PAINEWEBBER PACE SELECT ADVISORS TRUST, 497, 2000-12-07

PAINEWEBBER PACE SELECT ADVISORS TRUST
497, 2000-12-07

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<PAGE>
PaineWebber PACE Select Advisors Trust

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

PACE International Emerging Markets Equity Investments

--------------------
PROSPECTUS
NOVEMBER 27, 2000
----------------------------------

This prospectus offers Class P shares of the twelve funds in the Trust to
participants in the PaineWebber PACE-SM- Select Advisors Program. The PACE
Select Advisors Program and these funds are designed to assist you in devising
an asset allocation strategy to meet your individual needs.

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved any fund's shares or determined whether this prospectus
is complete or accurate. To state otherwise is a crime.
<PAGE>
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------------------------
PaineWebber PACE Select Advisors Trust

Contents
THE FUNDS

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<TABLE>
<S> <C> <C>
What every investor PACE Money Market Investments
should know about 4 Investment Objective, Strategies and
Risks
the funds 5 Performance
6 Expenses and Fee Tables
PACE Government Securities Fixed Income Investments
7 Investment Objective, Strategies and
Risks
8 Performance
9 Expenses and Fee Tables
PACE Intermediate Fixed Income Investments
10 Investment Objective, Strategies and
Risks
11 Performance
12 Expenses and Fee Tables
PACE Strategic Fixed Income Investments
13 Investment Objective, Strategies and
Risks
14 Performance
15 Expenses and Fee Tables
PACE Municipal Fixed Income Investments
16 Investment Objective, Strategies and
Risks
17 Performance
18 Expenses and Fee Tables
PACE Global Fixed Income Investments
19 Investment Objective, Strategies and
Risks
21 Performance
22 Expenses and Fee Tables
PACE Large Company Value Equity Investments
23 Investment Objectives, Strategies and
Risks
24 Performance
25 Expenses and Fee Tables
PACE Large Company Growth Equity Investments
26 Investment Objective, Strategies and
Risks
27 Performance
28 Expenses and Fee Tables
PACE Small/Medium Company Value Equity Investments
29 Investment Objective, Strategies and
Risks
30 Performance
31 Expenses and Fee Tables
PACE Small/Medium Company Growth Equity Investments
32 Investment Objective, Strategies and
Risks
33 Performance
34 Expenses and Fee Tables
PACE International Equity Investments
35 Investment Objective, Strategies and
Risks
36 Performance
37 Expenses and Fee Tables
PACE International Emerging Markets Equity Investments
38 Investment Objective, Strategies and
Risks
39 Performance
40 Expenses and Fee Tables
41 More About Risks and Investment
Strategies
</TABLE>

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Prospectus Page 2
<PAGE>
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PaineWebber PACE Select Advisors Trust

YOUR INVESTMENT

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<TABLE>
<S> <C> <C>
Information for 44 Investing in the Funds
managing your fund --Buying Shares
account --The PaineWebber PACE-SM- Select
Advisors
Program
--Selling Shares
--Pricing and Valuation
</TABLE>

ADDITIONAL INFORMATION

--------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
Additional important 46 Management
information about 51 Dividends and Taxes
the funds 52 Financial Highlights
A-1 Appendix A
B-1 Appendix B
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
Where to learn more Back Cover
about these funds
</TABLE>

The funds are not complete or
balanced investment programs.

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Prospectus Page 3
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PaineWebber PACE Money Market Investments

PACE Money Market Investments

INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

--------------------------------------------------------------------------------

FUND OBJECTIVE

Current income consistent with preservation of capital and liquidity.

PRINCIPAL INVESTMENT STRATEGIES

The fund is a money market mutual fund and seeks to maintain a stable price of
$1.00 per share. The fund invests in a diversified portfolio of high quality
money market instruments of governmental and private issuers.

Money market instruments are short-term debt obligations and similar securities.
They also include longer term bonds that have variable interest rates or other
special features that give them the financial characteristics of short-term
debt. The fund invests in foreign money market instruments only if they are
denominated in U.S. dollars.

Mitchell Hutchins Asset Management Inc., the fund's manager and investment
adviser, selects money market instruments for the fund based on its assessment
of relative values and changes in market and economic conditions. Mitchell
Hutchins considers safety of principal and liquidity in selecting securities for
the fund and thus may not buy securities that pay the highest yield.

PRINCIPAL RISKS

An investment in the fund is not a bank deposit and is neither insured nor
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. While the fund seeks to maintain the value of your investment at $1.00
per share, you may lose money by investing in the fund. Money market instruments
generally have a low risk of loss, but they are not risk-free. The principal
risks presented by the fund are:

- CREDIT RISK -- Issuers of money market instruments may fail to make payments
when due, or they may become less willing or less able to do so.

- INTEREST RATE RISK -- The value of the fund's investments generally will fall
when short term interest rates rise, and its yield will tend to lag behind
prevailing rates.

- FOREIGN INVESTING RISK -- The value of the fund's investments in foreign
securities may fall due to adverse political, social and economic developments
abroad. However, because the fund's foreign investments must be denominated in
U.S. dollars, it generally is not subject to the risk of changes in currency
valuations.

More information about risks of an investment in the fund is provided below in
"More About Risks and Investment Strategies."

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Prospectus Page 4
<PAGE>
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PaineWebber PACE Money Market Investments

PERFORMANCE

--------------------------------------------------------------------------------

RISK/RETURN BAR CHART AND TABLE

The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.

The bar chart shows how the fund's performance has varied from year to year. The
bar chart does not reflect the annual PACE Select Advisors Program fee; if it
did, the total returns shown would be lower.

The table that follows the bar chart shows the average annual returns over
several time periods for the fund's shares. The table does reflect the annual
PACE Select Advisors Program fee.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

TOTAL RETURN (1996 IS THE FUND'S FIRST FULL CALENDAR YEAR OF OPERATIONS)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR TOTAL RETURN
<S> <C>
1996 5.05%
1997 5.27%
1998 5.21%
1999 4.82%
</TABLE>

Total Return January 1 to September 30, 2000 -- 4.44%

Best quarter during calendar years shown: 4th quarter, 1997 -- 1.33%

Worst quarter during calendar years shown: 1st quarter, 1999 -- 1.12%

AVERAGE ANNUAL TOTAL RETURNS
as of December 31, 1999

<TABLE>
<CAPTION>
CLASS P
--------
<S> <C>
One Year.................................................... 3.26%
Life of Fund (Inception Date 8/24/95)....................... 3.55%
</TABLE>

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Prospectus Page 5
<PAGE>
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PaineWebber PACE Money Market Investments

EXPENSES AND FEE TABLES

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FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your
investment)

Maximum Sales Charge (Load) Imposed on Purchases
(as a % of offering price)................................ None
Maximum Deferred Sales Charge (Load)
(as a % of offering price)................................ None
Maximum Annual Account Fee for PaineWebber PACE Select
Advisors Program
(as a % of average value of shares held on the last
calendar day of the previous quarter)..................... 1.50%

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from
fund assets)

Management Fees............................................. 0.15%
Distribution and/or Service (12b-1) Fees.................... None
Other Expenses*............................................. 0.80%
----
Total Annual Fund Operating Expenses........................ 0.95%
====
Expense Reimbursements**.................................... 0.45%
----
Net Expenses**.............................................. 0.50%
====
</TABLE>

---------

* Includes an administration fee of 0.20% paid by the fund to Mitchell
Hutchins.

** The fund and Mitchell Hutchins have entered into a written expense
reimbursement agreement. Mitchell Hutchins is contractually obligated to
reimburse the fund to the extent that the fund's expenses through December 1,
2002 otherwise would exceed the "Net Expenses" rate shown above. The fund has
agreed to repay Mitchell Hutchins for those reimbursed expenses if it can do so
over the following three years without causing the fund's expenses in any of
those three years to exceed the "Net Expenses" rate.

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 in the fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example includes the maximum annual fee for the PACE Select Advisors Program and
also assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same, except for the two year period when the
fund's expenses are lower due to its reimbursement agreement with Mitchell
Hutchins. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ -------- -------- --------
<S> <C> <C> <C>
$203 $675 $1,222 $2,716
</TABLE>

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Prospectus Page 6
<PAGE>
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PaineWebber PACE Government Securities Fixed Income Investments

PACE Government Securities Fixed Income Investments

INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

--------------------------------------------------------------------------------

FUND OBJECTIVE

Current income.

PRINCIPAL INVESTMENT STRATEGIES

The fund invests in U.S. government bonds and other bonds of varying maturities,
but normally limits its portfolio "duration" to between one and seven years.
"Duration" is a measure of the fund's exposure to interest rate risk. A longer
duration means that changes in market interest rates are likely to have a larger
effect on the value of the assets in a portfolio.

The fund invests primarily in mortgage-backed securities issued or guaranteed by
U.S. government agencies and in other U.S. government securities. The fund also
invests, to a lesser extent, in investment grade bonds of private issuers,
including those backed by mortgages or other assets. These privately issued
bonds generally have one of the two highest credit ratings, although the fund
may invest to a limited extent in privately issued bonds with the third highest
credit rating. The fund may invest in when-issued or delayed delivery bonds to
increase its return, giving rise to a form of leverage. The fund may (but is not
required to) use options, futures and other derivatives as part of its
investment strategy or to help manage portfolio risks.

Mitchell Hutchins Asset Management Inc., the fund's manager, has selected
Pacific Investment Management Company LLC ("PIMCO") to serve as the fund's
investment adviser. PIMCO establishes duration targets for the fund's portfolio
based on its expectations for changes in interest rates and then positions the
fund to take advantage of yield curve shifts. PIMCO decides to buy or sell
specific bonds based on an analysis of their values relative to other similar
bonds. PIMCO monitors the prepayment experience of the fund's mortgage-backed
bonds and will also buy and sell securities to adjust the fund's average
portfolio duration, yield curve and sector and prepayment exposure, as
appropriate.

PRINCIPAL RISKS

An investment in the fund is not guaranteed; you may lose money by investing in
the fund. The principal risks presented by the fund are:

- INTEREST RATE RISK -- The value of the fund's investments generally will fall
when interest rates rise. Some corporate bonds provide that the issuer may
repay them earlier than the maturity date. When interest rates are falling,
bond issuers may exercise this right more often, and the fund may have to
reinvest these repayments at lower interest rates.

- PREPAYMENT RISK -- The fund's mortgage- and asset-backed securities may be
prepaid more rapidly than expected, especially when interest rates are
falling, and the fund may have to reinvest those prepayments at lower interest
rates. When interest rates are rising, slower prepayments may extend the
duration of the securities and may reduce their value.

- LEVERAGE RISK -- Leverage magnifies the effect of changes in market values.
While leverage can increase the fund's income and potential for gain, it also
can increase expenses and the risk of loss. The fund attempts to limit the
magnifying effect of its leverage by managing its portfolio duration.

- CREDIT RISK -- Bond issuers may fail to make payments when due, or they may
become less willing or less able to do so.

- DERIVATIVES RISK -- The fund's investments in derivatives may rise or fall
more rapidly than other investments.

More information about risks of an investment in the fund is provided below in
"More About Risks and Investment Strategies."

--------------------------------------------------------------------------------
Prospectus Page 7
<PAGE>
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------------------------
PaineWebber PACE Government Securities Fixed Income Investments

PERFORMANCE

--------------------------------------------------------------------------------

RISK/RETURN BAR CHART AND TABLE

The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.

The bar chart shows how the fund's performance has varied from year to year. The
bar chart does not reflect the maximum annual PACE Select Advisors Program fee;
if it did, the total returns shown would be lower.

The table that follows the bar chart shows the average annual returns for the
1999 calendar year and for the life of the fund and does reflect the maximum
annual PACE Select Advisors Program fee. The table compares fund returns to
returns on a broad-based market index that is unmanaged and that, therefore,
does not include any fees or expenses.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

TOTAL RETURN (1996 IS THE FUND'S FIRST FULL CALENDAR YEAR OF OPERATIONS)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR TOTAL RETURN
<S> <C>
1996 4.26%
1997 9.04%
1998 6.42%
1999 1.01%
</TABLE>

Total Return January 1 to September 30, 2000 -- 7.19%

Best quarter during calendar years shown: 2nd quarter, 1997 -- 3.50%

Worst quarter during calendar years shown: 1st quarter, 1996 -- (1.33)%

AVERAGE ANNUAL TOTAL RETURNS

as of December 31, 1999

<TABLE>
<CAPTION>
LEHMAN BROTHERS
MORTGAGE-BACKED
CLASS P SECURITIES INDEX
------- ----------------
<S> <C> <C>
One Year.................................................... (0.49)% 1.86%
Life of Fund (Inception Date 8/24/95)....................... 4.29% 6.42%
</TABLE>

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Prospectus Page 8
<PAGE>
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------------------------
PaineWebber PACE Government Securities Fixed Income Investments

EXPENSES AND FEE TABLES

--------------------------------------------------------------------------------

FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your
investment)

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from fund
assets)

Management Fees............................................. 0.50%
Distribution and/or Service (12b-1) Fees.................... None
Other Expenses*............................................. 0.41%
-----
Total Annual Fund Operating Expenses........................ 0.91%+
=====
Management Fee Waiver/Expense Reimbursements**.............. 0.04%
-----
Net Expenses**.............................................. 0.87%+
=====
</TABLE>

---------

* Includes an administration fee of 0.20% paid by the fund to Mitchell
Hutchins.

** The fund and Mitchell Hutchins have entered into a written agreement under
which Mitchell Hutchins is contractually obligated to waive its management fee
and/or reimburse the fund to the extent that the fund's expenses through
December 1, 2002 otherwise would exceed the "Net Expenses" rate shown above. The
fund has agreed to repay Mitchell Hutchins for any reimbursed expenses if it can
do so over the following three years without causing the fund's expenses in any
of those three years to exceed the "Net Expenses" rate.

+ Includes 0.02% of interest expense related to reverse repurchase agreements
during the year ended July 31, 2000.

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 in the fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example includes the maximum annual fee for the PACE Select Advisors Program and
also assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same, except for the two year period when the
fund's expenses are lower due to its agreement with Mitchell Hutchins. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ -------- -------- --------
<S> <C> <C> <C>
$240 $744 $1,278 $2,740
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 9
<PAGE>
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PaineWebber PACE Intermediate Fixed Income Investments

PACE Intermediate Fixed Income Investments

INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

--------------------------------------------------------------------------------

FUND OBJECTIVE

Current income, consistent with reasonable stability of principal.

PRINCIPAL INVESTMENT STRATEGIES

The fund invests in bonds of varying maturities, but normally limits its overall
portfolio "duration" to between two and four and one-half years. "Duration" is a
measure of the fund's exposure to interest rate risk. A longer duration means
that changes in market interest rates are likely to have a larger effect on the
value of the assets in a portfolio.

The fund invests primarily in U.S. and foreign government bonds, U.S. and
foreign corporate bonds and bonds that are backed by mortgages or other assets.
The fund limits its investments to investment grade bonds. The fund also may
invest in preferred stocks.

The fund's investments in securities of foreign issuers may include, to a
limited extent, securities that are denominated in foreign currencies of
developed countries. The fund may (but is not required to) use forward currency
contracts, options, futures and other derivatives as part of its investment
strategy or to help manage portfolio risks.

Mitchell Hutchins Asset Management Inc., the fund's manager, has selected
Metropolitan West Asset Management, LLC ("MWAM") to serve as the fund's
investment adviser. MWAM decides to buy specific bonds for the fund based on its
value added strategies, with the goal of outperforming the Lehman Brothers
Intermediate Government Credit Index while maintaining below average volatility.
These strategies are anchored by MWAM's long-term economic outlook and include
managing interest rate risk through limited duration shifts, yield curve
management, diversifying the fund's investments across all permitted investment
sectors while overweighting the most attractive sectors, identifying undervalued
securities and aggressive execution. MWAM generally sells securities that no
longer meet these selection criteria or when it identifies more attractive
investment opportunities and may also sell securities to adjust the average
duration of the fund's portfolio.

PRINCIPAL RISKS

An investment in the fund is not guaranteed; you may lose money by investing in
the fund. The principal risks presented by the fund are:

- CREDIT RISK -- Bond issuers may fail to make payments when due, or they may
become less willing or less able to do so.

- SINGLE ISSUER CONCENTRATION RISK -- Because the fund is non-diversified, it
can invest more of its assets in a single issuer than a diversified fund can.
As a result, changes in the market value of a single issuer can have a greater
effect on the fund's performance and share price than it would for a more
diversified fund.

- DERIVATIVES RISK -- The fund's investments in derivatives may rise or fall
more rapidly than other investments.

More information about risks of an investment in the fund is provided below in
"More About Risks and Investment Strategies."

--------------------------------------------------------------------------------
Prospectus Page 10
<PAGE>
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------------------------
PaineWebber PACE Intermediate Fixed Income Investments

PERFORMANCE

--------------------------------------------------------------------------------

RISK/RETURN BAR CHART AND TABLE

The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.

The fund's past performance does not necessarily indicate how the fund will
perform in the future. This may be particularly true for the period prior to
October 10, 2000, which is the date on which MWAM assumed day-to-day management
of the fund's assets. Prior to that date, another investment adviser was
responsible for managing the fund's assets. See Appendix A for information about
the historical performance of accounts managed by MWAM with substantially
similar investment objectives, policies and strategies to those of the fund.

TOTAL RETURN (1996 IS THE FUND'S FIRST FULL CALENDAR YEAR OF OPERATIONS)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR TOTAL RETURN
<S> <C>
1996 3.14%
1997 7.45%
1998 7.36%
1999 (0.11)%
</TABLE>

Total Return January 1 to September 30, 2000 -- 6.18%

Best quarter during calendar years shown: 3rd quarter, 1998 -- 4.17%

Worst quarter during calendar years shown: 1st quarter, 1996 -- (1.13)%

AVERAGE ANNUAL TOTAL RETURNS
as of December 31, 1999

<TABLE>
<CAPTION>
LEHMAN BROTHERS
INTERMEDIATE
CLASS P GOVERNMENT CREDIT INDEX
-------- -----------------------
<S> <C> <C>
One Year................................................. (1.59)% 0.39%
Life of Fund (Inception Date 8/24/95).................... 3.41% 5.74%
</TABLE>

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Prospectus Page 11
<PAGE>
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------------------------
PaineWebber PACE Intermediate Fixed Income Investments

EXPENSES AND FEE TABLES

--------------------------------------------------------------------------------

FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your
investment)

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from fund
assets)

---------

* Includes an administration fee of 0.20% paid by the fund to Mitchell
Hutchins.

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 in the fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example includes the maximum annual fee for the PACE Select Advisors Program and
also assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- -------- -------- --------
<S> <C> <C> <C>
$232 $715 $1,225 $2,626
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 12
<PAGE>
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------------------------
PaineWebber PACE Strategic Fixed Income Investments

PACE Strategic Fixed Income Investments

INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

--------------------------------------------------------------------------------

FUND OBJECTIVE

Total return consisting of income and capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The fund invests in bonds of varying maturities, but normally limits its
portfolio "duration" to between three and eight years. "Duration" is a measure
of the fund's exposure to interest rate risk. A longer duration means that
changes in market interest rates are likely to have a larger effect on the value
of the assets in a portfolio.

The fund invests primarily in investment grade bonds of governmental and private
issuers in the United States and foreign countries, including bonds that are
backed by mortgages or other assets, and in bonds that are convertible into
common stock. The fund's investments in securities of foreign issuers may
include, to a limited extent, securities that are denominated in foreign
currencies.

The fund also invests, to a limited extent, in bonds that are below investment
grade. Securities rated below investment grade are commonly known as "junk
bonds." The fund may invest in when-issued or delayed delivery bonds to increase
its return, giving rise to a form of leverage. The fund may (but is not required
to) use forward currency contracts, options, futures and other derivatives as
part of its investment strategy or to help manage portfolio risks.

Mitchell Hutchins Asset Management Inc., the fund's manager, has selected
Pacific Investment Management Company LLC ("PIMCO") to serve as the fund's
investment adviser. PIMCO seeks to invest the fund's assets in those areas of
the bond market that it considers undervalued, based on such factors as quality,
sector, coupon and maturity. PIMCO establishes duration targets for the fund's
portfolio based on its expectations for changes in interest rates and then
positions the fund to take advantage of yield curve shifts. PIMCO decides to buy
or sell specific bonds based on an analysis of their values relative to other
similar bonds. PIMCO monitors the prepayment experience of the fund's
mortgage-backed bonds and will also buy and sell securities to adjust the fund's
average portfolio duration, yield curve, sector and prepayment exposure, as
appropriate.

PRINCIPAL RISKS

An investment in the fund is not guaranteed; you may lose money by investing in
the fund. The principal risks presented by the fund are:

- CREDIT RISK -- Bond issuers may fail to make payments when due, or they may
become less willing or less able to do so. This risk is greater for lower
quality bonds than for bonds that are investment grade

- FOREIGN INVESTING RISK -- The value of the fund's investments in foreign
securities may fall due to adverse political, social and economic developments
abroad and due to decreases in foreign currency values relative to the U.S.
dollar. Investments in foreign government bonds involve special risks because
the fund may have limited legal recourse in the event of default.

- DERIVATIVES RISK -- The fund's investments in derivatives may rise or fall
more rapidly than other investments.

More information about risks of an investment in the fund is provided below in
"More About Risks and Investment Strategies."

--------------------------------------------------------------------------------
Prospectus Page 13
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Strategic Fixed Income Investments

PERFORMANCE

--------------------------------------------------------------------------------

RISK/RETURN BAR CHART AND TABLE

The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

TOTAL RETURN (1996 IS THE FUND'S FIRST FULL CALENDAR YEAR OF OPERATIONS)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR TOTAL RETURN
<S> <C>
1996 3.22%
1997 10.19%
1998 8.22%
1999 (2.74)%
</TABLE>

Total Return January 1 to September 30, 2000 -- 6.31%

Best quarter during calendar years shown: 3rd quarter, 1998 -- 4.52%

Worst quarter during calendar years shown: 1st quarter, 1996 -- (2.21)%

AVERAGE ANNUAL TOTAL RETURNS
as of December 31, 1999

<TABLE>
<CAPTION>
LEHMAN BROTHERS
GOVERNMENT/CORPORATE
CLASS P INDEX
-------- --------------------
<S> <C> <C>
One Year................................................... (4.19)% (2.15)%
Life of Fund (Inception Date 8/24/95)...................... 4.98% 5.84%
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 14
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Strategic Fixed Income Investments

EXPENSES AND FEE TABLES

--------------------------------------------------------------------------------

FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your
investment)

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from fund
assets)

Management Fees............................................. 0.50%
Distribution and/or Service (12b-1) Fees.................... None
Other Expenses*............................................. 0.39%
----
Total Annual Fund Operating Expenses........................ 0.89%
====
Management Fee Waiver/Expense Reimbursements**.............. 0.04%
----
Net Expenses**.............................................. 0.85%
====
</TABLE>

---------

* Includes an administration fee of 0.20% paid by the fund to Mitchell
Hutchins.

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 in the fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example includes the maximum annual fee for the PACE Select Advisors Program and
also assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same, except for the two year period when the
fund's expenses are lower due to its agreement with Mitchell Hutchins. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ -------- -------- --------
<S> <C> <C> <C>
$238 $738 $1,268 $2,720
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 15
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Municipal Fixed Income Investments

PACE Municipal Fixed Income Investments

INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

--------------------------------------------------------------------------------

FUND OBJECTIVE

High current income exempt from federal income tax.

PRINCIPAL INVESTMENT STRATEGIES

The fund invests substantially all of its assets in investment grade municipal
bonds of varying maturities. These are bonds and similar securities that are
exempt from federal income tax. Normally, the fund limits its investments in
municipal bonds that are subject to the federal alternative minimum tax (AMT) so
that not more than 25% of its interest income will be subject to the AMT. The
fund invests in municipal bonds that are subject to the AMT when its investment
adviser believes that they offer attractive yields relative to municipal bonds
that have similar investment characteristics but are not subject to the AMT.

The fund normally limits its portfolio "duration" to between three and seven
years. "Duration" is a measure of the fund's exposure to interest rate risk. A
longer duration means that changes in market interest rates are likely to have a
larger effect on the value of the assets in a portfolio. The fund may invest up
to 50% of its total assets in municipal bonds that are secured by revenues from
public housing authorities and state and local housing finance authorities,
including bonds that are secured or backed by the U.S. Treasury or other U.S.
government guaranteed securities.

The fund limits its investments in municipal bonds with the lowest investment
grade rating to 15% of its total assets at the time the bonds are purchased. The
fund may (but is not required to) use options, futures and other derivatives as
part of its investment strategy or to help manage its portfolio duration.

Mitchell Hutchins Asset Management Inc., the fund's manager, has selected
Standish, Ayer & Wood, Inc. ("Standish") to serve as the fund's investment
adviser. In deciding which securities to buy for the fund, Standish seeks to
identify undervalued sectors or geographical regions of the municipal market or
undervalued individual securities. To do this, Standish uses credit research and
valuation analysis and monitors the relationship of the municipal yield curve to
the treasury yield curve. Standish also uses credit quality assessments from its
in-house analysts to identify potential rating changes, undervalued issues and
macro trends with regard to market sectors and geographical regions. Standish
may make modest duration adjustments based on economic analyses and interest
rate forecasts. Standish generally sells securities if it identifies more
attractive investment opportunities within its investment criteria and doing so
may improve the fund's return. Standish also may sell securities with weakening
credit profiles or to adjust the average duration of the fund's portfolio.

PRINCIPAL RISKS

An investment in the fund is not guaranteed; you may lose money by investing in
the fund. The principal risks presented by the fund are:

- INTEREST RATE RISK -- The value of the fund's investments generally will fall
when interest rates rise. Some municipal bonds provide that the issuer may
repay them earlier than the maturity date. When interest rates are falling,
bond issuers may exercise this right more often, and the fund may have to
reinvest these repayments at lower interest rates.

- CREDIT RISK -- Bond issuers may fail to make payments when due, or they may
become less willing or less able to do so.

- POLITICAL RISK -- The fund's investments may be significantly affected by
political changes, including legislative proposals which may make municipal
bonds less attractive in comparison to taxable bonds.

- RELATED SECURITIES CONCENTRATION RISK -- Because the fund may invest more than
25% of its total assets in municipal bonds that are issued to finance similar
projects, changes that affect one type of municipal bond may have a
significant impact on the value of the fund.

- DERIVATIVES RISK -- The fund's investments in derivatives may rise or fall
more rapidly than other investments.

More information about risks of an investment in the fund is provided below in
"More About Risks and Investment Strategies."

--------------------------------------------------------------------------------
Prospectus Page 16
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Municipal Fixed Income Investments

PERFORMANCE

--------------------------------------------------------------------------------

RISK/RETURN BAR CHART AND TABLE

The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.

The fund's past performance does not necessarily indicate how the fund will
perform in the future. This may be particularly true for the period prior to
June 1, 2000, which is the date on which Standish assumed day-to-day management
of the fund's assets. Prior to that date, another investment adviser was
responsible for managing the fund's assets. See Appendix A for information about
the performance of a mutual fund and accounts managed by Standish with
substantially similar investment objectives, policies and strategies to those of
the fund.

TOTAL RETURN (1996 IS THE FUND'S FIRST FULL CALENDAR YEAR OF OPERATIONS)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR TOTAL RETURN
<S> <C>
1996 4.86%
1997 7.01%
1998 5.39%
1999 (2.14)%
</TABLE>

Total Return January 1 to September 30, 2000 -- 5.20%

Best quarter during calendar years shown: 3rd quarter, 1998 -- 2.52%

Worst quarter during calendar years shown: 2nd quarter, 1999 -- (1.21)%

AVERAGE ANNUAL TOTAL RETURNS
as of December 31, 1999

<TABLE>
<CAPTION>
LEHMAN BROTHERS
MUNICIPAL FIVE-YEAR
CLASS P INDEX
-------- -------------------
<S> <C> <C>
One Year.................................................... (3.60)% 0.73%
Life of Fund (Inception Date 8/24/95)....................... 3.02% 4.49%
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 17
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Municipal Fixed Income Investments

EXPENSES AND FEE TABLES

--------------------------------------------------------------------------------

FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your
investment)

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from
fund assets)

Management Fees............................................. 0.40%
Distribution and/or Service (12b-1) Fees.................... None
Other Expenses*............................................. 0.49%
----
Total Annual Fund Operating Expenses........................ 0.89%
====
Management Fee Waiver/Expense Reimbursements**.............. 0.04%
----
Net Expenses**.............................................. 0.85%
====
</TABLE>

---------

* Includes an administration fee of 0.20% paid by the fund to Mitchell
Hutchins.

** The fund and Mitchell Hutchins have entered into a written expense
reimbursement agreement under which Mitchell Hutchins is contractually obligated
to waive its management fee and/or reimburse the fund to the extent that the
fund's expenses through December 1, 2002 otherwise would exceed the "Net
Expenses" rate shown above. The fund has agreed to repay Mitchell Hutchins for
those reimbursed expenses if it can do so over the following three years without
causing the fund's expenses in any of those three years to exceed the "Net
Expenses" rate.

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 in the fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example includes the maximum annual fee for the PACE Select Advisors Program and
also assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same, except for the two year period when the
fund's expenses are lower due to its agreement with Mitchell Hutchins. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ -------- -------- --------
<S> <C> <C> <C>
$238 $738 $1,268 $2,720
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 18
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Global Fixed Income Investments

PACE Global Fixed Income Investments

INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

--------------------------------------------------------------------------------

FUND OBJECTIVE

High total return.

PRINCIPAL INVESTMENT STRATEGIES

The fund invests primarily in high-grade bonds of governmental and private
issuers in the United States and developed foreign countries. These high-grade
bonds are rated in one of the three highest rating categories or are of
comparable quality. The fund invests, to a limited extent, in lower rated bonds
of governmental and private issuers in emerging markets, including bonds that
are rated below investment grade.

The fund invests in bonds of varying maturities, but normally limits its
portfolio "duration" to between four and eight years. "Duration" is a measure of
the fund's exposure to interest rate risk. A longer duration means that changes
in market interest rates are likely to have a larger effect on the value of the
assets in a portfolio.

A portion of the fund's assets normally is invested in bonds of U.S. government
and private issuers. The balance of the fund's assets is allocated among bonds
of governmental and private issuers in various foreign countries. The fund's
investments may include mortgage-backed and asset-backed securities. The fund
may (but is not required to) use forward currency contracts, options, futures
and other derivatives as part of its investment strategy or to help manage
portfolio risks.

Mitchell Hutchins Asset Management Inc., the fund's manager, has selected Rogge
Global Partners plc and Fischer Francis Trees & Watts, Inc. and its affiliates
("FFTW") to serve as the fund's investment advisers. Mitchell Hutchins allocates
the fund's assets between two investment advisers and may change the allocation
at any time. The relative values of each investment adviser's share of the
fund's assets also may change over time.

Rogge Global Partners seeks to invest the fund assets it manages in bonds of
issuers in financially healthy countries because it believes that these
investments produce the highest bond and currency returns over time. In deciding
which bonds to buy for the fund, Rogge Global Partners uses a top-down analysis
to find value across countries and to forecast interest and currency-exchange
rates over a one-year horizon. Rogge Global Partners also uses an optimization
model to help determine country, currency and duration positions for the fund.
Rogge Global Partners generally sells securities that no longer meet these
selection criteria or when it identifies more attractive investment
opportunities and may also sell securities to adjust the average duration of the
fund assets it manages.

FFTW seeks to outperform a benchmark, the Lehman Global Aggregate Index
(Unhedged), for its share of the fund's assets through an active bond selection
process that relies on (1) construction of diversified portfolios,
(2) identifying the most attractive sectors and the most attractive individual
securities within those sectors and (3) monitoring portfolio risk with risk
management tools. FFTW divides the investment universe into three major blocs
(Europe, the United States, and Japan) and analyzes in each bloc trends in
economic growth, inflation, monetary and fiscal policies. FFTW decides which
securities to buy for the fund by looking for investment opportunities where its
opinions on the current economic environment of a bloc or country differ from
those it judges to be reflected in current market valuations. FFTW generally
sells securities when it has identified more attractive investment
opportunities.

PRINCIPAL RISKS

An investment in the fund is not guaranteed; you may lose money by investing in
the fund. The principal risks presented by the fund are:

- FOREIGN INVESTING AND EMERGING MARKETS RISKS -- The value of the fund's
investments in foreign securities may fall due to adverse political, social
and economic developments abroad and due to decreases in foreign currency
values relative to the U.S. dollar. These risks are greater for investments in
emerging market issuers.

--------------------------------------------------------------------------------
Prospectus Page 19
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Global Fixed Income Investments

Investments in foreign government bonds involve special risks because the fund
may have limited legal recourse in the event of default.

- PREPAYMENT RISK -- The fund's mortgage-backed and asset-backed securities may
be prepaid more rapidly than expected, especially when interest rates are
falling, and the fund may have to reinvest those prepayments at lower interest
rates. When interest rates are rising, slower prepayments may extend the
duration of the securities and may reduce their value.

- DERIVATIVES RISK -- The fund's investments in derivatives may rise or fall
more rapidly than other investments.

More information about risks of an investment in the fund is provided below in
"More About Risks and Investment Strategies."

--------------------------------------------------------------------------------
Prospectus Page 20
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Global Fixed Income Investments

PERFORMANCE

--------------------------------------------------------------------------------

RISK/RETURN BAR CHART AND TABLE

The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.

The fund's past performance does not necessarily indicate how the fund will
perform in the future. This may be particularly true for the period prior to
October 10, 2000, which is the date on which FFTW assumed day-to-day management
of a portion of the fund's assets. Prior to that date, Rogge Global Partners was
responsible for managing all the fund's assets. See Appendix A for information
about the performance of a mutual fund managed by FFTW with substantially
similar investment objectives, policies and strategies to those of the fund.

TOTAL RETURN (1996 IS THE FUND'S FIRST FULL CALENDAR YEAR OF OPERATIONS)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR TOTAL RETURN
<S> <C>
1996 4.59%
1997 1.00%
1998 18.60%
1999 (8.52)%
</TABLE>

Total Return January 1 to September 30, 2000 -- (5.43)%
Best quarter during calendar years shown: 3rd quarter, 1998 -- 8.60%

Worst quarter during calendar years shown: 1st quarter, 1999 -- (4.83)%

AVERAGE ANNUAL TOTAL RETURNS
as of December 31, 1999

<TABLE>
<CAPTION>
SALOMON SMITH BARNEY
WORLD GOVERNMENT
BOND INDEX
CLASS P (UNHEDGED)
-------- --------------------
<S> <C> <C>
One Year................................................... (9.88)% (4.27)%
Life of Fund (Inception Date 8/24/95)...................... 3.10% 4.43%
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 21
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Global Fixed Income Investments

EXPENSES AND FEE TABLES

--------------------------------------------------------------------------------

FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your
investment)

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from
fund assets)

Management Fees............................................. 0.60%
Distribution and/or Service (12b-1) Fees.................... None
Other Expenses*............................................. 0.58%
----
Total Annual Fund Operating Expenses........................ 1.18%
====
Management Fee Waiver/Expense Reimbursements**.............. 0.23%
----
Net Expenses**.............................................. 0.95%
====
</TABLE>

---------

* Includes an administration fee of 0.20% paid by the fund to Mitchell
Hutchins.

** The fund and Mitchell Hutchins have entered into a written agreement under
which Mitchell Hutchins is contractually obligated to waive its management fees
and/or reimburse the fund to the extent that the fund's expenses through
December 1, 2002 otherwise would exceed the "Net Expenses" rate shown above. The
fund has agreed to repay Mitchell Hutchins for any reimbursed expenses if it can
do so over the following three years without causing the fund's expenses in any
of those three years to exceed the "Net Expenses" rate.

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 in the fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example includes the maximum annual fee for the PACE Select Advisors Program and
also assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same, except for the two year period when the
fund's expenses are lower due to its agreement with Mitchell Hutchins. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ -------- -------- --------
<S> <C> <C> <C>
$248 $788 $1,378 $2,978
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 22
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Large Company Value Equity Investments

PACE Large Company Value Equity Investments

INVESTMENT OBJECTIVES, STRATEGIES AND RISKS

--------------------------------------------------------------------------------

FUND OBJECTIVES

Capital appreciation and dividend income.

PRINCIPAL INVESTMENT STRATEGIES

The fund invests primarily in stocks of U.S. companies that are believed to be
undervalued and that have total market capitalizations of $4.0 billion or
greater at the time of purchase. The fund seeks income primarily from dividend
paying stocks.

The fund may invest, to a limited extent, in other securities, including stocks
of companies with smaller total market capitalizations and convertible bonds
that are rated below investment grade. The fund may invest up to 10% of its
total assets in U.S. dollar denominated foreign securities. The fund also may
(but is not required to) use options, futures and other derivatives as part of
its investment strategy or to help manage portfolio risks.

The fund's manager, Mitchell Hutchins Asset Management Inc., has selected
Institutional Capital Corporation ("ICAP"), Westwood Management Corporation
("Westwood") and State Street Global Advisors ("SSgA") to serve as the fund's
investment advisers. Mitchell Hutchins allocates the fund's assets among the
three investment advisers and has initially allocated approximately 50% of the
fund's assets to SSgA and approximately 25% each to ICAP and Westwood. Mitchell
Hutchins may change this allocation at any time. The relative value of each
investment adviser's share of the fund's assets also may change over time.

In managing its share of the fund's assets, ICAP uses its proprietary valuation
model to identify large-capitalization companies that ICAP believes offer the
best relative values because they sell below the price-to-earnings ratio
warranted by their prospects. ICAP looks for companies where a catalyst for a
positive change is about to occur with potential to produce stock appreciation
of 20% or more relative to the market over a 12 to 18 month period. The catalyst
can be thematic (E.G., global economic recovery) or company specific (E.G., a
corporate restructuring or a new product). ICAP also uses internally generated
research to evaluate the financial condition and business prospects of every
company it considers. ICAP monitors each stock purchased and sells the stock
when its target price is achieved, the catalyst becomes inoperative or ICAP
identifies another stock with greater opportunity for appreciation.

In managing its share of the fund's assets, Westwood maintains a list of
securities that it believes have proven records and potential for above-average
earnings growth. It considers purchasing a security on such list if Westwood's
forecast for growth rates and earnings estimates exceeds Wall Street
expectations, or Westwood's forecasted price/earnings ratio is less than the
forecasted growth rate. Westwood monitors the issuing companies and will sell a
stock if Westwood expects limited future price appreciation or the projected
price/earnings ratio exceeds the three-year growth rate.

In managing its share of the fund's assets, SSgA seeks to outperform the Russell
1000 Value Index (before fees and expenses). SSgA uses several independent
valuation measures to identify investment opportunities within a large cap value
universe and combines factors to produce an overall rank. Comprehensive research
determines the optimal weighting of these perspectives to arrive at strategies
that vary by industry. SSgA ranks all companies within the investable universe
initially from top to bottom based on their relative attractiveness. SSgA
constructs the fund's portfolio by selecting the highest-ranked stocks from the
universe and manages deviations from the benchmark to maximize the risk/reward
trade-off. The resulting portfolio has characteristics similar to the Russell
1000 Value Index. SSgA generally sells stocks that no longer meet its selection
criteria or that it believes otherwise may adversely affect the fund's
performance relative to that of the index.

PRINCIPAL RISKS

An investment in the fund is not guaranteed; you may lose money by investing in
the fund. The principal risks presented by the fund are:

- EQUITY RISK -- Stocks and other equity securities generally fluctuate in value
more than bonds. The fund could lose all of its investment in a company's
stock.

- INDEX STRATEGY RISK -- SSgA's proprietary strategy may not result in
outperformance of the designated index and may even result in
underperformance.

- DERIVATIVES RISK -- The fund's investments in derivatives may rise or fall
more rapidly than other investments.

More information about risks of an investment in the fund is provided below in
"More About Risks and Investment Strategies."

--------------------------------------------------------------------------------
Prospectus Page 23
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Large Company Value Equity Investments

PERFORMANCE

--------------------------------------------------------------------------------

RISK/RETURN BAR CHART AND TABLE

The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.

The fund's past performance does not necessarily indicate how the fund will
perform in the future. This may be particularly true for the period prior to
July 1, 2000, when another investment adviser was responsible for managing all
the fund's assets. ICAP and Westwood each assumed day-to-day management of a
portion of the fund's assets on July 1, 2000 and SSgA also assumed day-to-day
management of a portion of the fund's assets on October 10, 2000. See
Appendix A for information about the performance of mutual funds and accounts
managed by ICAP and Westwood and the historical performance of accounts managed
by SSgA with substantially similar investment objectives, policies and
strategies to those of the fund.

TOTAL RETURN (1996 IS THE FUND'S FIRST FULL CALENDAR YEAR OF OPERATIONS)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR TOTAL RETURN
<S> <C>
1996 25.11%
1997 24.75%
1998 18.36%
1999 (4.14)%
</TABLE>

Total Return January 1 to September 30, 2000 -- (1.38)%

Best quarter during calendar years shown: 4th quarter, 1998 -- 16.26%

Worst quarter during calendar years shown: 3rd quarter, 1999 -- (14.40)%

AVERAGE ANNUAL TOTAL RETURNS

as of December 31, 1999

<TABLE>
<CAPTION>
RUSSELL 1000
CLASS P VALUE INDEX
-------- ------------
<S> <C> <C>
One Year.................................................... (5.57)% 7.35%
Life of Fund (Inception Date 8/24/95)....................... 15.20% 20.64%
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 24
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Large Company Value Equity Investments

EXPENSES AND FEE TABLES

--------------------------------------------------------------------------------

FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your
investment)

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from
fund assets)

Management Fee Waiver**..................................... 0.07%
----
Net Expenses**.............................................. 0.89%
====
</TABLE>

---------

* Includes an administration fee of 0.20% paid by the fund to Mitchell
Hutchins.

** The fund and Mitchell Hutchins have entered into a written agreement under
which Mitchell Hutchins is contractually obligated to waive its management fee
through December 1, 2002 to the extent necessary to reflect the lower overall
fees paid to the fund's investment advisers as a result of the lower
sub-advisory fee paid to SSgA.

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 in the fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example includes the maximum annual fee for the PACE Select Advisors Program and
also assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same, except for the two-year period when the
fund's expenses are lower due to its agreement with Mitchell Hutchins. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ -------- -------- --------
<S> <C> <C> <C>
$242 $753 $1,298 $2,785
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 25
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Large Company Growth Equity Investments

PACE Large Company Growth Equity Investments

INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

--------------------------------------------------------------------------------

FUND OBJECTIVE

Capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The fund invests primarily in stocks of companies that are believed to have
substantial potential for capital growth and that have total market
capitalizations of $4.0 billion or greater at the time of purchase. Dividend
income is an incidental consideration in the investment advisers' selection of
stocks for the fund.

The fund may invest, to a limited extent, in other securities, including
securities convertible into stocks and stocks of companies with smaller total
market capitalizations. The fund may invest up to 10% of its total assets in
U.S. dollar denominated foreign securities. The fund also may (but is not
required to) use options, futures and other derivatives as part of its
investment strategy or to help manage portfolio risks.

The fund's manager, Mitchell Hutchins Asset Management Inc. has selected
Alliance Capital Management L.P. ("Alliance Capital") and State Street Global
Advisors ("SSgA") to serve as the fund's investment advisers. Mitchell Hutchins
allocates the fund's assets between the two investment advisers and has
initially allocated approximately 60% of the fund's assets to Alliance Capital
and approximately 40% to SSgA. Mitchell Hutchins may change this allocation at
any time. The relative values of each investment adviser's share of the fund's
assets also may change over time.

In managing its share of the fund's assets, Alliance Capital follows its
"disciplined growth" strategy in seeking to identify the best combinations of
earnings growth and reasonable valuation in selecting stocks for the fund.
Alliance Capital ranks each stock in its investment universe based on its
analysts' assessments and fundamental research that includes six measures of
earnings growth and valuation. The fund normally invests in stocks that rank in
the top 30% of this research universe and generally sells stocks that rank in
the bottom half.

In managing its share of the fund's assets, SSgA seeks to outperform the Russell
1000 Growth Index (before fees and expenses). SSgA uses several independent
valuation measures to identify investment opportunities within a large cap
growth universe and combines factors to produce an overall rank. Comprehensive
research determines the optimal weighting of these perspectives to arrive at
strategies that vary by industry. SSgA ranks all companies within the investable
universe from top to bottom based on their relative attractiveness. SSgA
constructs the fund's portfolio by selecting the highest-ranked stocks from the
universe and manages deviations from the benchmark to maximize the risk/reward
trade-off. The resulting portfolio has characteristics similar to the Russell
1000 Growth Index. SSgA generally sells stocks that no longer meet its selection
criteria or that it believes otherwise may adversely affect the fund's
performance relative to that of the index.

PRINCIPAL RISKS

An investment in the fund is not guaranteed; you may lose money by investing in
the fund. The principal risks presented by the fund are:

- EQUITY RISK -- Stocks and other equity securities generally fluctuate in value
more than bonds. The fund could lose all of its investment in a company's
stock.

- INDEX STRATEGY RISK -- SSgA's proprietary strategy may not result in
outperformance of the designated index and may even result in
underperformance.

- TECHNOLOGY SECTOR RISK -- The fund may invest a significant portion of its
assets in the stocks of companies in the technology sector. As a result, the
fund is more susceptible to the risks that are associated with that sector
than a fund with a broader range of investments, and the fund's performance
will be adversely affected by unfavorable developments in the technology
sector.

- DERIVATIVES RISK -- The fund's investments in derivatives may rise or fall
more rapidly than other investments.

More information about risks of an investment in the fund is provided below in
"More About Risks and Investment Strategies."

--------------------------------------------------------------------------------
Prospectus Page 26
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Large Company Growth Equity Investments

PERFORMANCE

--------------------------------------------------------------------------------

RISK/RETURN BAR CHART AND TABLE

The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.

The fund's past performance does not necessarily indicate how the fund will
perform in the future. Prior to November 10, 1997, another investment adviser
was responsible for managing all the fund's assets. Alliance Capital assumed
day-to-day management of the fund's assets on November 10, 1997 and SSgA assumed
day-to-day management of a portion of the fund's assets on October 10, 2000. See
Appendix A for information about the historical performance of accounts managed
by SSgA with substantially similar investment objectives, policies and
strategies to those of the fund.

TOTAL RETURN (1996 IS THE FUND'S FIRST FULL CALENDAR YEAR OF OPERATIONS)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR TOTAL RETURN
<S> <C>
1996 21.24%
1997 24.79%
1998 40.05%
1999 25.25%
</TABLE>

Total Return January 1 to September 30, 2000 -- (1.26)%

Best quarter during calendar years shown: 4th quarter, 1998 -- 31.80%

Worst quarter during calendar years shown: 3rd quarter, 1998 -- (14.42)%

AVERAGE ANNUAL TOTAL RETURNS

as of December 31, 1999

<TABLE>
<CAPTION>
RUSSELL 1000
CLASS P GROWTH INDEX
-------- ------------
<S> <C> <C>
One Year.................................................... 23.38% 33.16%
Life of Fund (Inception Date 8/24/95)....................... 25.07% 31.22%
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 27
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Large Company Growth Equity Investments

EXPENSES AND FEE TABLES

--------------------------------------------------------------------------------

FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your
investment)

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from
fund assets)

Management Fee Waiver**..................................... 0.06%
----
Net Expenses**.............................................. 0.88%
====
</TABLE>

---------

* Includes an administration fee of 0.20% paid by the fund to Mitchell
Hutchins.

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 in the fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example includes the maximum annual fee for the PACE Select Advisors Program and
also assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same, except for the two-year period when the
fund's expenses are lower due to its agreement with Mitchell Hutchins. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ -------- -------- --------
<S> <C> <C> <C>
$241 $749 $1,289 $2,767
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 28
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Small/Medium Company Value Equity Investments

PACE Small/Medium Company Value Equity Investments

INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

--------------------------------------------------------------------------------

FUND OBJECTIVE

Capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The fund invests primarily in stocks of companies that are believed to be
undervalued or overlooked in the marketplace and that have total market
capitalizations of less than $4.0 billion at the time of purchase. These stocks
also generally have price-to-earnings (P/E) ratios below the market average. The
fund invests only in stocks that are traded on major exchanges or the over-
the-counter market.

The fund may invest, to a limited extent, in stocks of companies with larger
total market capitalizations and other securities, including securities
convertible into stocks. The fund also may (but is not required to) use options,
futures and other derivatives as part of its investment strategy or to help
manage portfolio risks.

Mitchell Hutchins Asset Management Inc., the fund's manager, has selected Ariel
Capital Management, Inc. ("Ariel") and ICM Asset Management, Inc. ("ICM") to
serve as the fund's investment advisers. Mitchell Hutchins allocates the fund's
assets between the two investment advisers and may change the allocation at any
time. The relative values of each investment adviser's share of the fund's
assets also may change over time.

In managing its share of the fund's assets, Ariel invests in stocks of companies
that it believes are misunderstood or undervalued. It seeks to identify
companies in consistent industries with distinct market niches and excellent
management teams. It focuses on value stocks, which it defines as stocks that
have a low P/E ratio based on forward earnings and that trade at a significant
discount to the private market value that Ariel calculates for each stock. Ariel
generally sells stocks that cease to meet these criteria or that are at risk for
fundamental deterioration.

In managing its share of the fund's assets, ICM invests primarily in common
stocks of companies believed to offer good relative value that have either
fallen into disfavor among investors or are under-researched. In deciding which
stocks to buy for the fund, ICM uses a top-down analysis to identify broad
sectors of the market believed to offer good relative value and then seeks to
identify individual companies within those sectors that meet ICM's investment
criteria. ICM also performs a bottom-up analysis to attempt to discover
inefficiently priced stocks in a broad range of sectors, including those not
identified in the top-down analysis. These two approaches are combined in
various proportions depending on market conditions. Regardless of which approach
is used to identify stock candidates, ICM also applies fundamental research
analysis. ICM generally sells stocks that meet price objectives, no longer meet
its selection criteria, are at risk for fundamental deterioration or when it
identifies more attractive investment opportunities.

PRINCIPAL RISKS

An investment in the fund is not guaranteed; you may lose money by investing in
the fund. The principal risks presented by the fund are:

- EQUITY RISK -- Stocks and other equity securities generally fluctuate in value
more than bonds. The fund could lose all of its investment in a company's
stock.

- LIMITED CAPITALIZATION RISK -- Equity risk is greater for the common stocks of
mid and small cap companies because they generally are more vulnerable than
larger companies to adverse business or economic developments and they may
have more limited resources. In general, these risks are greater for small cap
companies than for mid cap companies.

- DERIVATIVES RISK -- The fund's investments in derivatives may rise or fall
more rapidly than other investments.

More information about risks of an investment in the fund is provided below in
"More About Risks and Investment Strategies."

--------------------------------------------------------------------------------
Prospectus Page 29
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Small/Medium Company Value Equity Investments

PERFORMANCE

--------------------------------------------------------------------------------

RISK/RETURN BAR CHART AND TABLE

The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.

The fund's past performance does not necessarily indicate how the fund will
perform in the future. This may be particularly true for the period prior to
October 4, 1999, when another investment adviser was responsible for managing
all the fund's assets. Ariel assumed day-to-day management of a portion of the
fund's assets on October 4, 1999 and ICM assumed responsibility for managing a
portion of the fund's assets on October 10, 2000. See Appendix A for information
about the performance of a mutual fund and accounts managed by Ariel and the
historical performance of accounts managed by ICM with substantially similar
investment objectives, policies and strategies to those of the fund.

TOTAL RETURN (1996 IS THE FUND'S FIRST FULL CALENDAR YEAR OF OPERATIONS)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR TOTAL RETURN
<S> <C>
1996 22.35%
1997 37.26%
1998 (9.34)%
1999 (2.79)%
</TABLE>

Total Return January 1 to September 30, 2000 -- 4.00%

Best quarter during calendar years shown: 2nd quarter, 1999 -- 21.25%

Worst quarter during calendar years shown: 3rd quarter, 1998 -- (20.00)%

AVERAGE ANNUAL TOTAL RETURNS

as of December 31, 1999

<TABLE>
<CAPTION>
RUSSELL 2500
CLASS P VALUE INDEX
-------- ------------
<S> <C> <C>
One Year.................................................... (4.24)% 1.49%
Life of Fund (Inception Date 8/24/95)....................... 7.76% 13.13%
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 30
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Small/Medium Company Value Equity Investments

EXPENSES AND FEE TABLES

--------------------------------------------------------------------------------

FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your
investment)

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from
fund assets)

Management Fees............................................. 0.60%
Distribution and/or Service (12b-1) Fees.................... None
Other Expenses*............................................. 0.41%
----
Total Annual Fund Operating Expenses........................ 1.01%
====
Management Fee Waiver/Expense Reimbursements**.............. 0.01%
----
Net Expenses**.............................................. 1.00%
====
</TABLE>

---------

* Includes an administration fee of 0.20% paid by the fund to Mitchell
Hutchins.

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 in the fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example includes the maximum annual fee for the PACE Select Advisors Program and
also assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same, except for the two year period when the
fund's expenses are lower due to its agreement with Mitchell Hutchins. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ -------- -------- --------
<S> <C> <C> <C>
$253 $780 $1,334 $2,844
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 31
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Small/Medium Company Growth Equity Investments

PACE Small/Medium Company Growth Equity Investments

INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

--------------------------------------------------------------------------------

FUND OBJECTIVE

Capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The fund 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 total market capitalizations of less than $4.0
billion at the time of purchase. Dividend income is an incidental consideration
in the investment adviser's selection of stocks for the fund.

Mitchell Hutchins Asset Management Inc., the fund's manager, has selected
Delaware Management Company to serve as the fund's investment adviser. In
deciding which stocks to buy for the fund, Delaware Management Company 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. Delaware
Management Company also considers the quality of a company's management team and
the strength of its finances and internal controls in selecting stocks for the
fund. Although Delaware Management Company follows companies in a full range of
market sectors, it may focus on a limited number of attractive industries.
Delaware Management Company generally sells stocks that no longer meet its
selection criteria, are at risk for fundamental deterioration or when it
identifies more attractive investment opportunities.

PRINCIPAL RISKS

An investment in the fund is not guaranteed; you may lose money by investing in
the fund. The principal risks presented by the fund are:

- EQUITY RISK -- Stocks and other equity securities generally fluctuate in value
more than bonds. The fund could lose all of its investment in a company's
stock.

- TECHNOLOGY SECTOR RISK -- The fund may invest a significant portion of its
assets in the stocks of companies in the technology sector. As a result, the
fund is more susceptible to the risks that are associated with that sector
than a fund with a broader range of investments, and the fund's performance
may be adversely affected by unfavorable developments in the technology
sector.

- DERIVATIVES RISK -- The fund's investments in derivatives may rise or fall
more rapidly than other investments.

More information about risks of an investment in the fund is provided below in
"More About Risks and Investment Strategies."

--------------------------------------------------------------------------------
Prospectus Page 32
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Small/Medium Company Growth Equity Investments

PERFORMANCE

--------------------------------------------------------------------------------

RISK/RETURN BAR CHART AND TABLE

The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.

The fund's past performance does not necessarily indicate how the fund will
perform in the future. This may be particularly true for the period prior to
December 17, 1996, which is the date on which Delaware Management Company
assumed day-to-day management of the fund's assets. Prior to that date, another
investment adviser was responsible for managing the fund's assets.

TOTAL RETURN (1996 IS THE FUND'S FIRST FULL CALENDAR YEAR OF OPERATIONS)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
CALENDAR YEAR TOTAL RETURN
1996 7.36%
1997 21.73%
1998 14.86%
1999 78.75%
</TABLE>

Total Return January 1 to September 30, 2000 -- 20.94%

Best quarter during calendar years shown: 4th quarter, 1999 -- 38.15%

Worst quarter during calendar years shown: 3rd quarter, 1998 -- (15.44)%

AVERAGE ANNUAL TOTAL RETURNS

as of December 31, 1999

<TABLE>
<CAPTION>
RUSSELL 2500
CLASS P GROWTH INDEX
-------- ------------
<S> <C> <C>
One Year.................................................... 76.09% 55.48%
Life of Fund (Inception Date 8/24/95)....................... 23.15% 19.95%
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 33
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Small/Medium Company Growth Equity Investments

EXPENSES AND FEE TABLES

--------------------------------------------------------------------------------

FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your
investment)

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from
fund assets)

---------

* Includes an administration fee of 0.20% paid by the fund to Mitchell
Hutchins.

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 in the fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example includes the maximum annual fee for the PACE Select Advisors Program and
also assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ -------- -------- --------
<S> <C> <C> <C>
$249 $767 $1,311 $2,796
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 34
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE International Equity Investments

PACE International Equity Investments

INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

--------------------------------------------------------------------------------

FUND OBJECTIVE

Capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The fund 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.

The fund may invest, to a limited extent, in stocks of companies in emerging
markets, including Asia, Latin America and other regions where markets may not
yet fully reflect the potential of the developing economy. The fund may also
invest, to a limited extent, in securities of other investment companies that
invest in foreign markets and securities convertible into stocks, including
convertible bonds that are below investment grade. The fund may (but is not
required to) use forward currency contracts, options, futures and other
derivatives as part of its investment strategy or to help manage portfolio
risks.

Mitchell Hutchins Asset Management Inc., the fund's manager, has selected Martin
Currie Inc. to serve as the fund's investment adviser. Martin Currie Inc. looks
for companies that exhibit strong fundamentals and attractive valuations based
on estimates of future earnings. In making country allocation decisions, Martin
Currie Inc. considers such factors as economic and political stability, breadth
and liquidity of the market, the nature of local investors, the currency
outlook, valuation and the settlement system. Martin Currie Inc. generally sells
securities when either the country or the issuer no longer meets these selection
criteria or when it identifies more attractive investment opportunities.

PRINCIPAL RISKS

An investment in the fund is not guaranteed; you may lose money by investing in
the fund. The principal risks presented by the fund are:

- EQUITY RISK -- Stocks and other equity securities generally fluctuate in value
more than bonds. The fund could lose all of its investment in a company's
stock.

- DERIVATIVES RISK -- The fund's investments in derivatives may rise or fall
more rapidly than other investments.

More information about risks of an investment in the fund is provided below in
"More About Risks and Investment Strategies."

--------------------------------------------------------------------------------
Prospectus Page 35
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE International Equity Investments

PERFORMANCE

--------------------------------------------------------------------------------

RISK/RETURN BAR CHART AND TABLE

The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

TOTAL RETURN (1996 IS THE FUND'S FIRST FULL CALENDAR YEAR OF OPERATIONS)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
CALENDAR YEAR TOTAL RETURN
<S> <C>
1996 10.30%
1997 9.46%
1998 16.34%
1999 35.65%
</TABLE>

Total Return January 1 to September 30, 2000 -- (12.71)%

Best quarter during calendar years shown: 4th quarter, 1999 -- 24.39%

Worst quarter during calendar years shown: 3rd quarter, 1998 -- (14.64)%

AVERAGE ANNUAL TOTAL RETURNS

as of December 31, 1999

<TABLE>
<CAPTION>
MSCI EUROPE,
AUSTRALASIA
AND
CLASS P FAR EAST INDEX
-------- --------------
<S> <C> <C>
One Year.................................................... 33.63% 26.96%
Life of Fund (Inception Date 8/24/95)....................... 15.13% 13.70%
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 36
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE International Equity Investments

EXPENSES AND FEE TABLES

--------------------------------------------------------------------------------

FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your
investment)

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from
fund assets)

Management Fees............................................. 0.70%
Distribution and/or Service (12b-1) Fees.................... None
Other Expenses*............................................. 0.46%
----
Total Annual Fund Operating Expenses........................ 1.16%
====
</TABLE>

---------

* Includes an administration fee of 0.20% paid by the fund to Mitchell
Hutchins.

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 in the fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example includes the maximum annual fee for the PACE Select Advisors Program and
also assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ -------- -------- --------
<S> <C> <C> <C>
$269 $826 $1,410 $2,993
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 37
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE International Emerging Markets Equity Investments

PACE International Emerging Markets Equity Investments

INVESTMENT OBJECTIVE, STRATEGIES AND RISK

--------------------------------------------------------------------------------

FUND OBJECTIVE

Capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The fund invests primarily in stocks of companies domiciled in emerging market
countries. The fund generally defines emerging market countries as countries
that are not included in the MSCI World Index of major world economies. However,
countries included in this index may be considered emerging markets based on
current political and economic factors. For example, the fund's investment
adviser has determined, based on an analysis of current economic and political
factors pertaining to Hong Kong SAR, that Hong Kong SAR should be considered as
an emerging market country for purposes of the Fund's eligible investments. The
fund may not always diversify its investments on a geographic basis among
emerging market countries.

The fund may invest, to a limited extent, in bonds, including up to 10% of its
total assets in bonds that are below investment grade. Below investment grade
securities are commonly known as "junk bonds." The fund may also invest, to a
limited extent, in securities of other investment companies that invest in
emerging markets. The fund may (but is not required to) use forward currency
contracts, options, futures and other derivatives as part of its investment
strategy or to help manage portfolio risks.

Mitchell Hutchins Asset Management Inc., the fund's manager, has selected
Schroder Investment Management North America Inc. ("SIMNA") to serve as the
fund's investment adviser. SIMNA focuses on companies that it believes have a
sustainable competitive advantage and growth potential that is undervalued by
other investors. SIMNA allocates the fund's assets among emerging market
countries based on its assessment of the likelihood that those countries will
have favorable long-term business environments. In deciding which securities
within a country to buy for the fund, SIMNA analyzes historical growth rates and
future growth prospects, management capability and profit margins. SIMNA's
evaluation of securities reflects information available from the extensive
network of locally based analysts maintained by SIMNA and its affiliates. SIMNA
generally sells securities when either the country or the issuer no longer meets
these selection criteria or when it identifies more attractive investment
opportunities.

PRINCIPAL RISKS

An investment in the fund is not guaranteed; you may lose money by investing in
the fund. The principal risks presented by the fund are:

- EQUITY RISK -- Stocks and other equity securities generally fluctuate in value
more than bonds. The fund could lose all of its investment in a company's
stock.

- GEOGRAPHIC CONCENTRATION RISK -- To the extent the fund invests a significant
portion of its assets in one geographic area, it will be more susceptible to
factors adversely affecting that area.

- DERIVATIVES RISK -- The fund's investments in derivatives may rise or fall
more rapidly than other investments.

More information about risks of an investment in the fund is provided below in
"More About Risks and Investment Strategies."

--------------------------------------------------------------------------------
Prospectus Page 38
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE International Emerging Markets Equity Investments

PERFORMANCE

--------------------------------------------------------------------------------

RISK/RETURN BAR CHART AND TABLE

The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

TOTAL RETURN (1996 IS THE FUND'S FIRST FULL CALENDAR YEAR OF OPERATIONS)

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S> <C>
CALENDAR YEAR TOTAL RETURN
1996 8.52%
1997 (4.72)%
1998 (24.43)%
1999 61.85%
</TABLE>

Total Return January 1 to September 30, 2000 -- (24.35)%

Best quarter during calendar years shown: 4th quarter, 1999 -- 27.14%
Worst quarter during calendar years shown: 3rd quarter, 1998 -- (21.52)%

AVERAGE ANNUAL TOTAL RETURNS
as of December 31, 1999

<TABLE>
<CAPTION>
MSCI
EMERGING
MARKETS
FREE
CLASS P INDEX
-------- --------
<S> <C> <C>
One Year.................................................... 59.43% 66.41%
Life of Fund (Inception Date 8/24/95)....................... 3.51% 3.14%
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 39
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE International Emerging Markets Equity Investments

EXPENSES AND FEE TABLES

--------------------------------------------------------------------------------

FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your
investment)

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from
fund assets)

Management Fees............................................. 0.90%
Distribution and/or Service (12b-1) Fees.................... None
Other Expenses*............................................. 0.85%
----
Total Annual Fund Operating Expenses........................ 1.75%
====
Management Fee Waiver/Expense Reimbursements**.............. 0.25%
----
Net Expenses**.............................................. 1.50%
====
</TABLE>

---------

* Includes an administration fee of 0.20% paid by the fund to Mitchell
Hutchins.

** The fund and Mitchell Hutchins have entered into a written agreement.
Mitchell Hutchins is contractually obligated to waive its management fee and/or
reimburse the fund to the extent that the fund's expenses through December 1,
2002 otherwise would exceed the "Net Expenses" rate shown above. The fund has
agreed to repay Mitchell Hutchins for any reimbursed expenses if it can do so
over the following three years without causing the fund's expenses in any of
those three years to exceed the "Net Expenses" rate.

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 in the fund for the time periods
indicated and then sell all of your shares at the end of those periods. The
example includes the maximum annual fee for the PACE Select Advisors Program and
also assumes that your investment has a 5% return each year and that the fund's
operating expenses remain the same, except for the two year period when the
fund's expenses are lower due to its agreement with Mitchell Hutchins. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ -------- -------- --------
<S> <C> <C> <C>
$303 $953 $1,653 $3,514
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page 40
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

MORE ABOUT RISKS AND INVESTMENT STRATEGIES

--------------------------------------------------------------------------------

PRINCIPAL RISKS

The main risks of investing in the funds are described below. Not all of these
risks apply to each fund. You can find a list of the main risks that apply to a
particular fund by looking under the "Investment Objective, Strategies and
Risks" heading for that fund.

Other risks of investing in a fund, along with further details about some of the
risks described below, are discussed in the funds' Statement of Additional
Information ("SAI"). Information on how you can obtain the SAI is on the back
cover of this prospectus.

CREDIT RISK. Credit risk is the risk that the issuer of a bond will not make
principal or interest payments when they are due. Even if an issuer does not
default on a payment, a bond's value may decline if the market believes that the
issuer has become less able, or less willing, to make payments on time. Even
high quality bonds are subject to some credit risk. However, credit risk is
greater for lower quality bonds. Bonds that are not investment grade involve
high credit risk and are considered speculative. Some of these low quality bonds
may be in default when purchased by a fund. Low quality bonds may fluctuate in
value more than higher quality bonds and, during periods of market volatility,
may be more difficult to sell at the time and price a fund desires.

DERIVATIVES RISK. The value of "derivatives" -- so-called because their value
"derives" from the value of an underlying asset, reference rate or index -- may
rise or fall more rapidly than other investments. For some derivatives, it is
possible for a fund to lose more than the amount it invested in the derivative.
Options, futures contracts and forward currency contracts are examples of
derivatives. A fund's use of derivatives may not succeed for various reasons,
including unexpected changes in the values of the derivatives or the assets
underlying them. Also, if a fund uses derivatives to adjust or "hedge" the
overall risk of its portfolio, the hedge may not succeed if changes in the
values of the derivatives are not matched by opposite changes in the values of
the assets being hedged.

EQUITY RISK. The prices of common stocks and other equity securities generally
fluctuate more than those of other investments. They reflect changes in the
issuing company's financial condition and changes in the overall market. A fund
may lose a substantial part, or even all, of its investment in a company's
stock.

FOREIGN INVESTING AND EMERGING MARKETS RISKS. Foreign investing involves risks
relating to political, social and economic developments abroad to a greater
extent than investing in the securities of U.S. issuers. In addition, there are
differences between U.S. and foreign regulatory requirements and market
practices. Foreign investments denominated in foreign currencies are subject to
the risk that the value of a foreign currency will fall in relation to the U.S.
dollar. Currency exchange rates can be volatile and can be affected by, among
other factors, the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency controls and
speculation. Investments in foreign government bonds involve special risks
because the investors may have limited legal recourse in the event of default.
Political conditions, especially a country's willingness to meet the terms of
its debt obligations, can be of considerable significance.

Securities of issuers located in emerging market countries are subject to all of
the risks of other foreign securities. However, the level of those risks often
is higher due to the fact that social, political, legal and economic systems in
emerging market countries may be less fully developed and less stable than those
in developed countries. Emerging market securities also may be subject to
additional risks, such as lower liquidity and larger or more rapid changes in
value.

GEOGRAPHIC CONCENTRATION RISK. PACE International Emerging Markets Equity
Investments will not necessarily seek to diversify its investments on a
geographic basis within the emerging markets category. To the extent the fund
concentrates its investments in issuers located in one country or area, it is
more susceptible to factors adversely affecting that country or area.

INDEX STRATEGY RISK. Performance of the portions of PACE Large Company Value
Equity Investments and

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PACE Large Company Growth Equity Investments managed by SSgA may deviate from
that of an index because of shareholder purchases and sales of shares, which can
occur daily, and because of fees and expenses borne by a fund.

INTEREST RATE RISK. The value of bonds generally can be expected to fall when
interest rates rise and to rise when interest rates fall. Interest rate risk is
the risk that interest rates will rise, so that the value of a fund's
investments in bonds will fall. Interest rate risk is the primary source of risk
for U.S. government and usually for other very high quality bonds. The impact of
changes in the general level of interest rates on lower quality bonds may be
greater or less than the impact on higher quality bonds.

Some corporate and municipal bonds, particularly those issued at relatively high
interest rates, provide that the issuer may repay them earlier than the maturity
date. The issuers of these bonds are most likely to exercise these "call"
provisions if prevailing interest rates are lower than they were when the bonds
were issued. A fund then may have to reinvest the repayments at lower interest
rates. Bonds subject to call provisions also may not benefit fully from the rise
in value that generally occurs for bonds when interest rates fall.

LEVERAGE RISK. Leverage involves increasing the total assets in which a fund
can invest beyond the level of its net assets. Because leverage increases the
amount of a fund's assets, it can magnify the effect on the fund of changes in
market values. As a result, while leverage can increase a fund's income and
potential for gain, it also can increase expenses and the risk of loss. PACE
Government Securities Fixed Income Investments and PACE Strategic Fixed Income
Investments, which use leverage by investing in when-issued and delayed delivery
bonds, attempt to limit the potential magnifying effect of the leverage by
managing their portfolio duration.

LIMITED CAPITALIZATION RISK. Securities of mid and small capitalization
companies generally involve greater risk than securities of larger
capitalization companies because they may be more vulnerable to adverse business
or economic developments. Mid and small capitalization companies also may have
limited product lines, markets or financial resources, and they may be dependent
on a relatively small management group. Securities of mid and small cap
companies may be less liquid and more volatile than securities of larger
capitalization companies or the market averages in general. 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. In general, all of these risks are greater for small cap companies
than for mid cap companies.

POLITICAL RISK. The municipal bond market can be significantly affected by
political changes, including legislation or proposals at either the state or the
federal level to eliminate or limit the tax-exempt status of municipal bond
interest or the tax-exempt status of a municipal bond fund's dividends.
Similarly, reductions in tax rates may make municipal bonds less attractive in
comparison to taxable bonds. Legislatures also may fail to appropriate funds
needed to pay municipal bond obligations. These events could cause the value of
the municipal bonds held by PACE Municipal Fixed Income Investments to fall and
might adversely affect the tax-exempt status of the fund's investments or of the
dividends that the fund pays. During periods of uncertainty, the prices of
municipal securities can become volatile.

PREPAYMENT RISK. Payments on bonds that are backed by mortgage loans or similar
assets may be received earlier or later than expected due to changes in the rate
at which the underlying loans are prepaid. Faster prepayments often happen when
market interest rates are falling. As a result, a fund may need to reinvest
these early payments at those lower interest rates, thus reducing its income.
Conversely, when interest rates rise, prepayments may happen more slowly,
causing the underlying loans to be outstanding for a longer time than
anticipated. This can cause the market value of the security to fall because the
market may view its interest rate as too low for a longer term investment.

RELATED SECURITIES CONCENTRATION RISK. PACE Municipal Fixed Income Investments
may invest more than 25% of its total assets in municipal bonds that are issued
by public housing authorities and state and local housing finance authorities.
Economic, business or political developments or changes that affect one
municipal bond in this sector also may affect other municipal bonds in the same
sector. As a result, the fund is subject to greater risk than a fund that does
not follow this practice.

SINGLE ISSUER CONCENTRATION RISK. PACE Intermediate Fixed Income Investments
and PACE Global Fixed Income Investments are non-diversified. A non-diversified
fund may invest more than 5% of its total assets in securities of a single
issuer to a greater extent than a diversified fund. When a fund holds a large
position in the securities of one issuer, changes in the financial

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condition or in the market's assessment of that issuer may cause larger changes
in the fund's total return and in the price of its shares than it would for a
diversified fund.

TECHNOLOGY SECTOR RISK. PACE Large Company Growth Equity Investments and PACE
Small/Medium Company Growth Equity Investments each has invested a significant
portion of its assets in stocks of companies in the technology sector. As a
result, these funds are more susceptible to the risks that are associated with
that sector and their share prices may be more volatile than a fund with a
broader range of investments. Individual issuers within the technology sector,
as well as the techology sector as a whole, can be significantly affected by
obsolescence of existing technology, short product cycles, falling prices and
profits and competition from new market entrants.

ADDITIONAL INVESTMENT STRATEGIES

CASH RESERVES; DEFENSIVE POSITIONS. PACE Money Market Investments invests
exclusively in money market instruments. Each of the other funds may invest to a
limited extent in money market instruments as a cash reserve for liquidity or
other purposes. PACE Municipal Fixed Income Investments may invest to a limited
extent in taxable money market instruments for liquidity purposes when suitable
municipal money market instruments are not available.

As vehicles to implement long-term investment strategies, each fund is normally
fully invested in accordance with its investment objective and policies.
However, with the concurrence of Mitchell Hutchins Asset Management Inc., a fund
may take a defensive position that is different from its normal investment
strategy to protect itself from adverse market conditions. This means that a
fund may temporarily invest a larger-than-normal part, or even all, of its
assets in cash or money market instruments, including (for funds that are
authorized to invest outside the United States) money market instruments that
are denominated in foreign currencies. In addition, each fund may increase its
cash reserves in connection with transitioning its portfolio to reflect the
investment style and strategies of a new investment adviser. Because these
investments provide relatively low income, a defensive or transition position
may not be consistent with achieving a fund's investment objective.

In addition, the funds listed below may make the following temporary investments
for defensive purposes:

- PACE Municipal Fixed Income Investments may invest without limit in certain
taxable securities.

- PACE Global Fixed Income Investments may invest in securities of only one
country, including the United States.

- PACE International Equity Investments may invest without limit in bonds that
are traded in the United States and in foreign markets.

PORTFOLIO TURNOVER. Each fund (other than PACE Money Market Investments) may
engage in frequent trading to achieve its investment objective. Frequent trading
can result in portfolio turnover in excess of 100% (high portfolio turnover).

Frequent trading may increase the portion of a fund's capital gains that are
realized for tax purposes in any given year. This may increase the fund's
taxable distributions in that year. Frequent trading also may increase the
portion of a fund's realized capital gains that are considered "short-term" for
tax purposes. Shareholders will pay higher taxes on distributions that represent
short-term capital gains than they would pay on distributions that represent
long-term capital gains. Frequent trading also may result in higher fund
expenses due to transaction costs.

The funds do not restrict the frequency of trading to limit expenses or to
minimize the tax effect that a fund's distributions may have on shareholders.

PACE MONEY MARKET INVESTMENTS. Like all money market funds, PACE Money Market
Investments is subject to maturity, quality and diversification requirements
designed to help it maintain a stable price of $1.00 per share. Mitchell
Hutchins may use a number of professional money management techniques to respond
to changing economic and money market conditions and to shifts in fiscal and
monetary policy. These techniques include varying the fund's composition and
weighted average maturity based on its assessment of the relative values of
various money market instruments and future interest rate patterns. Mitchell
Hutchins also may buy or sell money market instruments to take advantage of
yield differences.

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INVESTING IN THE FUNDS

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BUYING SHARES
If you are a participant in the PaineWebber PACE-SM- Select Advisors Program,
you may buy Class P shares of the funds through a managed account maintained
with PaineWebber Incorporated.

You must make payment for fund shares by check made payable to PaineWebber. Your
payment is due no later than the first business day after the order is placed.
You may not place an order until you have completed the Investor Profile
Questionnaire for the PACE Select Advisors Program (described below), reviewed
the resulting analysis, made the asset allocation decision and executed the
necessary PACE Select Advisors Program documentation. Your Financial Advisor is
responsible for promptly forwarding your order to PaineWebber's headquarters.

The Trust and PaineWebber reserve the right to reject a purchase order or
suspend the offering of fund shares.

The minimum initial aggregate investment in the Trust is $10,000. Any subsequent
investment in the Trust must be at least $500. The Trust may vary these
minimums.

THE PAINEWEBBER PACE-SM- SELECT ADVISORS PROGRAM
The PaineWebber PACE-SM- Select Advisors Program is an investment advisory
service pursuant to which PaineWebber Incorporated provides you with
personalized investment allocation recommendations. PaineWebber does not have
any investment discretion over your PACE Select Advisors Program account. You
will make all the investment decisions.

Under the PACE Select Advisors Program, your Financial Advisor assists you in

- identifying your financial characteristics, including your risk tolerance and
investment objectives; and

- completing an Investor Profile Questionnaire, which you may update from time
to time with your Financial Advisor's assistance.

PaineWebber uses an investment profile evaluation and asset allocation
methodology to translate this information into a suggested allocation of your
assets among different funds. Your Financial Advisor presents the recommended
allocation to you initially and reviews the PACE Select Advisors Program account
with you at least annually. Your Financial Advisor also may, if you so request,
review with you the monthly account statements and other information, such as
quarterly performance data. Your Financial Advisor also monitors any changes in
your financial characteristics that you identify through a revised Investor
Profile Questionnaire and communicates these changes to PaineWebber for
reevaluation of your investment profile.

You may direct your PaineWebber Financial Advisor to automatically rebalance
your PACE Select Advisors Program account on a quarterly basis to assure that
any deviation from the designated allocation among the funds does not exceed a
specified threshold.

PACE PROGRAM FEE

For the services provided to you under the PACE Select Advisors Program, you
will pay PaineWebber a quarterly Program Fee at an annual rate of up to 1.50% of
the value of the shares of the funds held in your account under the PACE Select
Advisors Program. This quarterly fee is generally charged to your PaineWebber
account. The Program Fee may be reduced for

- certain Individual Retirement Accounts,

- retirement plans for self-employed individuals and

- employee benefit plans that are subject to the Employee Retirement Security
Act of 1974.

For these participants, PaineWebber may provide different services than those
described above and may charge different fees. These participants also may make
arrangements to pay the quarterly fee separately. In addition, Trustees of the
Trust, employees of Mitchell Hutchins and PaineWebber and their family members
who maintain an "employee-related" account at PaineWebber, and trustees or
directors of other PaineWebber mutual funds may participate in the PACE Select
Advisors Program at a reduced fee or for no fee.

Program Fees also may be subject to negotiation and may differ based upon the
type of account, the size of the account, the amount of PACE Select Advisors
Program assets in the account and the number or range of supplementary advisory
services to be provided by Financial Advisors, among other factors.

Financial Advisors receive a portion of the PACE Select Advisors Program Fee for
the services they provide to participants.

Investors who are fiduciaries for a retirement or employee benefit plan should
consider, in a prudent manner, the relationship of the fees to be paid by the
plan and the level of services to be provided by PaineWebber.

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As a PACE Select Advisors Program participant, you may incur greater total fees
and expenses than investors purchasing shares of similar investment companies
without the benefit of these professional asset allocation recommendations.

SELLING SHARES
You can sell your fund shares at any time. You may sell your shares by
contacting your Financial Advisor in person or by telephone or mail. Your
Financial Advisor is responsible for promptly forwarding your request to
PaineWebber's headquarters. After it receives and accepts your request,
PaineWebber repurchases your fund shares. You generally will receive the
proceeds of the sale within the first business day after PaineWebber receives
the order.

PaineWebber reserves the right not to repurchase your shares. In that case,
PaineWebber forwards your request to sell your shares to the funds' transfer
agent. The transfer agent will sell your shares after you provide it with the
following information in writing:

- Your name and address;

- The fund's name;

- Your account number;

- The dollar amount or number of shares you want to sell; and

- A guarantee of each registered owner's signature. A signature guarantee may be
obtained from a financial institution, broker, dealer or clearing agency that
is a participant in one of the medallion programs recognized by the Securities
Transfer Agents Association. These are: Securities Transfer Agents Medallion
Program (STAMP), Stock Exchanges Medallion Program (SEMP) and the New York
Stock Exchange Medallion Signature Program (MSP). The Trust and the transfer
agent will not accept signature guarantees that are not a part of these
programs.

Sales through the transfer agent may also need to include additional supporting
documents for sales by estates, trusts, guardianships, custodianships,
partnerships and corporations.

It costs the Trust money to maintain shareholder accounts. Therefore, the Trust
reserves the right to repurchase all fund shares in any PACE Select Advisors
Program account that has a net asset value of less than $7,500. If the Trust
elects to do this with your account, it will notify you that you can increase
the amount invested to the account minimum in effect at the time the PACE Select
Advisors Program account was originally opened or more within 30 days. This
notice may appear on your account statement.

If you want to sell shares that you purchased recently, the Trust may delay
payment until it verifies that it has received good payment. If you purchased
shares by check, this can take up to 15 days.

PRICING AND VALUATION
The price at which you may buy or sell each fund's shares is based on the next
net asset value per share calculated after your order is placed. Each fund
calculates its net asset value on days that the New York Stock Exchange is open
as of the close of regular trading on the NYSE (generally, 4:00 p.m., Eastern
time). The NYSE normally is not open, and the funds do not price their shares,
on most national holidays and on Good Friday. If trading on the NYSE is halted
for the day before 4:00 p.m., Eastern time, each fund's net asset value per
share will be calculated as of the time trading was halted.

PACE MONEY MARKET INVESTMENTS' net asset value per share is expected to be $1.00
per share, although this value is not guaranteed. PACE Money Market Investments
values its securities at their amortized cost. This method uses a constant
amortization to maturity of the difference between the cost of the instrument to
the fund and the amount due at maturity.

OTHER FUNDS. Each other fund calculates its net asset value based on the
current market value for its portfolio securities. The funds normally obtain
market values for their securities from independent pricing services that use
reported last sales prices, current market quotations or valuations from
computerized "matrix" systems that derive values based on comparable securities.
If a market value is not available from an independent pricing source for a
particular security, that security is valued at a fair value determined by or
under the direction of the Trust's board of trustees. The funds normally use the
amortized cost method to value bonds that will mature in 60 days or less.

Judgment plays a greater role in valuing thinly traded securities, including
many lower-rated bonds, because there is less reliable, objective data
available.

The funds calculate the U.S. dollar value of investments that are denominated in
foreign currencies daily, based on current exchange rates. A fund may own
securities, including some securities that trade primarily in foreign markets,
that trade on weekends or other days on which a fund does not calculate net
asset value. As a result, a fund's net asset value may change on days when you
will not be able to buy or sell fund shares. If a fund concludes that a material
change in the value of a foreign security has occurred after the close of
trading in the principal foreign market but before the close of the NYSE, the
fund may use fair value methods to reflect those changes. This policy is
intended to assure that the fund's net asset value fairly reflects security
values as of the time of pricing.

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MANAGEMENT

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MANAGER AND INVESTMENT ADVISERS

Mitchell Hutchins Asset Management Inc. is the manager and administrator of each
fund. Mitchell Hutchins is located at 51 West 52nd Street, New York, New York
10019-6114, and is a wholly owned asset management subsidiary of PaineWebber
Incorporated, which is an indirect wholly owned subsidiary of UBS AG.

UBS AG, with headquarters in Zurich, Switzerland, is an internationally
diversified organization with operations in many areas of the financial services
industry. On October 31, 2000, Mitchell Hutchins was adviser or sub-adviser to
31 investment companies with 75 separate portfolios and aggregate assets of
approximately $58.3 billion.

Mitchell Hutchins provides investment advisory services for PACE Money Market
Investments. Mitchell Hutchins selects investment advisers for the other funds,
subject to approval of the board, and reviews the performance of those
investment advisers.

The funds have received an exemptive order from the SEC to permit the board to
select and replace investment advisers and to amend the sub-advisory contracts
between Mitchell Hutchins and the investment advisers without obtaining
shareholder approval.

ADVISORY FEES

Each fund pays fees to Mitchell Hutchins for administrative and advisory
services. The annual contract rate for administrative services is 0.20% of each
fund's average daily net assets. The annual contract rate for advisory services
varies from 0.15% to 0.90% of a fund's average daily net assets. The following
table shows the combined annual fee rate for administrative and advisory
services for each fund:

<TABLE>
<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>

During the fiscal year ended July 31, 2000, some of the funds paid Mitchell
Hutchins at the lower effective rate shown below because Mitchell Hutchins
waived a portion of its fees:

<TABLE>
<S> <C>
PACE Money Market Investments.......... 0.00%
PACE Government Securities Fixed Income
Investments.......................... 0.66%
PACE Intermediate Fixed Income
Investments.......................... 0.59%
PACE Strategic Fixed Income
Investments.......................... 0.66%
PACE Municipal Fixed Income
Investments.......................... 0.56%
PACE Global Fixed Income Investments... 0.57%
PACE Small/Medium Company Value Equity
Investments.......................... 0.79%
PACE Small/Medium Company Growth Equity
Investments.......................... 0.79%
PACE International Emerging Markets
Equity Investments................... 0.85%
</TABLE>

INVESTMENT ADVISERS AND PORTFOLIO MANAGERS

PACE MONEY MARKET INVESTMENTS. Mitchell Hutchins provides all investment
advisory services for this fund. Susan P. Ryan, a senior vice president of
Mitchell Hutchins, is primarily responsible for the fund's day-to-day portfolio
management. She has held her fund responsibilities since its inception.

PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS AND PACE STRATEGIC FIXED
INCOME INVESTMENTS. Pacific Investment Management Company LLC ("PIMCO") serves
as investment adviser for these funds. PIMCO is located at 840 Newport Center
Drive, Suite 300, Newport Beach, California 92660. On September 30, 2000, PIMCO
had approximately $207 billion in assets

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under management. PIMCO is one of the largest fixed income management firms in
the nation. Included among PIMCO's institutional clients are many "Fortune 500"
companies.

Since November 1999, Scott Mather, a senior vice president of PIMCO, has been
primarily responsible for the day-to-day portfolio management for PACE
Government Securities Fixed Income Investments. Prior to joining PIMCO in 1998,
he was associated with Goldman Sachs where he was a trader in the fixed income
division and specialized in structuring and trading a broad range of
mortgage-backed securities as well as managing a proprietary derivatives
position.

Since July 1997, William C. Powers, a managing director of PIMCO, has been
primarily responsible for the day-to-day portfolio management for PACE Strategic
Fixed Income Investments. Mr. Powers has been associated with PIMCO since 1991
as a senior member of the fixed income portfolio management group.

PACE INTERMEDIATE FIXED INCOME INVESTMENTS. Metropolitan West Asset Management,
LLC ("MWAM") serves as investment adviser for PACE Intermediate Fixed Income
Investments. MWAM is located at 11766 Wilshire Blvd., Suite 1580, Los Angeles,
California 90025. MWAM was formed in 1996 and, as of September 30, 2000, had
over $8.7 billion in fixed income investments under management.

MWAM uses a team approach in advising PACE Intermediate Fixed Income
Investments. The team members are Stephen Kane, Laird R. Landmann, Tad Rivelle
and Brian H. Loo. All team members have held their fund responsibilities since
October 10, 2000.

Mr. Kane has been a portfolio manager with MWAM since August 1996. From November
1995 until July 1996, he was an account manager with PIMCO in Newport Beach,
California. Before then, Mr. Kane was a merchant banking associate with Union
Bank in Los Angeles, California.

Mr. Landmann has been a managing director and portfolio manager with MWAM since
August 1996. From November 1992 until July 1996, he was a principal and
co-director of fixed income with Hotchkis and Wiley in Los Angeles, California.
Before then, he was a portfolio manager with PIMCO in Newport Beach, California.

Mr. Rivelle has been the chief investment officer and a managing director with
MWAM since August 1996. From November 1992 until July 1996, he was a principal
and co-director of fixed income with Hotchkis and Wiley in Los Angeles,
California. Before then, he was a portfolio manager with PIMCO in Newport Beach,
California.

Mr. Loo has been a portfolio manager and analyst with MWAM since August 1996.
From June 1996 until July 1996, Mr. Loo worked as an analyst with Hotchkis and
Wiley in Los Angeles, California. Before then, he worked as an analyst with
Trust Company of the West (starting in May 1994 while completing a graduate
finance degree at Carnegie Mellon University.

PACE MUNICIPAL FIXED INCOME INVESTMENTS. Standish, Ayer & Wood, Inc.
("Standish") serves as investment adviser for PACE Municipal Fixed Income
Investments. Standish is located at One Financial Center, Boston, Massachusetts
02111. Standish was founded in 1933 and, as of September 30, 2000, had over
$45 billion in assets under management. Christine L. Todd is primarily
responsible for the day-to-day management of the fund. She has held her fund
responsibilities since June 1, 2000. Ms. Todd is an associate director of
Standish. She joined Standish in 1995 from Gannett, Welsh & Kotler, where she
was a vice president responsible for municipal bond research and trading.

PACE GLOBAL FIXED INCOME INVESTMENTS. Rogge Global Partners plc and Fischer
Francis Trees & Watts, Inc. and its affiliates serve as investment advisers for
PACE Global Fixed Income Investments. Rogge Global Partners is located at Sion
Hall, 56 Victoria Embankment, London, EC4Y ODZ, England. Rogge Global Partners
was organized in 1984 and specializes in global fixed income management. As of
September 30, 2000, it had approximately $7.9 billion in assets under
management.

Rogge Global Partners uses a team approach in managing the fund's portfolio. The
team is lead by Olaf Rogge, the chief investment officer of Rogge Global
Partners. Mr. Rogge, who founded Rogge Global Partners in 1984, has been
managing global investments for more than 25 years and has held his fund
responsibilities since the fund's inception in August 1995.

Other members of the team are John Graham, Richard Bell, Adrian James, Malie
Conway and Richard Gray. These team members have held their fund
responsibilities since August 1995 except for Ms. Conway. who has held her
responsibilities since August 1998, and Mr. Gray, who has held his fund
responsibilities since April 1999.

Mr. Graham joined Rogge Global Partners in February 1994 and is currently a
director, portfolio manager and analyst. Prior to that time, he served as a
senior manager of the multi-currency fixed income

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investment team at JP Morgan. Mr. Bell joined Rogge Global Partners in
June 1990 and serves as a director, portfolio manager and analyst. Mr. James
joined Rogge Global Partners in April 1995 and serves as a director, portfolio
manager and analyst. From October 1987 through April 1995, Mr. James worked for
NatWest Capital Markets, where he was a director and functioned as the
international bond economist.

Ms. Conway joined Rogge Global Partners in 1998 as a portfolio manager in charge
of global credit. She was previously a senior portfolio manager at Rothschild
Asset Management managing U.S., global and short-term mandates. Before joining
Rothschild, she spent seven years at JP Morgan where she also managed U.S.,
global and short-term mandates.

Richard Gray joined Rogge Global Partners in April 1999 and serves as a
portfolio manager and head of emerging markets. He was previously a vice
president, emerging debt research of Bank of America (1995-1999) and director,
emerging debt research for Nomura International (1994-1995).

Fischer Francis Trees & Watts, Inc. ("FFTW (NY)") is located at 200 Park Avenue,
46th Floor, New York, New York 10166. The addresses for its affiliates are 3
Royal Court, The Royal Exchange, London, EC 3V 3RA for Fischer Francis Trees &
Watts (UK); 50 Raffles Place, #22-01 Singapore Land Tower, Singapore 048623 for
Fischer Francis Trees & Watts Pte Ltd (Singapore); and Fukoku Seimei Building
21F, 2-2, Uchisaiwaicho 2-chome, Chiyoda-Ku Tokyo 100, for Fischer Francis Trees
& Watts KK (Japan). FFTW (Japan) will not assume duties as sub-adviser to the
fund until it has completed its registration as an investment adviser with the
SEC. The affiliates are either wholly owned subsidiaries of FFTW(NY) or are
owned jointly by FFTW(NY) and its parent corporation. FFTW (NY) and its
affiliates are referred to collectively as "FFTW." As of September 30, 2000,
FFTW and its affiliates had approximately $30 billion in assets under
management.

FFTW uses a team approach in which a specific portfolio manager is responsible
for managing FFTW's share of the fund's assets and determines the broad risk
parameters under which these investments operate, but relies on specialist
investment teams to determine specific fund investments. The portfolio manager
is David Marmon, a managing director of FFTW. Key members of the team are
Liaquat Ahamed, a managing director and chief investment officer of FFTW, and
Adnan Akant, Stewart Russell, Richard Williams and Simon Hard, all of whom are
managing directors of FFTW. These individuals have held their fund
responsibilities since October 10, 2000.

Mr. Marmon joined FFTW in 1990 from Yamaichi International (America) where he
was head of futures and options research. His responsibilities at Yamaichi
included generating trade ideas, daily analysis of market opportunities and
preparing research reports. He was previously a financial analyst and strategist
at the First Boston Corporation, where he developed hedging programs for
financial institutions and industrial firms. He also performed historical and
scenario analyses of the futures and options markets for traders and clients.
Mr. Marmon began his career in finance as a research analyst on Chase
Manhattan's arbitrage and municipal trading desks.

Mr. Ahamed came to FFTW in 1988 after nine years with the World Bank, where he
was in charge of the bank's investments in all non-dollar government bond
markets. Before assuming responsibility for the management of the non-dollar
portfolios, he was responsible for investment and trading in each of the
markets, including pounds sterling, Deutsche mark, Japanese yen, Canadian
dollars and Australian dollars. In addition, he was involved in providing
technical advice to numerous central banks on reserve and liability management.
Mr. Ahamed worked initially as an economist at the World Bank, providing
economic advice and analyses to senior government officials in numerous
developing countries including the Philippines, Korea, Bangladesh and Kenya.

Mr. Akant joined FFTW in 1984 after six years with the World Bank, where he
served initially as a project financial analyst in Europe and the Middle East
area before joining the treasurer's staff as an investment officer in 1979. Over
the next five years, as a member of the investment department, he was
responsible for investment and trading of each of the major sectors of the
bank's actively managed liquidity portfolio. He was a member of the investment
strategy committee and shares responsibility for formulating and implementing
the bank's trading and investment strategy. In 1982, Mr. Akant was promoted to
senior investment officer and was the division's deputy in charge of the U.S.
dollar portfolio.

Mr. Russell joined FFTW in 1992 from the short-term proprietary trading desk in
the global markets area of J.P. Morgan. His primary responsibilities included
proprietary positioning of U.S. and non-U.S. government obligations, corporate
bonds and asset-backed securities.

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PaineWebber PACE Select Advisors Trust

Prior to that, Mr. Russell managed J.P. Morgan's short-term interest rate risk
group, coordinating a $10 billion book of assets and liabilities.

Mr. Williams joined FFTW in 1995 from Deutsche Morgan Grenfell, where he worked
as an analyst in the fixed-income research department.

Mr. Hard joined FFTW's affiliate in London in 1989 from Mercury Asset
Management, the investment management affiliate of S.G. Warburg & Co., LTD (now
Warburg Dillon Read). His responsibilities there included the formulation of
global bond and currency investment policies, and the management of interest
rate and currency exposures of the firm's specialist non-dollar bond portfolios.
He was previously first vice president and London branch manager of Julius Baer
Investment Management, Inc.

PACE LARGE COMPANY VALUE EQUITY INVESTMENTS. Institutional Capital Corporation
("ICAP"), Westwood Management Corporation ("Westwood") and State Street Global
Advisors ("SSgA") serve as investment advisers for PACE Large Company Value
Equity Investments. ICAP is located at 225 West Wacker Drive, Suite 2400,
Chicago, Illinois 60606-1229, and has been in the investment management business
since 1970. As of September 30, 2000, ICAP had approximately $14.4 billion in
assets under management. ICAP uses a team approach in the day-to-day management
of its share of the fund's assets and has held its fund responsibilities since
July 1, 2000.

Westwood is located at 300 Crescent Court, Suite 1300, Dallas, Texas 75201, and
has been in the investment management business since 1983. As of September 30,
2000, Westwood had approximately $3.2 billion in assets under management. Susan
M. Byrne, President of Westwood since 1983, is primarily responsible for the
day-to-day management of Westwood's share of the fund's assets. Ms. Byrne has
held her fund responsibilities since July 1, 2000.

SSgA is located at Two International Place, Boston, Massachusetts 02110, and is
the investment management division of State Street Bank and Trust Company. As of
September 30, 2000, SSgA had approximately $741 billion under management. SSgA
uses a team approach in the day-to-day management of its share of the fund's
assets. SSgA has held its fund responsibilities since October 10, 2000.

PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS. Alliance Capital Management L.P.
("Alliance Capital") and State Street Global Advisors ('SSgA") serve as
investment advisers for PACE Large Company Growth Equity Investments. Alliance
Capital is located at 1345 Avenue of the Americas, New York, New York 10105. It
is a leading international investment manager supervising client accounts with
assets as of September 30, 2000, of approximately $388 billion.

Jane Mack Gould is primarily responsible for the day-to-day management of the
fund's assets allocated to Alliance Capital and has held her fund
responsibilities since November 1997. Ms. Gould is a senior vice president and
portfolio manager and has been with Alliance Capital since 1971.

PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS. Ariel Capital Management,
Inc. ("Ariel") and ICM Asset Management, Inc. ("ICM") serve as investment
advisers for PACE Small/Medium Company Value Equity Investments. Ariel is
located at 307 North Michigan Avenue, Suite 500, Chicago, Illinois 60601. It is
an investment manager with approximately $4.6 billion in assets under management
as of September 30, 2000. Eric T. McKissack is primarily responsible for the
day-to-day management of the fund's assets allocated to Ariel and held his fund
responsibilities since October 1999. He has been with Ariel since 1986 and is
currently its vice chair and co-chief investment officer.

ICM is located at 601 W. Main Avenue, Suite 600, Spokane, WA 99201. Although ICM
has been in the investment advisory business since 1981, it has not previously
advised mutual funds. As of September 30, 2000, it had approximately
$1.86 billion in assets under management. ICM uses a team approach in the
day-to-day management of its share of the fund's assets and has held its fund
responsibilities since October 10, 2000. ICM's team is led by Kevin A. Jones,
CFA, and James M. Simmons, CFA. Five experienced analysts round out the research
team led by Messrs. Simmons and Jones.

Mr. Simmons is the founder and chief investment officer of ICM. Mr. Jones is a
senior portfolio manager with ICM and has managed small- and mid-cap portfolios
since 1997. Prior to his appointment as senior portfolio manager in October
1998, Mr. Jones covered numerous industries as a research analyst. Before
joining ICM,

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PaineWebber PACE Select Advisors Trust

Mr. Jones spent time as a portfolio analyst for another Northwest investment
adviser and as a financial consultant for two major brokerage firms. He has over
12 years experience in the securities industry.

PACE SMALL/MEDIUM COMPANY GROWTH EQUITY INVESTMENTS. Delaware Management Company
serves as investment adviser for PACE Small/Medium Company Growth Equity
Investments. Delaware Management Company is located at One Commerce Square,
Philadelphia, PA 19103. Delaware Management Company and its predecessors have
been managing funds for affiliated organizations in the financial services
industry, including insurance and investment management, since 1938. As of
September 30, 2000, Delaware Management Company and its affiliates had over
$80 billion in assets under management.

Gerald S. Frey is primarily responsible for the fund's day-to-day portfolio
management and has held his fund responsibilities since December 1996. Mr. Frey
is a vice president of Delaware Management Company. Prior to joining the group
of companies of which Delaware Management Company is a part in 1996, Mr. Frey
was a senior director with Morgan Grenfell Capital Management, Incorporated in
New York. He has 18 years of experience in the money management business.

In making investment decisions for the fund, Mr. Frey regularly consults with
other members of the Delaware Management Company team: John A. Heffern, Marshall
T. Bassett, Jeffrey Hynoski, Steven Lampe, Lori F. Wachs and Frank Houghton.
Mr. Heffern joined Delaware Management Company in 1997 and serves as a vice
president. Previously, he was a senior vice president, equity research at
NatWest Securities Corporation's Specialty Financial Services unit. Prior to
that, he was a principal and senior regional bank analyst at Alex. Brown & Sons.
Mr. Bassett joined Delaware Management Company in 1997 and serves as a vice
president. Previously, he was employed by Morgan Stanley Asset Management's
Emerging Growth Group, most recently as a vice president, where he analyzed
small growth companies. Prior to that, he was a trust officer at Sovran Bank and
Trust Company. Mr. Hynoski joined Delaware Management Company in 1998 and serves
as a vice president. Previously, he held the position of vice president with
Bessemer Trust since 1993. Prior to that, he served as an analyst for Lord
Abbett and Cowen Asset Management. Prior to that, he held a manager position
with Price Waterhouse servicing the financial services industry. Ms. Wachs
joined Delaware Management Company in 1992 and serves as an assistant vice
president. Previously, she was an equity analyst at Goldman Sachs & Company for
two years.

Mr. Houghton joined Delaware Management Company in 2000 and serves as a senior
vice president and portfolio manager. Previously, he was a vice president and a
portfolio manager with Lynch & Mayer, a Delaware affiliate, since 1990.

PACE INTERNATIONAL EQUITY INVESTMENTS. Martin Currie Inc. serves as investment
adviser for this fund. Martin Currie Inc. is located at Saltire Court, 20 Castle
Terrace, Edinburgh, Scotland EHI 2ES. Martin Currie Inc. and its affiliates are
part of one of Scotland's leading independent investment management companies
which, since its founding in 1881, has developed an expertise in equity
investments. As of September 30, 2000, Martin Currie Inc. and its affiliates had
over $10.7 billion in assets under management.

Martin Currie Inc. uses a team approach in the management of the fund's
portfolio. The team is led by James Fairweather, who has served as chief
investment officer of Martin Currie Inc. since 1997. Mr. Fairweather joined
Martin Currie Inc. in 1984 and has served in various investment management
capacities since then. He has held his fund responsibilities since its inception
in August 1995.

PACE INTERNATIONAL EMERGING MARKETS EQUITY INVESTMENTS. Schroder Investment
Management North America Inc. serves as investment adviser for this fund. SIMNA
is located at 787 Seventh Avenue, New York, New York 10019. SIMNA and its
affiliates have developed an expertise in emerging markets investments. As of
June 30, 2000, SIMNA had approximately $46 billion in assets under management.
As of the same date, SIMNA's ultimate parent, Schroders plc, and its affiliates
collectively had approximately $217 billion in assets under management.

All investment decisions for the Fund are made by SIMNA's emerging markets
investment committee. The investment committee consists of investment
professionals with specific geographic or regional expertise, as well as members
responsible for economic analysis and strategy and global stock and sector
selection.

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PaineWebber PACE Select Advisors Trust

DIVIDENDS AND TAXES

--------------------------------------------------------------------------------

DIVIDENDS

PACE MONEY MARKET INVESTMENTS normally declares dividends daily and pays them
monthly. Shares of this fund earn dividends on the day they are sold but do not
earn dividends on the day they are purchased.

PACE GOVERNMENT SECURITIES FIXED INCOME INVESTMENTS, PACE INTERMEDIATE FIXED
INCOME INVESTMENTS, PACE STRATEGIC FIXED INCOME INVESTMENTS, PACE MUNICIPAL
FIXED INCOME INVESTMENTS AND PACE GLOBAL FIXED INCOME INVESTMENTS normally
declare and pay dividends monthly. These funds distribute substantially all of
their gains, if any, annually.

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 normally declare and
pay dividends annually. These funds distribute substantially all of their gains,
if any, annually.

You will receive dividends in additional shares of the same fund unless you
elect to receive them in cash. Contact your Financial Advisor at PaineWebber if
you prefer to receive dividends in cash.

TAXES

PACE MUNICIPAL FIXED INCOME INVESTMENTS seeks to pay dividends that are exempt
from federal income tax. However, a portion of its dividends may be subject to
state income taxes and its distributions of gain may be subject to both federal
and state income taxes whether you receive them in additional fund shares or in
cash. The fund also may pay dividends that are subject to the federal
alternative minimum tax.

The dividends that you receive from the other funds generally are subject to
federal income tax regardless of whether you receive them in additional fund
shares or in cash. If you hold shares of these funds through a tax-exempt
account or plan, such as an IRA or 401(k) plan, dividends on your shares
generally will not be subject to tax.

When you sell fund shares, you generally will be subject to federal income tax
on any gain you realize. However, you will not recognize any gain on the sale of
your shares in PACE MONEY MARKET INVESTMENTS so long as it maintains a share
price of $1.00.

Any distribution of capital gains may be taxed at a lower rate than ordinary
income, depending on whether the fund held the assets that generated the gains
for more than 12 months. Your fund will tell you how you should treat its
dividends for tax purposes.

As noted above, shareholders will pay the PACE Select Advisors Program Fee. For
individual shareholders, this fee will be treated as a "miscellaneous itemized
deduction" for federal income tax purposes.

See the SAI for a more detailed discussion. Prospective shareholders are urged
to consult their tax advisers.

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PaineWebber PACE Select Advisors Trust

FINANCIAL HIGHLIGHTS

--------------------------------------------------------------------------------

The following financial highlights tables are intended to help you understand
each fund's financial performance for the periods shown. Certain information
reflects financial results for a single fund share. In the tables, "total
investment return" represents the rate that an investor would have earned (or
lost) on an investment in a fund, assuming reinvestment of all dividends.

This information has been audited by Ernst & Young LLP, independent auditors,
whose report, along with the funds' financial statements, is included in the
funds' Annual Report to Shareholders. The Annual Report may be obtained without
charge by calling 1-800-986-0088.

<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 the PACE Program
Fee; results would be lower if this fee was included. Total investment
return for period of less than one year has not been annualized.

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<PAGE>
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PaineWebber PACE Select Advisors Trust

FINANCIAL HIGHLIGHTS
(Continued)

--------------------------------------------------------------------------------

<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 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 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.

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PaineWebber PACE Select Advisors Trust

FINANCIAL HIGHLIGHTS
(Continued)

--------------------------------------------------------------------------------

<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.

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Prospectus Page 54
<PAGE>
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------------------------
PaineWebber PACE Select Advisors Trust

FINANCIAL HIGHLIGHTS
(Continued)

--------------------------------------------------------------------------------

<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 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.

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<PAGE>
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------------------------
PaineWebber PACE Select Advisors Trust

FINANCIAL HIGHLIGHTS
(Continued)

--------------------------------------------------------------------------------

<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 and 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.

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<PAGE>
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------------------------
PaineWebber PACE Select Advisors Trust

FINANCIAL HIGHLIGHTS
(Continued)

--------------------------------------------------------------------------------

<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 realized and 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)
Dividend 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 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.

--------------------------------------------------------------------------------
Prospectus Page 57
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

FINANCIAL HIGHLIGHTS
(Continued)

--------------------------------------------------------------------------------

<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.

--------------------------------------------------------------------------------
Prospectus Page 58
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

FINANCIAL HIGHLIGHTS
(Continued)

--------------------------------------------------------------------------------

<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 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.

--------------------------------------------------------------------------------
Prospectus Page 59
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

FINANCIAL HIGHLIGHTS
(Continued)

--------------------------------------------------------------------------------

<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 the 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. continued 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 period of less
than one year has not been annualized.

--------------------------------------------------------------------------------
Prospectus Page 60
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

FINANCIAL HIGHLIGHTS
(Continued)

--------------------------------------------------------------------------------

<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 transferred 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.

--------------------------------------------------------------------------------
Prospectus Page 61
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

FINANCIAL HIGHLIGHTS
(Continued)

--------------------------------------------------------------------------------

<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-Adviser................. 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-adviser's capital
contribution of approximately $0.05 per share, the total return for the
year ended July 31, 2000 would have been 14.6%.

--------------------------------------------------------------------------------
Prospectus Page 62
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

FINANCIAL HIGHLIGHTS
(Continued)

--------------------------------------------------------------------------------

<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.

--------------------------------------------------------------------------------
Prospectus Page 63
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

APPENDIX A

PERFORMANCE INFORMATION FOR NEW INVESTMENT ADVISERS

Certain PACE funds have recently undergone a change in investment advisers. To
assist prospective and existing shareholders in making an informed investment
decision, this Appendix provides performance information about comparable mutual
funds, and/or a composite of all advisory accounts, managed by these new
investment advisers in a substantially similar manner to the way in which the
investment adviser manages the respective PACE Fund's assets ("Related
Performance Information").

Where an investment adviser has been managing a registered investment company
(mutual fund) with substantially similar investment objectives, policies and
strategies ("Comparable Fund") to those of a PACE fund, the Comparable Fund's
average total return is presented in accordance with SEC performance rules
(shown both before and after deducting any applicable fund sales charges). Where
an investment adviser manages advisory accounts in a manner that is
substantially similar to the way in which it manages a PACE fund's assets, this
appendix presents the composite performance of all those accounts ("Account
Composite Performance"), calculated in accordance with the recommended standards
of the Association of Investment Management and Research ("AIMR") (shown both
before and after deducting the maximum annual PACE Program fee). AIMR is a
non-profit membership and education organization that, among other things, has
formulated a set of performance presentation standards for investment advisers.
The Account Composite Performance was obtained from the records maintained by
the respective investment adviser and adjusted by Mitchell Hutchins to reflect
the fees and expenses of the corresponding PACE fund. Where applicable, both
Comparable Fund and Account Composite Performance is included. The performance
of the corresponding PACE fund is shown for Class P shares both before and after
deducting the maximum annual PACE Program fee. In addition, the performance of
an appropriate unmanaged benchmark index, not adjusted for any fees or expenses,
is provided as well.

Finally, please note that:

- Related Performance Information is not the PACE fund's own historical
performance and is not necessarily an indication of the corresponding PACE
fund's future performance. This is particularly true for Account Composite
Performance because these accounts may not be subject to certain investment
limitations, diversification requirements and other restrictions imposed on
mutual funds by the 1940 Act and the Internal Revenue Code, which, if
applicable, may have adversely affected the performance of these accounts.

- As more fully described below, certain investment advisers for which we have
included Related Performance Information manage only a portion of a PACE
fund's assets. THUS, THE FUTURE PERFORMANCE OF EACH INVESTMENT ADVISER WILL
IMPACT THE PERFORMANCE OF THE RESPECTIVE PACE FUND ONLY FOR THAT PORTION OF
THE ASSETS IT MANAGES. The percentage of a PACE fund's assets that is
allocated to a particular investment adviser can be changed by Mitchell
Hutchins at any time.

- Any investment adviser may be replaced at any time by Mitchell Hutchins,
subject to approval by the PACE fund's board of trustees. No shareholder vote
is required. THIS MANAGEMENT STRUCTURE MAY RESULT IN MORE FREQUENT TURNOVER OF
INVESTMENT ADVISERS THAN OTHER FUNDS THAT TYPICALLY MUST SEEK SHAREHOLDER
APPROVAL BEFORE MAKING SUCH A CHANGE.

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Prospectus Page A-1
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

1. PACE INTERMEDIATE FIXED INCOME INVESTMENTS

Account Composite Performance for Metropolitan West Asset Management LLC
("MWAM"), a new investment adviser to the fund, is provided below. Prior to
October 10, 2000, all of the fund's assets were managed by a different
investment adviser.

<TABLE>
<CAPTION>
PACE INTERMEDIATE PACE INTERMEDIATE
FIXED INCOME FIXED INCOME
MWAM INVESTMENTS INVESTMENTS
MWAM COMPOSITE AS OF CLASS P SHARES AS CLASS P SHARES AS LEHMAN BROTHERS
COMPOSITE AS OF 9/30/00 OF 9/30/00 (WITH OF 9/30/00 INTERMEDIATE
9/30/00 (WITH (WITHOUT PACE PACE PROGRAM (WITHOUT PACE GOVERNMENT
PACE PROGRAM FEE) PROGRAM FEE) FEE) PROGRAM FEE) CREDIT INDEX
----------------- --------------- ------------------ ------------------ ---------------
<S> <C> <C> <C> <C> <C>
YTD (1/1/00 - 9/30/00).......... 4.81% 5.99% 5.00% 6.18% 6.19%
1 Year.......................... 4.59% 6.16% 4.51% 6.09% 6.25%
3 Years......................... 4.59% 6.17% 3.58% 5.15% 5.69%
5 Years......................... N/A N/A 3.65% 5.21% 6.08%
Since inception (8/24/95) of
Class P shares PACE fund....... N/A N/A 3.89% 5.46% 6.12%
</TABLE>

2. PACE MUNICIPAL FIXED INCOME INVESTMENTS

Account Composite Performance and performance for the only Comparable Mutual
Fund advised by Standish, Ayer & Wood, Inc., a new investment adviser to the
fund, is provided below. Prior to June 1, 2000, all of the fund's assets were
managed by a different investment adviser.
<TABLE>
<CAPTION>
PACE
PACE MUNICIPAL
STANDISH STANDISH MUNICIPAL FIXED INCOME
STANDISH, AYER & STANDISH, AYER & INTERMEDIATE INTERMEDIATE FIXED INCOME INVESTMENTS
WOOD, INC. WOOD, INC. TAX EXEMPT TAX EXEMPT INVESTMENTS CLASS P SHARES
COMPOSITE AS OF COMPOSITE AS OF BOND FUND AS BOND FUND AS CLASS P SHARES AS OF 9/30/00
9/30/00 (WITH 9/30/00 (WITHOUT OF 9/30/00 OF 9/30/00 AS OF 9/30/00 (WITHOUT
PACE PROGRAM PACE PROGRAM (WITH SALES (WITHOUT SALES (WITH PACE PACE
FEE) FEE) CHARGES) CHARGES) PROGRAM FEE) PROGRAM FEE)
---------------- ---------------- ------------ -------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
YTD (1/1/00 - 9/30/00).... 3.85% 5.01% N/A 5.12% 4.02% 5.20%
1 Year.................... 3.27% 4.81% N/A 4.93% 2.84% 4.39%
3 Years................... 2.23% 3.76% N/A 3.90% 1.94% 3.48%
5 Years................... 3.15% 4.70% N/A 5.03% 3.29% 4.85%
Since inception (8/24/95)
of Class P shares PACE
fund..................... N/A N/A N/A 5.06% 3.37% 4.93%

LEHMAN
MUNICIPAL
FIVE YEAR
BOND INDEX
----------
<S> <C>
YTD (1/1/00 - 9/30/00).... 4.80%
1 Year.................... 4.81%
3 Years................... 4.36%
5 Years................... 4.82%
Since inception (8/24/95)
of Class P shares PACE
fund..................... 4.79%
</TABLE>

3. PACE GLOBAL FIXED INCOME INVESTMENTS

Performance for the Comparable Mutual Fund managed by Fischer Francis Trees &
Watts, Inc. and its affiliates ("FFTW"), a new investment adviser to the fund,
is provided below. Prior to October 10, 2000, all of PACE Global Fixed Income
Investments' assets were managed by Rogge Global Partners plc ("Rogge Global
Partners"). As of October 10, 2000, Rogge Global Partners manages approximately
50% of the fund's assets and FFTW manages approximately 50% of the fund's
assets. Mitchell Hutchins may change these allocations at any time.

<TABLE>
<CAPTION>
PACE GLOBAL
PACE GLOBAL FIXED INCOME
FIXED INCOME INVESTMENTS
FFTW FFTW INVESTMENTS CLASS P
WORLDWIDE WORLDWIDE CLASS P SHARES LEHMAN
PORTFOLIO PORTFOLIO AS SHARES AS OF AS OF 9/30/00 GLOBAL SSB WORLD
AS OF 9/30/00 OF 9/30/00 9/30/00 (WITHOUT AGGREGATE GOVT BOND
(WITH SALES (WITHOUT SALES (WITH PACE PACE BOND INDEX INDEX
CHARGES) CHARGES) PROGRAM FEE) PROGRAM FEE) (UNHEDGED) (UNHEDGED)
------------- -------------- ------------ ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
YTD (1/1/00 - 9/30/00).................. N/A (1.16)% (6.49)% (5.43)% (0.60)% (2.60)%
1 Year.................................. N/A (2.30)% (8.68)% (7.29)% (2.17)% (3.90)%
3 Years................................. N/A 3.04 % (0.79)% 0.71 % 2.84 % 2.52 %
5 Years................................. N/A 4.28 % 0.88 % 2.41 % 3.93 % 2.83 %
Since inception (8/24/95) of Class P
shares PACE fund....................... N/A 4.62 % 1.30 % 2.83 % 4.24 % 3.23 %
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page A-2
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

4. PACE LARGE COMPANY VALUE EQUITY INVESTMENTS

Related Performance Information for Institutional Capital Corp. ("ICAP"),
Westwood Management Corporation ("Westwood"), and State Street Global Advisors
("SSgA"), the investment advisers to the fund, is set forth below.

Prior to July 1, 2000, all of the fund's assets were managed by a different
investment adviser. As of July 1, 2000, ICAP and Westwood each managed
approximately 50% of the fund's assets. As of October 10, 2000, ICAP and
Westwood each manages approximately 25% of the fund's assets and SSgA manages
approximately 50% of the fund's assets. Mitchell Hutchins may change these
allocations at any time.

<TABLE>
<CAPTION>
PACE LARGE PACE LARGE
COMPANY VALUE COMPANY VALUE
EQUITY EQUITY
INVESTMENTS INVESTMENTS
SSGA COMPOSITE SSGA COMPOSITE CLASS P SHARES CLASS P SHARES RUSSELL
AS OF 9/30/00 AS OF 9/30/00 AS OF 9/30/00 AS OF 9/30/00 1000
(WITH PACE (WITHOUT PACE (WITH PACE (WITHOUT PACE VALUE
PROGRAM FEE) PROGRAM FEE) PROGRAM FEE) PROGRAM FEE) INDEX
------------------------ -------------- --------------- --------------- --------
<S> <C> <C> <C> <C> <C>
YTD (1/1/00 - 9/30/00)................. 3.91% 5.08% (2.48)% (1.38)% 3.30%
1 Year................................. 8.69% 10.32% (1.45)% 0.04 % 8.91%
3 Years................................ 7.75% 9.37% 1.86 % 3.40 % 10.23%
5 Years................................ 17.78% 19.57% 11.62 % 13.31 % 17.59%
Since inception (8/24/95) of Class P
shares PACE fund...................... 18.25% 20.01% 12.27 % 13.97 % 18.10%
</TABLE>
<TABLE>
<CAPTION>
PACE LARGE
COMPANY VALUE
ICAP EQUITY
ICAP COMPOSITE AS ICAP EQUITY INVESTMENTS
COMPOSITE AS OF 9/30/00 ICAP EQUITY PORTFOLIO AS CLASS P SHARES AS
OF 9/30/00 (WITHOUT PORTFOLIO AS OF OF 9/30/00 OF 9/30/00 (WITH
(WITH PACE PACE 9/30/00 (WITH (WITHOUT SALES PACE PROGRAM
PROGRAM FEE) PROGRAM FEE) SALES CHARGES) CHARGES) FEE)
------------- ------------- --------------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
YTD (1/1/00 - 9/30/00)....... (0.73)% 0.39% N/A 2.01% (2.48)%
1 Year....................... 8.62 % 10.23% N/A 12.34% (1.45)%
3 Years...................... 6.28 % 7.87% N/A 8.88% 1.86 %
5 Years...................... 14.96 % 16.65% N/A 17.29% 11.62 %
Since inception (8/24/95) of
Class P shares PACE fund.... N/A N/A N/A 17.98% 12.27 %

<CAPTION>
PACE LARGE
COMPANY VALUE
EQUITY
INVESTMENTS
CLASS P SHARES RUSSELL
AS OF 9/30/00 1000
(WITHOUT PACE VALUE
PROGRAM FEE) INDEX
--------------- ------------------------
<S> <C> <C>
YTD (1/1/00 - 9/30/00)....... (1.38)% 3.30%
1 Year....................... 0.04 % 8.91%
3 Years...................... 3.40 % 10.23%
5 Years...................... 13.31 % 17.59%
Since inception (8/24/95) of
Class P shares PACE fund.... 13.97 % 18.10%
</TABLE>
<TABLE>
<CAPTION>
PACE LARGE
GABELLI COMPANY
WESTWOOD VALUE EQUITY
WESTWOOD WESTWOOD GABELLI WESTWOOD EQUITY FUND INVESTMENTS
COMPOSITE AS OF COMPOSITE AS EQUITY FUND (A SHARES) AS OF CLASS P SHARES
9/30/00 (WITH OF 9/30/00 (A SHARES) AS OF 9/30/00 AS OF 9/30/00
PACE PROGRAM (WITHOUT PACE 9/30/00 (WITH (WITHOUT SALES (WITH PACE
FEE) PROGRAM FEE) SALES CHARGES) CHARGES) PROGRAM FEE)
---------------- ------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
YTD (1/1/00 -
9/30/00)............... 7.22% 8.40% 3.76% 8.08% (2.48)%
1 Year.................. 15.28% 16.96% 14.21% 18.98% (1.45)%
3 Years................. 12.25% 13.91% 10.28% 11.79% 1.86 %
5 Years................. 20.21% 21.95% 18.74% 19.71% 11.62 %
Since inception
(8/24/95) of Class P
shares PACE fund....... N/A N/A 19.02% 19.98% 12.27 %

<CAPTION>
PACE LARGE
COMPANY VALUE
EQUITY
INVESTMENTS
CLASS P SHARES RUSSELL
AS OF 9/30/00 1000
(WITHOUT PACE VALUE
PROGRAM FEE) INDEX
--------------- --------
<S> <C> <C>
YTD (1/1/00 -
9/30/00)............... (1.38)% 3.30%
1 Year.................. 0.04 % 8.91%
3 Years................. 3.40 % 10.23%
5 Years................. 13.31 % 17.59%
Since inception
(8/24/95) of Class P
shares PACE fund....... 13.97 % 18.10%
</TABLE>

--------------------------------------------------------------------------------
Prospectus Page A-3
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

5. PACE LARGE COMPANY GROWTH EQUITY INVESTMENTS

Account Composite performance for State Street Global Advisors ("SSgA"), an
investment adviser of the fund, is set forth below.

Prior to October 10, 2000, all of the fund's assets were managed by Alliance
Capital Management L.P. ("Alliance Capital"). As of October 10, 2000, Alliance
Capital manages approximately 60% of the fund's assets and SSgA manages
approximately 40% of the fund's assets. Mitchell Hutchins may change these
allocations at any time.

<TABLE>
<CAPTION>
PACE LARGE PACE LARGE
COMPANY GROWTH COMPANY GROWTH
EQUITY EQUITY
INVESTMENTS INVESTMENTS
SSGA COMPOSITE SSGA COMPOSITE CLASS P SHARES AS CLASS P SHARES RUSSELL
AS OF 9/30/00 AS OF 9/30/00 OF 9/30/00 (WITH AS OF 9/30/00 1000
(WITH PACE (WITHOUT PACE PACE PROGRAM (WITHOUT PACE GROWTH
PROGRAM FEE) PROGRAM FEE) FEE) PROGRAM FEE) INDEX
-------------- -------------- ------------------ ---------------- --------
<S> <C> <C> <C> <C> <C>
YTD (1/1/00 - 9/30/00)....................... (5.74)% (4.66)% (2.37)% (1.26)% (1.37)%
1 Year....................................... 15.91% 17.64% 15.06 % 16.80 % 23.43 %
3 Years...................................... 19.03% 20.81% 18.59 % 20.39 % 22.74 %
5 Years...................................... 22.49% 24.31% 20.12 % 21.94 % 25.07 %
Since inception (8/24/95) of Class P shares
PACE fund................................... 22.90% 24.73% 20.46 % 22.28 % 25.72 %
</TABLE>

6. PACE SMALL/MEDIUM COMPANY VALUE EQUITY INVESTMENTS

Performance for ICM Asset Management, Inc. ("ICM") and Ariel Capital Management
Inc. ("Ariel"), each an investment adviser of the fund, is set forth below.
Prior to October 4, 1999, all of the fund's assets were managed by a different
investment adviser. As of October 4, 1999, the former investment adviser and
Ariel Capital Management, Inc. ("Ariel") each managed a portion of the fund's
assets. As of October 10, 2000, Ariel and ICM each initially manages
approximately 50% of the fund 's assets. Mitchell Hutchins may change these
allocations at any time.

<TABLE>
<CAPTION>
PACE SMALL/MEDIUM PACE SMALL/MEDIUM
COMPANY VALUE COMPANY VALUE
ICM COMPOSITE ICM COMPOSITE EQUITY INVESTMENTS EQUITY INVESTMENTS RUSSELL RUSSELL
AS OF 9/30/00 AS OF 9/30/00 CLASS P SHARES AS OF CLASS P SHARES AS OF 2000 2500
(WITH PACE (WITHOUT PACE 9/30/00 (WITH PACE 9/30/00 (WITHOUT VALUE VALUE
PROGRAM FEE) PROGRAM FEE) PROGRAM FEE) PACE PROGRAM FEE) INDEX INDEX
-------------- -------------- --------------------- --------------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
YTD (1/1/00 - 9/30/00).... 29.63% 31.61% 2.84 % 4.00 % 13.62% 11.21%
1 Year.................... 26.81% 28.74% 1.39 % 2.93 % 15.36% 15.75%
3 Years................... 0.64% 1.15% (3.72)% (2.26)% 2.11% 4.41%
5 Years................... N/A N/A 7.32 % 8.94 % 11.50% 13.33%
Since inception (8/24/95)
of Class P shares PACE
fund..................... N/A N/A 7.17 % 8.79 % 11.63% 13.47%
</TABLE>
<TABLE>
<CAPTION>
PACE SMALL/
PACE SMALL/ MEDIUM
ARIEL MEDIUM COMPANY
ARIEL COMPOSITE ARIEL COMPANY VALUE EQUITY
COMPOSITE AS OF ARIEL APPRECIATION VALUE EQUITY INVESTMENTS
AS OF 9/30/00 APPRECIATION FUND AS OF INVESTMENTS CLASS P SHARES
9/30/00 (WITHOUT FUND AS OF 9/30/00 CLASS P SHARES AS OF 9/30/00
(WITH PACE PACE 9/30/00 (WITHOUT AS OF 9/30/00 (WITHOUT
PROGRAM PROGRAM (WITH SALES SALES (WITH PACE PACE
FEE) FEE) CHARGES) CHARGES) PROGRAM FEE) PROGRAM FEE)
----------- ----------- ------------ ------------ -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
YTD (1/1/00 - 9/30/00)............. 7.68% 8.89% N/A 11.56% 2.84 % 4.00 %
1 Year............................. 8.93% 10.57% N/A 14.11% 1.39 % 2.93 %
3 Years............................ 8.73% 10.37% N/A 12.22% (3.72)% (2.26)%
5 Years............................ 16.46% 18.20% N/A 18.96% 7.32 % 8.94 %
Since inception (8/24/95) of
Class P shares PACE fund.......... 16.76% 18.51% N/A 18.41% 7.17 % 8.79 %

RUSSELL
MID RUSSELL
CAP 2500
VALUE VALUE
INDEX INDEX
-------- --------
<S> <C> <C>
YTD (1/1/00 - 9/30/00)............. 8.90% 11.21%
1 Year............................. 13.00% 15.75%
3 Years............................ 5.96% 4.41%
5 Years............................ 14.07% 13.33%
Since inception (8/24/95) of
Class P shares PACE fund.......... 14.33% 13.47%
</TABLE>

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Prospectus Page A-4
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

APPENDIX B

INTRODUCTORY NOTE:

THIS APPENDIX IS PROVIDED FOR ERISA ACCOUNTS PURSUANT TO CONDITIONS IMPOSED
BY A GRANT OF INDIVIDUAL EXEMPTIONS BY THE DEPARTMENT OF LABOR.

THE NOTICE OF PROPOSED EXEMPTION AND RELATED GRANT OF INDIVIDUAL EXEMPTIONS
REPRODUCED BELOW DATE FROM 1996. THE FACTUAL INFORMATION CONTAINED THEREIN WAS
ACCURATE AS OF THAT TIME; HOWEVER, THE FUNDS HAVE CHANGED OVER THE YEARS. THE
INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS IS MORE CURRENT AND SHOULD BE
RELIED UPON WHERE THERE ARE DIFFERENCES. FOR EXAMPLE:

- THE NAME OF THE TRUST WAS CHANGED FROM MANAGED ACCOUNTS SERVICES PORTFOLIO
TRUST TO PAINEWEBBER PACE SELECT ADVISORS TRUST;

- PAINEWEBBER MANAGED ACCOUNTS SERVICES (PMAS) IS NOW KNOWN AS PAINEWEBBER
INVESTMENT CONSULTING SERVICES (PICS); AND

- CERTAIN FEE ARRANGEMENTS HAVE CHANGED AND A NUMBER OF SUB-ADVISERS HAVE BEEN
REPLACED.

THIS DOCUMENT HAS BEEN PREPARED BY PAINEWEBBER INCORPORATED
AS A COPY OF THE NOTICE THAT APPEARED IN THE FEDERAL REGISTER ON
FRIDAY, MARCH 22, 1996 (VOL. 61, N0. 57 AT 11882).

PAINEWEBBER INCORPORATED (PAINEWEBBER) LOCATED IN NEW YORK, NY [Application
No. D-09818]

PROPOSED EXEMPTION

Based on the facts and representations set forth in the application, the
Department is considering granting an exemption under the authority of section
408(a) of the Act and section 4975(c)(2) of the Code and in accordance with the
procedures set forth in 29 CFR Part 2570, Subpart B (55 FR 32836, August 10,
1990).(1)

Section I. Covered Transactions

If the exemption is granted, the restrictions of section 406(a) of the Act and
the sanctions resulting from the application of section 4975 of the Code, by
reason of section 4975(c)(1) (A) through (D) of the Code, shall not apply,
effective August 18, 1995, to the purchase or redemption of shares by an
employee benefit plan, an individual retirement account (the IRA) or a
retirement plan for a self-employed individual (the Keogh Plan) (collectively
referred to herein as the Plans) in the PaineWebber Managed Accounts Services
Portfolio Trust (the Trust) established in connection with such Plans'
participation in the PaineWebber PACE Program (the PACE Program).

In addition, the restrictions of section 406(b) of the Act and the sanctions
resulting from the application of section 4975 of the Code, by reason of section
4975(c)(1) (E) and (F) of the Code, shall not apply, effective August 18, 1995,
to (a) the provision, by PaineWebber Managed Accounts Services (PMAS), a
division of PaineWebber, of asset allocation and related services to an
independent fiduciary of a Plan (the Independent Fiduciary) or to a directing
participant (the Directing Participant) in a Plan that is covered under the
provisions of section 404(c) of the Act (the Section 404(c) Plan), which may
result in the selection by the Independent Fiduciary or the Directing
Participant of portfolios of the Trust (the Portfolios) in the PACE Program for
the investment of Plan assets; and (b) the provision of investment management
services by Mitchell Hutchins Asset Management, Inc. (Mitchell Hutchins) to the
PACE Money Market Investments Portfolio of the Trust.

This proposed exemption is subject to the conditions set forth below in
Section II.

Section II. General Conditions
(a) The participation of each Plan in the PACE Program is approved by an
Independent Fiduciary or, if applicable, Directing Participant.

(b) As to each Plan, the total fees paid to PMAS and its affiliates constitute
no more than reasonable compensation and do not include the receipt of
fees pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the '40
Act) by PMAS and its affiliates in connection with the transactions.

(d) The terms of each purchase or redemption of Trust shares remain at least as
favorable to an investing Plan as those obtainable in an arm's length
transaction with an unrelated party.

(e) PMAS provides written documentation to an Independent Fiduciary or a
Directing Participant of its recommendations or evaluations based upon
objective criteria.

(f) Any recommendation or evaluation made by PMAS to an Independent Fiduciary or
Directing Participant is implemented only at the express direction of such
fiduciary or participant.

(g) PMAS provides investment advice in writing to an Independent Fiduciary or
Directing Participant with respect to all available Portfolios.

----------------------------------
(1) For purposes of this proposed exemption, reference to provisions of Title
I of the Act, unless otherwise specified, refer also to the corresponding
provisions of the Code.

--------------------------------------------------------------------------------
Prospectus Page B-1
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

(h) With the exception of the PACE Money Market Investments Portfolio, any
sub-adviser (the Sub-Adviser) appointed by Mitchell Hutchins to exercise
investment discretion with respect to a Portfolio is independent of
PaineWebber and its affiliates.

(i) The quarterly fee that is paid by a Plan to PMAS for asset allocation and
related services rendered to such Plan under the PACE Program (i.e., the
outside fee) is offset by such amount as is necessary to assure
that Mitchell Hutchins retains 20 basis points as a management fee from any
Portfolio (with the exception of the PACE Money Market Investments Portfolio
from which Mitchell Hutchins retains an investment management fee of 15
basis points) containing investments attributable to the Plan investor.
However, the quarterly fee of 20 basis points that is paid to Mitchell
Hutchins for administrative services is retained by Mitchell Hutchins and is
not offset against the outside fee.

(j) With respect to its participation in the PACE Program prior to purchasing
Trust shares,

(1) Each Independent Fiduciary receives the following written or oral
disclosures from PaineWebber:

(A) A copy of the prospectus (the Prospectus) for the Trust discussing
the investment objectives of the Portfolios comprising the Trust; the
policies employed to achieve these objectives; the corporate
affiliation existing between PaineWebber, PMAS, Mitchell Hutchins and
their affiliates; the compensation paid to such entities; any
additional information explaining the risks of investing in the
Trust; and sufficient and understandable disclosures relating to
rebalancing of investor accounts.

(B) Upon written or oral request to PaineWebber, a Statement of
Additional Information supplementing the Prospectus, which describes
the types of securities and other instruments in which the Portfolios
may invest, the investment policies and strategies that the
Portfolios may utilize and certain risks attendant to those
investments, policies and strategies.

(D) A written analysis of PMAS's asset allocation decision and
recommendation of specific Portfolios.

(E) A copy of the agreement between PMAS and such Plan relating to
participation in the PACE Program.

(F) Upon written request to Mitchell Hutchins, a copy of the respective
investment advisory agreement between Mitchell Hutchins and the
Sub-Advisers.

(G) Copies of the proposed exemption and grant notice describing the
exemptive relief provided herein.

(2) In the case of a Section 404(c) Plan, the Independent Fiduciary will--

(A) Make copies of the foregoing documents available to Directing
Participants.

(B) Allow Directing Participants to interact with PaineWebber Investment
Executives and receive information relative to the services offered
under the PACE Program, including the rebalancing feature, and the
operation and objectives of the Portfolios.

(3) If accepted as an investor in the PACE Program, an Independent Fiduciary
of an IRA or Keogh Plan, is required to acknowledge, in writing to PMAS,
prior to purchasing Trust shares that such fiduciary has received copies
of the documents described in paragraph (j)(l) of this Section II.

(4) With respect to a Section 404(c) Plan, written acknowledgement of the
receipt of such documents is provided by the Independent Fiduciary (i.e.,
the Plan administrator, trustee, investment manager or named fiduciary,
as the recordholder of Trust shares). Such Independent Fiduciary will be
required to represent in writing to PMAS that such fiduciary is--

(A) Independent of PaineWebber and its affiliates;

(B) Knowledgeable with respect to the Plan in administrative matters and
funding matters related thereto, and;

(5) With respect to a Plan that is covered under Title I of the Act, where
investment decisions are made by a trustee, investment manager or a named
fiduciary, such Independent Fiduciary is required to acknowledge, in
writing, receipt of such documents and represent to PMAS that such
fiduciary is--

(A) Independent of PMAS and its affiliates;

(B) Capable of making an independent decision regarding the investment
of Plan assets;

(D) Able to make an informed decision concerning participation in the
PACE Program.

--------------------------------------------------------------------------------
Prospectus Page B-2
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

(k) As applicable, subsequent to its participation in the PACE Program, each
Independent Fiduciary receives the following written or oral disclosures with
respect to its ongoing participation in the PACE Program:

(1) Written confirmations of each purchase or redemption transaction by the
Plan with
respect to a Portfolio.

(2) Telephone quotations from PaineWebber of such Plan's account balance.

(3) A monthly statement of account from PaineWebber specifying the net asset
value of the Plan's investment in such account.
Such statement is also anticipated to include cash flow and transaction
activity during the month, unrealized gains or losses on Portfolio shares
held; and a summary of total earnings and capital returns on the Plan's
PACE Portfolio for the month and year-to-date.

(4) The Trust's semi-annual and annual report which will include financial
statements for the Trust and investment management fees paid by each
Portfolio.

(5) A written quarterly monitoring report that includes a record of the
Plan's PACE Program portfolio for the quarter and since inception,
showing the rates of return relative to comparative market indices
(illustrated in a manner that reflects the effect of any fees for
participation in the PACE Program actually incurred during the period);
an investment outlook summary containing market commentary; and the
Plan's actual PACE Program portfolio with a breakdown, in both dollars
and percentages, of the holdings in each portfolio. The quarterly
monitoring report will also contain an analysis and an evaluation of
a Plan investor's account to ascertain whether the Plan's investment
objectives have been met and recommending, if required, changes in
Portfolio allocations.

(6) A statement, furnished at least quarterly or annually, specifying--

(A) The total, expressed in dollars, of each Portfolio's brokerage
commissions that are paid to PaineWebber and its affiliates;

(B) The total, expressed in dollars, of each Portfolio's brokerage
commissions that are paid to unrelated brokerage firms;

(C) The average brokerage commissions per share by the Trust to brokers
affiliated with PaineWebber, expressed as cents per share; and

(D) The average brokerage commissions per share by the Trust to brokers
unrelated to PaineWebber and its affiliates, expressed as cents per
share for any year in which brokerage commissions are paid to
PaineWebber by the Trust Portfolios in which a Plan's assets are
invested.

(7) Periodic meetings with a PaineWebber Investment Executive by Independent
Fiduciaries to discuss the quarterly monitoring report or any other
questions that may arise.

(l) In the case of a Section 404(c) Plan where the Independent Fiduciary has
established an omnibus account in the name of the Plan (the Undisclosed
Account) with PaineWebber, the information noted above in subparagraphs
(k)(1) through (k)(7) of this Section II may be provided directly by
PaineWebber to the Directing Participants or to the Independent Fiduciary for
dissemination to the Directing Participants, depending upon the arrangement
negotiated by the Independent Fiduciary with PMAS.

(m) If previously authorized in writing by the Independent Fiduciary, the Plan
investor's account is automatically rebalanced on a periodic basis to the
asset allocation previously prescribed by the Plan or participant, as
applicable, if the quarterly screening reveals that one or more Portfolio
allocations deviates from the allocation prescribed by the investor by the
agreed-upon formula threshold.

(n) The books and records of the Trust are audited annually by independent,
certified public accountants and all investors receive copies of an audited
financial report no later than 60 days after the close of each Trust fiscal
year.

(o) PaineWebber maintains, for a period of six years, the records necessary to
enable the persons described in paragraph (p) of this Section II to determine
whether the conditions of this exemption have been met, except that--

(1) A prohibited transaction will not be considered to have occurred if, due
to circumstances beyond the control of PaineWebber and/or its affiliates,
the records are lost or destroyed prior to the end of the six year
period; and

(2) No party in interest other than PaineWebber shall be subject to the
civil penalty that may be assessed under section 502(i) of the Act, or to
the taxes imposed by section 4975(a) and (b) of the Code, if the records
are not maintained, or are not available for examination as required by
paragraph (p)(1) of this Section II below.

(p) (1) Except as provided in subparagraph (p)(2) of this paragraph and
notwithstanding any provisions of subsections (a)(2) and (b) of section
504 of the Act, the records referred to in paragraph (o) of this
Section II are unconditionally available at their customary location
during normal business hours by:

(A) Any duly authorized employee or representative of the Department,
the Internal

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Prospectus Page B-3
<PAGE>
--------------------------------------------------------------------------------
------------------------
PaineWebber PACE Select Advisors Trust

Revenue Service (the Service) or the Securities and Exchange
Commission (the SEC);

(B) Any fiduciary of a participating Plan or any duly authorized
representative of such fiduciary;

(C) Any contributing employer to any participating Plan or any duly
authorized employee representative of such employer; and

(D) Any participant or beneficiary of any participating Plan, or any
duly authorized representative of such participant or beneficiary.

(p) (2) None of the persons described above in paragraphs
(p)(l)(B)-(p)(l)(D) of this paragraph (P) are authorized to examine the
trade secrets of PaineWebber or Mitchell Hutchins or commercial or
financial information which is privileged or confidential.

Section III. Definitions

For purposes of this proposed exemption:

(a) The term "PaineWebber" means PaineWebber Incorporated and any affiliate of
PaineWebber, as defined in paragraph (b) of this Section III.

(b) An "affiliate" of PaineWebber includes--

(1) Any person directly or indirectly through one or more intermediaries,
controlling, controlled by, or under common control with PaineWebber.

(2) Any officer, director or partner in such person, and

(3) Any corporation or partnership of which such person is an officer,
director or a 5 percent partner or owner.

(c) The term "control" means the power to exercise a controlling influence over
the management or policies of a person other than an individual.

(d) The term "Independent Fiduciary" means a Plan fiduciary which is independent
of PaineWebber and its affiliates and is either

(1) A Plan administrator, trustee, investment manager or named fiduciary, as
the recordholder of Trust shares of a Section 404(c) Plan;

(2) A participant in a Keogh Plan;

(3) An individual covered under a self-directed IRA which invests in Trust
shares;

(4) An employee, officer or director of PaineWebber and/or its affiliates
covered by an IRA not subject to Title I of the Act;

(5) A trustee, Plan administrator, investment manager or named fiduciary
responsible for investment decisions in the case of a Title I Plan that
does not permit individual direction as contemplated by Section
404(c) of the Act; or

(e) The term "Directing Participant" means a participant in a Plan covered under
the provisions of section 404(c) of the Act, who is permitted under the terms
of the Plan to direct, and who elects to so direct, the investment of the
assets of his or her account in such Plan.

(f) The term "Plan" means a pension plan described in 29 CFR 2510.3-2, a welfare
benefit plan described in 29 CFR 2510.3-1, a plan described in section
4975(e)(1) of the Code, and in the case of a Section 404(c) Plan, the
individual account of a Directing Participant.

Effective Date: If granted, this proposed exemption will be effective as of
August 18, 1995.

SUMMARY OF FACTS AND REPRESENTATIONS

1. The parties to the transactions are as follows:

(a) PAINEWEBBER GROUP (PAINE WEBBER GROUP), located in New York, New York,
is the parent of PaineWebber. Paine Webber Group is one of the leading
full-line securities firms servicing institutions, governments and
individual investors in the United States and throughout the world. Paine
Webber Group conducts its businesses in part through PMAS, a division of
PaineWebber and Mitchell Hutchins, a wholly owned subsidiary of
PaineWebber. Paine Webber Group is a member of all principal securities
and commodities exchanges in the United States and the National
Association of Securities Dealers, Inc. In addition, it holds memberships
or associate memberships on several principal foreign securities and
commodities exchanges. Although Paine Webber Group is not an operating
company and, as such, maintains no assets under management, as of
September 30, 1994, Paine Webber Group and its subsidiaries rendered
investment advisory services with respect to $36.1 billion in assets.

(b) PAINEWEBBER, whose principal executive offices are located in New York,
New York, provides investment advisory services to individuals, banks,
thrift institutions, investment companies, pension and profit sharing
plans, trusts, estates, charitable organizations, corporations and other
business and government entities. PaineWebber is also responsible for
securities underwriting, investment and merchant banking services and
securities and commodities trading as principal and agent. PaineWebber
serves as the dealer of Trust shares described herein.

(c) PMAS, located in Weehawken, New Jersey is responsible for individual
investor account management and investor consulting services. PMAS
provides such services to the investors involved in various PaineWebber
investment

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PaineWebber PACE Select Advisors Trust

programs by providing asset allocation recommendations and related
services with respect to their investments. PMAS provides investment
consulting and advisory services to more than 40,000 accounts, with
account sizes ranging from institutional accounts in excess of $650
million in assets to individual accounts with $100,000 minimum
investments. PMAS provides investors in the Trust with asset allocation
recommendations and related services with respect to investments in the
Trust Portfolios.

(d) MITCHELL HUTCHINS, which is located in New York, New York, is a
registered investment adviser under the Investment Adviser's Act of 1940
(the Advisers Act) and a wholly owned subsidiary of PaineWebber. Mitchell
Hutchins provides investment advisory and asset management services to
investors and develops and distributes investment products, including
mutual funds and limited partnerships. Mitchell Hutchins also provides
financial services to over $24.8 billion in client assets representing
twenty-eight investment companies with fifty-five separate portfolios.
Mitchell Hutchins is providing investment management and administrative
services with respect to the Trust and investment advisory services with
respect to one of the Trust's Portfolios.

(e) STATE STREET BANK AND TRUST COMPANY (STATE STREET), located in North
Quincy, Massachusetts, serves as the custodian of assets for the Trust.
State Street is not affiliated with PaineWebber and its affiliates. It
provides a full array of integrated banking products, focusing on
servicing financial assets (i.e., asset custody, cash management,
securities lending, multi-currency accounting and foreign exchange),
managing assets and commercial lending. As of September 30, 1994, State
Street rendered custodian services with respect to approximately $1.6
trillion in assets and provided investment management services to
approximately $155 billion in assets.

(f) PFPC, INC. (PFPC), a subsidiary of PNC Bank, National Association, and
whose principal address is in Wilmington, Delaware, serves as the Trust's
transfer and dividend disbursing agent. PFPC is not affiliated with
PaineWebber and its affiliates. PFPC provides a complete range of mutual
fund administration and accounting services to a diverse product base of
domestic and international investment portfolios. PFPC is also one of the
nation's leading providers of transfer and shareholder servicing services
to mutual funds and asset management accounts. As of September 30, 1994,
PFPC rendered accounting and administration services to over 400 mutual
funds and provided transfer agency, dividend disbursing and/or
shareholder servicing services with respect to more than 3.1 million
shareholder accounts.

2. The Trust is a no load, open-end, diversified management investment company
registered under the '40 Act. The Trust was organized as a Delaware business
trust on September 9, 1994 and it has an indefinite duration. As of
November 6, 1995, the Trust had $184 million in net assets. The Trust
presently consists of twelve different portfolios which will pay dividends to
investors. The composition of the Portfolios will cover a spectrum of
investments ranging from foreign and U.S. Government-related securities to
equity and debt securities issued by foreign and domestic corporations.
Although a Portfolio of the Trust is permitted to invest its assets in
securities issued by PaineWebber and/or its affiliates, the percentage of that
Portfolio's net assets invested in such securities will never exceed one
percent. With the exception of the PACE Money Market Investments Portfolio,
shares in each of the Portfolios are being initially offered to the public at
a net asset value of $10 per share. Shares in the PACE Money Market
Investments Portfolio are being initially offered to the public at a net asset
value of $1.00 per share.

3. Mitchell Hutchins serves as the distributor of Trust shares and PaineWebber
serves as the dealer with respect to shares of the Portfolios.(2) Such shares
are being offered by PaineWebber at no load, to participants in the PACE
Program. The PACE Program is an investment service pursuant to which PMAS
provides participants in the PACE Program with asset allocation
recommendations and related services with respect to the Portfolios based on
an evaluation of an investor's investment objectives and risk tolerances. As
stated above, State Street will serve as the custodian of each Portfolio's
assets and PFPC serves as the Portfolio's transfer and dividend disbursing
agent.

To participate in the PACE Program, each investor must open a brokerage
account with PaineWebber.(3) The minimum initial investment in the PACE
Program is $10,000.

Although PaineWebber anticipates that investors in the Trust will initially
consist of institutions and

----------------------------------
(2) As distributor or principal underwriter for the Trust, Mitchell Hutchins
will use its best efforts, consistent with its other businesses, to sell shares
of the Portfolios. Pursuant to a separate dealer agreement with Mitchell
Hutchins, PaineWebber will sell Trust shares to investors. However, neither
Mitchell Hutchins nor PaineWebber will receive any compensation for their
services as distributor or dealer of Trust shares. According to the applicants,
Mitchell Hutchins and PaineWebber may be regarded as having an indirect economic
incentive by virtue of the fact that Mitchell Hutchins and PaineWebber will be
paid for the services they provide to the Trust in their respective capacities
as investment manager and administrator of the Trust (Mitchell Hutchins) and as
the provider of asset allocation and related services (PaineWebber, through
PMAS).

(3) According to the Statement of Additional Information that accompanies the
Prospectus for the PACE Program, shares in the Trust are not certificated for
reasons of economy and convenience. However, PFPC maintains a record of each
investor's ownership of shares. Although Trust shares are transferable and
accord voting rights to their owners, they do not confer pre-emptive rights
(i.e., the privilege of a shareholder to maintain a proportionate share of
ownership of a company by purchasing a proportionate share of any new stock
issues). PaineWebber represents that in the context of an open-end investment
company that continuously issues and redeems shares, a pre-emptive right would
make the normal operations of the Trust impossible.

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PaineWebber PACE Select Advisors Trust

individuals, it is proposed that prospective investors will include Plans
for which PaineWebber may or may not currently maintain investment accounts.
A majority of these Plans may be IRAs or Keogh Plans. In addition, it is
proposed that Plans for which PaineWebber or an affiliate serves as a
prototype sponsor and/or a nondiscretionary trustee or custodian be
permitted to invest in the Trust.(4)

The applicants represent that the initial purchase of shares in the Trust by
a Plan participating in the PACE Program may give rise to a prohibited
transaction where PaineWebber, or an affiliate thereof, is a party in
interest with respect to the Plan. PaineWebber also acknowledges that a
prohibited transaction could arise upon a subsequent purchase or redemption
of shares in the Trust by a participating Plan inasmuch as the party in
interest relationship between PaineWebber and the Plan may have been
established at that point.

Accordingly, the applicants have requested retroactive exemptive relief from
the Department with respect to the purchase and redemption of shares in the
Trust by a Plan participating in the PACE Program where PaineWebber does not
(a) sponsor the Plan (other than as prototype sponsor) or (b) have
discretionary authority over such Plan's assets.(5) No commissions or fees
will be paid by a Plan with respect to the sale and redemption transactions
or a Plan's exchange of shares in a Portfolio for shares of another
Portfolio. If granted, the proposed exemption will be effective as of
August 18, 1995.

4. Overall responsibility for the management and supervision of the Trust and
the Portfolios rests with the Trust's Board of Trustees (the Trustees). The
Trustees will approve all significant agreements involving the Trust and the
persons and companies that provide services to the Trust and the Portfolios.

5. Mitchell Hutchins also serves as the investment manager to each Portfolio.
Under its investment management and administration agreement with the Trust,
Mitchell Hutchins will provide certain investment management and
administrative services to the Trust and the Portfolios that, in part, involve
calculating each Portfolio's net asset value(6) and, with the exception of the
PACE Money Market Investments Portfolio (for which Mitchell Hutchins will
exercise investment discretion), making recommendations to the Board of
Trustees of the Trust regarding (a) the investment policies of each Portfolio
and (b) the selection and retention of the Sub-Advisers who will exercise
investment discretion with respect to the assets of each Portfolio.(7)

The Sub-Advisers will provide discretionary advisory services with respect
to the investment of the assets of the respective Portfolios (other than the
PACE Money Market Investments Portfolio) on the basis of their performance
in their respective areas of expertise in asset management. With the
exception of the PACE Money Market Investments Portfolio which will be
advised by Mitchell Hutchins, PaineWebber represents that all of the
Sub-Advisers, will be independent of, and will remain independent of
PaineWebber and/or its affiliates. The Sub-Advisers will be registered
investment advisers under the Advisers Act and maintain their principal
executive offices in various regions of the United States.

The administrative services for which Mitchell Hutchins will be responsible
include the following: (a) supervising all aspects of the operations of the
Trust and each Portfolio (e.g., oversight of transfer agency, custodial,
legal and accounting services; (b) providing the Trust and each Portfolio
with corporate, administrative and clerical personnel as well as maintaining
books and records for the Trust and each Portfolio; (c) arranging for the
periodic preparation, updating, filing and dissemination of the Trust's
Registration Statement, proxy materials, tax returns and required reports to
each Portfolio's shareholders and the SEC, as well as other federal or state
regulatory authorities; (d) providing the Trust and each Portfolio with, and
obtaining for it, office space, equipment and

----------------------------------
As for voting rights, PaineWebber states that they are accorded to
recordholders of Trust shares. PaineWebber notes that a recordholder of Trust
shares may determine to seek the submission of proxies by Plan participants and
vote Trust shares accordingly. In the case of individual account plans such as
Section 404(c) Plans, PaineWebber believes that most Plans will pass the vote
through to Directing Participants on a pro-rata basis.
(4) The Department notes that the general standards of fiduciary conduct
promulgated under the Act would apply to the participation in the PACE Program
by an Independent Fiduciary. Section 404 of the Act requires that a fiduciary
discharge his duties respecting a plan solely in the interest of the plan's
participants and beneficiaries and in a prudent fashion. Accordingly, an
Independent Fiduciary must act prudently with respect to the decision to enter
into the PACE Program with PMAS as well as with respect to the negotiation of
services that will be performed thereunder and the compensation that will be
paid to PaineWebber and its affiliates. The Department expects an Independent
Fiduciary, prior to entering into the PACE Program, to understand fully all
aspects of such arrangement following disclosure by PMAS of all relevant
information.

(5) PaineWebber represents that to the extent employee benefit plans that are
maintained by PaineWebber purchase or redeem shares in the Trust, such
transactions will meet the provisions of Prohibited Transaction Exemption (PTE)
77-3 (42 FR 18734, April 8, 1977). PaineWebber further represents that, although
the exemptive relief proposed above would not permit PaineWebber or an affiliate
(while serving as a Plan fiduciary with discretionary authority over the
management of a Plan's assets) to invest those assets over which it exercises
discretionary authority in Trust shares, a purchase or redemption of Trust
shares under such circumstances would be permissible if made in compliance with
the terms and conditions of PTE 77-4 (42 FR 18732, April 8, 1977). The
Department expresses no opinion herein as to whether such transactions will
comply with the terms and conditions of PTEs 77-3 and 77-4.

(6) The net asset value of each Portfolio's shares, except for the PACE Money
Market Investments Portfolio, fluctuates and is determined as of the close of
regular trading on the New York Stock Exchange (the NYSE) (currently, 4:00 p.m.
Eastern Time) each business day. The net asset value of shares in the PACE Money
Market Investments Portfolio is determined as of 12:00 p.m. each business day.
Each Portfolio's net asset value per share is determined by dividing the value
of the securities held by the Portfolio plus any cash or other assets minus all
liabilities by the total number of Portfolio shares outstanding.

(7) Subject to the supervision and direction of the Trustees, Mitchell
Hutchins will provide to the Trust investment management evaluation services
principally by performing initial review on prospective Sub-Advisers for each
Portfolio and thereafter monitoring each Sub-Adviser's performance. In
evaluating prospective Sub-Advisers, Mitchell Hutchins will consider, among
other factors, each Sub-Adviser's level of expertise, consistency of performance
and investment discipline or philosophy. Mitchell Hutchins will have the
responsibility for communicating performance expectations and evaluations to the
Sub-Advisers and ultimately recommending to the Trustees whether a Sub-Adviser's
contract should be continued.

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PaineWebber PACE Select Advisors Trust

services; (e) providing the Trustees with economic and investment analyses
and reports, and making available to the Trustees, upon request, any
economic, statistical and investment services. These administrative services
do not include any management services that might be performed by Mitchell
Hutchins. As noted in Representations 17 and 18, Mitchell Hutchins is
separately compensated for management services rendered to the Trust.

6. Through the PACE Program, PMAS is providing a Plan investor with non-binding,
asset allocation recommendations with respect to such investor's investments
in the Portfolios. In order to make these evaluations, PMAS will furnish
copies of an investor questionnaire, designed to elicit information about the
specific investment needs, objectives and expectations of the investor, to an
Independent Fiduciary of a Title I Plan that does not permit
individually-directed investments, to an Independent Fiduciary of an IRA or a
Keogh Plan, or to a Directing Participant of a Section 404(c) Plan. Although
the contents of the questionnaire may vary somewhat depending upon the type of
Plan investing in the PACE Program, for a particular Plan, the same
questionnaire will be given to each participant.

In the case of a Section 404(c) Plan where an Independent Fiduciary has
established an Undisclosed Account with PaineWebber in the name of the Plan,
PMAS will provide investor questionnaires to each Directing Participant
through PaineWebber Investment Executives (who are registered
representatives of PaineWebber), via the Plan's benefits personnel or
independent recordkeeper (the Recordkeeper), or by other means requested by
the Independent Fiduciary. The applicants recognize that Section
404(c) Plans typically employ a Recordkeeper to assist the Independent
Fiduciary with maintaining Plan-related data which is used to generate
benefit status reports, regulatory compliance reports and participant- and
Plan-level investment performance reports. Therefore, the Undisclosed
Account arrangement is intended to coordinate with the functions
traditionally provided to Section 404(c) Plans by their Recordkeepers.(8)

7. Based upon data obtained from the investor questionnaire, PMAS will evaluate
the investor's risk tolerances and investment objectives. PMAS will then
recommend, in writing, an appropriate allocation of assets among suitable
Portfolios that conforms to these tolerances and objectives.

PaineWebber represents that PMAS will not have any discretionary authority
or control with respect to the allocation of an investor's assets among the
Portfolios. In the case of an IRA or Keogh Plan, PaineWebber represents that
all of PMAS's recommendations and evaluations will be presented to the
Independent Fiduciary and will be implemented only if accepted and acted
upon by such fiduciary.

In the case of a Section 404(c) Plan, PaineWebber represents that Directing
Participants in such Plan will be presented with recommendations and
evaluations that aretailored to the responses provided by that Directing
Participant in his or her questionnaire. PMAS's recommendations will be
disseminated to Directing Participants in accordance with procedures
established for the Plan.

After receipt of PMAS's initial recommendations, which may or may not be
adopted, the Independent Fiduciary or Directing Participant, as applicable,
will select the specific Portfolios. PMAS will continue to recommend to
Independent Fiduciaries or Directing Participants asset allocations among
the selected Portfolios.

8. Aside from the investor questionnaire, in order for a Plan to participate in
the PACE Program, PaineWebber or PMAS will provide an Independent Fiduciary
with a copy of the Trust Prospectus discussing (a) the investment objectives
of the Portfolios comprising the Trust, (b) the policies employed to achieve
these objectives, (c) the corporate affiliation existing between PaineWebber,
PMAS, Mitchell Hutchins and their subsidiaries, and (d) the compensation paid
to such entities by the Trust and information explaining the risks attendant
to investing in the Trust. In addition, upon written or oral request to
PaineWebber, the Independent Fiduciary will be given a Statement of Additional
Information supplementing the Prospectus which describes, in further detail,
the types of securities and other instruments in which the Portfolios may
invest, the investment policies and strategies that the Portfolios may utilize
and certain risks attendant to those investments, policies and strategies.
Further, each Independent Fiduciary will be given a copy of the investment
advisory agreement between PMAS and such Plan relating to participation in the
PACE Program, including copies of the notice of proposed exemption and grant
notice for the exemptive relief provided herein. Upon oral or written request
to the Trust, PaineWebber will also provide an Independent

----------------------------------
(8) The applicants wish to emphasize that the PACE Program can currently be
provided to participants in Section 404(c) Plans on either an Undisclosed
Account or a disclosed account (the Disclosed Account) basis (i.e., where the
Independent Fiduciary opens a separate PACE Program account with PaineWebber for
each Directing Participant). In this regard, the applicants note that
PaineWebber presently offers the PACE Program on a Disclosed Account arrangement
to IRAs and Keogh Plans. However, for other Section 404(c) Plans such as those
that are covered under the provisions of section 401(k) of the Code, PaineWebber
prefers not to establish Disclosed Accounts for individual participants because
of servicing and other administrative matters typically undertaken by such
Plan's Recordkeepers. The applicants note that from the participant's
perspective, there is no difference in the nature of the services provided under
the PACE Program regardless of whether the participant's investment is held
through a "Disclosed" or "Undisclosed" Account arrangement. The applicants state
that these designations are primarily internal distinctions relating to whether
the participant's name appears in the account set-up and reflects differences in
the applicable sub-accounting functions.

Notwithstanding the above, the Department wishes to point out that,
regardless of the arrangement negotiated with PaineWebber, an Independent
Fiduciary of a Section 404(c) Plan has the responsibility to disseminate all
information it receives to each Directing Participant investing in the PACE
Program.

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Prospectus Page B-7
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PaineWebber PACE Select Advisors Trust

Fiduciary with a copy of the respective investment advisory agreements between
Mitchell Hutchins and the Sub-Advisers.

In the case of a Section 404(c) Plan, depending on the arrangement
negotiated with the Independent Fiduciary, PaineWebber represents that the
Independent Fiduciary will make available copies of the foregoing documents
to Directing Participants.

In addition, Independent Fiduciaries and, if applicable, Directing
Participants, will receive introductory documentation regarding the PACE
Program in marketing materials and in other communications. Further,
depending upon the arrangement negotiated between PMAS and the Independent
Fiduciary, a PaineWebber Investment Executive will meet with a Directing
Participant, upon oral or written request, to discuss the services offered
under the PACE Program, including the rebalancing feature described in
Representation 12, as well as the operation and objectives of the
Portfolios.(9)

9. If accepted as an investor in the PACE Program, an Independent Fiduciary will
be required by PMAS to acknowledge, in writing, prior to purchasing Trust
shares, that such fiduciary has received copies of the documents referred to
in Representation 8. With respect to a Plan that is covered by Title I of the
Act (e.g., a defined contribution plan), where investment decisions will be
made by a trustee, investment manager or a named fiduciary, PMAS will require
that such Independent Fiduciary acknowledge in writing receipt of such
documents and represent to PaineWebber that such fiduciary is (a) independent
of PaineWebber and its affiliates, (b) capable of making an independent
decision regarding the investment of Plan assets, (c) knowledgeable with
respect to the Plan in administrative matters and funding matters related
thereto, and (d) able to make an informed decision concerning participation in
the PACE Program.

With respect to a Section 404(c) Plan, written acknowledgement of the
receipt of such documents will be provided by the Independent Fiduciary
(i.e., the Plan administrator, trustee, investment manager or named
fiduciary, as the recordholder of Trust shares). Such Independent Fiduciary
will be required to represent, in writing, to PMAS that such fiduciary
is (a) independent of PaineWebber and its affiliates, (b) knowledgeable with
respect to the Plan in administrative matters and funding matters related
thereto, and (c) able to make an informed decision concerning participation
in the PACE Program.

10. After the selection of specific Portfolios by an Independent Fiduciary or a
Directing Participant,(10) PMAS will continue to provide recommendations to
such persons relating to asset allocations among the selected Portfolios.
However, with respect to a Section 404(c) Plan in which at least three
Portfolios may be selected by the Independent Fiduciary, PMAS's initial asset
allocation recommendation to Directing Participants will be limited to fthe
suggested Portfolios offered under the Plan. PMAS anticipates that it may
also work with the Independent Fiduciary of a Section 404(c) Plan to assist
the fiduciary in (a) identifying and drafting investment objectives,
(b) selecting suitable investment categories or actual Portfolios to be
offered to Directing Participants or (c) recommending appropriate long-term
investment allocations to a Directing Participant, if this individual
receives such advice.

An Independent Fiduciary or a Directing Participant will be permitted to
change his or her investment allocation by specifying the new allocation in
writing or by other means authorized by the Plan (e.g., by use of a kiosk).
Although PaineWebber currently imposes no limitation on the frequency with
which an Independent Fiduciary or a Directing Participant may change his or
her prescribed asset allocation, PaineWebber reserves the right to impose
reasonable limitations.

11. Depending on the arrangement negotiated with PMAS, PaineWebber will provide
each Independent Fiduciary with the following information: (a) Written
confirmations of each purchase and redemption of shares of a Portfolio;
(b) daily telephone quotations of such Plan's account balance; (c) a monthly
statement of account specifying the net asset value of a Plan's assets that
are invested in such account; and (d) a quarterly, written investment
performance monitoring report.

The monthly account statement will include, among other information:
(a) cash flow and transaction activity during the month, including purchase,
sale and exchange activity and dividends paid or reinvested; (b) unrealized
gains or losses on Portfolio shares held; and (c) a summary of total
earnings and capital returns on the Plan's PACE Program Portfolio for the
month and year-to-date. The quarterly investment performance report will
include, among other information, the following: (a) a record of the
performance of the Plan's PACE Program portfolio for the quarter and since
inception showing rates of return relative to comparative market indices
(illustrated in a manner that reflects the effect of any fees for
participation in the PACE Program actually incurred during the period)(11);
(b) an investment outlook summary containing market commentary; and (c) the
Plan's actual PACE Program portfolio with a breakdown, in both dollars and
percentages, of the holdings in each Portfolio. In addition, to the extent
required by the arrangement negotiated with the Independent Fiduciary, the
quarterly performance monitoring report will (a) contain an analysis and an
evaluation of a Plan investor's account to assist the investor to ascertain
whether the investment objectives are being met, and

----------------------------------
(9) The Department is expressing no opinion as to whether the information
provided under the PACE Program is sufficient to enable a Directing Participant
to exercise independent control over assets in his or her account as
contemplated by Section 404(c) of the Act.

(10) In the case of a Section 404(c) Plan, PMAS will receive electronically
from the Recordkeeper each participant's investment selections.

(11) The comparative index is a blended index of the individual Portfolio
indices that are weighted by the allocation percentages corresponding to those
holdings that make up the investor's total investment in the PACE Program.

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PaineWebber PACE Select Advisors Trust

(b) recommend, from time to time, changes in Portfolio allocations. The
quarterly performance monitoring report is described in the summary of the
PACE Program contained in the Trust Prospectus.

With respect to a Section 404(c) Plan, the quarterly investment performance
report transmitted to the Independent Fiduciary will include the following
aggregate information relative to the Undisclosed Account as well as market
commentary: (a) a record of the performance of the Plan's assets and rates
of return as compared to several appropriate market indices (illustrated in
a manner that reflects the effect of any fees for participation in the PACE
Program actually incurred during the period); and (b) the Plan's actual
investment portfolio with a breakdown of investments made in each Portfolio.
As to each Directing Participant, PMAS will provide information to be
contained in the quarterly performance monitoring report to such
participants.

In addition, on both a quarterly and annual basis, commencing with the first
quarterly report due after this notice of proposed exemption is issued,
PaineWebber will provide, as applicable, an Independent Fiduciary or a
Directing Participant with written disclosures of (a) the total, expressed
in dollars, of each Portfolio's brokerage commissions that are paid to
PaineWebber and its affiliates; (b) the total, expressed in dollars, of each
Portfolio's brokerage commissions that are paid to unrelated brokerage
firms; (c) the average brokerage commissions per share by the Trust to
brokers affiliated with the PaineWebber, expressed as cents per share; and
(d) the average brokerage commissions per share by the Trust to brokers
unrelated to the PaineWebber and its affiliates, expressed as cents per
share for any year in which brokerage commissions are paid to PaineWebber by
the Trust Portfolios in which a Plan's assets are invested.

Further, the Independent Fiduciary or Directing Participant, as applicable,
will have access to a PaineWebber Investment Executive for the discussion of
the quarterly performance monitoring reports, the rebalancing feature
described below in Representation 12 or any questions that may arise.

12. Depending on the arrangement negotiated with PMAS, for any investor who so
directs PMAS, the investor's Trust holdings will be automatically rebalanced
on a periodic basis to maintain the investor's designated allocation among
the Portfolios. PMAS will receive no additional compensation to provide this
service. At both the Independent Fiduciary and Directing Participant levels,
the rebalancing election will be made in writing or in any manner permitted
by the Plan (e.g., in the case of a Section 404(c) Plan, electronic
transmissionby the Recordkeeper to PMAS of the Directing Participant's
election). The election will be accompanied by a disclosure that is designed
to provide the Independent Fiduciary and the Directing Participant, as
applicable, with an understanding of the rebalancing feature. Disclosure of
the rebalancing feature is included in the Prospectus for the PACE Program
which will be provided to each Independent Fiduciary and Directing
Participant.

It is currently anticipated that screening will be performed quarterly with
respect to the PACE Program accounts for which the investor has elected the
rebalancing service and that rebalancing will be performed for each such
account where any Portfolio allocation deviates from the allocation
prescribed by the investor by the agreed-upon uniform threshold.(12) The
threshold for triggering rebalancing is a percentage (presently, 2 1/2
percent) that has been established by PaineWebber and is applied uniformly
to all accounts subject to rebalancing. If PaineWebber were, in the future,
to determine that this uniform threshold should be changed, PMAS would
notify all investors (including Independent Fiduciaries and Directing
Participants) who had elected the rebalancing feature. Then, in order to
continue to provide this service, PMAS would need to obtain the consent of
each such investor.

The applicants note that rebalancing is a feature that an investor chooses
to apply indefinitely until the investor notifies PaineWebber that it wishes
to have this service discontinued. After rebalancing has been discontinued,
an investor may reactivate the rebalancing service by notifying PaineWebber
in writing.

13. PaineWebber notes that not all of the services described above will be
provided to every Plan. The services that will be provided will depend on
what is decided upon by the Independent Fiduciary. Assuming the Independent
Fiduciary requests a reduction in the level of services, there will be no
corresponding reduction in the fee that the fiduciary pays PMAS. This is due
to the bundled nature of the services provided in the PACE Program. For
example, if the Independent Fiduciary were to limit the number of Portfolios
available as investment options for its Plan participants, this might be
deemed a reduction in the services available under the PACE Program that
would not result in any reduction in the applicable Program fee. Similarly,
under the PACE Program, an Independent Fiduciary of a Section 404(c) Plan may
decide for its own reasons not to make the automatic rebalancing service
available to Directing Participants. Under such

----------------------------------
(12) Currently, with regard to investors who have elected the rebalancing
feature, rebalancing is effected by an automated, mechanical system that, as to
each account: (a) Calculates the current allocation for each Portfolio based on
the quarter-end net asset value; (b) compares the current allocation for each
Portfolio with the allocation prescribed by the investor; (c) identifies for
rebalancing all accounts with one or more Portfolios whose current allocation
deviates by the agreed-upon threshold from the allocation prescribed by the
investor; and (d) for each account which has been identified for rebalancing
pursuant to (a)-(c), (1) calculates the dollar difference between the current
allocation and the allocation prescribed by the investor, (2) reduces each
Portfolio whose current allocation exceeds the allocation prescribed by the
investor by an amount equal to the dollar difference between the two
allocations, and (3) increases each Portfolio whose current allocation is less
than the allocation prescribed by the investor by an amount equal to the dollar
difference between the two allocations. This rebalancing is accomplished by
automatically exchanging, in the order of the Portfolio's respective CUSIP
numbers, a dollar-equivalent number of shares of each Portfolio to be reduced
for the corresponding number of shares of a Portfolio to be increased until the
current allocation is equal to the allocation prescribed by the investor.
Valuation of the Portfolios is done as of the close of regular trading on the
NYSE each business day.

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Prospectus Page B-9
<PAGE>
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------------------------
PaineWebber PACE Select Advisors Trust

circumstances, PMAS will not reduce its fees to reflect the absence of the
provision of rebalancing services to the Plan. Further, under the particular
arrangement which it has negotiated with PMAS, the Independent Fiduciary may
or may not request PaineWebber Investment Executives to make presentations or
be available to meet with Directing Participants.

Thus, an Independent Fiduciary may choose all, some or none of the PACE
Program's optional services. If an Independent Fiduciary selects all of
these services, the Plan will incur no greater an annual fee than had that
Independent Fiduciary selected some or none of these services. The absence
of a reduction in fees in the event not all services are requested is an
issue that should be considered by the Independent Fiduciary.(13)
Nonetheless, the Applicants represent that the reduction in the types of
services provided will not cause the fees paid to PaineWebber by a Plan
under the PACE Program to violate section 408(b)(2) of the Act.

14. Plans wishing to redeem their Trust shares may communicate their requests in
writing or by telephone to PMAS. Redemption requests received in proper
form prior to the close of trading on the NYSE will be effected at the net
asset value per share determined on that day. Redemption requests received
after the close of regular trading on the NYSE will be effected
at the net asset value at the close of business of the next day, except on
weekends or holidays when the NYSE is closed. A Portfolio will be required to
transmit redemption proceeds for credit to an investor's account
with PaineWebber within 5 business days after receipt of the redemption
request.(14) In the case of an IRA or Keogh Plan investor, PaineWebber will
not hold redemption proceeds as free credit balances and will, in the absence
of receiving investment instructions, place all such assets in a money market
fund (other than the PACE Money Market Investments Portfolio) that may be
affiliated with PaineWebber.(15) In the case of Plans that are covered by
Title I of the Act, the redemption proceeds will be invested by PaineWebber
in accordance with the investment directions of the Independent Fiduciary
responsible for the management of the Plan's assets. With respect to a
Section 404(c) Plan, the treatment of such investment will depend upon the
arrangement for participant investment instructions selected by the Plan
sponsor. In the event that the Independent Fiduciary does not give other
investment directions, such assets will be swept into a no-load money market
fund that may be affiliated with PaineWebber. No brokerage charge or
commission is charged to the participant for this service.

Due to the high costs of maintaining small PACE Program (Plan) accounts, the
Trusts may redeem all Trust shares held in a PACE Program account in which
the Trust shares have a current value of $7,500 or less after the investor
has been given at least thirty days in which to purchase additional Trust
shares to increase the value of the account to more than the $7,500 amount.
Proceeds of an involuntary redemption will be deposited in the investor's
brokerage account unless PaineWebber is otherwise instructed.(16)

15. Through the PACE Program, shares of a Portfolio may be exchanged by an
investor for shares of another Portfolio at their respective net asset values
and without the payment of an exchange fee. However, Portfolio shares are not
exchangeable with shares of other PaineWebber group of funds or portfolio
families.

With respect to brokerage transactions that are entered into under the PACE
Program for a Portfolio, such transactions may be executed through
PaineWebber and other affiliated broker-dealers, if in the judgment of
Mitchell Hutchins or the Sub-Adviser, as applicable, the use of such
broker-dealer is likely to result in price and execution at least as
favorable, and at a commission charge comparable to those of other qualified
broker-dealers.

16. Each Portfolio will bear its own expenses, which generally include all costs
that are not specifically borne by PaineWebber, Mitchell Hutchins or the
Sub-Advisers. Included among a Portfolio's expenses will be costs incurred in
connection with the Portfolio's organization, investment management and
administration fees, fees for necessary professional and brokerage services,
fees for any pricing service, the costs of regulatory compliance and costs
associated with maintaining the Trust's legal existence and shareholder
relations. No Portfolio, however, will impose sales charges on purchases,
reinvested dividends, deferred sales charges, redemption fees; nor will any
Portfolio incur distribution expenses. Investment management fees payable to
Mitchell Hutchins and the Sub-Advisers will be disclosed in the Trust
Prospectus.

17. As to each Plan, the total fees that are paid to PMAS and its affiliates
will constitute no more than reasonable compensation.(17) In this regard, for
its services under

----------------------------------
(13) In this regard, the Department emphasizes that it expects the Independent
Fiduciary to consider prudently the relationship of the fees to be paid by the
Plan to the level of services to be provided by PaineWebber. In response to the
Department's concern over this matter, PaineWebber represents that it will amend
the Trust Prospectus to include the following statement: "Investors who are
fiduciaries or otherwise, in the process of making investment decisions with
respect to Plans, should consider, in a prudent manner, the relationship of the
fees to be paid by the Plan along with the level of services provided by
PaineWebber."

(14) PaineWebber will provide clearance (on a fully disclosed basis),
settlement and other back office services to other broker-dealers.

(15) The applicants are not requesting, nor is the Department proposing,
exemptive relief with respect to the investment, by PaineWebber, of redemption
proceeds in an affiliated money market fund and where the Plan investor has not
given investment instructions. The applicants represent that to the extent
PaineWebber is considered a fiduciary, such investments will comply with the
terms and conditions of PTE 77-4. However, the Department expresses no opinion
herein on whether such transactions are covered by this class exemption.

(16) The thirty day limit does not restrict a Plan's ability to redeem its
interest in the Trust. The thirty day notice period is provided to give a Plan
an opportunity to increase the value of the assets in its Plan account with
PaineWebber to an amount in excess of $7,500. If desired, the Plan may still
follow the redemption guidelines described above.

(17) The applicants represent that PMAS and its affiliates will not receive
12b-1 Fees in connection with the transactions.

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Prospectus Page B-10
<PAGE>
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------------------------
PaineWebber PACE Select Advisors Trust

the PACE Program, PMAS charges an investor a quarterly fee for asset
allocation and related services. This "outside fee", will not be more than
1.50 percent on an annual basis of the maximum annual value of the assets in
the investor's PACE Program account. Such fee may be paid either from the
assets in the account or by separate check. A smaller outside fee may be
charged depending on such factors as the size of the PACE Program account
(e.g., PACE Program accounts in excess of $100,000), the number of Plan
participants or the number of PACE Program accounts. The outside fee is
charged directly to an investor and is neither affected by the allocation of
assets among the Portfolios nor by whether an investor follows or ignores
PMAS's advice.(18) In the case of Plans, the outside fee may be paid by the
Plan or the Plan sponsor or, in the case of IRAs only, the fee may be paid by
the IRA owner directly.

For Plan investors, the outside fee will be payable in full within five
business days (or such other period as may be required under applicable law
or regulation) after the trade date for the initial investment in the
Portfolios and will be based on the value of assets in the PACE Program on
the trade date of the initial investment. The initial fee payment will cover
the period from the initial investment trade date through the last calendar
day of the subsequent calendar quarter, and the fee will be pro-rated
accordingly. Thereafter, the quarterly fee will cover the period from the
first calendar day through the last calendar day of the current calendar
quarter. The quarterly fee will be based on the value of assets in the PACE
Program measured as of the last calendar day of the previous quarter, and
will be payable on the fifth business day of the current quarter.

If additional funds are invested in the Portfolios during any quarter, the
applicable fee, pro-rated for the number of calendar days then remaining in
the quarter and covering the amount of such additional funds, shall be
charged and be payable five business days later. In the case of redemptions
during a quarter, the fee shall be reduced accordingly, pro-rated for the
number of calendar days then remaining in the quarter. If the net fee
increase or decrease to an investor for additional purchases and/or
redemptions during any one quarter is less than $20, the fee increase or
decrease will be waived.

In addition, for investment management and administrative services provided
to the Trust, Mitchell Hutchins will be paid, from each Portfolio, a fee
which is computed daily and paid monthly at an annual rate ranging from .35
percent to 1.10 percent, of which the management fee component ranges from
.15 percent to .90 percent on an annual basis, of each Portfolio's average
daily net assets depending upon the Portfolio's objective.(19) From these
management fees, Mitchell Hutchins will compensate the applicable
Sub-Adviser. This "inside fee," which is the difference between the
individual Portfolio's total management fee and the fee paid by Mitchell
Hutchins to the Sub-Adviser, will vary from the annual rate of .15 percent
to .40 percent depending on the Portfolio. With the exception of the PACE
Money Market Investments Portfolio from which Mitchell Hutchins is paid a
management fee of 15 basis points, Mitchell Hutchins is retaining 20 basis
points as a management fee from each remaining single Portfolio on
investment assets attributable to the Plans. Pursuant to Transfer Agency and
Service Agreements with the Trust, PFPC and State Street will be paid annual
fees of $350,000 and $650,000, respectively, for transfer agent and
custodial services.

18. The management fees that are paid at the Portfolio level to Mitchell
Hutchins and the Sub-Advisers are set forth in the following table. For
purposes of the table, Mitchell Hutchins and a Sub-Adviser are referred to as
"MH" and "SA," respectively. As noted in the table, the sum of the management
fees retained by Mitchell Hutchins and the Sub-Adviser with respect to a
Portfolio will equal the total management fee paid by that Portfolio.

<TABLE>
<CAPTION>
MH MH
MANAGEMENT SA RETAINED RETAINED FEE
PORTFOLIO FEE (PERCENT) FEE (PERCENT) (PERCENT)
--------- --------------- --------------- ---------------
<S> <C> <C> <C>
PACE Money Market Investments............................. .15 .00 .15
PACE Government Securities Fixed Income Investments....... .50 .25 .25
PACE Intermediate Fixed Income Investments................ .40 .20 .20
PACE Strategic Fixed Income Investments................... .50 .25 .25
PACE Municipal Fixed Income Investments................... .40 .20 .20
PACE Global Fixed Income Investments...................... .60 .35 .25
PACE Large Company Value Equity Investments............... .60 .30 .30
PACE Large Company Growth Equity Investments.............. .60 .30 .30
PACE Small/Medium Company Value Equity Investments........ .60 .30 .30
PACE Small/Medium Company Growth Equity Investments....... .60 .30 .30
PACE International Equity Investments..................... .70 .40 .30
PACE International Emerging Markets Investments........... .90 .50 .40
</TABLE>

----------------------------------
(18) PaineWebber represents that the outside fee will not be imposed on the
accounts of the PaineWebber Group and its subsidiaries, including PaineWebber,
PMAS, Mitchell Hutchins or their subsidiaries, accounts of their immediate
families and IRAs and certain employee pension benefit plans for these persons.
The applicants state that this fee will be waived to encourage employees to
invest in PaineWebber, although PaineWebber reserves the right to impose such
fees. However, with respect to IRAs or Plans maintained by PaineWebber or its
affiliates for their employees, the applicants assert that such waiver would be
required by PTE 77-3.

(19) The fees payable to Mitchell Hutchins under its investment management and
administration agreement with the Trust are comprised of two components. One
component is for administrative services provided to each Portfolio at the
annual rate of .20 percent of each Portfolio's net assets. The second component
is for investment management and related services provided to each Portfolio.
The annualized fee range here is from .15 percent to .90 percent of the
Portfolio's average daily net assets.

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Prospectus Page B-11
<PAGE>
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PaineWebber PACE Select Advisors Trust

PMAS is offsetting, quarterly, against the outside fee such amounts as is
necessary to ensure that Mitchell Hutchins retains no more than 20 basis
points as a management fee from any Portfolio on investment assets
attributable to any Plan.(20)
The administrative services fee payable to Mitchell Hutchins is not being
offset against the outside fee. Instead, that fee is being retained by
Mitchell Hutchins.

19. The following example demonstrates the operation of the fee offset
mechanism, the calculation of the net inside fee, and the calculation of the
total of a Plan investor's net outside fee and share of the investment
management fees paid by the Portfolios in a given calendar quarter or year:

Assume that as of September 30, 1995, the net asset value of Trust Portfolio
shares held by a Plan investor was $1,000. Investment assets attributable to
the Plan were distributed among five Trust Portfolios: (1) PACE Money Market
Investments in which the Plan made a $50 investment and from which Mitchell
Hutchins would retain an inside fee of .15 percent; (2) PACE Intermediate
Fixed Income Investments in which the Plan made a $200 investment and from
which Mitchell Hutchins would retain an inside fee of .20 percent; (3) PACE
Large Company Value Equity Investments in which the Plan made a $250
investment and Mitchell Hutchins would retain an inside fee of .30 percent;
(4) PACE Small/Medium Company Growth Equity Investments in which the Plan
made a $250 investment and Mitchell Hutchins would be entitled to receive an
inside fee of .30 percent; and (5) PACE International Equity Investments in
which the Plan made a $250 investment and Mitchell Hutchins would be
entitled to receive an inside fee of .30 percent.

Assume that the Plan investor pays an outside fee of 1.50 percent so that
the total outside fee for the calendar quarter October 1 through
December 31, prior to the fee offset, would be as follows:

<TABLE>
<CAPTION>
MAXIMUM OUTSIDE
AMOUNT OUTSIDE QUARTERLY
PORTFOLIO INVESTED QUARTERLY FEE FEE
--------- --------------- ---------------- ---------------
<S> <C> <C> <C>
PACE Money Market Investments........................... $ 50 1.50% (.25) $0.1875
PACE Intermediate Fixed Income Investments.............. 200 1.50% (.25) .7500
PACE Large Company Value Equity Investments............. 250 1.50% (.25) .9375
PACE Small/Medium Company Growth Equity Investments..... 250 1.50% (.25) .9375
PACE International Equity Investments................... 250 1.50% (.25) .9375
----- -------------- -------
Total Outside Fee Per Quarter........................... 1,000 -- 3.7500
</TABLE>

Under the proposed fee offset, the outside fee charged to the Plan must be
reduced by a Reduction Factor to ensure that Mitchell Hutchins retains an
inside fee of no more than 20 basis points from each of the Portfolios on
investment assets attributable to the Plan. The following table shows the
Reduction Factor as applied to each of the Portfolios comprising the Trust:

<TABLE>
<CAPTION>
MH MAXIMUM REDUCTION
RETAINED FEE MH FEE FACTOR
PORTFOLIO (PERCENT) (PERCENT) (PERCENT)
--------- --------------- --------------- ---------------
<S> <C> <C> <C>
PACE Money Market Investments........................... .15 .15 .00
PACE Government Securities Fixed Income Investments..... .25 .20 .05
PACE Intermediate Fixed Income Investments.............. .20 .20 .00
PACE Strategic Fixed Income Investments................. .25 .20 .05
PACE Municipal Fixed Income Investments................. .20 .20 .00
PACE Global Fixed Income Investments.................... .25 .20 .05
PACE Large Company Value Equity Investments............. .30 .20 .10
PACE Large Company Growth Equity Investments............ .30 .20 .10
PACE Small/Medium Company Value Equity Investments...... .30 .20 .10
PACE Small/Medium Company Growth Equity Investments..... .30 .20 .10
PACE International Equity Investments................... .30 .20 .10
PACE International Emerging Markets Investments......... .40 .20 .20
</TABLE>

Under the proposed fee offset, a Reduction Factor of .10 percent is applied
against the quarterly outside fee with respect to the value of Plan assets
that have been invested in PACE Large Company Value Equity Investments, PACE
Small/Medium Company Growth Equity Investments and PACE International Equity
Investments. As noted above, the PACE Money Market Investments Portfolio and
the PACE Intermediate Fixed Income Investments Portfolio do not require the
application of a Reduction Factor because the management fee retained by
Mitchell Hutchins for managing these Portfolios does not exceed 20 basis
points. Therefore, the quarterly offset for the plan investor is computed as
follows:
(.25)[($250).10% + ($250).10% + ($250).10%] = $0.1875 or $.19.
In the foregoing example, if the Plan investor elects to receive an invoice
directly, the Plan investor would be mailed a statement for its PACE Program
account on or about October 15, 1995. This statement would show the outside
fee to be charged for the calendar quarter October 1 through December 31, as
adjusted by subtracting the quarterly offset from the quarterly outside fee
as determined above. The net quarterly outside fee that would be paid to
PMAS would be determined as follows:
$3.75 - $.19 = $3.56.

The Plan investor that elects to receive an invoice directly would be asked
to pay the outside fee for that quarter within 30 days of the date
on which the statement was mailed (e.g., November 15, 1995). If the outside
fee were not paid by that date, PMAS would debit the account of the Plan
investor (as with other investors) for the amount

----------------------------------
(20) PaineWebber asserts that it chose 20 basis points as the maximum net fee
retained for management services rendered to the Portfolios because this amount
represents the lowest percentage management fee charged by PaineWebber among the
Portfolios (excluding the PACE Money Market Investments Portfolio for which a
fee of 15 basis points will be charged).

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Prospectus Page B-12
<PAGE>
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------------------------
PaineWebber PACE Select Advisors Trust

of the outside fee (pursuant to the authorization contained in the PACE
Program Investment Advisory Agreement, and as described in the PACE Program
Description appended to the Prospectus).(21) A Plan investor that elects to
have the outside fee debited from its account would receive, in November, a
statement as of October 31 reflecting the outside fee and the quarterly
offset therefrom.

Assuming the Plan investor's investment in and allocation among the
Portfolios remains constant throughout the quarter, (a) the Plan investor's
fees for the quarter for asset allocation and related services provided by
PMAS (net outside fee) and (b) the fees paid by the Portfolios for
investment management services provided by Mitchell Hutchins (inside fee)
would be as follows:

$3.56 (net outside fee)+(.25) [($50+$200+$250+$250+$250).20%]
(administrative services fee)+(.25)

[($50).15% + ($200).20% + ($250 + $250 + $250).30%] (inside fee) =
$4.74.

Assuming the Plan investor's investment in and allocation among the
Portfolios remains constant throughout the year, the total net outside fee
and inside fee borne by the Plan investor for the year would be as follows:

4 (($4.74) = $18.96 or 1.89% per $1,000 invested.

20. PaineWebber notes that a potential conflict may exist by reason of the
variance in retained inside fees between the different Portfolios. For
example, Mitchell Hutchins will retain a lower inside fee with respect to
assets invested in the PACE Money Market Investments Portfolio than all other
Portfolios. PaineWebber recognizes that this factor could result in the
recommendation of a higher fee-generating Portfolio to an investing Plan.
Nonetheless, PMAS will be subject to and intends to comply fully with the
standards of fiduciary duty that require that it act solely in the best
interest of the Plan when making investment recommendations.

21. The books of the Trust will be audited annually by independent, certified
public accountants selected by the Trustees and approved by the investors.
All investors will receive copies of an audited financial report no later
than sixty days after the close of each Trust fiscal year. All Trust
financial statements will be prepared in accordance with generally accepted
accounting principles and relevant provisions of the federal securities laws.
The books and financial records of the Trust will be open for inspection by
any investor, including the Department, the Service and SEC, at all times
during regular business hours.

22. In summary, it is represented that the transactions will satisfy the
statutory criteria for an exemption under section 408(a) of the Act because:

(a) The investment of a Plan's assets in the PACE Program will be made and
approved by a Plan fiduciary or participant that is independent of
PaineWebber and its affiliates such that the Independent Fiduciary or
Directing Participant will maintain complete discretion with respect to
participating in the PACE Program.
(b) An Independent Fiduciary or Directing Participant will have full
discretion to redeem his or her shares in the Trust.

(c) No Plan will pay a fee or commission by reason of the acquisition or
redemption of shares in the Trust and PMAS nor will its affiliates
receive 12b-1 Fees in connection with the transactions.

(d) Prior to making an investment in the PACE Program, each Independent
Fiduciary or Directing Participant will receive offering materials and
disclosures from PMAS which disclose all material facts concerning the
purpose, fees, structure, operation, risks and participation in the PACE
Program.

(e) PMAS will provide written documentation to an Independent Fiduciary or
Directing Participant of its recommendations or evaluations based upon
objective criteria.

(f) With the exception of Mitchell Hutchins which will manage the PACE Money
Market Investments Portfolio, any Sub-Adviser appointed to exercise
investment discretion over a Portfolio will always be independent of
PaineWebber and its affiliates.

(g) The quarterly investment advisory fee that is paid by a Plan to PMAS for
investment advisory services rendered to such Plan will be offset by such
amount as is necessary to assure that Mitchell Hutchins retains 20 basis
points from any Portfolio (with the exception of the PACE Money Market
Investments Portfolio) on investment assets attributable to the Plan
investor. However, the quarterly fee paid to Mitchell Hutchins for
administrative services will be retained by Mitchell Hutchins and will
not be offset against the outside fee.

(h) Each participating Plan will receive copies of the Trust's semi-annual
and annual report which will include financial statements for the Trust
that have been prepared by independent, certified public accountants and
investment management fees paid by each Portfolio.

(i) On a quarterly and annual basis, PaineWebber will provide written
disclosures to an Independent Fiduciary or, if applicable, Directing
Participant, with respect to (1) the total, expressed in dollars,

----------------------------------
(21) PaineWebber explains that the foregoing example illustrates the fact that
Plan investors will get the benefit of the fee offset contemporaneously upon the
payment of the outside fee. Because the inside fee is paid monthly and the fee
offset is computed quarterly, the applicants also explain that PMAS does not
receive the benefit of a "float" as a result of such calculations because the
fee offset will always be realized no later than the time that the outside fee
is paid. Since the inside fee is paid at the end of each calendar month, the
applicants further explain that Plan investors will realize the full benefit of
the offset before the time that the inside fee is paid for the second and third
months of the calendar quarter.

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Prospectus Page B-13
<PAGE>
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PaineWebber PACE Select Advisors Trust

of each Portfolio's brokerage commissions that are paid to PaineWebber
and its affiliates; (2) the total, expressed in dollars, of each
Portfolio's brokerage commissions that are paid to unrelated brokerage
firms; (3) the average brokerage commissions per share by the Trust to
brokers affiliated with the PaineWebber, expressed as cents per share;
and (4) the average brokerage commissions per share by the Trust to
brokers unrelated to the PaineWebber and its affiliates, expressed as
cents per share for any year in which brokerage commissions are paid to
PaineWebber by the Trust Portfolios in which a Plan's assets are
invested.
For Further Information Contact: Ms. Jan D. Broady of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)

40000-40004 FEDERAL REGISTER VOL. 61, NO. 148 WEDNESDAY, JULY 31, 1996
[PROHIBITED TRANSACTION EXEMPTION 96-59; EXEMPTION
APPLICATION NO. D-09818, ET AL.] NOTICES
GRANT OF INDIVIDUAL EXEMPTIONS; PAINEWEBBER INCORPORATED
AGENCY: Pension and Welfare Benefits Administration, Labor.
ACTION: GRANT OF INDIVIDUAL EXEMPTIONS.
--------------------------------------------------------------------------------

SUMMARY: This document contains exemptions issued by the Department of Labor
(the Department) from certain of the prohibited transaction restrictions of the
Employee Retirement Income Security Act of 1974 (the Act) and/or the Internal
Revenue Code of 1986 (the Code).

Notices were published in the FEDERAL REGISTER of the pendency before the
Department of proposals to grant such exemptions. The notices set forth a
summary of facts and representations contained in each application for exemption
and referred interested persons to the respective applications for a complete
statement of the facts and representations. The applications have been available
for public inspection at the Department in Washington, D.C. The notices also
invited interested persons to submit comments on the requested exemptions to the
Department. In addition the notices stated that any interested person might
submit a written request that a public hearing be held (where appropriate). The
applicants have represented that they have complied with the requirements of the
notification to interested persons. No public comments and no requests for a
hearing, unless otherwise stated, were received by the Department.

The notices of proposed exemption were issued and the exemptions are being
granted solely by the Department because, effective December 31, 1978, section
102 of Reorganization Plan No. 4 of 1978 (43 FR 47713, October 17, 1978)
transferred the authority of the Secretary of the Treasury to issue exemptions
of the type proposed to the Secretary of Labor.

STATUTORY FINDINGS

In accordance with section 408(a) of the Act and/or section 4975(c)(2) of the
Code and the procedures set forth in 29 CFR Part 2570, Subpart B (55 FR 32836,
32847, August 10, 1990) and based upon the entire record, the Department makes
the following findings:

(a) The exemptions are administratively feasible;

(b) They are in the interests of the plans and their participants and
beneficiaries; and

PAINEWEBBER INCORPORATED (PAINEWEBBER), LOCATED IN NEW YORK, NY [Prohibited
Transaction Exemption 96-59; Exemption Application No. D-09818]

EXEMPTION

Section I. Covered Transactions

The restrictions of section 406(a) of the Act and the sanctions resulting from
the application of section 4975 of the Code, by reason of section
4975(c)(1)(A) through (D) of the Code, shall not apply, effective August 18,
1995, to the purchase or redemption of shares by an employee benefit plan, a
plan described in section 403(b) of the Code (the Section 403(b) Plan), an
individual retirement account (the IRA) or a retirement plan for a self-employed
individual (the Keogh Plan) (collectively referred to herein as the Plans) in
the PaineWebber Managed Accounts Services Portfolio Trust (the Trust)
established in connection with such Plans' participation in the PaineWebber PACE
Program (the PACE Program).

In addition, the restrictions of section 406(b) of the Act and the sanctions
resulting from the application of section 4975 of the Code, by reason of section
4975(c)(1)(E) and (F) of the Code, shall not apply, effective August 18, 1995,
to (a) the provision, by PaineWebber Managed Accounts Services (PMAS), a
division of PaineWebber, of assetallocation and related services to an
independent fiduciary of a Plan (the Independent Fiduciary) or to a directing
participant (the Directing Participant) in a Plan that is covered under and
permits participant selection as contemplated by the provisions of section
404(c) of the Act (the Section 404(c) Plan), which may result in the selection
by the Independent Fiduciary or the Directing Participant of portfolios of the
Trust (the Portfolios) in the PACE Program for the investment of Plan assets;
and (b) the provision of investment management services by Mitchell Hutchins
Asset Management, Inc. (Mitchell Hutchins) to the PACE Money Market Investments
Portfolio of the Trust.

This exemption is subject to the conditions set forth below in Section II.

Section II. General Conditions

(a) The participation of each Plan in the PACE Program is approved by an
Independent Fiduciary or, if applicable, Directing Participant.

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Prospectus Page B-14
<PAGE>
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PaineWebber PACE Select Advisors Trust

(b) As to each Plan, the total fees paid to PMAS and its affiliates constitute
no more than reasonable compensation and do not include the receipt of fees
pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the '40 Act)
by PMAS and its affiliates in connection with the transactions.

(d) The terms of each purchase or redemption of Trust shares remain at least as
favorable to an investing Plan as those obtainable in an arm's length
transaction with an unrelated party.

(e) PMAS provides written documentation to an Independent Fiduciary or a
Directing Participant of its recommendations or evaluations based upon
objective criteria.

(f) Any recommendation or evaluation made by PMAS to an Independent Fiduciary or
Directing Participant is implemented only at the express direction of such
fiduciary or participant.

(g) PMAS provides investment advice in writing to an Independent Fiduciary or
Directing Participant with respect to all Portfolios made available under the
Plan.

(i) The quarterly fee that is paid by a Plan to PMAS for asset allocation and
related services rendered to such Plan under the PACE Program (i.e., the
outside fee) is offset by such amount as is necessary to assure that
Mitchell Hutchins retains 20 basis points as a management fee from any
Portfolio (with the exception of the PACE Money Market Investments Portfolio
from which Mitchell Hutchins retains an investment management fee of 15
basis points) containing investments attributable to the Plan investor.
However, the quarterly fee of 20 basis points that is paid to Mitchell
Hutchins for administrative services is retained by Mitchell Hutchins and is
not offset against the outside fee.

(j) With respect to its participation in the PACE Program prior to purchasing
Trust shares,

(1) Each Independent Fiduciary receives the following written or oral
disclosures from PaineWebber:

(D) A written analysis of PMAS's asset allocation recommendation of
specific Portfolios.

(E) A copy of the agreement between PMAS and such Plan relating to
participation in the PACE Program.

(F) Upon written request to Mitchell Hutchins, a copy of the respective
investment advisory agreements between Mitchell Hutchins and the
Sub-Advisers.

(G) Copies of the proposed exemption and grant notice describing the
exemptive relief provided herein.

(2) In the case of a Section 404(c) Plan, the Independent Fiduciary will--

(A) Make copies of the foregoing documents available to Directing
Participants.

(3) If accepted as an investor in the PACE Program, an Independent Fiduciary
of a Section 403(b) Plan, an IRA or a Keogh Plan, is required to
acknowledge, in writing to PMAS, prior to purchasing Trust shares that
such fiduciary has received copies of the documents described in
paragraph (j)(1) of this Section II.

(4) With respect to a Section 404(c) Plan, written acknowledgment of the
receipt of such documents is provided by the Independent Fiduciary (i.e.,
the Plan administrator, trustee, investment manager or named fiduciary).
Such Independent Fiduciary will be required to represent in writing to
PMAS that such fiduciary is--

(A) Independent of PaineWebber and its affiliates;

(B) Knowledgeable with respect to the Plan in administrative matters and
funding matters related thereto, and;

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PaineWebber PACE Select Advisors Trust

(A) Independent of PMAS and its affiliates;

(B) Capable of making an independent decision regarding the investment
of Plan assets;

(D) Able to make an informed decision concerning participation in the
PACE Program.

(1) Written confirmations of each purchase or redemption transaction by the
Plan with respect to a Portfolio.

(2) Telephone access to quotations from PaineWebber of such Plan's account
balance.

(3) A monthly statement of account from PaineWebber specifying the net asset
value of the Plan's investment in such account. Such statement is also
anticipated to include cash flow and transaction activity during the
month, unrealized gains or losses on Portfolio shares held; and a summary
of total earnings and capital returns on the Plan's PACE Portfolio for
the month and year-to-date.

(4) The Trust's semi-annual and annual report which will include financial
statements for the Trust and investment management fees paid by each
Portfolio.

(5) A written quarterly monitoring report that includes (a) a record of the
Plan's PACE Program portfolio for the quarter and since inception,
showing the rates of return relative to comparative market indices
(illustrated in a manner that reflects the effect of any fees for
participation in the PACE Program actually incurred during the period);
(b) an investment outlook summary containing market commentary; and
(c) the Plan's actual PACE Program portfolio with a breakdown, in both
dollars and percentages, of the holdings in each portfolio. The quarterly
monitoring report will also contain an analysis and an evaluation of a
Plan investor's account to assist the investor to ascertain whether the
Plan's investment objectives have been met and recommending, if required,
changes in Portfolio allocations.

(6) A statement, furnished at least quarterly or annually, specifying--

(A) The total, expressed in dollars, of each Portfolio's brokerage
commissions that are paid to PaineWebber and its affiliates;

(B) The total, expressed in dollars, of each Portfolio's brokerage
commissions that are paid to unrelated brokerage firms;

(C) The average brokerage commissions per share that are paid by the
Trust to brokers affiliated with PaineWebber, expressed as cents per
share; and

(D) The average brokerage commissions per share that are paid by the
Trust to brokers unrelated to PaineWebber and its affiliates,
expressed as cents per share for any year in which brokerage
commissions are paid to PaineWebber by the Trust Portfolios in which
a Plan's assets are invested.

(7) Periodic meetings with a PaineWebber Investment Executive (or the
appropriate PaineWebber representative) by Independent Fiduciaries to
discuss the quarterly monitoring report or any other questions that may
arise.

(1) In the case of a Section 404(c) Plan where the Independent Fiduciary has
established an omnibus account in the name of the Plan (the Undisclosed
Account) with PaineWebber, depending upon the arrangement negotiated by the
Independent Fiduciary with PMAS, certain of the information noted above in
subparagraphs (k)(1) through (k)(7) of this Section II may be provided by
PaineWebber to the Directing Participants or to the Independent Fiduciary for
dissemination to the Directing Participants.

(n) The books and records of the Trust are audited annually by independent,
certified public accountants and all investors are sent copies of an audited
financial report no later than 60 days after the close of each Trust fiscal
year.

(o) PaineWebber maintains, for a period of six years, the records necessary to
enable the persons described in

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PaineWebber PACE Select Advisors Trust

paragraph (p) of this Section II to determine whether the conditions of this
exemption have been met, except that--

(2) No party in interest other than PaineWebber shall be subject to the
civil penalty that may be assessed under section 502(i) of the Act, or to
the taxes imposed by section 4975 (a) and (b) of the Code, if the records
are not maintained, or are not available for examination as required by
paragraph (p)(l) of this Section II below.

(p) (1) Except as provided in subparagraph (p)(2) of this paragraph and
notwithstanding any provisions of subsections (a)(2) and (b) of section 504
of the Act, the records referred to in paragraph (o) of this Section II are
unconditionally available at their customary location during normal business
hours by:

(A) Any duly authorized employee or representative of the Department, the
Internal Revenue Service (the Service) or the Securities and Exchange
Commission (the SEC);

(B) Any fiduciary of a participating Plan or any duly authorized
representative of such fiduciary;

(C) Any contributing employer to any participating Plan or any duly
authorized employee representative of such employer; and

(D) Any participant or beneficiary of any participating Plan, or any duly
authorized representative of such participant or beneficiary.

(p) (2) None of the persons described above in paragraphs (p)(1)(B)-(p)(1)(D) of
this paragraph (p) are authorized to examine the trade secrets of PaineWebber
or Mitchell Hutchins or commercial or financial information which is
privileged or confidential.

Section III. Definitions

For purposes of this exemption:

(a) The term "PaineWebber" means PaineWebber Incorporated and any affiliate of
PaineWebber, as defined in paragraph (b) of this Section III.

(b) An "affiliate" of PaineWebber includes--

(1) Any person directly or indirectly through one or more intermediaries,
controlling, controlled by, or under common control with PaineWebber.

(2) Any officer, director or partner in such person, and

(3) Any corporation or partnership of which such person is an officer,
director or a 5 percent partner or owner.

(c) The term "control" means the power to exercise a controlling influence over
the management or policies of a person other than an individual.

(d) The term "Independent Fiduciary" means a Plan fiduciary which is independent
of PaineWebber and its affiliates and is either

(1) A Plan administrator, trustee, investment manager or named fiduciary of
a Section 404(c) Plan or a Section 403(b) Plan;

(2) A participant in a Keogh Plan;

(3) An individual covered under a self-directed IRA which invests in Trust
shares;

(4) An employee, officer or director of PaineWebber and/or its affiliates
covered by an IRA not subject to Title I of the Act;
(5) A trustee, Plan administrator, investment manager or named fiduciary
responsible for investment decisions in the case of a Title I Plan that
does not permit individual direction as contemplated by Section
404(c) of the Act; or

EFFECTIVE DATE: This exemption will be effective as of August 18, 1995.

For a more complete statement of the facts and representations supporting
the Department's decision to grant this exemption, refer to the notice of
proposed exemption (the Notice) published on March 22, 1996 at 61 FR 11882.

WRITTEN COMMENTS

The Department received one written comment with respect to the Notice and no
requests for a public hearing. The comment was submitted by PaineWebber, PMAS
and Mitchell Hutchins (collectively, the Applicants). Their comment is broken
down into the areas discussed below.

(1) SECTION 403(b) PLAN PARTICIPATION. In addition to IRAs, Keogh Plans, Section
404(c) Plans and other types of employee benefit plans that will participate
in the PACE Program, the Applicants represent that they wish to offer shares
in the Trust to Plans that are described in section 403(b) of the Code.
Therefore, the Applicants have requested that the Department include
references to Section 403(b) Plans in the exemptive language set forth in
Section I, in the conditional

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PaineWebber PACE Select Advisors Trust

language set forth in Sections II(j)(3) and III(d)(1) and in Representation 6
of the Summary of Facts and Representations (the Summary). The Department has
revised the Notice accordingly.

(2) AVAILABLE PORTFOLIOS. Section II(g) of the Notice states that PMAS will
provide investment advice in writing to an Independent Fiduciary or a
Directing Participant with respect to all available Portfolios offered by the
Trust. The Applicants note, however, that, in the case of a Section
404(c) Plan, an Independent Fiduciary will determine the initial array of
Portfolios among which the Directing Participants may allocate Plan assets,
and that such fiduciary may decide to include less than all of the Portfolios
in that array. Therefore, the Applicants have requested that the Department
revise Section II(g) of the Notice as follows to make it clear that
"available" Portfolios are those that will be selected by the Independent
Fiduciary under such circumstances:

(g) PMAS provides investment advice in writing to an Independent Fiduciary or
Directing Participant with respect to all Portfolios made available under the
Plan.

The Department has made the change requested by the Applicants.

(3) INDEPENDENT FIDUCIARY ROLE. With respect to a Section 404(c) Plan,
Section II(j)(4) of the Notice states that written acknowledgement of the
receipt of initial disclosures from PaineWebber will be provided by the
Independent Fiduciary who may be the Plan administrator, trustee,
investment manager or the named fiduciary, as the record holder of Trust
shares. The Applicants wish to clarify that because the trustee of a
trust is generally the legal owner of trust assets, the Plan trustee
rather than the Independent Fiduciary is the actual recordholder of Trust
shares. Therefore, the Applicants request that the Department revise
Section II(j)(4) of the Notice to read as follows:

The Department has amended the Notice in this regard.

(4) DIRECTING PARTICIPANT DISCLOSURE. Section II(1) of the Notice states, in
relevant part, that if an Independent Fiduciary of a Section 404(c) Plan
has established an Undisclosed Account with PaineWebber, certain
disclosures will be provided by PaineWebber to the Directing Participants
or to the Independent Fiduciary for dissemination to the Directing
Participants, depending upon the arrangement negotiated with PMAS. In an
effort to reflect the manner in which that information will be
distributed or made available to Directing Participants and/or to the
Independent Fiduciaries of Section 404(c) Plans, the Applicants request
that the Department modify Section II(l) of the Notice.

The Department has amended Section II(1) of the Notice to read as follows:

(5) DESCRIPTION OF PAINEWEBBER GROUP AND PAINEWEBBER. Representation
1(a) of the Summary, states, in part, that the PaineWebber Group is a
member of all principal securities and commodities exchanges in the
United States and the National Association of Securities Dealers, Inc. It
is also represented that PaineWebber Group holds memberships or associate
memberships on several principal foreign securities and commodities
exchanges. Although the Applicants furnished this information to the
Department, they wish to clarify that these representations pertain to
PaineWebber rather than to the Paine Webber Group. Therefore, they
request that the Department make appropriate changes to the Summary.

The Department has revised the language in Representation 1(b) of the
Summary as follows:

PaineWebber is a member of all principal securities and commodities
exchanges in the United States and the National Association of Securities
Dealers, Inc. It also holds memberships or associate memberships on several
principal foreign securities and commodities exchanges.

(6) NET ASSET VALUE PER SHARE. In pertinent part, Representation 2 of the
Summary states that with the exception of the PACE Money Market
Investments Portfolio, shares in the Trust were initially offered to the
public by PaineWebber at a net asset value of $10 per share and that
shares in the PACE Money Market Investments Portfolio are being offered
to the public at a net asset value of $1.00 per share. The Applicants
wish to clarify that with the exception of the PACE Money Market
Investments Portfolio in which shares are offered to the public at a net
asset value of $1.00 per share, shares in the other Portfolios were
initially offered to the public at a net asset value of $12 per share.

Accordingly, the Department has revised the sixth and seventh sentences of
Representation 2 to read as follows:

With the exception of the PACE Money Market Investments Portfolio, shares in
each of the Portfolios were initially offered to the public at a net asset value
of $12 per share. Shares in the PACE Money Market Investments Portfolio are
offered to the public at a net asset value of $1.00 per share.

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PaineWebber PACE Select Advisors Trust

(7) MINIMUM INVESTMENTS. The second paragraph of Representation 3 of the Summary
states, in part, that the minimum initial investment for a prospective
investor in the PACE Program is $10,000. The Applicants note, however, that
the minimum initial investment threshold for an investor is currently $25,000
and not $10,000. For Plan investors and Uniform Gift or Transfer to Minors
Accounts, the Applicants wish to clarify that the minimum initial investment
is presently $10,000.

The Department has revised part of Representation 3 to read as follows:

*** The minimum initial investment in the PACE Program currently is $25,000
(except for Plans and Uniform Gift or Transfer to Minors Accounts, for
which the minimum initial investment is currently $10,000).

(8) VALUATION OF PORTFOLIO SHARES. Footnote 10 of the Summary states, in part,
that the net asset value of shares in the PACE Money Market Investments
Portfolio is determined as of 12 p.m. each business day. To indicate that the
net asset value of all Portfolio shares, including shares of the PACE Money
Market Investments Portfolio, is being determined as of the close of regular
trading on the New York Stock Exchange (currently 4 p.m., Eastern Time) each
business day, the Applicants request that the Department modify Footnote 10
of the Summary.

The Department has modified Footnote 10 to read as follows:

The net asset value of each Portfolio's shares is determined as of the close
of regular trading on the New York Stock Exchange (the NYSE) (currently,
4 p.m., Eastern Time) each business day. Each Portfolio's net asset value per
share is determined by dividing the value of the securities held by the
Portfolio plus any cash or other assets minus all liabilities by the total
number of Portfolio shares outstanding.

In addition, the Applicants have requested that Footnote 16 of the Summary
be revised to incorporate the following language:

*** The net asset value of each Portfolio's shares is determined as of the
close of regular trading on the NYSE (currently, 4 p.m. Eastern Time)
each business day. PaineWebber may, in the future, impose a minimum
dollar threshold on rebalancing transactions in order to avoid DE
MINIMUS transactions.

(9) PAYMENT OF REDEMPTION PROCEEDS. Representation 14 of the Summary states, in
part, that a Portfolio will be required to transmit redemption proceeds for
credit to an investor's account within 5 business days after receipt.
Similarly, Representation 17 of the Summary sets forth the same time frame
for the payment of the outside fee as well as the applicable fee if
additional funds are invested during a calendar quarter. Because Federal
Securities laws currently require PaineWebber to settle its obligations
within three business days, the Applicants have requested that the
Department revise the Summary to reflect the current timing of such payments.
The Department does not object to these necessary revisions and has deleted
references to the five business day requirement and inserted the phrase "three
business days" in the fourth sentence of paragraph one of Representation 14, in
the first sentence of paragraph two of Representation 17 and in the first
sentence of paragraph three of Representation 17.

(10) BROKERAGE COMMISSION INFORMATION. Representation 22(i)
of the Summary states, in part, that on a quarterly and annual basis,
PaineWebber will provide written disclosures to an Independent Fiduciary or,
if applicable, a Directing Participant regarding brokerage commissions that
are paid to PaineWebber and/or its affiliates or to unrelated parties. The
Applicants have requested that the Department revise this representation to
reflect that brokerage commission information will be provided to the
Independent Fiduciary and, depending on the arrangement negotiated between
the Independent Fiduciary of a Section 404(c) Plan and PMAS, to a Directing
Participant. The Applicants state that the language set forth in the Summary
appears to indicate that PaineWebber will provide such information under all
circumstances to Independent Fiduciaries and where applicable, to Directing
Participants only.

The Department has revised paragraph (i) of Representation 22 to read, in
part, as follows:

(i) On a quarterly and annual basis, PaineWebber will provide written
disclosures to an Independent Fiduciary and, depending on the arrangement
negotiated with PMAS, a Directing Participant, with respect to (1) the total,
expressed in dollars, of each Portfolio's brokerage commissions that are paid
to PaineWebber and its affiliates;***

After giving full consideration to the entire record, the Department has
decided to grant the exemption subject to the modifications or clarifications
described above. The Applicants' comment letter has been included as part of the
public record of the exemption application. The complete application file,
including all supplemental submissions received by the Department, is made
available for public inspection in the Public Documents Room of the Pension and
Welfare Benefits Administration, Room N-5638, U.S. Department of Labor, 200
Constitution Avenue, NW., Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)

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PaineWebber PACE Select Advisors Trust

TICKER SYMBOLS

<TABLE>
<S> <C>
PACE Money Market Investments PCEXX
PACE Government Securities Fixed Income Investments PCGTX
PACE Intermediate Fixed Income Investments PCIFX
PACE Strategic Fixed Income Investments PCSIX
PACE Municipal Fixed Income Investments PCMNX
PACE Global Fixed Income Investments PCGLX
PACE Large Company Value Equity Investments PCLVX
PACE Large Company Growth Equity Investments PCLCX
PACE Small/Medium Company Value Equity Investments PCSVX
PACE Small/Medium Company Growth Equity Investments PCSGX
PACE International Equity Investments PCIEX
PACE International Emerging Markets Equity Investments PCEMX
</TABLE>

If you want more information about the funds, the following documents are
available free upon request:

ANNUAL/SEMI-ANNUAL REPORTS:

Additional information about the funds' investments is available in the funds'
annual and semi-annual reports to shareholders. In the funds' annual reports,
you will find a discussion of the market conditions and investment strategies
that significantly affected the funds' performance during the last fiscal year.

STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CONTRACT PROSPECTUS:

The SAI provides more detailed information about the funds and is incorporated
by reference into this prospectus.

You may discuss your questions about the funds by contacting your Financial
Advisor. You may obtain free copies of the funds' annual and semi-annual reports
and the SAI by contacting the funds directly at 1-800-647-1568.

You may review and copy information about the funds, including shareholder
reports and the SAI, at the Public Reference Room of the Securities and Exchange
Commission. You may obtain information about the operations of the SEC's Public
Reference Room by calling the SEC at 1-202-942-8090. You can get copies of
reports and other information about the funds:

- For a fee, by electronic request at [email protected] or by writing the SEC's
Public Reference Section, Washington, D.C. 20549-0102; or

- Free from the EDGAR Database on the SEC's Internet website at:
http://www.sec.gov

PaineWebber PACE Select Advisors Trust
Investment Company Act File No. 811-8764

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