<PAGE>
PAINEWEBBER P A C E-SM-
Personalized Asset Consulting and Evaluation
Going The
Distance
To Meet Your
Financial Needs
Annual Report
July 31, 1999
This material is intended for use only by current PACE investors and must be
preceded or accompanied by the current PACE prospectus.
<PAGE>
PAINEWEBBER P A C E
TABLE OF CONTENTS
<TABLE>
<S> <C>
- --------------------------------------------------------
Introduction................................. 1
U.S. Investment Overview..................... 2
Global Investment Overview................... 2
PACE Money Market Investments................ 4
PACE Government Securities Fixed Income
Investments................................. 6
PACE Intermediate Fixed Income Investments... 8
PACE Strategic Fixed Income Investments...... 10
PACE Municipal Fixed Income Investments...... 12
PACE Global Fixed Income Investments......... 15
PACE Large Company Value Equity
Investments................................. 17
PACE Large Company Growth Equity
Investments................................. 19
PACE Small/Medium Company Value Equity
Investments................................. 22
PACE Small/Medium Company Growth Equity
Investments................................. 24
PACE International Equity Investments........ 26
PACE International Emerging Markets Equity
Investments................................. 28
Financial Statements......................... 30
- --------------------------------------------------------
</TABLE>
i
<PAGE>
INTRODUCTION
DEAR PAINEWEBBER PACE-SM- SHAREHOLDER:
We are pleased to present you with the annual report for the PACE Portfolios,
comprising the PaineWebber PACE Select Advisors Trust.
In this report you will find Mitchell Hutchins' summaries of the domestic and
international markets for the fiscal year ended July 31, 1999, covering events
since the semiannual report for January 31, 1999. We then summarize the
performance of each PACE Portfolio and present comments from each of the
investment advisers. Please note that the opinions of the advisers do not
necessarily represent those of PaineWebber Incorporated or Mitchell Hutchins
Asset Management Inc.
We are pleased with the overall performance of the PACE Portfolios over the
past fiscal year. We recognize the far-ranging needs of today's investors and
the importance of well-planned, well-diversified portfolios. To meet these
needs, the PACE Portfolios offer a wide choice of actively managed Portfolios
that allow you to take advantage of investment opportunities as they arise.
We appreciate the opportunity to help you achieve your financial goals. If you
have any questions about the PaineWebber PACE Program or about PACE Select
Advisors Trust, please contact your Financial Advisor.
Sincerely,
<TABLE>
<CAPTION>
/s/ Margo Alexander /s/ Bruce A. Bursey
<S> <C>
MARGO ALEXANDER BRUCE A. BURSEY
Chairman and Chief Executive Officer Senior Vice President
Mitchell Hutchins Asset Management Inc. Managed Accounts Consulting Services
PaineWebber Incorporated
</TABLE>
September 15, 1999
This letter is intended to assist shareholders in understanding how the
portfolios performed during the fiscal year ended July 31, 1999, and reflects
both our views and the sub-advisers' views at the time of its writing. Of
course, these views may change in response to changing circumstances. We
encourage you to consult your Financial Advisor regarding your personal
investment program.
1
<PAGE>
U.S. INVESTMENT OVERVIEW
STOCK MARKET
The S&P 500 Index advanced an impressive 20.20% for the fiscal year ended July
31, 1999, notwithstanding a year marked by considerable market volatility. In
August 1998, Russia devalued the ruble and effectively defaulted on its
Soviet-era debt, and investors scurried for the exits. Financial markets around
the globe contracted as investors sought the safety of U.S. Treasury securities.
Highly leveraged hedge funds were forced to sell assets at depressed prices to
cover losses. In an attempt to forestall the spreading crisis, the Federal
Reserve cut interest rates in September, October and November, from 5.50% to
4.75%. The cuts reassured investors, and the markets began to rally towards the
end of 1998.
January 1999 saw renewed volatility, however, as U.S. interest rates began to
rise and Brazil was forced to devalue its currency. As conditions began to
stabilize in the spring, market leadership shifted toward value-oriented stocks
and away from the high price-to-earnings growth stocks that led the market for
most of the last two years. The performance gap between growth and value
narrowed to more normal levels. As market leadership broadened, growth stocks
again outperformed value stocks toward the end of the fiscal year. We attribute
the market broadening to improving global economies, particularly those in Asia
and Latin America, which in turn led to a rise in interest rates.
BOND MARKET
As nervous investors fled other assets for the safety of U.S. Treasury
securities, some sectors of the bond market became so illiquid that they
virtually shut down. Yield spreads--the yield premium that fixed-income
securities must pay above Treasurys to compensate for their higher risk--widened
across all sectors. After the Fed lowered interest rates, the markets responded
positively and began to stabilize by mid-October. Spreads to Treasurys recovered
somewhat, and the high-yield market made a partial comeback in the final months
of 1998.
Fear of inflation drove the bond markets during the second half of the fiscal
year. Bond prices declined as investors reacted to improving economic prospects
in Asia and Latin America, rapidly growing U.S. demand, higher oil prices and
fears that future wage increases would not be offset by commodity deflation.
Citing a renewed risk of inflation, the Federal Reserve raised rates on June 30
and again on August 24--a total increase of half a percentage point.
GLOBAL INVESTMENT OVERVIEW
STOCK MARKETS
The international stock markets ended the fiscal year on an upbeat note,
recovering from last year's losses. International stock markets, as measured by
the Morgan Stanley Capital International Europe, Australia and Far East Index
(MSCI EAFE), advanced 10.02% for the 12 months ended July 31, 1999.
Asian markets rallied early in 1999, prompted by interest rate cuts in the
developed economies and the announcement by the International Monetary Fund
(IMF) of a $41.5 billion aid package for Brazil. Latin America recovered as
Brazil's fiscal adjustment allowed interest rates to decline.
European markets performed poorly as measured by the MSCI Europe ex-UK Index,
which lost 5.59% for the year. Germany and Italy continued to struggle with weak
industrial performance, but periphery countries of Spain, Finland and Ireland
exhibited stronger economic growth as they benefited from their inclusion in the
European Monetary Union. Stronger economic growth did not necessarily mean
stronger market performance--Ireland's market was flat because of fears that
rapid economic growth would end in a severe slowdown.
Japan's stock market gained 45.38% for the year ended July 31, 1999, as
measured by the MSCI Japan Index. Japan surprised the market by reporting
positive GDP numbers and investors became more positive on a possible turnaround
in the Japanese economy. Although the broad economy improved, the twin engines
of growth--personal consumption and business investment--remained weak.
Emerging market performance was very strong, led by a resurgence of the Asian
markets. The MSCI Pacific ex-Japan Index returned 45.98%. Despite improving
fundamentals, Latin America lost 6.75% as measured by the MSCI Emerging Markets
Free Latin America Index.
2
<PAGE>
BOND MARKETS
Developed government bond markets were prime beneficiaries of the "flight to
quality" that dominated the latter half of 1998, when investors put safety ahead
of most other concerns. Fears of financial stresses from the collapse of
emerging stock and bond markets drove down yields in virtually all developed
markets to levels not seen in decades. Nonetheless, the developed markets
managed gains for the 12 months ended July 31, 1999, returning 6.54% as measured
by the Salomon Smith Barney World Government Bond Index.
Emerging markets, as measured by the JP Morgan Emerging Market Bond Index Plus
(EMBI+), lost 6.89% for the 12 months ended July 31, 1999. The EMBI+ was
impacted heavily by the performance of Russian debt. During the period, Russian
bonds rallied from extremely depressed levels despite doubts about the
government's ability and willingness to repay its foreign obligations.
Uncertainties continued to cloud the outlook for Latin American debt,
specifically, Argentina's ability to roll over large amounts of external debt at
a time of worsening recession, the prospect of a Brady rescheduling by Ecuador
and Brazil's ability to sustain the economic and fiscal targets in its IMF
program. On the other hand, higher world growth and rising commodity prices
could help the creditworthiness of many countries.
3
<PAGE>
PACE MONEY MARKET INVESTMENTS
ADVISER: Mitchell Hutchins Asset Management Inc.
PORTFOLIO MANAGER: Susan Ryan
OBJECTIVE: Current income consistent with preservation of capital and liquidity
INVESTMENT PROCESS: The Portfolio invests in high-quality, U.S.
dollar-denominated money market instruments with maturities of 13 months or
less, and maintains a maximum dollar-weighted average maturity of 90 days.
Security selection follows an approved list of top-tier rated securities
reviewed by the firm's credit analysts.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEARS 8/24/95
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
With PACE program fee 3.45% 3.59% 3.60%
Without PACE program fee 4.85% 5.16% 5.16%
90-Day U.S. T-Bill 4.55% 4.95% 5.01%
Lipper Median 4.58% 4.87% 4.91%
- ----------------------------------------------------------------------------------
</TABLE>
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO AND THE
90-DAY U.S. TREASURY BILL
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio Without 90-Day T-Bill
Fee Portfolio With Fee* Index
<S> <C> <C> <C>
Aug-95 $10,011 $10,008 $10,000
Sep-95 $10,055 $10,039 $10,044
Oct-95 $10,100 $10,072 $10,088
Nov-95 $10,144 $10,103 $10,134
Dec-95 $10,190 $10,135 $10,177
Jan-96 $10,234 $10,167 $10,220
Feb-96 $10,274 $10,194 $10,261
Mar-96 $10,316 $10,223 $10,303
Apr-96 $10,357 $10,251 $10,345
May-96 $10,400 $10,280 $10,389
Jun-96 $10,442 $10,308 $10,432
Jul-96 $10,485 $10,338 $10,477
Aug-96 $10,529 $10,369 $10,521
Sep-96 $10,572 $10,398 $10,565
Oct-96 $10,616 $10,428 $10,609
Nov-96 $10,660 $10,458 $10,653
Dec-96 $10,704 $10,488 $10,697
Jan-97 $10,749 $10,519 $10,742
Feb-97 $10,790 $10,547 $10,787
Mar-97 $10,836 $10,578 $10,833
Apr-97 $10,882 $10,609 $10,880
May-97 $10,929 $10,643 $10,925
Jun-97 $10,976 $10,675 $10,970
Jul-97 $11,024 $10,708 $11,016
Aug-97 $11,073 $10,742 $11,064
Sep-97 $11,120 $10,775 $11,109
Oct-97 $11,169 $10,808 $11,155
Nov-97 $11,218 $10,841 $11,204
Dec-97 $11,268 $10,877 $11,252
Jan-98 $11,319 $10,912 $11,299
Feb-98 $11,364 $10,942 $11,347
Mar-98 $11,414 $10,976 $11,394
Apr-98 $11,463 $11,009 $11,441
May-98 $11,515 $11,045 $11,489
Jun-98 $11,562 $11,077 $11,536
Jul-98 $11,611 $11,110 $11,583
Aug-98 $11,663 $11,146 $11,631
Sep-98 $11,711 $11,177 $11,675
Oct-98 $11,759 $11,209 $11,714
Nov-98 $11,808 $11,243 $11,757
Dec-98 $11,853 $11,271 $11,800
Jan-99 $11,900 $11,301 $11,843
Feb-99 $11,970 $11,354 $11,887
Mar-99 $12,010 $11,377 $11,931
Apr-99 $12,056 $11,407 $11,974
May-99 $12,104 $11,438 $12,018
Jun-99 $12,148 $11,465 $12,064
Jul-99 $12,194 $11,494 $12,110
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Money Market Investments versus the
90-day U.S. Treasury bill. It is important to note that PACE Money Market
Investments is a professionally managed portfolio while the index is not
available for investment and is unmanaged. The comparison is shown for
illustrative purposes only.
ADVISER'S COMMENTS
The key market event in the first half of the fiscal year was the global
financial crisis that began with Russia's default in August 1998. Money market
mutual fund assets increased during the period as investors sought safety of
principal. The Federal Reserve lowered the federal funds rate by 0.75% during
the fourth quarter of 1998 to help restore confidence in the financial markets.
At the same time, European central banks began cutting interest rates in
preparation for the January 1, 1999, debut of the euro currency. Lower interest
rates helped to calm the global financial markets, and rates declined across the
short-term yield curve (maturities of one month to one year) as 1998 drew to a
close.
4
<PAGE>
During the second half of the fiscal year, inflation risk became the dominant
theme driving bond yields higher. Interest rates rose as the markets reacted to
improving economic prospects in Asia and Latin America, rapidly growing U.S.
demand, higher oil prices and fears that future wage increases might not be
offset by commodity deflation. By the end of the fiscal year on July 31, 1999,
the Federal Reserve had raised the federal funds rate by 0.25% to 5.00%.
We remained slightly bullish on the fixed income markets during the first nine
months of the Portfolio's fiscal year, expecting interest rates to remain
unchanged. Since we did not expect major changes in rates, we kept the
Portfolio's weighted average maturity slightly long, about 5-10 days above the
average of its peer group. During the last three months of the fiscal year, we
shortened the maturity to 3-5 days above the peer group average in anticipation
of rising interest rates. We maintained our focus on top-tier credit quality
instruments.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION*
<S> <C>
- ---------------------------------------------------------
Commercial Paper 64.2
U.S. Treasurys/Agencies 15.0
Bank Obligations 14.6
Corporate & MTNs 6.2
- ---------------------------------------------------------
Total 100.0
</TABLE>
<TABLE>
<CAPTION>
TOP 10 COMMERCIAL PAPER HOLDINGS* PORTFOLIO S&P RATING
<S> <C> <C>
- -----------------------------------------------------------------------
Woodstreet Funding Corp. 4.96 A1
Banque et Caisse d'Epargne de l'Etat 4.23 A1+
PACCAR Financial Corp. 4.23 A1+
Rio Tinto America Inc. 4.23 A1+
Vermont American Corp. 4.23 A1
Parthenon Receivables Funding LLC 4.22 Aa1+
Block Financial Corp. 3.43 A1
Glaxo Wellcome PLC 3.39 A1+
Koch Industries 3.17 A1+
Generale Funding 3.16 A1+
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CHARACTERISTICS*
<S> <C>
- --------------------------------------------------------
Size of Portfolio ($MM) $47.3
# of Issuers (excl Govts) 38
Weighted Average Maturity 56 days
- --------------------------------------------------------
</TABLE>
We are closely monitoring the market as Y2K approaches. It is likely that
issues of new short-term debt will decrease toward year-end, limiting supplies
and triggering price increases. Also, investors might seek safety by reducing
their exposure to corporate credits and increasing their positions in U.S.
government securities, precipitating a "flight to quality." To provide
sufficient liquidity at year-end, we currently intend to maintain a position of
about 20% in U.S. Government securities. However, this planned defensive posture
may change in response to changing market circumstances as Y2K approaches.
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
5
<PAGE>
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
ADVISER: Pacific Investment Management Company (PIMCO)
PORTFOLIO MANAGER: Pasi Hamalainen
OBJECTIVE: Current income
INVESTMENT PROCESS: The Portfolio invests primarily in U.S. government and
agency securities of varying maturities, as well as mortgage-backed securities.
The Portfolio's dollar-weighted average duration ranges between one and seven
years. PIMCO establishes duration targets based on its expectations for changes
in interest rates, then positions the Portfolio to take advantage of yield curve
shifts. Securities are chosen for their value relative to other equivalent
securities.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEARS 8/24/95
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
With PACE program fee 0.50% 4.97% 4.51%
Without PACE program fee 2.02% 6.56% 6.09%
Lehman Brothers Mortgage Backed Securities
Index 2.78% 6.94% 6.45%
Lipper Median 1.84% 5.86% 5.32%
- ----------------------------------------------------------------------------------
</TABLE>
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO AND THE
LEHMAN BROTHERS MORTGAGE BACKED SECURITIES INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO PORTFOLIO LEHMAN BROTHERS
Mortgage Backed Securities
Without Fee With Fee* Index
<S> <C> <C> <C>
Aug-95 $10,008 $10,005 $10,000
Sep-95 $10,050 $10,034 $10,088
Oct-95 $10,219 $10,190 $10,178
Nov-95 $10,343 $10,301 $10,294
Dec-95 $10,493 $10,437 $10,422
Jan-96 $10,552 $10,483 $10,501
Feb-96 $10,402 $10,321 $10,413
Mar-96 $10,354 $10,260 $10,376
Apr-96 $10,297 $10,191 $10,347
May-96 $10,301 $10,182 $10,317
Jun-96 $10,427 $10,294 $10,459
Jul-96 $10,435 $10,289 $10,498
Aug-96 $10,460 $10,301 $10,498
Sep-96 $10,627 $10,452 $10,673
Oct-96 $10,837 $10,645 $10,883
Nov-96 $11,012 $10,804 $11,038
Dec-96 $10,940 $10,720 $10,981
Jan-97 $10,993 $10,758 $11,062
Feb-97 $11,019 $10,770 $11,099
Mar-97 $10,927 $10,667 $10,994
Apr-97 $11,090 $10,813 $11,169
May-97 $11,185 $10,891 $11,278
Jun-97 $11,310 $11,000 $11,410
Jul-97 $11,522 $11,192 $11,625
Aug-97 $11,495 $11,151 $11,597
Sep-97 $11,624 $11,262 $11,744
Oct-97 $11,771 $11,391 $11,875
Nov-97 $11,827 $11,430 $11,914
Dec-97 $11,929 $11,514 $12,022
Jan-98 $12,034 $11,601 $12,141
Feb-98 $12,049 $11,601 $12,167
Mar-98 $12,089 $11,626 $12,218
Apr-98 $12,156 $11,676 $12,288
May-98 $12,252 $11,752 $12,369
Jun-98 $12,326 $11,809 $12,428
Jul-98 $12,374 $11,840 $12,491
Aug-98 $12,515 $11,960 $12,605
Sep-98 $12,624 $12,049 $12,757
Oct-98 $12,586 $11,998 $12,740
Nov-98 $12,623 $12,018 $12,804
Dec-98 $12,694 $12,071 $12,858
Jan-99 $12,796 $12,152 $12,950
Feb-99 $12,718 $12,063 $12,898
Mar-99 $12,804 $12,129 $12,985
Apr-99 $12,848 $12,156 $13,045
May-99 $12,782 $12,078 $12,972
Jun-99 $12,707 $11,992 $12,926
Jul-99 $12,625 $11,900 $12,839
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Government Securities Fixed Income
Investments versus the Lehman Brothers Mortgage Backed Securities Index. It is
important to note that PACE Government Securities Fixed Income Investments is a
professionally managed portfolio while the index is not available for investment
and is unmanaged. The comparison is shown for illustrative purposes only.
ADVISER'S COMMENTS
Above-index duration, or the Portfolio's sensitivity to interest rate changes,
was a negative for performance as rates rose by as much as 40 basis points
during the period (a basis point equals 1/100th of one percent). During the
second
6
<PAGE>
half of the period an overweighting in less-prepayment sensitive lower-coupon
mortgages detracted slightly from performance as prepayment concerns diminished.
Limited exposure to yield enhancing collateralized mortgage obligations (CMOs)
added to returns, as did the use of relatively high-yielding adjustable rate
mortgages (ARMs).
Economic expansion will likely continue, though at a slower pace, as higher
interest rates reduce growth in consumer and investment spending. While the Fed
may tighten further to cool the economy, we do not believe the central bank will
embark on a protracted series of rate hikes such as last occurred in 1994.
Compared to 1994, real interest rates are higher, inflation is lower and recent
monetary stimulus has been less substantial. Inflation will likely trend upward
due to leveling off of commodity prices after recent declines, but global excess
capacity and technology driven productivity gains will limit those increases.
We believe moderating growth and relatively low inflation will keep interest
rates near current levels over the next few months, making yield more important
than price movement in determining Portfolio returns. As interest rate
volatility declines, strategies and securities that provide incremental yield
will enhance Portfolio performance. We expect to:
- Continue emphasizing mortgages, which remain a prudent way to boost yield
while avoiding credit risk
- Keep a significant portion of the Portfolio in highly liquid pass-through
mortgages
- Maintain exposure to well-structured CMOs to boost yield and better manage
prepayment risk
- Continue to use ARMs as higher yielding alternatives to other short-term
holdings
<TABLE>
<CAPTION>
CHARACTERISTICS* PORTFOLIO INDEX
<S> <C> <C>
- ---------------------------------------------------------------------
Duration (years) 4.29 4.15
Maturity (years) 5.73 7.49
Average Coupon 7.70% 6.80%
Average Yield to Maturity 6.80% 7.30%
Average Quality AAA AAA
Size of Portfolio ($MM): $ 281.2 $ 1,790.1
Number of Securities: 211 --
Cash Equivalents 0.2% --
Bonds 99.8% --
- ---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
ASSET ALLOCATION* PORTFOLIO INDEX
<S> <C> <C>
- ---------------------------------------------------------------------
Agency Mortgage Pass-Throughs 62.7 100.0
Collateralized Mortgages 16.4 --
Commercial Paper 10.4 --
U.S. Gov't & Agency 8.8 --
Agency Backed 0.7 --
Asset Backed 0.5 --
Stripped Mortgage Backed 0.3 --
Cash Equivalents 0.2 --
- ---------------------------------------------------------------------
Total 100.0 100.0
</TABLE>
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
7
<PAGE>
PACE INTERMEDIATE FIXED INCOME INVESTMENTS
ADVISER: Pacific Income Advisers, Inc.
PORTFOLIO MANAGER: Lloyd McAdams
OBJECTIVE: Current income consistent with reasonable stability of principal
INVESTMENT PROCESS: The Portfolio invests in fixed income securities rated at
least BBB; its dollar-weighted average duration (a measure of sensitivity to
interest rate changes) ranges between two and four and one-half years. The
adviser focuses on anticipating yield curve shifts and actively rotating among
fixed income sectors based on its assessment of the risks and reward of each
sector. Pacific Income Advisers uses a proprietary risk-adjustment model to
identify undervalued securities.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEARS 8/24/95
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
With PACE program fee 1.28% 4.19% 3.73%
Without PACE program fee 2.81% 5.76% 5.30%
Lehman Brothers Intermediate-Term
Government/Corporate Index 3.73% 6.50% 6.08%
Lipper Median 2.94% 5.68% 5.43%
- ----------------------------------------------------------------------------------
</TABLE>
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO AND THE
LEHMAN BROTHERS INTERMEDIATE-TERM GOVERNMENT/CORPORATE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO PORTFOLIO LEHMAN BROTHERS INTERMEDIATE-
Without Fee With Fee* Term Govt/Corp Index
<S> <C> <C> <C>
Aug-95 $10,000 $10,000 $10,000
Sep-95 $10,175 $10,159 $10,072
Oct-95 $10,232 $10,203 $10,184
Nov-95 $10,281 $10,240 $10,317
Dec-95 $10,396 $10,341 $10,426
Jan-96 $10,413 $10,344 $10,515
Feb-96 $10,340 $10,259 $10,392
Mar-96 $10,279 $10,186 $10,339
Apr-96 $10,227 $10,122 $10,303
May-96 $10,226 $10,108 $10,295
Jun-96 $10,314 $10,182 $10,404
Jul-96 $10,359 $10,214 $10,435
Aug-96 $10,381 $10,223 $10,443
Sep-96 $10,508 $10,335 $10,589
Oct-96 $10,662 $10,474 $10,776
Nov-96 $10,782 $10,579 $10,918
Dec-96 $10,722 $10,506 $10,848
Jan-97 $10,758 $10,528 $10,891
Feb-97 $10,779 $10,536 $10,911
Mar-97 $10,720 $10,464 $10,836
Apr-97 $10,825 $10,554 $10,963
May-97 $10,910 $10,624 $11,054
Jun-97 $11,006 $10,704 $11,154
Jul-97 $11,202 $10,881 $11,381
Aug-97 $11,133 $10,800 $11,324
Sep-97 $11,285 $10,934 $11,455
Oct-97 $11,401 $11,032 $11,582
Nov-97 $11,415 $11,033 $11,608
Dec-97 $11,521 $11,120 $11,701
Jan-98 $11,671 $11,251 $11,854
Feb-98 $11,640 $11,207 $11,845
Mar-98 $11,663 $11,216 $11,883
Apr-98 $11,712 $11,249 $11,942
May-98 $11,812 $11,331 $12,029
Jun-98 $11,896 $11,397 $12,106
Jul-98 $11,920 $11,406 $12,148
Aug-98 $12,118 $11,580 $12,339
Sep-98 $12,393 $11,828 $12,649
Oct-98 $12,331 $11,755 $12,636
Nov-98 $12,307 $11,717 $12,635
Dec-98 $12,368 $11,761 $12,686
Jan-99 $12,428 $11,803 $12,755
Feb-99 $12,256 $11,625 $12,568
Mar-99 $12,344 $11,694 $12,662
Apr-99 $12,366 $11,700 $12,701
May-99 $12,268 $11,593 $12,604
Jun-99 $12,262 $11,573 $12,612
Jul-99 $12,255 $11,552 $12,601
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Intermediate Fixed Income
Investments versus the Lehman Brothers Intermediate-Term Government/Corporate
Index. It is important to note that PACE Intermediate Fixed Income Investments
is a professionally managed portfolio while the index is not available for
investment and is unmanaged. The comparison is shown for illustrative purposes
only.
8
<PAGE>
ADVISER'S COMMENTS
For the twelve months ending July 31, 1999 the Portfolio underperformed the
Lehman Government/Corporate Intermediate Index. The Portfolio benefited from its
duration position during the period. Overweighting of spread sectors during the
period detracted from returns as spreads widened. The Portfolio underperformed
the Lipper median return of 2.94% because of its generally longer duration and
the fact that interest rates were higher for the period.
The Federal Reserve increased the federal funds rate by 25 basis points at the
end of June, and again on August 24, in response to the strong economy and
rising inflationary pressures. After the tightening, a slowdown in productivity
gains coupled with strong labor markets and rising labor costs caused the
markets to sell off further. Spread sectors (e.g., corporates, mortgages)
suffered substantial widening, reflecting the heavy corporate issuance taking
place ahead of the year 2000 and the increased investor demand for liquidity. We
view this widening as technical in nature and not reflecting any changes in
fundamentals.
The duration of the Portfolio was neutral to the benchmark for the period. At
the end of July we moved the Portfolio duration to 0.2 years shorter than the
benchmark. We increased the Portfolio allocation to spread sectors as spreads
widened to levels that made them undervalued on a risk-adjusted basis. We will
continue to utilize any weakness in spreads to add to our mortgage and corporate
exposure on a selective basis. We believe that at these spread levels selective
purchases of securities should provide the Portfolio with excess returns.
<TABLE>
<CAPTION>
CHARACTERISTICS* PORTFOLIO INDEX
<S> <C> <C>
- ---------------------------------------------------------------------
Duration (years) 3.2 3.4
Maturity (years) 4.6 4.3
Average Coupon 6.4% 6.4%
Average Yield to Maturity 6.6% 6.3%
Size of Portfolio ($MM): $ 137.3 --
Number of Securities: 146 --
Bonds 99.7% --
Cash 0.3% --
- ---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
QUALITY DIVERSIFICATION* PORTFOLIO INDEX
<S> <C> <C>
- ---------------------------------------------------------------------
Cash & Cash Equivalents 0.3 0.0
Government & Govt Agencies 44.9 69.4
AAA 12.4 2.0
AA 3.7 6.6
A 22.1 12.7
BBB 16.6 9.3
- ---------------------------------------------------------------------
Total 100.0 100.0
</TABLE>
<TABLE>
<CAPTION>
ASSET ALLOCATION* PORTFOLIO INDEX
<S> <C> <C>
- ---------------------------------------------------------------------
Cash & Equivalents 0.3 0.0
U.S. Governments 34.2 53.5
Agencies 10.7 15.9
Mortgage Backed 9.2 0.0
Asset-Backed 6.4 0.0
Corporate Inv. Grade 39.2 30.6
Corporate Below Inv. Grade 0.0 0.0
Foreign 0.0 0.0
- ---------------------------------------------------------------------
Total 100.0 100.0
</TABLE>
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
9
<PAGE>
PACE STRATEGIC FIXED INCOME INVESTMENTS
ADVISER: Pacific Investment Management Company (PIMCO)
PORTFOLIO MANAGER: William Powers
OBJECTIVE: Total return consisting of income and capital appreciation
INVESTMENT PROCESS: The Portfolio invests primarily in fixed income securities
of varying maturities. Its dollar-weighted average duration (a measure of
sensitivity to interest rate changes) ranges between three and eight years.
PIMCO invests in those areas of the bond market it considers undervalued, based
on such factors as quality, sector, coupon and maturity.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEARS 8/24/95
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
With PACE program fee -1.28% 5.05% 5.53%
Without PACE program fee 0.21% 6.63% 7.12%
Lehman Brothers Government/ Corporate Bond
Index 2.33% 7.00% 6.37%
Lipper Median 1.75% 6.12% 5.56%
- ----------------------------------------------------------------------------------
</TABLE>
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO AND THE
LEHMAN BROTHERS GOVERNMENT/ CORPORATE BOND INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio Without
Fee Portfolio With Fee* Lehman Brothers Govt/Corp Index
<S> <C> <C> <C>
Aug-95 $10,067 $10,063 $10,000
Sep-95 $10,425 $10,409 $10,102
Oct-95 $10,660 $10,630 $10,250
Nov-95 $10,859 $10,815 $10,420
Dec-95 $11,023 $10,964 $10,573
Jan-96 $11,099 $11,026 $10,638
Feb-96 $10,808 $10,724 $10,413
Mar-96 $10,779 $10,682 $10,325
Apr-96 $10,679 $10,569 $10,254
May-96 $10,665 $10,543 $10,237
Jun-96 $10,820 $10,682 $10,373
Jul-96 $10,815 $10,663 $10,397
Aug-96 $10,775 $10,611 $10,371
Sep-96 $11,009 $10,828 $10,555
Oct-96 $11,278 $11,079 $10,801
Nov-96 $11,519 $11,301 $11,000
Dec-96 $11,377 $11,148 $10,878
Jan-97 $11,413 $11,169 $10,891
Feb-97 $11,443 $11,185 $10,914
Mar-97 $11,264 $10,996 $10,784
Apr-97 $11,459 $11,172 $10,941
May-97 $11,564 $11,261 $11,043
Jun-97 $11,697 $11,376 $11,176
Jul-97 $12,042 $11,697 $11,518
Aug-97 $11,890 $11,535 $11,389
Sep-97 $12,082 $11,706 $11,567
Oct-97 $12,303 $11,905 $11,752
Nov-97 $12,377 $11,962 $11,815
Dec-97 $12,537 $12,101 $11,939
Jan-98 $12,728 $12,271 $12,107
Feb-98 $12,678 $12,207 $12,083
Mar-98 $12,706 $12,219 $12,120
Apr-98 $12,770 $12,265 $12,181
May-98 $12,913 $12,387 $12,311
Jun-98 $13,067 $12,519 $12,437
Jul-98 $13,085 $12,521 $12,447
Aug-98 $13,282 $12,693 $12,690
Sep-98 $13,658 $13,036 $13,053
Oct-98 $13,450 $12,821 $12,960
Nov-98 $13,485 $12,838 $13,038
Dec-98 $13,568 $12,901 $13,070
Jan-99 $13,640 $12,954 $13,163
Feb-99 $13,255 $12,573 $12,850
Mar-99 $13,393 $12,688 $12,914
Apr-99 $13,437 $12,714 $12,946
May-99 $13,297 $12,565 $12,813
Jun-99 $13,184 $12,443 $12,773
Jul-99 $13,113 $12,360 $12,737
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Strategic Fixed Income Investments
versus the Lehman Brothers Government/Corporate Bond Index. It is important to
note that PACE Strategic Fixed Income Investments is a professionally managed
portfolio while the index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
ADVISER'S COMMENTS
The Portfolio's above-benchmark duration, or sensitivity to interest rate
changes, detracted from performance during the period as interest rates rose as
much as 40 basis points. (A basis point equals 1/100th of one percent.) The
emphasis on mortgages hurt returns. Increased market volatility and concern
about Federal Reserve rate hikes produced unfavorable price performance for
mortgages, which offset the yield advantage of these securities relative to
10
<PAGE>
Treasurys. The Portfolio's underweight of high-grade corporates helped returns
as corporates lagged Treasurys during the period. Limited holdings of
high-quality emerging market bonds were modestly positive due to their
relatively high yields.
Economic expansion will likely continue, though at a slower pace, as higher
interest rates reduce growth in consumer and investment spending. While the Fed
may tighten further to cool the economy, we do not believe the central bank will
embark on a protracted series of rate hikes such as last occurred in 1994.
Compared to 1994, real interest rates are higher, inflation is lower and recent
monetary stimulus has been less substantial. Inflation will likely trend upward
due to leveling off of commodity prices after recent declines, but global excess
capacity and technology-driven productivity gains will limit those increases.
We believe moderating growth and relatively low inflation should keep interest
rates near current levels over the next few months, making yield more important
than price movement in determining Portfolio returns. We intend to continue
writing options on Treasurys to generate income--we favor securities with
embedded option premiums such as mortgages and other callable bonds. Also, we
continue to favor less-prepayment sensitive mortgages, including lower-coupon
issues. We intend to underweight investment-grade corporates but will attempt to
exploit selective opportunities in the finance and utility sectors. The
Portfolio holds modest levels of below-investment-grade and emerging market
bonds, seeking to capture their attractive yield premiums.
<TABLE>
<CAPTION>
CHARACTERISTICS* PORTFOLIO INDEX
<S> <C> <C>
- ---------------------------------------------------------------------
Duration (years) 5.69 5.43
Maturity (years) 10.91 9.97
Average Coupon 6.07% 6.73%
Average Yield to Maturity 6.80% 6.50%
Size of Portfolio ($MM): $ 225.6 $ 3,423
Number of Securities: 146 --
Bonds 92.5% --
Cash & Equivalents 7.5% --
- ---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
QUALITY DIVERSIFICATION* PORTFOLIO INDEX
<S> <C> <C>
- ---------------------------------------------------------------------
AAA 66.7 69.0
AA 5.8 7.0
A 9.9 10.0
BBB 10.2 10.0
BB & B 7.4 --
- ---------------------------------------------------------------------
Total 100.0 96.0
</TABLE>
<TABLE>
<CAPTION>
SECTOR ALLOCATION* PORTFOLIO INDEX
<S> <C> <C>
- ---------------------------------------------------------------------
Mortgage Backed 49.7 --
Corporate Bonds 29.3 33.0
U.S. Government/Agency 11.8 67.0
Cash Equivalents 7.5 --
Emerging Markets 1.7 --
- ---------------------------------------------------------------------
Total 100.0 100.0
</TABLE>
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
11
<PAGE>
PACE MUNICIPAL FIXED INCOME INVESTMENTS
ADVISER: Morgan Grenfell Capital Management, Incorporated
PORTFOLIO MANAGER: David Baldt
OBJECTIVE: High current income exempt from federal income tax
INVESTMENT PROCESS: The Portfolio invests in general obligation, revenue and
private activity bonds and notes, the interest on which is exempt from federal
income tax. Its dollar-weighted average duration (a measure of sensitivity to
interest rate changes) ranges between three and seven years. Morgan Grenfell
seeks to provide consistent returns with low volatility by selecting
high-quality securities across all maturities and keeping Portfolio duration
close to its benchmark. Emphasis is placed on issues with enhancements--such as
government backing or collateral--that reduce credit risk.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEARS 8/24/95
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------
With PACE program fee 0.82% 3.58% 3.97%
Without PACE program fee 2.34% 5.14% 5.54%
Lehman Brothers Municipal Five-Year Index 3.52% 5.17% 4.89%
Lipper Median 2.25% 5.02% 4.87%
- ------------------------------------------------------------------------------------
</TABLE>
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO AND THE
LEHMAN BROTHERS MUNICIPAL FIVE-YEAR INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio Without Lehman Brothers Municipal Five-Year
Fee Portfolio With Fee* Index
<S> <C> <C> <C>
Aug-95 $10,042 $10,038 $10,000
Sep-95 $10,092 $10,076 $10,025
Oct-95 $10,199 $10,170 $10,086
Nov-95 $10,355 $10,313 $10,178
Dec-95 $10,505 $10,449 $10,231
Jan-96 $10,513 $10,444 $10,333
Feb-96 $10,519 $10,437 $10,304
Mar-96 $10,386 $10,292 $10,232
Apr-96 $10,381 $10,274 $10,231
May-96 $10,453 $10,332 $10,227
Jun-96 $10,552 $10,417 $10,288
Jul-96 $10,638 $10,489 $10,363
Aug-96 $10,690 $10,527 $10,373
Sep-96 $10,811 $10,633 $10,458
Oct-96 $10,899 $10,706 $10,549
Nov-96 $11,050 $10,841 $10,686
Dec-96 $11,015 $10,793 $10,666
Jan-97 $11,068 $10,831 $10,702
Feb-97 $11,181 $10,929 $10,780
Mar-97 $11,047 $10,784 $10,663
Apr-97 $11,092 $10,815 $10,708
May-97 $11,184 $10,891 $10,840
Jun-97 $11,277 $10,967 $10,922
Jul-97 $11,522 $11,191 $11,115
Aug-97 $11,425 $11,083 $11,058
Sep-97 $11,540 $11,181 $11,156
Oct-97 $11,649 $11,272 $11,214
Nov-97 $11,684 $11,293 $11,249
Dec-97 $11,787 $11,377 $11,346
Jan-98 $11,861 $11,435 $11,449
Feb-98 $11,887 $11,445 $11,468
Mar-98 $11,924 $11,467 $11,478
Apr-98 $11,884 $11,414 $11,430
May-98 $12,015 $11,525 $11,567
Jun-98 $12,050 $11,544 $11,606
Jul-98 $12,083 $11,562 $11,647
Aug-98 $12,240 $11,697 $11,790
Sep-98 $12,353 $11,791 $11,911
Oct-98 $12,361 $11,783 $11,946
Nov-98 $12,386 $11,793 $11,967
Dec-98 $12,422 $11,812 $12,009
Jan-99 $12,529 $11,899 $12,135
Feb-99 $12,483 $11,841 $12,123
Mar-99 $12,480 $11,823 $12,133
Apr-99 $12,525 $11,850 $12,170
May-99 $12,472 $11,786 $12,120
Jun-99 $12,330 $11,637 $11,983
Jul-99 $12,366 $11,656 $12,057
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Municipal Fixed Income Investments
versus the Lehman Brothers Municipal Five-Year Index. It is important to note
that PACE Municipal Fixed Income Investments is a professionally managed
portfolio while the index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
12
<PAGE>
ADVISER'S COMMENTS
The Portfolio underperformed due to the fact that its duration--a measure of
interest rate risk--was extended vs. the Lehman Brothers Municipal Five-Year
Index, as we were finding value in longer maturity bonds. Additionally, the
Portfolio's peer group, the Lipper Intermediate Municipal Bond universe,
maintains a longer duration than the Index.
<TABLE>
<CAPTION>
CHARACTERISTICS* PORTFOLIO INDEX
<S> <C> <C>
- -----------------------------------------------------------------------
Duration (years) 5.74 4.25
Maturity (years) 7.90 4.81
Average Coupon 5.77% 5.53%
Average Yield to Maturity 5.06% 4.46%
Size of Portfolio ($MM) $ 55.8 --
# of Securities 148 --
Bonds 98.85% --
Cash 1.15% --
- -----------------------------------------------------------------------
</TABLE>
The Portfolio's significant concentration of escrowed-to-maturity (ETM) and
federal agency-backed housing paper-- which provide a significant portion of
total return through coupon income--cushioned the general price weakening in the
municipal market. Almost 40% of the Portfolio consists of ETM or federal agency
backed paper.* The Portfolio will continue to be affected by the lack of supply
and lack of institutional demand in the municipal market. We continue to focus
on higher credit quality bonds, as investors are not being rewarded for buying
lower-quality paper.
<TABLE>
<CAPTION>
TOP 5 SECTORS* TOP 5 STATES*
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Insured 29.71 California 11.76
Federal Agency Backed 22.37 Texas 11.64
ETM Pre-Refunded 17.39 Pennsylvania 10.77
Corporate Supported 11.83 Indiana 6.77
Hospital 11.61 Illinois 4.86
- ----------------------------------------------------------------------------------------------
Total 92.91 Total 45.13
</TABLE>
The bond market continued to struggle in the second quarter of 1999 as strong
U.S. economic growth caused investors to fear the effects of rising inflation
which erodes the value of their investments. This fear triggered a sell-off in
the U.S. Treasury market, causing Treasury bond yields to rise and prices to
decline. The poor performance in the Treasury market spilled over into the
municipal bond market. Municipal bonds held steadier than other market sectors,
however, due to the more muted rise in municipal yields, and continuing limited
supply.
Through the first half of 1999, the total supply of new municipal bond issues
decreased by 23% from 1998's near record levels. New York, one of the largest
issuers, decreased new issuance by 50%. Two factors caused the supply decrease:
the reduction of refunding candidates as interest rates rose, which limited the
potential interest savings from refunding older debt, and legal restrictions
that limit municipalities to only one tax-exempt refunding per issue.
Offsetting the decrease in supply is a more fundamental change in the demand
for municipal paper. Institutional buyers such as insurance companies have not
been as active because of declining profitability. The lack of institutional
demand has reduced market liquidity. As a result, dealers now require more
profit to inventory municipal bonds.
Short and intermediate maturities now represent better value on the yield
curve. Consequently, we expect to maintain or shorten Portfolio duration. We
continue to find significant value in higher-quality issues, such as
government-backed bonds. We do not believe investors are rewarded for purchasing
lower-rated issues.
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
13
<PAGE>
Municipal bonds remain moderately undervalued relative to Treasury bonds. The
yield ratio between Treasury and municipal bonds, measured as a percentage, is
currently 89% for a 30 year AA Municipal bond versus a 30 year Treasury bond.
Historically, the relationship between these two yields has been around 84%. The
yield ratio between municipal and Treasury bonds should continue to trend
downward until it reaches its historical levels. We believe supply will continue
to be moderate compared to 1998 levels.
<TABLE>
<CAPTION>
QUALITY DIVERSIFICATION* PORTFOLIO INDEX
<S> <C> <C>
- ---------------------------------------------------------------------
Government 37.76 --
AAA 23.69 53.35
AA 19.71 29.07
A 13.73 12.59
BBB -- 4.99
Other/Not Rated 1.96 --
- ---------------------------------------------------------------------
</TABLE>
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
14
<PAGE>
PACE GLOBAL FIXED INCOME INVESTMENTS
ADVISER: Rogge Global Partners plc
PORTFOLIO MANAGER: Team led by Olaf Rogge
OBJECTIVE: High total return
INVESTMENT PROCESS: The adviser believes that financially healthy countries
produce the highest bond and currency returns over time. The Portfolio invests
in high-grade fixed income securities issued by U.S. and foreign governments,
supranational entities and overseas private issuers. Its dollar-weighted average
duration (a measure of sensitivity to interest rate changes) ranges between four
and eight years. The adviser uses a top-down analysis to find value across
countries and to forecast interest and currency-exchange rates over a one-year
horizon. An optimization model helps determine country, currency and duration
positions.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEARS 8/24/95
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
With PACE program fee 4.90% 3.40% 3.91%
Without PACE program fee 6.49% 4.97% 5.48%
Salomon Smith Barney World Government Bond
Index 6.54% 4.29% 4.73%
Lipper Median 0.77% 4.47% 5.45%
- ----------------------------------------------------------------------------------
</TABLE>
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO AND THE
SALOMON SMITH BARNEY WORLD GOVERNMENT BOND INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio Without
Fee Portfolio With Fee* Salomon Smith Barney World Govt Bond Index
<S> <C> <C> <C>
Aug-95 $9,950 $9,947 $10,000
Sep-95 $10,242 $10,226 $10,223
Oct-95 $10,360 $10,331 $10,300
Nov-95 $10,460 $10,417 $10,416
Dec-95 $10,643 $10,586 $10,525
Jan-96 $10,583 $10,514 $10,395
Feb-96 $10,439 $10,358 $10,342
Mar-96 $10,346 $10,252 $10,327
Apr-96 $10,482 $10,374 $10,286
May-96 $10,421 $10,301 $10,288
Jun-96 $10,487 $10,353 $10,369
Jul-96 $10,668 $10,519 $10,569
Aug-96 $10,685 $10,523 $10,610
Sep-96 $10,798 $10,621 $10,653
Oct-96 $11,042 $10,847 $10,852
Nov-96 $11,252 $11,039 $10,996
Dec-96 $11,131 $10,907 $10,907
Jan-97 $10,828 $10,597 $10,615
Feb-97 $10,819 $10,575 $10,536
Mar-97 $10,694 $10,440 $10,456
Apr-97 $10,551 $10,287 $10,364
May-97 $10,821 $10,537 $10,646
Jun-97 $10,974 $10,672 $10,772
Jul-97 $11,046 $10,729 $10,688
Aug-97 $10,910 $10,584 $10,682
Sep-97 $11,293 $10,942 $10,909
Oct-97 $11,431 $11,061 $11,136
Nov-97 $11,320 $10,941 $10,966
Dec-97 $11,242 $10,851 $10,933
Jan-98 $11,400 $10,990 $11,039
Feb-98 $11,502 $11,075 $11,129
Mar-98 $11,446 $11,007 $11,018
Apr-98 $11,576 $11,118 $11,195
May-98 $11,529 $11,059 $11,220
Jun-98 $11,586 $11,100 $11,237
Jul-98 $11,586 $11,086 $11,252
Aug-98 $11,842 $11,317 $11,558
Sep-98 $12,582 $12,009 $12,173
Oct-98 $12,906 $12,303 $12,533
Nov-98 $12,897 $12,278 $12,356
Dec-98 $13,333 $12,678 $12,605
Jan-99 $13,241 $12,575 $12,489
Feb-99 $12,688 $12,035 $12,088
Mar-99 $12,688 $12,020 $12,118
Apr-99 $12,668 $11,985 $12,113
May-99 $12,337 $11,658 $11,910
Jun-99 $12,161 $11,477 $11,701
Jul-99 $12,338 $11,629 $11,988
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Global Fixed Income Investments
versus the Salomon Smith Barney World Government Bond Index. It is important to
note that PACE Global Fixed Income Investments is a professionally managed
portfolio while the Index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
15
<PAGE>
ADVISER'S COMMENTS
For the fiscal year, the Portfolio underperformed the Salomon Smith Barney
World Government Bond Index, largely due to the Portfolio's underweighting in
Japanese government bonds during the first part of the year. The Portfolio
outperformed the median return in the Lipper global income peer group, however.
The outlook for the global fixed income markets seems positive for the balance
of the year. While interest rates in North America and Japan are likely to rise,
the output gap in Europe should provide a non-inflationary environment in which
European rates can de-couple from U.S. rates. Furthermore, disillusioned foreign
holders of U.S. domestic assets are beginning to sell their holdings to invest
elsewhere. With the U.S. more dependent than ever on foreign capital to plug its
current account deficit, we believe the dollar will be under constant downward
pressure over the balance of the year. A decline in the dollar potentially means
positive returns for global bonds.
Our investment strategy is to overweight European bonds. We hold debt
instruments in the core Euroland markets and in the peripheral markets such as
Sweden, Norway, Denmark and the United Kingdom. Our currency strategy involves
holding the currencies of the bonds we own. The Portfolio has a neutral
weighting in Japanese yen, as this currency has been kept artificially low vs.
the dollar over the past 18 months. We also shortened the duration of the
Portfolio in anticipation of a higher rate environment in North America. We
selectively hold longer duration bonds in some of the European markets.
<TABLE>
<CAPTION>
CHARACTERISTICS* PORTFOLIO INDEX
<S> <C> <C>
- -------------------------------------------------------------------
Duration (years) 4.61 5.60
Maturity (years) 6.75 7.68
Weighted Average Coupon 5.63% 6.01%
Weighted Average Yield to Maturity 5.24% 4.16%
Portfolio Size ($MM) $100.9 --
Number of Securities 56 --
- -------------------------------------------------------------------
<CAPTION>
QUALITY DIVERSIFICATION* PORTFOLIO INDEX
<S> <C> <C>
- -------------------------------------------------------------------
Cash 2.86 --
U.S. Government/Agency 12.58 29.52
AAA 49.89 54.62
AA 21.48 15.86
A 7.39 --
BBB 0.82 --
BB 4.98 --
- -------------------------------------------------------------------
Total 100.00 100.00
</TABLE>
<TABLE>
<CAPTION>
TOP 5 COUNTRIES* PORTFOLIO INDEX TOP 5 CURRENCIES* PORTFOLIO INDEX
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
USA 19.97 29.52 Euro 36.52 35.73
Canada 17.12 2.99 Yen 21.39 21.61
Germany 13.66 8.48 Canadian Dollar 15.67 2.95
Sweden 8.12 1.27 U.S. Dollar 13.85 29.35
Netherlands 5.16 2.79 Swedish Krona 5.08 1.27
- ----------------------------------------------------------------------------------------------------------------
Total 64.03 45.05 Total 92.51 90.91
</TABLE>
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
16
<PAGE>
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
ADVISER: Brinson Partners, Inc.
PORTFOLIO MANAGERS: Jeffrey J. Diermeier, Robert C. Moore, John C. Leonard and
Lydia J. Miller
OBJECTIVE: Capital appreciation and dividend income
INVESTMENT PROCESS: The Portfolio invests in equity securities that the adviser
considers undervalued. Normally, at least 65% of the Portfolio is invested in
common stocks of companies with market capitalization of at least $2.5 billion
when purchased. Brinson Partners' research focuses on several levels of
analysis, including understanding wealth shifts that occur within the equity
market and individual company research. Stock selection begins with the broad
stock universe within which the adviser looks for undervalued issues. The firm's
analysts conduct primary, fundamental research on a dynamic universe of 700
stocks. The adviser's expectations of a company's ability to generate profit and
to grow its business into the future determine the company's intrinsic value.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEARS 8/24/95
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
With PACE program fee 11.14% 20.91% 20.05%
Without PACE program fee 12.82% 22.74% 21.87%
Russell 1000 Value Index 14.99% 26.29% 23.70%
Lipper Median 14.28% 22.34% 20.79%
- ----------------------------------------------------------------------------------
</TABLE>
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO AND THE
RUSSELL 1000 VALUE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio Without Russell 1000 Value
Fee Portfolio With Fee* Index
<S> <C> <C> <C>
Aug-95 $10,117 $10,113 $10,000
Sep-95 $10,442 $10,425 $10,362
Oct-95 $10,408 $10,379 $10,259
Nov-95 $10,975 $10,930 $10,780
Dec-95 $11,169 $11,110 $11,050
Jan-96 $11,622 $11,546 $11,395
Feb-96 $11,798 $11,706 $11,482
Mar-96 $12,016 $11,907 $11,677
Apr-96 $12,242 $12,116 $11,721
May-96 $12,426 $12,283 $11,868
Jun-96 $12,384 $12,227 $11,877
Jul-96 $11,790 $11,625 $11,428
Aug-96 $12,250 $12,064 $11,755
Sep-96 $12,795 $12,585 $12,223
Oct-96 $13,072 $12,840 $12,696
Nov-96 $13,968 $13,704 $13,616
Dec-96 $13,974 $13,693 $13,442
Jan-97 $14,483 $14,174 $14,094
Feb-97 $14,580 $14,250 $14,301
Mar-97 $14,106 $13,770 $13,786
Apr-97 $14,527 $14,163 $14,365
May-97 $15,598 $15,188 $15,168
Jun-97 $16,326 $15,878 $15,819
Jul-97 $17,581 $17,077 $17,009
Aug-97 $16,888 $16,383 $16,403
Sep-97 $17,643 $17,094 $17,394
Oct-97 $16,669 $16,130 $16,909
Nov-97 $17,028 $16,458 $17,656
Dec-97 $17,433 $16,827 $18,171
Jan-98 $17,557 $16,926 $17,914
Feb-98 $19,081 $18,373 $19,120
Mar-98 $20,178 $19,404 $20,289
Apr-98 $19,977 $19,187 $20,425
May-98 $19,691 $18,889 $20,122
Jun-98 $19,815 $18,984 $20,380
Jul-98 $19,320 $18,486 $20,020
Aug-98 $16,565 $15,831 $17,041
Sep-98 $17,747 $16,939 $18,019
Oct-98 $19,091 $18,199 $19,416
Nov-98 $19,892 $18,938 $20,320
Dec-98 $20,632 $19,619 $21,011
Jan-99 $20,498 $19,467 $21,179
Feb-99 $19,715 $18,700 $20,881
Mar-99 $20,395 $19,321 $21,313
Apr-99 $22,220 $21,024 $23,304
May-99 $21,901 $20,695 $23,047
Jun-99 $22,777 $21,496 $23,716
Jul-99 $21,798 $20,546 $23,021
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Large Company Value Equity
Investments versus the Russell 1000 Value Index. It is important to note that
PACE Large Company Value Equity Investments is a professionally managed
portfolio while the Index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
17
<PAGE>
ADVISER'S COMMENTS
For the fiscal year ended July 31, 1999, the Portfolio trailed the return of
the benchmark. Stock selection provided significant positive results, yet this
favorable performance was diminished by the negative effect of industry
weightings and factor positions over the year. The underweighting in
telecommunications was the primary source of negative results. Among factor
influences, the underweighting to yield and overweighting to earnings
variability detracted from performance. The lower than market beta of the
Portfolio added to results.
After strong performance in the first quarter, global equity markets were
characterized by volatility. The major factors driving this volatility were
increased interest rate and inflation fears due to the booming U.S. economy, an
early recovery in Asia (ex-Japan) and higher commodity prices. Widespread
concerns about the sustainability of current low inflation rates at such high
economic speed put upward pressure on global bond yields. During June, the U.S.
market continued to focus on the anticipated rate hike by the Fed at its
month-end meeting. During June, growth stocks outperformed value stocks and
large stocks outperformed small stocks, reversing the trends of the prior two
months. During July, value stocks slightly outperformed growth, as measured by
the 3.01% decline in the Russell 1000 Value Index compared to the 3.34% decline
in the Russell 1000 Growth Index.
In the United States, we remain overweighted in a number of basic materials
stocks in the construction, paper and specialty chemical industries, as well as
in the life insurance/managed care, defense/aerospace and the railroad/air-
transport industries. The Portfolio's key underweightings occur in the consumer,
traditional telephone, financial services and energy industries.
<TABLE>
<CAPTION>
CHARACTERISTICS*
<S> <C>
- ----------------------------------------------------------
Size of Portfolio ($MM) $ 376.5
No. of Securities 89
Stocks 96%
Cash 4%
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP TEN HOLDINGS*
<S> <C>
- ----------------------------------------------------------
Xerox Corp. 4.52
Burlington Northern Santa Fe, Inc. 3.60
Electronic Data Systems Corp. 3.36
Raytheon Co. 3.20
Corning, Inc. 3.08
FDX Corp. 3.08
Aetna Life & Casualty Co. 2.74
General Instrument Corp. 2.62
Lockheed Martin Corp. 2.50
CIGNA Corp. 2.41
- ----------------------------------------------------------
Total 31.11
</TABLE>
<TABLE>
<CAPTION>
TOP FIVE SECTORS*
<S> <C>
- ----------------------------------------------------------
Health 11.06
Technology 10.74
Finance--Banks 10.30
Services 9.53
Finance--Nonbanks 8.80
- ----------------------------------------------------------
Total 50.43
</TABLE>
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
18
<PAGE>
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
ADVISER: Alliance Capital Management L.P.
PORTFOLIO MANAGER: Jane Gould
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: The Portfolio invests in companies that the adviser believes
have faster rates of earnings growth than the average rate of the companies that
comprise the S&P 500 Index. Normally, at least 65% of the Portfolio is invested
in common stocks of companies with market capitalization of at least $2.5
billion at time of purchase. Alliance chooses stocks by identifying the best
combinations of earnings growth and reasonable valuation. Each stock in the
adviser's research universe is ranked based on analysts' assessments and six
measures of earnings growth and valuation. The Portfolio normally invests in
stocks that rank within the resulting top 30% of the universe.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION SINCE CURRENT
1 YEAR 3 YEARS 8/24/95 MANAGER 11/30/97
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
With PACE program fee 17.87% 28.17% 23.53% 28.17%
Without PACE program fee 19.66% 30.10% 25.40% 30.11%
Russell 1000 Growth Index 24.04% 31.21% 27.68% 27.48%
Lipper Median 18.39% 25.13% 21.48% 20.39%
- -----------------------------------------------------------------------------------------------------
</TABLE>
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO AND THE
RUSSELL 1000 GROWTH INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO WITHOUT
FEE PORTFOLIO WITH FEE* RUSSELL 1000 GROWTH INDEX
<S> <C> <C> <C>
Aug-95 $10,000 $9,997 $10,000
Sep-95 $10,367 $10,350 $10,461
Oct-95 $10,400 $10,371 $10,468
Nov-95 $10,675 $10,632 $10,876
Dec-95 $10,667 $10,610 $10,938
Jan-96 $10,967 $10,895 $11,304
Feb-96 $11,234 $11,147 $11,511
Mar-96 $11,284 $11,182 $11,526
Apr-96 $11,485 $11,367 $11,829
May-96 $11,810 $11,674 $12,242
Jun-96 $11,819 $11,668 $12,259
Jul-96 $11,076 $10,921 $11,540
Aug-96 $11,485 $11,310 $11,838
Sep-96 $12,520 $12,314 $12,700
Oct-96 $12,662 $12,438 $12,776
Nov-96 $13,338 $13,085 $13,736
Dec-96 $12,932 $12,672 $13,467
Jan-97 $13,660 $13,368 $14,411
Feb-97 $13,267 $12,967 $14,313
Mar-97 $12,313 $12,020 $13,538
Apr-97 $13,208 $12,878 $14,437
May-97 $13,944 $13,578 $15,480
Jun-97 $14,605 $14,204 $16,099
Jul-97 $16,128 $15,665 $17,522
Aug-97 $15,115 $14,664 $16,496
Sep-97 $16,019 $15,521 $17,308
Oct-97 $15,567 $15,064 $16,668
Nov-97 $15,735 $15,207 $17,376
Dec-97 $16,138 $15,577 $17,571
Jan-98 $16,475 $15,883 $18,096
Feb-98 $18,089 $17,417 $19,457
Mar-98 $18,789 $18,069 $20,232
Apr-98 $19,100 $18,344 $20,512
May-98 $18,896 $18,126 $19,930
Jun-98 $20,039 $19,199 $21,151
Jul-98 $20,385 $19,506 $21,011
Aug-98 $16,377 $15,651 $17,858
Sep-98 $17,149 $16,368 $19,229
Oct-98 $19,100 $18,207 $20,775
Nov-98 $20,350 $19,375 $22,356
Dec-98 $22,601 $21,491 $24,373
Jan-99 $24,138 $22,923 $25,803
Feb-99 $23,167 $21,974 $24,624
Mar-99 $23,996 $22,732 $25,922
Apr-99 $24,043 $22,748 $25,956
May-99 $23,402 $22,114 $25,159
Jun-99 $25,429 $23,999 $26,920
Jul-99 $24,392 $22,992 $26,064
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Large Company Growth Equity
Investments versus the Russell 1000 Growth Index. It is important to note that
PACE Large Company Growth Equity Investments is a professionally managed
portfolio while the Index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
19
<PAGE>
ADVISER'S COMMENTS
During the 12 months ended July 31, 1999, the Portfolio underperformed the
Russell 1000 Growth Index. The Portfolio's underperformance was due primarily to
its overweighting in financial services during the third quarter of 1998. We
have maintained these holdings due to their attractive fundamental earnings
outlook and earnings multiples well below that of the S&P 500. The
underweighting in technology was not as pronounced as the July 31, 1999 data
indicate.
<TABLE>
<CAPTION>
TOP FIVE SECTORS*
<S> <C>
- ----------------------------------------------------------
Technology 27.8
Consumer Services 18.1
Financial Services 17.2
Healthcare 12.4
Consumer Staples 8.3
- ----------------------------------------------------------
Total 83.8
</TABLE>
The technology sector weight in the Russell 1000 Growth Index was 24.7% at
July 31, 1998 and 30.1% at March 31, 1999. The large increase in weight to 36.6%
was caused by the addition of several Internet stocks, which represented more
than 5% of the Index as of July 31, 1999. The Portfolio's technology holdings
generally outperformed the Index with the exception of Compaq. Consumer services
(retail, Harley Davidson, Liberty Media among others) and multi-industry (Tyco)
were overweighted in the Portfolio. The industries and stocks mentioned boosted
performance. We were underweighted in consumer staples and healthcare, both of
which trailed the Index.
<TABLE>
<CAPTION>
TOP 10 STOCKS*
<S> <C>
- ----------------------------------------------------------
Cisco Systems, Inc. 4.6
Bristol-Myers Squibb Co. 4.3
Tyco International Ltd. 4.3
Solectron Corp. 4.2
AT&T Liberty Media Corp. 3.8
Dell Computer Corp. 3.8
Intel Corp. 3.8
Citigroup, Inc. 3.5
Microsoft 3.5
Schering-Plough Corp. 3.4
- ----------------------------------------------------------
Total 39.2
</TABLE>
After exceptionally robust economic growth of 4.3% in the first quarter, we
expect a more modest 3% rate for the remainder of the year. The most impressive
phenomenon remains the remarkable inflation behavior. As always, we focus
intensely on unit labor costs which look encouraging. Productivity has grown at
a 2.1% annual rate over the last four years, twice the rate of the prior 20
years! We conclude that our forecast of 2% inflation this year is still
appropriate. We have increased modestly our interest rate forecast to reflect
current yields rather than any change in our inflation expectations. We expect
short-term rates to move in line with inflation and employment gains. Long-term
rates likely will fluctuate within a 5.75-6.25% range. The upper end of the
range is marginally higher than we would like, but does not require a change in
our investment strategy.
Market leadership shifted abruptly in April when cyclical stocks outperformed
growth equities by a wide margin. The perception that economies outside the
United States were recovering caused interest rates to rise which, in turn,
compressed P/E multiples in growth sectors such as healthcare and technology.
This market broadening is a positive development, as the S&P 500 has been
dominated by a relatively narrow list of very large capitalization names.
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
20
<PAGE>
During this period, we maintained our conviction that cyclical companies did
not possess sustainable pricing power notwithstanding a bottoming and recovery
in some depressed foreign economies. Thus, investor expectations were likely to
be disappointed. We continued to focus on companies with the most attractive
combination of superior earnings expectations and reasonable valuations. We
added to holdings which had been unduly depressed such as Allied Signal, Harley
Davidson (1.8%), Kohls (2.6%), Kroger (2.3%) and Solectron (4.2%).* We funded
these purchases primarily with reductions in some consumer staples stocks where
unit growth has been impaired by emerging market weakness. We have also added
recently to telecommunications/media with purchases of Mediaone and Time Warner.
While we remain impressed with the fundamentals of the U.S. economy, we
believe stock valuations are relatively full on a near term basis. Thus,
sensitivity to earnings shortfalls is high. We continue to scrutinize carefully
holdings to ensure that we are invested in well-managed companies with
leadership positions and above average growth in their markets. Emphasis
continues on technology, financial services and consumer services, particularly
retail. We believe these sectors will provide superior earnings in the
environment we have described.
<TABLE>
<CAPTION>
CHARACTERISTICS*
<S> <C>
- --------------------------------------------------------
Size of Portfolio ($MM) $378.4
Price/Earnings Ratio 36.6x
Price/Book Ratio 12.4x
Number of Securities 46
Stocks 97.0%
Cash 3.0%
- --------------------------------------------------------
</TABLE>
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
21
<PAGE>
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
ADVISER: Brandywine Asset Management, Inc.
PORTFOLIO MANAGERS: Michael Jamison, Henry Otto and Steve Tonkovich
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: The Portfolio invests in equity securities that the adviser
believes are undervalued or overlooked in the market. Such equities usually have
price-to-earnings (P/E) ratios below the market average. Normally, at least 65%
of the Portfolio is invested in common stocks of companies with market
capitalization of less than $2.5 billion at the time of purchase. The adviser
narrows the small company universe to about 650 stocks using three quantitative
screens: positive trailing 12-month operating earnings, lowest P/E quartile
based on trailing 12-month operating earnings, and market cap over $10 million
but below the median cap of the New York Stock Exchange. Fundamental review
further narrows the universe by excluding stocks for: earnings adjustments that
raise P/E above the lowest quartile, pre-announced earnings changes that when
formally reported will raise P/E, strong recent price gains, and severe or
sudden fundamental deterioration.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEARS 8/24/95
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
With PACE program fee -0.35% 14.99% 11.60%
Without PACE program fee 1.16% 16.73% 13.28%
Russell 2500 Value Index 3.85% 17.64% 15.54%
Lipper Median 5.38% 13.55% 12.81%
- ----------------------------------------------------------------------------------
</TABLE>
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO AND THE
RUSSELL 2500 VALUE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO WITHOUT RUSSELL 2500 VALUE
FEE PORTFOLIO WITH FEE* INDEX
<S> <C> <C> <C>
Aug-95 $10,017 $10,013 $10,000
Sep-95 $10,025 $10,009 $10,158
Oct-95 $9,617 $9,589 $9,886
Nov-95 $9,867 $9,826 $10,328
Dec-95 $9,992 $9,939 $10,548
Jan-96 $10,034 $9,968 $10,668
Feb-96 $10,142 $10,063 $10,820
Mar-96 $10,376 $10,283 $11,024
Apr-96 $10,711 $10,601 $11,242
May-96 $10,953 $10,827 $11,426
Jun-96 $10,786 $10,649 $11,361
Jul-96 $10,276 $10,132 $10,816
Aug-96 $10,276 $10,630 $11,325
Sep-96 $11,096 $10,913 $11,713
Oct-96 $11,246 $11,047 $11,910
Nov-96 $11,948 $11,722 $12,613
Dec-96 $12,225 $11,979 $12,887
Jan-97 $12,656 $12,386 $13,217
Feb-97 $12,777 $12,488 $13,364
Mar-97 $12,406 $12,111 $12,991
Apr-97 $12,389 $12,079 $13,242
May-97 $13,432 $13,080 $14,165
Jun-97 $14,346 $13,952 $14,832
Jul-97 $15,105 $14,672 $15,642
Aug-97 $15,337 $14,879 $15,721
Sep-97 $16,476 $15,963 $16,678
Oct-97 $16,165 $15,643 $16,184
Nov-97 $16,277 $15,732 $16,530
Dec-97 $16,781 $16,198 $17,150
Jan-98 $16,511 $15,918 $16,857
Feb-98 $17,645 $16,989 $17,902
Mar-98 $18,341 $17,638 $18,786
Apr-98 $18,592 $17,857 $18,775
May-98 $17,812 $17,086 $18,183
Jun-98 $17,422 $16,691 $18,114
Jul-98 $16,158 $15,461 $16,956
Aug-98 $13,770 $13,159 $14,294
Sep-98 $13,937 $13,303 $15,130
Oct-98 $14,402 $13,729 $15,805
Nov-98 $14,783 $14,074 $16,315
Dec-98 $15,214 $14,467 $16,820
Jan-99 $15,079 $14,321 $16,336
Feb-99 $13,803 $13,092 $15,498
Mar-99 $13,626 $12,908 $15,474
Apr-99 $15,380 $14,552 $17,002
May-99 $15,899 $15,024 $17,349
Jun-99 $16,522 $15,593 $17,953
Jul-99 $16,345 $15,407 $17,610
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Small/Medium Company Value Equity
Investments versus the Russell 2500 Value Index. It is important to note that
PACE Small/Medium Company Value Equity Investments is a professionally managed
portfolio while the Index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
22
<PAGE>
ADVISER'S COMMENTS
The Portfolio's lagging performance versus the Russell 2500 Value Index and
its Lipper peer group is primarily the result of the Portfolio's lower average
capitalization compared to the Index ($496 million versus $1.8 billion) and our
peers. This market cap differential had a large negative impact on performance
from July 1998 through March 1999 as larger cap stocks significantly
outperformed smaller stocks. That trend reversed in the last few months, and the
Portfolio closed much of its performance gap with the Index. Sectors that most
helped the Portfolio's performance included oil services, where depressed stocks
benefited from the steep rise in oil prices, and retailing, where strong
consumer demand drove gains for apparel sellers. The Portfolio's below-index
performance in the technology sector had the greatest negative impact on return.
<TABLE>
<CAPTION>
CHARACTERISTICS* TOP FIVE SECTORS*
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Price/Earnings Ratio 10.4x Producer Manufacturing 16.8
Price/Book Ratio 1.3x Finance 16.3
Dividend Yield 1.2% Industrial/Commercial Services 10.6
Size of Portfolio ($MM) $205.8 Consumer Durables 10.2
Number of Securities 695 Consumer Non-Durables 9.9
---------
Stocks 97.1% Total 63.8
Cash 2.9%
- ---------------------------------------------------------------------------------------
</TABLE>
The second quarter of 1999 was a welcome break from the lengthy dominance of
large cap growth stocks. Even with those gains, however, small cap value stocks
have barely begun to close the extraordinary valuation gap between large and
small stocks. The improving world economy coupled with heavy merger activity
should continue to benefit these small stocks. We believe the recent increase in
small cap merger and acquisition activity represents an important performance
catalyst. Small stocks reached such low prices that they have become attractive
takeover targets, which has begun to push prices back to more normal levels.
<TABLE>
<CAPTION>
TOP 10 STOCKS* PORTFOLIO
<S> <C>
- -----------------------------------------------------
Calpine Corp. 1.0
U.S. Freightways Corp. 1.0
Alliant Techsystem Inc. 0.9
Amerus Life Holdings 0.8
Polaris Industries Inc. 0.8
Centex Construction Products Inc. 0.7
Commerce Group Inc. 0.7
Texas Industries, Inc. 0.7
Arvin Industries Inc. 0.7
Public Service Co. 0.7
- -----------------------------------------------------
Total 8.0
</TABLE>
The Portfolio benefited in the quarter from significant weightings in
economically sensitive sectors such as manufacturing, steels and chemicals. The
companies had reached extreme valuation discounts and responded positively to
the worldwide stabilization. Portfolio performance also was helped by a
below-index weighting in financial services. Financial stocks generally produced
strong returns over the last few years, but have lagged throughout
1999--primarily due to rising interest rates. We remain underweighted in
technology due to the sector's extended valuations.
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
23
<PAGE>
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
ADVISER: Delaware Management Company, Inc.
PORTFOLIO MANAGER: Gerald Frey
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: The Portfolio invests in common stocks of "emerging growth"
companies, which feature above-average rates of earnings growth. Normally, at
least 65% of the Portfolio is invested in common stocks of companies with market
capitalization of less than $2.5 billion. Up to 5% of the total assets may be
invested in foreign securities, including American Depository Receipts. The
adviser employs a bottom-up, fundamental analysis to identify companies with
annual earnings growth of at least 25% and priced at a modest premium to the
earnings multiples to the S&P 500 Index. Important criteria include free cash
flow, strength of management, degree of insider ownership and potential for
upside surprises.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION SINCE CURRENT
1 YEAR 3 YEARS 8/24/95 MANAGER 12/31/96
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
With PACE program fee 31.63% 23.52% 15.04% 22.09%
Without PACE program fee 33.62% 25.39% 16.78% 23.94%
Russell 2500 Growth Index 19.29% 15.03% 15.54% 11.99%
Lipper Median 5.38% 13.55% 12.84% 9.73%
- -----------------------------------------------------------------------------------------------------
</TABLE>
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO AND THE
RUSSELL 2500 GROWTH INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio Without
Fee Portfolio With Fee* Russell 2500 Growth Index
<S> <C> <C> <C>
Aug-95 $9,942 $9,938 $10,000
Sep-95 $9,967 $9,951 $10,214
Oct-95 $9,575 $9,548 $9,853
Nov-95 $9,758 $9,719 $10,256
Dec-95 $9,863 $9,810 $10,393
Jan-96 $9,470 $9,408 $10,425
Feb-96 $10,004 $9,926 $10,884
Mar-96 $10,013 $9,922 $11,120
Apr-96 $10,881 $10,769 $11,882
May-96 $11,348 $11,217 $12,306
Jun-96 $10,764 $10,627 $11,689
Jul-96 $9,345 $9,215 $10,527
Aug-96 $9,821 $9,671 $11,253
Sep-96 $10,463 $10,291 $11,850
Oct-96 $10,088 $9,910 $11,482
Nov-96 $10,463 $10,266 $11,903
Dec-96 $10,589 $10,375 $11,961
Jan-97 $10,989 $10,754 $12,319
Feb-97 $10,572 $10,333 $11,780
Mar-97 $9,804 $9,571 $11,004
Apr-97 $9,571 $9,331 $11,054
May-97 $10,697 $10,416 $12,379
Jun-97 $11,198 $10,890 $12,794
Jul-97 $12,049 $11,703 $13,606
Aug-97 $12,341 $11,972 $13,938
Sep-97 $13,509 $13,089 $14,923
Oct-97 $12,917 $12,499 $13,992
Nov-97 $12,733 $12,306 $13,778
Dec-97 $12,889 $12,442 $13,729
Jan-98 $12,706 $12,250 $13,549
Feb-98 $13,430 $12,932 $14,712
Mar-98 $14,286 $13,738 $15,259
Apr-98 $14,207 $13,645 $15,397
May-98 $13,334 $12,791 $14,409
Jun-98 $14,076 $13,486 $14,514
Jul-98 $13,788 $13,193 $13,434
Aug-98 $11,022 $10,533 $10,381
Sep-98 $11,903 $11,361 $11,291
Oct-98 $12,444 $11,863 $12,054
Nov-98 $13,518 $12,870 $12,911
Dec-98 $14,805 $14,078 $14,154
Jan-99 $15,350 $14,578 $14,564
Feb-99 $14,242 $13,509 $13,382
Mar-99 $15,225 $14,423 $14,005
Apr-99 $15,832 $14,980 $15,122
May-99 $16,047 $15,163 $15,279
Jun-99 $18,066 $17,050 $16,359
Jul-99 $18,423 $17,366 $16,025
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE Small/Medium Company Growth Equity
Investments versus the Russell 2500 Growth Index. It is important to note that
PACE Small/Medium Company Growth Equity Investments is a professionally managed
portfolio while the Index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
24
<PAGE>
ADVISER'S COMMENTS
The Portfolio's overweighting in technology generated significant positive
performance. Three positions--Applied Micro Circuits Corp., Gemstar Group Ltd.
and Nextlink Communications Inc.--appreciated more than 200% over the last 12
months. Our underweightings in healthcare and financial services also proved
positive. We continued to concentrate on 70-80 holdings, allowing us to truly
know what we hold and avoid span of control problems.
<TABLE>
<CAPTION>
CHARACTERISTICS* TOP FIVE SECTORS*
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Price/Earnings Ratio 39.7x Technology 31.55
Price/Book Ratio 5.9x Consumer Non-Durables 14.27
Dividend Yield 0.44% Business Services 14.00
Portfolio Size ($MM) $265.3 Consumer Services 13.20
Number of Securities 71 Basic Industry 7.24
-----
Stocks 93% Total 80.26
Cash 7%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
Are we witnessing an economic sea change? Even Alan Greenspan seems to think
that old-school economics may not apply to the technological revolution the U.S.
economy has embraced in the 1990s. Consistently above-average GDP growth, worker
productivity and corporate profits seem to support the notion that meaningful
growth can coexist with low inflation. A review of major economic statistics
supports this sea change of thinking:
- The Conference Board's index of leading economic indicators (which is
designed to forecast economic activity six to nine months ahead) rose 0.3%
in May with nine of the ten components increasing.
- The Conference Board's consumer-confidence index (consumer spending is now
estimated to comprise 70% of GDP) rose in May to its highest level since
October 1968.
- CPI and PPI inflation measures remain muted for the year even after a brief
spike in April.
The narrow focus of the stock market over the last 18 months has frustrated
many investors. Other than a small group of large capitalization companies, most
stocks have underperformed, causing many to question the prudence of market
diversification. The market broadened significantly during the second quarter of
1999, rewarding the previously out-of-favor small cap stocks. We believe small
cap stocks still offer good value compared to their large cap brethren.
<TABLE>
<CAPTION>
TOP TEN STOCKS* SECTOR PORTFOLIO
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------
Gemstar Group Ltd. Technology 4.42
Veritas Software Co. Technology 4.37
Applied Micro Circuits Corp. Technology 4.15
Micrel Inc. Technology 3.82
Nextlink Communications Inc. Telecommunications 3.72
Cost Plus Inc. Consumer Non-Durables 3.08
Mettler Toledo International Inc. Basic Industry 3.07
Profit Recovery Group International, Inc. Business Services 2.95
USA Networks Inc. Business Services 2.86
Staples Inc. Consumer Non-Durables 2.85
- --------------------------------------------------------------------------------------------------------------
Total 35.29
</TABLE>
As a disciplined small cap growth manager, we only buy stocks that, in our
opinion, have substantially above average growth expectations. We define growth
companies as those with sustainable high growth in sales, profitability and
earnings. 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 management with demonstrated ability to add value through
sales/earnings growth and acquisitions.
We continue to favor the service sectors and technology. We have decreased our
financial weighting and continue to de-emphasize healthcare and energy. Overall,
we feel that patient small cap investors have been rewarded for sticking to
their long-term investment strategy. We are confident the small cap segment of
the market continues to offer good value to equity investors.
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
25
<PAGE>
PACE INTERNATIONAL EQUITY INVESTMENTS
ADVISER: Martin Currie Inc.
PORTFOLIO MANAGERS: Team led by James Fairweather
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: Normally, at least 65% of the Portfolio is invested in
equity securities of companies domiciled in three or more countries outside the
United States. Up to 10% of the Portfolio may be invested in emerging markets. A
significant portion of currency exposure may be hedged back to the U.S. dollar.
The adviser looks for companies that exhibit strong fundamentals and attractive
valuations based on estimates of future earnings. In making country allocation
decisions, the adviser considers such factors as economic and political
stability, the currency outlook, local investor sentiment, breadth and liquidity
of the market, valuation and the reliability of trading systems.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEARS 8/24/95
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------
With PACE program fee 5.73% 11.70% 10.30%
Without PACE program fee 7.33% 13.38% 11.97%
MSCI EAFE Index 10.02% 11.28% 10.34%
Lipper Median 6.07% 11.70% 10.90%
- ------------------------------------------------------------------------------------
</TABLE>
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO AND THE
MSCI EAFE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio Without
Fee Portfolio With Fee* MSCI EAFE Index
<S> <C> <C> <C>
Aug-95 $9,942 $9,938 $10,000
Sep-95 $10,008 $9,993 $10,195
Oct-95 $9,875 $9,847 $9,921
Nov-95 $9,967 $9,926 $10,197
Dec-95 $10,356 $10,301 $10,607
Jan-96 $10,691 $10,621 $10,651
Feb-96 $10,658 $10,575 $10,687
Mar-96 $10,901 $10,802 $10,914
Apr-96 $11,118 $11,004 $11,231
May-96 $11,009 $10,883 $11,025
Jun-96 $11,127 $10,985 $11,086
Jul-96 $10,708 $10,558 $10,763
Aug-96 $10,767 $10,603 $10,786
Sep-96 $11,060 $10,878 $11,073
Oct-96 $10,884 $10,691 $10,960
Nov-96 $11,336 $11,122 $11,397
Dec-96 $11,423 $11,193 $11,250
Jan-97 $11,236 $10,996 $10,856
Feb-97 $11,465 $11,206 $11,034
Mar-97 $11,440 $11,167 $11,074
Apr-97 $11,542 $11,253 $11,132
May-97 $12,375 $12,050 $11,857
Jun-97 $12,944 $12,589 $12,510
Jul-97 $13,310 $12,928 $12,713
Aug-97 $12,213 $11,848 $11,763
Sep-97 $13,012 $12,607 $12,422
Oct-97 $12,018 $11,629 $11,467
Nov-97 $12,094 $11,689 $11,350
Dec-97 $12,503 $12,069 $11,449
Jan-98 $12,706 $12,249 $11,972
Feb-98 $13,444 $12,945 $12,740
Mar-98 $13,928 $13,394 $13,133
Apr-98 $14,112 $13,554 $13,237
May-98 $14,235 $13,655 $13,172
Jun-98 $14,235 $13,638 $13,272
Jul-98 $14,543 $13,916 $13,406
Aug-98 $12,679 $12,117 $11,745
Sep-98 $12,152 $11,598 $11,349
Oct-98 $13,163 $12,548 $12,679
Nov-98 $13,910 $13,243 $13,352
Dec-98 $14,546 $13,832 $13,908
Jan-99 $14,619 $13,883 $13,893
Feb-99 $14,110 $13,383 $13,384
Mar-99 $14,755 $13,978 $13,984
Apr-99 $15,155 $14,338 $14,556
May-99 $14,519 $13,720 $13,823
Jun-99 $15,300 $14,440 $14,508
Jul-99 $15,609 $14,713 $15,000
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE International Equity Investments
versus the MSCI EAFE Index. It is important to note that PACE International
Equity Investments is a professionally managed portfolio while the Index is not
available for investment and is unmanaged. The comparison is shown for
illustrative purposes only.
26
<PAGE>
ADVISER'S COMMENTS
The Portfolio underperformed the MSCI EAFE Index for the twelve months ended
July 1999. Portfolio performance was hurt by an underweighted position in Japan,
by country selection in the Pacific and by exposure to Latin America. Successful
stock selection in Japan was not enough to offset these negative factors.
<TABLE>
<CAPTION>
TOP FIVE COUNTRIES* PORTFOLIO INDEX TOP FIVE SECTORS* PORTFOLIO
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Japan 28.4 25.5 Consumer Goods and Services 44.5
United Kingdom 15.2 21.8 Financial Services 20.6
France 11.7 9.4 Information Technology 12.0
Germany 7.3 9.4 General Industrials 10.0
Switzerland 3.9 6.8 Basic Industries 7.4
- ------------------------------------------------------------------------------------------------------
Total 66.5 72.9 Total 94.5
</TABLE>
Our analysis shows that our market allocation has been successful, but our
stock selection in Europe and the UK has held back performance. We have
rebalanced the European component towards more of a growth bias.
<TABLE>
<CAPTION>
REGIONAL ALLOCATION* PORTFOLIO INDEX CHARACTERISTICS*
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Europe 52.9 68.0 Portfolio Size ($MM) $213.6
Asia 36.4 32.0 Number of Securities 128
Emerging Markets 5.8 0.0 Stocks 95.1%
Cash 4.9 0.0 Cash 4.9%
- ----------------------------------------------------------------------------------------------------
Total 100.0 100.0
</TABLE>
With the specter of rising interest rates in the United States, it is likely
that market leadership will pass from the U.S., continental Europe and the UK to
Japan and the Pacific Basin. With such a large component of the Index in
retreat, the upside potential for the Index could be rather modest.
We have further reduced the exposure to continental Europe and the UK. The
Portfolio is underweighted in these two markets because of interest rate
concerns, and it is becoming increasingly difficult to find reasons to expect
the markets to outperform. We believe the background from Wall Street is not
positive.
The Portfolio has been rebalanced towards Japan and Asia and is overweight in
these two markets, relative to the Index.* Japan may be showing neither promise
of growth nor evidence of value, but we anticipate change, particularly from
management initiatives.
<TABLE>
<CAPTION>
TOP TEN STOCKS* COUNTRY PORTFOLIO
<S> <C> <C>
- ----------------------------------------------------------------------
Rohm Company Ltd. Japan 2.2
Sony Corp. Japan 2.0
NTT Mobile Communication Japan 1.9
Fujitsu Japan 1.8
Vivendi France 1.8
Yamanouchi Pharmaceutical Co. Japan 1.8
Mannesmann AG Germany 1.8
Societe Generale France 1.7
Nokia Finland 1.5
Shin-Etsu Chemical Company Ltd. Japan 1.5
- ----------------------------------------------------------------------
Total 18.1
</TABLE>
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
27
<PAGE>
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
ADVISER: Schroder Investment Management North America Inc.
PORTFOLIO MANAGERS: John Troiano, Heather Crighton and Mark Bridgeman
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: Normally, at least 65% of the Portfolio is invested in
equity securities of issuers in three or more emerging-market countries. The
adviser's network of regional specialists and analysts in 11 countries supports
an intensive program of proprietary emerging-markets research. Schroder uses its
proprietary research network to identify companies with professional management,
sustainable earnings growth, high domestic market share and credible accounting
standards.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/99
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEARS 8/24/95
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------
With PACE program fee 14.92% -2.17% -0.97%
Without PACE program fee 16.66% -0.69% 0.53%
MSCI EMF ex-Malaysia Index 21.17% 1.15% 0.88%
Lipper Median 8.89% -1.33% -0.53%
- -----------------------------------------------------------------------------------
</TABLE>
Past performance does not predict future performance. The return and principal
value of an investment will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
results assume reinvestment of all dividends and capital gains.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO AND THE
MSCI EMF EX-MALAYSIA INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Portfolio Without
Fee Portfolio With Fee* MSCI EMF ex-Malaysia Index
<S> <C> <C> <C>
Aug-95 $10,017 $10,013 $10,000
Sep-95 $9,900 $9,884 $9,981
Oct-95 $9,517 $9,490 $9,633
Nov-95 $9,475 $9,436 $9,424
Dec-95 $9,814 $9,761 $9,816
Jan-96 $10,765 $10,694 $10,581
Feb-96 $10,481 $10,399 $10,304
Mar-96 $10,623 $10,527 $10,265
Apr-96 $10,965 $10,853 $10,648
May-96 $11,057 $10,930 $10,681
Jun-96 $11,074 $10,933 $10,752
Jul-96 $10,423 $10,277 $10,001
Aug-96 $10,581 $10,420 $10,195
Sep-96 $10,581 $10,407 $10,267
Oct-96 $10,106 $9,927 $9,904
Nov-96 $10,348 $10,152 $10,024
Dec-96 $10,649 $10,435 $10,059
Jan-97 $11,202 $10,963 $10,849
Feb-97 $11,629 $11,366 $11,311
Mar-97 $11,478 $11,205 $11,077
Apr-97 $11,629 $11,338 $11,326
May-97 $12,190 $11,870 $11,665
Jun-97 $12,826 $12,474 $12,439
Jul-97 $13,061 $12,686 $12,827
Aug-97 $11,654 $11,306 $11,480
Sep-97 $12,190 $11,811 $11,916
Oct-97 $10,206 $9,876 $10,009
Nov-97 $10,005 $9,669 $9,789
Dec-97 $10,147 $9,795 $10,044
Jan-98 $9,609 $9,264 $9,280
Feb-98 $10,231 $9,851 $10,023
Mar-98 $10,601 $10,195 $10,514
Apr-98 $10,660 $10,238 $10,525
May-98 $9,248 $8,871 $9,104
Jun-98 $8,399 $8,046 $8,221
Jul-98 $8,752 $8,374 $8,541
Aug-98 $6,280 $6,002 $6,067
Sep-98 $6,591 $6,291 $6,485
Oct-98 $7,289 $6,948 $7,166
Nov-98 $7,625 $7,260 $7,718
Dec-98 $7,668 $7,291 $7,606
Jan-99 $7,693 $7,306 $7,484
Feb-99 $7,643 $7,249 $7,556
Mar-99 $8,524 $8,075 $8,552
Apr-99 $9,498 $8,987 $9,610
May-99 $9,363 $8,847 $9,555
Jun-99 $10,523 $9,932 $10,639
Jul-99 $10,210 $9,624 $10,350
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
The graph depicts the performance of PACE International Emerging Markets
Equity Investments versus the MSCI EMF ex-Malaysia Index. It is important to
note that PACE International Emerging Markets Equity Investments is a
professionally managed portfolio while the Index is not available for investment
and is unmanaged. The comparison is shown for illustrative purposes only.
ADVISER'S COMMENTS
The Portfolio underperformed the MSCI EMF ex-Malaysia Index for the fiscal
year ended July 31, 1999. This underperformance was due primarily to stock
selection in Asia, particularly in Thailand and India. Stock selection in Latin
America and Europe, Mid East and Africa (EMEA) further detracted from results.
Stock selection underperformed
28
<PAGE>
mainly because the blue chip stocks that meet the Portfolio's investment
criteria suffered in the first half of the year from liquidity-driven selling.
Our country weightings somewhat offset the stock selection results--the
Portfolio benefited most from an overweighting in Asia.
<TABLE>
<CAPTION>
CHARACTERISTICS* REGIONAL ALLOCATION*
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Portfolio Size ($MM) $87.3 Asia 45.9
Number of Securities 215 Europe/Mid East/Africa 26.7
Stocks 98.3% Latin America 25.7
---
Cash 1.7% Total 98.3
- --------------------------------------------------------------------------------------------------
</TABLE>
The Portfolio fared well over the twelve months compared to its Lipper peer
group. The Portfolio benefited from increasing its exposure to Asia early in the
fourth quarter of 1998, and from its reduced exposure to Brazil during the
volatility leading up to that country's currency devaluation in January 1999.
<TABLE>
<CAPTION>
TOP TEN STOCKS* COUNTRY PORTFOLIO TOP FIVE COUNTRIES*
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Samsung Electronics Co. Korea 6.7 Korea 16.2
Telefonos de Mexico Mexico 3.7 Mexico 11.6
Korea Electric Power Corp. Korea 2.6 Taiwan 10.0
Taiwan Semiconductor Taiwan 2.4 India 8.7
Hindustan Lever Ltd. India 1.5 Brazil 8.4
---
Cifra SA de CV Mexico 1.3 Total 54.9
Alpha Credit Bank Greece 1.2
Companhia Vale do Rio Doce Brazil 1.1
Hellenic Telecom Greece 1.1
Cathay Life Insurance Taiwan 1.0
- -----------------------------------------------------------------------------------------------------------------
Total 22.6
</TABLE>
The outlook for the emerging markets has improved significantly but a number
of concerns remain. U.S. economic strength has supported the strong performance
of the emerging markets this year. Going forward, strong growth in the United
States coupled with the improved global situation may lead to further U.S.
interest rate increases to cool the domestic economy. If this were to happen, a
number of emerging markets could suffer due to their reliance on exports to
offset their weak domestic spending. However, we expect that stronger growth in
continental Europe and Japan could offset this and absorb emerging market
exports.
We remain positive on the prospects for economic recovery in Asia,
particularly Korea, although we think much of the potential recovery has been
reflected in recent performance. Within Latin America, we continue to prefer the
larger markets of Brazil and Mexico, where declining interest rates and
improving growth are supporting the local equity markets. EMEA remains our least
favorite area overall, with the main underweight positions in South Africa and
Greece.
- -------------
*All weightings represent percentages of Portfolio assets as of July 31, 1999.
The Portfolio is actively managed and all holdings are subject to change.
29
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MONEY MARKET INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- ---------------- -------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS--15.04%
$ 900 Federal Farm Credit Bank........................... 08/30/99 to 10/01/99 5.363 to 5.639%* $ 900,000
500 Federal Home Loan Bank............................. 01/19/00 4.850 500,000
1,000 Federal Home Loan Bank............................. 08/03/99 5.173* 999,716
1,000 Federal Home Loan Mortgage......................... 08/23/99 4.910 996,999
500 Student Loan Marketing Association................. 01/14/00 5.000 500,000
3,200 Student Loan Marketing Association................. 08/02/99 to 08/03/99 5.06 to 5.313* 3,199,222
-------------
Total U.S. Government Agency Obligations (cost--$7,095,937).... 7,095,937
-------------
DOMESTIC BANK NOTES--4.87%
300 First National Bank of Chicago..................... 03/15/00 5.180 299,892
700 First Tennessee Bank N. A. Memphis................. 01/14/00 to 03/08/00 5.100 to 5.210 700,000
700 First Tennessee Bank N. A. Memphis................. 08/03/99 5.183* 700,000
300 Harris Trust & Savings Bank........................ 01/24/00 5.020 300,014
300 LaSalle National Bank.............................. 07/14/00 5.690 300,028
-------------
Total Domestic Bank Notes (cost--$2,299,934)................... 2,299,934
-------------
YANKEE CERTIFICATES OF DEPOSIT--9.75%
300 Bank of Nova Scotia................................ 01/14/00 5.050 299,987
400 Barclays Bank PLC.................................. 01/10/00 4.980 399,966
300 Bayerische Hypotheken-und Wechsel-Bank............. 04/28/00 5.150 299,891
500 Deutsche Bank AG................................... 08/23/99 5.600 500,000
1,100 National Westminster Bank PLC...................... 07/03/00 5.530 1,097,849
1,000 Svenska Handelsbanken.............................. 02/22/00 to 05/22/00 5.100 to 5.280 999,799
400 Toronto-Dominion Bank.............................. 01/07/00 4.990 399,983
600 Westpac Banking Corp............................... 03/17/00 to 03/31/00 5.165 to 5.175 599,924
-------------
Total Yankee Certificates of Deposit (cost--$4,597,399)........ 4,597,399
-------------
COMMERCIAL [email protected]%
ASSET BACKED-BANKING--7.96%
1,409 Atlantis One Funding Corp.......................... 08/04/99 5.080 1,408,404
2,351 Woodstreet Funding Corp............................ 08/05/99 to 08/30/99 5.100 to 5.120 2,346,110
-------------
3,754,514
-------------
ASSET BACKED-FINANCE--2.11%
1,000 CC (USA) Inc....................................... 08/16/99 5.120 997,867
-------------
ASSET BACKED-MISCELLANEOUS--17.91%
1,477 Delaware Funding Corp.............................. 08/16/99 5.120 1,473,849
1,040 Enterprise Funding Corp............................ 08/16/99 5.120 1,037,781
1,461 Falcon Asset Securitization Corp................... 08/16/99 to 08/23/99 5.110 to 5.120 1,456,932
2,000 Parthenon Receivables Funding LLC.................. 08/18/99 5.130 1,995,155
1,491 Preferred Receivables Funding Corp................. 09/01/99 5.130 1,484,414
1,000 Triple A One Funding Corp.......................... 08/03/99 5.110 999,716
-------------
8,447,847
-------------
AUTO & TRUCK--9.91%
1,004 BMW US Capital Corp................................ 08/17/99 5.080 1,001,733
500 Ford Motor Credit Corp............................. 08/26/99 5.080 498,236
1,179 General Motors Acceptance Corp..................... 08/16/99 5.060 1,176,514
2,000 PACCAR Financial Corp.............................. 08/13/99 5.080 1,996,614
-------------
4,673,097
-------------
</TABLE>
30
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MONEY MARKET INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- ---------------- -------------
<C> <S> <C> <C> <C>
</TABLE>
COMMERCIAL PAPER@--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
BANKING-DOMESTIC--3.17%
$ 1,500 Generale Funding................................... 08/30/99 5.120% $ 1,493,813
-------------
BANKING-FOREIGN--4.24%
2,000 Banque et Caisse d'Epargne de L'Etat............... 08/03/99 5.110 1,999,432
-------------
BUSINESS SERVICES--3.43%
1,621 Block Financial Corp............................... 08/02/99 5.120 1,620,769
-------------
DRUGS, HEALTH CARE--3.39%
1,603 Glaxo Wellcome PLC................................. 08/09/99 5.090 1,601,187
-------------
ELECTRONICS--4.24%
2,000 Vermont American Corp.............................. 08/05/99 5.050 1,998,878
-------------
ENERGY--3.18%
1,500 Koch Industries.................................... 08/02/99 5.110 1,499,787
-------------
FOOD, BEVERAGE & TOBACCO--0.53%
250 Campbell Soup Co................................... 09/03/99 5.120 248,827
-------------
METALS & MINING--4.23%
2,000 Rio Tinto America Inc.............................. 08/03/99 to 08/19/99 5.070 to 5.100 1,997,182
-------------
Total Commercial Paper (cost--$30,333,200)..................... 30,333,200
-------------
SHORT-TERM CORPORATE OBLIGATIONS--6.22%
AUTO & TRUCK--1.45%
675 Ford Motor Credit Corp............................. 08/15/00 6.85 682,349
-------------
BANKING--0.64%
300 Norwest Corp....................................... 08/31/99 5.550 299,993
-------------
BROKER-DEALER--0.42%
200 Goldman Sachs Group L. P........................... 09/15/99 6.875 200,286
-------------
FINANCE-DIVERSIFIED--3.18%
1,500 Associates Corp. of North America.................. 08/30/99 5.109* 1,499,178
-------------
INSURANCE--0.53%
250 Prudential Funding Corp............................ 08/03/99 5.283* 250,000
-------------
Total Short-Term Corporate Obligations (cost--$2,931,806)...... 2,931,806
-------------
Total Investments (cost--$47,258,276)--100.18%................. 47,258,276
Liabilities in excess of other assets--(0.18)%................. (84,649)
-------------
Net Assets--100.00%............................................ $ 47,173,627
-------------
-------------
</TABLE>
- -----------------
* Variable rate security--Maturity dates reflect earlier of reset dates or
maturity dates. The interest rates shown are current rates as of July 31,
1999 and reset periodically.
@ Interest rates shown are discount rates at date of purchase.
Weighted average maturity--56 days
See accompanying notes to financial statements
31
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- ----------------- -------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS--10.84%
$ 1,200 Federal Home Loan Mortgage Discount Notes................ 08/16/99 to 08/19/99 4.960% $ 1,197,355
35 U.S. Treasury Bills...................................... 09/16/99 4.550 34,796
3,200 U.S. Treasury Bonds(1)................................... 08/15/03 11.125 3,784,000
16,093 U.S. Treasury Inflation Index Notes...................... 07/15/02 to 01/15/08 3.375 to 3.625 15,767,819
-------------
Total U.S. Government and Agency Obligations (cost--$20,940,175)..... 20,783,970
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--35.86%
5,372 GNMA..................................................... 11/20/21 to 12/20/27 6.125 5,435,376
3,266 GNMA..................................................... 01/20/18 to 02/20/27 6.375 3,317,933
1,189 GNMA..................................................... 08/20/25 to 09/20/26 6.625 1,205,181
1,781 GNMA..................................................... 09/15/01 6.800 1,806,660
2,013 GNMA..................................................... 06/20/22 to 05/20/25 6.875 2,046,157
4,440 GNMA..................................................... 05/15/02 to 08/15/23 7.000 4,380,185
1,500 GNMA..................................................... 01/15/00 to 07/15/29 7.470 1,534,649
240 GNMA..................................................... 08/15/21 to 09/15/23 7.500 240,062
102 GNMA II ARM.............................................. 04/20/18 6.875 103,516
641 GNMA Project Loan PT Wexford On The Green................ 10/15/22 7.000 587,114
2,000 GNMA Project Loan River Valley Nursing................... 09/30/29 7.500 1,947,500
47,370 GNMA TBA................................................. TBA 7.000 46,141,317
-------------
Total Government National Mortgage Association Certificates
(cost--$69,158,246)................................................ 68,745,650
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--18.47%
2,464 FHLMC ARM................................................ 01/01/28 6.384 2,456,420
999 FHLMC.................................................... 11/01/02 7.000 1,007,061
9,515 FHLMC.................................................... 10/01/17 to 11/01/28 7.500 9,538,147
5,615 FHLMC.................................................... 03/01/13 to 06/01/27 8.000 5,741,021
596 FHLMC.................................................... 04/01/04 8.500 613,138
6,500 FHLMC TBA................................................ TBA 5.500 5,827,653
5,500 FHLMC TBA................................................ TBA 6.500 5,235,471
5,000 FHLMC TBA................................................ TBA 7.500 4,992,190
-------------
Total Federal Home Loan Mortgage Corporation Certificates
(cost--$35,896,809)................................................ 35,411,101
-------------
FEDERAL HOUSING ADMINISTRATION CERTIFICATES--8.39%
16,743 FHA Project Notes (cost--$16,890,317).................... 10/15/04 to 02/01/29 6.850 to 7.880 16,092,862
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--29.26%
1,213 FNMA..................................................... 02/25/14 6.000 1,014,462
4,357 FNMA..................................................... 05/01/03 6.500 4,362,292
2,162 FNMA ARM................................................. 12/01/27 6.639 2,181,320
7,837 FNMA..................................................... 03/01/04 to 03/01/09 7.000 7,847,132
4,844 FNMA..................................................... 03/18/18 7.250 4,844,690
2,657 FNMA..................................................... 10/01/26 to 11/01/26 7.500 2,662,748
3,266 FNMA..................................................... 07/01/25 to 07/01/27 8.000 3,346,189
7,517 FNMA..................................................... 02/01/25 to 09/01/27 8.500 7,824,407
1,444 FNMA..................................................... 10/01/19 to 02/01/26 9.000 1,531,253
21,500 FNMA TBA................................................. TBA 7.000 20,491,411
-------------
Total Federal National Mortgage Association Certificates
(cost--$56,713,779)................................................ 56,105,904
-------------
</TABLE>
32
<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>
COLLATERALIZED MORTGAGE OBLIGATIONS--23.77%
$ 127 FHLMC GNMA REMIC Series 23, Class KZ..................... 11/25/23 6.500% $ 112,092
556 FHLMC REMIC Series 159, Class H.......................... 09/15/21 4.500 518,126
316 FHLMC REMIC Series 1347, Class HC........................ 12/15/21 4.250 297,729
214 FHLMC REMIC Series 1425, Class E......................... 08/15/05 6.500 214,125
601 FHLMC REMIC Series 1489, Class F......................... 07/15/05 5.500 600,038
1,032 FHLMC REMIC Series 1502, Class PX........................ 04/15/23 7.000 980,360
542 FHLMC REMIC Series 1534, Class Z......................... 06/15/23 5.000 403,173
1,520 FHLMC REMIC Series 1542, Class Z......................... 07/15/23 7.000 1,413,059
167 FHLMC REMIC Series 1573, Class PZ........................ 09/15/23 7.000 170,149
95 FHLMC REMIC Series 1595, Class A......................... 06/15/11 5.600 94,801
396 FHLMC REMIC Series 1640, Class F......................... 10/15/07 5.838++ 397,339
139 FHLMC REMIC Series 1658, Class GZ........................ 01/15/24 7.000 129,607
937 FHLMC REMIC Series 1694, Class Z......................... 03/15/24 6.500 845,121
101 FHLMC REMIC Series 1775, Class Z......................... 03/15/25 8.500 105,962
3,085 FHLMC REMIC Series 1869, Class J......................... 12/15/24 8.000 3,149,985
1,213 FHLMC REMIC Series 1933, Class ZA........................ 02/15/27 8.000 1,253,844
89 FNMA REMIC Trust 1992 - 74, Class Z...................... 05/25/22 8.000 90,663
165 FNMA REMIC Trust 1992 - 129, Class L..................... 07/25/22 6.000 150,051
12 FNMA REMIC Trust 1992 - 216, Class E..................... 03/25/13 7.000 11,834
1,167 FNMA REMIC Trust 1993 - 37, Class PX..................... 03/25/23 7.000 1,094,344
435 FNMA REMIC Trust 1993 - 40, Class ZA..................... 12/25/23 6.500 387,365
854 FNMA REMIC Trust 1993 - 49, Class C...................... 04/25/10 6.000 851,942
281 FNMA REMIC Trust 1993 - 53, Class E...................... 04/25/17 5.750 280,180
6,447 FNMA REMIC Trust 1993 - 122, Class A..................... 09/25/20 6.500 6,441,408
111 FNMA REMIC Trust 1993 - 162, Class C..................... 08/25/23 3.000@ 108,484
821 FNMA REMIC Trust 1993 - 201, Class E..................... 12/25/15 5.500 818,792
42 FNMA REMIC Trust 1993 - 240, Class Z..................... 12/25/13 6.250 40,424
1,107 FNMA REMIC Trust 1993 - 250, Class DZ.................... 12/25/23 7.000 1,031,597
66 FNMA REMIC Trust 1993 - 250, Class Z..................... 12/25/23 7.000 63,899
72 FNMA REMIC Trust 1994 - 27, Class CZ..................... 02/25/24 6.500 63,720
3 FNMA REMIC Trust 1997 - 35, Class PL..................... 05/18/13 6.500 2,689
1,012 FNMA REMIC Trust G92 - 40, Class ZC...................... 07/25/22 7.000 1,004,635
148 FNMA REMIC Trust G94 - 6, Class PJ....................... 05/17/24 8.000 158,466
548 Bear Stearns Mortgage Securities Inc. Series 1993-8,
Class A-5.............................................. 08/25/24 6.350 547,379
1,750 Chase Mortgage Finance Corp. Series 1998, Class IA-8..... 08/25/28 6.750 1,566,630
1 Citicorp Mortgage Securities Inc. REMIC Series 1998-8,
Class A................................................ 09/25/28 6.750 1,226
1,000 Countrywide Home Loan Inc................................ 06/15/04 6.850 991,246
1,500 CWMBS Inc. Series 1998-15, Class A8...................... 10/25/28 6.750 1,397,701
1,500 CWMBS Inc. Series 1998-A13, Class A13.................... 12/25/28 6.500 1,350,525
1,235 Firstplus Home Loan Owner Trust Series 1998 - 1, Class
A2..................................................... 11/10/10 5.970++ 1,233,106
928 Headlands Mortgage Security Inc. REMIC Series 1997 - 1,
Class A, II............................................ 03/15/12 7.750 936,835
612 Headlands Mortgage Security Inc. REMIC Series 1997 - 2,
Class A, II............................................ 05/25/12 7.750 616,456
512 Headlands Mortgage Security Inc. REMIC Series 1997 - 4,
Class A, II............................................ 11/25/12 7.250 512,353
1,500 Headlands Mortgage Security Inc. REMIC Series 1998 - 1,
Class A3............................................... 11/25/28 6.500 1,378,740
1,657 Merrill Lynch Mortgage Investors, Inc. Series 1999, Class
H1..................................................... 03/20/17 6.210 1,653,135
2,077 Morgan Stanley Capital Inc. Series 1998 - HF1, Class
A1..................................................... 01/15/07 6.190 2,001,746
3 Norwest Asset Securities Corp. REMIC Series 1997 - 2,
Class A8............................................... 03/25/27 7.500 2,636
1,650 PNC Mortgage Securities Corp. Series 1998 - 9, Class
3A4.................................................... 11/25/28 6.750 1,553,459
2,500 PNC Mortgage Securities Corp. Series 1999 - 5, Class
2A5.................................................... 07/25/29 6.750 2,345,500
444 Prudential Home Mortgage REMIC 1993 - 29, Class A8....... 08/25/08 6.750 435,164
</TABLE>
33
<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>
$ 25 Prudential Home Mortgage REMIC 1993 - 43, Class A1....... 10/25/23 5.400% $ 24,956
1,321 Prudential Home Mortgage REMIC 1993 - 54, Class A19...... 01/25/24 6.500 1,097,065
1,000 Prudential Securities Secured Financing Corp. Series 1992
- C2, Class A1......................................... 06/15/08 6.955 993,438
1,500 Residential Funding Mortgage Securities Inc. Series 1998
- S12, Class A6........................................ 05/25/28 6.750 1,413,149
242 Resolution Trust Corp. REMIC Series 1992 - 3, Class A2
ARM.................................................... 09/25/19 6.543 241,436
-------------
Total Collateralized Mortgage Obligations (cost--$45,884,857)........ 45,579,884
-------------
STRIPPED MORTGAGE-BACKED SECURITIES--0.67%
1,093 FHLMC REMIC Series 1554, Class I(2) +++.................. 08/15/08 8.190* 116,511
8 FNMA REMIC Trust 1992 - 142, Class KB(2) +++............. 08/25/07 11.977 199,987
9 FNMA REMIC Trust 1992 - 157, Class JA(2) +++............. 09/25/07 10.146 198,554
909 FNMA REMIC Trust 1993 - 131, Class JB(2) +++............. 05/25/05 11.980* 4,878
1,004 FNMA REMIC Trust 1993 - 137, Class PN(2) +++............. 12/25/16 6.870* 21,242
194 FNMA REMIC Trust 1993 - 161, Class GC(2) ++.............. 02/25/23 3.381 141,799
1,617 FNMA REMIC Trust 1994 - 7, Class PK(2) +++............... 05/25/08 7.200* 111,795
1,682 FNMA REMIC Trust 1994 - 30, Class IA(2) +++.............. 11/25/22 6.820* 231,208
1,500 Firstplus Home Loan Owner Trust Series 1998 - 5, Class
A1(2) +++.............................................. 10/10/00 6.420* 99,140
4,000 Residential Funding Mortgage Securities Inc. Series 1998
- H12, Class A6 +++.................................... 06/25/00 8.110* 157,500
-------------
Total Stripped Mortgage-Backed Securities (cost--$1,163,445)......... 1,282,614
-------------
ASSET BACKED SECURITIES--2.80%
270 Chase Manhattan Grantor Trust Series 1995 - B, Class A... 11/15/01 5.900 270,108
4,000 Student Loan Marketing Association....................... 06/30/00 5.684++ 3,992,800
1,112 Student Loan Marketing Association Series 96 - 2, Class
A1..................................................... 10/25/04 5.017++ 1,108,433
-------------
Total Asset Backed Securities (cost--$5,376,268)..................... 5,371,341
-------------
AGENCY BACKED SECURITIES--1.02%
2,000 Student Loan Trust (cost--$1,961,955).................... 10/27/05 5.330 1,948,300
-------------
COMMERCIAL [email protected]%
6,900 American Express Centurion Bank.......................... 08/04/99 5.060 6,897,090
1,900 AT&T Capital Corp........................................ 08/20/99 5.050 1,894,936
2,000 BellSouth Telecommunications............................. 08/03/99 5.040 1,999,440
3,400 BellSouth Telecommunications............................. 08/25/99 5.090 3,388,463
6,800 Campbell Soup Co......................................... 08/10/99 5.020 6,791,466
1,600 Emerson Electric Co...................................... 08/06/99 5.060 1,598,875
4,200 Hewlett Packard Co....................................... 08/13/99 5.040 4,192,944
400 IBM Credit Corp.......................................... 08/02/99 5.060 399,944
2,200 Southwestern Public Service Co........................... 08/06/99 5.050 2,198,457
-------------
Total Commercial Paper (cost--$29,361,615)........................... 29,361,615
-------------
REPURCHASE AGREEMENTS--0.28%
459 Repurchase Agreement dated 07/30/99 with State Street
Bank & Trust Company, collateralized by $470,000 U.S.
Treasury Notes, 5.375% due 06/30/00 (value--$471,763)
proceeds: $459,163..................................... 08/02/99 4.250 459,000
</TABLE>
34
<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>
REPURCHASE AGREEMENTS--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 71 Repurchase Agreement dated 07/30/99 with State Street
Bank & Trust Company, collateralized by $70,000 U.S.
Treasury Notes, 6.500% due 11/15/26 (value--$72,625)
proceeds: $71,025...................................... 08/02/99 4.250% $ 71,000
-------------
Total Repurchase Agreements (cost--$530,000)......................... 530,000
-------------
Total Investments (cost--$283,877,466)--146.68%...................... 281,213,241
Liabilities in excess of other assets--(46.68)%...................... (89,494,393)
-------------
Net Assets--100.00%.................................................. $191,718,848
-------------
-------------
</TABLE>
- -----------------
++ Floating rate securities--The interest rates shown are the current rates
as of July 31, 1999.
++ 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.
@ Interest rate shown is discount rate at date of purchase.
* Rate reflects annualized yield at date of purchase.
(1) Security, or a portion thereof, was on loan at July 31, 1999.
(2) Illiquid securities representing 0.59% of net assets.
ARM Adjustable Rate Mortgage--The interest rates shown are the current rates
as of July 31, 1999.
REMIC Real Estate Mortgage Investment Conduit.
TBA To Be Assigned--Securities are purchased on a forward commitment with an
approximate principal amount (generally +/- 1.0%) and no definite
maturity date. The actual principal amount and maturity date will be
determined upon settlement when the specific mortgage pools are assigned.
See accompanying notes to financial statements
35
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERMEDIATE FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- ----------- -------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS--33.77%
4.000 to
$47,805 U.S. Treasury Notes (1) (cost--$48,033,887)........ 10/31/00 to 11/15/08 7.875% $ 46,954,111
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--2.10%
576 GNMA............................................... 11/20/27 6.000 578,308
606 GNMA............................................... 10/20/27 6.125 609,338
1,237 GNMA............................................... 11/15/26 to 12/15/26 7.750 1,257,550
45 GNMA............................................... 11/20/01 8.500 46,046
220 GNMA............................................... 12/15/01 to 01/15/02 9.000 227,848
188 GNMA............................................... 07/15/04 to 09/15/04 9.500 199,048
-------------
Total Government National Mortgage Association Certificates
(cost--$2,905,263)........................................... 2,918,138
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--0.24%
1 FHLMC.............................................. 12/01/99 5.500 1,311
152 FHLMC.............................................. 03/01/00 7.000 152,909
176 FHLMC.............................................. 06/01/02 8.000 179,382
-------------
Total Federal Home Loan Mortgage Corporation Certificates
(cost--$331,860)............................................. 333,602
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--7.60%
7,944 FNMA............................................... 09/01/28 to 11/01/28 6.500 7,568,931
1,573 FNMA............................................... 09/01/25 7.000 1,540,791
602 FNMA............................................... 06/01/10 to 09/01/10 7.500 611,202
640 FNMA............................................... 03/01/04 8.000 650,851
175 FNMA............................................... 09/01/07 13.000 195,775
-------------
Total Federal National Mortgage Association Certificates
(cost--$11,044,619).......................................... 10,567,550
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS--9.77%
148 FHLMC Series 1497, Class O......................... 10/15/22 7.000 148,309
91 FHLMC Series 1588, Class TB........................ 06/15/23 6.500 90,314
55 FNMA REMIC Trust 1989-101, Class G................. 03/25/19 8.000 55,221
22 FNMA REMIC Trust 1990-114, Class D................. 05/25/16 9.000 21,833
23 FNMA REMIC Trust 1991-04, Class E.................. 09/25/05 8.250 23,557
575 FNMA REMIC Trust 1993-70, Class C.................. 03/25/18 6.900 577,914
95 Aetna Commercial Mortgage Corp. Series 1995-C5,
Class A2......................................... 12/26/30 6.590 95,091
36 American Southwest Financial Co. Series 60, Class
C................................................ 03/01/18 9.000 35,692
1,195 BA Mortgage Securities Inc. Series 1997-2, Class
1A5.............................................. 10/25/27 7.250 1,175,269
807 Countrywide Home Loans Series 1997-10, Class A4.... 02/25/28 6.612 798,554
1,403 DLJ Mortgage Acceptance Corporation Series
1997-CF1, Class A1A.............................. 05/15/06 7.400 1,419,369
119 FDIC REMIC Trust Series 1994-C1, Class 2A2......... 09/25/25 7.850 118,926
1,336 FDIC REMIC Trust Series 1996-C1, Class 1A.......... 05/25/26 6.750 1,331,809
1,757 GMAC Commercial Mortgage Security Inc. Series
1997-C2, Class A1 ............................... 12/15/04 6.451 1,729,977
1,322 LB Commercial Conduit Mortgage Trust............... 08/25/04 7.204 1,340,180
298 Norwest Asset Securities Corp. Series 1997-5, Class
A2............................................... 04/25/12 7.000 298,522
237 Residential Asset Securitization Series 1997, Class
A1............................................... 03/25/27 7.000 237,340
208 Resolution Trust Corp. Series 1995-C1, Class A2C... 02/25/27 6.900 209,117
1,417 Resolution Trust Corp. Series 1995-C2, Class D..... 05/25/27 7.000 1,412,330
1,463 Structured Asset Securities Corp. Series 1997-C1,
Class D.......................................... 08/25/00 5.513 1,461,078
1,000 Structured Asset Securities Corp. Series 1995-C4,
Class D.......................................... 06/25/26 7.000 996,250
-------------
Total Collateralized Mortgage Obligations
(cost--$13,665,399).......................................... 13,576,652
-------------
</TABLE>
36
<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 DEBT--38.61%
AEROSPACE--0.64%
$ 900 Lockheed Martin Corp............................... 05/15/06 7.250% $ 893,593
-------------
AIRLINES--0.12%
177 Continental Airlines Trust Series 1997-4, Class
4C............................................... 07/02/07 6.800 172,693
-------------
AUTOMOTIVE--1.78%
6.500 to
1,150 Ford Motor Credit Corp.(1)......................... 11/19/99 to 02/28/02 7.500 1,150,008
1,225 Ford Motor Credit MTN.............................. 12/30/14 9.140 1,322,525
-------------
2,472,533
-------------
BANKS--8.15%
895 ABN Amro Bank NV................................... 05/31/05 7.250 894,691
950 Ahmanson (H.F.) & Companies Inc.................... 10/01/02 8.250 986,956
1,155 BankAmerica Corp................................... 11/15/04 8.950 1,161,935
910 BankBoston NA MTN.................................. 03/25/08 6.375 850,885
258 Continental Bank NA................................ 04/01/01 12.500 282,172
740 First Bank Systems Inc............................. 05/01/05 7.625 765,434
1,000 First Union Corp................................... 11/15/04 8.770 1,005,121
735 First USA Bank MTN................................. 12/03/01 6.625 736,169
490 Mellon Bank NA..................................... 06/01/03 6.750 488,791
1,125 PNC Bank, NA....................................... 04/15/05 7.875 1,169,376
500 Sovran Financial Corp.............................. 06/15/06 9.250 546,297
375 Toronto Dominion Bank Ontario...................... 08/15/04 7.875 375,604
600 United States Bancorp MTN.......................... 05/15/04 6.000 578,529
1,510 Wells Fargo & Co................................... 07/15/04 6.625 1,491,456
-------------
11,333,416
-------------
CHEMICALS--0.75%
111 Dexter Corp........................................ 12/15/16 9.250 115,304
960 Eastman Chemical Co................................ 01/15/04 6.375 932,585
-------------
1,047,889
-------------
COMPUTER HARDWARE--1.47%
1,000 Sun Microsystems Inc............................... 08/15/04 7.350 999,880
1,100 Xerox Corp. MTN.................................... 12/15/03 5.250 1,047,928
-------------
2,047,808
-------------
COMPUTER SOFTWARE & SERVICES--1.18%
900 Computer Associates International Inc.............. 04/15/03 6.250 869,181
780 Oracle Corp........................................ 02/15/04 6.720 770,962
-------------
1,640,143
-------------
ENERGY--0.76%
1,090 Noram Energy Corp.................................. 11/01/03 6.375 1,057,666
-------------
FINANCIAL SERVICES--5.88%
1,240 American Express Credit Corp....................... 08/10/05 6.250 1,229,656
625 Associates Corp. NA................................ 11/01/03 5.750 599,214
870 Beneficial Corp.................................... 12/15/04 6.810 856,867
635 Countrywide Funding Corp. MTN...................... 09/16/03 7.450 641,750
225 GATX Capital Corp.................................. 11/01/00 6.500 225,261
1,420 Heller Financial Inc. MTN.......................... 07/22/02 6.500 1,406,178
1,200 Household Finance Corp............................. 06/30/00 6.375 1,203,632
650 Mellon Financial Co................................ 11/15/03 5.750 624,997
780 Southern Investments PLC........................... 12/01/06 6.800 744,863
660 U.S. West Capital Funding Inc...................... 07/15/02 6.125 646,020
-------------
8,178,438
-------------
</TABLE>
37
<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>
CORPORATE DEBT--(CONTINUED)
<TABLE>
<C> <S> <C> <C> <C>
HOTELS & LODGING--0.70%
$ 1,000 Marriott International Inc......................... 11/15/03 6.625% $ 974,076
-------------
INSURANCE--3.14%
955 Aetna Services Inc................................. 08/15/06 7.125 945,940
435 AON Corp........................................... 10/01/99 6.875 435,827
135 Chubb Corp......................................... 11/15/99 8.750 135,000
910 CNA Financial Corp................................. 04/15/05 6.500 879,808
1,010 Conseco Inc. MTN................................... 06/15/01 6.400 986,818
1,000 Freemont General Corp.............................. 03/17/04 7.700 978,817
-------------
4,362,210
-------------
INFORMATION & COMPUTER SERVICES--1.40%
1,400 Comdisco Inc....................................... 04/30/02 5.950 1,371,091
371 First Data Corp.................................... 04/01/03 6.625 369,055
200 ITT Corp........................................... 03/01/06 8.750 202,446
-------------
1,942,592
-------------
LEISURE--0.96%
965 Carnival Corp...................................... 04/15/08 6.150 906,408
430 Time Warner Entertainment Co. LP................... 09/01/08 7.250 428,949
-------------
1,335,357
-------------
OIL & GAS--0.06%
83 Mobil Oil Corp..................................... 02/29/00 9.170 83,143
-------------
RAILROADS--0.53%
297 Consolidated Rail Corp............................. 04/01/05 7.070 296,875
188 CSX Transportation Inc............................. 03/01/06 8.410 195,621
250 TTX Co. MTN........................................ 07/15/27 5.980 250,523
-------------
743,019
-------------
REAL PROPERTY--4.91%
605 Archstone Communities Trust MTN.................... 10/13/00 6.170 597,284
750 Corporate Property Investment Trust................ 08/15/04 7.750 762,994
950 Federal Realty Investment Trust.................... 01/15/00 8.875 961,594
410 Health Care Property Investments Inc............... 02/15/06 6.500 362,802
6.500 to
1,645 Kimco Realty Corp.................................. 10/01/03 to 11/14/05 6.830 1,590,943
1,000 Nationwide Health Property Inc..................... 09/18/01 7.000 982,835
950 New Plan Realty Trust Corp......................... 04/06/05 7.750 956,828
135 Post Apartment Homes LP............................ 12/31/99 6.220 135,045
480 Summit Properties Partnership LP................... 10/05/00 6.710 473,610
-------------
6,823,935
-------------
RETAIL--2.39%
1,325 Dayton Hudson Corp................................. 03/01/06 9.250 1,376,574
885 JC Penney Inc...................................... 04/01/07 7.600 886,648
980 Sears Roebuck Acceptance Corp...................... 03/20/03 6.000 955,882
100 Wal-Mart Stores Inc................................ 06/29/11 8.875 103,442
-------------
3,322,546
-------------
TELECOMMUNICATIONS--2.04%
1,180 AT&T Corp.......................................... 03/15/04 5.625 1,132,700
450 Carolina Telephone & Telegraph Co.................. 05/01/03 6.125 439,565
305 Lucent Technologies Inc............................ 07/15/06 7.250 311,810
920 MCI Worldcom Inc................................... 04/01/04 7.550 947,305
-------------
2,831,380
-------------
</TABLE>
38
<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>
CORPORATE DEBT--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
UTILITIES--1.75%
$ 700 New York State Electric & Gas Corp................. 05/01/20 9.875% $ 743,998
1,075 TXU Eastern Funding Co............................. 05/15/05 6.450 1,022,093
8.250 to
650 Virginia Electric & Power Co....................... 04/01/21 to 03/01/25 8.750 660,881
-------------
2,426,972
-------------
Total Corporate Debt (cost--$55,006,168)....................... 53,689,409
-------------
ASSET BACKED SECURITIES--6.36%
720 Aames Mortgage Trust Series 1996-D, Class A1G...... 03/15/29 7.320 723,701
525 Green Tree Financial Corp. Series 1996-3, Class
A4............................................... 05/15/27 7.100 530,806
1,000 Ikon Receivables LLC............................... 05/15/05 5.990 997,969
1,970 California Infrastructure, Series 1997-1 Class
A5............................................... 06/25/04 6.250 1,963,716
1,444 EMAC Trust Series 1998-1, Class 1A................. 07/15/03 6.110 1,424,872
317 EQCC Home Equity Loan Trust Series 1996, Class A... 01/15/12 6.950 317,624
270 Money Store Home Equity Trust, Series 1997-A, Class
A6............................................... 10/15/21 7.210 272,462
260 Money Store Trust Series 1997-C, Class AH5......... 02/15/15 6.590 259,342
529 NYCTL Trust Series 1998-2, Class A................. 07/25/06 7.980 526,560
102 Residential Asset Security Mortgage Pass Through
Series 1997, Class A............................. 04/25/28 7.070 102,239
167 Sears Credit Account Master Trust II............... 10/15/03 6.500 166,893
955 Team Fleet Financing Corp. Series 1998-2, Class
A................................................ 07/25/02 6.070 942,466
600 UCFC Loan Trust Series 1996-B1, Class A7........... 11/15/27 8.200 610,688
-------------
Total Asset Backed Securities (cost--$8,885,753)............... 8,839,338
-------------
REPURCHASE AGREEMENT--0.28%
395 Repurchase Agreement dated 7/30/99 with State
Street Bank & Trust Co., collateralized by
$234,044 U.S. Treasury Notes, 5.75% due 08/15/03
(value $238,431); and by $158,395 U.S. Treasury
Notes, 6.25% due 02/15/03 (value $164,533);
proceeds: $395,140 (cost--$395,000).............. 08/02/99 4.250 395,000
-------------
Total Investments (cost--$140,267,949)--98.73%................. 137,273,800
Other assets in excess of liabilities--1.27%................... 1,769,102
-------------
Net Assets--100.00%............................................ $139,042,902
-------------
-------------
</TABLE>
- -----------------
FDIC Federal Deposit Insurance Corporation.
MTN Medium Term Notes.
REMIC Real Estate Mortgage Investment Conduit.
(1) Security, or portion thereof, was on loan at July 31, 1999.
See accompanying notes to financial statements
39
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE STRATEGIC FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- -------------------- -------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS--12.01%
$ 8,350 Federal Farm Credit Banks Consolidated Systems
MTN............................................. 11/27/06 6.380% $ 8,134,653
1,400 U.S. Treasury Bonds............................... 08/15/13 12.000 1,945,563
17,003 U.S. Treasury Inflation Index Notes............... 07/15/02 to 01/15/09 3.625 to 3.875 16,616,196
-------------
Total U.S. Government and Agency Obligations
(cost--$27,498,500)......................................... 26,696,412
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--5.08%
211 GNMA ARM.......................................... 11/20/23 6.125 214,403
624 GNMA ARM.......................................... 01/20/26 6.375 634,345
2,000 GNMA TBA.......................................... TBA 6.500 1,895,000
7,908 GNMA.............................................. 10/15/23 6.610 7,599,576
941 GNMA ARM.......................................... 05/20/26 6.375 953,401
-------------
Total Government National Mortgage Association Certificates
(cost--$11,724,300)......................................... 11,296,725
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--3.27%
3,300 FHLMC............................................. 07/15/04 6.250 3,271,003
4,562 FHLMC............................................. 01/15/24 to 06/15/28 6.500 3,989,736
-------------
Total Federal Home Loan Mortgage Corporation Certificates
(cost--$7,638,418).......................................... 7,260,739
-------------
FEDERAL HOUSING ADMINISTRATION CERTIFICATES--1.98%
2,243 FHA Project Notes................................. 08/01/20 to 07/01/25 7.430 2,179,747
2,226 FHA Project Notes................................. 10/01/20 to 06/01/21 7.430 2,210,848
-------------
Total Federal Housing Administration Certificates
(cost--$4,569,253).......................................... 4,390,595
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--1.43%
1,361 FNMA COFI ARM..................................... 11/01/26 5.740 1,242,140
36 FNMA ARM.......................................... 12/01/17 5.875 36,119
1,076 FNMA ARM.......................................... 05/01/27 6.793 1,087,650
791 FNMA ARM.......................................... 04/01/27 7.088 800,229
-------------
Total Federal National Mortgage Association Certificates
(cost--$3,309,923).......................................... 3,166,138
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS--38.52%
1,000 FHLMC REMIC, Series 1278, Class K................. 05/15/22 7.000 969,878
100 FHLMC REMIC, Series 1366, Class H................. 08/15/07 6.000 98,375
29 FHLMC REMIC, Series 1367, Class KA................ 09/15/22 6.500 27,613
1,148 FHLMC REMIC, Series 1502, Class PX-Z.............. 04/15/23 7.000 1,090,596
817 FHLMC REMIC, Series 1503, Class PZ................ 05/15/23 7.000 771,092
461 FHLMC REMIC, Series 1534, Class Z................. 06/15/23 5.000 342,697
731 FHLMC REMIC, Series 1548, Class Z................. 07/15/23 7.000 687,754
1,066 FHLMC REMIC, Series 1562, Class Z................. 07/15/23 7.000 1,042,197
175 FHLMC REMIC, Series 1601, Class PB................ 11/15/23 6.500 156,551
136 FHLMC REMIC, Series 1611, Class I................. 02/15/23 6.000 130,954
745 FHLMC REMIC, Series 1628, Class KZ................ 12/15/23 6.250 661,151
285 FHLMC REMIC, Series 1694, Class Z................. 03/15/24 6.500 257,488
2,000 FHLMC REMIC, Series 2080, Class PJ................ 08/15/28 6.500 1,914,305
1,061 FHLMC REMIC, Series 2080, Class Z................. 08/15/28 6.500 933,175
293 FHLMC REMIC, Series G15, Class PZ................. 07/25/23 7.000 262,556
289 FHLMC REMIC, Series G23, Class KZ................. 11/25/23 6.500 254,754
1,444 FHLMC REMIC, Series G24, Class Z.................. 11/25/23 6.500 1,273,720
193 FNMA REMIC Trust, Series 1991-65, Class Z......... 06/25/21 6.500 187,826
</TABLE>
40
<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--(CONTINUED)
<TABLE>
<C> <S> <C> <C> <C>
$ 75 FNMA REMIC Trust, Series 1992-118, Class K........ 09/25/08 7.500% $ 75,995
160 FNMA REMIC Trust, Series 1992-129, Class L........ 07/25/22 6.000 145,504
561 FNMA REMIC Trust, Series 1992-G36, Class Z........ 07/25/22 7.000 556,513
81 FNMA REMIC Trust, Series 1993-37, Class PX........ 03/25/23 7.000 75,874
172 FNMA REMIC Trust, Series 1993-56, Class PZ........ 05/25/23 7.000 164,303
305 FNMA REMIC Trust, Series 1993-60, Class Z......... 05/25/23 7.000 285,566
711 FNMA REMIC Trust, Series 1993-65, Class ZZ........ 06/25/13 7.000 681,645
130 FNMA REMIC Trust, Series 1993-70, Class Z......... 05/25/23 6.900 121,664
375 FNMA REMIC Trust, Series 1993-96, Class Z......... 06/25/23 7.000 359,833
279 FNMA REMIC Trust, Series 1993-122, Class L........ 01/25/23 6.500 263,353
76 FNMA REMIC Trust, Series 1993-149, Class L........ 08/25/23 6.000 70,975
142 FNMA REMIC Trust, Series 1993-160, Class ZB....... 09/25/23 6.500 129,086
137 FNMA REMIC Trust, Series 1993-163, Class ZA....... 09/25/23 7.000 129,880
97 FNMA REMIC Trust, Series 1993-199, Class Z........ 10/25/23 7.000 89,118
411 FNMA REMIC Trust, Series 1993-G10, Class G........ 05/25/22 5.000 398,258
144 FNMA REMIC Trust, Series 1993-G40, Class Z........ 12/25/23 6.500 127,843
283 FNMA REMIC Trust, Series 1994-23, Class PX........ 08/25/23 6.000 245,755
1,990 FNMA REMIC, Series 1998-50, Class PE.............. 09/25/28 6.500 1,892,084
4,000 FNMA REMIC, Series 1998-M5, Class B............... 09/25/07 6.270 3,854,600
1,590 FNMA REMIC, Series 1998-M7, Class Z............... 05/25/36 6.390 1,341,224
5,137 FNMA REMIC, Series 1999-10, Class MZ.............. 09/17/38 6.500 4,428,161
3,800 ABN AMRO Mortgage Corp. REMIC, Series 1998-3,
Class A3........................................ 09/25/28 6.750 3,573,900
1,733 American Residential Mortgage Loan Trust, Series
1998-1, Class 1................................. 05/25/29 5.273++ 1,726,803
271 Bear Stearns Mortgage Securities Inc. REMIC,
Series 1994-1 Class 3A, ARM..................... 05/25/23 7.093 266,283
249 California Federal Bank REMIC, Series 1990-BN1,
Class A, ARM.................................... 08/25/30 6.258 244,060
1,006 Capital Asset Research Funding, Series 1998-A,
Class A......................................... 12/15/05 5.905 1,000,993
6,941 Citicorp Mortgage Securities Inc. REMIC, Series
1998-8, Class A3................................ 09/25/28 6.750 6,537,624
5,000 Citicorp Mortgage Securities Inc. REMIC, Series
1998-9, Class A5................................ 10/25/28 6.500 4,598,850
4,128 Community Program Loan Trust, Series 1987-A, Class
A4.............................................. 10/01/18 4.500 3,814,312
171 Contimortgage Home Equity Loan Trust, Series
1998-1, Class A2................................ 07/15/12 6.180 170,560
5,507 GMAC Commercial Mortgage Security Inc., Series
1998-C1, Class A1............................... 11/15/07 6.411 5,389,684
4,827 Housing Security Inc., Series 1992-8, Class B..... 06/25/24 6.422 4,902,486
1,951 LTC Commercial Mortgage Certificates, Series
1998-1, Class A................................. 05/28/30 6.029 1,867,965
1,815 Mid-State Trust, Series 4, Class A................ 04/01/30 8.330 1,873,764
1,314 The Money Store Home Equity Trust, Series 1997-D,
Class AF3....................................... 11/15/21 6.345 1,312,520
620 The Money Store Home Equity Trust, Series 1998-A,
Class AV........................................ 06/15/29 5.355++ 622,523
5,000 Norwest Asset Securities Corp. REMIC, Series
1998-30, Class A17.............................. 12/25/28 6.250 4,492,900
7,688 PNC Mortgage Securities Corp., Series 1999-3,
Class 4A1....................................... 04/25/29 6.750 7,368,777
150 Residential Funding Mortgage, Series 1993-S30,
Class A9........................................ 08/25/23 7.500++ 148,077
2,349 Residential Funding Mortgage Securities I Inc.,
Series 1997-S7, Class A5........................ 05/25/27 7.500 2,208,035
1,000 Residential Funding Mortgage Securities I Inc.,
Series 1997-S14, Class A6....................... 10/25/27 7.250 994,565
686 Resolution Trust Corp. Mortgage, Series 1992-C1,
Class B, ARM.................................... 08/25/23 7.375 707,729
2,831 Salomon Brothers Mortgage Securities Inc. VII
REMIC, Series 1993-3, Class A7MZ................ 08/25/23 7.200 2,703,468
2,218 SLMA Student Loan Trust, Series 1998-1, Class
A1.............................................. 01/25/07 5.443++ 2,212,054
</TABLE>
41
<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>
$ 365 U.S. Department of Veteran Affairs Vendee Mortgage
Trust, Series 1993-3, Class 2ZA................. 06/15/20 6.500% $ 347,332
-------------
Total Collateralized Mortgage Obligations
(cost--$88,480,315)......................................... 85,585,180
-------------
STRIPPED MORTGAGE-BACKED SECURITIES+--0.24%
218 FHLMC Series 1625, Class GA+++.................... 01/15/08 7.700(1) 13,745
2 FNMA REMIC Trust 1993-134, Class EA+++............ 11/25/05 10.480(1) 12,911
598 FNMA REMIC Trust 1993-201, Class JA+++............ 09/25/21 8.310(1) 76,988
3,227 FNMA REMIC Trust 1993-201, Class JC+++............ 05/25/19 6.000(1) 422,713
-------------
Total Stripped Mortgage-Backed Securities (cost--$508,360).... 526,357
-------------
CORPORATE BONDS--29.74%
500 AMR Corp.......................................... 02/01/01 10.000 522,261
3,700 AT&T Capital Corp................................. 04/23/02 5.561++ 3,693,788
1,700 Columbia HCA Health Care Corp..................... 07/15/45 6.630 1,624,132
2,000 Connecticut Light & Power Co...................... 07/01/00 5.750 1,993,214
6,800 General Motors Acceptance Corp.................... 08/06/01 to 04/05/04 5.560 to 5.573++ 6,794,913
3,250 Goldman Sachs Group............................... 03/19/01 5.294++ 3,251,521
4,000 Infrastructure Finance............................ 03/26/09 5.030++ 3,997,500
1,500 MBNA American Bank................................ 12/10/02 5.471++ 1,469,889
1,000 Mexico Credit Certificate of Deposit.............. 02/25/02 10.510++ 1,018,149
336 Midland Funding Corp.............................. 07/23/02 10.330++ 352,096
4,500 Morgan Stanley Dean Witter........................ 04/22/04 5.559++ 4,488,476
2,900 Nacional Financiera............................... 05/08/03 7.245++ 2,568,475
1,000 National Power Corp............................... 05/15/28 9.625 847,724
2,200 Niagara Mohawk Power Co........................... 10/01/02 7.250 2,200,352
2,400 Petroleos Mexicanos............................... 10/29/99 to 09/15/27 7.750 to 9.500 2,330,063
4,000 Philip Morris Companies Inc.(2)................... 04/01/04 to 07/15/05 7.000 to 7.500 4,027,780
1,500 Qatar............................................. 02/18/04 6.200++ 1,520,625
2,900 Sakura Capital Funding Cayman LTD................. 08/29/49 5.997++ 2,312,750
4,605 Sprint Capital Corp............................... 05/01/04 5.875 4,408,136
2,000 Telewest PLC...................................... 10/01/07 11.000 1,780,000
475 Terra Industries.................................. 06/15/05 10.500 380,000
2,000 Texas Utilities Co.+.............................. 06/25/01 5.729++ 2,000,000
2,000 Textron Financial Corp.+.......................... 05/28/02 5.392++ 1,994,102
500 United Air Lines Inc.............................. 11/27/12 10.360 571,740
6,000 US West Capital Funding Inc.+..................... 06/15/00 5.546++ 5,995,950
2,000 Westpoint Stevens Inc............................. 06/15/05 7.875 1,945,000
2,000 Williams Cos Inc.................................. 01/30/00 5.593++ 2,001,620
-------------
Total Corporate Bonds (cost--$66,770,607)..................... 66,090,256
-------------
COMMERCIAL [email protected]%
600 American Express Credit Corp...................... 08/04/99 5.030 599,747
4,400 Campbell Soup Co.................................. 08/10/99 5.010 4,394,478
200 Emerson Electric Co............................... 08/06/99 5.050 199,859
200 Hewlett Packard Co................................ 08/20/99 5.080 199,468
6,800 Shell Oil Co...................................... 08/16/99 5.080 6,785,692
600 Southwestern Public Service Co.................... 08/06/99 5.050 599,579
-------------
Total Commercial Paper (cost--$12,778,823).................... 12,778,823
-------------
FOREIGN GOVERNMENT OBLIGATIONS--1.62%
956 Republic of Argentina............................. 05/24/01 9.500 889,361
1,000 Republic of Korea................................. 04/08/00 7.594 1,000,000
</TABLE>
42
<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>
FOREIGN GOVERNMENT OBLIGATIONS--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 2,000 United Mexican States............................. 04/07/04 to 12/31/19 6.250 to 9.060% $ 1,711,250
-------------
Total Foreign Government Obligations (cost--$3,748,674)....... 3,600,611
-------------
SHORT-TERM U.S. GOVERNMENT AND AGENCY [email protected]%
1,000 Federal Home Loan Mortgage Corp. Discount Notes... 08/19/99 4.980 990,112
1,290 U.S. Treasury Bills++++++......................... 09/16/99 4.550 to 4.600 1,282,511
-------------
Total Short-Term U.S. Government and Agency Obligations
(cost--$2,272,623).......................................... 2,272,623
-------------
REPURCHASE AGREEMENT--0.87%
1,943 Repurchase Agreement dated 07/30/99 with State
Street Bank & Trust Company, collateralized by
$1,800,000 U.S. Treasury Notes, 7.500% due
02/15/05 (value--$1,982,250); proceeds:
$1,943,688 (cost--$1,943,000)................... 08/02/99 4.250 1,943,000
-------------
Total Investments (cost--$231,242,796)--101.53%............... 225,607,459
Liabilities in excess of other assets--(1.53)%................ (3,393,135)
-------------
Net Assets--100.00%........................................... $222,214,324
-------------
-------------
</TABLE>
- -----------------
++ Floating rate securities--The interest rates shown are the current rates
as of July 31, 1999.
+ Illiquid securities represent 4.73% of net assets.
+++ Interest Only Security--This security entitles the holder to receive
interest payments from an underlying pool or mortgages. The risk
associated with this security is related to the speed of the principal
paydowns. High prepayments would result in a smaller amount of interest
being received and cause the yield to decrease. Low prepayments would
result in a greater amount of interest being received and cause the yield
to increase.
++++++ Entire or partial amount pledged as collateral for futures transactions.
@ Interest rates shown are discount rates at date of purchase.
ARM Adjustable Rate Mortgage--The interest rates shown are the current rates
as of July 31, 1999.
COFI Cost of Funds Index
MTN Medium Term Note
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.
(2) Security, or a portion thereof, was on loan at July 31, 1999.
43
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE STRATEGIC FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF EXPIRATION
CONTRACTS STRIKE PRICE DATES VALUE
- --------- ------------ --------------- -------
<C> <S> <C> <C> <C>
WRITTEN OPTIONS
71 U.S. Treasury Bonds Futures Calls................. $124 September 1999 $ 1,109
101 U.S. Treasury Bonds Futures Calls................. 118 September 1999 12,625
71 U.S. Treasury Bonds Futures Puts.................. 114 September 1999 41,047
101 U.S. Treasury Bonds Futures Puts.................. 108 September 1999 1,578
-------
$56,359
-------
-------
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
IN EXPIRATION APPRECIATION
CONTRACTS TO RECEIVE EXCHANGE FOR DATES (DEPRECIATION)
------------------------------------------------------------ -------------- --------------- -----------
<C> <S> <C> <C> <C>
FUTURES CONTRACTS
82 U.S. 2 Year Treasury Notes.................................. $ 16,993,219 September 1999 $ 23,832
52 U.S. 5 Year Treasury Notes.................................. 5,642,000 September 1999 (6,500)
436 U.S. 10 Year Treasury Notes................................. 48,363,782 September 1999 (265,887)
10 U.S. 10 Year Treasury Notes................................. 1,002,500 March 2000 (18,438)
158 U.S. 30 Year Treasury Bonds................................. 18,329,234 September 1999 (164,891)
52 90 Day Eurodollar........................................... 12,242,100 March 2000 (18,717)
44 90 Day Eurodollar........................................... 10,335,050 June 2000 (23,650)
-----------
$ (474,251)
-----------
-----------
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
CONTRACT
TO IN MATURITY UNREALIZED
DELIVER EXCHANGE FOR DATE (DEPRECIATION)
---------- -------------- --------- -------------
<S> <C> <C> <C> <C>
Japanese Yen.............................................................. 70,000,000 US$ 577,772 09/13/99 $ (32,808)
-------------
-------------
</TABLE>
See accompanying notes to financial statements
44
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MUNICIPAL FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------------ -------------------- ---------------- ------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--97.09%
ALABAMA--0.41%
$ 70 Birmingham Medical Clinic Board Revenue Bapist
Medical Centers (Escrow to Maturity)............ 07/01/05 7.300% $ 76,259
155 Pell City Industrial Development Board Revenue
Shelby Steel Fabricators (Letter of Credit)*.... 09/01/01 7.700 155,451
------------
231,710
------------
ARIZONA--2.89%
70 Pima County Hospital Revenue St. Joseph Hospital
Project (Escrow to Maturity).................... 01/01/09 7.500 78,630
1,000 Santa Cruz County Industrial Development Authority
Industrial Development Revenue (Optional Put
08/01/07 @ 100)................................. 08/01/20 4.750 979,800
570 Show Low Industrial Development Authority Revenue
Navapache Regional Medical Center Series A (ACA
Insured)........................................ 12/01/06 5.125 577,085
------------
1,635,515
------------
ARKANSAS--0.37%
60 Arkansas State Development Finance Authority (MBIA
Insured)........................................ 10/01/16 5.100 60,185
30 Pulaski County Residential Housing Single Family
(Escrow to Maturity)............................ 06/01/10 7.250 33,794
104 Springdale Residential Housing Mortgage Series A
(FNMA Collateralized)........................... 09/01/11 7.650 112,936
------------
206,915
------------
CALIFORNIA--11.59%
880 Abag Finance Authority For Nonprofit Refunding
Housing Sundale Arms Apts Project A (FNMA
Collateralized)*................................ 03/01/19 5.100 842,134
140 California Pollution Control Financing Kaiser
Steel Corporation Project (Escrow to
Maturity)....................................... 10/01/08 7.250 154,791
970 California Statewide Community Development Housing
Riverside Gardens Project Series J (Letter of
Credit)*........................................ 10/01/12 5.100 966,246
85 California Statewide Community Housing Senior Lien
(FHA Insured)................................... 09/01/00 5.000 85,711
125 Inglewood Residential Rehabilitation (Escrow to
Maturity)....................................... 08/01/10 7.500 141,411
410 Lancaster Redevelopment Agency Multi-Family
Housing Refunding FHA High Valley Apartments
Project Series A (FHA Insured).................. 12/01/05 5.250 414,371
695 Los Angeles Community Redevelopment Agency
Refunding Monterey Hills Redevelopment Project
B............................................... 12/01/22 8.650 783,835
300 Los Angeles Multi-Family Revenue Housing
Earthquake Rehabilitation Project Series C (FNMA
Collateralized)*................................ 07/01/07 5.150 304,467
110 Palmdale Residential Mortgage (Escrow to
Maturity)....................................... 11/01/12 9.250 140,578
500 Riverside County California Housing Authority
Revenue Refunding Breezewood Apts Project Series
B (MBIA Insured)................................ 06/01/19 5.000 478,140
1,085 Sacramento Utility District Electric (Escrow to
Maturity)....................................... 03/01/10 to 02/01/11 5.500 to 6.800 1,198,851
1,015 Vista California Multi-Family Housing Pepperwood
Apartments (Mandatory Put 06/01/05 @ 100) (FNMA
Collateralized)................................. 06/01/25 5.700 1,055,184
------------
6,565,719
------------
COLORADO--2.21%
300 Colorado Housing Finance Authority Multi-Family
Insured Mortgage C3 (FHA Insured)............... 10/01/21 5.700 303,255
505 Colorado Housing Finance Authority Single Family
Progam Subordinated*............................ 11/01/04 5.750 510,641
</TABLE>
45
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MUNICIPAL FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ------------ -------------------- ---------------- ------------
<C> <S> <C> <C> <C>
</TABLE>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
COLORADO--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
$ 410 Lakewood Company Multi-Family Housing Mortgage FHA
Mortgage Loan................................... 10/01/15 6.550% $ 436,597
------------
1,250,493
------------
CONNECTICUT--2.55%
1,500 Connecticut State Development Authority Revenue
Life Care Facility Seabury Project (Asset
Guaranty Insured)............................... 09/01/15 5.000 1,445,340
------------
DISTRICT OF COLUMBIA--3.66%
555 District of Columbia Housing Finance Authority
Certificate of Participation (Asset Guaranty
Insured)........................................ 06/01/08 4.850 546,120
1,500 District of Columbia Series A (MBIA Insured)...... 06/01/08 5.250 1,527,495
------------
2,073,615
------------
FLORIDA--2.25%
250 Alachua County Health Facilities Authority Shands
Hospital At The University of Florida (MBIA
Insured)........................................ 12/01/05 6.100 263,590
100 Clearwater Housing Development Corporation Revenue
Refunding Clearwater Apartments Series A (FHA
Insured)........................................ 07/01/01 6.200 102,257
100 Dade County Educational Facilities Authority
Revenue (Letter of Credit)...................... 01/01/02 5.150 101,999
155 Palm Beach County Solid Waste Authority Revenue
(Escrow to Maturity) (MBIA Insured)............. 12/01/04 10.000 180,056
240 Pasco County Housing Finance Authority Refunding
Oak Trail Apartments Project Series B (Mandatory
Put 06/01/08@100) (ACA Insured)................. 06/01/27 5.500 248,990
355 Pasco County MBIA West Pasco Water and Sewer Unit
(Escrow to Maturity) (MBIA Insured)............. 08/01/08 6.375 379,641
------------
1,276,533
------------
GEORGIA--1.98%
350 Canton Housing Authority Multi-Housing Canterbury
Ridge Apartments Project (FNMA
Collateralized)*................................ 03/01/08 4.900 348,530
130 Gwinnett County Water & Sewer Authority (Escrow to
Maturity)....................................... 10/01/04 9.600 152,305
600 Marietta Housing Authority Multi-Family Housing
Refunding Ridge Part Apartments Project A
(Mandatory Put 06/01/05 @ 100) (FNMA
Collateralized)................................. 06/01/25 5.700 622,524
------------
1,123,359
------------
ILLINOIS--4.79%
230 Belleville St. Clair County (Escrow to
Maturity)....................................... 11/01/09 7.250 258,762
350 Greater Peoria Airport Authority (AMBAC
Insured)*....................................... 12/01/07 6.700 383,187
500 Illinois Educational Facilities Authority Revenues
Refunding Northwestern Medical Facility
Foundation (MBIA Insured)....................... 11/15/28 5.125 459,240
780 Illinois Health Facilities Authority Revenue
Ravenswood Hospital (Escrow to Maturity)........ 08/01/06 7.250 849,560
250 Palatine Village Housing Revenue Clover Ridge
(Mandatory Put 12/15/02 @ 100) (Letter of
Credit)......................................... 12/15/07 4.750 250,915
510 St. Clair County Certificates Participation Series
A (FSA Insured)................................. 10/01/07 to 10/01/08 4.900 to 5.000 510,025
------------
2,711,689
------------
INDIANA--6.67%
620 Fort Wayne Hospital Authority Revenue Parkview
Memorial Hospital (Escrow to Maturity).......... 01/01/02 to 01/01/07 6.500 to 6.875 652,556
200 Gary Mortgage Revenue Willow On Clark Apts A (GNMA
Collateralized)*................................ 08/20/38 5.400 186,226
</TABLE>
46
<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>
$ 915 Indiana Health Facility Hospital Revenue Kings
Daughters Hospital (Asset Guaranty Insured)..... 02/15/04 to 02/15/05 5.000% $ 925,825
420 Indianapolis Economic Development Revenue Knob In
The Woods Project (Mandatory Put 12/01/04 @ 100)
(FNMA Collateralized)........................... 12/01/24 6.375 456,128
600 Indianapolis Economic Development Revenue
Refunding Bethany Independent Series A (GNMA
Collateralized)*................................ 04/20/17 5.350 579,954
1,000 New Castle Economic Development Revenue Refunding
FHA Raintree Square Project A................... 04/01/19 5.550 978,840
------------
3,779,529
------------
IOWA--0.37%
140 Iowa Finance Authority Multi-Family Revenue
Refunding Housing Forest Glen Apartments Project
A (FNMA Collateralized)......................... 11/01/03 4.700 140,172
70 Iowa Finance Authority Multi-Family Revenue
Refunding Housing Hillcrest Series C (FNMA
Collateralized)................................. 11/01/02 4.600 70,189
------------
210,361
------------
KANSAS--0.06%
35 Wichita Hospital Revenue St. Francis Hospital &
Nursing Senior A................................ 10/01/07 6.750 35,003
------------
KENTUCKY--0.31%
60 Kentucky State Revenue Turnpike Authority
Resources Recovery Road Revenue (Escrow to
Maturity)....................................... 07/01/09 7.200 67,930
105 Kentucky State Revenue Turnpike Authority Toll
Road (Escrow to Maturity)....................... 07/01/08 5.875 109,860
------------
177,790
------------
LOUISIANA--3.56%
345 East Baton Rouge Parish Womans Hospital Foundation
(Escrow to Maturity)............................ 10/01/08 7.200 382,902
95 East Baton Rouge Single Family Mortgage Series C
(GNMA/FNMA Collateralized)...................... 04/01/32 7.000 98,925
800 Louisiana Public Facilities Authority Revenue and
Education A1 (Mandatory Put 06/01/02 @ 100)
(AMBAC Insured)................................. 12/01/15 5.000 809,856
650 Louisiana State Health Education Authority Alton
Ochsner Medical Foundation (Escrow to
Maturity)....................................... 05/01/05 8.750 728,052
------------
2,019,735
------------
MASSACHUSETTS--2.58%
520 Massachusetts Bay Transport Authority General
Transportation Systems Series B (FSA Insured)... 03/01/26 5.250 495,648
1,005 Massachusetts State Development Finance Agency
Curry College Series A (ACA Insured)............ 03/01/19 5.375 966,700
------------
1,462,348
------------
MICHIGAN--1.03%
130 Michigan State Hospital Finance Authority Revenue
St. Joseph's Mercy Hospital (Escrow to
Maturity)....................................... 07/01/03 9.250 143,158
200 Michigan State Housing Development Authority
Series B........................................ 12/01/12 7.650 204,910
220 Michigan State Strategic Limited Obligation....... 08/15/05 7.875 234,078
------------
582,146
------------
</TABLE>
47
<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>
MINNESOTA--1.04%
$ 335 Coon Rapids Hospital Revenue Health Central
Incorporated (Escrow to Maturity)............... 08/01/08 7.625% $ 377,361
142 Eden Prairie Multi-Family Housing (GNMA
Collateralized)................................. 01/20/06 5.500 147,152
55 Moorhead Residential Mortgage (Escrow to
Maturity)....................................... 08/01/11 7.100 61,935
------------
586,448
------------
MISSISSIPPI--0.76%
450 Corinth Alcorn County Mississippi Hospital
Refunding Magnolia Registered Health Center A... 10/01/08 5.000 432,990
------------
MISSOURI--3.59%
1,500 Missouri State Development Finance Board
Recreation YMCA Greater St. Louis Project Series
A (Letter of Credit)............................ 09/01/06 to 09/01/08 4.600 to 4.800 1,467,419
450 St. Charles County Industrial Development
Refunding Garden View Care Center Project
(Letter of Credit).............................. 11/15/16 5.400 421,146
140 St. Louis County Single Family Housing (AMBAC
Insured)........................................ 10/01/16 9.250 145,775
------------
2,034,340
------------
NEBRASKA--0.46%
250 Nebraska Investment Finance Authority Multi-Family
Housing Series A (FNMA Collateralized)*......... 12/01/15 6.000 258,923
------------
NEW JERSEY--0.26%
135 New Jersey Health Care Facilities Financing St.
Barnabas Medical Center (Escrow to Maturity).... 07/01/11 7.000 149,383
------------
NEW MEXICO--1.64%
945 Sandoval County Multi-Family Housing Arrowhead
Ridge Apts Series A (FSA Insured)*.............. 11/01/09 4.750 930,627
------------
NEW YORK--1.38%
200 New York City Housing Authority Refunding Security
Assisted Series A............................... 07/01/05 5.250 203,038
300 New York City Housing Authority Refunding Security
Assisted Series A (AMBAC Insured)............... 07/01/08 5.450 312,453
195 Onondaga County Industrial Development Civic
Lemoyne College Project Series A................ 03/01/04 5.000 194,203
75 Onondaga County Industrial Development Civic
Refunding Syracuse Home Association Project..... 12/01/07 4.500 71,285
------------
780,979
------------
NORTH CAROLINA--0.67%
375 Asheville Housing Authority Multi-Family Housing
Woodridge Apartments (GNMA Collateralized)*..... 11/20/19 5.700 381,398
------------
NORTH DAKOTA--1.00%
140 North Dakota Housing Finance Agency Housing
Finance Home Series A *......................... 01/01/10 4.750 136,182
440 North Dakota Housing Finance Agency Housing
Finance Series D*............................... 01/01/10 4.750 431,169
------------
567,351
------------
OHIO--0.41%
160 Dayton Hospital Revenue Good Samaritan First
Mortgage Revenue (Escrow to Maturity)........... 12/01/05 6.000 167,392
</TABLE>
48
<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>
$ 65 Ohio Housing Finance Agency Single Family Mortgage
Series C (GNMA Collateralized)*................. 09/01/21 7.850% $ 67,743
------------
235,135
------------
OKLAHOMA--2.29%
335 Comanche County Hospital Authority Revenue Series
A (Connie Lee Insured).......................... 07/01/06 5.100 339,767
425 McAlester Public Works Authority Revenue (FSA
Insured)........................................ 12/01/04 8.250 501,653
490 Oklahoma City Public Property Authority Refunding
and Improvement Oklahoma City Golf Systems
(Asset Guaranty Insured)........................ 10/01/12 4.750 453,681
------------
1,295,101
------------
PENNSYLVANIA--10.61%
110 Allegheny County Industrial Commercial Development
MPB Association................................. 12/01/04 6.750 111,655
140 Allegheny County Residential Mortgage Revenue
Single Family Mortgage Series D2 (GNMA
Insured)*....................................... 05/01/08 4.850 137,504
400 Blair County Hospital Authority Revenue Hospital
Altoona Hospital Project A (AMBAC Insured)...... 07/01/06 5.375 414,340
30 Caln Township Municipal Sewer Revenue (Escrow to
Maturity)....................................... 01/01/09 5.700 31,180
535 Chester County Health & Education Jefferson Health
Systems Series B (AMBAC Insured)................ 05/15/12 5.000 520,667
50 Chester County Hospital Authority Revenue (Escrow
to Maturity).................................... 07/01/09 7.500 56,271
65 Conneaut School District (Escrow to Maturity)
(AMBAC Insured)................................. 05/01/02 9.250 70,465
145 Lancaster County Hospital Authority Lancaster
General Hospital Project (AMBAC Insured)........ 07/01/11 4.750 137,644
55 Lancaster Sewer Authority (Escrow to Maturity).... 04/01/12 6.000 58,694
400 Luzerne County Industrial Development Exempt
Series B*....................................... 12/01/22 7.125 432,184
35 Montgomery County Higher Education Beaver College
(Escrow to Maturity)............................ 10/01/00 6.750 35,593
1,000 Pennsylvania Housing Finance Agency Single Family
Mortgage Series 65A*............................ 04/01/08 4.600 974,410
600 Pennsylvania State Finance Authority Revenue
(Investment Agreement - Sun America)............ 11/01/09 6.600 648,198
500 Pennsylvania State Higher Education Facilities
Temple University First Series.................. 04/01/29 5.000 461,540
125 Philadelphia Hospital & Higher Education Health
Systems Jefferson Health Systems A (MBIA
Insured)........................................ 05/15/07 5.250 128,040
500 Philadelphia Hospitals & Higher Friends Hospital
(ACA Insured)................................... 05/01/11 6.200 519,755
125 Pittsburgh Urban Redevelopment Mortgage Series
B............................................... 10/01/11 to 10/01/12 4.800 to 4.900 120,950
1,180 Saucon Valley School District (AMBAC Insured)..... 10/15/09 4.650 1,151,633
------------
6,010,723
------------
RHODE ISLAND--1.72%
1,000 Rhode Island State Turnpike & Bridge Refunding.... 12/01/17 5.350 977,320
------------
SOUTH CAROLINA--1.53%
230 Charleston County Hospital Facility Roper Hospital
(Escrow to Maturity)............................ 10/01/11 7.000 257,434
325 South Carolina Jobs Economic Development
Caterpillar Incorporated Project*............... 06/01/08 5.050 314,584
290 South Carolina State Housing Multi-Family Housing
(FHA Insured)................................... 07/01/27 6.050 296,284
------------
868,302
------------
</TABLE>
49
<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>
SOUTH DAKOTA--0.89%
$ 465 South Dakota State Health & Educational Revenue
St. Lukes Hospital Project (Escrow to
Maturity)....................................... 10/01/07 6.800% $ 503,190
------------
TENNESSEE--4.16%
1,000 Bristol Industrial Development Board Refunding
Shelby Heights Apartments Project............... 03/01/22 6.200 1,039,020
430 Knox County Health Educational & Hospital Facility
St. Mary's Medical Center (Escrow to
Maturity)....................................... 08/01/03 7.250 455,185
200 La Follette Housing Development Corporation
(FHA/MBIA Insured).............................. 01/01/05 5.400 205,946
200 Metropolitan Government Nashville Health &
Education Southern Advantist Hospital Health
Systems (Escrow to Maturity).................... 10/01/09 8.700 240,526
420 Oak Ridge Industrial Development Board Refunding
The Gardens Series A (GNMA Collateralized)...... 08/20/13 5.125 415,430
------------
2,356,107
------------
TEXAS--11.47%
985 De Soto Housing Finance Corporation Multi
Refunding The Colonies Apartments Project
(Mandatory Put 10/01/07 @ 100) (FNMA
Collateralized)................................. 10/01/27 5.125 1,001,696
335 Galveston County Housing Finance Corporation
Single Family Mortgage Revenue.................. 04/01/15 9.750 364,105
370 Hidalgo County Health Services Corporation Mission
Hospital Project (Pre-Refunded 08/01/00 @
103)............................................ 02/01/25 10.250 403,748
255 Houston Texas Airport Systems Revenue (Escrow to
Maturity)....................................... 07/01/10 7.600 294,288
1,000 Lewisville Housing Finance Corporation Housing
Lewisville Limited Project (FSA Insured)........ 12/01/08 5.000 995,510
645 Odessa Junior College District Revenue Refunding &
Imot Series A (MBIA Insured).................... 12/01/09 4.750 627,501
1,500 Southeast Housing Finance Corporation Series B.... 12/01/16 7.625# 418,890
450 Tarrant County Health Facilities Development
Mortgage South Central Nursing A (FHA/MBIA
Insured)........................................ 01/01/37 6.000 471,568
1,100 Tarrant County Housing Finance Corporation
Refunding Multi-Family Housing Summit Project
(Mandatory Put 09/01/07 @ 100) (FNMA
Collateralized)................................. 09/01/27 5.080 1,113,002
780 Texas State Department Housing and Community
Housing Senior Dallas/Fort Worth Series A....... 07/01/06 6.000 808,501
------------
6,498,809
------------
UTAH--2.89%
270 Salt Lake City Hospital Revenue (Escrow to
Maturity)....................................... 06/01/09 7.350 299,805
560 Salt Lake County Multi-Family Housing James Pointe
Apartment Project B2 (Mandatory Put 10/01/05 @
100) (Asset Guaranty Insured)................... 10/01/25 5.500 575,859
135 Salt Lake County Water Conservation (Escrow to
Maturity) (MBIA Insured)........................ 10/01/02 10.875 150,475
595 Utah State Housing Finance Agency (AMBAC
Insured)........................................ 07/01/07 to 07/01/08 5.650 to 5.900 611,737
------------
1,637,876
------------
WEST VIRGINIA--0.53%
300 Preston County Pollution Control Refunding County
Commission Monongahhela C....................... 03/01/03 4.500 298,419
------------
WASHINGTON--0.47%
270 Washington State Housing Finance Commission Single
Family PG Series 3A (FNMA/GNMA
Collateralized)*................................ 12/01/10 5.200 264,327
------------
</TABLE>
50
<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)
<TABLE>
<C> <S> <C> <C> <C>
WEST VIRGINIA--0.08%
$ 40 Kanawha County Residential Mortgage Revenue
(Escrow to Maturity)............................ 09/01/10 7.375% $ 45,672
------------
WISCONSIN--1.45%
735 Wisconsin Housing & Economic Development Series
B*.............................................. 09/01/08 4.850 719,124
100 Wisconsin Housing & Economic Development Series
G*.............................................. 03/01/04 5.250 101,459
------------
820,583
------------
WYOMING--0.51%
295 Teton County Wyoming Hospital District Refunding
Improvement (ACA Insured)....................... 12/01/09 5.100 289,870
------------
Total Municipal Bonds and Notes (cost--$55,148,404)............. 55,011,673
------------
TAX EXEMPT COLLATERALIZED MORTGAGE OBLIGATIONS--0.65%
364 FHA Insured Trust 1996-01, Class A1++
(cost--$363,646)................................ 07/01/14 6.100 365,464
------------
<CAPTION>
NUMBER OF
SHARES
- ------------
<C> <S> <C> <C> <C>
TAX FREE MONEY MARKET FUND--0.76%
431 MuniCash Portfolio (cost--$431,357)............... 3.030(1) 431,357
------------
Total Investments (cost--$55,943,407)--98.50%................... 55,808,494
Other assets in excess of liabilities--1.50%.................... 850,414
------------
Net Assets--100.00%............................................. $56,658,908
------------
------------
</TABLE>
- -----------------
* Security subject to Alternative Minimum Tax.
# Zero coupon bond, rate represents annualized yield at date of purchase.
++ Illiquid security, representing 0.65% of net assets.
(1) Represents current yield at July 31, 1999.
ACA American Capital Access.
AMBAC American Municipal Bond Assurance Corporation.
FHA Federal Housing Authority.
FNMA Federal National Mortgage Association.
FSA Financial Security Assurance.
GNMA Government National Mortgage Association.
MBIA Municipal Bond Investors Assurance.
See accompanying notes to financial statements
51
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GLOBAL FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)** DATES RATES VALUE
- ------------- ------------------------ -------------- -------------
<C> <S> <C> <C> <C>
LONG-TERM GLOBAL DEBT SECURITIES--85.59%
AUSTRALIA--2.92%
4,200 Australia Commonwealth............................ 07/15/05 7.500% $ 2,952,306
-------------
CANADA--17.08%
23,227 Government of Canada.............................. 12/01/00 to 06/01/08 2.500 to 6.000 15,322,278
USD 2,000 Government of Canada.............................. 01/22/02 5.125 1,956,395
-------------
17,278,673
-------------
CHILE--0.55%
USD 400 Celulosa Arauco Constitucion...................... 12/15/03 6.750 367,033
USD 200 Republic of Chile................................. 04/28/09 6.875 187,000
-------------
554,033
-------------
DENMARK--4.80%
31,334 Kingdom of Denmark................................ 11/15/07 to 11/15/09 6.000 to 7.000 4,851,826
-------------
GERMANY--13.63%
EUR 12,854 Federal Republic of Germany....................... 07/15/03 to 01/04/09 3.250 to 6.750 13,781,001
-------------
ITALY--1.10%
JPY 120,000 Republic of Italy................................. 06/20/01 3.500 1,109,303
-------------
JAPAN--1.97%
USD 1,000 Export Import Bank of Japan....................... 03/01/04 4.989+ 995,500
USD 1,000 Tokyo Electric Power.............................. 02/13/07 7.000 999,059
-------------
1,994,559
-------------
MALAYSIA--1.43%
USD 1,100 Petroliam Nasional Berhad......................... 10/18/06 to 10/15/26 7.125 to 7.625 1,019,562
USD 450 Tenaga Nasional Berhad............................ 04/29/07 7.200 427,865
-------------
1,447,427
-------------
MEXICO--0.86%
USD 1,163 United Mexican States#............................ 01/15/07 to 12/31/19 6.250 to 9.875 873,911
-------------
NETHERLANDS--5.15%
EUR 4,748 Government of the Netherlands..................... 07/15/08 5.250 5,208,829
-------------
NORWAY--2.93%
22,800 Kingdom of Norway................................. 01/15/07 to 05/15/09 5.500 to 6.750 2,965,554
-------------
PHILIPPINES--1.17%
USD 1,390 Republic of Philippines........................... 12/01/17 6.500 1,180,805
-------------
SOUTH KOREA--2.65%
USD 2,530 Republic of Korea................................. 04/15/08 8.875 2,678,637
-------------
SWEDEN--8.10%
61,100 Kingdom of Sweden................................. 10/25/06 to 04/20/09 5.000 to 9.000 8,193,203
-------------
UNITED KINGDOM--7.10%
USD 2,600 Diageo PLC........................................ 06/24/04 6.625 2,580,016
600 LCR Finance PLC................................... 12/31/10 4.750 970,573
650 Tesco PLC......................................... 12/18/09 5.125 952,064
1,607 United Kingdom Gilt............................... 12/07/03 6.500 2,683,903
-------------
7,186,556
-------------
</TABLE>
52
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GLOBAL FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)** DATES RATES VALUE
- ------------- ------------------------ -------------- -------------
<C> <S> <C> <C> <C>
</TABLE>
LONG-TERM GLOBAL DEBT SECURITIES--(CONCLUDED)
<TABLE>
<C> <S> <C> <C> <C>
UNITED STATES--14.15%
$550 Ameritech Capital Funding Co...................... 05/18/09 6.250% $ 515,749
1,100 Amoco Corp........................................ 06/09/08 6.000 1,040,527
1,950 Conoco Inc........................................ 04/15/04 5.900 1,882,109
1,000 Ford Motor Credit Co.............................. 07/16/01 5.480 998,740
JPY 121,000 General Motors Acceptance Corp.................... 07/26/02 0.206+ 1,055,432
GBP 600 KFW International Finance Inc..................... 10/27/03 6.000 956,356
500 Lucent Technologies Inc........................... 03/15/29 6.450 448,747
5,688 U.S. Treasury Notes............................... 02/15/03 to 05/15/06 5.250 to 6.875 5,702,176
1,310 U.S. Treasury Bonds............................... 02/15/29 5.250 1,156,894
550 Xerox Corp. MTN................................... 06/15/37 5.875 555,176
-------------
14,311,906
-------------
Total Long-Term Global Debt Securities (cost--$90,476,527)....... 86,568,529
-------------
SHORT-TERM GLOBAL DEBT SECURITIES--11.30%
BELGIUM--1.58%
JPY 180,000 Kingdom of Belgium................................ 12/17/99 5.000 1,598,495
-------------
JAPAN--1.61%
185,000 Japan Development Bank............................ 10/01/99 5.000 1,626,331
-------------
UNITED KINGDOM--2.35%
1,464 United Kingdom Gilt............................... 08/10/99 6.000 2,373,418
-------------
UNITED STATES--5.76%
$4,000 Federal National Mortgage Association Discount
Notes........................................... 08/18/99 to 09/16/99 4.930 to 4.950 3,986,688
JPY 210,000 Federal National Mortgage Association............. 12/20/99 2.000 1,844,762
-------------
5,831,450
-------------
Total Short-Term Global Debt Securities (cost--$11,668,619)...... 11,429,694
-------------
REPURCHASE AGREEMENT--2.85%
$ 2,881 Repurchase Agreement dated 7/30/99 with SG Cowen
Securities Corp. collateralized by $1,913,000
U.S. Treasury Bonds, 11.250% due 02/15/15
(value-- $2,938,846); proceeds: $2,882,616
(cost-- $2,881,000)............................. 08/02/99 5.050 2,881,000
-------------
Total Investments (cost--$105,026,146)--99.74%................... 100,879,223
Other assets in excess of liabilities--0.26%..................... 263,888
-------------
Net Assets--100.00%.............................................. $101,143,111
-------------
-------------
</TABLE>
- -----------------
Note: The Portfolio of Investments is listed by the issuer's country of origin.
** In local currency unless otherwise indicated.
# Security represents a unit which is composed of the stated bond with
attached warrants or common stock.
+ Floating rate securities. The interest rates shown are the current rates
as of 7/31/99.
GBP British Pounds.
EUR Euro Dollars.
JPY Japanese Yen.
MTN Medium Term Notes.
USD U.S. Dollars.
53
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GLOBAL FIXED INCOME INVESTMENTS
FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
CONTRACT TO IN MATURITY APPRECIATION
DELIVER EXCHANGE FOR DATES (DEPRECIATION)
-------------- -------------- -------- ------------
<S> <C> <C> <C> <C>
British Pounds....................................................... 1,402,478 USD 2,200,488 08/20/99 $ 72,564
British Pounds....................................................... 2,056,222 USD 3,267,501 08/20/99 65,101
British Pounds....................................................... 5,203,569 USD 8,333,236 08/20/99 (100,398)
Euro Dollars......................................................... 8,093,272 GBP 5,203,569 08/20/99 338,260
Euro Dollars......................................................... 5,799,165 USD 6,110,000 08/20/99 103,486
Euro Dollars......................................................... 5,617,237 USD 5,970,000 08/20/99 48,561
Euro Dollars......................................................... 3,451,189 USD 3,578,539 08/20/99 119,222
Euro Dollars......................................................... 3,005,648 USD 3,111,747 08/20/99 108,639
Euro Dollars......................................................... 2,452,101 USD 2,538,612 08/20/99 88,680
Euro Dollars......................................................... 900,419 USD 923,056 08/20/99 41,694
Euro Dollars......................................................... 537,568 USD 549,583 08/20/99 26,392
Japanese Yen......................................................... 1,169,159,510 USD 9,759,261 08/20/99 470,397
Japanese Yen......................................................... 732,065,966 USD 6,206,000 08/20/99 199,272
U.S. Dollars......................................................... 36,387,000 DKK 5,062,891 08/20/99 (173,745)
U.S. Dollars......................................................... 9,212,225 EUR 9,519,545 08/20/99 (350,848)
U.S. Dollars......................................................... 5,578,188 EUR 5,970,000 08/20/99 (6,722)
U.S. Dollars......................................................... 1,936,479 EUR 2,070,386 08/20/99 (4,444)
U.S. Dollars......................................................... 1,877,432 EUR 1,909,123 08/20/99 (102,442)
U.S. Dollars......................................................... 1,535,693 EUR 1,634,960 08/20/99 (10,450)
U.S. Dollars......................................................... 5,566 EUR 5,752 08/20/99 (211)
U.S. Dollars......................................................... 346,724 GBP 554,621 08/20/99 (7,328)
U.S. Dollars......................................................... 121,000,000 JPY 1,023,689 08/20/99 (35,011)
U.S. Dollars......................................................... 65,789,374 JPY 548,245 08/20/99 (27,385)
U.S. Dollars......................................................... 24,500,000 NOK 3,111,747 08/20/99 (38,456)
U.S. Dollars......................................................... 30,200,000 SEK 3,578,538 08/20/99 (104,476)
------------
$ 720,352
------------
------------
</TABLE>
CURRENCY TYPE ABBREVIATIONS:
DKK Danish Kronas.
EUR Euro Dollars.
GBP British Pounds.
JPY Japanese Yen.
NOK Norwegian Krone.
SEK Swedish Krona.
USD U.S. Dollars.
INVESTMENTS BY TYPE OF ISSUER
<TABLE>
<CAPTION>
PERCENT OF PORTFOLIO
ASSETS
---------------------
LONG-TERM SHORT-TERM
--------- ---------
<S> <C> <C>
Government and other public issuers......................... 70.19% 9.72%
Repurchase agreements....................................... -- 2.86
Bank and other financial institutions....................... 2.89 1.61
Industrial.................................................. 12.73 --
--------- ---------
85.81% 14.19%
--------- ---------
--------- ---------
</TABLE>
See accompanying notes to financial statements
54
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--96.08%
AGRICULTURE, FOOD & BEVERAGE--0.78%
157,300 Tyson Foods Inc.(1)............................................................ $ 2,939,544
------------
BANKS--8.69%
46,000 Bank of Boston Corp. .......................................................... 2,159,125
73,300 The Chase Manhattan Corp. ..................................................... 5,634,937
22,200 First American Corp. of Tennessee.............................................. 932,400
41,925 First Security Corp. .......................................................... 1,061,227
70,300 First Union Corp. ............................................................. 3,233,800
106,000 Fleet Financial Group, Inc. ................................................... 4,293,000
124,600 Hibernia Corp. ................................................................ 1,775,550
68,900 PNC Bank Corp.(1).............................................................. 3,643,088
21,700 Regions Financial Corp. ....................................................... 771,706
108,558 US Bancorp..................................................................... 3,378,868
147,700 Wells Fargo and Co............................................................. 5,760,300
------------
32,644,001
------------
CHEMICALS--2.83%
46,600 Eastman Chemical Co.(1)........................................................ 2,408,637
2,900 Geon Co. ...................................................................... 88,813
153,300 IMC Global Inc.(1)............................................................. 2,797,725
121,700 Lyondell Chemical Co. ......................................................... 2,221,025
36,900 Praxair Inc. .................................................................. 1,702,012
47,300 Westvaco Corp. ................................................................ 1,392,394
------------
10,610,606
------------
COMPUTER HARDWARE--5.54%
156,800 Compaq Computer Corp. ......................................................... 3,763,200
349,400 Xerox Corp. ................................................................... 17,033,250
------------
20,796,450
------------
COMPUTER SOFTWARE--0.84%
114,300 Compuware Corp.*............................................................... 3,171,825
------------
CONSTRUCTION--4.67%
22,800 Armstrong World Industries, Inc.(1)............................................ 1,254,000
74,300 Champion Enterprises Inc.*(1).................................................. 1,016,981
54,700 Fleetwood Enterprises Inc. .................................................... 1,261,519
45,800 Lafarge Corp. ................................................................. 1,416,937
264,000 Masco Corp. ................................................................... 7,854,000
48,664 Southdown, Inc. ............................................................... 2,871,176
34,400 USG Corp.(1)................................................................... 1,846,850
------------
17,521,463
------------
DEFENSE/AEROSPACE--5.72%
270,532 Lockheed Martin Corp. ......................................................... 9,417,895
171,400 Raytheon Co.(1)................................................................ 12,051,563
------------
21,469,458
------------
DRUGS & MEDICINE--5.24%
72,000 Allergan, Inc. ................................................................ 6,804,000
135,800 Alza Corp.*(1)................................................................. 6,603,275
65,875 Covance Inc.*(1)............................................................... 1,292,797
45,900 Eli Lilly & Co. ............................................................... 3,012,188
34,100 Genzyme Corp.*(1).............................................................. 1,928,781
6,103 Genzyme Surgical Products(1)................................................... 32,231
------------
19,673,272
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
ELECTRIC UTILITIES--4.23%
78,100 CMS Energy Corp. .............................................................. $ 2,918,988
62,400 Dominion Resources, Inc. ...................................................... 2,749,500
221,600 Entergy Corp. ................................................................. 6,717,250
82,900 PECO Energy Co. ............................................................... 3,512,887
------------
15,898,625
------------
ELECTRICAL EQUIPMENT--4.19%
18,130 Comverse Technology Inc.*(1)................................................... 1,369,948
165,800 Corning, Inc. ................................................................. 11,606,000
40,000 Johnson Controls, Inc. ........................................................ 2,742,500
------------
15,718,448
------------
ELECTRICAL POWER--0.32%
25,100 Grainger (W.W.) Inc. .......................................................... 1,185,975
------------
ELECTRONIC COMPONENTS--0.42%
46,400 Commscope Inc.*................................................................ 1,586,300
------------
FINANCIAL SERVICES--3.70%
213,975 AON Corp. ..................................................................... 8,010,689
136,900 Household International, Inc. ................................................. 5,878,144
------------
13,888,833
------------
FOOD RETAIL--0.78%
244,700 Food Lion Inc. ................................................................ 2,921,106
------------
FOREST PRODUCTS, PAPER--3.31%
26,200 Champion International Corp.(1)................................................ 1,355,850
145,400 Fort James Corp. .............................................................. 5,307,100
94,400 Kimberly Clark Corp. .......................................................... 5,758,400
------------
12,421,350
------------
FREIGHT, AIR, SEA & LAND--3.08%
258,400 FDX Corp.*(1).................................................................. 11,579,550
------------
GAS UTILITY--0.23%
40,900 MCN Energy Group Inc. ......................................................... 871,681
------------
HOUSEHOLD PRODUCTS--1.75%
43,700 Dial Corp. .................................................................... 1,351,969
41,600 National Service Industries, Inc. ............................................. 1,469,000
86,700 Newell Rubbermaid Inc.(1)...................................................... 3,749,775
------------
6,570,744
------------
INDUSTRIAL PARTS--0.52%
44,800 Pentair Inc. .................................................................. 1,946,000
------------
INDUSTRIAL SERVICES/SUPPLIES--1.10%
34,200 Gatx Corp. .................................................................... 1,363,725
83,200 Viad Corp. .................................................................... 2,750,800
------------
4,114,525
------------
INFORMATION & COMPUTER SERVICES--5.98%
44,400 Computer Sciences Corp.*....................................................... 2,858,250
210,000 Electronic Data Systems Corp................................................... 12,665,625
140,020 First Data Corp. .............................................................. 6,939,741
------------
22,463,616
------------
</TABLE>
55
<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>
LEISURE--1.18%
188,400 Mattel, Inc.(1)................................................................ $ 4,427,400
------------
LIFE INSURANCE--5.16%
125,900 Aetna Life & Casualty Co. ..................................................... 10,323,800
102,700 CIGNA Corp. ................................................................... 9,056,856
------------
19,380,656
------------
MANUFACTURING-GENERAL--2.16%
87,000 American Standard Companies Inc.*.............................................. 3,833,438
25,700 Illinois Tool Works, Inc. ..................................................... 1,909,831
52,700 York International Corp. ...................................................... 2,355,031
------------
8,098,300
------------
MEDICAL PRODUCTS--2.89%
92,400 Baxter International Inc. ..................................................... 6,346,725
120,800 St. Jude Medical, Inc.*........................................................ 4,492,250
------------
10,838,975
------------
MEDICAL PROVIDERS--1.37%
84,600 United Healthcare Corp.(1)..................................................... 5,160,600
58,700 Vencor Inc.* .................................................................. 4,402
------------
5,165,002
------------
MINING & METALS--0.36%
24,760 Martin Marietta, Inc. ......................................................... 1,347,873
------------
MOTOR VEHICLES--3.01%
154,500 Delphi Automotive Systems Corp.(1)............................................. 2,781,000
76,000 Federal Mogul Corp.(1)......................................................... 3,686,000
101,400 Lear Corp.*(1)................................................................. 4,841,850
------------
11,308,850
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
OIL REFINING--0.55%
87,216 Ultramar Diamond Shamrock Corp. ............................................... $ 2,060,478
------------
PUBLISHING--0.78%
74,600 New York Times Co.(1).......................................................... 2,932,713
------------
RAILROADS--4.72%
423,300 Burlington Northern Santa Fe Inc. ............................................. 13,545,600
143,000 Norfolk Southern Corp.(1)...................................................... 4,182,750
------------
17,728,350
------------
SEMICONDUCTOR--0.88%
191,800 Advanced Micro Devices, Inc.*(1)............................................... 3,296,563
------------
SPECIALTY RETAIL--2.25%
144,000 Circuit City Stores, Inc. ..................................................... 6,804,000
105,400 Consolidated Stores Corp.*..................................................... 1,646,875
------------
8,450,875
------------
THRIFT--1.20%
139,000 Greenpoint Financial Corp. .................................................... 4,500,125
------------
TOBACCO--1.35%
135,800 Philip Morris Co., Inc. ....................................................... 5,058,550
------------
WIRELESS TELECOMMUNICATIONS--4.30%
216,400 General Instrument Corp.*...................................................... 9,819,150
118,200 Nextel Communications, Inc.*(1)................................................ 6,331,087
------------
16,150,237
------------
Total Common Stocks (cost--$313,042,142).................................................. 360,738,319
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES
- --------- -------------------- --------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS--0.31%
$ 1,175 U.S. Treasury Bills+
(cost--$1,174,422).................... 08/05/99 4.740%@ 1,174,422
------------
REPURCHASE AGREEMENT--3.90%
14,629 Repurchase Agreement dated 07/30/99 with
State Street
Bank & Trust Co., collateralized by
$8,667,914 U.S. Treasury Notes, 5.75%
due 08/15/03 (value--$8,830,436); and
by $5,866,224 U.S. Treasury Notes,
6.25% due 02/15/03 (value--
$6,093,540); proceeds: $14,634,181
(cost--$14,629,000)................... 08/02/99 4.250 14,629,000
------------
Total Investments (cost--$328,845,564)--100.29%.... 376,541,741
Liabilities in excess of other assets--(0.29)%..... (1,076,742)
------------
Net Assets--100.00%................................ $375,464,999
------------
------------
</TABLE>
- -----------------
* Non-Income producing security.
+ Entire or partial amount pledged as collateral for futures transactions.
@ Interest rate shown is discount rate at date of purchase.
(1) Security, or portion thereof, was on loan at July 31, 1999.
FUTURES CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF UNREALIZED
CONTRACTS CONTRACTS TO RECEIVE EXPIRATION DATE APPRECIATION
- ---------- -------------------- ---------------- -------------
<C> <S> <C> <C>
42 S&P 500............. September 1999 $ 102,667
-------------
-------------
</TABLE>
See accompanying notes to financial statements
56
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--97.01%
AGRICULTURE, FOOD & BEVERAGE--0.49%
31,000 The Coca-Cola Co. .................................................................................. $ 1,869,688
------------
APPAREL, RETAIL--0.55%
45,000 Gap, Inc.(1)........................................................................................ 2,103,750
------------
BANKS--7.82%
161,400 BankAmerica Corp. .................................................................................. 10,712,925
75,200 The Chase Manhattan Corp. .......................................................................... 5,781,000
296,323 Citigroup, Inc. .................................................................................... 13,204,894
------------
29,698,819
------------
COMPUTER HARDWARE--10.49%
282,550 Cisco Systems, Inc.*................................................................................ 17,553,419
352,000 Dell Computer Corp.*................................................................................ 14,388,000
63,000 International Business Machines..................................................................... 7,918,312
------------
39,859,731
------------
COMPUTER SOFTWARE--3.49%
154,400 Microsoft Corp.*.................................................................................... 13,249,450
------------
CONSTRUCTION--1.07%
136,700 Masco Corp. ........................................................................................ 4,066,825
------------
DEFENSE/AEROSPACE--2.09%
122,600 Allied Signal, Inc. ................................................................................ 7,930,688
------------
DIVERSIFIED RETAIL--5.35%
128,800 Kohls Corp.*........................................................................................ 9,796,850
249,200 Wal Mart Stores, Inc. .............................................................................. 10,528,700
------------
20,325,550
------------
DRUGS & MEDICINE--10.52%
27,700 Amgen, Inc.*........................................................................................ 2,129,438
245,900 Bristol-Myers Squibb Co. ........................................................................... 16,352,350
253,100 Pfizer, Inc. ....................................................................................... 8,589,581
263,100 Schering-Plough Corp. .............................................................................. 12,891,900
------------
39,963,269
------------
ELECTRIC UTILITIES--1.15%
72,600 AES Corp.(1)........................................................................................ 4,356,000
------------
ELECTRICAL EQUIPMENT--6.79%
57,200 Lucent Technologies, Inc. .......................................................................... 3,721,575
74,200 Nokia Corp. ADR(1).................................................................................. 6,311,638
245,000 Solectron Corp.*(1)................................................................................. 15,787,187
------------
25,820,400
------------
ENTERTAINMENT--1.00%
81,500 Carnival Corp. ..................................................................................... 3,784,656
------------
FINANCIAL SERVICES--4.39%
200,500 Associates First Capital Corp. ..................................................................... 7,681,656
315,850 MBNA Corp. ......................................................................................... 9,001,725
------------
16,683,381
------------
FOOD RETAIL--2.27%
328,600 Kroger Co.*......................................................................................... 8,646,287
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
HOUSEHOLD PRODUCTS--5.06%
152,900 Avon Products, Inc. ................................................................................ $ 6,956,950
171,000 Colgate-Palmolive Co. .............................................................................. 8,443,125
42,300 Procter & Gamble Co. ............................................................................... 3,828,150
------------
19,228,225
------------
INDUSTRIAL PARTS--1.42%
80,800 United Technologies Corp. .......................................................................... 5,388,350
------------
INFORMATION & COMPUTER SERVICES--2.11%
26,200 America Online Inc.*................................................................................ 2,492,275
85,700 Computer Sciences Corp.*............................................................................ 5,516,937
------------
8,009,212
------------
LEISURE--1.89%
130,000 Harley Davidson Inc. ............................................................................... 7,198,750
------------
LIFE INSURANCE--0.54%
40,000 Unumprovident Corp. ................................................................................ 2,070,000
------------
LONG DISTANCE & PHONE COMPANIES--7.13%
391,900 AT&T Liberty Media Corp............................................................................. 14,500,300
152,500 MCI WorldCom, Inc.*................................................................................. 12,581,250
------------
27,081,550
------------
MEDIA--2.37%
35,000 Amfm Inc. .......................................................................................... 1,837,500
44,000 Mediaone Group, Inc.*............................................................................... 3,184,500
55,500 Time Warner, Inc.................................................................................... 3,996,000
------------
9,018,000
------------
MEDICAL PRODUCTS--6.20%
101,400 Medtronic, Inc. .................................................................................... 7,307,138
166,200 Tyco International Ltd. ............................................................................ 16,235,662
------------
23,542,800
------------
OTHER INSURANCE--2.32%
76,000 American International Group, Inc. ................................................................. 8,825,500
------------
SECURITIES & ASSET MANAGEMENT--2.10%
88,600 Morgan Stanley Dean Witter Discover & Co. .......................................................... 7,985,075
------------
SEMICONDUCTOR--4.86%
111,200 Altera Corp.*....................................................................................... 4,031,000
209,200 Intel Corp. ........................................................................................ 14,434,800
------------
18,465,800
------------
SPECIALTY RETAIL--3.09%
183,900 Home Depot, Inc. ................................................................................... 11,735,119
------------
TOBACCO--0.45%
46,400 Philip Morris Co., Inc. ............................................................................ 1,728,400
------------
Total Common Stocks (cost--$252,059,690)....................................................................... 368,635,275
------------
</TABLE>
57
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- --------- -------------------- ---------------- ------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--2.59%
$ 9,814 Repurchase Agreement dated 07/30/99 with State Street Bank &
Trust Co., collateralized by $5,814,950 U.S. Treasury
Notes, 5.75% due 08/15/03 (value--$5,923,980); and by
$3,935,410 U.S. Treasury Notes, 6.25% due 02/15/03
(value--$4,087,908); proceeds: $9,817,476
(cost--$9,814,000)........................................ 08/02/99 4.250% $ 9,814,000
------------
378,449,275
Total Investments (cost--$261,873,690)--99.60%.........................
1,538,308
Other assets in excess of liabilities--0.40%...........................
------------
Net Assets--100.00%.................................................... $379,987,583
------------
------------
</TABLE>
- -----------------
* Non-Income producing security.
ADR American Depositary Receipt.
(1) Security, or a portion thereof, was on loan at July 31, 1999.
See accompanying notes to financial statements
58
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--97.07%
AGRICULTURE, FOOD & BEVERAGE--1.21%
14,700 Andersons Inc...................................................................................... $ 167,212
12,600 Michael Foods Inc.................................................................................. 292,162
19,500 Nash Finch Co...................................................................................... 177,937
63,200 Richfood Holdings Inc.............................................................................. 1,149,450
7,800 Sanderson Farms Inc................................................................................ 99,450
4,800 Sanfilippo John B & Son Inc.*...................................................................... 18,000
6,900 Suprema Specialties Inc.*.......................................................................... 54,769
9,300 Sylvan, Inc.*...................................................................................... 103,463
2,100 Vacu Dry Co.*...................................................................................... 19,163
38,600 Weider Nutrition International Inc................................................................. 183,350
29,100 WLR Foods Inc.*.................................................................................... 225,525
------------
2,490,481
------------
AIRLINES--0.76%
73,400 America West Holding Corp.*........................................................................ 1,454,237
41,300 Hawaiian Airlines Inc.............................................................................. 110,994
------------
1,565,231
------------
ALCOHOL--0.03%
6,700 Todhunter International Inc.*...................................................................... 67,000
------------
APPAREL, RETAIL--2.42%
67,200 Burlington Coat Factory Warehouse.................................................................. 1,218,000
9,900 Catherines Stores Corp.*........................................................................... 129,938
5,100 Concord Fabrics Inc.*.............................................................................. 39,206
5,100 Finish Line Inc.*.................................................................................. 53,550
36,000 Footstar Inc.*..................................................................................... 1,296,000
44,900 Genesco Inc.*...................................................................................... 541,606
31,200 Goodys Family Clothing Inc.*....................................................................... 327,600
8,200 Jos. A Bank Clothiers Inc.*........................................................................ 43,050
19,200 Paul Harris Stores Inc.*........................................................................... 118,800
11,200 Perry Ellis International Inc.*.................................................................... 141,750
3,200 Premiumwear Inc.*.................................................................................. 18,400
9,000 S & K Famous Brands Inc.*.......................................................................... 77,625
33,800 Syms Corp.*........................................................................................ 253,500
45,200 The Dress Barn*.................................................................................... 720,375
------------
4,979,400
------------
APPAREL, TEXTILES--3.43%
13,200 Barry R G Corp. Ohio*.............................................................................. 72,600
109,900 Burlington Industries Inc.* (1).................................................................... 762,431
12,725 Conso Products Co.*................................................................................ 71,578
4,832 Decorator Industries, Inc.......................................................................... 33,824
21,300 Dixie Group Inc.................................................................................... 191,700
23,700 Dyersburg Corp.*................................................................................... 20,738
20,400 Galey & Lord Inc.*................................................................................. 86,700
9,200 Garan Inc.......................................................................................... 293,250
45,600 Guilford Mills, Inc................................................................................ 427,500
1,200 Hallwood Group Inc.*............................................................................... 22,200
4,600 Hampshire Group, Ltd.*............................................................................. 57,500
6,163 Jones Apparel Group Inc.*.......................................................................... 202,609
40,400 Justin Industries Inc.............................................................................. 563,075
600 Lacrosse Footwear Inc.............................................................................. 4,388
17,500 Maxwell Shoe Inc.*................................................................................. 156,406
15,700 Movie Star Inc.*................................................................................... 29,437
37,400 Nautica Enterprises Inc.*.......................................................................... 635,800
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
APPAREL, TEXTILES--(CONCLUDED)
<TABLE>
<C> <S> <C>
16,500 Oxford Industries Inc.............................................................................. $ 411,469
25,300 Pillowtex Corp..................................................................................... 396,894
14,800 Quaker Fabric Corp................................................................................. 74,000
8,400 Rocky Shoes & Boots*............................................................................... 58,800
4,300 Span America Medical Systems Inc................................................................... 18,544
5,200 Sport Haley Inc.*.................................................................................. 25,350
8,200 Synthetic Industries Inc.*......................................................................... 213,200
5,400 Tandy Brands Accessories Inc.*..................................................................... 77,625
17,700 Timberland Co.*.................................................................................... 1,439,231
19,800 Unifi Inc.*........................................................................................ 318,037
3,600 Weyco Group Inc.................................................................................... 86,400
27,700 Wolverine World Wide Inc........................................................................... 325,475
------------
7,076,761
------------
BANKS--1.56%
3,500 American Bank Inc.................................................................................. 80,063
10,500 Barnett Inc.*...................................................................................... 85,312
11,600 Community Bank Systems Inc......................................................................... 301,600
18,100 Corus Bank Shares Inc.............................................................................. 561,100
4,500 CPB Inc............................................................................................ 100,687
26,400 Delta Financial Corp.* (1)......................................................................... 196,350
4,100 First Citizens Bancshares, Inc..................................................................... 326,975
9,200 First Republic Bank San Francisco California*...................................................... 242,650
3,100 Independent Bancshares Inc......................................................................... 38,169
6,800 Merchants Bancshares Inc........................................................................... 161,500
15,600 National City Bancorp.............................................................................. 312,975
19,019 Republic Bancorp Inc............................................................................... 267,455
10,600 Sterling Financial Corp. Washington*............................................................... 165,625
23,800 U.S. Bancorp Inc................................................................................... 371,875
------------
3,212,336
------------
BROADCASTING & PUBLISHING--0.04%
9,300 VDI Media*......................................................................................... 78,469
------------
BUILDING AND CONSTRUCTION PRODUCTS--0.01%
400 Kevco Inc.*........................................................................................ 2,550
3,400 Meadow Valley Corp.*............................................................................... 14,025
------------
16,575
------------
CHEMICALS--3.81%
11,865 Aceto Corp......................................................................................... 140,897
4,100 American Biltrite Inc.............................................................................. 87,125
3,300 American Vanguard Corp............................................................................. 19,181
8,000 Ameron, Inc........................................................................................ 340,500
1,300 Atlantis Plastics Inc.*............................................................................ 19,175
14,500 Bairnco Corp....................................................................................... 113,281
8,800 Balchem Corp....................................................................................... 57,200
15,700 Congoleum Corp.*................................................................................... 112,844
17,500 Dexter Corp........................................................................................ 686,875
148,900 Ethyl Corp......................................................................................... 846,869
26,300 Foamex International Inc........................................................................... 208,756
12,600 Furon Co........................................................................................... 212,625
31,800 Gencorp Inc.*...................................................................................... 836,737
32,700 General Chemical Group Inc......................................................................... 128,756
55,700 Georgia Gulf Corp.................................................................................. 765,875
</TABLE>
59
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
CHEMICALS--(CONCLUDED)
<TABLE>
<C> <S> <C>
23,000 Hanna M.A. Co...................................................................................... $ 368,000
200 International Specialty Products*.................................................................. 1,788
8,100 Lydall Inc.*....................................................................................... 95,175
70,700 NL Industries Inc.................................................................................. 901,425
15,900 Quaker Chemical.................................................................................... 256,388
8,400 Raven Industries Inc............................................................................... 139,650
40,600 Schulman A Inc..................................................................................... 784,087
15,700 Stepan Chemical Co................................................................................. 391,519
9,800 Sybron Chemicals Inc.*............................................................................. 150,675
11,500 Wellman Inc........................................................................................ 186,156
------------
7,851,559
------------
COMPUTER--BUSINESS SERVICES--0.05%
2,700 Cotelligent, Inc.*................................................................................. 15,863
17,300 Ontrack Data International Inc.*................................................................... 84,337
------------
100,200
------------
COMPUTER HARDWARE--1.07%
10,800 Alphanet Solutions Inc.*........................................................................... 44,550
20,300 Amplicon Inc....................................................................................... 268,975
9,000 Dataram Corp.*..................................................................................... 92,250
800 Equinox Systems Inc.*.............................................................................. 10,100
15,700 Gradco Systems Inc.*............................................................................... 32,381
29,800 Inacom Corp.*...................................................................................... 413,475
8,400 Kentek Information Systems Inc..................................................................... 66,675
4,300 McRae Industries Inc............................................................................... 24,188
9,100 Printronix Corp.*.................................................................................. 128,538
23,500 PSC Inc.*.......................................................................................... 232,062
13,900 Savoir Technology Group Inc.*...................................................................... 132,050
9,400 Scan Optics Inc.*.................................................................................. 32,900
18,400 Splash Technology Holdings Inc.*................................................................... 125,350
61,000 Systemax Inc.*..................................................................................... 606,187
------------
2,209,681
------------
COMPUTER SOFTWARE--1.08%
26,600 Alternative Resources Corp.*....................................................................... 186,200
3,000 Ansys Inc.*........................................................................................ 27,938
60,300 Avant Corp.*....................................................................................... 866,812
2,300 Boundless Corp.*................................................................................... 12,363
2,900 CFI Proservices Inc.*.............................................................................. 35,162
21,900 MSC Software Corp.*................................................................................ 119,081
6,300 Prophet 21 Inc.*................................................................................... 55,125
20,600 Saga Systems Inc.*................................................................................. 236,900
4,300 Software Spectrum, Inc.* (1)....................................................................... 69,875
2,260 3Dfx Interactive Inc.*............................................................................. 30,228
33,200 Veritas DGC Inc.*.................................................................................. 593,450
------------
2,233,134
------------
CONSTRUCTION--0.58%
32,800 American Homestar Corp.*........................................................................... 237,800
6,200 Dayton Superior Corp.*............................................................................. 125,550
79,500 Oakwood Homes Corp................................................................................. 839,719
------------
1,203,069
------------
CONSUMER DURABLES--1.46%
19,100 Chromcraft Revington Inc.*......................................................................... 259,044
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
CONSUMER DURABLES--(CONCLUDED)
<TABLE>
<C> <S> <C>
15,800 CHS Electronics, Inc.*............................................................................. $ 60,237
12,200 Flexsteel Industries Inc........................................................................... 163,175
13,500 Home Products International Inc.*.................................................................. 111,375
94,100 Interface, Inc..................................................................................... 841,019
200 Ladd Furniture Inc.*............................................................................... 4,125
29,600 Mikasa Inc......................................................................................... 386,650
24,600 O'Sullivan Industries*............................................................................. 387,450
2,100 Pulaski Furniture Corp............................................................................. 45,413
21,900 Rowe Furniture Corp................................................................................ 247,744
10,200 Stanley Furniture Co., Inc.*....................................................................... 245,437
6,171 Virco Manufacturing Corp........................................................................... 102,593
4,800 Winsloew Furniture Inc.*........................................................................... 161,400
------------
3,015,662
------------
DEFENSE/AEROSPACE--1.33%
10,200 AAR Corp........................................................................................... 214,837
23,000 Alliant Techsystems Inc.*.......................................................................... 1,901,812
8,200 Allied Research Corp.*............................................................................. 44,588
4,900 Curtiss Wright Corp................................................................................ 180,687
11,800 EDO Corp........................................................................................... 94,400
15,900 GRC International Inc.*............................................................................ 127,200
6,200 Herley Industries Inc.*............................................................................ 86,025
1,900 International Airline Support Inc.*................................................................ 8,788
6,000 Sifco Industries Inc............................................................................... 54,375
6,100 Spacehab Inc.*..................................................................................... 34,313
------------
2,747,025
------------
DIVERSIFIED INDUSTRIALS--0.19%
12,300 Acx Technologies, Inc.*............................................................................ 142,988
18,700 Esco Electronics Corp.............................................................................. 251,281
------------
394,269
------------
DIVERSIFIED RETAIL--0.58%
27,200 Bon Ton Stores Inc.*............................................................................... 149,600
51,700 Homebase Inc.* (1)................................................................................. 268,194
23,500 RDO Equipment Co.*................................................................................. 211,500
8,700 Specialty Catalog Corp.*........................................................................... 32,625
42,800 Value City Department Stores Inc.*................................................................. 526,975
------------
1,188,894
------------
DRUGS & MEDICINE--0.48%
63,266 Herbalife International Inc., Class A (1).......................................................... 731,513
19,533 Herbalife International Inc., Class B (1).......................................................... 183,732
4,900 Moore Medical Corp.*............................................................................... 57,575
6,400 Natural Alternatives International Inc.*........................................................... 21,600
------------
994,420
------------
ELECTRIC UTILITIES--2.64%
10,000 Bangor Hydro Electric Co........................................................................... 166,250
35,100 Cleco Corp......................................................................................... 1,127,587
9,500 Cogeneration Corp. America*........................................................................ 166,250
19,300 Commonwealth Energy Systems........................................................................ 841,963
82,700 El Paso Electric Co.*.............................................................................. 749,469
400 Maine Public Service Co............................................................................ 7,100
73,600 Public Service Co.................................................................................. 1,467,400
2,800 Saint Joseph Light & Power Co...................................................................... 58,800
</TABLE>
60
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
ELECTRIC UTILITIES--(CONCLUDED)
<TABLE>
<C> <S> <C>
21,200 TNP Enterprises Inc................................................................................ $ 809,575
900 United Illuminating Co............................................................................. 40,106
------------
5,434,500
------------
ELECTRICAL EQUIPMENT--1.54%
9,000 Acme Electric Corp.*............................................................................... 45,000
1,500 American Technical Ceramics*....................................................................... 16,313
7,100 Applied Signal Technology Inc...................................................................... 73,219
4,400 Bel Fuse Inc....................................................................................... 122,650
42,400 Belden, Inc........................................................................................ 1,054,700
22,700 Brown & Sharpe Manufacturing Co.*.................................................................. 85,125
19,500 Cherry Corp.*...................................................................................... 288,844
10,700 Cobra Electronics Corp.*........................................................................... 42,800
5,100 Cognitronics Corp.*................................................................................ 86,381
9,600 Comdial Corp.*..................................................................................... 67,200
2,700 Davox Corp.*....................................................................................... 43,537
3,000 Detection Systems Inc.*............................................................................ 25,687
21,100 Louisiana Barge Inc.*.............................................................................. 44,837
2,081 MTS Systems Corp................................................................................... 21,851
1,300 Napco Security Systems Inc.*....................................................................... 5,038
2,200 Nortech Systems Inc.*.............................................................................. 6,325
6,200 O. I. Corp.*....................................................................................... 28,675
52,400 Pioneer Standard Electronics, Inc. (1)............................................................. 671,375
13,200 Reliability Inc.*.................................................................................. 59,400
7,700 RF Monolithics Inc.*............................................................................... 72,669
10,700 Sparton Corp.*..................................................................................... 70,887
100 Spectrum Control Inc.*............................................................................. 669
9,000 T B Woods Corp..................................................................................... 91,687
1,500 Technical Operations Sevcon Inc.................................................................... 19,875
9,000 Vertex Communications Corp.*....................................................................... 111,375
4,800 Video Display Corp.*............................................................................... 21,750
------------
3,177,869
------------
ELECTRICAL POWER--2.73%
8,500 Aztec Manufacturing Co............................................................................. 85,000
43,000 Cable Design Technologies Corp.*................................................................... 779,375
27,000 Calpine Corp.*..................................................................................... 2,030,062
15,100 Carbide/Graphite Group Inc.*....................................................................... 210,456
22,500 Encore Wire Corp.*................................................................................. 230,625
33,000 Hughes Supply, Inc................................................................................. 940,500
13,100 Lamson & Sessions Co.*............................................................................. 76,963
4,500 SL Industries Inc.................................................................................. 55,406
42,700 UCAR International Inc.*........................................................................... 1,134,219
6,400 Woodhead Industries................................................................................ 76,000
------------
5,618,606
------------
ELECTRONIC COMPONENTS--0.68%
7,100 Axsys Technologies Inc.*........................................................................... 78,100
63,500 General Semiconductor Inc.*........................................................................ 543,719
20,900 Recoton Corp.*..................................................................................... 219,450
1,200 Sensory Science Corp.*............................................................................. 3,900
21,200 Triumph Group Inc.*................................................................................ 547,225
------------
1,392,394
------------
ENTERTAINMENT--0.05%
5,800 Funco Inc.......................................................................................... 102,950
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
ENVIRONMENTAL SERVICES--0.04%
7,100 Exponent Inc.*..................................................................................... $ 50,588
7,400 MFRI Inc.*......................................................................................... 30,525
------------
81,113
------------
FINANCIAL SERVICES--2.22%
45,000 Advanta Corp. (1).................................................................................. 984,375
82,500 Amresco Inc........................................................................................ 515,625
69,200 Arcadia Financial Ltd.*............................................................................ 501,700
41,300 Bluegreen Corp..................................................................................... 263,287
21,400 Consumer Portfolio Services Inc.................................................................... 33,438
3,800 Dewolfe Companies Inc.*............................................................................ 29,450
21,400 Ezcorp Inc......................................................................................... 125,725
32,400 First Alliance Co.................................................................................. 105,300
12,800 Firstcity Financial Corp........................................................................... 72,000
8,400 FTI Consulting Inc.*............................................................................... 49,875
3,000 Jwgenesis Financial Corp........................................................................... 49,500
9,200 Kaye Group Inc..................................................................................... 78,775
17,900 Main St. & Main Inc................................................................................ 60,413
4,200 Pacific Crest Capital Inc.*........................................................................ 64,575
7,500 Refac Technology Development Corp.................................................................. 45,000
45,550 Resource Bank Shares Mortgage Group Inc............................................................ 318,850
8,800 Strattec Security Corp.*........................................................................... 313,500
17,400 Student Loan Corp.................................................................................. 757,987
1,600 TFC Enterprises Inc................................................................................ 4,700
33,900 World Acceptance Corp.*............................................................................ 211,875
------------
4,585,950
------------
FOOD RETAIL--0.32%
10,600 Eagle Food Certificates Inc.*...................................................................... 27,162
36,800 M & F Worldwide Corp.*............................................................................. 354,200
8,700 Marsh Supermarkets Inc............................................................................. 134,850
2,100 Rocky Medium Term Note Chocolate Factory........................................................... 12,075
3,650 Schultz Sav-O Stores, Inc.......................................................................... 59,769
8,200 Western Beef, Inc.*................................................................................ 67,394
------------
655,450
------------
FOREST PRODUCTS, PAPER--1.99%
4,500 Baltek Corp........................................................................................ 43,312
9,300 BCT International Inc.*............................................................................ 21,506
113,100 Boise Cascade Office Products Corp................................................................. 1,244,100
15,400 Caraustar Industries Inc........................................................................... 383,075
13,950 Fibermark Inc.*.................................................................................... 190,069
21,300 Glatfelter PH Co................................................................................... 296,869
1,000 Quipp Inc.*........................................................................................ 13,625
20,890 Republic Group Inc................................................................................. 378,631
61,800 Rock-Tennessee Co.................................................................................. 1,050,600
30,700 Schweitzer Mauduit International Inc............................................................... 485,444
------------
4,107,231
------------
FREIGHT, AIR, SEA & LAND--3.85%
34,800 Arkansas Best Corp.*............................................................................... 378,450
41,200 Arnold Industries Inc.............................................................................. 648,900
7,300 Boyd Brothers Transportation Inc.*................................................................. 75,738
2,500 Circle International Group Inc..................................................................... 60,000
</TABLE>
61
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
FREIGHT, AIR, SEA & LAND--(CONCLUDED)
<TABLE>
<C> <S> <C>
8,300 Consolidated Delivery & Logistics Inc.*............................................................ $ 30,088
40,400 Consolidated Freightways Corp.*.................................................................... 426,725
26,600 Covenant Transport, Inc., Class A*................................................................. 468,825
12,200 Dynamex Inc.*...................................................................................... 39,650
9,400 Genesee & Wyoming Inc.*............................................................................ 103,400
30,900 Hunt J B Transport Services Inc.................................................................... 465,431
30,400 Hvide Marine Inc.* (1)............................................................................. 54,150
30,200 Kitty Hawk Inc.*................................................................................... 203,850
8,800 Landstar Systems Inc.*............................................................................. 355,300
16,500 Old Dominion Freight Lines Inc.*................................................................... 247,500
12,800 PAM Transportation Services Inc.*.................................................................. 144,800
36,500 Roadway Express Inc................................................................................ 796,156
8,900 Smithway Motor Xpress Corp.*....................................................................... 87,888
11,900 Transport Corp. of America*........................................................................ 165,112
16,200 Trico Marine Services Inc.*........................................................................ 111,375
41,000 U.S. Freightways Corp.............................................................................. 2,024,375
18,900 U.S. Xpress Enterprises Inc.*...................................................................... 184,275
16,800 USA Truck Inc.*.................................................................................... 151,200
41,100 Yellow Corp.*...................................................................................... 703,837
------------
7,927,025
------------
GAS UTILITY--0.13%
5,550 Energysouth Inc.................................................................................... 114,469
2,000 SJW Corp........................................................................................... 160,500
------------
274,969
------------
HEALTH & PERSONAL CARE--0.13%
5,400 Hawaii Tech Pharmacal Co. Inc.*.................................................................... 24,300
11,400 Inter Parfums*..................................................................................... 113,287
30,100 Mim Corp.*......................................................................................... 60,200
6,200 Styling Technology Corp.*.......................................................................... 79,438
------------
277,225
------------
HEALTHCARE COST CONTAINMENT--0.19%
37,600 Ameripath Inc.*.................................................................................... 361,900
23,900 Innovative Clinical Solutions*..................................................................... 32,863
------------
394,763
------------
HEAVY MACHINERY--1.69%
119,200 Agco Corp. (1)..................................................................................... 1,117,500
12,600 Alamo Group Inc.................................................................................... 113,400
23,000 Cascade Corp....................................................................................... 316,250
17,800 Columbus Mckinnon Corp............................................................................. 408,287
11,400 Gehl Co.*.......................................................................................... 243,675
4,200 Gencor Industries Inc.............................................................................. 26,513
13,500 NACCO Industries Inc............................................................................... 1,056,375
7,600 Printware Inc.*.................................................................................... 19,000
1,300 Richton International Corp.*....................................................................... 19,175
4,600 Tennant Co......................................................................................... 157,550
------------
3,477,725
------------
HOTELS--1.63%
9,000 Ameristar Casinos Inc.*............................................................................ 29,813
5,300 Anchor Gaming*..................................................................................... 268,312
5,600 Black Hawk Gaming & Development Inc.*.............................................................. 39,900
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
HOTELS--(CONCLUDED)
<TABLE>
<C> <S> <C>
68,700 Boyd Gaming Corp.*................................................................................. $ 429,375
33,000 Host Marriott Services Corp.*...................................................................... 513,562
8,200 Isle Capri Casinos Inc.*........................................................................... 76,362
8,700 Lady Luck Gaming Corp.*............................................................................ 45,675
18,225 Lakes Gaming Inc.*................................................................................. 230,091
41,800 Lodgian Inc.*...................................................................................... 214,225
6,784 Playcore Inc.*..................................................................................... 55,968
103,900 Prime Hospitality Corp.*........................................................................... 1,136,406
13,200 Sholodge, Inc.*.................................................................................... 73,425
27,500 Suburban Lodges America Inc.*...................................................................... 166,719
6,900 Supertel Hospitality*.............................................................................. 84,094
------------
3,363,927
------------
HOUSEHOLD PRODUCTS--0.63%
7,100 Align Rite International Inc.*..................................................................... 107,387
11,600 CCA Industries Inc.*............................................................................... 15,225
12,300 CPAC Inc........................................................................................... 95,325
25,900 Ekco Group Inc.*................................................................................... 110,075
24,500 French Fragrances Inc.* (1)........................................................................ 176,094
4,500 Jason Inc.*........................................................................................ 37,125
16,400 Libbey Inc......................................................................................... 508,400
22,500 Lifetime Hoan Corp................................................................................. 208,125
7,800 Stephan Co......................................................................................... 31,200
------------
1,288,956
------------
HUMAN RESOURCES--0.12%
10,100 Personnel Group Of America Inc.*................................................................... 95,319
26,400 Westaff Inc.*...................................................................................... 161,700
------------
257,019
------------
INDUSTRIAL PARTS--6.12%
9,600 Amcast Industrial Corp............................................................................. 175,800
5,200 Amistar Corp.*..................................................................................... 9,100
16,500 Ampco Pittsburgh Corp.............................................................................. 212,437
29,700 Baldwin Technology Inc.*........................................................................... 98,381
32,800 Barnes Group Inc................................................................................... 649,850
6,600 Bridgeport Machines Inc.*.......................................................................... 63,938
500 Chicago Rivet Machine Co........................................................................... 12,063
22,500 Commercial Intertech Corp.......................................................................... 330,469
18,100 DT Industries Inc.................................................................................. 113,125
16,600 Esterline Technologies Corp.*...................................................................... 256,262
5,300 Fansteel Inc. Delaware*............................................................................ 30,806
8,250 Farr Co.*.......................................................................................... 84,563
7,000 Farrel Corp........................................................................................ 14,219
17,000 Genlyte Group Inc.*................................................................................ 395,250
13,600 Gleason Corp....................................................................................... 219,300
8,900 Global Industrial Technologies Inc.*............................................................... 106,244
7,600 Gorman Rupp Co..................................................................................... 122,550
3,200 Graham Corp.*...................................................................................... 26,800
19,550 Hardinge Brothers Inc.............................................................................. 322,575
65,600 Hexcel Corp.*...................................................................................... 557,600
12,900 Hirsch International Group*........................................................................ 26,606
12,600 Hurco Co. Inc.*.................................................................................... 53,550
14,700 Intevac Inc.* (1).................................................................................. 69,825
5,300 K Tron International Inc.*......................................................................... 94,738
36,200 Kaman Corp......................................................................................... 524,900
</TABLE>
62
<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>
42,800 Kennametal Inc..................................................................................... $ 1,032,550
14,200 Lawson Products Inc................................................................................ 337,250
13,000 Lufkin Industries, Inc............................................................................. 214,500
58,700 Magnetek Inc.*..................................................................................... 598,006
48,700 Mark IV Industries Inc............................................................................. 1,040,962
8,700 Mestek, Inc.*...................................................................................... 190,856
3,000 NN Ball & Roller Inc............................................................................... 20,625
4,200 Nortek, Inc.*...................................................................................... 163,800
2,500 P & F Industries Inc.*............................................................................. 24,063
1,000 Peerless Manufacturing Co.......................................................................... 12,000
9,400 Pennsylvania Engineering Manufacturing Corp........................................................ 225,600
3,300 Pennsylvania Engineering Manufacturing Corp., Class A.............................................. 72,600
19,000 Powell Industries Inc.*............................................................................ 166,250
28,200 Quanex Corp........................................................................................ 743,775
4,600 Scotsman Industries, Inc........................................................................... 153,813
21,700 Shaw Group Inc.*................................................................................... 431,287
24,900 Specialty Equipment Cos., Inc.*.................................................................... 647,400
20,800 Standex International Corp......................................................................... 551,200
11,000 Starrett LS Co..................................................................................... 305,250
7,600 Summa Industries Inc.*............................................................................. 107,350
12,500 Transtechnology Corp............................................................................... 207,031
44,300 Watts Industries Inc............................................................................... 791,862
------------
12,608,981
------------
INDUSTRIAL SERVICES/SUPPLIES--2.58%
27,600 C D I Corp.*....................................................................................... 900,450
21,900 Electro Rental*.................................................................................... 271,012
59,700 Flowserve Corp. (1)................................................................................ 1,048,481
19,750 Healthcare Services Group Inc.*.................................................................... 185,156
44,050 Interpool Inc...................................................................................... 569,897
7,900 McGrath Rentcorp................................................................................... 146,150
15,100 Mitcham Industries Inc.*........................................................................... 65,119
13,335 Monro Muffler Brake Inc.*.......................................................................... 100,846
13,800 National Techical Systems Inc...................................................................... 52,613
12,800 PLM International Inc.*............................................................................ 72,800
15,700 Remedytemp*........................................................................................ 280,637
43,500 Rollins Truck Leasing Corp......................................................................... 494,812
22,600 SOS Staffing Services Inc.*........................................................................ 122,888
13,100 Sunrise Leasing Corp.*............................................................................. 56,289
38,300 Superior Energy Services Inc.*..................................................................... 220,225
8,400 Superior Surgical Manufacturing Inc................................................................ 106,050
36,100 Unifirst Corp...................................................................................... 602,419
2,900 Winston Resources Inc.*............................................................................ 13,050
1,900 WPI Group Inc.*.................................................................................... 7,719
680 Zimmerman Sign Co.*................................................................................ 2,253
------------
5,318,866
------------
INFORMATION & COMPUTER SERVICES--0.45%
6,500 Advo Inc.*......................................................................................... 124,312
11,300 American Physician Partners Inc.*.................................................................. 84,044
7,400 American Physicians Service Group*................................................................. 27,750
4,600 Amrep Corp.*....................................................................................... 29,325
9,600 Corrpro Cos Inc.*.................................................................................. 82,800
3,300 General Employment Enterprises*.................................................................... 18,563
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
INFORMATION & COMPUTER SERVICES--(CONCLUDED)
<TABLE>
<C> <S> <C>
35,400 RTI International Metals Inc. (1)*................................................................. $ 455,775
1,000 Transport Lux Corp................................................................................. 7,625
2,300 Value Line Inc..................................................................................... 91,712
------------
921,906
------------
INSTRUMENTS--SCIENTIFIC--0.09%
15,600 Metrika Systems Corp.*............................................................................. 128,700
5,000 Williams Controls Inc.*............................................................................ 15,625
1,600 Woodward Governor Co............................................................................... 38,800
------------
183,125
------------
LEISURE--2.41%
55,300 Arctic Cat Inc..................................................................................... 501,156
7,950 Boston Acoustics Inc............................................................................... 147,075
14,900 Cannondale Corp.*.................................................................................. 156,450
19,400 Concord Camera Corp.*.............................................................................. 141,862
24,100 Department 56 Inc.*................................................................................ 697,394
6,000 Ellett Brothers Inc................................................................................ 36,750
5,000 Equity Marketing Inc.*............................................................................. 56,563
2,300 Escalade Inc.*..................................................................................... 40,825
3,000 Fountain Power Boat Inds Inc.*..................................................................... 13,125
6,300 Inland Entertainment Corp.*........................................................................ 14,963
23,600 K2 Inc.*........................................................................................... 233,050
5,400 Koss Corp.*........................................................................................ 66,825
56,600 Midway Games Inc.*................................................................................. 665,050
9,800 Oneida Ltd......................................................................................... 254,800
11,100 Play By Play Toys & Novelties*..................................................................... 29,138
40,900 Polaris Industries Inc............................................................................. 1,610,437
9,900 Russ Berrie & Company Inc.......................................................................... 241,931
15,700 Seattle Filmworks Inc.*............................................................................ 43,175
3,000 Sportsmans Guide Inc.*............................................................................. 16,875
------------
4,967,444
------------
LIFE INSURANCE--2.25%
39,600 American Annuity Group Inc......................................................................... 950,400
61,724 Amerus Life Holdings Inc........................................................................... 1,701,267
42,800 Arm Financial Inc.*................................................................................ 214,000
2,812 Cotton States Life Insurance Co.................................................................... 31,108
17,394 Delphi Financial Group, Inc.*...................................................................... 652,275
5,800 Independence Holding Co............................................................................ 67,425
5,400 National Western Life Insurance Co.*............................................................... 523,800
21,200 Presidential Life Corp............................................................................. 406,775
13,600 Standard Management Corp.*......................................................................... 81,600
------------
4,628,650
------------
LONG DISTANCE & PHONE COMPANIES--0.01%
1,600 Hector Communications Corp.*....................................................................... 19,600
------------
MACHINERY & ENGINEERING SERVICES--0.04%
34,100 Iteq Inc.*......................................................................................... 76,725
------------
MANUFACTURING-GENERAL--2.31%
13,400 Alltrista Corp.*................................................................................... 408,700
63,100 Buckeye Technologies Inc.*......................................................................... 1,049,037
1,300 Core Matls Corp.*.................................................................................. 3,331
8,700 Denali Inc.*....................................................................................... 72,863
</TABLE>
63
<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)
MANUFACTURING-GENERAL--(CONCLUDED)
<TABLE>
<C> <S> <C>
10,800 Featherlite Manufacturing Inc.*.................................................................... $ 67,500
32,400 Gentek Inc......................................................................................... 461,700
17,700 Media Arts Group Inc.*............................................................................. 95,138
72,700 Milacron Inc....................................................................................... 1,244,987
5,100 Ocular Sciences Inc.*.............................................................................. 100,406
11,200 Oroamerica Inc.*................................................................................... 76,300
3,600 Q E P Inc.*........................................................................................ 29,475
35,900 Regal Beloit Corp.................................................................................. 751,656
18,500 Silgan Holdings Inc.*.............................................................................. 401,219
------------
4,762,312
------------
MANUFACTURING-HIGH TECHNOLOGY--0.52%
15,000 Blonder Tongue Labs Inc.*.......................................................................... 96,563
96,500 CellStar Corp.*.................................................................................... 639,312
16,400 Channell Commercial Corp.*......................................................................... 169,125
3,000 Communications Systems............................................................................. 43,500
5,900 Delaware Global Technologies Corp.*................................................................ 47,938
6,200 Percon Acquisition Inc.*........................................................................... 55,800
1,100 Thermwood Corp.*................................................................................... 6,600
2,500 Vivid Technologies Inc.*........................................................................... 7,500
1,600 WSI Industries, Inc.*.............................................................................. 7,000
------------
1,073,338
------------
MEDIA--0.02%
4,500 Datron Systems Inc. California..................................................................... 33,750
------------
MEDICAL PRODUCTS--0.54%
12,500 American Dental Technologies*...................................................................... 43,750
2,700 Bacou USA Inc.*.................................................................................... 48,600
10,600 Bio Rad Laboratories Inc.*......................................................................... 289,512
6,900 Biosource International Inc.*...................................................................... 36,656
4,200 Lakeland Industries, Inc.*......................................................................... 25,988
10,100 Medstone International Inc.*....................................................................... 66,281
6,600 Mesa Labs Inc.*.................................................................................... 32,588
31,900 Natures Sunshine Products Inc...................................................................... 299,062
8,500 PolyMedica Inc.*................................................................................... 141,313
6,800 Selas Corp. America................................................................................ 39,950
11,000 Utah Medical Products Inc.*........................................................................ 83,875
------------
1,107,575
------------
MEDICAL PROVIDERS--1.81%
185,200 Beverly Enterprises Inc.*.......................................................................... 1,064,900
10,700 Castle Dental Ctrs Inc.*........................................................................... 49,488
13,600 Coast Dental Services Inc.*........................................................................ 62,050
67,400 Genesis Health Ventures Inc.*...................................................................... 176,925
14,200 Healthcare Recoveries Inc.*........................................................................ 65,675
11,900 Horizon Health Corp.*.............................................................................. 84,788
101,500 Integrated Health Services, Inc.*.................................................................. 570,937
14,400 Monarch Dental Corp.*.............................................................................. 53,100
21,000 Pediatrix Medical Group* (1)....................................................................... 413,437
41,500 Promedco Management Co.*........................................................................... 128,391
15,700 Raytel Medical Corp.*.............................................................................. 65,744
9,400 Rehabcare Group Inc.*.............................................................................. 196,812
21,300 Response Oncology Inc.*............................................................................ 53,250
25,900 Rural/Metro Corp.*................................................................................. 210,437
32,900 Sierra Health Services Inc.*....................................................................... 425,644
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
MEDICAL PROVIDERS--(CONCLUDED)
<TABLE>
<C> <S> <C>
800 Specialty Care Network Inc.*....................................................................... $ 4,000
18,000 Unilab Corp.*...................................................................................... 96,750
------------
3,722,328
------------
MINING & METALS--5.75%
191,600 Armco Inc.*........................................................................................ 1,257,375
14,500 Atchinson Casting Corp.*........................................................................... 142,281
22,900 Bayou Steel Corp.*................................................................................. 78,719
34,600 Carpenter Technology Corp.......................................................................... 916,900
5,700 Castle A M & Co.................................................................................... 87,281
16,300 Century Aluminum Co................................................................................ 171,150
27,200 Chase Industries Inc.*............................................................................. 227,800
21,900 Cleveland Cliffs Inc............................................................................... 700,800
29,000 Commercial Metals Co............................................................................... 957,000
9,609 Friedman Industries, Inc.*......................................................................... 40,838
5,700 IMCO Recycling Inc................................................................................. 99,394
45,200 Intermet Corp...................................................................................... 514,150
5,100 Keystone Consolidated Industries Inc.*............................................................. 30,600
7,900 Lindberg Corp...................................................................................... 103,688
68,100 Metals USA Inc.* (1)............................................................................... 846,994
64,900 National Steel Corp................................................................................ 535,425
6,300 Niagara Corp.* (1)................................................................................. 34,847
2,000 Northern Technologies International................................................................ 15,750
11,400 Northwest Pipe Co.*................................................................................ 203,775
7,300 Oglebay Norton Co.................................................................................. 168,812
7,900 Pitt Desmoines Inc................................................................................. 231,075
35,500 Pittston Co........................................................................................ 355,000
6,000 Reliance Steel & Aluminum Co....................................................................... 204,000
4,975 Riviera Tool Co.*.................................................................................. 21,144
15,150 Roanoke Electric Steel Corp........................................................................ 251,869
26,700 Special Metals Corp.*.............................................................................. 135,169
22,200 Steel Technologies Inc............................................................................. 237,262
42,200 Texas Industries, Inc.............................................................................. 1,487,550
38,600 Titanium Metals Corp. (1).......................................................................... 504,212
12,500 Universal Stainless & Alloy*....................................................................... 65,625
13,100 Webco Industries Inc.*............................................................................. 59,769
27,800 Wolverine Tube Inc.*............................................................................... 580,325
27,800 Wyman Gordon Co.*.................................................................................. 529,937
6,922 Zemex Corp.*....................................................................................... 50,185
------------
11,846,701
------------
MOTOR VEHICLES--4.41%
39,400 Arvin Industries Inc............................................................................... 1,472,575
6,264 Autocam Corp....................................................................................... 86,130
7,400 Bandag Inc......................................................................................... 248,363
10,400 Collins Industries Inc............................................................................. 68,900
17,900 Dura Automotive Systems, Inc.*..................................................................... 528,050
6,000 Edelbrock Corp.*................................................................................... 90,000
55,500 Fleetwood Enterprises Inc. (1)..................................................................... 1,279,969
80,300 Mascotech Inc...................................................................................... 1,345,025
25,200 Modine Manufacturing Co............................................................................ 807,187
8,800 Motorcar Parts & Accesories Inc.*.................................................................. 45,375
14,600 R & B Inc.*........................................................................................ 138,700
8,200 Rush Enterprises Inc.*............................................................................. 151,700
19,400 Shiloh Industries Inc.*............................................................................ 232,800
32,200 Simpson Industries, Inc............................................................................ 386,400
</TABLE>
64
<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)
MOTOR VEHICLES--(CONCLUDED)
<TABLE>
<C> <S> <C>
30,000 Standard Products Co............................................................................... $ 1,065,000
7,553 Supreme Industries, Inc.*.......................................................................... 63,256
40,700 TBC Corp.*......................................................................................... 302,706
8,112 Varlen Corp........................................................................................ 307,242
21,800 Wabash National Corp............................................................................... 460,525
------------
9,079,903
------------
OIL REFINING--0.53%
5,700 Adams Resources & Energy Inc....................................................................... 44,175
4,400 Castle Energy Corp................................................................................. 75,900
48,500 Frontier Oil Corp.................................................................................. 318,281
14,700 Holly Corp......................................................................................... 220,500
11,762 Mercury Air Group, Inc.*........................................................................... 82,334
18,800 Petroleum Development Corp......................................................................... 86,950
19,300 World Fuel Services Corp........................................................................... 266,581
------------
1,094,721
------------
OIL SERVICES--3.30%
41,700 Friede Goldman International Inc. (1).............................................................. 505,613
23,100 Gulf Islands Fabrication Inc....................................................................... 277,200
3,300 Marine Drilling Companies, Inc..................................................................... 49,294
79,500 National Oilwell Inc............................................................................... 1,267,031
7,800 Oceaneering International Inc.*.................................................................... 137,475
42,700 Offshore Logistics Inc............................................................................. 517,737
13,700 Pool Energy Services Co............................................................................ 285,131
86,400 Pride International Inc.*.......................................................................... 1,026,000
16,300 Rowan Co., Inc.*................................................................................... 306,644
12,100 RPC Energy Services, Inc.*......................................................................... 83,944
20,600 Seacor Smit Inc.................................................................................... 1,023,562
19,800 Tuboscope Inc...................................................................................... 297,000
97,400 Varco International Inc............................................................................ 1,034,875
------------
6,811,506
------------
OTHER INSURANCE--7.54%
27,100 Acceptance Insurance Co.*.......................................................................... 414,969
7,778 Amwest Insurance Group, Inc........................................................................ 87,503
10,200 Atlantic American Corp.*........................................................................... 41,438
5,880 Bancinsurance Corp.*............................................................................... 30,135
48,500 Capital Re Corp.................................................................................... 651,719
21,700 Centris Group Inc.................................................................................. 203,437
16,600 Chartwell Re Corp.................................................................................. 306,062
58,900 Commerce Group Inc................................................................................. 1,501,950
10,933 Donegal Group Inc.................................................................................. 120,263
8,500 EMC Insurance Group Inc............................................................................ 107,844
67,700 Enhance Financial Services Group Inc............................................................... 1,404,775
55,583 Fidelity National Financial Inc.................................................................... 969,229
47,900 Foremost Corp. of America.......................................................................... 1,209,475
10,170 Frontier Insurance Group Inc....................................................................... 149,372
57,900 Harleysville Group Inc............................................................................. 1,129,050
2,200 Investors Title Insurance Co....................................................................... 41,525
27,300 Landamerica Financial Group Inc.................................................................... 668,850
2,100 Midland Co......................................................................................... 47,644
37,800 MMI Companies Inc.................................................................................. 616,612
10,265 Mobile America Corp................................................................................ 32,078
12,700 Navigators Group Inc.*............................................................................. 198,437
11,100 Nymagic Inc........................................................................................ 158,175
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
OTHER INSURANCE--(CONCLUDED)
<TABLE>
<C> <S> <C>
28,400 Orion Capital Corp................................................................................. $ 1,350,775
15,300 Pennsylvania America Group Inc..................................................................... 154,913
12,800 Pennsylvania Treaty American Corp.................................................................. 295,200
6,388 Professionals Insurance Co. Management Group*...................................................... 195,632
17,178 PXRE Corp.......................................................................................... 276,995
15,875 RLI Corp........................................................................................... 587,375
53,700 Selective Insurance Group Inc...................................................................... 1,060,575
25,200 Stewart Information Services Corp.................................................................. 559,125
20,150 Trenwick Group Inc................................................................................. 486,119
12,400 UNICO American Healthcare Co....................................................................... 126,325
6,954 Xl Capital Ltd..................................................................................... 365,085
------------
15,548,661
------------
PUBLISHING--0.93%
13,900 Cadmus Communications Corp......................................................................... 182,437
3,400 Courier Corp....................................................................................... 80,750
6,100 Educational Development Corp....................................................................... 16,013
29,000 Ennis Business Forms Inc........................................................................... 268,250
37,300 Franklin Quest Co.*................................................................................ 261,100
28,700 Merrill Corp....................................................................................... 574,000
3,200 Northstar Computer Forms Inc....................................................................... 36,000
11,700 Primesource Corp................................................................................... 84,825
20,300 Scientific Games Holdings Corp.*................................................................... 417,419
------------
1,920,794
------------
RAILROADS--0.47%
5,800 Providence & Worcester Railroad Co................................................................. 79,750
16,600 Railtex Inc.*...................................................................................... 241,738
27,800 The Greenbrier Companies, Inc...................................................................... 316,225
14,000 Westinghouse Air Brake Co.......................................................................... 332,500
------------
970,213
------------
REAL PROPERTY--6.73%
12,100 Beazer Homes USA Inc.*............................................................................. 307,037
13,200 Butler Manufacturing Co............................................................................ 367,125
16,700 Cameron Ashley Building Products, Inc.*............................................................ 205,619
32,020 Cavalier Homes Inc................................................................................. 174,109
38,000 Centex Construction Products Inc................................................................... 1,517,625
34,600 Del Webb Corp...................................................................................... 769,850
6,100 Dominion Homes Inc.*............................................................................... 38,888
15,500 Drew Industries Inc.*.............................................................................. 185,031
19,800 Engle Homes Inc.................................................................................... 259,875
12,400 Florida Rock Industries, Inc....................................................................... 477,400
21,300 Fortress Group Inc................................................................................. 27,291
16,200 Giant Cement Holding, Inc.*........................................................................ 352,350
54,800 Griffon Corp.*..................................................................................... 411,000
8,600 Grubb & Ellis Co................................................................................... 46,225
38,100 Hovnanian Enterprises Inc.*........................................................................ 323,850
5,200 International Aluminum Corp........................................................................ 143,000
37,800 Lone Star Industries, Inc.......................................................................... 1,448,212
19,900 M.D.C. Holdings, Inc............................................................................... 412,925
6,000 Miller Building Systems Inc........................................................................ 34,125
7,488 MYR Group, Inc..................................................................................... 144,144
2,800 NCI Building Systems Inc.*......................................................................... 53,550
</TABLE>
65
<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)
REAL PROPERTY--(CONCLUDED)
<TABLE>
<C> <S> <C>
5,000 Nobility Homes, Inc.*.............................................................................. $ 42,188
15,100 NVR, Inc.*......................................................................................... 849,375
11,700 Patrick Industries Inc............................................................................. 171,844
8,100 Perini Corp.*...................................................................................... 43,538
13,100 Robertson Ceco Corp.*.............................................................................. 114,625
26,500 Ryland Group Inc................................................................................... 738,687
17,500 Schottenstein Homes Inc............................................................................ 332,500
16,100 Skyline Corp....................................................................................... 488,031
25,600 Southern Energy Homes Inc.*........................................................................ 96,000
52,900 Standard Pacific Corp.............................................................................. 684,394
65,300 Toll Brothers Inc.*................................................................................ 1,387,625
13,700 Turner Corp.*...................................................................................... 360,481
23,100 United States Home Corp.*.......................................................................... 794,062
10,400 Washington Homes Inc.*............................................................................. 71,500
------------
13,874,081
------------
RENTAL AUTO/EQUIPMENT--0.34%
8,800 Budget Group Inc.*................................................................................. 80,850
26,000 Cort Business Services Corp.*...................................................................... 628,875
------------
709,725
------------
RESTAURANTS--2.00%
6,600 Arkansas Restaurants Corp.*........................................................................ 74,250
3,500 Benihana Inc.*..................................................................................... 50,750
14,800 Blimpie International Inc.......................................................................... 47,175
86,300 CKE Restaurants, Inc............................................................................... 1,208,200
18,000 Cooker Restaurant Corp............................................................................. 78,750
8,100 ELXSI Corp.*....................................................................................... 91,125
60,300 Landrys Seafood Restaurant Inc.*................................................................... 505,012
9,400 Lone Star Steakhouse & Saloon*..................................................................... 82,544
41,100 Lubys Cafeterias Inc............................................................................... 608,794
6,900 Max & Ermas Restaurants Inc.*...................................................................... 49,162
16,200 Piccadilly Cafeterias Inc.......................................................................... 129,600
44,000 Rainforest Cafe Inc.*.............................................................................. 308,000
80,000 Ryan's Family Steak Houses, Inc.*.................................................................. 855,000
12,400 Sizzler International Inc.*........................................................................ 33,325
------------
4,121,687
------------
SECURITIES & ASSET MANAGEMENT--0.28%
28,050 Morgan Keegan, Inc................................................................................. 487,369
9,728 Stifel Financial Corp.............................................................................. 93,024
------------
580,393
------------
SEMICONDUCTOR--1.14%
2,200 Bell Microproducts Inc.*........................................................................... 16,981
7,800 Diodes Inc.*....................................................................................... 65,813
2,600 Katy Industris Inc................................................................................. 33,638
16,200 Marshall Industries*............................................................................... 603,450
8,800 Microsemi Corp.*................................................................................... 68,200
46,400 Neomagic Corp.*.................................................................................... 435,000
15,000 Nu Horizons Electronics Corp.*..................................................................... 119,531
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
SEMICONDUCTOR--(CONCLUDED)
<TABLE>
<C> <S> <C>
37,900 Pilgrims Pride Corp................................................................................ $ 791,162
26,700 Richardson Electronics Ltd......................................................................... 185,231
11,200 Taitron Components Inc.*........................................................................... 33,600
------------
2,352,606
------------
SPECIALTY RETAIL--1.50%
12,300 Advanced Marketing Services, Inc................................................................... 199,875
22,600 Building Materials Holding Corp.*.................................................................. 285,325
46,900 Central Garden & Pet Co.*.......................................................................... 425,031
26,500 Cole National Corp.*............................................................................... 215,313
8,800 Duckwall Alto Stores Inc.*......................................................................... 88,000
18,500 Finlay Enterprises Inc.*........................................................................... 265,937
25,800 Friedman's Inc..................................................................................... 220,912
32,000 Garden Ridge Corp.*................................................................................ 199,000
6,400 Holiday RV Superstores Inc.*....................................................................... 24,000
47,100 Jan Bell Marketing Inc.*........................................................................... 141,300
1,900 Michael Anthony Jewelers, Inc.*.................................................................... 7,481
6,900 Piercing Pagoda Inc.*.............................................................................. 115,575
11,200 Rex Stores Corp.*.................................................................................. 416,500
11,200 Sport Supply Group Inc.*........................................................................... 93,800
31,500 United States Office Products Co.*................................................................. 149,625
9,400 Wolohan Lumber Co.................................................................................. 120,438
17,800 York Group Inc..................................................................................... 131,275
------------
3,099,387
------------
THRIFT--1.21%
41,250 Bankatlantic Bancorp Inc. (1)...................................................................... 317,109
38,400 Downey Financial Corp.............................................................................. 895,200
34,600 Firstfed Financial Corp. Delaware*................................................................. 553,600
17,000 Hamilton Bancorp Inc. Florida*..................................................................... 459,000
500 Hawthorne Financial Corp.*......................................................................... 8,000
17,900 Metrowest Bank..................................................................................... 120,825
6,600 Saint Francis Capital Corp......................................................................... 140,250
1,600 Washington Savings Bank FSB........................................................................ 6,500
------------
2,500,484
------------
TOBACCO--0.84%
47,200 General Cigar Holdings Inc.*....................................................................... 356,950
22,100 Standard Commercial Corp........................................................................... 117,406
42,100 Universal Corp..................................................................................... 1,265,631
------------
1,739,987
------------
WATER--0.07%
3,900 Aquarion Co........................................................................................ 136,500
------------
WIRELESS TELECOMMUNICATIONS--0.21%
56,500 Interdigital Commerce Corp......................................................................... 296,625
86,300 Rohn Industry Inc.*................................................................................ 140,239
------------
436,864
------------
Total Common Stocks (cost--$190,848,949)...................................................................... 200,090,651
------------
</TABLE>
66
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- --------- -------------------- -------------- ------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--2.76%
$ 5,676 Repurchase Agreement dated 07/30/99 with State Street Bank &
Trust Co., collateralized by $3,363,119 U.S. Treasury
Notes, 5.75% due 08/15/03 (value--$3,426,178); and by
$2,276,074 U.S. Treasury Notes, 6.25% due 02/15/03
(value--$2,364,272); proceeds: $5,678,010
(cost--$5,676,000)........................................ 08/02/99 4.250% $ 5,676,000
------------
Total Investments (cost--$196,524,949)--99.82%......................... 205,766,651
Other assets in excess of liabilities--0.18%........................... 364,614
------------
Net Assets--100.00%.................................................... $206,131,265
------------
------------
</TABLE>
- -----------------
* Non-income producing security.
(1) Security, or portion thereof, was on loan at July 31, 1999.
See accompanying notes to financial statements
67
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY GROWTH INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--92.78%
APPAREL, RETAIL--2.10%
105,600 American Eagle Outfitters Inc.*(1)................................................................. $ 4,078,800
42,100 Talbots Inc........................................................................................ 1,481,394
------------
5,560,194
------------
BANKS--1.13%
113,900 Webster Financial Corp............................................................................. 3,004,113
------------
CABLE--0.54%
48,200 Insight Communications Inc.*....................................................................... 1,439,975
------------
COMPUTER HARDWARE--4.49%
113,000 Jack Henry & Associates Inc.(1).................................................................... 4,887,250
128,700 Network Appliance, Inc.*........................................................................... 7,014,150
------------
11,901,400
------------
COMPUTER SOFTWARE--8.90%
117,600 Bindview Development Corp.*........................................................................ 2,660,700
27,800 Clarify, Inc.*..................................................................................... 915,662
83,500 Exchange Applications Software*.................................................................... 2,948,594
43,400 Legato Systems Inc.*............................................................................... 3,103,100
16,600 Neon Systems Inc.*................................................................................. 545,725
43,000 Onyx Software Corp.*(1)............................................................................ 677,250
9,400 Packeteer Incorporated*............................................................................ 277,300
11,500 Persistence Software Inc.*......................................................................... 194,063
98,000 Softworks Inc.*.................................................................................... 713,562
206,600 Veritas Software Co.*(1)........................................................................... 11,595,425
------------
23,631,381
------------
CONSTRUCTION--0.21%
52,600 National Equipment Services Inc.*.................................................................. 555,588
------------
DIVERSIFIED RETAIL--3.27%
185,700 Cost Plus Inc.*.................................................................................... 8,170,800
25,500 Hibbett Sporting Goods Inc.*(1).................................................................... 516,375
------------
8,687,175
------------
DRUGS & MEDICINE--1.20%
44,000 Pharmacopeia Inc.*................................................................................. 517,000
21,100 QLT Phototherapeutics*............................................................................. 1,350,400
71,700 United Therapeutics Corp.*......................................................................... 1,313,006
------------
3,180,406
------------
ELECTRICAL EQUIPMENT--4.42%
177,100 Gemstar Group Ltd.*................................................................................ 11,732,875
------------
ELECTRONIC COMPONENTS--1.46%
52,100 Teradyne Inc.*(1).................................................................................. 3,884,706
------------
ENTERTAINMENT--6.20%
205,000 CEC Entertainment Inc.*............................................................................ 6,457,500
72,300 Tweeter Home Entertainment
Group Inc.*(1)................................................................................... 2,408,494
158,300 USA Networks, Inc.*................................................................................ 7,588,506
------------
16,454,500
------------
FINANCIAL SERVICES--2.61%
16,600 Corporate Executive Board Co.*..................................................................... 628,725
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
FINANCIAL SERVICES--(CONCLUDED)
<TABLE>
<C> <S> <C>
131,200 Doral Financial Corp............................................................................... $ 2,164,800
104,800 Metris Co., Inc.................................................................................... 4,119,950
------------
6,913,475
------------
FOOD RETAIL--0.18%
90,800 Packaged Ice Inc.*................................................................................. 459,675
1,600 Schultz Sav O Stores Inc........................................................................... 26,200
------------
485,875
------------
FREIGHT, AIR, SEA & LAND--0.44%
49,200 Forward Air Corp.*................................................................................. 1,153,125
------------
HOTELS--0.64%
165,600 Extended Stay America Inc.*........................................................................ 1,687,050
------------
INDUSTRIAL SERVICES/SUPPLIES--1.04%
45,500 Comfort Systems USA Inc.*.......................................................................... 733,687
38,300 G&K Services Inc.*................................................................................. 2,033,491
------------
2,767,178
------------
INSTRUMENTS--SCIENTIFIC--3.07%
281,500 Mettler Toledo International Inc.*................................................................. 8,145,906
------------
LEISURE--0.35%
76,400 West Marine Inc.*.................................................................................. 935,900
------------
LIFE INSURANCE--0.34%
37,900 Annuity and Life Re Holdings....................................................................... 909,600
------------
MEDIA--6.56%
99,000 AMFM Inc.*(1)...................................................................................... 5,197,500
43,000 Emmis Broadcasting Corp.*.......................................................................... 2,252,125
40,700 Metro Networks Inc.*............................................................................... 2,228,325
42,500 Radio One Inc.*.................................................................................... 1,888,594
84,600 Salem Communications Corp.*(1)..................................................................... 2,368,800
59,400 TCA Cable TV Inc.*................................................................................. 3,482,325
------------
17,417,669
------------
MEDICAL PRODUCTS--0.25%
14,700 Xomed Surgical Products Inc.*...................................................................... 669,769
------------
MEDICAL PROVIDERS--2.15%
204,900 Brookdale Living Community Inc.*................................................................... 2,714,925
70,100 Trigon Healthcare Inc.*............................................................................ 2,444,737
48,200 Women First Healthcare Inc.*....................................................................... 548,275
------------
5,707,937
------------
OTHER INSURANCE--2.41%
115,100 Ambac Financial Group Inc.......................................................................... 6,402,437
------------
PUBLISHING--2.00%
133,700 Consolidated Graphics Inc.*........................................................................ 5,314,575
------------
RESTAURANTS--4.94%
138,250 Cheesecake Factory Inc.*........................................................................... 4,147,500
103,300 Dave & Busters Inc.*............................................................................... 2,698,713
64,300 Ruby Tuesday Inc................................................................................... 1,350,300
</TABLE>
68
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY GROWTH INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONCLUDED)
RESTAURANTS--(CONCLUDED)
<TABLE>
<C> <S> <C>
152,650 Sonic Corp.*....................................................................................... $ 4,903,881
------------
13,100,394
------------
SECURITIES & ASSET MANAGEMENT--0.07%
12,700 Freedom Securities Corp............................................................................ 190,500
------------
SEMICONDUCTOR--10.93%
117,200 Applied Micro Circuits Corp.*...................................................................... 11,016,800
22,400 Hi/Fn Inc.*(1)..................................................................................... 2,167,200
128,300 Micrel Inc.*(1).................................................................................... 10,135,700
72,600 PMC Sierra Inc.*(1)................................................................................ 5,680,950
------------
29,000,650
------------
SPECIALTY RETAIL--12.86%
125,850 Dollar Tree Stores Inc.*........................................................................... 5,325,028
136,600 Duane Reade Inc.*(1)............................................................................... 4,337,050
136,500 Linens 'N Things Inc.*............................................................................. 6,313,125
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
SPECIALTY RETAIL--(CONCLUDED)
<TABLE>
<C> <S> <C>
64,400 O'Reilly Automotive Inc.*.......................................................................... $ 2,745,050
152,100 Profit Recovery Group
International Inc.*.............................................................................. 7,833,150
262,075 Staples Inc.*...................................................................................... 7,567,416
------------
34,120,819
------------
UTILITIES--1.31%
130,900 Waste Connections Inc.*............................................................................ 3,468,850
------------
WIRELESS TELECOMMUNICATIONS--6.71%
79,500 Concord Communications Inc.*....................................................................... 3,259,500
88,100 Nextlink Communications Inc.*(1)................................................................... 9,878,212
189,300 Pinnacle Holdings Inc.*............................................................................ 4,673,344
------------
17,811,056
------------
Total Common Stocks (cost--$162,878,743)...................................................................... 246,235,078
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- --------- -------------------- --------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--7.20%
$ 19,111 Repurchase Agreement dated 07/30/99 with State Street Bank &
Trust Co., collateralized by $11,323,568 U.S. Treasury
Notes, 5.75% due 08/15/03 (value--$11,535,886); and by
$7,663,504 U.S. Treasury Notes, 6.25% due 02/15/03
(value--$7,960,465); proceeds: $19,117,768
(cost--$19,111,000)....................................... 08/02/99 4.250% 19,111,000
------------
Total Investments (cost--$181,989,743)--99.98%......................... 265,346,078
Other assets in excess of liabilities--0.02%........................... 59,383
------------
Net Assets--100.00%.................................................... $265,405,461
------------
------------
</TABLE>
- -----------------
* Non-Income producing security.
(1) Security, or a portion thereof, was on loan at July 31, 1999.
See accompanying notes to financial statements
69
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES# VALUE
- --------------- ---------------
<C> <S> <C>
COMMON STOCKS--94.16%
AUSTRALIA--3.05%
LEISURE & ENTERTAINMENT--0.69%
214,010 TABCORP Holdings Ltd............................................................ $ 1,466,573
---------------
MEDIA--0.68%
163,000 News Corporation Ltd............................................................ 1,446,794
---------------
METALS & MINING--0.45%
430,000 North Ltd....................................................................... 968,206
---------------
RETAIL--0.50%
298,000 Woolworths Ltd.................................................................. 1,079,029
---------------
TELECOMMUNICATIONS--SERVICES--0.73%
286,200 Telstra Corp.................................................................... 1,567,155
---------------
Total Australia Common Stocks...................................................................... 6,527,757
---------------
BRAZIL--0.72%
METALS & MINING--0.29%
31,000 Companhia Vale do Rio Doce ADR.................................................. 608,685
---------------
OIL & GAS--0.43%
65,000 Petroleo Brasileiro S.A. ADR.................................................... 925,210
---------------
Total Brazil Common Stocks......................................................................... 1,533,895
---------------
EGYPT--0.07%
CONSTRUCTION--0.07%
11,000 Suez Cement Co. S.A. GDR**...................................................... 157,300
---------------
FINLAND--1.49%
TELECOMMUNICATIONS--1.49%
36,817 Nokia Corp...................................................................... 3,190,334
---------------
FRANCE--11.66%
AUTO & TRUCK--0.62%
17,641 Valeo S.A....................................................................... 1,334,275
---------------
AUTOMOTIVE--1.03%
12,770 Peugeot S.A..................................................................... 2,199,477
---------------
BANKS--1.68%
19,169 Societe Generale(1)............................................................. 3,601,029
---------------
COMPUTER SOFTWARE & SERVICES--1.29%
16,230 Cap Gemini S.A.(1).............................................................. 2,760,694
---------------
CONSTRUCTION--1.19%
14,046 Cie de Saint-Gobain............................................................. 2,546,977
---------------
ENTERTAINMENT--1.26%
11,364 Accor........................................................................... 2,704,979
---------------
FINANCE--1.39%
25,306 AXA............................................................................. 2,964,424
---------------
OIL & GAS--1.40%
23,521 Total S.A. (Class B)(1)......................................................... 2,994,370
---------------
<CAPTION>
NUMBER OF
SHARES# VALUE
- --------------- ---------------
<C> <S> <C>
</TABLE>
FRANCE--(CONCLUDED)
<TABLE>
<C> <S> <C>
UTILITIES--1.80%
49,046 Vivendi......................................................................... $ 3,853,879
---------------
Total France Common Stocks......................................................................... 24,960,104
---------------
GERMANY--7.29%
BANKS--0.87%
32,969 Bayer Vereinsbank AG............................................................ 1,876,377
---------------
CHEMICALS--2.29%
49,069 BASF AG......................................................................... 2,220,497
63,676 Hoechst AG...................................................................... 2,683,952
---------------
4,904,449
---------------
COMPUTER SOFTWARE & SERVICES--0.96%
24,811 Siemens AG...................................................................... 2,051,759
---------------
ENGINEERING SERVICES--1.71%
24,065 Mannesmann AG................................................................... 3,658,328
---------------
METALS & MINING--0.59%
21,829 Preussag AG..................................................................... 1,263,379
---------------
RETAIL--0.87%
33,911 Metro AG........................................................................ 1,857,433
---------------
Total Germany Common Stocks........................................................................ 15,611,725
---------------
GREECE--0.16%
BANKS--0.02%
537 Alpha Credit Bank............................................................... 38,807
---------------
TELECOMMUNICATIONS--0.14%
14,600 Hellenic Telecommunications..................................................... 307,217
---------------
Total Greece Common Stocks......................................................................... 346,024
---------------
HONG KONG--3.72%
BANKS--0.66%
275,500 Dao Heng Bank Group............................................................. 1,402,063
---------------
FINANCE--0.86%
1,000,000 China Everbright Pacific Ltd.................................................... 805,247
225,000 Swire Pacific Ltd............................................................... 1,043,599
---------------
1,848,846
---------------
REAL ESTATE--1.38%
136,600 Cheung Kong Holdings Ltd........................................................ 1,192,364
88,000 Henderson Land Developement Company Ltd......................................... 497,732
480,000 New World Development Ltd....................................................... 1,267,780
---------------
2,957,876
---------------
TELECOMMUNICATIONS--SERVICES--0.82%
743,402 Cable & Wireless HKT Ltd........................................................ 1,747,975
---------------
Total Hong Kong Common Stocks...................................................................... 7,956,760
---------------
</TABLE>
70
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES# VALUE
- --------------- ---------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
<TABLE>
<C> <S> <C>
HUNGARY--0.19%
OIL EQUIPMENT & SERVICES--0.19%
15,000 Mol Magyar Olaj-es Gazipari GDR**............................................... $ 406,950
---------------
INDONESIA--0.50%
TELECOMMUNICATIONS--0.50%
112,360 Perusahaan Persero Part Telekomunikiasi ADR(1).................................. 1,067,420
---------------
IRELAND--0.80%
BANKS--0.80%
177,774 Bank of Ireland................................................................. 1,702,135
---------------
ISRAEL--0.22%
ELECTRONICS--0.22%
8,900 Orbotech Ltd.*.................................................................. 473,925
---------------
ITALY--2.81%
BANKS--1.16%
194,466 San Paolo - IMI SPA............................................................. 2,467,351
---------------
COMPUTERS--1.22%
190,484 Tecnost SPA..................................................................... 472,769
216,193 Telecom Italia SPA.............................................................. 2,139,371
---------------
2,612,140
---------------
TELECOMMUNICATIONS--0.43%
159,813 Telecom Italia Mobilare......................................................... 924,937
---------------
Total Italy Common Stocks.......................................................................... 6,004,428
---------------
JAPAN--27.45%
AUTO MANUFACTURER--0.83%
41,000 Honda Motor Company Ltd......................................................... 1,777,400
---------------
AUTO PARTS--1.08%
75,000 Bridgestone Corp................................................................ 2,309,303
---------------
BASIC INDUSTRIES--1.48%
87,000 Shin Etsu Chemical Company Ltd.................................................. 3,156,875
---------------
CAPITAL GOODS--7.55%
91,000 Canon Inc....................................................................... 2,881,329
258,000 Hitachi Ltd.(1)................................................................. 2,599,241
12,800 Mabuchi Motor Co................................................................ 1,277,265
14,000 Riso Kagaku Corp.(1)............................................................ 787,649
24,000 Rohm Company Ltd................................................................ 4,494,570
32,400 Sony Corp.(1)................................................................... 4,123,302
---------------
16,163,356
---------------
CHEMICALS--2.53%
220,000 Asahi Chemical Industries....................................................... 1,103,406
106,000 Kao Corp........................................................................ 2,949,452
145,000 Sumitomo Bakelite Company Ltd.(1)............................................... 1,365,956
---------------
5,418,814
---------------
COMPUTERS--1.88%
260 NTT Mobile Communication(1)..................................................... 4,018,666
---------------
<CAPTION>
NUMBER OF
SHARES# VALUE
- --------------- ---------------
<C> <S> <C>
</TABLE>
JAPAN--(CONCLUDED)
<TABLE>
<C> <S> <C>
CONSUMER DURABLES--3.99%
30,000 Ito Yokado Company Ltd.......................................................... $ 2,041,083
108,000 Marui Company Ltd............................................................... 1,665,524
24,000 Secom Company Ltd............................................................... 2,844,956
51,000 Taisho Pharmaceutical Co........................................................ 1,979,589
---------------
8,531,152
---------------
CONSUMER GOODS--0.45%
19,000 Familymart Co................................................................... 969,515
---------------
ELECTRICAL EQUIPMENT--1.82%
130,000 Fujitsu(1)...................................................................... 3,900,737
---------------
ENGINEERING--0.30%
240,000 Kubota Corp..................................................................... 651,053
---------------
ENTERTAINMENT--0.56%
31,000 Fuji Photo Film Company Ltd..................................................... 1,192,464
---------------
FINANCE--0.56%
18,000 Promise Company Ltd............................................................. 1,193,249
---------------
FOREST PRODUCTS--1.20%
214,000 Toppan Printing Co.............................................................. 2,557,285
---------------
HEALTHCARE--1.77%
82,000 Yamanouchi Pharmaceutical Co.(1)................................................ 3,797,985
---------------
INSURANCE--0.42%
170,000 Mitsui Marine & Fire............................................................ 908,980
---------------
SERVICES--0.43%
7,400 Benesse Corp.................................................................... 928,832
---------------
TOBACCO--0.60%
107 Japan Tobacco Inc............................................................... 1,287,976
---------------
Total Japan Common Stocks.......................................................................... 58,763,642
---------------
KOREA--0.91%
FINANCE--0.23%
28,010 Shinhan Bank GDR*............................................................... 494,376
---------------
TELECOMMUNICATIONS--SERVICES--0.68%
39,420 Korea Telecom Corp. ADR*........................................................ 1,451,149
---------------
Total Korea Common Stocks.......................................................................... 1,945,525
---------------
MEXICO--1.50%
CONSTRUCTION--0.25%
121,500 Cemex S.A. Series B............................................................. 523,651
---------------
DIVERSIFIED INDUSTRIES--0.16%
16,200 Desc S.A. ADR................................................................... 345,263
---------------
MEDIA--0.39%
22,000 Grupo Televisa S.A. de C.V. ADR*................................................ 841,500
---------------
RETAIL--0.29%
336,000 Cifra S.A. de C.V. Series V*.................................................... 622,156
---------------
</TABLE>
71
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES# VALUE
- --------------- ---------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
MEXICO--(CONCLUDED)
<TABLE>
<C> <S> <C>
UTILITIES--0.41%
11,700 Telefonos de Mexico, S.A. de C.V. ADR........................................... $ 883,350
---------------
Total Mexico Common Stocks......................................................................... 3,215,920
---------------
NETHERLANDS--3.84%
FINANCE--1.18%
49,403 ING Groep NV.................................................................... 2,526,294
---------------
MEDIA--0.50%
29,292 Wolters Kluwer NV............................................................... 1,068,578
---------------
PUBLISHING--0.99%
57,727 VNU NV.......................................................................... 2,112,067
---------------
RETAIL--1.17%
71,921 Ahold NV........................................................................ 2,508,280
---------------
Total Netherlands Common Stocks.................................................................... 8,215,219
---------------
POLAND--0.13%
FINANCIAL SERVICES--0.13%
17,000 Bank Handlowy W Warszawie S.A. GDR**............................................ 266,900
---------------
SINGAPORE--1.87%
FINANCE--0.59%
152,000 Overseas Chinese Banking Corp................................................... 1,273,819
---------------
REAL ESTATE--0.62%
190,000 City Development Ltd............................................................ 1,321,248
---------------
TELECOMMUNICATIONS--SERVICES--0.28%
348,000 Singapore Telecommunications, Ltd.(1)........................................... 593,616
---------------
TRANSPORTATION--0.38%
86,000 Singapore Airlines.............................................................. 807,608
---------------
Total Singapore Common Stocks...................................................................... 3,996,291
---------------
SOUTH AFRICA--0.14%
FINANCE--0.14%
14,200 Nedcor Ltd...................................................................... 306,927
---------------
SPAIN--3.45%
BANKS--2.16%
105,125 Argentaria Corp. BC S.A......................................................... 2,315,608
233,122 Banco Santander Central Hispanormer............................................. 2,306,894
---------------
4,622,502
---------------
TELECOMMUNICATIONS--1.29%
172,794 Telefonica S.A.................................................................. 2,763,583
---------------
Total Spain Common Stocks.......................................................................... 7,386,085
---------------
<CAPTION>
NUMBER OF
SHARES# VALUE
- --------------- ---------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
SWEDEN--2.05%
BANKS--0.89%
120,000 Forenings Sparbanken AB......................................................... $ 1,907,384
---------------
TELECOMMUNICATIONS--EQUIPMENT--1.16%
76,000 Ericsson LM B Shares............................................................ 2,476,188
---------------
Total Sweden Common Stocks......................................................................... 4,383,572
---------------
SWITZERLAND--3.86%
CHEMICALS--0.62%
2,759 Clariant AG..................................................................... 1,323,935
---------------
CONSUMER DURABLES--1.29%
1,910 Novartis AG..................................................................... 2,757,282
---------------
MEDICAL PROVIDERS--1.18%
230 Roche Holdings AG............................................................... 2,541,854
---------------
UTILITIES--0.77%
4,600 Swisscom AG..................................................................... 1,643,187
---------------
Total Switzerland Common Stocks.................................................................... 8,266,258
---------------
UNITED KINGDOM--15.24%
BANKS--1.76%
121,000 Lloyds TSB Group PLC............................................................ 1,579,624
60,000 National Westminster Bank PLC................................................... 1,182,463
47,831 Royal Bank of Scotland Group PLC................................................ 1,000,005
---------------
3,762,092
---------------
CONSUMER PRODUCTS--0.77%
78,000 Vodafone Group PLC.............................................................. 1,638,170
---------------
DIVERSIFIED INDUSTRIES--.65%
94,000 General Electric PLC............................................................ 943,783
109,071 Wassall PLC..................................................................... 438,393
---------------
1,382,176
---------------
ENGINEERING SERVICES--1.77%
95,000 GKN PLC......................................................................... 1,624,348
90,000 McKechnie PLC................................................................... 725,669
102,771 Smiths Industries PLC........................................................... 1,444,084
---------------
3,794,101
---------------
INSURANCE--0.43%
75,500 Allied Zurich................................................................... 923,228
---------------
INSURANCE & RELATED SERVICES--0.35%
310,000 Legal & General Group PLC....................................................... 751,114
---------------
LEISURE & ENTERTAINMENT--0.75%
406,000 Hilton Group PLC................................................................ 1,600,596
---------------
MANUFACTURING--0.63%
139,678 Unilever PLC.................................................................... 1,339,016
---------------
MEDIA--0.62%
142,000 British Sky Broadcast........................................................... 1,335,960
---------------
METALS & MINING--0.10%
4,060 Anglo American PLC(1)........................................................... 209,769
---------------
</TABLE>
72
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES# VALUE
- --------------- ---------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONCLUDED)
UNITED KINGDOM--(CONTINUED)
<TABLE>
<C> <S> <C>
OIL & GAS--1.75%
86,000 British Petroleum............................................................... $ 1,685,107
264,000 LASMO PLC....................................................................... 710,256
166,000 Shell Transportation & Trading Co............................................... 1,353,253
---------------
3,748,616
---------------
PHARMACEUTICAL--2.24%
80,000 Glaxo Wellcome PLC.............................................................. 2,065,422
119,000 Smithkline Beecham.............................................................. 1,469,619
34,000 AstraZeneca Group PLC........................................................... 1,267,388
---------------
4,802,429
---------------
REAL ESTATE--0.75%
120,000 Land Securities PLC............................................................. 1,614,218
---------------
RESTAURANTS--0.57%
119,000 Scottish & Newcastle PLC........................................................ 1,224,683
---------------
RETAIL--0.33%
115,000 Marks & Spencer PLC............................................................. 709,178
---------------
TELECOMMUNICATIONS--1.18%
57,000 British Telecommunications PLC.................................................. 988,465
126,000 Cable & Wireless PLC............................................................ 1,541,773
---------------
2,530,238
---------------
<CAPTION>
NUMBER OF
SHARES# VALUE
- --------------- ---------------
<C> <S> <C>
</TABLE>
UNITED KINGDOM--(CONCLUDED)
<TABLE>
<C> <S> <C>
UTILITIES--0.59%
151,000 Scottish Power PLC.............................................................. $ 1,259,359
---------------
Total United Kingdom Common Stocks................................................................. 32,624,943
---------------
UNITED STATES--1.04%
ELECTRONICS--0.38%
46,800 Synnex Technology International Corp. GDR....................................... 802,620
---------------
FOOD, BEVERAGE & TOBACCO--0.66%
47,700 ITC Ltd. GDR.................................................................... 1,411,920
---------------
Total United States Common Stocks.................................................................. 2,214,540
---------------
Total Common Stocks (cost--$178,287,301)........................................................... 201,524,579
---------------
PREFERRED STOCKS--0.51%
JAPAN--0.51%
BANKS--0.51%
126,000,000 Sanwa International Finance
(cost--$1,034,157)............................................................ 1,082,559
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)# DATES RATES
- ---------- ------------ -------
<C> <S> <C> <C> <C>
CONVERTIBLE BONDS--0.44%
JAPAN--0.44%
BANKS--0.44%
152,000 TB Finance Ltd. (cost--$969,028)....................................... 10/01/04 2.750% 944,655
------------
REPURCHASE AGREEMENT--4.71%
$ 10,088 Repurchase Agreement dated 07/30/99 with State Street Bank & Trust Co.,
collateralized by $5,977,299 U.S. Treasury Notes, 5.75% due 08/15/03
(value--$6,089,373); and by $4,045,284 U.S. Treasury Notes, 6.25% due
02/15/03 (value--$4,202,039); proceeds: $10,091,573
(cost--$10,088,000).................................................. 08/02/99 4.250 10,088,000
------------
Total Investments (cost--$190,378,486)--99.82%..................................... 213,639,793
376,707
Other assets in excess of liabilities--0.18%.......................................
------------
Net Assets--100.00%................................................................ $214,016,500
------------
------------
</TABLE>
- ---------------
# In local currency unless otherwise indicated.
* 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.
GDR Global Depositary Receipt.
(1) Security, or portion thereof, was on loan at July 31, 1999.
See accompanying notes to financial statements
73
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- ---------------
<C> <S> <C>
COMMON STOCKS--88.54%
ARGENTINA--1.87%
ALCOHOLIC BEVERAGES--0.30%
25,300 Quilmes Industrial Quinsa S.A. ADR......................................... $ 264,069
---------------
BANKS--0.26%
14,100 Banco de Galicia y Buenos Aires S.A. de C.V. ADR (1)....................... 229,125
---------------
DISTRIBUTORS--0.07%
25,600 Siderar S.A................................................................ 65,818
---------------
DIVERSIFIED INDUSTRIALS--0.37%
58,347 Perez Companc S.A. Class B................................................. 329,792
---------------
OIL & GAS--0.08%
38,200 Gas Natural Ban Sa Class B................................................. 70,698
---------------
TELECOMMUNICATIONS--0.79%
26,900 Telecom Argentina Stet-Fran Tel S.A. Class B............................... 145,049
19,000 Telefonica de Argentina S.A. Class B ADR................................... 549,813
---------------
694,862
---------------
Total Argentina Common Stocks................................................................. 1,654,364
---------------
BOTSWANA--0.23%
BREWERIES, PUBS, & RESTAURANTS--0.23%
172,000 Sechaba Breweries Ltd. Ord.+............................................... 200,110
---------------
BRAZIL--1.57%
ELECTRICITY--0.64%
23,770,000 Centrais Electricas Brasilieras S.A. (Electrobras)......................... 386,778
2,758,000 Companhia Paulista de Forca e Luz Com NPV.................................. 180,372
---------------
567,150
---------------
FOOD STORES--0.30%
16,100 Companhia Brasileira De Distr.............................................. 267,663
---------------
MEDIA--0.17%
8,000 Aracruz Celulose S.A. ADR.................................................. 152,000
---------------
TELECOMMUNICATIONS--0.46%
17,000 Embratel Participacoes S.A. ADR............................................ 183,812
13,500 Tele Norte Leste Participacoes............................................. 221,062
5,000 Telecomunicacoes Brasileiras S.A. (Telebras) ADR........................... 313
---------------
405,187
---------------
Total Brazil Common Stocks.................................................................... 1,392,000
---------------
CHILE--2.69%
ALCOHOLIC BEVERAGES--0.10%
2,400 Vina Concha Y Toro S.A. ADR................................................ 88,050
---------------
BANKS--0.36%
6,100 Banco Santiago............................................................. 130,388
12,500 Banco Santander Chile Series A ADR......................................... 187,500
---------------
317,888
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- ---------------
<C> <S> <C>
</TABLE>
CHILE--(CONCLUDED)
<TABLE>
<C> <S> <C>
BREWERIES, PUBS, & RESTAURANTS--0.32%
5,900 Compania Cervecerias Unidas S.A. ADS....................................... $ 154,506
9,600 Embotelladora Andina Sa ADS................................................ 129,600
---------------
284,106
---------------
DIVERSIFIED INDUSTRIALS--0.19%
17,000 Quinenco S.A. ADR.......................................................... 167,875
---------------
ELECTRICITY--0.69%
17,500 Chilectra ADR.............................................................. 356,836
10,700 Empresa Nacional De Elec................................................... 125,056
5,518 Enersis S.A. ADR........................................................... 128,638
---------------
610,530
---------------
EXTRACTIVE INDUSTRIES--0.23%
6,600 Sociedad Quimica Y Minera de Chile S.A. Series B ADR....................... 202,537
---------------
RETAILERS, FOOD--0.32%
16,900 Distribucion y Servicio D&S ADS............................................ 283,075
---------------
TELECOMMUNICATIONS--0.48%
16,850 Compania de Telecomunicaciones de Chile S.A. ADR (1)....................... 429,675
---------------
Total Chile Common Stocks..................................................................... 2,383,736
---------------
CHINA--0.62%
COMMERCE/INDUSTRIAL--0.30%
132,000 Beijing Enterprise......................................................... 261,905
---------------
ELECTRICITY & GAS--0.32%
22,800 Huaneng Power International, Inc. ADR...................................... 283,575
---------------
Total China Common Stocks..................................................................... 545,480
---------------
CROATIA--0.29%
HEALTH/PERSONAL CARE--0.29%
18,550 Pliva D.D. GDR*............................................................ 259,700
---------------
CZECH REPUBLIC--1.07%
BANKS--0.26%
23,700 Ceska Sporitelna*.......................................................... 111,390
14,260 Komercni Banka A S......................................................... 119,071
---------------
230,461
---------------
UTILITIES--0.81%
8,550 Ceske Energeticke Zavody A.S.*............................................. 18,768
2,380 Ceske Radiomunikace A.S.*.................................................. 85,680
34,470 SPT Telecom A.S. (Reg) S*.................................................. 615,329
---------------
719,777
---------------
Total Czech Republic Common Stocks............................................................ 950,238
---------------
EGYPT--0.32%
OTHER FINANCIAL--0.07%
6,160 Efg Hermes Holding S A E GDS............................................... 65,296
---------------
</TABLE>
74
<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)
EGYPT--(CONCLUDED)
<TABLE>
<C> <S> <C>
RETAILERS, GENERAL--0.25%
11,360 Oriental Weavers C......................................................... $ 216,571
---------------
Total Egypt Common Stocks..................................................................... 281,867
---------------
GREECE--4.21%
BANKS--1.50%
14,351 Alpha Credit Bank.......................................................... 1,037,103
4,154 National Bank of Greece*................................................... 290,910
---------------
1,328,013
---------------
BEVERAGE/TOBACCO MANUFACTURING--0.55%
21,060 Hellenic Bottling Company S.A.............................................. 484,695
---------------
COMMUNICATIONS--0.26%
10,180 Stet Hellas Telecommunications*............................................ 227,778
---------------
CONSTRUCTION/BUILDING MATERIALS--0.57%
5,000 Titan Cement Company S.A................................................... 501,397
---------------
FOOD/GROCERY PRODUCTS--0.27%
8,700 Chipita.................................................................... 241,134
---------------
UTILITIES--1.06%
44,736 Hellenic Telecom Organization.............................................. 941,346
---------------
Total Greece Common Stocks.................................................................... 3,724,363
---------------
HONG KONG--1.92%
COMMERCE/INDUSTRIAL--0.24%
824,000 Beijing Datang Power Generation Company Ltd. 'H' Share..................... 214,981
---------------
COMMUNICATIONS--0.39%
115,000 China Telecom Hong Kong Ltd.*.............................................. 343,744
---------------
GLASS & CERAMICS--0.35%
396,000 China Merchants Holdings Intl.............................................. 313,775
---------------
REAL ESTATE--0.62%
141,000 China Resources Enterprises Ltd............................................ 219,813
170,000 New World China*........................................................... 156,604
108,000 New World Infrastructure*.................................................. 167,672
---------------
544,089
---------------
SHIPPING--0.26%
250,000 Cosco Pacific Ltd. Ord..................................................... 225,469
---------------
TRANSPORTATION EQUIPMENT--0.06%
307,000 Zhejiang Expressway Co. Ltd. 'H' Shares.................................... 54,189
---------------
Total Hong Kong Common Stocks................................................................. 1,696,247
---------------
HUNGARY--1.65%
BANKS--0.31%
6,200 OTP Bank GDR............................................................... 274,350
---------------
OIL--0.53%
17,360 Magyar Olaj-Es Gazipare Reszvnytaras Ag. Series 'A'........................ 464,380
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- ---------------
<C> <S> <C>
</TABLE>
HUNGARY--(CONCLUDED)
<TABLE>
<C> <S> <C>
UTILITIES--0.81%
23,480 Matav RT ADS Series 'B' (1)................................................ $ 716,140
---------------
Total Hungary Common Stocks................................................................... 1,454,870
---------------
INDIA--8.54%
AUTO COMPONENTS--0.25%
40,000 Tata Eng & Loco Con........................................................ 221,361
---------------
BANKS/RETAIL--0.41%
64,000 State Bank of India Ord.................................................... 362,445
---------------
CONSTRUCTION/BUILDING MATERIALS--0.91%
169,250 Associated Cement Co....................................................... 805,006
---------------
ELECTRICITY--0.00%
50 Bses....................................................................... 178
---------------
ELECTRICITY & GAS--0.11%
52,000 Tata Power Company......................................................... 94,764
---------------
ENGINEERING VEHICLES--0.40%
31,000 Bajaj Auto Ltd............................................................. 351,119
---------------
HOUSEHOLD GOODS & TEXTILES--2.20%
21,200 Hindustan Lever Ltd........................................................ 1,335,576
150,000 Reliance Industries Ltd.................................................... 615,571
---------------
1,951,147
---------------
OIL & GAS--0.82%
72,000 Bharat Heavy Elect......................................................... 425,191
30,000 Castrol India Ltd.......................................................... 298,408
---------------
723,599
---------------
OIL, INTEGRATED--0.55%
53,000 Bharat Petrol Corporation Ltd.............................................. 313,599
30,000 Hindustan Petroleum Corp. Ltd.............................................. 171,972
---------------
485,571
---------------
PHARMACEUTICALS--0.40%
17,000 Dr Reddys Labs............................................................. 354,059
100 Ranbaxy Laboratories Ltd................................................... 2,041
---------------
356,100
---------------
SUPPORT SERVICES--0.87%
15,300 Niit....................................................................... 766,129
---------------
TELECOMMUNICATIONS--0.64%
93,000 Mahanagar Tele Nigam....................................................... 446,228
5,000 Videsh Sanchar Nigam Ltd................................................... 123,414
---------------
569,642
---------------
TOBACCO--0.98%
38,000 ITC Ltd.................................................................... 869,661
---------------
TRANSPORTATION--0.00%
300 Great Eastern Shipping Co.................................................. 152
---------------
Total India Common Stocks..................................................................... 7,556,874
---------------
</TABLE>
75
<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>
INDONESIA--2.60%
BANKS--0.31%
9,245,000 P.T. Bank Internasional Indonesia.......................................... $ 270,322
---------------
FOODS--0.90%
151,000 H M Sampoerna.............................................................. 368,669
353,000 P.T. Indofoods Sukses Makmur............................................... 428,348
---------------
797,017
---------------
MISCELLANEOUS MANUFACTURING--0.50%
160,000 P.T. Gudang Garam.......................................................... 444,444
---------------
TELECOMMUNICATIONS--0.76%
55,000 P.T. Indosat............................................................... 91,667
1,297,620 P.T. Telekomunikasi Indonesia.............................................. 583,360
---------------
675,027
---------------
TRANSPORTATION EQUIPMENT--0.13%
246,000 Astra Intl................................................................. 115,987
---------------
Total Indonesia Common Stocks................................................................. 2,302,797
---------------
ISRAEL--3.81%
BANKS--1.43%
266,500 Bank Hapoalim B.M.......................................................... 671,593
336,320 BkLeumiLe-Israel B.M....................................................... 590,368
---------------
1,261,961
---------------
PHARMACEUTICALS--0.60%
11,500 Teva Pharmaceutical Industries Ltd., ADR................................... 533,313
---------------
RETAIL TRADE--0.47%
147,340 Super-sol Ltd.............................................................. 415,591
---------------
RETAILERS, FOOD--0.33%
18,134 Blue Square-Israel Ltd ADS................................................. 290,144
---------------
TELECOMMUNICATIONS--0.65%
16,980 ECI Telecommunications Ltd. (1)............................................ 576,259
---------------
UTILITIES--0.33%
76,300 BEZEQ-Israeli Telec........................................................ 291,722
---------------
Total Israel Common Stocks.................................................................... 3,368,990
---------------
KOREA--14.36%
BANKS--0.36%
62,000 Korea Exchange Bank........................................................ 321,978
---------------
CHEMICALS--1.01%
37,000 Hanwha Chemical............................................................ 276,693
20,339 L.G. Chemicals............................................................. 616,845
---------------
893,538
---------------
COMMUNICATIONS--0.37%
8,900 Korea Telecom.............................................................. 327,631
---------------
ELECTRICAL APPLIANCES--6.60%
37,208 Samsung Electronics Co..................................................... 5,843,217
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- ---------------
<C> <S> <C>
</TABLE>
KOREA--(CONCLUDED)
<TABLE>
<C> <S> <C>
ELECTRICITY & GAS--2.58%
64,220 Korea Electric Power Corp.................................................. $ 2,289,188
---------------
FINANCIAL--1.77%
50,506 Kookmin Bank............................................................... 763,780
87,500 Shinhan Bank............................................................... 799,751
---------------
1,563,531
---------------
IRON & STEEL--0.62%
4,450 Pohang Iron & Steel Co. Ltd................................................ 547,237
---------------
OIL--0.34%
11,774 Yukong Ltd.-SK Corporation................................................. 300,342
---------------
SECURITIES--0.37%
16,020 Daewoo Securities.......................................................... 324,793
---------------
SHIPPING--0.34%
19,000 Hyundai Merch Marine....................................................... 299,959
---------------
Total Korea Common Stocks..................................................................... 12,711,414
---------------
MALAYSIA--0.35%
ELECTRICITY & GAS--0.18%
79,000 Tenaga Nasional Berhad..................................................... 163,717
---------------
SERVICES--0.17%
30,000 Resorts World Berhad....................................................... 64,658
40,000 Tanjong PLC................................................................ 83,842
---------------
148,500
---------------
Total Malaysia Common Stocks.................................................................. 312,217
---------------
MAURITIUS--0.20%
OTHER FINANCIAL--0.20%
301,000 State Bank of Mauritius.................................................... 180,397
---------------
MEXICO--11.47%
ALCOHOLIC BEVERAGES--0.63%
201,500 Grupo Modelo Sa De CV...................................................... 557,518
---------------
BANKS/RETAIL--0.67%
272,500 Grupo Financiero Banamex Accival Series B*................................. 588,672
---------------
BREWERIES, PUBS, & RESTAURANTS--0.82%
211,600 Fomento Economico Mexica S.A. de C.V. Series B and 4 Units Series D*....... 728,452
---------------
BUILDING MATERIALS & MERCHANTS--0.83%
172,461 Cemex S.A. NPV (CPO)....................................................... 737,781
---------------
CONSTRUCTION--0.62%
64,000 Consorcio ARA S.A. de C.V.*................................................ 244,844
91,500 Grupo Industrial Saltillo, S.A. de C.V..................................... 304,773
---------------
549,617
---------------
DIVERSIFIED INDUSTRIES--0.36%
90,000 Alfa S.A................................................................... 314,622
---------------
</TABLE>
76
<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>
EXTRACTIVE INDUSTRIES--0.14%
46,900 Industrias Penoles......................................................... $ 124,774
---------------
FOOD, BEVERAGE & TOBACCO--0.07%
37,000 Grupo Sanborns Sa Cv....................................................... 62,999
---------------
FOOD & DRUG RETAILERS--0.15%
94,000 Grupo Continential......................................................... 135,043
---------------
FOOD PRODUCERS--0.54%
212,120 Grupo Industrial Bimbo S.A. de C.V. Series 'A' NPV......................... 475,165
---------------
MEDIA--0.88%
212,700 Controladora Commercial Mexicana........................................... 181,079
15,600 Grupo Televisa, S.A. de C.V. GDS (1)....................................... 596,700
---------------
777,779
---------------
METALS--0.14%
12,800 Tubos de Acero de Mexico S.A. de C.V. ADR*................................. 127,200
---------------
PAPER, PACKAGING & PRINTING--0.66%
164,750 Kimberly-Clark de Mexico S.A. de C.V....................................... 584,699
---------------
RETAILERS, GENERAL--1.33%
714,000 Cifra S.A. de C.V. Series C*............................................... 1,174,677
---------------
TELECOMMUNICATIONS--3.63%
42,500 Telefonos de Mexico, S.A. de C.V. ADR...................................... 3,208,750
---------------
Total Mexico Common Stocks.................................................................... 10,147,748
---------------
PAKISTAN--0.15%
CHEMICALS--0.00%
2,990 Engro Chemicals Pakistan Ord............................................... 4,338
---------------
TELECOMMUNICATIONS--0.15%
292,000 Pakistan Telecommunications Corp. Ord. A................................... 131,703
---------------
Total Pakistan Common Stocks.................................................................. 136,041
---------------
PERU--1.00%
BANKS/RETAIL--0.14%
258,024 Banco Continental.......................................................... 128,490
---------------
ELECTRICITY--0.15%
200,000 Luz Del Sur S.A. Class B................................................... 134,993
---------------
EXTRACTIVE INDUSTRIES--0.21%
11,600 Compania De Minas Buenaventura S.A. ADS.................................... 182,700
---------------
TELECOMMUNICATIONS--0.50%
30,000 Telefonica Del Peru ADS.................................................... 440,625
---------------
Total Peru Common Stocks...................................................................... 886,808
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- ---------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
PHILIPPINES--2.03%
BANKS--0.27%
28,000 Metropolitan Bank & Trust Company.......................................... $ 238,182
---------------
ELECTRICITY & GAS--0.49%
135,520 Manila Electric Co. Class B................................................ 432,960
---------------
FOODS--0.27%
127,050 San Miguel Corporation Class B............................................. 237,600
---------------
REAL ESTATE--0.53%
909,000 Ayala Corp (1)............................................................. 283,325
634,820 Ayala Land Inc. Class B.................................................... 181,377
---------------
464,702
---------------
TELECOMMUNICATIONS--0.47%
14,580 Philippine Long Distance Telephone Co...................................... 420,358
---------------
Total Philippines Common Stocks............................................................... 1,793,802
---------------
POLAND--1.53%
BANKS--0.10%
1,535 Bank Przemslawa-Handlowy S.A............................................... 90,798
---------------
DIVERSIFIED HOLDINGS COMPANIES--0.62%
41,980 Elektrim*.................................................................. 550,004
---------------
FINANCIAL INSTITUTIONS/SERVICES--0.21%
11,700 Bank Handlowy W Warszawie S.A.............................................. 183,690
---------------
METALS & MINING--0.14%
8,800 Kghm Polska Miedz S.A...................................................... 118,800
---------------
UTILITIES--0.46%
60,000 Telekomunika Polska S.A. GDR............................................... 408,000
---------------
Total Poland Common Stocks.................................................................... 1,351,292
---------------
PORTUGAL--0.01%
UTILITIES--0.01%
165 Portugal Telecom S.A....................................................... 7,308
---------------
RUSSIA--1.84%
MACHINERY/ENGINE SERVICES--0.32%
31,790 Unified Energy System...................................................... 278,163
---------------
OIL--1.39%
7,000 Gazprom ADR*............................................................... 75,390
17,015 Lukoil Holding ADR......................................................... 570,002
69,090 Surgutneftegaz ADR (1)..................................................... 587,265
---------------
1,232,657
---------------
OIL, INTEGRATED--0.13%
35,600 Ao Mosenergo ADR........................................................... 117,836
---------------
Total Russia Common Stocks.................................................................... 1,628,656
---------------
</TABLE>
77
<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>
SOUTH AFRICA--8.23%
BANKS/RETAIL--0.63%
100,873 Amalgamated Bank of South Africa Group Ltd................................. $ 558,996
---------------
BREWERIES, PUBS, & RESTAURANTS--0.44%
47,451 South African Breweries Ltd................................................ 384,998
---------------
DIVERSIFIED INDUSTRIALS--1.57%
108,332 Barlow Ltd................................................................. 606,483
234,275 Malbak Ltd................................................................. 152,065
61,300 Rembrandt Group Ltd........................................................ 460,061
69,500 Smith C.G.................................................................. 173,680
---------------
1,392,289
---------------
FINANCIAL SERVICES--0.60%
488,975 FirstRand Ltd.............................................................. 529,244
---------------
HOUSEHOLD GOODS & TEXTILES--0.22%
249,800 Profurn.................................................................... 198,624
---------------
INSURANCE--0.55%
423,065 Sanlam Ltd.*............................................................... 490,858
---------------
LIFE ASSURANCE--0.44%
31,920 Liberty Life Assoc......................................................... 385,889
---------------
MINING--0.98%
16,718 Anglo American* (1)........................................................ 863,775
---------------
OIL EXPLORATION & PRODUCTION--0.85%
101,260 Sasol Ltd.................................................................. 752,569
---------------
OTHER FINANCIAL--0.25%
24,600 Fedsure Holdings Ltd....................................................... 221,150
---------------
PAPER, PACKAGING & PRINTING--0.71%
69,700 Sappi...................................................................... 627,724
---------------
RETAILERS, GENERAL--0.99%
57,215 Ellerine Holdings Ltd...................................................... 211,684
124,237 LA Retail Stores Ltd....................................................... 156,241
600,000 Metro Cash And Carry....................................................... 511,156
---------------
879,081
---------------
Total South Africa Common Stocks.............................................................. 7,285,197
---------------
TAIWAN--9.82%
BANKS--1.55%
146,738 Bank Sinopac............................................................... 81,471
368,000 First Bank................................................................. 563,871
452,000 Hua Nan Bank............................................................... 722,022
---------------
1,367,364
---------------
CHEMICALS--0.95%
240,750 Formosa Plastic............................................................ 388,307
343,216 Nan Ya Plastic............................................................. 452,440
---------------
840,747
---------------
COMMERCE/INDUSTRIAL--0.82%
68,200 Asustek Computer Inc....................................................... 725,577
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- ---------------
<C> <S> <C>
</TABLE>
TAIWAN--(CONCLUDED)
<TABLE>
<C> <S> <C>
ELECTRICAL APPLIANCES--3.66%
414,000 Acer Inc*.................................................................. $ 776,892
2,214 Advanced Semiconductor*.................................................... 33,985
225,810 Siliconware Precision Industries Co.*...................................... 353,704
592,860 Taiwan Semiconductor Manufacturing Co.*.................................... 2,077,952
---------------
3,242,533
---------------
INSURANCE--0.98%
308,200 Cathay Life Insurance*..................................................... 869,919
---------------
IRON & STEEL--0.71%
931,450 China Steel Corp.*......................................................... 632,716
---------------
MACHINERY/ENGINE SERVICES--0.25%
40,600 Hon Hai Precision*......................................................... 217,860
---------------
SHIPPING--0.46%
363,000 Evergreen Marine*.......................................................... 403,083
---------------
TEXTILES--0.44%
306,000 Far East Textile........................................................... 391,991
---------------
Total Taiwan Common Stocks.................................................................... 8,691,790
---------------
THAILAND--3.23%
BANKS--0.98%
72,000 Bangkok Bank Public Co. Ltd.*.............................................. 226,421
192,000 Siam Commercial Bk......................................................... 237,388
158,000 Thai Farmers Bank Public Company Ltd. (1).................................. 401,317
---------------
865,126
---------------
COMMUNICATIONS--0.74%
145,300 Telecomasia (1)*........................................................... 133,759
361,700 TelecomAsia Corporation Public Company Ltd. (1)............................ 294,085
96,000 Total Access Communication Public Company Ltd.............................. 228,480
---------------
656,324
---------------
CONSTRUCTION--0.16%
6,000 Siam Cement Co.*........................................................... 144,497
---------------
ELECTRICITY & GAS--0.53%
246,500 Electricity Generating Public Company Ltd. (1)............................. 467,094
---------------
MINING--0.42%
47,200 PTT Exploration & Production Public Company Ltd............................ 370,445
---------------
TELECOMMUNICATIONS--0.40%
29,600 Advanced Info Services Public Company Ltd.*................................ 358,016
---------------
Total Thailand Common Stocks.................................................................. 2,861,502
---------------
</TABLE>
78
<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)
<TABLE>
<C> <S> <C>
TURKEY--2.93%
BANKS--1.63%
48,714,780 Akbank T.A.S............................................................... $ 850,903
36,332,950 Yapi Ve Kredi Bankasi A.S.................................................. 592,321
---------------
1,443,224
---------------
FINANCIAL INSTITUTIONS/SERVICES--0.78%
22,853,345 Haci Omer Sabanci.......................................................... 691,912
---------------
RETAIL TRADE--0.52%
1,042,502 Migros Turk T.A.S.......................................................... 455,236
---------------
Total Turkey Common Stocks.................................................................... 2,590,372
---------------
Total Common Stocks (cost--$66,405,349)....................................................... 78,356,180
---------------
PREFERRED STOCKS--6.71%
BRAZIL--6.71%
BANKS/RETAIL--1.71%
52,660,000 Banco Bradesco S.A......................................................... 253,145
586,000 Banco Itau S.A............................................................. 286,629
49,200 Companhia Vale Rio Doce 'A'................................................ 973,549
---------------
1,513,323
---------------
BREWERIES, PUBS, & RESTAURANTS--0.60%
902,000 Companhia Cervejaria Brahma................................................ 527,889
---------------
BUILDING MATERIALS & MERCHANTS--0.14%
1,380,000 Companhia Cimento Portland Itau............................................ 120,336
---------------
ELECTRICITY--0.86%
11,310,000 Centrais Electricas Brasileiras S.A. (Electrobras) 'B' Shares.............. 192,757
42,900 Companhia Paranaense de Energia Copel ADR.................................. 292,256
6,941,130 Eletropaulo Metrop......................................................... 280,128
---------------
765,141
---------------
ENGINEERING--0.31%
16,800,000 Cosigua Sid Guanab......................................................... 272,331
---------------
OIL EXPLORATION & PRODUCTION--0.73%
4,513,000 Petrol Brasileiro-Petrobras................................................ 648,596
---------------
SUPPORT SERVICES--0.39%
20,191,879 Companhia Energetica de Minas Gerais....................................... 349,887
---------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------- ---------------
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C>
PREFERRED STOCKS--(CONCLUDED)
BRAZIL--(CONCLUDED)
TELECOMMUNICATIONS--1.97%
48,850,000 Tele Centro Sul Pa......................................................... $ 527,001
7,436,423 Telecomunicacoes de Sao Paulo S.A. (Telesp)................................ 748,215
1,091,000 Telecomunicacoes do Parana S.A. (Telepar).................................. 182,951
5,361,423 Telesp Celular S.A......................................................... 281,707
---------------
1,739,874
---------------
Total Preferred Stocks (cost--$6,840,001)..................................................... 5,937,377
---------------
<CAPTION>
NUMBER OF
WARRANTS
- ---------------
<C> <S> <C>
WARRANTS--1.68%
KOREA--1.61%
IRON & STEEL--0.63%
4,500 Pohang Iron & Steel Co. Ltd................................................ 553,365
---------------
TELECOMMUNICATIONS--0.98%
700 SK Telecom................................................................. 872,452
---------------
Total Korea Warrants.......................................................................... 1,425,817
---------------
THAILAND--0.07%
BANKS--0.07%
127,000 Siam Commercial Bank....................................................... 64,004
---------------
Total Warrants (cost--$788,584)............................................................... 1,489,821
---------------
<CAPTION>
NUMBER OF
RIGHTS
- ---------------
<C> <S> <C>
RIGHTS--0.00%
TAIWAN--0.00%
COMMERCE/INDUSTRIAL--0.00%
68,200 Asustek Computer Inc....................................................... 317
---------------
Total Rights (cost--$0)....................................................................... 317
---------------
</TABLE>
79
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- ---------- ------------ ------- ------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--1.71%
$ 1,509 Repurchase Agreement dated 07/30/99 with State Street Bank & Trust
Co., collateralized by $894,107 U.S. Treasury Notes, 5.75% due
08/15/03 (value--$910,871); and by $605,108 U.S. Treasury Notes,
6.25% due 02/15/03 (value--$628,556); proceeds: $1,509,534
(cost--$1,509,000).............................................. 08/02/99 4.250% $ 1,509,000
------------
Total Investments (cost--$75,542,934)--98.64%................................. 87,292,695
1,204,587
Other assets in excess of liabilities--1.36%..................................
------------
Net Assets--100.00%........................................................... $ 88,497,282
------------
------------
</TABLE>
- ---------------
* Non-income producing security.
+ Illiquid security, representing 0.23% of net assets.
ADR American Depositary Receipt.
ADS American Depositary Shares.
GDR Global Depositary Receipt.
GDS Global Depositary Shares.
(1) Security, or a portion thereof, was on loan at July 31, 1999.
FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
CONTRACT TO IN MATURITY UNREALIZED
DELIVER EXCHANGE FOR DATE DEPRECIATION
------------- ---------------- --------- -------------
<S> <C> <C> <C> <C>
Hong Kong Dollar..................................................... 5,966,000 US$ 747,553 01/21/00 $ (16,932)
-------------
-------------
</TABLE>
See accompanying notes to financial statements.
80
<PAGE>
[This page intentionally left blank]
81
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1999
<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--$47,258,276; $283,877,466;
$140,267,949; $231,242,796;
$55,943,407; $105,026,146;
$328,845,564; $261,873,690;
$196,524,949; $181,989,743;
$190,378,486; $75,542,934,
respectively)......................... $47,258,276 $ 281,213,241 $ 137,273,800 $ 225,607,459
Investments of cash collateral received
for securities loaned, at value
(cost--$0, $4,044,000; $42,917,725;
$204,000; $0; $0, $49,107,490;
$29,147,100; $8,746,300; $36,453,500;
$20,245,675; $4,024,284,
respectively)......................... -- 4,044,000 42,917,725 204,000
Cash (including cash denominated in
foreign currencies)................... -- -- 455 527,385
Receivable for investments sold......... -- 48,178,658 10,404,301 241
Receivable for shares of beneficial
interest sold......................... 319,734 191,287 198,619 221,588
Unrealized appreciation of forward
foreign currency contracts............ -- -- -- --
Dividends and interest receivable....... 228,515 1,787,898 1,767,577 1,767,031
Receivable from investment adviser...... 7,100 -- -- --
Deferred organizational expenses........ 20,057 20,057 20,057 20,057
Other assets............................ 68,952 38,722 30,718 20,034
------------- ------------- ------------- -------------
Total assets............................ 47,902,634 335,473,863 192,613,252 228,367,795
------------- ------------- ------------- -------------
LIABILITIES
Payable for shares of beneficial
interest repurchased.................. 513,875 259,989 209,929 113,082
Dividends payable to shareholders....... 101,558 -- -- --
Payable for investments purchased....... -- 138,593,842 10,284,696 5,346,037
Payable for cash collateral for
securities loaned..................... -- 4,044,000 42,917,725 204,000
Payable to custodian.................... 6,014 635,567 -- --
Unrealized depreciation of forward
foreign currency contracts............ -- -- -- 32,808
Outstanding options written, at value
(premium received--$120,856).......... -- -- -- 56,359
Variation margin payable................ -- -- -- 187,235
Payable to investment adviser........... -- 107,225 72,518 125,700
Accrued expenses and other
liabilities........................... 107,560 114,392 85,482 88,250
------------- ------------- ------------- -------------
Total liabilities....................... 729,007 143,755,015 53,570,350 6,153,471
------------- ------------- ------------- -------------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--47,174,256;
15,849,823; 11,608,745; 18,019,254;
4,553,652; 8,558,384; 17,759,409;
14,681,086; 13,085,410; 12,868,715;
12,454,359; 7,342,237, respectively
(unlimited amount authorized)......... 47,174,256 196,472,427 141,951,840 233,788,698
Accumulated undistributed (distributions
in excess of) net investment income
(loss)................................ -- 1,228,999 622,555 1,046,199
Accumulated net realized gains (losses)
from investments, other assets,
liabilities, futures, options and
forward contracts denominated in
foreign currency transactions......... (629) (3,318,353) (537,344) (6,569,986)
Net unrealized appreciation
(depreciation) of investments, other
assets, liabilities, futures, options
written and forward contracts
denominated in foreign currencies..... -- (2,664,225) (2,994,149) (6,050,587)
------------- ------------- ------------- -------------
Net assets.............................. $47,173,627 $ 191,718,848 $ 139,042,902 $ 222,214,324
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net asset value, offering and redemption
price per share....................... $1.00 $12.10 $11.98 $12.33
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
82
<PAGE>
<TABLE>
<CAPTION>
PACE PACE
PACE PACE PACE PACE SMALL/MEDIUM SMALL/MEDIUM
MUNICIPAL GLOBAL FIXED LARGE COMPANY LARGE COMPANY COMPANY COMPANY
FIXED INCOME INCOME VALUE EQUITY GROWTH EQUITY VALUE EQUITY GROWTH EQUITY
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
------------ ------------- -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at value
(cost--$47,258,276; $283,877,466;
$140,267,949; $231,242,796;
$55,943,407; $105,026,146;
$328,845,564; $261,873,690;
$196,524,949; $181,989,743;
$190,378,486; $75,542,934,
respectively)......................... $55,808,494 $ 100,879,223 $376,541,741 $378,449,275 $205,766,651 $265,346,078
Investments of cash collateral received
for securities loaned, at value
(cost--$0, $4,044,000; $42,917,725;
$204,000; $0; $0, $49,107,490;
$29,147,100; $8,746,300; $36,453,500;
$20,245,675; $4,024,284,
respectively)......................... -- -- 49,107,490 29,147,100 8,746,300 36,453,500
Cash (including cash denominated in
foreign currencies)................... -- 412,585 190 967 786 842
Receivable for investments sold......... -- 2,459,306 455,495 1,462,923 290,079 1,050,505
Receivable for shares of beneficial
interest sold......................... 76,526 88,667 355,444 426,690 218,091 246,184
Unrealized appreciation of forward
foreign currency contracts............ -- 1,682,268 -- -- -- --
Dividends and interest receivable....... 860,659 1,654,380 259,854 180,588 172,393 154,360
Receivable from investment adviser...... -- -- -- -- -- --
Deferred organizational expenses........ 20,057 20,057 20,057 20,057 20,057 20,057
Other assets............................ 31,472 35,974 48,360 27,907 31,181 26,968
------------ ------------- -------------- -------------- ------------- -------------
Total assets............................ 56,797,208 107,232,460 426,788,631 409,715,507 215,245,538 303,298,494
------------ ------------- -------------- -------------- ------------- -------------
LIABILITIES
Payable for shares of beneficial
interest repurchased.................. 23,249 112,411 183,887 186,447 90,133 117,249
Dividends payable to shareholders....... -- -- -- -- -- --
Payable for investments purchased....... -- 4,909,299 1,449,585 -- -- 922,012
Payable for cash collateral for
securities loaned..................... -- -- 49,107,490 29,147,100 8,746,300 36,453,500
Payable to custodian.................... -- -- -- -- -- --
Unrealized depreciation of forward
foreign currency contracts............ -- 961,916 -- -- -- --
Outstanding options written, at value
(premium received--$120,856).......... -- -- -- -- -- --
Variation margin payable................ -- -- 189,000 -- -- --
Payable to investment adviser........... 22,736 49,467 264,965 269,291 141,857 182,705
Accrued expenses and other
liabilities........................... 92,315 56,256 128,705 125,086 135,983 217,567
------------ ------------- -------------- -------------- ------------- -------------
Total liabilities....................... 138,300 6,089,349 51,323,632 29,727,924 9,114,273 37,893,033
------------ ------------- -------------- -------------- ------------- -------------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--47,174,256;
15,849,823; 11,608,745; 18,019,254;
4,553,652; 8,558,384; 17,759,409;
14,681,086; 13,085,410; 12,868,715;
12,454,359; 7,342,237, respectively
(unlimited amount authorized)......... 56,861,641 105,571,847 302,832,371 253,504,127 190,222,836 166,786,934
Accumulated undistributed (distributions
in excess of) net investment income
(loss)................................ 212,788 (1,772,649) 1,275,994 1,132 392,044 1,131
Accumulated net realized gains (losses)
from investments, other assets,
liabilities, futures, options and
forward contracts denominated in
foreign currency transactions......... (280,608) 780,191 23,557,790 9,906,739 6,274,683 15,261,061
Net unrealized appreciation
(depreciation) of investments, other
assets, liabilities, futures, options
written and forward contracts
denominated in foreign currencies..... (134,913) (3,436,278) 47,798,844 116,575,585 9,241,702 83,356,335
------------ ------------- -------------- -------------- ------------- -------------
Net assets.............................. $56,658,908 $ 101,143,111 $375,464,999 $379,987,583 $206,131,265 $265,405,461
------------ ------------- -------------- -------------- ------------- -------------
------------ ------------- -------------- -------------- ------------- -------------
Net asset value, offering and redemption
price per share....................... $12.44 $11.82 $21.14 $25.88 $15.75 $20.62
------------ ------------- -------------- -------------- ------------- -------------
------------ ------------- -------------- -------------- ------------- -------------
<CAPTION>
PACE
PACE INTERNATIONAL
INTERNATIONAL EMERGING MARKETS
EQUITY EQUITY
INVESTMENTS INVESTMENTS
------------- ----------------
<S> <C> <C>
ASSETS
Investments, at value
(cost--$47,258,276; $283,877,466;
$140,267,949; $231,242,796;
$55,943,407; $105,026,146;
$328,845,564; $261,873,690;
$196,524,949; $181,989,743;
$190,378,486; $75,542,934,
respectively)......................... $ 213,639,793 $ 87,292,695
Investments of cash collateral received
for securities loaned, at value
(cost--$0, $4,044,000; $42,917,725;
$204,000; $0; $0, $49,107,490;
$29,147,100; $8,746,300; $36,453,500;
$20,245,675; $4,024,284,
respectively)......................... 20,245,675 4,024,284
Cash (including cash denominated in
foreign currencies)................... 1,608,617 1,560,103
Receivable for investments sold......... 1,019,950 343,476
Receivable for shares of beneficial
interest sold......................... 266,716 115,920
Unrealized appreciation of forward
foreign currency contracts............ -- --
Dividends and interest receivable....... 415,328 302,880
Receivable from investment adviser...... -- --
Deferred organizational expenses........ 20,057 20,057
Other assets............................ 261,513 42,934
------------- ----------------
Total assets............................ 237,477,649 93,702,349
------------- ----------------
LIABILITIES
Payable for shares of beneficial
interest repurchased.................. 90,317 51,529
Dividends payable to shareholders....... -- --
Payable for investments purchased....... 2,788,505 629,550
Payable for cash collateral for
securities loaned..................... 20,245,675 4,024,284
Payable to custodian.................... -- --
Unrealized depreciation of forward
foreign currency contracts............ -- 16,932
Outstanding options written, at value
(premium received--$120,856).......... -- --
Variation margin payable................ -- --
Payable to investment adviser........... 163,949 70,061
Accrued expenses and other
liabilities........................... 172,703 412,711
------------- ----------------
Total liabilities....................... 23,461,149 5,205,067
------------- ----------------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--47,174,256;
15,849,823; 11,608,745; 18,019,254;
4,553,652; 8,558,384; 17,759,409;
14,681,086; 13,085,410; 12,868,715;
12,454,359; 7,342,237, respectively
(unlimited amount authorized)......... 176,622,617 87,196,806
Accumulated undistributed (distributions
in excess of) net investment income
(loss)................................ 1,160,098 725,160
Accumulated net realized gains (losses)
from investments, other assets,
liabilities, futures, options and
forward contracts denominated in
foreign currency transactions......... 12,935,510 (10,874,759)
Net unrealized appreciation
(depreciation) of investments, other
assets, liabilities, futures, options
written and forward contracts
denominated in foreign currencies..... 23,298,275 11,450,075
------------- ----------------
Net assets.............................. $ 214,016,500 $ 88,497,282
------------- ----------------
------------- ----------------
Net asset value, offering and redemption
price per share....................... $17.18 $12.05
------------- ----------------
------------- ----------------
</TABLE>
See accompanying notes to financial statements
83
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 1999
<TABLE>
<CAPTION>
PACE
GOVERNMENT PACE PACE
PACE SECURITIES INTERMEDIATE STRATEGIC
MONEY MARKET FIXED INCOME FIXED INCOME FIXED INCOME
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding
taxes, if any)........................ $ 1,698,415 $11,623,278 $ 7,478,483 $11,893,864
Dividends (net of foreign withholding
taxes, if any)........................ -- -- -- --
------------ ------------ ------------ ------------
1,698,415 11,623,278 7,478,483 11,893,864
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory and administration
fees.................................. 114,410 1,277,768 740,117 1,302,736
Transfer agency fees and expenses....... 112,938 82,333 42,364 81,931
Legal and audit......................... 28,458 47,661 30,312 39,429
Trustees' fees and expenses............. 26,250 26,250 26,250 26,250
Reports and notices to shareholders..... 25,274 41,191 22,325 25,082
Amortization of organizational
expenses.............................. 18,980 18,980 18,980 18,980
Federal and state registration fees..... 14,214 30,483 28,108 36,031
Custody and accounting.................. 3,703 110,748 75,707 113,067
Interest expense........................ -- 41,340 -- 58,566
Other expenses.......................... 4,262 18,599 3,281 9,122
------------ ------------ ------------ ------------
348,489 1,695,353 987,444 1,711,194
Less: Fee waivers and reimbursements
from investment adviser............... (185,048) (102,428) (1,460) (70,795)
------------ ------------ ------------ ------------
Net expenses............................ 163,441 1,592,925 985,984 1,640,399
------------ ------------ ------------ ------------
Net investment income (loss)............ 1,534,974 10,030,353 6,492,499 10,253,465
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT ACTIVITIES:
Net realized gains (losses) from:
Investment transactions............... 165 (2,597,744) (168,313) (1,322,029)
Futures............................... -- 57,256 -- (2,486,229)
Options written....................... -- -- -- (198,492)
Foreign currency transactions......... -- -- -- (11,967)
Net change in unrealized
appreciation/depreciation of:
Investments........................... -- (4,324,044) (3,749,017) (8,080,766)
Futures............................... -- -- -- (405,049)
Options written....................... -- -- -- 64,497
Other assets, liabilities and forward
contracts denominated in foreign
currencies........................... -- -- -- (5,496)
------------ ------------ ------------ ------------
Net realized and unrealized gains
(losses) from investment activities... 165 (6,864,532) (3,917,330) (12,445,531)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations............. $ 1,535,139 $ 3,165,821 $ 2,575,169 $(2,192,066)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
84
<PAGE>
<TABLE>
<CAPTION>
PACE
PACE PACE PACE PACE SMALL/MEDIUM
MUNICIPAL GLOBAL FIXED LARGE COMPANY LARGE COMPANY COMPANY
FIXED INCOME INCOME VALUE EQUITY GROWTH EQUITY VALUE EQUITY
INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS INVESTMENTS
------------ ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding
taxes, if any)........................ $ 2,969,647 $ 5,557,550 $ 520,330 $ 228,442 $ 300,130
Dividends (net of foreign withholding
taxes, if any)........................ -- -- 4,873,815 2,130,431 2,299,108
------------ ------------ ------------- ------------- -------------
2,969,647 5,557,550 5,394,145 2,358,873 2,599,238
------------ ------------ ------------- ------------- -------------
EXPENSES:
Investment advisory and administration
fees.................................. 337,795 805,390 2,581,440 2,593,183 1,458,785
Transfer agency fees and expenses....... 27,000 95,234 129,616 117,537 108,286
Legal and audit......................... 25,676 28,860 57,689 74,069 47,598
Trustees' fees and expenses............. 26,250 26,250 26,250 26,250 26,250
Reports and notices to shareholders..... 17,205 22,258 63,359 75,091 40,679
Amortization of organizational
expenses.............................. 18,980 18,980 18,980 18,980 18,980
Federal and state registration fees..... 6,098 20,115 44,206 45,746 26,709
Custody and accounting.................. 35,689 152,689 184,508 171,676 109,797
Interest expense........................ -- -- -- -- --
Other expenses.......................... 7,935 8,089 12,966 21,388 11,297
------------ ------------ ------------- ------------- -------------
502,628 1,177,865 3,119,014 3,143,920 1,848,381
Less: Fee waivers and reimbursements
from investment adviser............... (24,086) (220,842) (1,732) (3,823) (25,179)
------------ ------------ ------------- ------------- -------------
Net expenses............................ 478,542 957,023 3,117,282 3,140,097 1,823,202
------------ ------------ ------------- ------------- -------------
Net investment income (loss)............ 2,491,105 4,600,527 2,276,863 (781,224) 776,036
------------ ------------ ------------- ------------- -------------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT ACTIVITIES:
Net realized gains (losses) from:
Investment transactions............... (112,308) 3,498,901 24,186,831 10,229,777 6,402,434
Futures............................... -- -- 825,096 -- --
Options written....................... -- -- -- -- --
Foreign currency transactions......... -- 2,153,170 -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments........................... (1,140,661) (5,366,888) 14,004,928 52,000,533 (2,998,643)
Futures............................... -- -- 367,192 -- --
Options written....................... -- -- -- -- --
Other assets, liabilities and forward
contracts denominated in foreign
currencies........................... -- 889,876 -- -- --
------------ ------------ ------------- ------------- -------------
Net realized and unrealized gains
(losses) from investment activities... (1,252,969) 1,175,059 39,384,047 62,230,310 3,403,791
------------ ------------ ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations............. $ 1,238,136 $ 5,775,586 $ 41,660,910 $ 61,449,086 $ 4,179,827
------------ ------------ ------------- ------------- -------------
------------ ------------ ------------- ------------- -------------
<CAPTION>
PACE
PACE INTERNATIONAL
SMALL/MEDIUM PACE EMERGING
COMPANY INTERNATIONAL MARKETS
GROWTH EQUITY EQUITY EQUITY
INVESTMENTS INVESTMENTS INVESTMENTS
------------- ------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding
taxes, if any)........................ $ 698,020 $ 403,892 $ 138,226
Dividends (net of foreign withholding
taxes, if any)........................ 394,041 2,743,213 1,601,617
------------- ------------- ------------
1,092,061 3,147,105 1,739,843
------------- ------------- ------------
EXPENSES:
Investment advisory and administration
fees.................................. 1,704,803 1,615,444 751,091
Transfer agency fees and expenses....... 120,099 110,689 95,931
Legal and audit......................... 51,440 49,548 42,217
Trustees' fees and expenses............. 26,250 26,250 26,250
Reports and notices to shareholders..... 42,018 46,391 21,374
Amortization of organizational
expenses.............................. 18,980 18,980 18,980
Federal and state registration fees..... 30,381 38,876 21,553
Custody and accounting.................. 128,423 269,336 239,017
Interest expense........................ -- -- --
Other expenses.......................... 16,303 21,053 3,712
------------- ------------- ------------
2,138,697 2,196,567 1,220,125
Less: Fee waivers and reimbursements
from investment adviser............... (15,569) (834) (195,575)
------------- ------------- ------------
Net expenses............................ 2,123,128 2,195,733 1,024,550
------------- ------------- ------------
Net investment income (loss)............ (1,031,067) 951,372 715,293
------------- ------------- ------------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT ACTIVITIES:
Net realized gains (losses) from:
Investment transactions............... 15,551,333 13,004,589 (3,396,344)
Futures............................... -- -- --
Options written....................... -- -- --
Foreign currency transactions......... -- 547,518 140,459
Net change in unrealized
appreciation/depreciation of:
Investments........................... 54,182,221 857,043 17,387,157
Futures............................... -- -- --
Options written....................... -- -- --
Other assets, liabilities and forward
contracts denominated in foreign
currencies........................... -- 252,109 (298,617)
------------- ------------- ------------
Net realized and unrealized gains
(losses) from investment activities... 69,733,554 14,661,259 13,832,655
------------- ------------- ------------
Net increase (decrease) in net assets
resulting from operations............. $ 68,702,487 $ 15,612,631 $14,547,948
------------- ------------- ------------
------------- ------------- ------------
</TABLE>
See accompanying notes to financial statements
85
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PACE
PACE GOVERNMENT SECURITIES
MONEY MARKET INVESTMENTS FIXED INCOME INVESTMENTS
---------------------------- -----------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
JULY 31, JULY 31,
---------------------------- -----------------------------
1999 1998 1999 1998
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 1,534,974 $ 1,132,282 $ 10,030,353 $ 7,737,662
Net realized gains (losses) from:
Investment, future and option
transactions....................... 165 (794) (2,597,744) 1,768,979
Foreign currency transactions....... -- -- 57,256 --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... -- -- (4,324,044) (219,247)
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- -- -- --
------------- ------------ ------------- -------------
Net increase (decrease) in net assets
resulting from operations............ 1,535,139 1,131,488 3,165,821 9,287,394
------------- ------------ ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (1,534,974) (1,132,282) (10,395,294) (7,404,245)
Net realized gains from investment
transactions......................... -- -- (453,493) (1,983,939)
------------- ------------ ------------- -------------
(1,534,974) (1,132,282) (10,848,787) (9,388,184)
------------- ------------ ------------- -------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 73,861,364 23,490,598 76,221,851 74,953,404
Cost of shares repurchased............ (53,636,534) (15,154,011) (49,556,340) (23,558,064)
Proceeds from dividends reinvested.... 1,455,251 1,087,530 10,617,096 9,218,788
------------- ------------ ------------- -------------
Net increase in net assets from
beneficial interest transactions..... 21,680,081 9,424,117 37,282,607 60,614,128
------------- ------------ ------------- -------------
Net increase in net assets............ 21,680,246 9,423,323 29,599,641 60,513,338
NET ASSETS:
Beginning of year..................... 25,493,381 16,070,058 162,119,207 101,605,869
------------- ------------ ------------- -------------
End of year........................... $ 47,173,627 $ 25,493,381 $ 191,718,848 $ 162,119,207
------------- ------------ ------------- -------------
------------- ------------ ------------- -------------
Undistributed net investment income... $ -- $ -- $ 1,228,999 $ 827,906
------------- ------------ ------------- -------------
------------- ------------ ------------- -------------
</TABLE>
86
<PAGE>
<TABLE>
<CAPTION>
PACE PACE
INTERMEDIATE FIXED INCOME STRATEGIC FIXED INCOME
INVESTMENTS INVESTMENTS
----------------------------- -----------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
JULY 31, JULY 31,
----------------------------- -----------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 6,492,499 $ 4,708,834 $ 10,253,465 $ 5,466,270
Net realized gains (losses) from:
Investment, future and option
transactions....................... (168,313) 694,295 (4,006,750) 2,535,815
Foreign currency transactions....... -- (156,977) (11,967) 3,871
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... (3,749,017) (131) (8,421,318) 380,806
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- 10,844 (5,496) (17)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations............ 2,575,169 5,256,865 (2,192,066) 8,386,745
------------- ------------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (6,342,333) (4,386,424) (9,918,107) (5,206,415)
Net realized gains from investment
transactions......................... (724,632) -- (4,178,827) (882,227)
------------- ------------- ------------- -------------
(7,066,965) (4,386,424) (14,096,934) (6,088,642)
------------- ------------- ------------- -------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 71,711,855 47,167,401 139,745,175 61,068,745
Cost of shares repurchased............ (34,775,205) (19,400,214) (42,026,189) (17,663,041)
Proceeds from dividends reinvested.... 6,908,534 4,301,281 13,904,642 6,001,405
------------- ------------- ------------- -------------
Net increase in net assets from
beneficial interest transactions..... 43,845,184 32,068,468 111,623,628 49,407,109
------------- ------------- ------------- -------------
Net increase in net assets............ 39,353,388 32,938,909 95,334,628 51,705,212
NET ASSETS:
Beginning of year..................... 99,689,514 66,750,605 126,879,696 75,174,484
------------- ------------- ------------- -------------
End of year........................... $ 139,042,902 $ 99,689,514 $ 222,214,324 $ 126,879,696
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Undistributed net investment income... $ 622,555 $ 473,206 $ 1,046,199 $ 637,680
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
<CAPTION>
PACE PACE
MUNICIPAL FIXED INCOME GLOBAL FIXED INCOME
INVESTMENTS INVESTMENTS
----------------------------- -----------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
JULY 31, JULY 31,
----------------------------- -----------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 2,491,105 $ 2,019,017 $ 4,600,527 $ 3,828,624
Net realized gains (losses) from:
Investment, future and option
transactions....................... (112,308) (13,397) 3,498,901 2,109,651
Foreign currency transactions....... -- -- 2,153,170 (3,629,877)
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... (1,140,661) 85,256 (5,366,888) 863,281
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- -- 889,876 236,923
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations............ 1,238,136 2,090,876 5,775,586 3,408,602
------------- ------------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (2,465,695) (1,949,614) (6,373,655) (2,451,594)
Net realized gains from investment
transactions......................... -- -- (3,639,664) (621,114)
------------- ------------- ------------- -------------
(2,465,695) (1,949,614) (10,013,319) (3,072,708)
------------- ------------- ------------- -------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 20,483,781 26,084,535 35,855,990 40,175,161
Cost of shares repurchased............ (16,611,583) (10,769,886) (29,144,329) (14,974,347)
Proceeds from dividends reinvested.... 2,376,569 1,889,649 9,831,275 3,021,988
------------- ------------- ------------- -------------
Net increase in net assets from
beneficial interest transactions..... 6,248,767 17,204,298 16,542,936 28,222,802
------------- ------------- ------------- -------------
Net increase in net assets............ 5,021,208 17,345,560 12,305,203 28,558,696
NET ASSETS:
Beginning of year..................... 51,637,700 34,292,140 88,837,908 60,279,212
------------- ------------- ------------- -------------
End of year........................... $ 56,658,908 $ 51,637,700 $ 101,143,111 $ 88,837,908
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Undistributed net investment income... $ 212,788 $ 187,378 $ -- $ --
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
See accompanying notes to financial statements
87
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PACE PACE
LARGE COMPANY VALUE LARGE COMPANY GROWTH
EQUITY INVESTMENTS EQUITY INVESTMENTS
----------------------------- -----------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
JULY 31, JULY 31,
----------------------------- -----------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss).......... $ 2,276,863 $ 1,825,428 $ (781,224) $ (295,829)
Net realized gains (losses) from:
Investment, future and option
transactions....................... 25,011,927 25,588,461 10,229,777 30,303,857
Foreign currency transactions....... -- -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... 14,372,120 (5,835,473) 52,000,533 23,781,478
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- -- -- --
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations............ 41,660,910 21,578,416 61,449,086 53,789,506
------------- ------------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (2,068,017) (1,408,413) -- (89,237)
Net realized gains from investment
transactions......................... (21,559,073) (14,337,107) (19,611,543) (10,121,657)
------------- ------------- ------------- -------------
(23,627,090) (15,745,520) (19,611,543) (10,210,894)
------------- ------------- ------------- -------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 148,206,501 112,692,706 142,031,214 106,725,695
Cost of shares repurchased............ (80,472,039) (48,536,702) (98,726,785) (45,303,487)
Proceeds from dividends reinvested.... 23,342,638 15,558,619 19,384,120 10,126,809
------------- ------------- ------------- -------------
Net increase in net assets derived
from beneficial interest
transactions......................... 91,077,100 79,714,623 62,688,549 71,549,017
------------- ------------- ------------- -------------
Net increase in net assets............ 109,110,920 85,547,519 104,526,092 115,127,629
NET ASSETS:
Beginning of year..................... 266,354,079 180,806,560 275,461,491 160,333,862
------------- ------------- ------------- -------------
End of year........................... $ 375,464,999 $ 266,354,079 $ 379,987,583 $ 275,461,491
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Undistributed net investment income... $ 1,275,994 $ 1,067,148 $ 1,132 $ 1,132
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
88
<PAGE>
<TABLE>
<CAPTION>
PACE PACE
SMALL/MEDIUM COMPANY SMALL/MEDIUM COMPANY GROWTH
VALUE EQUITY INVESTMENTS EQUITY INVESTMENTS
----------------------------- -----------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
JULY 31, JULY 31,
----------------------------- -----------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss).......... $ 776,036 $ 1,051,168 $ (1,031,067) $ (329,021)
Net realized gains (losses) from:
Investment, future and option
transactions....................... 6,402,434 22,462,701 15,551,333 8,732,887
Foreign currency transactions....... -- -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... (2,998,643) (15,463,480) 54,182,221 12,043,636
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- -- -- --
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations............ 4,179,827 8,050,389 68,702,487 20,447,502
------------- ------------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (1,010,551) (1,076,984) -- --
Net realized gains from investment
transactions......................... (17,717,110) (10,697,586) (5,125,542) (6,433,649)
------------- ------------- ------------- -------------
(18,727,661) (11,774,570) (5,125,542) (6,433,649)
------------- ------------- ------------- -------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 78,192,098 80,270,327 69,286,726 84,765,291
Cost of shares repurchased............ (59,597,665) (39,712,671) (71,374,034) (31,908,469)
Proceeds from dividends reinvested.... 18,526,406 11,677,703 5,060,397 6,376,127
------------- ------------- ------------- -------------
Net increase in net assets derived
from beneficial interest
transactions......................... 37,120,839 52,235,359 2,973,089 59,232,949
------------- ------------- ------------- -------------
Net increase in net assets............ 22,573,005 48,511,178 66,550,034 73,246,802
NET ASSETS:
Beginning of year..................... 183,558,260 135,047,082 198,855,427 125,608,625
------------- ------------- ------------- -------------
End of year........................... $ 206,131,265 $ 183,558,260 $ 265,405,461 $ 198,855,427
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Undistributed net investment income... $ 392,044 $ 626,559 $ 1,131 $ 1,131
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
<CAPTION>
PACE PACE
INTERNATIONAL EQUITY INTERNATIONAL EMERGING
INVESTMENTS MARKETS EQUITY INVESTMENTS
----------------------------- -----------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
JULY 31, JULY 31,
----------------------------- -----------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss).......... $ 951,372 $ 1,469,982 $ 715,293 $ 557,171
Net realized gains (losses) from:
Investment, future and option
transactions....................... 13,004,589 5,057,201 (3,396,344) (7,304,773)
Foreign currency transactions....... 547,518 326,095 140,459 (179,557)
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... 857,043 7,689,825 17,387,157 (15,705,030)
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. 252,109 (207,538) (298,617) 243,360
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations............ 15,612,631 14,335,565 14,547,948 (22,388,829)
------------- ------------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (1,983,217) (1,289,475) (468,284) (208,975)
Net realized gains from investment
transactions......................... (3,678,063) (2,560,448) -- --
------------- ------------- ------------- -------------
(5,661,280) (3,849,923) (468,284) (208,975)
------------- ------------- ------------- -------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 78,914,213 71,453,827 34,235,058 43,340,509
Cost of shares repurchased............ (44,926,114) (24,249,999) (23,516,593) (12,471,626)
Proceeds from dividends reinvested.... 5,599,716 3,808,818 462,033 206,708
------------- ------------- ------------- -------------
Net increase in net assets derived
from beneficial interest
transactions......................... 39,587,815 51,012,646 11,180,498 31,075,591
------------- ------------- ------------- -------------
Net increase in net assets............ 49,539,166 61,498,288 25,260,162 8,477,787
NET ASSETS:
Beginning of year..................... 164,477,334 102,979,046 63,237,120 54,759,333
------------- ------------- ------------- -------------
End of year........................... $ 214,016,500 $ 164,477,334 $ 88,497,282 $ 63,237,120
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Undistributed net investment income... $ 1,160,098 $ 1,664,182 $ 725,160 $ 337,692
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
See accompanying notes to financial statements
89
<PAGE>
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber PACE Select Advisors Trust (the "Trust") is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended, as an open-end management investment company currently composed of
twelve separate investment portfolios and was organized as a Delaware business
trust under the laws of the State of Delaware by Certificate of Trust dated
September 9, 1994, as amended June 9, 1995. The trustees of the Trust have
authority to issue an unlimited number of shares of beneficial interest, par
value $0.001 per share.
The Trust has twelve Portfolios of shares available for investment, each
having its own investment objectives and policies: PACE Money Market
Investments, PACE Government Securities Fixed Income Investments, PACE
Intermediate Fixed Income Investments, PACE Strategic Fixed Income Investments,
PACE Municipal Fixed Income Investments, PACE Global Fixed Income Investments,
PACE Large Company Value Equity Investments, PACE Large Company Growth Equity
Investments, PACE Small/Medium Company Value Equity Investments, PACE
Small/Medium Company Growth Equity Investments, PACE International Equity
Investments and PACE International Emerging Markets Equity Investments
(collectively referred to as the "Portfolios").
The Portfolios are diversified with the exception of PACE Intermediate Fixed
Income Investments and PACE Global Fixed Income Investments. Shares of the
Portfolios currently are available only to participants in the PaineWebber
PACE-SM- Program.
The Trust incurred costs of approximately $1,138,000 in connection with the
organization of the Trust and the registration of its shares. Such costs have
been deferred and are being amortized using the straight-line method over the
period of benefit, not to exceed five years, beginning with the commencement of
operations of the Trust.
The preparation of financial statements in accordance with generally accepted
accounting principles requires the Trust's management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates. The following is a
summary of significant accounting policies:
VALUATION OF INVESTMENTS--Each Portfolio calculates its net asset value based
on the current market value for its portfolio securities. The Portfolios
normally obtain market values for their securities from independent pricing
sources. Independent pricing sources may use reported last sale prices, current
market quotations or valuations from computerized "matrix" systems that derive
values based on comparable securities. Securities traded in the over-the-counter
("OTC") market and listed on The Nasdaq Stock Market, Inc. ("Nasdaq") normally
are valued at the last sale price on Nasdaq prior to valuation. Other OTC
securities are valued at the last bid price available prior to valuation.
Securities which are listed on U.S. and foreign stock exchanges normally are
valued at the last sale price on the day the securities are valued or, lacking
any sales on such day, at the last available bid price. In cases where
securities are traded on more than one exchange, the securities are valued on
the exchange designated as the primary market by Mitchell Hutchins Asset
Management Inc. ("Mitchell Hutchins"), a wholly owned asset management
subsidiary of PaineWebber Incorporated ("PaineWebber") and investment adviser
and administrator of the Portfolios, or by the Portfolio's sub-advisor. If a
market value is not available from an independent pricing source for a
particular security, that security is valued at fair value as determined in good
faith by or under the direction of the Trust's board of trustees (the "board").
The amortized cost method of valuation, which approximates market value,
generally is used to value short-term debt instruments with sixty days or less
remaining to maturity, unless the board determines that this does not represent
fair value. Investments of the PACE Money Market Investments are valued using
the amortized cost method of valuation. All investments quoted in foreign
currencies will be valued daily in U.S. dollars on the basis of the foreign
currency exchange rates prevailing at the time such valuation is determined by
the Portfolio's custodian.
Foreign currency exchange rates are generally determined prior to the close of
the New York Stock Exchange ("NYSE"). Occasionally, events affecting the value
of foreign investments and such exchange rates occur between the time at which
they are determined and the close of the NYSE, which will not be reflected in
the computation of the
90
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Portfolio's net asset value. If events materially affecting the value of such
securities or currency exchange rates occur during such time periods, the
securities will be valued at their fair value as determined in good faith by or
under the direction of the Trust's board.
REPURCHASE AGREEMENTS--The Portfolios' custodian takes possession of the
collateral pledged for investments in repurchase agreements. The underlying
collateral is valued daily on a mark-to-market basis to ensure that the value,
including accrued interest, is at least equal to the repurchase price. In the
event of default of the obligation to repurchase, the Portfolios have the right
to liquidate the collateral and apply the proceeds in satisfaction of the
obligations. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings. Each Portfolio (with the
exception of PACE Municipal Fixed Income Investments) occasionally participates
in joint repurchase agreement transactions with other funds managed by Mitchell
Hutchins.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME--Investment transactions are
recorded on a trade date basis. Realized gains and losses from investment
transactions and foreign exchange transactions are calculated using the
identified cost method. Dividend income is recorded on the ex-dividend date
("ex-date") (except for certain dividends from foreign securities that are
recorded as soon after the ex-date as the respective Portfolio, using reasonable
diligence, becomes aware of such dividends). Interest income is recorded on an
accrual basis. Discounts are accreted and premiums are amortized 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 (loss) for income tax reporting purposes.
FORWARD FOREIGN CURRENCY CONTRACTS--Certain Portfolios may enter into forward
foreign currency exchange contracts ("forward contracts") in connection with
planned purchases or sales of securities or to hedge the U.S. dollar value of
portfolio securities denominated in a particular currency. The Portfolios may
also engage in cross-hedging by using forward contracts in one currency to hedge
fluctuations in the value of securities denominated in a different currency if
the applicable sub-adviser anticipates that there is a correlation between the
two currencies. Forward contracts may also be used to shift a Portfolio's
exposure to foreign currency fluctuations from one country to another.
The Portfolios have no specific limitation on the percentage of assets which
may be committed to such contracts; however, the value of all forward contracts
will not exceed the total market value of a Portfolio's total assets. The
Portfolios may enter into forward contracts or maintain a net exposure to
forward contracts only if (1) the consummation of the contracts would not
obligate the Portfolio to deliver an amount of foreign currency in excess of the
value of the positions being hedged by such contracts or (2) the Portfolios
maintain cash or liquid securities in a segregated account in an amount not less
than the value of the Portfolio's total assets committed to the consummation of
the forward contracts and not covered as provided in (1) above, as
marked-to-market daily.
91
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 primarily use financial futures contracts for
hedging purposes or to manage the average duration of a portfolio. However,
imperfect correlations between futures contracts and the portfolio securities
being hedged, or market disruptions, do not normally permit full control of
these risks at all times.
Upon entering into a financial futures contract, a Portfolio is required to
pledge to a broker an amount equal to a certain percentage of the contract
amount. This amount is known as the "initial margin." Subsequent payments, known
as "variation margin," are made or received by the Portfolio each day, depending
on the daily fluctuations in the value of the underlying financial futures
contracts. Such variation margin is recorded for financial statement purposes on
a daily basis as an unrealized gain or loss until the financial futures contract
is closed, at which time the net gain or loss is reclassified to realized.
REVERSE REPURCHASE AGREEMENTS--The Trust may enter into reverse repurchase
agreements with qualified third party broker-dealers as determined by, and under
the direction of, the Trust's board of trustees. Interest on the value of
reverse repurchase agreements issued and outstanding is based upon competitive
market rates at the time of issuance. At the time the Trust enters into a
reverse repurchase agreement, it establishes and maintains a segregated account
with the Trust's custodian containing liquid securities having a value not less
than the repurchase price, including accrued interest, of the reverse repurchase
agreement.
For the year ended July 31, 1999, the PACE Government Securities Fixed Income
Portfolio and the PACE Strategic Fixed Income Portfolio were the only
Portfolio's which engaged in reverse repurchase agreements. The weighted average
daily balance of reverse repurchase agreements outstanding during the year ended
July 31, 1999 was $720,381 and $1,155,288, respectively, at a weighted average
interest rate of 5.61% and 5.00%, respectively.
92
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DIVIDENDS AND DISTRIBUTIONS--Dividends and distributions to shareholders are
recorded on the ex-date. The amounts of dividends and distributions are
determined in accordance with federal income tax regulations, which may differ
from generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification.
CONCENTRATION OF RISK
Investing in securities of foreign issuers and currency transactions may
involve certain considerations and risks not typically associated with
investments in the United States. These risks include revaluation of currencies,
adverse fluctuations in foreign currency values and possible adverse political,
social and economic developments, including those particular to a specific
industry, country or region, which could cause the securities and their markets
to be less liquid and prices more volatile than those of comparable U.S.
companies and U.S. government securities. These risks are greater with respect
to securities of issuers located in emerging market countries in which the PACE
Global Fixed Income Investments, PACE International Equity Investments and PACE
International Emerging Markets Equity Investments Portfolios are authorized to
invest.
Small cap companies may be more vulnerable than larger companies to adverse
business or economic developments. Small cap companies may also have limited
product lines, markets or financial resources, and may be dependent on a
relatively small management group. Securities of such companies may be less
liquid and more volatile than securities of larger companies or the market
averages in general and, therefore, may involve greater risk than investing in
larger companies. In addition, small cap companies may not be well-known to the
investing public, may not have institutional ownership and may have only
cyclical, static or moderate growth prospects.
The ability of the issuers of debt securities held by the Portfolios to meet
their obligations may be affected by economic and political developments
particular to a specific industry, country, state or region.
INVESTMENT ADVISER AND ADMINISTRATOR
The Trust has entered into an Investment Advisory and Administration Contract
("Advisory Contract") with Mitchell Hutchins. In accordance with the Advisory
Contract, each Portfolio pays Mitchell Hutchins an investment advisory and
administration fee, which is accrued daily and paid monthly, in accordance with
the following schedule:
<TABLE>
<CAPTION>
ANNUAL RATE
AS A PERCENTAGE OF
EACH PORTFOLIO'S
PORTFOLIO AVERAGE DAILY NET ASSETS
- ------------------------------------------------------------------------------------ --------------------------
<S> <C>
PACE Money Market Investments....................................................... 0.35%
PACE Government Securities Fixed Income Investments................................. 0.70%
PACE Intermediate Fixed Income Investments.......................................... 0.60%
PACE Strategic Fixed Income Investments............................................. 0.70%
PACE Municipal Fixed Income Investments............................................. 0.60%
PACE Global Fixed Income Investments................................................ 0.80%
PACE Large Company Value Equity Investments......................................... 0.80%
PACE Large Company Growth Equity Investments........................................ 0.80%
PACE Small/Medium Company Value Equity Investments.................................. 0.80%
PACE Small/Medium Company Growth Equity Investments................................. 0.80%
PACE International Equity Investments............................................... 0.90%
PACE International Emerging Markets Equity Investments.............................. 1.10%
</TABLE>
93
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Under separate Sub-Advisory Agreements, with the exception of PACE Money
Market Investments, Mitchell Hutchins (not the Portfolios) pays each Sub-Adviser
a fee from the investment advisory fee which Mitchell Hutchins receives, 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 Investment Management North America Inc. 0.50%
Investments
</TABLE>
Mitchell Hutchins agreed to waive all or a portion of its investment advisory
and administration fee and reimburse certain operating expenses for the year
ended July 31, 1999, which will lower the overall expenses of certain
Portfolios.
As of July 31, 1999 the Portfolio's owed PaineWebber for investment advisory
and administration fees as follows:
<TABLE>
<CAPTION>
PORTFOLIO
- ---------------------------------------------------------------------------------------------
<S> <C>
PACE Money Market Investments................................................................ $ 0
PACE Government Securities Fixed Income Investments.......................................... $ 107,206
PACE Intermediate Fixed Income Investments................................................... $ 70,065
PACE Strategic Fixed Income Investments...................................................... $ 125,646
PACE Municipal Fixed Income Investments...................................................... $ 22,736
PACE Global Fixed Income Investments......................................................... $ 49,443
PACE Large Company Value Equity Investments.................................................. $ 263,026
PACE Large Company Growth Equity Investments................................................. $ 269,291
PACE Small/Medium Company Value Equity Investments........................................... $ 140,584
PACE Small/Medium Company Growth Equity Investments.......................................... $ 179,886
PACE International Equity Investments........................................................ $ 161,514
PACE International Emerging Markets Equity Investments....................................... $ 69,040
</TABLE>
During the year ending July 31, 1999, 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
94
<PAGE>
NOTES TO FINANCIAL STATEMENTS
the cash or U.S. government securities held as collateral, net of fee rebates
paid to the borrower plus reasonable administrative and custody fees.
PaineWebber, which is the Portfolio's lending agent, received compensation from
the Portfolios for the year ended July 31, 1999 as follows:
<TABLE>
<CAPTION>
PORTFOLIO COMPENSATION
- --------------------------------------------------------------------------------------------- -------------
<S> <C>
PACE Government Securities Fixed Income Investments.......................................... $ 1,509
PACE Intermediate Fixed Income Investments................................................... $ 53,171
PACE Strategic Fixed Income Investments...................................................... $ 360
PACE Global Fixed Income Investments......................................................... $ 18,241
PACE Large Company Value Equity Investments.................................................. $ 14,730
PACE Large Company Growth Equity Investments................................................. $ 11,998
PACE Small/Medium Company Value Equity Investments........................................... $ 11,326
PACE Small/Medium Company Growth Equity Investments.......................................... $ 28,352
PACE International Equity Investments........................................................ $ 18,210
PACE International Emerging Markets Equity Investments....................................... $ 7,978
</TABLE>
As of July 31, 1999 the Portfolio's owed PaineWebber for security lending fees
as follows:
<TABLE>
<CAPTION>
PORTFOLIO
- ---------------------------------------------------------------------------------------------
<S> <C>
PACE Government Securities Fixed Income...................................................... $ 19
PACE Intermediate Fixed Income Investments................................................... $ 2,453
PACE Strategic Fixed Income Investments...................................................... $ 54
PACE Global Fixed Income Investments......................................................... $ 24
PACE Large Company Value Equity Investments.................................................. $ 1,939
PACE Large Company Growth Equity Investments................................................. $ 734
PACE Small/Medium Company Value Equity Investments........................................... $ 1,273
PACE Small/Medium Company Growth Equity Investments.......................................... $ 2,819
PACE International Equity Investments........................................................ $ 2,435
PACE International Emerging Markets Equity Investments....................................... $ 1,021
</TABLE>
For the year ended July 31, 1999 the Portfolio's earned compensation from
securities lending transactions net of fees, rebates and expenses as follows:
<TABLE>
<CAPTION>
PORTFOLIO COMPENSATION
- --------------------------------------------------------------------------------------------- -------------
<S> <C>
PACE Government Securities Fixed Income...................................................... $ 4,537
PACE Intermediate Fixed Income Investments................................................... $ 159,350
PACE Strategic Fixed Income Investments...................................................... $ 1,088
PACE Global Fixed Income Investments......................................................... $ 55,054
PACE Large Company Value Equity Investments.................................................. $ 44,971
PACE Large Company Growth Equity Investments................................................. $ 40,821
PACE Small/Medium Company Value Equity Investments........................................... $ 33,000
PACE Small/Medium Company Growth Equity Investments.......................................... $ 84,079
PACE International Equity Investments........................................................ $ 57,243
PACE International Emerging Markets Equity Investments....................................... $ 23,669
</TABLE>
95
<PAGE>
NOTES TO FINANCIAL STATEMENTS
As of July 31, 1999 the Portfolios held cash as collateral for market values
of securities loaned as follows:
<TABLE>
<CAPTION>
COLLATERAL MARKET VALUE
FOR OF
SECURITIES SECURITIES
PORTFOLIO LOANED LOANED
- ------------------------------------------------------------ ------------ ------------
<S> <C> <C>
PACE Government Securities Fixed Income..................... $ 4,044,000 $ 3,784,000
PACE Intermediate Fixed Income Investments.................. $42,917,725 $ 41,145,004
PACE Strategic Fixed Income Investments..................... $ 204,000 $ 196,911
PACE Large Company Value Equity Investments................. $49,107,490 $ 46,888,464
PACE Large Company Growth Equity Investments................ $29,147,100 $ 28,393,663
PACE Small/Medium Company Value Equity Investments.......... $ 8,746,300 $ 8,181,769
PACE Small/Medium Company Growth Equity Investments......... $36,453,500 $ 36,136,456
PACE International Equity Investments....................... $20,245,675 $ 19,456,928
PACE International Emerging Markets Equity Investments...... $ 4,024,284 $ 3,464,528
</TABLE>
As of July 31, 1999 the Funds invested the collateral in the following money
market funds and certificates of deposit:
<TABLE>
<CAPTION>
NUMBER OF
SHARES/
PRINCIPAL
AMOUNT VALUE
- ------------- -----------
<C> <S> <C>
PACE GOVERNMENT SECURITIES FIXED INCOME:
4,000,000 Cayman Islands Bank Certificate of Deposit, 4.125% due 08/02/99..................................... $ 4,000,000
40,035 Janus Money Market Institutional Shares............................................................. 40,035
3,965 Liquid Assets Portfolio............................................................................. 3,965
-----------
Total investments of cash collateral for securities loaned (cost--$4,044,000)....................... $ 4,044,000
-----------
-----------
PACE INTERMEDIATE FIXED INCOME INVESTMENTS:
8,000,000 Cayman Islands Bank Certificate of Deposit, 5.125% due 08/02/99..................................... $ 8,000,000
3,906,811 Janus Money Market Institutional Shares............................................................. 3,906,811
2,978,028 Liquid Assets Portfolio............................................................................. 2,978,028
28,016,474 MH Private Money Market Fund LLC.................................................................... 28,016,474
16,412 Prime Portfolio..................................................................................... 16,412
-----------
Total investments of cash collateral for securities loaned (cost--$42,917,725)...................... $42,917,725
-----------
-----------
PACE STRATEGIC FIXED INCOME INVESTMENTS:
48,333 Janus Money Market Institutional Shares............................................................. $ 48,333
28,230 Liquid Assets Portfolio............................................................................. 28,230
127,437 MH Private Money Market Fund LLC.................................................................... 127,437
-----------
Total investments of cash collateral for securities loaned (cost--$204,000)......................... $ 204,000
-----------
-----------
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS:
9,144,954 Janus Money Market Institutional Shares............................................................. $ 9,144,954
5,512,839 Liquid Assets Portfolio............................................................................. 5,512,839
34,449,129 MH Private Money Market Fund LLC.................................................................... 34,449,129
568 Prime Portfolio..................................................................................... 568
-----------
Total investments of cash collateral for securities loaned (cost--$49,107,490)...................... $49,107,490
-----------
-----------
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS:
2,099,010 Janus Money Market Institutional Shares............................................................. $ 2,099,010
6,985,147 Liquid Assets Portfolio............................................................................. 6,985,147
20,062,702 MH Private Money Market Fund LLC.................................................................... 20,062,702
241 Prime Portfolio..................................................................................... 241
-----------
Total investments of cash collateral for securities loaned (cost--$29,147,100)...................... $29,147,100
-----------
-----------
</TABLE>
96
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES/
PRINCIPAL
AMOUNT VALUE
- ------------- -----------
<C> <S> <C>
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS:
931,358 Janus Money Market Institutional Shares............................................................. $ 931,358
910,664 Liquid Assets Portfolio............................................................................. 910,664
6,903,476 MH Private Money Market Fund LLC.................................................................... 6,903,476
802 TempCash Portfolio.................................................................................. 802
-----------
Total investments of cash collateral for securities loaned (cost--$8,746,300)....................... $ 8,746,300
-----------
-----------
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS:
3,600,235 Janus Money Market Institutional Shares............................................................. $ 3,600,235
6,557,976 Liquid Assets Portfolio............................................................................. 6,557,976
26,553 Prime Portfolio..................................................................................... 26,553
26,268,736 MH Private Money Market Fund LLC.................................................................... 26,268,736
-----------
Total investments of cash collateral for securities loaned (cost--$36,453,500)...................... $36,453,500
-----------
-----------
PACE INTERNATIONAL EQUITY INVESTMENTS:
1,952,852 Janus Money Market Institutional Shares............................................................. $ 1,952,852
1,437,123 Liquid Asset Portfolio.............................................................................. 1,437,123
248 Prime Portfolio..................................................................................... 248
16,855,452 MH Private Money Market Fund LLC.................................................................... 16,855,452
-----------
Total investments of cash collateral for securities loaned (cost--$20,245,675)...................... $20,245,675
-----------
-----------
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS:
354,127 Liquid Assets Portfolio............................................................................. $ 354,127
634,406 Janus Money Market Institutional Shares............................................................. 634,406
3,035,751 MH Private Money Market Fund LLC.................................................................... 3,035,751
-----------
Total investments of cash collateral for securities loaned (cost--$4,024,284)....................... $ 4,024,284
-----------
-----------
</TABLE>
BANK LINE OF CREDIT
Each of the Portfolios, with the exception of PACE Money Market Investments,
may participate with other funds managed by Mitchell Hutchins in a $200 million
committed credit facility ("Facility") to be utilized for temporary financing
until the settlement of sales or purchases of portfolio securities, the
repurchase or redemption of shares of the Portfolios at the request of the
shareholders and other temporary or emergency purposes. In connection therewith,
the Portfolios have agreed to pay commitment fees, pro rata, based on the
relative asset size of the funds in the Facility. Interest is charged to the
Portfolios at rates based on prevailing market rates in effect at the time of
borrowings. For the year ended July 31, 1999, the Portfolios did not borrow
under the Facility.
WRITTEN OPTION ACTIVITY
Written option activity for the year ended July 31, 1999 for PACE Strategic
Fixed Income Investments was as follows:
<TABLE>
<CAPTION>
AMOUNT
OF
NUMBER OF PREMIUMS
OPTIONS RECEIVED
--------- --------
<S> <C> <C>
Options outstanding at July 31, 1998............... 0 0
Options written.................................... 649 $265,108
Options terminated in closing purchase
transactions..................................... (66) (16,843)
Options expired prior to exercise.................. (239) (127,409)
--------- --------
Options outstanding at July 31, 1999............... 344 $120,856
--------- --------
--------- --------
</TABLE>
97
<PAGE>
NOTES TO FINANCIAL STATEMENTS
INVESTMENTS IN SECURITIES
At July 31, 1999, 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........... $ 712,164 $ (3,376,389) $ (2,664,225)
PACE Intermediate Fixed Income Investments.................... $ 146,447 $ (3,140,596) $ (2,994,149)
PACE Strategic Fixed Income Investments....................... $ 942,372 $ (6,577,709) $ (5,635,337)
PACE Municipal Fixed Income Investments....................... $ 502,377 $ (637,290) $ (134,913)
PACE Global Fixed Income Investments.......................... $ 371,377 $ (4,518,300) $ (4,146,923)
PACE Large Company Value Equity Investments................... $ 64,446,802 $(16,750,625) $ 47,696,177
PACE Large Company Growth Equity Investments.................. $ 118,626,982 $ (2,051,397) $ 116,575,585
PACE Small/Medium Company Value Equity Investments............ $ 31,900,351 $(22,658,649) $ 9,241,702
PACE Small/Medium Company Growth Equity Investments........... $ 87,230,458 $ (3,874,123) $ 83,356,335
PACE International Equity Investments......................... $ 31,770,912 $ (8,509,605) $ 23,261,307
PACE International Emerging Markets Equity Investments........ $ 18,483,499 $ (6,733,738) $ 11,749,761
</TABLE>
For U.S. federal income tax purposes, the cost of securities owned at July 31,
1999 was substantially the same as the cost of securities for financial
statement purposes.
For the year ended July 31, 1999, 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......................... $1,017,948,724 $ 977,823,214
PACE Intermediate Fixed Income Investments.................................. $ 149,963,880 $ 106,377,131
PACE Strategic Fixed Income Investments..................................... $ 443,562,052 $ 369,540,063
PACE Municipal Fixed Income Investments..................................... $ 11,815,657 $ 5,954,012
PACE Global Fixed Income Investments........................................ $ 221,125,603 $ 209,112,800
PACE Large Company Value Equity Investments................................. $ 188,631,461 $ 124,761,725
PACE Large Company Growth Equity Investments................................ $ 169,195,044 $ 135,622,003
PACE Small/Medium Company Value Equity Investments.......................... $ 122,553,953 $ 100,723,674
PACE Small/Medium Company Growth Equity Investments......................... $ 206,687,380 $ 215,256,918
PACE International Equity Investments....................................... $ 183,936,821 $ 151,991,981
PACE International Emerging Markets Equity Investments...................... $ 56,494,328 $ 42,622,997
</TABLE>
FEDERAL TAX STATUS
Each of the Portfolios intends to distribute substantially all of its taxable
income and to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies. Accordingly, no provision for
federal income taxes is required. In addition, by distributing during each
calendar year substantially all of its net investment income, capital gains and
certain other amounts, if any, each Portfolio intends not to be subject to a
federal excise tax.
98
<PAGE>
NOTES TO FINANCIAL STATEMENTS
At July 31, 1999, PACE Municipal Fixed Income Investments and PACE
International Emerging Markets Equity Investments had net capital loss
carryforwards of $155,099 and $7,981,845, 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, 2007. To the extent that such
losses are used to offset future capital gains, the gains so offset will not be
distributed to shareholders.
In accordance with U.S. Treasury regulations, the following Portfolios have
elected to defer realized capital losses and foreign currency losses arising
after October 31, 1998. Such losses are treated for tax purposes as arising on
August 1, 1999:
<TABLE>
<CAPTION>
FOREIGN
CAPITAL CURRENCY
PORTFOLIO LOSSES LOSSES
- ------------------------------------------------------------------------------------------------------- ---------- ------------
<S> <C> <C>
PACE Government Securities Fixed Income Investments.................................................... $3,282,530 --
PACE Intermediate Fixed Income Investments............................................................. $ 535,624 --
PACE Strategic Fixed Income Investments................................................................ $6,863,487 $ 51,527
PACE Municipal Fixed Income Investments................................................................ $ 85,927 --
PACE Global Fixed Income Investments................................................................... -- $1,511,058
PACE International Emerging Markets Equity Investments................................................. $1,827,552 --
</TABLE>
At July 31, 1999, the effect of permanent "book/tax" reclassifications
resulted in increases (decreases) to the components of net assets as follows:
<TABLE>
<CAPTION>
ACCUMULATED
ACCUMULATED NET REALIZED
NET INVESTMENT GAINS BENEFICIAL
PORTFOLIO INCOME (LOSS) (LOSSES) INTEREST
- -------------------------------------------------------------------------------------- -------------- ------------ -----------
<S> <C> <C> <C>
PACE Government Securities Fixed Income Investments................................... $ 766,035 $ (777,204) $ 11,169
PACE Intermediate Fixed Income Investments............................................ $ (817) $ 794 $ 23
PACE Strategic Fixed Income Investments............................................... $ 73,161 $ (73,161) --
PACE Global Fixed Income Investments.................................................. $ 2,153,169 $(2,153,169) --
PACE Large Company Value Equity Investments........................................... -- $(1,101,230) $ 1,101,230
PACE Large Company Growth Equity Investments.......................................... $ 781,224 $(3,061,467) $ 2,280,243
PACE Small/Medium Company Value Equity Investments.................................... -- $(1,765,758) $ 1,765,758
PACE Small/Medium Company Growth Equity Investments................................... $ 1,031,066 $ 1,958 $(1,033,024)
PACE International Equity Investments................................................. $ 527,761 $ (527,761) --
PACE International Emerging Markets Equity Investments................................ $ 140,459 $ (140,459) --
</TABLE>
SHARES OF BENEFICIAL INTEREST
For the year ended July 31, 1999, transactions in shares of beneficial
interest for each of the Portfolios were as follows:
<TABLE>
<CAPTION>
NET
INCREASE
SHARES DIVIDENDS IN SHARES
PORTFOLIO SHARES SOLD REPURCHASED REINVESTED OUTSTANDING
- -------------------------------------------------------------------------- ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
PACE Money Market Investments............................................. 73,861,364 (53,636,534) 1,455,251 21,680,081
PACE Government Securities Fixed Income Investments....................... 6,093,627 (3,970,664) 852,684 2,975,647
PACE Intermediate Fixed Income Investments................................ 5,801,746 (2,825,616) 562,032 3,538,162
PACE Strategic Fixed Income Investments................................... 10,660,904 (3,241,234) 1,076,492 8,496,162
PACE Municipal Fixed Income Investments................................... 1,607,393 (1,306,420) 186,929 487,902
PACE Global Fixed Income Investments...................................... 2,847,192 (2,315,240) 773,007 1,304,959
PACE Large Company Value Equity Investments............................... 7,405,793 (3,982,286) 1,193,997 4,617,504
PACE Large Company Growth Equity Investments.............................. 5,989,806 (4,103,382) 813,775 2,700,199
PACE Small/Medium Company Value Equity Investments........................ 5,296,830 (4,082,992) 1,317,668 2,531,506
PACE Small/Medium Company Growth Equity Investments....................... 4,344,031 (4,376,870) 315,880 283,041
PACE International Equity Investments..................................... 5,000,157 (2,843,542) 353,072 2,509,687
PACE International Emerging Markets Equity Investments.................... 3,655,135 (2,437,099) 51,623 1,269,659
</TABLE>
99
<PAGE>
NOTES TO FINANCIAL STATEMENTS
For the year ended July 31, 1998, transactions in shares of beneficial interest
for each of the Portfolios were as follows:
<TABLE>
<CAPTION>
NET
INCREASE
SHARES DIVIDENDS IN SHARES
PORTFOLIO SHARES SOLD REPURCHASED REINVESTED OUTSTANDING
- -------------------------------------------------------------------------- ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
PACE Money Market Investments............................................. 23,490,598 (15,154,011) 1,087,530 9,424,117
PACE Government Securities Fixed Income Investments....................... 5,956,008 (1,871,923) 735,288 4,819,373
PACE Intermediate Fixed Income Investments................................ 3,838,135 (1,575,993) 350,527 2,612,669
PACE Strategic Fixed Income Investments................................... 4,641,172 (1,341,365) 456,984 3,756,791
PACE Municipal Fixed Income Investments................................... 2,059,685 (849,714) 149,316 1,359,287
PACE Global Fixed Income Investments...................................... 3,272,148 (1,217,922) 246,330 2,300,556
PACE Large Company Value Equity Investments............................... 5,651,851 (2,414,998) 876,048 4,112,901
PACE Large Company Growth Equity Investments.............................. 5,306,522 (2,219,585) 577,355 3,664,292
PACE Small/Medium Company Value Equity Investments........................ 4,284,262 (2,103,668) 663,129 2,843,723
PACE Small/Medium Company Growth Equity Investments....................... 5,487,097 (2,056,793) 455,763 3,886,067
PACE International Equity Investments..................................... 4,679,150 (1,584,848) 275,005 3,369,307
PACE International Emerging Markets Equity Investments.................... 3,585,094 (1,039,414) 17,728 2,563,408
</TABLE>
100
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
MONEY MARKET INVESTMENTS
-----------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
------------------------------ ENDED
1999 1998 1997 JULY 31, 1996+
-------- -------- -------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------
Net investment income............................. 0.05 0.05 0.05 0.05
-------- -------- -------- -------
Dividends from net investment income.............. (0.05) (0.05) (0.05) (0.05)
-------- -------- -------- -------
Net asset value, end of period.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------
-------- -------- -------- -------
Total investment return (1)....................... 4.85% 5.32% 5.13% 4.75%
-------- -------- -------- -------
-------- -------- -------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $ 47,174 $ 25,493 $ 16,070 $10,221
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.50% 0.50% 0.50% 0.50%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 1.07% 1.20% 1.89% 2.40%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 4.70% 5.20% 5.04% 4.93%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 4.13% 4.50% 3.65% 3.03%*
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends at net
asset value on the payable dates, and a sale at net asset value on the
last day of each period reported. The figures do not include the PACE
Program Fee; results would be lower if this fee was included. Total
investment return for period of less than one year has not been
annualized.
101
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
---------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
--------------------------------- ENDED
1999 1998 1997 JULY 31, 1996+
--------- --------- --------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 12.59 $ 12.61 $ 12.07 $ 12.00
--------- --------- --------- -------
Net investment income............................. 0.68 0.72 0.64 0.49
Net realized and unrealized gains (losses) from
investments and futures......................... (0.43) 0.18 0.58 0.03
--------- --------- --------- -------
Net increase from investment operations........... 0.25 0.90 1.22 0.52
--------- --------- --------- -------
Dividends from net investment income.............. (0.71) (0.72) (0.63) (0.44)
Distributions from net realized gains from
investments..................................... (0.03) (0.20) (0.05) (0.01)
--------- --------- --------- -------
Total dividends and distributions................. (0.74) (0.92) (0.68) (0.45)
--------- --------- --------- -------
Net asset value, end of period.................... $ 12.10 $ 12.59 $ 12.61 $ 12.07
--------- --------- --------- -------
--------- --------- --------- -------
Total investment return (1)....................... 2.02% 7.39% 10.42% 4.35%
--------- --------- --------- -------
--------- --------- --------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $ 191,719 $ 162,119 $ 101,606 $ 58,752
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.87%++ 0.85% 1.57%++ 0.85%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 0.93%++ 0.95% 1.70%++ 1.15%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 5.49%++ 5.90% 5.44%++ 5.09%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 5.43%++ 5.80% 5.31%++ 4.79%*
Portfolio turnover................................ 418% 353% 712% 978%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized.
++ Includes 0.01% and 0.72% of interest expense related to the reverse
repurchase agreements during the years ended July 31, 1999 and July 31,
1997, respectively.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include the PACE Program Fee; results would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
102
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
INTERMEDIATE FIXED INCOME INVESTMENTS
-----------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
------------------------------ ENDED
1999 1998 1997 JULY 31, 1996+
--------- ------- -------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 12.35 $ 12.23 $ 11.95 $ 12.00
--------- ------- -------- -------
Net investment income............................. 0.63 0.67 0.66 0.53
Net realized and unrealized gains (losses) from
investments and foreign currency................. (0.28) 0.09 0.28 (0.09)
--------- ------- -------- -------
Net increase from investment operations........... 0.35 0.76 0.94 0.44
--------- ------- -------- -------
Dividends from net investment income.............. (0.64) (0.64) (0.66) (0.48)
Distributions from net realized gains from
investments...................................... (0.08) -- -- (0.01)
--------- ------- -------- -------
Total dividends and distributions................. (0.72) (0.64) (0.66) (0.49)
--------- ------- -------- -------
Net asset value, end of period.................... $ 11.98 $ 12.35 $ 12.23 $ 11.95
--------- ------- -------- -------
--------- ------- -------- -------
Total investment return (1)....................... 2.81% 6.41% 8.14% 3.59%
--------- ------- -------- -------
--------- ------- -------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $ 139,043 $99,690 $ 66,751 $41,273
Expenses to average net assets, net of fee waivers
and expense reimbursements....................... 0.80% 0.84% 0.85% 0.85%*
Expenses to average net assets, before fee waivers
and expense reimbursements....................... 0.80% 0.84% 0.99% 1.23%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements........ 5.26% 5.60% 5.70% 5.56%*
Net investment income to average net assets,
before fee waivers and expense reimbursements.... 5.26% 5.60% 5.56% 5.18%*
Portfolio turnover................................ 89% 111% 67% 36%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include the PACE Program Fee; results would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
103
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
STRATEGIC FIXED INCOME INVESTMENTS
-------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
-------------------------------- ENDED
1999 1998 1997 JULY 31, 1996+
--------- --------- -------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 13.32 $ 13.04 $ 12.44 $ 12.00
--------- --------- -------- -------
Net investment income............................. 0.69 0.69 0.67 0.59
Net realized and unrealized gains (losses) from
investments, futures, options and foreign
currency........................................ (0.64) 0.40 0.70 0.38
--------- --------- -------- -------
Net increase (decrease) from investment
operations...................................... 0.05 1.09 1.37 0.97
--------- --------- -------- -------
Dividends from net investment income.............. (0.70) (0.69) (0.67) (0.52)
Distributions from net realized gains from
investments..................................... (0.34) (0.12) (0.10) (0.01)
--------- --------- -------- -------
Total dividends and distributions................. (1.04) (0.81) (0.77) (0.53)
--------- --------- -------- -------
Net asset value, end of period.................... $ 12.33 $ 13.32 $ 13.04 $ 12.44
--------- --------- -------- -------
--------- --------- -------- -------
Total investment return (1)....................... 0.21% 8.66% 11.35% 8.15%
--------- --------- -------- -------
--------- --------- -------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $ 222,214 $ 126,880 $ 75,174 $42,550
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.88%++ 0.85% 0.85% 0.85%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 0.92%++ 0.94% 1.10% 1.40%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 5.51%++ 5.49% 5.69% 5.85%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 5.47%++ 5.40% 5.44% 5.30%*
Portfolio turnover................................ 202% 234% 357% 166%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
++ Includes 0.03% of interest expense related to the reverse repurchase
agreements for the year ended July 31, 1999.
* Annualized.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include the PACE Program Fee; results would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
104
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
MUNICIPAL FIXED INCOME INVESTMENTS
------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
------------------------------- ENDED
1999 1998 1997 JULY 31, 1996+
--------- -------- -------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 12.70 $ 12.67 $ 12.32 $ 12.00
--------- -------- -------- -------
Net investment income............................. 0.56 0.58 0.61 0.49
Net realized and unrealized gains (losses) from
investments..................................... (0.26) 0.02 0.38 0.27
--------- -------- -------- -------
Net increase from investment operations........... 0.30 0.60 0.99 0.76
--------- -------- -------- -------
Dividends from net investment income.............. (0.56) (0.57) (0.61) (0.43)
Distributions from net realized gains from
investments..................................... -- -- (0.03) (0.01)
--------- -------- -------- -------
Total dividends and distributions................. (0.56) (0.57) (0.64) (0.44)
--------- -------- -------- -------
Net asset value, end of period.................... $ 12.44 $ 12.70 $ 12.67 $ 12.32
--------- -------- -------- -------
--------- -------- -------- -------
Total investment return (1)....................... 2.34% 4.87% 8.30% 6.38%
--------- -------- -------- -------
--------- -------- -------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $ 56,659 $ 51,638 $ 34,292 $17,765
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.85% 0.85% 0.85% 0.85%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 0.89% 0.93% 1.40% 1.74%*
Net investment income to average net assets, net
of
fee waivers and expense reimbursements.......... 4.42% 4.67% 5.08% 4.95%*
Net investment income to average net assets,
before
fee waivers and expense reimbursements.......... 4.38% 4.59% 4.53% 4.07%*
Portfolio turnover................................ 11% 34% 15% 78%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include the PACE Program Fee; results would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
105
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
GLOBAL FIXED INCOME INVESTMENTS
------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
------------------------------- ENDED
1999 1998 1997 JULY 31, 1996+
--------- -------- -------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 12.25 $ 12.17 $ 12.33 $ 12.00
--------- -------- -------- -------
Net investment income............................. 0.65 0.62 0.64 0.53
Net realized and unrealized gains (losses) from
investments and foreign currency................ 0.20 (0.03) (0.21) 0.27
--------- -------- -------- -------
Net increase from investment operations........... 0.85 0.59 0.43 0.80
--------- -------- -------- -------
Dividends from net investment income and foreign
currency........................................ (0.81) (0.40) (0.51) (0.46)
Distributions from net realized gains from
investments..................................... (0.47) (0.11) (0.08) (0.01)
--------- -------- -------- -------
Total dividends and distributions................. (1.28) (0.51) (0.59) (0.47)
--------- -------- -------- -------
Net asset value, end of period.................... $ 11.82 $ 12.25 $ 12.17 $ 12.33
--------- -------- -------- -------
--------- -------- -------- -------
Total investment return (1)....................... 6.49% 4.88% 3.54% 6.68%
--------- -------- -------- -------
--------- -------- -------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $ 101,143 $ 88,838 $ 60,279 $38,296
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.95% 0.95% 0.95% 0.95%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 1.17% 1.23% 1.29% 1.61%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 4.57% 5.10% 5.36% 5.24%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 4.35% 4.82% 5.02% 4.58%*
Portfolio turnover................................ 226% 125% 270% 197%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include the PACE Program Fee; results would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
106
<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 YEARS ENDED
JULY 31, FOR THE PERIOD
--------------------------------- ENDED
1999 1998 1997 JULY 31, 1996+
--------- --------- --------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 20.27 $ 20.03 $ 14.07 $ 12.00
--------- --------- --------- -------
Net investment income............................. 0.13 0.14 0.11 0.12
Net realized and unrealized gains from investments
and futures..................................... 2.34 1.63 6.61 2.02
--------- --------- --------- -------
Net increase from investment operations........... 2.47 1.77 6.72 2.14
--------- --------- --------- -------
Dividends from net investment income.............. (0.14) (0.14) (0.11) (0.05)
Distributions from net realized gains from
investments..................................... (1.46) (1.39) (0.65) (0.02)
--------- --------- --------- -------
Total dividends and distributions................. (1.60) (1.53) (0.76) (0.07)
--------- --------- --------- -------
Net asset value, end of period.................... $ 21.14 $ 20.27 $ 20.03 $ 14.07
--------- --------- --------- -------
--------- --------- --------- -------
Total investment return (1)....................... 12.82% 9.89% 49.13% 17.90%
--------- --------- --------- -------
--------- --------- --------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $ 375,465 $ 266,354 $ 180,807 $80,897
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.96% 0.98% 1.00% 1.00%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 0.96% 0.98% 1.06% 1.40%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 0.71% 0.82% 0.81% 1.22%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 0.71% 0.82% 0.75% 0.82%*
Portfolio turnover................................ 40% 34% 46% 38%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include the PACE Program Fee; results would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
107
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
LARGE COMPANY GROWTH EQUITY INVESTMENTS
----------------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
----------------------------------------- ENDED
1999 1998# 1997 JULY 31, 1996+
---------------- --------- --------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 22.99 $ 19.28 $ 13.27 $ 12.00
-------- --------- --------- -------
Net investment income (loss)...................... (0.05) (0.03) 0.03 0.03
Net realized and unrealized gains from
investments..................................... 4.44 4.79 6.01 1.26
-------- --------- --------- -------
Net increase from investment operations........... 4.39 4.76 6.04 1.29
-------- --------- --------- -------
Dividends from net investment income.............. -- (0.01) (0.03) (0.02)
Distributions from net realized gains from
investments..................................... (1.50) (1.04) -- --
-------- --------- --------- -------
Total dividends and distributions................. (1.50) (1.05) (0.03) (0.02)
-------- --------- --------- -------
Net asset value, end of period.................... $ 25.88 $ 22.99 $ 19.28 $ 13.27
-------- --------- --------- -------
-------- --------- --------- -------
Total investment return (1)....................... 19.66% 26.40% 45.61% 10.76%
-------- --------- --------- -------
-------- --------- --------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $ 379,988 $ 275,461 $ 160,334 $69,248
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.97% 1.00% 1.00% 1.00%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 0.97% 1.02% 1.05% 1.33%*
Net investment income (loss) to average net
assets, net of fee waivers and expense
reimbursements.................................. (0.24)% (0.14)% 0.22% 0.33%*
Net investment income (loss) to average net
assets, before fee waivers and expense
reimbursements.................................. (0.24)% (0.16)% 0.17% (0.01)%*
Portfolio turnover................................ 43% 102% 73% 65%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized.
# Sub-Investment advisory functions for this portfolio were transferred
from Chancellor LGT Asset Management, Inc. to Alliance Capital Management
L.P. on November 10, 1997.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include the PACE Program Fee; results would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
108
<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 YEARS ENDED
JULY 31, FOR THE PERIOD
--------------------------------- ENDED
1999 1998 1997 JULY 31, 1996+
--------- --------- --------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 17.39 $ 17.52 $ 12.29 $ 12.00
--------- --------- --------- -------
Net investment income............................. 0.06 0.10 0.12 0.10
Net realized and unrealized gains (losses) from
investments..................................... (0.06) 1.14 5.55 0.23
--------- --------- --------- -------
Net increase from investment operations........... 0.00 1.24 5.67 0.33
--------- --------- --------- -------
Dividends from net investment income.............. (0.09) (0.13) (0.10) (0.04)
Distributions from net realized gains from
investments..................................... (1.55) (1.24) (0.34) --
--------- --------- --------- -------
Total dividends and distributions................. (1.64) (1.37) (0.44) (0.04)
--------- --------- --------- -------
Net asset value, end of period.................... $ 15.75 $ 17.39 $ 17.52 $ 12.29
--------- --------- --------- -------
--------- --------- --------- -------
Total investment return (1)....................... 1.16% 6.97% 46.99% 2.76%
--------- --------- --------- -------
--------- --------- --------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $ 206,131 $ 183,558 $ 135,047 $63,894
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 1.00% 0.99% 1.00% 1.00%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 1.01% 1.00% 1.12% 1.51%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 0.42% 0.61% 1.00% 1.07%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 0.41% 0.60% 0.88% 0.56%*
Portfolio turnover................................ 57% 42% 39% 30%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include the PACE Program Fee; results would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
109
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
--------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
--------------------------------- ENDED
1999 1998 1997# JULY 31, 1996+
--------- --------- --------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 15.80 $ 14.44 $ 11.20 $ 12.00
--------- --------- --------- -------
Net investment income (loss)...................... (0.08) (0.03) (0.02) 0.00**
Net realized and unrealized gains (losses) from
investments..................................... 5.28 2.03 3.26 (0.78)
--------- --------- --------- -------
Net increase (decrease) from investment
operations...................................... 5.20 2.00 3.24 (0.78)
--------- --------- --------- -------
Dividends from net investment income.............. -- -- -- (0.02)
Distributions from net realized gains from
investments..................................... (0.38) (0.64) -- --
--------- --------- --------- -------
Total dividends and distributions................. (0.38) (0.64) 0.00 (0.02)
--------- --------- --------- -------
Net asset value, end of period.................... $ 20.62 $ 15.80 $ 14.44 $ 11.20
--------- --------- --------- -------
--------- --------- --------- -------
Total investment return (1)....................... 33.62% 14.44% 28.93% (6.55)%
--------- --------- --------- -------
--------- --------- --------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $ 265,405 $ 198,855 $ 125,609 $63,364
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 1.00% 1.00% 1.00% 1.00%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 1.01% 1.03% 1.08% 1.27%*
Net investment loss to average net assets, net of
fee waivers and expense reimbursements.......... (0.48)% (0.20)% (0.21)% (0.14)%*
Net investment loss to average net assets, before
fee waivers and expense reimbursements.......... (0.49)% (0.23)% (0.29)% (0.41)%*
Portfolio turnover................................ 102% 131% 247% 115%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized.
** Amount is less than $0.005 per share
# Sub-Investment advisory functions for this portfolio were transferred
from Westfield Capital Management Company, Inc. to Delaware Management
Company, Inc. on December 17, 1996.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include the PACE Program Fee; results would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
110
<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 YEARS ENDED
JULY 31, FOR THE PERIOD
--------------------------------- ENDED
1999 1998 1997 JULY 31, 1996+
--------- --------- --------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 16.54 $ 15.66 $ 12.79 $ 12.00
--------- --------- --------- -------
Net investment income............................. 0.07 0.16 0.10 0.12
Net realized and unrealized gains from investments
and foreign currency............................ 1.10 1.20 2.97 0.73
--------- --------- --------- -------
Net increase from investment operations........... 1.17 1.36 3.07 0.85
--------- --------- --------- -------
Dividends from net investment income.............. (0.19) (0.16) (0.13) (0.06)
Distributions from net realized gains from
investments..................................... (0.34) (0.32) (0.07) --
--------- --------- --------- -------
Total dividends and distributions................. (0.53) (0.48) (0.20) (0.06)
--------- --------- --------- -------
Net asset value, end of period.................... $ 17.18 $ 16.54 $ 15.66 $ 12.79
--------- --------- --------- -------
--------- --------- --------- -------
Total investment return (1)....................... 7.33% 9.27% 24.30% 7.08%
--------- --------- --------- -------
--------- --------- --------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $ 214,017 $ 164,477 $ 102,979 $45,331
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 1.22% 1.21% 1.35% 1.50%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 1.22% 1.21% 1.35% 1.81%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 0.53% 1.14% 0.95% 1.35%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 0.53% 1.14% 0.95% 1.04%*
Portfolio turnover................................ 89% 56% 55% 25%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include the PACE Program Fee; results would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
111
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
-----------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
------------------------------------ ENDED
1999 1998 1997 JULY 31, 1996+
---------- ---------- ---------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.................................. $ 10.41 $ 15.60 $ 12.49 $ 12.00
---------- ---------- ---------- -------
Net investment income................................................. 0.09 0.09 0.06 0.07
Net realized and unrealized gains (losses) from investments and
foreign currency.................................................... 1.62 (5.23) 3.09 0.44
---------- ---------- ---------- -------
Net increase (decrease) from investment operations.................... 1.71 (5.14) 3.15 0.51
---------- ---------- ---------- -------
Dividends from net investment income.................................. (0.07) (0.05) (0.04) (0.02)
---------- ---------- ---------- -------
Net asset value, end of period........................................ $ 12.05 $ 10.41 $ 15.60 $ 12.49
---------- ---------- ---------- -------
---------- ---------- ---------- -------
Total investment return (1)........................................... 16.66% (32.99)% 25.31% 4.23%
---------- ---------- ---------- -------
---------- ---------- ---------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)..................................... $ 88,497 $ 63,237 $ 54,759 $ 25,481
Expenses to average net assets, net of fee waivers and expense
reimbursements...................................................... 1.50% 1.50% 1.50% 1.50%*
Expenses to average net assets, before fee waivers and expense
reimbursements...................................................... 1.79% 1.79% 2.09% 2.35%*
Net investment income to average net assets, net of fee waivers and
expense reimbursements.............................................. 1.05% 0.98% 0.63% 0.94%*
Net investment income to average net assets, before fee waivers and
expense reimbursements.............................................. 0.76% 0.69% 0.04% 0.08%*
Portfolio turnover.................................................... 66% 51% 39% 22%
</TABLE>
- -----------------
+ For the period August 24, 1995 (commencement of operations) through July
31, 1996.
* Annualized.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include the PACE Program Fee; results would be lower if this fee was
included. Total investment return for period of less than one year has
not been annualized.
112
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Trustees and Shareholders of
PaineWebber PACE Select Advisors Trust
We have audited the accompanying statement of assets and liabilities of
PaineWebber PACE Select Advisors Trust (comprising, respectively, PACE Money
Market Investments, PACE Government Securities Fixed Income Investments, PACE
Intermediate Fixed Income Investments, PACE Strategic Fixed Income Investments,
PACE Municipal Fixed Income Investments, PACE Global Fixed Income Investments,
PACE Large Company Value Equity Investments, PACE Large Company Growth Equity
Investments, PACE Small/Medium Company Value Equity Investments, PACE Small/
Medium Company Growth Equity Investments, PACE International Equity Investments
and PACE International Emerging Markets Equity Investments) (the "Trust"),
including the portfolios of investments as of July 31, 1999, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended, and the financial
highlights for each of the periods indicated therein. These financial statements
and financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
investments owned as of July 31, 1999 by correspondence with the custodians and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting PaineWebber PACE Select Advisors Trust
at July 31, 1999, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended,
and the financial highlights for each of the indicated periods, in conformity
with generally accepted accounting principles.
[ERNST & YOUNG SIGNATURE]
New York, New York
September 20, 1999
113
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
TAX INFORMATION (UNAUDITED)
We are required by subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of each Portfolio's fiscal year end (July
31, 1999) as to the federal tax status of distributions received by shareholders
during such fiscal year. Accordingly, we are advising you that the following
distributions paid during the fiscal year by the Portfolios were derived from
the following sources:
<TABLE>
<CAPTION>
NET SHORT-TERM LONG-TERM DIVIDEND*
INVESTMENT CAPITAL CAPITAL RECEIVED
PER SHARE DATA: INCOME GAINS** GAINS DEDUCTION
- ------------------------------ ---------- ---------- --------- ---------
<S> <C> <C> <C> <C>
PACE Money Market
Investments................. $0.04743 -- -- --
PACE Government Securities
Fixed Income Investments.... $0.7148 $0.0294 $0.0023 --
PACE Intermediate Fixed Income
Investments................. $0.6378 $0.0639 $0.0164 --
PACE Strategic Fixed Income
Investments................. $0.6985 $0.2437 $0.0963 --
PACE Municipal Fixed Income
Investments***.............. $0.5588 -- -- --
PACE Global Fixed Income
Investments................. $0.8124 $0.2980 $0.1743 --
PACE Large Company Value
Equity Investments.......... $0.1400 $0.1385 $1.3215 77.20%
PACE Large Company Growth
Equity Investments.......... -- $0.4496 $1.0496 22.96%
PACE Small/Medium Company
Value Equity Investments.... $0.0887 $0.2863 $1.2688 39.72%
PACE Small/Medium Company
Growth Equity Investments... -- -- $0.3817 --
PACE International Equity
Investments................. $0.1850 $0.0129 $0.3302 --
PACE International Emerging
Markets Equity
Investments................. $0.0703 -- -- --
</TABLE>
- -------------
* Percentage of ordinary income dividends qualifying for the dividends received
deduction available to corporate shareholders.
** Taxable as ordinary income.
*** The Portfolio's net investment income is tax exempt.
Dividends received by tax-exempt recipients (e.g., IRAs and Keoghs) need not
be reported as taxable income. Some retirement trusts (e.g., corporate, Keogh
and 403(b)(7) plans) may need this information for their annual information
reporting.
PACE International Equity Investments and PACE International Emerging Markets
Equity Investments intend to make an election under Internal Revenue Code
Section 853 to pass through foreign taxes paid by the Portfolios to its
shareholders. The amount of foreign taxes paid by PACE International Equity
Investments and PACE International Emerging Markets Equity Investments for the
fiscal year ended July 31, 1999, is $324,278 and $173,669, respectively. The
foreign source income for information reporting purposes is $1,149,263 for PACE
International Equity Investments and $718,105 for PACE International Emerging
Markets Equity Investments.
Shareholders should not use the above information to prepare their tax
returns. Since each Portfolio's fiscal year is not the calendar year, another
notification will be sent with respect to calendar year 1999. Such notification,
which will reflect the amount to be used by calendar year taxpayers on their
federal income tax returns, will be made in conjunction with Form 1099 DIV and
will be mailed in January 2000. Shareholders are advised to consult their own
tax advisers with respect to the tax consequences of their investment in each of
the Portfolios.
114
<PAGE>
MANAGED ACCOUNTS SERVICES
PAINEWEBBER
-C-1999 PaineWebber Incorporated
Member SIPC
