<PAGE>
PAINEWEBBER P A C E-SM-
Personalized Asset Consulting and Evaluation
Going The
Distance
To Meet Your
Financial Needs
Annual Report
July 31, 2000
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-SM-
TABLE OF CONTENTS
<TABLE>
<S> <C>
-----------------------------------------------------------
Table of Contents............................ i
Introduction................................. 1
PACE Money Market Investments................ 2
PACE Government Securities Fixed Income
Investments................................. 4
PACE Intermediate Fixed Income Investments... 6
PACE Strategic Fixed Income Investments...... 8
PACE Municipal Fixed Income Investments...... 10
PACE Global Fixed Income Investments......... 13
PACE Large Company Value Equity
Investments................................. 15
PACE Large Company Growth Equity
Investments................................. 18
PACE Small/Medium Company Value Equity
Investments................................. 20
PACE Small/Medium Company Growth Equity
Investments................................. 23
PACE International Equity Investments........ 25
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 summaries of the performance of each PACE
Portfolio and comments from each of the investment advisers covering events for
the fiscal year ended July 31, 2000. Please note that the opinions of the
advisers do not necessarily represent those of PaineWebber Inc. 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 Senior Vice President
Mitchell Hutchins Asset Management Inc. Managed Accounts Consulting Services
PaineWebber Incorporated
</TABLE>
September 15, 2000
This letter is intended to assist shareholders in understanding how the
portfolios performed during the fiscal year ended July 31, 2000, 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>
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 is a money market mutual fund and seeks to
maintain a stable price of $1.00 per share, although it may be possible to lose
money by investing in this fund. The Portfolio invests in a diversified
portfolio of high-quality money market instruments of governmental and private
issuers. Security selection is based on the assessment of relative values and
changes in market and economic conditions.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/00
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS SINCE INCEPTION 8/24/95
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------
With PACE program fee* 2.13% 3.96% 3.66% 3.63%
Without PACE program fee 2.90% 5.53% 5.23% 5.20%
90-Day U.S. T-Bill 2.91% 5.50% 5.07% 5.11%
Lipper Money Market Funds Median 2.78% 5.31% 5.00% 4.92%
--------------------------------------------------------------------------------------------------
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
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. Total returns
for periods of one year or less are cumulative.
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 FEE PORTFOLIO WITH FEE* 3 MONTH T-BILL 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
Aug-99 $12,223 $11,507 $12,157
Sep-99 $12,269 $11,536 $12,204
Oct-99 $12,320 $11,570 $12,253
Nov-99 $12,372 $11,603 $12,304
Dec-99 $12,428 $11,641 $12,357
Jan-00 $12,484 $11,680 $12,412
Feb-00 $12,538 $11,715 $12,469
Mar-00 $12,596 $11,755 $12,527
Apr-00 $12,655 $11,795 $12,586
May-00 $12,717 $11,838 $12,647
Jun-00 $12,780 $11,882 $12,706
Jul-00 $12,847 $11,929 $12,771
</TABLE>
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
On the heels of six Fed Fund rate increases during the 12 months ended June 30
totaling 1.75 percent, the Federal Reserve (the "Fed") decided against
additional tightening at its August 22 Open Market Committee meeting. Recent
economic news suggests that the economy has achieved its hoped-for soft landing
and that interest rates will stabilize along with the economy. Gross domestic
product (GDP), adjusted for inflation, slowed in the second quarter after
2
<PAGE>
recording a 5.5% increase during the first quarter and a 7.3% surge in fourth
quarter 1999. Gasoline prices, which increased dramatically during the period,
have also stabilized and may decrease in the coming months. Unemployment figures
remain a concern, however, as a continuing shortage of workers may continue to
pressure wages.
Yields on the 30-year Treasury suffered during the fiscal year. The U.S.
Treasury's announcement in January to buy back $30 billion in Treasury debt
during 2000 drove down the yield on the 30-year Treasury, causing a dramatic
yield curve inversion. Short-term rates rose during the period, with the yield
on 90-day T-bills increasing from 5.31% to 5.86% at period-end.
During the period, the Fund had a weighted average maturity below that of its
peer group, a beneficial strategy since rates rose significantly during the
span. At the same time, the Fund continued to focus on investments of the
highest credit quality.
We anticipate that inflation as measured by the Consumer Price Index (CPI)
will slow to 3.5% annually by year-end and to 3% annually in 2001. Thus, we
believe that rate increases of the past year have served their purpose and the
economic activity has slowed to manageable levels. Reduced Treasury supply in
the face of increasing federal surpluses may continue to hamper the recovery of
long bonds. However, shorter-term instruments should stabilize and spreads
should recover if the economy avoids future inflationary or interest-rate shocks
in the coming months. Should this scenario play out, the Fund's average weighted
maturity may continue to increase.
PACE MONEY MARKET INVESTMENTS--PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS*
<S> <C>
------------------------------------------------------
Net Assets ($MM) $65.5
Number of Issuers (excl Govts) 36
Weighted Average Maturity 68 days
------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION*
<S> <C>
---------------------------------------------------------
Commercial Paper 57.9%
U.S. Government Agency Obligations 16.6
Short-Term Corporate Obligations 11.7
Certificates of Deposit 6.9
Money Market Funds 3.7
Other Assets in Excess of Liabilities 1.7
Bank Notes 1.5
---------------------------------------------------------
Total 100.0
</TABLE>
<TABLE>
<CAPTION>
TOP 10 HOLDINGS (EXCLUDING U.S. GOV'T AGENCY OBLIGATIONS)*
<S> <C>
-----------------------------------------------------------------
Parthenon Receivables Funding 3.9%
AT&T Capital 3.1
Beta Finance 3.1
Centric Capital 3.1
International Lease Finance 3.1
Merrill Lynch 3.1
Morgan Stanley Dean Witter 3.1
Bell Atlantic Financial Services 3.0
Giro Funding 3.0
RTZ America 3.0
-----------------------------------------------------------------
Total 31.5
</TABLE>
*Weightings represent percentages of net assets as of July 31, 2000. The
Portfolio is actively managed and all holdings are subject to change.
3
<PAGE>
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
ADVISER: Pacific Investment Management Company (PIMCO)
PORTFOLIO MANAGER: Scott Mather
OBJECTIVE: Current income
INVESTMENT PROCESS: The Portfolio invests primarily in mortgage-backed
securities along with U.S. government and agency securities of varying
maturities. The Portfolio's dollar-weighted average duration ranges between one
and seven years. (Duration is a measure of a bond portfolio's sensitivity to
interest-rate changes.) PIMCO establishes duration targets based on its
expectations for changes in interest rates, then positions the Portfolio to take
advantage of yield curve shifts. Securities are chosen for their value relative
to other equivalent securities.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/00
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS SINCE INCEPTION 8/24/95
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
With PACE program fee* 4.37% 4.77% 3.66% 4.56%
Without PACE program fee 5.15% 6.36% 5.23% 6.14%
Lehman Brothers Mortgage Backed Securities
Index 5.24% 6.43% 5.54% 6.56%
Lipper Intermediate U.S. Government Funds
Median 4.58% 4.69% 4.49% 5.40%
-------------------------------------------------------------------------------------------------
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
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. Total returns
for periods of one year or less are cumulative.
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 WITHOUT FEE PORTFOLIO WITH FEE* LEHMAN BROTHERS MORTGAGE BACKED SECURITIES 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
Aug-99 $12,609 $11,871 $12,839
Sep-99 $12,804 $12,039 $13,047
Oct-99 $12,849 $12,066 $13,122
Nov-99 $12,863 $12,064 $13,129
Dec-99 $12,823 $12,011 $13,097
Jan-00 $12,769 $11,946 $12,983
Feb-00 $12,953 $12,103 $13,134
Mar-00 $13,119 $12,243 $13,277
Apr-00 $13,128 $12,236 $13,286
May-00 $13,093 $12,188 $13,293
Jun-00 $13,348 $12,410 $13,577
Jul-00 $13,427 $12,468 $13,664
</TABLE>
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.
4
<PAGE>
ADVISER'S COMMENTS
Below-index duration, a measure of the Portfolio's sensitivity to interest
rate changes, was a positive for performance as intermediate- and short-term
rates rose during the period. An overweight in GNMA securities had a positive
impact on performance as GNMAs outperformed conventional mortgages because of
their "full faith and credit backing" from the Federal government. An
underweight in deep discount mortgages was a modest negative as these bonds
offered the best performing coupon for the period. Limited exposure to
yield-enhancing collateralized mortgage obligations (CMOs) added to returns, as
did the use of relatively high-yielding adjustable rate mortgages (ARMs).
PIMCO's secular outlook is bullish based on expectations of a slowing U.S.
economy, leading to anticipated maximum U.S. and global growth of three percent
over the next several years. While the tightening cycle by the Federal Reserve
Board (the "Fed") appears to be almost over, monetary policy will probably
remain restrictive until a slowdown is confirmed.
Prospects for mortgages remain favorable because of limited new supply and
reduced prepayment risk due to recent increases in mortgage rates. We intend to
target portfolio duration near the benchmark in anticipation of higher inflation
in the near term. To take advantage across the yield curve, however, the
Portfolio continues to hold a broader selection of maturities than the
benchmark. We also expect to reduce the overweight of GNMAs to a more neutral
position relative to conventional mortgages as relative value between these
sectors has become more balanced. We anticipate maintaining limited exposure to
well-structured CMOs to capture attractive yields. We also expect to continue
emphasizing ARMs as their relatively high yields should increase investor demand
and boost prices.
PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS--PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS* PORTFOLIO INDEX
<S> <C> <C>
-------------------------------------------------------------------
Duration 3.64 yrs 4.11 yrs
Maturity 4.90 yrs 7.36 yrs
Average Coupon 6.65% 6.86%
Average Yield to Maturity 7.96% 7.58%
Average Quality AAA AAA
Net Assets ($MM) $198.9 $1,946.6
Number of Securities 186 519
Bonds 165% 100%
Liabilities in Excess of Other Assets -65% 0%
-------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
ASSET ALLOCATION* PORTFOLIO INDEX
<S> <C> <C>
-------------------------------------------------------------------
Agency Mortgage Pass-Throughs 118.1% 100.0%
Collateralized Mortgages 31.7 --
U.S. Government 2.5 --
Cash & Equivalents 8.5 --
Corporate Obligations 1.5 --
Asset Backed 2.8 --
Liabilities in Excess of Other Assets -65.1 --
-------------------------------------------------------------------
Total 100.0 100.0
</TABLE>
*Weightings represent percentages of net assets as of July 31, 2000. The
Portfolio is actively managed and all holdings are subject to change.
5
<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 primarily in U.S. and foreign
government and corporate bonds along with bonds that are backed by mortgages or
other assets. The Portfolio limits its investments to investment grade bonds.
The Portfolio's 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 7/31/00
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS SINCE INCEPTION 8/24/95
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------
With PACE program fee* 3.56% 3.18% 3.08% 3.62%
Without PACE program fee 4.34% 4.74% 4.64% 5.18%
Lehman Brothers Intermediate-Term
Government/Corporate Bond Index 4.39% 5.11% 5.19% 5.89%
Lipper Short-Intermediate Grade Debt Funds
Median 3.83% 4.70% 4.58% 5.40%
--------------------------------------------------------------------------------------------------
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
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. Total returns
for periods of one year or less are cumulative.
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 $10,108 $10,105 $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
Aug-99 $12,269 $11,550 $12,611
Sep-99 $12,366 $11,627 $12,728
Oct-99 $12,393 $11,638 $12,761
Nov-99 $12,401 $11,631 $12,777
Dec-99 $12,355 $11,573 $12,735
Jan-00 $12,302 $11,509 $12,687
Feb-00 $12,418 $11,603 $12,792
Mar-00 $12,567 $11,728 $12,925
Apr-00 $12,503 $11,653 $12,895
May-00 $12,513 $11,648 $12,915
Jun-00 $12,750 $11,854 $13,143
Jul-00 $12,836 $11,919 $13,243
</TABLE>
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.
ADVISER'S COMMENTS
For the twelve months ended July 31, 2000 the Portfolio lagged the Lehman
Brothers Intermediate-Term Government/Corporate Index. The Portfolio's modest
overweight in corporates detracted from returns, as corporates significantly
underperformed during the period.
6
<PAGE>
The Federal Reserve Board (the "Fed") raised the Federal Funds rate by 50
basis points in May, in order to restore supply-demand imbalances and contain
the rapid economic expansion of the previous quarters. (A basis point equals
1/100th of one percent.) Rapid productivity gains and a modest economic slowdown
toward the end of the fiscal year led the market to believe that the Fed's
tightening cycle was almost over. This supposition led to a 40 basis point rally
in the 10-year Treasury. The yield curve modestly steepened through the end of
July, but the Treasury buyback of long-term debt should keep the yield curve
inverted in the near term. (An inverted yield curve means that short-term rates
are higher than long-term rates.) We expect the Fed to remain on hold while the
effects of prior rate hikes work through the economy. After the dramatic
widening in May, corporate spreads have stabilized and begun to tighten, which
we expect to continue. (Spreads are the difference in yield or income over
Treasurys that corporate and agency obligations must offer to compensate
investors for their greater risk.)
The Portfolio began the fiscal year with a longer than benchmark duration
(duration is a measure of a bond portfolio's sensitivity to interest rate
changes). During the fiscal year we moved duration to a neutral position and
then, in August, to a position shorter than the benchmark. These moves stemmed
from our belief that there is limited upside after the recent rally. It appears
that the most optimistic economic scenario has been priced into the Treasury
market, making the risk-adjusted value of Treasurys inferior to that of spread
sectors. We remain overweighted in spread sectors, as they remain undervalued on
a risk-adjusted basis and we expect them to continue their recent tightening
trend. We continue to favor higher quality corporate sectors. As we move down in
quality, certain securities and industries offer risk-adjusted value, but we
will utilize highly liquid securities only in the near term as it appears that
the illiquidity premium does not offer sufficient compensation for the downside
risk.
PACE INTERMEDIATE FIXED INCOME INVESTMENTS--PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS* PORTFOLIO INDEX
<S> <C> <C>
-------------------------------------------------------------------
Duration 3.4 yrs 3.4 yrs
Maturity 5.3 yrs 4.4 yrs
Average Coupon 6.8% 6.6%
Average Yield to Maturity 7.5% 7.0%
Net Assets ($MM) $ 134.1 --
Number of Securities 135 --
Bonds 96.2% 100%
Cash & Equivalents 3.8% 0%
-------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
QUALITY DIVERSIFICATION* PORTFOLIO INDEX
<S> <C> <C>
-------------------------------------------------------------------
Cash & Equivalents 3.8% 0.0%
U.S. Government & Gov't Agencies 35.3 62.2
AAA 12.2 2.8
AA 3.9 7.9
A 27.4 16.2
BBB 16.8 10.9
BB 0.6 0.0
-------------------------------------------------------------------
Total 100.0 100.0
</TABLE>
<TABLE>
<CAPTION>
ASSET ALLOCATION* PORTFOLIO INDEX
<S> <C> <C>
-------------------------------------------------------------------
Corporates 44.0% 37.8%
U.S. Government & Gov't Agencies 35.3 62.2
Mortgage Backed 11.4 0.0
Asset Backed 5.5 0.0
Cash & Equivalents 3.8 0.0
-------------------------------------------------------------------
Total 100.0 100.0
</TABLE>
*Weightings represent percentages of net assets as of July 31, 2000. The
Portfolio is actively managed and all holdings are subject to change.
7
<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 investment grade bonds of
governmental and private issuers in the United States and foreign countries. Its
dollar-weighted average duration (a measure of sensitivity to interest rate
changes) 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 7/31/00
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS SINCE INCEPTION 8/24/95
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------
With PACE program fee* 4.25% 3.52% 3.04% 5.11%
Without PACE program fee 5.03% 5.08% 4.59% 6.70%
Lehman Brothers Government/
Corporate Bond Index 5.31% 5.72% 5.34% 6.24%
Lipper Investment Grade Debt Funds Median 4.28% 4.56% 4.37% 5.54%
--------------------------------------------------------------------------------------------------
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
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. Total returns
for periods of one year or less are cumulative.
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
Aug-99 $13,109 $12,341 $12,727
Sep-99 $13,231 $12,440 $12,842
Oct-99 $13,261 $12,453 $12,875
Nov-99 $13,273 $12,449 $12,867
Dec-99 $13,196 $12,361 $12,789
Jan-00 $13,119 $12,274 $12,785
Feb-00 $13,297 $12,424 $12,945
Mar-00 $13,528 $12,625 $13,133
Apr-00 $13,385 $12,475 $13,068
May-00 $13,375 $12,450 $13,057
Jun-00 $13,691 $12,729 $13,323
Jul-00 $13,780 $12,795 $13,464
</TABLE>
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 underperformed its benchmark for the fiscal year. During this
period, U.S. Treasury bonds outperformed other types of bonds. The Portfolio's
emphasis on mortgages and corporate bonds put it at a disadvantage to the
benchmark. The Portfolio's below-benchmark duration, or sensitivity to interest
rate changes, had a minimal impact on performance during the second half of the
fiscal year as the yield curve inverted. (An inverted curve means
8
<PAGE>
that short-term rates are higher than long-term rates.) As the yield curve
inverted, our focus on longer maturity Treasurys was positive. Emerging market
bonds added to returns, but not enough to offset the impact of the Portfolio's
corporate exposure.
PIMCO's secular outlook is bullish based on expectations of a slowing U.S.
economy, leading to anticipated maximum U.S. and global growth of three percent
over the next several years. While the tightening cycle by the Federal Reserve
Board (the "Fed") appears to be almost over, monetary policy will probably
remain restrictive until a slowdown is confirmed. Treasury yields, especially on
the long end, are expected to remain volatile due to government buybacks,
surpluses and shifting sentiment about growth prospects for the economy.
We intend to target duration near the benchmark in anticipation of continued
growth and higher inflation in the near term. We will continue to emphasize
mortgages, where credit risk is minimal and attractive yield premiums provide a
cushion against adverse price performance. We intend to continue underweighting
corporates to protect against widening yield premiums arising from potential
economic weakness. For now, our sector strategy focuses on intermediate
maturities but retains long-end exposure to benefit from debt buybacks. We are
limiting below-investment-grade holdings to select upper-tier securities, as
credit quality remains a concern. We will hold modest levels of highly liquid,
top-quality emerging market bonds amid increased volatility in this sector. We
expect to maintain euro exposure and implement other strategies that can benefit
from the convergence of growth in the U.S., the U.K. and Europe. Lastly, we
expect to own modest levels of convertibles to exploit attractive return
potential, but will concentrate on higher quality issues.
PACE STRATEGIC FIXED INCOME INVESTMENTS--PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS* PORTFOLIO INDEX
<S> <C> <C>
-------------------------------------------------------------------
Duration 5.38 yrs 5.39 yrs
Maturity 9.17 yrs 9.74 yrs
Average Coupon 6.69% 6.88%
Average Yield to Maturity 7.76% 7.00%
Net Assets ($MM) $234.7 --
Bonds 120.6% 100%
Liabilities in Excess of Other Assets -20.6% 0%
-------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
QUALITY DIVERSIFICATION* PORTFOLIO INDEX
<S> <C> <C>
-------------------------------------------------------------------
AAA 69.0% 65.0%
AA 5.0 7.0
A 12.0 16.0
BBB 10.0 12.0
BB & B 4.0 0.0
-------------------------------------------------------------------
Total 100.0 100.0
</TABLE>
<TABLE>
<CAPTION>
SECTOR ALLOCATION* PORTFOLIO INDEX
<S> <C> <C>
------------------------------------------------------------------------
CMOs, ARMs, Strips 36.4% --
Corporates (incl. Yankees and Convertibles) 20.7 34.0%
Agency Mortgage Pass-Throughs 27.4 --
U.S. Government 18.5 66.0
Asset Backed 6.7 --
Foreign (incl. Emerging Markets) 2.0 --
Cash & Equivalents 1.5 --
Other 7.4 --
Liabilities in Excess of Other Assets -20.6 --
------------------------------------------------------------------------
Total 100.0 100.0
</TABLE>
*Weightings represent percentages of net assets as of July 31, 2000. The
Portfolio is actively managed and all holdings are subject to change.
9
<PAGE>
PACE MUNICIPAL FIXED INCOME INVESTMENTS
ADVISER: Standish, Ayer & Wood, Inc.
PORTFOLIO MANAGER: Christine H. Psyhogeos
OBJECTIVE: High current income exempt from Federal income tax
INVESTMENT PROCESS: The Portfolio invests in revenue, private activity and
general obligation bonds and notes, the interest on which (in the opinion of
counsel to the issuers) is exempt from Federal income tax. The Portfolio
normally maintains a dollar-weighted average duration of between three and seven
years. (Duration is a measure of sensitivity to changes in interest rates.) At
least 80% of the total assets of the Portfolio is invested in municipal
obligations under normal conditions. No more than 25% is invested in municipal
securities whose issuers are located in the same state or are secured by
revenues from entities in a single industry (except for housing authorities in
which up to 50% of total assets may be invested). Investments are limited to
securities rated at least A or the equivalent at the time of purchase, except up
to 15% of assets may be invested in municipal securities rated BBB or the
equivalent at the time of purchase. Up to 10% of net assets may be invested in
illiquid securities.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/00
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS SINCE INCEPTION 8/24/95
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
With PACE program fee* 4.07% 0.85% 1.65% 3.33%
Without PACE program fee 4.85% 2.37% 3.19% 4.89%
Lehman Brothers Municipal Five-Year Index 3.92% 4.22% 4.17% 4.75%
Lipper Intermediate Municipal Debt Funds
Median 4.56% 3.52% 3.49% 4.79%
-------------------------------------------------------------------------------------------------
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
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. Total returns
for periods of one year or less are cumulative.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE PORTFOLIO AND THE
LEHMAN BROTHERS MUNICIPAL FIVE-YEAR INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PORTFOLIO WITHOUT FEE PORTFOLIO WITH FEE* LEHMAN BROTHERS MUNICIPAL FIVE-YEAR 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
Aug-99 $12,283 $11,564 $12,052
Sep-99 $12,249 $11,517 $12,096
Oct-99 $12,145 $11,405 $12,065
Nov-99 $12,222 $11,463 $12,137
Dec-99 $12,155 $11,386 $12,096
Jan-00 $12,074 $11,296 $12,092
Feb-00 $12,215 $11,413 $12,132
Mar-00 $12,398 $11,570 $12,242
Apr-00 $12,346 $11,507 $12,214
May-00 $12,275 $11,426 $12,210
Jun-00 $12,510 $11,631 $12,434
Jul-00 $12,660 $11,755 $12,564
</TABLE>
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.
10
<PAGE>
ADVISER'S COMMENTS
As of June 1, 2000, Standish, Ayer & Wood, Inc. assumed responsibility for
managing the Portfolio.
The Portfolio underperformed the benchmark and the median for the fiscal year
as a whole, but improved performance considerably in the second six months.
Through the end of 1999 and the beginning of 2000, the bond market experienced
one of its worst years in history. Rising interest rates and fears of inflation
led to a sell-off in the bond market. Performance lagged as the Portfolio had
extended duration during the first half of the year. (Duration is a measure of
sensitivity to interest rate changes.) Performance was enhanced by shortened
duration during the second half and by an emphasis on credit quality.
During the fiscal year, tax-exempt interest rates declined across the yield
curve, from 70 basis points on short maturities to 25 basis points on long
maturities. (A basis point equals 1/100th of one percent.) This was a positive
for the Portfolio, as its lower coupon bonds performed well in this environment.
The Portfolio's underweight to general obligation and insured bonds was a
moderate negative, as these performed slightly better than other sectors. Bonds
from high tax states (CA, NY, MA and double exempt Puerto Rico) performed well
on the strength of demand from wealthy individual investors. In the revenue
sector, hospital bond prices firmed while the Portfolio's heavy exposure to
housing bonds hurt performance.
The Portfolio ended the period with a more neutral duration posture against
the benchmark. Long-term bonds--including some of the volatile discount
coupons--were sold in favor of high quality, higher coupon bonds of shorter
duration. We added shorter-term non-callable issues as well as shorter duration
bonds with embedded calls. We sold selected bonds of lesser quality, thereby
strengthening credit quality. Increased exposure to government bonds also
enhanced performance.
The municipal market suffered from poor liquidity during the year, as
institutions pulled back from participation. Mutual funds were net sellers of
munis, while insurance companies, facing lower profitability, cut back on
buying. Increased demand from retail investors partly offset weak institutional
demand, as did reduced supply of new issues.
The market has begun to stabilize in expectations that the Federal Reserve
Board will continue decisive strikes against inflation. Recent economic
indicators have been favorable to bonds, which began to rally as this reporting
period drew to a close. Municipal bonds have performed particularly well. Given
the high volatility and still lofty valuations in much of the equity markets,
some investors are returning to the relative stability of bonds--particularly
given the attractive taxable equivalent yields available from municipals.
Currently, five-year AAA municipals offer 75.2% of Treasury issues, slightly
cheaper than historical norms.
Adding value above the benchmark in this market environment continues to be a
challenge. The municipal yield curve is fairly flat. Quality state and sector
spreads are tight and liquidity makes transactions difficult. The prospects for
economic growth further complicate the interest rate outlook.
In this period of market volatility, we intend to target Portfolio duration
close to that of the benchmark and avoid making bets on the direction of
interest rates. We will continue to emphasize high quality intermediate-term tax
exempt bonds. We also plan to be well diversified across sector, region and call
structure within the municipal bond market, consistent with our aim to deliver
incremental yield in a tax-advantaged, low volatility bond portfolio.
11
<PAGE>
PACE MUNICIPAL FIXED INCOME INVESTMENTS--PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS* PORTFOLIO INDEX
<S> <C> <C>
--------------------------------------------------------------------
Duration 4.49 yrs 4.12 yrs
Maturity 5.71 yrs 4.96 yrs
Average Coupon 6.09% 5.49%
Net Assets ($MM) $53.6 --
Bonds 100% 100%
Cash & Equivalents 0% 0%
--------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 SECTORS* PORTFOLIO INDEX TOP 5 STATES* PORTFOLIO INDEX
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
Insured 28.1% 30.2% Texas 18.0% 5.7%
Housing 26.1 2.0 California 10.4 12.4
ETM Pre-Refunded 22.3 25.7 Pennsylvania 6.8 3.5
General Obligation 8.5 28.9 Washington D.C. 6.3 1.2
LOC/GIC 3.1 0.0 Illinois 5.0 4.5
---------------------------------------------------------------------------------------------------------------------
Total 88.1 86.8 Total 46.5 27.3
</TABLE>
<TABLE>
<CAPTION>
QUALITY DIVERSIFICATION* PORTFOLIO INDEX
<S> <C> <C>
-------------------------------------------------------------------
Government 22.6% 17.7%
AAA 46.3 37.5
AA 17.9 29.0
A 12.8 11.3
BBB 0.4 4.5
-------------------------------------------------------------------
Total 100.0 100.0
</TABLE>
*Weightings represent percentages of net assets as of July 31, 2000. The
Portfolio is actively managed and all holdings are subject to change.
12
<PAGE>
PACE GLOBAL FIXED INCOME INVESTMENTS
ADVISER: Rogge Global Partners plc
PORTFOLIO MANAGER: Team led by Olaf Rogge
OBJECTIVE: High total return
INVESTMENT PROCESS: Because the adviser believes that financially healthy
countries produce the highest bond and currency returns over time, the Portfolio
invests primarily in high-grade bonds of governmental and private issuers in the
U.S. and developed foreign countries. 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 7/31/00
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS SINCE INCEPTION 8/24/95
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------
With PACE program fee* -0.66% -6.39% 0.49% 1.73%
Without PACE program fee 0.09% -4.97% 2.01% 3.27%
Salomon Smith Barney World
Government Bond Index 0.48% -1.01% 3.55% 3.54%
Lipper Global Income Funds Median 1.31% -0.87% 1.47% 4.13%
----------------------------------------------------------------------------------------------------------------
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
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. Total returns
for periods of one year or less are cumulative.
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
Aug-99 $12,348 $11,625 $12,043
Sep-99 $12,443 $11,699 $12,231
Oct-99 $12,422 $11,665 $12,225
Nov-99 $12,232 $11,472 $12,097
Dec-99 $12,197 $11,425 $12,067
Jan-00 $11,714 $10,959 $11,810
Feb-00 $11,681 $10,915 $11,725
Mar-00 $12,005 $11,203 $12,089
Apr-00 $11,496 $10,715 $11,694
May-00 $11,627 $10,823 $11,785
Jun-00 $11,932 $11,094 $12,071
Jul-00 $11,724 $10,887 $11,867
</TABLE>
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.
13
<PAGE>
ADVISER'S COMMENTS
The Portfolio underperformed its benchmark for the year ended July 31, 2000
largely due to our overweight position in European currencies, including both
the euro and peripheral currencies including the Swedish krona and Norwegian
krone. On the other hand, country selection had a positive contribution to
performance, primarily due to our large underweight position in Japanese bonds.
Our use of corporate and emerging market issues also made substantial
contributions to the Portfolio. Unfortunately, these positive influences could
not entirely offset the impact of the European currencies.
Looking forward, we remain advocates of European assets with heavy exposure in
Germany, the Netherlands and Denmark. Economic growth in Europe remains strong,
with few signs of inflation in the system and none of the debt problems faced by
the United States. European fixed income markets are outperforming Japanese
markets and look relatively attractive vis-a-vis the U.S. as well. We are
managing the currency exposure to these European assets from a benchmark neutral
position, hedging some of the exposure back into U.S. dollars as U.S.
investments continue to attract flows from all over the world. While we believe
that these flows will moderate over the next few quarters, it is difficult to
deny their impact at the current time.
In Japan, the wheels of change are grinding slowly forward. The Bank of Japan
(BOJ) dropped its zero interest rate policy just before a Japanese holiday
period. We believe that this will have little short-term impact on Japanese
assets, but it does signal that the BOJ feels more comfortable with the
performance of the domestic economy than it has for some time. However, we are
aware that the Japanese government sought to prevent or delay this policy change
and will continue to look for ways to stimulate the economy from the fiscal side
of the equation. As a result, we remain underweight in both Japanese bonds and
currency.
PACE GLOBAL FIXED INCOME INVESTMENTS--PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS* PORTFOLIO INDEX
<S> <C> <C>
-------------------------------------------------------------------
Duration 5.32 yrs 5.61 yrs
Maturity 8.65 yrs 7.60 yrs
Weighted Average Coupon 6.20% 5.50%
Weighted Average Yield to Maturity 5.54% 4.51%
Net Assets ($MM) $100.8 --
Number of Securities 50 --
-------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
QUALITY DIVERSIFICATION* PORTFOLIO INDEX
<S> <C> <C>
-------------------------------------------------------------------
U.S. Government 9.7% 27.3%
AAA 45.8 56.9
AA 23.8 15.0
A 9.1 0.8
BBB 4.5 0.0
BB 3.9 0.0
Cash & Equivalents 3.2 0.0
-------------------------------------------------------------------
Total 100.0 100.0
</TABLE>
<TABLE>
<CAPTION>
TOP 5 COUNTRIES* PORTFOLIO INDEX TOP 5 CURRENCIES* PORTFOLIO INDEX
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
United States 20.8% 27.3% Euro 50.6% 34.0%
Germany 16.6 8.0 Yen 19.0 26.1
Netherlands 12.9 2.4 $US 16.6 27.3
Japan 11.1 26.1 Danish Kroner 5.5 1.2
Denmark 8.5 1.2 Canadian Dollar 4.9 2.9
-------------------------------------------------------------------------------------------------------------
Total 69.9 65.0 Total 96.6 91.5
</TABLE>
*Weightings represent percentages of net assets as of July 31, 2000. The
Portfolio is actively managed and all holdings are subject to change.
14
<PAGE>
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
ADVISERS: Westwood Management Corporation and Institutional Capital Corporation
PORTFOLIO MANAGERS: (Westwood) Susan Byrne and Kellie Stark; ICAP Investment
Team
OBJECTIVE: Capital appreciation and dividend income
WESTWOOD INVESTMENT PROCESS: Westwood screens large capitalization companies for
those that have reported a positive earnings surprise which has received little
or no recognition in the form of positive future earnings revisions, and for
those companies that have a price-to-sales ratio less than the Standard & Poor's
500 Index. These companies are further screened to identify those with improving
returns on equity combined with stable-to-declining debt/equity ratios.
Forward-looking fundamental analysis is then applied to these potential
investments. Those companies that pass through the screening and fundamental
research process are placed on a monitor list, at which point a catalyst for
purchase is sought.
ICAP INVESTMENT PROCESS: ICAP uses a team approach with a value-oriented
investment style. ICAP uses a proprietary model to identify large capitalization
companies that ICAP believes offer the best relative values. ICAP further
narrows its search to companies where a catalyst for positive change is, in
ICAP's view, about to occur. Finally, ICAP researches the financial condition
and business prospects of those companies where a catalyst may be about to
occur.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/00
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS SINCE INCEPTION 8/24/95
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------
With PACE program fee* -0.01% -16.01% 0.35% 11.67%
Without PACE program fee 0.74% -14.74% 1.87% 13.36%
Russell 1000 Value Index 0.24% -5.00% 8.74% 17.24%
Lipper Multi-Cap Value Funds Median 4.20% -2.24% 5.23% 13.75%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
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. Total returns
for periods of one year or less are cumulative.
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 FEE PORTFOLIO WITH FEE* RUSSELL 1000 VALUE 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
Aug-99 $21,024 $19,793 $22,167
Sep-99 $19,498 $18,333 $21,393
Oct-99 $19,539 $18,349 $22,625
Nov-99 $19,653 $18,432 $22,449
Dec-99 $19,779 $18,527 $22,557
Jan-00 $18,449 $17,260 $21,821
Feb-00 $16,937 $15,825 $20,200
Mar-00 $18,630 $17,386 $22,664
Apr-00 $19,460 $18,138 $22,401
May-00 $19,699 $18,337 $22,637
Jun-00 $18,869 $17,543 $21,602
Jul-00 $18,585 $17,257 $21,872
</TABLE>
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.
15
<PAGE>
ADVISERS' COMMENTS
On July 1, 2000, Westwood Management Corporation and Institutional Capital
Corporation replaced Brinson Partners, Inc. as the advisers for the Portfolio.
WESTWOOD MANAGEMENT
During the 12-month period ended July 31, 2000, the performance of the Large
Company Value Equity Investments Portfolio lagged that of its benchmark, the
Russell 1000 Value Index.
The second half of 1999 ran rampant with the technology sector remaining in
the lead. Dot Com was the theme despite a series of rate hikes beginning
June 30th, as inflationary pressures crept into the markets. Throughout the
domestic and foreign economies merger announcements continued to make headlines
and drive equity prices. After the beginning of the millennium, the market
rotated away from technology related issues as investors began to fear future
earnings results and retreated to the blue chip, "old economy" names and gave up
their "new economy" growth oriented names. Oil peaked to new highs as OPEC talks
regarding the production levels continued, and finished at $32 levels. Economic
growth over the past 12 months remained quite strong, as real GDP expanded by
6.1%.
For the month of July 2000, the Portfolio declined 1.63%, after deduction of
fees. In contrast, the Portfolio's benchmark, the Russell 1000 Value Index, rose
1.25%. The performance and overweighting in the energy and technology areas had
a negative impact on the Portfolio's return. However, stock selection and an
overweighting in healthcare aided performance. Stock selection in finance and
basic materials also helped performance.
In July 2000, volatility continued to be the dominant theme for the NASDAQ
Composite Index. Following a strong rally, the NASDAQ declined sharply in the
second half of the month. Momentum investors were scared out of large-cap growth
stocks when a few large technology companies announced that earnings would lag
original forecasts. Energy prices declined from their highs, as OPEC production
increased and inventory levels began a seasonal build. The transportation and
financial sectors led the market in July. Financial stocks strengthened, as
investors viewed the prospect of higher interest rates as positive for the
banking sector. Communication services, healthcare and consumer cyclicals were
among the market sectors that declined during July. At the end of the fiscal
year, Westwood's portion of the portfolio was overweighted in energy, consumer
cyclicals, technology and transportation stocks.
INSTITUTIONAL CAPITAL CORPORATION
Performance in the equity markets over the past twelve months was more notable
for volatility than for returns. It appeared that economic growth had begun to
moderate. However, there was also upward pressure on wages and prices. As a
result, investors were anticipating modest tightening by the Federal Reserve
Board for the rest of 2000.
The stock market continued its volatile behavior in July 2000. Equity prices
rose sharply in the first half of the month but reversed course and registered
new losses by the end of the month. In comparison to the Portfolio's benchmark,
the Russell 1000 Value Index, Institutional Capital Corporation's portion of the
Portfolio was overweighted in technology and healthcare stocks and underweighted
in financial stocks.
We believe that there are many good individual investment opportunities in the
market. Valuation disparities remain extremely wide. In the technology sector, a
concentration of capitalization and an extension of valuation have come at the
expense of all other market sectors. As a result, a broad range of companies is
selling substantially below recent highs, where valuations are a fraction of
historic levels and where earnings prospects are intact. We will continue to
seek investment opportunities in companies that are undervalued relative to
their peer groups and to the market and which have an upside potential of at
least 20% over the next 12 to 18 months.
16
<PAGE>
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS--PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS* 7/31/00
<S> <C>
-------------------------------------------------------
Size of Portfolio ($MM) $335.3
Number of Securities 92
Stocks 97.8%
Cash & Equivalents 2.2%
-------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP TEN HOLDINGS* 7/31/00
<S> <C>
-------------------------------------------------------
Citigroup 3.2%
Exxon Mobil 3.2
IBM 3.1
Verizon Communications 3.0
Pharmacia 2.7
Conoco 2.4
Philips Electronics 2.1
Ford Motor Co. 1.7
Union Carbide 1.6
Wellpoint Health Networks 1.6
-------------------------------------------------------
Total 24.6
</TABLE>
<TABLE>
<CAPTION>
TOP FIVE SECTORS* 7/31/00
<S> <C>
-------------------------------------------------------
Consumer Cyclical 15.8%
Financial Services 15.3
Technology 13.5
Energy 12.3
Utility 10.0
-------------------------------------------------------
Total 66.9
</TABLE>
*Weightings represent percentages of net assets as of July 31, 2000. The
Portfolio is actively managed and all holdings are subject to change.
17
<PAGE>
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
ADVISER: Alliance Capital Management L.P.
PORTFOLIO MANAGER: Jane Mack Gould
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: The Portfolio invests primarily 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 $4.0 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 7/31/00
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS SINCE INCEPTION 8/24/95
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------
With PACE program fee* 5.73% 16.00% 19.41% 21.96%
Without PACE program fee 6.53% 17.76% 21.21% 23.80%
Russell 1000 Growth Index 4.80% 24.38% 22.76% 27.01%
Lipper Large-Cap Growth Funds Median 5.11% 26.02% 22.33% 24.19%
--------------------------------------------------------------------------------------------------
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
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. Total returns
for periods of one year or less are cumulative.
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
Aug-99 $24,835 $23,380 $26,489
Sep-99 $23,930 $22,500 $25,932
Oct-99 $25,731 $24,163 $27,890
Nov-99 $26,126 $24,504 $29,393
Dec-99 $28,307 $26,516 $32,450
Jan-00 $26,963 $25,225 $30,928
Feb-00 $26,750 $24,995 $32,441
Mar-00 $30,000 $27,996 $34,764
Apr-00 $29,071 $27,096 $33,109
May-00 $27,708 $25,793 $31,440
Jun-00 $29,071 $27,028 $33,823
Jul-00 $28,723 $26,671 $32,413
</TABLE>
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.
ADVISER'S COMMENTS
During the 12-month period ended July 31, 2000, the Portfolio's performance
lagged that of the Russell 1000 Growth Index. The Portfolio's underperformance
resulted from an underweighting in technology stocks relative to the Index. In
the Index, the technology component has risen from 24.7% on July 31, 1998 to
36.6% on July 31, 1999 to 56.9% on July 31, 2000. From July 31, 1999 through
July 31, 2000, technology stocks accounted for an average of 41.2% of the
Russell 1000 Growth Index. For the same period, however, technology stocks
composed only 31.7% of the PACE Portfolio.
18
<PAGE>
Currently, the Portfolio's stock selection discipline does not support a
benchmark weighting in technology stocks. On July 31, 2000, 41% of Portfolio
assets were invested in the technology sector; but technology stocks represented
56.9% of the Russell 1000 Growth Index. As price opportunities presented
themselves, we added to the Portfolio's technology positions. We believe that
continued market volatility is likely to offer more opportunities for technology
investment.
As we move forward, we believe the investment environment will continue to be
challenging. Conviction is likely to remain fragile, as investors react to daily
consensus views on economic strength, inflation, Federal Reserve Board
intentions and the earnings guidance of corporate managements. We believe that
higher interest rates are starting to slow economic growth. Signs of moderation
are apparent in retail sales, hours worked, employment, housing starts,
purchasing manager surveys, leading indicators and business investment excluding
technology. We estimate that real GDP will grow slightly less than 4% for the
remainder of the year and around 3.5% in 2001. Reported inflation has been
distorted by rising oil prices, but oil prices appear to be declining. Despite
the length of the current economic expansion, excellent productivity gains have
sustained low unit labor costs. We believe Fed policy will continue to be
sensitive to monthly data on employment, spending and inflation. Short-term
interest rates could rise 0.25% to 0.50% by year-end. Long-term interest rates
are expected to fluctuate between 5.75% and 6.75%.
We will continue to focus our investment strategy on stocks that meet our
criteria for increased revenues through strong unit growth independent of price
increases. We believe such companies will perform well during the transition to
slower economic growth and afterwards. Volatility is likely to continue to
characterize the market and may present opportunities to add to favored
holdings. In the past, we have taken advantage of such price weakness to
increase our technology holdings. Outside the area of technology, we are aware
of attractive values in other sectors and will pursue a diversified approach to
Portfolio construction. As always, we seek the best combination of superior
relative earnings growth at reasonable valuation. In that regard, we believe the
case for financial services stocks is especially compelling.
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS--PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS* 7/31/00
<S> <C>
-------------------------------------------------------
Net Assets ($MM) $436.8
Number of Securities 83
Stocks 98.4%
ADRs 1.5%
Cash & Equivalents 0.1%
-------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP FIVE SECTORS* 7/31/00
<S> <C>
-------------------------------------------------------
Technology 43.2%
Financial Services 19.3
Consumer Cyclical 12.1
Healthcare 12.0
Utilities 5.3
-------------------------------------------------------
Total 91.9
</TABLE>
<TABLE>
<CAPTION>
TOP 10 STOCKS* 7/31/00
<S> <C>
-------------------------------------------------------
Cisco Systems 5.5%
Intel 5.4
Pfizer 4.9
Tyco International 4.3
Citigroup 4.3
General Electric 4.0
Solectron 4.0
Dell Computer 3.8
Schering-Plough 3.7
AT&T Liberty Media 3.3
-------------------------------------------------------
Total 43.2
</TABLE>
*Weightings represent percentages of net assets as of July 31, 2000. The
Portfolio is actively managed and all holdings are subject to change.
19
<PAGE>
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
ADVISERS: Ariel Capital Management, Inc./ Brandywine Asset Management, Inc.
PORTFOLIO MANAGERS: Eric T. McKissack of Ariel; Henry Otto and Steve Tonkovich
of Brandywine
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: The Portfolio invests primarily in equity securities that
are believed to be undervalued or overlooked in the marketplace and that have
market capitalizations of less than $4.0 billion at the time of purchase.
Brandywine and Ariel each manage a portion of the Portfolio. Ariel seeks to
identify companies in consistent industries with distinct market niches and
excellent management teams. Ariel defines value stocks generally as those that
have low price/earnings (P/E) ratios based on forward earnings and that trade at
significant discounts to the private market value that Ariel calculates for each
stock. Brandywine starts with quantitative analysis that focuses on stocks with
low P/E ratios. Brandywine then uses fundamental analysis to exclude stocks
based on earnings adjustments that raise P/E above the target range,
preannounced 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 7/31/00
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS SINCE INCEPTION 8/24/95
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------
With PACE program fee* 3.85% -11.92% -2.57% 6.37%
Without PACE program fee 4.63% -10.59% -1.09% 7.98%
Russell 2500 Value Index 10.92% 3.05% 5.08% 12.90%
Lipper Small-Cap Value Funds Median 10.36% 6.22% 2.42% 10.56%
------------------------------------------------------------------------------------------------------------------
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
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. Total returns
for periods of one year or less are cumulative.
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 FEE PORTFOLIO WITH FEE* RUSSELL 2500 VALUE 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
Aug-99 $15,567 $14,655 $16,934
Sep-99 $14,944 $14,051 $16,400
Oct-99 $14,488 $13,605 $16,417
Nov-99 $14,488 $13,588 $16,507
Dec-99 $14,789 $13,854 $17,070
Jan-00 $13,967 $13,067 $16,360
Feb-00 $13,178 $12,313 $16,643
Mar-00 $14,110 $13,167 $17,868
Apr-00 $14,033 $13,079 $17,861
May-00 $14,175 $13,196 $17,829
Jun-00 $14,164 $13,169 $17,761
Jul-00 $14,614 $13,570 $18,146
</TABLE>
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.
20
<PAGE>
ADVISERS' COMMENTS
ARIEL CAPITAL MANAGEMENT
The first seven months of 2000 witnessed distinct periods of under- and
outperformance by the value sectors of the market. Dominance of growth sectors
continued in January and February followed by the crumbling of the technology
sector in March. The factors driving broad stock market performance during the
remaining four months were clear--as the sector was toppled by its own excess, a
flight to quality ensued. Technology's dramatic turn hurt the entire U.S. stock
market and especially punished momentum investors heavily weighted in the most
popular aggressive growth stocks. The Portfolio, underweighted in technology,
enjoyed a measure of protection as the sector faltered.
In addition, a number of holdings performed quite well when their value was
unlocked as a result of being taken over. The Portfolio benefited from the
announced acquisition of long-time favorite, Central Newspapers by Gannett at
$64 per share--a large premium over its $31.50 per share price at the time of
announcement. The purchase of refrigeration systems manufacturer Hussmann
International by Ingersoll-Rand for $29 a share offered another nice performance
lift--Hussmann shares traded at $13.38 at the time. [Hussmann International
(1.5%)* and Central Newspapers (3.5%)* were sold in May and June of 2000,
respectively.]
We have continued to utilize strong value ideals throughout the year and have
discovered several attractive stocks, which we feel offer excellent
opportunities for future appreciation. Two such examples are Cardinal Health
(1.2% as of July 31, 2000)* and the Tribune Company (0.8% as of July 31, 2000).*
In the healthcare sector, Cardinal Health maintains the second largest drug
distribution business, the largest manufacturing and medical-surgical
distribution operation and the largest pharmaceutical service portfolio in the
U.S. and was selling at a very attractive valuation. We also used weakness in
the newspaper/publishing industry to initiate a position in an old-time
favorite, the Tribune Company. Tribune, one of the industry's largest players,
owns major newspaper and broadcasting properties in New York, Los Angeles,
Chicago, Atlanta and other major markets.
BRANDYWINE ASSET MANAGEMENT
For the fiscal year ended July 31, 2000, the U.S. equity market gained despite
rising interest rates, driven higher by strong consumer confidence and investor
optimism about technology spending. Market gains remained concentrated in growth
stocks. Value lagged due to investor disinterest.
The technology sector accounted for most of the Portfolio's underperformance
versus its benchmark. Our disciplined value approach kept the Portfolio
underweighted in technology stocks because of their steep valuations, yet
investors had a nearly insatiable appetite for these stocks. The Portfolio's
healthcare investments were the other major source of poor performance relative
to the benchmarks. Although we had only a small weighting in hospitals, HMOs,
nursing homes and rehabilitation centers, the stocks dropped dramatically due to
radical changes in Medicare reimbursement. These stocks later rallied as
Congress passed helpful regulatory changes.
For the year ended July 31, 2000, oil services companies were among the
Portfolio's strongest contributors to performance. The retail and consumer
product sectors also provided a positive contribution to the Portfolio as strong
consumer spending helped these stocks. Despite investor concerns about the
economy's sustainability, continued economic growth also helped the Portfolio's
cyclical holdings in trucking, steel, chemicals and textiles.
We have identified several potential catalysts for the realization of the
potential available in small cap value stocks. First, any decline in the
Internet euphoria followed by more realistic evaluation of stock prices relative
to fundamentals could benefit our style. Second, the dramatic rise in mergers,
acquisitions and stock buybacks among the Portfolio's holdings indicates that
corporate decision-makers confirm that these stocks' business fundamentals do
not justify their current valuation discounts.
*Weightings represent percentages of net assets as of the dates indicated. The
Portfolio is actively managed, and its composition will vary over time.
21
<PAGE>
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS--PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS* 7/31/00 TOP FIVE SECTORS* 7/31/00
<S> <C> <C> <C>
----------------------------------------------------------------------------------
Price/Earnings Ratio 7.3x Consumer Cyclical 37.0%
Price/Book Ratio 9.5x Financial Services 18.0
Dividend Yield 1.8% Consumer Noncyclical 9.0
Net Assets ($MM) $213.7 Technology 7.8
Number of Securities 638 Basic Materials 6.0
-----
Stocks 94.3% Total 77.8
Cash & Equivalents 5.7%
----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 10 STOCKS* 7/31/00
<S> <C>
-----------------------------------------------
Herman Miller 2.6%
MBIA 2.5
Rouse Co. 2.3
Houghton Mifflin Co. 2.1
MBNA 2.1
International Game Technology 2.0
Lee Enterprises 1.9
Equifax 1.9
CenturyTel 1.8
McCormick & Company 1.8
-----------------------------------------------
Total 21.0
</TABLE>
*Weightings represent percentages of net assets as of July 31, 2000. The
Portfolio is actively managed and all holdings are subject to change.
22
<PAGE>
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
ADVISER: Delaware Management Company, Inc.
PORTFOLIO MANAGER: Gerald S. Frey
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: The Portfolio invests primarily in stocks of "emerging
growth" companies that are believed to have potential for high future earnings
growth relative to the overall market and that have market capitalizations of
less than $4.0 billion at the time of purchase. Up to 5% of the total assets may
be invested in U.S. dollar-denominated foreign securities. The adviser employs a
bottom-up, fundamental analysis to identify companies that have substantially
above average earnings growth because of management changes, new products,
growth of established products or structural changes in the economy.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/00
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS SINCE INCEPTION 8/24/95
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
With PACE program fee* 16.04% 59.89% 33.37% 22.95%
Without PACE program fee 16.92% 62.30% 35.39% 24.81%
Russell 2500 Growth Index -1.04% 35.14% 16.76% 17.01%
Lipper Mid-Cap Growth Funds Median 4.48% 53.49% 25.90% 21.82%
--------------------------------------------------------------------------------------------------------
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
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. Total returns
for periods of one year or less are cumulative.
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
Aug-99 $17,878 $16,831 $15,679
Sep-99 $19,156 $18,011 $15,792
Oct-99 $20,523 $19,273 $16,561
Nov-99 $21,935 $20,572 $18,517
Dec-99 $26,464 $24,790 $22,009
Jan-00 $25,575 $23,927 $21,886
Feb-00 $32,974 $30,810 $27,500
Mar-00 $32,480 $30,311 $25,341
Apr-00 $29,072 $27,097 $22,873
May-00 $26,158 $24,350 $20,837
Jun-00 $30,248 $28,122 $23,592
Jul-00 $29,902 $27,766 $21,660
</TABLE>
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.
ADVISER'S COMMENTS
For the one-year period ended July 31, 2000, the portfolio returned 59.89% net
of fees, beating the Russell 2500 Growth benchmark by nearly 25 percentage
points.
Technology stocks were by far the strongest performers during the fiscal year,
with the Portfolio's holdings returning approximately 185% compared to the
benchmark's technology issues returning approximately 123%. (Technology stocks
23
<PAGE>
represented 42% of the Portfolio as of July 31, 2000.) Notable performers in
this sector include Applied Micro Circuits, Network Appliance and PMC-Sierra.
Performance was somewhat dampened by our overexposure in the consumer services
sector, which was one of the poorest performing sectors in the benchmark. Our
overall stock selections within this sector, however, were considerably better
than the benchmark performance, with an 11% positive return vs. the Index's
negative 16% return.
Overall, we are pleased that patient small cap investors have been rewarded
for sticking to their long-term investment strategy. We are confident the small
capitalization segment of the market continues to offer good value to equity
investors.
We believe the primary determinant of market returns in the near future will
be whether or not the Federal Reserve (the "Fed") ends its series of interest
rate increases. If signs appear that rapid economic growth will continue, the
Fed may raise rates further in an effort to slow the economy and control
inflationary pressures. If recent rate hikes have successfully brought the
economic growth rate down to a sustainable, noninflationary level, the financial
markets should be able to continue their gains.
Until the Fed's direction becomes clear, markets will continue their recent
volatile pattern. In this environment, companies that fall short of growth
expectations may see a significant decrease in their share price. The winners
will be those companies that exhibit an ability to sustain sales and earnings
growth.
Going forward, our two largest sector weightings are technology and business
services, which we think will be the most successful sectors in the slower
growth economic environment described above. We have begun increasing our
healthcare exposure, and feel that this segment's recent gains will continue.
Our weightings of basic industries and capital goods are currently below the
benchmark, as we feel that these companies will lag the earnings and sales
growth of other sectors. We continue to emphasize quality companies with strong
fundamentals, solid business plans and good market presence while we cull those
companies we believe may miss earnings expectations.
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS--PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS* 7/31/00 TOP FIVE SECTORS* 7/31/00
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
Price/Earnings Ratio 37.00x Technology 42.0%
Price/Book Ratio 7.33x Business Services 11.8
Net Assets ($MM) $319.6 Consumer Nondurables 11.7
Number of Securities 81 Consumer Services 11.4
Stocks 95.0% Healthcare 9.4
-----
Cash & Equivalents 5.0% Total 86.3
-----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 10 HOLDINGS* 7/31/00
<S> <C>
---------------------------------------------------------------
Micrel 5.1%
Applied Micro Circuits 4.9
Network Appliance 4.7
PMC-Sierra 4.3
Dollar Tree Stores 3.5
Veritas Software 3.3
Nextlink Communications 2.6
Pinnacle Holdings 2.6
Dycom Industries 2.4
Henry (Jack) & Associates 2.4
---------------------------------------------------------------
Total 35.8
</TABLE>
*Weightings represent percentages of net assets as of July 31, 2000. The
Portfolio is actively managed and all holdings are subject to change.
24
<PAGE>
PACE INTERNATIONAL EQUITY INVESTMENTS
ADVISER: Martin Currie Inc.
PORTFOLIO MANAGER: Team led by James Fairweather
OBJECTIVE: Capital appreciation
INVESTMENT PROCESS: The Portfolio invests primarily in stocks of companies that
are domiciled in developed foreign countries and principally traded in Japanese,
European, Pacific and Australian securities markets or traded in U.S. securities
markets. Up to 10% of the Portfolio may be invested in emerging markets. A large
part of the Portfolio's investments are usually denominated in foreign
currencies. The 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 settlement system.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/00
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS SINCE INCEPTION 8/24/95
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
With PACE program fee* -3.94% 13.20% 8.81% 10.87%
Without PACE program fee -3.21% 14.91% 10.46% 12.55%
MSCI EAFE Index -1.73% 9.27% 8.33% 10.37%
Lipper International Funds Median -2.61% 14.43% 8.75% 11.50%
--------------------------------------------------------------------------------------------------------
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
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. Total returns
for periods of one year or less are cumulative.
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 $10,198
Oct-95 $9,875 $9,847 $9,927
Nov-95 $9,967 $9,926 $10,206
Dec-95 $10,356 $10,301 $10,619
Jan-96 $10,691 $10,621 $10,665
Feb-96 $10,658 $10,575 $10,703
Mar-96 $10,901 $10,802 $10,933
Apr-96 $11,118 $11,004 $11,254
May-96 $11,009 $10,883 $11,049
Jun-96 $11,127 $10,985 $11,114
Jul-96 $10,708 $10,558 $10,792
Aug-96 $10,767 $10,603 $10,817
Sep-96 $11,060 $10,878 $11,107
Oct-96 $10,884 $10,691 $10,996
Nov-96 $11,336 $11,122 $11,436
Dec-96 $11,423 $11,193 $11,292
Jan-97 $11,236 $10,996 $10,899
Feb-97 $11,465 $11,206 $11,080
Mar-97 $11,440 $11,167 $11,123
Apr-97 $11,542 $11,253 $11,184
May-97 $12,375 $12,050 $11,915
Jun-97 $12,944 $12,589 $12,575
Jul-97 $13,310 $12,928 $12,781
Aug-97 $12,213 $11,848 $11,829
Sep-97 $13,012 $12,607 $12,494
Oct-97 $12,018 $11,629 $11,537
Nov-97 $12,094 $11,689 $11,421
Dec-97 $12,503 $12,069 $11,524
Jan-98 $12,706 $12,249 $12,054
Feb-98 $13,444 $12,945 $12,830
Mar-98 $13,928 $13,394 $13,228
Apr-98 $14,112 $13,554 $13,335
May-98 $14,235 $13,655 $13,274
Jun-98 $14,235 $13,638 $13,378
Jul-98 $14,543 $13,916 $13,517
Aug-98 $12,679 $12,117 $11,845
Sep-98 $12,152 $11,598 $11,485
Oct-98 $13,163 $12,548 $12,685
Nov-98 $13,910 $13,243 $13,338
Dec-98 $14,546 $13,832 $13,868
Jan-99 $14,619 $13,883 $13,830
Feb-99 $14,110 $13,383 $13,504
Mar-99 $14,755 $13,978 $14,071
Apr-99 $15,155 $14,338 $14,644
May-99 $14,519 $13,720 $13,892
Jun-99 $15,300 $14,440 $14,437
Jul-99 $15,609 $14,713 $14,870
Aug-99 $15,809 $14,883 $14,928
Sep-99 $15,863 $14,915 $15,082
Oct-99 $16,445 $15,443 $15,650
Nov-99 $17,717 $16,616 $16,198
Dec-99 $19,732 $18,484 $17,654
Jan-00 $18,531 $17,337 $16,535
Feb-00 $19,617 $18,330 $16,983
Mar-00 $19,819 $18,495 $17,645
Apr-00 $18,445 $17,192 $16,721
May-00 $17,734 $16,508 $16,316
Jun-00 $18,512 $17,211 $16,957
Jul-00 $17,936 $16,654 $16,250
</TABLE>
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.
25
<PAGE>
ADVISER'S COMMENTS
For the 12-month period ended July 31, 2000, the Portfolio outperformed the
MSCI EAFE Index. The Portfolio's strong performance can be traced back to the
fourth quarter of 1999, which was a particularly good period for the markets
represented in the EAFE Index. During that quarter, recovery in economic
forecasts for the Pacific region drove all markets ahead strongly.
During the fiscal year, telecommunications, media and technology stocks were
well represented in the Portfolio. Asset allocation decisions had a neutral
effect on performance. The Portfolio's outperformance was generated largely by
successful stock selection in Europe and Japan. Early in the fiscal year,
recovery in the Pacific and in small markets resulted in a period of very strong
returns for the EAFE Index. In March 2000, however, fears of higher U.S.
interest rates and a correction in the NASDAQ Composite Index triggered
widespread profit taking. Market volatility continued for the rest of the
period.
For much of 1999, the Portfolio was overweighted in Japan and Asia at the
expense of the United Kingdom and Europe. As commodity prices rose, currencies
stabilized and interest rates declined, we also favored selective smaller
markets, such as Mexico, Brazil, India, Korea, Egypt, Israel and South Africa.
In January 2000, we began rebalancing the Portfolio toward Europe from Japan,
because we recognized the underperformance of European markets and the
increasingly unclear outlook for Japan. Investments in emerging markets were
also switched into Europe in anticipation of a volatile summer. Toward the end
of the period, the Japanese market declined heavily with the unwinding of cross
shareholdings and heavy foreign selling. The next move will be to put assets
back into that market from other Asian markets.
We do not anticipate further significant interest-rate hikes, and we do not
expect global economies to deteriorate. Inflation does not appear to pose a
threat, although both bond and equity markets are likely to react to any
negative short-term data, particularly from the U.S. Longer term, there is
reason to be positive about international markets. Sustained growth, stable
interest rates, low inflation and positive corporate earnings in international
markets remain supportive.
26
<PAGE>
PACE INTERNATIONAL EQUITY INVESTMENTS--PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS* 7/31/00 REGIONAL ALLOCATION* 7/31/00
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
Net Assets ($MM) $246.5 Europe 59.8%
Number of Securities 113 Asia 30.0
Equities 94.1% Emerging Markets 5.3
Cash & Equivalents 4.9% Cash & Equivalents 4.9
------
Preferred Stock/Convertible Bonds 1.0% Total 100.0
---------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP FIVE COUNTRIES* 7/31/00 TOP FIVE SECTORS* 7/31/00
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
Japan 23.9% Consumer Goods & Services 46.0%
United Kingdom 18.4 Financials 18.5
France 18.3 Information Technology 14.9
Spain 5.1 General Industrials 9.2
Netherlands 4.6 Basic Industries 6.6
---------------------------------------------------------------------------------------------------------------------
Total 70.3 Total 95.2
</TABLE>
<TABLE>
<CAPTION>
TOP TEN STOCKS* 7/31/00
<S> <C>
-------------------------------------------------------
Vodafone Group 3.8%
Ericsson 3.0
VNU 2.8
Vivendi 2.4
AXA 2.2
Total Fina Elf 2.2
Aventis 2.2
Glaxo Wellcome 2.0
Alcatel 2.0
Telefonica 2.0
-------------------------------------------------------
Total 24.6
</TABLE>
*Weightings represent percentages of net assets as of July 31, 2000. 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: The Portfolio invests primarily in stocks of companies
domiciled in emerging market countries. The adviser's network of regional
specialists and analysts in 24 countries supports an intensive program of
proprietary emerging markets research. Schroder uses its proprietary research
network to identify attractively valued companies in emerging markets that it
believes can leverage off the growth opportunities in these faster growing
economies.
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 7/31/00
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS SINCE INCEPTION 8/24/95
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------
With PACE program fee* -16.99% -1.51% -9.26% -1.08%
Without PACE program fee -16.36% -0.02% -7.89% 0.42%
MSCI EMF Ex-Malaysia Index -13.24% 6.74% -7.08% -0.04%
Lipper Emerging Markets Funds Median -12.30% 10.93% -7.07% 0.82%
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
* The maximum annual PACE program fee is 1.5% of the value of PACE assets.
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. Total returns
for periods of one year or less are cumulative.
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
Aug-99 $10,235 $9,636 $10,444
Sep-99 $9,761 $9,178 $10,091
Oct-99 $9,939 $9,333 $10,306
Nov-99 $10,803 $10,132 $11,230
Dec-99 $12,410 $11,625 $12,659
Jan-00 $12,205 $11,419 $12,735
Feb-00 $12,146 $11,349 $12,903
Mar-00 $12,316 $11,494 $12,966
Apr-00 $10,917 $10,175 $11,737
May-00 $10,430 $9,709 $11,252
Jun-00 $10,831 $10,070 $11,648
Jul-00 $10,208 $9,479 $11,049
</TABLE>
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.
28
<PAGE>
ADVISER'S COMMENTS
Over the fiscal year ended July 31, 2000, the Portfolio underperformed the
MSCI EMF Index. This underperformance can be attributed primarily to stock
selection in Asia, particularly in Korean and Taiwanese technology stocks. Stock
selection in Latin America (Argentina) and Europe, Middle East and Africa (EMEA)
(Turkey) also detracted from performance. The Portfolio's underperformance was
offset slightly by overweighted positions in Mexico and Brazil along with an
overweighted position in Malaysia prior to that country's reinstatement in the
MSCI EMF Index.
Recent performance of emerging markets has been driven by perceptions about
the direction of the U.S. economy and U.S. interest rates. Market volatility in
the developed markets--notably in the U.S. NASDAQ Composite Index--also affected
the emerging markets, not because of the high proportion of technology stocks in
emerging markets, but because in times of uncertainty higher risk assets tend to
suffer. As a result, emerging markets underperformed developed markets during
the second quarter of 2000, even though economic and earnings data continued to
improve. Recent emerging market performance has improved, as U.S. economic data
have suggested that the U.S. economy is slowing and may achieve a soft landing.
Falling interest rates and compelling valuations make Brazil our favorite Latin
American market. We have increased the Portfolio's exposure to Asia through
purchases of hardware stocks in Taiwan and Korea. Within EMEA, the Portfolio is
underweighted in Greece and South Africa.
The short-term direction of the emerging markets will continue to depend on
perceptions about the global economy and investor attitudes toward risk. It is
hard to envision significant outperformance in emerging markets while there are
doubts as to whether or not the U.S. economy will suffer a hard landing.
However, we believe that ongoing structural improvements within emerging markets
will limit any underperformance and provide a platform for renewed strength once
the outlook for the U.S. becomes clearer. Although recent data have dampened
fears of a hard landing for the U.S. economy, sentiment toward Latin America
remains fragile due to the belief that it would be the hardest hit region in the
event of a U.S. economic downturn. The impact of a U.S. hard landing would
affect both direct trades links (mainly impacting Mexico) and the availability
of capital via interest rates (more significant for Brazil). Given our core
scenario for a soft landing, we believe that the capital flows issue has been
exaggerated.
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS--PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS* 7/31/00 REGIONAL ALLOCATION* 7/31/00
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------
Net Assets ($MM) $82.2 Asia 48.2%
Number of Securities 181 Latin America 25.2
Equities (common and preferred stocks, Europe/Mid East/Africa 23.3
warrants and rights) 96.7% Cash & Equivalents 3.3
-----
Cash & Equivalents 3.3% Total 100.0
-----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP FIVE COUNTRIES* 7/31/00 TOP TEN STOCKS* 7/31/00
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------
Taiwan 13.0% Telefonos de Mexico 4.1%
Korea 11.7 Samsung Electronics 3.7
Brazil 11.0 China Telecom Hong Kong 2.6
Mexico 10.6 Infosys Technologies 2.5
Hong Kong/China 7.4 China Unicom 2.4
----
Total 53.7 Korea Telecom 2.3
Taiwan Semiconductor 2.2
United Microelectronics 2.1
Korea Electric Power 2.0
Compeq Manufacturing 1.8
-----------------------------------------------------------------------------------------------------------------
Total 25.7
</TABLE>
*Weightings represent percentages of net assets as of July 31, 2000. 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, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- ---------------- ------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS--16.63%
$3,003 Federal Home Loan Mortgage Corp. .................. 08/15/00 6.400% $ 2,995,526
2,400 Federal National Mortgage Association.............. 08/03/00 to 08/09/00 6.390 2,397,976
5,500 Student Loan Marketing Association................. 08/01/00 6.719 to 6.919* 5,499,033
-----------
Total U.S. Government Agency Obligations
(cost--$10,892,535)......................................... 10,892,535
-----------
BANK NOTES--1.53%
DOMESTIC--1.53%
1,000 Bank of America N.A. (cost--$1,000,000)............ 10/12/00 6.650 1,000,000
-----------
CERTIFICATES OF DEPOSIT--6.87%
YANKEE--6.87%
1,500 Commerzbank AG..................................... 06/22/01 to 07/23/01 7.075 to 7.090 1,499,844
1,500 Svenska Handelsbanken.............................. 05/02/01 to 06/20/01 6.995 to 7.100 1,500,349
500 UBS AG Stamford Branch............................. 07/19/01 7.030 499,905
1,000 Westpac Banking Corp. ............................. 05/14/01 6.815 1,000,000
-----------
Total Certificates of Deposit (cost--$4,500,098).............. 4,500,098
-----------
COMMERCIAL [email protected]%
ASSET BACKED-BANKING--6.08%
2,000 Atlantis One Funding Corp. ........................ 09/13/00 6.550 1,984,353
2,000 Centric Capital Corp. ............................. 08/04/00 6.550 1,998,908
-----------
3,983,261
-----------
ASSET BACKED-MISCELLANEOUS--11.68%
1,105 Delaware Funding Corp. ............................ 10/05/00 6.540 1,091,952
2,000 Giro Funding Corp. ................................ 08/17/00 6.550 1,994,178
2,610 Parthenon Receivables Funding LLC.................. 09/13/00 to 10/25/00 6.560 to 6.630 2,574,192
2,000 Receivables Capital Corp. ......................... 08/23/00 6.550 1,991,994
-----------
7,652,316
-----------
AUTO & TRUCK--2.85%
1,000 DaimlerChrysler N.A. Holding Corp. ................ 09/27/00 6.550 989,629
892 PACCAR Financial Corp. ............................ 10/20/00 6.510 879,096
-----------
1,868,725
-----------
BANKING-DOMESTIC--1.90%
1,245 San Paolo IMI U.S. Finance Co. .................... 08/01/00 6.530 1,245,000
-----------
BANKING-FOREIGN--3.03%
1,000 Halifax PLC........................................ 09/01/00 6.500 994,403
1,000 Societe Generale................................... 10/13/00 6.540 986,738
-----------
1,981,141
-----------
BROKER-DEALER--1.50%
1,000 Goldman Sachs Group, Inc. ......................... 10/16/00 6.550 986,172
-----------
BUILDING MATERIALS--2.29%
1,500 Sherwin-Williams Co. .............................. 08/01/00 6.500 1,500,000
-----------
CHEMICALS--1.62%
1,074 Henkel Corp. ...................................... 10/03/00 6.510 1,061,764
-----------
ELECTRONICS--2.57%
1,700 Motorola Credit Corp. ............................. 09/15/00 6.520 1,686,145
-----------
ENTERTAINMENT--1.53%
1,000 Walt Disney Co. ................................... 08/03/00 6.480 999,640
-----------
</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>
COMMERCIAL PAPER@--(CONCLUDED)
FINANCE-AIRCRAFT--3.05%
$2,000 International Lease Finance Corp. ................. 08/02/00 6.500% $ 1,999,639
-----------
FOOD, BEVERAGE & TOBACCO--1.52%
1,000 Campbell Soup Co. ................................. 08/28/00 6.550 995,088
-----------
INSURANCE--6.07%
2,000 Prudential Funding Corp. .......................... 08/21/00 6.520 1,992,756
2,000 USAA Capital Corp. ................................ 09/11/00 6.540 1,985,103
-----------
3,977,859
-----------
METALS & MINING--3.04%
2,000 RTZ America, Inc. ................................. 08/15/00 6.530 1,994,921
-----------
PRINTING, PUBLISHING--3.04%
2,000 Reed Elsevier PLC.................................. 08/23/00 6.530 1,992,019
-----------
TELECOMMUNICATIONS--6.10%
2,000 AT&T Capital Corp. ................................ 08/01/00 6.500 2,000,000
2,000 Bell Atlantic Financial Services, Inc. ............ 08/16/00 6.500 1,994,583
-----------
3,994,583
-----------
Total Commercial Paper (cost--$37,918,273).................... 37,918,273
-----------
SHORT-TERM CORPORATE OBLIGATIONS--11.71%
ASSET BACKED-FINANCE--3.05%
2,000 Beta Finance....................................... 01/18/01 6.640 2,000,000
-----------
AUTO & TRUCK--1.03%
675 Ford Motor Credit Corp. ........................... 08/15/00 6.850 675,271
-----------
BROKER-DEALER--6.10%
2,000 Merrill Lynch & Co., Inc. ......................... 02/07/01 to 03/06/01 6.580 to 6.740 1,999,892
2,000 Morgan Stanley Dean Witter & Co. .................. 08/15/00 6.645 2,000,000
-----------
3,999,892
-----------
FINANCE-INDEPENDENT--1.53%
1,000 National Rural Utilities Cooperative Finance Corp.
MTN.............................................. 07/20/01 6.710 1,000,000
-----------
Total Short-Term Corporate Obligations (cost--$7,675,163)..... 7,675,163
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
(000)
---------
<C> <S> <C> <C> <C>
MONEY MARKET FUNDS--3.66%
1,915 AIM Liquid Assets Portfolio........................ 1,915,247
483 AIM Prime Portfolio................................ 482,941
-----------
2,398,188
Total Money Market Funds (cost--$2,398,188)...................
-----------
64,384,257
Total Investments (cost--$64,384,257)--98.27%.................
1,136,500
Other assets in excess of liabilities--1.73%..................
-----------
Net Assets--100.00%........................................... $65,520,757
===========
</TABLE>
-----------------
* Variable rate securities--maturity date reflects earlier of reset date or
maturity date. The interest rates shown are the current rates as of
July 31, 2000, and reset periodically.
@ Interest rates shown are discount rates at date of purchase.
MTN Medium Term Note.
Weighted Average Maturity--68 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, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- ----------------- -------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS--2.42%
$ 4,839 U.S. Treasury Inflation Index Notes (cost--$4,789,638)... 07/15/02 3.625% $ 4,821,287
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--51.92%
4,466 GNMA..................................................... 07/20/25 to 09/20/26 6.750 4,490,751
3,694 GNMA..................................................... 10/15/40 6.800 3,686,108
7,590 GNMA..................................................... 05/15/02 to 11/20/27 7.000 7,557,891
2,606 GNMA..................................................... 06/16/26 7.040+ 2,585,051
4,120 GNMA..................................................... 11/20/21 to 12/20/27 7.125 4,134,598
4,795 GNMA..................................................... 01/20/18 to 02/20/27 7.375 4,817,913
1,494 GNMA..................................................... 05/15/39 7.470 1,474,303
1,298 GNMA..................................................... 07/15/02 to 09/30/29 7.500 1,299,879
533 GNMA..................................................... 12/15/07 to 08/15/09 8.000 542,741
2,885 GNMA..................................................... 06/20/16 8.500 2,921,257
3,995 GNMA ARM................................................. 05/20/30 6.000 3,918,267
22,000 GNMA I................................................... 08/23/30 6.500 21,793,750
10,000 GNMA I................................................... 08/23/30 7.000 9,706,200
6,000 GNMA II.................................................. 08/25/30 8.500 6,093,750
998 GNMA II.................................................. 04/20/30 9.000 1,021,226
332 GNMA II ARM.............................................. 04/20/18 to 01/20/28 6.375 333,584
24,483 GNMA II ARM.............................................. 10/20/29 to 08/24/30 7.000 24,428,510
1,500 GNMA II ARM.............................................. 07/20/30 7.500 1,503,225
72 GNMA Project Loan........................................ 10/15/40 7.000 62,660
934 GNMA Project Loan........................................ 09/30/29 7.500 895,874
-------------
Total Government National Mortgage Association Certificates
(cost--$103,818,551).............................................. 103,267,538
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--8.70%
220 FHLMC.................................................... 08/01/01 6.500 218,001
1,895 FHLMC.................................................... 09/01/04 7.000 1,878,253
984 FHLMC.................................................... 05/01/21 7.450 978,511
789 FHLMC.................................................... 10/01/17 to 11/01/24 7.500 783,984
876 FHLMC.................................................... 03/01/13 8.000 881,132
283 FHLMC.................................................... 04/01/04 8.500 283,982
1,858 FHLMC ARM................................................ 01/01/30 5.950 1,867,450
1,903 FHLMC ARM................................................ 01/01/28 6.352 1,883,990
1,873 FHLMC ARM................................................ 12/01/29 6.468 1,891,699
993 FHLMC ARM................................................ 10/01/29 6.906 991,777
1,773 FHLMC ARM................................................ 07/01/24 7.742 1,808,409
3,733 FHLMC ARM................................................ 04/01/29 7.907 3,834,577
-------------
Total Federal Home Loan Mortgage Corporation Certificates
(cost--$17,353,284)............................................... 17,301,765
-------------
FEDERAL HOUSING ADMINISTRATION CERTIFICATES--9.01%
18,662 FHA Project Notes (cost--$18,802,998).................... 10/15/04 to 02/01/29 6.850 to 8.500 17,920,086
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--48.53%
1,502 FNMA..................................................... 03/01/04 7.000 1,489,630
3,612 FNMA(1).................................................. 01/01/07 7.220 3,636,670
1,735 FNMA..................................................... 04/01/07 7.250 1,735,255
40,200 FNMA..................................................... 10/01/26 to 08/16/30 7.500 39,626,000
1,573 FNMA..................................................... 07/01/25 to 10/01/29 8.000 1,586,188
2,264 FNMA..................................................... 11/01/02 to 09/01/27 8.500 2,306,023
1,087 FNMA..................................................... 10/01/19 to 02/01/26 9.000 1,121,721
</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>
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--(CONCLUDED)
$ 1,836 FNMA ARM................................................. 02/01/30 6.276% $ 1,859,262
1,389 FNMA ARM................................................. 02/01/29 6.424 1,405,656
1,862 FNMA ARM................................................. 12/01/27 6.629 1,852,853
3,188 FNMA ARM................................................. 03/01/07 6.820 3,201,042
4,961 FNMA ARM................................................. 07/01/09 7.249 4,947,190
1,642 FNMA ARM................................................. 03/01/25 7.810 1,680,984
30,000 FNMA TBA................................................. TBA 8.000 30,084,360
-------------
Total Federal National Mortgage Association Certificates.
(cost--$96,715,818) 96,532,834
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS--25.87%
136 FHLMC GNMA REMIC, Series 23, Class KZ.................... 11/25/23 6.500 114,123
413 FHLMC REMIC, Series 0159, Class H........................ 09/15/21 4.500 379,392
550 FHLMC REMIC, Series 0185, Class E........................ 08/15/06 9.000 559,620
2,102 FHLMC REMIC, Series 1003, Class H........................ 10/15/20 7.438++ 2,117,058
3,666 FHLMC REMIC, Series 1188, Class H........................ 12/15/20 7.500 3,670,156
1,971 FHLMC REMIC, Series 1322, Class G........................ 02/15/07 7.500 1,979,886
299 FHLMC REMIC, Series 1347, Class HC....................... 12/15/21 4.250 276,467
2,280 FHLMC REMIC, Series 1361, Class D........................ 11/15/05 6.000 2,268,188
1,106 FHLMC REMIC, Series 1502, Class PX....................... 04/15/23 7.000 969,396
605 FHLMC REMIC, Series 1534, Class Z........................ 06/15/23 5.000 426,837
1,630 FHLMC REMIC, Series 1542, Class Z........................ 07/15/23 7.000 1,446,932
79 FHLMC REMIC, Series 1552, Class EA....................... 01/15/17 5.850 79,186
179 FHLMC REMIC, Series 1573, Class PZ....................... 09/15/23 7.000 162,186
255 FHLMC REMIC, Series 1640, Class F........................ 10/15/07 7.088++ 254,690
150 FHLMC REMIC, Series 1658, Class GZ....................... 01/15/24 7.000 135,893
114 FHLMC REMIC, Series 1661, Class PE....................... 11/15/06 6.000 113,810
1,000 FHLMC REMIC, Series 1694, Class Z........................ 03/15/24 6.500 868,568
110 FHLMC REMIC, Series 1775, Class Z........................ 03/15/25 8.500 112,996
3,085 FHLMC REMIC, Series 1869, Class J........................ 12/15/24 8.000 3,109,343
1,313 FHLMC REMIC, Series 1933, Class ZA....................... 02/15/27 8.000 1,314,272
89 FNMA REMIC, Trust 1992 - 074, Class Z.................... 05/25/22 8.000 89,019
165 FNMA REMIC, Trust 1992 - 129, Class L.................... 07/25/22 6.000 144,528
1,251 FNMA REMIC, Trust 1993 - 037, Class PX................... 03/25/23 7.000 1,122,227
464 FNMA REMIC, Trust 1993 - 040, Class ZA................... 12/25/23 6.500 401,819
47 FNMA REMIC, Trust 1993 - 162, Class C.................... 08/25/23 3.000@ 46,319
45 FNMA REMIC, Trust 1993 - 240, Class Z.................... 12/25/13 6.250 40,516
1,187 FNMA REMIC, Trust 1993 - 250, Class DZ................... 12/25/23 7.000 992,139
71 FNMA REMIC, Trust 1993 - 250, Class Z.................... 12/25/23 7.000 65,975
77 FNMA REMIC, Trust 1994 - 027, Class CZ................... 02/25/24 6.500 66,515
876 FNMA REMIC, Trust 1999 - 003, Class CZ................... 02/25/14 6.000 716,987
107 FNMA REMIC, Trust 1999 - 043, Class AZ................... 08/25/29 7.000 92,220
1,105 FNMA REMIC, Trust G92 - 040, Class ZC.................... 07/25/22 7.000 1,077,759
148 FNMA REMIC, Trust G94 - 006, Class PJ.................... 05/17/24 8.000 150,586
919 GNMA REMIC, Trust Series 2000 - 009, Class FH............ 02/16/30 7.126++ 922,361
100 Bank of America Mortgage Securities, Series 1999-5,
Class A-22............................................. 05/25/29 6.500 90,863
450 Bank of America Mortgage Securities, Series 1999-8,
Class A-12............................................. 08/25/29 6.350 416,812
207 Bear Stearns Mortgage Securities Inc., Series 1993-8,
Class A-5.............................................. 08/25/24 6.350 206,163
2,379 Bear Stearns Mortgage Securities Inc., Series 1996-4,
Class AI-1............................................. 09/25/27 8.125 2,401,504
1,750 Chase Mortgage Finance Corp., Series 1998, Class IA-8.... 08/25/28 6.750 1,536,743
1,000 Countrywide Home Loan Inc. .............................. 06/15/04 6.850 975,880
1,500 CWMBS Inc., Series 1998-13, Class A3..................... 12/25/28 6.500 1,337,805
</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>
COLLATERALIZED MORTGAGE OBLIGATIONS--(CONCLUDED)
$ 1,500 CWMBS Inc., Series 1998-15, Class A8..................... 10/25/28 6.750% $ 1,300,505
3,382 Farmer Mac., Series 2002, Class AA1...................... 04/25/01 7.721 3,380,077
530 Green Tree Financial Corp., Series 1998, Class 2......... 11/01/16 6.240 519,956
686 Headlands Mortgage Security Inc. REMIC, Series 1997-1,.
Class A, II 03/15/12 7.750 689,249
489 Headlands Mortgage Security Inc. REMIC, Series 1997-2,.
Class A, II 05/25/12 7.750 490,697
383 Headlands Mortgage Security Inc. REMIC, Series 1997-4,.
Class A, II 11/25/12 7.250 380,330
1,500 Headlands Mortgage Security Inc. REMIC, Series 1998-1,.
Class A, III 11/25/28 6.500 1,368,570
703 Merrill Lynch Mortgage Investors, Inc., Series 1999,
Class H1............................................... 03/20/17 6.210++ 698,216
1,610 Morgan Stanley Capital Inc., Series 1998 - HF1,
Class A1............................................... 01/15/07 6.190++ 1,557,497
1,639 PNC Mortgage Securities Corp., Series 1998 - 5,
Class 2A5.............................................. 11/25/28 6.750 1,526,259
2,500 PNC Mortgage Securities Corp., Series 1999 - 5,
Class 2A5.............................................. 07/25/29 6.750 2,322,625
1,410 Prudential Home Mortgage REMIC, Series 1993 - 54,.
Class A19 01/25/24 6.500 1,188,280
436 Prudential Home Mortgage REMIC, 1993 - 29, Class A8...... 08/25/08 6.750 423,257
1,500 Residential Funding Mortgage Securities Inc.,............
Series 1998 - S12, Class A6 05/25/28 6.750 1,359,461
990 Small Business Administration, Series 1995-10,
Class I................................................ 03/01/05 7.750 994,061
-------------
Total Collateralized Mortgage Obligations (cost--$52,756,351)....... 51,452,779
-------------
ASSET BACKED SECURITIES--2.76%
863 Beneficial Home Equity Loan Trust........................ 04/28/26 6.945++ 862,514
2,000 Conseco Finance Home Loan Trust.......................... 06/15/24 9.520 2,003,480
688 Student Loan Marketing Association Series 1996 - 2,
Class A1............................................... 10/25/04 6.581 686,863
2,000 Student Loan Trust....................................... 10/27/25 6.740 1,939,960
-------------
Total Asset Backed Securities (cost--$5,486,505).................... 5,492,817
-------------
STRIPPED MORTGAGE-BACKED SECURITIES--5.85%
815 FHLMC REMIC, Series 0013, Class B(1)+++.................. 06/25/23 7.000 466,384
772 FHLMC REMIC, Series 1554, Class I(1)+++.................. 08/15/08 6.500* 66,078
5,000 FHLMC REMIC, Series 1627, Class PN(1)+++................. 09/15/22 6.000 1,055,866
1,613 FHLMC REMIC, Series 1993 - 138, Class CL(1)+++........... 11/25/22 7.000 334,878
4,854 FHLMC REMIC, Series 2059, Class PI(1)+++................. 07/15/26 6.500 1,112,681
9,033 FHLMC REMIC, Series 2080, Class VK(1)+++................. 09/15/05 6.500 1,361,748
1,000 FHLMC REMIC, Series 2110, Class PT(1)+++................. 07/15/23 6.000 306,780
941 FHLMC REMIC, Series 2136, Class GD(1)+++................. 03/15/29 7.000 207,923
3,818 FHLMC REMIC, Series 2178, Class PI(1)+++................. 08/15/29 7.500 886,047
6 FNMA REMIC, Trust 1992 - 142, Class KB(1)+++............. 08/25/07 11.977 164,618
7 FNMA REMIC, Trust 1992 - 157, Class JA(1)+++............. 09/25/07 10.146 166,283
616 FNMA REMIC, Trust 1992 - 207, Class U(1)+++.............. 10/25/07 7.500 111,156
2,926 FNMA REMIC, Trust 1993 - 116, Class H(1)+++.............. 07/25/22 7.000 514,564
186 FNMA REMIC, Trust 1993 - 161, Class GC(1)**.............. 02/25/23 0.010* 126,760
794 FNMA REMIC, Trust 1994 - 007, Class PK(1)+++............. 05/25/08 6.500* 40,883
1,184 FNMA REMIC, Trust 1994 - 030, Class IA(1)+++............. 11/25/22 6.500* 141,378
7,119 FNMA REMIC, Trust 1998 - 013, Class PI(1)+++............. 07/18/19 7.000 729,469
3,301 FNMA REMIC, Trust 1998 - 024, Class OK(1)+++............. 11/18/21 7.000 433,157
1,388 FNMA REMIC, Trust 1998 - 044, Class IG(1)+++............. 07/18/16 6.500 208,041
6,705 GNMA REMIC, Trust Series 1998 - 001, Class PG(1)+++...... 07/20/24 7.000 1,063,625
4,424 Chase Mortgage Finance Corp.,
Series 1998 - S2, Class A4(1)+++....................... 07/25/28 6.750 536,410
16,000 Conseco Finance Securitizations(1)+++.................... 12/15/29 7.000 1,015,000
</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>
STRIPPED MORTGAGE-BACKED SECURITIES--(CONCLUDED)
$15,096 CWMBS Inc., Series 1998-14, Class A2(1)+++............... 12/25/13 0.500*% $ 207,564
1,500 First Plus Home Loan Owner Trust Series 1998 - 5,.
Class A1 (1)+++ 10/10/00 6.000* 14,297
10 Residential Funding Mortgage Securities Inc.,............
Series 1993-S15, Class A9(1)+++ 04/25/08 7.721++ 92,763
1,428 Residential Funding Mortgage Securities Inc.,............
Series 1998-S20, Class A19(1)+++ 09/25/28 6.750 267,777
-------------
Total Stripped Mortgage-Backed Securities (cost--$11,256,924)....... 11,632,130
-------------
CORPORATE OBLIGATIONS--1.51%
2,000 Lehman Brothers Holdings Inc. MTN........................ 04/02/02 7.678 2,007,542
1,000 Morgan Stanley Dean Witter & Co.......................... 01/28/02 6.837@ 1,000,699
-------------
Total Corporate Obligations (cost--$3,006,152)...................... 3,008,241
-------------
COMMERCIAL PAPER--0.35%
700 Dominion Resources MTN (cost--$699,915).................. 01/26/01 7.026 699,915
-------------
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--0.05%
105 U.S. Treasury Notes (cost--$104,922)..................... 08/31/00 5.125@ 104,869
-------------
REPURCHASE AGREEMENT--8.09%
16,093 Repurchase Agreement dated 07/31/00 with State Street
Bank & Trust Co., collateralized by $11,995,000 U.S.
Treasury Bond, 8.750% due 08/15/20 (value--
$16,418,156) proceeds: $16,095,347
(cost--$16,093,000).................................... 08/01/00 5.250 16,093,000
-------------
328,327,261
Total Investments (cost--$330,884,058)--165.06%.....................
(129,409,240)
Liabilities in excess of other assets--(65.06)%.....................
-------------
Net Assets--100.00%................................................. $ 198,918,021
=============
</TABLE>
-----------------
++ Floating rate securities. The interest rates shown are the current rates
as of July 31, 2000.
* Rate reflects annualized yield at date of purchase.
** Principal Only Security. This security entitles the holder to receive
principal payments from an underlying pool of mortgages. High prepayments
return principal faster than expected and cause the yield to increase.
Low prepayments return principal more slowly than expected and cause the
yield to decrease.
+++ Interest Only Security. This security entitles the holder to receive
interest payments from an underlying pool of mortgages. The risk
associated with this security is related to the speed of the principal
paydowns. High prepayments would result in a smaller amount of interest
being received and cause the yield to decrease. Low prepayments would
result in a greater amount of interest being received and cause the yield
to increase.
+ Estimated yield to maturity at July 31, 2000.
@ Interest rate shown is discount rate at date of purchase.
(1) Illiquid securities representing 7.36% of net assets.
ARM Adjustable Rate Mortgage--The interest rates shown are the current rates
as of July 31, 2000.
MTN Medium Term Note.
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.
<TABLE>
<CAPTION>
NUMBER OF EXPIRATION
CONTRACTS STRIKE PRICE DATES VALUE
--------- ------------ --------------- -------
<C> <S> <C> <C> <C>
WRITTEN OPTIONS(1)
300 Federal National Mortgage Association Calls....... $123.75 September 2000 $77,700
=======
</TABLE>
See accompanying notes to financial statements
35
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERMEDIATE FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- ----------- ------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS--25.34%
4.250 to
$33,910 U.S. Treasury Notes(1) (cost--$33,836,016)......... 11/15/03 to 02/15/10 7.875% $ 33,975,552
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--1.45%
854 GNMA............................................... 11/15/26 to 12/15/26 7.750 852,493
19 GNMA............................................... 11/20/01 8.500 18,876
95 GNMA............................................... 01/15/02 9.000 96,140
142 GNMA............................................... 07/15/04 to 09/15/04 9.500 147,400
830 GNMA ARM........................................... 10/20/27 to 11/20/27 7.125 831,833
------------
Total Government National Mortgage Association Certificates
(cost--$1,960,240).......................................... 1,946,742
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--0.06%
79 FHLMC (cost--$79,657).............................. 06/01/02 8.000 79,281
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--8.59%
1,400 FNMA............................................... 09/01/25 7.000 1,355,751
9,658 FNMA............................................... 06/01/10 to 09/01/29 7.500 9,541,329
544 FNMA............................................... 03/01/04 8.000 544,706
75 FNMA............................................... 09/01/07 13.000 84,075
------------
Total Federal National Mortgage Association Certificates
(cost--$11,746,484)......................................... 11,525,861
------------
COLLATERALIZED MORTGAGE OBLIGATIONS--11.25%
869 FDIC REMIC Trust, Series 1996-C1, Class 1A......... 05/25/26 6.750 863,790
119 FHLMC, Series 1497, Class O........................ 10/15/22 7.000 111,898
67 FHLMC, Series 1588, Class TB....................... 06/15/23 6.500 65,915
274 FNMA REMIC Trust, Series 1993-70, Class C.......... 03/25/18 6.900 272,303
540 Amresco Residential Securities Mortgage Loan Trust,
Series 1996-3, Class A6.......................... 11/25/24 7.875 540,443
1,573 GMAC Commercial Mortgage Security Inc.,
Series 1997-C2, Class A1......................... 12/15/04 6.451 1,530,519
1,183 BA Mortgage Securities Inc., Series 1997-2, Class
1A5.............................................. 10/25/27 7.250 1,150,794
600 CWMBS Inc., Series 1997-10, Class A4............... 02/25/28 6.613 591,843
1,288 DLJ Mortgage Acceptance Corp., Series 1997-CF1,
Class A1A........................................ 05/15/06 7.400 1,289,524
855 Drexel Burnham Lambert, Series H, Class 4.......... 04/01/17 8.500 860,970
1,265 LB Commercial Conduit Mortgage Trust,
Series 1995-C2, Class A.......................... 08/25/04 7.220 1,262,572
169 Norwest Asset Securities Corp., Series 1997-5,
Class A2......................................... 04/25/12 7.000 168,106
57 PNC Mortgage Securities Corp., Series 1997-2, Class
A................................................ 03/25/27 7.250 56,336
72 Residential Asset Security Mortgage, Series 1997
Class A.......................................... 03/25/27 7.000 71,501
428 Resolution Trust Corp., Series 1994-C1, Class C.... 06/25/26 8.000 426,232
1,374 Resolution Trust Corp., Series 1995-C2, Class D.... 05/25/27 7.000 1,369,516
2,299 SASCO Commercial Mortgage Trust, Series 1998-C3A,
Class E.......................................... 06/25/01 7.400 2,292,638
1,000 Salomon Brothers Mortgage Securities VII Inc.,
Series 1997-LB6, Class A4........................ 12/25/27 6.910 989,130
729 Structured Asset Securities Corp.,
Series 1995-C4, Class A2 ARM..................... 06/25/26 7.160 729,026
445 Structured Asset Securities Corp., Series 1995-C4,
Class D.......................................... 06/25/26 7.000 443,097
------------
Total Collateralized Mortgage Obligations
(cost--$15,240,764)......................................... 15,086,153
------------
</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 NOTES--44.04%
AEROSPACE--0.38%
$ 500 Lockheed Martin Corp............................... 12/01/09 8.200% $ 508,001
------------
AIRLINES--1.13%
171 Continental Airlines Trust, Series 1997-4, Class
4C............................................... 07/02/07 6.800 162,985
1,410 Continental Airlines Trust, Series 1998-3, Class
2C............................................... 11/01/05 7.250 1,348,806
------------
1,511,791
------------
AUTOMOTIVE--1.51%
750 Ford Motor Credit Corp............................. 02/28/02 6.500 740,855
1,225 Ford Motor Credit MTN.............................. 12/30/14 9.140 1,281,058
------------
2,021,913
------------
BANKS--8.22%
895 ABN Amro Bank NV................................... 05/31/05 7.250 888,531
910 BankBoston NA MTN.................................. 03/25/08 6.375 839,772
258 Continental Bank NA................................ 04/01/01 12.500 266,667
740 First Bank Systems Inc............................. 05/01/05 7.625 742,849
1,430 First Union Corp................................... 11/01/04 6.950 1,387,642
735 First USA Bank MTN................................. 12/03/01 6.625 727,687
490 Mellon Bank NA..................................... 06/01/03 6.750 482,079
1,125 PNC Bank, NA....................................... 04/15/05 7.875 1,144,993
900 Security Pacific Corp. MTN......................... 07/01/03 9.800 947,065
500 Sovran Financial Corp.............................. 06/15/06 9.250 527,298
600 United States Bancorp MTN.......................... 05/15/04 6.000 569,716
1,050 Washington Mutual Inc.............................. 08/15/06 7.500 1,026,664
1,510 Wells Fargo & Co................................... 07/15/04 6.625 1,472,128
------------
11,023,091
------------
CHEMICALS--0.68%
960 Eastman Chemical Co................................ 01/15/04 6.375 913,597
------------
COMPUTER HARDWARE--0.74%
1,000 Sun Microsystems Inc............................... 08/15/04 7.350 997,502
------------
COMPUTER SOFTWARE & SERVICES--1.20%
900 Computer Associates International Inc.............. 04/15/03 6.250 847,798
780 Oracle Corp........................................ 02/15/04 6.720 765,863
------------
1,613,661
------------
ELECTRIC COMPANIES--0.89%
1,180 Constellation Energy Group Inc..................... 04/01/05 7.875 1,191,860
------------
ENERGY--0.78%
1,090 Noram Energy Corp.................................. 11/01/03 6.375 1,040,348
------------
FINANCIAL SERVICES--6.19%
1,240 American Express Credit Corp....................... 08/10/05 6.250 1,226,562
1,400 Aristar Inc........................................ 09/01/04 7.375 1,365,168
625 Associates Corp. NA................................ 11/01/03 5.750 592,026
1,400 Bellsouth Capital Funding Corp..................... 02/15/30 7.875 1,397,480
870 Beneficial Corp.................................... 12/15/04 6.810 849,699
635 Countrywide Funding Corp. MTN...................... 09/16/03 7.450 628,605
225 GATX Capital Corp.................................. 11/01/00 6.500 224,362
</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>
CORPORATE NOTES--(CONTINUED)
FINANCIAL SERVICES--(CONCLUDED)
$ 1,420 Heller Financial Inc. MTN.......................... 07/22/02 6.500% $ 1,395,861
650 Mellon Financial Co................................ 11/15/03 5.750 618,970
------------
8,298,733
------------
HOTELS & LODGING--0.72%
1,000 Marriott International Inc......................... 11/15/03 6.625 962,583
------------
INFORMATION & COMPUTER SERVICES--1.26%
1,400 Comdisco Inc....................................... 04/30/02 5.950 1,333,476
371 First Data Corp.................................... 04/01/03 6.625 362,540
------------
1,696,016
------------
INSURANCE--2.46%
700 Ace Ina Holding Inc................................ 08/15/06 8.300 707,298
955 Aetna Services Inc................................. 08/15/06 7.125 910,584
910 CNA Financial Corp................................. 04/15/05 6.500 829,762
1,010 Conseco Inc........................................ 06/15/01 6.400 848,400
------------
3,296,044
------------
LEISURE--0.94%
965 Carnival Corp...................................... 04/15/08 6.150 846,669
430 Time Warner Entertainment Co. LP................... 09/01/08 7.250 416,857
------------
1,263,526
------------
METALS & MINING--0.15%
200 BHP Finance USA LTD................................ 12/01/02 7.875 199,928
------------
OFFICE EQUIPMENT--0.73%
1,100 Xerox Corp. MTN.................................... 12/15/03 5.250 979,239
------------
RAILROADS--0.35%
297 Consolidated Rail Corp............................. 04/01/05 7.070 292,821
165 CSX Transportation Inc............................. 03/01/06 8.410 171,054
------------
463,875
------------
REAL ESTATE INVESTMENT TRUSTS--7.23%
760 Archstone Communities Trust MTN.................... 10/13/00 6.170 758,237
1,200 Bradley Operating Limited Partnership.............. 03/15/06 8.875 1,145,453
7.050 to
1,150 Corporate Property Investment Trust................ 04/01/03 to 08/15/04 7.750 1,124,922
410 Health Care Property Investments Inc............... 02/15/06 6.500 358,365
6.500 to
1,645 Kimco Realty Corp.................................. 10/01/03 to 11/14/05 6.830 1,576,587
1,000 Nationwide Health Property Inc..................... 09/18/01 7.000 983,366
950 New Plan Realty Trust Corp......................... 04/06/05 7.750 946,994
1,355 Prologis Trust..................................... 07/15/06 7.050 1,273,890
400 Rouse Co........................................... 01/15/03 8.500 405,366
1,125 Summit Properties Partnership LP................... 10/05/00 6.710 1,122,592
------------
9,695,772
------------
RETAIL--2.38%
1,370 Dayton Hudson Corp................................. 03/01/06 9.250 1,370,491
885 JC Penney Inc...................................... 04/01/07 7.600 774,197
</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>
CORPORATE NOTES--(CONCLUDED)
RETAIL--(CONCLUDED)
$ 980 Sears Roebuck Acceptance Corp...................... 03/20/03 6.000% $ 942,744
100 Wal-Mart Stores Inc................................ 06/29/11 8.875 103,329
------------
3,190,761
------------
TELECOMMUNICATIONS--3.79%
1,180 AT&T Corp.......................................... 03/15/04 5.625 1,113,768
450 Carolina Telephone & Telegraph Co.................. 05/01/03 6.125 436,342
2,210 Vodafone AirTouch PLC.............................. 02/15/10 7.750 2,207,702
7.550 to
1,320 WorldCom Inc....................................... 04/01/04 to 05/15/06 8.000 1,330,072
------------
5,087,884
------------
UTILITIES--2.31%
700 New York State Electric & Gas Corp................. 05/01/20 9.875 730,360
780 Southern Investments PLC........................... 12/01/06 6.800 715,962
1,075 TXU Eastern Funding Co............................. 05/15/05 6.450 1,004,547
8.250 to
650 Virginia Electric & Power Co....................... 04/01/21 to 03/01/25 8.750 650,456
------------
3,101,325
------------
Total Corporate Notes (cost--$61,285,774)..................... 59,057,450
------------
ASSET BACKED SECURITIES--5.54%
720 Aames Mortgage Trust, Series 1996-D, Class A1G..... 03/15/29 7.320 700,042
1,970 California Infrastructure, Series 1997-1, Class
A5............................................... 06/25/04 6.250 1,942,282
1,176 EMAC Trust, Series 1998-1, Class 1A................ 07/15/03 6.110 1,150,129
525 Green Tree Financial Corp., Series 1996-3, Class
A4............................................... 05/15/27 7.100 522,590
1,000 Ikon Receivables LLC, Series 1999-1, Class A3...... 05/15/05 5.990 989,430
165 Money Store Home Equity Trust, Series 1996-D, Class
A6............................................... 06/15/21 6.830 164,440
240 Money Store Home Equity Trust, Series 1997-A, Class
A6............................................... 10/15/21 7.210 238,840
191 Money Store Home Equity Trust, Series 1997-C, Class
AH5.............................................. 02/15/15 6.590 190,164
955 Team Fleet Financing Corp., Series 1998-2, Class
A................................................ 07/25/02 6.070 943,808
600 UCFC Loan Trust, Series 1996-B1, Class A7.......... 09/15/27 8.200 589,594
------------
Total Asset Backed Securities (cost--$7,559,736).............. 7,431,319
------------
REPURCHASE AGREEMENT--2.12%
2,844 Repurchase Agreement dated 07/31/00 with State
Street Bank & Trust Co., collateralized by
$836,636 U.S. Treasury Notes, 6.625% due
03/31/02; (value--$857,551) and $1,589,127 U.S.
Treasury Bonds, 8.125% due 08/15/19; (value--
$2,044,014); proceeds: $2,844,415
(cost--$2,844,000)............................... 08/01/00 5.250 2,844,000
------------
Total Investments (cost--$134,552,671)--98.39%................ 131,946,358
Other assets in excess of liabilities--1.61%.................. 2,156,001
------------
Net Assets--100.00%........................................... $134,102,359
============
</TABLE>
-----------------
ARM Adjustible Rate Mortgage--The interest rates shown are the current rate
as of July 31, 2000.
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, 2000.
See accompanying notes to financial statements
39
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE STRATEGIC FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- ------------------------- ------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS--18.48%
$19,300 U.S. Treasury Bonds(1)............................ 08/15/15 to 02/15/26 6.000 to 10.625% $ 23,203,849
18,544 U.S. Treasury Inflation Index Notes............... 07/15/02 to 01/15/07 3.375 to 3.625 18,019,672
5,700 U.S. Treasury Stripped Principal Payment Bonds.... 02/15/15 to 11/15/18 6.779 to 6.873@ 2,166,768
------------
Total U.S. Government Obligations (cost--$42,736,341)........ 43,390,289
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--17.55%
175 GNMA ARM.......................................... 11/20/23 7.125 175,644
1,196 GNMA ARM.......................................... 01/20/26 to 05/20/26 7.375 1,199,581
1,600 GNMA I TBA........................................ TBA 7.000 1,552,992
21,100 GNMA I TBA........................................ TBA 7.500 20,884,021
12,000 GNMA I TBA........................................ TBA 8.000 12,084,000
5,200 GNMA I TBA........................................ TBA 8.500 5,305,622
------------
Total Government National Mortgage Association Certificates
(cost--$41,145,277)........................................ 41,201,860
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--2.44%
1,696 FHLMC ARM......................................... 05/01/25 7.645 1,738,862
4,500 FHLMC TBA......................................... TBA 5.500 3,985,290
------------
Total Federal Home Loan Mortgage Corporation Certificates
(cost--$5,691,261)......................................... 5,724,152
------------
FEDERAL HOUSING ADMINISTRATION CERTIFICATES--1.76%
4,239 FHA Project Notes (cost--$4,334,816).............. 08/01/20 to 07/01/25 7.430 4,140,397
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--5.55%
3,887 FNMA ARM.......................................... 12/01/09 6.970 3,668,312
35 FNMA ARM.......................................... 12/01/17 7.125 35,156
585 FNMA ARM.......................................... 04/01/27 7.796 600,923
824 FNMA ARM.......................................... 05/01/27 7.861 847,200
1,147 FNMA ARM COFI..................................... 11/01/26 5.740 1,042,671
6,900 FNMA TBA.......................................... TBA 6.000 6,330,750
500 FNMA TBA.......................................... TBA 8.000 501,406
------------
Total Federal National Mortgage Association Certificates
(cost--$13,367,128)........................................ 13,026,418
------------
COLLATERALIZED MORTGAGE OBLIGATIONS--36.30%
1,000 FHLMC REMIC, Series 1278, Class K................. 05/15/22 7.000 953,791
100 FHLMC REMIC, Series 1366, Class H................. 08/15/07 6.000 97,187
29 FHLMC REMIC, Series 1367, Class KA................ 09/15/22 6.500 26,526
1,231 FHLMC REMIC, Series 1502, Class PX-Z.............. 04/15/23 7.000 1,078,398
876 FHLMC REMIC, Series 1503, Class PZ................ 05/15/23 7.000 793,276
484 FHLMC REMIC, Series 1534, Class Z................. 06/15/23 5.000 341,470
784 FHLMC REMIC, Series 1548, Class Z................. 07/15/23 7.000 713,465
1,143 FHLMC REMIC, Series 1562, Class Z................. 07/15/23 7.000 1,032,508
186 FHLMC REMIC, Series 1601, Class PB................ 11/15/23 6.500 161,404
136 FHLMC REMIC, Series 1611, Class I................. 02/15/23 6.000 129,554
793 FHLMC REMIC, Series 1628, Class KZ................ 12/15/23 6.250 672,452
305 FHLMC REMIC, Series 1694, Class Z................. 03/15/24 6.500 264,631
2,578 FHLMC REMIC, Series 1870, Class Z................. 01/15/24 6.500 2,230,984
2,289 FHLMC REMIC, Series 2061, Class Z................. 06/15/28 6.500 1,884,504
3,311 FHLMC REMIC, Series 2106, Class ZB................ 12/15/28 6.250 2,625,034
445 FHLMC REMIC, Series G15, Class PZ................. 07/25/23 7.000 389,611
</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>
COLLATERALIZED MORTGAGE OBLIGATIONS--(CONCLUDED)
$ 308 FHLMC REMIC, Series G23, Class KZ................. 11/25/23 6.500% $ 259,370
1,541 FHLMC REMIC, Series G24, Class ZA................. 11/25/23 6.500 1,323,006
205 FNMA REMIC, Trust Series 1991-065, Class Z........ 06/25/21 6.500 194,820
75 FNMA REMIC, Trust Series 1992-118, Class K........ 09/25/08 7.500 74,594
160 FNMA REMIC, Trust Series 1992-129, Class L........ 07/25/22 6.000 140,148
554 FNMA REMIC, Trust Series 1992-G40, Class ZC....... 07/25/22 7.000 540,451
87 FNMA REMIC, Trust Series 1993-037, Class PX....... 03/25/23 7.000 77,808
185 FNMA REMIC, Trust Series 1993-056, Class PZ....... 05/25/23 7.000 165,828
351 FNMA REMIC, Trust Series 1993-060, Class Z........ 05/25/23 7.000 318,100
762 FNMA REMIC, Trust Series 1993-065, Class ZZ....... 06/25/13 7.000 718,532
139 FNMA REMIC, Trust Series 1993-070, Class Z........ 05/25/23 6.900 123,946
402 FNMA REMIC, Trust Series 1993-096, Class Z........ 06/25/23 7.000 363,191
279 FNMA REMIC, Trust Series 1993-122, Class L........ 01/25/23 6.500 258,035
76 FNMA REMIC, Trust Series 1993-149, Class L........ 08/25/23 6.000 70,169
151 FNMA REMIC, Trust Series 1993-160, Class ZB....... 09/25/23 6.500 133,703
147 FNMA REMIC, Trust Series 1993-163, Class ZA....... 09/25/23 7.000 133,474
104 FNMA REMIC, Trust Series 1993-199, Class Z........ 10/25/23 7.000 93,912
284 FNMA REMIC, Trust Series 1993-G10, Class G........ 05/25/22 5.000 273,811
153 FNMA REMIC, Trust Series 1993-G40, Class Z........ 12/25/23 6.500 132,614
301 FNMA REMIC, Trust Series 1994-023, Class PX....... 08/25/23 6.000 251,037
3,442 FNMA REMIC, Trust Series 1998-063, Class ZA....... 11/25/28 6.000 2,520,557
4,000 FNMA REMIC, Trust Series 1998-M, Class B.......... 09/25/07 6.270 3,723,469
1,695 FNMA REMIC, Trust Series 1998-M7, Class Z......... 05/25/36 6.390 1,398,821
5,481 FNMA REMIC, Trust Series 1999-010, Class MZ....... 09/17/38 6.500 4,374,458
2,500 FNMA REMIC, Trust Series 1999-W4, Class A9........ 02/25/29 6.250 2,123,039
10,000 FNMA REMIC, Trust Series 2000-012, Class PG....... 04/25/30 7.500 9,897,775
4,191 GNMA REMIC, Trust Series 2000-009, Class FG....... 02/16/30 7.226++ 4,174,476
1,103 GNMA REMIC, Trust Series 2000-009, Class FH....... 02/16/30 7.126++ 1,106,834
3,145 Small Business Administration Series 1999-20K,
Class 1......................................... 11/01/19 7.060 2,892,944
389 U.S. Department of Veteran Affairs Vendee Mortgage
Trust,. Series 1993-3, Class 2ZA 06/15/20 6.500 366,820
2,000 BA Mortgage Securities, Inc., Series 1998-4, Class
1A-12........................................... 08/25/28 6.750 1,890,500
222 Bear Stearns Mortgage Securities Inc. REMIC,
Series 1994-1,. Class 3A ARM 05/25/23 7.098 217,305
190 California Federal Bank REMIC, Series 1990- BN1,
Class A. ARM 08/25/30 6.695 188,475
516 Capital Asset Research Funding, Series 1998-A,
Class A ARM..................................... 12/15/05 5.905 510,217
5,000 Citicorp Mortgage Securities Inc. REMIC, Series
1998-9, Class A5................................ 10/25/28 6.500 4,567,600
3,751 Community Program Loan Trust, Series 1987-A, Class
A4.............................................. 10/01/18 4.500 3,367,099
4,855 GMAC Commercial Mortgage Security Inc., Series
1998-C1,. Class A1 ARM 11/15/07 6.411 4,696,722
3,981 Housing Security Inc., Series 1992-8, Class B
ARM............................................. 06/25/24 6.537 3,861,147
1,873 LTC Commercial Mortgage Certificates, Series
1998-1, Class A. ARM 05/28/30 6.029 1,783,380
3,000 Oakwood Mortgage Investors Inc., Series 1999-B,
Class A2........................................ 12/15/13 6.190 2,912,370
2,516 Residential Funding Mortgage Securities I Inc.,.
Series 1997-S7, Class A5 05/25/27 7.500 2,399,702
150 Residential Funding Mortgage, Series 1993-S30,
Class A9........................................ 08/25/23 7.500 144,750
3,041 Salomon Brothers Mortgage Securities Inc. VII
REMIC,. Series 1993-3, Class A7-MZ 08/25/23 7.200 2,768,668
4,500 Structured Asset Securities Corp., Series 1997-4,
Class 2A-9...................................... 12/25/27 7.000 4,282,605
------------
Total Collateralized Mortgage Obligations
(cost--$88,166,084)........................................ 85,211,077
------------
ASSET BACKED SECURITIES--6.71%
635 American Residential Mortgage Loan Trust, Series
1998-001, Class 1 ARM........................... 05/25/29 6.800 634,499
</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>
ASSET BACKED SECURITIES--(CONCLUDED)
$ 3,294 Delta Funding Home Equity Loan Trust,
Series 1999-003,. Class A1-A ARM 09/15/29 7.036% $ 3,304,814
2,392 First Security Auto Owner Trust, Series 1999-1,
Class A3........................................ 06/15/03 5.580 2,373,965
2,500 Keystone Owner Trust, Series 1998-P2, Class A4+... 12/25/18 6.840 2,459,675
2,798 Metropolitan Asset Funding, Inc., Series 2000-A,
Class A3+....................................... 12/25/23 8.115 2,810,241
1,714 Mid-State Trust, Series 4, Class A................ 04/01/30 8.330 1,712,208
360 Money Store Home Equity Trust,....................
Series 1997-D, Class AF3 ARM 11/15/21 6.345 356,284
341 Money Store Home Equity Trust, Series 1998-A,
Class AV ARM.................................... 06/15/29 6.806 340,809
1,753 SLMA Student Loan Trust, Series 1998-1, Class A1
ARM............................................. 01/25/07 6.781 1,752,305
------------
Total Asset Backed Securities (cost--$15,823,483)............ 15,744,800
------------
STRIPPED MORTGAGE-BACKED SECURITIES+--0.12%
109 FHLMC, Series 1625, Class GA+++................... 01/15/08 7.700(2) 4,810
1 FNMA REMIC, Trust Series 1993-134, Class EA+++.... 11/25/05 10.480(2) 1,054
426 FNMA REMIC, Trust Series 1993-201, Class JB+++.... 09/25/21 8.310(2) 47,323
3,020 FNMA REMIC, Trust Series 1993-201, Class JC+++.... 05/25/19 6.000(2) 222,131
------------
Total Stripped Mortgage-Backed Securities (cost--$279,507)... 275,318
------------
CORPORATE BONDS--26.66%
AIRLINES--0.45%
500 AMR Corp.......................................... 02/01/01 10.000 504,013
500 United Air Lines Inc.............................. 11/27/12 10.360 552,770
------------
1,056,783
------------
APPAREL & FOOTWEAR--0.74%
2,000 Westpoint Stevens Inc............................. 06/15/05 7.875 1,742,500
------------
BANKS--0.63%
1,500 MBNA American Bank................................ 12/10/02 7.175++ 1,476,209
------------
ENERGY--0.93%
2,200 NRG Energy Inc.................................... 11/01/03 8.000 2,190,870
------------
FINANCIAL SERVICES--7.13%
3,700 AT&T Capital Corp................................. 04/23/02 7.010++ 3,706,068
6,800 General Motors Acceptance Corp.................... 08/06/01 to 04/05/04 6.853 to 7.020++ 6,804,005
4,000 Infrastructure Finance Corp....................... 03/26/09 6.435++ 3,997,500
236 Midland Funding Corp.............................. 07/23/02 10.330++ 241,298
2,000 Textron Financial Corp............................ 05/28/02 7.178++ 1,994,618
------------
16,743,489
------------
INSURANCE--PROPERTY/CASUALTY--0.43%
1,000 Nehi Inc.+........................................ 06/09/03 11.260++ 1,000,000
------------
MEDIA--0.86%
2,000 Cox Enterprises, Inc.............................. 02/15/07 8.000 2,015,772
------------
MEDICAL PROVIDERS--0.70%
1,700 Columbia HCA Health Care Corp..................... 07/15/45 6.630 1,638,123
------------
</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>
CORPORATE BONDS--(CONCLUDED)
OTHER INSURANCE--0.43%
$ 1,000 Alpha Wind Reinsurance............................ 05/23/01 11.320%++ $ 1,000,000
------------
SECURITIES & ASSET MANAGEMENT--4.29%
3,250 Goldman Sachs Group, Inc.+........................ 03/19/01 6.898++ 3,251,661
2,300 Lehman Brothers Holdings Inc...................... 04/02/02 7.679++ 2,308,673
4,500 Morgan Stanley Dean Witter & Co................... 04/22/04 6.990++ 4,497,143
------------
10,057,477
------------
TOBACCO--1.63%
4,000 Philip Morris Companies Inc....................... 04/01/04 to 07/15/05 7.000 to 7.500 3,833,711
------------
UTILITIES--1.55%
1,663 Niagara Mohawk Power Co........................... 10/01/02 7.250 1,647,712
2,000 TXU Corp.......................................... 06/25/01 7.315++ 1,997,514
------------
3,645,226
------------
YANKEE--6.89%
2,500 Compagnie Financiere de CIC et de l'Union
Europeenne...................................... 10/29/49 7.434++ 2,387,500
2,000 Fuji Finance Cayman Ltd........................... 04/15/10 8.625++ 1,964,700
1,000 Korea Development Bank............................ 10/06/00 7.675++ 999,081
1,000 Mexico Credit Link+............................... 02/25/02 11.804++ 1,040,460
2,900 Nacional Financiera............................... 05/08/03 8.575++ 2,932,338
1,000 National Power Corp............................... 05/15/28 9.625++ 725,200
2,300 Nordbanken AB+.................................... 11/29/49 8.950++ 2,305,012
1,400 Petroleos Mexicanos............................... 09/15/27 9.500 1,435,000
2,400 Residential Reinsurance........................... 06/01/01 10.926++ 2,394,000
------------
16,183,291
------------
Total Corporate Bonds (cost--$62,998,328).................... 62,583,451
------------
CONVERTIBLE BONDS--0.80%
MEDIA--0.45%
1,070 Clear Channel Communications...................... 12/01/02 1.500 1,052,612
------------
SEMI-CONDUCTOR--0.14%
500 Conexant Systems Inc.............................. 02/01/07 4.000 335,625
------------
WIRELESS TELECOMMUNICATIONS--0.21%
500 Nextel Communications............................. 01/15/10 5.250 498,750
------------
Total Convertible Bonds (cost--$2,092,352)................... 1,886,987
------------
INTERNATIONAL GOVERNMENT OBLIGATIONS--2.01%
EUR790 Federal Republic of Germany....................... 01/04/24 to 01/04/30 6.250 818,044
$ 2,097 Republic of Brazil................................ 01/01/01 to 07/26/07 7.875 to 11.250 2,002,391
2,000 United Mexican States............................. 04/07/04 to 12/31/19 6.250 to 10.495++ 1,900,000
------------
Total International Government Obligations
(cost--$4,597,095)......................................... 4,720,435
------------
</TABLE>
43
<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>
MUNICIPAL SECURITIES--0.73%
$ 1,000 Massachusetts State Turnpike Authority
Metropolitan Highway System Revenue Series A
(MBIA Insured).................................. 01/01/37 5.000% $ 879,210
1,000 Massachusetts State Water Resources Authority
Revenue Series A................................ 08/01/37 4.750 831,890
------------
Total Municipal Securities (cost--$1,700,286)................ 1,711,100
------------
SHORT-TERM U.S. GOVERNMENT AND AGENCY OBLIGATIONS--0.27%
630 U.S. Treasury Notes++++++ (cost--$629,212)........ 08/31/00 5.125 629,212
------------
REPURCHASE AGREEMENT--1.20%
2,822 Repurchase Agreement dated 07/31/00 with State
Street Bank & Trust Co., collateralized by
$2,965,452 U.S. Treasury Inflation Index Bond,
3.625% due 04/15/28; (value-$2,880,500);
proceeds $2,822,412 (cost $2,822,000)........... 08/01/00 5.250 2,822,000
------------
Total Investments (cost--$286,383,170) 120.58%............... 283,067,496
Liabilities in excess of other assets--(20.58)%.............. (48,319,771)
------------
Net Assets--100.00%.......................................... $234,747,725
============
</TABLE>
-----------------
++ Floating rate securities. The interest rates shown are the current rates
as of July 31, 2000.
+ Illiquid securities representing 5.66% of net assets.
+++ Interest Only Security. This security entitles the holder to receive
interest payments from an underlying pool of mortgages. The risk
associated with this security is related to the speed of the principal
paydowns. High prepayments would result in a smaller amount of interest
being received and cause the yield to decrease. Low prepayments would
result in a greater amount of interest being received and cause the yield
to increase.
++++++ Entire or partial amount pledged as collateral for futures and options
transactions.
@ Interest rate shown is the discount rate at date of purchase.
ARM Adjustable Rate Mortgage--The interest rates shown are the current rates
as of July 31, 2000.
COFI Cost of Funds Index.
REMIC Real Estate Mortgage Investment Conduit.
MBIA Municipal Bond Investors Assurance.
TBA (To Be Assigned)--Securities are purchased on a forward commitment with
an approximate principal amount (generally +/- 1.0%) and no definite
maturity date. The actual principal amount and maturity date will be
determined upon settlement when the specific mortgage pools are assigned.
EUR Euro.
(1) Security, or a portion thereof, was on loan at July 31, 2000.
(2) Annualized yield at date of purchase.
44
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE STRATEGIC FIXED INCOME INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF STRIKE EXPIRATION
CONTRACTS PRICE/RATE DATES VALUE
--------- ----------- --------------- --------
<C> <S> <C> <C> <C>
WRITTEN OPTIONS+
20 Euro Futures Puts................................. $ 92.25 December 2000 $ 750
94 Euro Futures Puts................................. 92.75 March 2001 28,200
94 Euro Futures Calls................................ 93.25 March 2001 29,375
240 Federal National Morgage Association Calls........ 100.73 September 2000 62,160
2,270 Interest Rate Swap Puts........................... 7.75% September 2000 3,258
7,000 Interest Rate Swap Calls.......................... 7.00% September 2000 10,745
8 U.S. Treasury Bonds Futures Puts.................. $ 94.00 August 2000 250
95 U.S. Treasury Notes Futures Puts.................. 100.00 August 2000 14,844
29 U.S. Treasury Notes Futures Puts.................. 97.00 August 2000 1,812
--------
$151,394
========
</TABLE>
FUTURES CONTRACTS
<TABLE>
<CAPTION>
IN EXPIRATION UNREALIZED
CONTRACTS TO RECEIVE EXCHANGE FOR DATES APPRECIATION
------------------------------------------------------------ ------------- --------------- ------------
<C> <S> <C> <C> <C>
8 10 Year Eurobond Futures.................................... $ 195,327 September 2000 $ 5,041
20 Municipal Bond Futures...................................... 1,956,875 September 2000 116,875
---------
$ 121,916
=========
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
CONTRACTS IN UNREALIZED
TO EXCHANGE MATURITY APPRECIATION
DELIVER FOR DATES (DEPRECIATION)
---------- ---------- -------- --------------
<S> <C> <C> <C> <C>
Euro........................................................ 690,000 $ 639,863 08/10/00 $ (13,015)
Euro........................................................ 140,000 129,863 08/14/00 2,221
Euro........................................................ 3,533,000 3,277,185 08/14/00 (21,772)
Euro........................................................ 3,200,000 2,968,909 08/17/00 (80,275)
Japanese Yen................................................ 70,000,000 640,406 08/17/00 7,742
---------
$(105,099)
=========
</TABLE>
See accompanying notes to financial statements
45
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE MUNICIPAL FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
------------ -------------------- ---------------- ------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES--100.53%
ALABAMA--0.21%
$ 105 Birmingham Medical Clinic Board Revenue Baptist
Medical Centers (Escrow to Maturity)............ 07/01/05 7.300% $ 112,189
-----------
ALASKA--3.92%
2,055 Alaska Student Loan Corporation Revenue Series A
(AMBAC Insured)*................................ 07/01/06 to 07/01/09 5.350 to 5.550 2,102,005
-----------
ARIZONA--2.21%
490 Peoria Water & Sewer Revenue (FGIC Insured)*...... 07/01/04 7.500 541,112
65 Pima County Hospital Revenue St. Joseph Hospital
Project (Escrow to Maturity).................... 01/01/09 7.500 71,315
570 Show Low Industrial Development Authority Revenue
Navapache Regional Medical Center Series A (ACA
Insured)........................................ 12/01/06 5.125 573,785
-----------
1,186,212
-----------
ARKANSAS--0.37%
60 Arkansas State Development Finance Authority (MBIA
Insured)........................................ 10/01/16 5.100 60,131
35 Pulaski County Residential Housing Single-Family
(Escrow to Maturity)............................ 06/01/10 7.250 38,757
92 Springdale Residential Housing Mortgage Series A
(FNMA Collateralized)........................... 09/01/11 7.650 98,975
-----------
197,863
-----------
CALIFORNIA--10.35%
880 Abag Finance Authority For Nonprofit Refunding
Housing Sundale Arms Apartments Project A (FNMA
Collateralized)*................................ 03/01/19 5.100 783,816
170 California Pollution Control Financing Kaiser
Steel Corporation Project (Escrow to
Maturity)....................................... 10/01/08 7.250 184,477
920 California Statewide Community Development Housing
Riverside Gardens Project Series J (Letter of
Credit)*........................................ 10/01/12 5.100 906,660
30 California Statewide Community Housing Senior Lien
(FHA Insured)................................... 09/01/00 5.000 30,008
150 Inglewood Residential Rehabilitation (Escrow to
Maturity)....................................... 08/01/10 7.500 168,431
355 Lancaster Redevelopment Agency Multi-Family
Housing Refunding FHA High Valley Apartments
Project Series A (FHA Insured).................. 12/01/05 5.250 352,046
470 Los Angeles Community Redevelopment Agency
Refunding Monterey Hills Redevelopment Project
B............................................... 12/01/22 8.650 508,084
280 Los Angeles Multi-Family Revenue Housing
Earthquake Rehabilitation Project Series C (FNMA
Collateralized)*................................ 07/01/07 5.150 280,311
110 Palmdale Residential Mortgage (Escrow to
Maturity)....................................... 11/01/12 9.250 136,755
20 Sacramento Utility District Electric Revenue
(Escrow to
Maturity)....................................... 02/01/11 5.500 20,735
1,055 Sacramento Utility District Electric Revenue White
Rock Project (Escrow to Maturity)............... 03/01/10 to 05/01/10 6.750 to 6.800 1,157,246
1,000 Vista Multi-Family Housing Pepperwood Apartments
(Mandatory Put 06/01/05 @ 100) (FNMA
Collateralized)................................. 06/01/25 5.700 1,016,350
-----------
5,544,919
-----------
COLORADO--0.82%
440 Colorado Housing Finance Authority Single-Family
Program Subordinated*........................... 11/01/04 5.750 436,691
-----------
DISTRICT OF COLUMBIA--6.31%
505 District of Columbia Housing Finance Authority
Certificate of Participation (Asset Guaranty
Insured)........................................ 06/01/08 4.850 495,809
1,340 District of Columbia Revenue Refunding Howard
University Project (MBIA Insured)............... 10/01/02 5.250 1,359,618
</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>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
DISTRICT OF COLUMBIA--(CONCLUDED)
$1,500 District of Columbia Series A (MBIA Insured)...... 06/01/08 5.250% $ 1,525,905
-----------
3,381,332
-----------
FLORIDA--1.11%
250 Alachua County Health Facilities Authority Shands
Hospital at The University of Florida (MBIA
Insured)........................................ 12/01/05 6.100 258,020
50 Clearwater Housing Development Corp. Revenue
Refunding Clearwater Apartments Series A (FHA
Insured)........................................ 07/01/01 6.200 50,377
100 Dade County Educational Facilities Authority
Revenue (Letter of Credit)...................... 01/01/02 5.150 100,769
165 Palm Beach County Solid Waste Authority Revenue
(Escrow to Maturity) (MBIA Insured)............. 12/01/04 10.000 185,234
-----------
594,400
-----------
GEORGIA--1.41%
130 Gwinnett County Water & Sewer Authority (Escrow to
Maturity)....................................... 10/01/04 9.600 145,830
600 Marietta Housing Authority Multi-Family Housing
Refunding Ridge Apartments Project A (Mandatory
Put 06/01/05 @ 100) (FNMA Collateralized)....... 06/01/25 5.700 611,088
-----------
756,918
-----------
ILLINOIS--4.99%
315 Belleville St. Clair County (Escrow to
Maturity)....................................... 11/01/09 7.250 346,859
350 Greater Peoria Airport Authority (AMBAC
Insured)*....................................... 12/01/07 6.700 375,004
500 Illinois Educational Facilities Authority Revenues
Refunding Northwestern Medical Facility
Foundation (MBIA Insured)....................... 11/15/28 5.125 441,410
710 Illinois Health Facilities Authority Revenue
Ravenswood Hospital (Escrow to Maturity)........ 08/01/06 7.250 754,183
250 Palatine Housing Revenue Clover Ridge (Mandatory
Put 12/15/02 @ 100) (Letter of Credit).......... 12/15/07 4.750 247,615
510 St. Clair County Certificates of Participation
Series A (FSA Insured).......................... 10/01/07 to 10/01/08 4.900 to 5.000 509,562
-----------
2,674,633
-----------
INDIANA--3.11%
200 Fort Wayne Hospital Authority Revenue (Escrow to
Maturity)....................................... 01/01/07 6.625 210,762
40 Fort Wayne Hospital Authority Revenue Lutheran
Hospital Project (Escrow to Maturity)........... 01/01/02 6.875 40,368
400 Fort Wayne Hospital Authority Revenue Parkview
Memorial Hospital (Escrow to Maturity).......... 01/01/05 6.500 413,580
415 Indianapolis Economic Development Revenue Knob In
The Woods Project (Mandatory Put 12/01/04 @ 100)
(FNMA Collateralized)*.......................... 12/01/24 6.375 435,796
595 Indianapolis Economic Development Revenue
Refunding Bethany Series A (GNMA
Collateralized)*................................ 04/20/17 5.350 566,285
-----------
1,666,791
-----------
IOWA--0.39%
140 Iowa Finance Authority Multi-Family Revenue
Refunding Housing Forest Glen Apartments Project
A (FNMA Collateralized)......................... 11/01/03 4.700 138,513
70 Iowa Finance Authority Multi-Family Revenue
Refunding Housing Hillcrest Series C (FNMA
Collateralized)................................. 11/01/02 4.600 69,556
-----------
208,069
-----------
KANSAS--1.08%
500 Burlington Pollution Control Revenue Refunding
Kansas Gas & Electric Company Project (MBIA
Insured)........................................ 06/01/31 7.000 518,850
</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>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
KANSAS--(CONCLUDED)
$ 60 Wichita Hospital Revenue St. Francis Hospital &
Nursing Senior A. (Escrow to Maturity) 10/01/07 6.750% $ 60,117
-----------
578,967
-----------
KENTUCKY--0.42%
60 Kentucky State Revenue Turnpike Authority (Escrow
to
Maturity)....................................... 07/01/09 7.200 66,627
155 Kentucky State Revenue Turnpike Authority Toll
Road (Escrow to Maturity)....................... 07/01/08 5.875 159,782
-----------
226,409
-----------
LOUISIANA--4.51%
410 East Baton Rouge Parish Womans Hospital Foundation
(Escrow to Maturity)............................ 10/01/08 7.200 445,026
75 East Baton Rouge Single-Family Mortgage Series C
(GNMA/FNMA Collateralized)...................... 04/01/32 7.000 76,930
500 Jefferson Parish Home Mortgage Single-Family
Housing Revenue Series D-1 (Mandatory Put
08/01/01 @ 100) (FNMA/GNMA Collateralized)...... 06/01/10 5.600 503,340
800 Louisiana Public Facilities Authority and Health
Education A1 (Mandatory Put 06/01/02 @ 100)
(AMBAC Insured)................................. 12/01/15 5.000 800,080
540 Louisiana State Health Education Authority Alton
Ochsner Medical Foundation (Escrow to
Maturity)....................................... 05/01/05 8.750 590,819
-----------
2,416,195
-----------
MASSACHUSETTS--3.78%
520 Massachusetts Bay Transport Authority General
Transportation Systems Series B (FSA Insured)... 03/01/26 5.250 488,670
600 Massachusetts State Development Finance Agency
Biomedical Research Series C.................... 08/01/02 5.500 604,620
1,005 Massachusetts State Development Finance Agency
Curry College Series A (ACA Insured)............ 03/01/19 5.375 933,032
-----------
2,026,322
-----------
MICHIGAN--0.86%
115 Michigan State Hospital Finance Authority Revenue
St. Joseph's Mercy Hospital (Escrow to
Maturity)....................................... 07/01/03 9.250 123,981
125 Michigan State Housing Development Authority
Series B*....................................... 12/01/12 7.650 127,811
195 Michigan State Strategic Limited Obligation
(Escrow to
Maturity)....................................... 08/15/05 7.875 207,601
-----------
459,393
-----------
MINNESOTA--1.53%
385 Coon Rapids Hospital Revenue Health Central
Incorporated (Escrow to Maturity)............... 08/01/08 7.625 422,168
123 Eden Prairie Multi-Family Housing (GNMA
Collateralized)................................. 01/20/06 5.500 125,027
200 Edina Refunding Tax Increment Series B............ 02/01/06 5.800 200,222
65 Moorhead Residential Mortgage (Escrow to
Maturity)....................................... 08/01/11 7.100 71,974
-----------
819,391
-----------
MISSOURI--2.92%
1,500 Missouri State Development Finance Board
Recreation Facility YMCA Greater St. Louis
Project Series A (Letter of Credit)............. 09/01/06 to 09/01/08 4.600 to 4.800 1,453,201
110 St. Louis County Single-Family Housing (AMBAC
Insured)........................................ 10/01/16 9.250 111,825
-----------
1,565,026
-----------
</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>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
NEBRASKA--0.47%
$ 250 Nebraska Investment Finance Authority Multi-Family
Housing Series A (FNMA Collateralized)*......... 12/01/15 6.000% $ 250,563
-----------
NEW JERSEY--0.25%
125 New Jersey Health Care Facilities Financing St.
Barnabas Medical Center (Escrow to Maturity).... 07/01/11 7.000 136,043
-----------
NEW YORK--3.98%
200 New York City Housing Authority Multi-Family
Revenue Refunding Series A...................... 07/01/05 5.250 199,222
300 New York City Housing Authority Multi-Family
Revenue Refunding Series A (AMBAC Insured)...... 07/01/08 5.450 302,865
1,030 New York City Municipal Water Finance Authority
Series B........................................ 06/15/04 5.125 1,049,652
320 New York State Energy Research & Development
Authority Series C.............................. 06/01/29 4.250 320,000
195 Onondaga County Industrial Development Civic
Facility Lemoyne College Project Series A....... 03/01/04 5.000 191,921
75 Onondaga County Industrial Development Civic
Facility Syracuse Home Association Project
(Letter of Credit).............................. 12/01/07 4.500 71,301
-----------
2,134,961
-----------
OHIO--0.46%
190 Dayton Hospital Revenue Good Samaritan (Escrow to
Maturity)....................................... 12/01/05 6.000 195,979
50 Ohio Housing Finance Agency Single-Family Mortgage
Series C (GNMA Collateralized)*................. 09/01/21 7.850 51,059
-----------
247,038
-----------
OKLAHOMA--4.08%
335 Comanche County Hospital Authority Revenue Series
A (Connie Lee Insured).......................... 07/01/06 5.100 338,611
425 McAlester Public Works Authority Revenue (FSA
Insured) (Escrow to Maturity)................... 12/01/04 8.250 485,635
1,330 Tulsa Metropolitan Utility Authority Revenue...... 02/01/03 7.000 1,364,460
-----------
2,188,706
-----------
PENNSYLVANIA--6.83%
140 Allegheny County Residential Mortgage Revenue
Single-Family Mortgage Series D2 (GNMA
Insured)*....................................... 05/01/08 4.850 136,097
400 Blair County Hospital Authority Revenue Hospital
Altoona Hospital Project A (AMBAC Insured)...... 07/01/06 5.375 410,464
30 Caln Township Municipal Sewer Revenue (Escrow to
Maturity)....................................... 01/01/09 5.700 30,695
535 Chester County Health & Education Jefferson Health
Systems Series B (AMBAC Insured)................ 05/15/12 5.000 519,196
45 Chester County Hospital Authority Revenue (Escrow
to Maturity).................................... 07/01/09 7.500 49,485
60 Conneaut School District (Escrow to Maturity)
(AMBAC Insured)................................. 05/01/02 9.250 63,324
145 Lancaster County Hospital Authority Lancaster
General Hospital Project (AMBAC Insured)........ 07/01/11 4.750 137,067
75 Lancaster Sewer Authority (Escrow to Maturity).... 04/01/12 6.000 79,276
400 Luzerne County Industrial Development Authority
Pennsylvania Gas & Water Series B*.............. 12/01/22 7.125 423,592
15 Montgomery County Higher Education Beaver College
(Escrow to Maturity)............................ 10/01/00 6.750 15,054
600 Pennsylvania State Finance Authority Revenue
(Investment Agreement--Sun America)............. 11/01/09 6.600 637,512
500 Pennsylvania State Higher Education Facilities
Temple University First Series (MBIA Insured)... 04/01/29 5.000 446,940
125 Philadelphia Hospital & Higher Education Health
Systems Jefferson Health Systems A (MBIA
Insured)........................................ 05/15/07 5.250 127,564
</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>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
PENNSYLVANIA--(CONCLUDED)
$ 600 Saucon Valley School District (AMBAC Insured)..... 10/15/09 4.650% $ 585,222
-----------
3,661,488
-----------
RHODE ISLAND--4.77%
1,500 Rhode Island Depositors Protection Corporation
Series A (Escrow to Maturity)................... 08/01/22 6.950 1,598,535
1,000 Rhode Island State Turnpike & Bridge Refunding.... 12/01/17 5.350 960,200
-----------
2,558,735
-----------
SOUTH CAROLINA--1.03%
220 Charleston County Hospital Facility Roper Hospital
(Escrow to Maturity)............................ 10/01/11 7.000 243,349
325 South Carolina Jobs Economic Development
Caterpillar Incorporated Project*............... 06/01/08 5.050 309,998
-----------
553,347
-----------
SOUTH DAKOTA--0.91%
460 South Dakota State Health & Educational Revenue
St. Lukes Hospital Project (Escrow to
Maturity)....................................... 10/01/07 6.800 487,301
-----------
TENNESSEE--1.55%
420 Knox County Health Educational & Housing Facility
St. Mary's Medical Center (Escrow to
Maturity)....................................... 08/01/03 7.250 435,969
170 La Follette Housing Development Corporation
(FHA/MBIA Insured).............................. 01/01/05 5.400 171,652
190 Metropolitan Government Nashville Health &
Education Southern Advantist Hospital Health
Systems (Escrow to Maturity).................... 10/01/09 8.700 223,396
-----------
831,017
-----------
TEXAS--18.02%
975 De Soto Housing Finance Corporation Multi-Family
Mortgage The Colonies Apartments Project
(Mandatory Put 10/01/07 @ 100) (FNMA
Collateralized)................................. 10/01/27 5.125 975,799
330 Galena Park Independent School District........... 08/15/02 6.250 341,253
265 Galveston County Housing Finance Corporation
Single-Family Mortgage Revenue.................. 04/01/15 9.750 278,952
100 Grapevine Industrial Development Corporation
Revenue America Airlines B1 Project (Letter of
Credit)......................................... 12/01/24 4.400 100,000
400 Hidalgo County Health Services Corporation Mission
Hospital Project (Pre-Refunded 08/01/00 @
103)............................................ 02/01/25 10.250 412,000
245 Houston Texas Airport Systems Revenue (Escrow to
Maturity)....................................... 07/01/10 7.600 276,777
1,000 Lewisville Housing Finance Corporation
Multi-Family Housing Lewisville Limited Project
(FSA Insured)*.................................. 12/01/08 5.000 975,330
505 Mckinney Independent School District School
Building Revenue................................ 02/15/04 6.000 526,765
1,285 Mission Consolidated Independent School District
Revenue......................................... 02/15/04 6.500 1,362,151
645 Odessa Junior College District Revenue Refunding &
Imot Series A (MBIA Insured).................... 12/01/09 4.750 631,165
1,015 South Plains Finance Corporation Refunding
Mortgage Series C (FMNA/GNMA Collateralized).... 03/01/21 7.400 1,132,192
1,500 Southeast Housing Finance Corporation Series B
(Pre-refunded to 12/01/02 @ 36.127)............. 12/01/16 7.625# 485,475
1,100 Tarrant County Housing Finance Corporation
Refunding Multi-Family Housing Summit Project A
(Mandatory Put 09/01/07 @ 100) (FNMA
Collateralized)................................. 03/01/27 5.080 1,087,724
1,040 Texas State Refunding Series A.................... 10/01/03 5.700 1,074,206
-----------
9,659,789
-----------
</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>
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
UTAH--4.58%
$ 250 Salt Lake City Hospital Revenue (Escrow to
Maturity)....................................... 06/01/09 7.350% $ 272,130
490 Salt Lake County Multi-Family Housing James Pointe
Apartment (Mandatory Put 10/01/05 @ 100) (Asset
Guaranty Insured)............................... 10/01/25 5.500 492,803
105 Salt Lake County Water Conservation (Escrow to
Maturity) (MBIA Insured)........................ 10/01/02 10.875 112,932
1,000 Utah Associated Municipal Power Systems Revenue
San Juan Project (MBIA Insured)................. 06/01/22 6.375 1,077,720
360 Utah State Housing Finance Agency Single-Family
Mortgage Sub A1 (AMBAC Insured)................. 07/01/08 5.900 372,373
75 Utah State Housing Finance Agency Single-Family
Mortgage Sub G (AMBAC Insured).................. 07/01/07 5.650 76,101
50 Utah State Housing Finance Agency Single-Family
Mortgage Sub H1 (AMBAC Insured)................. 07/01/07 5.650 50,734
-----------
2,454,793
-----------
WASHINGTON--1.92%
1,000 King County Sewer Revenue Series A................ 01/01/03 5.800 1,028,260
-----------
WEST VIRGINIA--0.67%
55 Kanawha County Residential Mortgage Revenue
(Escrow to Maturity)............................ 09/01/10 7.375 60,895
300 Preston County Pollution Control Revenue
Monongahhela Power Services..................... 03/01/03 4.500 295,257
-----------
356,152
-----------
WISCONSIN--0.19%
100 Wisconsin Housing & Economic Development Series
G*.............................................. 03/01/04 5.250 100,481
-----------
WYOMING--0.52%
295 Teton County Hospital District Refunding
Improvement (ACA Insured)....................... 12/01/09 5.100 277,619
-----------
Total Municipal Bonds and Notes (cost--$54,247,945)............. 53,880,018
-----------
TAX-FREE MONEY MARKET FUND--0.15%
79 Seven Seas Money Market Fund (cost--$78,573)...... 78,573
-----------
Total Investments (cost--$54,326,518)--100.68%.................. 53,958,591
(364,310)
Liabilities in excess of other assets--(0.68)%..................
-----------
Net Assets--100.00%............................................. $53,594,281
===========
</TABLE>
-----------------
# Zero coupon bond; rate represents annualized yield at date of purchase.
* Security subject to Alternative Minimum Tax.
ACA American Capital Access.
AMBAC American Municipal Bond Assurance Corporation.
FGIC Federal Guaranty Insurance Corporation.
FHA Federal Housing Authority.
FNMA Federal National Mortgage Association.
FSA Financial Security Assurance.
GNMA Government National Mortgage Association.
MBIA Municipal Bond Investors Assurance.
See accompanying notes to financial statements
51
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE GLOBAL FIXED INCOME INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000)** DATES RATES VALUE
------------- ------------------------ -------------- ------------
<C> <S> <C> <C> <C>
LONG-TERM GLOBAL DEBT SECURITIES--95.64%
CANADA--4.98%
7,700 Government of Canada.............................. 06/01/09 to 06/01/10 5.500% $ 5,019,613
------------
DENMARK--8.54%
66,170 Kingdom of Denmark................................ 03/15/06 to 11/15/11 6.000 to 8.000 8,612,900
------------
GERMANY--16.57%
18,130 Federal Republic of Germany....................... 06/14/02 to 07/04/10 4.500 to 5.375 16,707,743
------------
ITALY--3.50%
JPY 80,000 Republic of Italy................................. 05/12/02 0.375 726,355
3,120 Republic of Italy................................. 05/01/08 5.000 2,801,572
------------
3,527,927
------------
JAPAN--11.10%
100,000 Export-Import Bank of Japan....................... 10/01/03 4.375 1,018,052
100,000 Inter-American Development Bank................... 02/05/02 2.250 938,558
900,000 Japan Government Bond............................. 06/22/15 0.900 8,328,395
100,000 Primus Financial Services......................... 12/16/02 0.790 910,841
------------
11,195,846
------------
KOREA--0.48%
JPY 34,000 Korea Development Bank............................ 08/16/02 2.700 311,929
JPY 20,000 Korea Industrial Leasing Corp. ................... 08/07/02 2.200 174,101
------------
486,030
------------
MALAYSIA--1.23%
USD 300 Government of Malaysia............................ 06/01/09 8.750 312,765
USD 520 Petroliam Nasional Berhad (Petronas).............. 08/15/15 7.750 483,600
USD 450 Tenaga Nasional Berhad............................ 04/29/07 7.200 447,043
------------
1,243,408
------------
MEXICO--3.05%
USD 1,000 PEMEX Petrolium................................... 09/15/27 9.500 1,025,000
EUR 2,245 United Mexican States#............................ 03/08/10 7.500 2,049,235
------------
3,074,235
------------
NETHERLANDS--12.85%
13,363 Government of the Netherlands..................... 02/15/07 to 07/15/09 3.750 to 5.750 11,960,550
USD 1,000 Repsol International Finance B.V. ................ 07/15/05 7.450 993,500
------------
12,954,050
------------
NORWAY--4.67%
42,600 Kingdom of Norway................................. 11/30/04 to 05/15/09 5.500 to 6.750 4,703,948
------------
SOUTH KOREA--3.03%
USD 2,930 Republic of Korea................................. 04/15/08 8.875 3,055,111
------------
SPAIN--3.23%
3,600 Kingdom of Spain.................................. 07/30/09 5.150 3,258,388
------------
TUNISIA--0.34%
USD 400 Banque Centrale de Tunisie........................ 09/19/27 8.250 346,000
------------
UNITED KINGDOM--1.26%
USD 1,300 Diageo PLC........................................ 06/24/04 6.625 1,266,714
------------
</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>
LONG-TERM GLOBAL DEBT SECURITIES--(CONCLUDED)
UNITED STATES--20.81%
1,100 Amoco Corp. ...................................... 06/09/08 6.000% $ 1,011,450
1,000 AT&T Universal Card Master Trust Class A.......... 09/17/03 6.878 1,000,300
JPY 107,000 BMW US Capital Corp. ............................. 12/20/02 0.700 974,908
1,000 Ford Motor Credit Co. ............................ 03/15/05 7.500 995,383
JPY 131,000 General Motors Acceptance Corp. .................. 07/26/02 0.299+ 1,183,658
JPY 100,000 International Business Machines Corp. ............ 04/14/03 0.900+ 913,047
500 Israel Electric Corp. Ltd. MTN.................... 10/15/09 8.250 500,155
EUR 915 PEMEX Master Trust................................ 08/02/07 7.750 839,451
550 State of Israel................................... 03/15/10 7.750 543,523
JPY 200,000 Toyota Motor Credit Corp. ........................ 05/23/03 0.625 1,819,118
9,490 United States Treasury Notes(1)................... 01/15/09 to 02/15/10 3.875 to 6.500 9,752,859
JPY 100,000 Westpac Banking Corp. ............................ 09/24/01 0.129+ 910,790
550 Xerox Corp. MTN................................... 06/15/37 5.875 538,188
------------
20,982,830
------------
Total Long-Term Global Debt Securities (cost--$102,472,213)...... 96,434,743
------------
SHORT TERM GLOBAL DEBT SECURITIES--1.12%
JPY 120,000 Republic of Italy (cost--$1,109,303).............. 06/20/01 3.500 1,126,207
------------
REPURCHASE AGREEMENT--1.94%
$ 1,958 Repurchase Agreement dated 07/31/00 with SG
Warburg collateralized by $1,947,000 U.S.
Treasury Bonds, 6.125% due 11/15/27
(value--$1,998,109); proceeds: $1,958,354
(cost--$1,958,000).............................. 08/01/00 6.500 1,958,000
------------
Total Investments (cost--$105,539,516)--98.70%................... 99,518,950
1,312,032
Other assets in excess of liabilities--1.30%.....................
------------
Net Assets--100.00%.............................................. $100,830,982
============
</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 July 31, 2000.
(1) Security, or portion thereof, was on loan at July 31, 2000.
EUR Euro Dollars.
JPY Japanese Yen.
MTN Medium Term Note.
USD U.S. Dollars.
See accompanying notes to financial statements.
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.............................................. 627,021 USD 938,149 09/28/00 $ 2,404
Euro........................................................ 11,014,524 USD 10,200,000 09/28/00 43,516
Euro........................................................ 9,740,849 USD 9,141,787 09/28/00 (82,790)
Euro........................................................ 5,575,123 USD 5,246,330 09/28/00 (61,462)
Euro........................................................ 3,552,471 USD 3,336,303 09/28/00 (32,502)
Japanese Yen................................................ 832,452,135 USD 7,853,322 09/28/00 (182,590)
Swedish Krona............................................... 12,350,310 USD 1,389,499 09/28/00 (37,094)
Swedish Krona............................................... 36,083 USD 3,972 09/28/00 (20)
U.S. Dollars................................................ 202,624 CAD 136,908 09/28/00 458
U.S. Dollars................................................ 10,350,532 DKK 1,301,626 11/24/00 11,674
U.S. Dollars................................................ 17,080,498 DKK 2,146,317 11/24/00 17,632
U.S. Dollars................................................ 8,982,031 EUR 8,420,654 09/28/00 67,358
U.S. Dollars................................................ 5,660,954 EUR 5,315,976 09/28/00 51,284
U.S. Dollars................................................ 939,824 EUR 880,963 09/28/00 6,926
U.S. Dollars................................................ 502,493 EUR 467,319 09/28/00 0
U.S. Dollars................................................ 627,021 GBP 942,589 09/28/00 2,035
U.S. Dollars................................................ 460,176,135 JPY 4,300,712 09/28/00 60,362
U.S. Dollars................................................ 372,276,000 JPY 3,512,038 09/28/00 81,655
U.S. Dollars................................................ 12,234,765 NOK 1,404,496 09/28/00 23,814
U.S. Dollars................................................ 12,386,393 SEK 1,391,261 09/28/00 34,905
-----------
$ 7,565
===========
</TABLE>
CURRENCY TYPE ABBREVIATIONS:
CAD Canadian Dollars.
DKK Danish Krone.
EUR Euro.
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......................... 78.21% 1.13%
Repurchase agreements....................................... -- 1.97%
Bank and other financial institutions....................... 9.47 --
Industrial.................................................. 9.22 --
------ ------
96.90% 3.10%
====== ======
</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, 2000
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
COMMON STOCKS--97.82%
AGRICULTURE, FOOD & BEVERAGE--1.37%
114,900 H. J. Heinz Co................................................................. $ 4,588,819
------------
AIRLINES--1.50%
93,700 Delta Air Lines, Inc. ......................................................... 5,030,519
------------
ALCOHOL--2.87%
63,700 Anheuser-Busch Companies, Inc. ................................................ 5,127,850
79,900 Seagram Co. Ltd. .............................................................. 4,479,394
------------
9,607,244
------------
APPAREL, RETAIL--1.34%
220,100 The Limited, Inc. ............................................................. 4,498,294
------------
BANKS--8.37%
37,900 Bank One Corp.(1).............................................................. 1,205,694
101,300 Chase Manhattan Corp. ......................................................... 5,033,344
152,100 Citigroup, Inc. ............................................................... 10,732,556
91,100 PNC Bank Corp. ................................................................ 4,634,712
108,800 Wells Fargo and Co. ........................................................... 4,494,800
45,000 Zions BanCorp. ................................................................ 1,968,750
------------
28,069,856
------------
CHEMICALS--1.95%
31,750 Air Products & Chemicals, Inc. ................................................ 1,059,656
122,600 Union Carbide Corp.(1) ........................................................ 5,494,013
------------
6,553,669
------------
COMPUTER HARDWARE--3.02%
189,100 Compaq Computer Corp. ......................................................... 5,306,619
44,000 Hewlett-Packard Co. ........................................................... 4,804,250
------------
10,110,869
------------
COMPUTER SOFTWARE--3.96
120,700 Computer Associates International, Inc. ....................................... 2,994,869
91,400 International Business Machines Corp. ......................................... 10,276,787
------------
13,271,656
------------
DEFENSE/AEROSPACE--1.63%
59,800 General Dynamics Corp. ........................................................ 3,374,963
46,800 TRW Inc. ...................................................................... 2,103,075
------------
5,478,038
------------
DIVERSIFIED RETAIL--1.74%
82,600 Federated Department Stores, Inc.*............................................. 1,987,562
132,000 Target Corp. .................................................................. 3,828,000
------------
5,815,562
------------
DRUGS & MEDICINE--4.06%
90,700 Bristol-Myers Squibb Co. ...................................................... 4,500,988
166,500 Pharmacia Corp. ............................................................... 9,115,875
------------
13,616,863
------------
ELECTRIC UTILITIES--4.57%
127,900 Edison International, Inc. .................................................... 2,518,031
100,200 Florida Progress Corp. ........................................................ 4,909,800
52,300 FPL Group, Inc. ............................................................... 2,523,475
160,000 Reliant Energy, Inc. .......................................................... 5,360,000
------------
15,311,306
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
ELECTRICAL EQUIPMENT--1.37%
139,100 Motorola, Inc. ................................................................ $ 4,598,994
------------
ELECTRICAL POWER--2.15%
160,319 Koninklijke (Royal) Philips Electronics N.V., ADR*(1).......................... 7,199,976
------------
ENERGY RESERVES & PRODUCTION--1.81%
96,300 Apache Corp.(1)................................................................ 4,790,925
39,500 Burlington Resources, Inc.(1).................................................. 1,288,687
------------
6,079,612
------------
ENERGY SOURCES--3.17%
132,800 Exxon Mobil Corp. ............................................................. 10,624,000
------------
FINANCIAL SERVICES--3.81%
174,650 Associates First Capital Corp. ................................................ 4,573,647
95,150 Federal National Mortgage Association.......................................... 4,745,606
77,200 Household International, Inc................................................... 3,440,225
------------
12,759,478
------------
FOREST PRODUCTS, PAPER--2.09%
68,200 Kimberly Clark Corp. .......................................................... 3,917,237
67,600 Weyerhaeuser Co. .............................................................. 3,088,475
------------
7,005,712
------------
FREIGHT, AIR, SEA & LAND--1.40%
80,100 United Parcel Service, Inc. ................................................... 4,705,875
------------
HEAVY MACHINERY--1.43%
124,700 Deere & Co.(1)................................................................. 4,808,744
------------
HOTELS--0.77%
75,600 Starwood Hotels & Resorts Worldwide, Inc.(1)................................... 2,579,850
------------
HOUSEHOLD PRODUCTS--1.98%
120,600 Avon Products, Inc.(1)......................................................... 4,786,312
68,850 Newell Rubbermaid, Inc. ....................................................... 1,854,647
------------
6,640,959
------------
INDUSTRIAL SERVICES & SUPPLIES--1.02%
64,000 Tyco International Ltd. ....................................................... 3,424,000
------------
INFORMATION & COMPUTER SERVICES--1.08%
84,200 Electronic Data Systems Corp. ................................................. 3,620,600
------------
LIFE INSURANCE--0.74%
44,650 Aetna Life & Casualty Co. ..................................................... 2,478,075
------------
LONG DISTANCE & PHONE COMPANIES--8.42%
157,900 AT&T Corp. .................................................................... 4,885,031
119,700 MCI Worldcom Inc.*............................................................. 4,675,781
80,642 Qwest Communications International Inc.*....................................... 3,785,134
110,600 SBC Communications, Inc. ...................................................... 4,707,413
216,802 Verizon Communications......................................................... 10,189,694
------------
28,243,053
------------
MEDIA--4.97%
35,600 AM/FM Inc.*.................................................................... 2,543,175
141,700 Fox Entertainment Group Inc.*.................................................. 4,339,563
</TABLE>
55
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
MEDIA--(CONCLUDED)
61,000 Time Warner, Inc. ............................................................. $ 4,677,937
132,200 Walt Disney Co. ............................................................... 5,114,487
------------
16,675,162
------------
MEDICAL PRODUCTS--3.91%
92,000 Abbott Laboratories............................................................ 3,829,500
22,150 Bausch & Lomb, Inc. ........................................................... 1,377,453
70,000 Baxter International Inc. ..................................................... 5,442,500
97,900 Becton, Dickinson & Co. ....................................................... 2,471,975
------------
13,121,428
------------
MEDICAL PROVIDERS--1.63%
62,700 Wellpoint Health Networks, Inc.*............................................... 5,466,656
------------
MINING & METALS--1.50%
165,900 Alcoa, Inc. ................................................................... 5,018,475
------------
MOTOR VEHICLES--3.97%
122,600 Ford Motor Co. ................................................................ 5,708,563
88,000 General Motors Corp. .......................................................... 5,010,500
111,300 Lear Corp.*.................................................................... 2,594,681
------------
13,313,744
------------
OIL REFINING--5.89%
351,800 Conoco, Inc. .................................................................. 8,113,387
90,300 Texaco, Inc. .................................................................. 4,464,206
96,600 USX-Marathon Group............................................................. 2,348,588
115,700 Williams Companies, Inc. ...................................................... 4,830,475
------------
19,756,656
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
OIL SERVICES--1.45%
106,500 Devon Energy Corp. ............................................................ $ 4,872,375
------------
OTHER INSURANCE--2.37%
147,700 Allstate Corp. ................................................................ 4,070,981
183,800 MetLife Inc.*.................................................................. 3,859,800
------------
7,930,781
------------
PUBLISHING--0.59%
38,100 Knight-Ridder, Inc. ........................................................... 1,985,963
------------
RAILROADS--0.46%
62,600 Burlington Northern Santa Fe Inc. ............................................. 1,529,788
------------
REAL PROPERTY--1.20%
45,000 Kimco Realty Corp. ............................................................ 1,856,250
55,000 Vornado Realty Trust........................................................... 2,151,875
------------
4,008,125
------------
RESTAURANTS--0.50%
69,000 Tricon Global Restaurants, Inc.*............................................... 1,668,938
------------
SPECIALTY RETAIL--0.75%
73,600 Tiffany & Co. ................................................................. 2,520,800
------------
WIRELESS TELECOMMUNICATIONS--1.01%
78,900 Vodafone Group PLC, ADR*(1).................................................... 3,402,562
------------
Total Common Stocks (cost--$337,104,360).................................................. 327,993,076
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES
--------- -------------------- --------------
<C> <S> <C> <C> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--0.15%
$ 500 U.S. Treasury Bills (cost--$498,747).... 08/17/00 5.640%@ 498,747
------------
REPURCHASE AGREEMENTS--2.03%
5,996 Repurchase Agreement dated 07/31/00 with
SG Cowen Securities Group,
collateralized by $4,608,000 U.S.
Treasury Bonds, 8.875% due 08/15/17
(value--$6,117,120); proceeds:
$5,997,083 (cost--$5,996,000)......... 08/01/00 6.500 5,996,000
804 Repurchase Agreement dated 07/31/00 with
State Street Bank & Trust Co.,
collateralized by $236,517 U.S.
Treasury Notes, 6.625% due 03/31/02;
(value--$242,430) and $449,247 U.S.
Treasury Bonds, 8.125% due 08/15/19;
(value--$577,844); proceeds: $804,117
(cost--$804,000)...................... 08/01/00 5.250 804,000
------------
Total Repurchase Agreement (cost--$6,800,000)...... 6,800,000
------------
Total Investments (cost--$344,403,107)--100.00%.... 335,291,823
Other assets in excess of liabilities--0.00%....... 2,587
------------
Net Assets--100.00%................................ $335,294,410
============
</TABLE>
-----------------
* Non-Income producing security.
@ Interest rate shown is discounted rate at date of purchase.
ADR American Depositary Receipt.
(1) Security, or portion thereof, was on loan at July 31, 2000.
See accompanying notes to financial statements
56
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 2000
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
COMMON STOCKS--99.91%
BANKS--6.41%
183,600 Chase Manhattan Corp. ......................................................... $ 9,122,625
267,323 Citigroup, Inc. ............................................................... 18,862,979
------------
27,985,604
------------
CHEMICALS--0.31%
26,500 Sealed Air Corp.*(1)........................................................... 1,334,938
------------
COMPUTER HARDWARE--10.62%
368,100 Cisco Systems, Inc.*........................................................... 24,087,544
375,400 Dell Computer Corp.*........................................................... 16,494,137
55,000 Sun Microsystems, Inc.*........................................................ 5,799,063
------------
46,380,744
------------
COMPUTER SOFTWARE--6.31%
126,200 Microsoft Corp.*............................................................... 8,810,338
187,600 Oracle Corp.*.................................................................. 14,105,175
45,500 VERITAS Software Corp.*........................................................ 4,638,156
------------
27,553,669
------------
DIVERSIFIED RETAIL--4.24%
232,600 Kohls Corp.*(1)................................................................ 13,200,050
97,100 Wal-Mart Stores, Inc.(1)....................................................... 5,334,431
------------
18,534,481
------------
DRUGS & MEDICINE--8.53%
494,450 Pfizer, Inc. .................................................................. 21,323,156
369,100 Schering-Plough Corp. ......................................................... 15,940,506
------------
37,263,662
------------
ELECTRIC UTILITIES--1.51%
123,800 AES Corp.*..................................................................... 6,615,563
------------
ELECTRICAL EQUIPMENT--6.10%
63,400 Flextronics International Ltd.*................................................ 4,488,522
143,870 Honeywell, Inc. ............................................................... 4,837,629
430,000 Solectron Corp.*(1)............................................................ 17,334,375
------------
26,660,526
------------
FINANCIAL SERVICES--6.21%
340,000 General Electric Co. .......................................................... 17,488,750
288,150 MBNA Corp. .................................................................... 9,617,006
------------
27,105,756
------------
FOOD RETAIL--1.28%
269,600 Kroger Co.*(1)................................................................. 5,577,350
------------
HOUSEHOLD PRODUCTS--2.12%
166,600 Colgate-Palmolive Co. ......................................................... 9,277,538
------------
INDUSTRIAL SERVICES & SUPPLIES--4.33%
353,400 Tyco International Ltd. ....................................................... 18,906,900
------------
INFORMATION & COMPUTER SERVICES--3.50%
50,800 America Online Inc.*........................................................... 2,708,275
27,000 Computer Sciences Corp.*....................................................... 1,687,500
56,900 Nortel Networks Corp. ......................................................... 4,231,937
26,000 VeriSign, Inc.*(1)............................................................. 4,125,875
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
INFORMATION & COMPUTER SERVICES--(CONCLUDED)
19,600 Yahoo, Inc.*................................................................... $ 2,522,275
------------
15,275,862
------------
LEISURE--2.08%
202,700 Harley Davidson Inc.(1)........................................................ 9,096,163
------------
LONG DISTANCE & PHONE COMPANIES--0.50%
61,700 Sprint Corp. .................................................................. 2,198,062
------------
MEDIA--5.35%
91,300 Comcast Corp., Class A......................................................... 3,105,626
643,100 Liberty Media Group, Class A*.................................................. 14,308,975
77,700 Time Warner, Inc. ............................................................. 5,958,619
------------
23,373,220
------------
MEDICAL PRODUCTS--3.44%
112,000 Guidant Corp.*................................................................. 6,314,000
171,000 Medtronic, Inc.(1)............................................................. 8,731,687
------------
15,045,687
------------
OTHER INSURANCE--3.10%
154,200 American International Group, Inc. ............................................ 13,521,412
------------
SECURITIES & ASSET MANAGEMENT--3.56%
16,000 Merrill Lynch & Co., Inc. ..................................................... 2,068,000
147,800 Morgan Stanley Dean Witter & Co.(1)............................................ 13,486,750
------------
15,554,750
------------
SEMICONDUCTOR--11.24%
133,200 Altera Corp.*(1)............................................................... 13,078,575
44,600 Applied Materials, Inc.*....................................................... 3,384,025
354,400 Intel Corp.(1)................................................................. 23,656,200
36,000 JDS Uniphase Corp.*(1)......................................................... 4,252,500
24,300 PMC-Sierra, Inc.*.............................................................. 4,711,162
------------
49,082,462
------------
SPECIALTY RETAIL--2.69%
166,350 Home Depot, Inc. .............................................................. 8,608,613
92,000 Tiffany & Co. ................................................................. 3,151,000
------------
11,759,613
------------
WIRELESS TELECOMMUNICATIONS--6.48%
71,575 Amdocs LTD*(1)................................................................. 4,808,945
165,000 AT&T Wireless Group*........................................................... 4,537,500
284,700 Nokia Corp., ADR............................................................... 12,615,769
146,900 Vodafone Group PLC, ADR*(1).................................................... 6,335,063
------------
28,297,277
------------
Total Investments (cost--$304,876,461)--99.91%............................................ 436,401,239
404,870
Other assets in excess of liabilities--0.09%..............................................
------------
Net Assets--100.00%....................................................................... $436,806,109
============
</TABLE>
-----------------
* Non-Income producing security.
ADR American Depositary Receipt.
(1) Security, or portion thereof, was on loan at July 31, 2000.
See accompanying notes to financial statements.
57
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 2000
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
COMMON STOCKS--94.31%
AGRICULTURE, FOOD & BEVERAGE--3.89%
7,500 Agribrands International, Inc.*.................................................................... $ 281,250
9,700 Andersons Inc...................................................................................... 84,269
6,200 International Multifoods Corp...................................................................... 108,112
132,900 McCormick & Company Inc............................................................................ 3,895,631
13,700 Nash Finch Co...................................................................................... 124,156
18,950 Pilgrims Pride Corp., Class A...................................................................... 99,488
37,900 Pilgrims Pride Corp., Class B...................................................................... 274,775
14,600 Sanderson Farms Inc................................................................................ 93,075
5,500 Suprema Specialties Inc.*.......................................................................... 56,719
9,300 Sylvan, Inc.*...................................................................................... 90,094
209,100 Whitman Corp....................................................................................... 3,123,431
20,000 WLR Foods Inc.*.................................................................................... 92,500
------------
8,323,500
------------
AIRLINES--0.70%
21,000 Alaska Air Group, Inc.* (1)........................................................................ 576,187
44,700 America West Holding Corp.* (1).................................................................... 717,994
7,100 Amtran Inc.*....................................................................................... 93,188
49,600 Hawaiian Airlines Inc.*............................................................................ 114,700
------------
1,502,069
------------
ALCOHOL--0.02%
1,200 Golden State Vintners, Inc.*....................................................................... 5,550
5,900 Todhunter International Inc.*...................................................................... 44,250
------------
49,800
------------
APPAREL, RETAIL--0.90%
17,400 Abercrombie and Fitch Co.* (1)..................................................................... 279,487
35,300 Burlington Coat Factory Warehouse Corp............................................................. 414,775
1,900 Cache, Inc.*....................................................................................... 5,581
19,200 Cato Corp., Class A................................................................................ 213,600
14,400 Finish Line Inc.*.................................................................................. 116,100
22,100 Genesco Inc.*...................................................................................... 337,025
40,200 Goodys Family Clothing Inc.*....................................................................... 209,794
11,200 J. Baker, Inc...................................................................................... 57,400
8,200 Jos. A. Bank Clothiers, Inc.*...................................................................... 32,800
12,400 One Price Clothing Stores Inc.*.................................................................... 23,250
10,400 Paul Harris Stores Inc.*........................................................................... 30,550
5,700 S & K Famous Brands Inc.*.......................................................................... 45,244
7,700 Shoe Carnival, Inc.*............................................................................... 48,125
4,900 Shoe Pavilion, Inc.*............................................................................... 11,025
4,900 The Buckle, Inc.*.................................................................................. 66,762
3,600 United Retail Group Inc.*.......................................................................... 21,038
------------
1,912,556
------------
APPAREL, TEXTILES--1.36%
17,200 Brown Shoe Inc..................................................................................... 244,025
30,000 Burlington Industries Inc.*........................................................................ 48,750
6,700 Culp, Inc.......................................................................................... 38,106
8,200 Cutter & Buck Inc.*................................................................................ 70,725
10,700 Dan River Inc.*.................................................................................... 48,150
3,832 Decorator Industries, Inc.......................................................................... 16,765
14,700 Dixie Group Inc.*.................................................................................. 77,175
6,400 Garan Inc.......................................................................................... 140,000
13,400 Gerber Childrenswear Inc.*......................................................................... 69,512
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
APPAREL, TEXTILES--(CONCLUDED)
2,500 Haggar Corp........................................................................................ $ 30,938
1,800 Hallwood Group Inc.*............................................................................... 12,713
4,600 Hampshire Group, Ltd.*............................................................................. 38,238
6,400 K-Swiss, Inc....................................................................................... 108,800
19,600 Kellwood Co........................................................................................ 438,550
10,600 Maxwell Shoe Inc.*................................................................................. 114,612
26,700 Nautica Enterprises Inc.*.......................................................................... 290,362
9,600 Oxford Industries Inc.............................................................................. 185,400
8,100 Perry Ellis International Inc.*.................................................................... 78,975
1,482 Simone Central Holdings Inc.*...................................................................... 2,779
400 Sport Haley Inc.*.................................................................................. 1,475
6,900 Tandy Brands Accessories Inc.*..................................................................... 61,237
9,200 Tarrant Apparel Group*............................................................................. 73,600
12,900 Warnaco Group Inc., Class A........................................................................ 53,213
31,200 Westpoint Stevens Inc. (1)......................................................................... 374,400
3,600 Weyco Group Inc.................................................................................... 90,000
17,700 Wolverine World Wide Inc. (1)...................................................................... 186,956
------------
2,895,456
------------
BANKS--2.08%
1,100 American Bank Inc.................................................................................. 20,900
5,200 Arrow Financial Corp............................................................................... 79,625
3,000 BostonFed Bancorp, Inc............................................................................. 44,625
1,500 BYL Bancorp*....................................................................................... 13,406
34,300 Citizens Banking Corp.............................................................................. 686,000
2,700 Columbia Bancorp................................................................................... 26,831
34,900 Commercial Federal Corp............................................................................ 619,475
3,700 Community Bank Systems, Inc........................................................................ 81,862
17,500 Corus Bank Shares Inc.............................................................................. 511,875
18,600 Delta Financial Corp.*............................................................................. 25,575
12,800 First Citizens Bancshares, Inc..................................................................... 780,800
3,200 GBC Bancorp........................................................................................ 104,000
3,900 IBERIABANK Corp.................................................................................... 64,350
1,900 Independent Bank Corp.............................................................................. 21,969
3,500 Industrial Bancorp, Inc............................................................................ 42,000
6,800 Merchants Bancshares Inc........................................................................... 132,600
10,600 National City Bancorp.............................................................................. 155,025
3,130 Northrim Bank Alaska............................................................................... 23,084
2,100 PFF Bancorp, Inc................................................................................... 36,488
4,000 Republic Bancorp Inc............................................................................... 32,500
6,000 Sterling Bancorp................................................................................... 96,000
9,700 Sterling Financial Corp.*.......................................................................... 108,519
8,050 Three Rivers Bancorp, Inc.......................................................................... 65,909
16,100 U.S. Bancorp, Inc.................................................................................. 79,494
22,700 Webster Financial Corp............................................................................. 507,912
3,600 West Coast Bancorp................................................................................. 33,075
3,900 Yardville National Bancorp......................................................................... 41,438
------------
4,435,337
------------
CHEMICALS--2.84%
7,100 A. Schulman, Inc................................................................................... 89,194
4,100 American Biltrite Inc.............................................................................. 50,738
5,100 American Pacific Corp.*............................................................................ 32,513
3,300 American Vanguard Corp............................................................................. 26,813
4,800 Ameron, Inc........................................................................................ 180,000
4,700 Associate Materials Inc............................................................................ 76,963
</TABLE>
58
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
CHEMICALS--(CONCLUDED)
24,500 Avery Dennison Corp................................................................................ $ 1,329,125
9,600 Bairnco Corp....................................................................................... 69,000
5,900 Chemfab Corp.*..................................................................................... 106,937
101,100 Ethyl Corp......................................................................................... 202,200
4,300 Foamex International Inc.*......................................................................... 29,025
50,400 Gencorp Inc........................................................................................ 400,050
49,600 International Specialty Products Inc.*............................................................. 291,400
15,100 Ivex Packaging Corp.*.............................................................................. 156,662
9,100 Lydall Inc.*....................................................................................... 101,238
15,700 Myers Industries, Inc.............................................................................. 209,987
3,100 NCH Corp........................................................................................... 118,187
61,600 NL Industries Inc.................................................................................. 1,139,600
4,100 Oil-Dri Corporation of America..................................................................... 32,800
50,400 Omnova Solutions Inc............................................................................... 321,300
8,100 Patrick Industries Inc............................................................................. 55,434
10,800 Quaker Chemical.................................................................................... 184,275
5,300 Raven Industries Inc............................................................................... 79,500
11,700 Stepan Chemical Co................................................................................. 257,400
5,200 Summa Industries*.................................................................................. 62,075
46,300 W.R. Grace & Co.*.................................................................................. 457,212
------------
6,059,628
------------
COMPUTER HARDWARE--1.50%
14,400 Amplicon Inc....................................................................................... 136,800
17,400 Gerber Scientific, Inc............................................................................. 174,000
4,000 Global Imaging Systems, Inc.*...................................................................... 31,000
9,400 Gradco Systems Inc.*............................................................................... 14,394
4,100 McRae Industries Inc............................................................................... 21,012
21,100 Paravant Inc.*..................................................................................... 60,662
73,000 Pitney Bowes, Inc.................................................................................. 2,527,625
14,400 PSC Inc.*.......................................................................................... 52,200
18,900 ScanSoft, Inc.*.................................................................................... 34,847
43,300 Systemax Inc.*..................................................................................... 159,669
------------
3,212,209
------------
COMPUTER SOFTWARE--0.35%
40,400 Avant Corp.*....................................................................................... 631,250
6,900 Bell Industries, Inc.*............................................................................. 17,250
9,600 Comdial Corp.*..................................................................................... 24,600
2,700 Concentrex, Inc.*.................................................................................. 18,394
4,300 Software Spectrum, Inc.*........................................................................... 66,112
------------
757,606
------------
CONSTRUCTION--6.75%
10,100 Beazer Homes USA, Inc.*............................................................................ 212,731
8,500 Butler Manufacturing Co............................................................................ 176,906
4,100 Catalina Lighting, Inc.*........................................................................... 17,425
34,100 Champion Enterprise Inc.*.......................................................................... 185,419
77,200 D.R. Horton Inc.................................................................................... 1,196,600
35,000 Dal-Tile International Inc.*....................................................................... 315,000
6,100 Dominion Homes Inc.*............................................................................... 32,597
3,500 EMCOR Group, Inc.*................................................................................. 82,031
13,500 Engle Homes Inc.................................................................................... 129,094
33,800 Hovnanian Enterprises Inc.*........................................................................ 202,800
35,100 Kaufman and Broad Home Corp........................................................................ 686,644
19,900 M.D.C. Holdings, Inc............................................................................... 398,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
CONSTRUCTION--(CONCLUDED)
10,700 M/I Schottenstein Homes, Inc....................................................................... $ 192,600
2,700 Meadow Valley Corp.*............................................................................... 8,269
4,300 Miller Building Systems Inc.*...................................................................... 32,788
13,100 Morrison Knudsen Corp.*............................................................................ 126,087
21,900 NCI Building Systems Inc.*......................................................................... 413,362
3,800 Nobility Homes Inc.*............................................................................... 21,494
13,200 NVR Inc.*.......................................................................................... 813,450
22,900 Owens Corning...................................................................................... 125,950
17,900 Palm Harbor Homes Inc.*............................................................................ 264,025
6,100 Park Ohio Holdings Corp.*.......................................................................... 56,425
6,900 Perini Corp........................................................................................ 27,600
33,600 Pulte Corp......................................................................................... 770,700
10,300 Railworks Corp.*................................................................................... 95,275
190,900 Rouse Co........................................................................................... 4,975,331
18,000 Ryland Group Inc................................................................................... 360,000
7,500 Silverleaf Resorts Inc.*........................................................................... 25,313
10,900 Skyline Corp....................................................................................... 220,044
35,900 Standard Pacific Corp.............................................................................. 455,481
44,100 Toll Brothers Inc.*................................................................................ 1,066,669
27,100 Trammell Crow Co.*................................................................................. 281,162
5,300 Wabash National Corp............................................................................... 56,975
9,400 Washington Homes Inc............................................................................... 61,100
22,000 Webb Delaware Corp................................................................................. 335,500
------------
14,420,847
------------
CONSUMER DURABLES--5.00%
12,900 Chromcraft Revington Inc.*......................................................................... 141,900
12,200 Flexsteel Industries Inc........................................................................... 150,213
39,100 Furniture Brands International, Inc.*.............................................................. 579,169
174,900 Herman Miller Inc.................................................................................. 5,487,487
8,900 Home Products International Inc.*.................................................................. 26,700
63,900 Interface, Inc..................................................................................... 327,487
188,200 Leggett & Platt, Inc. (1).......................................................................... 3,293,500
16,390 Rowe Furniture Corp................................................................................ 73,755
19,900 Royal Appliance Manufacturing Co.*................................................................. 104,475
8,600 Stanley Furniture Co., Inc.*....................................................................... 194,575
7,200 The First Years Inc................................................................................ 78,750
7,900 U.S. Can Corp.*.................................................................................... 148,125
6,788 Virco Manufacturing Corp........................................................................... 86,547
------------
10,692,683
------------
DEFENSE/AEROSPACE--1.02%
5,900 AAR Corp........................................................................................... 70,800
6,900 Ducommun Inc.*..................................................................................... 92,287
8,100 EDO Corp........................................................................................... 48,094
6,200 Herley Industries, Inc.*........................................................................... 111,600
1,900 International Airline Support Inc.*................................................................ 3,800
6,900 Kellstrom Industries Inc.*......................................................................... 38,812
9,800 Ladish Co., Inc.*.................................................................................. 106,575
1,000 LMI Aerospace Inc.*................................................................................ 2,438
6,600 Moog Inc.*......................................................................................... 191,400
23,100 Precision Castparts Corp........................................................................... 1,476,956
6,000 SIFCO Industries, Inc.............................................................................. 36,375
------------
2,179,137
------------
</TABLE>
59
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
DIVERSIFIED RETAIL--0.35%
18,500 BonTon Stores Inc.*................................................................................ $ 43,938
11,800 Elder Beerman Stores Corp.*........................................................................ 51,256
45,900 Homebase Inc.*..................................................................................... 111,881
14,100 Jo-Ann Stores, Inc.*............................................................................... 102,225
20,700 RDO Equipment Co.*................................................................................. 90,562
23,600 Shopko Stores, Inc.*............................................................................... 340,725
5,300 Specialty Catalog Corp.*........................................................................... 13,913
------------
754,500
------------
DRUGS & MEDICINE--1.47%
34,600 Cardinal Health, Inc. (1).......................................................................... 2,543,100
5,800 Chattem, Inc.*..................................................................................... 71,050
32,004 Herbalife International Inc., Class A.............................................................. 306,038
19,533 Herbalife International Inc., Class B*............................................................. 180,680
5,000 Natrol, Inc.*...................................................................................... 11,875
7,700 USANA Health Sciences, Inc.*....................................................................... 23,100
------------
3,135,843
------------
ELECTRIC UTILITIES--1.09%
8,900 Bangor Hydro Electric Co........................................................................... 208,594
3,100 Central Vermont Public Service Corp................................................................ 36,813
14,271 Lennox International Inc........................................................................... 188,199
400 Maine Public Service Co............................................................................ 9,450
49,300 Public Service Co. of New Mexico................................................................... 893,562
43,500 RGS Energy Group Inc............................................................................... 997,781
------------
2,334,399
------------
ELECTRICAL EQUIPMENT--0.03%
4,200 Pioneer-Standard Electronics, Inc.................................................................. 56,700
------------
ELECTRICAL POWER--0.71%
10,000 A.O. Smith Corp.................................................................................... 161,250
10,500 Alpine Group, Inc.*................................................................................ 69,563
10,100 Carbide/Graphite Group Inc.*....................................................................... 43,556
28,300 Hughes Supply, Inc................................................................................. 535,931
10,500 Lamson & Sessions Co.*............................................................................. 182,438
2,800 Lincoln Electric Holdings Inc...................................................................... 42,350
2,200 LSI Industries Inc................................................................................. 36,850
13,400 Woodward Governor Co............................................................................... 442,200
------------
1,514,138
------------
ELECTRONIC COMPONENTS--0.27%
12,200 SLI, Inc........................................................................................... 131,913
14,200 Triumph Group Inc.*................................................................................ 434,875
------------
566,788
------------
ENTERTAINMENT--0.76%
86,400 Carnival Corp...................................................................................... 1,614,600
------------
ENVIRONMENTAL SERVICES--0.52%
2,400 ATG Inc.*.......................................................................................... 5,550
7,100 Exponent Inc.*..................................................................................... 63,013
16,500 IT Group, Inc.*.................................................................................... 72,188
5,000 Met-Pro Corp....................................................................................... 50,625
99,800 ServiceMaster Co................................................................................... 929,387
------------
1,120,763
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
FINANCIAL SERVICES--3.58%
30,700 Advanta Corp. (1).................................................................................. $ 351,131
2,700 American Business Financial Services, Inc. (1)..................................................... 36,788
28,000 Bluegreen Corp.*................................................................................... 77,000
5,100 CCBT Financial Companies Inc....................................................................... 80,962
3,800 DeWolfe Companies, Inc.*........................................................................... 28,975
11,400 Ezcorp Inc.*....................................................................................... 16,744
11,400 Gallagher (Arthur J) & Co.......................................................................... 559,312
49,100 H&R Block, Inc..................................................................................... 1,571,200
3,800 Hawthorne Financial Corp.*......................................................................... 38,950
9,200 Kaye Group Inc..................................................................................... 57,500
4,100 Main St. & Main Inc.*.............................................................................. 10,891
3,900 Matrix Bancorp Inc.*............................................................................... 40,463
132,100 MBNA Corp.......................................................................................... 4,408,837
3,700 New Century Financial Corp.* (1)................................................................... 44,227
4,800 Onyx Acceptance Corp.*............................................................................. 21,900
3,200 Pacific Crest Capital Inc.......................................................................... 39,200
5,900 Refac*............................................................................................. 18,806
22,300 Resource Bank Shares Mortgage Group Inc............................................................ 91,987
1,300 TFC Enterprises, Inc.*............................................................................. 2,356
3,500 Ugly Duckling Corp.*............................................................................... 24,938
1,700 Union Acceptance Corp.*............................................................................ 10,413
23,000 World Acceptance Corp.*............................................................................ 117,875
------------
7,650,455
------------
FOOD RETAIL--0.88%
52,025 Albertson's Inc.................................................................................... 1,570,504
25,000 M & F Worldwide Corp.*............................................................................. 137,500
8,700 Marsh Supermarkets Inc............................................................................. 130,500
3,650 Schultz Sav-O Stores, Inc.......................................................................... 43,344
------------
1,881,848
------------
FOREST PRODUCTS, PAPER--0.35%
3,000 Baltek Corp.*...................................................................................... 20,437
6,400 BCT International Inc.*............................................................................ 10,000
9,450 Fibermark Inc.*.................................................................................... 112,809
34,400 Graphic Packaging International Corp.*............................................................. 81,700
1,000 Quipp Inc.*........................................................................................ 21,000
14,290 Republic Group Inc................................................................................. 184,877
19,100 Schweitzer Mauduit International Inc............................................................... 253,075
4,700 Universal Forest Products, Inc..................................................................... 59,044
1,100 Wickes Co.*........................................................................................ 5,294
------------
748,236
------------
FREIGHT, AIR, SEA & LAND--1.69%
7,500 AirNet Systems, Inc.*.............................................................................. 35,625
23,800 Arkansas Best Corp.*............................................................................... 337,662
34,900 Arnold Industries Inc.............................................................................. 477,694
4,300 Boyd Brothers Transportation Inc.*................................................................. 17,200
8,500 CD&L, Inc.*........................................................................................ 9,563
10,700 Consolidated Freightways Corp.*.................................................................... 47,147
12,500 Covenant Transport, Inc., Class A*................................................................. 100,000
5,800 Genesee & Wyoming Inc.*............................................................................ 108,750
3,500 M.S. Carriers, Inc.*............................................................................... 70,219
4,100 Motor Cargo Industries, Inc.*...................................................................... 18,963
</TABLE>
60
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
FREIGHT, AIR, SEA & LAND--(CONCLUDED)
14,200 Old Dominion Freight Lines Inc.*................................................................... $ 138,450
10,200 PAM Transportation Services Inc.*.................................................................. 93,075
36,500 Roadway Express Inc................................................................................ 866,875
6,100 Smithway Motor Xpress Corp.*....................................................................... 18,681
8,100 Transport Corp. of America*........................................................................ 48,600
17,800 U.S. Xpress Enterprises Inc.*...................................................................... 145,181
11,300 USA Truck Inc.*.................................................................................... 74,862
19,000 USFreightways Corp................................................................................. 527,250
30,100 Yellow Corp.*...................................................................................... 483,481
------------
3,619,278
------------
GAS UTILITY--0.03%
3,850 Energysouth Inc.................................................................................... 72,188
------------
HEAVY MACHINERY--0.73%
13,800 Cascade Corp....................................................................................... 175,087
16,400 Columbus Mckinnon Corp............................................................................. 241,900
7,800 Gehl Co.*.......................................................................................... 106,275
32,000 JLG Industries, Inc................................................................................ 326,000
9,900 NACCO Industries Inc............................................................................... 359,494
1,100 Richton International Corp.*....................................................................... 21,175
19,700 Terex Corp.*....................................................................................... 325,050
------------
1,554,981
------------
HOTELS--0.74%
8,700 Anchor Gaming*..................................................................................... 471,431
4,500 Black Hawk Gaming & Development Inc.*.............................................................. 29,250
74,900 Boyd Gaming Corp.*................................................................................. 332,369
12,825 Lakes Gaming Inc.*................................................................................. 115,425
62,500 Prime Hospitality Corp.*........................................................................... 593,750
6,700 Suburban Lodges America Inc.*...................................................................... 47,738
------------
1,589,963
------------
HOUSEHOLD PRODUCTS--4.30%
77,800 Clorox Co. (1)..................................................................................... 3,214,112
7,500 CPAC Inc........................................................................................... 56,250
2,000 Dixon Ticonderoga Co.*............................................................................. 6,250
70,300 Fortune Brands, Inc. (1)........................................................................... 1,581,750
16,700 French Fragrances Inc.* (1)........................................................................ 133,600
24,700 Jason Inc.*........................................................................................ 265,525
32,300 National Service Industries, Inc................................................................... 660,131
121,700 Newell Rubbermaid, Inc............................................................................. 3,278,294
------------
9,195,912
------------
INDUSTRIAL PARTS--0.29%
17,700 Briggs & Stratton Corp............................................................................. 622,819
------------
INDUSTRIAL SERVICES & SUPPLIES--3.84%
16,200 Amerco*............................................................................................ 319,950
29,200 ArvinMeritor, Inc.................................................................................. 456,250
37,800 Avis Rental A Car Inc.*............................................................................ 845,775
14,200 Burns International Services Corp.*................................................................ 188,150
5,300 Butler International Inc.*......................................................................... 38,425
22,000 CDI Corp.*......................................................................................... 437,250
7,400 Childrens Comprehensive Services*.................................................................. 21,738
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
INDUSTRIAL SERVICES & SUPPLIES--(CONCLUDED)
27,600 Comfort Systems USA Inc.*.......................................................................... $ 122,475
7,500 Cornell Companies, Inc.*........................................................................... 48,281
7,000 Correctional Services Corp.*....................................................................... 32,375
19,200 Dollar Thrifty Automotive Group, Inc.*............................................................. 361,200
90,300 Harte-Hanks Co..................................................................................... 2,285,719
8,500 Headway Corporate Resources Inc.*.................................................................. 24,969
13,350 Healthcare Services Group Inc.*.................................................................... 63,412
5,600 Innotrac Corp.*.................................................................................... 28,700
1,200 International Aircraft Investors*.................................................................. 6,300
36,350 Interpool Inc...................................................................................... 415,753
7,900 McGrath Rentcorp................................................................................... 119,487
16,800 National Equipment Services Inc.*.................................................................. 88,200
10,100 National Technical Systems Inc..................................................................... 37,875
34,500 Personnel Group of America Inc.*................................................................... 109,969
12,216 Pittston Brinks Group.............................................................................. 146,592
44,700 Rollins Truck Leasing Corp......................................................................... 318,487
21,800 Simpson Industries, Inc............................................................................ 177,125
15,300 SOS Staffing Services Inc.*........................................................................ 40,163
3,300 Sterile Recoveries Inc.*........................................................................... 32,175
7,700 Superior Surgical Manufacturing Inc................................................................ 60,638
23,900 Unifirst Corp...................................................................................... 224,062
31,500 Wallace Computer Series, Inc....................................................................... 281,531
19,200 Westaff Inc.*...................................................................................... 81,600
28,700 York International Corp............................................................................ 798,219
680 Zimmerman Sign Co.*................................................................................ 2,040
------------
8,214,885
------------
INFORMATION & COMPUTER SERVICES--4.14%
5,400 Amrep Corp.*....................................................................................... 27,338
9,300 Corrpro Companies Inc.*............................................................................ 33,131
56,100 Dun & Bradstreet Corp.............................................................................. 1,658,456
167,700 Equifax, Inc. (1).................................................................................. 3,961,912
5,800 FTI Consulting, Inc.*.............................................................................. 59,812
3,795 General Employment Enterprises*.................................................................... 13,757
23,100 Magellan Health Services Inc.*..................................................................... 37,538
2,900 Marlton Technologies, Inc.*........................................................................ 5,619
10,400 Navigant Consulting Co.*........................................................................... 35,100
7,700 OrthAlliance, Inc.*................................................................................ 43,313
2,800 Pomeroy Computer Resources, Inc.*.................................................................. 47,600
4,600 Right Management Consultants, Inc.*................................................................ 46,000
71,800 Sun Guard Data Systems*............................................................................ 2,373,887
1,000 Transport Lux Corp................................................................................. 4,625
12,400 URS Corp.*......................................................................................... 186,000
63,800 US Oncology, Inc.*................................................................................. 319,000
------------
8,853,088
------------
LEISURE--4.55%
6,050 Boston Acoustics Inc............................................................................... 65,794
6,400 Brass Eagle Inc.*.................................................................................. 24,000
5,600 Cannondale Corp.*.................................................................................. 35,175
19,200 Department 56 Inc.*................................................................................ 189,600
4,800 Ellett Brothers Inc................................................................................ 15,900
2,300 Escalade Inc.*..................................................................................... 41,688
43,400 GTECH Holdings Corp.*.............................................................................. 886,987
269,200 Hasbro, Inc........................................................................................ 3,062,150
143,100 International Game Technology*..................................................................... 4,248,281
</TABLE>
61
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
LEISURE--(CONCLUDED)
8,000 Johnson Outdoors Inc.*............................................................................. $ 49,500
20,000 K2 Inc.*........................................................................................... 198,750
3,600 Koss Corp.*........................................................................................ 68,400
10,900 MarineMax, Inc.*................................................................................... 84,475
5,400 McNaughton Apparel Group Inc.*..................................................................... 68,850
12,900 Oneida Ltd......................................................................................... 233,812
7,600 OroAmerica Inc.*................................................................................... 53,200
9,900 Russ Berrie & Company Inc.......................................................................... 194,288
20,900 Sturm Ruger & Co. Inc.............................................................................. 184,181
5,200 Travis Boats & Motors, Inc.*....................................................................... 21,450
------------
9,726,481
------------
LIFE INSURANCE--1.17%
23,800 AmerUs Life Holdings, Inc.......................................................................... 544,425
2,812 Cotton States Life Insurance Co.................................................................... 25,132
24,881 Delphi Financial Group, Inc.*...................................................................... 957,918
21,400 Great American Financial Resources, Inc............................................................ 374,500
5,800 Independence Holding Co............................................................................ 79,388
4,200 National Western Life Insurance Co.*............................................................... 308,700
9,200 Penn Treaty American Corp.*........................................................................ 147,200
1,700 Presidential Life Corp............................................................................. 24,544
9,200 Standard Management Corp.*......................................................................... 34,500
------------
2,496,307
------------
LONG DISTANCE & PHONE COMPANIES--1.83%
133,700 CenturyTel, Inc.................................................................................... 3,919,081
------------
MANUFACTURING--GENERAL--2.62%
8,100 Alltrista Corp.*................................................................................... 180,225
9,600 Amcast Industrial Corp............................................................................. 103,200
11,600 Ampco-Pittsburgh Corp.............................................................................. 137,750
6,800 Avteam Inc.*....................................................................................... 12,538
27,800 Baldwin Technology Inc.*........................................................................... 53,862
9,000 Ballantyne Omaha Inc.*............................................................................. 19,688
23,000 Barnes Group Inc................................................................................... 454,250
500 Chicago Rivet Machine Co........................................................................... 10,625
7,100 CTB International Corp.*........................................................................... 53,250
6,000 Denali Inc.*....................................................................................... 7,125
18,500 Detroit Diesel Corp................................................................................ 420,875
6,500 Farrel Corp........................................................................................ 9,750
7,900 Featherlite Manufacturing Inc.*.................................................................... 27,650
27,900 Fedders Corp....................................................................................... 144,731
25,100 Gentek Inc......................................................................................... 288,650
1,800 Graham Corp.*...................................................................................... 14,175
9,000 Hardinge, Inc...................................................................................... 119,250
7,200 Hurco Companies Inc.*.............................................................................. 27,000
6,500 JLK Direct Distribution Inc.*...................................................................... 46,313
3,600 K Tron International Inc.*......................................................................... 61,200
28,500 Kaman Corp......................................................................................... 356,250
15,400 Media Arts Group Inc.*............................................................................. 60,637
8,700 Mestek, Inc.*...................................................................................... 146,269
44,800 Milacron Inc....................................................................................... 644,000
6,800 Nortek, Inc.*...................................................................................... 133,450
2,500 P & F Industries Inc.*............................................................................. 21,250
1,000 Peerless Manufacturing Co.......................................................................... 16,250
3,200 Q E P Inc.*........................................................................................ 28,400
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
MANUFACTURING--GENERAL--(CONCLUDED)
4,000 Riviera Tool Co.*.................................................................................. $ 13,750
23,400 Specialty Equipment Companies Inc.*................................................................ 637,650
1,600 SPS Technologies, Inc.*............................................................................ 71,800
1,700 Standard Motor Products Inc........................................................................ 16,469
8,200 Starrett LS Co..................................................................................... 149,137
8,500 TB Woods Corp...................................................................................... 90,312
15,100 Tecumseh Products Co., Class A..................................................................... 536,050
7,400 Transtechnology Corp............................................................................... 74,925
41,200 Wabtec Corp........................................................................................ 414,575
------------
5,603,281
------------
MANUFACTURING--HIGH TECHNOLOGY--1.34%
6,100 Acme Electric Corp.*............................................................................... 52,231
10,100 Applied Signal Technology Inc...................................................................... 98,475
7,600 Bel Fuse Inc....................................................................................... 209,000
1,300 Bio Rad Laboratories Inc.*......................................................................... 30,713
2,900 Blonder Tongue Labs Inc.*.......................................................................... 19,575
8,200 Channell Commercial Corp.*......................................................................... 102,500
7,300 Cobra Electronics Corp.*........................................................................... 45,169
9,300 Delaware Global Technologies Corp.*................................................................ 84,862
16,600 Esterline Technologies Corp.*...................................................................... 244,850
67,800 Galileo International Inc. (1)..................................................................... 1,305,150
30,600 Generale Cable Corp................................................................................ 263,925
36,800 Griffon Corp.*..................................................................................... 230,000
2,200 Lowrance Electronics, Inc.*........................................................................ 7,975
1,300 Napco Security Systems Inc.*....................................................................... 4,956
15,647 Superior TeleCom Inc............................................................................... 135,933
2,300 Tech/Ops Sevcon, Inc............................................................................... 21,850
1,100 Thermwood Corp.*................................................................................... 5,638
------------
2,862,802
------------
MEDIA--0.82%
53,600 Tribune Co. (1).................................................................................... 1,742,000
------------
MEDICAL PRODUCTS--1.78%
11,500 American Medical Technologies Inc.*................................................................ 14,375
3,200 Lakeland Industries, Inc.*......................................................................... 18,800
4,700 Mesa Labs Inc.*.................................................................................... 26,437
5,400 Minntech Corp...................................................................................... 37,125
21,300 Natures Sunshine Products Inc...................................................................... 170,400
18,000 Sola International Inc.*........................................................................... 106,875
161,500 Sybron International Corp.*........................................................................ 3,361,219
11,000 Utah Medical Products Inc.*........................................................................ 77,000
------------
3,812,231
------------
MEDICAL PROVIDERS--1.19%
6,100 Air Methods Corp.*................................................................................. 26,687
25,500 Ameripath Inc.*.................................................................................... 323,531
124,000 Beverly Enterprises Inc.*.......................................................................... 426,250
23,800 Capital Senior Living Corp.*....................................................................... 71,400
9,400 Carriage Services Inc.*............................................................................ 20,563
7,800 Castle Dental Centers, Inc.*....................................................................... 24,375
5,700 Coast Dental Services Inc.*........................................................................ 9,263
1,000 Curative Health Services, Inc.*.................................................................... 6,375
13,900 Healthcare Recoveries Inc.*........................................................................ 54,731
8,300 Horizon Health Corp.*.............................................................................. 43,575
</TABLE>
62
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
MEDICAL PROVIDERS--(CONCLUDED)
14,400 Monarch Dental Corp.*.............................................................................. $ 39,600
16,800 Pediatrix Medical Group*........................................................................... 258,300
10,500 Prime Medical Services, Inc.*...................................................................... 85,312
25,500 Promedco Management Co.*........................................................................... 34,266
10,600 Raytel Medical Corp.*.............................................................................. 12,588
15,000 Rehabcare Group Inc.*.............................................................................. 533,437
6,200 Rural/Metro Corp.*................................................................................. 11,819
127,000 Service Corporation International.................................................................. 325,437
32,400 Sierra Health Services Inc.*....................................................................... 103,275
64,900 Stewart Enterprises Inc............................................................................ 141,969
------------
2,552,753
------------
MINING & METALS--2.75%
2,000 AK Steel Holding Corp.............................................................................. 20,125
9,200 Atchinson Casting Corp.*........................................................................... 55,200
23,600 Ball Corp.......................................................................................... 818,625
17,300 Bayou Steel Corp.*................................................................................. 38,925
23,500 Centex Construction Products Inc................................................................... 575,750
18,400 Chase Industries Inc.*............................................................................. 167,900
17,300 Commercial Metals Co............................................................................... 508,187
4,400 Eastern Co......................................................................................... 64,350
6,200 Fansteel Inc.*..................................................................................... 25,188
9,039 Friedman Industries, Inc........................................................................... 30,507
21,100 IMCO Recycling Inc................................................................................. 102,862
30,700 Intermet Corp...................................................................................... 222,575
12,500 Lawson Products, Inc............................................................................... 321,875
7,100 Lindberg Corp...................................................................................... 50,588
46,200 Metals USA Inc.*................................................................................... 199,237
11,300 Niagara Corp.*..................................................................................... 49,084
7,800 Northwest Pipe Co.*................................................................................ 99,938
5,800 Oglebay Norton Co.................................................................................. 152,250
6,300 Pitt-Des Moines, Inc............................................................................... 183,881
20,800 Quanex Corp........................................................................................ 374,400
13,450 Roanoke Electric Steel Corp........................................................................ 159,719
11,800 Ryerson Tull, Inc.................................................................................. 103,987
5,100 Schuff Steel Co.*.................................................................................. 13,388
20,900 Silgan Holdings Inc.*.............................................................................. 185,161
13,500 Steel Technologies Inc............................................................................. 92,813
25,400 Texas Industries, Inc.............................................................................. 823,912
38,200 USEC Inc........................................................................................... 167,125
16,100 Wolverine Tube Inc.*............................................................................... 279,737
------------
5,887,289
------------
MOTOR VEHICLES--2.39%
7,800 Bandag Inc......................................................................................... 201,825
20,100 Coachmen Industries, Inc........................................................................... 208,538
59,400 Cooper Tire & Rubber Co............................................................................ 664,537
14,200 Delco Remy International Inc.*..................................................................... 118,925
9,500 Donnelly Corp...................................................................................... 124,688
20,900 Dura Automotive Systems, Inc.*..................................................................... 215,531
6,000 Edelbrock Corp..................................................................................... 58,500
55,900 Federal-Mogul Corp................................................................................. 510,088
40,300 Fleetwood Enterprises Inc. (1)..................................................................... 521,381
22,400 Hayes Lemmerz International Inc.*.................................................................. 302,400
9,100 Keystone Automotive Industries, Inc.*.............................................................. 55,738
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
MOTOR VEHICLES--(CONCLUDED)
54,200 Mascotech Inc...................................................................................... $ 623,300
20,100 Modine Manufacturing Co............................................................................ 542,700
10,100 R & B Inc.*........................................................................................ 25,881
3,805 Rexhall Industries, Inc.*.......................................................................... 18,549
8,000 Rush Enterprises Inc.*............................................................................. 48,250
16,900 Shiloh Industries Inc.*............................................................................ 111,963
2,900 Standard Automotive Corp.*......................................................................... 16,675
15,823 Supreme Industries, Inc.*.......................................................................... 79,115
25,600 TBC Corp.*......................................................................................... 118,400
26,300 Tower Automotive, Inc.* (1)........................................................................ 320,531
1,500 Transportation Components Inc.*.................................................................... 2,531
16,800 Winnebago Industries, Inc.......................................................................... 217,350
------------
5,107,396
------------
OIL REFINING--0.27%
5,100 Adams Resources & Energy Inc....................................................................... 68,213
9,300 Castle Energy Corp................................................................................. 65,681
6,100 Giant Industries Inc.*............................................................................. 42,700
10,000 Holly Corp......................................................................................... 120,000
4,000 Kaneb Services Inc.*............................................................................... 16,750
7,962 Mercury Air Group, Inc.*........................................................................... 50,758
18,800 Petroleum Development Corp.*....................................................................... 94,000
14,700 World Fuel Services Corp........................................................................... 116,681
------------
574,783
------------
OIL SERVICES--0.09%
28,400 Friede Goldman International Inc.*................................................................. 182,825
------------
OTHER INSURANCE--6.53%
10,200 Acceptance Insurance Co.*.......................................................................... 47,175
10,200 Atlantic American Corp.*........................................................................... 21,038
5,880 Bancinsurance Corp.*............................................................................... 23,152
42,200 Commerce Group Inc................................................................................. 1,171,050
8,733 Donegal Group Inc.................................................................................. 62,223
46,000 Enhance Financial Services Group Inc............................................................... 727,375
36,783 Fidelity National Financial, Inc. (1).............................................................. 650,599
7,500 FPIC Insurance Group Inc.* (1)..................................................................... 89,531
32,500 Harleysville Group Inc............................................................................. 591,094
2,200 Investors Title Insurance Co....................................................................... 26,400
18,500 LandAmerica Financial Group Inc.................................................................... 448,625
94,600 MBIA, Inc.......................................................................................... 5,268,037
2,100 Midland Co......................................................................................... 55,650
7,300 Philadelphia Consolidated Holding Corp.* (1)....................................................... 118,169
5,596 Professionals Insurance Company Management Group*.................................................. 124,511
15,300 Radiologix Inc.*................................................................................... 61,200
13,875 RLI Corp........................................................................................... 485,625
23,100 State Auto Financial Corp.......................................................................... 264,206
17,400 Stewart Information Services Corp.*................................................................ 230,550
7,600 Unico American Corp................................................................................ 50,825
8,800 Vesta Insurance Group, Inc......................................................................... 47,850
51,400 Xl Capital Ltd. (1)................................................................................ 3,392,400
------------
13,957,285
------------
</TABLE>
63
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
PRECIOUS METALS--0.00%
1,900 Michael Anthony Jewelers Inc.*..................................................................... $ 4,038
------------
PRINTING-COMMERCIAL--0.02%
6,100 Mail-Well, Inc.*................................................................................... 43,081
------------
PUBLISHING--5.72%
11,400 Cadmus Communications Corp......................................................................... 92,625
11,000 Consolidated Graphics, Inc.*....................................................................... 117,563
3,400 Courier Corp....................................................................................... 99,450
19,700 Ennis Business Forms Inc........................................................................... 157,600
96,600 Houghton Mifflin Co. (1)........................................................................... 4,576,425
155,400 Lee Enterprises Inc................................................................................ 4,118,100
64,200 McClatchy Co....................................................................................... 2,178,787
10,000 New England Business Service, Inc.................................................................. 207,500
7,900 Primesource Corp................................................................................... 39,994
21,400 Standard Register.................................................................................. 274,187
20,800 Standex International Corp......................................................................... 358,800
------------
12,221,031
------------
RAILROADS--0.35%
26,800 Greenbrier Companies, Inc.......................................................................... 222,775
27,400 Trinity Industries, Inc............................................................................ 527,450
------------
750,225
------------
REAL PROPERTY--0.02%
1,300 Crossmann Communities, Inc.*....................................................................... 19,500
2,000 Meritage Corp.*.................................................................................... 26,000
------------
45,500
------------
RESTAURANTS--1.30%
4,000 Arkansas Restaurants Corp.*........................................................................ 37,500
3,500 Benihana Inc.*..................................................................................... 45,500
93,400 Bob Evans Farms Inc................................................................................ 1,494,400
63,000 CKE Restaurants, Inc............................................................................... 185,063
1,700 Dave & Busters Inc.*............................................................................... 10,944
5,200 ELXSI Corp.*....................................................................................... 57,850
27,100 Lubys Cafeterias Inc............................................................................... 220,187
16,300 NPC International, Inc.*........................................................................... 142,625
29,300 Rainforest Cafe Inc.*.............................................................................. 62,263
44,900 Ryan's Family Steak Houses, Inc.*.................................................................. 409,712
9,800 Schlotzskys Inc.*.................................................................................. 51,450
34,200 Sizzler International Inc.*........................................................................ 64,125
------------
2,781,619
------------
SECURITIES & ASSET MANAGEMENT--2.46%
96,700 Franklin Resources, Inc............................................................................ 3,469,113
5,700 ITLA Capital Corp.*................................................................................ 79,889
8,328 Stifel Financial Corp.............................................................................. 97,854
39,600 T. Rowe Price & Associates Inc..................................................................... 1,618,650
------------
5,265,506
------------
SEMICONDUCTOR--0.11%
1,339 Avnet, Inc......................................................................................... 76,240
800 Bell Microproducts Inc.*........................................................................... 18,900
2,600 Katy Industries Inc................................................................................ 27,300
30,200 Neomagic Corp.*.................................................................................... 89,656
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
SEMICONDUCTOR--(CONCLUDED)
3,900 O.I. Corp.*........................................................................................ $ 13,650
------------
225,746
------------
SPECIALTY RETAIL--2.12%
5,900 A.C. Moore Arts & Crafts, Inc.*.................................................................... 49,413
19,600 Barnett Inc.*...................................................................................... 242,550
4,100 Bebe Stores, Inc.*................................................................................. 40,744
6,500 Brookstone, Inc.*.................................................................................. 76,375
15,300 Building Materials Holding Corp.*.................................................................. 154,912
34,100 Central Garden & Pet Co.*.......................................................................... 251,487
20,100 CSK Auto Corp.*.................................................................................... 170,850
2,100 Discount Auto Parts Inc.*.......................................................................... 17,063
6,100 Duckwall Alto Stores Inc.*......................................................................... 51,088
12,600 Finlay Enterprises Inc.*........................................................................... 162,225
17,400 Friedman's Inc..................................................................................... 100,050
13,700 Hancock Fabrics, Inc............................................................................... 55,656
16,500 Haverty Furniture Companies, Inc................................................................... 190,781
117,500 Longs Drug Stores Corp............................................................................. 2,379,375
9,500 Movie Gallery Inc.*................................................................................ 35,031
43,700 Musicland Stores, Corp.*........................................................................... 344,137
2,700 Piercing Pagoda, Inc.*............................................................................. 39,825
1,200 Tractor Supply Co.*................................................................................ 17,550
5,100 United Auto Group, Inc.*........................................................................... 39,844
6,400 Wolohan Lumber Co.................................................................................. 70,400
10,800 York Group Inc.*................................................................................... 33,750
------------
4,523,106
------------
THRIFT--2.25%
1,400 Alliance Bancorp of New England, Inc............................................................... 11,200
2,700 Bank of the Ozarks, Inc............................................................................ 40,500
2,100 Bank United Corp................................................................................... 76,519
50,537 BankAtlantic Bancorp Inc........................................................................... 170,562
13,500 Bay View Capital Corp.............................................................................. 118,125
10,500 BSB Bancorp, Inc................................................................................... 224,437
4,100 Camco Financial Corp............................................................................... 34,338
4,700 Capital Crossing Bank*............................................................................. 35,838
7,500 Dime Community Bancorp Inc......................................................................... 128,437
34,100 Downey Financial Corp. (1)......................................................................... 1,193,500
3,000 First Bell Bancorp Inc............................................................................. 46,500
4,400 First Essex Bancorp Inc............................................................................ 69,850
5,500 First Republic Bank*............................................................................... 119,625
2,500 FirstFed America Bancorp, Inc...................................................................... 33,125
23,400 FirstFed Financial Corp.*.......................................................................... 374,400
9,800 Flagstar Bancorp Inc............................................................................... 113,312
12,200 Hamilton Bancorp Inc.*............................................................................. 219,600
3,100 Klamath First Bancorp Inc.......................................................................... 34,100
18,800 Local Financial Corp.*............................................................................. 159,800
18,400 MAF Bancorp, Inc................................................................................... 366,850
7,300 Parkvale Financial Corp............................................................................ 124,100
6,200 PennFed Financial Services, Inc.................................................................... 81,375
5,000 Quaker City Bancorp Inc.*.......................................................................... 83,750
11,400 Republic Security Financial Corp................................................................... 49,163
2,300 Southwest Bancorp, Inc............................................................................. 36,513
37,600 Washington Federal Inc............................................................................. 705,000
2,000 Westcorp Inc....................................................................................... 26,000
3,100 WesterFed Financial Corp........................................................................... 45,725
</TABLE>
64
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
THRIFT--(CONCLUDED)
8,000 WSFS Financial Corp................................................................................ $ 81,000
------------
4,803,244
------------
TOBACCO--0.45%
1,700 Holts Cigar Holdings Inc.*......................................................................... 8,500
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
TOBACCO--(CONCLUDED)
15,700 Standard Commercial Corp........................................................................... $ 76,538
39,200 Universal Corp..................................................................................... 869,750
------------
954,788
------------
Total Common Stocks (cost--$218,240,032)...................................................................... 201,584,610
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
--------- -------------------- --------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--5.19%
$ 11,103 Repurchase Agreement dated 07/31/00 with State Street Bank &
Trust Co., collateralized by $3,266,232 U.S. Treasury
Notes, 6.625% due 03/31/02; (value--$3,347,888) and
$6,203,964 U.S. Treasury Bonds, 8.125% due 08/15/19;
(value--$7,979,849); proceeds: $11,104,619
(cost--$11,103,000)....................................... 08/01/00 5.250% 11,103,000
------------
Total Investments (cost--$229,343,032)--99.50%......................... 212,687,610
Other assets in excess of liabilities--0.50%........................... 1,061,259
------------
Net Assets--100.00%.................................................... $213,748,869
============
</TABLE>
-----------------
* Non-income producing security.
(1) Security, or portion thereof, was on loan at July 31, 2000.
See accompanying notes to financial statements.
65
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 2000
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
COMMON STOCKS--95.01%
APPAREL, RETAIL--0.91%
90,000 Hot Topic Inc.*(1)................................................................................. $ 2,902,500
------------
BANKS--1.27%
137,200 Doral Financial Corp. ............................................................................. 1,783,600
102,200 Webster Financial Corp. ........................................................................... 2,286,725
------------
4,070,325
------------
BUSINESS & PUBLIC SERVICES--3.34%
89,700 Bright Horizons Family Solutions*.................................................................. 2,186,438
74,900 Corporate Executive Board Co.*..................................................................... 4,793,600
20,300 Heidrick & Struggles
International, Inc.*............................................................................. 1,360,100
99,100 West Teleservices Corp.*........................................................................... 2,341,237
------------
10,681,375
------------
CABLE--0.10%
24,800 Insight Communications Inc.*....................................................................... 303,800
------------
COMPUTER-BUSINESS SERVICES--2.66%
69,100 Bisys Group Inc.*.................................................................................. 4,387,850
47,300 Digital Insight Corp.*(1).......................................................................... 1,481,081
52,700 eLoyalty Corp.*.................................................................................... 782,266
60,500 Espeed Inc.*....................................................................................... 1,852,812
------------
8,504,009
------------
COMPUTER HARDWARE--5.50%
174,100 Network Appliance, Inc.*(1)........................................................................ 15,005,244
40,500 RSA Security Inc.*................................................................................. 2,566,687
------------
17,571,931
------------
COMPUTER SOFTWARE--14.73%
111,200 Broadbase Software, Inc.*(1)....................................................................... 2,620,150
117,700 CareScience, Inc.*(1).............................................................................. 706,200
56,900 Concord Communications Inc.*(1).................................................................... 1,564,750
76,000 Cysive, Inc.*...................................................................................... 1,824,000
94,800 Exchange Applications Software*(1)................................................................. 2,085,600
29,700 Extensity Inc.*.................................................................................... 480,769
57,585 i2 Technologies, Inc.*(1).......................................................................... 7,471,654
168,700 Jack Henry & Associates Inc.(1).................................................................... 7,570,413
34,500 Manugistics Group, Inc.*........................................................................... 1,914,750
74,900 NetIQ Corp.*(1).................................................................................... 3,613,925
136,100 New Era of Networks, Inc.*(1)...................................................................... 3,402,500
77,000 Onyx Software Corp.*............................................................................... 1,862,437
53,200 Register.com, Inc.*................................................................................ 1,441,388
103,275 VERITAS Software Corp.*............................................................................ 10,527,595
------------
47,086,131
------------
CONSTRUCTION--2.40%
179,050 Dycom Industries Inc.*(1).......................................................................... 7,654,388
------------
DIVERSIFIED RETAIL--1.82%
174,700 Cost Plus Inc.*.................................................................................... 5,819,694
------------
DRUGS & MEDICINE--7.72%
93,200 Cima Labs Inc.*.................................................................................... 2,830,950
86,200 Cubist Pharmaceuticals Inc.*....................................................................... 3,889,775
33,300 Inhale Therapeutic Systems, Inc.*.................................................................. 2,703,544
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
DRUGS & MEDICINE--(CONCLUDED)
137,100 IntraBiotics Pharmaceuticals, Inc.*(1)............................................................. $ 4,095,862
69,600 Pharmacopeia, Inc. Class A*........................................................................ 2,788,350
59,500 Pharmacopeia, Inc. Class B*........................................................................ 2,176,335
63,000 United Therapeutics Corp.*(1)...................................................................... 6,174,000
------------
24,658,816
------------
ELECTRICAL EQUIPMENT--2.29%
42,000 Advanced Energy Industries, Inc.*(1)............................................................... 1,890,000
51,300 LTX Corp.*......................................................................................... 1,128,600
59,900 Teradyne Inc.*..................................................................................... 3,796,163
43,000 Western Multiplex Corp. ........................................................................... 516,000
------------
7,330,763
------------
FINANCIAL SERVICES--1.44%
13,000 GATX Corp. ........................................................................................ 519,188
139,600 Metris Co., Inc. .................................................................................. 4,092,025
------------
4,611,213
------------
FOOD RETAIL--0.53%
84,300 American Italian Pasta Co.*........................................................................ 1,664,925
1,600 Schultz Sav-O Stores, Inc. ........................................................................ 19,000
------------
1,683,925
------------
HOTELS--0.77%
177,800 Extended Stay America Inc.*........................................................................ 2,444,750
------------
HUMAN RESOURCES--0.41%
33,800 Hall, Kinion & Associates, Inc.*................................................................... 1,322,425
------------
INDUSTRIAL PARTS--2.12%
167,600 Mettler-Toledo International Inc.*................................................................. 6,787,800
------------
INDUSTRIAL SERVICES & SUPPLIES--0.22%
9,600 CoorsTek, Inc.*.................................................................................... 413,400
15,800 MSC Industrial Direct Co., Inc. Class A*........................................................... 287,363
------------
700,763
------------
INFORMATION & COMPUTER SERVICES--0.68%
24,500 Diamond Technology Partners Inc.*.................................................................. 2,182,031
------------
INSURANCE--0.78%
40,900 Radian Group Inc. ................................................................................. 2,489,788
------------
MEDIA--6.56%
37,200 Acme Communications Inc.*.......................................................................... 395,250
102,800 Gemstar-TV Guide International, Inc.*.............................................................. 6,251,525
110,100 Getty Images Inc.*(1).............................................................................. 3,984,244
113,500 Radio One, Inc. Class A*(1)........................................................................ 2,645,968
171,200 Radio One, Inc. Class D*(1)........................................................................ 3,231,400
49,200 True North Communications, Inc. ................................................................... 2,401,575
74,400 Westwood One Inc.*................................................................................. 2,069,250
------------
20,979,212
------------
MEDICAL-BIMEDICAL & GENETICS--2.52%
28,900 Exelixis, Inc.*(1)................................................................................. 1,125,294
60,800 Neurocrine Biosciences Inc.*....................................................................... 1,941,800
</TABLE>
66
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
MEDICAL-BIMEDICAL & GENETICS--(CONCLUDED)
87,000 Trimeris, Inc.*(1)................................................................................. $ 4,969,875
------------
8,036,969
------------
OPTICAL--0.34%
29,500 Wesley Jessen Visioncare Inc.*..................................................................... 1,091,500
------------
RESTAURANTS--5.76%
194,800 CEC Entertainment Inc.*............................................................................ 5,430,050
170,625 Cheesecake Factory Inc.*(1)........................................................................ 5,172,070
34,100 Morrison Management Specialists Inc. .............................................................. 982,506
189,400 Ruby Tuesday Inc. ................................................................................. 2,331,988
147,050 Sonic Corp.*....................................................................................... 4,475,834
------------
18,392,448
------------
SEMICONDUCTOR--14.34%
105,600 Applied Micro Circuits Corp.*...................................................................... 15,760,800
325,200 Micrel Inc.*....................................................................................... 16,280,325
71,100 PMC Sierra, Inc.*.................................................................................. 13,784,512
------------
45,825,637
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<C> <S> <C>
SPECIALTY RETAIL--8.79%
264,375 Dollar Tree Stores Inc.*(1)........................................................................ $ 11,252,461
153,200 Duane Reade Inc.*(1)............................................................................... 3,504,450
165,100 Linens 'N Things Inc.*............................................................................. 4,942,681
129,600 Too Inc.*(1)....................................................................................... 2,907,900
152,000 Tweeter Home Entertainment
Group Inc.*...................................................................................... 5,491,000
------------
28,098,492
------------
WIRELESS TELECOMMUNICATIONS--7.01%
400 Leap Wireless International, Inc.*................................................................. 25,400
255,200 Nextlink Communications Inc.*...................................................................... 8,437,550
146,800 Pinnacle Holdings Inc.*............................................................................ 8,248,325
125,900 SBA Communcations Corp.*........................................................................... 5,681,237
------------
22,392,512
------------
Total Common Stocks (cost--$189,563,663)...................................................................... 303,623,197
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
--------- -------------------- --------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--4.06%
$12,966 Repurchase Agreement dated 07/31/00 with State Street
Bank & Trust Co. collateralized by $3,814,282 U.S.
Treasury Notes, 6.625% due 03/31/02; (value--$3,909,639)
and $7,244,943 U.S. Treasury Bonds, 8.125% due 08/15/19;
(value--$9,318,808); proceeds: $12,967,891
(cost--$12,966,000)....................................... 08/01/00 5.250% 12,966,000
------------
316,589,197
Total Investments (cost--$202,529,663)--99.07%.........................
2,982,274
Other assets in excess of liabilities--0.93%...........................
------------
Net Assets--100.00%.................................................... $319,571,471
============
</TABLE>
-----------------
* Non-Income producing security.
(1) Security, or portion thereof, was on loan at July 31, 2000.
See accompanying notes to financial statements
67
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 2000
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
COMMON STOCKS--94.09%
AUSTRALIA--1.88%
LIFE INSURANCE--0.66%
162,500 AMP Ltd......................................................................... $ 1,628,417
------------
MEDIA & PHOTOGRAPHY--0.80%
400,000 John Fairfax Holdings Ltd....................................................... 1,100,575
70,900 News Corp. Ltd.................................................................. 858,339
------------
1,958,914
------------
TRANSPORTATION--0.42%
35,800 Brambles Industries Ltd......................................................... 1,038,931
------------
Total Australia Common Stocks...................................................................... 4,626,262
------------
BRAZIL--0.51%
OIL & GAS--0.51%
48,000 Petroleo Brasileiro S.A., ADR(1)................................................ 1,254,960
------------
CZECH REPUBLIC--0.24%
TELECOMMUNICATIONS--SERVICES--0.24%
13,000 Cseke Radio KomuniKace A.S.,
GDR+.......................................................................... 585,000
------------
FINLAND--2.25%
SOFTWARE & COMPUTER SERVICES--0.34%
23,300 Tieto Corp...................................................................... 825,898
------------
TELECOMMUNICATIONS--SERVICES--1.91%
106,510 Nokia (AB) OY................................................................... 4,718,981
------------
Total Finland Common Stocks........................................................................ 5,544,879
------------
FRANCE--18.32%
BANKS--1.03%
40,760 Societe Generale*............................................................... 2,530,743
------------
CHEMICALS--2.16%
69,190 Aventis S.A..................................................................... 5,328,236
------------
DIVERSIFIED INDUSTRIALS--2.83%
36,178 Vivendi Environnement*.......................................................... 1,126,479
73,066 Vivendi SA...................................................................... 5,836,624
------------
6,963,103
------------
ENGINEERING & MACHINERY--0.42%
42,609 Alstom.......................................................................... 1,044,793
------------
FOOD & DRUG RETAILERS--1.89%
63,417 Carrefour....................................................................... 4,666,221
------------
LIFE INSURANCE--2.22%
35,973 AXA............................................................................. 5,467,133
------------
OIL & GAS--2.21%
36,744 Total FINA S.A., Series B....................................................... 5,444,701
------------
SOFTWARE & COMPUTER SERVICES--1.30%
16,359 Cap Gemini S.A.................................................................. 3,212,379
------------
SUPPORT SERVICES--0.59%
9,190 Sodexho Alliance................................................................ 1,446,932
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
FRANCE--(CONCLUDED)
TELECOMMUNICATIONS--SERVICES--2.01%
67,103 Alcatel*........................................................................ $ 4,949,874
------------
WATER--1.66%
25,073 Suez Lyonnaise des Eaux S.A..................................................... 4,101,003
------------
Total France Common Stocks......................................................................... 45,155,118
------------
GERMANY--1.58%
BANKS--1.58%
10,511 Allianz AG...................................................................... 3,896,314
------------
GREECE--0.24%
TELECOMMUNICATIONS--SERVICES--0.24%
26,100 Hellenic Telecom................................................................ 586,630
------------
HONG KONG--3.18%
BANKS--0.49%
537,000 Bank of East Asia, Ltd.......................................................... 1,215,384
------------
DIVERSIFIED INDUSTRIALS--0.72%
127,300 Hutchison Whampoa Ltd........................................................... 1,771,139
------------
REAL ESTATE--0.98%
125,000 Cheung Kong (Holdings) Ltd...................................................... 1,470,654
120,000 Sun Hung Kai Properties Ltd..................................................... 942,501
------------
2,413,155
------------
TELECOMMUNICATIONS--SERVICES--0.99%
159,000 China Telecom Ltd.*............................................................. 1,264,106
49,860 China Unicom Ltd., ADR*......................................................... 1,174,826
------------
2,438,932
------------
Total Hong Kong Common Stocks...................................................................... 7,838,610
------------
INDIA--0.34%
TELECOMMUNICATIONS--SERVICES--0.34%
77,000 Videsh Sanchar Nigam Ltd., GDR.................................................. 835,450
------------
IRELAND--0.21%
PHARMACEUTICALS--0.21%
9,600 Elan Corp. PLC, ADR*............................................................ 506,758
------------
ISRAEL--0.44%
BANKS--0.22%
194,000 Bank Hapoalim Ltd............................................................... 552,117
------------
INFORMATION TECHNOLOGY HARDWARE--0.22%
7,400 Nice Systems Ltd., ADR(1)*...................................................... 542,050
------------
Total Israel Common Stocks......................................................................... 1,094,167
------------
ITALY--4.19%
BANKS--1.14%
166,206 San Paolo--IMI SPA.............................................................. 2,818,622
------------
INFORMATION TECHNOLOGY HARDWARE--0.81%
155,766 Telecom Italia SPA(1)........................................................... 2,003,555
------------
</TABLE>
68
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
ITALY--(CONCLUDED)
LIFE ASSURANCE--0.60%
117,399 Alleanza Assicurazioni.......................................................... $ 1,463,275
------------
TELECOMMUNICATIONS--SERVICES--1.64%
427,441 Telecom Italia Mobilare SPA..................................................... 4,040,317
------------
Total Italy Common Stocks.......................................................................... 10,325,769
------------
JAPAN--23.34%
AUTOMOBILES--1.35%
74,000 Bridgestone Corp................................................................ 1,696,768
45,000 Honda Motor Co. Ltd............................................................. 1,641,063
------------
3,337,831
------------
CHEMICALS--3.30%
238,000 Asahi Chemical Industries Co. Ltd............................................... 1,514,555
79,000 Shin Etsu Chemical Co. Ltd...................................................... 3,961,344
222,000 Sumitomo Bakelite Co. Ltd.(1)................................................... 2,651,411
------------
8,127,310
------------
CONSTRUCTION & BUILDING MATERIALS--0.33%
128,000 Daiwa House Industry Co. ....................................................... 811,050
------------
ELECTRONIC & ELECTRICAL EQUIPMENT--3.89%
81,000 Canon Inc....................................................................... 3,603,774
14,700 Mabuchi Motor Co. Ltd........................................................... 1,799,891
23,700 Sony Corp....................................................................... 2,175,858
124,000 Sumitomo Electric Industries Ltd................................................ 2,005,525
------------
9,585,048
------------
FOOD & DRUG RETAILERS--0.34%
26,000 Familymart Co. Ltd.............................................................. 853,353
------------
GENERAL RETAILERS--1.14%
23,000 Ito-Yokado Co. Ltd.............................................................. 1,369,285
88,000 Marui Co. Ltd................................................................... 1,442,531
------------
2,811,816
------------
INFORMATION TECHNOLOGY HARDWARE--4.54%
105,000 Fujitsu Ltd..................................................................... 2,948,443
188,000 Hitachi Ltd..................................................................... 2,245,339
17,300 Matsushita Communication Industrial Co. Ltd..................................... 2,003,100
15,200 Rohm Co. Ltd.................................................................... 3,984,137
------------
11,181,019
------------
INSURANCE--0.22%
120,000 Mitsui Marine & Fire............................................................ 533,892
------------
LEISURE, ENTERTAINMENT & HOTELS--0.44%
38,000 Namco Ltd....................................................................... 1,077,449
------------
MEDIA & PHOTOGRAPHY--1.40%
34,000 Fuji Photo Film Co. Ltd......................................................... 1,261,613
216,000 Toppan Printing Co.............................................................. 2,185,896
------------
3,447,509
------------
PERSONAL CARE & HOUSEHOLD PRODUCTS--1.04%
87,000 Kao Corp........................................................................ 2,569,905
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
JAPAN--(CONCLUDED)
PHARMACEUTICALS--1.95%
47,000 Taisho Pharmaceutical Co........................................................ $ 1,581,164
69,000 Yamanouchi Pharmaceutical Co.................................................... 3,233,442
------------
4,814,606
------------
SOFTWARE & COMPUTER SERVICES--0.76%
61,000 MKC-STAT Corp................................................................... 1,018,289
7,000 Trend Micro Inc................................................................. 855,176
------------
1,873,465
------------
SUPPORT SERVICES--0.95%
15,800 Benesse Corp.................................................................... 792,269
25,000 Secom Co. Ltd.(1)............................................................... 1,556,730
------------
2,348,999
------------
TELECOMMUNICATIONS--SERVICES--1.69%
166 NTT Mobile Communication Network................................................ 4,161,918
------------
Total Japan Common Stocks.......................................................................... 57,535,170
------------
KOREA--0.56%
ELECTRONIC & ELECTRICAL EQUIPMENT--0.56%
9,600 Samsung Electronics, GDR+....................................................... 1,375,200
------------
MEXICO--1.97%
DIVERSIFIED INDUSTRIAL--0.13%
124,000 Alfa, S.A. de C.V., Series A.................................................... 325,689
------------
GENERAL RETAILERS--0.32%
336,000 Wal-Mart de Mexico S.A. de C.V., Series V*...................................... 774,888
------------
MEDIA & PHOTOGRAPHY--0.30%
11,300 Grupo Televisa S.A. de C.V., ADR*............................................... 730,262
------------
SPECIALTY & OTHER FINANCE--0.33%
170,000 Grupo Financiero Banamex........................................................ 814,969
------------
TELECOMMUNICATIONS--SERVICES--0.89%
41,800 Telefonos de Mexico, S.A. de C.V., ADR.......................................... 2,199,725
------------
Total Mexico Common Stocks......................................................................... 4,845,533
------------
NETHERLANDS--4.62%
BANKS--0.65%
24,035 ING Groep N.V................................................................... 1,606,791
------------
MEDIA & PHOTOGRAPHY--3.97%
268,340 Elsevier N.V.................................................................... 2,971,614
124,501 VNU N.V......................................................................... 6,807,129
------------
9,778,743
------------
Total Netherlands Common Stocks.................................................................... 11,385,534
------------
POLAND--0.27%
OIL & GAS--0.27%
71,000 Polski Koncern Naftowy Orlen S.A., GDR+......................................... 670,950
------------
</TABLE>
69
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
SINGAPORE--1.12%
BANKS--0.88%
90,000 DBS Group Holdings Ltd.......................................................... $ 1,084,994
260,000 Overseas Union Bank Ltd......................................................... 1,094,800
------------
2,179,794
------------
TELECOMMUNICATIONS--SERVICES--0.24%
426,500 Singapore Telecommunication Ltd................................................. 590,431
------------
Total Singapore Common Stocks...................................................................... 2,770,225
------------
SOUTH AFRICA--0.23%
BANKS--0.08%
375,100 BoE Ltd......................................................................... 210,185
------------
SOFTWARE & COMPUTER SERVICES--0.15%
480,000 Softline Ltd*................................................................... 362,069
------------
Total South Africa Common Stocks................................................................... 572,254
------------
SPAIN--5.06%
BANKS--2.40%
204,939 Banco Bilbao Vizcaya Argenta.................................................... 2,962,704
286,698 Banco Santander Central Hispanormer............................................. 2,959,709
------------
5,922,413
------------
SOFTWARE & COMPUTER SERVICES--0.68%
151,389 Amadeus Global Travel Distribution S.A.*........................................ 1,679,297
------------
TELECOMMUNICATIONS--SERVICES--1.98%
231,655 Telefonica S.A.*................................................................ 4,873,115
------------
Total Spain Common Stocks.......................................................................... 12,474,825
------------
SWEDEN--4.23%
BANKS--0.77%
124,000 Forenings Sparbanken AB......................................................... 1,893,130
------------
INFORMATION TECHNOLOGY HARDWARE--2.96%
374,000 Ericsson LM B Shares*........................................................... 7,300,545
------------
SUPPORT SERVICES--0.50%
57,000 Securitas AB.................................................................... 1,243,184
------------
Total Sweden Common Stocks......................................................................... 10,436,859
------------
SWITZERLAND--0.82%
CONSTRUCTION & BUILDING MATERIALS--0.82%
1,740 Holderbank Financiere Glarus AG................................................. 2,023,377
------------
TAIWAN--0.10%
ELECTRONIC & ELECTRICAL EQUIPMENT--0.10%
20,761 Compal Electronics Inc., GDR.................................................... 243,942
------------
UNITED KINGDOM--18.39%
AEROSPACE & DEFENSE--0.57%
102,771 Smiths Industries PLC........................................................... 1,409,216
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
UNITED KINGDOM--(CONCLUDED)
AUTOMOBILES--0.49%
95,000 GKN PLC......................................................................... $ 1,216,527
------------
BANKS--1.12%
204,000 HSBC Holdings................................................................... 2,762,132
------------
INFORMATION TECHNOLOGY HARDWARE--1.54%
235,000 Marconi PLC..................................................................... 3,794,645
------------
LEISURE, ENTERTAINMENT & HOTELS--0.44%
321,000 Hilton Group PLC................................................................ 1,082,365
------------
LIFE ASSURANCE--1.11%
200,000 Prudential PLC.................................................................. 2,730,451
------------
MEDIA & PHOTOGRAPHY--0.55%
100,000 WPP Group PLC................................................................... 1,356,983
------------
OIL & GAS--1.57%
169,000 BP Amoco PLC.................................................................... 1,479,059
296,000 Shell Transportation & Trading Co............................................... 2,377,621
------------
3,856,680
------------
PHARMACEUTICAL--3.25%
34,000 AstraZeneca Group PLC........................................................... 1,465,392
174,000 Glaxo Wellcome PLC.............................................................. 5,011,742
119,000 Smithkline Beecham.............................................................. 1,533,668
------------
8,010,802
------------
SOFTWARE & COMPUTER SERVICES--1.60%
325,000 Sage Group PLC.................................................................. 2,722,583
80,000 Sema Group PLC.................................................................. 1,209,671
------------
3,932,254
------------
SPECIALTY & OTHER FINANCE--1.39%
161,000 3I Group PLC.................................................................... 3,426,102
------------
TELECOMMUNICATIONS--SERVICES--4.76%
135,000 Cable & Wireless PLC............................................................ 2,350,856
2,122,265 Vodafone Group PLC.............................................................. 9,382,264
------------
11,733,120
------------
Total United Kingdom Common Stocks................................................................. 45,311,277
------------
Total Common Stocks (cost--$192,028,739)........................................................... 231,895,063
------------
PREFERRED STOCKS--0.96%
BRAZIL--0.44%
TELECOMMUNICATIONS--SERVICES--0.44%
50,000 Embratel Participacoes S.A., ADR................................................ 1,075,000
------------
JAPAN--0.52%
BANKS--0.52%
150,000,000 Sanwa International Finance..................................................... 1,285,499
------------
Total Preferred Stocks (cost--$2,499,342).......................................................... 2,360,499
------------
</TABLE>
70
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EQUITY INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
----------- ------------ -------- ------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--2.93%
$ 7,214 Repurchase Agreement dated 07/31/00 with State Street Bank & Trust Co.,
collateralized by $2,122,183 U.S. Treasury Notes, 6.625% due
03/31/02; (value--$2,175,237) and $4,030,928 U.S. Treasury Bonds,
8.125% due 08/15/19; (value--$5,184,782); proceeds: $7,215,052
(cost--$7,214,000)................................................... 08/01/00 5.250% $ 7,214,000
------------
241,469,562
Total Investments (cost--$201,742,081)--97.98%......................................
4,982,396
Other assets in excess of liabilities--2.02%........................................
------------
Net Assets--100.00%................................................................. $246,451,958
============
</TABLE>
-----------------
* Non-Income producing security.
+ Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified Institutional buyers.
ADR American Depositary Receipt.
GDR Global Depositary Receipt.
(1) Security, or portion thereof, was on loan at July 31, 2000.
See accompanying notes to financial statements
71
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
PORTFOLIO OF INVESTMENTS JULY 31, 2000
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
COMMON STOCKS--89.50%
ARGENTINA--1.29%
ALCOHOLIC BEVERAGES--0.20%
15,400 Quilmes Industrial Quinsa S.A., ADR........................................ $ 165,550
-----------
DIVERSIFIED INDUSTRIALS--0.25%
11,751 P C Holdings............................................................... 202,705
-----------
FINANCIAL SERVICES--0.14%
6,728 Grupo Financiero Galicia S.A., ADR, Class B(1)*............................ 119,001
-----------
TELECOMMUNICATIONS--0.70%
112,000 Telecom Argentina Stet-Fran Tel S.A., Class B.............................. 573,543
-----------
Total Argentina Common Stocks................................................................. 1,060,799
-----------
BRAZIL--4.23%
BASIC MATERIALS--0.33%
12,700 Aracruz Celulose S.A., ADR................................................. 273,844
-----------
FOOD STORES--0.61%
15,800 Companhia Brasileira de Distribucion....................................... 498,687
-----------
OIL & GAS--0.26%
18,300 Ultrapar Participacoes S.A. ............................................... 215,025
-----------
TELECOMMUNICATIONS--3.03%
5,000 Brasil Telecom Participacoes S.A., ADR..................................... 360,000
43,700 Embratel Participacoes S.A., ADR........................................... 939,550
43,555 Tele Norte Leste Participacoes............................................. 1,042,598
5,000 Telecomunicacoes Brasileiras S.A. (Telebras), ADR*......................... 0
4,000 Telesp Celular Participacoes S.A., ADR..................................... 150,750
-----------
2,492,898
-----------
Total Brazil Common Stocks.................................................................... 3,480,454
-----------
CHILE--2.03%
BANKS--0.35%
16,700 Banco Santiago............................................................. 287,031
-----------
BREWERIES, PUBS, & RESTAURANTS--0.45%
17,000 Compania Cervecerias Unidas S.A., ADS(1)................................... 374,000
-----------
DIVERSIFIED INDUSTRIALS--0.06%
6,100 Quinenco S.A., ADR......................................................... 51,469
-----------
ELECTRICITY--0.48%
11,218 Enersis S.A., ADR.......................................................... 218,050
13,100 Gener S.A., ADR............................................................ 173,575
-----------
391,625
-----------
RETAILERS, FOOD--0.25%
12,200 Distribucion Y Servicio D&S, ADS........................................... 202,825
-----------
TELECOMMUNICATIONS--0.44%
23,850 Compania de Telecomunicaciones de Chile S.A., ADR.......................... 357,750
-----------
Total Chile Common Stocks..................................................................... 1,664,700
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
CHINA--0.53%
ELECTRICITY & GAS--0.53%
3,000 Huaneng Power International, Inc., ADR..................................... $ 49,875
116,000 Huaneng Power International, Inc., Class H................................. 47,971
1,468,000 PetroChina Co., Ltd., Class H*............................................. 335,074
-----------
Total China Common Stocks..................................................................... 432,920
-----------
CZECH REPUBLIC--0.50%
BANKS--0.00%
1 Komercni Banka A.S.*....................................................... 8
-----------
UTILITIES--0.50%
64,000 Cez*....................................................................... 191,070
12,100 Cesky Telecom.............................................................. 218,931
-----------
410,001
-----------
Total Czech Republic Common Stocks............................................................ 410,009
-----------
EGYPT--0.39%
TELECOMMUNICATIONS--0.39%
6,700 Mobinil*................................................................... 192,877
16,900 Orascom Telecommunication S.A.E., GDR*..................................... 131,820
-----------
Total Egypt Common Stocks..................................................................... 324,697
-----------
GREECE--1.98%
BANKS--0.76%
10,066 Alpha Credit Bank.......................................................... 376,155
6,373 National Bank of Greece.................................................... 250,409
-----------
626,564
-----------
TELECOMMUNICATIONS--1.22%
37,180 Hellenic Telecom Organization.............................................. 835,666
8,260 Stet Hellas Telecommunications(1)*......................................... 167,265
-----------
1,002,931
-----------
Total Greece Common Stocks.................................................................... 1,629,495
-----------
HONG KONG--6.84%
COMMERCE/INDUSTRIAL--0.10%
15,000 Citic Pacific Ltd. ........................................................ 80,017
-----------
ELECTRICAL APPLIANCES--1.08%
701,000 Founder Holdings Ltd.*..................................................... 350,572
479,000 Legend Holdings Ltd. ...................................................... 540,521
-----------
891,093
-----------
FINANCIAL SERVICES--0.15%
12,000 Hang Seng Bank Ltd. ....................................................... 124,256
-----------
REAL ESTATE--0.46%
14,000 Cheung Kong (Holdings) Ltd. ............................................... 164,713
150,000 China Resources Enterprises Ltd. .......................................... 216,391
-----------
381,104
-----------
TELECOMMUNICATIONS--5.05%
269,000 China Mobile Ltd.*......................................................... 2,138,644
</TABLE>
72
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
HONG KONG--(CONCLUDED)
TELECOMMUNICATIONS--(CONCLUDED)
867,000 China Unicom Ltd.*......................................................... $ 2,006,738
-----------
4,145,382
-----------
Total Hong Kong Common Stocks................................................................. 5,621,852
-----------
HUNGARY--1.45%
BANKS--0.38%
6,084 OTP Bank, GDS.............................................................. 313,326
-----------
CHEMICALS--0.09%
2,180 Borsodchem RT., GDR........................................................ 69,433
-----------
OIL--0.20%
12,200 Magyar Olaj-Es Gazipare Reszvnytaras Ag., Series "A"....................... 162,260
-----------
TELECOMMUNICATIONS--0.78%
19,410 Matav RT, ADS, Series "B".................................................. 644,169
-----------
Total Hungary Common Stocks................................................................... 1,189,188
-----------
INDIA--6.16%
BANKS--0.30%
47,000 HDFC Bank.................................................................. 243,138
-----------
CONSTRUCTION/BUILDING MATERIALS--0.07%
24,250 Associated Cement Compania Ltd. ........................................... 58,189
-----------
DIVERSIFIED INDUSTRIALS--0.12%
22,000 Larsen & Toubro............................................................ 95,643
-----------
HOUSEHOLD GOODS & TEXTILES--0.90%
137,000 Hindustan Lever Ltd.*...................................................... 736,242
1,000 Reliance Industries Ltd. .................................................. 7,501
-----------
743,743
-----------
OIL, INTEGRATED--0.27%
55,600 Bharat Petrol Corp. Ltd. .................................................. 223,326
-----------
PHARMACEUTICALS--0.48%
32,100 Ranbaxy Laboratories Ltd. ................................................. 396,743
-----------
SUPPORT SERVICES--2.93%
13,500 Infosys Technologies....................................................... 2,038,021
6,700 Satyam Computer Services Ltd. ............................................. 365,845
-----------
2,403,866
-----------
TELECOMMUNICATIONS--1.09%
84,000 Mahanagar Tele Nigam....................................................... 322,295
13,000 Videsh Sanchar Nigam Ltd. ................................................. 246,033
13,000 Videsh Sanchar Nigam Ltd., GDR............................................. 141,050
19,000 Zee Telefilms Ltd.*........................................................ 184,623
-----------
894,001
-----------
TRANSPORTATION--0.00%
10 GESCO Corp. Ltd.*.......................................................... 3
90 Great Eastern Ship......................................................... 35
-----------
38
-----------
Total India Common Stocks..................................................................... 5,058,687
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
INDONESIA--0.69%
FOODS--0.45%
174,000 H M Sampoerna.............................................................. $ 261,000
237,000 P.T. Indofoods Sukses Makmur*.............................................. 114,506
-----------
375,506
-----------
TELECOMMUNICATIONS--0.24%
569,620 Telekomunikasi Indonesia................................................... 196,167
-----------
Total Indonesia Common Stocks................................................................. 571,673
-----------
ISRAEL--5.70%
BANKS--2.02%
441,680 Bank Hapoalim B.M. ........................................................ 1,257,006
199,030 BkLeumiLe-Israel B.M. ..................................................... 403,413
-----------
1,660,419
-----------
COMPUTER HARDWARE--0.07%
5,500 Scitex Corp. Ltd.*......................................................... 58,781
-----------
COMPUTER SOFTWARE--1.50%
10,640 Check Point Software Tech Ltd.*............................................ 1,234,240
-----------
ELECTRONIC & ELECTRICAL EQUIPMENT--0.26%
2,890 Nice Systems Ltd.*......................................................... 211,693
-----------
PHARMACEUTICALS--1.05%
14,260 Teva Pharmaceutical Industries Ltd., ADR................................... 866,295
-----------
RETAILERS, FOOD--0.23%
18,134 Blue Square-Israel Ltd., ADS(1)............................................ 191,540
-----------
TELECOMMUNICATIONS--0.57%
8,080 ECI Telecommunications Ltd.(1)............................................. 287,850
2,200 Gilat Satellite Networks Ltd.*............................................. 176,000
-----------
463,850
-----------
Total Israel Common Stocks.................................................................... 4,686,818
-----------
KOREA--11.73%
BANKS--1.52%
58,349 Kookmin Bank............................................................... 692,298
55,230 Shinhan Bank............................................................... 558,853
-----------
1,251,151
-----------
COMMUNICATIONS--1.73%
5,400 SK Telecom Co. Ltd. ....................................................... 1,344,258
12,009 Turbo Tek Co. Ltd. ........................................................ 78,823
-----------
1,423,081
-----------
ELECTRICAL APPLIANCES--4.16%
26,000 Hyundai Electronics........................................................ 405,104
11,408 Samsung Electronics Co. ................................................... 3,013,531
-----------
3,418,635
-----------
ELECTRICITY & GAS--2.03%
57,720 Korea Electric Power Corp. ................................................ 1,664,279
-----------
</TABLE>
73
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
KOREA--(CONCLUDED)
TELECOMMUNICATIONS--2.29%
26,300 Korea Telecom.............................................................. $ 1,879,329
-----------
Total Korea Common Stocks..................................................................... 9,636,475
-----------
MALAYSIA--3.89%
BANKS--0.50%
111,000 Malayan Banking Berhad..................................................... 411,868
-----------
COMMERCE/INDUSTRIAL--0.53%
131,000 AMMB Holdings Berhad....................................................... 430,921
-----------
COMMUNICATIONS--0.11%
54,000 Digi.com Berhad*........................................................... 86,684
-----------
CONSTRUCTION--0.40%
161,000 United Engineers (Malaysia) Ltd. Berhad.................................... 330,474
-----------
ELECTRICITY & GAS--1.07%
257,000 Tenaga Nasional Berhad..................................................... 879,211
-----------
SERVICES--0.49%
108,000 Genting Berhad............................................................. 338,210
30,000 Resorts World Berhad....................................................... 67,895
-----------
406,105
-----------
TELECOMMUNICATIONS--0.79%
207,000 Telekom Malaysia Berhad.................................................... 648,237
-----------
Total Malaysia Common Stocks.................................................................. 3,193,500
-----------
MEXICO--10.60%
ALCOHOLIC BEVERAGES--0.26%
94,500 Grupo Modelo S.A. de CV.................................................... 218,946
-----------
BANKS--0.85%
145,100 Grupo Financiero Banamex Accival, Series B*................................ 695,600
-----------
BREWERIES, PUBS, & RESTAURANTS--0.86%
170,400 Fomento Economico Mexica S.A. de C.V., Series B and 4 Units Series D....... 704,087
-----------
CONSTRUCTION--0.23%
128,000 Consorico ARA S.A. de C.V.*................................................ 188,597
-----------
CONSTRUCTION/BUILDING MATERIALS--0.94%
165,820 Cemex S.A. ................................................................ 777,226
-----------
MEDIA--1.53%
19,500 Grupo Televisa, S.A. de C.V., GDS*......................................... 1,260,188
-----------
PAPER, PACKAGING & PRINTING--0.73%
206,750 Kimberly-Clark de Mexico S.A. de C.V. ..................................... 599,323
-----------
RETAILERS, GENERAL--1.10%
405,000 Wal-Mart de Mexico S.A. de C.V., Series C*................................. 901,586
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
MEXICO--(CONCLUDED)
TELECOMMUNICATIONS--4.10%
64,000 Telefonos de Mexico, S.A. de C.V., ADR..................................... $ 3,368,000
-----------
Total Mexico Common Stocks.................................................................... 8,713,553
-----------
PERU--0.31%
BANKS--0.21%
21,500 Credicorp Ltd., ADR........................................................ 169,312
-----------
MINING--0.10%
5,100 Compania De Minas Buenaventura S.A., ADS................................... 84,150
-----------
Total Peru Common Stocks...................................................................... 253,462
-----------
PHILIPPINES--0.33%
ELECTRICITY & GAS--0.09%
56,424 Manila Electric Co., Class B............................................... 72,805
-----------
TELECOMMUNICATIONS--0.24%
13,580 Philippine Long Distance Telephone Co. .................................... 202,416
-----------
Total Philippines Common Stocks............................................................... 275,221
-----------
POLAND--1.63%
BANKS--0.41%
5,500 BRE Bank S.A. ............................................................. 172,439
7,400 Powszechny Bank Kredytowy S.A., GDR........................................ 169,090
-----------
341,529
-----------
DIVERSIFIED HOLDINGS COMPANIES--0.62%
45,590 Elektrim................................................................... 509,738
-----------
METALS & MINING--0.33%
20,620 KGHM Polska Miedz S.A. .................................................... 271,153
-----------
TELECOMMUNICATIONS--0.27%
31,000 Telekomunika Polska S.A., GDR.............................................. 221,650
-----------
Total Poland Common Stocks.................................................................... 1,344,070
-----------
RUSSIA--3.64%
OIL & GAS--2.80%
35,150 Gazprom, ADR............................................................... 223,202
23,805 Lukoil Holding, ADR........................................................ 1,266,426
54,050 Surgutneftegaz, ADR(1)..................................................... 816,155
-----------
2,305,783
-----------
TELECOMMUNICATIONS--0.48%
10,029 Mobile Telesystems, ADR*................................................... 228,160
11,600 Rostelecom, ADR............................................................ 164,575
-----------
392,735
-----------
UTILITIES--0.36%
20,980 Unified Energy Systems..................................................... 293,720
-----------
Total Russia Common Stocks.................................................................... 2,992,238
-----------
</TABLE>
74
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
SOUTH AFRICA--6.27%
BANKS--0.78%
260,400 African Bank Investments Ltd.*............................................. $ 304,922
91,672 Amalgamated Bank of South Africa Group Ltd. ............................... 331,916
-----------
636,838
-----------
DIVERSIFIED INDUSTRIALS--0.30%
41,032 Barlow Ltd. ............................................................... 247,607
-----------
FINANCIAL SERVICES--0.45%
369,475 FirstRand Ltd. ............................................................ 372,660
-----------
HOUSEHOLD GOODS & TEXTILES--0.46%
572,691 Profurn.................................................................... 378,503
-----------
INSURANCE--0.47%
322,465 Sanlam Ltd. ............................................................... 386,865
-----------
MINING--0.97%
21,900 Anglo American Platinum.................................................... 648,189
11,000 Johnnic Holdings Ltd. ..................................................... 150,144
-----------
798,333
-----------
OIL EXPLORATION & PRODUCTION--0.66%
86,360 Sasol Ltd. ................................................................ 545,954
-----------
OTHER FINANCIAL--0.19%
33,100 Fedsure Holdings Ltd. ..................................................... 152,422
-----------
PAPER, PACKAGING & PRINTING--0.90%
117,100 Nampak Ltd. ............................................................... 216,198
63,200 Sappi...................................................................... 519,402
-----------
735,600
-----------
RETAILERS, GENERAL--0.04%
131,964 LA Retail Stores Ltd. ..................................................... 32,233
-----------
TELECOMMUNICATIONS--1.05%
100,825 Dimension Data Holdings PLC(1)*............................................ 864,835
-----------
Total South Africa Common Stocks.............................................................. 5,151,850
-----------
TAIWAN--13.03%
CHEMICALS--1.09%
444,637 Nan Ya Plastic............................................................. 896,157
-----------
ELECTRICAL APPLIANCES--9.83%
163,200 Acer Communications & Multimedia Inc. ..................................... 457,865
259,200 Compeq Manufacturing Co. Ltd. ............................................. 1,512,906
13,080 Cosmo Electronics Corp. ................................................... 27,839
170,700 DBTEL Inc. ................................................................ 308,262
192,240 Macronix International Co. Ltd. ........................................... 399,854
70,000 Realtek Semiconductor Corp. ............................................... 435,666
127,680 Siliconware Precision Industries Co. ...................................... 216,163
441,600 Taiwan Semiconductor Manufacturing Co. .................................... 1,808,552
725,200 United Microelectronics Corp. ............................................. 1,753,950
35,000 Via Technologies Inc. ..................................................... 579,007
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
TAIWAN--(CONTINUED)
ELECTRICAL APPLIANCES--(CONCLUDED)
234,120 Winbond Electronics Corp. ................................................. $ 577,561
-----------
8,077,625
-----------
MACHINERY/ENGINE SERVICES--0.38%
40,300 Hon Hai Precision.......................................................... 313,199
-----------
MISCELLANEOUS FINANCIAL--0.37%
290,000 Yuanta Securities Co. ..................................................... 306,740
-----------
MISCELLANEOUS MANUFACTURING--0.64%
75,600 Ambit Microsystems Corp. .................................................. 526,591
-----------
PRECISION MACHINEY--0.35%
89,988 Wintek Corp. .............................................................. 284,386
-----------
TELECOMMUNICATIONS--0.37%
99,600 Systex Corp. .............................................................. 300,310
-----------
Total Taiwan Common Stocks.................................................................... 10,705,008
-----------
THAILAND--1.33%
BANKS--0.11%
156,000 Thai Farmers Bank Public Co. Ltd.(1)*...................................... 90,610
-----------
COMMUNICATIONS--0.35%
422,000 TelecomAsia Corporation Public Co. Ltd.*................................... 285,963
-----------
CONSTRUCTION--0.28%
18,500 Siam Cement Co.*........................................................... 229,235
-----------
TELECOMMUNICATIONS--0.59%
43,600 Advanced Info Services Public Co. Ltd.*.................................... 485,383
-----------
Total Thailand Common Stocks.................................................................. 1,091,191
-----------
TURKEY--4.43%
BANKS--2.39%
28,794,800 Akbank T.A.S. ............................................................. 203,945
25,142,500 Turkiye Is Bankasi (Isbank)................................................ 514,445
38,264,950 Turkyie Garanti Bankasi.................................................... 433,631
77,261,021 Yapi Ve Kredi Bankasi A.S. ................................................ 814,746
-----------
1,966,767
-----------
BREWERIES, PUBS AND RESTAURANTS--0.23%
3,206,162 Anadolu Efes Biracilik ve Malt Sanayii A.S.*............................... 191,759
-----------
CONSTRUCTION/BUILDING MATERIALS--0.06%
3,538,000 Akcansa Cimento S.A. ...................................................... 48,447
-----------
DIVERSIFIED INDUSTRIALS--0.29%
3,926,160 KOC Holding................................................................ 234,822
-----------
ELECTRICAL EQUIPMENT--0.29%
1,111,600 Vestel Electronic Sanayi ve Ticaret*....................................... 236,194
-----------
FINANCIAL INSTITUTIONS/SERVICES--0.22%
16,713,591 Haci Omer Sabanci.......................................................... 176,251
-----------
</TABLE>
75
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
TURKEY--(CONCLUDED)
HOUSEHOLD GOODS & TEXTILES--0.20%
4,305,500 Arcelik A.S. .............................................................. $ 160,944
-----------
MEDIA--0.21%
7,757,225 Dogan Yayin Holding A.S. .................................................. 107,443
6,430,522 Hurriyet Gazete............................................................ 67,812
-----------
175,255
-----------
RETAIL TRADE--0.38%
1,906,506 Migros Turk T.A.S. ........................................................ 315,075
-----------
STEEL & OTHER MATERIALS--0.16%
3,681,000 Eregli Demir Celik......................................................... 131,806
-----------
Total Turkey Common Stocks.................................................................... 3,637,320
-----------
ZIMBABWE--0.52%
TELECOMMUNICATIONS--0.52%
1,092,000 Econet Wireless Holding*................................................... 427,676
-----------
Total Common Stocks (cost--$71,844,347)....................................................... 73,552,856
-----------
PREFERRED STOCKS--6.75%
BRAZIL--6.75%
BANKS/RETAIL--2.41%
96,155,131 Banco Bradesco S.A. ....................................................... 836,956
2,940,000 Banco Itau S.A. ........................................................... 274,107
31,300 Companhia Vale Do Rio Doce "A"............................................. 867,583
-----------
1,978,646
-----------
BREWERIES, PUBS, & RESTAURANTS--0.49%
382,000 Companhia Cervejaria Brahma................................................ 402,445
-----------
BUILDING MATERIALS & MERCHANTS--0.27%
1,380,000 Companhia Cimento Portland Itau............................................ 221,578
-----------
ELECTRICITY--0.83%
49,600 Companhia Paranaense de Energia Copel, ADR................................. 461,900
3,309,030 Eletropaulo Electricidade Sao Paulo........................................ 224,641
-----------
686,541
-----------
OIL EXPLORATION & PRODUCTION--1.34%
36,190 Petrol Brasileiro-Petrobras................................................ 954,600
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------- ---------------
<C> <S> <C>
BRAZIL--(CONCLUDED)
OIL EXPLORATION & PRODUCTION--(CONCLUDED)
5,600 Petrol Brasileiros......................................................... $ 146,389
-----------
1,100,989
-----------
TELECOMMUNICATIONS--1.41%
43,550,000 Tele Centro Sul Pa......................................................... 626,384
35,672,527 Telesp Cellular Participacoes.............................................. 532,576
1 Telesp Tel Sao Paulo....................................................... 0
-----------
1,158,960
-----------
Total Preferred Stocks (cost--$3,904,531)..................................................... 5,549,159
-----------
<CAPTION>
NUMBER OF
WARRANTS/
RIGHTS
---------------
<C> <S> <C>
WARRANTS--0.27%
MEXICO--0.01%
CONSTRUCTION/BUILDING MATERIALS--0.01%
12,000 Cemex Appreciation*........................................................ 3,363
-----------
SWITZERLAND--0.26%
BANKS--0.26%
3,000 UBS AG..................................................................... 214,380
-----------
Total Warrants (cost--$255,945)............................................................... 217,743
-----------
RIGHTS--0.15%
BRAZIL--0.00%
BANKS/RETAIL--0.00%
11,000 Companhia Vale do Rio Doce................................................. 0
-----------
SWITZERLAND--0.15%
BANKS--0.15%
33,000 UBS AG..................................................................... 124,509
-----------
THAILAND--0.00%
COMMUNICATIONS--0.00%
133,263 TelecomAsia Corporation Public Co. Ltd.*................................... 0
-----------
Total Rights (cost--$96,388).................................................................. 124,509
-----------
</TABLE>
76
<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--0.68%
$ 558 Repurchase Agreement dated 07/31/00 with State Street Bank &
Trust Company, collateralized by $164,150 U.S. Treasury Notes,
6.625% due 03/31/02; (value--$168,254) and $311,791 U.S.
Treasury Bonds, 8.125% due 08/15/19; (value--$401,041);
proceeds: $558,081 (cost--$558,000)............................. 08/01/00 5.250% $ 558,000
-----------
80,002,267
Total Investments (cost--$76,659,211)--97.35%..................................
2,176,246
Other assets in excess of liabilities--2.65%...................................
-----------
Net Assets--100.00%............................................................ $82,178,513
===========
</TABLE>
---------------
* Non-income producing security.
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, 2000.
See accompanying notes to financial statements
77
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
STATEMENT OF ASSETS AND LIABILITIES JULY 31, 2000
<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--$64,384,257; $330,884,058;
$134,552,671; $286,383,170;
$54,326,518; $105,539,516;
$344,403,107; $304,876,461;
$229,343,032; $202,529,663;
$201,742,081; $76,659,211,
respectively)......................... $64,384,257 $328,327,261 $131,946,358 $283,067,496
Investments of cash collateral received
for securities loaned, at value
(cost--$0; $0; $33,624,373;
$18,710,750; $0; $9,073,875
$28,786,800; $68,528,100; $18,674,100;
$47,973,850; $5,729,750; $2,193,700,
respectively)......................... -- -- 33,624,373 18,710,750
Cash (including cash denominated in
foreign currencies, at value)......... -- -- 731 1,013,088
Receivable for investments sold......... -- 3,260 110 2,748
Receivable for shares of beneficial
interest sold......................... 1,512,782 110,435 107,910 174,319
Unrealized appreciation of forward
foreign currency contracts............ -- -- -- 9,963
Dividends and interest receivable....... 210,377 1,633,542 2,179,984 2,628,112
Receivable from investment adviser...... 6,229 -- -- --
Variation margin receivable............. -- -- -- 932
Unrealized appreciation on interest rate
swaps................................. -- -- -- 314,857
Deferred organizational expenses........ 1,025 1,025 1,025 1,025
Other assets............................ 21,904 32,713 32,366 18,814
----------- ------------ ------------ ------------
Total assets............................ 66,136,574 330,108,236 167,892,857 305,942,104
----------- ------------ ------------ ------------
LIABILITIES
Payable for shares of beneficial
interest repurchased.................. 455,959 103,565 34,364 61,842
Dividends payable to shareholders....... 158,206 -- -- --
Payable to custodian.................... -- 82,526 -- --
Payable for investments purchased....... -- 130,699,989 -- 51,921,062
Payable for cash collateral for
securities loaned..................... -- -- 33,624,373 18,710,750
Unrealized depreciation of forward
foreign currency contracts............ -- -- -- 115,062
Outstanding options written, at value
(premium received--$0; $84,375; $0;
$275,159; $0; $0; $0; $0; $0; $0; $0;
$0, respectively)..................... -- 77,700 -- 151,394
Payable to affiliates................... -- 114,807 69,710 135,553
Accrued expenses and other
liabilities........................... 1,652 111,628 62,051 98,716
----------- ------------ ------------ ------------
Total liabilities....................... 615,817 131,190,215 33,790,498 71,194,379
----------- ------------ ------------ ------------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--65,521,320;
16,458,856; 11,347,462; 19,230,063;
4,410,094; 9,445,090; 20,507,671;
14,705,436; 16,034,793; 10,556,285;
13,203,941; 6,869,421, respectively
(unlimited amount authorized)......... 65,521,320 203,803,263 138,976,267 248,479,090
Accumulated undistributed (distributions
in excess of) net investment income
(loss)................................ -- 1,181,552 642,139 475,152
Accumulated net realized gains (losses)
from investments, other assets,
liabilities, futures, swaps, options
and forward contracts denominated in
foreign currency transactions......... (563) (3,516,672) (2,909,734) (11,306,390)
Net unrealized appreciation
(depreciation) of investments, other
assets, liabilities, futures, swaps,
options written and forward contracts
denominated in foreign currencies..... -- (2,550,122) (2,606,313) (2,900,127)
----------- ------------ ------------ ------------
Net assets.............................. $65,520,757 $198,918,021 $134,102,359 $234,747,725
=========== ============ ============ ============
Net asset value, offering price and
redemption value per share............ $ 1.00 $ 12.09 $ 11.82 $ 12.21
=========== ============ ============ ============
</TABLE>
78
<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--$64,384,257; $330,884,058;
$134,552,671; $286,383,170;
$54,326,518; $105,539,516;
$344,403,107; $304,876,461;
$229,343,032; $202,529,663;
$201,742,081; $76,659,211,
respectively)......................... $53,958,591 $ 99,518,950 $335,291,823 $436,401,239 $212,687,610 $316,589,197
Investments of cash collateral received
for securities loaned, at value
(cost--$0; $0; $33,624,373;
$18,710,750; $0; $9,073,875
$28,786,800; $68,528,100; $18,674,100;
$47,973,850; $5,729,750; $2,193,700,
respectively)......................... -- 9,073,875 28,786,800 68,528,100 18,674,100 47,973,850
Cash (including cash denominated in
foreign currencies, at value)......... -- 172,970 32,936 -- 843 423
Receivable for investments sold......... 575,314 859,552 1,478,244 2,079,833 1,286,772 7,202,034
Receivable for shares of beneficial
interest sold......................... 24,569 88,317 175,085 166,754 114,978 130,664
Unrealized appreciation of forward
foreign currency contracts............ -- 404,023 -- -- -- --
Dividends and interest receivable....... 824,948 1,603,698 303,098 45,860 120,739 6,152
Receivable from investment adviser...... -- -- -- -- -- --
Variation margin receivable............. -- -- -- -- -- --
Unrealized appreciation on interest rate
swaps................................. -- -- -- -- -- --
Deferred organizational expenses........ 1,025 1,025 1,025 1,025 1,025 1,025
Other assets............................ 15,690 17,958 46,443 48,711 66,167 60,023
----------- ------------ ------------ ------------ ------------ ------------
Total assets............................ 55,400,137 111,740,368 366,115,454 507,271,522 232,952,234 371,963,368
----------- ------------ ------------ ------------ ------------ ------------
LIABILITIES
Payable for shares of beneficial
interest repurchased.................. 103,206 47,038 111,422 145,262 99,013 118,601
Dividends payable to shareholders....... -- -- -- -- -- --
Payable to custodian.................... -- -- -- 733,188 -- --
Payable for investments purchased....... 1,629,457 1,306,383 1,538,295 621,687 154,954 3,956,880
Payable for cash collateral for
securities loaned..................... -- 9,073,875 28,786,800 68,528,100 18,674,100 47,973,850
Unrealized depreciation of forward
foreign currency contracts............ -- 396,458 -- -- -- --
Outstanding options written, at value
(premium received--$0; $84,375; $0;
$275,159; $0; $0; $0; $0; $0; $0; $0;
$0, respectively)..................... -- -- -- -- -- --
Payable to affiliates................... 26,102 45,469 231,826 306,627 140,995 233,378
Accrued expenses and other
liabilities........................... 47,091 40,163 152,701 130,549 134,303 109,188
----------- ------------ ------------ ------------ ------------ ------------
Total liabilities....................... 1,805,856 10,909,386 30,821,044 70,465,413 19,203,365 52,391,897
----------- ------------ ------------ ------------ ------------ ------------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--65,521,320;
16,458,856; 11,347,462; 19,230,063;
4,410,094; 9,445,090; 20,507,671;
14,705,436; 16,034,793; 10,556,285;
13,203,941; 6,869,421, respectively
(unlimited amount authorized)......... 55,163,504 115,037,575 354,857,514 249,985,378 230,680,256 97,573,619
Accumulated undistributed (distributions
in excess of) net investment income
(loss)................................ 200,660 (5,181,475) 1,716,264 1,131 1,068,966 1,131
Accumulated net realized gains (losses)
from investments, other assets,
liabilities, futures, swaps, options
and forward contracts denominated in
foreign currency transactions......... (1,401,956) (2,984,485) (12,168,084) 55,294,822 (1,344,931) 107,937,187
Net unrealized appreciation
(depreciation) of investments, other
assets, liabilities, futures, swaps,
options written and forward contracts
denominated in foreign currencies..... (367,927) (6,040,633) (9,111,284) 131,524,778 (16,655,422) 114,059,534
----------- ------------ ------------ ------------ ------------ ------------
Net assets.............................. $53,594,281 $100,830,982 $335,294,410 $436,806,109 $213,748,869 $319,571,471
=========== ============ ============ ============ ============ ============
Net asset value, offering price and
redemption value per share............ $ 12.15 $ 10.68 $ 16.35 $ 29.70 $ 13.33 $ 30.27
=========== ============ ============ ============ ============ ============
<CAPTION>
PACE
PACE INTERNATIONAL
INTERNATIONAL EMERGING MARKETS
EQUITY EQUITY
INVESTMENTS INVESTMENTS
------------- ----------------
<S> <C> <C>
ASSETS
Investments, at value
(cost--$64,384,257; $330,884,058;
$134,552,671; $286,383,170;
$54,326,518; $105,539,516;
$344,403,107; $304,876,461;
$229,343,032; $202,529,663;
$201,742,081; $76,659,211,
respectively)......................... $241,469,562 $80,002,267
Investments of cash collateral received
for securities loaned, at value
(cost--$0; $0; $33,624,373;
$18,710,750; $0; $9,073,875
$28,786,800; $68,528,100; $18,674,100;
$47,973,850; $5,729,750; $2,193,700,
respectively)......................... 5,729,750 2,193,700
Cash (including cash denominated in
foreign currencies, at value)......... 3,515,630 1,714,189
Receivable for investments sold......... 2,201,468 790,978
Receivable for shares of beneficial
interest sold......................... 171,835 60,258
Unrealized appreciation of forward
foreign currency contracts............ -- --
Dividends and interest receivable....... 476,283 180,590
Receivable from investment adviser...... -- --
Variation margin receivable............. -- --
Unrealized appreciation on interest rate
swaps................................. -- --
Deferred organizational expenses........ 1,025 1,025
Other assets............................ 50,567 42,836
------------ -----------
Total assets............................ 253,616,120 84,985,843
------------ -----------
LIABILITIES
Payable for shares of beneficial
interest repurchased.................. 60,860 34,311
Dividends payable to shareholders....... -- --
Payable to custodian.................... -- --
Payable for investments purchased....... 1,044,522 331,662
Payable for cash collateral for
securities loaned..................... 5,729,750 2,193,700
Unrealized depreciation of forward
foreign currency contracts............ -- --
Outstanding options written, at value
(premium received--$0; $84,375; $0;
$275,159; $0; $0; $0; $0; $0; $0; $0;
$0, respectively)..................... -- --
Payable to affiliates................... 196,714 59,813
Accrued expenses and other
liabilities........................... 132,316 187,844
------------ -----------
Total liabilities....................... 7,164,162 2,807,330
------------ -----------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--65,521,320;
16,458,856; 11,347,462; 19,230,063;
4,410,094; 9,445,090; 20,507,671;
14,705,436; 16,034,793; 10,556,285;
13,203,941; 6,869,421, respectively
(unlimited amount authorized)......... 190,876,988 79,889,855
Accumulated undistributed (distributions
in excess of) net investment income
(loss)................................ 264,006 (134,207)
Accumulated net realized gains (losses)
from investments, other assets,
liabilities, futures, swaps, options
and forward contracts denominated in
foreign currency transactions......... 15,631,499 (877,165)
Net unrealized appreciation
(depreciation) of investments, other
assets, liabilities, futures, swaps,
options written and forward contracts
denominated in foreign currencies..... 39,679,465 3,300,030
------------ -----------
Net assets.............................. $246,451,958 $82,178,513
============ ===========
Net asset value, offering price and
redemption value per share............ $ 18.67 $ 11.96
============ ===========
</TABLE>
See accompanying notes to financial statements
79
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2000
<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 of $0; $0; $0; $0; $0; $15,333;
$0; $0; $0; $0; $2,686; $10,
respectively)......................... $3,574,741 $13,773,465 $ 9,289,251 $15,708,916
Dividends (net of foreign withholding
taxes of $0; $0; $0; $0; $0; $0; $0;
$9,433; $0; $4,461; $419,116;
$160,996, respectively)............... -- -- -- --
---------- ----------- ----------- -----------
3,574,741 13,773,465 9,289,251 15,708,916
---------- ----------- ----------- -----------
EXPENSES:
Investment advisory and administration
fees.................................. 210,048 1,380,076 828,218 1,596,218
Transfer agency fees and expenses....... 196,018 87,822 44,344 95,883
Reports and notices to shareholders..... 47,591 37,193 22,325 37,321
Legal and audit......................... 31,850 67,927 47,894 64,261
Federal and state registration fees..... 26,367 8,935 17,274 36,694
Trustees' fees.......................... 26,250 26,250 26,250 26,250
Amortization of organizational
expenses.............................. 19,032 19,032 19,032 19,032
Custody and accounting.................. 7,925 120,092 84,658 138,630
Interest expense........................ -- 39,447 -- --
Other expenses.......................... 4,366 12,281 2,438 4,842
---------- ----------- ----------- -----------
569,447 1,799,055 1,092,433 2,019,131
Less: Fee waivers and reimbursements
from investment adviser............... (269,771) (83,618) (13,758) (84,075)
---------- ----------- ----------- -----------
Net expenses............................ 299,676 1,715,437 1,078,675 1,935,056
---------- ----------- ----------- -----------
Net investment income (loss)............ 3,275,065 12,058,028 8,210,576 13,773,860
---------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT ACTIVITIES:
Net realized gains (losses) from:
Investment transactions............... 66 (537,607) (2,315,802) (2,240,419)
Futures............................... -- 410,235 -- (1,982,336)
Options............................... -- 142,578 -- (462,361)
Foreign currency transactions......... -- -- -- (840,910)
Swaps................................. -- -- -- (8,999)
Net change in unrealized
apprecation/depreciation of:
Investments........................... -- 107,428 387,836 2,319,663
Futures............................... -- -- -- 596,167
Options............................... -- 6,675 -- 59,268
Swaps................................. -- -- -- 314,857
Other assets, liabilities and forward
contracts denominated in foreign
currencies........................... -- -- -- (139,495)
---------- ----------- ----------- -----------
Net realized and unrealized gains
(losses) from investment activities... 66 129,309 (1,927,966) (2,384,565)
---------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations............. $3,275,131 $12,187,337 $ 6,282,610 $11,389,295
========== =========== =========== ===========
</TABLE>
80
<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>
INVESTMENT INCOME:
Interest (net of foreign withholding
taxes of $0; $0; $0; $0; $0; $15,333;
$0; $0; $0; $0; $2,686; $10,
respectively)......................... $ 3,036,217 $ 5,703,986 $ 517,478 $ 223,698 $ 505,157 $ 764,224
Dividends (net of foreign withholding
taxes of $0; $0; $0; $0; $0; $0; $0;
$9,433; $0; $4,461; $419,116;
$160,996, respectively)............... -- -- 5,821,563 2,041,322 2,978,001 200,751
----------- ------------ ------------ ----------- ------------ ------------
3,036,217 5,703,986 6,339,041 2,265,020 3,483,158 964,975
----------- ------------ ------------ ----------- ------------ ------------
EXPENSES:
Investment advisory and administration
fees.................................. 329,466 821,382 2,800,505 3,458,178 1,574,930 2,495,426
Transfer agency fees and expenses....... 25,659 96,771 153,350 129,725 110,990 121,245
Reports and notices to shareholders..... 20,820 24,921 48,573 43,320 43,030 42,332
Legal and audit......................... 26,148 37,266 44,674 61,118 57,490 69,680
Federal and state registration fees..... 6,105 23,239 53,991 42,471 36,260 29,682
Trustees' fees.......................... 26,250 26,250 26,250 26,250 26,250 26,250
Amortization of organizational
expenses.............................. 19,032 19,032 19,032 19,032 19,032 19,032
Custody and accounting.................. 35,947 155,144 210,038 247,363 118,120 187,662
Interest expense........................ -- -- -- -- -- --
Other expenses.......................... 1,034 10,533 18,862 13,538 11,259 2,530
----------- ------------ ------------ ----------- ------------ ------------
490,461 1,214,538 3,375,275 4,040,995 1,997,361 2,993,839
Less: Fee waivers and reimbursements
from investment adviser............... (23,718) (240,342) (16,771) (22,200) (32,450) (17,105)
----------- ------------ ------------ ----------- ------------ ------------
Net expenses............................ 466,743 974,196 3,358,504 4,018,795 1,964,911 2,976,734
----------- ------------ ------------ ----------- ------------ ------------
Net investment income (loss)............ 2,569,474 4,729,790 2,980,537 (1,753,775) 1,518,247 (2,011,759)
----------- ------------ ------------ ----------- ------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT ACTIVITIES:
Net realized gains (losses) from:
Investment transactions............... (1,121,348) (2,984,485) (4,668,473) 56,955,344 2,717,494 128,087,825
Futures............................... -- -- 227,223 -- -- --
Options............................... -- -- -- -- -- --
Foreign currency transactions......... -- (4,448,096) -- -- -- --
Swaps................................. -- -- -- -- -- --
Net change in unrealized
apprecation/depreciation of:
Investments........................... (233,014) (1,873,643) (56,807,461) 14,949,193 (25,897,124) 30,703,199
Futures............................... -- -- (102,667) -- -- --
Options............................... -- -- -- -- -- --
Swaps................................. -- -- -- -- -- --
Other assets, liabilities and forward
contracts denominated in foreign
currencies........................... -- (730,712) -- -- -- --
----------- ------------ ------------ ----------- ------------ ------------
Net realized and unrealized gains
(losses) from investment activities... (1,354,362) (10,036,936) (61,351,378) 71,904,537 (23,179,630) 158,791,024
----------- ------------ ------------ ----------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations............. $ 1,215,112 $ (5,307,146) $(58,370,841) $70,150,762 $(21,661,383) $156,779,265
=========== ============ ============ =========== ============ ============
<CAPTION>
PACE
PACE INTERNATIONAL
INTERNATIONAL EMERGING MARKETS
EQUITY EQUITY
INVESTMENTS INVESTMENTS
------------- ----------------
<S> <C> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding
taxes of $0; $0; $0; $0; $0; $15,333;
$0; $0; $0; $0; $2,686; $10,
respectively)......................... $ 878,820 $ 78,638
Dividends (net of foreign withholding
taxes of $0; $0; $0; $0; $0; $0; $0;
$9,433; $0; $4,461; $419,116;
$160,996, respectively)............... 2,901,895 1,198,182
----------- -----------
3,780,715 1,276,820
----------- -----------
EXPENSES:
Investment advisory and administration
fees.................................. 2,227,716 991,438
Transfer agency fees and expenses....... 111,468 99,510
Reports and notices to shareholders..... 42,612 26,062
Legal and audit......................... 47,330 60,522
Federal and state registration fees..... 33,082 21,964
Trustees' fees.......................... 26,250 26,250
Amortization of organizational
expenses.............................. 19,032 19,032
Custody and accounting.................. 351,286 320,527
Interest expense........................ -- --
Other expenses.......................... 10,070 6,599
----------- -----------
2,868,846 1,571,904
Less: Fee waivers and reimbursements
from investment adviser............... (7,642) (222,127)
----------- -----------
Net expenses............................ 2,861,204 1,349,777
----------- -----------
Net investment income (loss)............ 919,511 (72,957)
----------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT ACTIVITIES:
Net realized gains (losses) from:
Investment transactions............... 16,408,727 9,997,594
Futures............................... -- --
Options............................... -- --
Foreign currency transactions......... (966,600) (242,500)
Swaps................................. -- --
Net change in unrealized
apprecation/depreciation of:
Investments........................... 16,466,174 (8,406,705)
Futures............................... -- --
Options............................... -- --
Swaps................................. -- --
Other assets, liabilities and forward
contracts denominated in foreign
currencies........................... (84,984) 256,660
----------- -----------
Net realized and unrealized gains
(losses) from investment activities... 31,823,317 1,605,049
----------- -----------
Net increase (decrease) in net assets
resulting from operations............. $32,742,828 $ 1,532,092
=========== ===========
</TABLE>
See accompanying notes to financial statements
81
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PACE PACE
MONEY MARKET GOVERNMENT SECURITIES
INVESTMENTS FIXED INCOME INVESTMENTS
-------------------------- ---------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
JULY 31, JULY 31,
-------------------------- ---------------------------
2000 1999 2000 1999
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income................. $3,275,065 $ 1,534,974 $ 12,058,028 $ 10,030,353
Net realized gains (losses) from:
Investment, future, swap, and option
transactions....................... 66 165 15,206 (2,597,744)
Foreign currency transactions....... -- -- -- 57,256
Net change in unrealized
appreciation/depreciation of:
Investments, futures, swaps and
options............................ -- -- 114,103 (4,324,044)
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- -- -- --
----------- ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations............ 3,275,131 1,535,139 12,187,337 3,165,821
----------- ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (3,275,065) (1,534,974) (12,319,000) (10,395,294)
Net realized gains from investment
transactions......................... -- -- -- (453,493)
Paid in capital....................... -- -- -- --
----------- ------------ ------------ ------------
(3,275,065) (1,534,974) (12,319,000) (10,848,787)
----------- ------------ ------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 95,347,054 73,861,364 62,815,799 76,221,851
Cost of shares repurchased............ (80,153,026) (53,636,534) (67,554,961) (49,556,340)
Proceeds from dividends reinvested.... 3,153,036 1,455,251 12,069,998 10,617,096
----------- ------------ ------------ ------------
Net increase (decrease) in net assets
from beneficial interest
transactions......................... 18,347,064 21,680,081 7,330,836 37,282,607
----------- ------------ ------------ ------------
Net increase (decrease) in net
assets............................... 18,347,130 21,680,246 7,199,173 29,599,641
NET ASSETS:
Beginning of year..................... 47,173,627 25,493,381 191,718,848 162,119,207
----------- ------------ ------------ ------------
End of year........................... $65,520,757 $ 47,173,627 $198,918,021 $191,718,848
=========== ============ ============ ============
Undistributed net investment income... $ -- $ -- $ 1,181,552 $ 1,228,999
=========== ============ ============ ============
</TABLE>
82
<PAGE>
<TABLE>
<CAPTION>
PACE PACE PACE
INTERMEDIATE FIXED INCOME STRATEGIC FIXED INCOME MUNICIPAL FIXED INCOME
INVESTMENTS INVESTMENTS INVESTMENTS
--------------------------- --------------------------- ---------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED FOR THE YEARS ENDED
JULY 31, JULY 31, JULY 31,
--------------------------- --------------------------- ---------------------------
2000 1999 2000 1999 2000 1999
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 8,210,576 $ 6,492,499 $13,773,860 $10,253,465 $ 2,569,474 $ 2,491,105
Net realized gains (losses) from:
Investment, future, swap, and option
transactions....................... (2,315,802) (168,313) (4,705,796) (4,006,750) (1,121,348) (112,308)
Foreign currency transactions....... -- -- (829,229) (11,967) -- --
Net change in unrealized
appreciation/depreciation of:
Investments, futures, swaps and
options............................ 387,836 (3,749,017) 3,289,955 (8,421,318) (233,014) (1,140,661)
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- -- (139,495) (5,496) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations............ 6,282,610 2,575,169 11,389,295 (2,192,066) 1,215,112 1,238,136
------------ ------------ ------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (8,211,628) (6,342,333) (13,546,286) (9,918,107) (2,581,602) (2,465,695)
Net realized gains from investment
transactions......................... (35,975) (724,632) -- (4,178,827) -- --
Paid in capital....................... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
(8,247,603) (7,066,965) (13,546,286) (14,096,934) (2,581,602) (2,465,695)
------------ ------------ ------------ ------------ ------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 40,293,964 71,711,855 64,108,891 139,745,175 16,187,372 20,483,781
Cost of shares repurchased............ (51,337,322) (34,775,205) (62,812,383) (42,026,189) (20,370,295) (16,611,583)
Proceeds from dividends reinvested.... 8,067,808 6,908,534 13,393,884 13,904,642 2,484,786 2,376,569
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
from beneficial interest
transactions......................... (2,975,550) 43,845,184 14,690,392 111,623,628 (1,698,137) 6,248,767
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets............................... (4,940,543) 39,353,388 12,533,401 95,334,628 (3,064,627) 5,021,208
NET ASSETS:
Beginning of year..................... 139,042,902 99,689,514 222,214,324 126,879,696 56,658,908 51,637,700
------------ ------------ ------------ ------------ ------------ ------------
End of year........................... $134,102,359 $139,042,902 $234,747,725 $222,214,324 $53,594,281 $56,658,908
============ ============ ============ ============ ============ ============
Undistributed net investment income... $ 642,139 $ 622,555 $ 475,152 $ 1,046,199 $ 200,660 $ 212,788
============ ============ ============ ============ ============ ============
<CAPTION>
PACE
GLOBAL FIXED INCOME
INVESTMENTS
-----------------------------
FOR THE YEARS ENDED
JULY 31,
-----------------------------
2000 1999
------------ --------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 4,729,790 $ 4,600,527
Net realized gains (losses) from:
Investment, future, swap, and option
transactions....................... (2,984,485) 3,498,901
Foreign currency transactions....... (4,448,096) 2,153,170
Net change in unrealized
appreciation/depreciation of:
Investments, futures, swaps and
options............................ (1,873,645) (5,366,888)
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. (730,710) 889,876
------------ ------------
Net increase (decrease) in net assets
resulting from operations............ (5,307,146) 5,775,586
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (3,785,353) (6,373,655)
Net realized gains from investment
transactions......................... (781,420) (3,639,664)
Paid in capital....................... (586,535) --
------------ ------------
(5,153,308) (10,013,319)
------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 39,653,457 35,855,990
Cost of shares repurchased............ (34,559,600) (29,144,329)
Proceeds from dividends reinvested.... 5,054,468 9,831,275
------------ ------------
Net increase (decrease) in net assets
from beneficial interest
transactions......................... 10,148,325 16,542,936
------------ ------------
Net increase (decrease) in net
assets............................... (312,129) 12,305,203
NET ASSETS:
Beginning of year..................... 101,143,111 88,837,908
------------ ------------
End of year........................... $100,830,982 $101,143,111
============ ============
Undistributed net investment income... $ -- $ --
============ ============
</TABLE>
See accompanying notes to financial statements
83
<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,
--------------------------- ---------------------------
2000 1999 2000 1999
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss).......... $ 2,980,537 $ 2,276,863 $ (1,753,775) $ (781,224)
Net realized gains (losses) from:
Investment, future and option
transactions....................... (4,441,250) 25,011,927 56,955,344 10,229,777
Foreign currency transactions....... -- -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... (56,910,128) 14,372,120 14,949,193 52,000,533
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- -- -- --
------------- ------------ ------------- ------------
Net increase (decrease) in net assets
resulting from operations............ (58,370,841) 41,660,910 70,150,762 61,449,086
------------- ------------ ------------- ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (2,495,534) (2,068,017) -- --
Net realized gains from investment
transactions......................... (30,040,611) (21,559,073) (11,567,261) (19,611,543)
------------- ------------ ------------- ------------
(32,536,145) (23,627,090) (11,567,261) (19,611,543)
------------- ------------ ------------- ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 147,357,307 148,206,501 135,593,185 142,031,214
Cost of shares repurchased............ (128,553,245) (80,472,039) (148,736,983) (98,726,785)
Proceeds from dividends reinvested.... 31,932,335 23,342,638 11,378,823 19,384,120
------------- ------------ ------------- ------------
Net increase (decrease) in net assets
from beneficial interest
transactions......................... 50,736,397 91,077,100 (1,764,975) 62,688,549
------------- ------------ ------------- ------------
Contribution to capital from
Sub-Adviser.......................... -- -- -- --
------------- ------------ ------------- ------------
Net increase (decrease) in net
assets............................... (40,170,589) 109,110,920 56,818,526 104,526,092
NET ASSETS:
Beginning of year..................... 375,464,999 266,354,079 379,987,583 275,461,491
------------- ------------ ------------- ------------
End of year........................... $ 335,294,410 $375,464,999 $ 436,806,109 $379,987,583
============= ============ ============= ============
Undistributed net investment income... $ 1,716,264 $ 1,275,994 $ 1,131 $ 1,132
============= ============ ============= ============
</TABLE>
84
<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,
-------------------------- ---------------------------
2000 1999 2000 1999
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss).......... $ 1,518,247 $ 776,036 $ (2,011,759) $ (1,031,067)
Net realized gains (losses) from:
Investment, future and option
transactions....................... 2,717,494 6,402,434 128,087,825 15,551,333
Foreign currency transactions....... -- -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... (25,897,124) (2,998,643) 30,703,199 54,182,221
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. -- -- -- --
------------ ------------ ------------- ------------
Net increase (decrease) in net assets
resulting from operations............ (21,661,383) 4,179,827 156,779,265 68,702,487
------------ ------------ ------------- ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (832,372) (1,010,551) -- --
Net realized gains from investment
transactions......................... (9,001,354) (17,717,110) (33,399,940) (5,125,542)
------------ ------------ ------------- ------------
(9,833,726) (18,727,661) (33,399,940) (5,125,542)
------------ ------------ ------------- ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 83,666,072 78,192,098 71,190,367 69,286,726
Cost of shares repurchased............ (54,265,656) (59,597,665) (173,407,222) (71,374,034)
Proceeds from dividends reinvested.... 9,712,297 18,526,406 33,003,540 5,060,397
------------ ------------ ------------- ------------
Net increase (decrease) in net assets
from beneficial interest
transactions......................... 39,112,713 37,120,839 (69,213,315) 2,973,089
------------ ------------ ------------- ------------
Contribution to capital from
Sub-Adviser.......................... -- -- -- --
------------ ------------ ------------- ------------
Net increase (decrease) in net
assets............................... 7,617,604 22,573,005 54,166,010 66,550,034
NET ASSETS:
Beginning of year..................... 206,131,265 183,558,260 265,405,461 198,855,427
------------ ------------ ------------- ------------
End of year........................... $213,748,869 $206,131,265 $ 319,571,471 $265,405,461
============ ============ ============= ============
Undistributed net investment income... $ 1,068,966 $ 392,044 $ 1,131 $ 1,131
============ ============ ============= ============
<CAPTION>
PACE
PACE INTERNATIONAL EMERGING
INTERNATIONAL EQUITY INVESTMENTS MARKETS EQUITY INVESTMENTS
-------------------------------- --------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
JULY 31, JULY 31,
-------------------------------- --------------------------
2000 1999 2000 1999
--------------- --------------- ------------ ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss).......... $ 919,511 $ 951,372 $ (72,957) $ 715,293
Net realized gains (losses) from:
Investment, future and option
transactions....................... 16,408,727 13,004,589 9,997,594 (3,396,344)
Foreign currency transactions....... (966,600) 547,518 (242,500) 140,459
Net change in unrealized
appreciation/depreciation of:
Investments, futures and options.... 16,466,174 857,043 (8,406,705) 17,387,157
Other assets, liabilities and
forward contracts denominated in
foreign currencies................. (84,984) 252,109 256,660 (298,617)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations............ 32,742,828 15,612,631 1,532,092 14,547,948
------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................. (1,491,665) (1,983,217) (724,583) (468,284)
Net realized gains from investment
transactions......................... (13,070,076) (3,678,063) -- --
------------ ------------ ------------ ------------
(14,561,741) (5,661,280) (724,583) (468,284)
------------ ------------ ------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of
shares............................... 73,257,178 78,914,213 30,492,713 34,235,058
Cost of shares repurchased............ (73,965,090) (44,926,114) (38,335,487) (23,516,593)
Proceeds from dividends reinvested.... 14,268,026 5,599,716 716,496 462,033
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
from beneficial interest
transactions......................... 13,560,114 39,587,815 (7,126,278) 11,180,498
------------ ------------ ------------ ------------
Contribution to capital from
Sub-Adviser.......................... 694,257 -- -- --
------------ ------------ ------------ ------------
Net increase (decrease) in net
assets............................... 32,435,458 49,539,166 (6,318,769) 25,260,162
NET ASSETS:
Beginning of year..................... 214,016,500 164,477,334 88,497,282 63,237,120
------------ ------------ ------------ ------------
End of year........................... $246,451,958 $214,016,500 $ 82,178,513 $ 88,497,282
============ ============ ============ ============
Undistributed net investment income... $ 264,006 $ 1,160,098 $ -- $ 725,160
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements
85
<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 and thereafter. The trustees of the
Trust have authority to issue an unlimited number of shares of beneficial
interest, par value $0.001 per share.
The Trust has twelve Portfolios available for investment, each having its own
investment objectives and policies: PACE Money Market Investments, PACE
Government Securities Fixed Income Investments, PACE Intermediate Fixed Income
Investments, PACE Strategic Fixed Income Investments, PACE Municipal Fixed
Income Investments, PACE Global Fixed Income Investments, PACE Large Company
Value Equity Investments, PACE Large Company Growth Equity Investments, PACE
Small/Medium Company Value Equity Investments, PACE Small/Medium Company Growth
Equity Investments, PACE International Equity Investments and PACE International
Emerging Markets Equity Investments (collectively referred to as the
"Portfolios").
The Portfolios are diversified with the exception of PACE Intermediate Fixed
Income Investments and PACE Global Fixed Income Investments. Shares of the
Portfolios currently are available only to participants in the PaineWebber
PACE-SM- Programs.
The Trust incurred costs of approximately $1,138,000 in connection with the
organization of the Trust and the registration of its shares. Such costs 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 accounting
principles generally accepted in the United States requires the Trust's
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of significant accounting policies:
VALUATION OF INVESTMENTS--Each Portfolio calculates its net asset value based
on the current market value for its portfolio securities. The Portfolios
normally obtain market values for their securities from independent pricing
sources. Independent pricing sources may use reported last sale prices, current
market quotations or valuations from computerized "matrix" systems that derive
values based on comparable securities. Securities traded in the over-the-
counter ("OTC") market and listed on The Nasdaq Stock Market, Inc. ("Nasdaq")
normally are valued at the last sale price on Nasdaq prior to valuation. Other
OTC securities are valued at the last bid price available prior to valuation.
Securities which are listed on U.S. and foreign stock exchanges normally are
valued at the last sale price on the day the securities are valued or, lacking
any sales on such day, at the last available bid price. In cases where
securities are traded on more than one exchange, the securities are valued on
the exchange designated as the primary market by Mitchell Hutchins Asset
Management Inc. ("Mitchell Hutchins"), the investment adviser and administrator
of the Portfolios, or by the Portfolio's sub-adviser. Mitchell Hutchins is a
wholly owned asset management subsidiary of PaineWebber Incorporated
("PaineWebber"), a wholly owned subsidiary of Paine Webber Group Inc. ("PW
Group"). 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.
86
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Foreign currency exchange rates are generally determined prior to the close of
the New York Stock Exchange ("NYSE"). Occasionally, events affecting the value
of foreign investments and such exchange rates occur between the time at which
they are determined and the close of the NYSE, which will not be reflected in
the computation of the Portfolio's net asset value. If events materially
affecting the value of such securities or currency exchange rates occur during
such time periods, the securities will be valued at their fair value as
determined in good faith by or under the direction of the board.
REPURCHASE AGREEMENTS--The Portfolios' custodian takes possession of the
collateral pledged for investments in repurchase agreements. The underlying
collateral is valued daily on a mark-to-market basis to ensure that the value,
including accrued interest, is at least equal to the repurchase price. In the
event of default of the obligation to repurchase, the Portfolios have the right
to liquidate the collateral and apply the proceeds in satisfaction of the
obligations. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings. Each Portfolio (with the
exception of PACE Municipal Fixed Income Investments) occasionally participates
in joint repurchase agreement transactions with other funds managed by Mitchell
Hutchins.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME--Investment transactions are
recorded on a trade date basis. Realized gains and losses from investment
transactions and foreign exchange transactions are calculated using the
identified cost method. Dividend income is recorded on the ex-dividend date
("ex-date") (except for certain dividends from foreign securities that are
recorded as soon after the ex-date as the respective Portfolio, using reasonable
diligence, becomes aware of such dividends). Interest income is recorded on an
accrual basis. Discounts are accreted and premiums are amortized 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.
87
<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 on
securities or derivative instruments in order to gain exposure to or protect
against changes in the markets. When a Portfolio writes a call or a put option,
an amount equal to the premium received by the Portfolio is included in the
Portfolio's Statement of Assets and Liabilities as an asset and as an equivalent
liability. The amount of the liability is subsequently marked-to-market to
reflect the current market value of the option written. If an option which the
Portfolio has written either expires on its stipulated expiration date or the
Portfolio enters into a closing purchase transaction, the Portfolio realizes a
gain (or loss if the cost of a closing purchase transaction exceeds the premium
received when the option was written) without regard to any unrealized gain or
loss on the underlying security or derivative instrument, and the liability
related to such option is extinguished. If a call option which the Portfolio has
written is exercised, the Portfolio realizes a capital gain or loss (long-term
or short-term, depending on the holding period of the underlying security) from
the sale of the underlying security or derivative instrument and the proceeds
from the sale are increased by the premium originally received. If a put option
which the Portfolio has written is exercised, the amount of the premium
originally received reduces the cost of the security or derivative instrument
which the Portfolio purchases upon exercise of the option.
FUTURES CONTRACTS--Using financial futures contracts involves various market
risks. The maximum amount at risk from the purchase of a futures contract is the
contract value. The Portfolios primarily use financial futures contracts for
hedging purposes or to manage the average duration of a portfolio. However,
imperfect correlations between futures contracts and the portfolio securities
being hedged, or market disruptions, do not normally permit full control of
these risks at all times.
Upon entering into a financial futures contract, a Portfolio is required to
pledge to a broker an amount equal to a certain percentage of the contract
amount. This amount is known as the "initial margin." Subsequent payments, known
as "variation margin," are made or received by the Portfolio each day, depending
on the daily fluctuations in the value of the underlying financial futures
contracts. Such variation margin is recorded for financial statement purposes on
a daily basis as an unrealized gain or loss until the financial futures contract
is closed, at which time the net gain or loss is reclassified to realized.
REVERSE REPURCHASE AGREEMENTS--The Trust may enter into reverse repurchase
agreements with qualified third party broker-dealers as determined by, and under
the direction of, the board. Interest on the value of reverse repurchase
agreements issued and outstanding is based upon competitive market rates at the
time of issuance. At the time the Trust enters into a reverse repurchase
agreement, it establishes and maintains a segregated account with the Trust's
custodian containing liquid securities having a value not less than the
repurchase price, including accrued interest, of the reverse repurchase
agreement.
For the year ended July 31, 2000, the PACE Government Securities Fixed Income
Portfolio was the only Portfolio which engaged in reverse repurchase agreements.
The weighted average daily balance of reverse repurchase agreements outstanding
during the year ended July 31, 2000 was $638,164 at a weighted average interest
rate of 6.08%.
INTEREST RATE SWAP AGREEMENTS--Certain Portfolios may enter into interest rate
swap agreements to protect themselves from interest rate fluctuations on a
portion of their borrowings. This type of swap is an agreement that obligates
two parties to exchange a series of cash flows at specified intervals based upon
or calculated by reference to a specified interest rate(s) for a specified
amount. The payment flows are usually netted against each other, with the
difference being paid by one party to the other.
88
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the contract. The loss incurred by the
failure of a counterparty is generally limited to the net interest payment to be
received by the Portfolio. Therefore, the Portfolio considers the
creditworthiness of the counterparty to a swap contract in evaluating potential
credit risk.
The Portfolio records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as interest
income (or as an offset to interest income). Fluctuations in the value of swap
contracts are recorded for financial statement purposes as unrealized
appreciation or depreciation of investments.
For the year ended July 31, 2000, PACE Strategic Fixed Income Investments was
the only Portfolio that had outstanding interest rate swap contracts with the
following terms:
<TABLE>
<CAPTION>
RATE TYPE
---------------------------------------------
NOTIONAL TERMINATION PAYMENTS MADE PAYMENTS RECEIVED UNREALIZED
AMOUNT DATE BY THE FUND BY THE FUND APPRECIATION
-------- ----------- ------------- ----------------- ------------
<S> <C> <C> <C> <C>
$880,000 01/04/09 6.000% 5.149%+ $148,665
670,000 05/22/30 6.175 4.655+ 127,034
190,000 01/04/24 6.250 4.110+ 39,158
--------
$314,857
========
</TABLE>
-------------
+ Rate based on LIBOR (London Interbank Offered Rate).
DIVIDENDS AND DISTRIBUTIONS--Dividends and distributions to shareholders are
recorded on the ex-date. The amounts of dividends and distributions are
determined in accordance with federal income tax regulations, which may differ
from generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification.
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.
89
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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>
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 Pacific Investment Management Company 0.25%
Income Investments
PACE Intermediate Fixed Income Pacific Income Advisors, Inc. 0.20%
Investments
PACE Strategic Fixed Income Pacific Investment Management Company 0.25%
Investments
PACE Municipal Fixed Income Standish, Ayer & Wood, Inc. 0.20%
Investments
PACE Global Fixed Income Investments Rogge Global Partners plc 0.35%
PACE Large Company Value Equity Institutional Capital Corp. and
Investments Westwood Management Corp. 0.30%
PACE Large Company Growth Equity Alliance Capital Management L.P. 0.30%
Investments
PACE Small/Medium Company Value Equity Brandywine Asset Management, Inc. and
Investments Ariel Capital Management, Inc. 0.30%
PACE Small/Medium Company Growth Delaware Management Company, Inc. 0.40%
Equity Investments
PACE International Equity Investments Martin Currie Inc. 0.40%
PACE International Emerging Markets Schroder Investment Management North
Equity Investments America Inc. 0.50%
</TABLE>
90
<PAGE>
NOTES TO FINANCIAL STATEMENTS
As of July 31, 2000 the Portfolios owed Mitchell Hutchins for investment
advisory and administration fees as follows:
<TABLE>
<CAPTION>
AMOUNTS
PORTFOLIO OWED
------------------------------------------------------------ ---------
<S> <C>
PACE Government Securities Fixed Income Investments......... $114,807
PACE Intermediate Fixed Income Investments.................. $ 66,858
PACE Strategic Fixed Income Investments..................... $135,134
PACE Municipal Fixed Income Investments..................... $ 26,102
PACE Global Fixed Income Investments........................ $ 43,680
PACE Large Company Value Equity Investments................. $231,264
PACE Large Company Growth Equity Investments................ $304,020
PACE Small/Medium Company Value Equity Investments.......... $139,735
PACE Small/Medium Company Growth Equity Investments......... $225,128
PACE International Equity Investments....................... $193,648
PACE International Emerging Markets Equity Investments...... $ 59,348
</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, 2000, which will lower the overall expenses of certain
Portfolios. Additionally, Mitchell Hutchins waived a portion of its investment
advisory and administration fees in connection with the Portfolio investments of
cash collateral from securities lending transactions in the Mitchell Hutchins
Private Money Market Fund LLC.
For the year ended July 31, 2000, Mitchell Hutchins and PaineWebber had the
following expense reimbursements and waivers:
<TABLE>
<CAPTION>
WAIVERS
AND
EXPENSE
PORTFOLIO REIMBURSEMENTS
------------------------------------------------------------ --------------
<S> <C>
PACE Money Market Investments............................... $269,771
PACE Government Securities Fixed Income Investments......... $ 83,618
PACE Intermediate Fixed Income Investments.................. $ 13,758
PACE Strategic Fixed Income Investments..................... $ 84,075
PACE Municipal Fixed Income Investments..................... $ 23,718
PACE Global Fixed Income Investments........................ $240,342
PACE Large Company Value Equity Investments................. $ 16,771
PACE Large Company Growth Equity Investments................ $ 22,200
PACE Small/Medium Company Value Equity Investments.......... $ 32,450
PACE Small/Medium Company Growth Equity Investments......... $ 17,105
PACE International Equity Investments....................... $ 7,642
PACE International Emerging Markets Equity Investments...... $222,127
</TABLE>
During the year ended July 31, 2000, the Portfolios did not pay any brokerage
commissions to PaineWebber.
On July 12, 2000, PW Group and UBS AG ("UBS") announced that they had entered
into an agreement and plan of merger under which PW Group will merge into a
wholly owned subsidiary of UBS. If all required approvals are obtained and the
required conditions are satisfied, PW Group and UBS expect to complete the
transaction in the fourth quarter of 2000. UBS, with headquarters in Zurich,
Switzerland, is an internationally diversified organization with operations in
many areas of the financial services industry.
91
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SECURITIES LENDING
Each Portfolio may lend securities up to 33 1/3% of its total assets to
qualified institutions. The loans are secured at all times by cash or U.S.
government securities in an amount at least equal to the market value of the
securities loaned, plus accrued interest and dividends, determined on a daily
basis and adjusted accordingly. The Portfolios will regain record ownership of
loaned securities to exercise certain beneficial rights. However, the Portfolios
may bear the risk of delay in recovery of, or even loss of rights in, the
securities loaned should the borrower fail financially. The Portfolios receive
compensation, which is included in interest income, for lending their securities
on interest earned on the cash or U.S. government securities held as collateral,
net of fee rebates paid to the borrower plus reasonable administrative and
custody fees. PaineWebber, which is the Portfolio's lending agent, received
compensation from the Portfolios for the year ended July 31, 2000 as follows:
<TABLE>
<CAPTION>
PORTFOLIO COMPENSATION
------------------------------------------------------------ ------------
<S> <C>
PACE Government Securities Fixed Income Investments......... $ 158
PACE Intermediate Fixed Income Investments.................. $54,662
PACE Strategic Fixed Income Investments..................... $ 4,240
PACE Global Fixed Income Investments........................ $11,024
PACE Large Company Value Equity Investments................. $20,527
PACE Large Company Growth Equity Investments................ $26,547
PACE Small/Medium Company Value Equity Investments.......... $15,171
PACE Small/Medium Company Growth Equity Investments......... $83,313
PACE International Equity Investments....................... $34,989
PACE International Emerging Markets Equity Investments...... $ 8,171
</TABLE>
For the year ended July 31, 2000 the Portfolios 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 Investments......... $ 499
PACE Intermediate Fixed Income Investments.................. $160,527
PACE Strategic Fixed Income Investments..................... $ 11,922
PACE Global Fixed Income Investments........................ $ 31,739
PACE Large Company Value Equity Investments................. $ 56,467
PACE Large Company Growth Equity Investments................ $ 72,370
PACE Small/Medium Company Value Equity Investments.......... $ 44,252
PACE Small/Medium Company Growth Equity Investments......... $242,107
PACE International Equity Investments....................... $101,443
PACE International Emerging Markets Equity Investments...... $ 23,592
</TABLE>
92
<PAGE>
NOTES TO FINANCIAL STATEMENTS
As of July 31, 2000 the Portfolios owed PaineWebber for security lending fees
as follows:
<TABLE>
<CAPTION>
AMOUNTS
PORTFOLIO OWED
------------------------------------------------------------ ---------
<S> <C>
PACE Government Securities Fixed Income Investments......... $ 0
PACE Intermediate Fixed Income Investments.................. $2,852
PACE Strategic Fixed Income Investments..................... $ 419
PACE Global Fixed Income Investments........................ $1,789
PACE Large Company Value Equity Investments................. $ 562
PACE Large Company Growth Equity Investments................ $2,607
PACE Small/Medium Company Value Equity Investments.......... $1,260
PACE Small/Medium Company Growth Equity Investments......... $8,250
PACE International Equity Investments....................... $3,066
PACE International Emerging Markets Equity Investments...... $ 465
</TABLE>
As of July 31, 2000 the Portfolios held cash as collateral for market values
of securities loaned as follows:
<TABLE>
<CAPTION>
COLLATERAL MARKET VALUE
FOR SECURITIES OF SECURITIES
PORTFOLIO LOANED LOANED
------------------------------------------------------------ -------------- -------------
<S> <C> <C>
PACE Intermediate Fixed Income Investments.................. $33,624,373 $32,274,971
PACE Strategic Fixed Income Investments..................... $18,710,750 $17,825,441
PACE Global Fixed Income Investments........................ $ 9,073,875 $ 8,675,630
PACE Large Company Value Equity Investments................. $28,786,800 $28,347,306
PACE Large Company Growth Equity Investments................ $68,528,100 $64,156,338
PACE Small/Medium Company Value Equity Investments.......... $18,674,100 $18,183,698
PACE Small/Medium Company Growth Equity Investments......... $47,973,850 $46,184,247
PACE International Equity Investments....................... $ 5,729,750 $ 5,517,106
PACE International Emerging Markets Equity Investments...... $ 2,193,700 $ 1,995,185
</TABLE>
As of July 31, 2000 the Portfolios invested the collateral in the following
money market funds:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------------- -----------
<C> <S> <C>
PACE INTERMEDIATE FIXED INCOME INVESTMENTS:
4,338,577 AIM Liquid Assets Portfolio................................. $ 4,338,577
6,795,672 AIM Prime Portfolio......................................... 6,795,672
22,351,405 Mitchell Hutchins Private Money Market Fund LLC............. 22,351,405
138,719 Scudder Institutional Fund.................................. 138,719
-----------
Total investments of cash collateral for securities loaned
(cost--$33,624,373)....................................... $33,624,373
===========
PACE STRATEGIC FIXED INCOME INVESTMENTS:
1,525,760 AIM Liquid Assets Portfolio................................. $ 1,525,760
7,158,920 AIM Prime Portfolio......................................... 7,158,920
10,020,262 Mitchell Hutchins Private Money Market Fund LLC............. 10,020,262
5,808 Scudder Institutional Fund.................................. 5,808
-----------
Total investments of cash collateral for securities loaned
(cost--$18,710,750)....................................... $18,710,750
===========
</TABLE>
93
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------------------- -----------
<C> <S> <C>
PACE GLOBAL FIXED INCOME INVESTMENTS:
518,794 AIM Liquid Assets Portfolio................................. $ 518,794
2,697,168 AIM Prime Portfolio......................................... 2,697,168
5,857,913 Mitchell Hutchins Private Money Market Fund LLC............. 5,857,913
-----------
Total investments of cash collateral for securities loaned
(cost--$9,073,875)........................................ $ 9,073,875
===========
PACE LARGE COMPANY VALUE EQUITY INVESTMENTS:
3,288,206 AIM Liquid Assets Portfolio................................. $ 3,288,206
5,247,608 AIM Prime Portfolio......................................... 5,247,608
17,247,093 Mitchell Hutchins Private Money Market Fund LLC............. 17,247,093
3,003,893 Scudder Institutional Fund.................................. 3,003,893
-----------
Total investments of cash collateral for securities loaned
(cost--$28,786,800)....................................... $28,786,800
===========
PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS:
5,563,384 AIM Liquid Assets Portfolio................................. $ 5,563,384
2,897,126 AIM Prime Portfolio......................................... 2,897,126
45,067,590 Mitchell Hutchins Private Money Market Fund LLC............. 45,067,590
15,000,000 Provident Temporary Cash Portfolio.......................... 15,000,000
-----------
Total investments of cash collateral for securities loaned
(cost--$68,528,100)....................................... $68,528,100
===========
PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS:
1,964,544 AIM Liquid Assets Portfolio................................. $ 1,964,544
4,375,230 AIM Prime Portfolio......................................... 4,375,230
12,334,326 Mitchell Hutchins Private Money Market Fund LLC............. 12,334,326
-----------
Total investments of cash collateral for securities loaned
(cost--$18,674,100)....................................... $18,674,100
===========
PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS:
489,535 AIM Liquid Assets Portfolio................................. $ 489,535
682,450 AIM Prime Portfolio......................................... 682,450
31,547,738 Mitchell Hutchins Private Money Market Fund LLC............. 31,547,738
15,000,000 Provident Temporary Cash Portfolio.......................... 15,000,000
254,127 Scudder Institutional Fund.................................. 254,127
-----------
Total investments of cash collateral for securities loaned
(cost--$47,973,850)....................................... $47,973,850
===========
PACE INTERNATIONAL EQUITY INVESTMENTS:
475,684 AIM Liquid Asset Portfolio.................................. $ 475,684
1,117,525 AIM Prime Portfolio......................................... 1,117,525
4,116,011 Mitchell Hutchins Private Money Market Fund LLC............. 4,116,011
20,530 Scudder Institutional Fund.................................. 20,530
-----------
Total investments of cash collateral for securities loaned
(cost--$5,729,750)........................................ $ 5,729,750
===========
PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS:
504,506 AIM Liquid Assets Portfolio................................. $ 504,506
946,895 AIM Prime Portfolio......................................... 946,895
742,299 Mitchell Hutchins Private Money Market Fund LLC............. 742,299
-----------
Total investments of cash collateral for securities loaned
(cost--$2,193,700)........................................ $ 2,193,700
===========
</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
94
<PAGE>
NOTES TO FINANCIAL STATEMENTS
borrowings. For the year ended July 31, 2000, PACE Large Company Growth Equity
Investments was the only Portfolio to borrow under the Facility. The Portfolio
had an amount outstanding under the Facility of $19,500,000 with an interest
rate of 6.86% on June 5, 2000. The Portfolio did not borrow under the Facility
at any other time for the year ended July 31, 2000.
WRITTEN OPTION ACTIVITY
Written option activity for the year ended July 31, 2000 for PACE Government
Securities Fixed Income Investments and PACE Strategic Fixed Income Investments
was as follows:
<TABLE>
<CAPTION>
PACE GOVERNMENT
SECURITIES FIXED INCOME PACE STRATEGIC FIXED INCOME
INVESTMENTS INVESTMENTS
----------------------- ----------------------------
AMOUNT OF AMOUNT OF
NUMBER OF PREMIUMS NUMBER OF PREMIUMS
OPTIONS RECEIVED OPTIONS RECEIVED
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Options outstanding at July 31, 1999............... 0 0 344 $ 120,856
Options written.................................... 1,850 $ 556,641 81,135 1,127,936
Options terminated in closing purchase
transactions..................................... (750) (329,688) (70,264) (696,004)
Options expired prior to exercise.................. (800) (142,578) (1,365) (277,629)
--------- ---------- ------------ ----------
Options outstanding at July 31, 2000............... 300 $ 84,375 9,850 $ 275,159
========= ========== ============ ==========
</TABLE>
95
<PAGE>
NOTES TO FINANCIAL STATEMENTS
INVESTMENTS IN SECURITIES
At July 31, 2000, 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.... $ 947,087 $ (3,503,884) $ (2,556,797)
PACE Intermediate Fixed Income Investments............. $ 512,254 $ (3,118,567) $ (2,606,313)
PACE Strategic Fixed Income Investments................ $ 2,331,696 $ (5,647,370) $ (3,315,674)
PACE Municipal Fixed Income Investments................ $ 337,155 $ (705,082) $ (367,927)
PACE Global Fixed Income Investments................... $ 332,129 $ (6,352,695) $ (6,020,566)
PACE Large Company Value Equity Investments............ $ 11,259,944 $(20,371,228) $ (9,111,284)
PACE Large Company Growth Equity Investments........... $144,308,116 $(12,783,338) $131,524,778
PACE Small/Medium Company Value Equity Investments..... $ 19,764,261 $(36,419,683) $(16,655,422)
PACE Small/Medium Company Growth Equity Investments.... $132,140,109 $(18,080,575) $114,059,534
PACE International Equity Investments.................. $ 47,737,980 $ (8,010,499) $ 39,727,481
PACE International Emerging Markets Equity
Investments.......................................... $ 12,552,745 $ (9,209,689) $ 3,343,056
</TABLE>
For U.S. federal income tax purposes, the cost of securities owned at
July 31, 2000 was substantially the same as the cost of securities for financial
statement purposes.
For the year ended July 31, 2000, 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......... $1,717,963,624 $1,654,943,866
PACE Intermediate Fixed Income Investments.................. $ 118,699,345 $ 124,466,868
PACE Strategic Fixed Income Investments..................... $ 981,014,262 $ 909,985,521
PACE Municipal Fixed Income Investments..................... $ 17,578,413 $ 18,071,028
PACE Global Fixed Income Investments........................ $ 174,556,393 $ 162,393,987
PACE Large Company Value Equity Investments................. $ 692,525,736 $ 663,611,676
PACE Large Company Growth Equity Investments................ $ 249,959,078 $ 254,097,651
PACE Small/Medium Company Value Equity Investments.......... $ 182,553,088 $ 157,812,337
PACE Small/Medium Company Growth Equity Investments......... $ 242,393,181 $ 343,765,857
PACE International Equity Investments....................... $ 168,546,274 $ 170,837,295
PACE International Emerging Markets Equity Investments...... $ 98,684,605 $ 106,617,930
</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.
At July 31, 2000, PACE Government Securities Fixed Income Investments, PACE
Intermediate Fixed Income Investments, PACE Strategic Fixed Income Investments,
PACE Municipal Fixed Income Investment, PACE Global Fixed Income Investments and
PACE International Emerging Markets Equity Investments had net capital loss
carryforwards of $3,236,735, $1,704,933, $7,758,393, $283,909, $1,235,105 and
$16,232, respectively. These carryforward losses are available
96
<PAGE>
NOTES TO FINANCIAL STATEMENTS
to reduce future net capital gains to the extent provided in the regulations and
will expire between July 31, 2007 and July 31, 2008. To the extent that such
losses are used to offset future capital gains, the gains so offset will not be
distributed to shareholders.
In accordance with U.S. Treasury regulations, the following Portfolios have
elected to defer realized capital losses and foreign currency losses arising
after October 31, 1999. Such losses are treated for tax purposes as arising on
August 1, 2000:
<TABLE>
<CAPTION>
FOREIGN
CAPITAL CURRENCY
PORTFOLIO LOSSES LOSSES
------------------------------------------------------------ ------- --------
<S> <C> <C>
PACE Government Securities Fixed Income Investments......... $ 262,707 --
PACE Intermediate Fixed Income Investments.................. $ 1,144,008 --
PACE Strategic Fixed Income Investments..................... $ 3,230,806 $ 953,305
PACE Municipal Fixed Income Investments..................... $ 1,079,383 --
PACE Global Fixed Income Investments........................ $ 1,652,908 $5,204,347
PACE Large Company Value Equity Investments................. $10,795,193 --
PACE Small/Medium Company Value Equity Investments.......... $ 1,341,159 --
PACE International Emerging Markets Equity Investments...... -- $ 135,338
</TABLE>
At July 31, 2000, 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... $ 213,525 $ (213,525) --
PACE Intermediate Fixed Income Investments............ $ 20,636 $ (20,613) $ (23)
PACE Strategic Fixed Income Investments............... $ (798,621) $ 798,621 --
PACE Global Fixed Income Investments.................. $ (3,766,728) $ 4,449,325 $ (682,597)
PACE Large Company Value Equity Investments........... $ (44,733) $ (1,244,013) $ 1,288,746
PACE Large Company Growth Equity Investments.......... $ 1,753,774 -- $ (1,753,774)
PACE Small/Medium Company Value Equity Investments.... $ (8,953) $ (1,335,754) $ 1,344,707
PACE Small/Medium Company Growth Equity Investments... $ 2,011,759 $ (2,011,759) --
PACE International Equity Investments................. $ (323,938) $ 323,938 --
PACE International Emerging Markets Equity
Investments......................................... $ (61,827) $ 242,500 $ (180,673)
</TABLE>
MONEY MARKET FUND BOND
Effective September 30, 1999, PACE Money Market Investments obtained an
insurance bond that provides limited coverage for certain loss events involving
certain money market instruments held by the Portfolio. These loss events
include non-payment of principal or interest or a bankruptcy or insolvency of
the issuer or credit enhancement provider (if any). The insurance bond provides
for coverage up to $200 million for a number of funds with a deductible of 10
basis points (0.10%) of the total assets of the Portfolio for First Tier
Securities and 50 basis points (0.50%) of the total assets of the Portfolio for
Second Tier Securities, in each case determined as of the close of business on
the first business day prior to the loss event. In the event of a loss covered
under the bond, the Portfolio would expect to retain the security in its
portfolio, rather than having to sell it at its current market value, until the
date of payment of the loss, which is generally no later than the maturity of
the security. While the policy is intended to provide some protection against
credit risk and to help the Portfolio maintain a constant price per share of
$1.00, there is no guarantee that the insurance will do so. For the period
September 30, 1999 to July 31, 2000, PACE Money Market Investments did not use
this insurance bond.
97
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CAPITAL CONTRIBUTIONS FROM SUB-ADVISER
On January 31, 2000, PACE International Equity Investments recorded a capital
contribution from Martin Currie Inc., the Portfolio's Sub-Adviser, in the amount
of $694,257. This amount was paid by the Sub-Adviser in connection with
unrealized appreciation on investments related to a corporate action.
SHARES OF BENEFICIAL INTEREST
For the year ended July 31, 2000, transactions in shares of beneficial
interest for each of the Portfolios were as follows:
<TABLE>
<CAPTION>
NET INCREASE
(DECREASE)
SHARES DIVIDENDS IN SHARES
PORTFOLIO SHARES SOLD REPURCHASED REINVESTED OUTSTANDING
------------------------------------------------------------ ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
PACE Money Market Investments............................... 95,347,055 (80,153,026) 3,153,035 18,347,064
PACE Government Securities Fixed Income Investments......... 5,225,679 (5,620,351) 1,003,705 609,033
PACE Intermediate Fixed Income Investments.................. 3,406,841 (4,351,976) 683,852 (261,283)
PACE Strategic Fixed Income Investments..................... 5,274,527 (5,165,373) 1,101,655 1,210,809
PACE Municipal Fixed Income Investments..................... 1,343,384 (1,693,153) 206,211 (143,558)
PACE Global Fixed Income Investments........................ 3,522,223 (3,085,947) 450,430 886,706
PACE Large Company Value Equity Investments................. 8,384,382 (7,492,649) 1,856,529 2,748,262
PACE Large Company Growth Equity Investments................ 4,839,099 (5,209,986) 395,237 24,350
PACE Small/Medium Company Value Equity Investments.......... 6,289,247 (4,082,962) 743,098 2,949,383
PACE Small/Medium Company Growth Equity Investments......... 2,700,975 (6,287,182) 1,273,777 (2,312,430)
PACE International Equity Investments....................... 3,850,099 (3,823,316) 722,799 749,582
PACE International Emerging Markets Equity Investments...... 2,298,222 (2,822,474) 51,436 (472,816)
</TABLE>
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>
98
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
MONEY MARKET INVESTMENTS
---------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
---------------------------------- ENDED
2000 1999 1998 1997 JULY 31, 1996+
------- ------- ------- ------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Net investment income............................. 0.05 0.05 0.05 0.05 0.05
------- ------- ------- ------- -------
Dividends from net investment income.............. (0.05) (0.05) (0.05) (0.05) (0.05)
------- ------- ------- ------- -------
Net asset value, end of period.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total investment return (1)....................... 5.53% 4.85% 5.32% 5.13% 4.75%
======= ======= ======= ======= =======
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $65,521 $47,174 $25,493 $16,070 $10,221
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.50% 0.50% 0.50% 0.50% 0.50%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 0.95% 1.07% 1.20% 1.89% 2.40%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 5.46% 4.70% 5.20% 5.04% 4.93%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 5.01% 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 $10,000 investment on
the first day of each period reported, reinvestment of all dividends at
net asset value on the payable dates, and a sale at net asset value on
the last day of each period reported. The figures do not include program
fees; results would be lower if this fee was included. Total investment
return for period of less than one year has not been annualized.
99
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS
-----------------------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
----------------------------------------------- ENDED
2000 1999 1998 1997 JULY 31, 1996+
----------- ----------- -------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 12.10 $ 12.59 $ 12.61 $ 12.07 $ 12.00
-------- -------- -------- -------- -------
Net investment income............................. 0.73 0.68 0.72 0.64 0.49
Net realized and unrealized gains (losses) from
investments, options and futures................ 0.01 (0.43) 0.18 0.58 0.03
-------- -------- -------- -------- -------
Net increase from investment operations........... 0.74 0.25 0.90 1.22 0.52
-------- -------- -------- -------- -------
Dividends from net investment income.............. (0.75) (0.71) (0.72) (0.63) (0.44)
Distributions from net realized gains from
investments..................................... -- (0.03) (0.20) (0.05) (0.01)
-------- -------- -------- -------- -------
Total dividends and distributions................. (0.75) (0.74) (0.92) (0.68) (0.45)
-------- -------- -------- -------- -------
Net asset value, end of period.................... $ 12.09 $ 12.10 $ 12.59 $ 12.61 $ 12.07
======== ======== ======== ======== =======
Total investment return (1)....................... 6.36% 2.02% 7.39% 10.42% 4.35%
======== ======== ======== ======== =======
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $198,918 $191,719 $162,119 $101,606 $58,752
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.87%++ 0.87%++ 0.85% 1.57%++ 0.85%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 0.91%++ 0.93%++ 0.95% 1.70%++ 1.15%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 6.12%++ 5.49%++ 5.90% 5.44%++ 5.09%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 6.08%++ 5.43%++ 5.80% 5.31%++ 4.79%*
Portfolio turnover................................ 585% 418% 353% 712% 978%
</TABLE>
-----------------
+ For the period August 24, 1995 (commencement of operations) through
July 31, 1996.
* Annualized.
++ Includes 0.02%, 0.01% and 0.72% of interest expense related to the
reverse repurchase agreements during the years ended July 31, 2000,
July 31, 1999 and July 31, 1997, respectively.
(1) Total investment return is calculated assuming a $10,000 investment on
the first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include any applicable sales charges or program fees; results would be
lower if they were included. Total investment return for period of less
than one year has not been annualized.
100
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
PACE
INTERMEDIATE FIXED INCOME INVESTMENTS
----------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
------------------------------------ ENDED
2000 1999 1998 1997 JULY 31, 1996+
-------- -------- ------- ------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 11.98 $ 12.35 $ 12.23 $ 11.95 $ 12.00
-------- -------- ------- ------- -------
Net investment income............................. 0.70 0.63 0.67 0.66 0.53
Net realized and unrealized gains (losses) from
investments and foreign currency................. (0.16) (0.28) 0.09 0.28 (0.09)
-------- -------- ------- ------- -------
Net increase from investment operations........... 0.54 0.35 0.76 0.94 0.44
-------- -------- ------- ------- -------
Dividends from net investment income.............. (0.70) (0.64) (0.64) (0.66) (0.48)
Distributions from net realized gains from
investments...................................... 0.00++ (0.08) -- -- (0.01)
-------- -------- ------- ------- -------
Total dividends and distributions................. (0.70) (0.72) (0.64) (0.66) (0.49)
-------- -------- ------- ------- -------
Net asset value, end of period.................... $ 11.82 $ 11.98 $ 12.35 $ 12.23 $ 11.95
======== ======== ======= ======= =======
Total investment return (1)....................... 4.74% 2.81% 6.41% 8.14% 3.59%
======== ======== ======= ======= =======
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $134,102 $139,043 $99,690 $66,751 $41,273
Expenses to average net assets, net of fee waivers
and expense reimbursements....................... 0.78% 0.80% 0.84% 0.85% 0.85%*
Expenses to average net assets, before fee waivers
and expense reimbursements....................... 0.79% 0.80% 0.84% 0.99% 1.23%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements........ 5.95% 5.26% 5.60% 5.70% 5.56%*
Net investment income to average net assets,
before fee waivers and expense reimbursements.... 5.94% 5.26% 5.60% 5.56% 5.18%*
Portfolio turnover................................ 88% 89% 111% 67% 36%
</TABLE>
-----------------
+ For the period August 24, 1995 (commencement of operations) through
July 31, 1996.
++ The Portfolio made a distribution of less than $0.005 during the period.
* Annualized.
(1) Total investment return is calculated assuming a $10,000 investment on
the first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include any applicable sales charges or program fees; results would be
lower if they were included. Total investment return for 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
STRATEGIC FIXED INCOME INVESTMENTS
--------------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
---------------------------------------- ENDED
2000 1999 1998 1997 JULY 31, 1996+
-------- ----------- -------- ------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 12.33 $ 13.32 $ 13.04 $ 12.44 $ 12.00
-------- -------- -------- ------- -------
Net investment income............................. 0.73 0.69 0.69 0.67 0.59
Net realized and unrealized gains (losses) from
investments, futures, swaps, options, and
foreign currency................................ (0.13) (0.64) 0.40 0.70 0.38
-------- -------- -------- ------- -------
Net increase from investment operations........... 0.60 0.05 1.09 1.37 0.97
-------- -------- -------- ------- -------
Dividends from net investment income.............. (0.72) (0.70) (0.69) (0.67) (0.52)
Distributions from net realized gains from
investments..................................... -- (0.34) (0.12) (0.10) (0.01)
-------- -------- -------- ------- -------
Total dividends and distributions................. (0.72) (1.04) (0.81) (0.77) (0.53)
-------- -------- -------- ------- -------
Net asset value, end of period.................... $ 12.21 $ 12.33 $ 13.32 $ 13.04 $ 12.44
======== ======== ======== ======= =======
Total investment return (1)....................... 5.08% 0.21% 8.66% 11.35% 8.15%
======== ======== ======== ======= =======
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $234,748 $222,214 $126,880 $75,174 $42,550
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.85% 0.88%++ 0.85% 0.85% 0.85%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 0.89% 0.92%++ 0.94% 1.10% 1.40%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 6.04% 5.51%++ 5.49% 5.69% 5.85%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 6.00% 5.47%++ 5.40% 5.44% 5.30%*
Portfolio turnover................................ 391% 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 $10,000 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 any applicable sales charges or program fees; results would be
lower if they were 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
MUNICIPAL FIXED INCOME INVESTMENTS
---------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
----------------------------------- ENDED
2000# 1999 1998 1997 JULY 31, 1996+
-------- ------- ------- ------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 12.44 $ 12.70 $ 12.67 $ 12.32 $ 12.00
------- ------- ------- ------- -------
Net investment income............................. 0.57 0.56 0.58 0.61 0.49
Net realized and unrealized gains (losses) from
investments..................................... (0.29) (0.26) 0.02 0.38 0.27
------- ------- ------- ------- -------
Net increase from investment operations........... 0.28 0.30 0.60 0.99 0.76
------- ------- ------- ------- -------
Dividends from net investment income.............. (0.57) (0.56) (0.57) (0.61) (0.43)
Distributions from net realized gains from
investments..................................... -- -- -- (0.03) (0.01)
------- ------- ------- ------- -------
Total dividends and distributions................. (0.57) (0.56) (0.57) (0.64) (0.44)
------- ------- ------- ------- -------
Net asset value, end of period.................... $ 12.15 $ 12.44 $ 12.70 $ 12.67 $ 12.32
======= ======= ======= ======= =======
Total investment return (1)....................... 2.37% 2.34% 4.87% 8.30% 6.38%
======= ======= ======= ======= =======
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $53,594 $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% 0.85%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 0.89% 0.89% 0.93% 1.40% 1.74%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 4.68% 4.42% 4.67% 5.08% 4.95%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 4.64% 4.38% 4.59% 4.53% 4.07%*
Portfolio turnover................................ 33% 11% 34% 15% 78%
</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 Deutsche Asset Management, Inc. to Standish, Ayer & Wood, Inc. on
June 1, 2000.
(1) Total investment return is calculated assuming a $10,000 investment on
the first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include any applicable sales charges or program fees; results would be
lower if they were included. Total investment return for 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
GLOBAL FIXED INCOME INVESTMENTS
-----------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
------------------------------------- ENDED
2000 1999 1998 1997 JULY 31, 1996+
--------- -------- ------- ------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 11.82 $ 12.25 $ 12.17 $ 12.33 $ 12.00
-------- -------- ------- ------- -------
Net investment income............................. 0.53 0.65 0.62 0.64 0.53
Net unrealized gains (losses) from investments and
foreign currency................................ (1.10) 0.20 (0.03) (0.21) 0.27
-------- -------- ------- ------- -------
Net increase (decrease) from investment
operations...................................... (0.57) 0.85 0.59 0.43 0.80
-------- -------- ------- ------- -------
Dividends from net investment income and foreign
currency........................................ (0.42) (0.81) (0.40) (0.51) (0.46)
Distributions from net realized gains from
investments..................................... (0.09) (0.47) (0.11) (0.08) (0.01)
Dividends from paid in capital.................... (0.06) -- -- -- --
-------- -------- ------- ------- -------
Total dividends and distributions................. (0.57) (1.28) (0.51) (0.59) (0.47)
-------- -------- ------- ------- -------
Net asset value, end of period.................... $ 10.68 $ 11.82 $ 12.25 $ 12.17 $ 12.33
======== ======== ======= ======= =======
Total investment return (1)....................... (4.97)% 6.49% 4.88% 3.54% 6.68%
======== ======== ======= ======= =======
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $100,831 $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% 0.95%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 1.18% 1.17% 1.23% 1.29% 1.61%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 4.50% 4.57% 5.10% 5.36% 5.24%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 4.27% 4.35% 4.82% 5.02% 4.58%*
Portfolio turnover................................ 170% 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 $10,000 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 any applicable sales charge or program fees; results would be
lower if they were 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
LARGE COMPANY VALUE EQUITY INVESTMENTS
-------------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
--------------------------------------- ENDED
2000# 1999 1998 1997 JULY 31, 1996+
--------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 21.14 $ 20.27 $ 20.03 $ 14.07 $ 12.00
-------- -------- -------- -------- -------
Net investment income............................. 0.15 0.13 0.14 0.11 0.12
Net realized and unrealized gains (losses) from
investments and futures......................... (3.17) 2.34 1.63 6.61 2.02
-------- -------- -------- -------- -------
Net increase (decrease) from investment
operations...................................... (3.02) 2.47 1.77 6.72 2.14
-------- -------- -------- -------- -------
Dividends from net investment income.............. (0.14) (0.14) (0.14) (0.11) (0.05)
Distributions from net realized gains from
investments..................................... (1.63) (1.46) (1.39) (0.65) (0.02)
-------- -------- -------- -------- -------
Total dividends and distributions................. (1.77) (1.60) (1.53) (0.76) (0.07)
-------- -------- -------- -------- -------
Net asset value, end of period.................... $ 16.35 $ 21.14 $ 20.27 $ 20.03 $ 14.07
======== ======== ======== ======== =======
Total investment return (1)....................... (14.74)% 12.82% 9.89% 49.13% 17.90%
======== ======== ======== ======== =======
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $335,294 $375,465 $266,354 $180,807 $80,897
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.96% 0.96% 0.98% 1.00% 1.00%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 0.96% 0.96% 0.98% 1.06% 1.40%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 0.85% 0.71% 0.82% 0.81% 1.22%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 0.85% 0.71% 0.82% 0.75% 0.82%*
Portfolio turnover................................ 195% 40% 34% 46% 38%
</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 Brinson Partners, Inc. to Institutional Capital Corp. and Westwood
Management Corp. on July 1, 2000.
(1) Total investment return is calculated assuming a $10,000 investment on
the first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include any applicable sales charges or program fees; results would be
lower if they were included. Total investment return for 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
LARGE COMPANY GROWTH EQUITY INVESTMENTS
---------------------------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
--------------------------------------------------- ENDED
2000 1999 1998# 1997 JULY 31, 1996+
------------- -------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 25.88 $ 22.99 $ 19.28 $ 13.27 $ 12.00
-------- -------- -------- -------- -------
Net investment income (loss)...................... (0.12) (0.05) (0.03) 0.03 0.03
Net realized and unrealized gains from
investments..................................... 4.69 4.44 4.79 6.01 1.26
-------- -------- -------- -------- -------
Net increase from investment operations........... 4.57 4.39 4.76 6.04 1.29
-------- -------- -------- -------- -------
Dividends from net investment income.............. -- -- (0.01) (0.03) (0.02)
Distributions from net realized gains from
investments..................................... (0.75) (1.50) (1.04) -- --
-------- -------- -------- -------- -------
Total dividends and distributions................. (0.75) (1.50) (1.05) (0.03) (0.02)
-------- -------- -------- -------- -------
Net asset value, end of period.................... $ 29.70 $ 25.88 $ 22.99 $ 19.28 $ 13.27
======== ======== ======== ======== =======
Total investment return (1)....................... 17.76% 19.66% 26.40% 45.61% 10.76%
======== ======== ======== ======== =======
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $436,806 $379,988 $275,461 $160,334 $69,248
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.94% 0.97% 1.00% 1.00% 1.00%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 0.94% 0.97% 1.02% 1.05% 1.33%*
Net investment income (loss) to average net
assets, net of fee waivers and expense
reimbursements.................................. (0.42)% (0.24)% (0.14)% 0.22% 0.33%*
Net investment income (loss) to average net
assets, before fee waivers and expense
reimbursements.................................. (0.42)% (0.24)% (0.16)% 0.17% (0.01)%*
Portfolio turnover................................ 59% 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 $10,000 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 any applicable sales charges or program fees; results would be
lower if they were 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
SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS
--------------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
--------------------------------------- ENDED
2000# 1999 1998 1997 JULY 31, 1996+
--------- -------- -------- -------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 15.75 $ 17.39 $ 17.52 $ 12.29 $ 12.00
-------- -------- -------- -------- -------
Net investment income............................. 0.10 0.06 0.10 0.12 0.10
Net realized and unrealized gains (losses) from
investments..................................... (1.79) (0.06) 1.14 5.55 0.23
-------- -------- -------- -------- -------
Net increase (decrease) from investment
operations...................................... (1.69) 0.00 1.24 5.67 0.33
-------- -------- -------- -------- -------
Dividends from net investment income.............. (0.06) (0.09) (0.13) (0.10) (0.04)
Distributions from net realized gains from
investments..................................... (0.67) (1.55) (1.24) (0.34) --
-------- -------- -------- -------- -------
Total dividends and distributions................. (0.73) (1.64) (1.37) (0.44) (0.04)
-------- -------- -------- -------- -------
Net asset value, end of period.................... $ 13.33 $ 15.75 $ 17.39 $ 17.52 $ 12.29
======== ======== ======== ======== =======
Total investment return (1)....................... (10.59)% 1.16% 6.97% 46.99% 2.76%
======== ======== ======== ======== =======
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $213,749 $206,131 $183,558 $135,047 $63,894
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 1.00% 1.00% 0.99% 1.00% 1.00%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 1.01% 1.01% 1.00% 1.12% 1.51%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 0.77% 0.42% 0.61% 1.00% 1.07%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 0.76% 0.41% 0.60% 0.88% 0.56%*
Portfolio turnover................................ 83% 57% 42% 39% 30%
</TABLE>
-----------------
+ For ther period August 24, 1995 (commencement of operations) through
July 31, 1996.
* Annualized.
# As of October 4, 1999, Ariel Capital Management Inc., sub-advises a
portion of the Portfolio. Brandywine Asset Management, Inc. continues to
sub-advise a portion of the Portfolio.
(1) Total investment return is calculated assuming a $10,000 investment on
the first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include any applicable sales charges or program fees; results would be
lower if they were included. Total investment return for the 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
SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS
---------------------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
---------------------------------------------- ENDED
2000 1999 1998 1997# JULY 31, 1996+
---------- ---------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 20.62 $ 15.80 $ 14.44 $ 11.20 $ 12.00
-------- -------- -------- -------- -------
Net investment loss............................... (0.19) (0.08) (0.03) (0.02) (0.00)**
Net realized and unrealized gains (losses) from
investments..................................... 12.58 5.28 2.03 3.26 (0.78)
-------- -------- -------- -------- -------
Net increase (decrease) from investment
operations...................................... 12.39 5.20 2.00 3.24 (0.78)
-------- -------- -------- -------- -------
Dividends from net investment income.............. -- -- -- -- (0.02)
Distributions from net realized gains from
investments..................................... (2.74) (0.38) (0.64) -- --
-------- -------- -------- -------- -------
Total dividends and distributions................. (2.74) (0.38) (0.64) -- (0.02)
-------- -------- -------- -------- -------
Net asset value, end of period.................... $ 30.27 $ 20.62 $ 15.80 $ 14.44 $ 11.20
======== ======== ======== ======== =======
Total investment return (1)....................... 62.30% 33.62% 14.44% 28.93% (6.55)%
======== ======== ======== ======== =======
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $319,571 $265,405 $198,855 $125,609 $63,364
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 0.95% 1.00% 1.00% 1.00% 1.00%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 0.96% 1.01% 1.03% 1.08% 1.27%*
Net investment loss to average net assets, net of
fee waivers and expense reimbursements.......... (0.64)% (0.48)% (0.20)% (0.21)% (0.14)%*
Net investment loss to average net assets, before
fee waivers and expense reimbursements.......... (0.65)% (0.49)% (0.23)% (0.29)% (0.41)%*
Portfolio turnover................................ 81% 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 transfered from
Westfield Capital Management Company, Inc. to Delaware Management
Company, Inc. on December 17, 1996.
(1) Total investment return is calculated assuming a $10,000 investment on
the first day of each period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of each period reported. The figures do not
include any applicable sales charges or program fees; results would be
lower if they were included. Total investment return for 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
INTERNATIONAL EQUITY INVESTMENTS
-------------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
-------------------------------------- ENDED
2000 1999 1998 1997 JULY 31, 1996+
-------- -------- -------- -------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 17.18 $ 16.54 $ 15.66 $ 12.79 $ 12.00
-------- -------- -------- -------- -------
Net investment income............................. 0.07 0.07 0.16 0.10 0.12
Net realized and unrealized gains from investments
and foreign currency............................ 2.51 1.10 1.20 2.97 0.73
-------- -------- -------- -------- -------
Net increase from investment operations........... 2.58 1.17 1.36 3.07 0.85
-------- -------- -------- -------- -------
Dividends from net investment income.............. (0.12) (0.19) (0.16) (0.13) (0.06)
Distributions from net realized gains from
investments..................................... (1.02) (0.34) (0.32) (0.07) --
-------- -------- -------- -------- -------
Total dividends and distributions................. (1.14) (0.53) (0.48) (0.20) (0.06)
-------- -------- -------- -------- -------
Capital contribution from Sub-Advisor............. 0.05 -- -- -- --
-------- -------- -------- -------- -------
Net asset value, end of period.................... $ 18.67 $ 17.18 $ 16.54 $ 15.66 $ 12.79
======== ======== ======== ======== =======
Total investment return (1)....................... 14.91% 7.33% 9.27% 24.30% 7.08%
======== ======== ======== ======== =======
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $246,452 $214,017 $164,477 $102,979 $45,331
Expenses to average net assets, net of fee waivers
and expense reimbursements...................... 1.16% 1.22% 1.21% 1.35% 1.50%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 1.16% 1.22% 1.21% 1.35% 1.81%*
Net investment income to average net assets, net
of fee waivers and expense reimbursements....... 0.37% 0.53% 1.14% 0.95% 1.35%*
Net investment income to average net assets,
before fee waivers and expense reimbursements... 0.37% 0.53% 1.14% 0.95% 1.04%*
Portfolio turnover................................ 72% 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 $10,000 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 any applicable sales charges or program fees; results would be
lower if they were included. Total investment return for period of less
than one year has not been annualized. If not for the sub-advisor's
capital contribution of approximately $0.05 per share, the total return
for the year ended July 31, 2000 would have been 14.6%.
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
INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS
-------------------------------------------------------
FOR THE YEARS ENDED
JULY 31, FOR THE PERIOD
-------------------------------------- ENDED
2000 1999 1998 1997 JULY 31, 1996+
-------- -------- -------- -------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 12.05 $ 10.41 $ 15.60 $ 12.49 $ 12.00
------- ------- ------- ------- -------
Net investment income (loss)...................... (0.01) 0.09 0.09 0.06 0.07
Net realized and unrealized gains (losses) from
investments and foreign currency................ 0.02 1.62 (5.23) 3.09 0.44
------- ------- ------- ------- -------
Net increase (decrease) from investment
operations...................................... 0.01 1.71 (5.14) 3.15 0.51
------- ------- ------- ------- -------
Dividends from net investment income.............. (0.10) (0.07) (0.05) (0.04) (0.02)
------- ------- ------- ------- -------
Net asset value, end of period.................... $ 11.96 $ 12.05 $ 10.41 $ 15.60 $ 12.49
======= ======= ======= ======= =======
Total investment return (1)....................... (0.02)% 16.66% (32.99)% 25.31% 4.23%
======= ======= ======= ======= =======
Ratios/Supplemental Data:
Net assets, end of period (000's)................. $82,179 $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% 1.50%*
Expenses to average net assets, before fee waivers
and expense reimbursements...................... 1.75% 1.79% 1.79% 2.09% 2.35%*
Net investment income (loss) to average net
assets, net of fee waivers and expense
reimbursements.................................. (0.08)% 1.05% 0.98% 0.63% 0.94%*
Net investment income (loss) to average net
assets, before fee waivers and expense
reimbursements.................................. (0.33)% 0.76% 0.69% 0.04% 0.08%*
Portfolio turnover................................ 115% 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 $10,000 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 any applicable sales charges or program fees; results would be
lower if they were included. Total investment return for period of less
than one year has not been annualized.
110
<PAGE>
PAINEWEBBER PACE SELECT ADVISORS TRUST
REPORT OF 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, 2000, 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 auditing standards generally
accepted in the United States. 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, 2000 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, 2000, 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 accounting principles generally accepted in the United States.
[LOGO]
New York, New York
September 22, 2000
111
<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, 2000) 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................. $0.0543 -- -- --
PACE Government Securities
Fixed Income Investments.... $0.7533 -- -- --
PACE Intermediate Fixed Income
Investments................. $0.7039 -- $0.0030 --
PACE Strategic Fixed Income
Investments................. $0.7240 -- -- --
PACE Municipal Fixed Income
Investments***.............. $0.5676 -- -- --
PACE Global Fixed Income
Investments................. $0.4800 $0.0625 $0.0260 --
PACE Large Company Value
Equity Investments.......... $0.1351 $0.1485 $1.4778 100.00%
PACE Large Company Growth
Equity Investments.......... -- -- $0.7514 --
PACE Small/Medium Company
Value Equity Investments.... $0.0624 $0.5115 $0.1633 54.71%
PACE Small/Medium Company
Growth Equity Investments... -- $0.1500 $2.5866 0.80%
PACE International Equity
Investments................. $0.1160 -- $1.0164 --
PACE International Emerging
Markets Equity
Investments................. $0.1025 -- -- --
</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, 2000, is $421,802 and $186,789, respectively. The
foreign source income for information reporting purposes is $1,892,900 for PACE
International Equity Investments and $186,789 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 2000. 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 2001. Shareholders are advised to consult their own
tax advisers with respect to the tax consequences of their investment in each of
the Portfolios.
112
<PAGE>
MANAGED ACCOUNTS SERVICES
PAINEWEBBER
-C-2000 PaineWebber Incorporated
All rights reserved
Member SIPC
