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PAINEWEBBER P A C E-SM-
Personalized Asset Consulting and Evaluation
Going The
Distance
To Meet Your
Financial Needs
Semiannual Report
January 31, 1998
This material is intended for use only by current PACE investors and must be
preceded or accompanied by the current PACE prospectus.
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DEAR PAINEWEBBER PACE-SM- SHAREHOLDER:
We are pleased to provide our semiannual report to you on the PACE Portfolios,
comprising the PaineWebber PACE Select Advisors Trust.
In this report you will find Mitchell Hutchins' summaries of the domestic and
international market environments for the semiannual report period of August 1,
1997 through January 31, 1998. In addition, we summarize the performance of each
PACE Portfolio over the reporting period, with brief commentaries from each of
the PACE investment managers. Please note that the opinions of the managers do
not necessarily represent the opinions of PaineWebber Incorporated or Mitchell
Hutchins Asset Management Inc.
Over all, we are quite pleased with the performance of the PACE Portfolios for
the period covered in this report. We recognize the far-ranging needs of today's
investors and the need for well-planned, well-diversified portfolios. To that
end, the PACE Portfolios offer an array of actively managed funds that can take
advantage of this ever-changing investment environment. Each PACE Portfolio
pursues a specific, well-articulated investment objective, follows a disciplined
investment strategy, and is guided by a leading investment manager carefully
chosen by PaineWebber and Mitchell Hutchins.
We appreciate the opportunity to help you plan for a successful future. If you
have any questions regarding the PACE Program and PaineWebber PACE Select
Advisors Trust, please contact your investment executive.
Sincerely,
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[SIG] [SIG]
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MARGO ALEXANDER BRUCE A. BURSEY
President Senior Vice President
Mitchell Hutchins Asset Management Inc. Managed Accounts Consulting Services
PaineWebber Incorporated
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March 26, 1998
This letter is intended to assist shareholders in understanding how the
portfolios performed during the semi-annual report period ended January 31,
1998, and reflects views at the time this report was prepared. Of course, these
views may change in response to changing circumstances. We encourage you to
consult your investment executive regarding your specific investment objectives.
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INVESTMENT OVERVIEW--DOMESTIC
The time period covered by this semiannual report--August 1, 1997 through
January 31, 1998--was marked by periods of heightened stock market volatility as
record setting new highs were often followed by sell-offs. Through all this, the
stock market, as measured by the S&P 500 Index, ended the period slightly higher
than where it began, up a modest 3.5%.*
During the summer, the specter of rising inflation worried investors,
triggering a sell-off in August. However, after Labor Day, the market quickly
regained its footing when, in September, actual CPI numbers came in lower than
anticipated. This took the pressure off the Federal Reserve (the "Fed") to raise
interest rates and the S&P 500 Index rebounded strongly for the month. In
October, a series of significant events--"Grey Monday," OPEC announcing
increased oil production, and Asian currency and economic implosions--caused a
sharp sell-off in equity markets worldwide, including the US stock market. As
events continued to unfold, investors' awareness of the overall implications of
the Asian crisis increased and the underlying strength of the US stock
market--low inflation, low and declining interest rates, industry consolidation,
mutual fund inflows and high consumer confidence--caused the stock market to
stage a comeback in November. The rally could not be sustained, however, and
volatility returned in December and January.
These events also had significant impact on the US bond market and, after an
initial sell-off, the bond market staged a strong rally throughout the remainder
of the period. As happened in the US stock market, investors' inflationary
concerns caused a bond market sell-off at the beginning of August. The market
rebounded in late August and September when pressure for the Fed to raise
interest rates abated. Then, as a result of the Asian crisis, the US Treasury
market staged a strong "flight to quality" rally in the latter part of the
period. The yield on the 30-year long bond declined by over 60 basis points to
levels approaching 30-year lows. The long end led the market and, therefore, the
Treasury yield curve flattened as yields declined across the curve. In an
environment of benevolent inflation, reports of modest economic growth and
concern regarding the effects of the Asian crisis on the US economy, it appears
that the Fed has adopted a "wait and see" stance. The bond market, as measured
by the Lehman Brothers Government/ Corporate Bond Index, posted a healthy 5.1%*
total return for the period.
INVESTMENT OVERVIEW--GLOBAL
In the global equity markets, Europe was the strongest performing region
during this time period, helped by the flow of funds from the troubled Southeast
Asian markets, declining interest rates, and company restructuring. Japan
continued its slide and investors remained skeptical that a proposed tax cut
would stimulate the economy enough to offset the decrease in exports to its
Asian neighbors. Towards the latter part of the year, Asia's economic and
currency problems ignited selling pressures in many key markets around the
world. As a result, the Morgan Stanley Capital International (MSCI) Europe,
Australia and Far East Index returned -5.7%* for the period covered by this
report. Through its impact on Hong Kong and developed markets, the crisis
affected most emerging markets, particularly Korea, Indonesia, and Thailand. The
Asian situation also caused fears in Latin America, especially Brazil, which
experienced a stock market sell-off and a sharp interest rate hike. Only Mexico
continued to outperform, as strong economic and corporate earnings growth was
maintained.
Global bond market performance in local currency terms was strong during this
time period, with the US bond market in particular benefiting from the growing
perceptions that the Asian crisis could significantly restrain US economic
growth and inflation in 1998. Although strong, European bond markets on balance
underperformed the US market in local currency and US dollar terms. As of this
writing, nearly full convergence of interest rates has occurred among candidates
for participation in the first round of European Economic and Monetary Union
(EMU) in January 1999.
* Source: Frank Russell Company
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PACE MONEY MARKET INVESTMENTS
MANAGED BY MITCHELL HUTCHINS ASSET MANAGEMENT INC., THE PORTFOLIO'S INVESTMENT
OBJECTIVE IS CURRENT INCOME CONSISTENT WITH PRESERVATION OF CAPITAL AND
LIQUIDITY. THE PORTFOLIO INVESTS IN HIGH-QUALITY, US DOLLAR-DENOMINATED MONEY
MARKET INSTRUMENTS WITH MATURITIES OF 13 MONTHS OR LESS. THE PORTFOLIO MAINTAINS
A DOLLAR-WEIGHTED AVERAGE PORTFOLIO MATURITY OF 90 DAYS OR LESS.
INVESTMENT PROCESS
MITCHELL HUTCHINS' FOCUS IS ON QUALITY, DIVERSITY, AND LIQUIDITY. INVESTMENT
CONSIDERATIONS INCLUDE A REVIEW OF INTEREST RATES VIS-A-VIS THE ECONOMIC
ENVIRONMENT, CURRENT SUPPLY AND DEMAND OF MONEY MARKET PRODUCTS, AND A REVIEW OF
CREDIT RISK. SECURITIES SELECTION FOLLOWS AN APPROVED LIST OF TOP-TIER RATED
SECURITIES REVIEWED BY THE FIRM'S CREDIT ANALYSTS.
COMMENTS FROM MITCHELL HUTCHINS ASSET MANAGEMENT INC.
For the six months covered by this report--August 1, 1997 through January 31,
1998--the Portfolio provided investors with a return of 2.67% (exclusive of the
PACE Program Fee), slightly outperforming the 2.57% average return of 90-Day US
Treasury Bills over this period. As of January 31, 1998, the Portfolio's 7-day
yield was 5.24%, and net assets of the Portfolio totaled $21.2 million.
During the period, we maintained the Portfolio's average weighted maturity
approximately 5 to 10 days longer than its peer group.* Due to our forecast that
interest rates will remain relatively stable, we continued to keep the
Portfolio's average maturity slightly longer than the money market fund average
of 65 days (as of January 31)*, which benefited the Portfolio. As always, we
were well diversified among issuers and industries.
Going forward, we expect to maintain our current strategy. We will continue to
seek to enhance the Portfolio's yield, without sacrificing credit quality and
liquidity, by taking advantage of opportunities caused by market volatility.
* Source: IBC Financial Data
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PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
MANAGED BY PACIFIC INVESTMENT MANAGEMENT COMPANY (PIMCO), THE PORTFOLIO'S
INVESTMENT OBJECTIVE IS CURRENT INCOME. THE PORTFOLIO INVESTS PRIMARILY IN US
GOVERNMENT AND AGENCY SECURITIES OF VARYING MATURITIES, AS WELL AS
MORTGAGE-BACKED SECURITIES, WITH A DOLLAR-WEIGHTED AVERAGE PORTFOLIO DURATION OF
BETWEEN TWO AND SEVEN YEARS.
INVESTMENT PROCESS
PIMCO'S INVESTMENT PROCESS BEGINS WITH A MACROECONOMIC ANALYSIS OF SECULAR AND
CYCLICAL INTEREST RATE TRENDS. THE PORTFOLIO'S DURATION IS ESTABLISHED BASED ON
PIMCO'S EXPECTATIONS FOR CHANGES IN INTEREST RATES. THEN, PIMCO EVALUATES THE
YIELD CURVE'S POTENTIAL FOR STEEPENING OR FLATTENING. INDIVIDUAL ISSUES ARE
CHOSEN FOR THEIR RELATIVE VALUE.
COMMENTS FROM PACIFIC INVESTMENT MANAGEMENT COMPANY
For the time period covered by this report--August 1, 1997 through January 31,
1998--the Portfolio's return of 4.44% (exclusive of the PACE Program Fee)
essentially matched the Lehman Brothers Mortgage Backed Securities Index (the
"Index") return of 4.45%. As of January 31, 1998, the Portfolio's net assets had
increased to $131.4 million.
Throughout the period, the Portfolio's longer-than-Index duration (2.24 years
for the Portfolio vs. 2.09 years for the Index) enhanced relative returns as
bond markets rallied and interest rates declined across the yield curve. The
Portfolio's exposure to the intermediate and shorter segments of the curve was
increased during the period, which hindered performance as the yield curve
flattened and longer-term maturities outperformed shorter-term maturities. The
Portfolio benefited from holding select mortgage issues that were less sensitive
to prepayment risk in a declining rate environment than the overall mortgage
sector.
Our expectation is that the Asian crisis will continue to unfold and that its
impact on the US economy will be greater than originally envisioned. We
anticipate the US economy to slow somewhat from its 1997 pace with GDP growth
averaging 2.5%-3.0%. This slowdown will result primarily from reduced investment
spending and weakened net exports. The economy will avoid stalling as a
confident consumer and steady spending drives the economy forward. Inflation
will decline to new lows under pressure from falling import and commodity
prices, lower production costs of US firms manufacturing in Asia, and reduced
pricing power of US manufacturers. We expect corporate profits will come under
increasing pressure from rising wage costs and stiff foreign competition.
Worldwide excess capacity in manufacturing will begin to depress US investment
spending.
Given these expectations, we will target Portfolio duration about 0.5 years
longer than that of the Index to take advantage of lower interest rates. We will
focus the Portfolio's maturity mix at the intermediate segment of the yield
curve where we can realize better price performance characteristics, especially
if the Fed eases slightly during the year. The Portfolio will remain
concentrated in mortgages, with emphasis focused in lower prepayment sensitive
issues. We will also selectively acquire asset-backed securities collateralized
by auto, home loan, and credit card receivables as we view these as attractive
cash equivalent holdings.
4
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PACE INTERMEDIATE FIXED INCOME INVESTMENTS
MANAGED BY PACIFIC INCOME ADVISERS, INC., THE PORTFOLIO'S INVESTMENT OBJECTIVE
IS CURRENT INCOME, CONSISTENT WITH REASONABLE STABILITY OF PRINCIPAL. THE
PORTFOLIO INVESTS IN FIXED INCOME SECURITIES WITH A DOLLAR-WEIGHTED AVERAGE
PORTFOLIO DURATION OF BETWEEN TWO AND FOUR AND ONE-HALF YEARS.
INVESTMENT PROCESS
PACIFIC INCOME ADVISERS, INC. FOCUSES ON YIELD CURVE ANALYSIS AND ACTIVE
SECTOR ROTATION, OVERWEIGHTING OR UNDERWEIGHTING SECTORS BASED ON A RISK/REWARD
ASSESSMENT AND ANTICIPATION OF CHANGING YIELD CURVE SHAPES. THE MANAGER UTILIZES
A PROPRIETARY MODEL TO IDENTIFY SECURITIES THAT ARE UNDERVALUED ON A
RISK-ADJUSTED BASIS.
COMMENTS FROM PACIFIC INCOME ADVISERS, INC.
For the time period covered by this report--August 1, 1997 through January 31,
1998--the Portfolio provided investors with a total return of 4.18% (exclusive
of the PACE Program Fee), which was in line with the Lehman Brothers
Intermediate-Term Government/Corporate Index (the "Index") return of 4.16%. As
of January 31, 1998, net assets of the Portfolio had increased to $84.8 million.
The Portfolio's duration strategy during the period had a neutral impact on
performance. In August and September, the Portfolio's duration was longer than
the benchmark's, which detracted from performance during the month of August and
aided performance in September. During the fourth quarter of 1997, we tactically
reduced duration as the yield curve flattened, which was neutral to slightly
negative for the Portfolio's performance. During the month of January, we
extended duration to equal the benchmark's (3.2 years) as the yield curve
steepened, which benefited performance.
Throughout the period, we maintained the Portfolio's underweighting in
corporate bonds. This contributed to performance as corporate bonds experienced
one of their worst quarters due to widening spreads in response to the Southeast
Asian market turmoil. We remained overweighted in mortgage-backed securities
through the end of 1997, which also contributed to performance since
mortgage-backed securities outperformed Treasury securities on a duration-
adjusted basis. In January, we selectively reduced the Portfolio's allocation to
mortgage-backed securities because some holdings within this sector became
overvalued on a risk-adjusted basis.
We continue to believe that the positive fundamentals of the bond market
remain intact going forward. There appears to be minimal inflationary pressures
as a result of global competition and productivity increases. The balanced
budget agreement is a long-term positive for the bond market since the supply of
US Treasuries should decrease. In addition, the short-term outlook is also
favorable due to the possibility that the US economy will slow down from its
current pace and that the Federal Reserve's next move might be to ease credit in
order to avoid potential deflationary pressures. Asset allocation moves out of
Southeast Asian markets and into US Treasuries should also provide the market
with upside potential. The spreads of mortgage-backed securities should come
under pressure as falling interest rates should encourage homeowners to
refinance, causing prepayments to increase.
5
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PACE STRATEGIC FIXED INCOME INVESTMENTS
MANAGED BY PACIFIC INVESTMENT MANAGEMENT COMPANY (PIMCO), THE PORTFOLIO'S
INVESTMENT OBJECTIVE IS TOTAL RETURN CONSISTING OF INCOME AND CAPITAL
APPRECIATION. THE PORTFOLIO INVESTS IN FIXED INCOME SECURITIES OF VARYING
MATURITIES WITH A DOLLAR-WEIGHTED AVERAGE PORTFOLIO DURATION OF BETWEEN THREE
AND EIGHT YEARS. PORTFOLIO HOLDINGS WILL BE INVESTED IN AREAS OF THE BOND MARKET
(BASED ON QUALITY, SECTOR, COUPON, OR MATURITY) WHICH PIMCO BELIEVES TO BE
RELATIVELY UNDERVALUED.
INVESTMENT PROCESS
PIMCO'S INVESTMENT PROCESS BEGINS WITH A MACROECONOMIC ANALYSIS OF SECULAR AND
CYCLICAL INTEREST RATE TRENDS. THE PORTFOLIO'S DURATION IS ESTABLISHED BASED ON
PIMCO'S EXPECTATIONS FOR CHANGES IN INTEREST RATES. THEN, PIMCO EVALUATES THE
YIELD CURVE'S POTENTIAL FOR STEEPENING OR FLATTENING. INDIVIDUAL ISSUES ARE
CHOSEN FOR THEIR RELATIVE VALUE.
COMMENTS FROM PACIFIC INVESTMENT MANAGEMENT COMPANY
For the time period covered by this report--August 1, 1997 through January 31,
1998--the Portfolio's 5.70% return (exclusive of the PACE Program Fee)
outperformed the Lehman Brothers Government/Corporate Bond Index (the "Index")
return of 5.12%. As of January 31, 1998, net assets of the Portfolio had
increased to $100.3 million.
Throughout the period, the Portfolio's longer-than-Index duration (5.7 years
for the Portfolio vs. 5.3 years for the Index) enhanced returns as bond markets
rallied and interest rates declined across the yield curve. The Portfolio's
maturity mix, or exposure to the yield curve, added to performance since the
Portfolio had significant exposure from the three-year segment out to the long
end, and interest rates fell roughly 60 basis points across these segments. The
mortgage sector performed well on a duration-adjusted basis versus other sectors
of the bond market during the period. The Portfolio benefited from an overweight
of this sector and holding select mortgage issues which were less sensitive to
prepayment risk in a declining rate environment. During the period, the Asian
turmoil caused corporate bond credit spreads to widen and also adversely
impacted emerging market debt. Therefore, the Portfolio benefited from its
underweighting of corporate bonds, however, the Portfolio's positions in
emerging market debt, albeit limited, detracted from performance.
We expect the Asian crisis to continue to unfold and have a greater impact on
the US economy than has been evident to date. We anticipate the US economy to
slow somewhat from its 1997 pace with GDP growth averaging 2.5%-3.0%. This
slowdown will result primarily from reduced investment spending and weakened net
exports. The economy will avoid stalling as a confident consumer and steady
spending drives the economy forward. Inflation will decline further under
pressure from falling import and commodity prices, lower production costs of US
firms manufacturing in Asia, and reduced pricing power of US manufacturers. We
expect corporate profits will come under increasing pressure from rising wage
costs and stiff foreign competition. Worldwide excess capacity in manufacturing
will begin to depress US investment spending. We feel that the Fed will closely
watch the Asian crisis impact on the US economy and could lower rates 25-50
basis points by the third quarter should the impact be significant.
Based on our forecasts, we will target Portfolio duration about 0.5 years
longer than that of the Index to benefit from lower interest rates. We will
focus the Portfolio's maturity mix at the intermediate segment of the yield
curve where we can realize better price performance characteristics, especially
if the Fed eases slightly during the year. The Portfolio will focus on less
prepayment sensitive mortgages, such as seasoned ARMs, lower coupon
pass-throughs and other mortgage products designed to protect the investor from
prepayment risk. We will liquidate higher coupon mortgages and use the proceeds
to increase the Portfolio's Treasury security holdings to benefit from
investors' flight to quality and to lengthen the Portfolio's duration. As we
anticipate that corporate profits will slow and spreads versus Treasury
securities will widen, we will continue to underweight this sector. We will
selectively hold non-dollar securities, however, since real interest rates
around the world are fairly similar, we currently see less value in this sector.
Emerging market holdings will comprise a small percentage of the Portfolio. We
may view a spike in the Asian crisis as a buying opportunity and slightly
increase our emerging market positions. However, we will focus in those
countries which are better insulated from the effects of the turmoil.
6
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PACE MUNICIPAL FIXED INCOME INVESTMENTS
MANAGED BY MORGAN GRENFELL CAPITAL MANAGEMENT, INCORPORATED, THE PORTFOLIO'S
INVESTMENT OBJECTIVE IS HIGH CURRENT INCOME EXEMPT FROM FEDERAL INCOME TAX. THE
PORTFOLIO INVESTS IN GENERAL OBLIGATION, REVENUE, AND PRIVATE ACTIVITY BONDS AND
NOTES, THE INTEREST ON WHICH IS EXEMPT FROM FEDERAL INCOME TAX, WITH A
DOLLAR-WEIGHTED AVERAGE PORTFOLIO DURATION OF BETWEEN THREE AND SEVEN YEARS.
INVESTMENT PROCESS
MORGAN GRENFELL SEEKS TO PROVIDE CONSISTENT RETURNS WITH LOW VOLATILITY BY
FOCUSING ON OPTIMAL ISSUE SELECTION AND NOT ATTEMPTING TO FORECAST INTEREST RATE
MOVES. THE PORTFOLIO IS CONSTRUCTED OF HIGH-QUALITY SECURITIES ACROSS ALL
MATURITIES SO THAT ITS AVERAGE DURATION IS CLOSE TO THAT OF ITS BENCHMARK INDEX.
ISSUES WITH FEDERAL GOVERNMENT BACKING, MORTGAGE COLLATERAL, AND OTHER CREDIT
ENHANCEMENTS ARE PREFERRED, WITH A LIMITED INVESTMENT IN REVENUE AND GENERAL
OBLIGATION ISSUES. GREATER EMPHASIS IS PLACED ON THE ISSUER'S ABILITY TO PAY
PRINCIPAL AND INTEREST THAN ON ISSUE SIZE.
COMMENTS FROM MORGAN GRENFELL CAPITAL MANAGEMENT, INCORPORATED
For the time period covered by this report--August 1, 1997 through January 31,
1998--the Portfolio had a total return of 2.95% (exclusive of the PACE Program
Fee), which was essentially in line with the Lehman Brothers Municipal Five-Year
Index (the "Index") return of 3.01%. As of January 31, 1998, net assets of the
Portfolio had grown to $44.3 million.
Three key forces drove the bond markets higher during the period: benevolent
inflation data, reports of stable growth and the decline in the Asian markets.
Concerned the Asian crisis will negatively impact US economic growth, investors
perceived that the Federal Reserve leans toward easing. As a result, the US
Treasury market experienced a strong "flight to quality" rally throughout the
latter half of this period to levels approaching 30-year lows. Within this
environment, the municipal market also traded higher, although it lagged the
Treasury market. Long maturities led the municipal rally as yields declined
across the curve. The municipal yield curve flattened by approximately 30 basis
points.
Throughout the period, yield spreads between high-quality and low-quality
securities continued to be narrow. We remain steadfast in our belief that
investors are not being adequately compensated for potential default risk.
Consequently, the Portfolio continued to emphasize high-quality municipal bonds,
such as AAA-rated prerefunded securities--bonds for which the issuer has floated
a second bond offering and is holding assets to pay off the originally issued
bond at the call date. As interest rates declined during the period, the
Portfolio's housing bond holdings held back performance as the risk of
prepayments in this sector rose, making these bonds less attractive.
Going forward, if turmoil continues in Asia, threatening US growth, the
Federal Reserve will most likely help drive rates lower. Despite the 30-year low
in interest rates, investors might begin to reallocate their stock assets into
the bond market based on this scenario. In our view, municipals are undervalued
relative to US Treasuries based on their narrow yield spreads. Eventually, this
yield relationship will widen, benefiting municipal bondholders.
7
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PACE GLOBAL FIXED INCOME INVESTMENTS
MANAGED BY ROGGE GLOBAL PARTNERS PLC, THE PORTFOLIO'S INVESTMENT OBJECTIVE IS
HIGH TOTAL RETURN. THE PORTFOLIO INVESTS IN HIGH-GRADE FIXED INCOME SECURITIES
ISSUED BY DOMESTIC AND FOREIGN GOVERNMENTS AND SUPRANATIONAL ENTITIES AND
PRIVATE ISSUERS LOCATED OVERSEAS, WITH A DOLLAR-WEIGHTED AVERAGE PORTFOLIO
DURATION OF BETWEEN FOUR AND EIGHT YEARS.
INVESTMENT PROCESS
ROGGE GLOBAL PARTNERS BELIEVES THAT, OVER TIME, FINANCIALLY HEALTHY COUNTRIES
PRODUCE THE HIGHEST BOND AND CURRENCY RETURNS. THEY USE A TOP-DOWN FUNDAMENTAL
APPROACH TO IDENTIFY RELATIVE VALUE ACROSS COUNTRIES. RATINGS BASED ON THIS
ANALYSIS ALLOW THEM TO FORECAST EXPECTED CHANGES IN INTEREST AND EXCHANGE RATES
OVER A 12-MONTH HORIZON. AN OPTIMIZATION MODEL IS THEN USED AS A TOOL TO HELP
DETERMINE COUNTRY/CURRENCY AND DURATION POSITIONS.
COMMENTS FROM ROGGE GLOBAL PARTNERS PLC
For the time period covered by this report--August 1, 1997 through January 31,
1998--the Portfolio's total return of 3.20% (excluding the PACE Program Fee) was
essentially in line with the Salomon Brothers World Government Index (the
"Index") return of 3.28%. The Portfolio's net assets as of January 31, 1998 had
increased to $75.1 million.
During this period, the Portfolio was helped by country selection and duration
position. First, we were overweighted in two of the top performing countries,
the US and UK, while we were underweighted in Japan, which performed poorly.
However, we were disappointed by returns in Canada, where rate increases by the
Bank of Canada caused Canadian Government issues to lag, and, therefore, our
overweighted Canadian position had a moderately negative impact on the
Portfolio. The second major source of added value was the Portfolio's
longer-than-Index duration position maintained throughout the period (5.7 years
for the Portfolio vs. 5.1 years for the Index as of January 31, 1998), which
reflects our view that global inflation will remain subdued for some time to
come. This disinflationary trend was strengthened by the Asian financial crisis.
The Portfolio's overweight in yen, the Deutschemark and the Canadian dollar
detracted from returns during the period as the US dollar strengthened in
reaction to sustained global volatility, particularly in the Southeast Asian
region.
Looking forward, we believe that the worldwide disinflation scenario will
continue to unfold. The Southeast Asian crisis is forecast to reduce world GDP
by 1% or more which should, in turn, keep interest rates lower than they would
otherwise have been in the US and Europe. In addition, we see global inflation
held in check by increased global trade and competition for market share
combined with responsible fiscal and monetary policy on the part of most
nations. Therefore, those countries whose inflation expectations have been high,
such as the US and UK, should produce the best returns as inflation forecasts
are reduced. As the year progresses, we expect that clarification of the final
details of European Economic and Monetary Union ("EMU"), scheduled to occur in
1999, will bring a strong bid to the central European markets. The Japanese bond
market remains relatively unattractive to us since both nominal and real
Japanese yields are at historic lows. In addition, we believe that there is a
high probability of further Japanese government spending initiatives, which will
mean more government borrowing, if not looser monetary policy.
8
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PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
MANAGED BY BRINSON PARTNERS, INC., THE PORTFOLIO'S INVESTMENT OBJECTIVE IS
CAPITAL APPRECIATION AND DIVIDEND INCOME. THE PORTFOLIO INVESTS IN EQUITY
SECURITIES THAT, IN BRINSON'S OPINION, ARE UNDERVALUED. UNDER NORMAL CONDITIONS,
AT LEAST 65% OF THE PORTFOLIO'S TOTAL ASSETS WILL BE INVESTED IN COMMON STOCKS
OF COMPANIES WITH TOTAL MARKET CAPITALIZATION OF $2.5 BILLION OR GREATER.
INVESTMENT PROCESS
BRINSON PARTNERS' PHILOSOPHY INCORPORATES BOTH TOP-DOWN AND BOTTOM-UP
ELEMENTS. BRINSON PARTNERS LOOKS FOR UNDERVALUED ISSUES IN THE CONTEXT OF AN
OVERALL MACROECONOMIC AND MARKET OUTLOOK. FUNDAMENTAL ANALYSIS IS CONDUCTED BY
THE FIRM'S INDUSTRY ANALYSTS ON A UNIVERSE OF 700 STOCKS. THE RESULTS OF THEIR
GROWTH AND CASH FLOW PROJECTIONS ARE INCORPORATED INTO A PROPRIETARY VALUATION
MODEL. THIS MODEL AIDS IN THE CALCULATION AND RANKING OF SECURITIES. THESE
QUANTITATIVE TOOLS, IN COMBINATION WITH THE JUDGMENT OF SENIOR INVESTMENT
PROFESSIONALS, DETERMINE WHICH SECURITIES ARE INCLUDED IN THE PORTFOLIO.
COMMENTS FROM BRINSON PARTNERS, INC.
For the time period covered by this report--August 1, 1997 through January 31,
1998--the Portfolio returned -0.14% (exclusive of the PACE Program Fee), which
significantly underperformed the Russell 1000 Value Index (the "Index") return
of 5.32%. During this time period, the Portfolio's net assets grew to $215.1
million. It's top five sector allocations as of January 31, 1998 were heathcare
(14.0% of the Portfolio), technology (9.7%), consumer non-durables (8.8%),
services* (8.5%), and financial/non-banks (6.7%).
Industry exposures within the Portfolio had a neutral effect on performance
during this period. The Portfolio's overweight in healthcare and underweight in
energy were the most positive contributors to performance. Energy stocks traded
off significantly due to a severe decline in oil prices and, therefore, the
Portfolio's energy sector underweight was beneficial to results. However, these
positive results were mostly offset by the negative effects of the Portfolio's
underweight in telephone utilities and overweight in railroads. The Portfolio's
technology exposure was overall neutral to performance and select technology
security results were mixed.
In addition, the Portfolio was minimally weighted in the very large and very
high quality issues that have come to dominate the market in recent years, and
which performed strongly in the last three months of the calendar year. In
reaction to the turmoil in Southeast Asia, the US stock market environment was
strongly influenced by a "flight to quality" rationale on the part of investors.
Thus the strongest relative performance was posted by the largest capitalization
issues in the market. Our analysts recognize the strong products, capable
managements and high worldwide market share positions that characterize most of
these companies, and they have taken these factors into account in formulating
their future estimates of profitability and growth. However, based on their
work, not only did we find these stocks to be relatively overvalued throughout
1997, but they are currently at the highest level of overvaluation we have
observed since the inception of our valuation methodology in 1981.
The Portfolio experienced some stock specific weakness, particularly in the
fourth quarter. Investors sold stocks with exposure to Southeast Asia, notably
in October, such as Federal Express Corp. (transportation) (3.3% of the
Portfolio's net assets as of January 31, 1998), Xerox Corp. (technology) (4.8%),
Lockheed Martin Corp. (aerospace and defense) (4.3%) and Corning Inc.
(capital/producer goods) (2.4%). We continue to hold these issues in the
Portfolio because they are attractively priced relative to their intrinsic
value, even with slower growth assumptions for Asia incorporated into our
analysis. Additionally, First Data Corp. (services) (2.2%) and Seagate
Technology Inc. (technology) (0.6%) were poor performers for the period. First
Data Corp. rebounded in January and we continue to hold it in the Portfolio
given the sound fundamentals of its core businesses and management's strategic
plans. Stocks that did well during the period included the drug stocks
(Schering-Plough Corp. (3.4%), Alza Corp. (1.0%), Allergan Inc. (1.0%), and
Forest Labs Inc. (0.8%)), EMC Corp. (technology) (2.7%), and the regional banks
(First Security Corp. (0.3%), Comerica (0.8%), and US Bancorp (1.9%)).
Looking ahead, the Portfolio maintains an overweighted position in stock with
traditional measures of value and an underweighted position in momentum stocks
and securities with foreign earnings exposure. With respect to the latter,
9
<PAGE>
we believe currency effects will continue to impede earnings comparisons for
many multinational companies. The Portfolio is underweighted in banks and
thrifts and miscellaneous finance. We recently reduced our successful overweight
in banks, reflecting our view that industry fundamentals seem to be
deteriorating even for banks with limited emerging market exposure. We continue
to maintain an underweight in telephone utilities where we believe that new
technology and intensifying competition will pressure profitability. We also
maintain an underweight in the largest capitalization securities that dominate
the Index due to unattractive valuations. Our overweight in the healthcare
sector reflects our view that healthcare is where revenue growth is likely to
continue to be faster than the economy.
* Services include: computer services, data processing, financial and
entertainment
10
<PAGE>
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
MANAGED BY ALLIANCE CAPITAL MANAGEMENT L.P., THE PORTFOLIO'S OBJECTIVE IS
CAPITAL APPRECIATION. THE PORTFOLIO INVESTS IN EQUITY SECURITIES OF COMPANIES
THAT, IN ALLIANCE'S OPINION, ARE CHARACTERIZED BY AN EARNINGS GROWTH RATE FASTER
THAN THAT OF THE AVERAGE GROWTH RATE OF THE COMPANIES INCLUDED IN THE S&P 500
INDEX. UNDER NORMAL CONDITIONS, AT LEAST 65% OF TOTAL ASSETS WILL BE INVESTED IN
COMMON STOCKS OF COMPANIES WITH TOTAL MARKET CAPITALIZATION OF $2.5 BILLION OR
GREATER AT THE TIME OF PURCHASE.
INVESTMENT PROCESS
ALLIANCE CAPITAL MANAGEMENT L.P. FOLLOWS ITS DISCIPLINED GROWTH STRATEGY IN
MANAGING THE PORTFOLIO, WHICH IS BASED ON ALLIANCE'S QUANTITATIVE SCORING SYSTEM
FOR STOCK SELECTION. EACH STOCK IN ALLIANCE'S RESEARCH UNIVERSE IS RANKED BASED
ON RESEARCH ANALYSTS' INVESTMENT OPINION AND SIX MEASURES OF FUNDAMENTAL
EARNINGS GROWTH AND VALUATION. THE PORTFOLIO IS NORMALLY CONCENTRATED IN THE TOP
30% OF THE RESEARCH UNIVERSE AS RANKED BY THIS STOCK SELECTION PROCESS. THIS
PROCESS SEEKS TO IDENTIFY THE BEST COMBINATION OF STRONG RELATIVE EARNINGS
GROWTH AND REASONABLE VALUATION.
COMMENTS FROM ALLIANCE CAPITAL MANAGEMENT L.P.
For the time period covered by the report--August 1, 1997 through January 31,
1998--the Portfolio returned 2.15% (exclusive of the PACE Program Fee),
underperforming the Russell 1000 Growth Index return of 3.28%. On November 10,
1997, Alliance Capital Management L.P. assumed management of the Portfolio,
replacing Chancellor LGT Asset Management, Inc. In the first two complete months
that Alliance Capital Management has managed the Portfolio (December 1, 1997
through January 31, 1998), the Portfolio returned 4.71% (exclusive of the PACE
Program Fee), outperforming the Russell 1000 Growth Index return of 4.14%. As of
January 31, 1998, the Portfolio's net assets had increased to $199.3 million,
and its top five sector allocations were in technology (20.0% of the Portfolio),
finance (16.0%), consumer staples (15.6%), healthcare (14.3%), and consumer
services (12.6%).
In the first several days after Alliance Capital Management assumed
responsibility, approximately 60% of the Portfolio was sold and reinvested to
align it with Alliance's Disciplined Growth Strategy. As is indicated in the
preceding paragraph, approximately two-thirds of the Portfolio is invested in
technology, finance, consumer staples and healthcare. During December 1997 and
January 1998, healthcare was the best performing sector, most likely reflecting
investors' desire for earnings visibility during the uncertainty created by the
Asian disruption. In addition, investors' concerns regarding the impact of Asian
events on multinational companies adversely impacted technology, consumer
staples, and finance. The Portfolio, however, held meaningful positions in
several companies within these lagging sectors which, in fact, outperformed the
Russell 1000 Growth Index for the period, specifically Cisco Systems, Inc. (4.3%
of the Portfolio's net assets as of January 31, 1998), Dell Computer Corp.
(2.1%) and Solectron Corp. (2.9%) in the technology sector, Colgate-Palmolive
Co. (2.3%) and Kroger Co. (2.0%) in consumer staples, and American International
Group Inc. (2.0%) and MBNA Corp. (2.1%) in the financial services sector.
Additional strong performers were Tyco International Ltd. (3.2%), Walt Disney
Co. (2.4%), Lucent Technologies Inc. (2.2%), Worldcom Inc. (2.4%) and Sealed Air
Corp. (1.6%). The market continued to rotate vigorously and, after dramatic
underperformance in December, technology recovered strongly in January.
Going forward, our outlook for the US economy is constructive. We believe the
rate of GDP growth in 1998 will slow to 2.5% or less, reflecting slower consumer
spending and sluggish exports. This outlook is reinforced by the collapse of
several emerging Asian markets. Inflation is remarkably low. The core PPI
(Producer Price Index, used to measure prices at the producer level) data showed
the weakest results on record: down 0.1% for the month of December 1997 (vs. the
month of November) and up only 0.1% versus December of 1996. Interest rates are
likely to benefit from slow growth and low inflation as well as from increased
demand for US Treasury securities resulting from chaos in Southeast Asia.
With regard to events in Asia, the impact of these developments on the US
economy and on corporations probably will not be understood for several
quarters. Although Asian trade is a small percentage of our global exports, the
strong US dollar will impede export growth to all world markets. The
implications for US corporate profits will vary by company, certainly, but
realistically we must expect virtually no pricing power and, therefore, slower
revenue and profit growth. These observations suggest a slowdown in capital
spending both domestically and abroad. Despite this sobering
11
<PAGE>
list of concerns, we believe the globalization and deregulation of industries
and markets remain intact. This secular trend offers exceptional opportunities
for multinational companies which are financially strong and competitively
positioned. In that regard, US companies stand out as global leaders, able to
capitalize on such opportunities.
This year will be challenging, but we believe strong companies will be even
stronger competitively at year end. While earnings growth will likely become
more challenging, valuation levels appear reasonable in the context of current
interest rate levels and historical precedent. Our investment strategy remains
focused on individual stock selection, seeking to build a portfolio of
well-managed companies with superior growth prospects in their respective
markets, and trading at modest relative valuation premiums to the overall
market. We will amend individual holdings as fundamentals demand. Thus far,
there has been little change in Portfolio holdings since our initial investment
positioning in November.
12
<PAGE>
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
MANAGED BY BRANDYWINE ASSET MANAGEMENT, INC., THE PORTFOLIO'S INVESTMENT
OBJECTIVE IS CAPITAL APPRECIATION. THE PORTFOLIO INVESTS IN EQUITY SECURITIES
THAT, IN BRANDYWINE'S OPINION, ARE UNDERVALUED OR OVERLOOKED IN THE MARKETPLACE
AT THE TIME OF PURCHASE, WHICH GENERALLY HAVE BELOW-MARKET AVERAGE
PRICE-TO-EARNINGS RATIOS. UNDER NORMAL CONDITIONS, AT LEAST 65% OF THE
PORTFOLIO'S TOTAL ASSETS WILL BE INVESTED IN COMMON STOCKS OF COMPANIES WITH
TOTAL MARKET CAPITALIZATION OF LESS THAN $2.5 BILLION.
INVESTMENT PROCESS
BRANDYWINE FIRST NARROWS THE SMALL COMPANY UNIVERSE TO APPROXIMATELY 650 SMALL
CAPITALIZATION VALUE STOCKS THROUGH THE USE OF THREE QUANTITATIVE SCREENING
CRITERIA: POSITIVE TRAILING 12-MONTH OPERATING EARNINGS; THE LOWEST
PRICE-TO-EARNINGS QUARTILE BASED ON THE TRAILING 12-MONTH OPERATING EARNINGS;
AND MARKET CAP GREATER THAN $10 MILLION BUT LOWER THAN MEDIAN CAPITALIZATION OF
THE NEW YORK STOCK EXCHANGE. A FUNDAMENTAL REVIEW OF EACH STOCK FURTHER NARROWS
THE LIST BY EXCLUDING STOCKS FOR THE FOLLOWING: ADJUSTMENTS TO EARNINGS THAT
ELIMINATE NON-OPERATING GAINS, THUS RAISING THE STOCK'S PRICE-TO-EARNINGS RATIO
ABOVE THE LOWER QUARTILE; PRE-ANNOUNCED SIGNIFICANT EARNINGS CHANGES, WHICH WHEN
FORMALLY REPORTED WILL RAISE THE STOCK'S PRICE-TO-EARNINGS RATIO; STRONG RECENT
PRICE GAINS; OR SEVERE OR SUDDEN FUNDAMENTAL DETERIORATION.
COMMENTS FROM BRANDYWINE ASSET MANAGEMENT, INC.
For the time period covered by this report--August 1, 1997 through January 31,
1998--the Portfolio's 9.31% return (exclusive of the PACE Program Fee)
outperformed the Russell 2500 Value Index (the "Index") return of 7.77%. As of
January 31, 1998, the Portfolio's net assets had increased to $170.8 million.
The top five sector allocations as of January 31, 1998 were in consumer
cyclicals (27.5% of the Portfolio), financials (23.4%), basic materials (15.0%),
capital goods (10.0%), and utilities (9.8%).
Small caps outperformed large caps by a wide margin in the first half of the
period. The largest of the S&P 500 Index stocks had led the market the last
three years and had achieved high valuations on expectations that the companies
would continue to deliver consistent growth. However, in August, several of
these companies pre-announced that earnings would be below expectations.
Meanwhile, fundamentals for the small caps generally remained solid. Therefore,
small cap stocks did well in August and September as investors shifted assets
from large caps into small caps. However, as the Asian economic problems
intensified later in the year, investor focus once again swung toward large cap
stocks. These stocks benefited from investors' belief that large cap stocks
could provide stable earnings in troubled times, and from the shift of assets
out of Asia and developing countries into the most liquid US stocks.
The Portfolio's strong performance versus the Index during this period is
attributable to the returns in several sectors. Financials have been among the
strongest performers throughout the year. Despite select sales in this sector as
certain stocks reached our sell targets, we still retained significant weighting
in the group. In mid-1997, we began reducing our technology exposure following
strong performance in these holdings in late 1996 and early 1997. As the Asian
economic crisis negatively impacted technology stocks, our low weighting versus
the Index helped the Portfolio's defensive behavior in a volatile market. Also,
since we had eliminated those technology stocks that had moved up the most and
achieved the highest valuations, our technology holdings fell less than did
those in the Index. Utilities are the third group that significantly benefited
the Portfolio's relative performance. Utilities had continually lagged the
market earlier in 1997 and had become increasingly undervalued. We steadily
increased our holdings in this sector through the prior few quarters. These
stocks performed extremely well during the violent market downdrafts in the
period and rallied strongly late in 1997 as interest rates fell below 6.0%.
Within the Portfolio, we have significantly reduced our financial holdings, as
many of these stocks have significantly increased in valuation. Intense
consolidation in the banking, brokerage, and insurance fields coupled with the
decline in Treasury yields led to strong returns in this sector. We have also
decreased our holdings of utility stocks since they have also increased in
valuation due to the decline in interest rates. In terms of the technology
sector, although many of these stocks have had their prices hit hard stemming
from events in Asia, we have cautiously added to our technology weighting. Our
caution stems from the fact that many of these companies are experiencing sharp
profit declines. We have begun making additions to the Portfolio in the consumer
non-durable area, such as restaurants, and the retail segment as these stocks
have lagged the market.
13
<PAGE>
Our economic outlook continues to anticipate stable growth and low inflation.
While this provides a positive environment for equities, many larger-cap
securities are already priced at levels that include very high expectations.
Small stocks, particularly in the value portion of the market, have more
reasonable valuations. In addition, smaller companies generally face less
exposure to economic influences outside the US. Thus, smaller stocks should
perform well in this period of international turmoil, as larger companies are
impacted by problems in Asia and other parts of the world.
14
<PAGE>
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
MANAGED BY DELAWARE MANAGEMENT COMPANY, INC., THE PORTFOLIO'S INVESTMENT
OBJECTIVE IS CAPITAL APPRECIATION. THE PORTFOLIO INVESTS PRIMARILY IN THE COMMON
STOCK OF "EMERGING GROWTH" COMPANIES, COMPANIES CHARACTERIZED BY ABOVE-AVERAGE
GROWTH OF EARNINGS RATES. UNDER NORMAL CONDITIONS, AT LEAST 65% OF THE
PORTFOLIO'S TOTAL ASSETS WILL BE INVESTED IN COMMON STOCK OF ISSUERS WITH A
TOTAL MARKET CAPITALIZATION OF LESS THAN $2.5 BILLION.
INVESTMENT PROCESS
DELAWARE MANAGEMENT COMPANY, INC. LOOKS FOR COMPANIES EXHIBITING ANNUAL
EARNINGS GROWTH OF 25% OR MORE BUT PRICED AT A MODEST PREMIUM TO THE S&P'S
MULTIPLE. OTHER IMPORTANT FACTORS IN THE INVESTMENT PROCESS INCLUDE FREE CASH
FLOW, STRONG MANAGEMENT WITH INSIDER OWNERSHIP, AND POTENTIAL FOR EARNINGS
SURPRISES. COMPANIES ARE IDENTIFIED USING IN-DEPTH FUNDAMENTAL, BOTTOM-UP
ANALYSIS.
COMMENTS FROM DELAWARE MANAGEMENT COMPANY, INC.
For the time period covered by this report--August 1, 1997 through January 31,
1998--the Portfolio's total return was 5.46% (exclusive of the PACE Program
Fee), which significantly outperformed the Russell 2500 Growth Index return of
- -0.42%. As of January 31, 1998, the Portfolio's net assets had increased to
$160.3 million. The top five sectors as of January 31, 1998 were
technology--hardware/software (24.8% of the Portfolio), consumer services
(13.1%), consumer non-durables (10.8%), business services (10.6%) and healthcare
(7.7%).
The reporting period exhibited a significant amount of volatility only to see
stocks end the period virtually unchanged. Financial services and business
services were exceptionally strong, while energy, technology and healthcare all
showed substantial weakness. Consumer stocks were alternately weak and strong
and, like the overall market, finished relatively unchanged. The Portfolio
benefited from overweightings in financials and business services and an
underweighting in energy. Despite an overweighting in technology, Portfolio
selections such as Platinum Technology Inc. (2.9% of the Portfolio's net assets
as of January 31, 1998) and EMC Corp. (2.5%) mitigated the overall sector
downturn. Other strong picks included Chancellor Media Corp. (2.3%), Linens 'N
Things Inc. (1.5%), Cendant Corp. (3.0%) and Gemstar Group Ltd. (1.8%). Overall,
good sector weightings and strong stock selection by the investment team led to
a significant outperformance of over 550 basis points relative to our benchmark,
the Russell 2500 Growth Index.
We continue to favor the service sectors and select technology industries. We
have increased our holdings in financial stocks, while healthcare is a smaller
portion of the Portfolio than at the beginning of the year. We continue to
emphasize quality companies with strong fundamentals, solid business plans, and
good market presence while we cull those companies we believe may miss earnings
expectations.
As a disciplined small cap growth manager we only buy stocks that have, in our
opinion, substantially above average growth expectations. We define growth
companies as those with sustainable high positive changes in sales,
profitability and earnings growth. In this attractive landscape for earnings
estimates growth, we are searching for small-cap companies that are selling at
discounts to our projected earnings growth, have a solid market position within
their industry, and have investor friendly managements with a demonstrated
ability to add value through sales/earnings growth and accretive acquisitions.
Against the strong 1997 economic backdrop, our economic outlook calls for a
continuation of the modest growth, benign inflation and low interest rate
environment, which has prevailed for some time. We believe the small/mid cap
segment of the market is attractive relative to larger capitalization issues
from an earnings growth, valuation, and foreign exposure perspective. While the
equity markets seems richly-valued, the absence of inflationary pressure and
favorable interest rate environment provide the underpinnings for a continued
positive market.
15
<PAGE>
PACE INTERNATIONAL EQUITY INVESTMENTS
MANAGED BY MARTIN CURRIE INC., THE PORTFOLIO'S INVESTMENT OBJECTIVE IS CAPITAL
APPRECIATION. THE PORTFOLIO INVESTS IN EQUITY SECURITIES OF COMPANIES DOMICILED
OUTSIDE THE UNITED STATES. UNDER NORMAL CONDITIONS, AT LEAST 65% OF THE
PORTFOLIO'S TOTAL ASSETS WILL BE INVESTED IN EQUITY SECURITIES OF COMPANIES
DOMICILED IN THREE OR MORE COUNTRIES OUTSIDE THE US. UP TO 10% OF THE
PORTFOLIO'S TOTAL ASSETS MAY BE INVESTED IN EMERGING MARKETS.
INVESTMENT PROCESS
MARTIN CURRIE LOOKS FOR COMPANIES THAT EXHIBIT STRONG FUNDAMENTALS AND
ATTRACTIVE VALUATIONS BASED ON ESTIMATES OF FUTURE EARNINGS. COUNTRY ALLOCATION
DECISIONS ARE BASED ON CRITERIA THAT INCLUDE ECONOMIC AND POLITICAL STABILITY,
THE BREADTH AND LIQUIDITY OF THE MARKET, THE NATURE OF THE LOCAL INVESTOR,
CURRENCY OUTLOOK, SETTLEMENT SYSTEM, AND VALUATION. A SIGNIFICANT PERCENTAGE OF
THE PORTFOLIO'S FOREIGN CURRENCY EXPOSURE MAY BE HEDGED BACK TO THE US DOLLAR.
COMMENTS FROM MARTIN CURRIE INC.
For the time period covered by this report--August 1, 1997 through January 31,
1998--the Portfolio's return of -4.54% (exclusive of the PACE Program Fee)
outperformed the Morgan Stanley Capital International's Europe, Australia, and
Far East (MSCI EAFE) Index return of -5.82%. As of January 31, 1998, the
Portfolio's net assets had grown to $125.2 million. The top five country
allocations as of January 31, 1998 were the UK (24.0% of the Portfolio's net
assets), Japan (14.7%), Germany (11.7%), France (8.9%) and Switzerland (6.9%).
The top five sector allocations as of January 31, 1998 were in consumer goods
and services (35.9% of the Portfolio), finance/insurance/real estate (26.2%),
capital goods (17.6%), basic industries (11.3%) and utilities (9.0%).
Over the six months ended January 31,1998, international markets were severely
affected by the collapse of Asia and the weakness of the Japanese market and
currency. Only the UK and European markets bucked the trend, supported by firm
bond markets and good liquidity. Heavy positions in the UK and Europe, and good
stock selection against a weak Japanese index, have ensured that the Portfolio
has remained ahead of the MSCI EAFE Index.
Within the UK, institutional liquidity, corporate activity and improving bond
yields took UK equities higher. Sectors that performed well were financials,
pharmaceuticals and consumer stocks. National Westminister (1.3% of the
Portfolio's net assets as of January 31, 1998), Glaxo Wellcome PLC (1.7%),
Granada Group PLC (1.1%) and Unilever PLC (1.1%) moved ahead strongly. The
strength of the UK currency (sterling) has continued to hold back export stocks
such as GKN PLC (1.2%). While some earnings forecasts have been reduced, the
market has been supported by the prospect of lower bond yields on European
Economic and Monetary Union (the "EMU") convergence.
Consolidation in the financial sector, and among certain retailers, has
continued to drive other European markets. Investors' concern about the impact
of Asia's economic crisis has been limited to specific companies, and European
bond markets have generally been supportive. The Portfolio's exposure to the
region has risen, and we have been playing restructuring themes through
financial stocks such as Allianz AG (Germany) (1.8%). Economically sensitive
stocks, such as Schneider (France), were sold.
The Japanese stock market and currency fell sharply as GDP forecasts were
continually reduced in the face of the Asian turmoil. The crisis in Korea and
collapse of the financial sector saw the Japanese market threatening to reach
new lows in January 1998. The Portfolio was protected from the worst of the
market decline by favoring large Japanese export stocks. Indications that the
crisis is being tackled, and that the government will support the financial
sector and depositors, fueled a substantial rally toward the end of the
semiannual period. Corporate buybacks, and other shareholder friendly measures,
which are likely later in the spring, may take the Japanese equity market
higher.
The Portfolio's Asian weighting was substantially reduced ahead of further
currency and market weakness. The Portfolio's exposure was very defensive,
having no investments in Thailand, Malaysia or Korea. We had reduced the Hong
Kong exposure in October 1997, ahead of a further correction. The Portfolio
holds Australian and Indian securities, which proved resilient.
We have continued to reduce the Portfolio's Latin American exposure. The
region is heavily owned by foreign investors who have regarded it as an
alternative to Asia, although markets have fallen sharply there. We have reduced
exposure to Mexico, Chile and Venezuela.
16
<PAGE>
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENT
MANAGED BY SCHRODER CAPITAL MANAGEMENT INTERNATIONAL INC., THE PORTFOLIO'S
INVESTMENT OBJECTIVE IS CAPITAL APPRECIATION. THE PORTFOLIO INVESTS, UNDER
NORMAL CONDITIONS, AT LEAST 65% OF ITS TOTAL ASSETS IN EQUITY SECURITIES OF
ISSUERS DOMICILED IN THREE OR MORE EMERGING MARKET COUNTRIES IN REGIONS SUCH AS
SOUTHEAST ASIA, LATIN AMERICA, AND EASTERN AND SOUTHERN EUROPE.
INVESTMENT PROCESS
SCHRODER CAPITAL MANAGEMENT INTERNATIONAL INC. ("SCHRODER") UTILIZES AN
EXTENSIVE NETWORK OF REGIONAL SPECIALISTS AND ANALYSTS IN 12 EMERGING MARKET
COUNTRIES. THIS LOCAL PRESENCE SUPPORTS AN INTENSIVE COMPANY RESEARCH PROGRAM
THAT IS ESSENTIAL IN EMERGING MARKETS. THE PROPRIETARY RESEARCH COMPILED IS THEN
USED TO IDENTIFY COMPANIES WHOSE CHARACTERISTICS FALL WITHIN SCHRODER'S
CRITERIA, INCLUDING PROFESSIONAL MANAGEMENT, SUSTAINABLE EARNINGS GROWTH AND
CREDIBLE ACCOUNTING STANDARDS.
COMMENTS FROM SCHRODER CAPITAL MANAGEMENT INTERNATIONAL INC.
For the time period covered by this report--August 1, 1997 through January 31,
1998--the Portfolio returned -26.43% (exclusive of the PACE Program Fee), which
outperformed the MSCI Emerging Markets Free Index (the "Index") return of
- -32.34%. As of January 31, 1998, the Portfolio's net assets were $52.5 million.
At the same date, the Portfolio's regional exposure in Latin America (36.8% of
the Portfolio's net assets) and Asia (23.2%) was reduced, and its exposure in
Europe (14.8%), Africa (8.6%) and the Middle East (3.9%) was increased. The top
five country allocations as of January 31, 1998 were Brazil (13.5% of the
Portfolio's net assets), Mexico (12.7%), South Africa (7.9%), India (7.7%) and
Taiwan (5.2%). The top five sector allocations as of January 31, 1998 were in
telecommunications (12.7% of the Portfolio), electricity (6.7%), banks/retail
(5.0%), food services (4.1%), and oil exploration/production (4.1%).
Global emerging markets suffered a reversal of fortune during the period as
the Southeast Asian crisis shattered investors' confidence. The Portfolio's
outperformance relative to the Index was primarily due to positive contributions
from both asset allocation and stock selection. In addition, the Portfolio's
cash position was increased during the period due to increased market
volatility. In Asia, the Portfolio's underweighted positions in Indonesia and
Taiwan were positive contributors to performance but this was offset by
overweighted positions in China, Korea and the Philippines. The Portfolio was
underweighted in Latin America, which hurt performance as the region
outperformed. Within Europe and Africa, the Portfolio's overweighted position in
Portugal and underweighted position in Russia were positive for performance.
Stock selection was also a positive, with securities in Taiwan, Indonesia, Chile
and Poland performing well and more than offsetting poor performance of
individual securities in Korea, Brazil and Mexico.
During the semiannual period, the devaluation of the Thai baht spilled over
into Indonesia, Malaysia and the Philippines. This currency weakness had an
immediate impact on the Asian region's corporate earnings outlook, and forced
interest rates up dramatically. Subsequently, the Korean won came under severe
pressure and declined over 50% against the US dollar. The political response
from the Asian governments dictated the reaction of the markets toward the end
of the reporting period. Following the Presidential elections, Korea announced a
package of financial reforms and was able to convert up to $24 billion of
short-term loans into 1-3 year credits. This was greeted enthusiastically by
investors and the currency and equity markets both rebounded in January. The
Thai government removed foreign exchange controls, which had been introduced
during the crisis in mid-1997, and the baht strengthened in response. Indonesia,
however, continues to suffer due to the reactionary stance of President Suharto
and the rupiah remained weak in the new year, although it is now well off its
dramatic lows. The Portfolio's underweighted position in Indonesia and the
decision to be underweighted in the country's banking sector contributed
positively to the Portfolio's performance.
Latin America suffered as a result of the Asian crisis and weaker commodity
prices. The region, as a whole, experienced higher interest rates and a lowering
of growth expectations. Mexico performed well in the first half of the period,
but currency weakness, due to poor trade deficit figures in December and the
subsequent fiscal tightening by the government, worried investors. In October,
the Brazilian government responded firmly to the Asian crisis by immediately
raising interest rates and announcing a strict package of fiscal tightening and
structural reforms. Consequently, the Brazilian market has begun to recover and
the Portfolio continues to invest in the country's
17
<PAGE>
privatization program. Argentina outperformed over the period as the economy
remained on course despite the global turmoil. Although Argentina's trade
deficit increased over the period, GDP growth should remain strong. The
commodity-driven markets of Chile and Peru were particularly weak over the
period as prices of the key commodities, such as oil and copper, were hit by the
lack of demand from Asia.
Eastern Europe outperformed the other emerging market regions since the Asian
contagion did not affect investor confidence as much. Russia, in which the
Portfolio is underweighted, was the notable exception. Russian interest rates
were raised to protect the currency and, consequently, the market underperformed
the Index. The Portfolio's two overweighted positions in Eastern Europe, Hungary
and Poland, both performed strongly as investors sought safe havens. Following
strong relative performance, the Portfolio's overweighted position in Portugal
was reduced. South Africa performed well at the end of the period as inflation
fell to a thirty-year low and the bond market rallied. Although still
underweighted, our increased position in South Africa is designed to capture the
market re-rating as interest rates fall.
The key decision going forward remains when to rebuild the Portfolio's
holdings in the depressed Southeast Asian markets. News across the region should
start to improve with current accounts turning around rapidly and currencies
strengthening. This should allow interest rates to fall and economies to
recover. The Portfolio's underweighted position in Latin America will be
maintained with Mexico and Brazil the favored markets. Within Europe, the Middle
East and Africa ("EMEA"), the Portfolio will remain overweighted in Hungary and
Poland, which continue to have sound economic fundamentals. The Portfolio's
underweighted position in Russia will remain until there is a distinct change in
direction for the economy and shareholder rights.
18
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MONEY MARKET INVESTMENTS
PORTFOLIO OF INVESTMENTS JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- ------------------------------------------------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS--1.42%
$ 100 Federal Home Loan Bank............................. 08/04/98 5.860 % $ 100,000
200 Student Loan Marketing Association*................ 02/03/98 5.469 200,000
------------------
Total U.S. Government and Agency Obligations
(cost--$300,000)........................................... 300,000
------------------
BANK NOTES--8.02%
DOMESTIC--8.02%
100 Bank America National Trust & Savings
Association...................................... 05/05/98 6.150 100,000
03/25/98 to
400 FCC National Bank.................................. 01/07/99 5.700 to 6.000 399,919
400 FCC National Bank*................................. 02/02/98 5.610 399,905
200 Greenwood Trust Co. ............................... 02/25/98 5.510 200,000
200 Huntington Bancshares Inc.......................... 10/02/98 5.870 199,955
400 PNC Bank N.A.*..................................... 02/02/98 5.600 399,827
------------------
Total Bank Notes (cost--$1,699,606).......................... 1,699,606
------------------
CERTIFICATES OF DEPOSIT--21.93%
DOMESTIC--6.59%
695 American Express Centurion Bank.................... 02/23/98 5.500 695,000
300 Bankers Trust New York Corp.*...................... 02/02/98 5.680 299,945
04/30/98 to
400 Bankers Trust New York Corp........................ 06/02/98 6.160 to 6.280 399,993
------------------
1,394,938
------------------
YANKEE--15.34%
200 Bayerische Vereinsbank............................. 10/06/98 5.710 199,700
250 Canadian Imperial Holdings Inc..................... 02/27/98 5.760 249,984
300 Credit Agricole Indosuez........................... 09/30/98 5.830 299,886
500 Credit Suisse First Boston*........................ 02/03/98 5.729 500,000
200 Creditanstalt Bankverein........................... 06/04/98 6.080 200,046
200 National Bank of Canada............................ 11/19/98 5.920 200,014
200 National Westminster Bancorp Inc................... 07/30/98 5.790 199,991
03/10/98 to
400 Royal Bank of Canada............................... 10/01/98 5.800 to 5.875 399,911
04/15/98 to
800 Societe Generale................................... 12/17/98 5.850 to 6.350 799,831
200 Suntrust Bank...................................... 07/14/98 5.830 199,944
------------------
3,249,307
------------------
Total Certificates of Deposit (cost--$4,644,245)............. 4,644,245
------------------
COMMERCIAL [email protected]%
ASSET-BACKED--10.91%
500 Eiger Capital Corp. ............................... 02/20/98 5.840 498,459
800 Enterprise Funding Corp. .......................... 03/04/98 5.520 796,197
500 Falcon Asset Securitization Corp. ................. 02/20/98 5.800 498,469
518 Triple-A One Funding Corp. ........................ 02/05/98 5.600 517,678
------------------
2,310,803
------------------
AUTO & TRUCK--3.91%
02/02/98 to
828 General Motors Acceptance Corp. ................... 02/03/98 5.530 to 5.640 827,780
------------------
BANKING--11.30%
100 Bankers Trust New York Corp. ...................... 03/30/98 5.580 99,117
700 BBL North America Inc. ............................ 02/06/98 5.480 699,467
400 BCI Funding Corp. ................................. 03/09/98 5.600 397,760
300 Cregem North America Inc. ......................... 04/06/98 5.550 297,040
400 Den Danske Corp. .................................. 02/13/98 5.490 399,268
500 San Paolo U.S. Financial Co. ...................... 02/02/98 5.600 499,922
------------------
2,392,574
------------------
BROKER-DEALER--6.96%
500 Goldman Sachs Group L.P. .......................... 09/25/98 5.580 481,710
200 Lehman Brothers Holdings Inc. ..................... 02/11/98 5.580 199,690
</TABLE>
19
<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)
BROKER-DEALER--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 400 Merrill Lynch & Co. Inc. .......................... 05/15/98 5.350 % $ 393,877
400 Morgan Stanley, Dean Witter, Discover Co. ......... 02/12/98 5.520 399,326
------------------
1,474,603
------------------
ENERGY--1.89%
400 Koch Industries.................................... 02/02/98 5.650 399,937
------------------
FINANCE-CONDUIT--7.60%
720 Compagnie Bancaire................................. 03/18/98 5.650 714,915
100 MetLife Funding Inc. .............................. 03/20/98 5.450 99,289
300 Svenska Handelsbanken Inc. ........................ 06/03/98 5.560 294,347
500 UBS Finance (DE) Inc. ............................. 02/02/98 5.630 499,922
------------------
1,608,473
------------------
FINANCE-INDEPENDENT--2.32%
500 National Rural Utilities Cooperative Finance
Corp. ........................................... 05/15/98 5.570 492,032
------------------
INSURANCE/PROPERTY & CASUALTY--2.19%
465 A.I. Credit Corp. ................................. 02/09/98 5.480 464,434
------------------
MANUFACTURING/DIVERSIFIED--3.24%
685 Allied Signal Inc. ................................ 02/02/98 5.550 684,894
------------------
RETAIL (MERCHANDISE)--2.36%
500 Sears Roebuck Acceptance Corp. .................... 02/09/98 5.570 499,381
------------------
TELECOMMUNICATIONS--2.36%
500 Lucent Technology Inc. ............................ 02/02/98 5.450 499,924
------------------
Total Commercial Paper (cost--$11,654,835)................... 11,654,835
------------------
SHORT-TERM CORPORATE OBLIGATIONS--12.98%
BROKER-DEALER--9.21%
150 Bear Stearns Co. Inc. ............................. 06/22/98 6.000 150,000
02/03/98 to
600 Bear Stearns Co. Inc.*............................. 02/20/98 5.539 to 5.609 600,000
400 Lehman Brothers Holdings Inc.* .................... 02/02/98 5.720 400,000
200 Merrill Lynch & Co. Inc.*.......................... 02/03/98 5.680 200,000
200 Merrill Lynch & Co. Inc............................ 10/09/98 5.960 200,000
200 Morgan Stanley Dean Witter*........................ 02/02/98 5.790 200,000
200 Morgan Stanley Group Inc.*......................... 02/13/98 5.825 200,000
------------------
1,950,000
------------------
COMPUTERS--2.83%
02/03/98 to
600 IBM Credit Corp.* ................................. 03/19/98 5.756 to 5.809 599,853
------------------
FINANCE-SUBSIDIARY--0.94%
200 Deutsche Bank Financial Inc. ...................... 11/17/98 5.920 200,000
------------------
2,749,853
Total Short-Term Corporate Obligations (cost--$2,749,853)....
------------------
21,048,539
Total Investments (cost--$21,048,539)--99.39%................
128,185
Other assets in excess of liabilities--0.61%.................
------------------
Net Assets--100.00%.......................................... $ 21,176,724
------------------
------------------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Variable rate security--Maturity dates reflects earlier of reset date or maturity date. The interest rates shown are
current rates as of January 31, 1998 and reset periodically.
@ Interest rates shown are discounted rates at date of purchase.
</TABLE>
Weighted average maturity--73 days
See accompanying notes to financial statements
20
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- ------------------------------------------------------
<C> <S> <C> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--37.63%
1/20/18 to
$15,556 GNMA II ARM........................................ 10/20/27 5.500 to 7.375% $ 15,890,400
30,600 GNMA TBA........................................... TBA 7.500 to 8.000 31,620,480
08/15/21 to
404 GNMA............................................... 09/15/23 7.500 415,815
1500 GNMA FHA Construction Loan......................... 09/17/37 7.470 1,515,210
------------------
Total Government National Mortgage Association Certificates
(cost--$49,258,237)........................................ 49,441,905
------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--16.45%
1,377 FHLMC.............................................. 04/01/04 8.500 1,411,010
17,000 FHLMC TBA.......................................... TBA 8.000 17,576,406
2,574 FHMLC.............................................. 07/01/01 7.500 2,625,954
------------------
Total Federal Home Loan Mortgage Corporation Certificates
(cost--$21,614,343)........................................ 21,613,370
------------------
FEDERAL HOUSING ADMINISTRATION CERTIFICATES--5.58%
05/01/16 to
7,133 FHA Project Notes (cost--$7,126,164)............... 02/01/29 6.900 to 7.880 7,331,940
------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--5.72%
4,403 FNMA............................................... 06/01/01 7.500 4,492,871
3,000 FNMA TBA........................................... TBA 6.199 3,020,625
------------------
Total Federal National Mortgage Association Certificates
(cost--$7,514,433)......................................... 7,513,496
------------------
COLLATERALIZED MORTGAGE OBLIGATIONS--56.45%
2,675 FHLMC GNMA REMIC Series 21, Class C................ 12/25/11 5.150 2,662,935
115 FHLMC GNMA REMIC Series 23, Class KZ............... 11/25/23 6.500 109,635
81 FHLMC REMIC Series 80, Class E..................... 06/15/19 8.600 80,568
650 FHLMC REMIC Series 159, Class H.................... 09/15/21 4.500 597,669
3,173 FHLMC REMIC Series 1198, Class G................... 07/15/05 6.750 3,187,167
1,770 FHLMC REMIC Series 1265, Class F................... 10/15/17 7.000 1,770,544
316 FHLMC REMIC Series 1347, Class HC.................. 12/15/21 4.250 284,299
425 FHLMC REMIC Series 1384, Class B................... 11/15/20 7.000 427,724
937 FHLMC REMIC Series 1386, Class B................... 12/15/05 6.000 936,137
2,061 FHLMC REMIC Series 1443, Class E................... 05/15/18 6.000 2,062,868
3,500 FHLMC REMIC Series 1484, Class E................... 03/15/17 6.000 3,502,870
1,993 FHLMC REMIC Series 1489, Class F................... 07/15/05 5.500 1,987,095
1,000 FHLMC REMIC Series 1491, Class E................... 02/15/17 5.000 990,220
1,000 FHLMC REMIC Series 1500, Class E................... 08/15/16 6.000 1,001,560
556 FHLMC REMIC Series 1502, Class PXZ................. 04/15/23 7.000 565,601
503 FHLMC REMIC Series 1534, Class Z................... 06/15/23 5.000 389,495
1,369 FHLMC REMIC Series 1542, Class Z................... 07/15/23 7.000 1,368,201
150 FHLMC REMIC Series 1573, Class PZ.................. 09/15/23 7.000 152,333
234 FHLMC REMIC Series 1576, Class PD.................. 09/15/02 5.500 233,194
4,508 FHLMC REMIC Series 1590, Class D................... 06/15/13 5.500 4,498,859
2,034 FHLMC REMIC Series 1595, Class A................... 06/15/11 5.600 2,021,592
607 FHLMC REMIC Series 1602, Class PD.................. 01/15/15 5.200 604,816
2,628 FHLMC REMIC Series 1606, Class D................... 08/15/04 5.250 2,621,293
851 FHLMC REMIC Series 1628, Class KZ.................. 12/15/23 6.250 829,718
450 FHLMC REMIC Series 1629, Class D................... 10/15/12 5.400 448,799
1,000 FHLMC REMIC Series 1638, Class BC.................. 09/15/15 5.250 996,850
761 FHLMC REMIC Series 1640, Class F ARM............... 10/15/07 6.025 762,676
126 FHLMC REMIC Series 1658, Class GZ.................. 01/15/24 7.000 124,260
500 FHLMC REMIC Series 1693, Class D................... 12/15/04 5.350 498,555
850 FHLMC REMIC Series 1694, Class Z................... 03/15/24 6.500 809,771
</TABLE>
21
<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>
$ 1,284 FHLMC REMIC Series 1708, Class A................... 04/15/06 6.000 % $ 1,287,690
89 FHLMC REMIC Series 1775, Class Z................... 03/15/25 8.500 104,784
993 FHLMC REMIC Series 1779, Class H................... 01/15/00 8.500 1,013,361
3,085 FHLMC REMIC Series 1869, Class J................... 12/15/24 8.000 3,268,252
2,791 FHLMC REMIC Series 1927, Class PA.................. 11/15/04 6.500 2,790,295
1,062 FHLMC REMIC Series 1933, Class ZA.................. 02/15/27 8.000 1,150,868
1,665 FHLMC Series 1958, Class A......................... 08/15/26 8.125 1,676,414
157 FNMA REMIC Trust 1990-76, Class E.................. 02/25/19 7.000 157,264
79 FNMA REMIC Trust 1992-74, Class Z.................. 05/25/22 8.000 84,876
165 FNMA REMIC Trust 1992-129, Class L................. 07/25/22 6.000 156,214
248 FNMA REMIC Trust 1992-201, Class A................. 12/25/19 6.250 247,926
975 FNMA REMIC Trust 1992-216, Class E................. 03/25/13 7.000 981,443
1,051 FNMA REMIC Trust 1993-37, Class PXZ................ 03/25/23 7.000 1,028,590
914 FNMA REMIC Trust 1993-38, Class G.................. 01/25/15 5.000 909,546
101 FNMA REMIC Trust 1993-52, Class D.................. 12/25/02 5.500 100,850
1,500 FNMA REMIC Trust 1993-53, Class E.................. 04/25/17 5.750 1,493,443
339 FNMA REMIC Trust 1993-59, Class D.................. 11/25/03 5.000 337,354
250 FNMA REMIC Trust 1993-162, Class C................. 08/25/23 3.000 240,438
553 FNMA REMIC Trust 1993-168, Class PD................ 07/25/14 5.600 550,712
1,099 FNMA REMIC Trust 1993-171, Class C................. 08/25/11 5.600 1,095,707
2,875 FNMA REMIC Trust 1993-188, Class X-188A-E.......... 07/25/03 5.400 2,864,830
774 FNMA REMIC Trust 1993-192, Class C................. 01/25/04 5.750 771,770
1,250 FNMA REMIC Trust 1993-201, Class E................. 12/25/15 5.500 1,241,075
2,739 FNMA REMIC Trust 1993-214, Class D................. 08/25/04 5.250 2,727,070
39 FNMA REMIC Trust 1993-240, Class Z................. 12/25/13 6.250 37,563
60 FNMA REMIC Trust 1993-250, Class Z................. 12/25/23 7.000 61,727
66 FNMA REMIC Trust 1994-27, Class CZ................. 02/25/24 6.500 61,725
471 FNMA REMIC Trust 1994-75, Class C.................. 01/25/13 6.000 469,047
320 FNMA REMIC Trust 1994-90, Class PC................. 07/25/01 6.500 319,301
746 FNMA REMIC Trust 1997-35, Class PL................. 05/18/13 6.500 750,521
147 FNMA REMIC Trust G92-40, Class ZC.................. 07/25/22 7.000 147,806
1,550 FNMA REMIC Trust G92-44, Class FC ARM.............. 08/25/20 5.794 1,535,980
395 FNMA REMIC Trust G93-40, Class ZA.................. 12/25/23 6.500 368,563
148 FNMA REMIC Trust G94-6, Class PJ................... 05/17/24 8.000 166,933
2,168 Independent National Mortgage Corp. REMIC
Series 1994-Q, Class A5.......................... 09/25/14 7.500 2,185,475
2,474 Norwest Asset Securities Corp. REMIC
Series 1997-1, Class A1.......................... 02/25/12 6.500 2,480,910
93 Prudential Home Mortgage REMIC Series 1993-13,
Class A6......................................... 04/25/08 5.500 92,544
463 Prudential Home Mortgage REMIC Series 1993-29,
Class A8......................................... 08/25/08 6.750 460,159
106 Prudential Home Mortgage REMIC Series 1993-43,
Class A1......................................... 10/25/23 5.400 105,157
1,199 Prudential Home Mortgage REMIC Series 1993-54,
Class A19........................................ 01/25/24 6.500 1,120,137
599 Resolution Trust Corp. REMIC Series 1992-3, Class
A2 ARM........................................... 09/25/19 6.797 598,193
317 Resolution Trust Corp. REMIC Series 1995-C1, Class
A3 ARM........................................... 02/25/27 6.138 317,009
76 Smith Barney Mortgage Capital Trust REMIC Series 6,
Class E.......................................... 02/01/19 9.800 76,180
------------------
Total Collateralized Mortgage Obligations
(cost--$72,865,260)........................................ 74,163,006
------------------
STRIPPED MORTGAGE-BACKED [email protected]%
441 FHLMC REMIC Series 173, Class F**.................. 06/15/21 6.595 + 415,995
1,562 FHLMC REMIC Series 1554, Class I***................ 08/15/08 6.500 ( ) 228,615
780 FHLMC REMIC Series 1583, Class IB***............... 11/15/13 7.000 ( ) 11,393
325 FHLMC REMIC Series 1700, Class D**................. 02/15/24 5.624 + 298,307
6,577 FNMA REMIC Trust 1993-131, Class JB***............. 05/25/05 7.000 ( ) 372,793
3,554 FNMA REMIC Trust 1993-137, Class PN***............. 12/25/16 7.000 ( ) 233,117
195 FNMA REMIC Trust 1993-161, Class GC**.............. 02/25/23 4.536 + 127,142
507 FNMA REMIC Trust 1993-177, Class B**............... 08/25/22 5.946 + 485,741
</TABLE>
22
<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>
$ 3,545 FNMA REMIC Trust 1994-7, Class PK***............... 05/25/08 6.500 % ) $ 327,846
2,774 FNMA REMIC Trust 1994-30, Class IA***.............. 11/25/22 6.500 ( ) 393,126
------------------
Total Stripped Mortgage-Backed Securities
(cost--$2,800,205)......................................... 2,894,075
------------------
ASSET-BACKED SECURITIES--9.69%
1,408 Chase Manhattan Grantor Trust Series 1995-B, Class
A................................................ 11/15/01 5.900 1,409,409
1,500 Contimortgage Home Equity Loan Series 1996-4, Class
A3............................................... 10/15/11 6.190 1,499,940
1,000 Contimortgage Home Equity Loan Series 1997-5, Class
A7*.............................................. 10/15/12 5.794 1,000,000
2,000 Contimortgage Home Equity Loan Series 1997-3, Class
A2............................................... 05/15/12 6.510 2,001,080
1,273 EQCC Home Equity Loan Trust Series 1997-1, Class
A1............................................... 05/15/05 6.310 1,276,757
587 Ford Credit Grantor Trust Series 1994-B, Class A... 10/15/99 7.300 588,793
143 Olympic Automobile Receivables Trust Series 1994-A,
Class A.......................................... 01/15/01 5.650 142,864
62 Premier Auto Trust Series 1993-6, Class A2......... 11/02/99 4.650 61,206
1,715 Premier Auto Trust Series 1995-3, Class A5......... 03/06/00 6.150 1,720,282
1,166 Student Loan Marketing Association Series 95-1,
Class A1*........................................ 04/26/04 5.685 1,166,002
1,874 Student Loan Marketing Association Series 97-2,
Class A1*........................................ 10/25/05 5.794 1,870,421
------------------
Total Asset-Backed Securities (cost--$12,716,779)............ 12,736,754
------------------
LONG-TERM U.S. GOVERNMENT AND AGENCY OBLIGATIONS--7.25%
4,000 Student Loan Marketing Association*................ 06/30/00 6.080 3,996,720
5,522 U.S. Treasury Inflation Index Notes................ 07/15/02 3.625 5,526,628
------------------
Total Long-Term U.S. Government and Agency Obligations
(cost--$9,544,529)......................................... 9,523,348
------------------
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--2.88%
3,800 Federal Home Loan Mortgage Discount Notes
02/17/98 to
(cost--$3,789,053)................................. 02/24/98 5.350 to 5.480 3,789,053
------------------
189,006,947
Total Investments (cost--$187,229,003)--143.85%..............
(57,620,485 )
Liabilities in excess of other assets--(43.85)%..............
------------------
Net Assets--100.00%.......................................... $ 131,386,462
------------------
------------------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Floating rate securities--The interest rates shown are the current rates as of January 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 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 January 31, 1998.
@ Illiquid securities representing 2.20% of net assets.
ARM Adjustable Rate Mortgage--The interest rate shown is the current rate as of January 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 8.19%.
(2) Annualized Yield at date of purchase was 7.16%.
(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%.
</TABLE>
See accompanying notes to financial statements
23
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERMEDIATE FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------- ------------------- --------------------- -------------------
<C> <S> <C> <C> <C>
U. S. GOVERNMENT OBLIGATIONS--54.40%
12/31/99 to
$ 45,005 U.S. Treasury Notes (1) (cost--$45,232,660).......... 08/15/07 5.625 to 7.500% $ 46,143,439
-------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--4.77%
07/15/04 to
353 GNMA................................................. 09/15/04 9.500 371,544
12/15/01 to
577 GNMA................................................. 01/15/02 9.000 597,852
97 GNMA................................................. 11/20/01 8.500 98,511
06/15/24 to
919 GNMA................................................. 12/15/25 7.500 946,234
10/20/27 to
2,012 GNMA................................................. 11/20/27 6.000 2,034,626
-------------------
Total Government National Mortgage Association Certificates
(cost--$4,041,779)............................................. 4,048,767
-------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--0.75%
335 FHLMC................................................ 06/01/02 8.000 340,935
291 FHLMC................................................ 12/01/99 5.500 290,990
-------------------
Total Federal Home Loan Mortgage Corporation Certificates
(cost--$626,386)............................................... 631,925
-------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--2.17%
863 FNMA................................................. 03/01/04 8.000 882,583
06/01/10 to
928 FNMA................................................. 09/01/10 7.500 957,148
-------------------
Total Federal National Mortgage Association Certificates
(cost--$1,834,965)............................................. 1,839,731
-------------------
COLLATERALIZED MORTGAGE OBLIGATIONS--12.01%
603 Aetna Commercial Mortgage Corp. ..................... 12/26/30 6.590 604,621
115 American Southwest Financial Co. .................... 03/01/18 9.000 117,511
379 Chase Mortgage Finance Corp. ........................ 10/25/24 6.700 378,012
950 FDIC REMIC Trust Series 1994-C1 Class 2A2............ 09/25/25 7.850 957,512
1,629 FDIC REMIC Trust Series 1996-C1 Class 1A............. 05/25/26 6.750 1,649,329
37 FHLMC Series 1180 Class H............................ 08/15/20 8.400 36,758
500 FHLMC Series 1497 Class O............................ 10/15/22 7.000 505,310
194 FHLMC Series 1588 Class TB........................... 06/15/23 6.500 194,763
421 FHLMC Series 1865 Class VA........................... 12/15/10 7.500 432,285
14 FNMA REMIC Trust 1990-9, Class D..................... 08/25/18 8.500 13,870
115 FNMA REMIC Trust 1991-04, Class E.................... 09/25/05 8.250 117,102
38 FNMA REMIC Trust 1993-233, Class C................... 11/25/02 4.850 37,741
675 FNMA REMIC Trust 1993-70, Class C.................... 03/25/18 6.900 684,869
264 FNMA REMIC Trust 1996-41, Class A.................... 06/25/20 7.750 267,723
304 LB Mortgage Trust Series 1992-M1, Class A1B.......... 03/25/12 8.000 306,158
400 Merrill Lynch Trust Series 32, Class H............... 08/01/18 9.450 417,126
1,000 Norwest Asset Securities Corp. Series 1997-5, Class
A2................................................. 04/25/12 7.000 1,010,950
740 Resolution Trust Corp. Series 1995-C1, Class A2C..... 02/25/27 6.900 742,243
684 Structured Asset Securities Corp. Series 1996-CFL,
Class A1B.......................................... 02/25/28 5.944 681,655
1,000 Westam Mortgage Financial Corp. Series 7, Class G.... 12/01/18 9.400 1,034,700
-------------------
Total Collateralized Mortgage Obligations (cost--$10,125,525).... 10,190,238
-------------------
ASSET-BACKED SECURITIES--3.11%
1,970 California Infrastructure............................ 06/25/04 6.250 2,004,357
600 UCFC Loan Trust...................................... 11/15/27 8.200 630,187
-------------------
Total Asset-Backed Securities (cost--$2,569,333)................. 2,634,544
-------------------
</TABLE>
24
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERMEDIATE FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------- ------------------- --------------------- -------------------
<C> <S> <C> <C> <C>
CORPORATE NOTES--20.97%
$ 435 AON Corp. ........................................... 10/01/99 6.875% $ 442,144
1,155 BankAmerica Corp. ................................... 11/15/04 8.950 1,207,647
870 Beneficial Corp. .................................... 12/15/04 6.810 891,834
230 Chubb Corp. ......................................... 11/15/99 8.750 231,555
04/01/01 to
508 Continental Bank NA.................................. 07/01/01 11.250 to 12.500 559,282
635 Countrywide Funding Corp. MTN........................ 09/16/03 7.450 668,971
371 First Data Corp. .................................... 04/01/03 6.625 381,742
1,000 First Union Corp. ................................... 11/15/04 8.770 1,046,603
810 First USA Bank....................................... 02/22/01 5.850 812,288
735 First USA Bank MTN................................... 12/03/01 6.625 754,585
11/19/99 to
1,150 Ford Motor Credit Corp. ............................. 02/28/02 6.500 to 7.500 1,174,270
250 Health Care Properties Investments Inc. ............. 02/15/06 6.500 250,689
1,200 Household Finance Corp. ............................. 06/30/00 6.375 1,209,702
200 ITT Corp. ........................................... 03/01/06 8.750 198,043
500 K Mart Corp. MTN..................................... 07/06/99 7.240 502,549
10/01/03 to
1,645 Kimco Realty Corp. .................................. 11/14/05 6.500 to 6.830 1,664,822
305 Lucent Technologies Inc. ............................ 07/15/06 7.250 327,193
490 Mellon Bank.......................................... 06/01/03 6.750 505,347
195 Mobil Oil Corp. ..................................... 02/29/00 9.170 201,681
1,325 New Plan Realty Trust Corp. ......................... 04/06/05 7.750 1,438,329
700 New York State Electric & Gas Corp. ................. 05/01/20 9.875 783,668
1,125 PNC Bank NA.......................................... 04/15/05 7.875 1,225,404
500 Sovran Financial Corp. .............................. 06/15/06 9.250 596,050
550 Virginia Electric & Power Co. ....................... 03/01/25 8.250 612,529
100 Wal Mart Stores Inc. ................................ 06/29/11 8.875 103,955
-------------------
Total Corporate Notes (cost--$17,405,928)........................ 17,790,882
-------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
- ----------
<C> <S> <C>
MONEY MARKET FUNDS--0.10%
89,462 Liquid Assets Portfolio (cost--$89,462)......................................................... 89,462
-------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000)
- ----------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--0.45%
$ 379 Repurchase Agreement dated 01/30/98 with State Street
Bank & Trust Company, collateralized by $264,370
U.S. Treasury Bonds, 9.875% due 11/15/15
(value-$386,587) proceeds: $379,158
(cost-$379,000).................................... 02/02/98 5.000 379,000
-------------------
INVESTMENTS OF CASH COLLATERAL FOR SECURITIES LOANED--23.80%
REPURCHASE AGREEMENTS--15.92%
3,500 Repurchase Agreement dated 01/30/98 with Citibank,
collateralized by $3,410,000 U.S. Treasury Notes,
6.125% due 07/31/00 (value-$3,571,975); proceeds:
$3,501,622......................................... 02/02/98 5.560 3,500,000
3,002 Repurchase Agreement dated 01/30/98 with Dresdner
Bank AG, collateralized by $2,796,000 U.S. Treasury
Bonds, 6.500% due 11/15/26 (value-$3,062,207);
proceeds: $3,003,396............................... 02/02/98 5.580 3,002,000
</TABLE>
25
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERMEDIATE FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------- ------------------- --------------------- -------------------
<C> <S> <C> <C> <C>
</TABLE>
INVESTMENTS OF CASH COLLATERAL FOR SECURITIES LOANED--(CONCLUDED)
REPURCHASE AGREEMENTS--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 3,500 Repurchase Agreement dated 01/30/98 with Societe
Generale, collateralized by $2,621,000 U.S Treasury
Bonds, 10.375% due 11/15/12 (value--$3,574,389);
proceeds: $3,501,628............................... 02/02/98 5.580% $ 3,500,000
3,500 Repurchase Agreement dated 01/30/98 with Union Bank
of Switzerland, collateralized by $3,450,000 U.S
Treasury Notes, 6.250% due 07/31/98
(value--$3,570,750); proceeds: $3,501,628.......... 02/02/98 5.580 3,500,000
-------------------
Total Repurchase Agreements (cost--$13,502,000).................. 13,502,000
-------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
- ----------
<C> <S> <C>
MONEY MARKET FUNDS--7.88%
4,555,404 Liquid Assets Portfolio......................................................................... 4,555,404
1,001,371 Prime Portfolio................................................................................. 1,001,371
1,113,165 TempCash Portfolio.............................................................................. 1,113,165
14,275 TempFund Portfolio.............................................................................. 14,275
-------------------
6,684,215
Total Money Market Funds (cost--$6,684,215).................................................................
-------------------
20,186,215
Total Investments of Cash Collateral for Securities Loaned (cost--$20,186,215)..............................
-------------------
103,934,203
Total Investments (cost--$102,491,253)--122.53%.............................................................
(19,113,187 )
Liabilities in excess of other assets--(22.53)%.............................................................
-------------------
Net Assets--100.00%......................................................................................... $ 84,821,016
-------------------
-------------------
</TABLE>
- -----------------
<TABLE>
<S> <C>
MTN Medium Term Note
REMIC Real Estate Mortgage Investment Conduit
(1) Security, or portion thereof, was on loan at January 31, 1998.
</TABLE>
See accompanying notes to financial statements
26
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE STRATEGIC FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- ------------------------------------------------------
<C> <S> <C> <C> <C>
U. S. GOVERNMENT OBLIGATIONS--12.19%
08/15/25 to
$ 9,750 U.S. Treasury Bonds................................ 11/15/26 6.000 to 6.875% $ 10,718,596
1,513 U.S. Treasury Inflation Index Notes................ 07/15/02 3.625 1,506,515
------------------
Total U. S. Government Obligations (cost--$11,915,441)....... 12,225,111
------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--15.72%
11/20/23 to
5,257 GNMA ARM........................................... 05/20/26 7.000 5,378,898
1,679 GNMA ARM........................................... 01/20/26 6.500 1,707,220
1,971 GNMA ARM........................................... 07/20/27 6.000 1,993,726
6,500 GNMA TBA........................................... TBA 7.500 6,688,910
------------------
Total Government National Mortgage Association Certificates
(cost--$15,702,638)........................................ 15,768,754
------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--0.48%
500 FHLMC Gold 30 Year TBA (cost--$487,656)............ TBA 6.000 486,250
------------------
FEDERAL HOUSING ADMINISTRATION CERTIFICATES--3.10%
08/01/20 to
3,046 FHA Project Notes (cost--$3,110,297)............... 12/01/21 7.430 3,106,738
------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--10.30%
2,734 FNMA ARM........................................... 05/01/27 7.571 2,836,221
39 FNMA ARM........................................... 12/01/17 7.250 40,782
2,852 FNMA ARM........................................... 04/01/27 7.170 2,951,319
1,980 FNMA ARM........................................... 11/01/35 6.207 1,993,366
432 FNMA ARM........................................... 08/01/28 6.207 434,299
399 FNMA ARM........................................... 03/01/27 6.207 401,223
1,783 FNMA ARM........................................... 12/01/26 4.960 1,675,076
------------------
Total Federal National Mortgage Association Certificates
(cost--$10,344,370)........................................ 10,332,286
------------------
COLLATERALIZED MORTGAGE OBLIGATIONS--16.27%
264 FHLMC GNMA REMIC Series 15 Class PZ................ 07/25/23 7.000 259,051
262 FHLMC REMIC Series G23 Class KZ.................... 11/25/23 6.500 249,170
1,310 FHLMC REMIC Series G24 Class ZA.................... 11/25/23 6.500 1,226,061
1,000 FHLMC REMIC Series 1278 Class K.................... 05/15/22 7.000 1,026,507
100 FHLMC REMIC Series 1366 Class H.................... 08/15/07 6.000 99,250
29 FHLMC REMIC Series 1367 Class KA................... 09/15/22 6.500 28,674
1,034 FHLMC REMIC Series 1502 Class PX-Z................. 04/15/23 7.000 1,051,820
735 FHLMC REMIC Series 1503 Class PZ................... 05/15/23 7.000 757,168
427 FHLMC REMIC Series 1534 Class Z.................... 06/15/23 5.000 331,070
658 FHLMC REMIC Series 1548 Class Z.................... 07/15/23 7.000 663,430
960 FHLMC REMIC Series 1562 Class Z.................... 07/15/23 7.000 967,731
136 FHLMC REMIC Series 1611 Class I.................... 02/15/23 6.000 134,811
159 FHLMC REMIC Series 1614 Class QZ................... 11/15/23 6.500 150,115
678 FHLMC REMIC Series 1628 Class KZ................... 12/15/23 6.250 661,260
259 FHLMC REMIC Series 1694 Class Z.................... 03/15/24 6.500 246,718
175 FNMA REMIC Trust 1991-65 Class Z................... 06/25/21 6.500 170,586
75 FNMA REMIC Trust 1992-118 Class K.................. 09/25/08 7.500 77,711
160 FNMA REMIC Trust 1992-129 Class L.................. 07/25/22 6.000 151,481
505 FNMA REMIC Trust G1992-40 Class ZC................. 07/25/22 7.000 508,451
73 FNMA REMIC Trust 1993-37 Class PXZ................. 03/25/23 7.000 71,316
155 FNMA REMIC Trust 1993-56 Class PZ.................. 05/25/23 7.000 159,868
274 FNMA REMIC Trust 1993-60 Class Z................... 05/25/23 7.000 278,348
117 FNMA REMIC Trust 1993-70 Class Z................... 05/25/23 6.900 115,891
337 FNMA REMIC Trust 1993-96 Class PZ.................. 06/25/23 7.000 354,045
279 FNMA REMIC Trust 1993-122 Class L.................. 01/25/23 6.500 276,181
76 FNMA REMIC Trust 1993-149 Class L.................. 08/25/23 6.000 74,630
128 FNMA REMIC Trust 1993-160 Class ZB................. 09/25/23 6.500 124,301
123 FNMA REMIC Trust 1993-163 Class ZA................. 09/25/23 7.000 125,047
</TABLE>
27
<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>
$ 87 FNMA REMIC Trust 1993-199 Class Z.................. 10/25/23 7.000% $ 85,718
640 FNMA REMIC Trust 1993-65 Class ZZ.................. 06/25/13 7.000 666,714
500 FNMA REMIC Trust G1993-10 Class G.................. 05/25/22 5.000 474,558
130 FNMA REMIC Trust G1993-40 Class Z.................. 12/25/23 6.500 121,641
126 FNMA REMIC Trust 1994-23 Class PXZ................. 08/25/23 6.000 116,737
487 Bear Stearns Mortgage Securities Inc. REMIC Series
94-1 Class 3A*................................... 05/25/23 7.221 492,616
389 California Federal Bank REMIC Series 1990 BN1,
Class A*......................................... 08/25/30 6.664 388,117
2,102 Residential Funding Mortgage Securities Inc. REMIC
Series 1997-S7 Class A5.......................... 05/25/27 7.500 2,132,537
150 Residential Funding Mortgage Securities Inc. REMIC
Series 1993-S30 Class A9......................... 08/25/23 7.500 154,031
1,000 Resolution Trust Corp. Mortgage REMIC Series 92-C1
Class B*......................................... 08/25/23 7.688 1,019,136
331 U.S. Department of Veteran Affairs Vendee Mortgage
Trust REMIC Series 1993-3, Class 2ZA............. 06/15/20 6.500 326,735
------------------
Total Collateralized Mortgage Obligations
(cost--$14,780,259)........................................ 16,319,232
------------------
STRIPPED MORTGAGE-BACKED SECURITIES(5)--1.67%
830 FHLMC REMIC Series 173 Class F**................... 06/15/21 6.595 + 783,535
504 FHLMC REMIC Series 1625 Class GA***................ 01/15/08 6.000 (1) 40,955
4 FNMA REMIC Trust 1993-134 Class EA***.............. 11/25/05 1159.740 (2) 57,772
940 FNMA REMIC Trust 1993-201 Class JA***.............. 09/25/21 6.500 (3) 135,366
3,227 FNMA REMIC Trust 1993-201 Class JC***.............. 05/25/19 6.500 (4) 656,716
------------------
Total Stripped Mortgage-Backed Securities
(cost--$1,642,600)......................................... 1,674,344
------------------
ASSET-BACKED SECURITIES--3.23%
1,231 Capital Equipment Receivables Trust Series 1996--1
Class A2......................................... 07/15/98 5.950 1,231,494
2,000 The Money Store Home Equity Trust Series 1997-D
Class AF3........................................ 11/15/21 6.345 2,006,875
------------------
Total Asset-Backed Securities (cost--$3,231,220)............. 3,238,369
------------------
CORPORATE BONDS--14.44%
500 AMR Corp........................................... 02/01/01 10.000 555,416
450 Continental Cablevision Inc........................ 06/01/07 11.000 500,557
100 Gulf States Utilities Co........................... 07/01/98 9.720 101,445
2,500 Lehman Brothers Holdings*.......................... 11/06/00 6.125 2,498,065
500 Niagara Mohawk Power Co............................ 04/01/24 7.875 502,496
1,500 Philip Morris Co................................... 07/15/05 7.000 1,550,256
12/01/02 to
3,300 RJR Nabisco Inc.................................... 09/15/03 7.625 to 8.625 3,473,229
500 United Air Lines Inc............................... 11/27/12 10.360 642,000
2,000 Williams Companies Inc.*........................... 01/30/00 5.909 2,000,000
2,500 Worldcom Inc....................................... 01/15/04 9.375 2,659,375
------------------
Total Corporate Bonds (cost--$14,132,370).................... 14,482,839
------------------
COMMERCIAL PAPER@++--29.71%
3,500 American Express Credit Corp....................... 02/20/98 5.450 3,489,933
300 AT&T Corp.......................................... 02/27/98 5.430 298,824
3,500 Australian Wheat Board............................. 02/06/98 5.720 3,497,219
600 Bellsouth Telecommunications Inc................... 02/20/98 5.730 598,185
3,000 Caisse D' Amortissement............................ 02/05/98 5.720 2,998,093
02/06/98 to
2,100 Dupont (E. I.) de Nemours & Co..................... 03/25/98 5.440 to 5.720 2,096,213
2,600 Emerson Electric Co................................ 02/26/98 5.430 2,590,196
400 Export Development Corp............................ 04/09/98 5.430 395,760
04/08/98 to
2,100 Ford Motor Credit Co............................... 04/10/98 5.460 to 5.520 2,077,604
1,000 General Motors Acceptance Corp..................... 06/10/98 5.740 979,786
02/06/98 to
2,400 KFW International Finance Inc...................... 02/20/98 5.460 to 5.730 2,394,544
4,500 National Rural Utilities Co-op Finance Corp........ 02/18/98 5.720 4,487,845
3,000 Oesterreichische Kontrollbank AG................... 02/05/98 5.710 2,998,097
900 Tampa Electric Co.................................. 02/18/98 5.450 897,684
------------------
Total Commercial Paper (cost--$29,800,680)................... 29,799,983
------------------
</TABLE>
28
<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>
FOREIGN GOVERNMENT OBLIGATIONS--3.56%
$ 600 Government of Canada............................... 02/09/98 5.690% $ 599,241
2,400 Republic of Argentina*............................. 03/31/05 6.688 2,133,000
1,000 United Mexican States Series B..................... 12/31/19 6.250 841,250
------------------
Total Foreign Government Obligations (cost--$3,536,046)...... 3,573,491
------------------
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS@++--0.41%
02/05/98 to
410 U.S. Treasury Bills (cost--$406,747)............... 04/16/98 4.980 to 5.175 406,293
------------------
REPURCHASE AGREEMENT--1.40%
1,404 Repurchase Agreement dated 01/30/98 with State
Street Bank & Trust Co., collateralized by
$1,420,000
U.S. Treasury Bills, 6.250% due 06/30/98
(value-$1,432,236) proceeds: $1,404,585
(cost-$1,404,000)................................ 02/02/98 5.000 1,404,000
------------------
Total Investments (cost--$110,494,324)--112.48%.............. 112,817,690
(12,521,673 )
Liabilities in excess of other assets--(12.48)%..............
------------------
Net Assets--100.00%.......................................... $ 100,296,017
------------------
------------------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Floating rate securities--The interest rates shown are the current rates as of January 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 January 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 January 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 1.67% of net assets.
</TABLE>
WRITTEN OPTIONS OPEN
<TABLE>
<CAPTION>
NUMBER OF UNDERLYING EXPIRATION EXERCISE
OPTIONS CONTRACT DATE PRICE VALUE
------------------------------------------------ -----
<S> <C> <C> <C> <C> <C>
Put..................................... 10 Eurodollar March 1998 $ 93.50 $ 125
---
---
</TABLE>
FUTURES CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF IN EXPIRATION UNREALIZED
CONTRACTS CONTRACTS TO RECEIVE EXCHANGE FOR DATE APPRECIATION
- ------------- --------------------------------------------------------------------------- ------------ ----------- -----------
<C> <S> <C> <C> <C>
161 5 year U.S. Treasury Notes................................................. $17,427,344 March 1998 $ 277,625
229 10 year U.S. Treasury Notes................................................ 25,594,781 March 1998 446,813
-----------
$ 724,438
-----------
-----------
</TABLE>
See accompanying notes to financial statements
29
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MUNICIPAL FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------- ------------------- --------------------- -------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--95.32%
ALABAMA--0.50%
$ 60 Birmingham Alabama Medical Clinic Board Revenue
Bapist Medical Centers (Escrow to Maturity)........ 07/01/05 7.300 % $ 67,467
155 Pell City Alabama Industrial Development Board
Revenue Shelby Steel Fabricators (Letter of
Credit--South Trust Bank)*......................... 09/01/01 7.700 155,460
-------------------
222,927
-------------------
ARIZONA--0.18%
70 Pima County Arizona Hospital Revenue St. Joseph
Hospital Project (Escrow to Maturity).............. 01/01/09 7.500 81,782
-------------------
ARKANSAS--0.82%
100 Arkansas State Development Finance Authority (MBIA
Insured)........................................... 10/01/16 5.100 101,817
30 Pulaski County Arkansas Residential Housing Single
Family (Escrow to Maturity)........................ 06/01/10 7.250 35,132
206 Springdale Arkansas Residential Housing Mortgage
Series A (FNMA Collateralized)..................... 09/01/11 7.650 226,588
-------------------
363,537
-------------------
CALIFORNIA--9.69%
105 California Pollution Control Financing Kaiser Steel
Corporation Project (Escrow to Maturity)........... 10/01/08 7.250 119,726
160 California Statewide Community Housing Senior Lien
(FHA Insured)...................................... 09/01/00 5.000 162,672
130 Inglewood California Residential Rehabilitation
(Escrow to Maturity)............................... 08/01/10 7.500 150,102
470 Lancaster California Redevelopment Agency Multi
Family Housing Refunding FHA High Valley Apartments
Project Series A (FHA Insured)..................... 12/01/05 5.250 479,034
700 Los Angeles California Community Redevelopment Agency
Refunding Monterey Hills Redevelopment Project B... 12/01/22 8.650 807,163
300 Los Angeles California Multi Family Revenue Housing
Earthquake Rehabilitation Project Series C (FNMA
Collateralized)*................................... 07/01/07 5.150 304,461
95 Palmdale California Residential Mortgage (Escrow to
Maturity).......................................... 11/01/12 9.250 126,444
535 Sacramento California Utility District Electric
(Escrow to Maturity)............................... 03/01/10 6.750 605,395
20 Sacramento California Utility District Electric
(Escrow to Maturity)............................... 02/01/11 5.500 21,207
375 Sacramento California Utility District Electric White
Rock Project (Escrow to Maturity).................. 05/01/10 6.800 426,600
1,035 Vista California Multi Family Housing Pepperwood
Apartments (Mandatory put 06/01/05 @ 100) (FNMA
Collateralized).................................... 06/01/25 5.700 1,091,956
-------------------
4,294,760
-------------------
COLORADO--2.72%
135 Colorado Health Facilities Authority Rose Medical
Center (Escrow to Maturity) (FNMA
Collateralized).................................... 09/01/08 7.125 154,309
600 Colorado Housing Finance Authority Single Family
Progam Subordinated*............................... 11/01/04 5.750 612,714
410 Lakewood Company Multi Family Housing Mortgage FHA
Mortgage Loan...................................... 10/01/15 6.550 440,004
-------------------
1,207,027
-------------------
</TABLE>
30
<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)
<TABLE>
<C> <S> <C> <C> <C>
FLORIDA--2.80%
$ 190 Altamonte Springs Florida Health Facilities Authority
Revenue (Escrow to Maturity)....................... 10/01/09 8.750% $ 239,212
240 Charlotte County Florida Utility Revenue Refunding
Series A (FGIC Insured)............................ 10/01/23 6.200 240,444
190 Clearwater Florida Housing Development Corporation
Revenue Refunding Clearwater Apartments Series A
(FHA Insured)...................................... 07/01/01 6.200 197,680
100 Dade County Florida Educational Facilities Authority
Revenue (Letter of Credit-Sun Bank)................ 01/01/02 5.150 103,689
60 Orange County Florida Health Facilities Authority
Southern Adv Hospital-Adv Health Systems (Escrow to
Maturity).......................................... 10/01/09 8.750 75,476
175 Palm Beach County Florida Solid Waste Authority
Revenue (Escrow to Maturity) (MBIA Insured)........ 12/01/04 10.000 212,999
155 Pasco County Florida MBIA West Pasco Water and Sewer
Unit (Escrow to Maturity) (MBIA Insured)........... 08/01/08 6.375 170,215
-------------------
1,239,715
-------------------
GEORGIA--1.58%
55 Gwinnett County Georgia Water & Sewer Authority
(Escrow to Maturity)............................... 10/01/04 9.600 68,488
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 5.700 630,744
-------------------
699,232
-------------------
ILLINOIS--6.88%
115 Belleville Illinois St. Clair County (Escrow to
Maturity).......................................... 11/01/09 7.250 134,428
450 Granite City Illinois Hospital Facility Revenue
(Escrow to Maturity)............................... 01/01/08 7.000 505,336
350 Greater Peoria Illinois Airport Authority (AMBAC
Insured)*.......................................... 12/01/07 6.700 397,054
320 Illinois Health Facilities Authority Revenue
Methodist Medical Center (Escrow to Maturity)...... 10/01/10 9.000 400,346
735 Illinois Health Facilities Authority Revenue
Ravenswood Hospital (Escrow to Maturity)........... 08/01/06 7.250 829,087
250 Palatine Village Housing Revenue Illinois Clover
Ridge Rmk (Mandatory put 12/01/05 @ 100) (Letter of
Credit-Lasalle National Bank)...................... 12/15/07 4.750 255,663
225 St. Clair County Illinois Certificates Participation
Series A (FSA Insured)............................. 10/01/07 4.900 231,446
285 St. Clair County Illinois Certificates Participation
Series A (FSA Insured)............................. 10/01/08 5.000 293,539
-------------------
3,046,899
-------------------
INDIANA--6.98%
85 Fort Wayne Indiana Hospital Authority Revenue
Parkview Memorial Hospital (Escrow to Maturity).... 01/01/02 6.875 89,401
450 Fort Wayne Indiana Hospital Authority Revenue
Parkview Memorial Hospital (Escrow to Maturity).... 01/01/05 6.500 485,451
70 Fort Wayne Indiana Hospital Authority Revenue
Parkview Memorial Hospital (Escrow to Maturity).... 01/01/07 6.625 76,912
345 Indiana Health Facility Hospital Revenue Kings
Daughters Hospital (Asset Guaranty Insured)........ 02/15/04 5.000 355,685
205 Indiana Health Facility Hospital Revenue Kings
Daughters Hospital (Asset Guaranty Insured)........ 08/15/04 5.000 211,804
365 Indiana Health Facility Hospital Revenue Kings
Daughters Hospital (Asset Guaranty Insured)........ 02/15/05 5.000 375,680
</TABLE>
31
<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>
$ 430 Indianapolis Indiana Economic Development Revenue
Knob In The Woods Project (Mandatory put 12/01/04 @
100) (FNMA Collateralized)......................... 12/01/04 6.375% $ 478,835
1,000 New Castle Indiana Economic Development Revenue
Refunding FHA Raintree Square Project A............ 04/01/19 5.550 1,018,260
-------------------
3,092,028
-------------------
IOWA--0.48%
140 Iowa Finance Authority Multi Family Revenue Refunding
Housing Forest Glen Apartments Project A (FNMA
Collateralized).................................... 11/01/03 4.700 141,212
70 Iowa Finance Authority Multi Family Revenue Refunding
Housing Hillcrest C (FNMA Collateralized).......... 11/01/02 4.600 70,626
-------------------
211,838
-------------------
KANSAS--0.16%
65 Wichita Kansas Hospital Revenue St. Francis Hospital
& Nursing Senior A................................. 10/01/07 6.750 72,454
-------------------
KENTUCKY--0.27%
55 Kentucky State Revenue Turnpike Authority Resources
Recovery Road Revenue (Escrow to Maturity)......... 07/01/09 7.200 64,859
50 Kentucky State Revenue Turnpike Authority Toll Road
(Escrow to Maturity)............................... 07/01/08 5.875 53,225
-------------------
118,084
-------------------
LOUISIANA--5.64%
125 East Baton Rouge Louisiana Single Family Mortgage
Series C (GNMA/FNMA Collateralized)................ 04/01/32 7.000 132,107
340 East Baton Rouge Parish Louisiana Womans Hospital
Foundation (Escrow to Maturity).................... 10/01/08 7.200 388,039
420 Jefferson Parish Louisiana Hospital Service District
No. 001 Hospital Revenue (Escrow to Maturity)...... 01/01/09 7.250 484,008
800 Louisiana Public Facilities Authority Revenue Cp Pg
Health and Education A1 Rmk (Mandatory put 06/01/02
@ 100) (AMBAC Insured)............................. 12/01/15 5.000 813,976
590 Louisiana State Health Education Authority Alton
Ochsner Medical Foundation (Escrow to Maturity).... 05/01/05 8.750 678,695
-------------------
2,496,825
-------------------
MAINE--0.13%
55 Maine Health & High Educational Facilities Hospital
St. Mary's General Hospital (Pre-Refunded 07/01/99
@ 102)............................................. 07/01/09 8.500 59,290
-------------------
MICHIGAN--4.99%
710 Detroit Michigan Water Supply Systems Revenue (Escrow
to Maturity)....................................... 01/01/05 8.875 835,500
485 Michigan Municipal Bond Authority Revenue Wayne
County Project (Escrow to Maturity) (MBIA
Insured)........................................... 12/01/02 7.400 538,913
140 Michigan State Hospital Finance Authority Revenue
Harper Grace Hospital (Escrow to Maturity)......... 05/01/09 7.125 161,741
190 Michigan State Hospital Finance Authority Revenue
Mount Carmel Mercy Hospital (Escrow to Maturity)... 08/01/05 7.500 213,153
10 Michigan State Hospital Finance Authority Revenue St.
Joseph's Mercy Hospital (Escrow to Maturity)....... 07/01/03 9.250 11,644
245 Michigan State Housing Development Authority*........ 12/01/12 7.650 255,559
</TABLE>
32
<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)
MICHIGAN--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 170 Michigan State Strategic Limited Obligation.......... 08/15/05 7.875% $ 195,119
-------------------
2,211,629
-------------------
MINNESOTA--1.19%
255 Coon Rapids Minnesota Hospital Revenue Health Central
Incorporated (Escrow to Maturity).................. 08/01/08 7.625 296,223
168 Eden Prairie Minnesota Multi Family Housing (GNMA
Collateralized).................................... 01/20/06 5.500 175,599
45 Moorhead Minnesota Residential Mortgage (Escrow to
Maturity).......................................... 08/01/11 7.100 53,033
-------------------
524,855
-------------------
MISSOURI--0.58%
240 St. Louis County Missouri Single Family Housing
(AMBAC Insured).................................... 10/01/16 9.250 256,133
-------------------
NEBRASKA--2.37%
1,000 Nebraska Higher Education Loan Program*.............. 12/01/02 6.700 1,051,550
-------------------
NEW JERSEY--6.07%
130 New Jersey Health Care Facilities Financing St.
Barnabas Medical Center (Escrow to Maturity)....... 07/01/11 7.000 149,157
399 New Jersey State Highway Garden State Parkway (Escrow
to Maturity)....................................... 01/01/11 6.500 450,192
155 New Jersey State Highway Garden State Parkway (Escrow
to Maturity)....................................... 01/01/11 6.600 175,881
1,500 New Jersey State Housing Mortgage Multi Family
Housing Revenue (FHA Insured)...................... 05/01/13 6.950 1,629,645
60 Secaucus New Jersey Municipal Utilities Authority
Sewer Revenue (Escrow to Maturity)................. 12/01/08 6.875 67,931
190 South Jersey Port Corporation (Escrow to Maturity)... 01/01/11 6.625 215,559
-------------------
2,688,365
-------------------
NEW MEXICO--0.73%
70 Albuquerque New Mexico Residential Mortgage Revenue
(Escrow to Maturity)............................... 03/01/04 7.000 76,197
245 Taos County New Mexico Hospital (Asset Guaranty
Insurance)......................................... 05/15/02 5.000 246,323
-------------------
322,520
-------------------
NEW YORK--1.17%
200 New York City Housing Authority Refunding Security
Assisted Series A.................................. 07/01/05 5.250 205,680
300 New York City Housing Authority Refunding Security
Assisted Series A (AMBAC Insured).................. 07/01/08 5.450 313,326
-------------------
519,006
-------------------
NORTH CAROLINA--0.86%
375 Asheville North Carolina Housing Authority Multi
Family Housing Woodridge Apartments (GNMA
Collateralized)*................................... 11/20/19 5.700 378,818
-------------------
OHIO--1.17%
115 Dayton Ohio Hospital Revenue Good Samaritan First
Mortgage Revenue (Escrow to Maturity).............. 12/01/05 6.000 122,294
45 Franklin County Ohio Hospital Revenue (Escrow to
Maturity).......................................... 12/01/08 7.400 51,810
</TABLE>
33
<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)
OHIO--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 90 Ohio Housing Finance Agency Single Family Mortgage
(GNMA Collateralized)*............................. 09/01/21 7.850% $ 95,607
195 Ohio State Water Development Authority Revenue
(Escrow to Maturity)............................... 12/01/10 9.375 249,608
-------------------
519,319
-------------------
OKLAHOMA--1.95%
335 Comanche County Oklahoma Hospital Authority Revenue
Series A (Connie Lee Insured)...................... 07/01/06 5.100 347,549
425 McAlester Oklahoma Public Works Authority Revenue
(FSA Insured)...................................... 12/01/04 8.250 518,275
-------------------
865,824
-------------------
PENNSYLVANIA--3.84%
125 Allegheny County Pennsylvania Industrial Commercial
Development MPB Association........................ 12/01/04 6.750 129,494
30 Caln Township Pennsylvania Municipal Sewer Revenue
(Escrow to Maturity)............................... 01/01/09 5.700 31,718
535 Chester County Pennsylvania Health & Education
Jefferson Health Systems Series B (AMBAC
Insured)........................................... 05/15/12 5.000 536,910
55 Chester County Pennsylvania Hospital Authority
Revenue (Escrow to Maturity)....................... 07/01/09 7.500 64,412
95 Conneaut Pennsylvania School District (Escrow to
Maturity) (AMBAC Insured).......................... 05/01/02 9.250 105,930
100 Erie Pennsylvania Higher Education Building Authority
Higher Education Building Authority Series 1993A... 03/15/20 5.750 102,270
70 Montgomery County Pennsylvania Higher Education
Beaver College (Escrow to Maturity)................ 10/01/00 6.750 72,448
405 Pittsburgh Pennsylvania Urban Redevelopment Authority
Oliver Garage Project (FGIC Insured)............... 06/01/11 5.200 412,869
220 Unity Township Pennsylvania Municipal Authority
(Escrow to Maturity)............................... 05/01/08 6.600 243,496
-------------------
1,699,547
-------------------
RHODE ISLAND--3.94%
700 Rhode Island Housing and Mortgage Finance*........... 04/01/22 8.050 736,323
1,000 Rhode Island State Turnpike & Bridge Refunding....... 12/01/17 5.350 1,009,610
-------------------
1,745,933
-------------------
SOUTH CAROLINA--1.32%
240 Charleston County South Carolina Hospital Facility
Roper Hospital (Escrow to Maturity)................ 10/01/11 7.000 278,002
295 South Carolina State Housing Multi Family (FHA
Insured)........................................... 07/01/27 6.050 304,903
-------------------
582,905
-------------------
SOUTH DAKOTA--1.01%
400 South Dakota State Health & Educational Revenue St.
Luke's Hospital Project (Escrow to Maturity)....... 10/01/07 6.800 448,668
-------------------
TENNESSEE--4.33%
1,000 Bristol Tennessee Industrial Development Board
Refunding Shelby Heights Apartments Project........ 03/01/22 6.200 1,030,930
360 Knox County Tennessee Health Educational & Hospital
Facility St. Mary's Medical Center (Escrow to
Maturity).......................................... 08/01/03 7.250 391,234
245 La Follette Tennessee Housing Development Corp.
(FHA/MBIA Insured)................................. 01/01/05 5.400 253,849
</TABLE>
34
<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)
TENNESSEE--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 195 Metropolitan Government Nashville Tennessee Health
and Education Southern Adv Hospital Adv Health
Systems (Escrow to Maturity)....................... 10/01/09 8.700% $ 242,933
-------------------
1,918,946
-------------------
TEXAS--13.32%
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 1,022,510
395 Galveston County Texas Housing Finance Corporation
Single Family Mortgage Revenue..................... 04/01/15 9.750 434,156
215 Hidalgo County Texas Health Services Corporation
Mission Hospital Project (Pre-Refunded 08/01/00 @
103)............................................... 02/01/25 10.250 252,062
295 Houston Texas Airport Systems Revenue (Escrow to
Maturity).......................................... 07/01/10 7.600 353,068
1,000 Lewisville Texas Housing Finance Corporation Housing
Lewisville Limited Project (FSA Insured)........... 12/01/08 5.000 1,001,470
1,500 Southeast Texas Housing Finance Corp................. 12/01/16 7.625# 388,635
450 Tarrant County Texas Health Facilities Development
Mortgage South Central Nursing A (FHA/MBIA
Insured)........................................... 01/01/37 6.000 490,941
1,100 Tarrant County Texas Housing Finance Corporation
Refunding Multi Family Housing Summit Project (FNMA
Collateralized).................................... 09/01/27 5.080 1,119,096
800 Texas State Department Housing and Community Housing
Senior Dallas/Fort Worth Series A.................. 07/01/06 6.000 839,816
-------------------
5,901,754
-------------------
UTAH--4.35%
300 Salt Lake City Utah Hospital Revenue (Escrow to
Maturity).......................................... 06/01/09 7.350 344,463
590 Salt Lake County Utah Multi Family Housing James
Pointe Apartment (Mandatory put 10/01/05 @ 100)
(Asset Guaranty Insurance)......................... 10/01/25 5.500 612,744
165 Salt Lake County Utah Water Conservation (Escrow to
Maturity) (MBIA Insured)........................... 10/01/02 10.875 195,862
125 Utah State Housing Finance Agency (AMBAC Insured).... 07/01/07 5.650 130,086
105 Utah State Housing Finance Agency (AMBAC Insured).... 07/01/07 5.650 109,153
515 Utah State Housing Finance Agency (AMBAC Insured).... 07/01/08 5.900 535,755
-------------------
1,928,063
-------------------
VIRGINIA--1.99%
630 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 4.550 630,088
250 King George County Virginia Industrial Development
Elementary School Project.......................... 08/01/98 4.875 250,218
-------------------
880,306
-------------------
WEST VIRGINIA--1.08%
385 Kanawha County West Virginia Building Commission
Revenue St. Francis Hospital (Escrow to
Maturity).......................................... 12/01/07 7.500 442,885
30 Kanawha County West Virginia Residential Mortgage
Revenue (Escrow to Maturity)....................... 09/01/10 7.375 35,516
-------------------
478,401
-------------------
WISCONSIN--0.23%
100 Wisconsin Housing & Economic Development Series G*... 03/01/04 5.250 102,718
-------------------
Total Municipal Bonds and Notes (cost--$41,020,757).............. 42,231,658
-------------------
</TABLE>
35
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MUNICIPAL FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- ---------- ------------------- --------------------- -------------------
TAX EXEMPT COLLATERALIZED MORTGAGE OBLIGATIONS--0.91%
<C> <S> <C> <C> <C>
$ 405 FHA Insured Trust 1996-01, Class A1 (1) (FHA Insured)
(cost--$405,172)................................... 11/01/06 6.100 % $ 404,159
-------------------
<CAPTION>
NUMBER OF
SHARES
- ----------
<C> <S> <C> <C> <C>
TAX FREE MONEY MARKET FUND--2.42%
1,072,582 MuniCash Portfolio (cost--$1,072,582)............................................................ 1,072,582
-------------------
Total Investments (cost--$42,498,511)--98.65%................................................................ 43,708,399
598,683
Other assets in excess of liabilities--1.35%.................................................................
-------------------
Net Assets--100.00%.......................................................................................... $ 44,307,082
-------------------
-------------------
</TABLE>
- -----------------
<TABLE>
<S> <C>
# Annualized yield at date of purchase on zero coupon bond
* Security subject to Federal Alternative Minimum Tax
AMBAC American Municipal Bond Assurance Corporation
FGIC Financial Guaranty Insurance Corporation
FHA Federal Housing Authority
FNMA Federal National Mortgage Association
FSA Financial Security Assurance
GNMA Government National Mortgage Association
MBIA Municipal Bond Investors Assurance
(1) Illiquid security representing 0.91% of net assets.
</TABLE>
See accompanying notes to financial statements
36
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GLOBAL FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)* DATES RATES VALUE
- ----------- ------------------- ------------------- -------------------
<C> <S> <C> <C> <C>
LONG-TERM GLOBAL DEBT SECURITIES--86.18%
ARGENTINA--1.63%
07/10/02 to
USD 1,500 Republic of Argentina............................... 03/31/23 5.500 to 8.750% $ 1,222,875
-------------------
BELGIUM--2.03%
JPY 180,000 Kingdom of Belgium.................................. 12/17/99 5.000 1,526,746
-------------------
GERMANY--18.23%
01/04/07 to
23,549 Federal Republic of Germany......................... 01/04/28 5.625 to 6.500 13,686,780
-------------------
JAPAN--2.08%
185,000 Japan Development Bank.............................. 10/01/99 5.000 1,559,264
-------------------
MEXICO--2.05%
CAD 750 United Mexican States............................... 06/02/03 7.000 484,286
USD 1,250 United Mexican States............................... 12/31/19 6.250 1,057,626
-------------------
1,541,912
-------------------
NORWAY--1.39%
7,200 Kingdom of Norway................................... 01/15/07 6.750 1,044,213
-------------------
PHILIPPINES--0.29%
USD 250 Republic of Philippines............................. 12/01/17 6.500 216,524
-------------------
SWEDEN--7.32%
10/25/06 to
39,800 Kingdom of Sweden................................... 08/15/07 6.500 to 8.000 5,492,813
-------------------
UNITED KINGDOM--18.50%
12/07/07 to
7,599 United Kingdom Gilt................................. 12/07/15 7.250 to 8.000 13,887,290
-------------------
UNITED STATES--31.79%
220 African Development Bank (2)........................ 10/15/15 6.875 231,663
350 Cajun Electrical Power Corp. ....................... 03/15/19 9.520 368,162
JPY 210,000 Federal National Mortgage Association............... 12/20/99 2.000 1,691,050
500 Rowan Companies Inc. ............................... 07/01/10 6.940 524,935
350 Salomon Inc. ....................................... 11/30/00 6.625 356,454
180 Statoil............................................. 05/01/16 7.375 196,128
11/15/26 to
4,688 U.S. Treasury Bonds (1)............................. 08/15/27 6.375 to 6.625 5,081,739
05/31/99 to
14,532 U.S. Treasury Notes (1)............................. 05/31/01 6.250 to 6.500 14,864,805
550 Xerox Corp. MTN..................................... 06/15/37 5.875 558,296
-------------------
23,873,232
-------------------
VENEZUELA--0.87%
USD 750 Republic of Venezuela............................... 03/31/20 6.750 651,562
-------------------
Total Long-Term Global Debt Securities (cost--$64,261,690)....... 64,703,211
-------------------
<CAPTION>
NUMBER OF
SHARES
- -----------
<C> <S> <C> <C> <C>
MONEY MARKET FUNDS--0.01%
5,300 Liquid Assets Portfolio (cost--$5,300)........................................................ 5,300
-------------------
</TABLE>
37
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GLOBAL FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- ----------- ------------------- ------------------- -------------------
REPURCHASE AGREEMENT--8.83%
<C> <S> <C> <C> <C>
$ 6,626 Repurchase Agreement dated 01/31/98 with State
Street Bank & Trust Co., collateralized by
$4,621,947
U.S. Treasury Bonds, 9.875% due 11/15/15
(value-$6,758,650) proceeds: $6,628,761
(cost-$6,626,000)................................. 02/02/98 5.000% $ 6,626,000
-------------------
<CAPTION>
NUMBER OF
SHARES
- -----------
<C> <S> <C> <C> <C>
INVESTMENTS OF CASH COLLATERAL FOR SECURITIES LOANED--3.41%
MONEY MARKET FUNDS--3.41%
2,566,200 Liquid Assets Portfolio (cost--$2,566,200).................................................... 2,566,200
-------------------
73,900,711
Total Investments (cost--$73,459,190)--98.43%..............................................................
1,177,427
Other assets in excess of liabilities--1.57%...............................................................
-------------------
$ 75,078,138
Net Assets--100.00%........................................................................................
-------------------
-------------------
</TABLE>
- -----------------
<TABLE>
<S> <C>
Note: The Portfolio of Investments is listed by the issuers country of origin.
* In local currency unless otherwise indicated
MTN Medium Term Note
USD U.S. Dollars
(1) Security, or portion thereof, was on loan at January 31, 1998.
(2) "Supranational" security denominated in U.S. Dollars.
</TABLE>
FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
CONTRACT TO MATURITY APPRECIATION
DELIVER IN EXCHANGE FOR DATES (DEPRECIATION)
----------- --------------- --------- -------------
<S> <C> <C> <C> <C>
British Pounds.......................................................... 3,947,016 U.S.$ 6,437,371 02/19/98 $ 35,310
Canadian Dollars........................................................ 4,861,212 U.S.$ 3,340,612 02/19/98 (87,606)
German Deutschemarks.................................................... 6,676,825 U.S.$ 3,644,754 02/02/98 (94,874)
German Deutschemarks.................................................... 11,147,248 U.S.$ 6,091,625 02/19/98 (160,336)
German Deutschemarks.................................................... 98,197 U.S.$ 53,662 02/19/98 (1,372)
German Deutschemarks.................................................... 3,394,941 U.S.$ 1,855,230 02/19/98 (30,220)
Japanese Yen............................................................ 589,691,993 U.S.$ 4,657,277 02/19/98 24,174
Japanese Yen............................................................ 534,710,750 U.S.$ 4,223,046 02/19/98 (46,954)
Japanese Yen............................................................ 730,436,528 U.S.$ 5,768,851 02/19/98 (76,044)
Norwegian Kroner........................................................ 11,401,956 U.S.$ 1,501,423 02/19/98 (70,112)
U.S. Dollars............................................................ 3,438,244 CAD 5,005,224 02/02/98 16,470
U.S. Dollars............................................................ 3,340,612 CAD 4,861,212 02/19/98 (19,885)
U.S. Dollars............................................................ 1,536,576 DEM 2,811,826 02/19/98 34,959
U.S. Dollars............................................................ 2,325,221 DEM 4,254,992 02/19/98 65,694
U.S. Dollars............................................................ 3,459,117 DEM 6,329,943 02/19/98 107,048
U.S. Dollars............................................................ 3,660,550 DEM 6,676,825 04/16/98 94,695
U.S. Dollars............................................................ 54,735 GBP 33,560 02/19/98 299
U.S. Dollars............................................................ 6,559,526 GBP 4,021,914 02/19/98 36,414
U.S. Dollars............................................................ 3,732,836 JPY 472,641,751 02/19/98 26,464
-------------
$ (145,876)
-------------
-------------
</TABLE>
CURRENCY TYPE ABBREVIATIONS:
CAD--Canadian Dollars GBP--British Pounds
DEM--German Deutschemarks JPY --Japanese Yen
38
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GLOBAL FIXED INCOME INVESTMENTS
INVESTMENTS BY TYPE OF ISSUER
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
----------------------------
LONG-TERM SHORT-TERM
------------- -------------
<S> <C> <C>
Government and other public issuers............... 78.88% --
Repurchase agreements............................. -- 8.83%
Bank and other financial institutions............. 4.63 --
Money Market Funds................................ -- 3.42
Other............................................. 2.67 --
----- -----
86.18% 12.25%
----- -----
----- -----
</TABLE>
See accompanying notes to financial statements
39
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--97.82%
AGRICULTURE, FOOD & BEVERAGE--3.83%
27,700 Bestfoods........................................................... $ 2,700,750
17,000 Corn Products International Inc.*................................... 544,000
64,600 Nabisco Holdings Corp. (1).......................................... 2,672,825
128,900 Tyson Foods Inc. ................................................... 2,328,256
------------
8,245,831
------------
BANKS--5.66%
30,800 Citicorp............................................................ 3,665,200
17,400 Comerica Inc. ...................................................... 1,642,125
16,600 First American Corp. ............................................... 743,887
20,850 First Security Corp. ............................................... 727,144
35,200 Hibernia Corp. ..................................................... 671,000
16,200 Regions Financial Corp. ............................................ 633,825
37,286 US Bancorp.......................................................... 4,082,817
------------
12,165,998
------------
CHEMICALS--2.15%
34,900 Eastman Chemical Co. ............................................... 2,078,731
17,500 Geon Co. ........................................................... 371,875
69,200 Lyondell Petrochemical Co. ......................................... 1,764,600
10,300 Witco Corp. ........................................................ 417,150
------------
4,632,356
------------
COMPUTER HARDWARE--8.11%
181,100 EMC Corp.*.......................................................... 5,897,069
56,600 Seagate Technology, Inc.*........................................... 1,312,412
127,200 Xerox Corp. (1)..................................................... 10,223,700
------------
17,433,181
------------
COMPUTER SOFTWARE--0.09%
30,000 Informix Corp.*..................................................... 195,000
------------
DEFENSE/AEROSPACE--6.17%
89,866 Lockheed Martin Corp. .............................................. 9,351,681
75,000 Raytheon Co. (1).................................................... 3,909,375
------------
13,261,056
------------
DIVERSIFIED RETAIL--1.40%
65,300 Sears Roebuck & Co. ................................................ 3,007,881
------------
DRUGS & MEDICINE--9.62%
64,900 Allergan, Inc. ..................................................... 2,206,600
63,300 Alza Corp.* (1)..................................................... 2,255,062
51,100 American Home Products Corp. ....................................... 4,876,856
24,800 Biogen Inc.*........................................................ 1,019,900
31,875 Covance Inc.*....................................................... 603,633
29,100 Forest Labs Inc.*................................................... 1,727,813
25,500 Genzyme Corp.*...................................................... 680,531
101,000 Schering-Plough Corp. .............................................. 7,309,875
------------
20,680,270
------------
ELECTRIC UTILITIES--5.83%
81,700 CMS Energy Corp. ................................................... 3,477,356
165,300 Entergy Corp. ...................................................... 4,731,712
25,800 Firstenergy Corp. .................................................. 748,200
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
ELECTRIC UTILITIES--(CONCLUDED)
<TABLE>
<C> <S> <C>
189,000 PECO Energy Co. .................................................... $ 3,579,188
------------
12,536,456
------------
ELECTRICAL EQUIPMENT--0.45%
28,920 Comverse Technology Inc.*........................................... 974,243
------------
ELECTRONIC COMPONENTS--0.48%
48,200 Commscope Inc.*..................................................... 632,625
32,725 General Semiconductor Inc.*......................................... 390,655
------------
1,023,280
------------
FINANCIAL SERVICES--3.15%
121,350 AON Corp. .......................................................... 6,772,847
------------
FOREST PRODUCTS, PAPER--4.13%
15,500 Champion International Corp. ....................................... 793,407
74,000 Fort James Corp. ................................................... 3,177,375
84,800 Kimberly Clark Corp. ............................................... 4,425,500
15,150 Westvaco Corp. ..................................................... 491,428
------------
8,887,710
------------
FOOD RETAIL--0.51%
122,800 Food Lion Inc. ..................................................... 1,097,525
------------
FREIGHT, AIR, SEA & LAND--3.29%
108,800 Federal Express Corp.*.............................................. 7,078,800
------------
HEAVY MACHINERY--0.78%
48,100 Harnischfeger Industries Inc. ...................................... 1,683,500
------------
HOUSEHOLD PRODUCTS--1.18%
32,700 Dial Corp. ......................................................... 684,656
12,400 National Services Industries, Inc. ................................. 620,000
62,200 Viad Corp. ......................................................... 1,236,225
------------
2,540,881
------------
INDUSTRIAL PARTS--1.49%
4,900 Briggs & Stratton Corp. ............................................ 215,906
33,500 Pentair Inc. ....................................................... 1,147,375
12,900 Timken Co. ......................................................... 416,025
39,500 York International Corp. ........................................... 1,431,875
------------
3,211,181
------------
INFORMATION & COMPUTER SERVICES--6.00%
83,000 Automatic Data Processing Inc. ..................................... 4,964,437
153,120 First Data Corp. ................................................... 4,689,300
41,250 Interpublic Group Companies, Inc. .................................. 2,023,828
61,700 Reynolds & Reynolds Co. ............................................ 1,226,288
------------
12,903,853
------------
MEDICAL PRODUCTS--2.67%
81,900 Baxter International Inc. .......................................... 4,560,806
27,400 Beckman Instruments Inc. ........................................... 1,179,913
------------
5,740,719
------------
</TABLE>
40
<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>
MEDICAL PROVIDERS--4.31%
150,600 Corning, Inc. ...................................................... $ 5,120,400
28,600 Health Care & Retirement Corp.*..................................... 1,135,062
39,700 Manor Care Inc. .................................................... 1,377,094
67,000 Vencor Inc.*........................................................ 1,641,500
------------
9,274,056
------------
MINING & METALS--1.22%
25,400 Birmingham Steel Corp. ............................................. 420,688
30,100 Crown Cork & Seal, Inc. ............................................ 1,489,950
18,560 Martin Marietta Inc. ............................................... 705,280
------------
2,615,918
------------
MOTOR VEHICLES--3.57%
17,800 Echlin, Inc. ....................................................... 633,012
91,000 Goodyear Tire & Rubber Co. (1)...................................... 5,698,875
27,300 Lear Corp.*......................................................... 1,356,469
------------
7,688,356
------------
OIL REFINING--2.75%
84,900 Enron Corp. ........................................................ 3,518,044
72,116 Ultramar Diamond Shamrock........................................... 2,402,364
------------
5,920,408
------------
OTHER INSURANCE--3.38%
41,400 CIGNA Corp. ........................................................ 7,019,887
6,100 Old Republic International Corp. ................................... 239,044
------------
7,258,931
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
PUBLISHING--1.77%
62,900 Gannett Inc. ....................................................... $ 3,805,450
------------
RAILROADS--3.20%
79,400 Burlington Northern Santa Fe Inc. .................................. 6,887,950
------------
REAL PROPERTY--2.18%
33,400 Champion Enterprise Inc.*........................................... 653,387
9,700 Fleetwood Enterprises Inc. ......................................... 403,763
73,800 Masco Corp. (1)..................................................... 3,634,650
------------
4,691,800
------------
SPECIALTY RETAIL--2.71%
93,600 Circuit City Stores, Inc. .......................................... 3,194,100
40,200 CVS Corp. .......................................................... 2,635,613
------------
5,829,713
------------
TOBACCO--3.45%
178,700 Phillip Morris Co. Inc. ............................................ 7,416,050
------------
WIRELESS TELECOMMUNICATIONS--2.29%
88,500 Nextel Communications Inc.*......................................... 2,417,156
144,400 Nextlevel Systems Inc.*............................................. 2,508,950
------------
4,926,106
------------
Total Common Stocks (cost--$179,169,208)....................................... 210,387,306
------------
</TABLE>
<TABLE>
<C> <S> <C>
MONEY MARKET FUNDS--0.01%
11,609 Liquid Assets Portfolio (cost--$11,609)............................. 11,609
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES
- --------- -------------------- --------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT [email protected]%
$ 350 U.S. Treasury Bills+ (cost--$344,186)............. 05/28/98 5.155 % 344,210
------------
REPURCHASE AGREEMENT--1.88%
4,040 Repurchase Agreement dated 01/30/98 with State
Street Bank & Trust Co., collateralized by
$2,819,681 U.S. Treasury Bonds, 9.875% due
11/15/15; (value-$4,123,205)
proceeds: $4,041,683 (cost-$4,040,000).......... 02/02/98 5.000 4,040,000
------------
</TABLE>
41
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -------------
<C> <S> <C> <C> <C>
INVESTMENTS OF CASH COLLATERAL FOR SECURITIES LOANED--8.55%
MONEY MARKET FUNDS--8.55%
16,882,161 Liquid Assets Portfolio............................................................................. $ 16,882,161
5,089 Prime Portfolio..................................................................................... 5,089
1,157,474 TempCash Portfolio.................................................................................. 1,157,474
348,675 TempFund Portfolio.................................................................................. 348,675
-------------
Total Investments of Cash Collateral for Securities Loaned (cost--$18,405,008).................................. 18,393,399
-------------
Total Investments (cost--$201,958,402)--108.42%................................................................. 233,176,524
Liabilities in excess of other assets--(8.42)%.................................................................. (18,116,506)
-------------
Net Assets--100.00%............................................................................................. $ 215,060,018
-------------
-------------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* 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 January 31, 1998.
</TABLE>
FUTURES CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF IN EXPIRATION UNREALIZED
CONTRACTS CONTRACTS TO RECEIVE EXCHANGE FOR DATE APPRECIATION
- ---------- -------------------------------------------------------------------------- ------------ ----------- -----------
<C> <S> <C> <C> <C>
7 S&P 500................................................................... $3,704,250 March 1998 $ 69,570
-----------
-----------
</TABLE>
See accompanying notes to financial statements
42
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--98.83%
AGRICULTURE, FOOD & BEVERAGE--3.91%
70,200 Campbell Soup Co.................................................... $ 3,755,700
62,400 The Coca-Cola Co.................................................... 4,040,400
-----------
7,796,100
-----------
BANKS--3.30%
33,100 The Chase Manhattan Corp............................................ 3,547,906
50,600 NationsBank Corp.................................................... 3,036,000
-----------
6,583,906
-----------
CHEMICALS--1.64%
52,000 Sealed Air Corp.* (1)............................................... 3,269,500
-----------
COMPUTER HARDWARE--10.11%
137,250 Cisco Systems, Inc.*................................................ 8,655,328
242,400 Compaq Computer Corp.*.............................................. 7,287,150
42,400 Dell Computer Corp.*................................................ 4,216,150
-----------
20,158,628
-----------
COMPUTER SOFTWARE--1.98%
26,400 Microsoft Corp.*.................................................... 3,938,550
-----------
CONSUMER DURABLES--1.27%
66,000 Sunbeam-Oster Co., Inc.............................................. 2,503,875
-----------
DEFENSE/AEROSPACE--2.17%
111,000 Allied-Signal, Inc.................................................. 4,322,063
-----------
DIVERSIFIED RETAIL--4.59%
39,100 Dayton Hudson Corp.................................................. 2,812,756
55,200 Kohls Corp.*........................................................ 3,829,500
62,800 Wal Mart Stores, Inc. (1)........................................... 2,504,150
-----------
9,146,406
-----------
DRUGS & MEDICINE--9.86%
48,500 Bristol-Myers Squibb Co............................................. 4,834,844
64,000 Merck & Co., Inc.................................................... 7,504,000
101,000 Schering-Plough Corp................................................ 7,309,875
-----------
19,648,719
-----------
ELECTRIC UTILITIES--0.82%
38,400 AES Corp.*.......................................................... 1,644,000
-----------
ELECTRICAL EQUIPMENT--5.12%
50,000 Lucent Technologies Inc. (1)........................................ 4,425,000
133,900 Solectron Corp.*.................................................... 5,791,175
-----------
10,216,175
-----------
ELECTRICAL POWER--1.25%
88,800 United States Industries Inc........................................ 2,491,950
-----------
ENERGY RESERVES & PRODUCTION--1.30%
78,300 Apache Corp......................................................... 2,593,688
-----------
ENTERTAINMENT--3.39%
37,200 Carnival Corp....................................................... 2,076,225
44,000 Walt Disney Co...................................................... 4,688,750
-----------
6,764,975
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
ENVIRONMENTAL SERVICES--1.91%
103,600 USA Waste Services Inc.* (1)........................................ $ 3,807,300
-----------
FINANCIAL SERVICES--2.06%
131,900 MBNA Corp........................................................... 4,097,144
-----------
FOOD RETAIL--1.96%
100,000 Kroger Co.*......................................................... 3,912,500
-----------
HOUSEHOLD PRODUCTS--6.83%
62,300 Colgate-Palmolive Co................................................ 4,563,475
60,000 Gillette Co......................................................... 5,925,000
39,900 Procter & Gamble Co................................................. 3,127,162
-----------
13,615,637
-----------
INDUSTRIAL PARTS--1.21%
29,600 United Technologies Corp............................................ 2,416,100
-----------
LEISURE--1.13%
89,800 Harley Davidson Inc................................................. 2,256,225
-----------
LONG DISTANCE & PHONE COMPANIES--2.36%
131,300 WorldCom, Inc.*..................................................... 4,702,181
-----------
MEDIA--1.45%
80,700 Liberty Media Group, Series A*...................................... 2,890,069
-----------
MEDICAL PRODUCTS--7.60%
62,100 Abbott Laboratories................................................. 4,397,456
85,600 Medtronic, Inc. (1)................................................. 4,370,950
143,700 Tyco International Ltd.............................................. 6,376,688
-----------
15,145,094
-----------
OIL SERVICES--3.41%
34,000 BJ Services Co.*.................................................... 2,059,125
81,900 Noble Drilling Corp................................................. 2,190,825
34,700 Schlumberger Ltd. (1)............................................... 2,556,956
-----------
6,806,906
-----------
OTHER INSURANCE--3.58%
37,000 American International Group Inc.................................... 4,081,562
73,000 Travelers Property Casualty Corp.................................... 3,047,750
-----------
7,129,312
-----------
SECURITIES & ASSET MANAGEMENT--7.03%
53,500 Merrill Lynch & Co., Inc............................................ 3,377,188
80,000 Morgan Stanley, Dean Witter, Discover & Co.......................... 4,670,000
120,449 Travelers Group Inc................................................. 5,962,225
-----------
14,009,413
-----------
SEMICONDUCTOR--2.75%
38,000 Altera Corp......................................................... 1,301,500
27,600 Applied Materials Inc.* (1)......................................... 905,625
40,500 Intel Corp.......................................................... 3,280,500
-----------
5,487,625
-----------
</TABLE>
43
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONCLUDED)
<TABLE>
<C> <S> <C>
SPECIALTY RETAIL--1.99%
65,700 Home Depot, Inc..................................................... $ 3,962,531
-----------
TOBACCO--2.85%
137,000 Phillip Morris Co. Inc.............................................. 5,685,500
-----------
Total Common Stocks (cost--$176,970,049)....................................... 197,002,072
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
INVESTMENTS OF CASH COLLATERAL FOR SECURITIES LOANED--7.82%
MONEY MARKET FUNDS--7.82%
8,724,424 Liquid Assets Portfolio............................................. $ 8,724,424
1,741,752 Prime Portfolio..................................................... 1,741,752
5,117,439 TempCash Portfolio.................................................. 5,117,439
8,285 TempFund Portfolio.................................................. 8,285
-----------
Total Investments of Cash Collateral for Securities Loaned
(cost--$15,591,900).......................................................... 15,591,900
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- --------- -------------------- --------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--1.32%
$ 2,621 Repurchase Agreement dated 01/30/98 with State
Street Bank & Trust Co., collateralized by
$1,828,271 U.S. Treasury Notes, 9.875% due
11/15/15 (value-$2,673,471) proceeds: $2,622,092
(cost-$2,621,000)............................... 02/02/98 5.000% 2,621,000
-----------
Total Investments (cost--$195,182,949)--107.97%.............. 215,214,972
Liabilities in excess of other assets--(7.97)%............... (15,879,449)
-----------
Net Assets--100.00%.......................................... $199,335,523
-----------
-----------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Non-income producing security
(1) Security, or a portion thereof, was loaned at January 31, 1998.
</TABLE>
See accompanying notes to financial statements
44
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--95.19%
AGRICULTURE, FOOD & BEVERAGE--0.76%
2,600 Cagle's Inc. ....................................................... $ 30,225
14,200 Chock Full of Nuts Corp.*........................................... 98,512
2,372 ERLY Industries Inc.*............................................... 16,011
24,100 Fleming Companies Inc............................................... 363,006
1,900 Grist Mill Co.*..................................................... 18,649
20,892 Imperial Holly Corp. ............................................... 180,193
19,500 Nash Finch Co. ..................................................... 380,250
11,000 Orange Company, Inc. New............................................ 81,125
6,000 Suprema Specialties Inc.*........................................... 20,063
9,300 Sylvan, Inc.*....................................................... 114,506
-----------
1,302,540
-----------
AIRLINES--2.16%
25,400 Alaska Air Group Inc.* (1).......................................... 1,233,487
51,500 America West Holding Corp.*......................................... 1,123,344
21,600 ASA Holdings Inc. .................................................. 745,200
13,300 Mesa Air Group Inc.*................................................ 89,775
9,750 Midwest Express Holdings Inc.*...................................... 405,234
16,600 World Airways Inc. New*............................................. 86,113
-----------
3,683,153
-----------
ALCOHOL--0.03%
5,600 Todhunter International Inc.*....................................... 55,300
-----------
APPAREL, RETAIL--0.40%
9,600 Cache Inc.*......................................................... 30,300
9,200 Cato Corp. New...................................................... 104,650
1,700 Concord Fabrics Inc.*............................................... 14,875
5,500 Filenes Basement Corp.*............................................. 23,891
5,200 Finish Line Inc.*................................................... 65,533
1,700 Haskel International Inc. .......................................... 19,990
5,300 S & K Famous Brands Inc.*........................................... 67,492
25,000 Syms Corp.*......................................................... 353,125
-----------
679,856
-----------
APPAREL, TEXTILES--2.80%
69,100 Burlington Industries Inc.*......................................... 984,675
42,800 Collins & Aikman Corp.*............................................. 355,775
12,725 Conso Products Co.*................................................. 93,847
7,600 Culp, Inc. ......................................................... 152,000
1,666 Decorator Industries, Inc. ......................................... 14,994
10,100 Dixie Group Inc. ................................................... 113,625
22,600 Dyersburg Corp. .................................................... 233,062
6,600 G-III Apparel Group Ltd.*........................................... 37,125
15,300 Galey & Lord Inc.*.................................................. 243,844
6,700 Garan Inc. ......................................................... 158,288
39,900 Guilford Mills, Inc. ............................................... 1,057,350
4,600 Hampshire Group, Ltd.*.............................................. 79,350
28,000 Hartmarx Corp.*..................................................... 208,250
31,000 Justin Industries Inc. ............................................. 410,750
12,500 Marisa Christina Inc.*.............................................. 56,250
5,800 Maxwell Shoe Inc.*.................................................. 81,925
11,200 Supreme International Corp.*........................................ 116,200
2,800 Tarrant Apparel Group*.............................................. 45,500
33,600 Tultex Corp.*....................................................... 126,000
3,600 Weyco Group Inc. ................................................... 76,500
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
APPAREL, TEXTILES--(CONCLUDED)
<TABLE>
<C> <S> <C>
19,000 Worldtex, Inc.*..................................................... $ 142,500
-----------
4,787,810
-----------
BANKS--3.28%
2,600 American Bank Inc. ................................................. 122,200
1,065 Associated Banc Corp. .............................................. 54,981
4,600 Banknorth Group Inc. ............................................... 286,350
5,156 Chittenden Corp. ................................................... 183,038
22,500 Citizens Banking Corp. ............................................. 720,000
383 Commerce Bancorp, Inc. ............................................. 17,222
6,300 Community Trust Bancorp Inc. ....................................... 191,756
16,900 Corus Bank Shares Inc. ............................................. 650,650
3,150 CVB Financial Corp. ................................................ 83,081
2,200 Evergreen Bancorp Inc. ............................................. 51,700
4,100 First Citizens Bancshares, Inc. .................................... 471,500
7,500 First Western Bancorp Inc. ......................................... 217,500
4,600 Firstbank Illinois Co. ............................................. 174,800
9,123 HUBCO Inc. ......................................................... 326,147
2,587 Interchange Financial Services Inc. ................................ 74,700
5,700 Mid America Bancorp................................................. 178,838
1,953 National Penn Banc Shares Inc. ..................................... 60,543
7,100 Onbancorp Inc. ..................................................... 495,225
13,000 One Valley Bancorp West Virginia Inc. .............................. 455,812
3,350 Susquehanna Bank Shares Inc. ....................................... 121,019
3,665 Union Planters Corp. ............................................... 225,398
6,400 United Bank Shares Inc. ............................................ 300,000
1,900 U.S. Bancorp. Inc. ................................................. 134,900
-----------
5,597,360
-----------
CHEMICALS--2.85%
7,910 Aceto Corp. ........................................................ 160,177
4,100 American Biltrite Inc. ............................................. 100,963
3,300 American Vanguard Corp. ............................................ 21,244
3,100 Ameron, Inc. ....................................................... 182,319
3,300 Atlantis Plastics Inc.*............................................. 16,706
13,500 Bairnco Corp. ...................................................... 137,531
12,200 Congoleum Corp. New*................................................ 114,375
6,800 Environmental Technologies*......................................... 41,650
43,200 Foamex International Inc. .......................................... 556,200
12,000 Furon Co. .......................................................... 233,250
31,800 Gencorp Inc. ....................................................... 787,050
2,800 General Magnaplate Corp. ........................................... 19,250
15,700 Gundle/SLT Environmental Inc.*...................................... 86,350
9,135 Hawkins Chemical Inc. .............................................. 91,350
12,000 High Plains Corp.*.................................................. 36,000
6,600 Martin Color-Fi Inc.*............................................... 29,288
1,300 Maxco Inc.*......................................................... 13,650
47,109 Mississippi Chemical Corp. ......................................... 845,018
1,900 NCH Corp. .......................................................... 119,139
1,800 Raven Industies Inc. ............................................... 40,725
11,200 Stepan Chemical Co. ................................................ 312,200
4,700 Sybron Chemicals Inc. .............................................. 163,325
63,800 Terra Industries Inc. .............................................. 765,600
-----------
4,873,360
-----------
</TABLE>
45
<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)
<TABLE>
<C> <S> <C>
COMPUTER HARDWARE--2.27%
13,600 Amplicon Inc. ...................................................... $ 241,400
1,300 Asante Technologies*................................................ 3,993
33,300 Auspex Systems Inc.*................................................ 299,700
37,100 Banctec, Inc.*...................................................... 948,369
9,300 Compucom Systems Inc.*.............................................. 74,981
4,500 Dataram Corp.*...................................................... 41,625
200 Equinox Systems Inc.*............................................... 3,800
5,000 Franklin Electronic Publishers Inc.*................................ 64,375
6,200 Gradco Systems Inc.*................................................ 41,850
8,500 Lumisys Inc.*....................................................... 42,500
1,500 McRae Industries Inc. .............................................. 11,344
6,200 Microage Inc.*...................................................... 67,812
10,200 Miltope Group Inc.*................................................. 32,513
33,500 Network Equipment Technologies, Inc.*............................... 422,937
7,800 Rainbow Technologies Inc.*.......................................... 193,050
6,200 SED International Holdings Inc.*.................................... 69,750
31,400 Stratus Computer Inc.*.............................................. 1,324,687
-----------
3,884,686
-----------
COMPUTER SOFTWARE--0.20%
18,400 3Do Co.*............................................................ 39,100
4,500 CFI Proservices Inc.*............................................... 68,625
1,800 GSE Systems Inc.*................................................... 4,050
20,100 MacNeal Schwendler Corp.*........................................... 187,181
3,100 Programmers Paradise Inc.*.......................................... 30,225
1,200 Santa Cruz Operation Inc.*.......................................... 4,875
-----------
334,056
-----------
CONSUMER DURABLES--1.33%
6,600 Chromcraft Revington Inc.*.......................................... 190,575
5,100 Craftmade International Inc. ....................................... 62,156
2,900 Flexsteel Industries Inc. .......................................... 37,700
7,000 Middleby Corp.*..................................................... 49,438
28,500 Mikasa Inc. ........................................................ 391,875
18,800 O'Sullivan Industries*.............................................. 189,175
2,100 Pulaski Furniture Corp. ............................................ 40,688
2,400 Shelby Williams Industries Inc. .................................... 37,950
5,100 Stanley Furniture Co., Inc.*........................................ 157,462
3,800 Tab Products Co. ................................................... 44,175
13,700 Toro Co. ........................................................... 533,444
12,800 United States Can Corp.*............................................ 192,000
5,610 Virco Manufacturing Corp. .......................................... 148,314
9,900 Winsloew Furniture Inc.*............................................ 191,812
-----------
2,266,764
-----------
DEFENSE/AEROSPACE--0.96%
23,000 Alliant Techsystems Inc.*........................................... 1,367,062
5,600 Allied Research Corp.*.............................................. 63,000
7,300 Edo Corp. .......................................................... 65,700
6,200 Herley Industries Inc.*............................................. 72,850
5,700 Safety Components International Inc.*............................... 77,663
-----------
1,646,275
-----------
DIVERSIFIED RETAIL--0.29%
16,900 Ames Department Stores Inc.*........................................ 242,938
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
DIVERSIFIED RETAIL--(CONCLUDED)
<TABLE>
<C> <S> <C>
37,900 Homebase Inc.*...................................................... $ 255,825
-----------
498,763
-----------
DRUGS & MEDICINE--0.59%
12,400 Bindley Western Industries, Inc. ................................... 346,425
29,300 Herbalife International Inc. ....................................... 664,134
-----------
1,010,559
-----------
ELECTRIC UTILITIES--6.74%
15,600 Black Hills Corp. .................................................. 512,850
31,000 Central Hudson Gas & Electric Corp. ................................ 1,234,187
38,500 Central Louisiana Electric Co. ..................................... 1,195,906
18,200 Central Vermont Public Service Corp. ............................... 242,288
27,700 Commonwealth Energy Systems......................................... 952,187
24,900 Eastern Utilities Associates........................................ 599,156
59,900 El Paso Electric Co.*............................................... 434,275
1,300 Florida Public Utilities Co. ....................................... 30,631
5,900 Green Mountain Power Corp. ......................................... 113,575
5,000 Orange & Rockland Utilities Inc. ................................... 222,500
9,100 Otter Tail Power Co. ............................................... 342,388
71,400 Public Service Co................................................... 1,615,425
21,600 Rochester Gas & Electric Corp. ..................................... 677,700
8,400 Saint Joseph Light & Power Co. ..................................... 151,725
4,700 Sierra Pacific Resources............................................ 166,263
18,200 Sig Corp Inc. ...................................................... 519,838
19,400 TNP Enterprises Inc. ............................................... 648,687
55,000 Unisource Energy Corp. ............................................. 948,750
14,800 United Illuminating Co. ............................................ 630,850
6,400 Unitil Corp. ....................................................... 172,000
3,400 Upper Peninsula Energy Corp. ....................................... 92,650
-----------
11,503,831
-----------
ELECTRICAL EQUIPMENT--2.55%
3,000 ADE Corp. Massachusetts*............................................ 50,063
49,100 Ampex Corp.*........................................................ 150,369
11,000 Applied Magnetics Corp.* (1)........................................ 127,875
1,800 Ault Inc. .......................................................... 10,238
8,800 Bel Fuse Inc.*...................................................... 193,050
8,400 Ceradyne Inc. California*........................................... 39,900
14,400 Cherry Corp.*....................................................... 219,600
4,600 Circuit Systems, Inc.*.............................................. 19,981
3,100 Continental Circuits Corp.*......................................... 43,400
11,100 CTS Corp. .......................................................... 357,975
2,400 DBA Systems Inc.*................................................... 18,750
7,900 Hutchinson Technology Inc.*......................................... 198,487
13,900 Intervoice Inc.*.................................................... 136,394
5,600 ITI Technologies Inc.*.............................................. 137,900
5,100 Jaco Electronics Inc.*.............................................. 34,106
29,100 Kemet Corp.*........................................................ 538,350
7,700 Louisiana Barge Inc.*............................................... 31,763
10,900 Methode Electronics Inc. ........................................... 156,687
15,400 Mosaix Inc.*........................................................ 140,525
2,200 Nortech Systems Inc.*............................................... 10,175
4,900 O. I. Corp.*........................................................ 21,284
7,900 Park Electrochemical Corp. ......................................... 252,800
29,300 Pioneer Standard Electronics, Inc. ................................. 408,369
</TABLE>
46
<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>
5,300 Plexus Corp.*....................................................... $ 82,150
1,900 Quad Systems Corp.*................................................. 9,619
10,500 Quixote Corp. ...................................................... 85,969
31,400 Read Rite Corp.*.................................................... 465,112
13,500 Richey Electronics Inc.*............................................ 119,812
1,900 Robinson Nugent Inc. ............................................... 8,550
4,300 Sigmatron International Inc.*....................................... 44,881
3,900 Spectrum Control Inc.*.............................................. 20,963
4,300 Speizman Industries Inc.*........................................... 23,650
11,000 Teltrend Inc.*...................................................... 160,875
4,000 Video Display Corp.*................................................ 37,500
-----------
4,357,122
-----------
ELECTRICAL POWER--0.32%
2,700 Carbide/Graphite Group Inc.*........................................ 91,800
12,400 Hughes Supply Inc. ................................................. 404,550
4,500 Sl Industries Inc. ................................................. 54,000
-----------
550,350
-----------
ELECTRONIC COMPONENTS--0.02%
1,300 Axsys Technologies Inc. ............................................ 27,300
-----------
ENERGY RESERVES & PRODUCTION--0.70%
33,400 Aquila Gas Pipeline Corp. .......................................... 354,875
7,700 Benton Oil & Gas Co.*............................................... 95,287
1,800 California Water Service Group...................................... 52,650
400 Columbus Energy Corp.*.............................................. 3,450
2,000 Enex Resources Corp. ............................................... 22,000
970 Forcenergy Inc. .................................................... 21,643
2,700 Prima Energy Corp.*................................................. 47,250
20,600 Vintage Petroleum Inc. ............................................. 363,075
5,000 Williams Clayton Energy Inc.*....................................... 63,750
12,518 Wilshire Oil Co. ................................................... 71,979
7,600 Wiser Oil Co. ...................................................... 99,750
-----------
1,195,709
-----------
ENTERTAINMENT--0.09%
6,000 Intrav Inc. ........................................................ 77,250
9,000 Rentrak Corp.*...................................................... 39,938
4,700 Vaughns Inc.*....................................................... 28,200
-----------
145,388
-----------
ENVIRONMENTAL SERVICES--0.13%
800 GNI Group Inc.*..................................................... 4,800
6,100 Layne Christensen Co.*.............................................. 85,400
7,400 MFRI Inc.*.......................................................... 63,825
2,700 Schnitzer Steel Industries Inc. .................................... 66,842
-----------
220,867
-----------
FINANCIAL SERVICES--2.19%
22,600 Arcadia Financial Ltd.* (1)......................................... 138,425
7,650 Dain Rauscher Corp. ................................................ 434,137
3,800 Dewolfe Cos Inc.*................................................... 23,275
3,300 First Cash Inc.*.................................................... 23,616
3,000 Frontier Adjusters America Inc. .................................... 8,438
27,200 Gallagher Arthur J & Co. ........................................... 1,006,400
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
FINANCIAL SERVICES--(CONCLUDED)
<TABLE>
<C> <S> <C>
8,200 Kaye Group Inc. .................................................... $ 53,300
1,000 Lexington Global Asset Management................................... 7,415
29,400 National Auto Credit Inc.*.......................................... 31,238
7,500 National Discount Brokers Group*.................................... 78,281
2,400 Pacific Crest Capital Inc.*......................................... 43,800
3,800 Refac Technology Development Corp. ................................. 46,075
24,150 Resource Bank Shares Mortgage Group Inc. ........................... 390,928
4,300 Strattec Security Corp.*............................................ 117,712
17,800 Student Loan Corp. ................................................. 809,900
3,300 TLII Liquidating Corp. ............................................. 33,413
13,600 Union Acceptance Corp.*............................................. 102,000
28,700 WFS Financial Inc.*................................................. 269,062
21,600 World Acceptance Corp.*............................................. 118,800
-----------
3,736,215
-----------
FOREST PRODUCTS, PAPER--1.33%
18,200 ABT Building Products Corp.*........................................ 263,900
4,200 Astronics Corp.*.................................................... 34,650
1,000 BCT International Inc.*............................................. 2,750
15,400 Caraustar Industries Inc. .......................................... 546,700
9,050 Fibermark Inc.*..................................................... 205,888
33,400 Glatfelter PH Co. .................................................. 574,062
12,100 Paragon Trade Brands Inc.*.......................................... 58,231
1,000 Quipp Inc.*......................................................... 16,625
7,590 Republic Group Inc. ................................................ 138,043
4,500 Schweitzer Mauduit International Inc. .............................. 160,875
3,100 Tranzonic Co. ...................................................... 89,900
6,800 Universal Forest Products, Inc. .................................... 89,675
4,480 Wausau Mosinee Paper Corp. ......................................... 92,960
-----------
2,274,259
-----------
FOOD RETAIL--0.52%
7,100 Eagle Food Certificates Inc.*....................................... 28,844
24,900 Ingles Markets Inc. ................................................ 339,262
10,200 M & F Worldwide Corp.*.............................................. 86,700
8,700 Marsh Supermarkets Inc. ............................................ 137,025
7,650 Schultz Sav O Stores Inc. .......................................... 114,750
5,000 Seaway Food Town Inc. .............................................. 110,000
8,200 Western Beef, Inc.*................................................. 65,600
-----------
882,181
-----------
FREIGHT, AIR, SEA & LAND--0.44%
11,600 Landstar Systems Inc.*.............................................. 303,050
5,900 Maritrans Inc. ..................................................... 53,469
5,300 MTL Inc.*........................................................... 145,087
3,300 PAM Transportation Services Inc.*................................... 31,763
6,700 Roadway Express Inc. Delaware....................................... 146,562
4,400 Transport Corp. of America*......................................... 67,100
-----------
747,031
-----------
GAS UTILITY--2.83%
7,000 Aquarion Co. ....................................................... 242,813
3,100 Atrion Corp. ....................................................... 41,075
3,800 Berkshire Gas Co. .................................................. 86,925
4,700 Chesapeake Utilities Corp. ......................................... 92,825
</TABLE>
47
<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)
GAS UTILITY--(CONCLUDED)
<TABLE>
<C> <S> <C>
9,700 Colonial Gas Co. ................................................... $ 278,875
11,900 Connecticut Energy Corp. ........................................... 323,531
4,500 Connecticut Water Service Inc. ..................................... 138,375
927 CTG Resources Inc. ................................................. 22,190
2,200 Energen Corp. ...................................................... 85,800
4,800 Energynorth Inc. ................................................... 134,400
10,900 Indiana Energy Inc. ................................................ 317,463
30,200 Laclede Gas Co. .................................................... 753,112
3,700 Mobile Gas Service Corp. ........................................... 142,450
9,900 North Carolina Natural Gas Corp. ................................... 370,012
23,400 Northwest Natural Gas Co. .......................................... 623,025
12,200 NUI Corp. .......................................................... 326,350
6,600 Providence Energy Corp. ............................................ 146,025
2,400 SJW Corp. .......................................................... 138,300
6,200 South Jersey Industries Inc. ....................................... 186,775
4,800 Southern California Water Co. ...................................... 121,500
2,800 Valley Resources Inc. .............................................. 33,250
8,900 Yankee Energy Systems Inc. ......................................... 224,169
-----------
4,829,240
-----------
HEAVY MACHINERY--0.77%
2,500 Alamo Group Inc. ................................................... 44,844
9,150 Allied Products Corp. .............................................. 211,594
17,100 Cascade Corp. ...................................................... 268,256
4,700 Gehl Co.*........................................................... 89,888
4,200 Gencor Industries Inc. ............................................. 84,263
1,400 NACCO Industries Inc. .............................................. 140,612
1,300 Richton International Corp.*........................................ 7,475
6,900 Tennant Co. ........................................................ 244,950
11,500 Titan International Inc. ........................................... 205,562
4,000 Western Power & Equipment Corp.*.................................... 24,500
-----------
1,321,944
-----------
HOTELS--0.90%
16,400 Ameristar Casinos Inc.*............................................. 94,300
3,800 Black Hawk Gaming & Development Inc.*............................... 28,500
17,300 Casino America Inc.*................................................ 46,494
70,800 Grand Casinos Inc.*................................................. 946,950
7,200 Hammons John Q Hotels Inc.*......................................... 58,950
12,400 NPC International Inc.*............................................. 120,900
14,200 Sholodge, Inc.*..................................................... 170,400
6,900 Supertel Hospitality*............................................... 62,100
-----------
1,528,594
-----------
HOUSEHOLD PRODUCTS--0.83%
4,900 Align Rite International Inc.*...................................... 71,050
8,600 Allou Health & Beauty Care, Inc.*................................... 65,038
8,800 American Safety Razor Co.*.......................................... 188,100
6,900 Beauticontrol Cosmetics Inc. ....................................... 53,906
9,600 CCA Industries Inc.*................................................ 25,200
12,300 CPAC Inc.*.......................................................... 123,769
2,800 Dixon Ticonderoga Co.*.............................................. 37,975
15,800 French Fragrances Inc.*............................................. 173,800
7,400 Jean Phillippe Fragrances Inc.*..................................... 51,800
3,800 Kimball International Inc. ......................................... 66,975
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
HOUSEHOLD PRODUCTS--(CONCLUDED)
<TABLE>
<C> <S> <C>
7,300 Libbey Inc. ........................................................ $ 254,131
16,400 Lifetime Hoan Corp. ................................................ 161,950
19,400 Parlux Fragrances Inc.*............................................. 31,525
10,600 Scotts Liquid Gold Inc. ............................................ 35,113
6,300 Stephan Co. ........................................................ 84,262
-----------
1,424,594
-----------
INDUSTRIAL PARTS--6.16%
12,800 Albany International Corp. ......................................... 285,600
14,900 Amcast Industrial Corp. ............................................ 335,250
3,700 Amistar Corp.*...................................................... 12,950
8,700 Ampco Pittsburgh Corp. ............................................. 144,094
15,800 Aviall Inc.*........................................................ 233,050
16,600 Baldwin Technology Inc.*............................................ 81,963
30,100 Barnes Group Inc. .................................................. 760,025
22,400 Blount International Inc. .......................................... 557,200
6,600 Bridgeport Machines Inc.*........................................... 81,675
5,700 Central Sprinkler Corp.*............................................ 108,300
30,300 Cincinnati Milacron Inc. ........................................... 772,650
15,300 Commercial Intertech Corp. ......................................... 294,525
10,900 DT Industries Inc. ................................................. 388,312
7,600 Durakon Industries Inc.*............................................ 60,800
8,300 Esterline Technologies Corp.*....................................... 284,794
5,500 Farr Co.*........................................................... 76,656
3,500 Farrel Corp. ....................................................... 16,625
32,400 Fedders USA Inc. ................................................... 186,300
14,800 Genlyte Group Inc.*................................................. 262,700
9,600 Gleason Corp. ...................................................... 233,400
34,000 Global Industrial Technologies Inc.*................................ 561,000
3,500 Gorman Rupp Co. .................................................... 68,250
11,800 Graco Inc. ......................................................... 493,387
1,700 Graham Corp.*....................................................... 26,350
8,200 Hardinge Brothers Inc. ............................................. 270,600
2,310 Hein Werner Corp.*.................................................. 15,304
10,700 Hurco Co. Inc.*..................................................... 70,888
12,900 Intevac Inc.*....................................................... 117,309
2,400 K Tron International Inc.*.......................................... 39,600
6,100 Kaman Corp. ........................................................ 103,700
7,600 Knape & Vogt Manufacturing Co. ..................................... 164,350
6,200 Lawson Products Inc. ............................................... 186,000
7,600 Mestek, Inc.*....................................................... 141,075
6,800 Newcor Inc. ........................................................ 56,100
5,800 NN Ball & Roller Inc. .............................................. 51,475
4,200 Nortek, Inc.*....................................................... 108,938
2,500 P & F Industries Inc.*.............................................. 17,500
3,300 Penn Engineering Manufacturing Corp. ............................... 78,994
6,000 Portec, Inc. ....................................................... 85,500
7,900 Powell Industries Inc.*............................................. 103,688
26,100 Quanex Corp. ....................................................... 761,794
4,600 Scotsman Industries, Inc. .......................................... 119,600
18,900 Specialty Equipment Cos Inc.*....................................... 321,300
10,200 Standex International Corp. ........................................ 281,137
9,000 Starrett LS Co. .................................................... 338,062
4,100 Summa Industries Inc.*.............................................. 49,713
6,700 Transtechnology Corp. .............................................. 175,037
9,000 Trident International Inc.*......................................... 129,375
</TABLE>
48
<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>
3,200 Twin Discount, Inc. ................................................ $ 99,800
10,900 Watts Industries Inc. .............................................. 303,156
-----------
10,515,851
-----------
INDUSTRIAL SERVICES/SUPPLIES--0.98%
7,800 Cohr Inc.*.......................................................... 94,575
7,700 Daw Technologies Inc.*.............................................. 11,309
200 Etown Corp. ........................................................ 7,225
18,000 Flowserve Corp. .................................................... 481,500
9,700 Healthcare Services Group Inc.*..................................... 135,800
23,150 Interpool Inc. ..................................................... 313,972
3,700 Leasing Solutions Inc.*............................................. 96,200
7,900 McGrath Rentcorp. .................................................. 166,888
7,200 Monro Muffler Brake Inc.*........................................... 104,400
10,400 PLM International Inc. ............................................. 55,900
13,100 Sunrise Leasing Corp.*.............................................. 35,206
8,400 Superior Surgical Manufacturing Inc. ............................... 132,300
7,358 Travel Ports America Inc.*.......................................... 28,972
680 Zimmerman Sign Co.*................................................. 2,550
-----------
1,666,797
-----------
INFORMATION & COMPUTER SERVICES--0.63%
2,600 Analysis & Technology Inc. ......................................... 48,588
31,000 Dames & Moore Inc. ................................................. 393,312
5,500 Devon Group Inc. New*............................................... 240,625
6,900 Right Management Consultants Inc.*.................................. 83,662
1,000 Transport Lux Corp. ................................................ 14,500
10,500 Transpro Inc. ...................................................... 85,969
9,300 URS Corp. New*...................................................... 124,969
2,300 Value Line Inc. .................................................... 90,706
-----------
1,082,331
-----------
LEISURE--2.15%
38,600 Arctic Cat Inc. .................................................... 371,525
14,900 Cannondale Corp.*................................................... 302,656
24,100 Department 56 Inc.*................................................. 685,344
3,800 First Commonwealth Inc. ............................................ 40,850
10,900 GT Bicycles Inc.*................................................... 63,356
4,700 Harveys Casino Resorts.............................................. 106,631
5,100 Inland Casino Corp. ................................................ 14,331
1,600 K Telephone International Inc.*..................................... 11,800
2,500 Koss Corp.*......................................................... 26,875
12,700 Marker International*............................................... 46,038
2,850 Movado Group Inc. .................................................. 61,275
4,900 Oneida Ltd. ........................................................ 133,831
4,000 Play By Play Toys & Novelties....................................... 76,000
38,300 Polaris Industries Inc. ............................................ 1,153,787
17,500 Quintel Entertainment Inc.*......................................... 107,188
3,700 Rawlings Sporting Goods Co.*........................................ 40,700
4,100 Shuffle Master Inc.*................................................ 32,544
13,300 Stanhome Inc. ...................................................... 360,762
6,784 Swing 'n Slide Corp.*............................................... 27,136
3,100 Video Update Inc.*.................................................. 7,750
-----------
3,670,379
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
LIFE INSURANCE--3.12%
6,500 Allied Life Financial Corp. ........................................ $ 146,250
55,600 American Annuity Group Inc. ........................................ 1,219,725
3,500 American Heritage Life Investment Corp. ............................ 130,156
6,724 Amerus Life Holdings Inc. .......................................... 231,138
2,813 Cotton States Life Insurance Co. ................................... 43,945
6,976 Delphi Financial Group, Inc.*....................................... 308,688
5,800 Independence Holding Co. New........................................ 68,875
23,000 Liberty Corp. ...................................................... 1,045,062
3,200 Life Re Corp. ...................................................... 196,800
18,700 Life USA Holdings Inc.*............................................. 299,200
2,300 National Western Life Insurance Co.*................................ 223,675
30,900 PennCorp Financial Group, Inc. (1).................................. 977,212
19,400 Presidential Life Corp. ............................................ 346,775
9,900 Seibels Bruce Group Inc.*........................................... 70,538
3,100 Standard Management Corp.*.......................................... 21,313
-----------
5,329,352
-----------
MANUFACTURING--GENERAL--0.00%
314 Axiohm Transaction Solutions*....................................... 4,553
-----------
MANUFACTURING--HIGH TECHNOLOGY--0.13%
4,500 C&D Technologies.................................................... 219,938
-----------
MEDICAL PRODUCTS--0.86%
12,200 Bio Rad Laboratories Inc.*.......................................... 297,375
3,000 BMC Industries Inc. ................................................ 48,750
4,900 Coherent Inc.*...................................................... 226,625
19,600 Figgie International Holdings Inc.*................................. 259,700
500 Lakeland Industries, Inc.*.......................................... 4,063
7,100 Maxxim Medical Inc.*................................................ 161,525
3,400 Medstone International Inc. New*.................................... 34,000
6,800 Selas Corp. America................................................. 68,000
11,000 Utah Medical Products Inc.*......................................... 80,437
15,300 Vital Signs Inc. ................................................... 294,525
-----------
1,475,000
-----------
MEDICAL PROVIDERS--1.77%
10,100 Advocat Services, Inc.*............................................. 83,956
4,400 American Homepatient Inc.*.......................................... 102,300
3,000 Caretenders Healthcorp*............................................. 25,125
35,200 Integrated Health Services, Inc. ................................... 1,007,600
2,800 Krug International Corp.*........................................... 15,750
25,200 Mariner Health Group Inc.*.......................................... 387,450
18,087 Medical Assurance Inc.*............................................. 470,270
34,200 Physicians Resource Group Inc.*..................................... 119,700
4,600 Raytel Medical Corp.*............................................... 58,650
4,200 Staff Builders Inc.*................................................ 7,088
1,000 Star Multi Care Services Inc........................................ 4,571
40,200 Sun Healthcare Group Inc.*.......................................... 748,725
-----------
3,031,185
-----------
MINING & METALS--8.49%
30,500 AK Steel Holding Corp. ............................................. 545,187
142,000 Armco Inc.*......................................................... 665,625
10,800 Atchison Casting Corp.*............................................. 182,925
17,400 Brush Wellman Inc. ................................................. 427,388
</TABLE>
49
<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)
MINING & METALS--(CONCLUDED)
<TABLE>
<C> <S> <C>
6,600 BWAY Corp.*......................................................... $ 141,900
21,400 Carpenter Technology Corp. ......................................... 929,562
5,700 Castle A M & Co. ................................................... 131,100
10,400 Chase Industries Inc.*.............................................. 240,500
25,400 Citation Corp.*..................................................... 433,387
21,900 Cleveland Cliffs Inc. .............................................. 1,073,100
8,100 Cold Metal Products Inc.*........................................... 37,463
26,900 Commercial Metals Co. .............................................. 813,725
12,700 Donnelly Corp. ..................................................... 225,425
11,500 Foster LB Co.*...................................................... 53,188
25,800 Friedmans Industries Inc. .......................................... 362,813
6,700 Green AP Industries Inc. ........................................... 71,606
42,400 Inland Steel Industries, Inc. ...................................... 845,350
43,700 Intermet Corp. ..................................................... 726,512
3,000 Keystone Consolidated Industries Inc.*.............................. 33,750
5,500 Lindberg Corp. ..................................................... 71,500
8,400 Maxxam Inc.*........................................................ 401,100
7,100 Mueller Industries Inc.*............................................ 382,513
3,400 National Standard Co.*.............................................. 18,700
48,800 National Steel Corp. ............................................... 628,300
2,600 Oglebay Norton Co. ................................................. 96,200
3,500 Olympic Steel Inc.*................................................. 57,313
7,200 Park Ohio Industries Inc.*.......................................... 124,200
3,950 Pitt Desmoines Inc. ................................................ 156,025
15,700 Pittston Co. ....................................................... 337,550
9,300 RMI Titanium Co.*................................................... 186,581
5,900 Roanoke Electric Steel Corp. ....................................... 146,025
24,800 Rouge Industries Inc. .............................................. 351,850
10,700 Steel Technologies Inc. ............................................ 125,725
7,300 Steel West Virginia Inc.*........................................... 58,400
23,700 Texas Industries Inc. .............................................. 1,159,819
28,500 Titanium Metals Corp.*.............................................. 757,031
2,500 United States Lime & Minerals, Inc. ................................ 16,250
5,800 Universal Stainless & Alloy*........................................ 73,225
6,600 Webco Industries Inc.*.............................................. 46,200
25,100 Wolverine Tube Inc.*................................................ 834,575
37,000 Zeigler Coal Holding Co. ........................................... 515,687
1,042 Zemex Corp.*........................................................ 8,401
-----------
14,493,676
-----------
MOTOR VEHICLES--3.95%
17,300 Arvin Industries Inc. .............................................. 596,850
6,919 Autocam Corp. ...................................................... 97,731
4,600 Breed Technologies, Inc. (1)........................................ 83,088
7,200 Defiance, Inc. ..................................................... 57,600
6,000 Edelbrock Corp.*.................................................... 118,500
18,000 Excel Industries, Inc. ............................................. 318,375
8,700 Global Motorsport Group Inc.*....................................... 108,750
4,100 Hilite Industries Inc. ............................................. 27,675
62,000 Mascotech Inc. ..................................................... 1,174,125
5,300 McClain Industries Inc.*............................................ 21,531
16,400 Modine Manufacturing Co. ........................................... 571,950
4,500 Monaco Coach Corp.*................................................. 145,687
4,100 Motorcar Parts & Accesories Inc.*................................... 61,500
200 National R.V. Holdings Inc.*........................................ 7,975
7,100 Oshkosh Truck Corp. ................................................ 135,787
14,600 R & B Inc.*......................................................... 140,525
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
MOTOR VEHICLES--(CONCLUDED)
<TABLE>
<C> <S> <C>
5,100 Republic Automotive Parts Inc.*..................................... $ 63,750
3,791 Rexhall Industries, Inc.*........................................... 19,429
14,800 Shiloh Industries Inc.*............................................. 281,200
31,000 Simpson Industries, Inc. ........................................... 372,000
7,200 SMC Corp.*.......................................................... 50,400
28,700 Standard Products Co. .............................................. 823,331
18,600 Superior Industries International Inc. ............................. 490,575
6,526 Supreme Industries, Inc.*........................................... 70,155
36,500 TBC Corp.*.......................................................... 333,062
9,200 Thor Industries, Inc. .............................................. 304,750
2,025 Valley Forge Corp. ................................................. 27,338
9,690 Varlen Corp. ....................................................... 240,433
-----------
6,744,072
-----------
OIL REFINING--0.65%
3,500 Adams Resources & Energy Inc. ...................................... 44,187
4,400 Castle Energy Corp. ................................................ 58,850
4,800 Crown Central Petroleum Co.*........................................ 93,600
6,400 Giant Industries Inc. .............................................. 108,800
9,400 Holly Corp. ........................................................ 245,575
7,762 Mercury Air Group, Inc.*............................................ 47,057
20,700 Tesoro Petroleum Corp.*............................................. 331,200
9,450 World Fuel Services Corp. .......................................... 187,819
-----------
1,117,088
-----------
OTHER INSURANCE--9.92%
22,200 Acceptance Insurance Co.*........................................... 524,475
5,200 ACMAT Corp.*........................................................ 89,700
24,525 Allied Group Inc. .................................................. 674,437
1,900 Argonaut Group, Inc. ............................................... 68,400
10,200 Atlantic American Corp.*............................................ 48,450
5,600 Bancinsurance Corp.*................................................ 28,700
21,700 Capital Re Corp. ................................................... 1,292,506
5,150 Capitol Transamerica Corp. ......................................... 112,013
9,500 Centris Group Inc. ................................................. 209,000
12,800 Chartwell Re Corp. ................................................. 433,600
23,800 Citizens Corp. ..................................................... 650,037
38,400 Commerce Group Inc. ................................................ 1,250,400
7,000 Donegal Group Inc. ................................................. 145,250
13,900 EMC Insurance Group Inc. ........................................... 185,913
11,300 Enhance Financial Services Group Inc. .............................. 628,562
17,721 Fidelity National Financial Inc. (1)................................ 509,479
16,800 First American Financial Corp. ..................................... 835,800
31,300 Frontier Insurance Group Inc. ...................................... 747,287
35,145 Gainsco Inc. ....................................................... 281,160
42,700 Harleysville Group Inc. ............................................ 1,083,512
2,200 Investors Title Insurance Co. ...................................... 55,550
10,500 Lawyers Title Corp. ................................................ 370,125
19,300 MMI Companies Inc. ................................................. 471,644
8,165 Mobile America Corp. Florida........................................ 113,289
27,400 Nac Re-Insurance Corp. ............................................. 1,370,000
5,200 National Insurance Group............................................ 41,600
10,900 Navigators Group Inc.*.............................................. 190,750
9,800 Nymagic Inc. ....................................................... 269,500
6,100 Omni Insurance Group Inc.*.......................................... 192,913
</TABLE>
50
<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>
3,080 Professionals Insurance Co. Management Group*....................... $ 129,360
24,778 PXRE Corp. ......................................................... 839,355
12,700 RLI Corp. .......................................................... 629,444
14,700 RTW Inc.*........................................................... 99,225
35,600 Selective Insurance Group Inc. ..................................... 925,600
8,300 State Auto Financial Corp. ......................................... 250,038
7,600 Stewart Information Services Corp. ................................. 227,050
8,342 Titan Holdings Inc. ................................................ 181,439
20,150 Trenwick Group Inc. ................................................ 700,212
7,000 UNICO American Healthcare Co. ...................................... 84,000
-----------
16,939,775
-----------
PRECIOUS METALS--0.05%
7,900 Lazare Kaplan International Inc.*................................... 85,913
-----------
PUBLISHING--1.61%
27,100 Bowne & Co. Inc. ................................................... 994,231
2,000 Courier Corp. ...................................................... 56,500
37,300 Franklin Quest Co.*................................................. 815,938
12,800 Merrill Corp. ...................................................... 249,600
4,400 Plenum Publishing Corp. ............................................ 205,700
3,000 Primesource Corp. .................................................. 28,875
20,300 Scientific Games Holdings Corp.*.................................... 400,925
-----------
2,751,769
-----------
RAILROADS--0.23%
3,200 Railtex Inc.*....................................................... 52,800
14,000 Westinghouse Air Brake Co........................................... 346,500
-----------
399,300
-----------
REAL PROPERTY--7.48%
7,000 American Buildings Co. New*......................................... 191,625
5,200 American Woodmark Corp. ............................................ 107,250
12,000 Apogee Enterprises Inc. ............................................ 141,750
8,700 Beazer Homes USA Inc.*.............................................. 186,506
3,900 Butler Manufacturing Co. ........................................... 125,288
16,700 Cameron Ashley Building Products, Inc.*............................. 279,725
16,520 Cavalier Homes Inc. ................................................ 181,720
38,000 Centex Construction Products Inc. .................................. 1,168,500
7,400 Continental Homes Holding Corp. .................................... 325,600
21,600 D.R. Horton Inc. (1)................................................ 426,600
6,100 Dominion Homes Inc.*................................................ 66,338
6,000 Dravo Corp.*........................................................ 60,000
2,900 Drew Industries Inc. New*........................................... 36,250
11,100 Engle Homes Inc. ................................................... 160,256
26,700 Florida Rock Industries, Inc. ...................................... 574,050
16,200 Giant Cement Holding, Inc.*......................................... 358,425
20,950 Granite Construction Inc. .......................................... 492,325
19,900 Griffon Corp.*...................................................... 297,256
34,600 Hovnanian Enterprises Inc.*......................................... 309,237
3,000 Jacobs Engineering Group Inc.*...................................... 80,813
11,700 Juno Lighting Inc. ................................................. 191,588
18,900 Lone Star Industries, Inc. ......................................... 1,051,312
19,900 M.D.C. Holdings, Inc. .............................................. 300,987
11,900 Medusa Corp. ....................................................... 524,344
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
REAL PROPERTY--(CONCLUDED)
<TABLE>
<C> <S> <C>
4,888 MYR Group, Inc. .................................................... $ 58,656
1,400 NCI Building Systems Inc.*.......................................... 49,438
15,100 NVR Inc.*........................................................... 377,500
10,100 Patrick Industries Inc. ............................................ 154,025
7,600 Perini Corp.*....................................................... 59,850
20,700 Pulte Corp. ........................................................ 882,337
11,400 Robertson Ceco Corp.*............................................... 96,900
6,500 Rottlund Inc.*...................................................... 17,875
7,900 Schottenstein Homes Inc. ........................................... 167,875
5,100 Schult Homes Corp. ................................................. 112,838
12,700 Skyline Corp. ...................................................... 352,425
25,600 Southern Energy Homes Inc.*......................................... 230,400
45,000 Toll Brothers Inc.*................................................. 1,254,375
13,100 United States Home Corp. New*....................................... 496,981
10,400 Washington Homes Inc. New*.......................................... 39,000
26,000 Webb Delaware Corp. ................................................ 703,625
8,600 Zaring Homes Inc. .................................................. 77,400
-----------
12,769,245
-----------
RESTAURANTS--2.11%
3,500 Benihana Inc.*...................................................... 42,000
5,700 Bertuccis Inc.*..................................................... 34,556
11,600 Blimpie International Inc. ......................................... 46,400
54,500 Boston Chicken Inc.* (1)............................................ 333,812
13,300 Cooker Restaurant Corp. ............................................ 118,869
6,900 Davco Restaurants Inc.*............................................. 135,413
1,800 Eateries Inc.*...................................................... 7,425
5,400 ELXSI Corp.*........................................................ 57,375
1,500 Garden Fresh Restaurant Corp.*...................................... 24,750
2,700 IHOP Corp. New*..................................................... 96,525
53,000 Lone Star Steakhouse & Saloon*...................................... 970,562
40,000 Lubys Cafeterias Inc. .............................................. 640,000
4,400 Max & Ermas Restaurants Inc.*....................................... 25,850
6,825 Morrison Restaurants Inc.*.......................................... 18,769
9,600 Piccadilly Cafeterias Inc. ......................................... 100,800
80,000 Ryan's Family Steak Houses, Inc.*................................... 665,000
10,000 Sbarro Inc. ........................................................ 293,125
-----------
3,611,231
-----------
SECURITIES & ASSET MANAGEMENT--1.38%
1,000 H D Vest Inc.*...................................................... 5,125
4,000 Interstate Johnson Lane, Inc. ...................................... 105,500
4,000 Jefferies Group, Inc. .............................................. 154,000
28,050 Morgan Keegan, Inc. ................................................ 575,025
36,050 Raymond James Financial, Inc. ...................................... 1,248,231
7,590 Southwest Securities Group Inc. .................................... 185,006
5,300 Stifel Financial Corp. ............................................. 72,213
1,000 Ziegler Companies Inc. ............................................. 20,250
-----------
2,365,350
-----------
SEMICONDUCTOR--1.22%
13,604 Bell Industries, Inc.*.............................................. 192,157
14,800 Bell Microproducts Inc.*............................................ 123,025
1,000 Bowmar Instrument Corp.*............................................ 2,625
39,500 Ess Technology Inc.*................................................ 270,328
21,800 Marshall Industries*................................................ 656,725
</TABLE>
51
<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>
4,700 Microsemi Corp.*.................................................... $ 95,175
15,000 Nu Horizons Electronics Corp.*...................................... 100,313
11,700 Oak Technology*..................................................... 65,990
4,200 Optek Technology Inc.*.............................................. 93,450
12,200 Pilgrims Pride Corp. ............................................... 186,050
8,000 Reptron Electronics Inc.*........................................... 96,000
11,200 Taitron Components Inc.*............................................ 26,600
18,300 Trident Microsystems Inc.*.......................................... 158,981
5,600 Xicor Inc.*......................................................... 17,150
-----------
2,084,569
-----------
SPECIALTY RETAIL--1.80%
8,200 Advanced Marketing Services, Inc.*.................................. 126,075
13,500 Blair Corp. ........................................................ 241,312
4,100 Brookstone Inc.*.................................................... 48,688
13,700 Building Materials Holding Corp.*................................... 150,700
8,800 Corporate Express, Inc.*............................................ 77,825
13,100 D I Y Home Warehouse Inc.*.......................................... 39,300
8,400 Damark International Inc.*.......................................... 86,100
19,200 Discount Auto Parts Inc.*........................................... 400,800
8,800 Duckwall Alto Stores Inc. New*...................................... 127,600
13,000 Finlay Enterprises Inc.*............................................ 299,000
4,210 Friedman Industries, Inc.*.......................................... 26,313
19,200 Global Directmail Corp.*............................................ 386,400
16,100 Haverty Furniture Companies Inc. ................................... 229,425
3,300 Holiday RV Superstores Inc.*........................................ 6,188
4,000 Inacom Corp.*....................................................... 100,000
1,500 Jan Bell Marketing Inc.*............................................ 4,031
10,900 Rex Stores Corp.*................................................... 110,362
148,800 Service Merchandise Co. , Inc.*..................................... 288,300
16,600 Tandycrafts Inc.*................................................... 71,587
11,500 Tractor Supply Co.*................................................. 161,000
7,900 Wolohan Lumber Co. ................................................. 98,750
-----------
3,079,756
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
THRIFT--1.80%
1,500 Anchor Bancorp Wisconsin Inc. ...................................... $ 54,000
18,400 Bankatlantic Bancorp Inc. (1)....................................... 294,400
10,450 D & N Savings Financial Corp. ...................................... 258,637
3,600 Haven Bancorp....................................................... 72,450
3,500 Keystone Heritage Group Inc. ....................................... 186,812
15,100 Metrowest Bank...................................................... 120,800
12,400 New York Bancorp Inc. .............................................. 469,650
2,656 Parkvale Financial Corp. ........................................... 82,336
3,300 Saint Francis Capital Corp. ........................................ 143,550
35,544 Sovereign Bancorp, Inc. ............................................ 662,007
1,600 Washington Savings Bank FSB......................................... 13,200
34,500 Westcorp Inc. ...................................................... 549,844
6,362 York Financial Corp. ............................................... 158,255
-----------
3,065,941
-----------
TOBACCO--0.16%
16,700 Standard Commercial Corp.*.......................................... 273,463
-----------
WIRELESS TELECOMMUNICATIONS--0.26%
2,600 Bogen Communications International Inc. ............................ 19,663
10,000 Periphonics Corp.*.................................................. 81,250
50,000 Rohn Inds Inc. ..................................................... 262,500
8,600 Symmetricom Inc.*................................................... 87,075
-----------
450,488
-----------
Total Common Stocks (cost--$135,450,127)....................................... 162,592,129
-----------
INVESTMENTS OF CASH COLLATERAL FOR SECURITIES LOANED--2.32%
MONEY MARKET FUNDS--2.32%
3,916,770 Liquid Assets Portfolio............................................. 3,916,770
21,715 TempCash Portfolio.................................................. 21,714
15,116 TempFund Portfolio.................................................. 15,116
-----------
Total Investments of Cash Collateral for Securities Loaned
(cost--$3,953,600)........................................................... 3,953,600
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- --------- --------------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--5.90%
$10,079 Repurchase Agreement dated 01/30/98 with State
Street Bank, collaterized by $7,030,569 U.S.
Treasury Bonds, 9.875% due 11/15/15
(value--$10,280,766) proceeds: $10,083,200
(cost--$10,079,000)............................ 02/02/98 5.000 % 10,079,000
-------------
Total Investments (cost--$149,482,727)--103.41%............ 176,624,729
(5,823,663)
Liabilities in excess of other assets--(3.41)%.............
-------------
Net Assets--100.00%........................................ $ 170,801,066
-------------
-------------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Non-income producing security
(1) Security, or portion thereof, was on loan at January 31, 1998.
</TABLE>
See accompanying notes to financial statements
52
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--88.39%
APPAREL, RETAIL--0.61%
26,700 Gadzooks Inc.* ......................................................................... $ 534,000
15,300 Pacific Sunwear Of California*.......................................................... 439,875
-----------
973,875
-----------
BANKS--0.41%
6,800 Merchants Bancshares Inc. .............................................................. 215,900
10,200 Peoples Heritage Financial Group........................................................ 438,600
-----------
654,500
-----------
CHEMICALS--1.21%
58,000 Nova Corp.* ............................................................................ 1,935,750
-----------
COMPUTER HARDWARE--4.40%
22,500 Black Box Corp.* ....................................................................... 731,250
121,800 EMC Corp.*.............................................................................. 3,966,112
63,800 Henry Jack & Associates Inc. ........................................................... 2,193,125
11,400 MMC Networks Inc.* ..................................................................... 169,575
-----------
7,060,062
-----------
COMPUTER SOFTWARE--12.94%
50,500 Aspect Development Inc.*................................................................ 2,263,031
74,900 Credit Management Solutions Inc.*....................................................... 702,188
67,900 Edwards J D & Co.* ..................................................................... 2,242,822
81,500 Flexiinternational Software*............................................................ 1,314,188
87,300 Hypercom Corp.* ........................................................................ 1,178,550
33,900 Hyperion Software Corp.* ............................................................... 1,368,712
184,800 Logility Inc.* ......................................................................... 2,148,300
78,000 Peerless Systems Corp.*................................................................. 848,250
168,200 Platinum Technology Inc.* (1)........................................................... 4,709,600
62,400 PSW Technologies Inc.*.................................................................. 670,800
21,400 Sportsline USA Inc.* (1) ............................................................... 454,750
57,800 Veritas Software Co.*................................................................... 2,839,425
-----------
20,740,616
-----------
CONSUMER DURABLES--0.35%
62,600 Racing Champions Corp.* (1)............................................................. 567,313
-----------
DEFENSE/AEROSPACE--1.43%
48,200 AAR Corp. (1) .......................................................................... 2,193,100
4,800 Kellstrom Industries Inc.*.............................................................. 98,400
-----------
2,291,500
-----------
DIVERSIFIED RETAIL--2.31%
7,700 Beringer Wine Estates Holdings*......................................................... 310,887
105,800 Cost Plus Inc.*......................................................................... 2,618,550
34,300 Hibbett Sporting Goods Inc.* ........................................................... 773,894
-----------
3,703,331
-----------
ELECTRIC UTILITIES--1.17%
43,872 AES Corp.*.............................................................................. 1,878,270
-----------
ELECTRICAL EQUIPMENT--2.93%
90,900 Gemstar Group Ltd.*..................................................................... 2,851,987
100,300 Pairgain Technologies Inc.*............................................................. 1,843,013
-----------
4,695,000
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
ELECTRONIC COMPONENTS--2.01%
39,800 P-Com Inc.*............................................................................. $ 776,100
81,900 Sipex Corp.*............................................................................ 2,451,881
-----------
3,227,981
-----------
ENVIRONMENTAL SERVICES--1.01%
60,900 Superior Services Inc.* ................................................................ 1,621,463
-----------
FINANCIAL SERVICES--3.30%
46,800 Capital Trust*.......................................................................... 465,075
7,200 Financial Federal Corp.* ............................................................... 146,250
37,900 Imperial Credit Commercial Mortgage Investment Corp. ................................... 568,500
82,900 INMC Mortgage Holdings Inc. ............................................................ 2,196,850
93,800 Ocwen Asset Investment Corp. ........................................................... 1,911,175
-----------
5,287,850
-----------
FOOD RETAIL--1.62%
44,100 American Italian Pasta Co.* ............................................................ 1,176,919
26,000 Scheid Vineyards Inc.*.................................................................. 198,250
50,200 United Natural Foods Inc.*.............................................................. 1,229,900
-----------
2,605,069
-----------
HOTELS--1.62%
77,900 Capstar Hotel Co.*...................................................................... 2,604,781
-----------
HOUSEHOLD PRODUCTS--0.81%
48,500 Coinmach Laundry Corp.* ................................................................ 1,303,438
-----------
INDUSTRIAL PARTS--0.26%
15,400 PRI Automation Inc.*.................................................................... 423,500
-----------
INDUSTRIAL SERVICES/SUPPLIES--10.28%
142,900 Cendant Corp.* ......................................................................... 4,840,737
124,700 Comfort Systems USA Inc.*............................................................... 2,408,269
15,000 G & K Services Inc.* ................................................................... 633,750
165,800 Innovative Valve Technologies*.......................................................... 2,984,400
39,900 Intergrated Electrical Services*........................................................ 588,525
52,200 May & Speh Inc.* ....................................................................... 698,175
48,100 Pittston Brinks Group................................................................... 1,951,056
79,200 Profit Recovery Group International Inc.*............................................... 1,252,350
63,200 SOS Staffing Services Inc.* ............................................................ 1,121,800
-----------
16,479,062
-----------
INFORMATION & COMPUTER SERVICES--1.86%
60,700 Checkfree Holdings Corp.*............................................................... 1,502,325
72,500 NFO Worldwide Inc.* .................................................................... 1,354,844
15,900 Princeton Video Image Inc.* ............................................................ 127,200
-----------
2,984,369
-----------
LEISURE--1.84%
64,400 Brookdale Living Cmntys Inc.* .......................................................... 1,207,500
53,200 Equity Marketing Inc.*.................................................................. 1,363,250
17,700 West Marine Inc.* ...................................................................... 378,337
-----------
2,949,087
-----------
</TABLE>
53
<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>
LIFE INSURANCE--0.42%
27,400 ESG Re Ltd. ............................................................................ $ 671,300
-----------
LONG DISTANCE & PHONE COMPANIES--1.68%
55,400 ICG Communications Inc.* (1)............................................................ 1,364,225
23,800 Teleport Communications Inc.*........................................................... 1,328,337
-----------
2,692,562
-----------
MANUFACTURING--GENERAL--2.52%
35,500 Kaynar Technologies Inc.*............................................................... 949,625
91,600 Mettler Toledo International Inc.* ..................................................... 1,648,800
17,000 Silgan Holdings Inc.*................................................................... 469,625
25,500 Wesley Jessen Visioncare Inc.* ......................................................... 969,000
-----------
4,037,050
-----------
MEDIA--3.37%
108,000 Chancellor Media Corp.* ................................................................ 3,712,500
23,600 Metro Networks Inc.*.................................................................... 806,825
18,900 TCA Cable TV Inc. ...................................................................... 883,575
-----------
5,402,900
-----------
MEDICAL PRODUCTS--1.87%
46,700 Cerus Corp.*............................................................................ 793,900
61,900 Physician Sales & Service Inc.*......................................................... 1,145,150
31,200 Renal Care Group Inc.*.................................................................. 1,056,900
-----------
2,995,950
-----------
MEDICAL PROVIDERS--5.19%
51,500 Alternative Living Services Inc.* (1)................................................... 1,506,375
46,800 American Oncology Resources Inc.*....................................................... 737,100
53,200 Atria Communities Inc.*................................................................. 964,250
36,200 Medpartners Inc.* ...................................................................... 359,738
97,700 Pharmerica Inc.* ....................................................................... 1,099,125
29,000 PMR Corp.*.............................................................................. 496,625
78,700 Sunrise Assisted Living Inc.*........................................................... 3,157,837
-----------
8,321,050
-----------
MINING & METALS--0.50%
56,000 Metals USA Inc.*........................................................................ 798,000
-----------
OIL SERVICES--1.07%
62,000 Precision Drilling Corp.*............................................................... 1,054,000
17,800 Veritas DGC Inc.*....................................................................... 657,488
-----------
1,711,488
-----------
OTHER INSURANCE--0.33%
8,800 Capital Re Corp. ....................................................................... 524,150
-----------
PUBLISHING--0.84%
58,500 Petersen Cos Inc.* ..................................................................... 1,345,500
-----------
REAL PROPERTY--3.49%
23,900 Engle Homes Inc. ....................................................................... 345,056
36,500 Koger Equity Inc. ...................................................................... 830,375
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
REAL PROPERTY--(CONCLUDED)
<TABLE>
<C> <S> <C>
13,100 Mack-Cali Realty Corp. ................................................................. $ 528,094
34,000 McDermott J Ray*........................................................................ 1,217,625
29,400 Prentiss Properties Trust............................................................... 801,150
29,500 Resource Asset Investment Trust......................................................... 446,187
13,100 Trammell Crow Co.* ..................................................................... 348,788
49,100 Wilmar Industries Inc.*................................................................. 1,080,200
-----------
5,597,475
-----------
RESTAURANTS--2.41%
41,400 Cheesecake Factory Inc.*................................................................ 1,208,362
35,600 Dave & Busters Inc.*.................................................................... 754,275
32,600 Morton's Restaurant Group Inc.*......................................................... 641,813
51,100 Showbiz Pizza Time Inc.* ............................................................... 1,258,337
-----------
3,862,787
-----------
SEMICONDUCTOR--0.83%
44,200 Micrel Inc.*............................................................................ 1,337,050
-----------
SPECIALTY RETAIL--9.76%
20,100 Amazon.com Inc.* (1).................................................................... 1,185,900
5,350 Arbor Drugs Inc.* ...................................................................... 110,009
24,900 Barnett Inc.* .......................................................................... 563,363
26,500 Concepts Direct Inc.*................................................................... 433,938
50,700 Dollar Tree Stores Inc.* (1) ........................................................... 2,157,919
36,500 General Nutrition Companies, Inc.*...................................................... 1,316,281
48,000 Home Shopping Network Inc.*............................................................. 2,289,000
53,400 Linens 'N Things Inc.*.................................................................. 2,359,612
41,200 MSC Industrial Direct Inc., Class A*.................................................... 1,838,550
30,400 Piercing Pagoda Inc.*................................................................... 912,000
59,900 Staples, Inc.*.......................................................................... 1,632,275
119,500 Sunglass Hut International Inc.*........................................................ 851,437
-----------
15,650,284
-----------
WIRELESS TELECOMMUNICATIONS--1.74%
51,300 Geotek Communications Corp.* ........................................................... 920,194
52,500 Nextlink Communications Inc.* .......................................................... 1,305,937
62,100 Pagemart Wireless Inc.*................................................................. 566,663
-----------
2,792,794
-----------
Total Common Stocks (cost--$120,045,231)........................................................... 141,727,157
-----------
INVESTMENTS OF CASH COLLATERAL FOR SECURITIES LOANED--5.90%
MONEY MARKET FUNDS--5.90%
5,945,296 Liquid Assets Portfolio................................................................. 5,945,296
3,254,800 Prime Portfolio......................................................................... 3,254,800
181,169 TempCash Portfolio...................................................................... 181,169
74,535 TempFund Portfolio...................................................................... 74,535
-----------
Total Investments of Cash Collateral for Securities Loaned (cost--$9,455,800)...................... 9,455,800
-----------
</TABLE>
54
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- -------- --------------- -------------- -----------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--11.62%
$18,633 Repurchase Agreement dated 01/31/98 with State Street Bank & Trust
Co., collateralized by $12,997,395 U.S. Treasury Notes, 9.875% due
11/15/15 (value-$19,006,025) proceeds: 18,640,764
(cost-$18,633,000)................................................. 02/02/98 5.000 % $18,633,000
-----------
Total Investments (cost--$148,134,031)--105.91%................................ 169,815,957
Liabilities in excess of other assets--(5.91)%................................. (9,482,424)
-----------
Net Assets--100.00%............................................................ $160,333,533
-----------
-----------
</TABLE>
- ---------------
<TABLE>
<S> <C>
* Non-income producing security
(1) Security, or a portion thereof, was on loan at January 31, 1998.
</TABLE>
See accompanying notes to financial statements
55
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
COMMON STOCKS--89.44%
ARGENTINA--0.71%
ENERGY--0.71%
134,572 Compania Perez Compane S.A. ............................................................ $ 884,523
------------
AUSTRALIA--2.39%
CONSUMER DURABLES--0.49%
113,000 News Corp. Ltd. ........................................................................ 608,028
------------
CONSUMER GOODS--0.44%
247,000 John Fairfax Holdings Ltd. ............................................................. 551,938
------------
FINANCE--0.42%
22,700 Lend Lease Corp. ....................................................................... 531,877
------------
OIL & GAS--0.36%
65,000 Woodside Petroleum Ltd. ................................................................ 447,770
------------
TELECOMMUNICATIONS--0.21%
115,000 Telstra Corp. .......................................................................... 261,705
------------
TRANSPORTATION--0.47%
107,000 Mayne Nickless Ltd. .................................................................... 594,813
------------
Total Australia Common Stocks....................................................................... 2,996,131
------------
AUSTRIA--0.62%
CAPITAL GOODS--0.62%
5,500 VA Technologies AG...................................................................... 781,717
------------
BELGIUM--1.11%
BANKS--1.11%
3,200 Generale De Banque...................................................................... 1,384,127
------------
BRAZIL--1.31%
OIL & GAS--0.46%
27,000 Petroleo Brasileiro S.A. Petro.......................................................... 584,145
------------
TELECOMMUNICATIONS--0.41%
4,600 Telecomunicacones Brasileiras S.A. ADR.................................................. 510,600
------------
UTILITIES--0.44%
25,000 Centrais Eletricas Brasileiras S.A. ADR................................................. 546,625
------------
Total Brazil Common Stocks.......................................................................... 1,641,370
------------
CHILE--0.51%
TELECOMMUNICATIONS--0.51%
26,300 Compania de Telecomunicaciones de Chile S.A. ADR (1).................................... 632,844
------------
DENMARK--2.02%
BANKS--0.39%
6,500 Unidanmark.............................................................................. 486,971
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
DENMARK--(CONCLUDED)
<TABLE>
<C> <S> <C>
HEALTH (NON-DRUG)--1.63%
14,241 Novo Nordisk A.S. ...................................................................... $ 2,039,995
------------
Total Denmark Common Stocks......................................................................... 2,526,966
------------
FRANCE--8.90%
BASIC INDUSTRIES--2.86%
4,800 Air Liquide S.A.--Prime Fide 1999....................................................... 752,968
4,000 Air Liquide S.A.--Prime Fide 2000....................................................... 630,855
48,300 Rhone Poulenc S.A....................................................................... 2,203,431
------------
3,587,254
------------
CONSUMER GOODS--1.24%
3,700 Promodes................................................................................ 1,549,277
------------
ENERGY--0.63%
7,000 Elf Aquitaine........................................................................... 789,221
------------
FINANCE--2.01%
30,300 AXA-UAP................................................................................. 2,512,781
------------
UTILITIES--2.16%
18,659 Compania Generale des Eaux.............................................................. 2,702,617
------------
Total France Common Stocks.......................................................................... 11,141,150
------------
GERMANY--11.69%
AUTOMOTIVE MANUFACTURING--1.47%
2,300 Bayer Motoren Werk AG................................................................... 1,833,070
------------
CAPITAL GOODS--2.18%
4,800 Mannesmann AG........................................................................... 2,727,660
------------
FINANCE--1.55%
29,900 Deutsche Bank AG........................................................................ 1,940,668
------------
INSURANCE--1.78%
7,500 Allianz AG.............................................................................. 2,231,290
------------
MACHINERY (DIVERSIFIED)--0.83%
8,300 SGL Carbon AG........................................................................... 1,042,087
------------
METALS & MINING--1.32%
5,100 Preussag AG............................................................................. 1,648,125
------------
UTILITIES--2.56%
46,500 Veba AG................................................................................. 3,208,472
------------
Total Germany Common Stocks......................................................................... 14,631,372
------------
GREECE--0.52%
BANKS--0.52%
13,000 Alpha Credit Bank....................................................................... 649,597
------------
HONG KONG--1.12%
FINANCE--0.84%
85,000 Citic Pacific Ltd. ..................................................................... 243,893
87,000 Hutchison Whampoa Ltd. ................................................................. 511,633
</TABLE>
56
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
HONG KONG--(CONCLUDED)
FINANCE--(CONCLUDED)
<TABLE>
<C> <S> <C>
122,000 New World Development Ltd. ............................................................. $ 294,080
------------
1,049,606
------------
UTILITIES--0.28%
64,000 CLP Holdings............................................................................ 351,557
------------
Total Hong Kong Common Stocks....................................................................... 1,401,163
------------
HUNGARY--0.51%
UTILITIES--0.51%
27,000 Matav ADR............................................................................... 638,550
------------
INDIA--1.33%
COMPUTER SOFTWARE & SERVICES--0.76%
83,000 Videsh Sanchar Nigam Ltd................................................................ 954,500
------------
UTILITIES--0.57%
47,000 Mahanagar Telephone Nigam Ltd. (1)...................................................... 707,938
------------
Total India Common Stocks........................................................................... 1,662,438
------------
ISRAEL--1.00%
COMMUNICATIONS--0.50%
25,000 ECI Telecommunications Ltd. ............................................................ 625,000
------------
HEALTHCARE--0.50%
13,500 Teva Pharmaceutical Industries Ltd. ADS................................................. 620,156
------------
Total Israel Common Stocks.......................................................................... 1,245,156
------------
ITALY--3.08%
ENERGY--1.15%
247,483 ENI SPA................................................................................. 1,440,598
------------
INSURANCE--1.32%
750,000 INA (1)................................................................................. 1,651,681
------------
RETAIL--0.61%
19,300 Gucci Group N.V. ....................................................................... 768,381
------------
Total Italy Common Stocks........................................................................... 3,860,660
------------
JAPAN--12.81%
AUTO MANAFACTURER--1.45%
30,000 Honda Motor Co. ........................................................................ 1,089,405
26,000 Toyota Motor Corp. ..................................................................... 725,010
------------
1,814,415
------------
BASIC INDUSTRIES--0.44%
25,000 Shin Etsu Chemical Company Ltd. ........................................................ 555,337
------------
CAPITAL GOODS--5.65%
44,000 Canon Inc. ............................................................................. 1,067,507
132,000 Hitachi Ltd............................................................................. 1,039,780
8,000 Mabuchi Motor Co. ...................................................................... 419,063
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
JAPAN--(CONCLUDED)
CAPITAL GOODS--(CONCLUDED)
<TABLE>
<C> <S> <C>
133,000 Mitsubishi Heavy Industry............................................................... $ 568,878
5,000 Riso Kagaku Corp. ...................................................................... 291,453
12,000 Rohm Company Ltd. ...................................................................... 1,313,903
18,600 Sony Corp. ............................................................................. 1,714,218
45,000 Sumitomo Electric Industries Ltd. ...................................................... 662,859
------------
7,077,661
------------
CONSUMER DURABLES--2.63%
22,000 Ito Yokado Company Ltd. ................................................................ 1,154,155
31,000 Marui Company Ltd. ..................................................................... 488,381
12,000 Secom Company Ltd. ..................................................................... 756,203
18,000 Shimachu Company Ltd. .................................................................. 321,859
23,000 Taisho Pharmaceutical Co. .............................................................. 576,133
------------
3,296,731
------------
ENTERTAINMENT--0.19%
8,000 Namco................................................................................... 234,423
------------
FINANCE--0.57%
45,000 Mitsui Fudosan Company Ltd. ............................................................ 446,632
5,000 Promise Co. Ltd. ....................................................................... 263,096
------------
709,728
------------
FOREST PRODUCTS--0.88%
88,000 Toppan Printing Co. .................................................................... 1,095,234
------------
HEALTHCARE--0.70%
36,000 Yamanouchi Pharmaceutical Co. .......................................................... 873,415
------------
TRANSPORTATION--0.30%
62,000 Nippon Express Corp. Ltd. .............................................................. 378,007
------------
Total Japan Common Stocks........................................................................... 16,034,951
------------
MEXICO--1.75%
BANKS--0.55%
259,000 Grupo Financiero Banamex................................................................ 695,528
------------
LEISURE & ENTERTAINMENT--0.81%
530,000 Cifra S.A. de C.V. Series C............................................................. 896,605
61,719 Cifra S.A. de C.V. Series V............................................................. 112,296
------------
1,008,901
------------
UTILITIES--0.39%
9,900 Telefonos de Mexico, S.A. de C.V. ADR................................................... 487,575
------------
Total Mexico Common Stocks.......................................................................... 2,192,004
------------
NETHERLANDS--3.22%
CONSUMER DURABLES--3.22%
122,000 Elsevier N.V. .......................................................................... 2,062,338
29,200 Philips Electronic N.V. ................................................................ 1,968,778
------------
4,031,116
------------
</TABLE>
57
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONCLUDED)
<TABLE>
<C> <S> <C>
PHILIPPINES--0.10%
REAL ESTATE--0.10%
3,900,000 Belle Corp. ............................................................................ $ 130,605
------------
SINGAPORE--0.43%
BANKS--0.30%
59,000 Development Bank of Singapore Ltd....................................................... 378,536
------------
CONSUMER GOODS--0.13%
12,000 Singapore Press Holding Ltd. ........................................................... 156,081
------------
Total Singapore Common Stocks....................................................................... 534,617
------------
SPAIN--1.36%
FINANCE--1.36%
48,300 Banco de Santander SA................................................................... 1,701,668
------------
SWEDEN--2.09%
BANKS--2.09%
18,400 Incentive AB............................................................................ 1,633,318
176,000 Nordbanken Holding AB................................................................... 982,949
------------
2,616,267
------------
SWITZERLAND--6.90%
CONSUMER DURABLES--4.58%
1,840 Novartis AG............................................................................. 3,142,433
250 Roche Holdings AG....................................................................... 2,588,767
------------
5,731,200
------------
DIVERSIFIED INDUSTRIES--2.32%
18,300 Credit Suisse Group..................................................................... 2,906,086
------------
Total Switzerland Common Stocks..................................................................... 8,637,286
------------
UNITED KINGDOM--23.96%
BANKS--4.76%
159,000 Lloyds TSB Group PLC.................................................................... 2,232,282
94,000 National Westminster.................................................................... 1,680,334
143,831 Royal Bank of Scotland Group PLC........................................................ 2,042,797
------------
5,955,413
------------
DIVERSIFIED INDUSTRIES--0.45%
109,071 Wassall PLC............................................................................. 566,226
------------
ELECTRICAL EQUIPMENT--0.85%
171,000 General Electric PLC.................................................................... 1,069,174
------------
ENGINEERING SERVICES--2.64%
72,000 GKN PLC................................................................................. 1,469,251
90,000 McKechnie PLC........................................................................... 609,739
96,732 Smiths Industries PLC................................................................... 1,227,001
------------
3,305,991
------------
FOOD PRODUCERS--1.13%
180,000 Unilever PLC............................................................................ 1,415,623
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ------------
<C> <S> <C>
</TABLE>
UNITED KINGDOM--(CONCLUDED)
<TABLE>
<C> <S> <C>
HOUSEHOLD PRODUCTS--1.40%
108,600 Reckitt & Colman PLC.................................................................... $ 1,746,303
------------
LEISURE & ENTERTAINMENT--2.34%
91,000 Granada Group PLC....................................................................... 1,430,610
312,000 Ladbroke Group PLC...................................................................... 1,497,460
------------
2,928,070
------------
OIL & GAS--2.40%
283,000 LASMO PLC............................................................................... 1,210,434
264,000 Shell Transportation & Trading Co. ..................................................... 1,792,878
------------
3,003,312
------------
PHARMACEUTICAL--1.65%
77,000 Glaxo Wellcome PLC...................................................................... 2,065,293
------------
REAL ESTATE--0.73%
50,000 Land Securities......................................................................... 911,752
------------
RETAIL--0.73%
146,193 Safeway PLC............................................................................. 916,455
------------
RETAIL (ALL OTHER)--1.28%
169,000 Marks & Spencer PLC..................................................................... 1,600,178
------------
TELECOMMUNICATIONS--1.52%
201,000 Cable & Wireless PLC.................................................................... 1,903,170
------------
TRANSPORTATION--0.73%
350,000 NFC PLC................................................................................. 914,201
------------
UTILITIES--1.35%
197,000 Scottish Power PLC...................................................................... 1,690,022
------------
29,991,183
Total United Kingdom Common Stocks..................................................................
------------
Total Common Stocks (cost--$101,073,806)............................................................ 111,947,461
------------
PREFERRED STOCKS--0.42%
JAPAN--0.42%
BANKS--0.42%
72,000 Sakura Finance (cost--$571,982)......................................................... 527,452
------------
<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).................................... 689
------------
</TABLE>
58
<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--1.44%
JAPAN--1.44%
ELECTRONICS--0.47%
JPY 63,000 Nitto Denko Corp................................... 03/31/99 2.200 % $ 592,532
------------
ENTERTAINMENT--0.19%
JPY 24,000 Namco.............................................. 09/30/98 4.700 229,697
------------
FINANCE--0.78%
$ 885 MBL International Finance.......................... 11/30/02 3.000 975,713
------------
Total Convertible Bonds (cost--$1,851,131)..................... 1,797,942
------------
REPURCHASE AGREEMENT--7.91%
9,896 Repurchase Agreement dated 01/30/98 with State
Street Bank & Trust Co., collateralized by
$6,902,926 U.S. Treasury Notes, 9.875% due
11/15/15 (value-$10,094,114) proceeds: $9,900,123
(cost-$9,896,000)................................ 02/02/98 5.000 9,896,000
------------
<CAPTION>
NUMBER OF
SHARES
- ----------
<C> <S> <C> <C> <C>
INVESTMENTS OF CASH COLLATERAL FOR SECURITIES LOANED--2.24%
MONEY MARKET FUNDS--2.24%
2,811,075 Liquid Assets Portfolio......................................................... 2,811,075
455 TempCash Portfolio.............................................................. 455
370 TempFund Portfolio.............................................................. 370
---------
Total Investments of Cash Collateral for Securities Loaned (cost--$2,811,900)............ 2,811,900
---------
Total Investments (cost--$116,204,819)--101.45%.......................................... 126,981,444
(1,820,993)
Liabilities in excess of other assets--(1.45)%...........................................
---------
Net Assets--100.00%...................................................................... $125,160,451
---------
---------
</TABLE>
- -----------------
<TABLE>
<S> <C>
ADR American Depositary Receipt
ADS American Depositary Shares
JPY Japanese Yen
(1) Security, or a portion thereof, was on loan at January 31, 1998.
</TABLE>
See accompanying notes to financial statements
59
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--77.32%
ARGENTINA--4.54%
ALCOHOLIC BEVERAGES--0.22%
9,000 Quilmes Industrial Quinsa S.A. ........................................................... $ 113,063
-----------
BANKS--0.21%
35,700 IRSA Inversiones y Representaciones S.A. Class B.......................................... 112,504
-----------
BANKS, RETAIL--0.24%
5,640 Banco de Galicia y Buenos Aires S.A. de C.V. ADR.......................................... 123,727
-----------
DIVERSIFIED INDUSTRIALS--0.34%
27,047 Perez Companc S.A. Class B................................................................ 177,776
-----------
OIL EXPLORATION & PRODUCTION--1.57%
96,480 Astra Cia Argentina de Petroleo S.A. Class B.............................................. 160,227
21,800 YPF Sociedad Anonima Series D ADR......................................................... 663,537
-----------
823,764
-----------
REAL ESTATE--0.27%
8,000 Cresud S.A. C.I.F.Y.A. ADR................................................................ 142,000
-----------
RETAILERS, GENERAL--0.34%
10,700 Importadora & Exportadora-Series B........................................................ 178,768
-----------
TELECOMMUNICATIONS--1.35%
61,000 Telecom Argentina S.A. ................................................................... 380,195
88,500 Telefonica de Argentina S.A. ............................................................. 305,458
700 Telefonica de Argentina S.A. Class B ADR.................................................. 24,238
-----------
709,891
-----------
Total Argentina Common Stocks........................................................................ 2,381,493
-----------
BOTSWANA--0.25%
BREWERIES, PUBS, & RESTAURANTS--0.25%
121,000 Sechaba Breweries......................................................................... 128,986
-----------
BRAZIL--3.52%
ELECTRICITY--1.77%
9,100,000 Centrais Electricas Brasilieras S.A. (Electrobras)........................................ 392,975
2,100,000 Companhia Paulista de Forca e Luz......................................................... 271,125
680,000 Light Servicos de Eletricidade S.A. ...................................................... 266,405
-----------
930,505
-----------
TELECOMMUNICATIONS--1.75%
7,550,000 Telecomunicacones Brasileiras S.A. (Telebras)............................................. 692,414
2,050 Telecomunicacones Brasileiras S.A. (Telebras) ADR......................................... 227,550
-----------
919,964
-----------
Total Brazil Common Stocks........................................................................... 1,850,469
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
CHILE--4.48%
BANKS, RETAIL--0.60%
26,200 Banco Santander Chile Series A
ADS (1)................................................................................. $ 314,400
-----------
BREWERIES, PUBS, & RESTAURANTS--0.54%
11,800 Compania Cervecerias Unidas S.A. ADR...................................................... 283,200
-----------
CHEMICALS--0.30%
9,500 Administradora de Fondas de Pensiones Providia S.A. ADR................................... 157,937
-----------
ELECTRICITY--1.24%
15,300 Chilectra S.A. ADR........................................................................ 378,675
13,741 Chilgener S.A. ADR........................................................................ 269,667
-----------
648,342
-----------
EXTRACTIVE INDUSTRIES--0.37%
4,800 Sociedad Quimica Y Minera de Chile S.A. Series B ADR...................................... 193,200
-----------
RETAILERS, FOOD--0.12%
4,000 Distribucion Y Servicio D&S............................................................... 63,000
-----------
RETAILERS, GENERAL--0.31%
8,800 Santa Isabel S.A. ADS*.................................................................... 163,900
-----------
TELECOMMUNICATIONS--1.00%
21,850 Compania de Telecomunicaciones de Chile S.A. ADR (1)...................................... 525,766
-----------
Total Chile Common Stocks............................................................................ 2,349,745
-----------
CHINA--0.71%
ELECTRICITY & GAS--0.45%
10,300 Huaneng Power International Inc. ADR*..................................................... 234,325
-----------
TRANSPORTATION--0.26%
122,000 Guangshen Railway......................................................................... 23,810
400,000 Qingling Motors Company Class H (1)....................................................... 113,739
-----------
137,549
-----------
Total China Common Stocks............................................................................ 371,874
-----------
CROATIA--0.48%
HEALTH/PERSONAL CARE--0.48%
15,820 Pliva D.D. GDR*........................................................................... 253,120
-----------
CZECH REPUBLIC--0.50%
HEAVY ENGINEERING/SHIPBUILDING--0.11%
4,050 Skoda Koncern Plzen A.S. ................................................................. 55,935
-----------
UTILITIES--0.39%
1,980 SPT Telecom A.S.*......................................................................... 207,448
-----------
Total Czech Republic Common Stocks................................................................... 263,383
-----------
</TABLE>
60
<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--0.47%
BANKS, RETAIL--0.47%
13,800 Commercial International Bank GDR*........................................................ $ 246,675
-----------
GREECE--0.72%
BEVERAGE/TOBACCO MANUFACTURING--0.72%
14,520 Hellenic Bottling Company S.A. ........................................................... 379,537
-----------
HONG KONG--2.31%
COMMERCE/INDUSTRIAL--0.84%
454,000 Beijing Datang Power Generation Company Ltd. ............................................. 215,646
56,000 Citic Pacific Ltd. ....................................................................... 160,682
24,000 Shanghai Industrial Holdings Ltd. ........................................................ 63,125
-----------
439,453
-----------
CONSTRUCTION/BUILDING MATERIALS--0.65%
125,000 Anhui Expressway Co. ..................................................................... 12,763
128,000 Cheung Kong Infrastucture Holdings........................................................ 327,569
-----------
340,332
-----------
FOODS--0.04%
25,000 NG Fung Hong.............................................................................. 23,588
-----------
REAL ESTATE--0.67%
271,000 China OverSeas Land & Investment.......................................................... 50,788
342,000 China Resources Beijing (1)............................................................... 117,139
12,000 China Resources Development Enterprises Ltd. ............................................. 16,130
86,000 New World Infrastructure Ltd.*+........................................................... 168,399
-----------
352,456
-----------
SERVICES--0.06%
175,000 China Travel International................................................................ 30,535
-----------
WHOLESALE--0.05%
57,000 Guangnan Holdings......................................................................... 29,101
-----------
Total Hong Kong Common Stocks........................................................................ 1,215,465
-----------
HUNGARY--2.71%
BANKS--0.40%
5,600 OTP Bank.................................................................................. 207,200
-----------
CHEMICALS--0.42%
7,000 Borsodchem RT GDR......................................................................... 222,250
-----------
CONSTRUCTION/BUILDING MATERIALS--0.27%
3,284 Pannonplast Muanya RT..................................................................... 143,430
-----------
HEALTH/PERSONAL CARE--0.50%
2,750 Gedeon Richter RT GDR..................................................................... 264,688
-----------
OIL--0.54%
11,700 Magyar Olaj Es Gazipari KT................................................................ 283,725
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
HUNGARY--(CONCLUDED)
<TABLE>
<C> <S> <C>
UTILITIES--0.58%
12,780 Matav RT.................................................................................. $ 302,247
-----------
Total Hungary Common Stocks.......................................................................... 1,423,540
-----------
INDIA--7.71%
BANKS, RETAIL--1.00%
84,700 State Bank of India....................................................................... 523,211
-----------
BUILDING MATERIALS & MERCHANTS--0.19%
3,000 Associated Cement......................................................................... 99,237
-----------
ELECTRICITY & GAS--0.22%
28,600 BSES Ltd.*................................................................................ 117,952
-----------
ELECTRONIC & ELECTRICAL EQUIPMENT--0.39%
29,000 Bharat Heavy Electricals Ltd. ............................................................ 202,587
-----------
ENGINEERING, VEHICLES--0.92%
20,500 Bajaj Auto................................................................................ 259,498
16,000 Mahindra & Mahindra....................................................................... 101,630
20,000 Tata Engineering & Locomotive Company Ltd. GDR+........................................... 120,440
-----------
481,568
-----------
EXTRACTIVE INDUSTRIES--0.00%
500 Steel Authority of India Ltd. ............................................................ 113
-----------
HOUSEHOLD GOODS & TEXTILES--0.84%
114,000 Reliance Industries Ltd. ................................................................. 441,990
-----------
OIL--1.48%
64,000 Bharat Petroleum Corporation Ltd. ........................................................ 579,560
20,000 Hindustan Petroleum Corp. ................................................................ 199,353
-----------
778,913
-----------
PHARMACEUTICALS--0.27%
8,000 Ranbaxy Laboratories Ltd. ................................................................ 142,665
-----------
TELECOMMUNICATIONS--1.14%
97,000 Mahanagar Telephone Nigam Ltd. ........................................................... 543,978
3,000 Videsh Sanchar Nigam Ltd. ................................................................ 55,498
-----------
599,476
-----------
TOBACCO--0.85%
31,000 ITC Ltd. ................................................................................. 445,750
-----------
TRANSPORTATION--0.41%
199,300 Great Eastern Ship........................................................................ 214,770
-----------
Total India Common Stocks............................................................................ 4,048,232
-----------
INDONESIA--1.32%
BANKS--0.00%
62,000 P.T. Bank Internasional Indonesia......................................................... 2,884
-----------
FOODS--0.03%
101,600 P.T. Indofoods Sukses Makmur.............................................................. 15,358
-----------
</TABLE>
61
<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)
INDONESIA--(CONCLUDED)
<TABLE>
<C> <S> <C>
MINING--0.07%
142,000 P.T. Aneka Tambang........................................................................ $ 21,795
14,000 P.T. Tambang Timah........................................................................ 13,544
-----------
35,339
-----------
MISCELLANEOUS MANUFACTURING--0.09%
40,000 P.T. Gudang Garam......................................................................... 47,256
-----------
OIL--0.51%
11,500 P.T. Gulf Indonesia Resources Ltd. ....................................................... 224,250
218,000 P.T. Perusahaan Perkebu................................................................... 43,093
-----------
267,343
-----------
TELECOMMUNICATIONS--0.62%
60,000 P.T. Indosat.............................................................................. 100,465
16,000 P.T. Perusahaan Persero Part Telekom ADR.................................................. 148,000
189,000 P.T. Telekomunikasi Indonesia (1)......................................................... 75,600
-----------
324,065
-----------
Total Indonesia Common Stocks........................................................................ 692,245
-----------
ISRAEL--2.44%
BANKS--0.80%
258,040 Bank Leumi................................................................................ 422,135
-----------
PHARMACEUTICALS--0.80%
9,120 Teva Pharmaceutical Industries Ltd., ADR.................................................. 418,950
-----------
RETAIL TRADE--0.35%
66,330 Supersol Ltd. ............................................................................ 183,861
-----------
RETAILERS, FOOD--0.08%
3,000 Blue Square-Israel Ltd ADR................................................................ 39,000
-----------
TELECOMMUNICATIONS--0.41%
8,700 ECI Telecommunications Ltd. .............................................................. 217,500
-----------
Total Israel Common Stocks........................................................................... 1,281,446
-----------
KOREA--2.84%
ELECTRICAL APPLIANCES--1.65%
38,830 L.G. Electronics Inc. .................................................................... 494,293
1,434 L.G. Information and Communications Ltd. ................................................. 63,984
5,454 Samsung Electronics Corp. ................................................................ 310,992
-----------
869,269
-----------
ELECTRICITY & GAS--0.10%
3,600 Korea Electric Power Corp. ............................................................... 52,205
-----------
IRON & STEEL--0.18%
1,750 Pohang Iron & Steel Co. Ltd. ............................................................. 93,701
-----------
OIL--0.67%
11,050 Ssangyong Oil Refining Co. ............................................................... 113,835
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
KOREA--(CONCLUDED)
OIL--(CONCLUDED)
<TABLE>
<C> <S> <C>
21,000 Yukong Ltd. .............................................................................. $ 235,630
-----------
349,465
-----------
TELECOMMUNICATIONS--0.24%
248 SK Telecom Company Ltd. .................................................................. 127,775
-----------
Total Korea Common Stocks............................................................................ 1,492,415
-----------
MAURITIUS--0.32%
OTHER FINANCIAL--0.32%
286,000 State Bank of Mauritius Ltd. ............................................................. 169,528
-----------
MEXICO--12.72%
BREWERIES, PUBS, & RESTAURANTS--1.31%
106,700 Fomento Economico Mexicano S.A. de C.V. Series B*......................................... 687,939
-----------
BUILDING MATERIALS & MERCHANTS--1.28%
184,400 Cemex S.A. de C.V. ....................................................................... 671,894
-----------
CONSTRUCTION/BUILDING MATERIALS--1.26%
15,100 Bufete Industrial S.A. ADR*............................................................... 135,900
74,000 Consorico ARA S.A. de C.V. (1) ........................................................... 323,909
20,000 Grupo Industrial Saltillo, S.A. de C.V. .................................................. 69,324
29,800 Hylsamex S.A. de C.V. (1) ................................................................ 135,022
-----------
664,155
-----------
DIVERSIFIED INDUSTRIALS--1.14%
44,000 Desc-Sociedad de Fomento Industrial, S.A. de C.V. Series B................................ 320,123
47,400 Grupo Carso, S.A. de C.V. Series A*....................................................... 278,131
-----------
598,254
-----------
FINANCIAL SERVICES--0.43%
423,000 Grupo Financiero Bancomer S.A. de C.V.* (1)............................................... 226,187
-----------
FOOD PRODUCERS--0.70%
24,000 Grupo Industrial Bimbo.................................................................... 235,656
88,000 Sistema Argos, S.A. de C.V. Series B...................................................... 132,213
-----------
367,869
-----------
MEDIA--1.10%
320,000 Control Commer Mexico..................................................................... 385,378
6,000 Grupo Televisa, S.A. de C.V. GDS.......................................................... 193,125
-----------
578,503
-----------
METALS--0.29%
9,000 Tubos de Acero de Mexico S.A. de C.V. ADR*................................................ 149,625
-----------
PAPER, PACKAGING & PRINTING--0.55%
66,750 Kimberly-Clark de Mexico S.A.
de C.V. (1) ............................................................................ 288,621
-----------
</TABLE>
62
<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)
<TABLE>
<C> <S> <C>
RETAILERS, GENERAL--1.62%
74,020 Cifra S.A. de C.V. Series A............................................................... $ 134,678
422,500 Cifra S.A. de C.V. Series C*.............................................................. 714,746
-----------
849,424
-----------
TELECOMMUNICATIONS--3.04%
23,600 Telefonos de Mexico, S.A. de C.V. ADR..................................................... 1,162,300
21,700 TV Azteca S.A. de C.V. ADR................................................................ 434,000
-----------
1,596,300
-----------
Total Mexico Common Stocks........................................................................... 6,678,771
-----------
PAKISTAN--1.02%
CHEMICALS--0.14%
13,000 Engro Chemicals........................................................................... 28,655
25,000 Fauji Fertilizer.......................................................................... 42,750
-----------
71,405
-----------
ELECTRICITY--0.46%
178,000 Hub Power Co.............................................................................. 238,245
-----------
RETAIL SALES--0.05%
1,000 Lever Brothers Pak........................................................................ 27,451
-----------
TELECOMMUNICATIONS--0.37%
292,000 Pak Telecom Corp.......................................................................... 195,746
-----------
Total Pakistan Common Stocks......................................................................... 532,847
-----------
PERU--0.56%
TELECOMMUNICATIONS--0.56%
15,000 Telefonica Del Peru S.A. Class B ADS...................................................... 294,375
-----------
PHILIPPINES--1.95%
ELECTRICITY & GAS--0.38%
63,520 Manila Electric Co. Class B............................................................... 199,423
-----------
REAL ESTATE--0.33%
488,350 Ayala Land Inc. Class B (1)............................................................... 170,355
-----------
TELECOMMUNICATIONS--1.24%
1,221,000 Digital Telecom........................................................................... 47,136
24,880 Philippine Long Distance Telephone
Co. (1) ................................................................................ 604,642
-----------
651,778
-----------
Total Philippines Common Stocks...................................................................... 1,021,556
-----------
POLAND--2.22%
AUTO COMPONENTS--0.26%
20,950 Stomil Olsztyn S.A. ...................................................................... 135,866
-----------
BEVERAGE/TOBACCO MANUFACTURING--0.63%
3,390 Zaklady Piwowarskie e Zywiec S.A. (Zywiec)................................................ 330,732
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
POLAND--(CONCLUDED)
<TABLE>
<C> <S> <C>
CONSTRUCTION/BUILDING MATERIALS--0.40%
9,100 Gorazdze S.A. ............................................................................ $ 211,688
-----------
DIVERSIFIED HOLDINGS COMPANIES--0.51%
27,000 Elektrim.................................................................................. 266,460
-----------
ELECTRICAL EQUIPMENT--0.42%
30,700 Bydgodska Fabryka Kabli S.A. ............................................................. 222,470
-----------
Total Poland Common Stocks........................................................................... 1,167,216
-----------
PORTUGAL--3.98%
FORESTRY/PAPER PRODUCTS--0.98%
20,300 Semapa Sociedade de Investimento e Gestao, S.A. .......................................... 512,403
-----------
RETAIL TRADE--1.01%
16,250 Estabelecimentos Jeronimo Martins & Filho, Sociedade Gestorade Participacoes Sociais,
S.A. ................................................................................... 529,957
-----------
UTILITIES--1.99%
9,900 Portugal Telecom S.A. .................................................................... 505,331
4,220 Telecel-Comunicacaoes Pessoais, S.A. ..................................................... 540,615
-----------
1,045,946
-----------
Total Portugal Common Stocks......................................................................... 2,088,306
-----------
RUSSIA--1.87%
MACHINERY/ENGINE SERVICES--0.63%
15,760 Unified Energy System..................................................................... 330,960
-----------
OIL--1.24%
16,000 Gazprom ADR* (1).......................................................................... 300,800
5,240 Lukoil Oil Co. (1) ....................................................................... 351,080
-----------
651,880
-----------
Total Russia Common Stocks........................................................................... 982,840
-----------
SOUTH AFRICA--7.90%
BANKS, RETAIL--0.96%
59,400 Amal Bank of South Africa................................................................. 420,978
9,000 First National Bank....................................................................... 85,654
-----------
506,632
-----------
BREWERIES, PUBS, & RESTAURANTS--1.01%
20,140 South African Breweries Ltd. ............................................................. 530,977
-----------
DIVERSIFIED INDUSTRIALS--1.91%
7,325 Anglo American Industrial Corp. of South Africa Ltd. S.A. ................................ 174,133
57,675 Barlow Ltd................................................................................ 525,542
91,275 Malbak Ltd. .............................................................................. 64,688
31,400 Rembrandt Group........................................................................... 238,115
-----------
1,002,478
-----------
</TABLE>
63
<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)
SOUTH AFRICA--(CONCLUDED)
<TABLE>
<C> <S> <C>
ELECTRICITY--0.34%
46,000 Energy Africa Ltd. ....................................................................... $ 178,374
-----------
ELECTRONIC & ELECTRICAL EQUIPMENT--0.28%
28,932 Dimension Data Holdings Ltd. ............................................................. 146,461
-----------
EXTRACTIVE INDUSTRIES--0.61%
7,200 Anglo American Corporation of South Africa Ltd S.A. ...................................... 319,287
-----------
MEDIA--0.05%
5,250 Primedia Ltd. ............................................................................ 26,790
-----------
OIL EXPLORATION & PRODUCTION--0.82%
47,060 Sasol Ltd. ............................................................................... 428,814
-----------
OTHER FINANCIAL--0.58%
24,600 Fedsure Holdings.......................................................................... 303,857
-----------
PAPER, PACKAGING & PRINTING--0.44%
68,000 Nampak.................................................................................... 234,079
-----------
PHARMACEUTICALS--0.21%
23,967 South African Druggist Ltd. .............................................................. 111,621
-----------
RETAILERS, FOOD--0.30%
33,099 Foodcorp Ltd. ............................................................................ 158,173
-----------
RETAILERS, GENERAL--0.39%
27,815 Ellerine Holdings......................................................................... 202,762
-----------
Total South Africa Common Stocks..................................................................... 4,150,305
-----------
TAIWAN--5.23%
COMMERCE/INDUSTRIAL--0.76%
20,500 Asustek Computer Inc. .................................................................... 402,312
-----------
CONSTRUCTION/BUILDING MATERIALS--0.35%
15,666 Asia Cement Corp. GDR..................................................................... 184,076
-----------
ELECTRICAL APPLIANCES--2.33%
16,000 Acer Inc. ................................................................................ 120,000
20,300 Siliconware Precision Industries Co. GDR*+ (1)............................................ 295,872
34,000 Taiwan Semiconductor Manufacturing Company Ltd. (1) ...................................... 807,500
-----------
1,223,372
-----------
MISCELLANEOUS FINANCIAL--1.20%
42,000 R.O.C. Taiwan Fund*....................................................................... 404,250
12,000 Taiwan Fund Inc. ......................................................................... 225,000
-----------
629,250
-----------
MISCELLANEOUS MANUFACTURING--0.41%
17,234 Teco Electric & Machinery Ltd. GDR........................................................ 213,271
-----------
TRANSPORTATION EQUIPMENT--0.18%
8,881 Evergreen Marine Corp. GDR*+.............................................................. 93,251
-----------
Total Taiwan Common Stocks........................................................................... 2,745,532
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
THAILAND--1.12%
ELECTRICITY & GAS--0.26%
49,500 Electricity Generating Public Company Ltd. ............................................... $ 137,005
-----------
MINING--0.58%
26,200 PTT Exploration & Production PLC.......................................................... 301,983
-----------
TELECOMMUNICATIONS--0.28%
20,000 Advanced Info Services PLC................................................................ 147,109
-----------
Total Thailand Common Stocks......................................................................... 586,097
-----------
TURKEY--2.29%
BANKS--0.44%
6,450,000 Yapi Ve Kredi Bankasi..................................................................... 232,964
-----------
FINANCIAL INSTITUTIONS/SERVICES--0.21%
4,229,000 Eczacibasi Yapi Gerecleri Sanayi ve Ticaret A.S. ......................................... 108,275
-----------
HOUSEHOLD DURABLES/APPLIANCES--0.41%
3,721,772 Trakya Cam Sanayii A.S. .................................................................. 216,951
-----------
RETAIL TRADE--0.65%
379,904 Migros Turk T.A.S. ....................................................................... 343,038
-----------
UTILITIES--0.58%
874,000 Northern Elektrik Telekomvaskayson A.S. .................................................. 303,687
-----------
Total Turkey Common Stocks........................................................................... 1,204,915
-----------
VENEZUELA--1.01%
ELECTRICITY--0.65%
354,292 Electricidad de Caracas................................................................... 339,945
-----------
TELECOMMUNICATIONS--0.36%
5,200 Compania Anonima National Telecom de Venezuela (CANTV) ADR................................ 191,100
-----------
Total Venezuela Common Stocks........................................................................ 531,045
-----------
ZIMBABWE--0.13%
EXTRACTIVE INDUSTRIES--0.13%
64,300 Meikles Africa Ltd. ...................................................................... 67,515
-----------
Total Common Stocks (cost--$43,161,001).............................................................. 40,599,473
-----------
PREFERRED STOCKS--9.96%
BRAZIL--9.96%
BANKS, RETAIL--1.24%
11,571,150 Banco Bradesco S.A. ...................................................................... 91,696
19,000 Companhia Vale do Rio Doce................................................................ 367,109
3,250,000 Uniao de Bancos Brasilerios S.A. (Unibanco)............................................... 190,989
-----------
649,794
-----------
</TABLE>
64
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
PREFERRED STOCKS--(CONCLUDED)
BRAZIL--(CONCLUDED)
<TABLE>
<C> <S> <C>
BREWERIES, PUBS, & RESTAURANTS--0.59%
452,000 Cia Cervejaria Brahma..................................................................... $ 309,892
-----------
DIVERSIFIED INDUSTRIALS--0.26%
220,000 Itausa Investimentos Itau S.A. ........................................................... 137,120
-----------
ELECTRICITY--1.93%
18,240,000 Centrais Electricas Brasileiras S.A. (Electrobras)........................................ 820,159
16,300 Companhia Paranaense de Energia........................................................... 195,600
-----------
1,015,759
-----------
ELECTRONIC & ELECTRICAL EQUIPMENT--0.60%
2,537,478 Telecomunicacoes do Rio de Janiero S.A. (Telerj).......................................... 316,083
-----------
ENGINEERING--0.22%
20,050 Usinas Siderurgicas de Minas Gerais S.A. (Usiminas)....................................... 118,004
-----------
OIL EXPLORATION & PRODUCTION--1.68%
4,125,000 Petroleo Brasileiros S.A. (Petrobras)..................................................... 881,489
-----------
PAPER, PACKAGING & PRINTING--0.11%
150,000 Klabin Fabricadora........................................................................ 58,766
-----------
SUPPORT SERVICES--0.66%
8,700,000 Companhia Energetica de Minas
Gerais.................................................................................. 343,941
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
</TABLE>
BRAZIL--(CONCLUDED)
<TABLE>
<C> <S> <C>
TELECOMMUNICATIONS--2.67%
4,590,000 Telecomunicacoes Brasileiras S.A. (Telebras).............................................. $ 502,689
3,101,423 Telecomunicacoes de Sao Paulo S.A. (Telesp)............................................... 897,510
-----------
1,400,199
-----------
Total Preferred Stocks (cost--$4,635,999)............................................................ 5,231,047
-----------
<CAPTION>
NUMBER OF
WARRANTS
- ---------
<C> <S> <C>
WARRANTS--0.00%
ISRAEL--0.00%
BANKS--0.00%
20,000 Bank Leumi, warrants expiring 08/10/98 (cost-$4,177)...................................... 2,272
-----------
<CAPTION>
NUMBER OF
RIGHTS
- ---------
<C> <S> <C>
STOCK RIGHTS--0.01%
BRAZIL--0.01%
BANKS, RETAIL--0.01%
494,726 Banco Bradesco S.A., rights expiring 02/05/98 (cost-$3,107)............................... 3,920
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- --------- -------------------- ----------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--13.49%
$ 7,084 Repurchase Agreement dated 01/31/98 with State 02/02/98 5.000% 7,084,000
Street Bank & Trust Co., collateralized by
$4,941,424 U.S. Treasury Notes, 9.875% due
11/15/15 (value-$7,225,819) proceeds: $7,086,952
(cost-$7,084,000)...............................
-----------
</TABLE>
65
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
INVESTMENTS OF CASH COLLATERAL FOR SECURITIES LOANED--7.07%
MONEY MARKET FUNDS--7.07%
2,225,281 Liquid Assets Portfolio..................................... $ 2,225,281
5,071 Prime Portfolio............................................. 5,071
1,476,688 TempCash Portfolio.......................................... 1,476,688
5,460 TempFund Portfolio.......................................... 5,460
-----------
Total Investments of Cash Collateral for Securities Loaned
(cost--$3,712,500)................................................... 3,712,500
-----------
56,633,212
Total Investments (cost--$58,600,784)--107.85%.........................
(4,121,154)
Liabilities in excess of other assets--(7.85)%.........................
-----------
Net Assets--100.00%.................................................... $52,512,058
-----------
-----------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Non-income producing security
+ Security exempt from registration under 144A of the Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified institutional buyers.
ADR American Depositary Receipt
ADS American Depositary Shares
GDR Global Depositary Receipt
(1) Security, or a portion thereof, was on loan at January 31, 1998.
</TABLE>
See accompanying notes to financial statements
66
<PAGE>
[This page intentionally left blank]
67
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
PACE
GOVERNMENT PACE PACE
PACE SECURITIES INTERMEDIATE STRATEGIC
MONEY MARKET FIXED INCOME FIXED INCOME FIXED INCOME
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Investments, at value
(cost--$21,048,539; $187,229,003;
$88,610,253; $109,090,324;
$42,498,511; $66,833,190;
$197,918,402; $192,561,949;
$139,403,727; $129,501,031;
$106,308,819 and $51,516,784,
respectively)......................... $21,048,539 $189,006,947 $90,053,203 $111,413,690
Repurchase Agreements, at value
(cost--$0; $0; $13,881,000;
$1,404,000; $0; $6,626,000;
$4,040,000; $2,621,000; $10,079,000;
$18,633,000; $9,896,000 and
$7,084,000, respectively)............. -- -- 13,881,000 1,404,000
------------ ------------ ------------ ------------
21,048,539 189,006,947 103,934,203 112,817,690
Cash (including cash denominated in
foreign currencies)................... -- 7,176,191 42,639 32,976
Receivable for investments sold......... -- 57,865,042 -- 499,258
Receivable for shares of beneficial
interest sold......................... 38,398 213,176 110,359 169,218
Receivable from adviser................. 4,439 -- -- --
Unrealized appreciation of forward
foreign currency contracts............ -- -- -- --
Dividends and interest receivable....... 169,546 856,872 1,124,877 902,665
Deferred organizational costs........... 48,449 48,449 48,449 48,449
Other assets............................ 20,502 59,457 17,319 102,664
------------ ------------ ------------ ------------
Total assets............................ 21,329,873 255,226,134 105,277,846 114,572,920
------------ ------------ ------------ ------------
LIABILITIES
Payable for shares of beneficial
interest repurchased.................. 6,476 28,721 46,970 13,375
Dividends payable....................... 49,973 -- -- --
Payable for investments purchased....... -- 123,661,666 -- 14,107,412
Collateral for securities loaned........ -- -- 20,186,215 --
Outstanding options written............. -- -- -- 125
Unrealized depreciation of forward
foreign currency contracts............ -- -- -- --
Payable to affiliates................... -- 38,581 42,663 42,299
Accrued expenses and other
liabilities........................... 96,700 110,704 180,982 113,692
------------ ------------ ------------ ------------
Total liabilities....................... 153,149 123,839,672 20,456,830 14,276,903
------------ ------------ ------------ ------------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--21,177,514;
10,437,647; 6,828,853; 7,539,953;
3,475,932; 6,108,666; 11,675,013;
10,729,730; 9,611,744; 11,013,691;
8,662,982 and 4,593,388 respectively
(unlimited number authorized)......... 21,177,514 128,559,389 82,792,852 95,896,317
Accumulated net investment income
(loss)................................ -- 590,496 549,097 440,483
Accumulated net realized gains (losses)
from investment, future and option
transactions.......................... (790) 458,633 38,067 902,766
Net unrealized appreciation
(depreciation) of investments,
futures, options and other assets and
liabilities denominated in foreign
currencies............................ -- 1,777,944 1,441,000 3,056,451
------------ ------------ ------------ ------------
Net assets.............................. $21,176,724 $131,386,462 $84,821,016 $100,296,017
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net asset value, offering price and
redemption value per share............ $1.00 $12.59 $12.42 $13.30
</TABLE>
68
<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>
ASSETS
Investments, at value
(cost--$21,048,539; $187,229,003;
$88,610,253; $109,090,324;
$42,498,511; $66,833,190;
$197,918,402; $192,561,949;
$139,403,727; $129,501,031;
$106,308,819 and $51,516,784,
respectively)......................... $43,708,399 $ 67,274,711 $229,136,524 $212,593,972 $166,545,729 $151,182,957
Repurchase Agreements, at value
(cost--$0; $0; $13,881,000;
$1,404,000; $0; $6,626,000;
$4,040,000; $2,621,000; $10,079,000;
$18,633,000; $9,896,000 and
$7,084,000, respectively)............. -- 6,626,000 4,040,000 2,621,000 10,079,000 18,633,000
------------ ------------ ------------ ------------ ------------ ------------
43,708,399 73,900,711 233,176,524 215,214,972 176,624,729 169,815,957
Cash (including cash denominated in
foreign currencies)................... -- 4,212,860 104 231,969 2,763 982
Receivable for investments sold......... -- 3,438,244 570,985 1,692,462 2,039,554 927,957
Receivable for shares of beneficial
interest sold......................... 63,003 98,246 338,446 310,859 209,163 210,259
Receivable from adviser................. -- -- -- -- -- --
Unrealized appreciation of forward
foreign currency contracts............ -- 441,527 -- -- -- --
Dividends and interest receivable....... 641,679 1,091,388 149,113 113,701 179,005 56,047
Deferred organizational costs........... 48,449 48,449 48,449 48,449 48,449 48,449
Other assets............................ 16,055 12,527 23,591 11,731 19,549 20,157
------------ ------------ ------------ ------------ ------------ ------------
Total assets............................ 44,477,585 83,243,952 234,307,212 217,624,143 179,123,212 171,079,808
------------ ------------ ------------ ------------ ------------ ------------
LIABILITIES
Payable for shares of beneficial
interest repurchased.................. 26,979 16,116 60,865 49,384 40,692 41,129
Dividends payable....................... -- -- -- -- -- --
Payable for investments purchased....... 17,619 4,881,473 489,030 2,465,558 4,079,098 1,081,119
Collateral for securities loaned........ -- 2,566,200 18,393,399 15,591,900 3,953,600 9,455,800
Outstanding options written............. -- -- -- -- -- --
Unrealized depreciation of forward
foreign currency contracts............ -- 587,403 -- -- -- --
Payable to affiliates................... 12,443 16,408 143,150 110,406 115,218 101,633
Accrued expenses and other
liabilities........................... 113,462 98,214 160,750 71,372 133,538 66,594
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities....................... 170,503 8,165,814 19,247,194 18,288,620 8,322,146 10,746,275
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--21,177,514;
10,437,647; 6,828,853; 7,539,953;
3,475,932; 6,108,666; 11,675,013;
10,729,730; 9,611,744; 11,013,691;
8,662,982 and 4,593,388 respectively
(unlimited number authorized)......... 43,118,883 74,934,035 180,424,773 161,444,277 133,421,148 140,002,145
Accumulated net investment income
(loss)................................ 167,016 406,904 5,033 (71,261) 171,048 (141,171)
Accumulated net realized gains (losses)
from investment, future and option
transactions.......................... (188,705) (547,167) 3,342,520 17,930,484 10,066,868 (1,209,367)
Net unrealized appreciation
(depreciation) of investments,
futures, options and other assets and
liabilities denominated in foreign
currencies............................ 1,209,888 284,366 31,287,692 20,032,023 27,142,002 21,681,926
------------ ------------ ------------ ------------ ------------ ------------
Net assets.............................. $44,307,082 $ 75,078,138 $215,060,018 $199,335,523 $170,801,066 $160,333,533
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, offering price and
redemption value per share............ $12.75 $12.29 $18.42 $18.58 $17.77 $14.56
<CAPTION>
PACE
INTERNATIONAL
PACE EMERGING
INTERNATIONAL MARKETS
EQUITY EQUITY
INVESTMENTS INVESTMENTS
------------ -----------
<S> <C> <C>
ASSETS
Investments, at value
(cost--$21,048,539; $187,229,003;
$88,610,253; $109,090,324;
$42,498,511; $66,833,190;
$197,918,402; $192,561,949;
$139,403,727; $129,501,031;
$106,308,819 and $51,516,784,
respectively)......................... $117,085,444 $49,549,212
Repurchase Agreements, at value
(cost--$0; $0; $13,881,000;
$1,404,000; $0; $6,626,000;
$4,040,000; $2,621,000; $10,079,000;
$18,633,000; $9,896,000 and
$7,084,000, respectively)............. 9,896,000 7,084,000
------------ -----------
126,981,444 56,633,212
Cash (including cash denominated in
foreign currencies)................... 2,012,739 1,813
Receivable for investments sold......... 1,619,126 304,975
Receivable for shares of beneficial
interest sold......................... 179,386 99,085
Receivable from adviser................. -- --
Unrealized appreciation of forward
foreign currency contracts............ -- --
Dividends and interest receivable....... 226,526 44,798
Deferred organizational costs........... 48,449 48,449
Other assets............................ 34,175 27,013
------------ -----------
Total assets............................ 131,101,845 57,159,345
------------ -----------
LIABILITIES
Payable for shares of beneficial
interest repurchased.................. 37,177 21,454
Dividends payable....................... -- --
Payable for investments purchased....... 2,906,449 706,192
Collateral for securities loaned........ 2,811,900 3,712,500
Outstanding options written............. -- --
Unrealized depreciation of forward
foreign currency contracts............ -- --
Payable to affiliates................... 93,066 25,166
Accrued expenses and other
liabilities........................... 92,802 181,975
------------ -----------
Total liabilities....................... 5,941,394 4,647,287
------------ -----------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--21,177,514;
10,437,647; 6,828,853; 7,539,953;
3,475,932; 6,108,666; 11,675,013;
10,729,730; 9,611,744; 11,013,691;
8,662,982 and 4,593,388 respectively
(unlimited number authorized)......... 116,491,719 59,388,764
Accumulated net investment income
(loss)................................ 41,347 40,190
Accumulated net realized gains (losses)
from investment, future and option
transactions.......................... (2,121,550) (4,917,829)
Net unrealized appreciation
(depreciation) of investments,
futures, options and other assets and
liabilities denominated in foreign
currencies............................ 10,748,935 (1,999,067)
------------ -----------
Net assets.............................. $125,160,451 $52,512,058
------------ -----------
------------ -----------
Net asset value, offering price and
redemption value per share............ $14.45 $11.43
</TABLE>
See accompanying notes to financial statements
69
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 1998(UNAUDITED)
<TABLE>
<CAPTION>
PACE
GOVERNMENT PACE PACE
PACE SECURITIES INTERMEDIATE STRATEGIC
MONEY MARKET FIXED INCOME FIXED INCOME FIXED INCOME
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding
taxes, if any)........................ $ 557,715 $ 3,932,305 $ 2,493,316 $ 2,747,873
Dividends (net of foreign withholding
taxes, if any)........................ -- -- -- --
------------ ------------ ------------ ------------
557,715 3,932,305 2,493,316 2,747,873
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory and administration
fees.................................. 34,065 410,291 229,664 306,491
Transfer agency fees and expenses....... 40,768 32,626 15,033 28,284
Trustees' fees.......................... 13,125 13,125 13,125 13,125
Amortization of organizational
expenses.............................. 9,568 9,568 9,568 9,568
Legal and audit......................... 9,364 19,420 11,962 16,640
Reports and notices to shareholders..... 6,482 22,259 12,869 11,242
Federal and state registration fees..... 3,831 16,586 6,226 8,855
Custody and accounting.................. 957 38,744 23,750 26,900
Other expenses.......................... 3,276 15,325 4,734 2,443
------------ ------------ ------------ ------------
121,436 577,944 326,931 423,548
Less: Fee waivers and expense
reimbursements from investment
adviser............................... (72,835) (78,624) (4,567) (51,382)
------------ ------------ ------------ ------------
Net expenses............................ 48,601 499,320 322,364 372,166
------------ ------------ ------------ ------------
Net investment income (loss)............ 509,114 3,432,985 2,170,952 2,375,707
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT TRANSACTIONS:
Net realized gains (losses) from:
Investment, future and option
transactions.......................... (790) 1,774,780 545,698 1,689,994
Foreign currency transactions....... -- -- (175,724) --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... -- (101,122) 687,951 1,060,263
Other assets, liabilities and
forward contracts denominated in
foreign currencies............... -- -- 8,894 751
------------ ------------ ------------ ------------
Net realized and unrealized gains
(losses) from investment
transactions.......................... (790) 1,673,658 1,066,819 2,751,008
------------ ------------ ------------ ------------
Net increase in net assets resulting
from operations....................... $ 508,324 $ 5,106,643 $ 3,237,771 $ 5,126,715
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
70
<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)........................ $ 1,112,014 $ 2,106,140 $ 144,778 $ 111,543 $ 275,511 $ 385,251
Dividends (net of foreign withholding
taxes, if any)........................ -- -- 1,575,230 698,245 1,102,812 212,432
------------ ------------ ------------ ------------ ------------ ------------
1,112,014 2,106,140 1,720,008 809,788 1,378,323 597,683
------------ ------------ ------------ ------------ ------------ ------------
EXPENSES:
Investment advisory and administration
fees.................................. 119,323 276,689 780,711 705,703 625,317 591,988
Transfer agency fees and expenses....... 12,000 37,716 42,815 49,750 41,430 44,516
Trustees' fees.......................... 13,125 13,125 13,125 13,125 13,125 13,125
Amortization of organizational
expenses.............................. 9,568 9,568 9,568 9,568 9,568 9,568
Legal and audit......................... 12,677 18,055 15,111 37,983 17,461 26,250
Reports and notices to shareholders..... 6,834 12,249 16,654 31,050 18,394 21,841
Federal and state registration fees..... 1,444 10,039 12,848 18,251 13,215 16,943
Custody and accounting.................. 12,805 53,524 60,137 53,363 47,262 45,375
Other expenses.......................... 3,913 9,948 5,726 3,145 7,476 4,209
------------ ------------ ------------ ------------ ------------ ------------
191,689 440,913 956,695 921,938 793,248 773,815
Less: Fee waivers and expense
reimbursements from investment
adviser............................... (22,643) (112,345) -- (39,809) (10,582) (33,830)
------------ ------------ ------------ ------------ ------------ ------------
Net expenses............................ 169,046 328,568 956,695 882,129 782,666 739,985
------------ ------------ ------------ ------------ ------------ ------------
Net investment income (loss)............ 942,968 1,777,572 763,313 (72,341) 595,657 (142,302)
------------ ------------ ------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT TRANSACTIONS:
Net realized gains (losses) from:
Investment, future and option
transactions.......................... (33,802) 1,356,085 7,724,815 25,588,487 13,174,452 2,359,229
Foreign currency transactions....... -- (1,320,572) -- -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... 289,396 84,837 (7,974,505) (20,761,551) (561,823) 4,551,448
Other assets, liabilities and
forward contracts denominated in
foreign currencies............... -- 258,999 -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net realized and unrealized gains
(losses) from investment
transactions.......................... 255,594 379,349 (249,690) 4,826,936 12,612,629 6,910,677
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting
from operations....................... $ 1,198,562 $ 2,156,921 $ 513,623 $ 4,754,595 $13,208,286 $ 6,768,375
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
<CAPTION>
PACE
INTERNATIONAL
PACE EMERGING
INTERNATIONAL MARKETS
EQUITY EQUITY
INVESTMENTS INVESTMENTS
------------ -----------
<S> <C> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding
taxes, if any)........................ $ 302,371 $ 147,109
Dividends (net of foreign withholding
taxes, if any)........................ 558,567 334,342
------------ -----------
860,938 481,451
------------ -----------
EXPENSES:
Investment advisory and administration
fees.................................. 504,845 294,316
Transfer agency fees and expenses....... 40,029 38,382
Trustees' fees.......................... 13,125 13,125
Amortization of organizational
expenses.............................. 9,568 9,568
Legal and audit......................... 14,513 15,700
Reports and notices to shareholders..... 6,459 13,465
Federal and state registration fees..... 6,295 10,548
Custody and accounting.................. 84,159 94,393
Other expenses.......................... 2,785 3,651
------------ -----------
681,778 493,148
Less: Fee waivers and expense
reimbursements from investment
adviser............................... -- (91,808)
------------ -----------
Net expenses............................ 681,778 401,340
------------ -----------
Net investment income (loss)............ 179,160 80,111
------------ -----------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT TRANSACTIONS:
Net realized gains (losses) from:
Investment, future and option
transactions.......................... (522,862) (4,645,646)
Foreign currency transactions....... (136,632) (98,541)
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... (3,937,814) (12,012,749)
Other assets, liabilities and
forward contracts denominated in
foreign currencies............... (20,087) 190,477
------------ -----------
Net realized and unrealized gains
(losses) from investment
transactions.......................... (4,617,395) (16,566,459)
------------ -----------
Net increase in net assets resulting
from operations....................... $(4,438,235) $(16,486,348)
------------ -----------
------------ -----------
</TABLE>
See accompanying notes to financial statements
71
<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 SIX FOR THE SIX
MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE YEAR
JANUARY 31, ENDED JANUARY 31, ENDED
1998 JULY 31, 1998 JULY 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 509,114 $ 669,007 $ 3,432,985 $ 4,314,719
Net realized gains (losses) from:
Investment, future and option
transactions....................... (790) 360 1,774,780 1,571,072
Foreign currency transactions....... -- -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... -- -- (101,122) 2,036,731
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- -- -- (10)
------------ ------------ ------------ ------------
Net increase in net assets resulting
from operations...................... 508,324 669,367 5,106,643 7,922,512
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (509,114) (669,007) (3,336,978) (4,069,911)
Net realized gains from investment
transactions......................... -- (619) (1,983,939) (336,399)
------------ ------------ ------------ ------------
(509,114) (669,626) (5,320,917) (4,406,310)
------------ ------------ ------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 11,139,695 14,140,218 33,898,528 51,021,900
Cost of shares repurchased............ (6,518,295) (8,937,847) (9,128,154) (16,027,909)
Proceeds from dividends reinvested.... 486,056 646,822 5,224,493 4,343,399
------------ ------------ ------------ ------------
Net increase in net assets derived
from beneficial
interest transactions................ 5,107,456 5,849,193 29,994,867 39,337,390
------------ ------------ ------------ ------------
Net increase in net assets............ 5,106,666 5,848,934 29,780,593 42,853,592
NET ASSETS:
Beginning of period................... 16,070,058 10,221,124 101,605,869 58,752,277
------------ ------------ ------------ ------------
End of period......................... $21,176,724 $16,070,058 $131,386,462 $101,605,869
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net investment income... $ -- $ -- $ 590,496 $ 494,489
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
72
<PAGE>
<TABLE>
<CAPTION>
PACE PACE PACE
INTERMEDIATE FIXED INCOME STRATEGIC FIXED INCOME MUNICIPAL FIXED INCOME
INVESTMENTS INVESTMENTS INVESTMENTS
--------------------------- --------------------------- ---------------------------
FOR THE SIX FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE YEAR
JANUARY 31, ENDED JANUARY 31, ENDED JANUARY 31, ENDED
1998 JULY 31, 1998 JULY 31, 1998 JULY 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 2,170,952 $ 3,026,315 $ 2,375,707 $ 3,183,558 $ 942,968 $ 1,213,887
Net realized gains (losses) from:
Investment, future and option
transactions....................... 545,698 (272,058) 1,689,994 804,905 (33,802) (117,168)
Foreign currency transactions....... (175,724) (2,307) -- -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... 687,951 1,470,929 1,060,263 2,393,323 289,396 850,557
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. 8,894 (11,478) 751 47 -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting
from operations...................... 3,237,771 4,211,401 5,126,715 6,381,833 1,198,562 1,947,276
------------ ------------ ------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (1,922,047) (2,918,801) (2,261,311) (3,066,213) (893,927) (1,168,430)
Net realized gains from investment
transactions......................... -- -- (882,227) (433,240) -- (58,851)
------------ ------------ ------------ ------------ ------------ ------------
(1,922,047) (2,918,801) (3,143,538) (3,499,453) (893,927) (1,227,281)
------------ ------------ ------------ ------------ ------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 21,794,238 34,600,315 27,355,921 38,094,747 13,035,442 19,365,469
Cost of shares repurchased............ (6,926,281) (13,278,515) (7,316,117) (11,807,997) (4,194,274) (4,749,932)
Proceeds from dividends reinvested.... 1,886,730 2,863,582 3,098,552 3,455,539 869,139 1,191,557
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets derived
from beneficial
interest transactions................ 16,754,687 24,185,382 23,138,356 29,742,289 9,710,307 15,807,094
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets............ 18,070,411 25,477,982 25,121,533 32,624,669 10,014,942 16,527,089
NET ASSETS:
Beginning of period................... 66,750,605 41,272,623 75,174,484 42,549,815 34,292,140 17,765,051
------------ ------------ ------------ ------------ ------------ ------------
End of period......................... $84,821,016 $66,750,605 $100,296,017 $75,174,484 $44,307,082 $34,292,140
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
Undistributed net investment income... $ 549,097 $ 300,192 $ 440,483 $ 326,087 $ 167,016 $ 117,975
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
<CAPTION>
PACE
GLOBAL FIXED INCOME
INVESTMENTS
---------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JANUARY 31, ENDED
1998 JULY 31,
(UNAUDITED) 1997
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 1,777,572 $ 2,608,277
Net realized gains (losses) from:
Investment, future and option
transactions....................... 1,356,085 990,587
Foreign currency transactions....... (1,320,572) (1,500,518)
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... 84,837 1,235
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. 258,999 (444,857)
------------ ------------
Net increase in net assets resulting
from operations...................... 2,156,921 1,654,724
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (864,807) (2,001,376)
Net realized gains from investment
transactions......................... (621,114) (320,299)
------------ ------------
(1,485,921) (2,321,675)
------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 18,721,477 30,873,266
Cost of shares repurchased............ (6,055,925) (10,515,151)
Proceeds from dividends reinvested.... 1,462,374 2,292,365
------------ ------------
Net increase in net assets derived
from beneficial
interest transactions................ 14,127,926 22,650,480
------------ ------------
Net increase in net assets............ 14,798,926 21,983,529
NET ASSETS:
Beginning of period................... 60,279,212 38,295,683
------------ ------------
End of period......................... $75,078,138 $60,279,212
------------ ------------
------------ ------------
Undistributed net investment income... $ 406,904 $ --
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements
73
<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 SIX FOR THE SIX
MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE YEAR
JANUARY 31, ENDED JANUARY 31, ENDED
1998 JULY 31, 1998 JULY 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss).......... $ 763,313 $ 1,022,857 $ (72,341) $ 242,099
Net realized gains (losses) from:
Investment, future and option
transactions....................... 7,724,815 12,582,167 25,588,487 3,415,324
Foreign currency transactions....... -- -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... (7,974,505) 38,091,574 (20,761,551) 38,776,128
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- 186 -- --
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations............ 513,623 51,696,784 4,754,595 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............................... 52,108,436 76,627,397 49,187,143 71,324,987
Cost of shares repurchased............ (18,175,632) (28,358,191) (14,855,992) (22,670,755)
Proceeds from dividends reinvested.... 15,552,551 5,318,346 10,126,809 224,739
------------ ------------ ------------ ------------
Net increase in net assets derived
from beneficial
interest transactions................ 49,485,355 53,587,552 44,457,960 48,878,971
------------ ------------ ------------ ------------
Net increase (decrease) in net
assets............................... 34,253,458 99,909,786 39,001,661 91,085,625
NET ASSETS:
Beginning of period................... 180,806,560 80,896,774 160,333,862 69,248,237
------------ ------------ ------------ ------------
End of period......................... $215,060,018 $180,806,560 $199,335,523 $160,333,862
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net investment income... $ 5,033 $ 650,133 $ -- $ 90,317
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
74
<PAGE>
<TABLE>
<CAPTION>
PACE PACE PACE
SMALL/MEDIUM COMPANY SMALL/MEDIUM COMPANY GROWTH INTERNATIONAL EQUITY
VALUE EQUITY INVESTMENTS EQUITY INVESTMENTS INVESTMENTS
--------------------------- --------------------------- ---------------------------
FOR THE SIX FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE YEAR MONTHS ENDED FOR THE YEAR
JANUARY 31, ENDED JANUARY 31, ENDED JANUARY 31, ENDED
1998 JULY 31, 1998 JULY 31, 1998 JULY 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss).......... $ 595,657 $ 963,437 $ (142,302) $ (187,269) $ 179,160 $ 670,093
Net realized gains (losses) from:
Investment, future and option
transactions....................... 13,174,452 8,345,595 2,359,229 4,458,445 (522,862) 1,296,752
Foreign currency transactions....... -- -- -- -- (136,632) 597,617
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... (561,823) 28,544,660 4,551,448 19,755,079 (3,937,814) 14,945,764
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- -- -- -- (20,087) (201,997)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations............ 13,208,286 37,853,692 6,768,375 24,026,255 (4,438,235) 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............................... 38,811,951 53,611,026 41,151,990 56,184,647 36,017,021 52,799,774
Cost of shares repurchased............ (16,162,757) (20,290,061) (13,133,571) (17,966,629) (9,355,208) (12,452,231)
Proceeds from dividends reinvested.... 11,671,074 2,715,942 6,371,763 -- 3,807,750 941,111
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets derived
from beneficial
interest transactions................ 34,320,268 36,036,907 34,390,182 38,218,018 30,469,563 41,288,654
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets............................... 35,753,984 71,152,756 34,724,908 62,244,273 22,181,405 57,648,482
NET ASSETS:
Beginning of period................... 135,047,082 63,894,326 125,608,625 63,364,352 102,979,046 45,330,564
------------ ------------ ------------ ------------ ------------ ------------
End of period......................... $170,801,066 $135,047,082 $160,333,533 $125,608,625 $125,160,451 $102,979,046
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
Undistributed net investment income... $ 171,048 $ 652,375 $ -- $ 1,131 $ 41,347 $ 1,151,662
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
<CAPTION>
PACE
INTERNATIONAL EMERGING
MARKETS EQUITY INVESTMENTS
---------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JANUARY 31, ENDED
1998 JULY 31,
(UNAUDITED) 1997
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss).......... $ 80,111 $ 240,541
Net realized gains (losses) from:
Investment, future and option
transactions....................... (4,645,646) (17,754)
Foreign currency transactions....... (98,541) (46,206)
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... (12,012,749) 9,730,201
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. 190,477 (209,093)
------------ ------------
Net increase (decrease) in net assets
resulting from operations............ (16,486,348) 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............................... 19,305,735 26,529,694
Cost of shares repurchased............ (5,064,395) (6,948,586)
Proceeds from dividends reinvested.... 206,708 105,920
------------ ------------
Net increase in net assets derived
from beneficial
interest transactions................ 14,448,048 19,687,028
------------ ------------
Net increase (decrease) in net
assets............................... (2,247,275) 29,277,909
NET ASSETS:
Beginning of period................... 54,759,333 25,481,424
------------ ------------
End of period......................... $52,512,058 $54,759,333
------------ ------------
------------ ------------
Undistributed net investment income... $ 40,190 $ 169,054
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements
75
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber PACE Select Advisors Trust (the "Trust") is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended, as an open-end management investment company currently composed of
twelve separate investment portfolios and was organized as a Delaware business
trust under the laws of the State of Delaware by Certificate of Trust dated
September 9, 1994, as amended June 9, 1995. 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.
ORGANIZATIONAL MATTERS--Prior to June 16, 1995, the Trust had no activities
other than organizational matters and activities related to the initial public
offering and issuance, at net asset value, of 19,337 shares of beneficial
interest of the Trust for a total of $100,000 to Mitchell Hutchins Asset
Management Inc. ("Mitchell Hutchins"), an asset management subsidiary of
PaineWebber Incorporated ("PaineWebber"). The Trust incurred costs of
approximately $1,138,000 in connection with the organization of the Trust and
the registration of its shares. Such costs have been deferred and are being
amortized using the straight-line method over 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 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").
76
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)
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
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 to hedge the U.S. dollar value of
portfolio securities denominated in a particular currency. These Portfolios may
also engage in cross-hedging by using forward contracts in one currency to hedge
fluctuations in the value of securities denominated in a different currency if
Mitchell Hutchins, or the applicable sub-adviser, anticipates that there is a
correlation between the two currencies. Forward contracts may also be used to
shift a Portfolio's exposure to foreign currency fluctuations from one country
to another.
The Portfolios have no specific limitation on the percentage of assets which
may be committed to such contracts; however, the value of all forward contracts
will not exceed the total market value of a Portfolio's total assets. The
Portfolios may enter into forward contracts or maintain a net exposure to
forward contracts only if (1) the consummation of the contracts would not
obligate the Portfolio to deliver an amount of foreign currency in excess of the
value of the positions being hedged by such contracts or (2) the Portfolios
maintain cash 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.
77
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)
Risks may arise upon entering into forward contracts from the potential
inability of counterparties to meet the terms of their contracts and from
unanticipated movements in the value of foreign currencies relative to the U.S.
dollar.
Fluctuations in the value of open forward contracts are recorded for book
purposes as unrealized gains or losses by the Portfolios. Realized gains and
losses include net gains or losses recognized by the Portfolio on contracts
which have matured.
OPTION WRITING--Certain Portfolios may write (sell) put and call options 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 six months ended January 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.
78
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)
CONCENTRATION OF RISK
Investing in securities of foreign issuers and currency transactions may
involve certain considerations and risks not typically associated with
investments in the United States. These risks include revaluation of currencies,
adverse fluctuations in foreign currency values and possible adverse political,
social and economic developments, including those particular to a specific
industry, country or region, which could cause the securities and their markets
to be less liquid and prices more volatile than those of comparable U.S.
companies and U.S. government securities. These risks are greater with respect
to securities of issuers located in emerging market countries in which the PACE
Global Fixed Income Investments, PACE International Equity Investments and PACE
International Emerging Markets Equity Investments Portfolios are authorized to
invest.
Small cap companies may be more vulnerable than larger companies to adverse
business or economic developments. Small cap companies may also have limited
product lines, markets or financial resources, and may be dependent on a
relatively small management group. Securities of such companies may be less
liquid and more volatile than securities of larger companies or the market
averages in general and, therefore, may involve greater risk than investing in
larger companies. In addition, small cap companies may not be well-known to the
investing public, may not have institutional ownership and may have only
cyclical, static or moderate growth prospects.
The ability of the issuers of debt securities held by the Portfolios to meet
their obligations may be affected by economic and political developments
particular to a specific industry, country 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>
79
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)
Under separate Sub-Advisory Agreements, with the exception of PACE Money
Market Investments, Mitchell Hutchins (not the Portfolios) pays each 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.
Investments 0.50%
</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 six months ended January 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
80
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)
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 six months ended January 31, 1998 as follows:
<TABLE>
<CAPTION>
PORTFOLIO COMPENSATION
- --------------------------------------------------------------------------------------------- -------------
<S> <C>
PACE Intermediate Fixed Income Investments................................................... $ 7,730
PACE Global Fixed Income Investments......................................................... $ 2,922
PACE Large Company Value Equity Investments.................................................. $ 4,873
PACE Large Company Growth Equity Investments................................................. $ 3,265
PACE Small/Medium Company Value Equity Investments........................................... $ 9,297
PACE Small/Medium Company Growth Equity Investments.......................................... $ 8,301
PACE International Equity Investments........................................................ $ 2,280
PACE International Emerging Markets Equity Investments....................................... $ 10,514
</TABLE>
As of January 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 Intermediate Fixed Income Investments..................................... $20,186,215 $19,623,454
PACE Global Fixed Income Investments........................................... $2,566,200 $2,470,345
PACE Large Company Value Equity Investments.................................... $18,393,399 $17,860,538
PACE Large Company Growth Equity Investments................................... $15,591,900 $15,118,163
PACE Small/Medium Company Value Equity Investments............................. $3,953,600 $3,729,481
PACE Small/Medium Company Growth Equity Investments............................ $9,455,800 $8,732,850
PACE International Equity Investments.......................................... $2,811,900 $2,732,200
PACE International Emerging Markets Equity Investments......................... $3,712,500 $2,973,952
</TABLE>
BANK LINE OF CREDIT
Each of the Portfolios may participate with other funds managed by Mitchell
Hutchins in a $200 million committed credit facility ("Facility") to be utilized
for temporary financing until the settlement of sales or purchases of portfolio
securities, the repurchase or redemption of shares of the Portfolios at the
request of the shareholders and other temporary or emergency purposes. In
connection therewith, the Portfolios have agreed to pay commitment fees, pro
rata, based on the relative asset size of the funds in the Facility. Interest is
charged to the Portfolios at rates based on prevailing market rates in effect at
the time of borrowings. For the six months ended January 31, 1998, the
Portfolios did not borrow under the Facility.
81
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)
WRITTEN OPTION ACTIVITY
Written option activity for the six months ended January 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................................................... -- --
--
-----------
Options outstanding at January 31, 1998............................................. 10 $ 8,771
--
--
-----------
-----------
</TABLE>
INVESTMENTS IN SECURITIES
At January 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............ $ 1,840,292 $ (62,348) $ 1,777,944
PACE Intermediate Fixed Income Investments..................... $ 1,496,300 $ (53,350) $ 1,442,950
PACE Strategic Fixed Income Investments........................ $ 2,458,013 $(134,647) $ 2,323,366
PACE Municipal Fixed Income Investments........................ $ 1,217,892 $ (8,004) $ 1,209,888
PACE Global Fixed Income Investments........................... $ 1,411,101 $(969,580) $ 441,521
PACE Large Company Value Equity Investments.................... $36,318,870 ($5,100,748) $ 31,218,122
PACE Large Company Growth Equity Investments................... $24,104,979 ($4,072,956) $ 20,032,023
PACE Small/Medium Company Value Equity Investments............. $32,607,134 ($5,465,132) $ 27,142,002
PACE Small/Medium Company Growth Equity Investments............ $25,464,201 ($3,782,275) $ 21,681,926
PACE International Equity Investments.......................... $15,739,116 ($4,962,491) $ 10,776,625
PACE International Emerging Markets Equity Investments......... $ 5,212,430 ($7,180,002) $ (1,967,572)
</TABLE>
For U.S. federal income tax purposes, the cost of securities owned at January
31, 1998 was substantially the same as the cost of securities for financial
statement purposes.
82
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)
For the six months ended January 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........................... $ 358,300,725 $ 288,254,131
PACE Intermediate Fixed Income Investments.................................... $ 61,219,626 $ 40,838,007
PACE Strategic Fixed Income Investments....................................... $ 100,390,177 $ 72,873,792
PACE Municipal Fixed Income Investments....................................... $ 14,253,905 $ 3,590,371
PACE Global Fixed Income Investments.......................................... $ 51,646,236 $ 43,512,128
PACE Large Company Value Equity Investments................................... $ 69,614,890 $ 32,064,892
PACE Large Company Growth Equity Investments.................................. $ 201,267,168 $ 165,448,986
PACE Small/Medium Company Value Equity Investments............................ $ 57,515,268 $ 35,952,510
PACE Small/Medium Company Growth Equity Investments........................... $ 106,267,286 $ 82,190,850
PACE International Equity Investments......................................... $ 55,215,787 $ 30,071,173
PACE International Emerging Markets Equity Investments........................ $ 22,783,708 $ 12,344,631
</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, 1997, PACE Intermediate Fixed Income Investments and PACE
International Emerging Markets Equity Investments had net capital loss
carryforwards of $178,596 and $57,491, respectively. These carryforward losses
are available to reduce future net capital gains to the extent provided in the
regulations, and will expire on July 31, 2005. To the extent that such losses
are used to offset future capital gains, the gains so offset will not be
distributed to shareholders.
83
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)
SHARES OF BENEFICIAL INTEREST
For the six months ended January 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............................................. 11,139,695 (6,518,295) 486,056 5,107,456
PACE Government Securities Fixed Income Investments....................... 2,689,367 (723,704) 417,181 2,382,844
PACE Intermediate Fixed Income Investments................................ 1,781,677 (565,361) 154,623 1,370,939
PACE Strategic Fixed Income Investments................................... 2,096,076 (560,052) 237,628 1,773,652
PACE Municipal Fixed Income Investments................................... 1,032,764 (332,222) 68,927 769,469
PACE Global Fixed Income Investments...................................... 1,530,227 (494,175) 119,745 1,155,797
PACE Large Company Value Equity Investments............................... 2,712,345 (942,043) 875,707 2,646,009
PACE Large Company Growth Equity Investments.............................. 2,627,163 (791,383) 577,355 2,413,135
PACE Small/Medium Company Value Equity Investments........................ 2,114,932 (876,122) 662,753 1,901,563
PACE Small/Medium Company Growth Equity Investments....................... 2,726,591 (867,958) 455,451 2,314,084
PACE International Equity Investments..................................... 2,455,863 (643,174) 274,928 2,087,617
PACE International Emerging Markets Equity Investments.................... 1,465,215 (398,725) 17,728 1,084,218
</TABLE>
For the year ended July 31, 1997, 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............................................. 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>
84
<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 SIX
MONTHS ENDED FOR THE YEAR
JANUARY 31, 1998 ENDED
(UNAUDITED) JULY 31, 1997
---------------- -------------
<S> <C> <C>
Net asset value, beginning of period.................................................... $ 1.00 $ 1.00
------- -------------
Net investment income................................................................... 0.03 0.05
------- -------------
Dividends from net investment income.................................................... (0.03) (0.05)
------- -------------
Net asset value, end of period.......................................................... $ 1.00 $ 1.00
------- -------------
------- -------------
Total investment return (1)............................................................. 2.67% 5.13%
------- -------------
------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)....................................................... $ 21,177 $ 16,070
Ratios of:
Expenses to average net assets, net of fee waivers and expense reimbursements........... 0.50%* 0.50%
Expenses to average net assets, before fee waivers and expense reimbursements........... 1.25 %* 1.89%
Net investment income to average net assets, net of fee waivers and expense
reimbursements........................................................................ 5.23 %* 5.04%
Net investment income to average net assets, before fee waivers and expense
reimbursements........................................................................ 4.48 %* 3.65%
<CAPTION>
FOR THE
PERIOD
ENDED
JULY 31,
1996+
-------------
<S> <C>
Net asset value, beginning of period.................................................... $ 1.00
-------------
Net investment income................................................................... 0.05
-------------
Dividends from net investment income.................................................... (0.05)
-------------
Net asset value, end of period.......................................................... $ 1.00
-------------
-------------
Total investment return (1)............................................................. 4.75%
-------------
-------------
Ratios/Supplemental Data:
Net assets, end of period (000's)....................................................... $ 10,221
Ratios of:
Expenses to average net assets, net of fee waivers and expense reimbursements........... 0.50 %*
Expenses to average net assets, before fee waivers and expense reimbursements........... 2.40 %*
Net investment income to average net assets, net of fee waivers and expense
reimbursements........................................................................ 4.93 %*
Net investment income to average net assets, before fee waivers and expense
reimbursements........................................................................ 3.03 %*
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ 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 periods of less than one year have not been annualized.
</TABLE>
85
<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
FOR THE SIX FOR THE YEAR PERIOD
MONTHS ENDED ENDED ENDED
JANUARY 31, 1998 JULY 31, JULY 31,
(UNAUDITED) 1997 1996+
---------------- ------------ -------------
<S> <C> <C> <C>
Net asset value, beginning of period......... $ 12.61 $ 12.07 $ 12.00
-------- ------------ -------------
Net investment income........................ 0.36 0.64 0.49
Net realized and unrealized gains from
investments and futures.................... 0.18 0.58 0.03
-------- ------------ -------------
Net increase from investment operations...... 0.54 1.22 0.52
-------- ------------ -------------
Dividends from net investment income......... (0.36) (0.63) (0.44)
Distributions from net realized gains from
investments................................ (0.20) (0.05) (0.01)
-------- ------------ -------------
Total dividends and distributions............ (0.56) (0.68) (0.45)
-------- ------------ -------------
Net asset value, end of period............... $ 12.59 $ 12.61 $ 12.07
-------- ------------ -------------
-------- ------------ -------------
Total investment return (1).................. 4.44% 10.42% 4.35%
-------- ------------ -------------
-------- ------------ -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)............ $ 131,386 $ 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......... 0.98%* 1.70%** 1.15%*
Net investment income to average net assets,
net of fee waivers and expense
reimbursements............................. 5.84%* 5.44%** 5.09%*
Net investment income to average net assets,
before fee waivers and expense
reimbursements............................. 5.71%* 5.31%** 4.79%*
Portfolio turnover rate...................... 207% 712% 978%
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ 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 periods of less than one year have not been annualized.
</TABLE>
86
<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 SIX PERIOD
MONTHS ENDED FOR THE YEAR ENDED
JANUARY 31, 1998 ENDED JULY 31,
(UNAUDITED) JULY 31, 1997 1996+
---------------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period.... $ 12.23 $ 11.95 $ 12.00
------- ------------- -------------
Net investment income................... 0.34 0.66 0.53
Net realized and unrealized gains
(losses) from investments and foreign
currency............................... 0.16 0.28 (0.09)
------- ------------- -------------
Net increase from investment
operations............................. 0.50 0.94 0.44
------- ------------- -------------
Dividends from net investment income.... (0.31) (0.66) (0.48)
Distributions from net realized gains
from investments....................... -- -- (0.01)
------- ------------- -------------
Total dividends and distributions....... (0.31) (0.66) (0.49)
------- ------------- -------------
Net asset value, end of period.......... $ 12.42 $ 12.23 $ 11.95
------- ------------- -------------
------- ------------- -------------
Total investment return (1)............. 4.18% 8.14% 3.59%
------- ------------- -------------
------- ------------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)....... $ 84,821 $ 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......................... 0.85%* 0.99% 1.23%*
Net investment income to average net
assets, net of fee waivers and expense
reimbursements......................... 5.67%* 5.70% 5.56%*
Net investment income to average net
assets, before fee waivers and expense
reimbursements......................... 5.66%* 5.56% 5.18%*
Portfolio turnover rate................. 55% 67% 36%
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ 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 periods of less than one year have not been annualized.
</TABLE>
87
<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 SIX
MONTHS ENDED FOR THE YEAR
JANUARY 31, 1998 ENDED
(UNAUDITED) JULY 31, 1997
---------------- -------------
<S> <C> <C>
Net asset value, beginning of period.................................................... $ 13.04 $ 12.44
-------- -------------
Net investment income................................................................... 0.34 0.67
Net realized and unrealized gains from investments, futures, options and foreign
currency.............................................................................. 0.38 0.70
-------- -------------
Net increase from investment operations................................................. 0.72 1.37
-------- -------------
Dividends from net investment income.................................................... (0.34) (0.67)
Distributions from net realized gains from investments.................................. (0.12) (0.10)
-------- -------------
Total dividends and distributions....................................................... (0.46) (0.77)
-------- -------------
Net asset value, end of period.......................................................... $ 13.30 $ 13.04
-------- -------------
-------- -------------
Total investment return (1)............................................................. 5.70% 11.35%
-------- -------------
-------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)....................................................... $ 100,296 $ 75,174
Ratios of:
Expenses to average net assets, net of fee waivers and expense reimbursements........... 0.85%* 0.85%
Expenses to average net assets, before fee waivers and expense reimbursements........... 0.97%* 1.10%
Net investment income to average net assets, net of fee waivers and expense
reimbursements........................................................................ 5.43%* 5.69%
Net investment income to average net assets, before fee waivers and expense
reimbursements........................................................................ 5.31%* 5.44%
Portfolio turnover rate................................................................. 124% 357%
<CAPTION>
FOR THE
PERIOD
ENDED
JULY 31,
1996+
-------------
<S> <C>
Net asset value, beginning of period.................................................... $ 12.00
-------------
Net investment income................................................................... 0.59
Net realized and unrealized gains from investments, futures, options and foreign
currency.............................................................................. 0.38
-------------
Net increase from investment operations................................................. 0.97
-------------
Dividends from net investment income.................................................... (0.52)
Distributions from net realized gains from investments.................................. (0.01)
-------------
Total dividends and distributions....................................................... (0.53)
-------------
Net asset value, end of period.......................................................... $ 12.44
-------------
-------------
Total investment return (1)............................................................. 8.15%
-------------
-------------
Ratios/Supplemental Data:
Net assets, end of period (000's)....................................................... $ 42,550
Ratios of:
Expenses to average net assets, net of fee waivers and expense reimbursements........... 0.85%*
Expenses to average net assets, before fee waivers and expense reimbursements........... 1.40%*
Net investment income to average net assets, net of fee waivers and expense
reimbursements........................................................................ 5.85%*
Net investment income to average net assets, before fee waivers and expense
reimbursements........................................................................ 5.30%*
Portfolio turnover rate................................................................. 166%
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ 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 periods of less than one year have not been annualized.
</TABLE>
88
<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
FOR THE SIX PERIOD
MONTHS ENDED FOR THE YEAR ENDED
JANUARY 31, 1998 ENDED JULY 31,
(UNAUDITED) JULY 31, 1997 1996+
----------------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period.............................................. $ 12.67 $ 12.32 $ 12.00
------- ------------- -------------
Net investment income............................................................. 0.29 0.61 0.49
Net realized and unrealized gains from investments................................ 0.08 0.38 0.27
------- ------------- -------------
Net increase from investment operations........................................... 0.37 0.99 0.76
------- ------------- -------------
Dividends from net investment income.............................................. (0.29) (0.61) (0.43)
Distributions from net realized gains from investments............................ -- (0.03) (0.01)
------- ------------- -------------
Total dividends and distributions................................................. (0.29) (0.64) (0.44)
------- ------------- -------------
Net asset value, end of period.................................................... $ 12.75 $ 12.67 $ 12.32
------- ------------- -------------
------- ------------- -------------
Total investment return (1)....................................................... 2.95% 8.30% 6.38%
------- ------------- -------------
------- ------------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)................................................. $ 44,307 $ 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..... 0.96%* 1.40% 1.74%*
Net investment income to average net assets, net of fee waivers and expense
reimbursements.................................................................. 4.74%* 5.08% 4.95%*
Net investment income to average net assets, before fee waivers and expense
reimbursements.................................................................. 4.63%* 4.53% 4.07%*
Portfolio turnover rate........................................................... 9% 15% 78%
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ 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 periods of less than one year have not been annualized.
</TABLE>
89
<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 SIX
MONTHS ENDED FOR THE YEAR
JANUARY 31, 1998 ENDED
(UNAUDITED) JULY 31, 1997
---------------- -------------
<S> <C> <C>
Net asset value, beginning of period.................................................... $ 12.17 $ 12.33
------- -------------
Net investment income................................................................... 0.33 0.64
Net realized and unrealized gains (losses) from investments and foreign currency........ 0.06 (0.21)
------- -------------
Net increase from investment operations................................................. 0.39 0.43
------- -------------
Dividends from net investment income.................................................... (0.16) (0.51)
Distributions from net realized gains from investments.................................. (0.11) (0.08)
------- -------------
Total dividends and distributions....................................................... (0.27) (0.59)
------- -------------
Net asset value, end of period.......................................................... $ 12.29 $ 12.17
------- -------------
------- -------------
Total investment return (1)............................................................. 3.20% 3.54%
------- -------------
------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)....................................................... $ 75,078 $ 60,279
Ratios of:
Expenses to average net assets, net of fee waivers and expense reimbursements........... 0.95%* 0.95%
Expenses to average net assets, before fee waivers and expense reimbursements........... 1.27%* 1.29%
Net investment income to average net assets, net of fee waivers and expense
reimbursements........................................................................ 5.14%* 5.36%
Net investment income to average net assets, before fee waivers and expense
reimbursements........................................................................ 4.82%* 5.02%
Portfolio turnover rate................................................................. 69% 270%
<CAPTION>
FOR THE
PERIOD
ENDED
JULY 31,
1996+
-------------
<S> <C>
Net asset value, beginning of period.................................................... $ 12.00
-------------
Net investment income................................................................... 0.53
Net realized and unrealized gains (losses) from investments and foreign currency........ 0.27
-------------
Net increase from investment operations................................................. 0.80
-------------
Dividends from net investment income.................................................... (0.46)
Distributions from net realized gains from investments.................................. (0.01)
-------------
Total dividends and distributions....................................................... (0.47)
-------------
Net asset value, end of period.......................................................... $ 12.33
-------------
-------------
Total investment return (1)............................................................. 6.68%
-------------
-------------
Ratios/Supplemental Data:
Net assets, end of period (000's)....................................................... $ 38,296
Ratios of:
Expenses to average net assets, net of fee waivers and expense reimbursements........... 0.95%*
Expenses to average net assets, before fee waivers and expense reimbursements........... 1.61%*
Net investment income to average net assets, net of fee waivers and expense
reimbursements........................................................................ 5.24%*
Net investment income to average net assets, before fee waivers and expense
reimbursements........................................................................ 4.58%*
Portfolio turnover rate................................................................. 197%
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ 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 periods of less than one year have not been annualized.
</TABLE>
90
<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 SIX PERIOD
MONTHS ENDED FOR THE YEAR ENDED
JANUARY 31, 1998 ENDED JULY 31,
(UNAUDITED) JULY 31, 1997 1996+
---------------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period.............................................. $ 20.03 $ 14.07 $ 12.00
-------- ------------- -------------
Net investment income............................................................. 0.06 0.11 0.12
Net realized and unrealized gains (losses) from investments and futures........... (0.14) 6.61 2.02
-------- ------------- -------------
Net increase (decrease) from investment operations................................ (0.08) 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.................................................... $ 18.42 $ 20.03 $ 14.07
-------- ------------- -------------
-------- ------------- -------------
Total investment return (1)....................................................... (0.14)% 49.13% 17.90%
-------- ------------- -------------
-------- ------------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)................................................. $ 215,060 $ 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.................................................................. 0.78%* 0.81% 1.22%*
Net investment income to average net assets, before fee waivers and expense
reimbursements.................................................................. 0.78%* 0.75% 0.82%*
Portfolio turnover rate........................................................... 17% 46% 38%
Average commission rate paid (2).................................................. $ 0.0445 $ 0.0455 --
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ 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 periods of less than one year have not been annualized.
(2) Effective for fiscal years beginning on or after September 1, 1995, the Portfolio is required to disclose the average
commission rate paid per share of common stock investments purchased or sold.
</TABLE>
91
<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 SIX
MONTHS ENDED FOR THE YEAR FOR THE PERIOD
JANUARY 31, 1998# ENDED ENDED
(UNAUDITED) JULY 31, 1997 JULY 31, 1996+
------------------- ----------------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period........................ $ 19.28 $ 13.27 $ 12.00
-------- -------- -------
Net investment income (loss)................................ (0.01) 0.03 0.03
Net realized and unrealized gains from investments.......... 0.36 6.01 1.26
-------- -------- -------
Net increase from investment operations..................... 0.35 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.............................. $ 18.58 $ 19.28 $ 13.27
-------- -------- -------
-------- -------- -------
Total investment return (1)................................. 2.15% 45.61% 10.76%
-------- -------- -------
-------- -------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)........................... $199,336 $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.................................... 1.05%* 1.05% 1.33%*
Net investment income (loss) to average net assets, net of
fee waivers and expense reimbursements.................... (0.08)%* 0.22% 0.33%*
Net investment income (loss) to average net assets, before
fee waivers and expense reimbursements.................... (0.13)%* 0.17% (0.01)*%
Portfolio turnover rate..................................... 96% 73% 65%
Average commission rate paid (2)............................ $0.0549 $0.0498 --
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ For the period August 24, 1995 (commencement of operations) through July 31, 1996.
* Annualized
# Investment advisory functions for this portfolio were transferred from Chancellor LGT Asset Management, Inc. to Alliance
Capital Management L.P. on November 10, 1997.
(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 periods of less than one year have not been annualized.
(2) Effective for fiscal years beginning on or after September 1, 1995, the Portfolio is required to disclose the average
commission rate paid per share of common stock investments purchased or sold.
</TABLE>
92
<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 SIX PERIOD
MONTHS ENDED FOR THE YEAR ENDED
JANUARY 31, 1998 ENDED JULY 31,
(UNAUDITED) JULY 31, 1997 1996+
---------------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period.............................................. $ 17.52 $ 12.29 $ 12.00
-------- ------------- -------------
Net investment income............................................................. 0.06 0.12 0.10
Net realized and unrealized gains from investments................................ 1.56 5.55 0.23
-------- ------------- -------------
Net increase from investment operations........................................... 1.62 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.................................................... $ 17.77 $ 17.52 $ 12.29
-------- ------------- -------------
-------- ------------- -------------
Total investment return (1)....................................................... 9.31% 46.99% 2.76%
-------- ------------- -------------
-------- ------------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)................................................. $ 170,801 $ 135,047 $ 63,894
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..... 1.01%* 1.12% 1.51%*
Net investment income to average net assets, net of fee waivers and expense
reimbursements.................................................................. 0.76%* 1.00% 1.07%*
Net investment income to average net assets, before fee waivers and expense
reimbursements.................................................................. 0.75%* 0.88% 0.56%*
Portfolio turnover rate........................................................... 25% 39% 30%
Average commission rate paid (2).................................................. $ 0.0488 $ 0.0492 --
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ 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 periods of less than one year have not been annualized.
(2) Effective for fiscal years beginning on or after September 1, 1995, the Portfolio is required to disclose the average
commission rate paid per share of common stock investments purchased or sold.
</TABLE>
93
<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 SIX MONTHS
ENDED FOR THE YEAR FOR THE PERIOD
JANUARY 31, 1998 ENDED ENDED
(UNAUDITED) JULY 31, 1997# JULY 31, 1996+
------------------- ----------------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period........................ $ 14.44 $ 11.20 $ 12.00
-------- -------- -------
Net investment loss......................................... (0.01) (0.02) 0.00
Net realized and unrealized gains (losses) from
investments............................................... 0.77 3.26 (0.78)
-------- -------- -------
Net increase (decrease) from investment operations.......... 0.76 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.............................. $ 14.56 $ 14.44 $ 11.20
-------- -------- -------
-------- -------- -------
Total investment return (1)................................. 5.46% 28.93% (6.55)%
-------- -------- -------
-------- -------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)........................... $160,334 $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.................................... 1.05%* 1.08% 1.27%*
Net investment loss to average net assets, net of fee
waivers and expense reimbursements........................ (0.19)%* (0.21)% (0.14)%*
Net investment loss to average net assets, before fee
waivers and expense reimbursements........................ (0.24)%* (0.29)% (0.41)%*
Portfolio turnover rate..................................... 62% 247% 115%
Average commission rate paid (2)............................ $0.0588 $0.0532 --
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ For the period August 24, 1995 (commencement of operations) through July 31, 1996.
* Annualized
# 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 periods of less than one year have not been annualized.
(2) Effective for fiscal years beginning on or after September 1, 1995, the Portfolio is required to disclose the average
commission rate paid per share of common stock investments purchased or sold.
</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
INTERNATIONAL EQUITY
INVESTMENTS
----------------------------------------------
FOR THE
FOR THE SIX PERIOD
MONTHS ENDED FOR THE YEAR ENDED
JANUARY 31, 1998 ENDED JULY 31,
(UNAUDITED) JULY 31, 1997 1996+
---------------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period.............................................. $ 15.66 $ 12.79 $ 12.00
-------- ------------- -------------
Net investment income (loss)...................................................... (0.01) 0.10 0.12
Net realized and unrealized gains (losses) from investments and foreign
currency........................................................................ (0.72) 2.97 0.73
-------- ------------- -------------
Net increase (decrease) from investment operations................................ (0.73) 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.................................................... $ 14.45 $ 15.66 $ 12.79
-------- ------------- -------------
-------- ------------- -------------
Total investment return (1)....................................................... (4.54%) 24.30% 7.08%
-------- ------------- -------------
-------- ------------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)................................................. $ 125,160 $ 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.................................................................. 0.32%* 0.95% 1.35%*
Net investment income to average net assets, before fee waivers and expense
reimbursements.................................................................. 0.32%* 0.95% 1.04%*
Portfolio turnover rate........................................................... 30% 55% 25%
Average commission rate paid (2).................................................. $ 0.0185 $ 0.0183 --
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ 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 periods of less than one year have not been annualized.
(2) Effective for fiscal years beginning on or after September 1, 1995, the Portfolio is required to disclose the average
commission rate paid per share of common stock investments purchased or sold.
</TABLE>
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
INTERNATIONAL EMERGING
MARKETS EQUITY INVESTMENTS
----------------------------------------------
FOR THE
FOR THE SIX PERIOD
MONTHS ENDED FOR THE YEAR ENDED
JANUARY 31, 1998 ENDED JULY 31,
(UNAUDITED) JULY 31, 1997 1996+
---------------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period............................................. $ 15.60 $ 12.49 $ 12.00
------- ------------- -------------
Net investment income............................................................ 0.01 0.06 0.07
Net realized and unrealized gains (losses) from investments and foreign
currency....................................................................... (4.13) 3.09 0.44
------- ------------- -------------
Net increase (decrease) from investment operations............................... (4.12) 3.15 0.51
------- ------------- -------------
Dividends from net investment income............................................. (0.05) (0.04) (0.02)
------- ------------- -------------
Net asset value, end of period................................................... $ 11.43 $ 15.60 $ 12.49
------- ------------- -------------
------- ------------- -------------
Total investment return (1)...................................................... (26.43)% 25.31% 4.23%
------- ------------- -------------
------- ------------- -------------
Ratios/Supplemental Data:
Net assets, end of period (000's)................................................ $ 52,512 $ 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.... 1.84%* 2.09% 2.35%*
Net investment income to average net assets, net of fee waivers and expense
reimbursements................................................................. 0.30%* 0.63% 0.94%*
Net investment income (loss) to average net assets, before fee waivers and
expense reimbursements......................................................... (0.04 )%* 0.04% 0.08%*
Portfolio turnover rate.......................................................... 26% 39% 22%
Average commission rate paid (2)................................................. $ 0.0019 $ 0.0011 --
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ 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 periods of less than one year have not been annualized.
(2) Effective for fiscal years beginning on or after September 1, 1995, the Portfolio is required to disclose the average
commission rate paid per share of common stock investments purchased or sold.
</TABLE>
96
<PAGE>
MANAGED ACCOUNTS SERVICES
PAINEWEBBER
-C-1998 PaineWebber Incorporated
Member SIPC
