options terminated in closing purchase transactions................................. -- --
Options expired prior to exercise................................................... (10 ) (8,771)
--
-----------
Options outstanding at July 31, 1998................................................ 0 $ 0
--
--
-----------
-----------
</TABLE>
91
<PAGE>
NOTES TO FINANCIAL STATEMENTS
INVESTMENTS IN SECURITIES
At July 31, 1998, the components of net unrealized appreciation (depreciation)
of investments were as follows:
<TABLE>
<CAPTION>
NET
UNREALIZED
GROSS GROSS APPRECIATION
PORTFOLIO APPRECIATION DEPRECIATION (DEPRECIATION)
- ---------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
PACE Government Securities Fixed Income Investments............. $ 1,826,869 $ (167,050) $ 1,659,819
PACE Intermediate Fixed Income Investments...................... $ 895,430 $ (140,562) $ 754,868
PACE Strategic Fixed Income Investments......................... $ 2,751,331 $ (305,902) $ 2,445,429
PACE Municipal Fixed Income Investments......................... $ 1,027,525 $ (21,777) $ 1,005,748
PACE Global Fixed Income Investments............................ $ 2,470,675 $ (1,250,710) $ 1,219,965
PACE Large Company Value Equity Investments..................... $45,297,170 $(11,605,921) $33,691,249
PACE Large Company Growth Equity Investments.................... $69,983,591 $ (5,408,539) $64,575,052
PACE Small/Medium Company Value Equity Investments.............. $30,147,149 $(17,906,804) $12,240,345
PACE Small/Medium Company Growth Equity Investments............. $33,977,657 $ (4,803,543) $29,174,114
PACE International Equity Investments........................... $29,613,058 $ (7,208,794) $22,404,264
PACE International Emerging Markets Equity Investments.......... $ 5,469,385 $(11,106,781) $(5,637,396)
</TABLE>
For U.S. federal income tax purposes, the cost of securities owned at July 31,
1998 was substantially the same as the cost of securities for financial
statement purposes.
For the year ended July 31, 1998, 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........................... $ 699,810,629 $ 598,238,711
PACE Intermediate Fixed Income Investments.................................... $ 122,782,998 $ 91,402,590
PACE Strategic Fixed Income Investments....................................... $ 284,501,499 $ 194,166,648
PACE Municipal Fixed Income Investments....................................... $ 33,475,471 $ 14,335,503
PACE Global Fixed Income Investments.......................................... $ 113,012,326 $ 86,838,627
PACE Large Company Value Equity Investments................................... $ 139,702,505 $ 73,057,028
PACE Large Company Growth Equity Investments.................................. $ 272,879,973 $ 210,485,899
PACE Small/Medium Company Value Equity Investments............................ $ 108,371,678 $ 68,930,798
PACE Small/Medium Company Growth Equity Investments........................... $ 252,029,110 $ 198,474,613
PACE International Equity Investments......................................... $ 118,745,998 $ 67,040,894
PACE International Emerging Markets Equity Investments........................ $ 55,049,480 $ 26,291,268
</TABLE>
FEDERAL INCOME 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.
At July 31, 1998, PACE Municipal Fixed Income Investments and PACE
International Emerging Markets Equity Investments had net capital loss
carryforwards of $127,608 and $1,627,998, respectively. These carryforward
losses are
92
<PAGE>
NOTES TO FINANCIAL STATEMENTS
available to reduce future net capital gains to the extent provided in the
regulations, and will expire on July 31, 2005 and July 31, 2006, respectively,
for PACE Municipal Fixed Investment and PACE International Emerging Markets
Investments. To the extent that such losses are used to offset future capital
gains, the gains so offset will not be distributed to shareholders.
In accordance with U.S. Treasury regulations, the following Portfolios have
elected to defer realized capital losses and foreign currency losses arising
after October 31, 1997. Such losses are treated for tax purposes as arising on
August 1, 1998:
<TABLE>
<CAPTION>
FOREIGN
CAPITAL CURRENCY
PORTFOLIO LOSSES LOSSES
- ------------------------------------------------------------------------------------------------------- ---------- ------------
<S> <C> <C>
PACE Intermediate Fixed Income Investments............................................................. -- $ 1,805
PACE Global Fixed Income Investments................................................................... $ -- $2,342,346
PACE International Emerging Markets Equity Investments................................................. $5,245,337 $ 131,350
</TABLE>
At July 31, 1998, the effect of permanent "book/tax" reclassifications
resulted in increases (decreases) to the components of net assets as follows:
<TABLE>
<CAPTION>
ACCUMULATED
ACCUMULATED NET REALIZED
NET INVESTMENT GAINS BENEFICIAL
PORTFOLIO INCOME (LOSS) (LOSSES) INTEREST
- -------------------------------------------------------------------------------------- -------------- ------------ ----------
<S> <C> <C> <C>
PACE Intermediate Fixed Income Investments............................................ $ (149,396) $ 149,396 --
PACE Strategic Fixed Income Investments............................................... 51,740 (51,740) --
PACE Global Fixed Income Investments.................................................. (3,023,859) 3,023,859 --
PACE Large Company Growth Equity Investments.......................................... 295,881 (295,881) --
PACE Small/Medium Company Growth Equity Investments................................... 329,021 (330,979) $ 1,958
PACE International Equity Investments................................................. 332,013 (332,013) --
PACE International Emerging Markets Equity Investments................................ (179,557) 179,557 --
</TABLE>
SHARES OF BENEFICIAL INTEREST
For the year ended July 31, 1998, transactions in shares of beneficial interest
for each of the Portfolios were as follows:
<TABLE>
<CAPTION>
DIVIDENDS
REINVESTED NET
IN INCREASE
SHARES ADDITIONAL IN SHARES
PORTFOLIO SHARES SOLD REPURCHASED SHARES OUTSTANDING
- -------------------------------------------------------------------------- ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
PACE Money Market Investments............................................. 23,490,598 (15,154,011) 1,087,530 9,424,117
PACE Government Securities Fixed Income Investments....................... 5,956,008 (1,871,923) 735,288 4,819,373
PACE Intermediate Fixed Income Investments................................ 3,838,135 (1,575,993) 350,527 2,612,669
PACE Strategic Fixed Income Investments................................... 4,641,172 (1,341,365) 456,984 3,756,791
PACE Municipal Fixed Income Investments................................... 2,059,685 (849,714) 149,316 1,359,287
PACE Global Fixed Income Investments...................................... 3,272,148 (1,217,922) 246,330 2,300,556
PACE Large Company Value Equity Investments............................... 5,651,851 (2,414,998) 876,048 4,112,901
PACE Large Company Growth Equity Investments.............................. 5,306,522 (2,219,585) 577,355 3,664,292
PACE Small/Medium Company Value Equity Investments........................ 4,284,262 (2,103,668) 663,129 2,843,723
PACE Small/Medium Company Growth Equity Investments....................... 5,487,097 (2,056,793) 455,763 3,886,067
PACE International Equity Investments..................................... 4,679,150 (1,584,848) 275,005 3,369,307
PACE International Emerging Markets Equity Investments.................... 3,585,094 (1,039,414) 17,728 2,563,408
</TABLE>
93
<PAGE>
NOTES TO FINANCIAL STATEMENTS
For the year ended July 31, 1997, transactions in shares of beneficial interest
for each of the Portfolios were as follows:
<TABLE>
<CAPTION>
DIVIDENDS NET
REINVESTED INCREASE
IN IN SHARES
SHARES ADDITIONAL OUTSTANDING
PORTFOLIO SHARES SOLD REPURCHASED SHARES -
- -------------------------------------------------------------------------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
PACE Money Market Investments............................................. 14,140,217 (8,937,846) 646,822 5,849,193
PACE Government Securities Fixed Income Investments....................... 4,135,657 (1,300,928) 351,935 3,186,664
PACE Intermediate Fixed Income Investments................................ 2,869,680 (1,103,102) 237,803 2,004,381
PACE Strategic Fixed Income Investments................................... 3,007,797 (934,320) 272,753 2,346,230
PACE Municipal Fixed Income Investments................................... 1,551,175 (382,058) 95,813 1,264,930
PACE Global Fixed Income Investments...................................... 2,520,920 (861,721) 186,704 1,845,903
PACE Large Company Value Equity Investments............................... 4,630,711 (1,684,274) 334,487 3,280,924
PACE Large Company Growth Equity Investments.............................. 4,500,306 (1,415,925) 14,388 3,098,769
PACE Small/Medium Company Value Equity Investments........................ 3,700,520 (1,383,789) 193,306 2,510,037
PACE Small/Medium Company Growth Equity Investments....................... 4,482,088 (1,439,050) -- 3,043,038
PACE International Equity Investments..................................... 3,862,639 (903,087) 71,296 3,030,848
PACE International Emerging Markets Equity Investments.................... 1,968,856 (508,458) 8,535 1,468,933
</TABLE>
94
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
MONEY MARKET INVESTMENTS
----------------------------------
FOR THE YEARS
ENDED
JULY 31, FOR THE PERIOD
------------------ ENDED
1998 1997 JULY 31, 1996+
-------- -------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period.............. $ 1.00 $ 1.00 $ 1.00
-------- -------- -------
Net investment income............................. 0.05 0.05 0.05
-------- -------- -------
Dividends from net investment income.............. (0.05) (0.05) (0.05)
-------- -------- -------
Net asset value, end of period.................... $ 1.00 $ 1.00 $ 1.00
-------- -------- -------
-------- -------- -------
Total investment return (1)....................... 5.32% 5.13% 4.75%
-------- -------- -------
-------- -------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $ 25,493 $ 16,070 $ 10,221
Ratios of:
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.50% 0.50% 0.50%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 1.20% 1.89% 2.40%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 5.20% 5.04% 4.93%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 4.50% 3.65% 3.03%*
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends at net
asset value on the payable dates, and a sale at net asset value on the
last day of each period reported. The figures do not include the PACE
Program Fee; results would be lower if this fee was included. Total
investment return for period of less than one year has not been
annualized.
95
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
GOVERNMENT SECURITIES FIXED
INCOME INVESTMENTS
----------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
----------------------- ENDED
1998 1997 JULY 31, 1996+
---------- ---------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period.............. $ 12.61 $ 12.07 $ 12.00
---------- ---------- -------
Net investment income............................. 0.72 0.64 0.49
Net realized and unrealized gains from investments
and futures..................................... 0.18 0.58 0.03
---------- ---------- -------
Net increase from investment operations........... 0.90 1.22 0.52
---------- ---------- -------
Dividends from net investment income.............. (0.72) (0.63) (0.44)
Distributions from net realized gains from
investments..................................... (0.20) (0.05) (0.01)
---------- ---------- -------
Total dividends and distributions................. (0.92) (0.68) (0.45)
---------- ---------- -------
Net asset value, end of period.................... $ 12.59 $ 12.61 $ 12.07
---------- ---------- -------
---------- ---------- -------
Total investment return (1)....................... 7.39% 10.42% 4.35%
---------- ---------- -------
---------- ---------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $ 162,119 $ 101,606 $ 58,752
Ratios of:
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.85% 1.57%** 0.85%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 0.95% 1.70%** 1.15%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 5.90% 5.44%** 5.09%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 5.80% 5.31%** 4.79%*
Portfolio turnover................................ 353% 712% 978%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized
** Includes 0.72% of interest expense related to the reverse repurchase
agreement transactions entered into during the fiscal year.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions 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 would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
96
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
INTERMEDIATE FIXED INCOME
INVESTMENTS
-----------------------------------
FOR THE
FOR THE YEARS ENDED PERIOD
JULY 31, ENDED
-------------------- JULY 31,
1998 1997 1996+
--------- --------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period.... $ 12.23 $ 11.95 $ 12.00
--------- --------- -------------
Net investment income................... 0.67 0.66 0.53
Net realized and unrealized gains
(losses) from investments and foreign
currency............................... 0.09 0.28 (0.09)
--------- --------- -------------
Net increase from investment
operations............................. 0.76 0.94 0.44
--------- --------- -------------
Dividends from net investment income.... (0.64) (0.66) (0.48)
Distributions from net realized gains
from investments....................... -- -- (0.01)
--------- --------- -------------
Total dividends and distributions....... (0.64) (0.66) (0.49)
--------- --------- -------------
Net asset value, end of period.......... $ 12.35 $ 12.23 $ 11.95
--------- --------- -------------
--------- --------- -------------
Total investment return (1)............. 6.41% 8.14% 3.59%
--------- --------- -------------
--------- --------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)....... $ 99,690 $ 66,751 $ 41,273
Ratios of:
Expenses to average net assets, net of
fee waivers and expense
reimbursements......................... 0.84% 0.85% 0.85%*
Expenses to average net assets, before
fee waivers and expense
reimbursements......................... 0.84% 0.99% 1.23%*
Net investment income to average net
assets, net of fee waivers and expense
reimbursements......................... 5.60% 5.70% 5.56%*
Net investment income to average net
assets, before fee waivers and expense
reimbursements......................... 5.60% 5.56% 5.18%*
Portfolio turnover...................... 111% 67% 36%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* 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
distributions 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 would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
97
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
STRATEGIC FIXED INCOME
INVESTMENTS
-----------------------------------
FOR THE
FOR THE YEARS ENDED PERIOD
JULY 31, ENDED
-------------------- JULY 31,
1998 1997 1996+
--------- --------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period........................................................... $ 13.04 $ 12.44 $ 12.00
--------- --------- -------------
Net investment income.......................................................................... 0.69 0.67 0.59
Net realized and unrealized gains from investments, futures, options and foreign currency...... 0.40 0.70 0.38
--------- --------- -------------
Net increase from investment operations........................................................ 1.09 1.37 0.97
--------- --------- -------------
Dividends from net investment income........................................................... (0.69) (0.67) (0.52)
Distributions from net realized gains from investments......................................... (0.12) (0.10) (0.01)
--------- --------- -------------
Total dividends and distributions.............................................................. (0.81) (0.77) (0.53)
--------- --------- -------------
Net asset value, end of period................................................................. $ 13.32 $ 13.04 $ 12.44
--------- --------- -------------
--------- --------- -------------
Total investment return (1).................................................................... 8.66% 11.35% 8.15%
--------- --------- -------------
--------- --------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's).............................................................. $ 126,880 $ 75,174 $ 42,550
Ratios of:
Expenses to average net assets, net of fee waivers and expense reimbursements.................. 0.85% 0.85% 0.85%*
Expenses to average net assets, before fee waivers and expense reimbursements.................. 0.94% 1.10% 1.40%*
Net investment income to average net assets, net of fee waivers and expense reimbursements..... 5.49% 5.69% 5.85%*
Net investment income to average net assets, before fee waivers and expense reimbursements..... 5.40% 5.44% 5.30%*
Portfolio turnover............................................................................. 234% 357% 166%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* 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
distributions 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 would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
98
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
MUNICIPAL FIXED INCOME
INVESTMENTS
----------------------------------
FOR THE YEARS
ENDED
JULY 31, FOR THE PERIOD
------------------ ENDED
1998 1997 JULY 31, 1996+
-------- -------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period.................................. $ 12.67 $ 12.32 $ 12.00
-------- -------- -------
Net investment income................................................. 0.58 0.61 0.49
Net realized and unrealized gains from investments.................... 0.02 0.38 0.27
-------- -------- -------
Net increase from investment operations............................... 0.60 0.99 0.76
-------- -------- -------
Dividends from net investment income.................................. (0.57) (0.61) (0.43)
Distributions from net realized gains from investments................ -- (0.03) (0.01)
-------- -------- -------
Total dividends and distributions..................................... (0.57) (0.64) (0.44)
-------- -------- -------
Net asset value, end of period........................................ $ 12.70 $ 12.67 $ 12.32
-------- -------- -------
-------- -------- -------
Total investment return (1)........................................... 4.87% 8.30% 6.38%
-------- -------- -------
-------- -------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)..................................... $ 51,638 $ 34,292 $ 17,765
Ratios of:
Expenses to average net assets, net of fee waivers and expense
reimbursements...................................................... 0.85% 0.85% 0.85%*
Expenses to average net assets, before fee waivers and expense
reimbursements...................................................... 0.93% 1.40% 1.74%*
Net investment income to average net assets, net of fee waivers and
expense reimbursements.............................................. 4.67% 5.08% 4.95%*
Net investment income to average net assets, before fee waivers and
expense reimbursements.............................................. 4.59% 4.53% 4.07%*
Portfolio turnover.................................................... 34% 15% 78%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* 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
distributions 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 would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
99
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
GLOBAL FIXED INCOME
INVESTMENTS
----------------------------------
FOR THE YEARS
ENDED
JULY 31, FOR THE PERIOD
------------------ ENDED
1998 1997 JULY 31, 1996+
-------- -------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period.................................. $ 12.17 $ 12.33 $ 12.00
-------- -------- -------
Net investment income................................................. 0.62 0.64 0.53
Net realized and unrealized gains (losses) from investments and
foreign currency.................................................... (0.03) (0.21) 0.27
-------- -------- -------
Net increase from investment operations............................... 0.59 0.43 0.80
-------- -------- -------
Dividends from net investment income.................................. (0.40) (0.51) (0.46)
Distributions from net realized gains from investments................ (0.11) (0.08) (0.01)
-------- -------- -------
Total dividends and distributions..................................... (0.51) (0.59) (0.47)
-------- -------- -------
Net asset value, end of period........................................ $ 12.25 $ 12.17 $ 12.33
-------- -------- -------
-------- -------- -------
Total investment return (1)........................................... 4.88% 3.54% 6.68%
-------- -------- -------
-------- -------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)..................................... $ 88,838 $ 60,279 $ 38,296
Ratios of:
Expenses to average net assets, net of fee waivers and expense
reimbursements...................................................... 0.95% 0.95% 0.95%*
Expenses to average net assets, before fee waivers and expense
reimbursements...................................................... 1.23% 1.29% 1.61%*
Net investment income to average net assets, net of fee waivers and
expense reimbursements.............................................. 5.10% 5.36% 5.24%*
Net investment income to average net assets, before fee waivers and
expense reimbursements.............................................. 4.82% 5.02% 4.58%*
Portfolio turnover.................................................... 125% 270% 197%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* 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
distributions 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 would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
100
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
LARGE COMPANY VALUE
EQUITY INVESTMENTS
-----------------------------------
FOR THE
FOR THE YEARS ENDED PERIOD
JULY 31, ENDED
-------------------- JULY 31,
1998 1997 1996+
--------- --------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period.......................................................... $ 20.03 $ 14.07 $ 12.00
--------- --------- -------------
Net investment income......................................................................... 0.14 0.11 0.12
Net realized and unrealized gains from investments and futures................................ 1.63 6.61 2.02
--------- --------- -------------
Net increase from investment operations....................................................... 1.77 6.72 2.14
--------- --------- -------------
Dividends from net investment income.......................................................... (0.14) (0.11) (0.05)
Distributions from net realized gains from investments........................................ (1.39) (0.65) (0.02)
--------- --------- -------------
Total dividends and distributions............................................................. (1.53) (0.76) (0.07)
--------- --------- -------------
Net asset value, end of period................................................................ $ 20.27 $ 20.03 $ 14.07
--------- --------- -------------
--------- --------- -------------
Total investment return (1)................................................................... 9.89% 49.13% 17.90%
--------- --------- -------------
--------- --------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)............................................................. $ 266,354 $ 180,807 $ 80,897
Ratios of:
Expenses to average net assets, net of fee waivers and expense reimbursements................. 0.98% 1.00% 1.00%*
Expenses to average net assets, before fee waivers and expense reimbursements................. 0.98% 1.06% 1.40%*
Net investment income to average net assets, net of fee waivers and expense reimbursements.... 0.82% 0.81% 1.22%*
Net investment income to average net assets, before fee waivers and expense reimbursements.... 0.82% 0.75% 0.82%*
Portfolio turnover............................................................................ 34% 46% 38%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* 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
distributions 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 would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
101
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
LARGE COMPANY GROWTH
EQUITY INVESTMENTS
----------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
----------------------- ENDED
1998# 1997 JULY 31, 1996+
---------- ---------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period.................................. $ 19.28 $ 13.27 $ 12.00
---------- ---------- -------
Net investment income (loss).......................................... (0.03) 0.03 0.03
Net realized and unrealized gains from investments.................... 4.79 6.01 1.26
---------- ---------- -------
Net increase from investment operations............................... 4.76 6.04 1.29
---------- ---------- -------
Dividends from net investment income.................................. (0.01) (0.03) (0.02)
Distributions from net realized gains from investments................ (1.04) -- --
---------- ---------- -------
Total dividends and distributions..................................... (1.05) (0.03) (0.02)
---------- ---------- -------
Net asset value, end of period........................................ $ 22.99 $ 19.28 $ 13.27
---------- ---------- -------
---------- ---------- -------
Total investment return (1)........................................... 26.40% 45.61% 10.76%
---------- ---------- -------
---------- ---------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)..................................... $ 275,461 $ 160,334 $ 69,248
Ratios of:
Expenses to average net assets, net of fee waivers and expense
reimbursements...................................................... 1.00% 1.00% 1.00%*
Expenses to average net assets, before fee waivers and expense
reimbursements...................................................... 1.02% 1.05% 1.33%*
Net investment income (loss) to average net assets, net of fee waivers
and expense reimbursements.......................................... (0.14)% 0.22% 0.33%*
Net investment income (loss) to average net assets, before fee waivers
and expense reimbursements.......................................... (0.16)% 0.17% (0.01)%*
Portfolio turnover.................................................... 102% 73% 65%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996
* Annualized
# Sub-Investment advisory functions for this portfolio were transferred
from Chancellor LGT Asset Management, Inc. to Alliance Capital Management
L.P. on November 10, 1997.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions 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 would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
102
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
SMALL/MEDIUM COMPANY VALUE
EQUITY INVESTMENTS
-----------------------------------
FOR THE
FOR THE YEARS ENDED PERIOD
JULY 31, ENDED
-------------------- JULY 31,
1998 1997 1996+
--------- --------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period.......................................................... $ 17.52 $ 12.29 $ 12.00
--------- --------- -------------
Net investment income......................................................................... 0.10 0.12 0.10
Net realized and unrealized gains from investments............................................ 1.14 5.55 0.23
--------- --------- -------------
Net increase from investment operations....................................................... 1.24 5.67 0.33
--------- --------- -------------
Dividends from net investment income.......................................................... (0.13) (0.10) (0.04)
Distributions from net realized gains from investments........................................ (1.24) (0.34) --
--------- --------- -------------
Total dividends and distributions............................................................. (1.37) (0.44) (0.04)
--------- --------- -------------
Net asset value, end of period................................................................ $ 17.39 $ 17.52 $ 12.29
--------- --------- -------------
--------- --------- -------------
Total investment return (1)................................................................... 6.97% 46.99% 2.76%
--------- --------- -------------
--------- --------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)............................................................. $ 183,558 $ 135,047 $ 63,894
Ratios of:
Expenses to average net assets, net of fee waivers and expense reimbursements................. 0.99% 1.00% 1.00%*
Expenses to average net assets, before fee waivers and expense reimbursements................. 1.00% 1.12% 1.51%*
Net investment income to average net assets, net of fee waivers and expense reimbursements.... 0.61% 1.00% 1.07%*
Net investment income to average net assets, before fee waivers and expense reimbursements.... 0.60% 0.88% 0.56%*
Portfolio turnover............................................................................ 42% 39% 30%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* 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
distributions 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 would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
103
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
SMALL/MEDIUM COMPANY GROWTH
EQUITY INVESTMENTS
----------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
----------------------- ENDED
1998 1997# JULY 31, 1996+
---------- ---------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period.................................. $ 14.44 $ 11.20 $ 12.00
---------- ---------- -------
Net investment loss................................................... (0.03) (0.02) 0.00
Net realized and unrealized gains (losses) from investments........... 2.03 3.26 (0.78)
---------- ---------- -------
Net increase (decrease) from investment operations.................... 2.00 3.24 (0.78)
---------- ---------- -------
Dividends from net investment income.................................. -- -- (0.02)
Distributions from net realized gains from investments................ (0.64) -- --
---------- ---------- -------
Total dividends and distributions..................................... (0.64) 0.00 (0.02)
---------- ---------- -------
Net asset value, end of period........................................ $ 15.80 $ 14.44 $ 11.20
---------- ---------- -------
---------- ---------- -------
Total investment return (1)........................................... 14.44% 28.93% (6.55)%
---------- ---------- -------
---------- ---------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)..................................... $ 198,855 $ 125,609 $ 63,364
Ratios of:
Expenses to average net assets, net of fee waivers and expense
reimbursements...................................................... 1.00% 1.00% 1.00%*
Expenses to average net assets, before fee waivers and expense
reimbursements...................................................... 1.03% 1.08% 1.27%*
Net investment loss to average net assets, net of fee waivers and
expense reimbursements.............................................. (0.20)% (0.21)% (0.14)%*
Net investment loss to average net assets, before fee waivers and
expense reimbursements.............................................. (0.23)% (0.29)% (0.41)%*
Portfolio turnover.................................................... 131% 247% 115%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized
# Sub-Investment advisory functions for this portfolio were transferred
from Westfield Capital Management Company, Inc. to Delaware Management
Company, Inc. on December 17, 1996.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions 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 would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
104
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
INTERNATIONAL EQUITY
INVESTMENTS
-----------------------------------
FOR THE
FOR THE YEARS ENDED PERIOD
JULY 31, ENDED
-------------------- JULY 31,
1998 1997 1996+
--------- --------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period.......................................................... $ 15.66 $ 12.79 $ 12.00
--------- --------- -------------
Net investment income......................................................................... 0.16 0.10 0.12
Net realized and unrealized gains from investments and foreign currency....................... 1.20 2.97 0.73
--------- --------- -------------
Net increase from investment operations....................................................... 1.36 3.07 0.85
--------- --------- -------------
Dividends from net investment income.......................................................... (0.16) (0.13) (0.06)
Distributions from net realized gains from investments........................................ (0.32) (0.07) --
--------- --------- -------------
Total dividends and distributions............................................................. (0.48) (0.20) (0.06)
--------- --------- -------------
Net asset value, end of period................................................................ $ 16.54 $ 15.66 $ 12.79
--------- --------- -------------
--------- --------- -------------
Total investment return (1)................................................................... 9.27% 24.30% 7.08%
--------- --------- -------------
--------- --------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)............................................................. $ 164,477 $ 102,979 $ 45,331
Ratios of:
Expenses to average net assets, net of fee waivers and expense reimbursements................. 1.21% 1.35% 1.50%*
Expenses to average net assets, before fee waivers and expense reimbursements................. 1.21% 1.35% 1.81%*
Net investment income to average net assets, net of fee waivers and expense reimbursements.... 1.14% 0.95% 1.35%*
Net investment income to average net assets, before fee waivers and expense reimbursements.... 1.14% 0.95% 1.04%*
Portfolio turnover............................................................................ 56% 55% 25%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* 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
distributions 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 would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
105
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
INTERNATIONAL EMERGING
MARKETS EQUITY INVESTMENTS
----------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
----------------------- ENDED
1998 1997 JULY 31, 1996+
---------- ---------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period.................................. $ 15.60 $ 12.49 $ 12.00
---------- ---------- -------
Net investment income................................................. 0.09 0.06 0.07
Net realized and unrealized gains (losses) from investments and
foreign currency.................................................... (5.23) 3.09 0.44
---------- ---------- -------
Net increase (decrease) from investment operations.................... (5.14) 3.15 0.51
---------- ---------- -------
Dividends from net investment income.................................. (0.05) (0.04) (0.02)
---------- ---------- -------
Net asset value, end of period........................................ $ 10.41 $ 15.60 $ 12.49
---------- ---------- -------
---------- ---------- -------
Total investment return (1)........................................... (32.99)% 25.31% 4.23%
---------- ---------- -------
---------- ---------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)..................................... $ 63,237 $ 54,759 $ 25,481
Ratios of:
Expenses to average net assets, net of fee waivers and expense
reimbursements...................................................... 1.50% 1.50% 1.50%*
Expenses to average net assets, before fee waivers and expense
reimbursements...................................................... 1.79% 2.09% 2.35%*
Net investment income to average net assets, net of fee waivers and
expense reimbursements.............................................. 0.98% 0.63% 0.94%*
Net investment income (loss) to average net assets, before fee waivers
and expense reimbursements.......................................... 0.69% 0.04% 0.08%*
Portfolio turnover.................................................... 51% 39% 22%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* 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
distributions 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 would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
106
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Trustees and Shareholders of
PaineWebber PACE Select Advisors Trust
We have audited the accompanying statement of assets and liabilities of
PaineWebber PACE Select Advisors Trust (comprising, respectively, 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) (the "Trust"),
including the portfolios of investments as of July 31, 1998, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the periods indicated therein. These financial statements
and financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
investments owned as of July 31, 1998 by correspondence with the custodians and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting PaineWebber PACE Select Advisors Trust
at July 31, 1998, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended,
and the financial highlights for each of the indicated periods, in conformity
with generally accepted accounting principles.
[ERNST & YOUNG SIGNATURE]
New York, New York
September 18, 1998
107
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
TAX INFORMATION (UNAUDITED)
We are required by subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of each Portfolio's fiscal year end (July
31, 1998) as to the federal tax status of distributions received by shareholders
during such fiscal year. Accordingly, we are advising you that the following
distributions paid during the fiscal year by the Portfolios were derived from
the following sources:
<TABLE>
<CAPTION>
LONG-TERM LONG-TERM
CAPITAL CAPITAL
NET SHORT-TERM GAINS GAINS DIVIDEND*
INVESTMENT CAPITAL (28% (20% RECEIVED
PER SHARE DATA: INCOME GAINS** RATE) RATE) DEDUCTION
- ------------------------------ ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
PACE Money Market
Investments................. $0.0497 -- -- -- --
PACE Government Securities
Fixed Income Investments.... $0.7163 $0.2035 -- -- --
PACE Intermediate Fixed Income
Investments................. $0.6436 -- -- -- --
PACE Strategic Fixed Income
Investments................. $0.6897 $0.0603 -- $0.0643 --
PACE Municipal Fixed Income
Investments***.............. $0.5730 -- -- -- --
PACE Global Fixed Income
Investments................. $0.4000 $0.1001 $0.0015 $0.0039 --
PACE Large Company Value
Equity Investments.......... $0.1364 $0.4624 $0.4519 $0.4742 45.22%
PACE Large Company Growth
Equity Investments.......... $0.0092 -- $0.6643 $0.3792 99.96%
PACE Small/Medium Company
Value Equity Investments.... $0.1252 $0.7079 $0.1706 $0.3651 29.54%
PACE Small/Medium Company
Growth Equity Investments... -- $0.5839 $0.0309 $0.0269 3.37%
PACE International Equity
Investments................. $0.1603 $0.1632 $0.0061 $0.1490 --
PACE International Emerging
Markets Equity
Investments................. $0.0484 -- -- -- --
</TABLE>
- -------------
* Percentage of ordinary income dividends qualifying for the dividends received
deduction available to corporate shareholders.
** Taxable as ordinary income.
*** The Portfolio's net investment income is tax exempt.
Dividends received by tax-exempt recipients (e.g., IRAs and Keoghs) need not
be reported as taxable income. Some retirement trusts (e.g., corporate, Keogh
and 403(b)(7) plans) may need this information for their annual information
reporting.
Since each Portfolio's fiscal year is not the calendar year, another
notification will be sent with respect to calendar year 1998. Such notification,
which will reflect the amount to be used by calendar year taxpayers on their
federal income tax returns, will be made in conjunction with Form 1099 DIV and
will be mailed in January 1999. Shareholders are advised to consult their own
tax advisers with respect to the tax consequences of their investment in each of
the Portfolios.
SPECIAL INFORMATION FOR PACE INTERNATIONAL EQUITY INVESTMENTS AND PACE
INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
The Portfolios intend to make an election under Internal Revenue Code Section
853 to pass through foreign taxes paid by the Portfolios to its shareholders.
The amount of foreign taxes paid for PACE International Equity Investments and
PACE International Emerging Markets Equity Investments for the fiscal year ended
July 31, 1998, on a per share basis, is $0.03427 and $0.01280, respectively.
Accordingly, shareholders would report this amount as an additional income
dividend on a federal income tax return and would be entitled to a foreign tax
credit, or an itemized deduction, at their option, for this amount in computing
their U.S. income tax liability. Generally, is it more advantageous to claim a
credit rather than to take a deduction.
108
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
TAX INFORMATION (UNAUDITED) (CONCLUDED)
The following tables identify the foreign source income earned and foreign
taxes paid through July 31, 1998 by its source on a per share basis. Since the
Portfolio's fiscal year is not the calendar year, shareholders should refer to
their Form 1099 DIV mailed in January 1999 to determine the amounts to be
included on their respective tax returns for 1998. Shareholders are advised to
consult their own tax advisers with respect to the tax consequences of their
investments in each of the Portfolios.
PACE INTERNATIONAL EQUITY INVESTMENTS
<TABLE>
<CAPTION>
GROSS FOREIGN NET
COUNTRY AMOUNT TAX AMOUNT
<S> <C> <C> <C>
Argentina 0.00100 0.00000 0.00100
Australia 0.00745 0.00049 0.00696
Austria 0.00141 0.00018 0.00123
Belgium 0.00476 0.00071 0.00405
Brazil 0.00625 0.00030 0.00595
Chile 0.00115 0.00040 0.00075
Denmark 0.00284 0.00043 0.00241
Egypt 0.00584 0.00000 0.00584
Finland 0.00231 0.00035 0.00196
France 0.03894 0.00572 0.03322
Germany 0.02073 0.00207 0.01866
Greece 0.00304 0.00000 0.00304
Hong Kong 0.00716 0.00006 0.00710
<CAPTION>
GROSS FOREIGN NET
COUNTRY AMOUNT TAX AMOUNT
<S> <C> <C> <C>
Israel 0.00061 0.00011 0.00050
Italy 0.03179 0.00477 0.02702
Japan 0.01366 0.00216 0.01150
Mexico 0.00283 0.00000 0.00283
Netherlands 0.00689 0.00103 0.00586
New Zealand 0.00043 0.00007 0.00036
Singapore 0.00084 0.00022 0.00062
Spain 0.00569 0.00085 0.00484
Sweden 0.00833 0.00125 0.00708
Switzerland 0.01002 0.00150 0.00852
Taiwan 0.00062 0.00012 0.00050
Turkey 0.00073 0.00000 0.00073
United Kingdom 0.09926 0.01149 0.08777
</TABLE>
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
GROSS FOREIGN NET
COUNTRY AMOUNT TAX AMOUNT
<S> <C> <C> <C>
Argentina 0.00951 0.00001 0.00950
Botswana 0.00181 0.00000 0.00181
Brazil 0.05475 0.00333 0.05142
Chile 0.01468 0.00455 0.01013
China 0.00014 0.00000 0.00014
Croatia 0.00044 0.00000 0.00044
Egypt 0.00156 0.00000 0.00156
Greece 0.00190 0.00000 0.00190
Hong Kong 0.00346 0.00000 0.00346
Hungary 0.00276 0.00017 0.00259
India 0.01218 0.00000 0.01218
Indonesia 0.00081 0.00000 0.00081
Israel 0.00459 0.00109 0.00350
Luxembourg 0.00050 0.00000 0.00050
Malaysia 0.00077 0.00021 0.00056
<CAPTION>
GROSS FOREIGN NET
COUNTRY AMOUNT TAX AMOUNT
<S> <C> <C> <C>
Mauritius 0.00052 0.00000 0.00052
Mexico 0.01997 0.00000 0.01997
Pakistan 0.00930 0.00094 0.00836
Peru 0.00144 0.00000 0.00144
Phillipines 0.00119 0.00030 0.00089
Poland 0.00162 0.00025 0.00137
Portugal 0.00689 0.00121 0.00568
Russia 0.00078 0.00012 0.00066
South Africa 0.02149 0.00000 0.02149
South Korea 0.00259 0.00043 0.00216
Taiwan 0.01981 0.00016 0.01965
Turkey 0.00418 0.00000 0.00418
Venezuela 0.00200 0.00000 0.00200
Zimbabwe 0.00022 0.00003 0.00019
</TABLE>
109
<PAGE>
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