UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-08764 | |||||||
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PACE® Select Advisors Trust | ||||||||
(Exact name of registrant as specified in charter) | ||||||||
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1285 Avenue of the Americas, New York, New York |
| 10019-6028 | ||||||
(Address of principal executive offices) |
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Mark F. Kemper, Esq. UBS Global Asset Management 1285 Avenue of the Americas New York, NY 10019-6028 | ||||||||
(Name and address of agent for service) | ||||||||
Copy to: Jack W. Murphy, Esq. Dechert LLP 1900 K Street, N.W. Washington, DC 20006
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Registrant’s telephone number, including area code: | 212-821 3000 |
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Date of fiscal year end: | July 31 |
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Date of reporting period: | July 31, 2014 |
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Item 1. Reports to Stockholders.
PACE Select
July 31, 2014
PACE® Select Advisors Trust
Annual Report
PACE® Select Advisors Trust
Table of contents | |||||||
Introduction | 2 | ||||||
Portfolio Advisor's and Sub-Advisors' commentaries and Portfolios of investments | |||||||
PACE® Money Market Investments | 5 | ||||||
PACE® Mortgage-Backed Securities Fixed Income Investments (formerly, PACE® Government Securities Fixed Income Investments) | 11 | ||||||
PACE® Intermediate Fixed Income Investments | 27 | ||||||
PACE® Strategic Fixed Income Investments | 47 | ||||||
PACE® Municipal Fixed Income Investments | 67 | ||||||
PACE® International Fixed Income Investments | 79 | ||||||
PACE® High Yield Investments | 92 | ||||||
PACE® Large Co Value Equity Investments | 107 | ||||||
PACE® Large Co Growth Equity Investments | 123 | ||||||
PACE® Small/Medium Co Value Equity Investments | 132 | ||||||
PACE® Small/Medium Co Growth Equity Investments | 143 | ||||||
PACE® International Equity Investments | 155 | ||||||
PACE® International Emerging Markets Equity Investments | 174 | ||||||
PACE® Global Real Estate Securities Investments | 186 | ||||||
PACE® Alternative Strategies Investments | 196 | ||||||
Understanding your Portfolio's expenses | 234 | ||||||
Statement of assets and liabilities | 240 | ||||||
Statement of operations | 248 | ||||||
Statement of changes in net assets | 252 | ||||||
Financial highlights | 258 | ||||||
Notes to financial statements | 288 | ||||||
Report of independent registered public accounting firm | 334 | ||||||
Tax information | 335 | ||||||
General information | 336 | ||||||
Board approvals of sub-advisory agreements | 337 | ||||||
Supplemental information, trustees and officers | 357 |
PACE Select Advisors Trust offers multiple share classes representing interests in 15 separate Portfolios. (PACE Money Market Investments offers only one share class.) Different classes of shares and/or Portfolios are offered by separate prospectuses.
For more information on a portfolio or class of shares, contact your financial advisor. He or she can send you a current prospectus relating to a portfolio or class of shares. Investors should carefully read and consider a mutual fund's investment objectives, risks, charges, and expenses before investing. The prospectus contains this and other information about a mutual fund. For a current prospectus, contact UBS Global Asset Management (Americas) Inc. at 888-793 8637, or visit us on the Web at www.ubs.com/globalam-us.
Derivatives vary in complexity, involve risks which are different from, and may be greater than, the risks associated with investing in securities or other instruments. Please see the funds' prospectuses for more complete discussion of the risks associated with investing in derivatives.
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PACE Select Advisors Trust
Introduction
September 17, 2014
Dear PACE Shareholder,
We are pleased to provide you with the annual report for the PACE portfolios (the "Portfolios"), comprising the PACE Select Advisors Trust. This report includes summaries of the performance of each Portfolio, as well as commentaries from the investment advisor and Sub-advisors regarding the events that affected Portfolio performance during the 12 months ended July 31, 2014. Please note that the opinions of the Sub-advisors do not necessarily represent those of UBS Global Asset Management (Americas) Inc.
Improving growth in the developed world
After three consecutive years of generally modest growth, the overall US economy contracted at a seasonally adjusted annualized rate of 2.1% in the first quarter of 2014. This followed relatively strong growth during the third and fourth quarters of 2013, during which the economy grew at seasonally adjusted annualized rates of 4.5% and 3.5%, respectively. The downturn was partially attributed to severe winter weather in parts of the country. However, the economy quickly regained its footing, as gross domestic product ("GDP") grew at a 4.2% rate during the second quarter.1
The Federal Reserve Board (the "Fed") took a number of actions during the reporting period. In December 2013, the Fed announced that it would begin paring back its monthly asset purchases, saying, "Beginning in January, the Committee will add to its holdings of agency mortgage-backed securities at a [reduced] pace of $35 billion per month rather than $40 billion per month, and will add to its holdings of longer-term Treasury securities at a [reduced] pace of $40 billion per month rather than $45 billion per month." At its meetings in January, March, April, June and July 2014, the Fed said it would further taper its asset purchases, in each case paring its total purchases a total of $10 billion per month. Beginning in August, the Fed purchased a total of $25 billion per month ($10 billion per month of agency mortgage-backed securities and $15 billion per month of longer-term Treasuries). The central bank anticipates ending its purchases in October 2014. However, in the official statement from its July meeting, the Fed continued to emphasize that short-term rates will stay low for "a considerable time after the asset purchase program ends."
Growth outside the US generally improved. In its July 2014 World Economic Outlook Update, the International Monetary Fund ("IMF") reported that "Leading indicators point to the global recovery regaining strength in the second quarter of 2014. This is consistent with the view that the unexpected weakness in the first quarter was, in large part, temporary because the impact of factors such as harsh winter weather and an inventory correction will disappear and policies have already responded to weaker growth, including in China." From a regional perspective, the IMF anticipates 2014 growth in the eurozone will be 1.1%, versus a contraction of 0.4% in 2013. Japan's economy is expected to expand 1.6% in 2014, compared with growth of 1.5% in 2013. Elsewhere, the IMF projects that overall growth in emerging market countries will slightly decelerate in 2014 to 4.6%, versus 4.7% in 2013. In particular, the IMF projects that growth in China will decline from 7.7% in 2013, to 7.4% in 2014. In contrast, GDP growth in India is projected to move from 5.0% in 2013 to 5.4% in 2014.
1 Based on the Commerce Department's third estimate announced on August 28, 2014, after the reporting period had ended.
2
PACE Select Advisors Trust
Global equities rally sharply
Despite a number of headwinds, the global equity market was highly resilient and generated strong results during the reporting period. The market was volatile at times, given mixed global growth, geopolitical issues and questions regarding future central bank monetary policy. However, investor demand was solid overall, as corporate profits often surprised and central banks largely remained highly accommodative. All told, the US stock market, as measured by the S&P 500 Index,2 gained 16.94% for the 12 months ended July 31, 2014. International developed equities, as measured by the MSCI EAFE Index (net),3 also produced strong results, gaining 15.07% during the annual period. Returns for emerging market equities, as measured by the MSCI Emerging Markets Index (net),4 were also impressive, as they returned 15.32% over the same period.
The fixed income market performs well
The fixed income market surprised many investors, as it posted positive results during the reporting period as a whole. During the first five months of the period, US Treasury yields moved higher and negatively impacted the overall bond market (yields and bond prices move in opposite directions). This was due to a number of factors, including continued economic growth and expectations that the Fed would begin tapering its asset purchase program. However, as discussed, the US economy weakened during the first quarter of 2014, and geopolitical concerns triggered several flights to quality. As a result, the yield on the 10-year Treasury fell from 3.04% at the end of 2013 to 2.58% on July 31, 2014. However, for the 12-month reporting period as a whole, the yield on the 10-year Treasury was relatively flat. The overall US bond market, as measured by the Barclays US Aggregate Index,5 gained 3.97% during the 12-month reporting period and the US taxable spread sectors (non-US Treasury fixed income securities) generated positive absolute returns. Assuming greater risk was often rewarded, as investors looked to generate incremental yield in the low interest rate environment. For example, high yield bonds, as measured by the BofA Merrill Lynch US High Yield Cash Pay Constrained Index,6 rose 8.19% during the
2 The S&P 500 Index is an unmanaged, weighted index composed of 500 widely held common stocks varying in composition, and is not available for direct investment. Investors should note that indices do not reflect the deduction of fees and expenses.
3 The MSCI EAFE Index (net) is an index of stocks designed to measure the investment returns of developed economies outside of North America. Net total return indices reinvest dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The index is constructed and managed with a view to being fully investable from the perspective of international institutional investors. Investors should note that indices do not reflect the deduction of fees and expenses.
4 The MSCI Emerging Markets Index (net) is a market capitalization-weighted index composed of different emerging market countries in Europe, Latin America, and the Pacific Basin. Net total return indices reinvest dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The index is constructed and managed with a view to being fully investable from the perspective of international institutional investors. Investors should note that indices do not reflect the deduction of fees and expenses.
5 The Barclays US Aggregate Index is an unmanaged broad based index designed to measure the US dollar-denominated, investment-grade, taxable bond market. The index includes bonds from the Treasury, government-related, corporate, mortgage-backed, asset-backed and commercial mortgage-backed sectors. Investors should note that indices do not reflect the deduction of fees and expenses.
6 The BofA Merrill Lynch US High Yield Cash Pay Constrained Index is an unmanaged index of publicly placed non-convertible, coupon-bearing US dollar denominated below investment grade corporate debt with a term to maturity of at least one year. The index is market capitalization weighted, so that larger bond issuers have a greater effect on the index's return. However, the representation of any single bond issuer is restricted to a maximum of 2% of the total index. Investors should note that indices do not reflect the deduction of fees and expenses.
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PACE Select Advisors Trust
reporting period. Elsewhere, emerging markets debt, as measured by the J.P. Morgan Emerging Markets Bond Index Global (EMBI Global),7 gained 10.13%.
Sincerely,
Mark E. Carver
President, PACE Select Advisors Trust
Managing Director, UBS Global Asset Management (Americas) Inc.
This report is intended to assist investors in understanding how the Portfolios performed during the 12-month period ended July 31, 2014. The views expressed in the advisor's and sub-advisors' comments sections are as of the end of the reporting period, reflect performance results gross of fees and expenses, and are those of the investment advisor (with respect to PACE Money Market Investments only) and sub-advisors. Sub-advisors' comments on Portfolios that have more than one sub-advisor are reflective of their portion of the Portfolio only. The views and opinions in this report were current as of September 17, 2014. They are not guarantees of future performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and the investment advisor and sub-advisors reserve the right to change their views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of a Portfolio's future investment intent.
7 The J.P. Morgan Emerging Markets Bond Index Global (EMBI Global) is an unmanaged index which is designed to track total returns for US dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady bonds, loans and Eurobonds. Investors should note that indices do not reflect the deduction of fees and expenses.
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PACE Select Advisors Trust
PACE Money Market Investments
Performance
For the 12 months ended July 31, 2014, the Portfolio returned 0.01% before the deduction of the maximum PACE program fee.1 Please remember that the PACE program fee is assessed outside the Portfolio at the PACE program account level. The program fee does not impact the determination of the Portfolio's net asset value per share. For comparison purposes, the median return of the Lipper Money Market Funds category was 0.01%. (Returns over various time periods are shown in the "Performance at a glance" table on page 6. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions.) For a detailed commentary on the market environment in general during the period, please refer to page 2.
Advisor's Comments
In December 2013, the Federal Reserve Board (the "Fed") announced that it would begin tapering its asset purchase program in January 2014. However, the Fed continued to hold the federal funds rate—or the "fed funds rate," which is the rate banks charge one another for funds they borrow on an overnight basis—at a historically low range between 0% and 0.25%. (For more details on the Fed's actions, see page 3.) This continued to depress yields on a wide range of short-term investments and kept the yields of the securities in which the Portfolio invests extremely low. As a result, the Portfolio's yield remained low during the reporting period.
We tactically adjusted the Portfolio's weighted average maturity ("WAM") throughout the 12-month review period. When the reporting period began, the Portfolio had a WAM of 29 days. This was increased to 40 days at the end of the reporting period.
At the issuer level, we maintained a high level of diversification, investing in smaller positions with the goal of reducing risk and keeping the Portfolio highly liquid. To that end, we typically purchased up to 3% in single nongovernment issuers throughout the reporting period. (The Portfolio is generally able to hold up to 5% in any one issuer, subject to certain exceptions.)
Several adjustments were made to the Portfolio's sector positioning during the 12-month period. We increased the Portfolio's exposure to certificates of deposit and, to a lesser extents, short-term corporate obligations and repurchase agreements. Conversely, we reduced our allocation to commercial paper and modestly pared our exposure to US government and agency obligations. (Repurchase agreements are transactions in which the seller of a security agrees to buy it back at a predetermined time and price or upon demand.)
PACE Select Advisors Trust – PACE Money Market Investments
Investment Advisor:
UBS Global Asset Management (Americas) Inc.
Portfolio Manager:
Robert Sabatino
Objective:
Current income consistent with preservation of capital and liquidity
Investment process:
The Portfolio is a money market mutual fund and seeks to maintain a stable price of $1.00 per share, although it may be possible to lose money by investing in this Portfolio. The Portfolio invests in a diversified portfolio of high-quality money market instruments of governmental and private issuers. Security selection is based on the assessment of relative values and changes in market and economic conditions.
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
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PACE Select Advisors Trust
PACE Money Market Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | 10 years | ||||||||||||
PACE Money Market Investments1 | 0.01 | % | 0.01 | % | 1.47 | % | |||||||||
Lipper Money Market Funds median | 0.01 | % | 0.01 | % | 1.43 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | 10 years | ||||||||||||
PACE Money Market Investments1 | 0.01 | % | 0.01 | % | 1.47 | % |
For PACE Money Market Investments1, the 7-day current yield for the period ended July 31, 2014 was 0.01% after fee waivers and/or expense reimbursements; the yield was (0.84)% before fee waivers and/or expense reimbursements. The Portfolio's yield quotation more closely reflects the current earnings of the Portfolio than the total return quotation. Yields will fluctuate and reflect fee waivers and/or expense reimbursements.
1 Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions. The return of an investment will fluctuate. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the payable dates. Current performance may be higher or lower than the performance data quoted.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
An investment in PACE Money Market Investments is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Portfolio seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Portfolio.
Not FDIC Insured. May lose value. No bank guarantee.
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PACE Select Advisors Trust
PACE Money Market Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Net assets (mm) | $ | 212.0 | |||||
Number of holdings | 62 | ||||||
Weighted average maturity | 40 days | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Commercial paper | 50.6 | % | |||||
Repurchase agreements | 16.9 | ||||||
Certificates of deposit | 18.4 | ||||||
US government and agency obligations | 12.3 | ||||||
Short-term corporate obligation | 1.9 | ||||||
Other assets less liabilities | (0.1 | ) | |||||
Total | 100.0 | % | |||||
Top 10 holdings1 | 07/31/14 | ||||||
Repurchase agreement with Barclays Capital, Inc., 0.060% due 08/01/14 | 9.4 | % | |||||
Repurchase agreement with Deutsche Bank Securities, Inc., 0.090% due 08/01/14 | 7.3 | ||||||
Federal Home Loan Bank, 0.120% due 05/15/15 | 3.3 | ||||||
MetLife Short Term Funding LLC, 0.110% due 08/19/14 | 3.1 | ||||||
US Treasury Notes, 0.500% due 10/15/14 | 2.8 | ||||||
Caisse Centrale Desjardins, 0.175% due 10/14/14 | 2.8 | ||||||
Sumitomo Mitsui Banking Corp., 0.150% due 08/11/14 | 2.4 | ||||||
Gemini Securitization Corp. LLC, 0.220% due 08/01/14 | 2.4 | ||||||
Erste Finance LLC, 0.160% due 08/01/14 | 2.4 | ||||||
Nrw. Bank, 0.100% due 08/11/14 | 2.4 | ||||||
Total | 38.3 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time.
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PACE Select Advisors Trust
PACE Money Market Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
US government and agency obligations—12.33% | |||||||||||
Federal Home Loan Bank 0.065%, due 08/08/141 | $ | 3,000,000 | $ | 2,999,962 | |||||||
0.095%, due 12/24/101 | 5,000,000 | 4,998,087 | |||||||||
0.120%, due 05/15/151 | 7,000,000 | 6,993,303 | |||||||||
0.125%, due 06/02/15 | 3,000,000 | 2,999,000 | |||||||||
Federal National Mortgage Association* 0.500%, due 07/02/15 | 2,000,000 | 2,005,532 | |||||||||
US Treasury Notes 0.250%, due 09/15/14 | 150,000 | 150,039 | |||||||||
0.500%, due 10/15/14 | 6,000,000 | 6,005,458 | |||||||||
Total US government and agency obligations (cost—$26,151,381) | 26,151,381 | ||||||||||
Certificates of deposit—18.39% | |||||||||||
Banking-non-US—10.85% | |||||||||||
Bank of Tokyo-Mitsubishi UFJ Ltd. 0.100%, due 08/01/14 | 3,000,000 | 3,000,000 | |||||||||
Credit Industriel et Commercial 0.160%, due 09/09/14 | 3,000,000 | 3,000,000 | |||||||||
0.170%, due 09/15/14 | 3,000,000 | 3,000,000 | |||||||||
Natixis 0.210%, due 09/03/142 | 2,000,000 | 2,000,000 | |||||||||
Norinchukin Bank 0.100%, due 08/05/14 | 3,000,000 | 3,000,000 | |||||||||
Rabobank Nederland NV 0.284%, due 10/10/142 | 1,000,000 | 1,000,000 | |||||||||
Societe Generale 0.275%, due 08/29/142 | 2,000,000 | 2,000,000 | |||||||||
Sumitomo Mitsui Banking Corp. 0.150%, due 08/11/14 | 5,000,000 | 5,000,000 | |||||||||
Toronto-Dominion Bank 0.230%, due 02/24/15 | 1,000,000 | 1,000,000 | |||||||||
23,000,000 | |||||||||||
Banking-US—7.54% | |||||||||||
BMO Harris Bank N.A. 0.190%, due 08/11/14 | 4,000,000 | 4,000,000 | |||||||||
Branch Banking & Trust Co. 0.150%, due 09/26/14 | 2,000,000 | 2,000,000 | |||||||||
Citibank N.A. 0.160%, due 08/06/14 | 2,000,000 | 2,000,000 | |||||||||
0.170%, due 10/02/14 | 3,000,000 | 3,000,000 | |||||||||
PNC Bank N.A. 0.230%, due 09/15/14 | 3,000,000 | 3,000,000 | |||||||||
Wells Fargo Bank N.A. 0.210%, due 12/08/14 | 2,000,000 | 2,000,000 | |||||||||
16,000,000 | |||||||||||
Total certificates of deposit (cost—$39,000,000) | 39,000,000 | ||||||||||
Commercial paper1—50.55% | |||||||||||
Asset backed-miscellaneous—24.05% | |||||||||||
Albion Capital Corp. 0.190%, due 08/15/14 | 3,000,000 | 2,999,778 |
Face amount | Value | ||||||||||
Commercial paper1—(continued) | |||||||||||
Asset backed-miscellaneous—(concluded) | |||||||||||
Antalis US Funding Corp. 0.160%, due 08/04/14 | $ | 3,000,000 | $ | 2,999,960 | |||||||
Atlantic Asset Securitization LLC 0.120%, due 08/14/14 | 5,000,000 | 4,999,784 | |||||||||
Gemini Securitization Corp. LLC 0.220%, due 08/01/14 | 5,000,000 | 5,000,000 | |||||||||
Gotham Funding Corp. 0.150%, due 08/07/14 | 2,000,000 | 1,999,950 | |||||||||
LMA Americas LLC 0.140%, due 08/12/14 | 5,000,000 | 4,999,786 | |||||||||
Manhattan Asset Funding Co. LLC 0.150%, due 08/05/14 | 4,000,000 | 3,999,934 | |||||||||
0.170%, due 09/12/14 | 2,000,000 | 1,999,603 | |||||||||
Old Line Funding LLC 0.190%, due 09/15/14 | 2,000,000 | 1,999,525 | |||||||||
0.220%, due 10/15/14 | 2,000,000 | 1,999,083 | |||||||||
Regency Markets No. 1 LLC 0.140%, due 08/14/14 | 3,000,000 | 2,999,848 | |||||||||
0.140%, due 08/15/14 | 2,000,000 | 1,999,891 | |||||||||
0.140%, due 08/20/14 | 1,000,000 | 999,926 | |||||||||
Salisbury Receivables Co. LLC 0.130%, due 08/15/14 | 2,000,000 | 1,999,899 | |||||||||
Sheffield Receivables Corp. 0.180%, due 08/14/14 | 2,000,000 | 1,999,870 | |||||||||
Versailles Commercial Paper LLC 0.100%, due 08/01/14 | 4,000,000 | 4,000,000 | |||||||||
Victory Receivables Corp. 0.140%, due 08/19/14 | 4,000,000 | 3,999,720 | |||||||||
50,996,557 | |||||||||||
Banking-non-US—9.43% | |||||||||||
ASB Finance Ltd. 0.245%, due 08/25/142 | 1,000,000 | 1,000,000 | |||||||||
Caisse Centrale Desjardins 0.175%, due 10/14/14 | 6,000,000 | 5,997,842 | |||||||||
Credit Suisse 0.175%, due 08/01/14 | 3,000,000 | 3,000,000 | |||||||||
0.210%, due 08/14/14 | 3,000,000 | 2,999,773 | |||||||||
Mitsubishi UFJ Trust & Banking Corp. 0.200%, due 08/08/14 | 2,000,000 | 1,999,922 | |||||||||
Nrw. Bank 0.100%, due 08/11/14 | 5,000,000 | 4,999,861 | |||||||||
19,997,398 | |||||||||||
Banking-US—4.72% | |||||||||||
Erste Finance LLC 0.160%, due 08/01/14 | 5,000,000 | 5,000,000 | |||||||||
ING (US) Funding LLC 0.200%, due 08/11/14 | 1,000,000 | 999,944 | |||||||||
0.160%, due 08/15/14 | 2,000,000 | 1,999,876 | |||||||||
0.200%, due 08/15/14 | 2,000,000 | 1,999,844 | |||||||||
9,999,664 |
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PACE Select Advisors Trust
PACE Money Market Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Commercial paper1—(concluded) | |||||||||||
Brokerage—1.42% | |||||||||||
Prudential Funding LLC 0.090%, due 08/05/14 | $ | 3,000,000 | $ | 2,999,970 | |||||||
Energy-integrated—0.94% | |||||||||||
CNPC Finance HK Ltd. 0.280%, due 08/06/14 | 2,000,000 | 1,999,922 | |||||||||
Finance-captive automotive—0.47% | |||||||||||
Toyota Motor Credit Corp. 0.210%, due 10/21/14 | 1,000,000 | 999,528 | |||||||||
Finance-non-captive diversified—0.94% | |||||||||||
General Electric Capital Corp. 0.210%, due 01/05/15 | 2,000,000 | 1,998,168 | |||||||||
Insurance-life—4.15% | |||||||||||
MetLife Short Term Funding LLC 0.110%, due 08/19/14 | 6,500,000 | 6,499,643 | |||||||||
Prudential PLC 0.170%, due 08/18/14 | 2,286,000 | 2,285,816 | |||||||||
8,785,459 | |||||||||||
Retail-discount—1.60% | |||||||||||
Wal-Mart Stores, Inc. 0.080%, due 08/18/14 | 3,400,000 | 3,399,872 | |||||||||
Tobacco—2.83% | |||||||||||
Philip Morris International Co. 0.090%, due 08/06/14 | 3,000,000 | 2,999,963 | |||||||||
0.100%, due 08/06/14 | 3,000,000 | 2,999,958 | |||||||||
5,999,921 | |||||||||||
Total commercial paper (cost—$107,176,459) | 107,176,459 | ||||||||||
Short-term corporate obligation—1.89% | |||||||||||
Banking-non-US—1.89% | |||||||||||
Barclays Bank PLC 0.360%, due 08/07/143 (cost—$4,000,000) | 4,000,000 | 4,000,000 |
Face amount | Value | ||||||||||
Repurchase agreements—16.91% | |||||||||||
Repurchase agreement dated 07/31/14 with Barclays Capital, Inc., 0.060% due 08/01/14, collateralized by $20,387,300 US Treasury Note, 2.250% due 07/31/21; (value—$20,400,042); proceeds: $20,000,033 | $ | 20,000,000 | $ | 20,000,000 | |||||||
Repurchase agreement dated 07/31/14 with Deutsche Bank Securities, Inc., 0.090% due 08/01/14, collateralized by $14,031,000 Federal Home Loan Mortgage Corp. obligations, 5.000% due 02/16/17; (value—$15,810,365); proceeds: $15,500,039 | 15,500,000 | 15,500,000 | |||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $354,146 US Treasury Note, 0.875% due 05/15/17; (value—$354,146); proceeds: $347,000 | 347,000 | 347,000 | |||||||||
Total repurchase agreements (cost—$35,847,000) | 35,847,000 | ||||||||||
Total investments (cost—$212,174,840 which approximates cost for federal income tax purposes)—100.07% | 212,174,840 | ||||||||||
Liabilities in excess of other assets—(0.07)% | (149,719 | ) | |||||||||
Net assets (applicable to 212,025,120 shares of beneficial interest outstanding equivalent to $1.00 per share)—100.00% | $ | 212,025,121 |
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PACE Select Advisors Trust
PACE Money Market Investments
Portfolio of investments—July 31, 2014
For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 232.
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
US government and agency obligations | $ | — | $ | 26,151,381 | $ | — | $ | 26,151,381 | |||||||||||
Certificates of deposit | — | 39,000,000 | — | 39,000,000 | |||||||||||||||
Commercial paper | — | 107,176,459 | — | 107,176,459 | |||||||||||||||
Short-term corporate obligation | — | 4,000,000 | — | 4,000,000 | |||||||||||||||
Repurchase agreements | — | 35,847,000 | — | 35,847,000 | |||||||||||||||
Total | $ | — | $ | 212,174,840 | $ | — | $ | 212,174,840 |
At July 31, 2014, there were no transfers between Level 1 and Level 2.
Issuer breakdown by country or territory of origin (unaudited)
Percentage of total investments | |||||||
United States | 75.4 | % | |||||
Japan | 6.6 | ||||||
France | 4.7 | ||||||
Canada | 3.3 | ||||||
United Kingdom | 3.0 | ||||||
Switzerland | 2.8 | ||||||
Germany | 2.3 | ||||||
China | 0.9 | ||||||
Netherlands | 0.5 | ||||||
New Zealand | 0.5 | ||||||
Total | 100.0 | % |
Portfolio footnotes
* On September 7, 2008, the Federal Housing Finance Agency placed the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.
1 Rates shown are the discount rates at date of purchase.
2 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2014 and changes periodically. The maturity date reflects earlier of reset date or stated maturity date.
3 Illiquid investment as of July 31, 2014.
See accompanying notes to financial statements.
10
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 4.00% before the deduction of the maximum PACE Select program fee.1 In comparison, the Barclays US Mortgage-Backed Securities Index (the "benchmark") returned 4.14%, and the Lipper US Mortgage Funds category posted a median return of 3.69%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 14. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisor's comments2
(Please note that while the sub-advisor outperformed the benchmark on a gross of fees basis, the Portfolio underperformed net of fees, as reported under "Performance." As stated in footnote one, the comments that follow address performance on a gross of fees basis.)
The Portfolio outperformed its benchmark during the reporting period. Near-benchmark US duration positioning was neutral for performance, as the yield on the 10-year US Treasury was relatively flat during the 12-month period (duration measures a portfolio's sensitivity to interest rate changes.) However, yield curve positioning, with a focus on shorter dated maturities, was negative for performance as short-term rates rose while long-term rates declined. (The yield curve plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates.)
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
3 Barclays US Mortgage-Backed Securities Index, as calculated by the investment advisor, which as of July 31, 2014 was approximately 4.17 years.
PACE Select Advisors Trust – PACE Mortgage-Backed Securities Fixed
Income Investments
Investment Sub-Advisor:
Pacific Investment Management Company LLC ("PIMCO")
Portfolio Manager:
Daniel Hyman and Michael Cudzil
Objective:
Current income
Investment process:
The Portfolio invests primarily in government fixed income securities which include US bonds, including those backed by mortgages, and related repurchase agreements. Mortgage-backed securities include "to be announced" or "TBA" securities which usually are traded on a forward commitment basis with an approximate principal amount and no defined maturity date; issued or guaranteed by US government agencies and instrumentalities. The Portfolio also invests, to a lesser extent, in investment grade bonds of private issuers, including those backed by mortgages or other assets. The Portfolio may invest in bonds of varying maturities, but normally limits its duration to within +/- 50% of the effective duration of the Portfolio's benchmark index.3 (Duration is a measure of a portfolio's sensitivity to interest rate changes.) The Portfolio may engage in short selling with respect to securities issued by the US Treasury and certain TBA securities coupon trades. PIMCO establishes duration targets based on its expectations for changes in interest rates, and then positions the Portfolio to take advantage of yield curve shifts. PIMCO decides to buy and sell specific bonds based on an analysis of their values relative to other similar securities.
11
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Sub-Advisor's comments – concluded
Tactical positioning within agency mortgage-backed securities ("MBS") benefited performance. An overall underweight to agency MBS detracted from performance, as the sector outperformed similar-duration Treasuries. However, a focus on Ginnie Mae ("GNMA") 4.5%-5% coupons and relative value positioning within conventional MBS (Freddie Mac and Fannie Mae) more than offset the underweight positioning, as the Portfolio's securities outperformed the broader MBS market. Additionally, holdings of agency collateralized mortgage obligations ("CMOs") were positive for performance.
Exposure to non-agency MBS contributed to performance, as these securities benefited from limited supply and continued improvement in the housing market.
The use of derivative instruments during the period was positive for performance. The Portfolio used mortgage pool options, primarily to manage interest rate and volatility risk within the MBS sector. Options and options on swaps were primarily used to manage interest rate and volatility exposures, but they were also used to generate income in expected interest rate scenarios. Total return swaps were used to gain exposure to an index of mortgages.
Special considerations
The Portfolio may be appropriate for long-term investors seeking current income who are able to withstand short-term fluctuations in the fixed income markets in return for potentially higher returns over the long term. The yield and value of the Portfolio change every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the issuers in which the Portfolio invests. It is important to note that an investment in the Portfolio is only one component of a balanced investment plan.
12
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Illustration of an assumed investment of $10,000 in Class P shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE Mortgage-Backed Securities Fixed Income Investments Class P shares versus the Barclays US Mortgage-Backed Securities Index over the 10 years ended July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE Mortgage-Backed Securities Fixed Income Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustration purposes only.
13
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 3.74 | % | 3.82 | % | 4.37 | % | |||||||||
Class C2 | 3.29 | % | 3.31 | % | 3.84 | % | |||||||||
Class Y3 | 4.00 | % | 4.08 | % | 4.65 | % | |||||||||
Class P4 | 4.00 | % | 4.09 | % | 4.62 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (0.90 | )% | 2.87 | % | 3.89 | % | |||||||||
Class C2 | 2.54 | % | 3.31 | % | 3.84 | % | |||||||||
Barclays US Mortgage-Backed Securities Index5 | 4.14 | % | 3.63 | % | 4.79 | % | |||||||||
Lipper US Mortgage Funds median | 3.69 | % | 4.09 | % | 4.19 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 3.93 | % | 4.17 | % | 4.51 | % | |||||||||
Class C2 | 3.40 | % | 3.66 | % | 3.99 | % | |||||||||
Class Y3 | 4.19 | % | 4.43 | % | 4.80 | % | |||||||||
Class P4 | 4.19 | % | 4.44 | % | 4.77 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (0.77 | )% | 3.22 | % | 4.03 | % | |||||||||
Class C2 | 2.65 | % | 3.66 | % | 3.99 | % |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—1.05% and 0.97%; Class C—1.56% and 1.47%; Class Y—0.85% and 0.72%; and Class P—0.86% and 0.72%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to (1) waive its management fees through November 30, 2014 to the extent necessary to reflect the lower sub-advisory fee paid by UBS Global AM to Pacific Investment Management Company LLC, the Portfolio's investment subadvisor; and (2) waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—0.97%; Class C—1.47%; Class Y—0.72%; and Class P—0.72%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses (pursuant to item (2)) to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 4.5%. Class A shares bear ongoing 12b-1 service fees.
2 Maximum contingent deferred sales charge for Class C shares is 0.75% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
3 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
4 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
5 The Barclays US Mortgage-Backed Securities Index is an unmanaged index which primarily covers the agency mortgage-backed pass-through securities issued by Ginnie Mae (formally known as Government National Mortgage Association or GNMA), Freddie Mac (formally known as Federal Home Loan Mortgage Corporation or FHLMC), and Fannie Mae (formally known as Federal National Mortgage Association or FNMA). Investors should note that indices do not reflect the deduction of fees and expenses.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
14
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Weighted average duration | 4.10 yrs. | ||||||
Weighted average maturity | 5.50 yrs. | ||||||
Average coupon | 2.07 | % | |||||
Average quality1 | AA+ | ||||||
Net assets (mm) | $ | 556.8 | |||||
Number of holdings | 520 | ||||||
Portfolio composition2 | 07/31/14 | ||||||
Bonds | 116.9 | % | |||||
Repurchase agreements | 25.9 | ||||||
Investments sold short | (6.1 | ) | |||||
Options and swaps | (0.0 | )3 | |||||
Cash equivalents and other assets less liabilities | (36.7 | ) | |||||
Total | 100.0 | % | |||||
Asset allocation2 | 07/31/14 | ||||||
US government agency mortgage pass-through certificates | 88.9 | % | |||||
Repurchase agreements | 25.9 | ||||||
Collateralized mortgage obligations | 15.4 | ||||||
US government obligations | 6.6 | ||||||
Asset-backed securities | 4.3 | ||||||
Stripped mortgage-backed securities | 1.7 | ||||||
Investments sold short | (6.1 | ) | |||||
Options and swaps | (0.0 | )3 | |||||
Cash equivalents and other assets less liabilities | (36.7 | ) | |||||
Total | 100.0 | % |
1 Credit quality ratings shown are based on the ratings assigned to portfolio holdings by Standard & Poor's Ratings Group, an independent rating agency.
2 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time.
3 Amount is less than (0.05)%.
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PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
US government obligations—6.61% | |||||||||||
US Treasury Notes 0.094%, due 04/30/161 | $ | 600,000 | $ | 600,032 | |||||||
1.500%, due 02/28/19 | 2,200,000 | 2,182,125 | |||||||||
1.500%, due 05/31/19 | 3,300,000 | 3,262,618 | |||||||||
1.625%, due 06/30/19 | 8,000,000 | 7,950,624 | |||||||||
1.750%, due 10/31/20 | 5,500,000 | 5,386,991 | |||||||||
2.000%, due 05/31/21 | 6,900,000 | 6,804,587 | |||||||||
2.125%, due 01/31/21 | 2,000,000 | 1,996,250 | |||||||||
2.500%, due 05/15/24 | 5,500,000 | 5,473,358 | |||||||||
2.750%, due 02/15/24 | 3,100,000 | 3,158,125 | |||||||||
Total US government obligations (cost—$36,854,951) | 36,814,710 | ||||||||||
Government national mortgage association certificates—28.85% | |||||||||||
GNMA 4.000%, due 04/15/41 | 786,029 | 833,799 | |||||||||
4.000%, due 12/15/41 | 2,616,168 | 2,775,732 | |||||||||
4.500%, due 06/15/39 | 477,437 | 517,876 | |||||||||
4.500%, due 09/15/39 | 1,721,611 | 1,875,914 | |||||||||
4.500%, due 11/15/39 | 413,140 | 448,134 | |||||||||
4.500%, due 01/15/40 | 454,487 | 494,305 | |||||||||
4.500%, due 05/15/40 | 213,787 | 232,550 | |||||||||
4.500%, due 06/15/40 | 851,257 | 925,950 | |||||||||
5.000%, due 12/15/34 | 361,764 | 398,155 | |||||||||
5.000%, due 04/15/38 | 257,213 | 282,013 | |||||||||
5.000%, due 05/15/38 | 13,662 | 14,963 | |||||||||
5.000%, due 08/15/39 | 771,541 | 848,241 | |||||||||
5.000%, due 09/15/39 | 1,003,904 | 1,104,130 | |||||||||
5.000%, due 10/15/39 | 11,141 | 12,250 | |||||||||
5.000%, due 12/15/39 | 29,133 | 32,047 | |||||||||
5.000%, due 02/15/40 | 398,502 | 438,311 | |||||||||
5.000%, due 05/15/40 | 751,051 | 829,654 | |||||||||
5.000%, due 06/15/40 | 1,080,217 | 1,187,938 | |||||||||
5.000%, due 09/15/40 | 13,493 | 14,839 | |||||||||
5.000%, due 05/15/41 | 173,005 | 189,452 | |||||||||
5.500%, due 08/15/35 | 63,088 | 70,254 | |||||||||
5.500%, due 02/15/38 | 8,145 | 9,016 | |||||||||
5.500%, due 04/15/38 | 717,171 | 793,610 | |||||||||
5.500%, due 05/15/38 | 738,453 | 817,466 | |||||||||
5.500%, due 06/15/38 | 451,734 | 500,070 | |||||||||
5.500%, due 10/15/38 | 1,961,153 | 2,170,783 | |||||||||
5.500%, due 11/15/38 | 101,942 | 112,807 | |||||||||
5.500%, due 12/15/38 | 21,815 | 24,149 | |||||||||
5.500%, due 03/15/39 | 338,359 | 376,493 | |||||||||
5.500%, due 05/15/39 | 191,707 | 212,306 | |||||||||
5.500%, due 09/15/39 | 949,740 | 1,051,787 | |||||||||
5.500%, due 01/15/40 | 11,594 | 12,839 | |||||||||
5.500%, due 03/15/40 | 1,235,087 | 1,367,993 | |||||||||
5.500%, due 05/15/40 | 73,467 | 81,333 | |||||||||
6.500%, due 02/15/29 | 1,362 | 1,567 | |||||||||
6.500%, due 11/15/34 | 4,908 | 5,570 | |||||||||
6.500%, due 01/15/36 | 12,626 | 14,329 | |||||||||
6.500%, due 03/15/36 | 1,976 | 2,252 | |||||||||
6.500%, due 09/15/36 | 359,157 | 408,684 | |||||||||
6.500%, due 02/15/37 | 18,299 | 20,586 |
Face amount | Value | ||||||||||
Government national mortgage association certificates—(continued) | |||||||||||
6.500%, due 04/15/37 | $ | 14,373 | $ | 16,631 | |||||||
6.500%, due 01/15/38 | 12,327 | 14,034 | |||||||||
6.500%, due 06/15/38 | 42,458 | 48,916 | |||||||||
6.500%, due 07/15/38 | 46,205 | 54,631 | |||||||||
6.500%, due 10/15/38 | 75,388 | 85,922 | |||||||||
6.500%, due 11/15/38 | 13,746 | 15,875 | |||||||||
7.500%, due 08/15/21 | 3,877 | 4,134 | |||||||||
8.000%, due 02/15/23 | 676 | 750 | |||||||||
8.250%, due 04/15/19 | 151,071 | 165,834 | |||||||||
10.500%, due 02/15/19 | 19,008 | 19,095 | |||||||||
10.500%, due 06/15/19 | 23,712 | 23,820 | |||||||||
10.500%, due 07/15/19 | 30,674 | 30,812 | |||||||||
10.500%, due 07/15/20 | 2,488 | 2,499 | |||||||||
10.500%, due 08/15/20 | 22,689 | 23,345 | |||||||||
11.500%, due 05/15/19 | 2,135 | 2,182 | |||||||||
GNMA II 3.500%, due 01/20/44 | 979,229 | 1,012,017 | |||||||||
4.500%, due 08/20/40 | 242,722 | 264,651 | |||||||||
5.000%, due 12/20/33 | 560,394 | 621,662 | |||||||||
5.000%, due 01/20/34 | 308,067 | 341,553 | |||||||||
5.000%, due 02/20/38 | 469,288 | 514,831 | |||||||||
5.000%, due 04/20/38 | 524,795 | 576,109 | |||||||||
5.000%, due 08/20/41 | 68,439 | 75,595 | |||||||||
5.000%, due 12/20/42 | 93,926 | 103,841 | |||||||||
5.000%, due 08/20/43 | 9,930,012 | 10,907,804 | |||||||||
9.000%, due 04/20/25 | 13,885 | 15,893 | |||||||||
9.000%, due 12/20/26 | 3,713 | 3,965 | |||||||||
9.000%, due 01/20/27 | 11,338 | 11,708 | |||||||||
9.000%, due 09/20/30 | 1,208 | 1,221 | |||||||||
9.000%, due 10/20/30 | 3,960 | 4,156 | |||||||||
9.000%, due 11/20/30 | 5,378 | 5,491 | |||||||||
GNMA II ARM 1.625%, due 07/20/17 | 2,255 | 2,333 | |||||||||
1.625%, due 09/20/21 | 95,507 | 99,210 | |||||||||
1.625%, due 06/20/22 | 85,296 | 87,626 | |||||||||
1.625%, due 01/20/23 | 63,613 | 65,940 | |||||||||
1.625%, due 03/20/23 | 30,972 | 31,685 | |||||||||
1.625%, due 01/20/24 | 82,969 | 86,446 | |||||||||
1.625%, due 04/20/24 | 119,778 | 120,219 | |||||||||
1.625%, due 02/20/25 | 19,516 | 20,326 | |||||||||
1.625%, due 08/20/25 | 23,610 | 24,287 | |||||||||
1.625%, due 09/20/25 | 30,579 | 31,698 | |||||||||
1.625%, due 03/20/26 | 17,168 | 17,647 | |||||||||
1.625%, due 04/20/26 | 170,305 | 176,010 | |||||||||
1.625%, due 06/20/26 | 68,055 | 70,442 | |||||||||
1.625%, due 08/20/26 | 34,078 | 35,106 | |||||||||
1.625%, due 01/20/27 | 134,138 | 134,644 | |||||||||
1.625%, due 04/20/27 | 38,381 | 39,667 | |||||||||
1.625%, due 07/20/27 | 12,540 | 12,934 | |||||||||
1.625%, due 01/20/28 | 15,029 | 15,483 | |||||||||
1.625%, due 02/20/28 | 11,448 | 11,894 | |||||||||
1.625%, due 04/20/30 | 12,543 | 12,956 | |||||||||
1.625%, due 05/20/30 | 147,014 | 151,829 | |||||||||
1.625%, due 07/20/30 | 76,760 | 79,745 |
16
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Government national mortgage association certificates—(concluded) | |||||||||||
2.000%, due 01/20/25 | $ | 8,200 | $ | 8,518 | |||||||
2.000%, due 05/20/25 | 8,907 | 9,263 | |||||||||
2.000%, due 09/20/26 | 5,224 | 5,468 | |||||||||
2.000%, due 01/20/27 | 6,926 | 7,233 | |||||||||
2.000%, due 02/20/27 | 12,465 | 13,022 | |||||||||
2.000%, due 04/20/27 | 4,249 | 4,412 | |||||||||
2.000%, due 08/20/27 | 33,777 | 35,378 | |||||||||
2.000%, due 04/20/30 | 15,475 | 16,203 | |||||||||
2.000%, due 05/20/30 | 434,875 | 455,343 | |||||||||
2.000%, due 07/20/30 | 24,334 | 25,471 | |||||||||
2.000%, due 08/20/30 | 117,051 | 122,522 | |||||||||
2.500%, due 04/20/18 | 2,715 | 2,726 | |||||||||
2.500%, due 11/20/21 | 19,986 | 20,558 | |||||||||
2.500%, due 03/20/25 | 28,827 | 30,294 | |||||||||
2.500%, due 07/20/30 | 53,426 | 56,428 | |||||||||
2.500%, due 08/20/30 | 4,392 | 4,421 | |||||||||
2.500%, due 10/20/30 | 23,036 | 23,189 | |||||||||
3.000%, due 04/20/18 | 3,491 | 3,613 | |||||||||
3.000%, due 05/20/25 | 61,889 | 64,829 | |||||||||
3.000%, due 06/20/25 | 21,392 | 22,245 | |||||||||
3.500%, due 03/20/25 | 13,093 | 13,098 | |||||||||
4.000%, due 01/20/18 | 55,240 | 58,312 | |||||||||
4.000%, due 05/20/18 | 3,701 | 3,870 | |||||||||
4.000%, due 06/20/19 | 24,159 | 25,441 | |||||||||
GNMA TBA 3.500% | 12,000,000 | 12,358,829 | |||||||||
4.000 | % | 8,000,000 | 8,456,029 | ||||||||
4.500 | % | 8,000,000 | 8,659,875 | ||||||||
5.000 | % | 1,000,000 | 1,094,785 | ||||||||
6.000 | % | 2,000,000 | 2,247,578 | ||||||||
6.500 | % | 500,000 | 562,031 | ||||||||
GNMA II TBA 2.500% | 1,000,000 | 956,562 | |||||||||
3.000 | %2 | 21,000,000 | 21,057,586 | ||||||||
3.500 | % | 26,000,000 | 26,822,151 | ||||||||
4.000 | % | 22,000,000 | 23,305,647 | ||||||||
4.500 | % | 15,000,000 | 16,292,343 | ||||||||
Total government national mortgage association certificates (cost—$160,215,136) | 160,652,524 | ||||||||||
Federal home loan mortgage corporation certificates*—14.84% | |||||||||||
FHLMC 3.000%, due 03/01/43 | 576,668 | 565,424 | |||||||||
3.000%, due 04/01/43 | 493,657 | 484,031 | |||||||||
3.000%, due 05/01/43 | 558,372 | 547,484 | |||||||||
3.500%, due 09/01/32 | 978,117 | 1,014,699 | |||||||||
4.000%, due 01/01/37 | 883,491 | 930,587 | |||||||||
4.000%, due 07/01/43 | 372,310 | 390,843 | |||||||||
5.000%, due 11/01/27 | 10,682 | 11,758 | |||||||||
5.000%, due 10/01/29 | 525,087 | 576,802 | |||||||||
5.000%, due 09/01/33 | 490,369 | 547,196 | |||||||||
5.000%, due 01/01/34 | 70,283 | 77,205 | |||||||||
5.000%, due 06/01/34 | 27,975 | 30,866 |
Face amount | Value | ||||||||||
Federal home loan mortgage corporation certificates*—(continued) | |||||||||||
5.000%, due 04/01/35 | $ | 61,177 | $ | 67,218 | |||||||
5.000%, due 05/01/35 | 326,065 | 359,661 | |||||||||
5.000%, due 07/01/35 | 1,989,390 | 2,194,163 | |||||||||
5.000%, due 08/01/35 | 94,540 | 104,262 | |||||||||
5.000%, due 10/01/35 | 77,372 | 85,323 | |||||||||
5.000%, due 12/01/35 | 21,349 | 23,538 | |||||||||
5.000%, due 06/01/37 | 134,746 | 148,017 | |||||||||
5.000%, due 06/01/39 | 154,505 | 169,722 | |||||||||
5.000%, due 08/01/39 | 67,710 | 74,379 | |||||||||
5.000%, due 03/01/40 | 17,514 | 19,367 | |||||||||
5.000%, due 07/01/40 | 135,447 | 148,830 | |||||||||
5.000%, due 08/01/40 | 145,675 | 160,473 | |||||||||
5.000%, due 09/01/40 | 119,026 | 130,799 | |||||||||
5.000%, due 11/01/40 | 529,884 | 583,037 | |||||||||
5.000%, due 02/01/41 | 1,199,701 | 1,323,548 | |||||||||
5.000%, due 03/01/41 | 73,922 | 81,233 | |||||||||
5.000%, due 04/01/41 | 2,591,063 | 2,858,927 | |||||||||
5.000%, due 05/01/41 | 561,077 | 619,081 | |||||||||
5.000%, due 06/01/41 | 152,480 | 168,296 | |||||||||
5.000%, due 07/01/41 | 100,602 | 110,998 | |||||||||
5.500%, due 06/01/28 | 3,795 | 4,212 | |||||||||
5.500%, due 02/01/32 | 4,158 | 4,628 | |||||||||
5.500%, due 12/01/32 | 6,270 | 6,997 | |||||||||
5.500%, due 02/01/33 | 147,247 | 162,698 | |||||||||
5.500%, due 05/01/33 | 3,256 | 3,633 | |||||||||
5.500%, due 06/01/33 | 356,603 | 397,848 | |||||||||
5.500%, due 12/01/33 | 144,640 | 161,916 | |||||||||
5.500%, due 12/01/34 | 117,166 | 131,264 | |||||||||
5.500%, due 06/01/35 | 2,088,263 | 2,335,083 | |||||||||
5.500%, due 07/01/35 | 14,048 | 15,705 | |||||||||
5.500%, due 10/01/35 | 595,740 | 663,724 | |||||||||
5.500%, due 12/01/35 | 311,391 | 347,339 | |||||||||
5.500%, due 06/01/36 | 1,181,305 | 1,318,720 | |||||||||
5.500%, due 12/01/36 | 2,038,967 | 2,251,669 | |||||||||
5.500%, due 03/01/37 | 256,255 | 284,785 | |||||||||
5.500%, due 07/01/37 | 135,629 | 144,403 | |||||||||
5.500%, due 10/01/37 | 13,420 | 14,820 | |||||||||
5.500%, due 04/01/38 | 415,995 | 461,034 | |||||||||
5.500%, due 05/01/38 | 59,410 | 65,607 | |||||||||
5.500%, due 12/01/38 | 9,984 | 11,104 | |||||||||
5.500%, due 01/01/39 | 173,357 | 191,442 | |||||||||
5.500%, due 09/01/39 | 516,586 | 576,403 | |||||||||
5.500%, due 02/01/40 | 26,248 | 28,986 | |||||||||
5.500%, due 03/01/40 | 18,721 | 20,680 | |||||||||
5.500%, due 05/01/40 | 352,532 | 389,308 | |||||||||
5.500%, due 02/01/41 | 97,257 | 107,491 | |||||||||
5.500%, due 03/01/41 | 370,916 | 409,609 | |||||||||
6.000%, due 11/01/37 | 3,476,172 | 3,895,061 | |||||||||
7.000%, due 08/01/25 | 507 | 575 | |||||||||
9.000%, due 04/01/25 | 32,263 | 32,689 | |||||||||
11.000%, due 09/01/15 | 158 | 160 | |||||||||
11.000%, due 10/01/15 | 53 | 54 | |||||||||
11.000%, due 12/01/15 | 808 | 839 | |||||||||
11.000%, due 06/01/19 | 277 | 278 | |||||||||
11.000%, due 09/01/20 | 320 | 325 |
17
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Federal home loan mortgage corporation certificates*—(concluded) | |||||||||||
11.500%, due 01/01/16 | $ | 854 | $ | 868 | |||||||
11.500%, due 01/01/18 | 2,708 | 2,720 | |||||||||
11.500%, due 06/01/19 | 13,410 | 13,634 | |||||||||
FHLMC ARM 2.256%, due 11/01/27 | 89,795 | 95,581 | |||||||||
2.262%, due 01/01/28 | 17,553 | 17,641 | |||||||||
2.310%, due 04/01/29 | 137,972 | 146,236 | |||||||||
2.337%, due 07/01/24 | 173,081 | 175,602 | |||||||||
2.352%, due 10/01/23 | 69,361 | 71,758 | |||||||||
2.394%, due 11/01/29 | 367,751 | 387,571 | |||||||||
2.407%, due 06/01/28 | 285,811 | 305,145 | |||||||||
2.407%, due 07/01/28 | 121,416 | 129,979 | |||||||||
2.433%, due 12/01/29 | 76,930 | 82,022 | |||||||||
2.540%, due 11/01/25 | 216,670 | 232,001 | |||||||||
2.540%, due 01/01/29 | 196,885 | 210,981 | |||||||||
2.555%, due 10/01/27 | 256,352 | 272,927 | |||||||||
2.570%, due 10/01/27 | 219,626 | 234,874 | |||||||||
2.750%, due 01/01/30 | 31,994 | 32,212 | |||||||||
2.965%, due 10/01/29 | 518 | 519 | |||||||||
FHLMC TBA 3.000% | 12,000,000 | 11,750,719 | |||||||||
4.000% | 17,000,000 | 17,843,093 | |||||||||
4.500% | 17,000,000 | 18,282,040 | |||||||||
5.000% | 3,000,000 | 3,297,305 | |||||||||
Total federal home loan mortgage corporation certificates (cost—$81,788,428) | 82,634,284 | ||||||||||
Federal housing administration certificates—0.11% | |||||||||||
FHA GMAC 7.400%, due 02/01/213 | 208,834 | 205,074 | |||||||||
FHA Reilly 6.896%, due 07/01/20 | 411,799 | 411,799 | |||||||||
Total federal housing administration certificates (cost—$620,995) | 616,873 | ||||||||||
Federal national mortgage association certificates*—45.06% | |||||||||||
FNMA 2.000%, due 05/01/28 | 330,728 | 323,761 | |||||||||
2.000%, due 08/01/28 | 443,452 | 434,109 | |||||||||
2.000%, due 10/01/28 | 2,152,710 | 2,107,367 | |||||||||
2.356%, due 03/01/23 | 2,851,579 | 2,780,305 | |||||||||
2.500%, due 06/01/28 | 706,577 | 713,466 | |||||||||
2.500%, due 07/01/28 | 6,381,518 | 6,443,805 | |||||||||
2.500%, due 08/01/28 | 138,050 | 139,270 | |||||||||
2.564%, due 02/01/23 | 1,662,747 | 1,648,935 | |||||||||
3.000%, due 06/01/29 | 7,999,997 | 8,256,676 | |||||||||
3.000%, due 10/01/42 | 967,932 | 951,877 | |||||||||
3.000%, due 04/01/43 | 966,940 | 949,939 | |||||||||
3.000%, due 06/01/43 | 5,187,620 | 5,093,538 | |||||||||
3.000%, due 07/01/43 | 8,497,190 | 8,340,313 | |||||||||
3.000%, due 08/01/43 | 12,626,750 | 12,391,285 | |||||||||
3.000%, due 09/01/43 | 1,973,662 | 1,940,300 |
Face amount | Value | ||||||||||
Federal national mortgage association certificates*—(continued) | |||||||||||
3.330%, due 07/01/22 | $ | 3,886,000 | $ | 4,027,554 | |||||||
3.500%, due 11/01/25 | 1,205,632 | 1,274,212 | |||||||||
3.500%, due 03/01/42 | 862,136 | 881,110 | |||||||||
3.500%, due 12/01/42 | 3,462,724 | 3,540,121 | |||||||||
3.500%, due 03/01/43 | 1,824,884 | 1,865,752 | |||||||||
3.500%, due 05/01/43 | 6,705,413 | 6,861,973 | |||||||||
3.600%, due 08/01/23 | 817,000 | 858,522 | |||||||||
3.765%, due 12/01/25 | 3,000,000 | 3,156,599 | |||||||||
4.000%, due 03/01/19 | 65,397 | 69,222 | |||||||||
4.000%, due 06/01/19 | 62,964 | 66,659 | |||||||||
4.000%, due 07/01/25 | 55,873 | 59,440 | |||||||||
4.000%, due 08/01/25 | 133,072 | 142,352 | |||||||||
4.000%, due 09/01/25 | 128,713 | 136,955 | |||||||||
4.000%, due 10/01/25 | 36,759 | 39,297 | |||||||||
4.000%, due 11/01/25 | 370,720 | 396,657 | |||||||||
4.000%, due 01/01/26 | 611,242 | 652,755 | |||||||||
4.000%, due 02/01/262 | 2,640,267 | 2,822,752 | |||||||||
4.000%, due 03/01/26 | 2,151,144 | 2,301,215 | |||||||||
4.000%, due 04/01/26 | 4,836,154 | 5,173,049 | |||||||||
4.000%, due 05/01/39 | 262,612 | 277,181 | |||||||||
4.000%, due 09/01/39 | 625,002 | 660,486 | |||||||||
4.000%, due 12/01/41 | 1,838,476 | 1,943,652 | |||||||||
4.000%, due 07/01/42 | 10,014,932 | 10,600,425 | |||||||||
4.000%, due 09/01/42 | 11,164,585 | 11,803,547 | |||||||||
4.000%, due 10/01/42 | 8,159,642 | 8,626,630 | |||||||||
4.500%, due 03/01/23 | 17,647 | 18,982 | |||||||||
4.500%, due 08/01/41 | 1,754,740 | 1,927,274 | |||||||||
5.000%, due 03/01/23 | 10,068 | 10,930 | |||||||||
5.000%, due 05/01/23 | 222,809 | 241,653 | |||||||||
5.000%, due 09/01/23 | 850,679 | 938,191 | |||||||||
5.000%, due 07/01/24 | 1,222,674 | 1,348,455 | |||||||||
5.000%, due 03/01/25 | 52,675 | 58,094 | |||||||||
5.000%, due 10/01/34 | 118,581 | 130,779 | |||||||||
5.000%, due 08/01/41 | 56,613 | 62,517 | |||||||||
5.500%, due 06/01/17 | 1,411 | 1,425 | |||||||||
5.500%, due 07/01/27 | 319,998 | 355,905 | |||||||||
5.500%, due 02/01/32 | 18,464 | 20,458 | |||||||||
5.500%, due 11/01/32 | 192,663 | 215,647 | |||||||||
5.500%, due 03/01/33 | 162,135 | 179,324 | |||||||||
5.500%, due 12/01/33 | 2,590 | 2,901 | |||||||||
5.500%, due 04/01/34 | 146,521 | 162,228 | |||||||||
5.500%, due 01/01/35 | 139,897 | 154,894 | |||||||||
5.500%, due 04/01/36 | 95,151 | 105,388 | |||||||||
5.500%, due 05/01/37 | 620,326 | 692,904 | |||||||||
5.500%, due 07/01/37 | 306,982 | 342,425 | |||||||||
5.500%, due 06/01/39 | 2,975,855 | 3,320,947 | |||||||||
5.500%, due 11/01/39 | 1,126,415 | 1,258,506 | |||||||||
6.000%, due 11/01/21 | 112,294 | 120,511 | |||||||||
6.000%, due 01/01/23 | 279,267 | 299,644 | |||||||||
6.000%, due 03/01/23 | 551,171 | 602,598 | |||||||||
6.000%, due 11/01/26 | 63,674 | 71,734 | |||||||||
6.000%, due 02/01/32 | 87,923 | 98,730 | |||||||||
6.000%, due 09/01/32 | 11,581 | 13,108 | |||||||||
6.000%, due 10/01/32 | 34,016 | 38,215 | |||||||||
6.000%, due 12/01/32 | 34,417 | 38,947 |
18
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Federal national mortgage association certificates*—(continued) | |||||||||||
6.000%, due 01/01/33 | $ | 157,437 | $ | 177,014 | |||||||
6.000%, due 02/01/33 | 45,380 | 50,933 | |||||||||
6.000%, due 09/01/34 | 369,289 | 416,197 | |||||||||
6.000%, due 04/01/35 | 1,120 | 1,258 | |||||||||
6.000%, due 05/01/35 | 187,583 | 211,224 | |||||||||
6.000%, due 06/01/35 | 41,249 | 46,696 | |||||||||
6.000%, due 07/01/35 | 98,905 | 111,591 | |||||||||
6.000%, due 08/01/35 | 180,899 | 203,107 | |||||||||
6.000%, due 09/01/35 | 3,075 | 3,479 | |||||||||
6.000%, due 01/01/36 | 97,563 | 110,115 | |||||||||
6.000%, due 06/01/36 | 4,631 | 5,218 | |||||||||
6.000%, due 09/01/36 | 118,350 | 133,162 | |||||||||
6.000%, due 10/01/36 | 72,058 | 81,141 | |||||||||
6.000%, due 11/01/36 | 626 | 703 | |||||||||
6.000%, due 12/01/36 | 446,874 | 503,315 | |||||||||
6.000%, due 01/01/37 | 35,344 | 39,752 | |||||||||
6.000%, due 03/01/37 | 87,991 | 98,981 | |||||||||
6.000%, due 10/01/37 | 320,907 | 359,937 | |||||||||
6.000%, due 12/01/37 | 154,945 | 173,817 | |||||||||
6.000%, due 01/01/38 | 1,043,355 | 1,170,250 | |||||||||
6.000%, due 08/01/38 | 2,315 | 2,597 | |||||||||
6.000%, due 10/01/38 | 545,485 | 614,396 | |||||||||
6.000%, due 11/01/38 | 1,909,066 | 2,148,201 | |||||||||
6.000%, due 01/01/39 | 697,925 | 785,966 | |||||||||
6.000%, due 04/01/392 | 1,323,572 | 1,488,696 | |||||||||
6.000%, due 05/01/39 | 136,593 | 153,679 | |||||||||
6.000%, due 04/01/40 | 460,237 | 516,968 | |||||||||
6.000%, due 11/01/402 | 1,585,993 | 1,787,742 | |||||||||
6.000%, due 05/01/412 | 1,359,756 | 1,529,754 | |||||||||
6.500%, due 07/01/19 | 17,310 | 19,468 | |||||||||
6.500%, due 10/01/36 | 685,341 | 780,979 | |||||||||
6.500%, due 02/01/37 | 10,102 | 11,345 | |||||||||
6.500%, due 07/01/37 | 85,113 | 95,581 | |||||||||
6.500%, due 08/01/37 | 251,293 | 282,198 | |||||||||
6.500%, due 09/01/37 | 297,324 | 333,890 | |||||||||
6.500%, due 12/01/37 | 360,230 | 404,532 | |||||||||
6.500%, due 08/01/38 | 4,958 | 5,568 | |||||||||
6.500%, due 05/01/40 | 3,365,611 | 3,823,323 | |||||||||
7.500%, due 11/01/26 | 22,036 | 22,373 | |||||||||
8.000%, due 11/01/26 | 30,263 | 33,155 | |||||||||
9.000%, due 02/01/26 | 20,456 | 22,959 | |||||||||
10.500%, due 08/01/20 | 356 | 359 | |||||||||
10.500%, due 04/01/22 | 11 | 11 | |||||||||
FNMA ARM 1.323%, due 03/01/44 | 401,608 | 417,997 | |||||||||
1.625%, due 09/01/15 | 6,384 | 6,387 | |||||||||
1.645%, due 07/01/30 | 22,631 | 23,268 | |||||||||
1.680%, due 10/01/26 | 227,152 | 231,769 | |||||||||
2.180%, due 05/01/30 | 51,400 | 53,970 | |||||||||
2.205%, due 02/01/26 | 40,565 | 40,553 | |||||||||
2.220%, due 09/01/26 | 23,968 | 24,073 | |||||||||
2.378%, due 02/01/30 | 6,197 | 6,228 | |||||||||
2.418%, due 03/01/25 | 131,788 | 139,151 | |||||||||
2.627%, due 12/01/27 | 25,255 | 25,346 |
Face amount | Value | ||||||||||
Federal national mortgage association certificates*—(concluded) | |||||||||||
FNMA TBA 2.500% | $ | 13,000,000 | $ | 12,948,876 | |||||||
3.000% | 26,100,000 | 25,755,576 | |||||||||
3.500%2 | 16,000,000 | 16,805,734 | |||||||||
4.000%2 | 13,500,000 | 14,210,012 | |||||||||
4.500%2 | 6,000,000 | 6,339,612 | |||||||||
5.000% | 18,585,000 | 20,423,661 | |||||||||
5.500% | 1,000,000 | 1,108,500 | |||||||||
Total federal national mortgage association certificates (cost—$248,652,387) | 250,908,720 | ||||||||||
Collateralized mortgage obligations—15.42% | |||||||||||
Alternative Loan Trust, Series 2003-16T1, Class A2 0.625%, due 09/25/331 | 157,906 | 155,143 | |||||||||
Series 2004-J7, Class 2A1 0.932%, due 09/25/341 | 177,793 | 175,433 | |||||||||
ARM Trust, Series 2005-8, Class 3A21 2.655%, due 11/25/351 | 1,652,326 | 1,423,640 | |||||||||
BCAP LLC 2010-RR1 Trust, Series 2010-RR1, Class 1A4 2.805%, due 03/26/371,4 | 332,413 | 260,614 | |||||||||
BCAP LLC 2011-RR10 Trust, Series 2011-RR10, Class 3A5 2.614%, due 06/26/351,4 | 559,278 | 566,397 | |||||||||
BCAP LLC 2011-RR11 Trust, Series 2011-R11, Class 22A1 1.596%, due 10/26/351,4 | 354,031 | 354,552 | |||||||||
Series 2011-R11, Class 8A5 0.356%, due 07/26/361,4 | 516,566 | 489,590 | |||||||||
BCAP LLC 2011-RR6-I Trust, Series 2011-RR6, Class 11A1 0.402%, due 07/26/351,4 | 202,999 | 199,724 | |||||||||
BCAP LLC 2013-RR1 Series 2013-RR1, Class 3A4 8.178%, due 10/26/371,4 | 495,215 | 450,539 | |||||||||
BCAP LLC 2013-RR5 Trust, Series 2013-RR5, Class 5A1 0.963%, due 11/26/461,4 | 419,892 | 404,237 | |||||||||
BCAP LLC 2014-RR1 Trust, Series 2014-RR1, Class 3A1 0.315%, due 03/26/371,4 | 198,802 | 193,070 | |||||||||
Bear Stearns ARM Trust, Series 2002-011, Class 1A2 2.667%, due 02/25/331 | 16,262 | 15,389 | |||||||||
Series 2004-002, Class 12A2 2.638%, due 05/25/341 | 93,411 | 91,828 | |||||||||
Bear Stearns Asset-Backed Securities Trust, Series 2003-AC5, Class A1 5.750%, due 10/25/335 | 1,496,859 | 1,561,371 |
19
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Series 2004-AC3, Class A2 6.000%, due 06/25/345 | $ | 1,720,739 | $ | 1,847,510 | |||||||
Chevy Chase Mortgage Funding Corp., Series 2004-1, Class A1 0.435%, due 01/25/351,4 | 172,981 | 154,208 | |||||||||
CHL Mortgage Pass-Through Trust, Series 2003-HYB1, Class 1A1 2.707%, due 05/19/331 | 10,074 | 9,933 | |||||||||
CSMC Trust, Series 2013-5R, Class 1A1 0.402%, due 02/27/361,4 | 814,065 | 769,657 | |||||||||
Series 2013-MH1, Class A 4.792%, due 05/27/531,3,6 | 1,090,429 | 1,079,678 | |||||||||
Deutsche Mortgage Securities, Inc., REMIC Trust, Series 2010-RS2, Class A2 3.835%, due 06/28/471,4 | 86,295 | 86,374 | |||||||||
FHLMC REMIC,* Series 0023, Class KZ 6.500%, due 11/25/23 | 37,624 | 41,899 | |||||||||
Series 0159, Class H 4.500%, due 09/15/21 | 9,477 | 10,003 | |||||||||
Series 1003, Class H 0.902%, due 10/15/201 | 22,518 | 22,799 | |||||||||
Series 1349, Class PS 7.500%, due 08/15/22 | 2,034 | 2,293 | |||||||||
Series 1502, Class PX 7.000%, due 04/15/23 | 260,051 | 287,640 | |||||||||
Series 1534, Class Z 5.000%, due 06/15/23 | 120,948 | 130,170 | |||||||||
Series 1573, Class PZ 7.000%, due 09/15/23 | 40,397 | 45,224 | |||||||||
Series 1658, Class GZ 7.000%, due 01/15/24 | 19,464 | 22,027 | |||||||||
Series 1694, Class Z 6.500%, due 03/15/24 | 166,673 | 186,222 | |||||||||
Series 1775, Class Z 8.500%, due 03/15/25 | 4,697 | 5,458 | |||||||||
Series 2400, Class FQ 0.652%, due 01/15/321 | 336,437 | 340,085 | |||||||||
Series 2411, Class FJ 0.502%, due 12/15/291 | 34,615 | 34,687 | |||||||||
Series 3096, Class FL 0.552%, due 01/15/361 | 321,001 | 321,289 | |||||||||
Series 3114, Class PF 0.552%, due 02/15/361 | 1,614,039 | 1,618,873 | |||||||||
Series 3153, Class UF 0.582%, due 05/15/361 | 334,178 | 334,920 | |||||||||
Series 3339, Class LI 6.328%, due 07/15/371,4,7 | 2,344,443 | 365,492 | |||||||||
Series 3442, Class MT 0.152%, due 07/15/341,6 | 220,063 | 206,116 | |||||||||
Series 3667, Class FW 0.702%, due 02/15/381 | 369,244 | 371,889 |
Face amount | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Series 3671, Class FQ 1.002%, due 12/15/361 | $ | 3,102,183 | $ | 3,154,545 | |||||||
Series 3864, Class NT 5.500%, due 03/15/391,6 | 1,805,715 | 1,870,028 | |||||||||
Series 4037, Class PI 3.000%, due 04/15/274,7 | 7,130,042 | 786,310 | |||||||||
Series 4141, Class IM 3.500%, due 12/15/424,7 | 6,758,460 | 1,210,640 | |||||||||
Series 4182, Class YI 2.500%, due 03/15/284,7 | 9,632,828 | 1,074,309 | |||||||||
Series 4238, Class FT 0.502%, due 08/15/431 | 1,357,149 | 1,360,379 | |||||||||
Series 4255, Class SN 11.863%, due 05/15/351,6 | 1,116,921 | 1,158,751 | |||||||||
Series 4265, Class ES 13.275%, due 11/15/431,6 | 3,663,809 | 3,972,834 | |||||||||
FNMA REMIC,* Trust 1987-002, Class Z 11.000%, due 11/25/17 | 31,793 | 33,247 | |||||||||
Trust 1988-007, Class Z 9.250%, due 04/25/18 | 77,009 | 83,982 | |||||||||
Trust 1992-129, Class L 6.000%, due 07/25/22 | 5,293 | 5,758 | |||||||||
Trust 1992-158, Class ZZ 7.750%, due 08/25/22 | 16,801 | 18,869 | |||||||||
Trust 1993-037, Class PX 7.000%, due 03/25/23 | 208,130 | 232,776 | |||||||||
Trust 1993-250, Class Z 7.000%, due 12/25/23 | 2,906 | 2,961 | |||||||||
Trust 1997-022, Class F 0.602%, due 03/25/271 | 224,947 | 220,193 | |||||||||
Trust 2002-060, Class F1 0.555%, due 06/25/321 | 141,170 | 140,436 | |||||||||
Trust 2006-112, Class LF 0.705%, due 11/25/361 | 4,491,566 | 4,516,270 | |||||||||
Trust 2007-067, Class FB 0.475%, due 07/25/371 | 1,487,924 | 1,486,605 | |||||||||
Trust 2009-033, Class FB 0.975%, due 03/25/371 | 2,217,865 | 2,251,634 | |||||||||
Trust 2010-035, Class EF 0.705%, due 04/25/401 | 605,864 | 609,997 | |||||||||
Trust 2010-141, Class FA 0.655%, due 12/25/401 | 1,219,364 | 1,221,720 | |||||||||
Trust 2012-090, Class FB 0.595%, due 08/25/421 | 587,192 | 584,822 | |||||||||
Trust 2012-111, Class HS 3.538%, due 10/25/421,6 | 291,143 | 237,036 | |||||||||
Trust 2012-128, Class FK 0.505%, due 11/25/421 | 909,825 | 914,297 | |||||||||
Trust 2012-151, Class SB 5.773%, due 01/25/431,6 | 1,612,749 | 1,271,841 | |||||||||
Trust 2013-010, Class US 7.604%, due 02/25/431,6 | 707,702 | 660,135 |
20
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Trust 2013-014, Class MI 3.500%, due 07/25/424,7 | $ | 1,507,637 | $ | 242,568 | |||||||
Trust 2013-028, Class YS 5.995%, due 07/25/421,4,7 | 1,933,534 | 384,811 | |||||||||
Trust 2013-030, Class CI 3.000%, due 04/25/434,7 | 2,907,530 | 515,172 | |||||||||
Trust 2013-030, Class GI 3.000%, due 01/25/434,7 | 6,244,309 | 1,141,930 | |||||||||
Trust 2013-030, Class JI 3.000%, due 04/25/434,7 | 2,165,713 | 401,292 | |||||||||
Trust 2013-034, Class PS 5.995%, due 08/25/421,4,7 | 1,574,503 | 296,324 | |||||||||
Trust 2013-044, Class ZG 3.500%, due 03/25/42 | 1,418,507 | 1,309,716 | |||||||||
Trust 2013-045, Class IK 3.000%, due 02/25/434,7 | 3,832,929 | 795,410 | |||||||||
Trust 2013-116, Class IY 3.000%, due 09/25/434,7 | 1,195,965 | 216,838 | |||||||||
Trust G92-040, Class ZC 7.000%, due 07/25/22 | 23,265 | 25,676 | |||||||||
Trust G94-006, Class PJ 8.000%, due 05/17/24 | 30,160 | 34,621 | |||||||||
GMACM Mortgage Loan Trust, Series 2004-AR1, Class 12A 2.989%, due 06/25/341 | 51,286 | 52,480 | |||||||||
GNMA REMIC, Trust 2000-009, Class FH 0.652%, due 02/16/301 | 24,769 | 24,970 | |||||||||
Trust 2000-035, Class F 0.702%, due 12/16/251 | 161,696 | 163,042 | |||||||||
Trust 2007-002, Class BO 0.266%, due 06/20/354,8 | 237,300 | 213,544 | |||||||||
Trust 2007-018, Class CO 0.540%, due 03/20/354,8 | 23,264 | 18,023 | |||||||||
Trust 2010-H01, Class FA 0.971%, due 01/20/601 | 5,073,983 | 5,131,172 | |||||||||
Trust 2013-H19, Class DF 0.801%, due 05/20/631 | 1,928,998 | 1,939,185 | |||||||||
Trust 2013-H20, Class FB 1.151%, due 08/20/631 | 2,973,552 | 3,060,370 | |||||||||
Trust 2013-H23, Class TA 0.871%, due 09/20/631 | 1,104,276 | 1,114,452 | |||||||||
Indymac Index Mortgage Loan Trust, Series 2005-AR2, Class 2A1A 0.475%, due 02/25/351 | 865,599 | 805,737 | |||||||||
JPMorgan Alternative Loan Trust, Series 2008-R4, Class 2A1 0.654%, due 06/27/371,4 | 2,639,716 | 2,205,452 | |||||||||
JPMorgan Resecuritization Trust, Series 2009-7, Class 1A1 2.586%, due 08/27/371,4 | 322,856 | 327,311 | |||||||||
LB Commercial Conduit Mortgage Trust, Series 2007-C3, Class A4 5.893%, due 07/15/441 | 2,500,000 | 2,750,425 |
Face amount | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Merrill Lynch Mortgage Investors Trust, Series 2004-1, Class 2A2 2.147%, due 12/25/341 | $ | 613,435 | $ | 610,654 | |||||||
Series 2004-A, Class A1 0.615%, due 04/25/291 | 150,206 | 144,685 | |||||||||
Morgan Stanley Mortgage Loan Trust, Series 2004-11AR, Class 1A1 0.475%, due 01/25/351 | 129,818 | 123,187 | |||||||||
Series 2005-6AR, Class 1A1 0.435%, due 11/25/351 | 265,282 | 261,965 | |||||||||
Morgan Stanley Re-REMIC Trust, Series 2010-R4, Class 4B 0.452%, due 02/26/371,4 | 412,721 | 263,885 | |||||||||
Series 2013-R10, Class 3A 0.465%, due 01/26/511,4 | 671,011 | 636,129 | |||||||||
Mortgage Equity Conversion Asset Trust, Series 2006-SFG3, Class A 0.610%, due 10/25/411,4 | 1,321,730 | 1,057,384 | |||||||||
Series 2007-FF3, Class A 0.610%, due 05/25/421,4 | 5,027,682 | 4,122,699 | |||||||||
NCUA Guaranteed Notes, Series 2011-R4, Class 1A 0.536%, due 03/06/201 | 1,834,421 | 1,838,819 | |||||||||
Opteum Mortgage Acceptance Corp., Asset Backed Pass-Through Certificates, Series 2005-2, Class AII2 0.465%, due 04/25/351 | 167,286 | 165,443 | |||||||||
RBSSP Resecuritization Trust Certificate, Series 2009-6, Class 18A1 0.652%, due 12/26/361,4 | 1,939,183 | 1,878,573 | |||||||||
Sequoia Mortgage Trust, Series 5, Class A 0.856%, due 10/19/261 | 233,119 | 231,397 | |||||||||
Structured ARM Loan, Series 2007-4, Class 1A2 0.375%, due 05/25/371 | 402,665 | 297,026 | |||||||||
Structured Asset Mortgage Investments, Inc., Series 2006-AR3, Class 11A1 0.365%, due 04/25/361 | 1,278,561 | 958,274 | |||||||||
Series 2007-AR5, Class A2 0.705%, due 09/25/471 | 6,686,347 | 2,817,640 | |||||||||
Thornburg Mortgage Securities Trust, Series 2005-1, Class A3 2.248%, due 04/25/451 | 239,263 | 242,612 | |||||||||
Washington Mutual Commercial Mortgage Securities Trust, Series 2007-SL3, Class A1A 5.334%, due 03/23/451,4 | 839,425 | 854,584 |
21
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Collateralized mortgage obligations—(concluded) | |||||||||||
Washington Mutual Mortgage Pass-Through Certificates, Series 2003-AR9, Class 1A6 2.410%, due 09/25/331 | $ | 1,922,005 | $ | 1,959,755 | |||||||
Series 2003-AR9, Class 2A 2.442%, due 09/25/331 | 504,008 | 511,401 | |||||||||
Total collateralized mortgage obligations (cost—$86,215,244) | 85,862,981 | ||||||||||
Asset-backed securities—4.31% | |||||||||||
ALM V Ltd., Series 2012-5A, Class A1R 1.454%, due 02/13/231,4 | 1,200,000 | 1,199,992 | |||||||||
Ameriquest Mortgage Securities, Inc., Asset-Backed Pass-Through Certificates, Series 2004-R9, Class M2 1.130%, due 10/25/341 | 1,275,000 | 1,212,836 | |||||||||
Series 2005-R1, Class M4 0.895%, due 03/25/351 | 200,000 | 157,497 | |||||||||
Series 2005-R11, Class M1 0.605%, due 01/25/361 | 400,000 | 352,209 | |||||||||
Amortizing Residential Collateral Trust, Series 2004-1, Class A5 1.155%, due 10/25/341 | 376,919 | 370,345 | |||||||||
Bear Stearns Asset-Backed Securities Trust, Series 2006-2, Class M1 0.575%, due 07/25/361 | 200,000 | 197,163 | |||||||||
Chase Funding Trust, Series 2002-3, Class 2A1 0.795%, due 08/25/321 | 198,741 | 181,238 | |||||||||
Countrywide Asset-Backed Certificates, Series 2004-4, Class M1 0.875%, due 07/25/341 | 300,000 | 281,251 | |||||||||
Series 2004-6, Class M11.055%, due 10/25/341 | 1,099,627 | 1,046,632 | |||||||||
Series 2005-13, Class 3AV3 0.402%, due 04/25/361 | 453,500 | 444,142 | |||||||||
Series 2005-8, Class M1 0.625%, due 12/25/351 | 2,386,872 | 2,384,210 | |||||||||
Dryden Senior Loan Fund, Series 2011-22A, Class A1R 1.404%, due 01/15/221,4 | 500,000 | 499,655 | |||||||||
EMC Mortgage Loan Trust, Series 2003-A, Class A2 0.905%, due 08/25/401,4 | 183,600 | 169,041 | |||||||||
FBR Securitization Trust, Series 2005-5, Class AV24 0.895%, due 11/25/351 | 244,001 | 242,785 |
Face amount | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
First Franklin Mortgage Loan Trust, Series 2005-FFH1, Class M1 0.605%, due 06/25/361 | $ | 261,217 | $ | 236,145 | |||||||
Fremont Home Loan Trust, Series 2004-A, Class M1 0.980%, due 01/25/341 | 815,654 | 742,556 | |||||||||
Green Tree Financial Corp., Series 1998-2, Class A5 6.240%, due 12/01/281 | 27,739 | 28,472 | |||||||||
GSAA Home Equity Trust, Series 2005-4, Class A5 0.375%, due 03/25/351 | 1,137,070 | 1,119,419 | |||||||||
JP Morgan Mortgage Acquisition Corp., Series 2005-FRE1, Class A2F3 3.700%, due 10/25/355 | 148,141 | 139,298 | |||||||||
Series 2006-FRE1, Class A1 0.385%, due 05/25/351 | 594,830 | 577,407 | |||||||||
Series 2006-FRE1, Class A3 0.345%, due 05/25/351 | 532,769 | 522,974 | |||||||||
Series 2006-FRE2, Class A1 0.335%, due 02/25/361 | 538,234 | 513,450 | |||||||||
JP Morgan Mortgage Acquisition Trust, Series 2006-ACC1, Class A1 0.312%, due 05/25/361 | 605,321 | 583,455 | |||||||||
Series 2006-ACC1, Class M1 0.422%, due 05/25/361 | 300,000 | 246,795 | |||||||||
Series 2006-CH1, Class A5 0.382%, due 07/25/361 | 225,000 | 214,225 | |||||||||
Series 2007-CH2, Class AV1 0.315%, due 01/25/371 | 1,112,251 | 1,080,104 | |||||||||
Merrill Lynch Mortgage Investors Trust, Series 2006-FF1, Class M3 0.465%, due 08/25/361 | 300,000 | 259,934 | |||||||||
Park Place Securities, Inc., Asset-Backed Pass Through Certificates, Series 2005-WHQ3, Class M4 0.785%, due 06/25/351 | 200,000 | 170,509 | |||||||||
RASC, Series 2005-KS11 Trust, Series 2005-KS11, Class M2 0.575%, due 12/25/351 | 400,000 | 321,639 | |||||||||
Renaissance Home Equity Loan Trust, Series 2003-2, Class A 1.032%, due 08/25/331 | 275,913 | 259,013 | |||||||||
Saturn CLO Ltd., Series 2007-1A, Class A1 0.449%, due 05/13/221,4 | 1,525,500 | 1,510,738 | |||||||||
Securitized Asset-Backed Receivables LLC Trust, Series 2005-FR5, Class A1B 0.435%, due 08/25/351 | 445,430 | 437,209 | |||||||||
SLM Student Loan Trust, Series 2008-9, Class A 1.734%, due 04/25/231 | 4,179,785 | 4,338,696 |
22
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Asset-backed securities—(concluded) | |||||||||||
Series 2010-A, Class 2A 3.402%, due 05/16/441,4 | $ | 1,312,037 | $ | 1,396,906 | |||||||
Specialty Underwriting & Residential Financing, Series 2003-BC1, Class A 0.835%, due 01/25/341 | 57,784 | 49,983 | |||||||||
Stone Tower CLO Ltd., Series 2007-6A, Class A1 0.463%, due 04/17/211,4 | 525,768 | 513,473 | |||||||||
Total asset-backed securities (cost—$23,937,438) | 24,001,396 | ||||||||||
Stripped mortgage-backed securities—1.72% | |||||||||||
FHLMC Multifamily Structured Pass-Through Certificates,* | |||||||||||
Series K005, Class AX 1.377%, due 11/25/191,4,7 | 23,988,256 | 1,504,496 | |||||||||
Series K006, Class AX1 1.032%, due 01/25/201,4,7 | 13,700,393 | 638,027 | |||||||||
Series K014, Class X1 1.251%, due 04/25/211,4,7 | 8,011,352 | 556,404 | |||||||||
Series K027, Class X1 0.840%, due 01/25/231,4,7 | 7,072,532 | 390,284 | |||||||||
Series K712, Class X1 1.392%, due 11/25/191,4,7 | 4,656,247 | 279,850 | |||||||||
Series KAIV, Class X1 1.369%, due 06/25/211,4,7 | 4,832,453 | 339,233 | |||||||||
FHLMC REMIC,* Series 0013, Class B 7.000%, due 06/25/234,7 | 88,033 | 19,377 | |||||||||
Series 2136, Class GD 7.000%, due 03/15/294,7 | 6,389 | 1,255 | |||||||||
Series 2178, Class PI 7.500%, due 08/15/294,7 | 35,961 | 7,154 | |||||||||
FNMA Aces, Trust 2013-M5, Class X2* 2.387%, due 01/25/221,4,7 | 2,201,241 | 262,621 | |||||||||
GNMA REMIC, Trust 2011-92, Class IX 1.149%, due 11/16/441,4,7 | 26,595,584 | 1,772,011 | |||||||||
KGS Alpha SBA, Series 2012 1.081%, due 04/25/381,3,6,7 | 75,510,046 | 3,772,021 | |||||||||
Total stripped mortgage-backed securities (cost—$8,902,603) | 9,542,733 | ||||||||||
Short-term US government and agency obligations9—6.14% | |||||||||||
Federal Home Loan Bank Discount Notes 0.086%, due 09/12/14 | 300,000 | 299,970 | |||||||||
0.065%, due 09/19/14 | 16,400,000 | 16,399,246 | |||||||||
0.076%, due 09/24/14 | 3,300,000 | 3,299,832 | |||||||||
0.085%, due 09/24/14 | 14,200,000 | 14,198,189 | |||||||||
Total short-term US government and agency obligations (cost—$34,196,332) | 34,197,237 |
Face amount | Value | ||||||||||
Repurchase agreements—25.85% | |||||||||||
Repurchase agreement dated 07/30/14 with Barclays Capital, Inc., 0.060% due 08/06/14, collateralized by $48,679,000 Federal Home Loan Mortgage Corp. obligations, 4.000% due 07/01/44; (value-$51,652,319); proceeds: $50,000,583 | $ | 50,000,000 | $ | 50,000,000 | |||||||
Repurchase agreement dated 07/31/14 with BNP Paribas Securities Corp. 0.140% due 08/01/14, collateralized by $60,215,000 Federal Home Loan Mortgage Corp. obligations, 3.000% due 01/01/43; (value-$54,055,313); proceeds: $52,200,203 | 52,200,000 | 52,200,000 | |||||||||
Repurchase agreement dated 07/31/14 with Goldman Sachs & Co., 0.130% due 08/01/14, collateralized by $46,882,000 Federal Home Loan Mortgage Corp. obligations, 3.500% due 09/01/42; (value-$42,783,206); proceeds: $41,300,149 | 41,300,000 | 41,300,000 | |||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $435,228 US Treasury Note, 0.625% due 05/31/17; (value-$431,449); proceeds: $423,000 | 423,000 | 423,000 | |||||||||
Total repurchase agreements (cost—$143,923,000) | 143,923,000 | ||||||||||
Notional amount | |||||||||||
Options purchased—0.00%10 | |||||||||||
Put swaptions purchased6—0.00%10 | |||||||||||
3 Month USD LIBOR 10 Year Swap, strike @ 2.830%, expires 08/05/2014 (Counterparty: CITI; receive fixed rate); underlying swap terminates 08/07/24 | USD | 6,000,000 | 678 |
23
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2014
Number of contracts/ Notional amount | Value | ||||||||||
Options purchased—(concluded) | |||||||||||
Put swaptions purchased6—(concluded) | |||||||||||
3 Month USD LIBOR 10 Year Swap, strike @ 2.980%, expires 08/05/2014 (Counterparty: CITI; receive fixed rate); underlying swap terminates 08/07/24 | USD | 16,000,000 | $ | 0 | |||||||
Total put swaptions purchased | 678 | ||||||||||
Total options purchased (cost—$109,250) | 678 | ||||||||||
Total investments before investments sold short (cost—$825,415,764)—148.91% | 829,155,136 |
Face amount | Value | ||||||||||
Investments sold short—(6.13)% | |||||||||||
FNMA TBA* 3.500% | $ | (5,000,000 | ) | $ | (5,079,842 | ) | |||||
4.000% | (16,000,000 | ) | (16,801,106 | ) | |||||||
4.500% | (3,500,000 | ) | (3,760,941 | ) | |||||||
6.000% | (4,000,000 | ) | (4,496,376 | ) | |||||||
GNMA TBA 3.000% | (4,000,000 | ) | (4,002,844 | ) | |||||||
Total investments sold short (proceeds—$34,127,109) | (34,141,109 | ) | |||||||||
Liabilities in excess of other assets—(42.78)% | (238,200,432 | ) | |||||||||
Net assets—100.00% | $ | 556,813,595 |
For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 232.
Aggregate cost for federal income tax purposes before investments sold short was $825,733,569; and net unrealized appreciation
consisted of:
Gross unrealized appreciation | $ | 8,025,195 | |||||
Gross unrealized depreciation | (4,603,628 | ) | |||||
Net unrealized appreciation | $ | 3,421,567 |
Written options*
Notional amount | Call options written | Expiration date | Premiums received | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||
$6,000,000 | FNMA TBA, 3.500%, strike @ 102.94 | 09/04/14 | $ | 11,719 | $ | (7,325 | ) | $ | 4,394 | ||||||||||||||
9,000,000 | FNMA TBA, 3.500%, strike @ 102.94 | 09/04/14 | 17,578 | (10,988 | ) | 6,590 | |||||||||||||||||
6,000,000 | FNMA TBA, 4.000%, strike @ 105.22 | 09/04/14 | 14,766 | (14,766 | ) | 0 | |||||||||||||||||
5,000,000 | FNMA TBA, 4.000%, strike @ 105.36 | 08/05/14 | 16,016 | (4,738 | ) | 11,278 | |||||||||||||||||
11,000,000 | FNMA TBA, 4.000%, strike @ 106.19 | 08/05/14 | 25,781 | (110 | ) | 25,671 | |||||||||||||||||
$ | 85,860 | $ | (37,927 | ) | $ | 47,933 | |||||||||||||||||
Put options written | |||||||||||||||||||||||
5,000,000 | FNMA TBA, 3.500%, strike @ 100.34 | 10/07/14 | $ | 25,781 | $ | (27,404 | ) | $ | (1,623 | ) | |||||||||||||
$ | 111,641 | $ | (65,331 | ) | $ | 46,310 |
Written option activity for the year ended July 31, 2014 was as follows:
Notional amount | Premiums received | ||||||||||
Options outstanding at July 31, 2013 | $ | — | $ | — | |||||||
Options written | 340,000,000 | 1,114,766 | |||||||||
Options exercised | (50,000,000 | ) | (191,875 | ) | |||||||
Options expired prior to exercise | (248,000,000 | ) | (811,250 | ) | |||||||
Options outstanding at July 31, 2014 | $ | 42,000,000 | $ | 111,641 |
24
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2014
Total return swap agreement6
Counterparty | Notional amount | Termination date | Payments made by the Portfolio12 | Payments received by the Portfolio11,12 | Upfront payment received | Value | Unrealized appreciation | ||||||||||||||||||||||||
CSI | $ | 5,294,599 | 01/12/43 | 1 Month USD LIBOR | $ | — | $ | 18,110 | $ | (1,118 | ) | $ | 16,992 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
US government obligations | $ | — | $ | 36,814,710 | $ | — | $ | 36,814,710 | |||||||||||
Government national mortgage association certificates | — | 160,652,524 | — | 160,652,524 | |||||||||||||||
Federal home loan mortgage corporation certificates | — | 82,634,284 | — | 82,634,284 | |||||||||||||||
Federal housing administration certificates | — | — | 616,873 | 616,873 | |||||||||||||||
Federal national mortgage association certificates | — | 250,908,720 | — | 250,908,720 | |||||||||||||||
Collateralized mortgage obligations | — | 79,603,220 | 6,259,761 | 85,862,981 | |||||||||||||||
Asset-backed securities | — | 24,001,396 | — | 24,001,396 | |||||||||||||||
Stripped mortgage-backed securities | — | 5,770,712 | 3,772,021 | 9,542,733 | |||||||||||||||
Short-term US government and agency obligations | — | 34,197,237 | — | 34,197,237 | |||||||||||||||
Repurchase agreements | — | 143,923,000 | — | 143,923,000 | |||||||||||||||
Options purchased | — | 678 | — | 678 | |||||||||||||||
Total | $ | — | $ | 818,506,481 | $ | 10,648,655 | $ | 829,155,136 | |||||||||||
Liabilities | |||||||||||||||||||
Investments sold short | $ | — | $ | (34,141,109 | ) | $ | — | $ | (34,141,109 | ) | |||||||||
Written options | — | (65,331 | ) | — | (65,331 | ) | |||||||||||||
Swap agreements | — | (1,118 | ) | — | (1,118 | ) | |||||||||||||
Total | $ | — | $ | (34,207,558 | ) | $ | — | $ | (34,207,558 | ) |
At July 31, 2014, there were no transfers between Level 1 and Level 2.
The following is a rollforward of the Portfolio's investments that were valued using unobservable inputs (Level 3) for the year ended July 31, 2014:
Federal housing administration certificates | Federal national mortgage association certificates | Collateralized mortgage obligations | Stripped mortgage- backed securities | Total | |||||||||||||||||||
Beginning balance | $ | 761,768 | $ | 12,250,706 | $ | 11,242,576 | $ | 4,943,954 | $ | 29,199,004 | |||||||||||||
Purchases | — | — | 1,091,404 | — | 1,091,404 | ||||||||||||||||||
Sales | (148,846 | ) | (12,353,974 | ) | (1,066,566 | ) | — | (13,569,386 | ) | ||||||||||||||
Accrued discounts/(premiums) | (127 | ) | — | 36,745 | (35,330 | ) | 1,288 | ||||||||||||||||
Total realized gain/(loss) | 51 | — | 30,996 | (873,856 | ) | (842,809 | ) | ||||||||||||||||
Net change in unrealized appreciation/depreciation | 4,027 | 103,268 | 55,778 | (262,747 | ) | (99,674 | ) | ||||||||||||||||
Transfers into Level 3 | — | — | — | — | — | ||||||||||||||||||
Transfers out of Level 3 | — | — | (5,131,172 | ) | — | (5,131,172 | ) | ||||||||||||||||
Ending balance | $ | 616,873 | $ | — | $ | 6,259,761 | $ | 3,772,021 | $ | 10,648,655 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investments held at July 31, 2014 was $(304,760). Transfers out of Level 3 represent the value at the end of the period. At July 31, 2014, a security was transferred from Level 3 to Level 2 as the valuation is based on observable inputs from an established pricing source.
25
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2014
Portfolio footnotes
* On September 7, 2008, the Federal Housing Finance Agency placed the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.
1 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2014 and changes periodically.
2 Security, or portion thereof, pledged as collateral for investments sold short or written options.
3 Security is being fair valued by a valuation committee under the direction of the board of trustees.
4 Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities, which represent 6.11% of net assets as of July 31, 2014, are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers.
5 Step bond that converts to the noted fixed rate at a designated future date.
6 Illiquid investment as of July 31, 2014.
7 Interest Only Securities. These securities entitle the holder to receive interest payments from an underlying pool of mortgages. The risk associated with these securities is related to the speed of the principal paydowns. High prepayments would result in a smaller amount of interest being received and cause the yield to decrease. Low prepayments would result in a greater amount of interest being received and cause the yield to increase.
8 Principal Only Security. This security entitles the holder to receive principal payments from an underlying pool of assets. High prepayments return principal faster than expected and cause the yield to increase. Low prepayments return principal more slowly than expected and cause the yield to decrease.
9 Rates shown are the discount rates at date of purchase.
10 Amount represents less than 0.005%.
11 Payment is based on the performance of the underlying 1 Month USD LIBOR.
12 Payments made or received are based on the notional amount.
See accompanying notes to financial statements.
26
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 2.56% before the deduction of the maximum PACE Select program fee.1 In comparison, the Barclays US Intermediate Government/Credit Index (the "benchmark") returned 2.32%, and the Lipper Core Bond Funds category posted a median return of 4.31%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 31. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisors' comments2
Please note: On June 5, 2014, Babson Capital Management began serving as a sub-advisor for this Portfolio.
BlackRock
Our portion of the Portfolio outperformed the Fund's benchmark during the reporting period, driven by a broad range of factors. The largest contributors to returns were duration and yield curve positioning. Over the course of the fiscal year, we tactically traded duration and yield curve positioning, taking both long and short positions. Performance was augmented primarily from being short duration when rates rose, such as during the fourth quarter of 2013. Similarly, the yield curve moved considerably over the 12-month reporting period. We took advantage of the flattening and re-steepening that occurred in the third quarter of 2013, as the market speculated on who the next Federal Reserve Board Chairperson would be. We were also well positioned for the flattening of the curve that has transpired in 2014. Also contributing to performance were allocations to high yield corporate bonds, commercial mortgage-backed securities ("CMBS") and asset-backed securities ("ABS"). Investors' appetite for yield drove spread sectors to tighten over the reporting period and, consequently, allocations to these sectors benefited returns. Investment grade corporate security selection also bolstered returns, as subordinated bank debt, our preference for financials over industrials and our participation in the September 2013 Verizon debt offering all proved beneficial for performance. Finally, our trading strategies in the foreign exchange markets supported performance. We opportunistically took short positions in the
PACE Select Advisors Trust – PACE Intermediate Fixed Income Investments
Investment Sub-Advisors:
BlackRock Financial Management, Inc. ("BlackRock")
Babson Capital Management LLC ("Babson")
Portfolio Managers:
BlackRock: David Antonelli and Akiva Dickstein
Babson: William Awad, Ronald Desautels, David Nagle, Charles Sanford and Douglas Trevallion
Objective:
Current income, consistent with reasonable stability of principal
Investment process:
BlackRock The Portfolio invests primarily in fixed income securities. BlackRock decides to buy specific bonds based on its credit analysis and review. BlackRock strives to add value by controlling the Portfolio's duration within a narrow band relative to the Barclays Capital US Intermediate Government/Credit Index. To accomplish this, BlackRock employs an analytical process that involves evaluating macroeconomic trends, technical market factors, yield-curve exposure and market volatility. Once BlackRock establishes the investment themes on duration, yield curve exposure, convexity, sector weighting, credit quality and liquidity, the Portfolio's investments are diversified by sector, subsector and security.
(continued on next page)
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
27
PACE Select Advisors Trust
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Sub-Advisor's comments – continued
euro, Australian dollar, British pound and Japanese yen during times when these currencies depreciated versus the US dollar. Detracting from performance was our underweight to investment grade corporate bonds which, like other spread sectors, outperformed the benchmark over the reporting period.
A number of derivative instruments were employed during the reporting period. Options on futures were used to manage the overall duration and yield curve exposures of the Portfolio. Interest rate swaps and swaptions were utilized to manage the Portfolio's overall duration and spread duration. Foreign exchange forward contracts were used to hedge foreign currency risk associated with holding bonds that are not denominated in US dollars. Furthermore, we used foreign-exchange options, as these option hedges can provide the same level of downside protection as a forward hedge, while allowing for unlimited participation in favorable currency moves, in exchange for an upfront premium payment. Finally, credit default swaps were used as a way to express a negative or positive view on a company's or group of companies' credit strength. We believe that derivatives are beneficial to performance as they help us manage our portion of the Portfolio more efficiently.
Babson Capital Management
Our portion of the Portfolio outperformed our specific benchmark, the Barclays 1-3 Year Government Index, but underperformed the Portfolio's index, the Barclays US Intermediate Government/Credit Index during the reporting period, from our inception as a sub-advisor on June 5, 2014 through July 31, 2014. Our allocation to the securitized sector detracted from performance. We are overweight this portion of the fixed income market, as consumers have reduced their debt levels and housing conditions have leveled off over the past year. Non-agency mortgage-backed securities ("MBS") had the weakest performance for the period, but the supply of non-agency MBS is low, with strong demand. Therefore, we have opportunistically added positions with strong underlying fundamentals. Consumer asset-backed securities ("ABS") modestly detracted from results. Within the sector, we prefer automobile receivables, timeshares and shipping containers, where we can enhance yield relative to alternatives such as credit card receivables. Elsewhere, our commercial mortgage-backed securities ("CMBS") were a slight contributor to performance. Within the CMBS market, we preferred shorter maturity securities. An overweight to investment grade corporate bonds, particularly A-rated securities, was the primary contributor to performance. Banking was our best performer within the sector, whereas our exposure to the leasing sector was a detractor. We added a small allocation to preferred debt (less than 1%) and these securities contributed modestly to results during the reporting period. Our allocation to BB-rated corporate bonds was a negative for performance. These securities sold off in July, due to increased market volatility as tensions between Russia and Ukraine continued to mount. Our BB-rated holdings have relatively shorter maturities—generally inside of three years. Even
Investment process (concluded)
Babson seeks to invest primarily in a diversified portfolio of short-term fixed income securities through an investment process that consists of a top-down, macroeconomic view, coupled with a bottom-up perspective driven by rigorous fundamental credit analysis. Babson seeks to add value through security selection, sector rotation, convexity biases and yield curve positioning. Finally, Babson employs a quantitative rules-based approach to manage duration, which involves limiting the portfolio duration to a range of 0-3 years, driven by the dynamics and shape of the yield curve.
28
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Sub-Advisor's comments – concluded
with the uptick in volatility, corporate fundamentals remain strong. However, we continue to monitor increasing debt on corporate balance sheets.
Although short on an absolute basis, our portion of the Portfolio's duration was longer than the benchmark's duration of 1.9 years. Positioning in Treasuries and Treasury futures benefited performance. However, our holdings in cash and cash equivalents detracted from performance, as we started investing our portion of the Portfolio on June 5, 2014.
The Fund does use derivatives to manage overall duration and yield curve exposures. As discussed, we used Treasury futures during the reporting period, and they were a modest contributor to performance.
Special considerations
The Portfolio may be appropriate for long-term investors seeking current income and a reasonable stability of principal. Investors should be able to withstand short-term fluctuations in the fixed income markets. The value of the Portfolio changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the companies in whose securities the Portfolio invests. It is important to note that an investment in the Portfolio is only one component of a balanced investment plan.
29
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Illustration of an assumed investment of $10,000 in Class P shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE Intermediate Fixed Income Investments Class P shares versus the Barclays US Intermediate Government/Credit Index over the 10 years ended July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE Intermediate Fixed Income Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustration purposes only.
30
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 2.30 | % | 3.17 | % | 3.52 | % | |||||||||
Class C2 | 1.78 | % | 2.66 | % | 2.99 | % | |||||||||
Class Y3 | 2.56 | % | 3.43 | % | 3.78 | % | |||||||||
Class P4 | 2.56 | % | 3.43 | % | 3.77 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (2.27 | )% | 2.22 | % | 3.04 | % | |||||||||
Class C2 | 1.03 | % | 2.66 | % | 2.99 | % | |||||||||
Barclays US Intermediate Government/Credit Index5 | 2.32 | % | 3.76 | % | 4.22 | % | |||||||||
Lipper Core Bond Funds median6 | 4.31 | % | 5.26 | % | 4.58 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 3.00 | % | 3.63 | % | 3.63 | % | |||||||||
Class C2 | 2.39 | % | 3.11 | % | 3.10 | % | |||||||||
Class Y3 | 3.17 | % | 3.90 | % | 3.89 | % | |||||||||
Class P4 | 3.17 | % | 3.89 | % | 3.89 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (1.61 | )% | 2.68 | % | 3.16 | % | |||||||||
Class C2 | 1.64 | % | 3.11 | % | 3.10 | % |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—0.99% and 0.93%; Class C—1.49% and 1.43%; Class Y—0.89% and 0.68%; and Class P—0.74% and 0.68%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—0.93%; Class C—1.43%; Class Y—0.68%; and Class P—0.68%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 4.5%. Class A shares bear ongoing 12b-1 service fees.
2 Maximum contingent deferred sales charge for Class C shares is 0.75% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
3 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
4 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
5 The Barclays US Intermediate Government/Credit Index is an unmanaged subset of the Barclays US Government/Credit Index covering all investment grade issues with maturities from one up to (but not including) 10 years. The average-weighted maturity is typically between four and five years. Investors should note that indices do not reflect the deduction of fees and expenses.
6 On September 20, 2013, Lipper renamed the peer group classification for PACE Intermediate Fixed Income Investments from the Lipper Intermediate Investment Grade Debt Funds category to the Lipper Core Bond Funds category in order to more accurately reflect the groups' strategies. This name change is purely cosmetic and will not affect any existing reports or processes.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
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Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Weighted average duration | 3.1 yrs. | ||||||
Weighted average maturity | 4.4 yrs. | ||||||
Average coupon | 2.33 | % | |||||
Net assets (mm) | $ | 447.9 | |||||
Number of holdings | 409 | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Bonds and notes | 92.0 | % | |||||
Preferred stocks | 0.7 | ||||||
Options, futures, swaps and forward foreign currency contracts | 0.02 | ||||||
Cash equivalents and other assets less liabilities | 7.3 | ||||||
Total | 100.0 | % | |||||
Quality diversification1 | 07/31/14 | ||||||
US government and agency securities | 50.1 | % | |||||
AAA | 5.2 | ||||||
AA | 4.6 | ||||||
A | 10.1 | ||||||
BBB and below/non-rated | 22.0 | ||||||
Preferred stock | 0.7 | ||||||
Options, futures, swaps and forward foreign currency contracts | 0.02 | ||||||
Cash equivalents and other assets less liabilities | 7.3 | ||||||
Total | 100.0 | % | |||||
Asset allocation1 | 07/31/14 | ||||||
US government obligations | 43.0 | % | |||||
Corporate notes | 33.1 | ||||||
Collateralized mortgage obligations | 6.9 | ||||||
Asset-backed securities | 7.9 | ||||||
US government agency mortgage pass-through certificates | 0.7 | ||||||
Non-US government obligations | 0.4 | ||||||
Preferred stock | 0.7 | ||||||
Options, futures, swaps and forward foreign currency contracts | 0.02 | ||||||
Cash equivalents and other assets less liabilities | 7.3 | ||||||
Total | 100.0 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time. Credit quality ratings shown are based on the ratings assigned to portfolio holdings by Standard & Poor's Ratings Group, an independent rating agency.
2 Amount is less than 0.05%.
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Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
US government obligations—42.95% | |||||||||||
US Treasury Bonds 3.375%, due 05/15/44 | 4,980,000 | $ | 5,039,914 | ||||||||
6.250%, due 05/15/30 | 1,180,000 | 1,673,387 | |||||||||
US Treasury Inflation Index Bonds (TIPS) 1.375%, due 02/15/44 | 673,636 | 748,578 | |||||||||
US Treasury Inflation Index Notes (TIPS) 0.125%, due 04/15/19 | 3,471,881 | 3,545,659 | |||||||||
0.625%, due 01/15/24 | 754,226 | 778,797 | |||||||||
US Treasury Notes 0.375%, due 04/30/16 | 3,000,000 | 2,998,008 | |||||||||
0.500%, due 07/31/16 | 20,150,000 | 20,134,263 | |||||||||
0.875%, due 04/30/17 | 2,000,000 | 1,996,876 | |||||||||
0.875%, due 07/15/172 | 71,005,000 | 70,738,731 | |||||||||
1.250%, due 11/30/18 | 1,165,000 | 1,147,252 | |||||||||
1.375%, due 09/30/18 | 4,550,000 | 4,516,230 | |||||||||
1.500%, due 12/31/18 | 4,090,000 | 4,065,714 | |||||||||
1.625%, due 03/31/19 | 4,810,000 | 4,792,338 | |||||||||
1.625%, due 07/31/19 | 34,390,000 | 34,164,333 | |||||||||
2.125%, due 07/31/21 | 20,830,000 | 20,846,268 | |||||||||
2.250%, due 03/31/21 | 7,200,000 | 7,228,123 | |||||||||
2.500%, due 05/15/24 | 7,985,000 | 7,946,321 | |||||||||
Total US government obligations (cost—$192,334,136) | 192,360,792 | ||||||||||
Commercial paper—6.46% | |||||||||||
Banking-US—6.46% | |||||||||||
ABB Treasury Centre 0.110%, due 08/19/143 | 2,000,000 | 1,999,890 | |||||||||
Air Products & Chemicals, Inc. 0.090%, due 08/11/143 | 2,000,000 | 1,999,950 | |||||||||
Bank of Nova Scotia 0.120%, due 10/20/143 | 2,000,000 | 1,999,467 | |||||||||
BASF Aktiengesellsch 0.110%, due 09/22/143 | 2,000,000 | 1,999,682 | |||||||||
BMW US Capital LLC 0.100%, due 09/26/143 | 2,000,000 | 1,999,689 | |||||||||
ConocoPhillips Qatar F 0.070%, due 08/08/143 | 2,000,000 | 1,999,973 | |||||||||
Emerson Electric Co. 0.070%, due 08/21/143 | 2,000,000 | 1,999,922 | |||||||||
Intel Corp. 0.080%, due 08/28/14 | 2,000,000 | 1,999,880 | |||||||||
John Deere Capital Corp. 0.080%, due 08/14/143 | 2,000,000 | 1,999,942 | |||||||||
L'Oreal USA, Inc. 0.080%, due 08/21/143 | 2,000,000 | 1,999,911 | |||||||||
National Rural Utilities Cooperative 0.100%, due 08/07/14 | 2,650,000 | 2,649,956 | |||||||||
PACCAR Financial Corp. 0.070%, due 08/06/14 | 2,300,000 | 2,299,977 | |||||||||
Precision Castparts Corp. 0.100%, due 09/17/143 | 2,000,000 | 1,999,739 |
Face amount1 | Value | ||||||||||
Commercial paper—(concluded) | |||||||||||
Banking-US—(concluded) | |||||||||||
Sanofi 0.080%, due 09/15/143 | 2,000,000 | $ | 1,999,800 | ||||||||
Total commercial paper (cost—$28,947,778) | 28,947,778 | ||||||||||
Federal home loan bank certificate—0.16% | |||||||||||
FHLB 4.000%, due 09/01/28 (cost—$678,894) | 680,000 | 712,677 | |||||||||
Federal home loan mortgage corporation certificates*—0.12% | |||||||||||
FHLMC 6.250%, due 07/15/32 | 302,000 | 416,526 | |||||||||
6.750%, due 03/15/31 | 82,000 | 117,427 | |||||||||
Total federal home loan mortgage corporation certificates (cost—$496,423) | 533,953 | ||||||||||
Federal national mortgage association certificates*—0.30% | |||||||||||
FNMA TBA 2.500% | 900,000 | 846,984 | |||||||||
3.000 | % | 500,000 | 515,469 | ||||||||
Total federal national mortgage association certificates (cost—$1,360,594) | 1,362,453 | ||||||||||
Collateralized mortgage obligations—6.94% | |||||||||||
Banc of America Commercial Mortgage Trust, Series 2007-4, Class AM 5.822%, due 02/10/514 | 400,000 | 444,710 | |||||||||
Bear Stearns Commercial Mortgage Securities Trust, Series 2006-PWR12, Class A1A 5.705%, due 09/11/384 | 1,508,467 | 1,618,591 | |||||||||
Commercial Mortgage Pass-Through Certificates, Series 2006-C5, Class AM 5.343%, due 12/15/39 | 840,000 | 906,309 | |||||||||
Series 2006-C8, Class AM 5.347%, due 12/10/46 | 655,000 | 708,691 | |||||||||
Series 2010-C1, Class A1 3.156%, due 07/10/463 | 1,136,943 | 1,158,778 | |||||||||
Series 2013-GAM, Class A2 3.367%, due 02/10/283 | 1,090,000 | 1,081,830 | |||||||||
Series 2014-CR16, Class A4 4.051%, due 04/10/47 | 585,000 | 617,062 | |||||||||
Series 2014-CR17, Class A5 3.977%, due 05/10/47 | 155,000 | 162,494 | |||||||||
Series 2014-TWC, Class A 1.002%, due 02/13/323,4 | 1,580,000 | 1,582,465 | |||||||||
Credit Suisse Commercial Mortgage Trust, Series 2006-C2, Class AM 5.669%, due 03/15/394 | 1,520,000 | 1,594,641 | |||||||||
Series 2007-C4, Class A1AM 5.856%, due 09/15/394 | 1,110,000 | 1,214,801 |
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PACE Select Advisors Trust
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Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
DBRR Trust, Series 2013-EZ3, Class A 1.636%, due 12/18/493,4 | 1,399,938 | $ | 1,410,438 | ||||||||
FHLMC Multifamily Structured Pass Through Certificates, Series K038, Class X1* 1.203%, due 03/25/244,5 | 6,450,721 | 579,978 | |||||||||
FHLMC REMIC,* Trust 4323, Class CA 4.000%, due 03/15/40 | 350,118 | 375,029 | |||||||||
Trust 4325, Class MA 4.000%, due 09/15/39 | 1,304,054 | 1,394,160 | |||||||||
Trust 4328, Class DA 4.000%, due 01/15/36 | 1,300,972 | 1,383,516 | |||||||||
Trust 4336, Class MA 4.000%, due 01/15/40 | 1,189,446 | 1,274,347 | |||||||||
FNMA REMIC,* Trust 2005-109, Class PV 6.000%, due 10/25/32 | 448,828 | 483,076 | |||||||||
Trust 2014-48, Class AB 4.000%, due 10/25/40 | 380,000 | 405,511 | |||||||||
FREMF Mortgage Trust, Series 2013-K712, Class B 3.368%, due 05/25/453,4 | 110,000 | 111,415 | |||||||||
Hilton USA Trust, Series 2013-HLT, Class AFX 2.662%, due 11/05/303 | 875,000 | 880,789 | |||||||||
JPMorgan Chase Commercial Mortgage Securities, Series 2005-LDP2, Class AM 4.780%, due 07/15/42 | 400,000 | 411,048 | |||||||||
Series 2006-CB14, Class AM 5.440%, due 12/12/444 | 400,000 | 423,335 | |||||||||
Series 2006-LDP8, Class AJ 5.480%, due 05/15/454 | 500,000 | 530,770 | |||||||||
Series 2007-CB18, Class A1A 5.431%, due 06/12/474 | 1,385,988 | 1,506,644 | |||||||||
Series 2007-LDPX, Class A1A 5.439%, due 01/15/49 | 692,327 | 756,464 | |||||||||
Series 2011-PLSD, Class A2 3.364%, due 11/13/443 | 800,000 | 833,984 | |||||||||
ML-CFC Commercial Mortgage Trust, Series 2006-4, Class A1A 5.166%, due 12/12/49 | 1,058,788 | 1,137,385 | |||||||||
Series 2007-9, Class AM 5.856%, due 09/12/494 | 350,000 | 389,206 | |||||||||
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C13, Class C 4.896%, due 11/15/464 | 815,000 | 854,087 | |||||||||
Morgan Stanley Capital I, Series 2005-HQ6, Class A4A 4.989%, due 08/13/42 | 2,075,000 | 2,119,185 | |||||||||
Series 2007-IQ14, Class A1A 5.665%, due 04/15/494 | 694,990 | 759,882 | |||||||||
Morgan Stanley Re-REMIC Trust 1.000%, due 03/27/513 | 214,593 | 213,855 |
Face amount1 | Value | ||||||||||
Collateralized mortgage obligations—(concluded) | |||||||||||
Motel 6 Trust, Series 2012-MTL6, Class B 2.743%, due 10/05/253 | 945,000 | $ | 949,933 | ||||||||
Small Business Administration, Series 2004-P10B, Class 1 4.754%, due 08/10/14 | 119,037 | 119,149 | |||||||||
STRPS 2012-1 Ltd., Series 2012-1A, Class A 1.500%, due 12/25/443 | 482,074 | 477,253 | |||||||||
VFC LLC, Series 2014-2, Class A 2.750%, due 07/20/306 | 226,511 | 226,492 | |||||||||
Total collateralized mortgage obligations (cost—$31,088,541) | 31,097,303 | ||||||||||
Asset-backed securities—7.87% | |||||||||||
Alterna Funding I LLC, Series 2014-1A, Class Note 1.625%, due 02/15/213,7 | 150,000 | 150,000 | |||||||||
American Credit Acceptance Receivables, Series 2014-3, Class A 0.990%, due 08/10/183 | 240,000 | 239,994 | |||||||||
AmeriCredit Automobile Receivables Trust, Series 2012-2, Class C 2.640%, due 10/10/17 | 130,000 | 132,856 | |||||||||
Series 2013-5, Class A2A 0.650%, due 03/08/17 | 1,275,364 | 1,276,635 | |||||||||
Series 2013-5, Class D 2.860%, due 12/08/19 | 585,000 | 594,064 | |||||||||
Argent Securities, Inc. Asset-Backed Pass-Through Certificates, Series 2005-W2, Class A2B2 0.415%, due 10/25/354 | 296,060 | 294,976 | |||||||||
ARL Second LLC, Series 2014-1A, Class A1 2.920%, due 06/15/443 | 396,579 | 395,277 | |||||||||
Auto ABS Compartiment, Series 2012-2, Class A 2.800%, due 04/27/258 | EUR | 252,136 | 340,949 | ||||||||
Avery Point V CLO Ltd., Series 2014-5A, Class A 1.696%, due 07/17/263,4 | 250,000 | 250,046 | |||||||||
Birchwood Park CLO Ltd., Series 2014-1A, Class A 1.674%, due 07/15/264 | 250,000 | 250,000 | |||||||||
Bumper, Series 2011-2, Class A 1.346%, due 02/23/234,8 | EUR | 211,995 | 284,736 | ||||||||
Capital Automotive REIT, Series 2010-1A, Class A 5.730%, due 12/15/383 | 94,811 | 101,458 | |||||||||
Carlyle Global Market Strategies CLO Ltd., Series 2013-4A, Class A1 1.704%, due 10/15/253,4 | 250,000 | 250,472 |
34
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Carrington Mortgage Loan Trust, Series 2005-NC4, Class A3 0.555%, due 09/25/354 | 58,078 | $ | 57,451 | ||||||||
CFC LLC, Series 2014-2A, Class A 1.440%, due 11/16/203 | 150,000 | 149,228 | |||||||||
Chrysler Capital Auto Receivables Trust, Series 2013-BA, Class A2 0.560%, due 12/15/163 | 1,253,984 | 1,255,015 | |||||||||
Series 2013-BA, Class A4 1.270%, due 03/15/193 | 1,240,000 | 1,239,586 | |||||||||
CLI Funding LLC, Series 2006-1A, Class A 0.336%, due 08/18/213,4 | 415,982 | 413,625 | |||||||||
CLI Funding V LLC, Series 2014-1A, Class A 3.290%, due 06/18/293 | 386,495 | 387,612 | |||||||||
Countrywide Asset-Backed Certificates, Series 2005-6, Class M1 0.645%, due 12/25/354 | 153,930 | 153,223 | |||||||||
CPS Auto Receivables Trust, Series 2013-A, Class A 1.310%, due 06/15/203 | 65,210 | 65,192 | |||||||||
Series 2013-C, Class A 1.640%, due 04/16/183 | 138,218 | 139,051 | |||||||||
Series 2014-B, Class A 1.110%, due 11/15/183 | 371,123 | 370,752 | |||||||||
CPS Auto Trust, Series 2012-C, Class A 1.820%, due 12/16/193 | 192,486 | 194,441 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2012-2A, Class A 1.520%, due 03/16/203 | 360,000 | 361,550 | |||||||||
Series 2013-1A, Class A 1.210%, due 10/15/203 | 1,495,000 | 1,497,418 | |||||||||
Series 2013-2A, Class B 2.260%, due 10/15/213 | 840,000 | 847,814 | |||||||||
Drug Royalty II LP 2, Series 2014-1, Class A1 3.082%, due 07/15/233,4 | 264,835 | 266,278 | |||||||||
Eaton Vance CLO Ltd., Series 2014-1A, Class A 1.685%, due 07/15/263,4 | 250,000 | 250,000 | |||||||||
Education Funding Capital Trust IV, Series 2004-1, Class A4 1.654%, due 06/15/434 | 150,000 | 150,401 | |||||||||
Education Loan Asset-Backed Trust I, Series 2012-1, Class A1 0.605%, due 06/25/223,4 | 423,713 | 423,529 | |||||||||
Exeter Automobile Receivables Trust, Series 2013-2A, Class A 1.490%, due 11/15/173 | 209,950 | 210,724 | |||||||||
Series 2014-1A, Class A 1.290%, due 05/15/183 | 123,282 | 123,491 | |||||||||
First Investors Auto Owner Trust, Series 2011-2A, Class C 5.020%, due 08/15/173 | 250,000 | 254,534 |
Face amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Series 2013-3A, Class A3 1.440%, due 10/15/193 | 150,000 | $ | 150,495 | ||||||||
Flagship Credit Auto Trust, Series 2014-1, Class A 1.210%, due 04/15/193 | 154,907 | 154,761 | |||||||||
Ford Credit Floorplan Master Owner Trust, Series 2012-2, Class A 1.920%, due 01/15/19 | 2,535,000 | 2,575,157 | |||||||||
Global Container Assets Ltd., Series 2013-1A, Class A1 2.200%, due 11/05/283 | 329,699 | 329,861 | |||||||||
Hilton Grand Vacations Trust, Series 2013-A, Class A 2.280%, due 01/25/263 | 139,450 | 141,109 | |||||||||
Series 2014-AA, Class A 1.770%, due 11/25/263 | 489,082 | 487,955 | |||||||||
Icon Brands Holdings LLC, Series 2012-1A, Class A 4.229%, due 01/25/433 | 142,903 | 143,871 | |||||||||
JP Morgan Mortgage Acquisition Corp., Series 2005-FRE1, Class A2V2 0.372%, due 10/25/354 | 291,107 | 285,576 | |||||||||
KeyCorp Student Loan Trust, Series 2006-A, Class 2A4 0.544%, due 09/27/354 | 300,000 | 288,659 | |||||||||
Lehman XS Trust, Series 2005-6, Class 1A1 0.415%, due 11/25/354,9 | 347,353 | 252,160 | |||||||||
Merrill Lynch Mortgage Synthetic, Series 205-ACR1, Class M1 0.889%, due 06/28/353,4 | 246,859 | 242,753 | |||||||||
Nelnet Student Loan Trust, Series 2014-1A, Class B 1.655%, due 10/25/473,4 | 100,000 | 93,547 | |||||||||
Series 2014-6A, Class A 0.720%, due 11/25/473,4 | 300,000 | 298,358 | |||||||||
Neuberger Berman CLO XVII Ltd., Series 2014-17A, Class X 1.231%, due 08/04/253,4 | 250,000 | 249,980 | |||||||||
New York City Tax Lien Trust, Series 2013-A, Class A 1.190%, due 11/10/263 | 87,934 | 87,872 | |||||||||
Series 2014-A, Class A 1.380%, due 11/10/273,7 | 150,000 | 149,980 | |||||||||
OneMain Financial Issuance Trust, Series 2014-1, Class A 2.430%, due 06/18/243 | 100,000 | 100,304 | |||||||||
RAAC Trust, Series 2005-RP2, Class M1 0.805%, due 06/25/353,4 | 527,153 | 527,915 | |||||||||
Series 2006-RP2, Class A 0.405%, due 02/25/373,4 | 334,271 | 329,835 | |||||||||
RASC Trust, Series 2005-AHL3, Class A2 0.395%, due 11/25/354 | 331,690 | 324,508 |
35
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Santander Drive Auto Receivables Trust, Series 2011-3, Class C 3.090%, due 05/15/17 | 1,125,657 | $ | 1,137,740 | ||||||||
Series 2012-1, Class C 3.780%, due 11/15/17 | 1,240,000 | 1,270,375 | |||||||||
Series 2012-3, Class C 3.010%, due 04/16/18 | 280,000 | 286,489 | |||||||||
Series 2012-4, Class C 2.940%, due 12/15/17 | 400,000 | 409,008 | |||||||||
Series 2012-5, Class C 2.700%, due 08/15/18 | 1,200,000 | 1,230,259 | |||||||||
Series 2013-4, Class A2 0.890%, due 09/15/16 | 394,666 | 395,040 | |||||||||
Series 2013-4, Class B 2.160%, due 01/15/20 | 1,200,000 | 1,225,249 | |||||||||
Series 2013-5, Class D 2.730%, due 10/15/19 | 749,000 | 758,535 | |||||||||
Sierra Timeshare Receivables Funding Co. LLC, Series 2012-2A, Class A 2.380%, due 03/20/293 | 345,412 | 350,224 | |||||||||
Series 2014-2A, Class A 2.050%, due 06/20/313 | 200,000 | 199,354 | |||||||||
Silver Bay Realty Trust, Series 2014-1, Class A 1.205%, due 09/17/314,7 | 1,253,000 | 1,253,000 | |||||||||
SLM Student Loan Trust, Series 2012-A, Class A1 1.552%, due 08/15/253,4 | 893,268 | 904,770 | |||||||||
Series 2012-D, Class A1 1.202%, due 06/15/233,4 | 744,802 | 748,996 | |||||||||
SoFi Professional Loan Program LLC, Series 2014-A, Class A2 3.020%, due 10/25/273 | 260,000 | 262,553 | |||||||||
SolarCity LMC Series III LLC, Series 2014-2, Class A 4.020%, due 07/20/443 | 810,000 | 807,479 | |||||||||
Sonic Capital LLC, Series 2011-1A, Class A2 5.438%, due 05/20/413 | 226,440 | 239,909 | |||||||||
Structured Asset Investment Loan Trust, Series 2005-6, Class A2 0.735%, due 07/25/354 | 224,326 | 223,942 | |||||||||
Tidewater Auto Receivables Trust, Series 2014-AA, Class A2 0.960%, due 07/15/173 | 550,000 | 549,921 | |||||||||
Series 2014-AA, Class A3 1.400%, due 07/15/183 | 500,000 | 499,129 | |||||||||
Trade MAPS 1 Ltd., Series 2013-1A, Class A 0.853%, due 12/10/183,4 | 250,000 | 250,748 | |||||||||
United Auto Credit Securitization Trust, Series 2014-1, Class A2 0.740%, due 06/15/163 | 200,000 | 199,989 |
Face amount1 | Value | ||||||||||
Asset-backed securities—(concluded) | |||||||||||
Westlake Automobile Receivables Trust, Series 2013-1A, Class A2 1.120%, due 01/15/183 | 105,485 | $ | 105,755 | ||||||||
World Financial Network Credit Card Master Trust, Series 2014-B, Class A 0.610%, due 07/15/19 | 1,365,000 | 1,364,245 | |||||||||
Total asset-backed securities (cost—$35,092,545) | 35,259,743 | ||||||||||
Corporate notes—33.14% | |||||||||||
Aerospace & defense—0.33% | |||||||||||
Precision Castparts Corp. 0.700%, due 12/20/15 | 1,140,000 | 1,139,715 | |||||||||
United Continental Holdings, Inc. 6.000%, due 12/01/202 | 340,000 | 357,000 | |||||||||
1,496,715 | |||||||||||
Auto & truck—0.34% | |||||||||||
General Motors Co. 3.500%, due 10/02/18 | 1,390,000 | 1,396,950 | |||||||||
6.250%, due 10/02/43 | 125,000 | 141,562 | |||||||||
1,538,512 | |||||||||||
Automotive—0.24% | |||||||||||
Asciano Finance Ltd. 5.000%, due 04/07/183 | 1,000,000 | 1,081,441 | |||||||||
Banking-non-US—1.37% | |||||||||||
BPCE SA 4.000%, due 04/15/24 | 370,000 | 374,277 | |||||||||
Caixa Economica Federal 2.375%, due 11/06/173 | 290,000 | 279,763 | |||||||||
Credit Agricole SA 2.500%, due 04/15/193 | 250,000 | 250,806 | |||||||||
European Investment Bank 1.750%, due 06/17/19 | 1,851,000 | 1,837,197 | |||||||||
HSBC Holdings PLC 4.250%, due 03/14/24 | 500,000 | 509,432 | |||||||||
ING Bank N.V. 5.800%, due 09/25/233 | 200,000 | 223,166 | |||||||||
Royal Bank of Scotland Group PLC 5.125%, due 05/28/24 | 845,000 | 844,870 | |||||||||
6.000%, due 12/19/23 | 205,000 | 217,874 | |||||||||
6.125%, due 12/15/22 | 25,000 | 26,890 | |||||||||
Societe Generale SA 5.000%, due 01/17/243 | 200,000 | 205,977 | |||||||||
Westpac Banking Corp. 1.375%, due 07/17/153 | 1,330,000 | 1,342,010 | |||||||||
6,112,262 | |||||||||||
Banking-US—5.47% | |||||||||||
Bank of America Corp. 2.600%, due 01/15/19 | 1,150,000 | 1,155,931 | |||||||||
2.650%, due 04/01/19 | 810,000 | 814,174 | |||||||||
5.125%, due 06/17/194,10 | 370,000 | 363,242 | |||||||||
5.625%, due 10/14/16 | 1,325,000 | 1,446,041 | |||||||||
5.700%, due 01/24/22 | 325,000 | 373,800 | |||||||||
6.500%, due 08/01/16 | 1,370,000 | 1,510,046 |
36
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Banking-US—(concluded) | |||||||||||
Bank of America Corp. MTN 1.300%, due 03/22/184 | 770,000 | $ | 782,413 | ||||||||
Bank of America Corp., Series 1 3.750%, due 07/12/16 | 650,000 | 682,158 | |||||||||
Capital One Bank USA N.A. 1.300%, due 06/05/17 | 250,000 | 249,486 | |||||||||
Capital One Financial Corp. 3.500%, due 06/15/23 | 245,000 | 243,405 | |||||||||
CIT Group, Inc. 3.875%, due 02/19/19 | 1,170,000 | 1,164,150 | |||||||||
4.750%, due 02/15/153 | 515,000 | 521,437 | |||||||||
5.250%, due 03/15/18 | 400,000 | 422,000 | |||||||||
5.500%, due 02/15/193 | 615,000 | 656,512 | |||||||||
Discover Bank/Greenwood DE 4.200%, due 08/08/23 | 270,000 | 281,608 | |||||||||
Fifth Third Bancorp 4.300%, due 01/16/24 | 335,000 | 348,469 | |||||||||
4.900%, due 09/30/192,4,10 | 285,000 | 284,287 | |||||||||
Goldman Sachs Group, Inc. 1.425%, due 04/30/184 | 530,000 | 540,156 | |||||||||
3.625%, due 01/22/23 | 655,000 | 650,697 | |||||||||
3.700%, due 08/01/15 | 1,110,000 | 1,142,484 | |||||||||
5.700%, due 05/10/194,10 | 465,000 | 473,602 | |||||||||
5.950%, due 01/18/18 | 1,030,000 | 1,161,155 | |||||||||
Inter-American Development Bank 1.000%, due 07/14/17 | 1,995,000 | 1,988,592 | |||||||||
JPMorgan Chase & Co. 1.134%, due 01/25/184 | 525,000 | 533,533 | |||||||||
3.200%, due 01/25/23 | 10,000 | 9,831 | |||||||||
3.250%, due 09/23/22 | 105,000 | 104,432 | |||||||||
3.625%, due 05/13/24 | 560,000 | 559,931 | |||||||||
4.500%, due 01/24/22 | 130,000 | 141,004 | |||||||||
5.000%, due 07/01/194,10 | 400,000 | 395,766 | |||||||||
6.300%, due 04/23/19 | 1,000,000 | 1,170,629 | |||||||||
JPMorgan Chase & Co. GMTN 0.847%, due 02/26/164 | 850,000 | 854,508 | |||||||||
JPMorgan Chase & Co. MTN 1.875%, due 03/20/15 | 920,000 | 928,130 | |||||||||
State Street Capital Trust IV 1.231%, due 06/15/374 | 570,000 | 493,050 | |||||||||
Wells Fargo & Co. 0.863%, due 04/23/184 | 685,000 | 691,095 | |||||||||
4.125%, due 08/15/23 | 450,000 | 465,574 | |||||||||
5.375%, due 11/02/43 | 110,000 | 120,760 | |||||||||
5.900%, due 06/15/244,10 | 175,000 | 182,788 | |||||||||
Wells Fargo & Co., Series K 7.980%, due 03/15/184,10 | 525,000 | 595,350 | |||||||||
24,502,226 | |||||||||||
Beverages—0.12% | |||||||||||
Anheuser-Busch InBev Finance, Inc. 2.625%, due 01/17/23 | 580,000 | 556,472 | |||||||||
Biotechnology—0.05% | |||||||||||
Amgen, Inc. 5.150%, due 11/15/41 | 215,000 | 230,250 |
Face amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Building products—0.32% | |||||||||||
Building Materials Corp. of America 6.750%, due 05/01/213 | 191,000 | $ | 203,654 | ||||||||
Cemex SAB de CV 5.875%, due 03/25/193 | 200,000 | 201,830 | |||||||||
Martin Marietta Materials, Inc. 1.331%, due 06/30/173,4 | 110,000 | 109,936 | |||||||||
Owens Corning 6.500%, due 12/01/16 | 500,000 | 554,670 | |||||||||
Standard Pacific Corp. 8.375%, due 01/15/21 | 300,000 | 347,250 | |||||||||
1,417,340 | |||||||||||
Chemicals—0.41% | |||||||||||
LyondellBasell Industries N.V. 5.000%, due 04/15/19 | 1,000,000 | 1,116,321 | |||||||||
Rockwood Specialties Group, Inc. 4.625%, due 10/15/20 | 700,000 | 728,000 | |||||||||
1,844,321 | |||||||||||
Commercial services—0.24% | |||||||||||
Air Lease Corp. 5.625%, due 04/01/179 | 1,000,000 | 1,085,000 | |||||||||
Communications equipment—0.08% | |||||||||||
Apple, Inc. 2.850%, due 05/06/21 | 335,000 | 336,258 | |||||||||
Computers—0.10% | |||||||||||
Hewlett-Packard Co. 2.750%, due 01/14/19 | 60,000 | 61,040 | |||||||||
Seagate Hdd Cayman Co. 3.750%, due 11/15/183 | 370,000 | 374,625 | |||||||||
435,665 | |||||||||||
Consumer products—0.24% | |||||||||||
Avon Products, Inc. 6.500%, due 03/01/192 | 1,000,000 | 1,092,715 | |||||||||
Diversified financial services—0.41% | |||||||||||
First Data Corp. 7.375%, due 06/15/193 | 405,000 | 425,250 | |||||||||
General Electric Capital Corp. 5.500%, due 01/08/20 | 620,000 | 713,748 | |||||||||
General Electric Capital Corp. MTN 4.375%, due 09/16/20 | 640,000 | 699,027 | |||||||||
1,838,025 | |||||||||||
Electric-integrated—1.80% | |||||||||||
Arrow Electronics, Inc. 3.375%, due 11/01/15 | 1,000,000 | 1,029,307 | |||||||||
Delphi Corp. 5.000%, due 02/15/23 | 165,000 | 177,169 | |||||||||
Duke Energy Corp. 3.950%, due 09/15/14 | 1,385,000 | 1,390,600 | |||||||||
Eaton Corp. 0.950%, due 11/02/15 | 910,000 | 912,826 |
37
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Electric-integrated—(concluded) | |||||||||||
Jabil Circuit, Inc. 8.250%, due 03/15/18 | 620,000 | $ | 730,050 | ||||||||
Jersey Central Power & Light Co. 5.625%, due 05/01/16 | 550,000 | 590,478 | |||||||||
Oncor Electric Delivery Co. LLC 4.100%, due 06/01/22 | 290,000 | 311,958 | |||||||||
Pacificorp 5.500%, due 01/15/19 | 651,000 | 742,024 | |||||||||
5.750%, due 04/01/37 | 275,000 | 339,105 | |||||||||
Progress Energy, Inc. 5.625%, due 01/15/16 | 995,000 | 1,063,159 | |||||||||
Puget Energy, Inc. 5.625%, due 07/15/22 | 450,000 | 517,967 | |||||||||
6.000%, due 09/01/21 | 75,000 | 87,776 | |||||||||
The ADT Corp. 4.125%, due 04/15/192 | 180,000 | 177,750 | |||||||||
8,070,169 | |||||||||||
Electric/gas—0.34% | |||||||||||
Ameren Illinois Co. 6.125%, due 11/15/17 | 1,085,000 | 1,244,735 | |||||||||
CenterPoint Energy, Inc. 6.500%, due 05/01/18 | 241,000 | 279,244 | |||||||||
1,523,979 | |||||||||||
Finance-captive automotive—2.61% | |||||||||||
American Honda Finance Corp. 1.000%, due 08/11/153 | 1,315,000 | 1,323,618 | |||||||||
Associated Banc-Corp 5.125%, due 03/28/16 | 822,000 | 870,801 | |||||||||
CDP Financial, Inc. 4.400%, due 11/25/193 | 1,160,000 | 1,279,971 | |||||||||
ERP Operating LP 3.000%, due 04/15/23 | 525,000 | 510,217 | |||||||||
Ford Motor Credit Co. LLC 1.474%, due 05/09/164 | 680,000 | 689,517 | |||||||||
1.700%, due 05/09/16 | 1,455,000 | 1,470,605 | |||||||||
2.375%, due 01/16/18 | 1,000,000 | 1,015,217 | |||||||||
6.625%, due 08/15/17 | 220,000 | 251,323 | |||||||||
FS Investment Corp. 4.000%, due 07/15/19 | 200,000 | 200,338 | |||||||||
General Motors Financial Co., Inc. 2.625%, due 07/10/17 | 105,000 | 104,620 | |||||||||
3.500%, due 07/10/192 | 675,000 | 672,368 | |||||||||
Hyundai Capital America 2.550%, due 02/06/193 | 1,000,000 | 1,006,400 | |||||||||
Janus Capital Group, Inc. 6.700%, due 06/15/179 | 1,000,000 | 1,125,035 | |||||||||
Regions Bank 7.500%, due 05/15/18 | 1,000,000 | 1,180,425 | |||||||||
11,700,455 | |||||||||||
Finance-other—0.12% | |||||||||||
International Lease Finance Corp. 3.875%, due 04/15/18 | 550,000 | 547,965 |
Face amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Financial services—4.27% | |||||||||||
Ally Financial, Inc. 5.500%, due 02/15/17 | 1,150,000 | $ | 1,224,750 | ||||||||
8.000%, due 11/01/31 | 275,000 | 343,062 | |||||||||
American Express Credit Corp. 2.375%, due 03/24/17 | 825,000 | 850,419 | |||||||||
Citigroup, Inc. 1.250%, due 01/15/16 | 1,060,000 | 1,065,643 | |||||||||
2.550%, due 04/08/19 | 200,000 | 200,905 | |||||||||
3.750%, due 06/16/24 | 315,000 | 313,549 | |||||||||
4.587%, due 12/15/15 | 2,290,000 | 2,406,882 | |||||||||
6.300%, due 05/15/244,10 | 705,000 | 707,820 | |||||||||
Credit Suisse AG Guernsey 1.625%, due 03/06/153 | 2,465,000 | 2,482,255 | |||||||||
2.600%, due 05/27/163 | 1,660,000 | 1,714,881 | |||||||||
Doric Nimrod Air Alpha Ltd 2013-1 Pass Through Trust 5.250%, due 05/30/232,3 | 378,009 | 401,635 | |||||||||
ERAC USA Finance LLC 6.375%, due 10/15/173 | 1,000,000 | 1,145,261 | |||||||||
Icahn Enterprises LP/Icahn Enterprises Finance Corp. 3.500%, due 03/15/17 | 455,000 | 452,725 | |||||||||
5.875%, due 02/01/22 | 300,000 | 305,812 | |||||||||
6.000%, due 08/01/20 | 1,050,000 | 1,094,625 | |||||||||
Intesa Sanpaolo SpA 5.017%, due 06/26/243 | 200,000 | 197,856 | |||||||||
Morgan Stanley 2.125%, due 04/25/18 | 860,000 | 862,548 | |||||||||
3.750%, due 02/25/23 | 210,000 | 211,743 | |||||||||
5.450%, due 07/15/194,10 | 335,000 | 335,419 | |||||||||
6.625%, due 04/01/18 | 400,000 | 462,644 | |||||||||
Morgan Stanley MTN 6.000%, due 04/28/15 | 1,025,000 | 1,063,662 | |||||||||
SteelRiver Transmission Co. LLC 4.710%, due 06/30/173 | 694,718 | 731,070 | |||||||||
US Bancorp MTN 1.950%, due 11/15/18 | 560,000 | 559,843 | |||||||||
19,135,009 | |||||||||||
Food processors/beverage/bottling—0.12% | |||||||||||
Ashland, Inc. 3.000%, due 03/15/16 | 550,000 | 553,438 | |||||||||
Food/beverage—0.15% | |||||||||||
WM Wrigley Jr Co. 1.400%, due 10/21/163 | 665,000 | 668,681 | |||||||||
Hotels, restaurants & leisure—0.23% | |||||||||||
Wyndham Worldwide Corp. 2.950%, due 03/01/17 | 1,000,000 | 1,031,719 | |||||||||
Industrial conglomerates—0.04% | |||||||||||
General Electric Co. 3.375%, due 03/11/24 | 190,000 | 192,710 |
38
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Insurance—0.79% | |||||||||||
MetLife Institutional Funding II 1.625%, due 04/02/153 | 1,440,000 | $ | 1,451,942 | ||||||||
New York Life Global Funding 0.750%, due 07/24/153 | 1,160,000 | 1,164,358 | |||||||||
Pacific LifeCorp. 5.125%, due 01/30/433 | 360,000 | 375,082 | |||||||||
Prudential Financial, Inc. MTN 3.000%, due 05/12/16 | 260,000 | 269,476 | |||||||||
4.750%, due 09/17/15 | 270,000 | 282,176 | |||||||||
3,543,034 | |||||||||||
Media—1.05% | |||||||||||
British Sky Broadcasting Group PLC 9.500%, due 11/15/183 | 1,000,000 | 1,275,860 | |||||||||
Comcast Corp. 4.250%, due 01/15/33 | 360,000 | 365,670 | |||||||||
4.750%, due 03/01/44 | 260,000 | 271,782 | |||||||||
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc. 4.450%, due 04/01/24 | 276,000 | 289,097 | |||||||||
Expedia, Inc. 7.456%, due 08/15/18 | 1,000,000 | 1,172,981 | |||||||||
NBCUniversal Enterprise, Inc. 5.250%, due 03/19/213,10 | 375,000 | 390,469 | |||||||||
NBCUniversal Media LLC 4.450%, due 01/15/43 | 280,000 | 280,352 | |||||||||
Thomson Reuters Corp. 1.300%, due 02/23/17 | 650,000 | 648,309 | |||||||||
4,694,520 | |||||||||||
Medical providers—0.69% | |||||||||||
Gilead Sciences, Inc. 4.400%, due 12/01/21 | 380,000 | 416,820 | |||||||||
HCA, Inc. 3.750%, due 03/15/19 | 310,000 | 307,675 | |||||||||
Tenet Healthcare Corp. 8.125%, due 04/01/22 | 500,000 | 558,750 | |||||||||
UnitedHealth Group, Inc. 2.875%, due 03/15/22 | 565,000 | 560,367 | |||||||||
3.375%, due 11/15/21 | 165,000 | 168,935 | |||||||||
WellPoint, Inc. 1.875%, due 01/15/18 | 1,000,000 | 1,004,074 | |||||||||
3.300%, due 01/15/23 | 83,000 | 82,177 | |||||||||
3,098,798 | |||||||||||
Metals & mining—0.65% | |||||||||||
ArcelorMittal 5.000%, due 02/25/179 | 550,000 | 566,500 | |||||||||
Glencore Funding LLC 3.125%, due 04/29/193 | 1,000,000 | 1,014,100 | |||||||||
Novelis, Inc. 8.750%, due 12/15/20 | 665,000 | 718,200 | |||||||||
Rio Tinto Finance USA PLC 2.875%, due 08/21/222 | 620,000 | 604,252 | |||||||||
2,903,052 |
Face amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Multi-line insurance—0.21% | |||||||||||
American International Group, Inc. 4.875%, due 06/01/22 | 245,000 | $ | 271,205 | ||||||||
5.450%, due 05/18/17 | 600,000 | 665,390 | |||||||||
936,595 | |||||||||||
Oil & gas—1.41% | |||||||||||
Anadarko Petroleum Corp. 3.450%, due 07/15/24 | 165,000 | 163,405 | |||||||||
Chesapeake Energy Corp. 3.250%, due 03/15/16 | 550,000 | 550,000 | |||||||||
5.750%, due 03/15/23 | 335,000 | 357,613 | |||||||||
Chevron Corp. 3.191%, due 06/24/23 | 205,000 | 206,931 | |||||||||
Continental Resources, Inc. 4.900%, due 06/01/443 | 90,000 | 92,087 | |||||||||
5.000%, due 09/15/22 | 505,000 | 541,612 | |||||||||
Denbury Resources, Inc. 4.625%, due 07/15/23 | 365,000 | 341,275 | |||||||||
MEG Energy Corp. 7.000%, due 03/31/243 | 375,000 | 396,563 | |||||||||
Peabody Energy Corp. 6.000%, due 11/15/18 | 650,000 | 648,375 | |||||||||
Petroleos Mexicanos 6.000%, due 03/05/20 | 132,000 | 149,160 | |||||||||
8.000%, due 05/03/19 | 100,000 | 121,890 | |||||||||
Pioneer Natural Resources Co. 6.875%, due 05/01/18 | 865,000 | 1,011,836 | |||||||||
Plains Exploration & Production Co. 6.500%, due 11/15/20 | 505,000 | 560,550 | |||||||||
8.625%, due 10/15/19 | 230,000 | 242,650 | |||||||||
Rowan Cos., Inc. 5.000%, due 09/01/17 | 69,000 | 74,459 | |||||||||
Statoil ASA 2.650%, due 01/15/24 | 435,000 | 417,484 | |||||||||
Transocean, Inc. 5.050%, due 12/15/16 | 386,000 | 417,775 | |||||||||
6,293,665 | |||||||||||
Oil services—0.55% | |||||||||||
BP Capital Markets PLC 2.500%, due 11/06/22 | 800,000 | 759,308 | |||||||||
2.750%, due 05/10/23 | 145,000 | 138,372 | |||||||||
Petrobras International Finance Co. 3.875%, due 01/27/16 | 1,505,000 | 1,548,479 | |||||||||
2,446,159 | |||||||||||
Pharmaceuticals—1.30% | |||||||||||
Forest Laboratories, Inc. 5.000%, due 12/15/213 | 1,410,000 | 1,535,490 | |||||||||
Hospira, Inc. 5.800%, due 08/12/23 | 455,000 | 507,521 | |||||||||
Mylan, Inc. 6.000%, due 11/15/183 | 1,040,000 | 1,083,351 | |||||||||
Novartis Capital Corp. 3.400%, due 05/06/24 | 255,000 | 257,400 |
39
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Pharmaceuticals—(concluded) | |||||||||||
Pfizer, Inc. 3.400%, due 05/15/24 | 295,000 | $ | 296,799 | ||||||||
Takeda Pharmaceutical Co. Ltd. 1.031%, due 03/17/153 | 1,460,000 | 1,465,415 | |||||||||
Valeant Pharmaceuticals International 6.875%, due 12/01/183 | 655,000 | 676,287 | |||||||||
5,822,263 | |||||||||||
Pipelines—1.84% | |||||||||||
Buckeye Partners LP 2.650%, due 11/15/18 | 875,000 | 884,685 | |||||||||
El Paso Pipeline Partners Operating Co. LLC 4.100%, due 11/15/15 | 2,725,000 | 2,825,929 | |||||||||
Energy Transfer Partners LP 4.150%, due 10/01/20 | 95,000 | 99,689 | |||||||||
Enterprise Products Operating LLC 3.200%, due 02/01/16 | 1,145,000 | 1,185,968 | |||||||||
3.350%, due 03/15/23 | 80,000 | 79,489 | |||||||||
8.375%, due 08/01/664 | 585,000 | 657,394 | |||||||||
Florida Gas Transmission Co. LLC 5.450%, due 07/15/203 | 369,000 | 411,702 | |||||||||
Sabine Pass Liquefaction LLC 5.625%, due 02/01/219 | 730,000 | 755,550 | |||||||||
5.625%, due 04/15/23 | 375,000 | 380,625 | |||||||||
5.750%, due 05/15/243 | 297,000 | 301,455 | |||||||||
Williams Cos., Inc. 7.875%, due 09/01/21 | 520,000 | 639,219 | |||||||||
8,221,705 | |||||||||||
Real estate investment trusts—0.54% | |||||||||||
ARC Properties Operating Partnership LP/Clark Acquisition LLC 2.000%, due 02/06/173 | 820,000 | 820,534 | |||||||||
3.000%, due 02/06/193 | 960,000 | 958,934 | |||||||||
Boston Properties LP 3.850%, due 02/01/23 | 205,000 | 211,347 | |||||||||
Simon Property Group LP 3.750%, due 02/01/24 | 255,000 | 260,082 | |||||||||
UDR, Inc. MTN 3.750%, due 07/01/24 | 185,000 | 184,995 | |||||||||
2,435,892 | |||||||||||
Rental auto/equipment—0.10% | |||||||||||
United Rentals North America, Inc. 6.125%, due 06/15/23 | 425,000 | 439,609 | |||||||||
Retail—0.86% | |||||||||||
Advance Auto Parts, Inc. 5.750%, due 05/01/20 | 1,000,000 | 1,137,719 | |||||||||
Amazon.com, Inc. 0.650%, due 11/27/15 | 1,190,000 | 1,191,424 | |||||||||
Macy's Retail Holdings, Inc. 7.450%, due 07/15/17 | 1,000,000 | 1,165,254 |
Face amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Retail—(concluded) | |||||||||||
Penske Automotive Group, Inc. 5.750%, due 10/01/22 | 335,000 | $ | 345,888 | ||||||||
3,840,285 | |||||||||||
Software & services—0.08% | |||||||||||
Oracle Corp. 2.800%, due 07/08/21 | 340,000 | 337,837 | |||||||||
Special purpose entity—0.64% | |||||||||||
Bunge Ltd. Finance Corp. 3.200%, due 06/15/17 | 1,127,000 | 1,169,700 | |||||||||
CNH Industrial Capital LLC 3.375%, due 07/15/193 | 1,000,000 | 976,250 | |||||||||
Crown Castle Towers LLC 6.113%, due 01/15/203 | 495,000 | 576,187 | |||||||||
Penske Truck Leasing Co. LP/PTL Finance Corp. 2.500%, due 06/15/193 | 150,000 | 149,953 | |||||||||
2,872,090 | |||||||||||
Technology, hardware & equipment—0.25% | |||||||||||
Pitney Bowes, Inc. MTN 5.750%, due 09/15/17 | 994,000 | 1,108,599 | |||||||||
Telecommunications—1.29% | |||||||||||
Alcatel-Lucent USA, Inc. 6.750%, due 11/15/203 | 460,000 | 469,200 | |||||||||
Numericable Group SA 6.000%, due 05/15/223 | 245,000 | 246,225 | |||||||||
Qwest Corp. 7.500%, due 10/01/14 | 144,000 | 145,526 | |||||||||
SBA Tower Trust 4.254%, due 04/15/153 | 1,200,000 | 1,228,649 | |||||||||
Sprint Nextel Corp. 7.875%, due 09/15/233 | 760,000 | 813,200 | |||||||||
Verizon Communications, Inc. 2.450%, due 11/01/22 | 560,000 | 524,500 | |||||||||
4.150%, due 03/15/24 | 366,000 | 378,727 | |||||||||
5.150%, due 09/15/23 | 1,764,000 | 1,952,176 | |||||||||
5,758,203 | |||||||||||
Telephone-integrated—0.21% | |||||||||||
Level 3 Financing, Inc. 6.125%, due 01/15/213 | 495,000 | 512,325 | |||||||||
8.125%, due 07/01/19 | 400,000 | 426,000 | |||||||||
938,325 | |||||||||||
Tobacco—0.10% | |||||||||||
Philip Morris International, Inc. 1.875%, due 01/15/19 | 270,000 | 267,530 | |||||||||
Reynolds American, Inc. 6.150%, due 09/15/43 | 152,000 | 173,477 | |||||||||
441,007 | |||||||||||
Transportation—0.15% | |||||||||||
Ryder System, Inc. MTN 2.450%, due 09/03/19 | 180,000 | 179,517 |
40
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate notes—(concluded) | |||||||||||
Transportation—(concluded) | |||||||||||
Union Pacific Railroad Co. 2014-1 Pass Through Trust 3.227%, due 05/14/26 | 200,000 | $ | 198,481 | ||||||||
Virgin Australia 2013-1B Trust 6.000%, due 10/23/203 | 292,245 | 306,126 | |||||||||
684,124 | |||||||||||
Utilities—0.28% | |||||||||||
HD Supply, Inc. 7.500%, due 07/15/20 | 1,125,000 | 1,200,937 | |||||||||
IPALCO Enterprises, Inc. 5.000%, due 05/01/18 | 69,000 | 72,623 | |||||||||
1,273,560 | |||||||||||
Wireless telecommunications—0.75% | |||||||||||
AT&T, Inc. 4.300%, due 12/15/42 | 100,000 | 94,032 | |||||||||
4.350%, due 06/15/45 | 240,000 | 225,929 | |||||||||
Crown Castle International Corp. 5.250%, due 01/15/23 | 330,000 | 333,300 | |||||||||
IAC/InterActiveCorp 4.875%, due 11/30/18 | 535,000 | 549,712 | |||||||||
Sprint Communications, Inc. 7.000%, due 03/01/203 | 498,000 | 560,250 | |||||||||
T-Mobile USA, Inc. 6.464%, due 04/28/19 | 1,005,000 | 1,047,712 | |||||||||
6.500%, due 01/15/24 | 135,000 | 140,738 | |||||||||
6.731%, due 04/28/22 | 105,000 | 109,988 | |||||||||
Vodafone Group PLC 2.500%, due 09/26/22 | 325,000 | 304,209 | |||||||||
3,365,870 | |||||||||||
Total corporate notes (cost—$146,790,267) | 148,446,519 | ||||||||||
Number of shares | |||||||||||
Preferred stocks—0.73% | |||||||||||
Banking-US—0.36% | |||||||||||
State Street Corp.4,11 | 19,216 | 495,196 | |||||||||
The Goldman Sachs Group, Inc.4,12 | 9,170 | 219,713 | |||||||||
The Goldman Sachs Group, Inc.4,13 | 16,000 | 409,440 | |||||||||
Wells Fargo & Co.4,14 | 20,000 | 512,000 | |||||||||
1,636,349 | |||||||||||
Financial services—0.37% | |||||||||||
Morgan Stanley15 | 65,000 | 1,643,850 | |||||||||
Total preferred stocks (cost—$3,251,550) | 3,280,199 | ||||||||||
Face amount1 | |||||||||||
Non-US government obligations—0.42% | |||||||||||
Brazilian Government International Bond 4.250%, due 01/07/25 | 655,000 | 655,655 |
Face amount1 | Value | ||||||||||
Non-US government obligations—(concluded) | |||||||||||
Mexico Government International Bond 3.500%, due 01/21/21 | 305,000 | $ | 312,625 | ||||||||
Republic of Colombia 2.625%, due 03/15/232 | 530,000 | 492,900 | |||||||||
South Africa Government International Bond 5.375%, due 07/24/44 | 200,000 | 201,500 | |||||||||
Uruguay Government International Bond 4.500%, due 08/14/24 | 190,000 | 199,975 | |||||||||
Total non-US government obligations (cost—$1,888,733) | 1,862,655 | ||||||||||
Repurchase agreement—0.99% | |||||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $4,554,967 US Treasury Note, 0.625% due 05/31/17; (value—$4,515,114); proceeds: $4,427,000 (cost—$4,427,000) | 4,427,000 | 4,427,000 | |||||||||
Number of contracts/ Notional amount | |||||||||||
Options purchased—0.11% | |||||||||||
Call swaptions purchased6—0.04% | |||||||||||
3 Month USD LIBOR 30 Year Swap, strike @ 3.45%, expires 05/01/17 (Counterparty: CSI; receive fixed rate); underlying swap terminates 05/03/47 | USD | 2,500,000 | 181,886 | ||||||||
Put options & swaptions purchased—0.07% | |||||||||||
Eurodollar 1 Year Mid-Curve Options, strike @ USD 98.75, expires 12/12/14 | 153 | 39,206 | |||||||||
Eurodollar 2 Year Mid-Curve Options, strike @ USD 97.75, expires 09/12/14 | 172 | 10,750 | |||||||||
US Treasury Note 10 Year Futures, strike @ 122.5, expires 09/26/14 | 43 | 18,812 | |||||||||
3 Month USD LIBOR 5 Year Swap, strike @ 4.500%, expires 07/18/18 (Counterparty: CSI; receive fixed rate); underlying swap terminates 07/20/236 | 8,400,000 | 141,359 |
41
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2014
Number of contracts/ Notional amount | Value | ||||||||||
Options purchased—(concluded) | |||||||||||
Put options & swaptions purchased—(concluded) | |||||||||||
3 Month USD LIBOR 30 Year Swap, strike @ 4.450%, expires 05/01/17 (Counterparty: CSI; receive fixed rate); underlying swap terminates 05/03/476 | USD | 2,500,000 | $ | 93,294 | |||||||
Total put options & swaptions purchased | 303,421 | ||||||||||
Total options purchased (cost—$608,874) | 485,307 |
Number of shares | Value | ||||||||||
Investment of cash collateral from securities loaned—14.82% | |||||||||||
Money market fund—14.82% | |||||||||||
UBS Private Money Market Fund LLC16 (cost—$66,357,164) | 66,357,164 | $ | 66,357,164 | ||||||||
Total investments (cost—$513,322,499)—115.01% | 515,133,543 | ||||||||||
Liabilities in excess of other assets—(15.01)% | (67,239,024 | ) | |||||||||
Net assets—100.00% | $ | 447,894,519 |
For a listing of defined portfolio acronyms, counterparty acronyms and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 232.
Aggregate cost for federal income tax purposes was $513,423,718; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 3,018,102 | |||||
Gross unrealized depreciation | (1,308,277 | ) | |||||
Net unrealized appreciation | $ | 1,709,825 |
Written options
Written option activity for the year ended July 31, 2014 was as follows:
Number of contracts | Premiums received | ||||||||||
Options outstanding at July 31, 2013 | — | $ | — | ||||||||
Options written | 1,785 | 465,917 | |||||||||
Options terminated in closing purchase transactions | (490 | ) | (76,953 | ) | |||||||
Options expired prior to exercise | (1,295 | ) | (388,964 | ) | |||||||
Options outstanding at July 31, 2014 | — | $ | — |
Written swaptions6
Notional amount (000) | Call options written | Counterparty | Pay/ receive floating rate | Expiration date | Premiums received | Current value | Unrealized appreciation | ||||||||||||||||||||||||
USD | 3,500 | 3 Month USD LIBOR Interest Rate Swap strike @ 2.50%, terminating 05/28/25 | BOA | Receive | 05/26/15 | $ | 31,850 | $ | (24,744 | ) | $ | 7,106 |
42
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2014
Written swaptions6—(concluded)
Notional amount (000) | Put swaptions written | Counterparty | Pay/ receive floating rate | Expiration date | Premiums received | Current value | Unrealized appreciation | ||||||||||||||||||||||||
USD | 10,100 | 3 Month USD LIBOR Interest Rate Swap strike @ 3.25%, terminating 06/26/25 | CSI | Pay | 06/24/15 | $ | 199,222 | $ | (175,809 | ) | $ | 23,413 | |||||||||||||||||||
USD | 3,500 | 3 Month USD LIBOR Interest Rate Swap strike @ 3.50%, terminating 05/28/25 | BOA | Pay | 05/26/15 | 43,750 | (32,172 | ) | 11,578 | ||||||||||||||||||||||
USD | 3,600 | 3 Month USD LIBOR Interest Rate Swap strike @ 3.90%, terminating 01/20/25 | BOA | Pay | 01/15/15 | 59,400 | (2,588 | ) | 56,812 | ||||||||||||||||||||||
USD | 1,200 | 3 Month USD LIBOR Interest Rate Swap strike @ 3.90%, terminating 01/20/25 | GSB | Pay | 01/15/15 | 19,690 | (863 | ) | 18,827 | ||||||||||||||||||||||
USD | 16,800 | 3 Month USD LIBOR Interest Rate Swap strike @ 6.00%, terminating 07/20/23 | CSI | Pay | 07/18/18 | 258,690 | (108,378 | ) | 150,312 | ||||||||||||||||||||||
$ | 580,752 | $ | (319,810 | ) | $ | 260,942 | |||||||||||||||||||||||||
$ | 612,602 | $ | (344,554 | ) | $ | 268,048 |
Swaptions and foreign exchange written options activity for the year ended July 31, 2014 was as follows:
Premiums received | |||||||
Swaptions and foreign exchange written options outstanding at July 31, 2013 | $ | 344,921 | |||||
Swaptions and foreign exchange options written | 1,185,069 | ||||||
Swaptions and foreign exchange written options terminated in closing purchase transactions | (917,388 | ) | |||||
Swaptions and foreign exchange written options expired prior to exercise | — | ||||||
Swaptions and foreign exchange written options outstanding at July 31, 2014 | $ | 612,602 |
Futures contracts
Number of contracts | Currency | Expiration date | Cost | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||
US Treasury futures buy contracts: | |||||||||||||||||||||||||||
8 | USD | US Long Bond Futures | September 2014 | $ | 1,084,155 | $ | 1,099,250 | $ | 15,095 | ||||||||||||||||||
158 | USD | US Treasury Note 2 Year Futures | September 2014 | 34,693,095 | 34,668,657 | (24,438 | ) | ||||||||||||||||||||
197 | USD | US Treasury Note 5 Year Futures | September 2014 | 23,496,456 | 23,410,680 | (85,776 | ) | ||||||||||||||||||||
118 | USD | US Treasury Note 10 Year Futures | September 2014 | 14,722,501 | 14,703,906 | (18,595 | ) | ||||||||||||||||||||
$ | 73,996,207 | $ | 73,882,493 | $ | (113,714 | ) | |||||||||||||||||||||
Proceeds | |||||||||||||||||||||||||||
US Treasury futures sell contracts: | |||||||||||||||||||||||||||
56 | USD | Ultra Long US Treasury Bond Futures | September 2014 | $ | 8,400,173 | $ | 8,447,250 | $ | (47,077 | ) | |||||||||||||||||
45 | USD | US Long Bond Futures | September 2014 | 6,154,753 | 6,183,281 | (28,528 | ) | ||||||||||||||||||||
71 | USD | US Treasury Note 5 Year Futures | September 2014 | 8,437,811 | 8,437,352 | 459 | |||||||||||||||||||||
$ | 22,992,737 | $ | 23,067,883 | $ | (75,146 | ) | |||||||||||||||||||||
$ | (188,860 | ) |
43
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2014
Forward foreign currency contracts
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
BB | AUD | 1,800,000 | USD | 1,671,583 | 10/01/14 | $ | 5,424 | ||||||||||||
CITI | EUR | 1,830,000 | USD | 2,491,710 | 08/05/14 | 41,240 | |||||||||||||
CITI | EUR | 1,235,000 | USD | 1,679,978 | 08/26/14 | 26,137 | |||||||||||||
CITI | USD | 2,494,665 | EUR | 1,830,000 | 08/05/14 | (44,195 | ) | ||||||||||||
CSI | GBP | 1,050,000 | USD | 1,791,323 | 09/23/14 | 19,330 | |||||||||||||
CSI | USD | 1,665,204 | EUR | 1,235,000 | 08/26/14 | (11,363 | ) | ||||||||||||
DB | CAD | 1,959,371 | USD | 1,800,000 | 09/23/14 | 5,221 | |||||||||||||
JPMCB | EUR | 517,000 | USD | 699,616 | 10/21/14 | 7,145 | |||||||||||||
$ | 48,939 |
Centrally cleared interest rate swap agreements
Notional amount (000) | Termination date | Payments made by the Portfolio17 | Payments received by the Portfolio17 | Value | Unrealized appreciation (depreciation) | ||||||||||||||||||
USD | 2,660 | 07/14/17 | 1.088 | % | 3 Month USD LIBOR | $ | 5,483 | $ | 5,439 | ||||||||||||||
USD | 28,100 | 11/30/18 | 1.575 | 3 Month USD LIBOR | 208,859 | 208,346 | |||||||||||||||||
USD | 4,000 | 06/26/24 | 2.700 | 3 Month USD LIBOR | (14,289 | ) | (14,371 | ) | |||||||||||||||
USD | 600 | 03/03/44 | 3.583 | 3 Month USD LIBOR | (43,068 | ) | (43,082 | ) | |||||||||||||||
USD | 1,300 | 03/03/44 | 3.584 | 3 Month USD LIBOR | (93,660 | ) | (93,692 | ) | |||||||||||||||
$ | 63,325 | $ | 62,640 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
US government obligations | $ | — | $ | 192,360,792 | $ | — | $ | 192,360,792 | |||||||||||
Commercial paper | — | 28,947,778 | — | 28,947,778 | |||||||||||||||
Federal home loan bank certificate | — | 712,677 | — | 712,677 | |||||||||||||||
Federal home loan mortgage corporation certificates | — | 533,953 | — | 533,953 | |||||||||||||||
Federal national mortgage association certificates | — | 1,362,453 | — | 1,362,453 | |||||||||||||||
Collateralized mortgage obligations | — | 30,406,195 | 691,108 | 31,097,303 | |||||||||||||||
Asset-backed securities | — | 35,109,763 | 149,980 | 35,259,743 | |||||||||||||||
Corporate notes | — | 148,446,519 | — | 148,446,519 | |||||||||||||||
Preferred stocks | 3,280,199 | — | — | 3,280,199 | |||||||||||||||
Non-US government obligations | — | 1,862,655 | — | 1,862,655 | |||||||||||||||
Repurchase agreement | — | 4,427,000 | — | 4,427,000 | |||||||||||||||
Options purchased | 68,768 | 416,539 | — | 485,307 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 66,357,164 | — | 66,357,164 | |||||||||||||||
Futures contracts | 15,554 | — | — | 15,554 | |||||||||||||||
Forward foreign currency contracts | — | 104,497 | — | 104,497 | |||||||||||||||
Swap agreements | — | 214,342 | — | 214,342 | |||||||||||||||
Total | $ | 3,364,521 | $ | 511,262,327 | $ | 841,088 | $ | 515,467,936 |
44
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2014
Fair valuation summary—(concluded)
Liabilities Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
Written swaptions | $ | — | $ | (344,554 | ) | $ | — | $ | (344,554 | ) | |||||||||
Futures contracts | (204,414 | ) | — | — | (204,414 | ) | |||||||||||||
Forward foreign currency contracts | — | (55,558 | ) | — | (55,558 | ) | |||||||||||||
Swap agreements | — | (151,017 | ) | — | (151,017 | ) | |||||||||||||
Total | $ | (204,414 | ) | $ | (551,129 | ) | $ | — | $ | (755,543 | ) |
At July 31, 2014, there were no transfers between Level 1 and Level 2.
The following is a rollforward of the Portofolio's investments that were valued using unobservable inputs (Level 3) for the year ended July 31, 2014:
Collateralized mortgage obligations | Asset-backed securities | Corporate notes | Total | ||||||||||||||||
Beginning balance | $ | 1,429,856 | $ | 406,558 | $ | 1,228,562 | $ | 3,064,976 | |||||||||||
Purchases | 187,776 | 149,980 | — | 337,756 | |||||||||||||||
Sales | (940,991 | ) | (411,652 | ) | (1,229,521 | ) | (2,582,164 | ) | |||||||||||
Accrued discounts/(premiums) | 35 | — | — | 35 | |||||||||||||||
Total realized gain/(loss) | 3,461 | 16,167 | 14,521 | 34,149 | |||||||||||||||
Net change in unrealized appreciation/depreciation | 10,971 | (11,073 | ) | (13,562 | ) | (13,664 | ) | ||||||||||||
Transfers into Level 3 | — | — | — | — | |||||||||||||||
Transfers out of Level 3 | — | — | — | — | |||||||||||||||
Ending balance | $ | 691,108 | $ | 149,980 | $ | — | $ | 841,088 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investments held at July 31, 2014 was $5,181.
Issuer breakdown by country or territory of origin (unaudited)
Percentage of total investments | |||||||
United States | 93.4 | % | |||||
Cayman Islands | 1.0 | ||||||
Canada | 1.0 | ||||||
United Kingdom | 0.9 | ||||||
Switzerland | 0.8 | ||||||
Australia | 0.5 | ||||||
Germany | 0.4 | ||||||
Luxembourg | 0.4 | ||||||
Japan | 0.3 | ||||||
Netherlands | 0.3 | ||||||
France | 0.2 | ||||||
Brazil | 0.2 | ||||||
Mexico | 0.1 | ||||||
Argentina | 0.1 | ||||||
Italy | 0.1 | ||||||
Colombia | 0.1 | ||||||
Norway | 0.1 | ||||||
Guernsey | 0.1 | ||||||
South Africa | 0.0 | † | |||||
Uruguay | 0.0 | † | |||||
Total | 100.0 | % |
† Amount represents less than 0.05%
45
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2014
Portfolio footnotes
* On September 7, 2008, the Federal Housing Finance Agency placed the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.
1 In US Dollars unless otherwise indicated.
2 Security, or portion thereof, was on loan at July 31, 2014.
3 Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities, which represent 19.03% of net assets as of July 31, 2014, are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers.
4 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2014 and changes periodically.
5 Interest Only Securities. These securities entitle the holder to receive interest payments from an underlying pool of mortgages. The risk associated with these securities is related to the speed of the principal paydowns. High prepayments would result in a smaller amount of interest being received and cause the yield to decrease. Low prepayments would result in a greater amount of interest being received and cause the yield to increase.
6 Illiquid investment as of July 31, 2014.
7 Security is being fair valued by a valuation committee under the direction of the board of trustees.
8 Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. At July 31, 2014, the value of these securities amounted to 0.14% of net assets.
9 Step bond that converts to the noted fixed rate at a designated future date.
10 Perpetual investment. The maturity date reflects the next call date.
11 Non cumulative preferred stock. Convertible until 03/15/24.
12 Non cumulative preferred stock. Convertible until 05/10/23.
13 Non cumulative preferred stock. Convertible until 05/10/24.
14 Non cumulative preferred stock. Convertible until 09/15/23.
15 Non cumulative preferred stock. Convertible until 07/15/19.
16 The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2014. The investment manager earns a management fee from UBS Private Money Market Fund LLC. Please see the Notes to financial statements for further information.
Security description | Value at 07/31/13 | Purchases during the year ended 07/31/14 | Sales during the year ended 07/31/14 | Value at 07/31/14 | Net income earned from affiliate for the year ended 07/31/14 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 702,620 | $ | 1,408,120,231 | $ | 1,342,465,687 | $ | 66,357,164 | $ | 2,279 |
17 Payments made/received are based on the notional amount.
See accompanying notes to financial statements.
46
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 3.77% before the deduction of the maximum PACE Select program fee.1 In comparison, the Barclays US Government/Credit Index (the "benchmark") returned 3.93%, the Lipper Core Plus Bond Funds category posted a median return of 5.12% and the Lipper Core Bond Funds category posted a median return of 4.31%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 50. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisor's comments2
(Please note that while the sub-advisor outperformed the benchmark on a gross of fees basis, the Portfolio underperformed net of fees, as reported under "Performance." As stated in footnote two, the comments that follow address performance on a gross of fees basis.)
An underweight to US duration was neutral for performance, as the yield on the 10-year US Treasury was relatively flat during the 12-month period. (Duration measures a portfolio's sensitivity to interest rate changes.) However, a focus on the 5- to 10-year portion of the US yield curve contributed to performance, as this portion of the curve benefited from roll-down (roll-down is a form of return that is realized as a bond approaches maturity, assuming an upward sloping yield curve). A short exposure to European core rates toward the end of the reporting period detracted from returns as their yields declined. However, this was partially offset by an allocation to peripheral European duration, especially Spain and Italy.
An underweight to investment grade corporate bonds detracted from performance, as the sector outpaced similar-duration Treasuries during the period amid generally "risk-on" investor sentiment. This was partially offset by an allocation to high yield corporate bonds, which posted strong returns as investors searched for yield.
PACE Select Advisors Trust – PACE Strategic Fixed Income Investments
Investment Sub-Advisor:
Pacific Investment Management Company LLC ("PIMCO")
Portfolio Manager:
Saumil H. Parikh
Objective:
Total return consisting of income and capital appreciation
Investment process:
The Portfolio invests primarily in investment grade fixed income securities of governmental and private issuers in the United States and foreign countries. Its duration (a measure of a portfolio's sensitivity to interest rate changes) is normally limited to within +/- 50% of the effective duration of the Portfolio's benchmark index.3 PIMCO seeks to invest in the areas of the bond market it considers undervalued, based on such factors as quality, sector, coupon and maturity. 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 Portfolio's mortgage-backed bonds, and will also buy and sell securities to adjust the average portfolio duration, credit quality, yield curve, sector and prepayment exposure, as appropriate.
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
3 Barclays US Government Credit Index, as calculated by the investment advisor, which as of July 31, 2014 was approximately 5.81 years.
47
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Sub-Advisor's comments – concluded
Exposure to non-agency mortgage-backed securities ("MBS") contributed to returns, as these securities benefited from limited supply and continued improvement in the housing market. A small allocation to commercial mortgage-backed securities ("CMBS") and collateralized debt obligations ("CDOs") was also positive for performance. Lastly, holdings of the Brazilian real contributed to returns, as the currency appreciated relative to the US dollar.
Overall, our use of derivatives generated positive results during the period. Interest rate swaps were used to adjust interest rate and yield curve exposures, as well as to substitute for physical securities. Credit default swaps were utilized to manage credit exposure in lieu of the direct buying or selling of securities. Options and options on swaps were primarily used to manage interest rate and volatility exposures, but they were also used to generate income in expected interest rate scenarios. Government futures were utilized to adjust interest rate exposures and replicate government bond positions.
Special considerations
The Portfolio may be appropriate for long-term investors seeking total return consisting of income and capital appreciation and who are able to withstand short-term fluctuations in the fixed income markets in return for potentially higher returns over the long term. The value of the Portfolio changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the companies in whose securities the Portfolio invests. In addition, investments in foreign bonds involve special risks. It is important to note that an investment in the Portfolio is only one component of a balanced investment plan.
48
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Illustration of an assumed investment of $10,000 in Class P shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE Strategic Fixed Income Investments Class P shares versus the Barclays US Government/Credit Index over the 10 years ended July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE Strategic Fixed Income Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustration purposes only.
49
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 3.51 | % | 6.69 | % | 6.02 | % | |||||||||
Class C2 | 3.03 | % | 6.19 | % | 5.51 | % | |||||||||
Class Y3 | 3.82 | % | 6.97 | % | 6.34 | % | |||||||||
Class P4 | 3.77 | % | 6.96 | % | 6.29 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (1.16 | )% | 5.71 | % | 5.54 | % | |||||||||
Class C2 | 2.29 | % | 6.19 | % | 5.51 | % | |||||||||
Barclays US Government/Credit Index5 | 3.93 | % | 4.69 | % | 4.82 | % | |||||||||
Lipper Core Plus Bond Funds median6,7 | 5.12 | % | 5.88 | % | 5.37 | % | |||||||||
Lipper Core Bond Funds median7 | 4.31 | % | 5.26 | % | 4.58 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 3.45 | % | 7.46 | % | 6.17 | % | |||||||||
Class C2 | 2.96 | % | 6.95 | % | 5.67 | % | |||||||||
Class Y3 | 3.67 | % | 7.72 | % | 6.49 | % | |||||||||
Class P4 | 3.71 | % | 7.71 | % | 6.44 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (1.20 | )% | 6.47 | % | 5.68 | % | |||||||||
Class C2 | 2.22 | % | 6.95 | % | 5.67 | % |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—1.03% and 1.03%; Class C—1.51% and 1.51%; Class Y—0.90% and 0.81%; and Class P—0.81% and 0.81%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—1.06%; Class C—1.56%; Class Y—0.81%; and Class P—0.81%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 4.5%. Class A shares bear ongoing 12b-1 service fees.
2 Maximum contingent deferred sales charge for Class C shares is 0.75% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
3 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
4 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
5 The Barclays US Government/Credit Index is an unmanaged index which is composed of all investment-grade bonds that have at least one year to maturity. The Index's total return comprises price appreciation/depreciation and income as a percentage of the original investment. The Index is rebalanced monthly by market capitalization. Investors should note that indices do not reflect the deduction of fees and expenses.
6 On September 20, 2013, Lipper renamed the peer group classification for PACE Strategic Fixed Income Investments from the Lipper Intermediate Investment Grade Debt Funds category to the Lipper Core Bond Funds category in order to more accurately reflect the groups' strategies. This name change is purely cosmetic and will not affect any existing reports or processes.
7 On February 12, 2014, Lipper changed the peer group classification for PACE Strategic Fixed Income Investments from the Lipper Core Bond Funds category to the Lipper Core Plus Bond Funds category.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
50
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Weighted average duration | 5.5 yrs. | ||||||
Weighted average maturity | 6.60 yrs. | ||||||
Average coupon | 3.57 | % | |||||
Net assets (mm) | $ | 952.2 | |||||
Number of holdings | 344 | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Bonds, notes and loan assignments | 105.1 | % | |||||
Preferred stock | 0.8 | ||||||
Investment sold short | (0.1 | ) | |||||
Options, swaptions, futures, swaps and forward foreign currency contracts | 0.2 | ||||||
Cash equivalents and other assets less liabilities | (6.0 | ) | |||||
Total | 100.0 | % | |||||
Quality diversification1 | 07/31/14 | ||||||
US government and agency securities | 52.2 | % | |||||
AAA | 4.0 | ||||||
AA | 5.7 | ||||||
A | 11.6 | ||||||
BBB | 14.9 | ||||||
BB | 5.9 | ||||||
B | 2.7 | ||||||
Below B/non-rated | 8.1 | ||||||
Preferred stock | 0.8 | ||||||
Investment sold short | (0.1 | ) | |||||
Options, swaptions, futures, swaps and forward foreign currency contracts | 0.2 | ||||||
Cash equivalents and other assets less liabilities | (6.0 | ) | |||||
Total | 100.0 | % | |||||
Asset allocation1 | 07/31/14 | ||||||
US government obligations | 40.8 | % | |||||
Corporate notes | 26.1 | ||||||
Collateralized mortgage obligations | 18.9 | ||||||
Non-US government obligations | 9.6 | ||||||
Asset-backed securities | 5.2 | ||||||
US government agency mortgage pass-through certificates | 2.5 | ||||||
Municipal bonds and notes | 1.7 | ||||||
Preferred stock | 0.8 | ||||||
Loan assignments | 0.3 | ||||||
Investment sold short | (0.1 | ) | |||||
Options, swaptions, futures, swaps and forward foreign currency contracts | 0.2 | ||||||
Cash equivalents and other assets less liabilities | (6.0 | ) | |||||
Total | 100.0 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time. Credit quality ratings shown are based on the ratings assigned to portfolio holdings by Standard & Poor's Ratings Group, an independent rating agency.
51
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
US government obligations—40.83% | |||||||||||
US Treasury Inflation Index Bonds (TIPS) 2.000%, due 01/15/26 | 2,756,527 | $ | 3,241,505 | ||||||||
2.375%, due 01/15/27 | 3,774,560 | 4,628,260 | |||||||||
2.500%, due 01/15/29 | 2,105,067 | 2,662,086 | |||||||||
US Treasury Inflation Index Notes (TIPS) 0.125%, due 07/15/22 | 7,758,000 | 7,773,151 | |||||||||
0.125%, due 07/15/24 | 62,412,140 | 61,475,958 | |||||||||
US Treasury Notes 2.000%, due 02/28/21 | 56,400,000 | 55,800,750 | |||||||||
2.125%, due 01/31/21 | 22,000,000 | 21,958,750 | |||||||||
2.500%, due 05/15/24 | 77,500,000 | 77,124,590 | |||||||||
2.750%, due 11/15/23 | 74,600,000 | 76,144,444 | |||||||||
2.750%, due 02/15/24 | 76,500,000 | 77,934,375 | |||||||||
Total US government obligations (cost—$386,468,890) | 388,743,869 | ||||||||||
Government national mortgage association certificates—0.01% | |||||||||||
GNMA II ARM 1.625%, due 11/20/232 | 4,472 | 4,583 | |||||||||
1.625%, due 07/20/252 | 5,963 | 6,180 | |||||||||
1.625%, due 01/20/262 | 10,631 | 10,925 | |||||||||
1.625%, due 05/20/262 | 18,690 | 19,221 | |||||||||
Total government national mortgage association certificates (cost—$40,152) | 40,909 | ||||||||||
Federal home loan mortgage corporation certificates*—0.14% | |||||||||||
FHLMC 7.645%, due 05/01/253 | 1,141,345 | 1,254,850 | |||||||||
FHLMC ARM 5.507%, due 03/01/362 | 63,887 | 65,888 | |||||||||
Total federal home loan mortgage corporation certificates (cost—$1,207,082) | 1,320,738 | ||||||||||
Federal housing administration certificates††—0.00% | |||||||||||
FHA GMAC 7.430%, due 06/01/21 | 15,037 | 15,037 | |||||||||
FHA Reilly 7.430%, due 10/01/20 | 3,527 | 3,527 | |||||||||
Total federal housing administration certificates (cost—$19,524) | 18,564 | ||||||||||
Federal national mortgage association certificates*—2.38% | |||||||||||
FNMA 3.500%, due 11/01/21 | 4,013,736 | 4,219,386 | |||||||||
3.500%, due 12/01/25 | 845,445 | 891,962 | |||||||||
4.500%, due 04/01/294 | 509,787 | 548,989 | |||||||||
5.401%, due 11/01/34 | 8,631,412 | 9,652,739 | |||||||||
FNMA ARM 1.523%, due 08/01/402 | 50,327 | 50,531 | |||||||||
2.180%, due 05/01/302 | 51,400 | 53,970 | |||||||||
2.328%, due 04/01/272 | 18,337 | 19,414 |
Face amount1 | Value | ||||||||||
Federal national mortgage association certificates*—(concluded) | |||||||||||
2.375%, due 03/01/362 | 58,984 | $ | 62,301 | ||||||||
2.393%, due 10/01/352 | 102,235 | 109,275 | |||||||||
2.405%, due 05/01/272 | 12,117 | 12,194 | |||||||||
2.504%, due 01/01/362 | 71,510 | 72,505 | |||||||||
2.561%, due 09/01/352 | 80,739 | 86,454 | |||||||||
5.342%, due 01/01/362 | 139,621 | 150,076 | |||||||||
5.357%, due 11/01/352 | 108,341 | 116,730 | |||||||||
5.455%, due 03/01/362 | 107,954 | 116,341 | |||||||||
5.519%, due 12/01/352 | 135,418 | 146,136 | |||||||||
5.689%, due 06/01/362 | 17,716 | 17,804 | |||||||||
5.698%, due 03/01/362 | 91,204 | 98,358 | |||||||||
5.734%, due 02/01/362 | 154,206 | 166,111 | |||||||||
5.783%, due 03/01/362 | 94,546 | 101,844 | |||||||||
FNMA ARM COFI 3.250%, due 11/01/263 | 43,336 | 39,283 | |||||||||
FNMA TBA 3.000% | 6,000,000 | 5,879,813 | |||||||||
Total federal national mortgage association certificates (cost—$21,348,642) | 22,612,216 | ||||||||||
Collateralized mortgage obligations—18.91% | |||||||||||
ARM Trust, Series 2005-5, Class 2A1 2.722%, due 09/25/352 | 318,364 | 287,123 | |||||||||
Banc of America Commercial Mortgage Trust, Series 2007-2, Class A1A 5.561%, due 04/10/492 | 403,916 | 437,875 | |||||||||
Banc of America Funding Corp., Series 2005-D, Class A1 2.627%, due 05/25/352 | 1,714,863 | 1,758,429 | |||||||||
Series 2007-3, Class 2A1 5.500%, due 09/25/34 | 169,779 | 172,231 | |||||||||
Banc of America Large Loan, Series 2010-UB5, Class A4A 5.647%, due 02/17/512,5 | 2,327,915 | 2,499,692 | |||||||||
Banc of America Merrill Lynch Large Loan, Series 2012-PARK, Class A 2.959%, due 12/10/305 | 1,000,000 | 985,659 | |||||||||
Banc of America Mortgage Securities, Inc., Series 2004-H, Class 2A2 2.743%, due 09/25/342 | 1,621,226 | 1,622,687 | |||||||||
Bank of America Mortgage Securities, Inc., Series 2002-G, Class 1A3 3.320%, due 07/20/322 | 5,419 | 5,511 | |||||||||
BCAP LLC 2011-RR10 Trust, Class 3A5 2.614%, due 06/26/352,5 | 1,576,147 | 1,596,210 | |||||||||
Bear Stearns Alternative Loan Trust-A Trust, Series 2003-3, Class 1A 2.060%, due 10/25/332 | 34,854 | 32,490 |
52
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Series 2004-9, Class 2A1 2.619%, due 09/25/342 | 780,546 | $ | 706,550 | ||||||||
Series 2005-7, Class 22A1 2.696%, due 09/25/352 | 1,236,143 | 1,076,130 | |||||||||
Series 2006-1, Class 21A2 2.601%, due 02/25/362 | 1,151,938 | 790,270 | |||||||||
Bear Stearns ARM Trust, Series 2003-1, Class 5A1 2.234%, due 04/25/332 | 14,635 | 14,672 | |||||||||
Series 2003-1, Class 6A1 2.504%, due 04/25/332 | 59,064 | 60,111 | |||||||||
Series 2003-5, Class 2A1 2.437%, due 08/25/332 | 357,888 | 365,548 | |||||||||
Series 2004-3, Class 1A2 2.761%, due 07/25/342 | 285,644 | 286,259 | |||||||||
Series 2004-6, Class 2A1 2.917%, due 09/25/342 | 1,465,164 | 1,373,025 | |||||||||
Series 2004-7, Class 1A1 2.638%, due 10/25/342 | 359,801 | 323,639 | |||||||||
Series 2004-9, Class 22A1 3.130%, due 11/25/342 | 39,127 | 39,495 | |||||||||
Series 2005-2, Class A1 2.580%, due 03/25/352 | 1,095,917 | 1,111,729 | |||||||||
Series 2005-5, Class A2 2.250%, due 08/25/352 | 1,903,682 | 1,931,225 | |||||||||
Series 2005-9, Class A1 2.410%, due 10/25/352 | 1,459,810 | 1,447,888 | |||||||||
Chase Mortgage Finance Corp., Series 2005-S3, Class A10 5.500%, due 11/25/35 | 3,227,000 | 3,210,081 | |||||||||
Series 2007-S6, Class 2A1 5.500%, due 12/25/22 | 1,264,821 | 1,264,494 | |||||||||
Citigroup Mortgage Loan Trust, Inc., Series 2005-11, Class A1A 2.530%, due 05/25/352 | 619,578 | 606,204 | |||||||||
Series 2005-4, Class A 5.229%, due 08/25/352 | 1,727,492 | 1,716,525 | |||||||||
Series 2005-6, Class A2 2.280%, due 09/25/352 | 129,381 | 130,011 | |||||||||
Series 2005-6, Class A3 1.930%, due 09/25/352 | 21,608 | 21,688 | |||||||||
Series 2006-AR1, Class 1A1 2.500%, due 10/25/352 | 3,402,773 | 3,338,777 | |||||||||
Countrywide Alternative Loan Trust, Series 2003-J3, Class 2A1 6.250%, due 12/25/33 | 154,368 | 159,067 | |||||||||
Series 2005-62, Class 2A1 1.033%, due 12/25/352 | 478,329 | 375,196 | |||||||||
Series 2006-41CB, Class 1A9 6.000%, due 01/25/37 | 964,460 | 832,805 | |||||||||
Countrywide Home Loan Mortgage Pass Through Trust, Series 2003-R4, Class 2A 5.807%, due 01/25/342,5 | 968,887 | 1,002,162 | |||||||||
Series 2004-12, Class 11A1 2.627%, due 08/25/342 | 508,480 | 451,746 |
Face amount1 | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Series 2004-12, Class 11A2 2.626%, due 08/25/342 | 326,880 | $ | 303,111 | ||||||||
Series 2004-12, Class 12A1 2.474%, due 08/25/342 | 99,783 | 87,551 | |||||||||
Series 2005-HYB9, Class 5A1 2.376%, due 02/20/362 | 384,384 | 331,118 | |||||||||
Credit Suisse Commercial Mortgage Trust, Series 2006-C2, Class A1A 5.669%, due 03/15/392 | 5,687,063 | 6,043,989 | |||||||||
DBRR 2013-EZ2 Trust, Series 2013-EZ2, Class A 0.853%, due 02/25/452,3,5 | 2,213,213 | 2,212,868 | |||||||||
FHLMC REMIC,* Series 1278, Class K 7.000%, due 05/15/22 | 41,211 | 45,221 | |||||||||
Series 1367, Class KA 6.500%, due 09/15/22 | 963 | 1,050 | |||||||||
Series 1502, Class PX 7.000%, due 04/15/23 | 289,292 | 319,984 | |||||||||
Series 1503, Class PZ 7.000%, due 05/15/23 | 91,007 | 102,913 | |||||||||
Series 1534, Class Z 5.000%, due 06/15/23 | 96,758 | 104,136 | |||||||||
Series 1548, Class Z 7.000%, due 07/15/23 | 66,881 | 75,029 | |||||||||
Series 1562, Class Z 7.000%, due 07/15/23 | 113,947 | 128,226 | |||||||||
Series 1694, Class Z 6.500%, due 03/15/24 | 50,781 | 56,737 | |||||||||
Series 2061, Class Z 6.500%, due 06/15/28 | 179,683 | 198,416 | |||||||||
Series 2400, Class FQ 0.652%, due 01/15/322 | 112,021 | 113,236 | |||||||||
Series 2764, Class LZ 4.500%, due 03/15/34 | 1,749,693 | 1,858,307 | |||||||||
Series 2764, Class ZG 5.500%, due 03/15/34 | 3,990,963 | 4,417,126 | |||||||||
Series 2835, Class JZ 5.000%, due 08/15/34 | 868,383 | 924,951 | |||||||||
Series 2921, Class PG 5.000%, due 01/15/35 | 6,167,286 | 6,620,137 | |||||||||
Series 2983, Class TZ 6.000%, due 05/15/35 | 4,068,825 | 4,462,207 | |||||||||
Series 3149, Class CZ 6.000%, due 05/15/36 | 4,630,560 | 5,094,598 | |||||||||
Series G23, Class KZ 6.500%, due 11/25/23 | 85,510 | 95,225 | |||||||||
Series T-054, Class 2A 6.500%, due 02/25/43 | 727,699 | 855,104 | |||||||||
Series T-058, Class 2A 6.500%, due 09/25/43 | 2,662,898 | 3,011,855 | |||||||||
Series T-075, Class A1 0.195%, due 12/25/362 | 1,218,652 | 1,211,032 |
53
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
First Horizon Mortgage Pass-Through Trust, Series 2005-AR3, Class 2A1 2.612%, due 08/25/352 | 82,305 | $ | 77,608 | ||||||||
FNMA REMIC,* Series 1991-065, Class Z 6.500%, due 06/25/21 | 3,616 | 3,868 | |||||||||
Series 1992-040, Class ZC 7.000%, due 07/25/22 | 11,666 | 12,876 | |||||||||
Series 1992-129, Class L 6.000%, due 07/25/22 | 5,132 | 5,583 | |||||||||
Series 1993-037, Class PX 7.000%, due 03/25/23 | 14,430 | 16,139 | |||||||||
Series 1993-060, Class Z 7.000%, due 05/25/23 | 79,180 | 87,496 | |||||||||
Series 1993-070, Class Z 6.900%, due 05/25/23 | 12,127 | 13,547 | |||||||||
Series 1993-096, Class PZ 7.000%, due 06/25/23 | 68,114 | 75,314 | |||||||||
Series 1993-160, Class ZB 6.500%, due 09/25/23 | 26,209 | 28,926 | |||||||||
Series 1993-163, Class ZB 7.000%, due 09/25/23 | 6,775 | 7,628 | |||||||||
Series 1998-066, Class FG 0.455%, due 12/25/282 | 54,400 | 54,611 | |||||||||
Series 1999-W4, Class A9 6.250%, due 02/25/29 | 390,119 | 434,608 | |||||||||
Series 2000-034, Class F 0.605%, due 10/25/302 | 8,303 | 8,387 | |||||||||
Series 2002-080, Class A1 6.500%, due 11/25/42 | 1,282,940 | 1,469,124 | |||||||||
Series 2003-064, Class AH 6.000%, due 07/25/33 | 4,550,055 | 4,990,855 | |||||||||
Series 2003-W8, Class 2A 7.000%, due 10/25/42 | 65,407 | 74,432 | |||||||||
Series 2004-T1, Class 1A1 6.000%, due 01/25/44 | 965,305 | 1,085,722 | |||||||||
Series 2004-W8, Class 2A 6.500%, due 06/25/44 | 1,280,978 | 1,468,702 | |||||||||
Series 2005-024, Class ZE 5.000%, due 04/25/35 | 1,812,976 | 1,947,270 | |||||||||
Series 2005-116, Class TZ 5.500%, due 01/25/36 | 6,186,610 | 6,669,129 | |||||||||
Series 2005-120, Class ZU 5.500%, due 01/25/36 | 6,072,273 | 6,555,753 | |||||||||
Series 2006-065, Class GD 6.000%, due 07/25/26 | 1,915,311 | 2,138,462 | |||||||||
GNMA REMIC, Trust Series 2000-009, Class FG 0.752%, due 02/16/302 | 77,779 | 78,510 | |||||||||
Trust Series 2002-031, Class FW 0.552%, due 06/16/312 | 82,559 | 82,995 | |||||||||
Trust Series 2003-98, Class Z 6.000%, due 11/20/33 | 10,196,522 | 11,403,708 |
Face amount1 | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Trust Series 2005-26, Class ZA 5.500%, due 01/20/35 | 8,010,686 | $ | 9,044,409 | ||||||||
GS Residential Mortgage Loan Trust, Series 2005-AR6, Class 2A1 2.658%, due 09/25/352 | 1,118,549 | 1,128,288 | |||||||||
Harborview Mortgage Loan Trust, Series 2004-11, Class 3A1A 0.506%, due 01/19/352 | 98,536 | 75,738 | |||||||||
Series 2005-4, Class 3A1 2.594%, due 07/19/352 | 510,413 | 476,486 | |||||||||
Housing Security, Inc., Series 1992-8, Class B 2.376%, due 06/25/242 | 104,662 | 105,795 | |||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP8, Class A1A 5.397%, due 05/15/45 | 7,774,917 | 8,355,283 | |||||||||
Series 2006-LDP9, Class A1A 5.257%, due 05/15/47 | 8,451,349 | 8,918,286 | |||||||||
JP Morgan Mortgage Trust, Series 2005-A1, Class 6T1 2.813%, due 02/25/352 | 17,520 | 17,376 | |||||||||
Series 2005-A8, Class 1A1 5.131%, due 11/25/352 | �� | 2,749,668 | 2,645,632 | ||||||||
Series 2006-A4, Class 2A2 2.349%, due 06/25/362 | 862,905 | 783,954 | |||||||||
Lehman Brothers Mortgage Trust, Series 1991-2, Class A3 8.532%, due 01/20/172 | 56,460 | 56,943 | |||||||||
NAAC Reperforming Loan REMIC Trust, Series 2004-R3, Class A1 6.500%, due 02/25/355 | 1,179,500 | 1,214,903 | |||||||||
Residential Accredit Loans, Inc., Series 2006-Q03, Class A1 0.365%, due 04/25/462 | 1,554,454 | 781,278 | |||||||||
Residential Asset Securitization Trust, Series 2006-A14C, Class 2A6 0.605%, due 12/25/362 | 1,324,680 | 522,280 | |||||||||
Residential Funding Mortgage Security I, Series 2004-S9, Class 1A23 5.500%, due 12/25/34 | 2,300,000 | 2,399,919 | |||||||||
Sequoia Mortgage Trust, Series 2005-4, Class 2A1 2.638%, due 04/20/352 | 1,415,020 | 1,413,416 | |||||||||
Series 2007-3, Class 1A1 0.356%, due 07/20/362 | 439,804 | 419,648 | |||||||||
Small Business Administration, Series 1999-20K, Class 1 7.060%, due 11/01/19 | 103,992 | 114,735 | |||||||||
Series 2000-20K, Class 1 7.220%, due 11/01/20 | 162,226 | 171,742 |
54
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Series 2002-20K, Class 1 5.080%, due 11/01/22 | 913,570 | $ | 982,915 | ||||||||
Series 2003-20I, Class 1 5.130%, due 09/01/23 | 181,994 | 196,565 | |||||||||
Series 2003-20L, Class 1 4.890%, due 12/01/23 | 525,350 | 564,228 | |||||||||
Series 2005-20H, Class 1 5.110%, due 08/01/25 | 967,741 | 1,043,017 | |||||||||
Series 2007-20D, Class 1 5.320%, due 04/01/27 | 2,942,780 | 3,267,633 | |||||||||
Structured ARM Loan Trust, Series 2004-8, Class 3A 2.436%, due 07/25/342 | 958,033 | 962,537 | |||||||||
Structured Asset Mortgage Investments, Inc., Series 2002-AR3, Class A1 0.816%, due 09/19/322 | 224,799 | 220,096 | |||||||||
Series 2006-AR3, Class 11A1 0.365%, due 04/25/362 | 3,554,399 | 2,664,001 | |||||||||
Structured Asset Securities Corp., Series 2001-SB1, Class A2 3.375%, due 08/25/31 | 1,050,641 | 1,035,604 | |||||||||
Wachovia Bank Commercial Mortgage Trust, Series 2006-C27, Class A1A 5.749%, due 07/15/452 | 8,170,995 | 8,829,144 | |||||||||
WaMu Mortgage Pass Through Certificates, Series 2002-AR6, Class A 1.474%, due 06/25/422 | 41,510 | 40,247 | |||||||||
Series 2005-AR1, Class A1A 0.475%, due 01/25/452 | 111,721 | 107,185 | |||||||||
Series 2005-AR13, Class A1A1 0.445%, due 10/25/452 | 1,308,765 | 1,235,570 | |||||||||
Series 2005-AR15, Class A1A1 0.415%, due 11/25/452 | 146,151 | 137,457 | |||||||||
Series 2005-AR2, Class 2A1A 0.465%, due 01/25/452 | 130,146 | 128,760 | |||||||||
Series 2006-AR11, Class 2A 2.182%, due 09/25/462 | 483,358 | 452,154 | |||||||||
Series 2006-AR2, Class 2A1 4.123%, due 03/25/362 | 1,238,119 | 1,155,986 | |||||||||
Series 2006-AR7, Class 3A 2.182%, due 07/25/462 | 1,994,902 | 1,809,622 | |||||||||
Series 2006-AR9, Class 1A 1.123%, due 08/25/462 | 1,443,387 | 1,289,265 | |||||||||
Series 2006-AR9, Class 2A 2.182%, due 08/25/462 | 1,100,565 | 1,034,140 | |||||||||
Wells Fargo Mortgage Backed Securities Trust, Series 2003-M, Class A1 2.619%, due 12/25/332 | 282,217 | 284,488 | |||||||||
Series 2004-CC, Class A1 2.615%, due 01/25/352 | 189,905 | 190,545 | |||||||||
Series 2004-DD, Class 2A6 2.612%, due 01/25/352 | 2,192,284 | 2,190,780 |
Face amount1 | Value | ||||||||||
Collateralized mortgage obligations—(concluded) | |||||||||||
Series 2006-AR2, Class 2A1 2.613%, due 03/25/362 | 1,524,389 | $ | 1,526,189 | ||||||||
Series 2006-AR8, Class 1A1 2.618%, due 04/25/362 | 593,157 | 595,842 | |||||||||
Total collateralized mortgage obligations (cost—$172,275,196) | 180,088,665 | ||||||||||
Asset-backed securities—5.15% | |||||||||||
Ameriquest Mortgage Securities, Inc. Asset-Backed Pass-Through Certificates, Series 2005-R8, Class M1 0.625%, due 10/25/352 | 1,000,000 | 929,527 | |||||||||
BlueMountain CLO Ltd. Series 2005-1A, Class A1F 0.461%, due 11/15/172,5 | 92,193 | 92,148 | |||||||||
CHEC Loan Trust, Series 2004-2, Class M1 0.795%, due 06/25/342 | 1,453,143 | 1,287,427 | |||||||||
Countrywide Asset-Backed Certificates, 0.402%, due 04/25/362 | 632,790 | 619,732 | |||||||||
0.335%, due 07/25/362 | 750,097 | 733,446 | |||||||||
Credit Suisse Mortgage Capital Certificate 2010-UD1 5.773%, due 12/16/492,5 | 1,031,488 | 1,093,625 | |||||||||
CSAB Mortgage Backed Trust, Series 2006-1, Class A6A 6.172%, due 06/25/366 | 607,393 | 393,406 | |||||||||
Delta Funding Home Equity Loan Trust, Series 1999-003, Class A1A 0.972%, due 09/15/292 | 60,720 | 55,790 | |||||||||
Dryden Senior Loan Fund, Series 2011-22A, Class A1R 1.404%, due 01/15/222,5 | 7,900,000 | 7,894,541 | |||||||||
Duane Street CLO III Ltd. Series 2006-3A, Class A1 0.484%, due 01/11/212,5 | 1,988,761 | 1,975,948 | |||||||||
EFS Volunteer LLC, Series 2010-1, Class A1 1.084%, due 10/26/262,5 | 359,653 | 361,883 | |||||||||
Euro-Galaxy CLO BV, Series 2006-1X, Class A2 0.444%, due 10/23/212,7,8 | EUR | 2,458,400 | 3,268,058 | ||||||||
First Frankin Mortgage Loan Trust, Series 2005-FFH3, Class M2 0.685%, due 09/25/352 | 1,000,000 | 933,683 | |||||||||
Franklin CLO Ltd. Series 5A, Class A2 0.491%, due 06/15/182,5 | 3,132,760 | 3,116,175 | |||||||||
Goldentree Loan Opportunities V Ltd. Series 2007-5A, Class A 0.929%, due 10/18/212,5 | 1,775,881 | 1,772,528 |
55
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Home Equity Asset Trust, Series 2005-2, Class M5 1.250%, due 07/25/352 | 1,000,000 | $ | 887,512 | ||||||||
Inwood Park CDO Ltd. Series 2006-1A, Class A1A 0.459%, due 01/20/212,5 | 2,567,780 | 2,559,196 | |||||||||
JP Morgan Mortgage Acquisition Trust 2006-NC1, Class A1 0.322%, due 04/25/362 | 2,881,573 | 2,748,609 | |||||||||
JP Morgan Mortgage Acquisition Trust 2007-CH2, Class AV1 0.315%, due 01/25/372 | 3,181,038 | 3,089,096 | |||||||||
Landmark VII CDO Ltd. Series 2006-7A, Class A1L 0.509%, due 07/15/182,5 | 822,494 | 821,135 | |||||||||
LightPoint Pan-European CLO 2006-1 PLC, Series 2006-1X, Class A 0.459%, due 01/31/222,7,8 | EUR | 458,296 | 610,152 | ||||||||
Madison Park Funding I Ltd. Series 2005-1A, Class AT 0.493%, due 05/10/192,5 | 243,273 | 243,213 | |||||||||
Madison Park Funding IV Ltd. Series 2007-4A, Class A1A 0.450%, due 03/22/212,5 | 496,619 | 492,177 | |||||||||
Mid-State Trust Series 4, Class A 8.330%, due 04/01/30 | 136,606 | 138,769 | |||||||||
Morgan Stanley ABS Capital I, Inc. Trust, Series 2005-HE1, Class M2 0.860%, due 12/25/342 | 1,377,133 | 1,318,532 | |||||||||
New Century Home Equity Loan Trust, Series 2005-D, Class A2D 0.485%, due 02/25/362 | 2,000,000 | 1,790,148 | |||||||||
RASC, Series 2005-KS11 Trust, Class M2 0.575%, due 12/25/352 | 1,100,000 | 884,508 | |||||||||
SASCO Mortgage Loan Trust, Series 2005-GEL1, Class M2 1.052%, due 12/25/342 | 753,022 | 663,932 | |||||||||
Saxon Asset Securities Trust, Series 2004-1, Class M1 0.947%, due 03/25/352 | 1,175,018 | 1,064,138 | |||||||||
SLC Student Loan Trust, Series 2008-2, Class A2 0.681%, due 06/15/172 | 710,162 | 710,544 | |||||||||
SLM Student Loan Trust, Series 2008-9, Class A 1.734%, due 04/25/232 | 4,075,290 | 4,230,229 | |||||||||
Stoney Lane Funding I Corp. Series 2007-1A, Class A1 0.473%, due 04/18/222,5 | 1,964,755 | 1,935,476 | |||||||||
Structured Asset Securities Corp. Mortgage Loan Trust, Series 2005-7XS, Class 2A1A 1.652%, due 04/25/352 | 101,432 | 98,352 |
Face amount1 | Value | ||||||||||
Asset-backed securities—(concluded) | |||||||||||
Structured Asset Securities Corp., Series 2005-WF1, Class M1 0.815%, due 02/25/352 | 277,875 | $ | 255,286 | ||||||||
Total asset-backed securities (cost—$48,585,699) | 49,068,921 | ||||||||||
Corporate notes—26.10% | |||||||||||
Airlines—0.86% | |||||||||||
American Airlines 2013-2, Class A Pass Through Trust 4.950%, due 01/15/23 | 3,115,095 | 3,370,221 | |||||||||
Continental Airlines 2009-2, Series A Pass Through Trust 7.250%, due 11/10/19 | 160,138 | 187,862 | |||||||||
Continental Airlines 2012-2, Class A Pass Through Trust 4.000%, due 10/29/24 | 1,554,621 | 1,585,714 | |||||||||
Northwest Airlines, Series 2000-1, Class G 7.150%, due 10/01/19 | 2,675,426 | 3,049,985 | |||||||||
8,193,782 | |||||||||||
Banking-non-US—4.72% | |||||||||||
Banco do Brasil SA 3.875%, due 10/10/22 | 400,000 | 374,000 | |||||||||
Banco Mercantil del Norte SA 4.375%, due 07/19/155 | 1,800,000 | 1,854,000 | |||||||||
Banco Santander Brasil SA 4.250%, due 01/14/165 | 3,500,000 | 3,609,550 | |||||||||
BPE Financiaciones SA 2.875%, due 05/19/16 | EUR | 2,100,000 | 2,866,136 | ||||||||
2.500%, due 02/01/17 | EUR | 4,600,000 | 6,245,743 | ||||||||
DNB Bank ASA 3.200%, due 04/03/175 | 4,900,000 | 5,131,628 | |||||||||
Eksportfinans ASA 3.000%, due 11/17/14 | 300,000 | 301,560 | |||||||||
0.890%, due 06/16/15 | JPY | 100,000,000 | 959,707 | ||||||||
2.000%, due 09/15/159 | 2,372,000 | 2,369,106 | |||||||||
2.375%, due 05/25/16 | 1,298,000 | 1,301,829 | |||||||||
5.500%, due 05/25/16 | 800,000 | 846,800 | |||||||||
2.875%, due 11/16/16 | CHF | 100,000 | 111,967 | ||||||||
5.500%, due 06/26/17 | 400,000 | 429,332 | |||||||||
Export-Import Bank of Korea 5.875%, due 01/14/15 | 2,600,000 | 2,657,351 | |||||||||
1.250%, due 11/20/15 | 600,000 | 602,700 | |||||||||
5.125%, due 06/29/20 | 400,000 | 446,953 | |||||||||
4.375%, due 09/15/21 | 1,300,000 | 1,404,653 | |||||||||
5.000%, due 04/11/22 | 4,200,000 | 4,711,812 | |||||||||
ICICI Bank Ltd. 5.500%, due 03/25/155 | 1,800,000 | 1,844,883 | |||||||||
5.000%, due 01/15/167 | 2,500,000 | 2,608,375 | |||||||||
KBC Bank NV 8.000%, due 01/25/232,7 | 2,800,000 | 3,178,000 | |||||||||
LBG Capital No.1 PLC 8.500%, due 12/17/212,5,10 | 400,000 | 438,981 |
56
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Banking-non-US—(concluded) | |||||||||||
Royal Bank of Scotland PLC MTN 9.500%, due 03/16/222,7 | 600,000 | $ | 697,500 | ||||||||
44,992,566 | |||||||||||
Banking-US—3.24% | |||||||||||
Aviation Capital Group Corp. 6.750%, due 04/06/215 | 6,120,000 | 6,892,081 | |||||||||
Bank of America Corp. 5.750%, due 12/01/17 | 500,000 | 560,919 | |||||||||
7.625%, due 06/01/19 | 3,700,000 | 4,528,578 | |||||||||
CIT Group, Inc. 4.750%, due 02/15/155 | 2,900,000 | 2,936,250 | |||||||||
5.250%, due 03/15/18 | 2,300,000 | 2,426,500 | |||||||||
5.500%, due 02/15/195 | 1,400,000 | 1,494,500 | |||||||||
JPMorgan Chase Bank N.A. 0.560%, due 06/13/162 | 400,000 | 398,618 | |||||||||
5.875%, due 06/13/16 | 1,100,000 | 1,196,553 | |||||||||
0.859%, due 05/31/172 | EUR | 4,400,000 | 5,882,983 | ||||||||
6.000%, due 10/01/17 | 3,400,000 | 3,837,825 | |||||||||
4.375%, due 11/30/212,7 | EUR | 500,000 | 705,077 | ||||||||
30,859,884 | |||||||||||
Diversified financials—2.19% | |||||||||||
American Express Co. 6.800%, due 09/01/662 | 3,800,000 | 4,142,000 | |||||||||
Doric Nimrod Air Finance Alpha Ltd. 2012-1, Class A Pass Through Trust 5.125%, due 11/30/225 | 544,043 | 580,542 | |||||||||
Goldman Sachs Group, Inc. 0.632%, due 07/22/152 | 300,000 | 300,167 | |||||||||
3.700%, due 08/01/15 | 1,700,000 | 1,749,750 | |||||||||
0.680%, due 03/22/162 | 1,200,000 | 1,200,070 | |||||||||
5.950%, due 01/18/18 | 3,200,000 | 3,607,472 | |||||||||
Lehman Brothers Holdings, Inc. MTN 0.000%, due 12/30/1611 | 1,900,000 | 375,250 | |||||||||
1.000%, due 12/30/1611 | 900,000 | 177,750 | |||||||||
1.000%, due 01/24/4911 | 4,500,000 | 871,875 | |||||||||
Merrill Lynch & Co. MTN 6.875%, due 04/25/18 | 6,700,000 | 7,819,382 | |||||||||
20,824,258 | |||||||||||
Electric-integrated—0.97% | |||||||||||
Centrais Eletricas Brasileiras SA 6.875%, due 07/30/195 | 200,000 | 220,000 | |||||||||
Puget Energy, Inc. 6.500%, due 12/15/20 | 7,600,000 | 9,039,242 | |||||||||
9,259,242 | |||||||||||
Finance-captive automotive—0.92% | |||||||||||
Bank of America NA 0.531%, due 06/15/172 | 3,500,000 | 3,460,653 | |||||||||
Denali Borrower LLC/Denali Finance Corp. 5.625%, due 10/15/205 | 1,800,000 | 1,854,000 |
Face amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Finance-captive automotive—(concluded) | |||||||||||
International Lease Finance Corp. 5.750%, due 05/15/16 | 100,000 | $ | 104,625 | ||||||||
Schaeffler Holding Finance BV 6.875%, due 08/15/185 | 3,200,000 | 3,360,000 | |||||||||
8,779,278 | |||||||||||
Finance-non-captive diversified—1.11% | |||||||||||
Ford Motor Credit Co. LLC 8.700%, due 10/01/14 | 4,000,000 | 4,051,632 | |||||||||
2.750%, due 05/15/15 | 1,425,000 | 1,448,986 | |||||||||
8.000%, due 12/15/16 | 600,000 | 691,819 | |||||||||
4.250%, due 02/03/17 | 4,100,000 | 4,374,606 | |||||||||
10,567,043 | |||||||||||
Financial services—3.59% | |||||||||||
Ally Financial, Inc. 8.300%, due 02/12/15 | 500,000 | 515,000 | |||||||||
4.625%, due 06/26/15 | 2,700,000 | 2,747,250 | |||||||||
8.000%, due 03/15/20 | 100,000 | 117,000 | |||||||||
Citicorp Lease Pass-Through Trust 1999-1 8.040%, due 12/15/195 | 1,000,000 | 1,188,538 | |||||||||
Citigroup, Inc. 5.500%, due 10/15/14 | 112,000 | 113,102 | |||||||||
4.587%, due 12/15/15 | 400,000 | 420,416 | |||||||||
1.250%, due 01/15/16 | 200,000 | 201,065 | |||||||||
6.125%, due 11/21/17 | 600,000 | 681,302 | |||||||||
1.924%, due 05/15/182 | 300,000 | 311,349 | |||||||||
8.500%, due 05/22/19 | 3,000,000 | 3,795,342 | |||||||||
GMAC International Finance BV 7.500%, due 04/21/157 | EUR | 700,000 | 978,400 | ||||||||
HSBC Finance Corp. 6.676%, due 01/15/21 | 1,400,000 | 1,669,105 | |||||||||
JPMorgan Chase & Co. 6.300%, due 04/23/19 | 400,000 | 468,251 | |||||||||
4.400%, due 07/22/20 | 600,000 | 650,102 | |||||||||
4.250%, due 10/15/20 | 3,500,000 | 3,754,404 | |||||||||
Morgan Stanley 7.300%, due 05/13/19 | 3,270,000 | 3,947,796 | |||||||||
Morgan Stanley MTN 6.000%, due 04/28/15 | 3,100,000 | 3,216,929 | |||||||||
Navient LLC MTN 6.250%, due 01/25/16 | 8,400,000 | 8,872,584 | |||||||||
8.450%, due 06/15/18 | 500,000 | 577,500 | |||||||||
34,225,435 | |||||||||||
Gaming—1.00% | |||||||||||
MGM Resorts International 6.625%, due 07/15/15 | 1,200,000 | 1,248,000 | |||||||||
6.875%, due 04/01/16 | 3,600,000 | 3,861,000 | |||||||||
7.500%, due 06/01/16 | 870,000 | 946,125 | |||||||||
7.625%, due 01/15/179 | 3,100,000 | 3,425,500 | |||||||||
9,480,625 |
57
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Insurance—1.56% | |||||||||||
American International Group, Inc. 6.765%, due 11/15/17 | GBP | 773,000 | $ | 1,481,270 | |||||||
8.250%, due 08/15/18 | 1,200,000 | 1,476,454 | |||||||||
8.175%, due 05/15/582 | 6,400,000 | 8,840,000 | |||||||||
Progressive Corp. 6.700%, due 06/15/372 | 2,800,000 | 3,080,000 | |||||||||
14,877,724 | |||||||||||
Media—0.70% | |||||||||||
British Sky Broadcasting Group PLC 6.100%, due 02/15/185 | 1,000,000 | 1,128,533 | |||||||||
DISH DBS Corp. 7.750%, due 05/31/15 | 300,000 | 314,250 | |||||||||
7.125%, due 02/01/16 | 700,000 | 745,500 | |||||||||
Time Warner Cable, Inc. 5.850%, due 05/01/17 | 200,000 | 223,632 | |||||||||
7.300%, due 07/01/38 | 2,500,000 | 3,334,220 | |||||||||
6.750%, due 06/15/39 | 700,000 | 885,851 | |||||||||
6,631,986 | |||||||||||
Media-cable—0.21% | |||||||||||
Time Warner Entertainment Co. LP 8.375%, due 03/15/23 | 1,500,000 | 2,004,326 | |||||||||
Medical providers—0.95% | |||||||||||
HCA, Inc. 6.500%, due 02/15/20 | 8,314,000 | 9,031,083 | |||||||||
Oil & gas—1.39% | |||||||||||
Encana Corp. 6.500%, due 05/15/19 | 1,400,000 | 1,650,198 | |||||||||
Pioneer Natural Resources Co. 5.875%, due 07/15/16 | 1,535,000 | 1,674,111 | |||||||||
Sinopec Group Overseas Development 2014 Ltd. 4.375%, due 04/10/247 | 5,600,000 | 5,798,240 | |||||||||
Southwestern Energy Co. 7.500%, due 02/01/18 | 3,506,000 | 4,140,144 | |||||||||
13,262,693 | |||||||||||
Pipelines—0.98% | |||||||||||
Sabine Pass Liquefaction LLC 5.750%, due 05/15/245 | 9,200,000 | 9,338,000 | |||||||||
Special purpose entity—0.93% | |||||||||||
CC Holdings GS V LLC/Crown Castle GS III Corp. 3.849%, due 04/15/23 | 4,000,000 | 3,986,064 | |||||||||
IPIC GMTN Ltd. 3.125%, due 11/15/155,9 | 2,000,000 | 2,045,000 | |||||||||
Murray Street Investment Trust I 4.647%, due 03/09/176 | 2,600,000 | 2,798,198 | |||||||||
8,829,262 |
Face amount1 | Value | ||||||||||
Corporate notes—(concluded) | |||||||||||
Steel producers/products—0.07% | |||||||||||
CSN Resources SA 6.500%, due 07/21/205,9 | 500,000 | $ | 509,850 | ||||||||
GTL Trade Finance, Inc. 7.250%, due 10/20/175 | 100,000 | 113,345 | |||||||||
623,195 | |||||||||||
Telecommunications—0.06% | |||||||||||
Sprint Nextel Corp. 6.000%, due 12/01/16 | 500,000 | 540,000 | |||||||||
Tobacco—0.49% | |||||||||||
Imperial Tobacco Finance PLC 3.500%, due 02/11/235 | 4,755,000 | 4,649,967 | |||||||||
Transportation services—0.16% | |||||||||||
Empresa de Transporte de Pasajeros Metro SA 4.750%, due 02/04/245 | 1,500,000 | 1,563,750 | |||||||||
Total corporate notes (cost—$238,457,265) | 248,534,099 | ||||||||||
Loan assignment—0.30% | |||||||||||
Food products—0.30% | |||||||||||
HJ Heinz Co. Term Loan B2 3.500%, due 06/05/20 (cost—$2,912,836) | 2,885,427 | 2,883,782 | |||||||||
Non-US government obligations—9.62% | |||||||||||
Brazil Letras do Tesouro Nacional 0.000%, due 01/01/1812 | BRL | 57,100,000 | 17,191,452 | ||||||||
Brazil Notas do Tesouro Nacional Serie B 6.000%, due 08/15/22 | BRL | 6,200,000 | 6,739,940 | ||||||||
6.000%, due 08/15/50 | BRL | 200,000 | 212,774 | ||||||||
Brazil Notas do Tesouro Nacional Series F 10.000%, due 01/01/21 | BRL | 23,080,000 | 9,375,994 | ||||||||
10.000%, due 01/01/23 | BRL | 581,000 | 231,673 | ||||||||
Emirate of Abu Dhabi 6.750%, due 04/08/195 | 2,300,000 | 2,788,750 | |||||||||
Italy Buoni Poliennali Del Tesoro 5.500%, due 11/01/22 | EUR | 10,000,000 | 16,551,062 | ||||||||
Mexico Government International Bond 6.050%, due 01/11/40 | 1,600,000 | 1,928,000 | |||||||||
Republic of Korea 7.125%, due 04/16/19 | 400,000 | 489,808 | |||||||||
Slovenia Government International Bond 4.700%, due 11/01/165 | EUR | 3,300,000 | 4,754,965 | ||||||||
5.850%, due 05/10/237 | 5,200,000 | 5,808,538 | |||||||||
Spain Government Bond 5.850%, due 01/31/22 | EUR | 10,900,000 | 18,503,048 |
58
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Non-US government obligations—(concluded) | |||||||||||
State of Qatar 4.000%, due 01/20/155 | 4,300,000 | $ | 4,359,125 | ||||||||
5.250%, due 01/20/205 | 2,100,000 | 2,383,500 | |||||||||
6.400%, due 01/20/405 | 200,000 | 248,500 | |||||||||
Total non-US government obligations (cost—$90,087,495) | 91,567,129 | ||||||||||
Municipal bonds and notes—1.67% | |||||||||||
Education—0.51% | |||||||||||
Los Angeles Unified School District Refunding, Series A-1 4.500%, due 01/01/28 | 3,800,000 | 4,098,224 | |||||||||
New York City Transitional Finance Authority Building Aid Revenue Fiscal 2008, Series S-1 5.000%, due 01/15/25 | 100,000 | 112,333 | |||||||||
Will County Community High School District No. 210 Lincoln-Way (Capital Appreciation) (AGM Insured) 0.000%, due 01/01/2112 | 780,000 | 690,433 | |||||||||
4,900,990 | |||||||||||
General obligation—0.22% | |||||||||||
California State (Build America Bonds) 7.500%, due 04/01/34 | 1,400,000 | 1,985,774 | |||||||||
Denver Arena Trust Revenue Note 6.940%, due 11/15/198 | 90,550 | 91,179 | |||||||||
2,076,953 | |||||||||||
Tobacco—0.06% | |||||||||||
Buckeye Tobacco Settlement Financing Authority (Asset Backed Series Turbo), Series A-2 5.875%, due 06/01/47 | 500,000 | 388,745 | |||||||||
Tobacco Settlement Funding Corp., Rhode Island, Series A 6.250%, due 06/01/42 | 200,000 | 199,984 | |||||||||
588,729 | |||||||||||
Transportation—0.67% | |||||||||||
Bay Area Toll Authority Toll Bridge Revenue (Build America Bonds) 6.263%, due 04/01/49 | 1,500,000 | 1,999,080 | |||||||||
Harris County Metropolitan Transportation Authority (Build America Bonds), Series C 6.875%, due 11/01/38 | 3,100,000 | 3,527,459 | |||||||||
Port Authority of New York & New Jersey Consolidated (One Hundred Fifty-Eight) 5.859%, due 12/01/24 | 700,000 | 848,211 | |||||||||
6,374,750 |
Face amount1 | Value | ||||||||||
Municipal bonds and notes—(concluded) | |||||||||||
Utilities—0.21% | |||||||||||
Cincinnati Water System Revenue (Build America Bonds), Series B 6.458%, due 12/01/34 | 100,000 | $ | 110,230 | ||||||||
Metropolitan Water District Southern California (Build America Bonds) 5.906%, due 07/01/25 | 1,700,000 | 1,882,410 | |||||||||
1,992,640 | |||||||||||
Total municipal bonds and notes (cost—$13,298,894) | 15,934,062 | ||||||||||
Number of shares | |||||||||||
Preferred stock13—0.81% | |||||||||||
Banks—0.81% | |||||||||||
Wells Fargo & Co. (cost—$3,810,820) | 6,400 | 7,744,000 | |||||||||
Face amount1 | |||||||||||
Repurchase agreements—4.21% | |||||||||||
Repurchase agreement dated 07/31/14 with BNP Paribas Securities Corp. 0.140% due 08/01/14, collateralized by $29,316,300 Federal National Mortgage Association obligations, 4.000% due 07/01/44; (value—$30,855,610); proceeds: $29,800,116 | 29,800,000 | 29,800,000 | |||||||||
Repurchase agreement dated 07/31/14 with Morgan Stanley & Co., 0.130% due 08/01/14, collateralized by $11,102,700 US Treasury Bonds, 2.875% due 05/15/43; (value—$10,307,296); proceeds: $10,000,036 | 10,000,000 | 10,000,000 | |||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $248,995 US Treasury Note, 0.625% due 05/31/17; (value—$246,817); proceeds: $242,000 | 242,000 | 242,000 | |||||||||
Total repurchase agreements (cost—$40,042,000) | 40,042,000 |
59
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
Number of contracts | Value | ||||||||||
Options purchased††—0.00% | |||||||||||
Call options purchased††—0.00% | |||||||||||
Eurodollar Futures, strike @ 99.75, expires 12/15/14 (cost—$10,670) | 125 | $ | 3,906 | ||||||||
Number of shares | |||||||||||
Investment of cash collateral from securities loaned—0.12% | |||||||||||
Money market fund—0.12% | |||||||||||
UBS Private Money Market Fund LLC14 (cost—$1,125,765) | 1,125,765 | 1,125,765 | |||||||||
Total investments before investments sold short (cost—$1,019,690,930)—110.25% | 1,049,728,625 |
Face amount1 | Value | ||||||||||
Investment sold short—(0.06)% | |||||||||||
FNMA TBA* (proceeds—$538,281) | (500,000 | ) | $ | (537,102 | ) | ||||||
Liabilities in excess of other assets—(10.18)% | (97,023,560 | ) | |||||||||
Net assets—100.00% | $ | 952,167,963 |
For a listing of defined portfolio acronyms, counterparty acronyms and currency type abbreviation that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 232.
Aggregate cost for federal income tax purposes before investments sold short was $1,024,160,001; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 34,222,944 | |||||
Gross unrealized depreciation | (8,654,320 | ) | |||||
Net unrealized appreciation | $ | 25,568,624 |
Written options
Number of contracts | Put options written | Expiration date | Premiums received | Current value | Unrealized appreciation | ||||||||||||||||||
125 | Eurodollar Futures, strike @ 99 | 12/15/14 | $ | 13,130 | $ | (781 | ) | $ | 12,349 |
Written options activity for the year ended July 31, 2014 was as follows:
Number of contracts | Premiums received | ||||||||||
Options outstanding at July 31, 2013 | — | $ | — | ||||||||
Options written | 1,529 | 635,763 | |||||||||
Options exercised | (67 | ) | (14,034 | ) | |||||||
Options terminated in closing purchase transactions | — | — | |||||||||
Options expired prior to exercise | (1,337 | ) | (608,599 | ) | |||||||
Options outstanding at July 31, 2014 | 125 | $ | 13,130 |
60
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
Written swaptions8
Notional amount (000) | Put swaptions written | Counterparty | Expiration date | Premiums received | Current value | Unrealized appreciation | |||||||||||||||||||||
EUR | 21,500 | CDX.ITRAXX Main 21, 5 Year Index, strike @ 1.000%; terminating 06/20/19 | GSI | 06/20/19 | $ | 65,307 | $ | (8,955 | ) | $ | 56,352 | ||||||||||||||||
EUR | 2,800 | CDX.ITRAXX Main 21, 5 Year Index, strike @ 1.000%; terminating 09/17/14 | CITI | 09/17/14 | 8,982 | (1,166 | ) | 7,816 | |||||||||||||||||||
EUR | 11,600 | CDX.ITRAXX Main 21, 5 Year Index, strike @ 1.000%; terminating 06/20/19 | GSI | 06/20/19 | 40,653 | (2,060 | ) | 38,593 | |||||||||||||||||||
EUR | 38,100 | CDX.ITRAXX Main 21, 5 Year Index, strike @ 1.100%; terminating 09/17/14 | BNP | 09/17/14 | 125,811 | (6,767 | ) | 119,044 | |||||||||||||||||||
EUR | 11,000 | CDX.ITRAXX Main 21, 5 Year Index, strike @ 1.000%; terminating 09/17/14 | JPMCB | 09/17/14 | 40,532 | (1,954 | ) | 38,578 | |||||||||||||||||||
$ | 281,285 | $ | (20,902 | ) | $ | 260,383 |
Swaptions activity for the year ended July 31, 2014 was as follows:
Premiums received | |||||||
Swaptions outstanding at July 31, 2013 | $ | — | |||||
Swaptions written | 741,972 | ||||||
Swaptions exercised | (62,044 | ) | |||||
Swaptions terminated in closing purchase transactions | — | ||||||
Swaptions expired prior to exercise | (398,643 | ) | |||||
Swaptions outstanding at July 31, 2014 | $ | 281,285 |
Futures contracts
Number of contracts | Currency | Expiration date | Proceeds | Current value | Unrealized depreciation | ||||||||||||||||||||||
Interest rate futures sell contracts: | |||||||||||||||||||||||||||
531 | AUD | Australian Bond 10 Year Futures | September 2014 | $ | 58,014,345 | $ | 59,656,194 | $ | (1,641,849 | ) |
Forward foreign currency contracts
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
BB | BRL | 12,819,394 | USD | 5,786,623 | 08/04/14 | $ | 136,201 | ||||||||||||
BB | BRL | 3,614,654 | USD | 1,603,591 | 09/03/14 | 24,333 | |||||||||||||
BB | GBP | 1,218,000 | USD | 2,044,424 | 09/11/14 | (11,293 | ) | ||||||||||||
BB | KRW | 4,827,616,000 | USD | 4,720,000 | 10/15/14 | 39,528 | |||||||||||||
BB | USD | 5,676,896 | BRL | 12,819,394 | 08/04/14 | (26,475 | ) | ||||||||||||
BNP | MXN | 25,520,000 | USD | 1,943,271 | 12/18/14 | 31,345 | |||||||||||||
BOA | EUR | 825,000 | USD | 1,112,470 | 08/05/14 | 7,751 | |||||||||||||
BOA | KRW | 10,227,000 | USD | 10,000 | 10/15/14 | 85 | |||||||||||||
CITI | EUR | 592,000 | USD | 805,855 | 08/05/14 | 13,135 | |||||||||||||
CITI | EUR | 55,767,000 | USD | 74,955,031 | 09/03/14 | 273,203 | |||||||||||||
CITI | USD | 74,950,848 | EUR | 55,767,000 | 08/05/14 | (275,803 | ) | ||||||||||||
CSI | BRL | 2,300,698 | USD | 1,012,631 | 08/04/14 | (1,451 | ) | ||||||||||||
CSI | BRL | 7,310,243 | USD | 3,156,000 | 10/02/14 | (13,203 | ) | ||||||||||||
CSI | BRL | 1,792,190 | USD | 771,000 | 01/05/15 | 13,397 | |||||||||||||
CSI | USD | 1,014,685 | BRL | 2,300,698 | 08/04/14 | (604 | ) |
61
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
Forward foreign currency contracts—(concluded)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
CSI | USD | 771,000 | BRL | 1,749,553 | 10/02/14 | $ | (12,518 | ) | |||||||||||
DB | EUR | 54,350,000 | USD | 73,876,053 | 08/05/14 | 1,098,447 | |||||||||||||
DB | JPY | 159,100,000 | USD | 1,545,676 | 09/03/14 | (1,276 | ) | ||||||||||||
DB | KRW | 4,346,475,000 | USD | 4,250,000 | 10/15/14 | 36,004 | |||||||||||||
DB | USD | 10,400,000 | CNY | 62,712,000 | 01/28/15 | (350,165 | ) | ||||||||||||
DB | USD | 1,100,000 | CNY | 6,523,000 | 04/07/16 | (65,356 | ) | ||||||||||||
DB | USD | 1,545,437 | JPY | 159,100,000 | 08/05/14 | 1,259 | |||||||||||||
DB | USD | 9,574,200 | KRW | 9,733,131,600 | 10/15/14 | (137,731 | ) | ||||||||||||
GSCM | BRL | 9,572,420 | USD | 4,128,268 | 10/02/14 | (21,655 | ) | ||||||||||||
GSCM | BRL | 1,905,822 | USD | 827,000 | 10/02/14 | 771 | |||||||||||||
GSCM | CNY | 62,712,000 | USD | 9,847,990 | 01/28/15 | (201,846 | ) | ||||||||||||
GSCM | KRW | 516,828,400 | USD | 506,000 | 08/18/14 | 3,562 | |||||||||||||
GSCM | USD | 2,035,301 | MXN | 26,810,000 | 08/25/14 | (10,478 | ) | ||||||||||||
HSBC | BRL | 25,791,940 | USD | 10,948,272 | 01/05/15 | 45,381 | |||||||||||||
JPMCB | BRL | 11,505,438 | USD | 5,074,287 | 08/04/14 | 3,019 | |||||||||||||
JPMCB | BRL | 6,091,588 | USD | 2,637,965 | 01/05/15 | 62,900 | |||||||||||||
JPMCB | CNY | 41,302,100 | USD | 6,423,344 | 04/07/16 | (127,781 | ) | ||||||||||||
JPMCB | JPY | 159,100,000 | USD | 1,566,938 | 08/05/14 | 20,242 | |||||||||||||
JPMCB | USD | 5,093,043 | BRL | 11,505,438 | 08/04/14 | (21,775 | ) | ||||||||||||
JPMCB | USD | 5,860,000 | CNY | 34,779,100 | 04/07/16 | (343,519 | ) | ||||||||||||
$ | 187,634 |
Interest rate swaps
Counterparty | Notional amount (000) | Termination date | Payments made by the Portfolio15 | Payments received by the Portfolio15 | Upfront payments received/ (made) | Value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||||
BOA | BRL | 14,200 | 01/02/17 | Brazil CETIP Interbank Deposit Rate | 8.860 | % | $ | (131,834 | ) | $ | (262,923 | ) | $ | (394,757 | ) | ||||||||||||||||
BNP | BRL | 200 | 01/04/21 | Brazil CETIP Interbank Deposit Rate | 11.680 | 128 | (10 | ) | 118 | ||||||||||||||||||||||
GSB | BRL | 42,000 | 01/04/21 | Brazil CETIP Interbank Deposit Rate | 11.680 | 30,106 | (2,184 | ) | 27,922 | ||||||||||||||||||||||
$ | (101,600 | ) | $ | (265,117 | ) | $ | (366,717 | ) |
Credit default swaps on corporate issues—buy protection16
Counterparty | Referenced obligations17 | Notional amount (000) | Termination dates | Payments made by the Portfolio15 | Upfront payments made | Value | Unrealized (depreciation) | ||||||||||||||||||||||||
BB | Macy's Retail Holdings, Inc. bond, 7.875%, due 07/15/15 | USD | 1,643 | 09/20/15 | 7.150 | % | $ | — | $ | (147,500 | ) | $ | (147,500 | ) | |||||||||||||||||
CITI | Credit Agricole bond, 5.065%, due 08/10/22 | EUR | 2,200 | 12/20/16 | 1.000 | (216,530 | ) | (40,096 | ) | (256,626 | ) | ||||||||||||||||||||
GSI | Credit Agricole bond, 5.065%, due 08/10/22 | EUR | 1,400 | 12/20/16 | 1.000 | (141,292 | ) | (25,516 | ) | (166,808 | ) | ||||||||||||||||||||
$ | (357,822 | ) | $ | (213,112 | ) | $ | (570,934 | ) |
62
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
Credit default swaps on corporate and sovereign issues—sell protection18
Counterparty | Referenced obligations16 | Notional amount (000) | Termination dates | Payments received by the Portfolio15 | Upfront payments received (made) | Value | Unrealized appreciation (depreciation) | Credit spread19 | |||||||||||||||||||||||||||
BB | BP Capital Markets America bond, 4.200%, due 6/15/18 | EUR | 500 | 06/20/15 | 1.000 | % | $ | 75,252 | $ | 6,116 | $ | 81,368 | 0.11 | ||||||||||||||||||||||
BB | Federal Republic of Brazil bond, 12.250%, due 03/06/30 | USD | 5,500 | 06/20/16 | 1.000 | 15,937 | 43,983 | 59,920 | 0.64 | ||||||||||||||||||||||||||
BB | Italy Republic bond, 1.000%, due 6/20/17 | EUR | 1,400 | 06/20/17 | 1.000 | 146,033 | 20,332 | 166,365 | 0.66 | ||||||||||||||||||||||||||
BOA | Goldman Sachs Group Inc. bond, 5.950%, due 01/18/18 | USD | 5,300 | 06/20/19 | 1.000 | (8,061 | ) | 55,622 | 47,561 | 0.80 | |||||||||||||||||||||||||
BOA | Italy Republic bond, 1.000%, due 06/20/17 | EUR | 1,000 | 06/20/17 | 1.000 | 105,511 | 14,522 | 120,033 | 0.66 | ||||||||||||||||||||||||||
BOA | Lloyds TSB Bank PLC bond, 3.375%, due 04/15/20 | EUR | 3,600 | 09/20/17 | 3.000 | (17,075 | ) | 412,787 | 395,712 | 0.39 | |||||||||||||||||||||||||
CITI | BP Capital Markets America bond, 4.200%, due 06/15/18 | USD | 200 | 06/20/15 | 5.000 | (3,642 | ) | 9,940 | 6,298 | 0.11 | |||||||||||||||||||||||||
CSI | BP Capital Markets America bond, 4.200%, due 06/15/18 | USD | 1,200 | 06/20/15 | 5.000 | (18,408 | ) | 59,642 | 41,234 | 0.11 | |||||||||||||||||||||||||
CSI | Citigroup Inc. bond, 1.000%, due 09/20/17 | USD | 8,100 | 09/20/14 | 1.000 | 6,535 | 18,460 | 24,995 | 0.21 | ||||||||||||||||||||||||||
CSI | Citigroup Inc. bond, 5.250%, due 03/15/18 | USD | 1,600 | 03/20/15 | 5.000 | (41,049 | ) | 55,871 | 14,822 | 0.47 | |||||||||||||||||||||||||
CSI | Finmeccanica Finance bond, 5.750%, due 12/12/18 | EUR | 6,600 | 03/20/19 | 5.000 | (863,515 | ) | 1,211,108 | 347,593 | 2.03 | |||||||||||||||||||||||||
DB | Bank of America Corp. bond, 5.650%, due 05/01/18 | USD | 500 | 06/20/19 | 1.000 | (8,284 | ) | 6,771 | (1,513 | ) | 0.74 | ||||||||||||||||||||||||
DB | BP Capital Markets America bond, 4.200%, due 06/15/18 | USD | 700 | 06/20/15 | 5.000 | (24,474 | ) | 34,791 | 10,317 | 0.11 | |||||||||||||||||||||||||
DB | Goldman Sachs Group Inc. bond, 5.950%, due 01/18/18 | USD | 100 | 03/20/19 | 0.455 | (419 | ) | 1,171 | 752 | 0.80 | |||||||||||||||||||||||||
DB | Goldman Sachs Group Inc. bond, 5.950%, due 01/18/18 | USD | 800 | 06/20/19 | 1.000 | (1,473 | ) | 8,396 | 6,923 | 0.80 | |||||||||||||||||||||||||
DB | Lloyds TSB Bank PLC bond, 3.375%, due 04/15/20 | EUR | 2,900 | 09/20/17 | 3.000 | (17,451 | ) | 332,522 | 315,071 | 0.39 | |||||||||||||||||||||||||
MSCI | Ford Motor Co. bond, 6.500%, due 08/01/18 | USD | 100 | 03/20/19 | 5.000 | (17,181 | ) | 19,156 | 1,975 | 0.85 | |||||||||||||||||||||||||
MSCI | China International Government bond, 4.750%, due 10/29/13 | USD | 4,100 | 09/20/16 | 1.000 | 17,807 | 69,906 | 87,713 | 0.26 | ||||||||||||||||||||||||||
$ | (653,957 | ) | $ | 2,381,096 | $ | 1,727,139 |
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PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
Centrally cleared interest rate swap agreements
Notional amount (000) | Termination date | Payments made by the Portfolio15 | Payments received by the Portfolio15 | Value | Unrealized appreciation (depreciation) | ||||||||||||||||||
AUD | 491,500 | 03/16/17 | 3 Month AUD LIBOR | 3.500 | % | $ | 1,836,239 | $ | 1,084,316 | ||||||||||||||
AUD | 91,000 | 06/18/19 | 6 Month AUD LIBOR | 4.000 | 2,776,023 | 2,913,657 | |||||||||||||||||
AUD | 13,000 | 12/17/19 | 6 Month AUD LIBOR | 3.750 | 192,588 | (40,004 | ) | ||||||||||||||||
EUR | 16,700 | 09/17/44 | 6 Month EURIBOR | 2.750 | (3,459,168 | ) | (839,476 | ) | |||||||||||||||
JPY | 1,300,000 | 09/18/23 | 6 Month JPY LIBOR | 1.000 | (508,137 | ) | (495,338 | ) | |||||||||||||||
USD | 18,600 | 12/17/17 | 3 Month USD LIBOR | 1.500 | 3,325 | 42,772 | |||||||||||||||||
USD | 46,600 | 03/21/23 | 3 Month USD LIBOR | 3.000 | (882,266 | ) | (81,027 | ) | |||||||||||||||
USD | 16,900 | 04/16/24 | 3 Month USD LIBOR | 2.800 | (330,173 | ) | (330,173 | ) | |||||||||||||||
$ | (371,569 | ) | $ | 2,254,727 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
US government obligations | $ | — | $ | 388,743,869 | $ | — | $ | 388,743,869 | |||||||||||
Government national mortgage association certificates | — | 40,909 | — | 40,909 | |||||||||||||||
Federal home loan mortgage corporation certificates | — | 65,888 | 1,254,850 | 1,320,738 | |||||||||||||||
Federal housing administration certificates | — | — | 18,564 | 18,564 | |||||||||||||||
Federal national mortgage association certificates | — | 22,572,933 | 39,283 | 22,612,216 | |||||||||||||||
Collateralized mortgage obligations | — | 177,818,854 | 2,269,811 | 180,088,665 | |||||||||||||||
Asset-backed securities | — | 49,068,921 | — | 49,068,921 | |||||||||||||||
Corporate notes | — | 248,534,099 | — | 248,534,099 | |||||||||||||||
Loan assignment | — | 2,883,782 | — | 2,883,782 | |||||||||||||||
Non-US government obligations | — | 91,567,129 | — | 91,567,129 | |||||||||||||||
Municipal bonds and notes | — | 15,934,062 | — | 15,934,062 | |||||||||||||||
Preferred stock | 7,744,000 | — | — | 7,744,000 | |||||||||||||||
Repurchase agreements | — | 40,042,000 | — | 40,042,000 | |||||||||||||||
Options purchased | 3,906 | — | — | 3,906 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 1,125,765 | — | 1,125,765 | |||||||||||||||
Forward foreign currency contracts | — | 1,810,563 | — | 1,810,563 | |||||||||||||||
Swap agreements | — | 7,189,271 | — | 7,189,271 | |||||||||||||||
Total | $ | 7,747,906 | $ | 1,047,398,045 | $ | 3,582,508 | $ | 1,058,728,459 | |||||||||||
Liabilities | |||||||||||||||||||
Investment sold short | $ | — | $ | (537,102 | ) | $ | — | $ | (537,102 | ) | |||||||||
Written options | (781 | ) | — | — | (781 | ) | |||||||||||||
Written swaptions | — | (20,902 | ) | — | (20,902 | ) | |||||||||||||
Futures contracts | (1,641,849 | ) | — | — | (1,641,849 | ) | |||||||||||||
Forward foreign currency contracts | — | (1,622,929 | ) | — | (1,622,929 | ) | |||||||||||||
Swap agreements | — | (5,657,973 | ) | — | (5,657,973 | ) | |||||||||||||
Total | $ | (1,642,630 | ) | $ | (7,838,906 | ) | $ | — | $ | (9,481,536 | ) |
64
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
At July 31, 2014, there were no transfers between Level 1 and Level 2.
The following is a rollforward of the Portfolio's investments that were valued using unobservable inputs (Level 3) for the year ended July 31, 2014:
Federal home loan mortgage corporation certificates | Federal housing administration certificates | Federal national mortgage association certificates | Collateralized mortgage obligations | Total | |||||||||||||||||||
Beginning balance | $ | 1,407,434 | $ | 21,003 | $ | 53,945 | $ | 115,797 | $ | 1,598,179 | |||||||||||||
Purchases | — | — | — | 3,646,788 | 3,646,788 | ||||||||||||||||||
Sales/paydowns | (63,473 | ) | (2,439 | ) | (15,300 | ) | (1,503,651 | ) | (1,584,863 | ) | |||||||||||||
Accrued discounts/(premiums) | — | (116 | ) | — | 6 | (110 | ) | ||||||||||||||||
Total realized gain/(loss) | (40 | ) | (134 | ) | — | 5,425 | 5,251 | ||||||||||||||||
Net change in unrealized appreciation/depreciation | (89,071 | ) | 250 | 638 | 5,446 | (82,737 | ) | ||||||||||||||||
Transfers into Level 3 | — | — | — | — | — | ||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | — | ||||||||||||||||||
Ending balance | $ | 1,254,850 | $ | 18,564 | $ | 39,283 | $ | 2,269,811 | $ | 3,582,508 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investments held at July 31, 2014 was $(71,973).
Issuer breakdown by country or territory of origin (unaudited)
Percentage of total investments | |||||||
United States | 83.1 | % | |||||
Brazil | 5.4 | ||||||
Cayman Islands | 1.9 | ||||||
Italy | 1.6 | ||||||
Norway | 1.1 | ||||||
Slovenia | 1.0 | ||||||
South Korea | 1.0 | ||||||
Spain | 0.9 | ||||||
Qatar | 0.7 | ||||||
British Virgin Islands | 0.6 | ||||||
United Kingdom | 0.5 | ||||||
India | 0.4 | ||||||
Netherlands | 0.4 | ||||||
Mexico | 0.4 | ||||||
Belgium | 0.3 | ||||||
United Arab Emirates | 0.3 | ||||||
Canada | 0.1 | ||||||
Chile | 0.1 | ||||||
Venezuela | 0.1 | ||||||
Guernsey | 0.1 | ||||||
Luxembourg | 0.0 | † | |||||
Total | 100.0 | % |
† Amount represents less than 0.05%
Portfolio footnotes
* On September 7, 2008, the Federal Housing Finance Agency placed the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.
†† Amount represents less than 0.005%.
1 In US Dollars unless otherwise indicated.
2 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2014 and changes periodically.
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PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2014
3 Security is being fair valued by a valuation committee under the direction of the board of trustees.
4 Security, or portion thereof, pledged as collateral for investments sold short.
5 Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities, which represent 10.21% of net assets as of July 31, 2014, are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers.
6 Step bond that converts to the noted fixed rate at a designated future date.
7 Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. At July 31, 2014, the value of this security amounted to 2.48% of net assets.
8 Illiquid investment as of July 31, 2014.
9 Security, or portion thereof, was on loan at July 31, 2014.
10 Perpetual investment. The maturity date reflects the next call date.
11 Bond interest in default.
12 Zero coupon bond. The rate shown represents annualized yield at the date of purchase.
13 Non cumulative preferred stock. Convertible until 12/31/49.
14 The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2014. The investment manager earns a management fee from UBS Private Money Market Fund LLC. Please see the Notes to financial statements for further information.
Security description | Value at 07/31/13 | Purchases during the year ended 07/31/14 | Sales during the year ended 07/31/14 | Value at 07/31/14 | Net income earned from affiliate for the year ended 07/31/14 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 3,121,965 | $ | 179,485,620 | $ | 181,481,820 | $ | 1,125,765 | $ | 343 |
15 Payments made or received are based on the notional amount.
16 If the Portfolio is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index
17 Payments from/to the counterparty will be received/made upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation.
18 If the Portfolio is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation.
19 Credit spreads, where applicable, represented in absolute terms, utilized in determining the market value as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity's credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. A credit spread identified as "Defaulted" indicates a credit event has occurred for the referenced entity. Credit spreads are unaudited.
See accompanying notes to financial statements.
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PACE Municipal Fixed Income Investments
Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 5.90% before the deduction of the maximum PACE Select program fee.1 In comparison, the Barclays US Municipal 3-15 Year Blend Index (the "benchmark") returned 6.09%, and the Lipper Intermediate Municipal Debt Funds category posted a median return of 5.21%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 70. Please note that the returns shown do not reflect the deduction of taxes that a shareholder could pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisor's comments2
(Please note that while the sub-advisor outperformed the benchmark on a gross of fees basis, the Portfolio underperformed net of fees, as reported under "Performance." As stated in footnote two, the comments that follow address performance on a gross of fees basis.)
The Portfolio outperformed its benchmark during the reporting period. The primary drivers of performance were contributions from sector allocations, particularly among revenue issuers, as well as duration and yield curve positioning. Security selection produced mixed results, with strong performance among our state tax-backed general obligation bonds, which was mitigated by weaker returns from select revenue utility issues.
From a sector perspective, performance was aided by a strategic overweight to revenue bonds, such as Hospitals, Airports and Transportation. These sectors performed well as investors sought income-oriented revenue bonds with relatively high yields. As market conditions changed near the end of the reporting period, volatility and credit spreads tightened dramatically and tactical positioning toward a more defensive stance was a modest detractor from performance. In particular, an emphasis on some of the more liquid, higher grade revenue sectors—such as essential service water, education and special tax bonds—was not rewarded, as these bonds lagged higher-yielding alternatives. An underweight to both state and local general obligation bonds, as well as lower-income producing US Treasury-backed pre-refunded bonds, contributed to results, as these areas lagged the benchmark.
PACE Select Advisors Trust – PACE Municipal Fixed Income Investments
Investment Sub-Advisor:
Standish Mellon Asset Management Company LLC ("Standish")
Portfolio Manager:
Christine L. Todd
Objective:
High current income exempt from federal income tax
Investment process:
In deciding which securities to buy for the Portfolio, 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 may also 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 that may improve the Portfolio's return. Standish also may sell securities with weakening credit profiles or to adjust the average duration of the Portfolio.
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeve performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
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Sub-Advisor's comments – concluded
Despite concerns over well-publicized financial and economic troubles in Detroit and Puerto Rico, which caused turbulence for those jurisdictions' bonds, state and local tax collections nationally remained in an upswing. Security selection among state general obligation bonds—especially in California and Illinois—contributed to performance, as tax revenues were bolstered by economic growth trends and a recovering labor market. However, this was partially offset by weaker returns among select Puerto Rico essential service revenue securities, which were eliminated from the Portfolio during the reporting period. From a quality perspective, an overweight among lower investment grade A-rated revenue bonds contributed to results, as investors' search for yield drove stronger returns versus the higher credit quality AAA-rated segment.
Our duration positioning was modestly long and beneficial as interest rates declined during the reporting period. Amid a persistent reach for yield, the longest maturity bonds produced the strongest total returns as the yield curve flattened. Tactical yield curve positioning, with an overweight to 10-year maturities, was also additive. Maintaining a yield or income advantage versus the benchmark, which was helped by a larger exposure to longer-term bonds, was a key driver to the Portfolio's returns.
No derivatives were used during the reporting period.
Special considerations
The Portfolio may be appropriate for long-term investors seeking high current income exempt from federal income taxes. Investors should be able to withstand short-term fluctuations in the fixed income markets in return for potentially higher returns over the long term. The yield and value of the Portfolio change every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the issuers in which the Portfolio invests. It is important to note that an investment in the Portfolio is only one component of a balanced investment plan.
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PACE Select Advisors Trust
PACE Municipal Fixed Income Investments
Illustration of an assumed investment of $10,000 in Class P shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE Municipal Fixed Income Investments Class P shares versus the Barclays US Municipal 3-15 Year Blend Index over the 10 years ended July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder could pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE Municipal Fixed Income Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustration purposes only.
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PACE Select Advisors Trust
PACE Municipal Fixed Income Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 5.64 | % | 4.25 | % | 3.68 | % | |||||||||
Class C2 | 5.10 | % | 3.72 | % | 3.16 | % | |||||||||
Class Y3 | 5.89 | % | 4.51 | % | 3.94 | % | |||||||||
Class P4 | 5.90 | % | 4.51 | % | 3.93 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 0.87 | % | 3.29 | % | 3.21 | % | |||||||||
Class C2 | 4.35 | % | 3.72 | % | 3.16 | % | |||||||||
Barclays US Municipal 3-15 Year Blend Index5 | 6.09 | % | 4.84 | % | 4.70 | % | |||||||||
Lipper Intermediate Municipal Debt Funds median | 5.21 | % | 4.46 | % | 3.79 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 5.07 | % | 4.62 | % | 3.75 | % | |||||||||
Class C2 | 4.55 | % | 4.09 | % | 3.23 | % | |||||||||
Class Y3 | 5.42 | % | 4.87 | % | 4.00 | % | |||||||||
Class P4 | 5.34 | % | 4.88 | % | 4.00 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 0.36 | % | 3.65 | % | 3.27 | % | |||||||||
Class C2 | 3.80 | % | 4.09 | % | 3.23 | % |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—0.93% and 0.90%; Class C—1.44% and 1.40%; Class Y—0.72% and 0.65%; and Class P—0.70% and 0.65%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—0.90%; Class C—1.40%; Class Y—0.65%; and Class P—0.65%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 4.5%. Class A shares bear ongoing 12b-1 service fees.
2 Maximum contingent deferred sales charge for Class C shares is 0.75% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
3 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
4 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
4 The Barclays US Municipal 3-15 Year Blend Index is an unmanaged total return performance benchmark for the tax-exempt bond market. The Index includes municipal bonds with an effective maturity between 2 and 17 years that have at least one year to maturity and are investment grade. Investors should note that indices do not reflect the deduction of fees and expenses.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder could pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
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Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Weighted average duration | 4.9 yrs. | ||||||
Weighted average maturity | 8.1 yrs. | ||||||
Average coupon | 5.03 | % | |||||
Net assets (mm) | $ | 409.3 | |||||
Number of holdings | 165 | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Municipal bonds and notes | 99.8 | % | |||||
Tax-free money market fund | 1.3 | ||||||
Cash equivalents and other assets less liabilities | (1.1 | ) | |||||
Total | 100.0 | % | |||||
Sectors1 | 07/31/14 | ||||||
Revenue | 60.6 | % | |||||
General obligations | 23.1 | ||||||
Lease revenue/special revenue | 15.4 | ||||||
Pre-refunded | 0.9 | ||||||
Total | 100 | % | |||||
Top five states1 | 07/31/14 | ||||||
California | 12.9 | % | |||||
Illinois | 11.5 | ||||||
New York | 9.9 | ||||||
Texas | 9.2 | ||||||
Florida | 6.6 | ||||||
Total | 50.1 | % | |||||
Quality diversification1 | 07/31/14 | ||||||
AAA and agency backed securities | 12.3 | % | |||||
AA | 52.7 | ||||||
A | 26.6 | ||||||
BBB | 1.3 | ||||||
Non-rated | 6.9 | ||||||
Tax-free money market fund | 1.3 | ||||||
Cash equivalents and other assets less liabilities | (1.1 | ) | |||||
Total | 100.0 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time. Credit quality ratings shown are based on the ratings assigned to portfolio holdings by Standard & Poor's Ratings Group, an independent rating agency.
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Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Municipal bonds and notes—99.84% | |||||||||||
Alabama—1.63% | |||||||||||
Alabama Public School & College Authority Revenue Refunding Series B 5.000%, due 01/01/26 | $ | 3,750,000 | $ | 4,510,388 | |||||||
Birmingham Waterworks Board Water Revenue Series A (Assured Guaranty Insured) 5.000%, due 01/01/24 | 2,005,000 | 2,179,194 | |||||||||
6,689,582 | |||||||||||
Alaska—0.53% | |||||||||||
North Slope Boro Series A (NATL-RE Insured) 5.000%, due 06/30/16 | 2,000,000 | 2,175,100 | |||||||||
Arizona—0.42% | |||||||||||
Pima County Sewer Revenue System (AGM Insured) 5.000%, due 07/01/23 | 1,500,000 | 1,722,390 | |||||||||
California—12.94% | |||||||||||
California State 5.000%, due 08/01/19 | 3,000,000 | 3,323,910 | |||||||||
5.000%, due 09/01/23 | 1,000,000 | 1,197,560 | |||||||||
5.000%, due 12/01/24 | 2,000,000 | 2,409,680 | |||||||||
5.000%, due 09/01/25 | 1,725,000 | 1,979,489 | |||||||||
5.250%, due 10/01/20 | 1,000,000 | 1,196,740 | |||||||||
5.500%, due 04/01/21 | 3,000,000 | 3,562,680 | |||||||||
California State Department of Water Resources Power Supply Revenue Series H (AGM Insured) 5.000%, due 05/01/22 | 1,400,000 | 1,607,802 | |||||||||
Series L 5.000%, due 05/01/17 | 1,000,000 | 1,123,730 | |||||||||
California State Economic Recovery Refunding Series A 5.000%, due 07/01/20 | 3,000,000 | 3,544,260 | |||||||||
California State Kindergarten, Series A4 0.030%, due 05/01/341 | 1,500,000 | 1,500,000 | |||||||||
California State Public Works Board Lease Revenue (Judicial Council Project) Series A 5.000%, due 03/01/24 | 1,750,000 | 2,073,207 | |||||||||
California Statewide Communities Development Authority Revenue Kaiser Permanente Series A 5.000%, due 04/01/19 | 3,000,000 | 3,504,720 | |||||||||
California Statewide Communities Development Authority Revenue St. Joseph Series F (AGM Insured) 5.250%, due 07/01/18 | 1,500,000 | 1,723,050 | |||||||||
Los Angeles Department of Airports (Los Angeles International Airport) Series A 5.000%, due 05/15/322 | 2,000,000 | 2,239,640 |
Face amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
California—(concluded) | |||||||||||
Los Angeles Department of Water & Power Revenue Power Systems Series B 5.000%, due 07/01/25 | $ | 5,000,000 | $ | 5,854,350 | |||||||
North Natomas Community Facilities District No. 4 Special Tax Series E 5.000%, due 09/01/19 | 1,385,000 | 1,579,773 | |||||||||
Northern California Power Agency Refunding (Hydroelectric Project 1) Series A 5.000%, due 07/01/28 | 1,845,000 | 2,092,138 | |||||||||
Orange County Transportation Authority Toll Road Revenue Refunding (Senior Lien 91 Express Lanes) 5.000%, due 08/15/29 | 1,000,000 | 1,126,090 | |||||||||
San Diego Public Facilities Financing Authority Sewer Revenue Senior Series A 5.000%, due 05/15/25 | 2,500,000 | 2,889,775 | |||||||||
San Francisco City and County Airports Community International Airport Revenue San Francisco International Airport 5.000%, due 05/01/172 | 3,715,000 | 4,163,438 | |||||||||
Stockton Unified School District (AGM Insured) 5.000%, due 07/01/23 | 1,270,000 | 1,452,143 | |||||||||
University of California Revenue Series Q 5.250%, due 05/15/23 | 2,500,000 | 2,830,325 | |||||||||
52,974,500 | |||||||||||
Colorado—3.11% | |||||||||||
Colorado Health Facilities Authority Revenue Boulder Community Hospital Project Series A 4.000%, due 10/01/18 | 1,500,000 | 1,611,840 | |||||||||
Denver City & County Airport Revenue Series A 5.500%, due 11/15/192 | 2,500,000 | 2,986,925 | |||||||||
Subseries A 5.500%, due 11/15/262 | 7,000,000 | 8,151,570 | |||||||||
12,750,335 | |||||||||||
District of Columbia—0.58% | |||||||||||
Metropolitan Washington, Airport Authority Airport System Revenue Series A 5.000%, due 10/01/222 | 2,000,000 | 2,364,380 | |||||||||
Florida—6.62% | |||||||||||
Broward Port Facilities Revenue Refunding Series B 5.000%, due 09/01/212 | 2,000,000 | 2,315,640 |
72
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Face amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Florida—(concluded) | |||||||||||
Citizens Property Insurance Corp. Senior Secured Coastal Series A-1 5.000%, due 06/01/19 | $ | 2,000,000 | $ | 2,317,360 | |||||||
Citizens Property Insurance Corp. Senior Secured High Risk Account 5.500%, due 06/01/17 | 2,835,000 | 3,210,354 | |||||||||
Florida Hurricane Catastrophe Fund Finance Corp. Revenue Series A 5.000%, due 07/01/16 | 1,500,000 | 1,633,125 | |||||||||
Florida State Board of Education Lottery Revenue Refunding Series C 5.000%, due 07/01/16 | 1,000,000 | 1,088,750 | |||||||||
Series E 5.000%, due 07/01/19 | 1,000,000 | 1,173,580 | |||||||||
Florida State Municipal Power Agency Revenue All Requirements Power Series A 5.250%, due 10/01/20 | 1,555,000 | 1,832,738 | |||||||||
5.250%, due 10/01/21 | 2,000,000 | 2,239,620 | |||||||||
Florida Turnpike Authority Revenue Series A 5.000%, due 07/01/25 | 3,000,000 | 3,569,730 | |||||||||
JEA Electric System Revenue Series A 5.000%, due 10/01/24 | 1,200,000 | 1,424,892 | |||||||||
Lakeland Energy System Revenue Refunding Series B (AGM Insured) 5.000%, due 10/01/17 | 2,000,000 | 2,259,400 | |||||||||
Orlando & Orange County Expressway Authority Expressway Revenue Junior Lien (NATL-RE-IBC/FGIC Insured) 8.250%, due 07/01/16 | 2,595,000 | 2,975,012 | |||||||||
Tampa Solid Waste System Revenue Refunding (AGM Insured) 5.000%, due 10/01/152 | 1,000,000 | 1,054,870 | |||||||||
27,095,071 | |||||||||||
Georgia—1.50% | |||||||||||
De Kalb County Water & Sewer Revenue Refunding Series B 5.250%, due 10/01/24 | 2,000,000 | 2,452,700 | |||||||||
Municipal Electric Authority of Georgia Project One Subseries D 5.750%, due 01/01/19 | 1,750,000 | 2,057,720 | |||||||||
Private Colleges & Universities Authority of Georgia Emory University Series A 5.000%, due 09/01/16 | 1,500,000 | 1,643,760 | |||||||||
6,154,180 | |||||||||||
Illinois—11.52% | |||||||||||
Chicago O'Hare International Airport Revenue Refunding General Third Lien Series B (NATL-RE Insured) 5.250%, due 01/01/18 | 1,000,000 | 1,141,670 |
Face amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Illinois—(concluded) | |||||||||||
Chicago O'Hare International Airport Revenue, Series A 5.000%, due 01/01/232 | $ | 1,150,000 | $ | 1,301,892 | |||||||
Chicago O'Hare International Airport Revenue Refunding General Senior Lien Series A 5.000%, due 01/01/182 | 2,000,000 | 2,258,680 | |||||||||
Chicago Refunding Series B (AGM Insured) 5.000%, due 01/01/26 | 3,500,000 | 3,556,700 | |||||||||
Cook County Forest Preservation District (AMBAC Insured) 5.000%, due 11/15/19 | 5,180,000 | 6,008,334 | |||||||||
Illinois Development Finance Authority Revenue School District Program School District No. U-46 (AGM Insured) 5.150%, due 01/01/19 | 2,000,000 | 2,280,460 | |||||||||
Illinois Finance Authority Revenue Advocate Health Care Network 5.000%, due 06/01/27 | 3,000,000 | 3,363,480 | |||||||||
Illinois Finance Authority Revenue University of Chicago Series A 5.000%, due 10/01/29 | 2,440,000 | 2,747,464 | |||||||||
Illinois Health Facilities Authority Revenue Evangelical Hospital Series A (Escrowed to Maturity) 6.750%, due 04/15/17 | 420,000 | 461,525 | |||||||||
Illinois Municipal Electric Agency Power Supply Refunding Series C (NATL-RE-FGIC Insured) 5.000%, due 02/01/16 | 1,200,000 | 1,281,804 | |||||||||
Illinois Toll Highway Authority Toll Highway Revenue Refunding Senior Series A-1 5.000%, due 01/01/25 | 1,250,000 | 1,409,388 | |||||||||
Railsplitter Tobacco Settlement Authority 5.500%, due 06/01/23 | 6,115,000 | 7,113,580 | |||||||||
6.000%, due 06/01/28 | 2,500,000 | 2,909,800 | |||||||||
Regional Transportation Authority Series A (AGM Insured) 5.750%, due 06/01/18 | 3,000,000 | 3,521,340 | |||||||||
Springfield Electric Revenue Senior Lien Electric 5.000%, due 03/01/16 | 2,000,000 | 2,135,840 | |||||||||
University of Illinois, (Auxiliary Facilities System), Series A 5.000%, due 04/01/27 | 4,000,000 | 4,533,800 | |||||||||
University of Illinois, Series A 5.000%, due 04/01/30 | 1,000,000 | 1,120,330 | |||||||||
47,146,087 |
73
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Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Indiana—2.41% | |||||||||||
Indiana State Finance Authority Environmental Facilities Revenue Refunding Industrial Power & Light Co. Series C 4.900%, due 01/01/16 | $ | 3,500,000 | $ | 3,714,550 | |||||||
Indiana University Revenues Student Fees Series S 5.000%, due 08/01/19 | 1,185,000 | 1,353,270 | |||||||||
Indianapolis Local Public Improvement Bond Bank Airport Authority Series F (AMBAC Insured) 5.000%, due 01/01/222 | 2,450,000 | 2,630,149 | |||||||||
Indianapolis Thermal Energy System Refunding (AGM Insured) 5.000%, due 10/01/16 | 2,000,000 | 2,187,540 | |||||||||
9,885,509 | |||||||||||
Kentucky—0.59% | |||||||||||
Pikeville Hospital Revenue Refunding & Improvement (Pikeville Medical Center) 6.000%, due 03/01/22 | 2,055,000 | 2,414,563 | |||||||||
Louisiana—2.77% | |||||||||||
Louisiana Public Facilities Authority Revenue Hurricane Recovery Project (AMBAC Insured) 5.000%, due 06/01/15 | 2,880,000 | 2,997,360 | |||||||||
State of Louisiana State Highway Improvement Revenue Series A 5.000%, due 06/15/29 | 3,500,000 | 4,090,905 | |||||||||
Tobacco Settlement Funding Corp., (Asset-Backed Refunding Bonds), Series A 5.000%, due 05/15/27 | 4,000,000 | 4,238,760 | |||||||||
11,327,025 | |||||||||||
Maryland—1.79% | |||||||||||
State of Maryland Second Series B 5.000%, due 08/01/223 | 2,500,000 | 3,059,550 | |||||||||
State of Maryland Second Series C 5.250%, due 08/01/203 | 3,500,000 | 4,247,600 | |||||||||
7,307,150 | |||||||||||
Massachusetts—5.35% | |||||||||||
Commonwealth of Massachusetts Federal Highway Grant Anticipation Notes (Accelerated Bridge Program), Series A, 5.000%, due 06/15/23 | 2,500,000 | 3,007,425 | |||||||||
Massachusetts Bay Transportation Authority Massachusetts Sales Tax Revenue Series B 5.250%, due 07/01/21 | 1,000,000 | 1,222,360 |
Face amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Massachusetts—(concluded) | |||||||||||
Massachusetts Educational Financing Authority, Series K 5.000%, due 07/01/222 | $ | 2,500,000 | $ | 2,809,725 | |||||||
Massachusetts Health & Educational Facilities Authority Revenue Massachusetts Institute of Technology Series M 5.250%, due 07/01/29 | 1,000,000 | 1,287,130 | |||||||||
Massachusetts Health & Educational Facilities Authority Revenue Partners Healthcare Systems Series G-5 5.000%, due 07/01/19 | 1,000,000 | 1,118,560 | |||||||||
Massachusetts State College Building Authority Revenue Refunding Series B 5.000%, due 05/01/29 | 2,500,000 | 2,873,175 | |||||||||
Massachusetts State School Building Authority Dedicated Sales Tax Revenue Series B 5.000%, due 08/15/28 | 3,000,000 | 3,501,210 | |||||||||
Massachusetts State Series B 5.000%, due 08/01/22 | 5,000,000 | 6,059,650 | |||||||||
21,879,235 | |||||||||||
Michigan—3.26% | |||||||||||
Detroit Sewer Disposal Revenue Senior Lien Series A (AGM Insured) 5.250%, due 07/01/19 | 2,500,000 | 2,560,725 | |||||||||
Michigan State Finance Authority Revenue Refunding (Unemployment Obligation Assessment) Series B 5.000%, due 07/01/21 | 4,000,000 | 4,572,240 | |||||||||
University of Michigan Series D-1, 0.030%, due 12/01/241 | 4,000,000 | 4,000,000 | |||||||||
Wayne County Airport Authority Revenue Refunding Detroit Metropolitan Airport Series A 5.000%, due 12/01/162 | 1,500,000 | 1,643,055 | |||||||||
Series D 5.000%, due 12/01/17 | 510,000 | 571,016 | |||||||||
13,347,036 | |||||||||||
Missouri—3.03% | |||||||||||
City of Kansas City, Missouri Airport Revenue Series A 5.000%, due 09/01/232 | 5,000,000 | 5,648,450 | |||||||||
Missouri State Health & Educational Facilities Authority Health Facilities Revenue SSM Health Care Series A 5.000%, due 06/01/27 | 1,500,000 | 1,719,360 |
74
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Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Missouri—(concluded) | |||||||||||
Missouri State Health & Educational Facilities Authority Health Facilities Revenue St. Lukes Health Systems Series A (AGM Insured) 5.000%, due 11/15/16 | $ | 2,000,000 | $ | 2,199,980 | |||||||
5.000%, due 11/15/17 | 2,500,000 | 2,827,925 | |||||||||
12,395,715 | |||||||||||
Nebraska—1.12% | |||||||||||
City of Lincoln, Nebraska Electric System Revenue 5.000%, due 09/01/22 | 3,790,000 | 4,586,393 | |||||||||
Nevada—1.18% | |||||||||||
Las Vegas Valley Water District Refunding & Improvement Series A 5.000%, due 02/01/17 | 1,500,000 | 1,664,835 | |||||||||
Las Vegas Valley Water District Series B 5.000%, due 06/01/25 | 2,700,000 | 3,159,999 | |||||||||
4,824,834 | |||||||||||
New Jersey—1.51% | |||||||||||
New Jersey Economic Development Authority Water Facilities Revenue Refunding American Water Co. Series C 5.100%, due 06/01/232 | 1,000,000 | 1,123,870 | |||||||||
New Jersey Health Care Facilities Financing Authority Revenue Refunding (Virtua Health) 5.000%, due 07/01/25 | 1,500,000 | 1,745,835 | |||||||||
New Jersey State Higher Education Assistance Authority Revenue, Series 1A 5.000%, due 12/01/182 | 1,000,000 | 1,136,960 | |||||||||
Rutgers State University Revenue, Series J 5.000%, due 05/01/19 | 1,860,000 | 2,173,522 | |||||||||
6,180,187 | |||||||||||
New Mexico—0.67% | |||||||||||
New Mexico Municipal Energy Acquisition Authority Gas Supply Revenue Subseries B 1.000%, due 11/01/391,3 | 2,750,000 | 2,757,838 | |||||||||
New York—9.94% | |||||||||||
Metropolitan Transportation Authority New York Dedicated Tax Fund Subseries B-1 5.000%, due 11/15/29 | 2,500,000 | 2,863,350 | |||||||||
Metropolitan Transportation Authority Revenue Transportation Series B 5.000%, due 11/15/27 | 2,090,000 | 2,416,542 |
Face amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
New York—(concluded) | |||||||||||
Series D 5.000%, due 11/15/23 | $ | 1,400,000 | $ | 1,571,038 | |||||||
Series G 5.000%, due 11/15/18 | 2,500,000 | 2,905,625 | |||||||||
New York City Health & Hospital Corp. Revenue Health System Series A 5.000%, due 02/15/22 | 3,500,000 | 4,024,160 | |||||||||
New York City Municipal Water Finance Authority Water & Sewer Systems Revenue (Second General Resolution) Series HH 5.000%, due 06/15/29 | 2,500,000 | 2,850,575 | |||||||||
New York City Series B 5.000%, due 08/01/17 | 1,750,000 | 1,975,225 | |||||||||
Series E 5.000%, due 08/01/24 | 3,065,000 | 3,615,505 | |||||||||
Series H 5.000%, due 08/01/25 | 2,990,000 | 3,560,342 | |||||||||
New York City Transitional Finance Authority Future Tax Secured Revenue, Series B 5.000%, due 02/01/23 | 2,500,000 | 2,941,075 | |||||||||
Subseries I 5.000%, due 05/01/23 | 2,435,000 | 2,949,783 | |||||||||
New York State Dorm Authority State Personal Income Tax Revenue General Purpose Series C 5.000%, due 03/15/25 | 2,320,000 | 2,706,071 | |||||||||
New York State Thruway Authority General Revenue Junior Indebtedness, Series A 5.000%, due 05/01/19 | 3,000,000 | 3,475,170 | |||||||||
New York State Thruway Authority General Revenue—Series I, 5.000%, due 01/01/20 | 1,500,000 | 1,755,090 | |||||||||
Tobacco Settlement Funding Corp., (Asset-Backed Revenue Bonds), Series B 5.000%, due 06/01/20 | 1,000,000 | 1,082,310 | |||||||||
40,691,861 | |||||||||||
North Carolina—1.42% | |||||||||||
North Carolina Capital Improvement Obligations Series C 5.000%, due 05/01/30 | 1,000,000 | 1,125,900 | |||||||||
University of North Carolina Chapel Hill Revenue, Series A 5.000%, due 12/01/27 | 2,160,000 | 2,513,527 | |||||||||
Wake County Industrial Facilities & Pollution Control Financing Authority Series E (AMBAC insured) 0.088%, due 10/01/221 | 2,375,000 | 2,185,000 | |||||||||
5,824,427 |
75
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Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Ohio—0.84% | |||||||||||
Kent State University Revenue General Receipts Series B (Assured Guaranty Insured) 5.000%, due 05/01/21 | $ | 3,000,000 | $ | 3,454,680 | |||||||
Pennsylvania—3.19% | |||||||||||
Allegheny County Port Authority Special Revenue Refunding Transportation 5.000%, due 03/01/25 | 1,000,000 | 1,120,260 | |||||||||
Pennsylvania Economic Development Financing Authority Unemployment Compensation Revenue, Series B 5.000%, due 01/01/22 | 1,750,000 | 1,963,955 | |||||||||
Pennsylvania Intergovernmental Cooperative Authority Special Tax Revenue Refunding Philadelphia Funding Program 5.000%, due 06/15/17 | 2,000,000 | 2,247,740 | |||||||||
Pennsylvania State Higher Educational Facilities Authority Revenue University of Pennsylvania Series A 5.000%, due 09/01/17 | 1,150,000 | 1,304,203 | |||||||||
Pennsylvania State Second Series 5.000%, due 10/15/26 | 2,500,000 | 2,943,275 | |||||||||
Philadelphia School District Refunding Series E 5.000%, due 09/01/18 | 1,000,000 | 1,129,320 | |||||||||
University of Pittsburgh of the Commonwealth System of Higher Education Capital Project Series B 5.500%, due 09/15/21 | 2,000,000 | 2,361,320 | |||||||||
13,070,073 | |||||||||||
Rhode Island—1.04% | |||||||||||
Rhode Island Health & Educational Building Corp. Higher Educational Facilities Revenue (Brown University) 5.000%, due 09/01/22 | 3,500,000 | 4,255,720 | |||||||||
South Carolina—1.27% | |||||||||||
Columbia Waterworks & Sewer Systems Refunding 5.000%, due 02/01/28 | 2,500,000 | 2,878,725 | |||||||||
Richland County School District No. 002 Series A (SCSDE Insured) 5.000%, due 02/01/21 | 2,000,000 | 2,317,480 | |||||||||
5,196,205 | |||||||||||
Tennessee—1.45% | |||||||||||
Metropolitan Government of Nashville & Davidson County, Series D 5.000%, due 07/01/23 | 5,000,000 | 5,915,750 |
Face amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Texas—9.19% | |||||||||||
Arlington Independent School District School Building Bond, Series A (PSF-GTD) 5.000%, due 02/15/25 | $ | 1,400,000 | $ | 1,674,750 | |||||||
5.000%, due 02/15/26 | 1,295,000 | 1,535,844 | |||||||||
City of Brownsville, Texas Utilities System Revenue Series A 5.000%, due 09/01/28 | 2,225,000 | 2,517,855 | |||||||||
Cypress-Fairbanks Independent School District (PSF-GTD) 5.000%, due 02/15/25 | 2,500,000 | 2,975,775 | |||||||||
EL Paso County Hospital District 5.000%, due 08/15/29 | 2,000,000 | 2,278,920 | |||||||||
Harris County Hospital District Revenue Refunding Senior Lien Series A (NATL-RE Insured) 5.000%, due 02/15/18 | 1,675,000 | 1,823,238 | |||||||||
Harris County Metropolitan Transportation Authority Sales & Use Tax Revenue Contractual Obligations 5.000%, due 11/01/23 | 2,000,000 | 2,432,340 | |||||||||
Harris County Metropolitan Transportation Authority Sales & Use Tax Revenue Series A 5.000%, due 11/01/29 | 2,000,000 | 2,276,960 | |||||||||
Houston Utility System Revenue First Lien Series D 5.000%, due 11/15/29 | 2,000,000 | 2,283,760 | |||||||||
Lower Colorado River Authority Refunding LCRA Transmission Services (BHAC Insured) 5.000%, due 05/15/20 | 1,765,000 | 2,010,123 | |||||||||
North Texas Health Facilities Development Corp. Hospital Revenue United Regional Health Care Systems (AGM Insured) 5.000%, due 09/01/21 | 1,450,000 | 1,595,754 | |||||||||
5.000%, due 09/01/22 | 1,400,000 | 1,540,728 | |||||||||
San Antonio Electric & Gas Refunding Series A 5.000%, due 02/01/17 | 1,295,000 | 1,440,208 | |||||||||
San Antonio Texas Refunding & Improvement 5.000%, due 02/01/203 | 4,370,000 | 5,180,591 | |||||||||
Socorro Independent School District Refunding Series A (PSF-GTD) 5.000%, due 08/15/28 | 3,885,000 | 4,633,601 | |||||||||
University of Texas University Revenues Refunding Financing System Series D Unrefunded Balance 5.000%, due 08/15/17 | 195,000 | 216,838 | |||||||||
West Travis County Public Utility Agency Revenue 5.500%, due 08/15/24 | 1,000,000 | 1,184,770 | |||||||||
37,602,055 |
76
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Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Utah—0.43% | |||||||||||
Intermountain Power Agency Power Supply Revenue Refunding, Subseries A 5.000%, due 07/01/17 | $ | 1,500,000 | $ | 1,689,135 | |||||||
Utah State Housing Finance Agency Single-Family Mortgage Series G-3, Class III 5.700%, due 07/01/152 | 65,000 | 65,216 | |||||||||
1,754,351 | |||||||||||
Washington—6.41% | |||||||||||
Energy Northwest Electric Revenue Prerefunded (Columbia Station), Series A 5.000%, due 07/01/21 | 625,000 | 680,844 | |||||||||
5.000%, due 07/01/23 | 785,000 | 855,140 | |||||||||
Energy Northwest Electric Revenue Refunding (Columbia Generating), Series A 5.000%, due 07/01/19 | 2,500,000 | 2,939,150 | |||||||||
Energy Northwest Electric Revenue Refunding (Project 1), Series A 5.000%, due 07/01/17 | 3,500,000 | 3,945,655 | |||||||||
Energy Northwest Electric Revenue Unrefunded (Columbia Station), Series A 5.000%, due 07/01/21 | 1,375,000 | 1,494,144 | |||||||||
5.000%, due 07/01/23 | 1,715,000 | 1,862,181 | |||||||||
Port of Seattle Refunding 5.500%, due 12/01/222 | 500,000 | 600,765 | |||||||||
Port of Seattle Revenue Refunding Intermediate Lien Series C 5.000%, due 02/01/162 | 1,000,000 | 1,069,080 | |||||||||
Seattle Municipal Lighting & Power Revenue Refunding & Improvement Series A 5.000%, due 02/01/22 | 2,500,000 | 2,944,250 | |||||||||
Washington Health Care Facilities Authority Overlake Hospital Medical Center Series A (Assured Guaranty Insured) 5.000%, due 07/01/16 | 1,000,000 | 1,040,910 |
Face amount | Value | ||||||||||
Municipal bonds and notes—(concluded) | |||||||||||
Washington—(concluded) | |||||||||||
Washington State Public Power Supply Systems Nuclear Project No. 1 Revenue Refunding Series B 7.125%, due 07/01/16 | $ | 3,000,000 | $ | 3,381,720 | |||||||
Washington State Series A-Various Purpose 5.000%, due 07/01/17 | 2,130,000 | 2,399,892 | |||||||||
5.000%, due 07/01/20 | 2,625,000 | 3,014,655 | |||||||||
26,228,386 | |||||||||||
Wisconsin—2.13% | |||||||||||
Wisconsin Health & Educational Facilities Authority Revenue (Aspirus, Inc. Obligated Group) 5.000%, due 08/15/27 | 1,000,000 | 1,121,950 | |||||||||
Wisconsin Health & Educational Facilities Authority Revenue (Aurora Health Care, Inc.) Series A 5.125%, due 04/15/31 | 3,000,000 | 3,200,400 | |||||||||
Wisconsin Health & Educational Facilities Authority Revenue (Unitypoint Health) Series A 5.000%, due 12/01/26 | 1,175,000 | 1,354,270 | |||||||||
WPPI Energy Power Supply Revenue Series A 5.000%, due 07/01/32 | 2,760,000 | 3,041,327 | |||||||||
8,717,947 | |||||||||||
Total municipal bonds and notes (cost—$390,706,474) | 408,688,565 | ||||||||||
Tax-free money market fund—1.25% | |||||||||||
State Street Global Advisors Tax Free Money Market Fund (cost—$5,104,096) | 5,104,096 | 5,104,096 | |||||||||
Total investments (cost—$395,810,570)—101.09% | 413,792,661 | ||||||||||
Liabilities in excess of other assets—(1.09)% | (4,453,369 | ) | |||||||||
Net assets—100.00% | $ | 409,339,292 |
For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 232.
Aggregate cost for federal income tax purposes was $395,810,570; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 18,940,033 | |||||
Gross unrealized depreciation | (957,942 | ) | |||||
Net unrealized appreciation | $ | 17,982,091 |
77
PACE Select Advisors Trust
PACE Municipal Fixed Income Investments
Portfolio of investments—July 31, 2014
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
Municipal bonds and notes | $ | — | $ | 408,688,565 | $ | — | $ | 408,688,565 | |||||||||||
Tax-free money market fund | — | 5,104,096 | — | 5,104,096 | |||||||||||||||
Total | $ | — | $ | 413,792,661 | $ | — | $ | 413,792,661 |
At July 31, 2014, there were no transfers between Level 1 and Level 2.
The following is a rollforward of the Portfolio's investment that was valued using unobservable inputs (Level 3) for the year ended July 31, 2014:
Municipal bonds and notes | |||||||
Beginning balance | $ | 2,161,250 | |||||
Purchases | — | ||||||
Sales | — | ||||||
Accrued discounts/(premiums) | 19,240 | ||||||
Total realized gain/(loss) | — | ||||||
Net change in unrealized appreciation/depreciation | 4,510 | ||||||
Transfers into Level 3 | — | ||||||
Transfers out of Level 3 | (2,185,000 | ) | |||||
Ending balance | $ | — |
Transfers out of Level 3 represent the value at the end of the period. At July 31, 2014, a security was transferred from Level 3 to Level 2 as the valuation is based on observable inputs from an established pricing source.
Portfolio footnotes
1 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2014 and changes periodically.
2 Security subject to Alternative Minimum Tax.
3 Security purchased on a when-issued basis. When-issued refers to a transaction made conditionally because a security, although authorized, has not yet been issued.
See accompanying notes to financial statements.
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PACE International Fixed Income Investments
Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 5.31% before the deduction of the maximum PACE Select program fee.1 In comparison, the Barclays Global Aggregate ex US Index (the "benchmark") returned 5.80%, the Barclays Global Aggregate ex USD 50% Hedged Index returned 5.70% and the Lipper International Income Funds category posted a median return of 5.58%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 82. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisor's comments2
(Please note that while the sub-advisor outperformed the benchmark on a gross of fees basis, the Portfolio underperformed net of fees, as reported under "Performance." As stated in footnote two, the comments that follow address performance on a gross of fees basis.)
The Portfolio outperformed its benchmark during the reporting period. After a sharp setback for risk assets (non-Treasuries) in the second quarter of 2013 and into the third quarter, global markets slowly returned to a less volatile mode. Over the 12-month reporting period, volatility declined. This occurred as the markets became more convinced that the world's central banks would not jeopardize the global economic recovery, however moderate, by withdrawing monetary easing and raising interest rates. In spite of poor growth in the US during the first quarter of 2014, risk assets continued to perform well.
The Portfolio's allocations to areas associated with structural economic and fiscal reform added value during the reporting period. In particular, our sector and security selection in banking and finance were significant contributors to results. Among the emerging markets, Mexico was a strong performer. In addition, several investments that fit our "Healthy Entity Philosophy" (fiscally sound countries/companies that are undervalued or countries/companies that are undergoing structural improvement in terms of their creditworthiness) helped the Portfolio. Among these were allocations to Norway, Sweden, New Zealand and Australia, as well as allocations to investment grade corporate bonds. An allocation to global high yield corporate bonds also added value, as the spread between high yield
PACE Select Advisors Trust – PACE International Fixed Income Investments
Investment Sub-Advisor:
Rogge Global Partners plc ("Rogge Global Partners")
Portfolio Managers:
Olaf Rogge, John Graham, Malie Conway, David Jacob and Jonathan Griggs
Objective:
High total return
Investment process:
Rogge Global Partners seeks to invest the Portfolio's assets in fixed income securities of financially healthy issuers, because it believes that these investments produce the highest bond and currency returns over time. In deciding which fixed income securities to buy for the Portfolio, 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 in those countries. Rogge Global Partners also uses an optimization model to help determine country, currency and duration positions for the Portfolio. 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 Portfolio.
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
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Sub-Advisor's comments – concluded
bonds and US Treasuries tightened throughout the fiscal year. We were also underweight some areas that we felt were less healthy or overvalued, including Japan, where our underweight currency position added significant value.
Detracting from performance were underweight positions in Japan, the UK and peripheral Europe, where the spread versus German government bonds continued to tighten over the fiscal year.
During the reporting period, interest rate futures were used to take positions in various government bond markets, to hedge interest rate exposure and to take yield curve positions. Foreign exchange forwards were also used to hedge bond exposures and take active currency positions. Overall, the use of these derivative instruments contributed to performance.
Special considerations
The Portfolio may be appropriate for long-term investors seeking high total return and who are able to withstand short-term fluctuations in the fixed income markets in return for potentially higher returns over the long term. The yield and value of the Portfolio change every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the issuers in which the Portfolio invests. It is important to note that an investment in the Portfolio is only one component of a balanced investment plan. The value of the Portfolio'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 US dollar. These risks are greater for investments in emerging markets than in more developed countries.
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Illustration of an assumed investment of $10,000 in Class P shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE International Fixed Income Investments Class P shares versus the Barclays Global Aggregate ex US Index and the Barclays Global Aggregate ex USD 50% Hedged Index over the 10 years ended July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE International Fixed Income Investments is a professionally managed portfolio while the Indices are not available for investment and are unmanaged. The comparison is shown for illustration purposes only.
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PACE International Fixed Income Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 5.08 | % | 2.75 | % | 4.10 | % | |||||||||
Class C2 | 4.47 | % | 2.25 | % | 3.59 | % | |||||||||
Class Y3 | 5.23 | % | 2.99 | % | 4.39 | % | |||||||||
Class P4 | 5.31 | % | 2.99 | % | 4.34 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 0.33 | % | 1.80 | % | 3.62 | % | |||||||||
Class C2 | 3.72 | % | 2.25 | % | 3.59 | % | |||||||||
Barclays Global Aggregate ex US Index5 | 5.80 | % | 3.56 | % | 5.04 | % | |||||||||
Barclays Global Aggregate ex USD 50% Hedged Index6 | 5.70 | % | 4.00 | % | 4.93 | % | |||||||||
Lipper International Income Funds median | 5.58 | % | 4.28 | % | 5.39 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 6.59 | % | 3.62 | % | 4.11 | % | |||||||||
Class C2 | 6.07 | % | 3.12 | % | 3.60 | % | |||||||||
Class Y3 | 6.85 | % | 3.87 | % | 4.40 | % | |||||||||
Class P4 | 6.83 | % | 3.87 | % | 4.35 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 1.83 | % | 2.67 | % | 3.63 | % | |||||||||
Class C2 | 5.32 | % | 3.12 | % | 3.60 | % |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—1.27% and 1.22%; Class C—1.75% and 1.69%; Class Y—1.09% and 1.00%; and Class P—1.10% and 1.00%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to (1) waive its management fees through November 30, 2014 to the extent necessary to reflect the lower sub-advisory fee paid by UBS Global AM to Rogge Global Partners plc, the Portfolio's investment sub-advisor; and (2) waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—1.25%; Class C—1.75%; Class Y—1.00%; and Class P—1.00%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses (pursuant to item (2)) to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 4.5%. Class A shares bear ongoing 12b-1 service fees.
2 Maximum contingent deferred sales charge for Class C shares is 0.75% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
3 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
4 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
5 The Barclays Global Aggregate ex US Index is an unmanaged index which provides a broad-based measure of the global investment grade fixed income markets excluding the US dollar denominated debt market. The two major components of this Index are the Pan-European Aggregate and the Asian-Pacific Aggregate Indices. The Index also includes Global Treasury, Eurodollar, Euro-Yen, Canadian, and investment grade 144A index-eligible securities not already in the three regional aggregate indices. Investors should note that indices do not reflect the deduction of fees and expenses.
6 The Barclays Global Aggregate ex USD 50% Hedged Index, is an index which provides a broad-based measure of the global investment grade fixed income markets excluding US dollar-denominated debt and provides 50% of its currency exposure in the US dollar. The other major currency exposures in this index are the Euro, the Japanese yen and, to a lesser extent, the British pound and the Canadian dollar. The two major components of this index are the Pan-European Aggregate and the Asian-Pacific Aggregate indices. The index also includes Canadian, Euro-yen, and other non-USD-denominated investment grade aggregate index eligible securities not already in the indices already noted. Investors should note that indices do not reflect the deduction of fees and expenses.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
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Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Weighted average duration | 6.3 yrs. | ||||||
Weighted average maturity | 8.8 yrs. | ||||||
Average coupon | 4.29 | % | |||||
Net assets (mm) | $ | 599.2 | |||||
Number of holdings | 173 | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Long-term global debt securities | 93.1 | % | |||||
US government obligation | 1.0 | ||||||
Futures and forward foreign currency contracts | 0.6 | ||||||
Cash equivalents and other assets less liabilities | 5.3 | ||||||
Total | 100.0 | % | |||||
Quality diversification1 | 07/31/14 | ||||||
AAA | 10.7 | % | |||||
AA | 8.5 | ||||||
A | 22.7 | ||||||
BBB | 12.7 | ||||||
BB | 3.3 | ||||||
B | 2.0 | ||||||
Non-rated | 34.2 | ||||||
Futures and forward foreign currency contracts | 0.6 | ||||||
Cash equivalents and other assets less liabilities | 5.3 | ||||||
Total | 100.0 | % | |||||
Top five countries of incorporation1 | 07/31/14 | ||||||
United States | 16.3 | % | |||||
United Kingdom | 13.5 | ||||||
Japan | 8.8 | ||||||
France | 8.1 | ||||||
Italy | 7.6 | ||||||
Total | 54.3 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time. Credit quality ratings shown are based on the ratings assigned to portfolio holdings by Standard & Poor's Ratings Group, an independent rating agency.
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Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Long-term global debt securities—93.11% | |||||||||||
Australia—1.86% | |||||||||||
Australia & New Zealand Banking Group Ltd. 5.125%, due 09/10/191 | EUR | 1,800,000 | $ | 2,819,895 | |||||||
Commonwealth Bank of Australia 3.000%, due 05/03/221 | EUR | 2,900,000 | 4,380,736 | ||||||||
Westpac Banking Corp. 3.625%, due 02/28/231,2 | USD | 1,750,000 | 1,804,635 | ||||||||
5.000%, due 10/21/191 | GBP | 1,150,000 | 2,151,235 | ||||||||
11,156,501 | |||||||||||
Belgium—1.89% | |||||||||||
Anheuser-Busch InBev SA 6.500%, due 06/23/171 | GBP | 2,100,000 | 3,989,536 | ||||||||
Belgium Government Bond 4.250%, due 09/28/221 | EUR | 4,400,000 | 7,304,385 | ||||||||
11,293,921 | |||||||||||
Brazil—0.16% | |||||||||||
Banco do Brasil SA 3.875%, due 10/10/22 | USD | 1,000,000 | 935,000 | ||||||||
Canada—1.67% | |||||||||||
Canadian Government Bond 5.750%, due 06/01/33 | CAD | 3,760,000 | 5,051,922 | ||||||||
Cards II Trust 3.333%, due 05/15/16 | CAD | 2,300,000 | 2,171,452 | ||||||||
Precision Drilling Corp. 6.625%, due 11/15/20 | USD | 704,000 | 735,680 | ||||||||
Toronto-Dominion Bank 1.400%, due 04/30/18 | USD | 2,100,000 | 2,069,531 | ||||||||
10,028,585 | |||||||||||
Chile—0.28% | |||||||||||
Banco Santander Chile 3.875%, due 09/20/223 | USD | 1,650,000 | 1,645,380 | ||||||||
Denmark—0.44% | |||||||||||
Denmark Government Bond 1.500%, due 11/15/23 | DKK | 14,450,000 | 2,658,414 | ||||||||
Dominican Republic—0.23% | |||||||||||
Dominican Republic International Bond 5.875%, due 04/18/243 | USD | 1,300,000 | 1,365,000 | ||||||||
Finland—0.51% | |||||||||||
Finland Government Bond 3.500%, due 04/15/211,3 | EUR | 1,950,000 | 3,071,363 | ||||||||
France—8.07% | |||||||||||
BNP Paribas Home Loan Covered Bonds SA 2.200%, due 11/02/153 | USD | 6,600,000 | 6,728,674 | ||||||||
BNP Paribas SA 2.375%, due 09/14/17 | USD | 5,700,000 | 5,810,027 | ||||||||
BPCE SA 4.625%, due 07/30/152,4 | EUR | 1,100,000 | 1,493,503 |
Face amount | Value | ||||||||||
Long-term global debt securities—(continued) | |||||||||||
France—(concluded) | |||||||||||
Electricite de France SA 2.750%, due 03/10/231 | EUR | 2,000,000 | $ | 2,888,599 | |||||||
France Government Bond OAT 2.250%, due 05/25/24 | EUR | 7,750,000 | 11,132,093 | ||||||||
3.250%, due 10/25/21 | EUR | 5,200,000 | 8,097,204 | ||||||||
4.750%, due 04/25/35 | EUR | 3,300,000 | 6,202,187 | ||||||||
Republic of France 4.000%, due 04/25/55 | EUR | 450,000 | 811,786 | ||||||||
Societe Generale SA 2.750%, due 10/12/17 | USD | 4,150,000 | 4,274,874 | ||||||||
5.200%, due 04/15/211 | USD | 800,000 | 897,944 | ||||||||
48,336,891 | |||||||||||
Germany—1.54% | |||||||||||
Bundesrepublik Deutschland 5.500%, due 01/04/31 | EUR | 3,450,000 | 7,046,094 | ||||||||
Trionista Holdco GmbH 5.000%, due 04/30/201 | EUR | 800,000 | 1,106,055 | ||||||||
Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH 7.500%, due 03/15/191 | EUR | 750,000 | 1,067,056 | ||||||||
9,219,205 | |||||||||||
Indonesia—0.70% | |||||||||||
Indonesia Government International Bond 3.375%, due 04/15/231 | USD | 4,450,000 | 4,183,000 | ||||||||
Ireland—1.07% | |||||||||||
Ardagh Packaging Finance PLC/ Ardagh Holdings USA, Inc. 4.250%, due 01/15/223 | EUR | 1,000,000 | 1,310,930 | ||||||||
German Residential Funding PLC 1.468%, due 08/27/241,2 | EUR | 1,971,369 | 2,687,416 | ||||||||
Rosneft Oil Co. via Rosneft International Finance Ltd. 3.149%, due 03/06/173 | USD | 400,000 | 386,000 | ||||||||
Willow No.2 Ireland PLC for Zurich Insurance Co. Ltd. 3.375%, due 06/27/221 | EUR | 1,350,000 | 2,016,679 | ||||||||
6,401,025 | |||||||||||
Italy—7.56% | |||||||||||
Assicurazioni Generali SpA 2.875%, due 01/14/201 | EUR | 100,000 | 142,526 | ||||||||
Buoni Poliennali Del Tesoro 4.500%, due 02/01/201 | EUR | 7,200,000 | 11,184,229 | ||||||||
4.750%, due 09/01/21 | EUR | 3,700,000 | 5,869,807 | ||||||||
Intesa Sanpaolo SpA 4.375%, due 10/15/191 | EUR | 1,200,000 | 1,824,307 | ||||||||
Italy Buoni Poliennali Del Tesoro 3.750%, due 09/01/24 | EUR | 1,350,000 | 1,975,944 | ||||||||
4.500%, due 03/01/24 | EUR | 3,700,000 | 5,755,775 | ||||||||
4.750%, due 09/15/16 | EUR | 7,050,000 | 10,264,650 | ||||||||
5.000%, due 09/01/401 | EUR | 4,000,000 | 6,412,015 |
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Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Long-term global debt securities—(continued) | |||||||||||
Italy—(concluded) | |||||||||||
UniCredit SpA 3.375%, due 01/11/181 | EUR | 1,300,000 | $ | 1,861,244 | |||||||
45,290,497 | |||||||||||
Japan—8.77% | |||||||||||
Development Bank of Japan 2.300%, due 03/19/26 | JPY | 500,000,000 | 5,714,062 | ||||||||
Government of Japan 2.200%, due 09/20/26 | JPY | 1,016,100,000 | 11,571,696 | ||||||||
2.300%, due 06/20/35 | JPY | 1,177,000,000 | 13,163,131 | ||||||||
2.300%, due 12/20/36 | JPY | 480,000,000 | 5,350,961 | ||||||||
Japan Government Thirty Year Bond 2.000%, due 09/20/41 | JPY | 882,600,000 | 9,276,228 | ||||||||
Mizuho Bank Ltd. 1.300%, due 04/16/173 | USD | 2,300,000 | 2,295,487 | ||||||||
Sumitomo Mitsui Banking Corp. 3.200%, due 07/18/22 | USD | 2,600,000 | 2,604,324 | ||||||||
The Bank of Tokyo-Mitsubishi UFJ Ltd. 3.750%, due 03/10/243 | USD | 2,500,000 | 2,582,260 | ||||||||
52,558,149 | |||||||||||
Liberia—0.06% | |||||||||||
Royal Caribbean Cruises Ltd. 5.250%, due 11/15/22 | USD | 350,000 | 362,250 | ||||||||
Luxembourg—0.59% | |||||||||||
HeidelbergCement Finance Luxembourg SA 7.500%, due 04/03/20 | EUR | 700,000 | 1,183,479 | ||||||||
KION Finance SA 6.750%, due 02/15/201 | EUR | 950,000 | 1,382,770 | ||||||||
Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc. 8.750%, due 02/01/19 | USD | 945,000 | �� | 994,613 | |||||||
3,560,862 | |||||||||||
Malaysia—0.31% | |||||||||||
Malaysia Government Bond, Series 0111 4.160%, due 07/15/21 | MYR | 5,800,000 | 1,849,249 | ||||||||
Mexico—4.60% | |||||||||||
BBVA Bancomer SA/Texas 6.500%, due 03/10/211 | USD | 350,000 | 392,000 | ||||||||
6.750%, due 09/30/221 | USD | 700,000 | 796,250 | ||||||||
Cemex SAB de CV 5.875%, due 03/25/191 | USD | 1,350,000 | 1,362,352 | ||||||||
Mexican Bonos 6.500%, due 06/10/21 | MXN | 48,430,000 | 3,885,958 | ||||||||
6.500%, due 06/09/22 | MXN | 157,500,000 | 12,562,571 | ||||||||
8.000%, due 12/07/23 | MXN | 77,650,000 | 6,806,382 | ||||||||
8.500%, due 05/31/29 | MXN | 19,200,000 | 1,754,026 | ||||||||
27,559,539 |
Face amount | Value | ||||||||||
Long-term global debt securities—(continued) | |||||||||||
Netherlands—4.98% | |||||||||||
ABN AMRO Bank N.V. 4.250%, due 02/02/171 | USD | 4,000,000 | $ | 4,272,040 | |||||||
6.375%, due 04/27/211 | EUR | 1,100,000 | 1,801,642 | ||||||||
Deutsche Telekom International Finance BV 2.250%, due 03/06/173 | USD | 2,650,000 | 2,703,575 | ||||||||
Enel Finance International N.V. 3.625%, due 04/17/181 | EUR | 2,000,000 | 2,932,536 | ||||||||
Heineken N.V. 2.125%, due 08/04/201 | EUR | 800,000 | 1,125,777 | ||||||||
ING Bank N.V. 3.750%, due 03/07/173 | USD | 3,150,000 | 3,334,716 | ||||||||
6.125%, due 05/29/232 | EUR | 1,450,000 | 2,213,450 | ||||||||
Linde Finance BV 3.125%, due 12/12/18 | EUR | 2,050,000 | 3,019,948 | ||||||||
Netherlands Government Bond 4.000%, due 01/15/371 | EUR | 1,900,000 | 3,434,348 | ||||||||
Rabobank 3.875%, due 02/08/22 | USD | 3,700,000 | 3,914,663 | ||||||||
UPC Holding BV 6.750%, due 03/15/233 | EUR | 750,000 | 1,104,636 | ||||||||
29,857,331 | |||||||||||
New Zealand—2.32% | |||||||||||
New Zealand Government Bond 3.000%, due 04/15/20 | NZD | 8,900,000 | 7,129,750 | ||||||||
5.500%, due 04/15/23 | NZD | 7,350,000 | 6,792,283 | ||||||||
13,922,033 | |||||||||||
Norway—4.98% | |||||||||||
DnB Bank ASA 4.375%, due 02/24/211 | EUR | 1,750,000 | 2,799,797 | ||||||||
Norway Government Bond 2.000%, due 05/24/23 | NOK | 99,550,000 | 15,573,022 | ||||||||
3.750%, due 05/25/21 | NOK | 64,850,000 | 11,472,673 | ||||||||
29,845,492 | |||||||||||
Poland—0.24% | |||||||||||
Poland Government Bond 5.750%, due 09/23/22 | PLN | 3,850,000 | 1,448,855 | ||||||||
Russia—1.01% | |||||||||||
Russian Foreign Bond 4.500%, due 04/04/221 | USD | 5,000,000 | 4,906,250 | ||||||||
5.000%, due 04/29/201 | USD | 1,100,000 | 1,137,125 | ||||||||
6,043,375 | |||||||||||
Singapore—1.01% | |||||||||||
DBS Bank Ltd. 5.000%, due 11/15/192,3 | USD | 2,400,000 | 2,420,544 | ||||||||
Oversea-Chinese Banking Corp., Ltd. 4.250%, due 11/18/191,2 | USD | 2,300,000 | 2,316,997 | ||||||||
United Overseas Bank Ltd. 5.375%, due 09/03/192,3 | USD | 1,300,000 | 1,303,523 | ||||||||
6,041,064 |
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Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Long-term global debt securities—(continued) | |||||||||||
South Korea—1.44% | |||||||||||
Korea Treasury Bond 5.750%, due 09/10/18 | KRW | 7,924,710,000 | $ | 8,613,199 | |||||||
Spain—5.29% | |||||||||||
BBVA Senior Finance SAU 2.375%, due 01/22/191 | EUR | 2,000,000 | 2,808,326 | ||||||||
Iberdrola Finanzas SAU 4.125%, due 03/23/20 | EUR | 1,800,000 | 2,769,535 | ||||||||
Santander International Debt SAU 4.000%, due 01/24/201 | EUR | 1,900,000 | 2,902,011 | ||||||||
Spain Government Bond 3.800%, due 04/30/241,3 | EUR | 2,150,000 | 3,193,225 | ||||||||
4.250%, due 10/31/16 | EUR | 3,200,000 | 4,643,483 | ||||||||
4.400%, due 10/31/231,3 | EUR | 2,250,000 | 3,503,297 | ||||||||
4.900%, due 07/30/40 | EUR | 700,000 | 1,119,204 | ||||||||
5.850%, due 01/31/22 | EUR | 6,350,000 | 10,779,298 | ||||||||
31,718,379 | |||||||||||
Sweden—2.42% | |||||||||||
Government of Sweden 3.500%, due 06/01/22 | SEK | 18,225,000 | 3,057,410 | ||||||||
4.250%, due 03/12/19 | SEK | 14,830,000 | 2,484,136 | ||||||||
Nordea Bank AB 3.125%, due 03/20/173 | USD | 5,200,000 | 5,437,016 | ||||||||
Swedbank AB 2.125%, due 09/29/173 | USD | 3,450,000 | 3,500,377 | ||||||||
14,478,939 | |||||||||||
United Kingdom—13.52% | |||||||||||
Abbey National Treasury Services PLC 5.750%, due 03/02/261 | GBP | 1,500,000 | 3,102,139 | ||||||||
Anglian Water Services Finance PLC 6.250%, due 06/27/16 | EUR | 900,000 | 1,333,614 | ||||||||
Arkle Master Issuer PLC 4.681%, due 02/17/171 | GBP | 700,000 | 1,260,548 | ||||||||
Barclays Bank PLC 5.140%, due 10/14/20 | USD | 1,100,000 | 1,194,066 | ||||||||
BAT International Finance PLC 3.250%, due 06/07/223 | USD | 1,350,000 | 1,343,852 | ||||||||
3.625%, due 11/09/211 | EUR | 1,050,000 | 1,601,187 | ||||||||
Coventry Building Society 2.250%, due 12/04/171 | EUR | 4,200,000 | 5,870,410 | ||||||||
HSBC Holdings PLC 4.250%, due 03/14/24 | USD | 2,700,000 | 2,750,930 | ||||||||
6.250%, due 03/19/18 | EUR | 2,100,000 | 3,288,308 | ||||||||
Lloyds TSB Bank PLC 4.875%, due 03/30/271 | GBP | 500,000 | 957,598 | ||||||||
5.125%, due 03/07/25 | GBP | 650,000 | 1,266,220 | ||||||||
6.500%, due 03/24/201 | EUR | 1,400,000 | 2,288,429 | ||||||||
Nationwide Building Society 4.375%, due 02/28/22 | EUR | 3,750,000 | 6,206,031 | ||||||||
Phones4u Finance PLC 9.500%, due 04/01/181 | GBP | 850,000 | 1,463,756 |
Face amount | Value | ||||||||||
Long-term global debt securities—(continued) | |||||||||||
United Kingdom—(concluded) | |||||||||||
Rio Tinto Finance USA PLC 2.000%, due 03/22/17 | USD | 1,550,000 | $ | 1,583,460 | |||||||
Royal Bank of Scotland PLC 5.625%, due 08/24/20 | USD | 500,000 | 570,168 | ||||||||
6.125%, due 01/11/21 | USD | 1,500,000 | 1,759,330 | ||||||||
Silverstone Master Issuer PLC 5.063%, due 10/21/161 | GBP | 1,300,000 | 2,350,288 | ||||||||
United Kingdom Gilt 4.500%, due 09/07/341 | GBP | 6,100,000 | 12,286,241 | ||||||||
United Kingdom Gilt Inflation Linked6 0.750%, due 03/22/341 | GBP | 2,765,769 | 5,421,974 | ||||||||
1.875%, due 11/22/221 | GBP | 9,966,603 | 20,189,239 | ||||||||
United Kingdom Treasury Bonds 4.250%, due 12/07/551 | GBP | 1,420,000 | 2,941,994 | ||||||||
81,029,782 | |||||||||||
United States—15.22% | |||||||||||
ABB Treasury Center USA, Inc. 2.500%, due 06/15/163 | USD | 2,350,000 | 2,415,661 | ||||||||
American Express Credit Corp. 2.375%, due 03/24/17 | USD | 2,600,000 | 2,680,109 | ||||||||
American International Group, Inc. 4.875%, due 06/01/22 | USD | 1,150,000 | 1,273,003 | ||||||||
Ball Corp. 5.750%, due 05/15/21 | USD | 1,050,000 | 1,094,625 | ||||||||
Bank of America Corp. 2.000%, due 01/11/18 | USD | 3,850,000 | 3,854,231 | ||||||||
Caterpillar Financial Services Corp. 1.000%, due 03/03/17 | USD | 1,700,000 | 1,695,510 | ||||||||
CCO Holdings LLC/CCO Holdings Capital Corp. 6.625%, due 01/31/22 | USD | 950,000 | 997,500 | ||||||||
CenturyLink, Inc. 5.800%, due 03/15/22 | USD | 1,000,000 | 1,025,000 | ||||||||
Chrysler Group LLC/CG Co-Issuer, Inc. 8.000%, due 06/15/19 | USD | 950,000 | 1,011,750 | ||||||||
Cisco Systems, Inc. 1.100%, due 03/03/17 | USD | 2,800,000 | 2,805,384 | ||||||||
Citigroup, Inc. 6.125%, due 05/15/18 | USD | 700,000 | 800,510 | ||||||||
Comcast Corp. 3.600%, due 03/01/24 | USD | 350,000 | 358,088 | ||||||||
Commercial Mortgage Pass-Through Certificates, Series 2012-9W57, Class A 2.365%, due 02/10/293 | USD | 1,000,000 | 1,023,942 | ||||||||
Continental Resources, Inc. 5.000%, due 09/15/22 | USD | 750,000 | 804,375 |
86
PACE Select Advisors Trust
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Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Long-term global debt securities—(continued) | |||||||||||
United States—(continued) | |||||||||||
Daimler Finance North America LLC 1.125%, due 03/10/173 | USD | 2,850,000 | $ | 2,838,674 | |||||||
Duke Energy Corp. 2.100%, due 06/15/18 | USD | 550,000 | 553,119 | ||||||||
First Data Corp. 7.375%, due 06/15/193 | USD | 950,000 | 997,500 | ||||||||
Florida Power & Light Co. 2.750%, due 06/01/23 | USD | 1,150,000 | 1,122,937 | ||||||||
Ford Motor Credit Co. LLC 5.000%, due 05/15/18 | USD | 1,500,000 | 1,651,887 | ||||||||
Fresenius Medical Care US Finance, Inc. 6.875%, due 07/15/17 | USD | 1,000,000 | 1,112,500 | ||||||||
General Electric Capital Corp. 6.000%, due 08/07/19 | USD | 2,250,000 | 2,643,059 | ||||||||
Gilead Sciences, Inc. 3.700%, due 04/01/24 | USD | 1,300,000 | 1,332,621 | ||||||||
GRACE 2014-GRCE Mortgage Trust, Class A 3.369%, due 06/10/283 | USD | 1,850,000 | 1,900,028 | ||||||||
Hilton USA Trust, Series 2013-HLT 2.662%, due 11/05/303 | USD | 1,950,000 | 1,962,901 | ||||||||
HJ Heinz Co. 4.250%, due 10/15/20 | USD | 1,000,000 | 993,750 | ||||||||
International Lease Finance Corp. 8.875%, due 09/01/17 | USD | 1,100,000 | 1,265,000 | ||||||||
JBS USA LLC/JBS USA Finance, Inc. 7.250%, due 06/01/211 | USD | 750,000 | 803,693 | ||||||||
JPMorgan Chase & Co. 1.350%, due 02/15/17 | USD | 2,700,000 | 2,703,067 | ||||||||
4.250%, due 10/15/20 | USD | 5,100,000 | 5,470,704 | ||||||||
Lamar Media Corp. 5.875%, due 02/01/22 | USD | 1,000,000 | 1,057,500 | ||||||||
Morgan Stanley 5.500%, due 07/28/21 | USD | 2,400,000 | 2,730,732 | ||||||||
Morgan Stanley Capital I Trust 2014-CPT, Class A 3.350%, due 07/13/292,3 | USD | 3,400,000 | 3,476,010 | ||||||||
New York Life Global Funding 1.650%, due 05/15/173 | USD | 2,700,000 | 2,724,427 | ||||||||
OBP Depositor LLC Trust, Series 2010-OBP, Class A 4.646%, due 07/15/453 | USD | 1,348,000 | 1,490,951 | ||||||||
Peabody Energy Corp. 6.250%, due 11/15/215 | USD | 1,350,000 | 1,279,125 | ||||||||
PNC Funding Corp. 5.125%, due 02/08/20 | USD | 2,550,000 | 2,898,560 | ||||||||
Prudential Financial, Inc. 3.500%, due 05/15/24 | USD | 2,950,000 | 2,933,928 |
Face amount | Value | ||||||||||
Long-term global debt securities—(concluded) | |||||||||||
United States—(concluded) | |||||||||||
Regency Energy Partners LP/ Regency Energy Finance Corp. 8.375%, due 06/01/193 | USD | 1,050,000 | $ | 1,123,500 | |||||||
Reynolds Group Issuer, Inc. 7.875%, due 08/15/19 | USD | 1,000,000 | 1,063,750 | ||||||||
Roche Holdings, Inc. 6.500%, due 03/04/211 | EUR | 2,000,000 | 3,571,890 | ||||||||
SESI LLC 7.125%, due 12/15/21 | USD | 1,000,000 | 1,112,500 | ||||||||
SLM Corp., Series MTN 5.500%, due 01/15/19 | USD | 1,150,000 | 1,190,250 | ||||||||
SunTrust Banks, Inc. 2.350%, due 11/01/18 | USD | 1,900,000 | 1,915,552 | ||||||||
The Goldman Sachs Group, Inc. 5.750%, due 01/24/22 | USD | 2,350,000 | 2,697,198 | ||||||||
UnitedHealth Group, Inc. 2.750%, due 02/15/23 | USD | 1,500,000 | 1,446,039 | ||||||||
Verizon Communications, Inc. 2.375%, due 02/17/22 | EUR | 800,000 | 1,126,677 | ||||||||
3.650%, due 09/14/18 | USD | 1,600,000 | 1,705,782 | ||||||||
4.150%, due 03/15/24 | USD | 1,450,000 | 1,500,422 | ||||||||
Wells Fargo & Co. 4.100%, due 06/03/26 | USD | 3,950,000 | 3,980,806 | ||||||||
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp. 7.750%, due 08/15/20 | USD | 900,000 | 969,750 | ||||||||
91,186,477 | |||||||||||
Uruguay—0.37% | |||||||||||
Uruguay Government International Bond 4.500%, due 08/14/24 | USD | 2,100,000 | 2,210,250 | ||||||||
Total long-term global debt securities (cost—$540,508,330) | 557,870,007 | ||||||||||
US government obligation—1.04% | |||||||||||
United States—1.04% | |||||||||||
US Treasury Inflation Indexed Bonds (TIPS) 0.125%, due 01/15/23 (cost—$6,749,130) | USD | 6,286,355 | 6,240,678 | ||||||||
Repurchase agreement—2.65% | |||||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $16,343,153 US Treasury Note, 0.625% due 05/31/17; (value—$16,200,150); proceeds: $15,884,000 (cost—$15,884,000) | 15,884,000 | 15,884,000 |
87
PACE Select Advisors Trust
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Investment of cash collateral from securities loaned—0.22% | |||||||||||
Money market fund—0.22% | |||||||||||
UBS Private Money Market Fund LLC7 (cost—$1,325,980) | 1,325,980 | $ | 1,325,980 | ||||||||
Total investments (cost—$564,467,440)—97.02% | 581,320,665 | ||||||||||
Other assets in excess of liabilities—2.98% | 17,837,461 | ||||||||||
Net assets—100.00% | $ | 599,158,126 |
For a listing of defined portfolio acronyms, counterparty acronyms and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 232.
Aggregate cost for federal income tax purposes was $570,101,793; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 21,322,746 | |||||
Gross unrealized depreciation | (10,103,874 | ) | |||||
Net unrealized appreciation | $ | 11,218,872 |
Futures contracts
Number of contracts | Currency | Expiration date | Cost | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||
Interest rate futures buy contracts: | |||||||||||||||||||||||||||
73 | AUD | Australian Bond 10 Year Futures | September 2014 | $ | 8,022,680 | $ | 8,204,853 | $ | 182,173 | ||||||||||||||||||
117 | CAD | Canada Government Bond 10 Year Futures | September 2014 | 14,491,960 | 14,712,993 | 221,033 | |||||||||||||||||||||
155 | EUR | German Euro BOBL Futures | September 2014 | 26,529,059 | 26,622,660 | 93,601 | |||||||||||||||||||||
155 | EUR | German Euro Bund Futures | September 2014 | 30,249,022 | 30,691,653 | 442,631 | |||||||||||||||||||||
67 | EUR | German Euro Buxl 30 Year Futures | September 2014 | 11,842,351 | 12,311,984 | 469,633 | |||||||||||||||||||||
378 | EUR | German Euro Schatz Futures | September 2014 | 55,935,740 | 55,967,856 | 32,116 | |||||||||||||||||||||
30 | JPY | Japan Government Bond 10 Year Futures | September 2014 | 42,378,519 | 42,569,166 | 190,647 | |||||||||||||||||||||
$ | 189,449,331 | $ | 191,081,165 | $ | 1,631,834 | ||||||||||||||||||||||
Proceeds | |||||||||||||||||||||||||||
Interest rate futures sell contracts: | |||||||||||||||||||||||||||
162 | GBP | United Kingdom Long Gilt Bond Futures | September 2014 | $ | 30,057,904 | $ | 30,271,478 | $ | (213,574 | ) | |||||||||||||||||
US Treasury futures sell contracts: | |||||||||||||||||||||||||||
33 | USD | US Treasury Note 2 Year Futures | September 2014 | 7,249,622 | 7,240,922 | 8,700 | |||||||||||||||||||||
4 | USD | US Long Bond Futures | September 2014 | 544,680 | 549,625 | (4,945 | ) | ||||||||||||||||||||
311 | USD | US Treasury Note 5 Year Futures | September 2014 | 37,184,307 | 36,957,977 | 226,330 | |||||||||||||||||||||
1,297 | USD | US Treasury Note 10 Year Futures | September 2014 | 161,926,907 | 161,618,360 | 308,547 | |||||||||||||||||||||
$ | 236,963,420 | $ | 236,638,362 | $ | 325,058 | ||||||||||||||||||||||
$ | 1,956,892 |
88
PACE Select Advisors Trust
PACE International Fixed Income Investments
Portfolio of investments—July 31, 2014
Forward foreign currency contracts
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
CITI | GBP | 855,017 | JPY | 146,643,060 | 08/13/14 | $ | (17,759 | ) | |||||||||||
CITI | GBP | 16,056,314 | USD | 26,854,025 | 08/13/14 | (251,883 | ) | ||||||||||||
CITI | SEK | 14,440,984 | EUR | 1,590,049 | 08/13/14 | 35,858 | |||||||||||||
CITI | USD | 6,229,818 | AUD | 6,750,264 | 08/13/14 | 39,728 | |||||||||||||
CITI | USD | 17,203,435 | CAD | 18,840,858 | 08/13/14 | 71,335 | |||||||||||||
CSI | EUR | 834,308 | CZK | 22,900,000 | 09/23/14 | (8,840 | ) | ||||||||||||
CSI | EUR | 1,367,739 | PLN | 5,716,190 | 09/23/14 | (5,593 | ) | ||||||||||||
CSI | EUR | 4,278,000 | USD | 5,796,622 | 08/13/14 | 68,003 | |||||||||||||
CSI | NZD | 29,572,181 | USD | 24,976,664 | 10/15/14 | 30,072 | |||||||||||||
CSI | USD | 13,044,382 | JPY | 1,324,998,000 | 08/13/14 | (162,779 | ) | ||||||||||||
CSI | USD | 25,130,439 | NZD | 29,572,181 | 08/13/14 | (30,983 | ) | ||||||||||||
DB | EUR | 4,100,161 | NZD | 6,422,000 | 08/13/14 | (39,789 | ) | ||||||||||||
DB | EUR | 1,380,820 | PLN | 5,771,000 | 09/23/14 | (5,602 | ) | ||||||||||||
DB | EUR | 1,562,387 | SEK | 14,440,984 | 08/13/14 | 1,185 | |||||||||||||
DB | EUR | 8,545,000 | USD | 11,608,553 | 08/13/14 | 166,047 | |||||||||||||
DB | GBP | 6,750,000 | EUR | 8,535,164 | 08/13/14 | 34,137 | |||||||||||||
DB | JPY | 1,471,641,060 | USD | 14,395,957 | 08/13/14 | 88,693 | |||||||||||||
DB | KRW | 3,650,000,000 | USD | 3,566,428 | 09/23/14 | 24,324 | |||||||||||||
DB | MYR | 2,770,000 | USD | 856,207 | 09/23/14 | (7,007 | ) | ||||||||||||
DB | NZD | 6,743,000 | USD | 5,843,383 | 08/13/14 | 120,246 | |||||||||||||
DB | SEK | 14,447,624 | EUR | 1,562,387 | 10/15/14 | (1,157 | ) | ||||||||||||
DB | USD | 11,055,581 | EUR | 8,110,935 | 08/13/14 | (194,327 | ) | ||||||||||||
DB | USD | 4,416,987 | INR | 268,862,000 | 12/03/14 | (96,489 | ) | ||||||||||||
DB | USD | 14,395,957 | JPY | 1,471,019,155 | 10/15/14 | (88,899 | ) | ||||||||||||
DB | USD | 820,026 | MXN | 10,732,666 | 09/23/14 | (11,135 | ) | ||||||||||||
DB | USD | 871,082 | TRY | 1,898,000 | 09/23/14 | 4,677 | |||||||||||||
GSI | AUD | 6,750,264 | USD | 6,316,897 | 08/13/14 | 47,350 | |||||||||||||
GSI | CHF | 3,626,991 | USD | 3,997,124 | 08/13/14 | 5,723 | |||||||||||||
GSI | EUR | 74,541,720 | USD | 101,491,012 | 08/13/14 | 1,673,095 | |||||||||||||
GSI | EUR | 72,337,877 | USD | 96,972,179 | 10/15/14 | 85,009 | |||||||||||||
GSI | GBP | 15,822,377 | USD | 26,780,955 | 10/15/14 | 84,021 | |||||||||||||
GSI | MXN | 205,231,303 | USD | 15,685,430 | 09/23/14 | 217,722 | |||||||||||||
GSI | NOK | 24,507,596 | EUR | 2,991,212 | 08/13/14 | 108,191 | |||||||||||||
GSI | NZD | 29,251,181 | USD | 24,448,868 | 08/13/14 | (378,139 | ) | ||||||||||||
GSI | USD | 6,289,491 | AUD | 6,750,264 | 10/15/14 | (47,212 | ) | ||||||||||||
GSI | USD | 280,916 | CAD | 305,204 | 08/13/14 | (1,081 | ) | ||||||||||||
GSI | USD | 4,047,823 | CHF | 3,626,991 | 08/13/14 | (56,421 | ) | ||||||||||||
GSI | USD | 3,997,124 | CHF | 3,625,292 | 10/15/14 | (5,761 | ) | ||||||||||||
GSI | USD | 99,675,810 | EUR | 74,337,877 | 08/13/14 | (130,857 | ) | ||||||||||||
GSI | USD | 26,795,195 | GBP | 15,822,377 | 08/13/14 | (84,215 | ) | ||||||||||||
GSI | USD | 1,165,278 | ZAR | 12,530,000 | 09/23/14 | (6,348 | ) | ||||||||||||
JPMCB | CAD | 19,146,062 | USD | 17,610,432 | 08/13/14 | 55,827 | |||||||||||||
JPMCB | CZK | 6,400,000 | EUR | 233,207 | 09/23/14 | 2,522 | |||||||||||||
JPMCB | DKK | 1,488,724 | EUR | 199,542 | 08/13/14 | (173 | ) | ||||||||||||
JPMCB | DKK | 1,488,484 | EUR | 199,617 | 10/15/14 | (82 | ) | ||||||||||||
JPMCB | EUR | 199,617 | DKK | 1,488,724 | 08/13/14 | 72 | |||||||||||||
JPMCB | EUR | 19,007,839 | NOK | 159,449,160 | 08/13/14 | (96,866 | ) |
89
PACE Select Advisors Trust
PACE International Fixed Income Investments
Portfolio of investments—July 31, 2014
Forward foreign currency contracts—(concluded)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
JPMCB | EUR | 1,806,273 | PLN | 7,508,647 | 09/23/14 | $ | (20,264 | ) | |||||||||||
JPMCB | GBP | 7,838,954 | USD | 13,268,096 | 10/15/14 | 41,509 | |||||||||||||
JPMCB | NOK | 134,941,564 | EUR | 16,469,946 | 08/13/14 | 595,710 | |||||||||||||
JPMCB | NOK | 159,842,622 | EUR | 19,007,839 | 10/15/14 | 96,736 | |||||||||||||
JPMCB | PLN | 1,610,805 | EUR | 385,378 | 09/23/14 | 1,514 | |||||||||||||
JPMCB | USD | 17,610,432 | CAD | 19,174,943 | 10/15/14 | (55,447 | ) | ||||||||||||
JPMCB | USD | 13,275,269 | GBP | 7,838,954 | 08/13/14 | (41,723 | ) | ||||||||||||
JPMCB | USD | 7,093,526 | INR | 433,640,000 | 09/23/14 | (11,738 | ) | ||||||||||||
JPMCB | USD | 781,704 | SGD | 976,779 | 09/23/14 | 1,288 | |||||||||||||
$ | 1,842,025 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
Long-term global debt securities | $ | — | $ | 557,870,007 | $ | — | $ | 557,870,007 | |||||||||||
US government obligations | — | 6,240,678 | — | 6,240,678 | |||||||||||||||
Repurchase agreement | — | 15,884,000 | — | 15,884,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 1,325,980 | — | 1,325,980 | |||||||||||||||
Futures contracts | 2,175,411 | — | — | 2,175,411 | |||||||||||||||
Forward foreign currency contracts | — | 3,700,594 | — | 3,700,594 | |||||||||||||||
Total | $ | 2,175,411 | $ | 585,021,259 | $ | — | $ | 587,196,670 | |||||||||||
Liabilities | |||||||||||||||||||
Futures contracts | $ | (218,519 | ) | $ | — | $ | — | $ | (218,519 | ) | |||||||||
Forward foreign currency contracts | — | (1,858,569 | ) | — | (1,858,569 | ) | |||||||||||||
Total | $ | (218,519 | ) | $ | (1,858,569 | ) | $ | — | $ | (2,077,088 | ) |
At July 31, 2014, there were no transfers between Level 1 and Level 2.
Investments by type of issuer (unaudited)
Percentage of total investments | |||||||||||
Long-term | Short-term | ||||||||||
Government and other public issuers | 52.67 | % | — | ||||||||
Repurchase agreement | — | 2.55 | % | ||||||||
Banks and other financial institutions | 28.01 | — | |||||||||
Industrial | 16.56 | — | |||||||||
Investment of cash collateral from securities loaned | — | 0.21 | |||||||||
97.24 | % | 2.76 | % |
90
PACE Select Advisors Trust
PACE International Fixed Income Investments
Portfolio of investments—July 31, 2014
Portfolio footnotes
1 Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. At July 31, 2014, the value of these securities amounted to 27.87% of net assets.
2 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2014 and changes periodically.
3 Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities, which represent 11.21% of net assets as of July 31, 2014, are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers.
4 Perpetual investment. The maturity date reflects the next call date.
5 Security, or portion thereof, was on loan at July 31, 2014.
6 Debt security whose principal and/or interest payments are adjusted for inflation, unlike debt securities that make fixed principal and interest payments. The interest rate paid by the securities is fixed, while the principal value rises or falls based on changes in an index. Thus, if inflation occurs, the principal and interest payments on the securities are adjusted accordingly to protect investors from inflationary loss. During a deflationary period, the principal and interest payments decrease, although the securities' principal amounts will not drop below their face amounts at maturity. In exchange for the inflation protection, the securities generally pay lower interest rates than typical government securities from the issuer's country. Only if inflation occurs will securities offer a higher real yield than a conventional security of the same maturity.
7 The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2014. The investment manager earns a management fee from UBS Private Money Market Fund LLC. Please see the Notes to financial statements for further information.
Security description | Value at 07/31/13 | Purchases during the year ended 07/31/14 | Sales during the year ended 07/31/14 | Value at 07/31/14 | Net income earned from affiliate for the year ended 07/31/14 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 1,096,145 | $ | 9,338,513 | $ | 9,108,678 | $ | 1,325,980 | $ | 105 |
See accompanying notes to financial statements.
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Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 7.92% before the deduction of the maximum PACE Select program fee.1 In comparison, the BofA Merrill Lynch Global High Yield Index (Hedged in USD) (the "benchmark") returned 9.14%, and the Lipper High Yield Funds category posted a median return of 7.19%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 95. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisor's comments2
The Portfolio underperformed its benchmark during the reporting period, as we looked to obtain a beta close to that of the market. (Beta is a measure of volatility or risk relative to the market as a whole.) We maintained an underweight to European industrials and an overweight to select European financials based on relative value considerations. With respect to the emerging market component of the Portfolio, we held an underweight versus the benchmark, while we were overweight select higher beta credits. Emerging markets outperformed global high yield bonds during the period, which returned 10.6%, as cited by the BofA Merrill Lynch High Yield Emerging Market Corporate Plus Index.
In terms of sectors, our exposure to banking—particularly our positions in HBOS, Belfius Financing and National Capital Trust—was beneficial for performance. Within insurance, the Portfolio's exposure to AIG, one of the largest issuers in the high yield market, was beneficial. In addition, the sovereign debt of Portugal performed well. In contrast, WPE International Cooperateif, an Argentinian/Brazilian hydro and wind power company, underperformed over the period. The company has been experiencing tight liquidity due to working capital constraints and a slowdown in projects. The Portfolio's exposure to several metals and mining companies, including Alpha Natural Resources, Aleris and Arch Coal, also weighed on performance. In addition, Sberbank, the largest bank in Russia, performed poorly, due to geopolitical tensions.
PACE Select Advisors Trust – PACE High Yield Investments
Investment Sub-Advisor:
MacKay Shields LLC ("MacKay Shields")
Portfolio Managers:
Dan Roberts, Taylor Wagenseil, Michael Kimble and Lou Cohen
Objective:
Total return
Investment process:
MacKay Shields attempts to deliver attractive risk-adjusted returns by avoiding most of the unusually large losses in the high yield market, even if it means giving up much of the large potential gains. MacKay Shields believes that there is a very small subset of bonds that delivers outsized gains in the market. Due to the limited upside inherent in most bonds, over time, outsized gains are expected to be smaller than unusually large losses. By attempting to limit the Portfolio's participation in the extremes of the market, MacKay Shields strives to add value over a market cycle with lower volatility. MacKay Shields seeks to do this through a rigorous process that attempts to screen out what it believes to be the riskiest issuers in the market.
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
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Sub-Advisor's comments – concluded
We maintained a shorter duration than the benchmark through the use of Treasury futures, which had a marginally negative impact on performance during the reporting period. As the cost of the futures position increased, we slightly pared back this exposure. Currency forwards were used during the reporting period to hedge the currency exposure of the Portfolio into US dollars.
Our baseline view on Federal Reserve Board policy, economic fundamentals and valuations within the credit markets has not changed. We continue to believe that a combination of macroeconomic and microeconomic fundamentals are supportive of current valuations in the credit markets. Economic activity is expanding, while fiscal discipline is emerging in the public sector. We believe the current growth environment could persist for an extended period of time and, therefore, we intend to maintain the current risk profile for the Portfolio.
Special considerations
The Portfolio may be appropriate for long-term investors seeking total return and who are able to withstand short-term fluctuations in the fixed income markets in return for potentially higher returns over the long term. The Portfolio seeks to achieve its objective by investing primarily in a professionally managed, diversified portfolio of fixed income securities rated below investment grade or considered to be of comparable quality (commonly referred to as "junk bonds"). These securities are subject to higher risks than investment grade securities, including greater price volatility and a greater risk of loss of principal and nonpayment of interest. Issuers of such securities are typically in poor financial health, and their ability to pay interest and principal is uncertain. The prices of such securities may be more vulnerable to bad economic news, or even the expectation of bad news, than higher rated or investment grade bonds and other fixed income securities. The value of the Portfolio changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the issuers in which the Portfolio invests. In addition, investments in foreign bonds involve special risks. It is important to note that an investment in the Portfolio is only one component of a balanced investment plan.
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Illustration of an assumed investment of $10,000 in Class P shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE High Yield Investments Class P shares versus the BofA Merrill Lynch Global High Yield Index (hedged in USD) from April 30, 2006, which is the month-end after the inception date of the Class P shares, through July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE High Yield Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustration purposes only.
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Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | Since Inception1 | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A2 | 7.59 | % | 11.32 | % | 8.46 | % | |||||||||
Class C3 | 7.20 | % | 10.84 | % | 14.35 | % | |||||||||
Class Y4 | 7.94 | % | 11.64 | % | 16.90 | % | |||||||||
Class P5 | 7.92 | % | 11.58 | % | 8.71 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A2 | 2.76 | % | 10.30 | % | 7.85 | % | |||||||||
Class C3 | 6.45 | % | 10.84 | % | 14.35 | % | |||||||||
BofA Merrill Lynch Global High Yield Index (hedged in USD)6 | 9.14 | % | 12.89 | % | 9.08 | % | |||||||||
Lipper High Yield Funds median | 7.19 | % | 10.96 | % | 7.21 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | Since Inception1 | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A2 | 10.64 | % | 12.82 | % | 8.72 | % | |||||||||
Class C3 | 10.14 | % | 12.32 | % | 14.84 | % | |||||||||
Class Y4 | 10.99 | % | 13.14 | % | 17.44 | % | |||||||||
Class P5 | 10.87 | % | 13.09 | % | 8.95 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A2 | 5.62 | % | 11.79 | % | 8.11 | % | |||||||||
Class C3 | 9.39 | % | 12.32 | % | 14.84 | % |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—1.27% and 1.27%; Class C—1.73% and 1.73%; Class Y—1.02% and 1.02%; and Class P—1.11% and 1.03%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—1.28%; Class C—1.78%; Class Y—1.03%; and Class P—1.03%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed this expense cap. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Since inception returns are calculated as of commencement of issuance on April 10, 2006 for Class P shares, May 1, 2006 for Class A shares and January 21, 2009 for Class C shares. Class Y shares commenced issuance on April 3, 2006 and had fully redeemed by July 24, 2006 remaining inactive through December 25, 2008. The inception return of Class Y shares is calculated from December 26, 2008, which is the date the Class Y shares recommenced investment operations. Since inception returns for the Index and Lipper median are shown as of April 30, 2006, which is the month-end after the inception date of the oldest share class (Class P).
2 Maximum sales charge for Class A shares is 4.5%. Class A shares bear ongoing 12b-1 service fees.
3 Maximum contingent deferred sales charge for Class C shares is 0.75% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
4 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
5 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
6 The BofA Merrill Lynch Global High Yield Index (hedged in USD) is an unmanaged index which covers US dollar, Canadian dollar, sterling and euro-denominated fixed rate debt of corporate issuers domiciled in an investment grade rated country (i.e., BBB or higher foreign currency long-term debt rating). Individual bonds must be rated below investment grade (i.e., BB or lower based on a composite of Moody's and S&P) but not in default; and must have at least one year remaining term to maturity; a minimum face value outstanding of $100 million, C$100 million, 50 million pounds sterling or 100 million euros; and have available price quotations. New issues qualify for inclusion after they settle. Investors should note that indices do not reflect the deduction of fees and expenses.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
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Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Weighted average duration | 3.7 yrs. | ||||||
Weighted average maturity | 4.4 yrs. | ||||||
Average coupon | 6.78 | % | |||||
Net assets (mm) | $ | 462.6 | |||||
Number of holdings | 313 | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Bonds and loan assignments | 96.6 | % | |||||
Common stocks and warrants | 0.8 | ||||||
Futures and forward foreign currency contracts | 0.3 | ||||||
Cash equivalents and other assets less liabilities | 2.3 | ||||||
Total | 100.0 | % | |||||
Quality diversification1 | 07/31/14 | ||||||
BB & higher | 49.3 | % | |||||
B | 26.2 | ||||||
CCC & lower | 11.8 | ||||||
Not rated | 10.1 | ||||||
Futures and forward foreign currency contracts | 0.3 | ||||||
Cash equivalents and other assets less liabilities | 2.3 | ||||||
Total | 100.0 | % | |||||
Asset allocation1 | 07/31/14 | ||||||
Corporate bonds | 92.2 | % | |||||
Non-US government obligation | 1.9 | ||||||
Loan assignments | 1.5 | ||||||
Common stocks and warrants | 0.8 | ||||||
Asset-backed securities | 0.7 | ||||||
Collateralized mortgage obligations | 0.3 | ||||||
Futures and forward foreign currency contracts | 0.3 | ||||||
Cash equivalents and other assets less liabilities | 2.3 | ||||||
Total | 100.0 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time. Credit quality ratings shown are based on the ratings assigned to portfolio holdings by Standard & Poor's Ratings Group, an independent rating agency.
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Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate bonds—92.19% | |||||||||||
Aerospace & defense—1.64% | |||||||||||
Alliant Techsystems, Inc. 6.875%, due 09/15/20 | 1,650,000 | $ | 1,749,000 | ||||||||
BE Aerospace, Inc. 6.875%, due 10/01/20 | 500,000 | 540,000 | |||||||||
Ducommun, Inc. 9.750%, due 07/15/18 | 635,000 | 700,087 | |||||||||
Spirit AeroSystems, Inc. 5.250%, due 03/15/222 | 3,000,000 | 3,000,000 | |||||||||
TransDigm, Inc. 6.000%, due 07/15/222 | 1,610,000 | 1,618,050 | |||||||||
7,607,137 | |||||||||||
Agriculture—0.51% | |||||||||||
Virgolino de Oliveira Finance Ltd. 10.875%, due 01/13/202 | 1,180,000 | 1,159,350 | |||||||||
11.750%, due 02/09/222 | 1,610,000 | 1,207,098 | |||||||||
2,366,448 | |||||||||||
Airlines—1.07% | |||||||||||
Continental Airlines Pass Through Trust 2003-ERJ1, Series RJ03 7.875%, due 07/02/18 | 511,808 | 551,473 | |||||||||
Continental Airlines Pass Through Trust 2004-ERJ1, Series RJ04 9.558%, due 09/01/19 | 554,525 | 630,453 | |||||||||
Continental Airlines Pass Through Trust 2005-ERJ1, Series ERJ1 9.798%, due 04/01/21 | 1,602,678 | 1,843,079 | |||||||||
Delta Air Lines Pass Through Trust 2010-1, Class B 6.375%, due 01/02/162 | 1,200,000 | 1,272,000 | |||||||||
US Airways Pass Through Trust 2012-1, Class B 8.000%, due 10/01/19 | 555,975 | 632,422 | |||||||||
4,929,427 | |||||||||||
Auto & truck—2.48% | |||||||||||
Chrysler Group LLC/CG Co-Issuer, Inc. 8.000%, due 06/15/19 | 200,000 | 213,000 | |||||||||
8.250%, due 06/15/21 | 2,150,000 | 2,365,000 | |||||||||
Ford Holdings, Inc. 9.300%, due 03/01/30 | 1,145,000 | 1,688,948 | |||||||||
9.375%, due 03/01/20 | 644,000 | 833,478 | |||||||||
Ford Motor Co. 6.625%, due 10/01/28 | 1,595,000 | 1,942,005 | |||||||||
8.875%, due 01/15/22 | 1,000,000 | 1,259,233 | |||||||||
9.215%, due 09/15/21 | 282,000 | 376,437 | |||||||||
Navistar International Corp. 8.250%, due 11/01/213 | 2,702,000 | 2,789,815 | |||||||||
11,467,916 |
Face amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Automotive parts—0.96% | |||||||||||
Gajah Tunggal Tbk PT 7.750%, due 02/06/182,3 | 1,650,000 | $ | 1,703,345 | ||||||||
Goodyear Tire & Rubber Co. 6.500%, due 03/01/21 | 400,000 | 423,000 | |||||||||
7.000%, due 05/15/22 | 1,710,000 | 1,855,350 | |||||||||
8.250%, due 08/15/20 | 420,000 | 453,600 | |||||||||
4,435,295 | |||||||||||
Banking-non-US—8.01% | |||||||||||
Banco Continental SAECA 8.875%, due 10/15/172 | 1,500,000 | 1,642,500 | |||||||||
Banco do Brasil SA 5.875%, due 01/19/232,3 | 1,900,000 | 1,935,074 | |||||||||
Barclays Bank PLC 10.000%, due 05/21/214 | GBP | 1,350,000 | 2,989,080 | ||||||||
BBVA International Preferred SAU 5.919%, due 04/18/173,5,6 | 1,500,000 | 1,560,000 | |||||||||
Belfius Funding NV 1.228%, due 02/09/175 | GBP | 2,350,000 | 3,774,088 | ||||||||
Deutsche Postbank Funding Trust IV 5.983%, due 06/29/174,5,6 | EUR | 2,150,000 | 3,088,834 | ||||||||
HBOS Capital Funding LP 6.461%, due 11/30/184,5,6 | GBP | 2,800,000 | 5,046,327 | ||||||||
HBOS PLC 5.125%, due 10/14/155,6 | EUR | 1,250,000 | 1,652,890 | ||||||||
ICICI Bank Ltd. 6.375%, due 04/30/224,5 | 3,565,000 | 3,689,775 | |||||||||
National Capital Trust I 5.620%, due 12/17/184,5,6 | GBP | 1,500,000 | 2,671,734 | ||||||||
Royal Bank of Scotland PLC 9.500%, due 03/16/224,5 | 2,750,000 | 3,196,875 | |||||||||
Sberbank of Russia Via SB Capital SA 5.125%, due 10/29/224 | 4,400,000 | 3,896,200 | |||||||||
UT2 Funding PLC 5.321%, due 06/30/167 | EUR | 1,400,000 | 1,926,224 | ||||||||
37,069,601 | |||||||||||
Banking-US—2.88% | |||||||||||
ABN Amro Bank NV 4.310%, due 03/10/165,6 | EUR | 2,905,000 | 3,958,015 | ||||||||
Commerzbank Capital Funding Trust 5.905%, due 04/12/186 | GBP | 800,000 | 1,357,393 | ||||||||
Dresdner Funding Trust I 8.151%, due 06/30/312 | 1,600,000 | 1,916,000 | |||||||||
Mellon Capital III 6.369%, due 09/05/665 | GBP | 1,850,000 | 3,279,521 | ||||||||
Wachovia Capital Trust III 5.570%, due 09/02/145,6 | 750,000 | 727,965 | |||||||||
Wells Fargo & Co. 5.900%, due 06/15/245,6 | 1,430,000 | 1,493,635 | |||||||||
Wells Fargo & Co., Series K 7.980%, due 03/15/185,6 | 525,000 | 595,350 | |||||||||
13,327,879 |
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Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Broadcast—0.35% | |||||||||||
Clear Channel Worldwide Holdings, Inc. 7.625%, due 03/15/20 | 127,000 | $ | 132,715 | ||||||||
7.625%, due 03/15/20 | 1,423,000 | 1,494,150 | |||||||||
1,626,865 | |||||||||||
Building & construction—1.77% | |||||||||||
Beazer Homes USA, Inc. 8.125%, due 06/15/16 | 835,000 | 905,975 | |||||||||
K. Hovnanian Enterprises, Inc. 6.250%, due 01/15/16 | 315,000 | 326,813 | |||||||||
7.250%, due 10/15/202 | 1,240,000 | 1,305,100 | |||||||||
KB Home 7.500%, due 09/15/223 | 1,485,000 | 1,622,362 | |||||||||
Pulte Group, Inc. 6.375%, due 05/15/33 | 567,000 | 565,583 | |||||||||
7.875%, due 06/15/32 | 870,000 | 978,750 | |||||||||
Shea Homes LP/Shea Homes Funding Corp. 8.625%, due 05/15/19 | 1,045,000 | 1,110,312 | |||||||||
Standard Pacific Corp. 6.250%, due 12/15/21 | 1,335,000 | 1,381,725 | |||||||||
8,196,620 | |||||||||||
Building materials—0.23% | |||||||||||
Interface, Inc. 7.625%, due 12/01/18 | 1,017,000 | 1,065,308 | |||||||||
Building products—0.89% | |||||||||||
Associated Materials LLC 9.125%, due 11/01/17 | 1,810,000 | 1,800,950 | |||||||||
USG Corp. 5.875%, due 11/01/212 | 1,235,000 | 1,272,050 | |||||||||
8.375%, due 10/15/182 | 210,000 | 219,450 | |||||||||
9.750%, due 01/15/187 | 690,000 | 809,025 | |||||||||
4,101,475 | |||||||||||
Building products-cement—0.71% | |||||||||||
HeidelbergCement Finance BV 7.500%, due 04/03/20 | EUR | 395,000 | 667,820 | ||||||||
Texas Industries, Inc. 9.250%, due 08/15/20 | 2,305,000 | 2,616,175 | |||||||||
3,283,995 | |||||||||||
Cable—0.63% | |||||||||||
CCO Holdings LLC/CCO Holdings Capital Corp. 5.750%, due 01/15/24 | 1,250,000 | 1,243,750 | |||||||||
Dish DBS Corp. 5.875%, due 07/15/22 | 730,000 | 762,850 | |||||||||
6.750%, due 06/01/21 | 835,000 | 918,500 | |||||||||
2,925,100 |
Face amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Car rental—1.08% | |||||||||||
Avis Budget Car Rental LLC/Avis Budget Finance, Inc. 5.125%, due 06/01/222 | 1,600,000 | $ | 1,552,000 | ||||||||
5.500%, due 04/01/23 | 170,000 | 170,000 | |||||||||
Hertz Corp. 5.875%, due 10/15/20 | 450,000 | 460,125 | |||||||||
6.250%, due 10/15/223 | 1,500,000 | 1,552,500 | |||||||||
6.750%, due 04/15/19 | 300,000 | 313,500 | |||||||||
7.375%, due 01/15/21 | 885,000 | 946,950 | |||||||||
4,995,075 | |||||||||||
Chemicals—1.43% | |||||||||||
Hexion US Finance Corp./Hexion Nova Scotia Finance ULC 8.875%, due 02/01/18 | 2,780,000 | 2,868,960 | |||||||||
Huntsman International LLC 8.625%, due 03/15/20 | 1,080,000 | 1,150,200 | |||||||||
Momentive Performance Materials, Inc. 10.000%, due 10/15/20 | 720,000 | 745,200 | |||||||||
Perstorp Holding AB 11.000%, due 08/15/174 | 1,750,000 | 1,863,750 | |||||||||
6,628,110 | |||||||||||
Coal—0.86% | |||||||||||
Alpha Natural Resources, Inc. 6.000%, due 06/01/193 | 1,190,000 | 803,250 | |||||||||
6.250%, due 06/01/213 | 245,000 | 159,250 | |||||||||
7.500%, due 08/01/202,3 | 1,180,000 | 1,088,550 | |||||||||
Arch Coal, Inc. 7.000%, due 06/15/193 | 825,000 | 565,125 | |||||||||
7.250%, due 10/01/203 | 275,000 | 182,875 | |||||||||
7.250%, due 06/15/213 | 460,000 | 299,000 | |||||||||
8.000%, due 01/15/192,3 | 930,000 | 897,450 | |||||||||
3,995,500 | |||||||||||
Commercial services—0.78% | |||||||||||
Iron Mountain, Inc. 5.750%, due 08/15/24 | 700,000 | 700,000 | |||||||||
6.000%, due 08/15/23 | 1,790,000 | 1,866,075 | |||||||||
8.375%, due 08/15/21 | 1,000,000 | 1,037,500 | |||||||||
3,603,575 | |||||||||||
Computer software & services—1.14% | |||||||||||
NCR Corp. 4.625%, due 02/15/21 | 1,870,000 | 1,841,950 | |||||||||
6.375%, due 12/15/23 | 1,100,000 | 1,166,000 | |||||||||
Sungard Data Systems, Inc. 6.625%, due 11/01/19 | 2,225,000 | 2,280,625 | |||||||||
5,288,575 | |||||||||||
Consumer products—1.31% | |||||||||||
Albea Beauty Holdings SA 8.375%, due 11/01/192 | 1,800,000 | 1,939,500 | |||||||||
Cosan Luxembourg SA 5.000%, due 03/14/232,3 | 200,000 | 188,744 |
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Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Consumer products—(concluded) | |||||||||||
Service Corp. International/US 5.375%, due 05/15/242 | 2,300,000 | $ | 2,351,750 | ||||||||
Weyerhaeuser Real Estate Co. 5.875%, due 06/15/242 | 1,575,000 | 1,598,625 | |||||||||
6,078,619 | |||||||||||
Containers & packaging—1.66% | |||||||||||
Ardagh Packaging Finance PLC/ Ardagh Holdings USA, Inc. 6.750%, due 01/31/212,3 | 3,050,000 | 3,042,375 | |||||||||
Ardagh Packaging Finance PLC/ Ardagh MP Holdings USA, Inc. 7.000%, due 11/15/202 | 290,294 | 285,940 | |||||||||
Owens-Brockway Glass Container, Inc. 7.375%, due 05/15/16 | 750,000 | 811,875 | |||||||||
Rexam PLC 6.750%, due 06/29/674,5 | EUR | 1,406,000 | 1,967,426 | ||||||||
Sealed Air Corp. 5.250%, due 04/01/232 | 425,000 | 418,625 | |||||||||
8.125%, due 09/15/192 | 1,075,000 | 1,162,344 | |||||||||
7,688,585 | |||||||||||
Diversified capital goods—0.14% | |||||||||||
Mueller Water Products, Inc. 8.750%, due 09/01/20 | 604,000 | 661,380 | |||||||||
Diversified financial services—2.00% | |||||||||||
Ally Financial, Inc. 8.000%, due 11/01/31 | 405,000 | 503,213 | |||||||||
8.000%, due 11/01/31 | 895,000 | 1,116,512 | |||||||||
Bank of America Corp. 8.000%, due 01/30/185,6 | 345,000 | 379,538 | |||||||||
First Data Corp. 8.875%, due 08/15/202 | 2,465,000 | 2,693,012 | |||||||||
10.625%, due 06/15/21 | 1,264,000 | 1,435,430 | |||||||||
GE Capital Trust III 6.500%, due 09/15/674,5 | GBP | 1,750,000 | 3,147,307 | ||||||||
9,275,012 | |||||||||||
Diversified manufacturing—0.83% | |||||||||||
Bombardier, Inc. 6.000%, due 10/15/222 | 925,000 | 906,500 | |||||||||
6.125%, due 01/15/232,3 | 725,000 | 714,125 | |||||||||
7.500%, due 03/15/182 | 270,000 | 294,975 | |||||||||
7.750%, due 03/15/202 | 1,770,000 | 1,911,600 | |||||||||
3,827,200 | |||||||||||
Electric utilities—0.20% | |||||||||||
NRG Energy, Inc. 8.250%, due 09/01/20 | 865,000 | 929,875 | |||||||||
Electric-generation—0.37% | |||||||||||
Calpine Corp. 5.750%, due 01/15/25 | 1,580,000 | 1,544,450 | |||||||||
Tenaska Alabama Partners LP 7.000%, due 06/30/212 | 164,040 | 174,702 | |||||||||
1,719,152 |
Face amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Electronics—0.57% | |||||||||||
Freescale Semiconductor, Inc. 5.000%, due 05/15/212 | 1,875,000 | $ | 1,865,625 | ||||||||
6.000%, due 01/15/222 | 757,000 | 779,710 | |||||||||
2,645,335 | |||||||||||
Finance-captive automotive—2.46% | |||||||||||
Ausdrill Finance Pty Ltd. 6.875%, due 11/01/192 | 880,000 | 800,800 | |||||||||
Credit Agricole SA 7.875%, due 01/23/242,3,5,6 | 2,000,000 | 2,124,500 | |||||||||
8.375%, due 10/13/192,5,6 | 765,000 | 894,094 | |||||||||
Ford Motor Credit Co. LLC 5.875%, due 08/02/21 | 750,000 | 873,466 | |||||||||
8.125%, due 01/15/20 | 480,000 | 606,938 | |||||||||
General Motors Financial Co., Inc. 3.250%, due 05/15/18 | 285,000 | 284,644 | |||||||||
Icahn Enterprises LP/Icahn Enterprises Finance Corp. 5.875%, due 02/01/22 | 485,000 | 494,397 | |||||||||
6.000%, due 08/01/20 | 3,130,000 | 3,263,025 | |||||||||
Schaeffler Finance BV 4.750%, due 05/15/212 | 2,020,000 | 2,050,300 | |||||||||
11,392,164 | |||||||||||
Finance-noncaptive consumer—0.39% | |||||||||||
CIT Group, Inc. 5.000%, due 08/15/22 | 1,740,000 | 1,796,550 | |||||||||
Finance-other—2.34% | |||||||||||
BBVA Bancomer SA/Texas 6.750%, due 09/30/222 | 1,550,000 | 1,763,125 | |||||||||
Navient LLC 8.000%, due 03/25/20 | 2,000,000 | 2,260,000 | |||||||||
8.450%, due 06/15/18 | 600,000 | 693,000 | |||||||||
OAS Finance Ltd. 8.000%, due 07/02/212 | 2,000,000 | 1,995,000 | |||||||||
Springleaf Finance Corp. 6.000%, due 06/01/20 | 3,490,000 | 3,542,350 | |||||||||
Springleaf Finance Corp. MTN 6.500%, due 09/15/17 | 545,000 | 581,787 | |||||||||
10,835,262 | |||||||||||
Financial services—3.31% | |||||||||||
Ageas Hybrid Financing SA 5.125%, due 06/20/164,5,6 | EUR | 2,125,000 | 2,845,482 | ||||||||
Assicurazioni Generali SpA 6.416%, due 02/08/225,6 | GBP | 1,300,000 | 2,271,607 | ||||||||
Banco de Bogota SA 5.375%, due 02/19/232 | 2,200,000 | 2,260,500 | |||||||||
Cemex Finance LLC 6.000%, due 04/01/242,3 | 1,200,000 | 1,200,000 | |||||||||
9.375%, due 10/12/222 | 1,800,000 | 2,065,500 | |||||||||
HSBC Finance Capital Trust IX 5.911%, due 11/30/355 | 1,450,000 | 1,504,375 |
99
PACE Select Advisors Trust
PACE High Yield Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Financial services—(concluded) | |||||||||||
Milacron LLC/Mcron Finance Corp. 7.750%, due 02/15/212 | 1,165,000 | $ | 1,255,287 | ||||||||
VTB Bank OJSC Via VTB Capital SA 6.950%, due 10/17/224 | 2,000,000 | 1,889,600 | |||||||||
15,292,351 | |||||||||||
Food products—2.18% | |||||||||||
ESAL GmbH 6.250%, due 02/05/232 | 945,000 | 923,738 | |||||||||
JBS USA LLC/JBS USA Finance, Inc. 8.250%, due 02/01/202 | 1,685,000 | 1,815,587 | |||||||||
Minerva Luxembourg SA 7.750%, due 01/31/232 | 2,100,000 | 2,249,625 | |||||||||
Premier Foods Finance PLC 6.500%, due 03/15/212 | GBP | 1,300,000 | 2,134,433 | ||||||||
Smithfield Foods, Inc. 6.625%, due 08/15/22 | 1,030,000 | 1,112,400 | |||||||||
USJ Acucar e Alcool SA 9.875%, due 11/09/192,3 | 1,800,000 | 1,832,400 | |||||||||
10,068,183 | |||||||||||
Food-wholesale—0.53% | |||||||||||
Barry Callebaut Services N.V. 5.500%, due 06/15/232 | 2,100,000 | 2,220,918 | |||||||||
6.000%, due 07/13/17 | EUR | 140,000 | 210,745 | ||||||||
2,431,663 | |||||||||||
Gaming—3.26% | |||||||||||
Caesars Entertainment Operating Co., Inc. 9.000%, due 02/15/203 | 2,700,000 | 2,247,750 | |||||||||
9.000%, due 02/15/20 | 2,800,000 | 2,317,000 | |||||||||
Isle of Capri Casinos, Inc. 7.750%, due 03/15/19 | 575,000 | 603,750 | |||||||||
8.875%, due 06/15/203 | 3,295,000 | 3,492,700 | |||||||||
MGM Resorts International 6.750%, due 10/01/20 | 2,683,000 | 2,904,347 | |||||||||
7.750%, due 03/15/223 | 740,000 | 851,000 | |||||||||
Mohegan Tribal Gaming Authority 9.750%, due 09/01/213 | 1,330,000 | 1,436,400 | |||||||||
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp. 7.750%, due 08/15/20 | 1,140,000 | 1,228,350 | |||||||||
15,081,297 | |||||||||||
Health care providers & services—5.15% | |||||||||||
Alere, Inc. 6.500%, due 06/15/20 | 675,000 | 690,188 | |||||||||
8.625%, due 10/01/18 | 1,240,000 | 1,294,250 | |||||||||
CHS/Community Health Systems, Inc. 5.125%, due 08/01/212 | 1,805,000 | 1,818,537 | |||||||||
DaVita HealthCare Partners, Inc. 5.750%, due 08/15/22 | 2,535,000 | 2,674,425 |
Face amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Health care providers & services—(concluded) | |||||||||||
Fresenius Medical Care US Finance, Inc. 6.875%, due 07/15/17 | 365,000 | $ | 406,063 | ||||||||
HCA, Inc. 5.000%, due 03/15/24 | 3,295,000 | 3,270,287 | |||||||||
7.500%, due 02/15/22 | 2,750,000 | 3,114,375 | |||||||||
Kinetic Concepts, Inc./KCI USA, Inc. 10.500%, due 11/01/18 | 1,520,000 | 1,683,400 | |||||||||
Millinckrodt International Finance SA/Mallinkrodt CB LLC 5.750%, due 08/01/222 | 2,270,000 | 2,281,350 | |||||||||
Multiplan, Inc. 6.625%, due 04/01/222 | 1,995,000 | 2,044,875 | |||||||||
Tenet Healthcare Corp. 8.125%, due 04/01/22 | 1,645,000 | 1,838,287 | |||||||||
Valeant Pharmaceuticals International, Inc. 5.625%, due 12/01/212 | 1,000,000 | 995,000 | |||||||||
Valeant Pharmaceuticals, Inc. 7.500%, due 07/15/212 | 1,595,000 | 1,722,600 | |||||||||
23,833,637 | |||||||||||
Hotels, restaurants & leisure—0.18% | |||||||||||
Paris Las Vegas Holdings 8.000%, due 10/01/202 | 795,000 | 814,875 | |||||||||
Insurance—4.53% | |||||||||||
American International Group, Inc. 4.875%, due 03/15/675 | EUR | 1,400,000 | 1,958,562 | ||||||||
5.000%, due 04/26/23 | GBP | 750,000 | 1,391,568 | ||||||||
Series A2 4.875%, due 03/15/675 | EUR | 4,500,000 | 6,295,377 | ||||||||
Series A3 5.750%, due 03/15/675 | GBP | 600,000 | 1,053,499 | ||||||||
Aviva PLC 6.875%, due 05/22/385 | EUR | 1,200,000 | 1,871,992 | ||||||||
Liberty Mutual Group, Inc. 7.800%, due 03/15/372 | 2,000,000 | 2,370,000 | |||||||||
Lincoln National Corp. 7.000%, due 05/17/665 | 1,555,000 | 1,596,791 | |||||||||
Pearl Group Holdings No 1 Ltd. 6.586%, due 04/25/165,6 | GBP | 1,411,000 | 2,320,254 | ||||||||
Scottish Widows PLC 5.500%, due 06/16/234 | GBP | 1,185,000 | 2,075,246 | ||||||||
20,933,289 | |||||||||||
Machinery—0.76% | |||||||||||
Mcron Finance Sub LLC/Mcron Finance Corp. 8.375%, due 05/15/192 | 920,000 | 1,005,100 | |||||||||
Sensata Technologies BV 4.875%, due 10/15/232 | 1,835,000 | 1,816,650 | |||||||||
Terex Corp. 6.000%, due 05/15/21 | 650,000 | 680,875 | |||||||||
3,502,625 |
100
PACE Select Advisors Trust
PACE High Yield Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Manufacturing-diversified—1.56% | |||||||||||
Amsted Industries, Inc. 5.000%, due 03/15/222 | 1,320,000 | $ | 1,310,100 | ||||||||
Gates Global LLC/Gates Global Co. 6.000%, due 07/15/222 | 3,200,000 | 3,120,000 | |||||||||
Kloeckner Pentaplast GmbH & Co. KG 11.625%, due 07/15/174 | EUR | 1,050,000 | 1,564,178 | ||||||||
SPX Corp. 6.875%, due 09/01/17 | 390,000 | 426,075 | |||||||||
WPE International Cooperatief UA 10.375%, due 09/30/202 | 1,700,000 | 778,739 | |||||||||
7,199,092 | |||||||||||
Media—1.84% | |||||||||||
Clear Channel Communications, Inc. 9.000%, due 03/01/21 | 3,785,000 | 3,912,744 | |||||||||
Clear Channel Worldwide Holdings, Inc. 6.500%, due 11/15/22 | 278,000 | 291,900 | |||||||||
Unify Germany Holdings BV 10.750%, due 11/15/154 | EUR | 748,000 | 1,006,718 | ||||||||
Lamar Media Corp. 5.875%, due 02/01/22 | 1,350,000 | 1,427,625 | |||||||||
TVN Finance Corp. III AB 7.375%, due 12/15/202 | EUR | 1,250,000 | 1,876,762 | ||||||||
8,515,749 | |||||||||||
Metals—1.99% | |||||||||||
Aleris International, Inc. 6.000%, due 06/01/208,9 | 13,347 | 11,295 | |||||||||
7.625%, due 02/15/18 | 835,000 | 855,875 | |||||||||
7.875%, due 11/01/20 | 1,730,000 | 1,777,575 | |||||||||
Novelis, Inc. 8.375%, due 12/15/17 | 1,250,000 | 1,314,062 | |||||||||
8.750%, due 12/15/20 | 935,000 | 1,009,800 | |||||||||
Vedanta Resources PLC 7.125%, due 05/31/232 | 2,200,000 | 2,323,750 | |||||||||
8.250%, due 06/07/212 | 1,700,000 | 1,908,250 | |||||||||
9,200,607 | |||||||||||
Metals & mining—1.46% | |||||||||||
ArcelorMittal 7.250%, due 03/01/413,7 | 1,665,000 | 1,698,300 | |||||||||
7.500%, due 10/15/397 | 3,405,000 | 3,549,712 | |||||||||
FMG Resources August 2006 Pty Ltd. 6.875%, due 02/01/182,3 | 525,000 | 544,688 | |||||||||
Glencore Finance Europe SA 6.500%, due 02/27/19 | GBP | 500,000 | 957,308 | ||||||||
6,750,008 |
Face amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Oil & gas—9.67% | |||||||||||
AmeriGas Partners LP/AmeriGas Finance Corp. 6.500%, due 05/20/21 | 678,000 | $ | 706,815 | ||||||||
Berry Petroleum Co. 6.750%, due 11/01/20 | 2,320,000 | 2,389,600 | |||||||||
Chesapeake Energy Corp. 5.375%, due 06/15/21 | 1,000,000 | 1,026,875 | |||||||||
6.250%, due 01/15/17 | EUR | 515,000 | 744,780 | ||||||||
6.625%, due 08/15/20 | 3,040,000 | 3,387,700 | |||||||||
Concho Resources, Inc. 5.500%, due 10/01/22 | 270,000 | 280,800 | |||||||||
5.500%, due 04/01/23 | 290,000 | 300,150 | |||||||||
6.500%, due 01/15/22 | 300,000 | 319,500 | |||||||||
Denbury Resources, Inc. 4.625%, due 07/15/23 | 1,500,000 | 1,402,500 | |||||||||
5.500%, due 05/01/22 | 1,200,000 | 1,179,000 | |||||||||
Energy Transfer Equity LP 7.500%, due 10/15/20 | 1,650,000 | 1,843,875 | |||||||||
EP Energy LLC/EP Energy Finance, Inc. 9.375%, due 05/01/20 | 2,105,000 | 2,331,287 | |||||||||
Ferrellgas LP/Ferrellgas Finance Corp. 6.500%, due 05/01/21 | 430,000 | 443,975 | |||||||||
Hilcorp Energy I LP/Hilcorp Finance Co. 7.625%, due 04/15/212 | 525,000 | 563,063 | |||||||||
8.000%, due 02/15/202 | 355,000 | 378,075 | |||||||||
Kinder Morgan Inc. 5.000%, due 02/15/212 | 3,370,000 | 3,416,337 | |||||||||
Linn Energy LLC/Linn Energy Finance Corp. 6.250%, due 11/01/19 | 800,000 | 812,000 | |||||||||
6.500%, due 05/15/19 | 800,000 | 817,500 | |||||||||
7.750%, due 02/01/21 | 500,000 | 523,750 | |||||||||
8.625%, due 04/15/20 | 1,790,000 | 1,890,687 | |||||||||
MarkWest Energy Partners LP/ MarkWest Energy Finance Corp. 5.500%, due 02/15/23 | 645,000 | 669,188 | |||||||||
6.500%, due 08/15/21 | 601,000 | 635,558 | |||||||||
Pacific Rubiales Energy Corp. 5.125%, due 03/28/232 | 2,300,000 | 2,251,125 | |||||||||
Parker Drilling Co. 6.750%, due 07/15/222 | 880,000 | 897,600 | |||||||||
Petroleos de Venezuela SA 12.750%, due 02/17/224 | 3,375,000 | 3,391,875 | |||||||||
Precision Drilling Corp. 6.500%, due 12/15/21 | 615,000 | 653,438 | |||||||||
6.625%, due 11/15/20 | 855,000 | 893,475 | |||||||||
Regency Energy Partners LP/ Regency Energy Finance Corp. 5.000%, due 10/01/22 | 500,000 | 493,750 | |||||||||
5.500%, due 04/15/23 | 1,230,000 | 1,242,300 | |||||||||
Samson Investment Co. 9.750%, due 02/15/202 | 1,515,000 | 1,533,937 |
101
PACE Select Advisors Trust
PACE High Yield Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Oil & gas—(concluded) | |||||||||||
Swift Energy Co. 7.125%, due 06/01/173 | 500,000 | $ | 506,250 | ||||||||
8.875%, due 01/15/20 | 1,520,000 | 1,588,400 | |||||||||
Targa Resources Partners LP/ Targa Resources Partners Finance Corp. 4.250%, due 11/15/23 | 900,000 | 873,000 | |||||||||
5.250%, due 05/01/23 | 1,465,000 | 1,486,975 | |||||||||
7.875%, due 10/15/18 | 730,000 | 764,675 | |||||||||
Whiting Petroleum Corp. 5.750%, due 03/15/21 | 1,925,000 | 2,103,062 | |||||||||
44,742,877 | |||||||||||
Oil services—1.94% | |||||||||||
Basic Energy Services, Inc. 7.750%, due 02/15/19 | 1,320,000 | 1,382,700 | |||||||||
7.750%, due 10/15/22 | 1,475,000 | 1,596,687 | |||||||||
Cie Generale de Geophysique-Veritas 6.500%, due 06/01/21 | 1,950,000 | 1,852,500 | |||||||||
CITGO Petroleum Corp. 6.250%, due 08/15/222 | 2,205,000 | 2,271,150 | |||||||||
Hornbeck Offshore Services, Inc. 5.000%, due 03/01/21 | 1,235,000 | 1,210,300 | |||||||||
5.875%, due 04/01/20 | 650,000 | 656,500 | |||||||||
8,969,837 | |||||||||||
Packaging—1.12% | |||||||||||
Reynolds Group Issuer 8.500%, due 05/15/18 | 1,765,000 | 1,831,188 | |||||||||
9.875%, due 08/15/19 | 3,115,000 | 3,356,412 | |||||||||
5,187,600 | |||||||||||
Paper & forest products—0.65% | |||||||||||
Fibria Overseas Finance Ltd. 5.250%, due 05/12/24 | 2,000,000 | 1,983,400 | |||||||||
Stora Enso Oyj 7.250%, due 04/15/362 | 1,000,000 | 1,025,000 | |||||||||
3,008,400 | |||||||||||
Pipelines—1.19% | |||||||||||
Atlas Pipeline Partners LP/Atlas Pipeline Finance Corp. 4.750%, due 11/15/21 | 790,000 | 746,550 | |||||||||
5.875%, due 08/01/23 | 2,045,000 | 2,009,213 | |||||||||
6.625%, due 10/01/20 | 400,000 | 416,000 | |||||||||
Georgian Oil and Gas Corp. 6.875%, due 05/16/172 | 1,700,000 | 1,806,250 | |||||||||
Penn Virginia Resource Partners LP/Penn Virginia Resource Finance Corp. II 6.500%, due 05/15/21 | 500,000 | 531,250 | |||||||||
5,509,263 |
Face amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Rental auto/equipment—0.56% | |||||||||||
United Rentals North America, Inc. 6.125%, due 06/15/23 | 670,000 | $ | 693,031 | ||||||||
7.375%, due 05/15/20 | 275,000 | 294,938 | |||||||||
7.625%, due 04/15/22 | 270,000 | 297,675 | |||||||||
8.375%, due 09/15/203 | 1,220,000 | 1,314,550 | |||||||||
2,600,194 | |||||||||||
Retail—0.10% | |||||||||||
Suburban Propane Partners LP/ Suburban Energy Finance Corp. 7.375%, due 08/01/21 | 436,000 | 467,610 | |||||||||
Steel—1.49% | |||||||||||
AK Steel Corp. 7.625%, due 05/15/203 | 1,350,000 | 1,380,375 | |||||||||
8.375%, due 04/01/223 | 400,000 | 421,000 | |||||||||
APERAM 7.375%, due 04/01/162 | 1,000,000 | 1,022,500 | |||||||||
Severstal OAO Via Steel Capital SA 5.900%, due 10/17/222 | 2,100,000 | 2,026,500 | |||||||||
US Steel Corp. 7.000%, due 02/01/183 | 1,170,000 | 1,266,525 | |||||||||
7.500%, due 03/15/22 | 700,000 | 759,500 | |||||||||
6,876,400 | |||||||||||
Telecom-integrated/services—1.07% | |||||||||||
Hughes Satellite Systems Corp. 7.625%, due 06/15/21 | 1,088,000 | 1,229,440 | |||||||||
Intelsat Luxembourg SA 8.125%, due 06/01/233 | 3,590,000 | 3,733,600 | |||||||||
4,963,040 | |||||||||||
Telecommunication services—0.79% | |||||||||||
Colombia Telecomunicaciones SA ESP 5.375%, due 09/27/222 | 2,250,000 | 2,277,450 | |||||||||
CommScope, Inc. 5.000%, due 06/15/212 | 1,370,000 | 1,356,300 | |||||||||
3,633,750 | |||||||||||
Telephone-integrated—2.17% | |||||||||||
Frontier Communications Corp. 7.000%, due 11/01/25 | 500,000 | 505,000 | |||||||||
7.125%, due 01/15/23 | 700,000 | 724,500 | |||||||||
Sprint Capital Corp. 6.875%, due 11/15/28 | 2,160,000 | 2,106,000 | |||||||||
6.900%, due 05/01/19 | 4,625,000 | 4,948,750 | |||||||||
8.750%, due 03/15/32 | 1,570,000 | 1,742,700 | |||||||||
10,026,950 | |||||||||||
Transportation—1.08% | |||||||||||
Stena AB 5.875%, due 02/01/194 | EUR | 650,000 | 955,245 | ||||||||
6.125%, due 02/01/174 | EUR | 1,500,000 | 2,164,240 | ||||||||
Ukraine Railways via Shortline PLC 9.500%, due 05/21/182,3 | 2,180,000 | 1,864,336 | |||||||||
4,983,821 |
102
PACE Select Advisors Trust
PACE High Yield Investments
Portfolio of investments—July 31, 2014
Face amount1 | Value | ||||||||||
Corporate bonds—(concluded) | |||||||||||
Transportation services—1.28% | |||||||||||
CHC Helicopter SA 9.250%, due 10/15/20 | 2,740,500 | $ | 2,939,734 | ||||||||
Hapag-Lloyd AG 9.750%, due 10/15/172,3 | 1,280,000 | 1,356,800 | |||||||||
PHI, Inc. 5.250%, due 03/15/192 | 1,400,000 | 1,407,000 | |||||||||
Teekay Corp. 8.500%, due 01/15/20 | 195,000 | 222,788 | |||||||||
5,926,322 | |||||||||||
Wireless telecommunication services—2.64% | |||||||||||
CenturyLink, Inc. 6.750%, due 12/01/23 | 1,315,000 | 1,426,775 | |||||||||
Comunicaciones Celulares SA 6.875%, due 02/06/242 | 2,000,000 | 2,130,000 | |||||||||
MetroPCS Wireless, Inc. 6.625%, due 11/15/20 | 490,000 | 514,500 | |||||||||
Sprint Nextel Corp. 6.000%, due 11/15/22 | 1,250,000 | 1,231,250 | |||||||||
7.875%, due 09/15/232 | 1,150,000 | 1,230,500 | |||||||||
T-Mobile USA, Inc. 6.125%, due 01/15/22 | 1,375,000 | 1,414,531 | |||||||||
6.542%, due 04/28/20 | 1,350,000 | 1,410,750 | |||||||||
ViaSat, Inc. 6.875%, due 06/15/20 | 1,984,000 | 2,132,800 | |||||||||
Windstream Corp. 6.375%, due 08/01/23 | 750,000 | 740,625 | |||||||||
12,231,731 | |||||||||||
Total corporate bonds (cost—$402,180,547) | 426,514,206 | ||||||||||
Loan assignments5—1.50% | |||||||||||
Airlines—0.43% | |||||||||||
US Airways Group, Inc. Term Loan B1 3.500%, due 05/23/19 | 1,980,000 | 1,968,872 | |||||||||
Broadcast—0.24% | |||||||||||
Clear Channel Communications, Inc. Term Loan D 6.905%, due 01/30/19 | 1,136,165 | 1,113,260 | |||||||||
Computer software & services—0.24% | |||||||||||
Sungard Data Systems, Inc. Term Loan E 4.000%, due 03/08/20 | 1,127,229 | 1,127,567 | |||||||||
Gaming—0.38% | |||||||||||
Scientific Games International Term Loan B 4.250%, due 10/18/20 | 1,791,000 | 1,761,449 | |||||||||
Support-services—0.21% | |||||||||||
Kar Auction Services, Inc. Term Loan B1 2.750%, due 03/11/17 | 498,232 | 497,196 |
Face amount1 | Value | ||||||||||
Loan assignments5—(concluded) | |||||||||||
Support-services—(concluded) | |||||||||||
Kar Auction Services, Inc. Term Loan B2 3.500%, due 03/11/21 | 498,232 | $ | 496,114 | ||||||||
993,310 | |||||||||||
Total loan assignments (cost—$6,936,368) | 6,964,458 | ||||||||||
Non-US government obligation—1.89% | |||||||||||
Portugal Obrigacoes do Tesouro OT 4.950%, due 10/25/234 (cost—$6,391,886) | EUR | 5,875,000 | 8,729,606 | ||||||||
Asset-backed securities—0.73% | |||||||||||
Citigroup Mortgage Loan Trust, Inc., Series 2007-AHL2, Class A3A 0.225%, due 05/25/375 | 291,471 | 249,867 | |||||||||
Home Equity Loan Trust, Series 2007-FRE1, Class 2AV1 0.285%, due 04/25/375 | 375,889 | 343,063 | |||||||||
HSI Asset Securitization Corp. Trust, Series 2007-NC1, Class A1 0.255%, due 04/25/375 | 354,716 | 320,870 | |||||||||
Merrill Lynch Mortgage Investors Trust, Series 2007-MLN1, Class A2A 0.265%, due 03/25/375 | 1,042,906 | 626,956 | |||||||||
Morgan Stanley Capital, Inc., Series 2006-HE6, Class A2B 0.255%, due 09/25/365 | 287,066 | 161,638 | |||||||||
Series 2006-HE8, Class A2B 0.255%, due 10/25/365 | 177,166 | 110,091 | |||||||||
Renaissance Home Equity Loan Trust, Series 2007-2, Class AF1 5.893%, due 06/25/377 | 1,439,883 | 804,023 | |||||||||
Soundview Home Equity Loan Trust, Series 2006-EQ2, Class A2 0.265%, due 01/25/375 | 844,183 | 571,759 | |||||||||
Series 2007-OPT1, Class 2A1 0.235%, due 06/25/375 | 286,341 | 170,132 | |||||||||
Total asset-backed securities (cost—$5,152,099) | 3,358,399 | ||||||||||
Collateralized mortgage obligations—0.24% | |||||||||||
Banc of America Mortgage Securities, Series 2005-J, Class 1A1 2.621%, due 11/25/355 | 484,644 | 430,062 | |||||||||
GSAA Home Equity Trust, Series 2006-14, Class A1 0.205%, due 09/25/365 | 707,146 | 390,962 | �� | ||||||||
WaMu Mortgage Pass-Through Certificates, Series 2006-AR14, Class 1A1 2.049%, due 11/25/365 | 306,066 | 269,973 | |||||||||
Total collateralized mortgage obligations (cost—$1,497,856) | 1,090,997 |
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—0.41% | |||||||||||
Automobiles—0.39% | |||||||||||
General Motors Co. | 44,444 | $ | 1,503,096 | ||||||||
Motors Liquidation Co. GUC Trust*,10 | 13,413 | 323,253 | |||||||||
1,826,349 | |||||||||||
Metals—0.02% | |||||||||||
Aleris International, Inc.*,8,9 | 15,446 | 91,132 | |||||||||
Total common stocks (cost—$1,410,502) | 1,917,481 | ||||||||||
Number of warrants | |||||||||||
Warrants*—0.42% | |||||||||||
Automobiles—0.42% | |||||||||||
Charter Communications, Inc., strike price $46.86, expires 11/30/14 | 1,818 | 199,380 | |||||||||
General Motors Co., strike price $10.00, expires 07/10/16 | 51,150 | 1,255,732 | |||||||||
General Motors Co., strike price $18.33, expires 07/10/19 | 29,200 | 493,480 | |||||||||
Total warrants (cost—$1,437,238) | 1,948,592 |
Face amount | Value | ||||||||||
Repurchase agreement—0.80% | |||||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $3,795,637 US Treasury Note, 0.625% due 05/31/17; (value—$3,762,425); proceeds: $3,689,000 (cost—$3,689,000) | $ | 3,689,000 | $ | 3,689,000 | |||||||
Number of shares | |||||||||||
Investment of cash collateral from securities loaned—7.48% | |||||||||||
Money market fund—7.48% | |||||||||||
UBS Private Money Market Fund LLC11 (cost—$34,618,990) | 34,618,990 | 34,618,990 | |||||||||
Total investments (cost—$463,314,486)—105.66% | 488,831,729 | ||||||||||
Liabilities in excess of other assets—(5.66)% | (26,206,335 | ) | |||||||||
Net assets—100.00% | $ | 462,625,394 |
For a listing of defined portfolio acronyms, counterparty acronyms and currency type abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 232.
Aggregate cost for federal income tax purposes was $463,314,486; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 34,084,457 | |||||
Gross unrealized depreciation | (8,567,214 | ) | |||||
Net unrealized appreciation | $ | 25,517,243 |
Futures contracts
Number of contracts | Currency | Expiration date | Proceeds | Current value | Unrealized appreciation | ||||||||||||||||||||||
US Treasury futures sell contracts: | |||||||||||||||||||||||||||
878 | USD | US Treasury Note 2 Year Futures | September 2014 | $ | 192,897,455 | $ | 192,652,407 | $ | 245,048 |
Forward foreign currency contracts
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation | |||||||||||||||
JPMCB | EUR | 33,104,000 | USD | 45,011,674 | 09/18/14 | $ | 677,426 | ||||||||||||
JPMCB | GBP | 20,749,000 | USD | 35,511,706 | 09/18/14 | 493,982 | |||||||||||||
$ | 1,171,408 |
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Portfolio of investments—July 31, 2014
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
Corporate bonds | $ | — | $ | 426,502,911 | $ | 11,295 | $ | 426,514,206 | |||||||||||
Loan assignments | — | 6,964,458 | — | 6,964,458 | |||||||||||||||
Non-US government obligation | — | 8,729,606 | — | 8,729,606 | |||||||||||||||
Asset-backed securities | — | 3,358,399 | — | 3,358,399 | |||||||||||||||
Collateralized mortgage obligations | — | 1,090,997 | — | 1,090,997 | |||||||||||||||
Common stocks | 1,826,349 | — | 91,132 | 1,917,481 | |||||||||||||||
Warrants | 1,948,592 | — | — | 1,948,592 | |||||||||||||||
Repurchase agreement | — | 3,689,000 | — | 3,689,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 34,618,990 | — | 34,618,990 | |||||||||||||||
Futures contracts | 245,048 | — | — | 245,048 | |||||||||||||||
Forward foreign currency contracts | — | 1,171,408 | — | 1,171,408 | |||||||||||||||
Total | $ | 4,019,989 | $ | 486,125,769 | $ | 102,427 | $ | 490,248,185 |
At July 31, 2014, there was a transfer from Level 2 to Level 1 of $199,380 due to valuation being based upon an unadjusted quoted price from a US exchange rather than over-the-counter pricing.
The following is a rollforward of the Portfolio's investments that were valued using unobservable inputs (Level 3) for the year ended July 31, 2014:
Corporate bonds | Common stocks | Total | |||||||||||||
Beginning balance | $ | 13,347 | $ | 274,167 | $ | 287,514 | |||||||||
Purchases | — | — | — | ||||||||||||
Sales | — | — | — | ||||||||||||
Accrued discounts/(premiums) | (96 | ) | — | (96 | ) | ||||||||||
Total realized gain/(loss) | — | — | — | ||||||||||||
Net change in unrealized appreciation/depreciation | (1,956 | ) | (183,035 | ) | (184,991 | ) | |||||||||
Transfers into Level 3 | — | — | — | ||||||||||||
Transfers out of Level 3 | — | — | — | ||||||||||||
Ending balance | $ | 11,295 | $ | 91,132 | $ | 102,427 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investments held at July 31, 2014 was $(184,991).
Issuer breakdown by country or territory of origin (unaudited)
Percentage of total investments | |||||||
United States | 68.3 | % | |||||
Luxembourg | 6.8 | ||||||
United Kingdom | 5.0 | ||||||
Netherlands | 2.7 | ||||||
Canada | 2.2 | ||||||
Portugal | 1.8 | ||||||
Sweden | 1.4 | ||||||
Cayman Islands | 1.1 | ||||||
Ireland | 1.1 |
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Portfolio of investments—July 31, 2014
Issuer breakdown by country or territory of origin (unaudited)—(concluded)
Percentage of total investments | |||||||
Jersey | 1.0 | % | |||||
France | 1.0 | ||||||
Colombia | 0.9 | ||||||
Brazil | 0.8 | ||||||
India | 0.8 | ||||||
Venezuela | 0.7 | ||||||
Germany | 0.6 | ||||||
Belgium | 0.5 | ||||||
Italy | 0.5 | ||||||
British Virgin Islands | 0.4 | ||||||
Georgia | 0.4 | ||||||
Mexico | 0.4 | ||||||
Indonesia | 0.3 | ||||||
Paraguay | 0.3 | ||||||
Spain | 0.3 | ||||||
Australia | 0.3 | ||||||
Finland | 0.2 | ||||||
Austria | 0.2 | ||||||
Marshall Islands | 0.0 | † | |||||
Total | 100.0 | % |
† Amount represents less than 0.05%
Portfolio footnotes
* Non-income producing security.
1 In US Dollars unless otherwise indicated.
2 Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities, which represent 27.07% of net assets as of July 31, 2014, are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers.
3 Security, or portion thereof, was on loan at July 31, 2014.
4 Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. At July 31, 2014, the value of these securities amounted to 12.14% of net assets.
5 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2014 and changes periodically. The maturity date reflects earlier of reset date or stated maturity date.
6 Perpetual investment. Date shown reflects the next call date.
7 Step bond that converts to the noted fixed rate at a designated future date.
8 Security is being fair valued by a valuation committee under the direction of the board of trustees.
9 Illiquid investments as of July 31, 2014.
10 Security exchanged on 04/21/11; position represents remaining escrow balance expected to be received upon finalization of debt restructuring.
11 The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2014. The investment manager earns a management fee from UBS Private Money Market Fund LLC. Please see the Notes to financial statements for further information.
Security description | Value at 07/31/13 | Purchases during the year ended 07/31/14 | Sales during the year ended 07/31/14 | Value at 07/31/14 | Net income earned from affiliate for the year ended 07/31/14 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 44,014,743 | $ | 164,987,370 | $ | 174,383,123 | $ | 34,618,990 | $ | 3,133 |
See accompanying notes to financial statements.
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Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 14.62% before the deduction of the maximum PACE Select program fee.1 In comparison, the Russell 1000 Value Index (the "benchmark") returned 15.47%, and the Lipper Large-Cap Value Funds category posted a median return of 14.62%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 112. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisors' comments2
Please note: On September 11, 2013, Los Angeles Capital Management and Equity Research began serving as a fourth sub-advisor for this Portfolio.
ICAP
Our portion of the Portfolio underperformed the benchmark during the reporting period. Our portion is built on a stock-by-stock basis and reflects the individual companies that we believe have a combination of attractive valuations and catalysts likely to trigger appreciation over a 12-18 month timeframe. In a period characterized by moderate volatility of returns, our performance was primarily driven by several key factors.
Stock selection in the information technology sector detracted from performance as software provider Symantec generated weak results. Symantec was negatively impacted as its sales force reorganization caused a greater than expected disruption of revenues. We sold the position from our portion of the Portfolio. In health care, blood products and medical devices provider Baxter International and large pharmaceutical firm Pfizer detracted from performance. Baxter International lagged due to concerns around increased competition. We sold our position in favor of other stocks with more attractive valuation and investment catalysts. In terms of Pfizer, while sales from
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
PACE Select Advisors Trust – PACE Large Co Value Equity Investments
Investment Sub-Advisors:
Institutional Capital LLC ("ICAP"); Pzena Investment Management, LLC ("Pzena"); Robeco Investment Management, Inc. ("Robeco") and Los Angeles Capital Management and Equity Research, Inc. ("Los Angeles Capital").
Portfolio Managers:
ICAP: Jerrold Senser, Thomas M. Cole, Andrew P. Starr and Matthew T. Swanson;
Pzena: Antonio DeSpirito, III, Richard S. Pzena, John P. Goetz and Benjamin Silver;
Robeco: Mark Donovan, CFA and Dave Pyle, CFA;
Los Angeles Capital: Thomas D. Stevens, CFA, Hal W. Reynolds, CFA and Daniel E. Allen, CFA
Objective:
Capital appreciation and dividend income
Investment process:
ICAP uses its proprietary valuation model to identify large capitalization companies that it believes offer the best relative values and seeks to avoid companies that exhibit excessive deterioration in earnings trends. ICAP looks for companies where there is a catalyst for positive change with potential to produce stock appreciation of 15% or more relative to the market over a 12- to 18-month period.
ICAP also uses internally and externally 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.
(continued on next page)
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Sub-Advisors' comments – continued
new products have been strong, news regarding products in the firm's pipeline has been mixed. We believe the stock is attractively valued, with potential additional restructuring or a split-up of the firm unlocking value for shareholders. Pfizer has also consistently returned cash to shareholders via dividends and stock repurchases. Citigroup, a global bank, also detracted from results, primarily due to the Federal Reserve's rejection of the firm's capital return plan. We believe that the company's renewed focus on efficiency and execution should result in higher earning power and enable the return of capital to shareholders.
Stock selection in the communications sector added value, led by global communications provider Vodafone. Its shares performed well as the company sold its stake in Verizon Wireless and returned a significant portion of the proceeds to shareholders. We subsequently sold our position in Vodafone. In the retail sector, CVS Caremark benefited from strong revenues, driven by increased utilization in its pharmacy benefit manager business. Other individual stocks that added value included media company Time Warner and oilfield services provider Halliburton. Time Warner's shares moved higher as investors learned the company was a potential acquisition candidate. Halliburton benefited from higher than expected drilling activity, with anticipation of firming prices in its pressure pumping business.
Derivatives were not used during the reporting period.
Pzena
Our portion of the Portfolio outperformed the benchmark during the reporting period. Our best performing holdings were in the mature technology, integrated energy and defense contracting industries. This was somewhat offset by weaker performance from our positions in the consumer discretionary and financial services sectors. In technology, Hewlett-Packard, Intel, Microsoft and Oracle all registered double-digit returns, as did integrated energy companies Royal Dutch Shell and BP PLC, as well as energy services provider Baker Hughes. Defense contractor Northrop Grumman proved its resilience in a constrained defense budget environment and was sold from our portion of the Portfolio as it reached our fair value target.
Although our holdings in the consumer discretionary sector posted positive absolute returns, the sector underperformed the benchmark. This was largely attributable to the office supply retailer Staples, the largest detractor during the reporting period. The company is undergoing a difficult
Investment process (concluded)
Pzena follows a disciplined investment process to implement its value philosophy, focusing exclusively on companies that are underperforming their historically demonstrated earnings power. Pzena applies intensive fundamental research to these companies in an effort to determine whether the problems that caused the earnings shortfall are temporary or permanent. The research process incorporates perspectives on valuation, earnings, management strategy, and downside protection.
Robeco invests primarily in a diversified portfolio of common stocks of issuers identified as having attractive value characteristics with strong fundamentals. Robeco establishes a sell discipline for each security in the portfolio based on its target price, and may also sell a security if business fundamentals weaken or if an expected catalyst fails to materialize. The short side of the portfolio is selected by identifying the contra-characteristics that we look for on the long portfolio and covering a short if the stock reaches its fair value or there is a positive change in fundamentals or business momentum.
Los Angeles Capital employs a "long/short" or "130/30" equity strategy. Los Angeles Capital buys securities "long" that it believes will outperform the market or decrease portfolio risk, and sells securities "short" that it believes will underperform the market. Los Angeles Capital uses a proprietary quantitative model that includes fundamental data inputs for a universe of equity securities and, through the use of statistical tools, estimates expected returns based on each security's risk characteristics and the expected return to each characteristic in the current market environment.
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Sub-Advisors' comments – continued
transition in its North American retail operations and is undertaking an aggressive cost cutting and store rationalization program to address the weakness. We continue to hold the position, as we see a favorable risk/return profile at current valuations, with downside protection provided by its healthy online and delivery business.
Over the fiscal year, we reduced exposure to producer durables by selling defense contractors L-3 Communications and Northrop Grumman, as they reached our fair value estimate. We redeployed the proceeds into the consumer discretionary and energy sectors by establishing positions in News Corp. (media), General Motors (autos), TRW (auto parts) and Murphy Oil (energy). Our technology exposure declined slightly as we sold Google when it reached our fair value estimate, and Dell when it was bought-out by Michael Dell. Conversely, we purchased Intel. Our financial weight remained relatively constant and continues to be our largest exposure, as the sector currently has some of the most attractive valuations.
Despite the market's strength, investors continue to be cautious and in search of yield, which has perpetuated a wide valuation spread between higher-priced dividend paying stocks and attractively valued economically-sensitive issues. This has resulted in a sector-skewed opportunity set dominated by financials, mature technology and energy, which comprise our largest exposures. Conversely, consumer staples, utilities and real estate investment trusts (REITs) have little representation in our portion of the Portfolio due to their premium valuations. We continue to be excited about the range of opportunities from a valuation perspective in today's markets and remain encouraged by the amount of value left on the table, particularly in economically sensitive sectors.
Derivatives were not used during the reporting period.
Robeco
Our portion of the Portfolio outperformed the benchmark during the reporting period, driven by sector allocation. From a sector standpoint, positive contributions came from the consumer non-durables, communications, capital goods, consumer durables and utilities. Most of our gains in the consumer non-durables sector were attributable to our avoidance of poorly performing companies, such as Procter & Gamble, a large holding in the benchmark that produced a negative return during the reporting period. In addition to avoiding some poor performers, our large overweight position in Tyson Foods contributed to performance, as its shares rallied sharply during the period. In the communications sector, Internet services company IAC/InterActiveCorp, produced strong returns, and our significant overweight position was rewarded. We closed our position in IAC/InterActiveCorp in April 2014, as the stock reached our price target. In the capital goods sector, our avoidance of General Electric was beneficial, as the stock significantly lagged the benchmark. Our underweight to the relatively underperforming utilities sector also added value on a relative basis, as the sector lagged the benchmark. We largely view utilities companies as unattractive businesses with overpriced valuations.
The basic industries and health care sectors were the primary detractors from results during the reporting period. This was attributed to our overweight positions in some paper products and packaging companies, which performed poorly, as well as our health care pharmaceutical holdings, which did not keep pace with those of the benchmark.
Derivatives were not used during the reporting period.
Los Angeles Capital
Our portion of the Portfolio outperformed the benchmark during the reporting period, from our inception as a sub-advisor on September 11, 2013 through July 31, 2014. Fundamental factors contributed significantly to our portion of the Portfolio's outperformance, whereas industry tilts detracted from results. Overweights to torpedo
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Sub-Advisors' comments – concluded
stocks (those with high expected earnings growth) and stocks with higher earnings yielded added value, reflecting a reward from our GARP (growth at a reasonable price) oriented positioning. Another positive contributor was an overweight to appraisal stocks (stocks with strong breakup values), as merger and acquisition ("M&A") activity was robust during the reporting period. However, some of our more bullish tilts detracted from results, as an overweight to smaller-capitalization companies with higher distress and pension risk was negative for performance. On an industry level, overweights to banks and technology hardware contributed to results, while a net short position in real estate was the primary detractor.
Looking forward, we expect our portion of the Portfolio to maintain its GARP orientation, with a tilt toward stocks with high expected earnings growth and low price-to-earnings multiples, as well as a tilt toward companies with strong breakup values. We also expect to maintain a tilt toward companies with strong earnings qualities and companies that have been repurchasing shares. As of the end of the reporting period, our portion of the Portfolio tilted toward energy, health care and telecommunication services relative to the benchmark, while tilting away from retail, capital goods and materials. We also exhibited a higher beta, but lower price-to-earnings and price-to-book ratios, as well as a higher dividend yield. (Beta is a measure of volatility or risk relative to the market as a whole.) Additionally, our portion of the Portfolio was tilted toward smaller companies.
Derivatives were not used during the reporting period.
Special considerations
The Portfolio may be appropriate for long-term investors seeking capital appreciation and dividend income and who are able to withstand short-term fluctuations in the equity markets in return for potentially higher returns over the long term. The value of the Portfolio changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the companies in whose securities the Portfolio invests. It is important to note that an investment in the Portfolio is only one component of a balanced investment plan.
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Illustration of an assumed investment of $10,000 in Class P shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE Large Co Value Equity Investments Class P shares versus the Russell 1000 Value Index over the 10 years ended July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE Large Co Value Equity Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustration purposes only.
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Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 14.39 | % | 15.40 | % | 7.75 | % | |||||||||
Class C2 | 13.43 | % | 14.46 | % | 6.90 | % | |||||||||
Class Y3 | 14.62 | % | 15.67 | % | 8.08 | % | |||||||||
Class P4 | 14.62 | % | 15.67 | % | 8.02 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 8.11 | % | 14.09 | % | 7.15 | % | |||||||||
Class C2 | 12.43 | % | 14.46 | % | 6.90 | % | |||||||||
Russell 1000 Value Index5 | 15.47 | % | 16.97 | % | 8.00 | % | |||||||||
Lipper Large-Cap Value Funds median | 14.62 | % | 15.02 | % | 7.23 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 21.65 | % | 17.41 | % | 7.64 | % | |||||||||
Class C2 | 20.77 | % | 16.49 | % | 6.79 | % | |||||||||
Class Y3 | 21.97 | % | 17.70 | % | 7.96 | % | |||||||||
Class P4 | 22.00 | % | 17.71 | % | 7.91 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 14.98 | % | 16.09 | % | 7.03 | % | |||||||||
Class C2 | 19.77 | % | 16.49 | % | 6.79 | % |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—1.27% and 1.27%; Class C—2.06% and 2.06%; Class Y—1.03% and 1.03%; and Class P—1.02% and 1.02%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—1.27%; Class C—2.02%; Class Y—1.02%; and Class P—1.02%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.
2 Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
3 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
4 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
5 The Russell 1000 Value Index measures the performance of the large-cap value segment of the US equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values. The Russell 1000 Value Index is constructed to provide a comprehensive and unbiased barometer for the large-cap value segment. The Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect value characteristics. Investors should note that indices do not reflect the deduction of fees and expenses.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
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Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Net assets (mm) | $ | 1,453.9 | |||||
Number of holdings | 476 | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Common stocks | 109.4 | % | |||||
ADRs | 2.0 | ||||||
Investments sold short | (13.2 | ) | |||||
Cash equivalents and other assets less liabilities | 1.8 | ||||||
Total | 100.0 | % |
Top five sectors (long holdings)1 | 07/31/14 | ||||||
Financials | 30.0 | % | |||||
Consumer discretionary | 16.0 | ||||||
Energy | 14.9 | ||||||
Health care | 14.9 | ||||||
Information technology | 14.7 | ||||||
Total | 90.5 | % | |||||
Top ten equity holdings (long holdings)1 | 07/31/14 | ||||||
Exxon Mobil Corp. | 3.9 | % | |||||
Pfizer, Inc. | 3.5 | ||||||
Citigroup, Inc. | 3.1 | ||||||
General Electric Co. | 2.4 | ||||||
Bank of America Corp. | 2.2 | ||||||
Comcast Corp., Class A | 2.1 | ||||||
Capital One Financial Corp. | 2.1 | ||||||
Time Warner, Inc. | 2.1 | ||||||
JPMorgan Chase & Co. | 1.9 | ||||||
Oracle Corp. | 1.9 | ||||||
Total | 25.2 | % |
Top five sectors (short holdings)1 | 07/31/14 | ||||||
Financials | (2.9 | )% | |||||
Consumer discretionary | (2.5 | ) | |||||
Information technology | (1.8 | ) | |||||
Industrials | (1.8 | ) | |||||
Consumer staples | (1.2 | ) | |||||
Total | (10.2 | )% | |||||
Top ten equity holdings (short holdings)1 | 07/31/14 | ||||||
Realty Income Corp. | (0.4 | )% | |||||
Twenty-First Century Fox, Inc., Class A | (0.3 | ) | |||||
Leucadia National Corp. | (0.2 | ) | |||||
Spectra Energy Corp. | (0.2 | ) | |||||
Walgreen Co. | (0.2 | ) | |||||
Air Products & Chemicals, Inc. | (0.2 | ) | |||||
Community Health Systems, Inc. | (0.2 | ) | |||||
Timken Co. | (0.1 | ) | |||||
NiSource, Inc. | (0.1 | ) | |||||
Tyler Technologies, Inc. | (0.1 | ) | |||||
Total | (2.0 | )% |
For a listing of defined portfolio acronyms that are used throughout the Portfolio statistics, please refer to page 232.
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time.
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—111.46% | |||||||||||
Aerospace & defense—3.54% | |||||||||||
Alliant Techsystems, Inc.1 | 8,946 | $ | 1,162,354 | ||||||||
Exelis, Inc. | 63,928 | 1,076,548 | |||||||||
General Dynamics Corp. | 22,124 | 2,583,420 | |||||||||
Honeywell International, Inc.1 | 32,919 | 3,022,952 | |||||||||
Huntington Ingalls Industries, Inc. | 4,520 | 410,958 | |||||||||
L-3 Communications Holdings, Inc.1 | 46,045 | 4,832,883 | |||||||||
Lockheed Martin Corp. | 56,556 | 9,443,155 | |||||||||
Northrop Grumman Corp. | 5,060 | 623,746 | |||||||||
Raytheon Co. | 74,642 | 6,775,254 | |||||||||
The Boeing Co. | 178,713 | 21,531,342 | |||||||||
51,462,612 | |||||||||||
Airlines—0.37% | |||||||||||
Delta Air Lines, Inc.1 | 89,090 | 3,337,312 | |||||||||
United Continental Holdings, Inc.*,1 | 42,911 | 1,990,641 | |||||||||
5,327,953 | |||||||||||
Auto components—2.37% | |||||||||||
Gentex Corp. | 35,940 | 1,038,666 | |||||||||
Johnson Controls, Inc. | 369,107 | 17,436,615 | |||||||||
Lear Corp. | 78,280 | 7,371,627 | |||||||||
TRW Automotive Holdings Corp.* | 84,569 | 8,650,563 | |||||||||
34,497,471 | |||||||||||
Automobiles—1.88% | |||||||||||
Ford Motor Co. | 1,012,172 | 17,227,167 | |||||||||
General Motors Co. | 298,001 | 10,078,394 | |||||||||
27,305,561 | |||||||||||
Banks—5.54% | |||||||||||
BB&T Corp.1 | 201,854 | 7,472,635 | |||||||||
City National Corp. | 24,780 | 1,864,695 | |||||||||
Comerica, Inc. | 116,047 | 5,832,522 | |||||||||
East West Bancorp, Inc. | 70,922 | 2,415,603 | |||||||||
Fifth Third Bancorp | 517,720 | 10,602,906 | |||||||||
PNC Financial Services Group, Inc. | 304,786 | 25,163,132 | |||||||||
Popular, Inc.* | 36,960 | 1,179,024 | |||||||||
Regions Financial Corp. | 119,867 | 1,215,452 | |||||||||
SunTrust Banks, Inc. | 60,638 | 2,307,276 | |||||||||
US Bancorp | 17,792 | 747,798 | |||||||||
Wells Fargo & Co. | 427,987 | 21,784,538 | |||||||||
80,585,581 | |||||||||||
Building products—0.44% | |||||||||||
Masco Corp. | 268,745 | 5,589,896 | |||||||||
Owens Corning | 23,960 | 815,838 | |||||||||
6,405,734 | |||||||||||
Capital markets—4.22% | |||||||||||
BlackRock, Inc. | 1,656 | 504,633 | |||||||||
E*TRADE Financial Corp.* | 18,169 | 381,912 | |||||||||
Franklin Resources, Inc. | 102,024 | 5,524,599 | |||||||||
Invesco Ltd. | 21,080 | 793,240 | |||||||||
Legg Mason, Inc. | 18,396 | 872,890 | |||||||||
Morgan Stanley1 | 317,420 | 10,265,363 | |||||||||
Raymond James Financial, Inc. | 17,948 | 914,451 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Capital markets—(concluded) | |||||||||||
State Street Corp. | 191,652 | $ | 13,499,967 | ||||||||
TD Ameritrade Holding Corp. | 49,517 | 1,590,486 | |||||||||
The Goldman Sachs Group, Inc. | 156,487 | 27,051,908 | |||||||||
61,399,449 | |||||||||||
Chemicals—2.21% | |||||||||||
Cabot Corp. | 10,631 | 556,958 | |||||||||
Huntsman Corp.1 | 176,203 | 4,590,088 | |||||||||
Monsanto Co. | 151,153 | 17,093,893 | |||||||||
Rockwood Holdings, Inc. | 16,140 | 1,274,091 | |||||||||
The Mosaic Co. | 186,316 | 8,591,031 | |||||||||
32,106,061 | |||||||||||
Commercial services & supplies—0.23% | |||||||||||
Corrections Corp. of America | 20,850 | 671,787 | |||||||||
R.R. Donnelley & Sons Co. | 74,800 | 1,298,528 | |||||||||
Waste Management, Inc. | 31,778 | 1,426,514 | |||||||||
3,396,829 | |||||||||||
Communications equipment—2.45% | |||||||||||
Brocade Communications Systems, Inc.1 | 742,714 | 6,840,396 | |||||||||
Cisco Systems, Inc. | 844,621 | 21,309,788 | |||||||||
Harris Corp. | 8,704 | 594,222 | |||||||||
Juniper Networks, Inc.* | 60,200 | 1,417,108 | |||||||||
Motorola Solutions, Inc. | 22,565 | 1,436,939 | |||||||||
QUALCOMM, Inc.1 | 54,434 | 4,011,786 | |||||||||
35,610,239 | |||||||||||
Construction & engineering—0.13% | |||||||||||
AECOM Technology Corp.* | 54,639 | 1,854,994 | |||||||||
Consumer finance—2.45% | |||||||||||
Capital One Financial Corp. | 382,073 | 30,390,086 | |||||||||
Discover Financial Services | 85,617 | 5,227,774 | |||||||||
35,617,860 | |||||||||||
Containers & packaging—0.64% | |||||||||||
Crown Holdings, Inc.*,1 | 59,190 | 2,755,294 | |||||||||
Graphic Packaging Holding Co.*,1 | 126,031 | 1,512,372 | |||||||||
MeadWestvaco Corp. | 29,364 | 1,227,415 | |||||||||
Owens-Illinois, Inc.* | 39,078 | 1,218,843 | |||||||||
Rock-Tenn Co., Class A | 19,955 | 1,984,126 | |||||||||
Sonoco Products Co. | 15,750 | 616,455 | |||||||||
9,314,505 | |||||||||||
Diversified consumer services—0.27% | |||||||||||
Apollo Education Group, Inc.*,1 | 109,514 | 3,058,726 | |||||||||
DeVry Education Group, Inc. | 6,889 | 275,353 | |||||||||
Service Corp. International | 27,177 | 570,717 | |||||||||
3,904,796 | |||||||||||
Diversified financial services—8.27% | |||||||||||
Bank of America Corp.1 | 2,087,664 | 31,836,876 | |||||||||
Citigroup, Inc. | 927,179 | 45,348,325 | |||||||||
CME Group, Inc.1 | 42,588 | 3,148,957 | |||||||||
Intercontinental Exchange, Inc. | 10,281 | 1,976,214 |
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Diversified financial services—(concluded) | |||||||||||
JPMorgan Chase & Co.1 | 487,680 | $ | 28,124,505 | ||||||||
MSCI, Inc.* | 20,807 | 941,517 | |||||||||
The NASDAQ OMX Group, Inc. | 28,439 | 1,199,841 | |||||||||
Voya Financial, Inc. | 204,713 | 7,594,852 | |||||||||
120,171,087 | |||||||||||
Diversified telecommunication services—1.22% | |||||||||||
AT&T, Inc.1 | 215,514 | 7,670,143 | |||||||||
CenturyLink, Inc.1 | 168,489 | 6,611,509 | |||||||||
Level 3 Communications, Inc.* | 6,840 | 300,823 | |||||||||
Verizon Communications, Inc.1 | 62,752 | 3,163,956 | |||||||||
17,746,431 | |||||||||||
Electric utilities—1.59% | |||||||||||
American Electric Power Co., Inc. | 18,286 | 950,689 | |||||||||
Duke Energy Corp. | 13,860 | 999,722 | |||||||||
Entergy Corp. | 29,110 | 2,120,081 | |||||||||
Exelon Corp. | 520,981 | 16,192,090 | |||||||||
FirstEnergy Corp. | 29,290 | 914,141 | |||||||||
The Southern Co. | 31,579 | 1,367,055 | |||||||||
Xcel Energy, Inc. | 20,825 | 641,410 | |||||||||
23,185,188 | |||||||||||
Electrical equipment—0.13% | |||||||||||
Emerson Electric Co. | 30,316 | 1,929,613 | |||||||||
Electronic equipment, instruments & components—1.51% | |||||||||||
Arrow Electronics, Inc.* | 14,030 | 813,039 | |||||||||
AVX Corp. | 27,631 | 375,782 | |||||||||
Corning, Inc. | 272,057 | 5,345,920 | |||||||||
Ingram Micro, Inc., Class A* | 64,365 | 1,847,275 | |||||||||
Jabil Circuit, Inc.1 | 185,266 | 3,697,909 | |||||||||
TE Connectivity Ltd. | 123,912 | 7,668,914 | |||||||||
Tech Data Corp.* | 20,699 | 1,299,690 | |||||||||
Vishay Intertechnology, Inc. | 57,657 | 849,288 | |||||||||
21,897,817 | |||||||||||
Energy equipment & services—2.29% | |||||||||||
Baker Hughes, Inc. | 100,638 | 6,920,875 | |||||||||
Cameron International Corp.* | 133,077 | 9,436,490 | |||||||||
Halliburton Co. | 175,996 | 12,141,964 | |||||||||
Nabors Industries, Ltd. | 10,760 | 292,242 | |||||||||
Patterson-UTI Energy, Inc. | 6,840 | 234,954 | |||||||||
Schlumberger Ltd.1 | 34,572 | 3,747,259 | |||||||||
Seventy Seven Energy, Inc.* | 2,432 | 54,550 | |||||||||
Unit Corp.* | 7,420 | 470,057 | |||||||||
33,298,391 | |||||||||||
Food & staples retailing—2.15% | |||||||||||
CVS Caremark Corp. | 347,970 | 26,570,989 | |||||||||
Rite Aid Corp.* | 246,311 | 1,647,821 | |||||||||
Safeway, Inc. | 35,500 | 1,223,330 | |||||||||
Wal-Mart Stores, Inc. | 23,909 | 1,759,224 | |||||||||
31,201,364 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Food products—0.94% | |||||||||||
Bunge Ltd. | 57,156 | $ | 4,506,179 | ||||||||
Mondelez International, Inc., Class A | 96,429 | 3,471,444 | |||||||||
Pinnacle Foods, Inc. | 8,315 | 250,531 | |||||||||
Tyson Foods, Inc., Class A1 | 147,590 | 5,491,824 | |||||||||
13,719,978 | |||||||||||
Gas utilities—0.26% | |||||||||||
Atmos Energy Corp. | 54,472 | 2,632,087 | |||||||||
Questar Corp. | 49,055 | 1,090,983 | |||||||||
3,723,070 | |||||||||||
Health care equipment & supplies—1.70% | |||||||||||
Alere, Inc.* | 24,604 | 984,160 | |||||||||
Becton, Dickinson and Co. | 49,913 | 5,801,887 | |||||||||
Boston Scientific Corp.*,1 | 207,913 | 2,657,128 | |||||||||
Covidien PLC1 | 51,799 | 4,481,131 | |||||||||
Hologic, Inc.* | 96,371 | 2,512,392 | |||||||||
Medtronic, Inc. | 89,566 | 5,529,805 | |||||||||
Zimmer Holdings, Inc.1 | 27,609 | 2,762,833 | |||||||||
24,729,336 | |||||||||||
Health care providers & services—5.04% | |||||||||||
Cardinal Health, Inc. | 32,382 | 2,320,170 | |||||||||
Cigna Corp. | 121,587 | 10,947,694 | |||||||||
Express Scripts Holding Co.* | 136,204 | 9,486,609 | |||||||||
HCA Holdings, Inc.* | 34,202 | 2,233,733 | |||||||||
Health Net, Inc.* | 44,363 | 1,827,312 | |||||||||
Humana, Inc. | 23,011 | 2,707,244 | |||||||||
Laboratory Corp. of America Holdings*,1 | 92,989 | 9,642,029 | |||||||||
LifePoint Hospitals, Inc.* | 25,787 | 1,849,444 | |||||||||
McKesson Corp.1 | 18,148 | 3,481,875 | |||||||||
Omnicare, Inc. | 69,998 | 4,374,875 | |||||||||
Quest Diagnostics, Inc.1 | 52,390 | 3,201,029 | |||||||||
UnitedHealth Group, Inc. | 221,338 | 17,939,445 | |||||||||
Universal Health Services, Inc., Class B1 | 16,159 | 1,722,549 | |||||||||
WellPoint, Inc. | 14,127 | 1,551,286 | |||||||||
73,285,294 | |||||||||||
Hotels, restaurants & leisure—0.27% | |||||||||||
MGM Resorts International* | 42,710 | 1,146,336 | |||||||||
Six Flags Entertainment Corp.1 | 71,743 | 2,742,018 | |||||||||
3,888,354 | |||||||||||
Household durables—0.15% | |||||||||||
Leggett & Platt, Inc. | 10,756 | 352,797 | |||||||||
Newell Rubbermaid, Inc. | 57,757 | 1,875,947 | |||||||||
2,228,744 | |||||||||||
Household products—0.49% | |||||||||||
The Procter & Gamble Co.1 | 91,884 | 7,104,471 | |||||||||
Independent power and renewable electricity producers—0.71% | |||||||||||
AES Corp.1 | 710,787 | 10,384,598 | |||||||||
Industrial conglomerates—2.40% | |||||||||||
General Electric Co. | 1,388,110 | 34,910,966 |
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Insurance—7.91% | |||||||||||
ACE Ltd. | 187,511 | $ | 18,769,851 | ||||||||
Aflac, Inc.1 | 44,482 | 2,657,355 | |||||||||
Allied World Assurance Co. Holdings AG | 43,960 | 1,583,000 | |||||||||
American International Group, Inc. | 159,172 | 8,273,761 | |||||||||
Assurant, Inc.1 | 42,510 | 2,693,434 | |||||||||
Assured Guaranty Ltd. | 62,850 | 1,402,812 | |||||||||
Axis Capital Holdings Ltd. | 194,131 | 8,376,753 | |||||||||
Berkshire Hathaway, Inc., Class B*,1 | 152,531 | 19,131,963 | |||||||||
Cincinnati Financial Corp. | 11,065 | 509,211 | |||||||||
Endurance Specialty Holdings Ltd. | 9,991 | 528,424 | |||||||||
Lincoln National Corp. | 26,141 | 1,369,527 | |||||||||
MBIA, Inc.* | 59,470 | 569,723 | |||||||||
MetLife, Inc. | 201,434 | 10,595,428 | |||||||||
Old Republic International Corp. | 154,590 | 2,224,550 | |||||||||
PartnerRe Ltd. | 11,314 | 1,180,729 | |||||||||
Prudential Financial, Inc.1 | 54,999 | 4,783,263 | |||||||||
RenaissanceRe Holdings Ltd. | 24,109 | 2,358,101 | |||||||||
The Allstate Corp. | 141,088 | 8,246,594 | |||||||||
The Chubb Corp. | 10,940 | 948,607 | |||||||||
The Hanover Insurance Group, Inc. | 17,732 | 1,025,087 | |||||||||
The Travelers Cos., Inc.1 | 66,949 | 5,995,952 | |||||||||
Unum Group | 75,553 | 2,593,734 | |||||||||
Validus Holdings Ltd. | 100,168 | 3,659,137 | |||||||||
Willis Group Holdings PLC | 135,371 | 5,516,368 | |||||||||
114,993,364 | |||||||||||
Internet & catalog retail—0.05% | |||||||||||
Liberty Interactive Corp., Class A*,1 | 26,199 | 734,882 | |||||||||
IT services—0.96% | |||||||||||
Blackhawk Network Holdings, Inc.* | 5,832 | 162,654 | |||||||||
Computer Sciences Corp. | 68,528 | 4,275,462 | |||||||||
DST Systems, Inc. | 3,350 | 301,735 | |||||||||
Fidelity National Information Services, Inc.1 | 36,683 | 2,068,921 | |||||||||
Global Payments, Inc. | 37,719 | 2,612,795 | |||||||||
Teradata Corp.* | 15,610 | 658,118 | |||||||||
Xerox Corp. | 289,517 | 3,838,995 | |||||||||
13,918,680 | |||||||||||
Life sciences tools & services—0.16% | |||||||||||
Agilent Technologies, Inc. | 8,390 | 470,595 | |||||||||
Charles River Laboratories International, Inc.* | 6,600 | 357,786 | |||||||||
QIAGEN N.V.* | 34,068 | 832,281 | |||||||||
Quintiles Transnational Holdings, Inc.* | 5,091 | 279,649 | |||||||||
Thermo Fisher Scientific, Inc. | 3,460 | 420,390 | |||||||||
2,360,701 | |||||||||||
Machinery—1.76% | |||||||||||
AGCO Corp.1 | 18,128 | 883,015 | |||||||||
Crane Co.1 | 51,825 | 3,555,713 | |||||||||
Dover Corp.1 | 29,427 | 2,523,660 | |||||||||
Joy Global, Inc. | 48,312 | 2,862,969 | |||||||||
Oshkosh Corp. | 37,969 | 1,754,927 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Machinery—(concluded) | |||||||||||
Parker Hannifin Corp. | 92,762 | $ | 10,662,992 | ||||||||
SPX Corp. | 25,995 | 2,576,885 | |||||||||
Stanley Black & Decker, Inc. | 8,523 | 745,336 | |||||||||
25,565,497 | |||||||||||
Media—9.59% | |||||||||||
CBS Corp., Class B | 27,438 | 1,559,302 | |||||||||
Comcast Corp., Class A | 571,891 | 30,727,703 | |||||||||
Gannett Co., Inc. | 17,909 | 585,982 | |||||||||
Liberty Global PLC, Series C* | 191,719 | 7,666,843 | |||||||||
Liberty Media Corp., Class A* | 48,801 | 2,296,087 | |||||||||
Liberty Media Corp., Class C* | 189,802 | 8,920,694 | |||||||||
Live Nation Entertainment, Inc.* | 85,085 | 1,974,823 | |||||||||
News Corp., Class A*,1 | 709,815 | 12,528,235 | |||||||||
Omnicom Group, Inc. | 120,009 | 8,399,430 | |||||||||
Scripps Networks Interactive, Inc., Class A | 23,986 | 1,976,686 | |||||||||
The Interpublic Group Cos., Inc. | 301,258 | 5,937,795 | |||||||||
The Walt Disney Co. | 43,636 | 3,747,460 | |||||||||
Thomson Reuters Corp.2 | 76,886 | 2,907,060 | |||||||||
Time Warner, Inc.1 | 365,194 | 30,318,406 | |||||||||
Time, Inc.*,1 | 22,648 | 545,817 | |||||||||
Viacom, Inc., Class B | 233,144 | 19,274,014 | |||||||||
139,366,337 | |||||||||||
Metals & mining—0.31% | |||||||||||
Alcoa, Inc. | 40,643 | 666,139 | |||||||||
Barrick Gold Corp. | 86,639 | 1,566,433 | |||||||||
Newmont Mining Corp. | 56,286 | 1,402,084 | |||||||||
Steel Dynamics, Inc. | 29,750 | 630,998 | |||||||||
TimkenSteel Corp.* | 6,732 | 292,909 | |||||||||
4,558,563 | |||||||||||
Multi-utilities—0.45% | |||||||||||
Ameren Corp. | 24,874 | 956,405 | |||||||||
Centerpoint Energy, Inc. | 70,568 | 1,716,214 | |||||||||
Dominion Resources, Inc. | 30,635 | 2,072,152 | |||||||||
Public Service Enterprise Group, Inc. | 31,518 | 1,108,488 | |||||||||
Vectren Corp. | 16,280 | 620,105 | |||||||||
6,473,364 | |||||||||||
Multiline retail—0.22% | |||||||||||
Kohl's Corp. | 15,358 | 822,267 | |||||||||
Macy's, Inc. | 39,879 | 2,304,608 | |||||||||
3,126,875 | |||||||||||
Oil, gas & consumable fuels—12.83% | |||||||||||
Apache Corp.1 | 51,435 | 5,280,317 | |||||||||
BP PLC, ADR | 252,291 | 12,354,690 | |||||||||
Chesapeake Energy Corp. | 34,050 | 897,899 | |||||||||
Chevron Corp.1 | 57,632 | 7,448,360 | |||||||||
ConocoPhillips1 | 49,578 | 4,090,185 | |||||||||
CONSOL Energy, Inc.1 | 78,094 | 3,031,609 | |||||||||
Devon Energy Corp.1 | 83,084 | 6,272,842 | |||||||||
Encana Corp. | 298,012 | 6,422,159 | |||||||||
Energen Corp.1 | 27,952 | 2,281,722 |
116
PACE Select Advisors Trust
PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Oil, gas & consumable fuels—(concluded) | |||||||||||
EOG Resources, Inc.1 | 30,777 | $ | 3,368,235 | ||||||||
EQT Corp. | 39,148 | 3,672,865 | |||||||||
Exxon Mobil Corp.1 | 574,474 | 56,838,458 | |||||||||
Hess Corp. | 10,580 | 1,047,208 | |||||||||
Kinder Morgan, Inc. | 23,990 | 863,160 | |||||||||
Marathon Oil Corp. | 48,530 | 1,880,537 | |||||||||
Marathon Petroleum Corp.1 | 64,351 | 5,372,021 | |||||||||
Murphy Oil Corp. | 127,365 | 7,913,187 | |||||||||
Occidental Petroleum Corp. | 120,594 | 11,783,240 | |||||||||
Peabody Energy Corp.2 | 83,389 | 1,265,011 | |||||||||
Phillips 66 | 145,234 | 11,779,930 | |||||||||
QEP Resources, Inc. | 152,301 | 5,033,548 | |||||||||
Royal Dutch Shell PLC, ADR | 163,820 | 13,405,391 | |||||||||
Southwestern Energy Co.* | 197,834 | 8,028,104 | |||||||||
Teekay Corp. | 5,630 | 313,366 | |||||||||
Ultra Petroleum Corp.*,2 | 23,944 | 548,796 | |||||||||
Valero Energy Corp.1 | 72,983 | 3,707,536 | |||||||||
Western Refining, Inc.1 | 40,583 | 1,662,280 | |||||||||
186,562,656 | |||||||||||
Paper & forest products—0.44% | |||||||||||
International Paper Co. | 135,645 | 6,443,138 | |||||||||
Pharmaceuticals—7.96% | |||||||||||
Abbott Laboratories | 144,221 | 6,074,588 | |||||||||
AbbVie, Inc.1 | 60,439 | 3,163,377 | |||||||||
Bristol-Myers Squibb Co. | 338,667 | 17,143,324 | |||||||||
Eli Lilly & Co. | 17,382 | 1,061,345 | |||||||||
Hospira, Inc.* | 12,664 | 702,472 | |||||||||
Johnson & Johnson | 156,228 | 15,636,860 | |||||||||
Merck & Co., Inc. | 67,487 | 3,829,212 | |||||||||
Pfizer, Inc.1 | 1,783,321 | 51,181,313 | |||||||||
Sanofi, ADR | 28,203 | 1,474,171 | |||||||||
Teva Pharmaceutical Industries Ltd., ADR | 48,538 | 2,596,783 | |||||||||
Valeant Pharmaceuticals International, Inc.*,2 | 109,445 | 12,847,749 | |||||||||
115,711,194 | |||||||||||
Professional services—0.09% | |||||||||||
Manpowergroup, Inc.1 | 16,370 | 1,275,059 | |||||||||
Real estate investment trusts—1.36% | |||||||||||
American Capital Agency Corp.1 | 104,955 | 2,426,560 | |||||||||
American Homes 4 Rent, Class A1 | 100,116 | 1,824,114 | |||||||||
Annaly Capital Management, Inc.1 | 148,550 | 1,648,905 | |||||||||
Chimera Investment Corp. | 216,030 | 684,815 | |||||||||
General Growth Properties, Inc. | 150,350 | 3,513,679 | |||||||||
HCP, Inc. | 10,260 | 426,098 | |||||||||
Healthcare Trust of America, Inc., Class A | 35,250 | 419,828 | |||||||||
Hospitality Properties Trust | 25,870 | 739,106 | |||||||||
MFA Financial, Inc. | 219,721 | 1,788,529 | |||||||||
Piedmont Office Realty Trust, Inc. | 26,630 | 517,953 | |||||||||
Public Storage | 5,390 | 924,978 |
Number of shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
Real estate investment trusts—(concluded) | |||||||||||
Retail Properties of America, Inc., Class A | 73,470 | $ | 1,105,723 | ||||||||
Two Harbors Investment Corp. | 219,383 | 2,244,288 | |||||||||
Weingarten Realty Investors | 47,080 | 1,549,403 | |||||||||
19,813,979 | |||||||||||
Real estate management & development—0.16% | |||||||||||
Jones Lang LaSalle, Inc. | 19,377 | 2,396,935 | |||||||||
Road & rail—0.38% | |||||||||||
Con-way, Inc. | 14,095 | 695,589 | |||||||||
Norfolk Southern Corp. | 39,414 | 4,006,827 | |||||||||
Ryder System, Inc. | 9,970 | 858,716 | |||||||||
5,561,132 | |||||||||||
Semiconductors & semiconductor equipment—2.35% | |||||||||||
Broadcom Corp., Class A | 88,340 | 3,379,888 | |||||||||
Intel Corp. | 294,350 | 9,975,522 | |||||||||
Lam Research Corp. | 23,611 | 1,652,770 | |||||||||
Marvell Technology Group Ltd. | 33,700 | 449,558 | |||||||||
ON Semiconductor Corp.* | 285,964 | 2,447,852 | |||||||||
Texas Instruments, Inc. | 352,089 | 16,284,116 | |||||||||
34,189,706 | |||||||||||
Software—3.35% | |||||||||||
Activision Blizzard, Inc.1 | 64,744 | 1,448,971 | |||||||||
Microsoft Corp. | 402,815 | 17,385,495 | |||||||||
Nuance Communications, Inc.* | 72,259 | 1,313,669 | |||||||||
Oracle Corp. | 675,044 | 27,265,027 | |||||||||
Symantec Corp. | 51,936 | 1,228,806 | |||||||||
48,641,968 | |||||||||||
Specialty retail—1.11% | |||||||||||
GameStop Corp., Class A2 | 19,160 | 804,145 | |||||||||
Staples, Inc.2 | 932,924 | 10,812,589 | |||||||||
The Home Depot, Inc.1 | 55,737 | 4,506,337 | |||||||||
16,123,071 | |||||||||||
Technology hardware, storage & peripherals—4.07% | |||||||||||
Apple, Inc.1 | 124,573 | 11,905,442 | |||||||||
EMC Corp. | 336,358 | 9,855,290 | |||||||||
Hewlett-Packard Co.1 | 576,043 | 20,512,891 | |||||||||
NetApp, Inc. | 273,243 | 10,612,758 | |||||||||
Seagate Technology PLC | 46,309 | 2,713,707 | |||||||||
Western Digital Corp.1 | 36,207 | 3,614,545 | |||||||||
59,214,633 | |||||||||||
Thrifts & mortgage finance—0.04% | |||||||||||
TFS Financial Corp.* | 44,773 | 603,540 | |||||||||
Trading companies & distributors—0.00%† | |||||||||||
Veritiv Corp.* | 421 | 16,806 | |||||||||
Wireless telecommunication services—0.05% | |||||||||||
Sprint Corp.* | 97,740 | 718,389 | |||||||||
Total common stocks (cost—$1,416,824,355) | 1,620,564,816 |
117
PACE Select Advisors Trust
PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Repurchase agreement—1.75% | |||||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $26,174,356 US Treasury Note, 0.625% due 05/31/17; (value—$25,945,331); proceeds: $25,439,000 (cost—$25,439,000) | $ | 25,439,000 | $ | 25,439,000 | |||||||
Number of shares | |||||||||||
Investment of cash collateral from securities loaned—0.08% | |||||||||||
Money market fund—0.08% | |||||||||||
UBS Private Money Market Fund LLC3 (cost—$1,130,800) | 1,130,800 | 1,130,800 | |||||||||
Total investments before investments sold short (cost—$1,443,394,155)—113.29% | 1,647,134,616 | ||||||||||
Investments sold short—(13.22)% | |||||||||||
Common stocks—(13.22)% | |||||||||||
Auto components—(0.08)% | |||||||||||
Dorman Products, Inc. | (27,342 | ) | (1,186,096 | ) | |||||||
Banks—(0.85)% | |||||||||||
Bank of Hawaii Corp. | (18,660 | ) | (1,066,979 | ) | |||||||
Community Bank System, Inc. | (29,365 | ) | (1,034,529 | ) | |||||||
CVB Financial Corp. | (56,467 | ) | (863,381 | ) | |||||||
First Financial Bankshares, Inc. | (35,274 | ) | (1,036,350 | ) | |||||||
Signature Bank | (2,060 | ) | (235,643 | ) | |||||||
Synovus Financial Corp. | (44,190 | ) | (1,040,671 | ) | |||||||
TCF Financial Corp. | (87,149 | ) | (1,377,826 | ) | |||||||
Trustmark Corp. | (50,823 | ) | (1,170,454 | ) | |||||||
UMB Financial Corp. | (16,994 | ) | (962,370 | ) | |||||||
United Bankshares, Inc. | (44,479 | ) | (1,426,886 | ) | |||||||
Valley National Bancorp | (81,492 | ) | (780,693 | ) | |||||||
Westamerica BanCorp. | (27,253 | ) | (1,303,239 | ) | |||||||
(12,299,021 | ) | ||||||||||
Beverages—(0.03)% | |||||||||||
Constellation Brands, Inc., Class A | (5,436 | ) | (452,601 | ) | |||||||
Biotechnology—(0.06)% | |||||||||||
Alkermes PLC | (12,470 | ) | (533,217 | ) | |||||||
Alnylam Pharmaceuticals, Inc. | (6,050 | ) | (327,003 | ) | |||||||
(860,220 | ) | ||||||||||
Building products—(0.10)% | |||||||||||
Fortune Brands Home & Security, Inc. | (16,108 | ) | (608,722 | ) | |||||||
USG Corp. | (29,736 | ) | (786,517 | ) | |||||||
(1,395,239 | ) | ||||||||||
Capital markets—(0.21)% | |||||||||||
Eaton Vance Corp. | (29,746 | ) | (1,044,977 | ) | |||||||
Greenhill & Co., Inc. | (28,472 | ) | (1,303,163 | ) | |||||||
TD Ameritrade Holding Corp. | (19,933 | ) | (640,248 | ) | |||||||
(2,988,388 | ) |
Number of shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Chemicals—(0.48)% | |||||||||||
Air Products & Chemicals, Inc. | (18,182 | ) | $ | (2,399,115 | ) | ||||||
E.I. du Pont de Nemours and Co. | (20,958 | ) | (1,347,809 | ) | |||||||
Intrepid Potash, Inc. | (85,344 | ) | (1,263,944 | ) | |||||||
Sigma-Aldrich Corp. | (16,600 | ) | (1,666,972 | ) | |||||||
Westlake Chemical Corp. | (3,620 | ) | (316,352 | ) | |||||||
(6,994,192 | ) | ||||||||||
Commercial services & supplies—(0.35)% | |||||||||||
Interface, Inc. | (68,683 | ) | (1,088,626 | ) | |||||||
Iron Mountain, Inc. | (45,891 | ) | (1,537,808 | ) | |||||||
Mobile Mini, Inc. | (20,065 | ) | (757,654 | ) | |||||||
Ritchie Brothers Auctioneers, Inc. | (31,754 | ) | (769,082 | ) | |||||||
Rollins, Inc. | (33,504 | ) | (948,498 | ) | |||||||
(5,101,668 | ) | ||||||||||
Communications equipment—(0.29)% | |||||||||||
Ciena Corp. | (59,292 | ) | (1,157,973 | ) | |||||||
Infinera Corp. | (115,880 | ) | (1,066,096 | ) | |||||||
JDS Uniphase Corp. | (55,000 | ) | (652,850 | ) | |||||||
ViaSat, Inc. | (24,014 | ) | (1,404,098 | ) | |||||||
(4,281,017 | ) | ||||||||||
Construction & engineering—(0.04)% | |||||||||||
Jacobs Engineering Group, Inc. | (10,684 | ) | (542,854 | ) | |||||||
Construction materials—(0.12)% | |||||||||||
Vulcan Materials Co. | (27,027 | ) | (1,706,215 | ) | |||||||
Consumer finance—(0.06)% | |||||||||||
Navient Corp. | (30,924 | ) | (531,893 | ) | |||||||
SLM Corp. | (30,924 | ) | (273,986 | ) | |||||||
(805,879 | ) | ||||||||||
Containers & packaging—(0.13)% | |||||||||||
Aptargroup, Inc. | (30,867 | ) | (1,885,974 | ) | |||||||
Diversified financial services—(0.27)% | |||||||||||
FNFV Group | (9,242 | ) | (151,206 | ) | |||||||
Leucadia National Corp. | (113,548 | ) | (2,805,771 | ) | |||||||
Voya Financial, Inc. | (27,677 | ) | (1,026,817 | ) | |||||||
(3,983,794 | ) | ||||||||||
Electric utilities—(0.06)% | |||||||||||
PPL Corp. | (24,870 | ) | (820,461 | ) | |||||||
Electrical equipment—(0.06)% | |||||||||||
AZZ, Inc. | (20,834 | ) | (909,196 | ) | |||||||
Electronic equipment, instruments & components—(0.35)% | |||||||||||
Corning, Inc. | (64,352 | ) | (1,264,517 | ) | |||||||
FLIR Systems, Inc. | (13,141 | ) | (437,332 | ) | |||||||
Itron, Inc. | (26,737 | ) | (961,997 | ) | |||||||
Knowles Corp. | (13,470 | ) | (391,708 | ) | |||||||
National Instruments Corp. | (31,053 | ) | (988,727 | ) | |||||||
Trimble Navigation Ltd. | (35,664 | ) | (1,102,018 | ) | |||||||
(5,146,299 | ) |
118
PACE Select Advisors Trust
PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Energy equipment & services—(0.09)% | |||||||||||
Helmerich & Payne, Inc. | (12,504 | ) | $ | (1,328,675 | ) | ||||||
Food & staples retailing—(0.33)% | |||||||||||
Sysco Corp. | (29,480 | ) | (1,052,141 | ) | |||||||
United Natural Foods, Inc. | (20,083 | ) | (1,177,266 | ) | |||||||
Walgreen Co. | (36,883 | ) | (2,536,444 | ) | |||||||
(4,765,851 | ) | ||||||||||
Food products—(0.73)% | |||||||||||
Campbell Soup Co. | (42,260 | ) | (1,757,593 | ) | |||||||
Flowers Foods, Inc. | (89,322 | ) | (1,705,157 | ) | |||||||
Kellogg Co. | (7,050 | ) | (421,801 | ) | |||||||
McCormick & Co., Inc. | (24,578 | ) | (1,616,741 | ) | |||||||
Pilgrim's Pride Corp. | (32,920 | ) | (920,443 | ) | |||||||
Post Holdings, Inc. | (19,009 | ) | (853,884 | ) | |||||||
Snyders-Lance, Inc. | (67,318 | ) | (1,670,160 | ) | |||||||
The Hillshire Brands Co. | (25,450 | ) | (1,597,497 | ) | |||||||
(10,543,276 | ) | ||||||||||
Gas utilities—(0.02)% | |||||||||||
National Fuel Gas Co. | (3,201 | ) | (220,581 | ) | |||||||
Health care equipment & supplies—(0.15)% | |||||||||||
ResMed, Inc. | (18,231 | ) | (943,272 | ) | |||||||
The Cooper Cos., Inc. | (7,428 | ) | (1,195,017 | ) | |||||||
(2,138,289 | ) | ||||||||||
Health care providers & services—(0.28)% | |||||||||||
Community Health Systems, Inc. | (45,460 | ) | (2,168,442 | ) | |||||||
Health Net, Inc. | (32,303 | ) | (1,330,561 | ) | |||||||
VCA, Inc. | (16,390 | ) | (611,183 | ) | |||||||
(4,110,186 | ) | ||||||||||
Health care technology—(0.04)% | |||||||||||
athenahealth, Inc. | (5,163 | ) | (642,277 | ) | |||||||
Hotels, restaurants & leisure—(0.48)% | |||||||||||
Bob Evans Farms, Inc. | (30,220 | ) | (1,435,752 | ) | |||||||
Buffalo Wild Wings, Inc. | (7,366 | ) | (1,070,427 | ) | |||||||
International Game Technology | (61,130 | ) | (1,034,931 | ) | |||||||
Krispy Kreme Doughnuts, Inc. | (47,201 | ) | (722,647 | ) | |||||||
Panera Bread Co., Class A | (8,630 | ) | (1,271,199 | ) | |||||||
The Cheesecake Factory, Inc. | (35,213 | ) | (1,509,934 | ) | |||||||
(7,044,890 | ) | ||||||||||
Household durables—(0.23)% | |||||||||||
Lennar Corp., Class A | (6,760 | ) | (244,915 | ) | |||||||
PulteGroup, Inc. | (100,780 | ) | (1,778,767 | ) | |||||||
Toll Brothers, Inc. | (39,050 | ) | (1,276,544 | ) | |||||||
(3,300,226 | ) | ||||||||||
Household products—(0.10)% | |||||||||||
The Clorox Co. | (16,514 | ) | (1,434,571 | ) | |||||||
Independent power and renewable electricity producers—(0.10)% | |||||||||||
NRG Energy, Inc. | (48,440 | ) | (1,499,702 | ) |
Number of shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Industrial conglomerates—(0.08)% | |||||||||||
Raven Industries, Inc. | (28,038 | ) | $ | (781,419 | ) | ||||||
Roper Industries, Inc. | (3,060 | ) | (440,854 | ) | |||||||
(1,222,273 | ) | ||||||||||
Insurance—(0.38)% | |||||||||||
American Financial Group, Inc. | (34,600 | ) | (1,937,254 | ) | |||||||
Arthur J. Gallagher & Co. | (5,130 | ) | (230,850 | ) | |||||||
Axis Capital Holdings Ltd. | (14,920 | ) | (643,798 | ) | |||||||
Brown & Brown, Inc. | (36,000 | ) | (1,108,080 | ) | |||||||
FNF Group | (27,730 | ) | (751,761 | ) | |||||||
Genworth Financial, Inc., Class A | (37,710 | ) | (494,001 | ) | |||||||
XL Group PLC | (11,380 | ) | (366,891 | ) | |||||||
(5,532,635 | ) | ||||||||||
Internet & catalog retail—(0.01)% | |||||||||||
HomeAway, Inc. | (4,200 | ) | (145,824 | ) | |||||||
Internet software & services—(0.12)% | |||||||||||
AOL, Inc. | (11,310 | ) | (436,001 | ) | |||||||
Equinix, Inc. | (6,247 | ) | (1,340,106 | ) | |||||||
(1,776,107 | ) | ||||||||||
IT services—(0.21)% | |||||||||||
Paychex, Inc. | (19,498 | ) | (799,613 | ) | |||||||
Total System Services, Inc. | (21,737 | ) | (695,584 | ) | |||||||
Wipro Ltd., ADR | (136,270 | ) | (1,573,919 | ) | |||||||
(3,069,116 | ) | ||||||||||
Machinery—(0.47)% | |||||||||||
Kennametal, Inc. | (23,912 | ) | (1,010,999 | ) | |||||||
Lincoln Electric Holdings, Inc. | (8,200 | ) | (544,808 | ) | |||||||
Pentair PLC | (10,267 | ) | (657,807 | ) | |||||||
Terex Corp. | (23,650 | ) | (816,161 | ) | |||||||
Timken Co. | (45,670 | ) | (2,023,181 | ) | |||||||
Valmont Industries, Inc. | (12,630 | ) | (1,839,307 | ) | |||||||
(6,892,263 | ) | ||||||||||
Media—(0.62)% | |||||||||||
Liberty Media Corp., Class A | (12,420 | ) | (584,361 | ) | |||||||
Liberty Media Corp., Class C | (24,840 | ) | (1,167,480 | ) | |||||||
Sirius XM Holdings, Inc. | (559,827 | ) | (1,892,215 | ) | |||||||
The Madison Square Garden Co., Class A | (23,340 | ) | (1,384,996 | ) | |||||||
Twenty-First Century Fox, Inc., Class A | (128,052 | ) | (4,056,687 | ) | |||||||
(9,085,739 | ) | ||||||||||
Metals & mining—(0.18)% | |||||||||||
Freeport-McMoRan, Inc. | (26,499 | ) | (986,293 | ) | |||||||
Royal Gold, Inc. | (21,824 | ) | (1,649,239 | ) | |||||||
(2,635,532 | ) | ||||||||||
Multi-utilities—(0.20)% | |||||||||||
Integrys Energy Group, Inc. | (14,370 | ) | (942,097 | ) | |||||||
NiSource, Inc. | (52,304 | ) | (1,970,815 | ) | |||||||
(2,912,912 | ) |
119
PACE Select Advisors Trust
PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Multiline retail—(0.04)% | |||||||||||
Target Corp. | (8,660 | ) | $ | (516,049 | ) | ||||||
Oil, gas & consumable fuels—(0.86)% | |||||||||||
Carrizo Oil & Gas, Inc. | (10,687 | ) | (656,289 | ) | |||||||
Cobalt International Energy, Inc. | (19,360 | ) | (310,147 | ) | |||||||
ConocoPhillips | (19,776 | ) | (1,631,520 | ) | |||||||
Continental Resources, Inc. | (12,264 | ) | (1,800,110 | ) | |||||||
Energen Corp. | (4,887 | ) | (398,926 | ) | |||||||
Gulfport Energy Corp. | (9,778 | ) | (522,243 | ) | |||||||
Matador Resources Co. | (49,040 | ) | (1,326,042 | ) | |||||||
ONEOK, Inc. | (7,930 | ) | (510,930 | ) | |||||||
QEP Resources, Inc. | (11,660 | ) | (385,363 | ) | |||||||
Spectra Energy Corp. | (66,530 | ) | (2,722,408 | ) | |||||||
Tesoro Corp. | (9,510 | ) | (585,245 | ) | |||||||
The Williams Cos., Inc. | (14,810 | ) | (838,690 | ) | |||||||
Ultra Petroleum Corp. | (32,632 | ) | (747,925 | ) | |||||||
(12,435,838 | ) | ||||||||||
Professional services—(0.16)% | |||||||||||
IHS, Inc., Class A | (5,431 | ) | (713,471 | ) | |||||||
Nielsen NV | (19,630 | ) | (905,139 | ) | |||||||
Towers Watson & Co., Class A | (6,760 | ) | (689,655 | ) | |||||||
(2,308,265 | ) | ||||||||||
Real estate investment trusts—(1.08)% | |||||||||||
AvalonBay Communities, Inc. | (11,992 | ) | (1,775,775 | ) | |||||||
Corporate Office Properties Trust | (13,449 | ) | (381,548 | ) | |||||||
Gaming and Leisure Properties, Inc. | (32,491 | ) | (1,093,972 | ) | |||||||
HCP, Inc. | (26,530 | ) | (1,101,791 | ) | |||||||
Health Care REIT, Inc. | (23,540 | ) | (1,497,850 | ) | |||||||
Omega Healthcare Investors, Inc. | (28,741 | ) | (1,050,196 | ) | |||||||
Prologis, Inc. | (20,413 | ) | (833,055 | ) | |||||||
Realty Income Corp. | (118,924 | ) | (5,119,678 | ) | |||||||
Rouse Properties, Inc. | (50,825 | ) | (861,484 | ) | |||||||
SL Green Realty Corp. | (7,784 | ) | (839,115 | ) | |||||||
UDR, Inc. | (38,409 | ) | (1,116,934 | ) | |||||||
(15,671,398 | ) | ||||||||||
Real estate management & development—(0.03)% | |||||||||||
The Howard Hughes Corp. | (3,120 | ) | (453,710 | ) | |||||||
Road & rail—(0.31)% | |||||||||||
Genesee & Wyoming, Inc., Class A | (6,340 | ) | (632,288 | ) | |||||||
J.B. Hunt Transport Services, Inc. | (15,707 | ) | (1,213,523 | ) | |||||||
Kansas City Southern | (12,605 | ) | (1,374,701 | ) | |||||||
Ryder System, Inc. | (15,761 | ) | (1,357,495 | ) | |||||||
(4,578,007 | ) | ||||||||||
Semiconductors & semiconductor equipment—(0.17)% | |||||||||||
Analog Devices, Inc. | (14,342 | ) | (711,793 | ) | |||||||
Cree, Inc. | (22,300 | ) | (1,053,229 | ) | |||||||
SunEdison, Inc. | (33,990 | ) | (679,800 | ) | |||||||
(2,444,822 | ) |
Number of shares | Value | ||||||||||
Investments sold short—(concluded) | |||||||||||
Common stocks—(concluded) | |||||||||||
Software—(0.59)% | |||||||||||
Blackbaud, Inc. | (25,522 | ) | $ | (936,913 | ) | ||||||
Concur Technologies, Inc. | (12,838 | ) | (1,193,421 | ) | |||||||
Electronic Arts, Inc. | (12,050 | ) | (404,880 | ) | |||||||
NetSuite, Inc. | (17,684 | ) | (1,490,938 | ) | |||||||
Rovi Corp. | (10,930 | ) | (255,434 | ) | |||||||
Salesforce.com, Inc. | (19,813 | ) | (1,074,855 | ) | |||||||
The Ultimate Software Group, Inc. | (7,968 | ) | (1,074,963 | ) | |||||||
Tyler Technologies, Inc. | (21,680 | ) | (1,967,026 | ) | |||||||
Zynga, Inc., Class A | (85,289 | ) | (249,044 | ) | |||||||
(8,647,474 | ) | ||||||||||
Specialty retail—(0.84)% | |||||||||||
Abercrombie & Fitch Co., Class A | (19,325 | ) | (760,246 | ) | |||||||
American Eagle Outfitters, Inc. | (22,389 | ) | (238,667 | ) | |||||||
AutoNation, Inc. | (18,212 | ) | (971,064 | ) | |||||||
Cabela's, Inc. | (20,178 | ) | (1,177,588 | ) | |||||||
CarMax, Inc. | (37,288 | ) | (1,820,027 | ) | |||||||
Foot Locker, Inc. | (11,910 | ) | (566,082 | ) | |||||||
L Brands, Inc. | (29,651 | ) | (1,718,869 | ) | |||||||
Monro Muffler Brake, Inc. | (31,803 | ) | (1,615,274 | ) | |||||||
Restoration Hardware Holdings, Inc. | (7,864 | ) | (643,197 | ) | |||||||
Sally Beauty Holdings, Inc. | (48,217 | ) | (1,251,231 | ) | |||||||
Signet Jewelers Ltd. | (14,965 | ) | (1,523,287 | ) | |||||||
(12,285,532 | ) | ||||||||||
Technology hardware, storage & peripherals—(0.04)% | |||||||||||
SanDisk Corp. | (6,001 | ) | (550,352 | ) | |||||||
Textiles, apparel & luxury goods—(0.23)% | |||||||||||
PVH Corp. | (11,789 | ) | (1,298,912 | ) | |||||||
Ralph Lauren Corp. | (4,840 | ) | (754,362 | ) | |||||||
Under Armour, Inc., Class A | (19,685 | ) | (1,313,974 | ) | |||||||
(3,367,248 | ) | ||||||||||
Trading companies & distributors—(0.24)% | |||||||||||
Fastenal Co. | (37,207 | ) | (1,650,130 | ) | |||||||
MRC Global, Inc. | (27,794 | ) | (745,713 | ) | |||||||
W.W. Grainger, Inc. | (4,484 | ) | (1,054,413 | ) | |||||||
(3,450,256 | ) | ||||||||||
Water utilities—(0.02)% | |||||||||||
Aqua America, Inc. | (13,075 | ) | (310,924 | ) | |||||||
Wireless telecommunication services—(0.25)% | |||||||||||
Sprint Corp. | (191,487 | ) | (1,407,429 | ) | |||||||
T-Mobile US, Inc. | (26,893 | ) | (885,855 | ) | |||||||
Telephone & Data Systems, Inc. | (39,000 | ) | (975,000 | ) | |||||||
US Cellular Corp. | (7,740 | ) | (302,557 | ) | |||||||
(3,570,841 | ) | ||||||||||
Total investments sold short (proceeds—$194,247,057) | (192,250,755 | ) | |||||||||
Liabilities in excess of other assets—(0.07)% | (962,257 | ) | |||||||||
Net assets—100.00% | $ | 1,453,921,604 |
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Portfolio of investments—July 31, 2014
For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 232.
Aggregate cost for federal income tax purposes before investments sold short was $1,451,675,222; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 209,653,980 | |||||
Gross unrealized depreciation | (14,194,586 | ) | |||||
Net unrealized appreciation | $ | 195,459,394 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
Common stocks | $ | 1,620,564,816 | $ | — | $ | — | $ | 1,620,564,816 | |||||||||||
Repurchase agreement | — | 25,439,000 | — | 25,439,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 1,130,800 | — | 1,130,800 | |||||||||||||||
Total | $ | 1,620,564,816 | $ | 26,569,800 | $ | — | $ | 1,647,134,616 | |||||||||||
Liabilities | |||||||||||||||||||
Investments sold short | $ | (192,250,755 | ) | $ | — | $ | — | $ | (192,250,755 | ) |
At July 31, 2014, there were no transfers between Level 1 and Level 2.
Issuer breakdown by country or territory of origin (unaudited)
Investments before investments sold short | Percentage of total investments before investments sold short | ||||||
United States | 92.0 | % | |||||
United Kingdom | 2.0 | ||||||
Switzerland | 1.7 | ||||||
Canada | 1.5 | ||||||
Bermuda | 1.4 | ||||||
Ireland | 0.8 | ||||||
Curacao | 0.2 | ||||||
Israel | 0.1 | ||||||
France | 0.1 | ||||||
Puerto Rico | 0.1 | ||||||
Netherlands | 0.1 | ||||||
Marshall Islands | 0.0 | † | |||||
Total | 100.0 | % | |||||
Investments sold short | Percentage of total investments sold short | ||||||
United States | (96.0 | )% | |||||
Bermuda | (1.1 | ) | |||||
Canada | (0.8 | ) | |||||
Ireland | (0.8 | ) | |||||
India | (0.8 | ) | |||||
Netherlands | (0.5 | ) | |||||
Total | (100.0 | )% |
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Portfolio of investments—July 31, 2014
Portfolio footnotes
* Non-income producing security.
† Amount represents less than 0.05%.
1 Security, or portion thereof, pledged as collateral for investments sold short.
2 Security, or portion thereof, was on loan at July 31, 2014.
3 The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2014. The investment manager earns a management fee from UBS Private Money Market Fund LLC. Please see the Notes to financial statements for further information.
Security description | Value at 07/31/13 | Purchases during the year ended 07/31/14 | Sales during the year ended 07/31/14 | Value at 07/31/14 | Net income earned from affiliate for the year ended 07/31/14 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 2,009,700 | $ | 200,998,057 | $ | 201,876,957 | $ | 1,130,800 | $ | 6,330 |
See accompanying notes to financial statements.
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Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 19.87% before the deduction of the maximum PACE Select program fee.1 In comparison, the Russell 1000 Growth Index (the "benchmark") returned 18.69%, and the Lipper Large-Cap Growth Funds category posted a median return of 18.21%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 127. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisors' comments2
Jackson Square (formerly known as Delaware Investment Fund Advisers)
Our portion of the Portfolio outperformed its benchmark during the reporting period. Strong results in the consumer staples and health care sectors helped overcome weak performance in the materials and processing, and financial services sectors.
In terms of individual holdings, top contributors to performance included Allergan, EOG Resources and Adobe Systems. Shares of Allergan appreciated sharply in April 2014, as Canadian pharmaceutical company Valeant Pharmaceuticals International made a rejected offer to acquire the company. Since making its initial offer, Valeant has increased its bid and it remains to be seen how aggressively Valeant will pursue an acquisition of Allergan. Currently, our discussions are focused on what we believe the fair value is for Allergan as a stand-alone business, as well as the potential value of a combined Valeant-Allergan entity.
The largest detractors from performance were Teradata, Kinder Morgan and Syngenta. Shares of Teradata declined amid growing concerns related to increased competition and the company's ability to further expand margins in the face of continued competitive pricing pressure. While we believe the database warehousing market is large and growing, and can
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
PACE Select Advisors Trust – PACE Large Co Growth Equity Investments
Investment Sub-Advisors:
Jackson Square Partners, LLC ("Jackson Square"); Roxbury Capital Management, LLC ("Roxbury") and J.P. Morgan Investment Management Inc. ("J.P. Morgan")
Portfolio Managers:
Jackson Square: Jeffrey Van Harte, Christopher Bonavico, Daniel Prislin and Christopher Ericksen;
Roxbury: Brian L. Massey and Silas A. Myers
J.P. Morgan: Gregory B. Luttrell
Objective:
Capital appreciation
Investment process:
Jackson Square invests primarily in common stocks of large capitalization growth-oriented companies that Jackson Square believes have long-term capital appreciation potential and are expected to grow faster than the US economy. Using a bottom-up approach, Jackson Square seeks to select securities of companies that it believes have attractive large end-market potential, dominant business models and strong free cash flow generation that are attractively priced compared to the intrinsic value of the securities. Jackson Square also considers a company's operational efficiencies, management's plans for capital allocation and the company's shareholder orientation.
Roxbury employs a bottom-up approach to stock selection, seeking high quality growth companies whose stocks are trading at discounts to fair value. Roxbury looks for companies with sustainable competitive advantages and opportunities to grow and reinvest capital at higher rates than their cost of capital. Roxbury also seeks to invest
(continued on next page)
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Sub-Advisors' comments – continued
likely accommodate several competitors, we feel Teradata may experience some competitive headwinds going forward. While we continue to believe in the company's long term potential, we decided to exit our position in Teradata due to its changing risk/reward profile, and allocated the proceeds to more attractive ideas. During the reporting period, we held a relatively small weighting in Kinder Morgan warrants as a result of the company's acquisition of El Paso Corporation, a previous holding of ours. We ultimately sold our position in the warrants, along with our position in the Kinder Morgan common stock.
Derivatives were not used during the reporting period.
Roxbury
Our portion of the Portfolio outperformed the benchmark during the reporting period. Every sector within the benchmark posted positive absolute returns during the period, with performance and stock selection in consumer discretionary and health care contributing the most to our results. Energy and information technology contributed the least to our portion of the Portfolio's return.
During the reporting period, our health care holdings appreciated sharply, as one of our positions, Allergan, became the subject of a proposed merger with Valeant Pharmaceuticals International. Overall, our holdings in the consumer discretionary sector rallied, with positions in Comcast, Nike and Starbucks contributing solidly to results during the reporting period. Although energy posted strong results for the 12 months ended July 31, 2014, stock selection detracted from relative performance. Stock selection in the information technology sector was underweight versus the benchmark, but negatively impacted performance.
The returns over our time horizon (three to five years) are based on the average upside to fair value and the expected growth of our companies' intrinsic value. Our average discount to intrinsic value is currently less than 10%, the lowest since our inception. With the discount between current prices and fair value prices unusually compressed, we don't expect appreciation in the next five years to achieve the above-average returns we've enjoyed over the last five years, when the starting discount to intrinsic value exceeded 70%, and the economy and investor sentiment was moribund. Therefore, we would anticipate returns to more closely correlate with our companies' per share intrinsic value growth, and expect only a modest return from the discounted price.
Derivatives were not a part of our investment strategy during the reporting period.
J.P. Morgan
Our portion of the Portfolio underperformed the benchmark during the reporting period. Much of our underperformance occurred in March and April 2014, as a sharp shift in investor sentiment led to a significant sell-off in higher growth stocks. We believe the sell-off was technical in nature, not tied to company fundamentals and, as such, our portion of the Portfolio has not undergone any wholesale changes. Stock selection in the information
Investment process (concluded)
in companies with management teams with a proven ability to allocate capital in ways that maximize shareholder value. Roxbury's investment approach seeks to balance both the protection of capital as well as the appreciation potential of a stock.
J.P. Morgan invests primarily in a focused portfolio of equity securities of large capitalization companies. J.P. Morgan considers large capitalization companies to be companies with market capitalizations equal to those within the universe of the Russell 1000 Growth Index at the time of purchase. Although J.P. Morgan will invest primarily in equity securities of U.S. companies, it may invest in foreign securities, including depositary receipts. J.P. Morgan utilizes a combination of qualitative analysis and quantitative metrics in order to seek to achieve target returns which are higher than those of the fund's benchmark while attempting to maintain a moderate risk profile.
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Sub-Advisors' comments – concluded
technology and energy sectors were the largest detractors from performance, while our holdings in the health care and consumer discretionary sectors contributed to results.
At the individual stock level, not owning consumer electronics company Apple, as well as an overweight position in data analytics company Teradata, were the top detractors from relative performance. On the positive side, overweight positions in social media network Facebook and online travel company Priceline Group, were the largest contributors to performance. We sold Teradata prior to the end of the reporting period, as the company no longer meets the fundamental criteria we look for in our holdings. We never held a position in Apple during the period.
We continue to focus on identifying companies that possess these three key characteristics: 1) a large addressable market undergoing meaningful change, 2) a sustainable competitive advantage with strong execution and 3) positive earnings revisions. We continue to find attractive opportunities in financial services, which remains our largest overweight exposure. We are also overweight the health care sector, where particularly we are finding investment opportunities in biotechnology. Our greatest underweights are in consumer staples and information technology, where our exposure has declined due to some recent eliminations from our portion of the Portfolio.
Derivatives were not a part of our investment strategy during the reporting period.
Special considerations
The Portfolio may be appropriate for long-term investors seeking capital appreciation who are able to withstand short-term fluctuations in the equity markets in return for potentially higher returns over the long term. The value of the Portfolio changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the companies in whose securities the Portfolio invests. Also, to the extent the Portfolio invests a large portion of its assets in a particular sector, the Portfolio may experience greater volatility and risk of loss due to unfavorable developments in that sector. It is important to note that an investment in the Portfolio is only one component of a balanced investment plan.
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Illustration of an assumed investment of $10,000 in Class P shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE Large Co Growth Equity Investments Class P shares versus the Russell 1000 Growth Index over the 10 years ended July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE Large Co Growth Equity Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustration purposes only.
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Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 19.60 | % | 16.14 | % | 7.99 | % | |||||||||
Class C2 | 18.54 | % | 15.18 | % | 7.10 | % | |||||||||
Class Y3 | 19.86 | % | 16.45 | % | 8.35 | % | |||||||||
Class P4 | 19.87 | % | 16.46 | % | 8.30 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 13.01 | % | 14.83 | % | 7.38 | % | |||||||||
Class C2 | 17.54 | % | 15.18 | % | 7.10 | % | |||||||||
Russell 1000 Growth Index5 | 18.69 | % | 17.25 | % | 8.66 | % | |||||||||
Lipper Large-Cap Growth Funds median | 18.21 | % | 15.57 | % | 8.01 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 27.74 | % | 17.99 | % | 7.52 | % | |||||||||
Class C2 | 26.61 | % | 17.00 | % | 6.63 | % | |||||||||
Class Y3 | 28.05 | % | 18.31 | % | 7.88 | % | |||||||||
Class P4 | 28.06 | % | 18.29 | % | 7.82 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 20.69 | % | 16.66 | % | 6.91 | % | |||||||||
Class C2 | 25.61 | % | 17.00 | % | 6.63 | % |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—1.21% and 1.21%; Class C—2.05% and 2.05%; Class Y—0.96% and 0.96%; and Class P—0.95% and 0.95%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—1.30%; Class C—2.05%; Class Y—1.05%; and Class P—1.05%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.
2 Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
3 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
4 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
5 The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the US equity universe. It includes those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Growth Index is constructed to provide a comprehensive and unbiased barometer for the large-cap growth segment. The Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect growth characteristics. Investors should note that indices do not reflect the deduction of fees and expenses.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
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Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Net assets (mm) | $ | 1,377.8 | |||||
Number of holdings | 68 | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Common stocks and warrants | 92.7 | % | |||||
ADRs | 3.1 | ||||||
Cash equivalents and other assets less liabilities | 4.2 | ||||||
Total | 100.0 | % | |||||
Top five sectors1 | 07/31/14 | ||||||
Information technology | 33.0 | % | |||||
Consumer discretionary | 15.5 | ||||||
Health care | 12.2 | ||||||
Financials | 12.0 | ||||||
Industrials | 8.9 | ||||||
Total | 81.6 | % | |||||
Top ten equity holdings1 | 07/31/14 | ||||||
QUALCOMM, Inc. | 3.5 | % | |||||
Berkshire Hathaway, Inc., Class B | 3.2 | ||||||
American Tower Corp. | 3.1 | ||||||
Allergan, Inc. | 3.1 | ||||||
Celgene Corp. | 2.9 | ||||||
Intuit, Inc. | 2.8 | ||||||
Google, Inc., Class A | 2.8 | ||||||
MasterCard, Inc., Class A | 2.8 | ||||||
Honeywell International, Inc. | 2.7 | ||||||
Adobe Systems, Inc. | 2.6 | ||||||
Total | 29.5 | % |
For a listing of defined portfolio acronyms that are used throughout the Portfolio statistics, please refer to page 232.
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time.
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—95.76% | |||||||||||
Aerospace & defense—7.31% | |||||||||||
B/E Aerospace, Inc.* | 335,222 | $ | 28,540,801 | ||||||||
Honeywell International, Inc. | 398,694 | 36,612,070 | |||||||||
TransDigm Group, Inc. | 212,042 | 35,606,093 | |||||||||
100,758,964 | |||||||||||
Biotechnology—5.40% | |||||||||||
Alexion Pharmaceuticals, Inc.* | 28,664 | 4,557,289 | |||||||||
Biogen Idec, Inc.* | 33,151 | 11,085,363 | |||||||||
Celgene Corp.* | 455,264 | 39,676,258 | |||||||||
Gilead Sciences, Inc.* | 154,665 | 14,159,581 | |||||||||
Vertex Pharmaceuticals, Inc.* | 55,211 | 4,908,810 | |||||||||
74,387,301 | |||||||||||
Capital markets—1.18% | |||||||||||
TD Ameritrade Holding Corp. | 321,848 | 10,337,758 | |||||||||
The Goldman Sachs Group, Inc. | 34,326 | 5,933,935 | |||||||||
16,271,693 | |||||||||||
Chemicals—1.03% | |||||||||||
Monsanto Co. | 54,846 | 6,202,534 | |||||||||
Syngenta AG, ADR | 112,900 | 8,009,126 | |||||||||
14,211,660 | |||||||||||
Communications equipment—3.48% | |||||||||||
QUALCOMM, Inc. | 650,452 | 47,938,312 | |||||||||
Diversified financial services—2.27% | |||||||||||
CME Group, Inc. | 145,975 | 10,793,391 | |||||||||
Intercontinental Exchange Group, Inc. | 106,391 | 20,450,478 | |||||||||
31,243,869 | |||||||||||
Electrical equipment—0.22% | |||||||||||
Rockwell Automation, Inc. | 26,958 | 3,010,130 | |||||||||
Energy equipment & services—0.76% | |||||||||||
Schlumberger Ltd. | 96,240 | 10,431,454 | |||||||||
Food & staples retailing—2.38% | |||||||||||
CVS Caremark Corp. | 79,600 | 6,078,256 | |||||||||
Walgreen Co. | 387,925 | 26,677,602 | |||||||||
32,755,858 | |||||||||||
Food products—2.12% | |||||||||||
Mondelez International, Inc., Class A | 810,866 | 29,191,176 | |||||||||
Hotels, restaurants & leisure—3.23% | |||||||||||
Las Vegas Sands Corp. | 134,200 | 9,910,670 | |||||||||
Starbucks Corp. | 446,231 | 34,663,224 | |||||||||
44,573,894 | |||||||||||
Insurance—5.39% | |||||||||||
Berkshire Hathaway, Inc., Class B* | 352,176 | 44,173,436 | |||||||||
Markel Corp.* | 44,083 | 27,865,305 | |||||||||
The Progressive Corp. | 92,583 | 2,170,145 | |||||||||
74,208,886 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Internet & catalog retail—4.83% | |||||||||||
Amazon.com, Inc.* | 27,869 | $ | 8,722,718 | ||||||||
Liberty Interactive Corp., Class A* | 782,700 | 21,954,735 | |||||||||
priceline.com, Inc.* | 28,859 | 35,855,865 | |||||||||
66,533,318 | |||||||||||
Internet software & services—10.33% | |||||||||||
Baidu, Inc., ADR* | 60,825 | 13,141,241 | |||||||||
eBay, Inc.* | 437,275 | 23,088,120 | |||||||||
Equinix, Inc.* | 85,900 | 18,427,268 | |||||||||
Facebook, Inc., Class A* | 166,248 | 12,077,917 | |||||||||
Google, Inc., Class C* | 55,568 | 31,762,669 | |||||||||
Google, Inc., Class A* | 65,796 | 38,132,072 | |||||||||
Yelp, Inc.* | 84,825 | 5,696,847 | |||||||||
142,326,134 | |||||||||||
IT services—6.03% | |||||||||||
Alliance Data Systems Corp.* | 37,309 | 9,785,778 | |||||||||
MasterCard, Inc., Class A | 513,703 | 38,091,077 | |||||||||
VeriFone Systems, Inc.* | 160,350 | 5,373,329 | |||||||||
Visa, Inc., Class A | 141,500 | 29,857,915 | |||||||||
83,108,099 | |||||||||||
Life sciences tools & services—1.75% | |||||||||||
Mettler-Toledo International, Inc.* | 93,862 | 24,135,675 | |||||||||
Machinery—0.55% | |||||||||||
Flowserve Corp. | 102,247 | 7,570,368 | |||||||||
Media—2.75% | |||||||||||
Comcast Corp., Special Class A | 214,605 | 11,474,929 | |||||||||
Discovery Communications, Inc., Class A* | 8,927 | 760,670 | |||||||||
Liberty Global PLC, Series C* | 641,587 | 25,657,064 | |||||||||
37,892,663 | |||||||||||
Oil, gas & consumable fuels—6.15% | |||||||||||
Cabot Oil & Gas Corp. | 168,824 | 5,562,751 | |||||||||
EOG Resources, Inc. | 269,075 | 29,447,568 | |||||||||
Occidental Petroleum Corp. | 342,214 | 33,437,730 | |||||||||
The Williams Cos., Inc. | 287,400 | 16,275,462 | |||||||||
84,723,511 | |||||||||||
Pharmaceuticals—5.04% | |||||||||||
Allergan, Inc. | 258,314 | 42,843,960 | |||||||||
Novo Nordisk A/S, ADR | 345,850 | 15,926,393 | |||||||||
Perrigo Co. PLC | 70,800 | 10,651,860 | |||||||||
69,422,213 | |||||||||||
Real estate investment trusts—3.13% | |||||||||||
American Tower Corp. | 457,305 | 43,165,019 | |||||||||
Road & rail—0.80% | |||||||||||
Kansas City Southern | 101,610 | 11,081,587 | |||||||||
Semiconductors & semiconductor equipment—0.42% | |||||||||||
ARM Holdings PLC, ADR | 136,934 | 5,855,298 |
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
Software—10.78% | |||||||||||
Adobe Systems, Inc.* | 524,111 | $ | 36,221,311 | ||||||||
Intuit, Inc. | 472,975 | 38,769,761 | |||||||||
Microsoft Corp. | 671,325 | 28,974,387 | |||||||||
Oracle Corp. | 823,510 | 33,261,569 | |||||||||
Salesforce.com, Inc.* | 108,773 | 5,900,935 | |||||||||
VMware, Inc., Class A* | 54,649 | 5,429,925 | |||||||||
148,557,888 | |||||||||||
Specialty retail—2.50% | |||||||||||
L Brands, Inc. | 336,275 | 19,493,862 | |||||||||
Sally Beauty Holdings, Inc.* | 287,200 | 7,452,840 | |||||||||
The Home Depot, Inc. | 92,517 | 7,479,999 | |||||||||
34,426,701 | |||||||||||
Technology hardware, storage & peripherals—1.94% | |||||||||||
Apple, Inc. | 279,650 | 26,726,150 | |||||||||
Textiles, apparel & luxury goods—2.17% | |||||||||||
Michael Kors Holdings Ltd.* | 82,800 | 6,746,544 | |||||||||
Nike, Inc., Class B | 299,477 | 23,098,661 | |||||||||
29,845,205 | |||||||||||
Wireless telecommunication services—1.82% | |||||||||||
Crown Castle International Corp. | 338,025 | 25,074,694 | |||||||||
Total common stocks (cost—$964,560,850) | 1,319,427,720 |
Face amount | Value | ||||||||||
Repurchase agreement—3.97% | |||||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $56,296,628 US Treasury Note, 0.625% due 05/31/17; (value—$55,804,032); proceeds: $54,715,000 (cost—$54,715,000) | $ | 54,715,000 | $ | 54,715,000 | |||||||
Total investments (cost—$1,019,275,850)—99.73% | 1,374,142,720 | ||||||||||
Other assets in excess of liabilities—0.27% | 3,702,848 | ||||||||||
Net assets—100.00% | $ | 1,377,845,568 |
For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 232.
Aggregate cost for federal income tax purposes was $1,021,675,341; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 356,401,507 | |||||
Gross unrealized depreciation | (3,934,128 | ) | |||||
Net unrealized appreciation | $ | 352,467,379 |
Affiliated issuer activity
The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2014. The investment manager earns a management fee from UBS Private Money Market Fund LLC. Please see the Notes to financial statements for further information.
Security description | Value at 07/31/13 | Purchases during the year ended 07/31/14 | Sales during the year ended 07/31/14 | Value at 07/31/14 | Net income earned from affiliate for the year ended 07/31/14 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 22,558,968 | $ | 158,663,687 | $ | 181,222,655 | $ | — | $ | 1,004 |
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Portfolio of investments—July 31, 2014
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
Common stocks | $ | 1,319,427,720 | $ | — | $ | — | $ | 1,319,427,720 | |||||||||||
Repurchase agreement | �� | 54,715,000 | — | 54,715,000 | |||||||||||||||
Total | $ | 1,319,427,720 | $ | 54,715,000 | $ | — | $ | 1,374,142,720 |
At July 31, 2014, there were no transfers between Level 1 and Level 2.
Issuer breakdown by country or territory of origin (unaudited)
Percentage of total investments | |||||||
United States | 93.0 | % | |||||
United Kingdom | 2.3 | ||||||
Denmark | 1.1 | ||||||
Cayman Islands | 0.9 | ||||||
Ireland | 0.8 | ||||||
Curacao | 0.8 | ||||||
Switzerland | 0.6 | ||||||
British Virgin Islands | 0.5 | ||||||
Total | 100.0 | % |
Portfolio footnotes
* Non-income producing security.
See accompanying notes to financial statements.
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Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 12.77% before the deduction of the maximum PACE Select program fee.1 In comparison, the Russell 2500 Value Index (the "benchmark") returned 12.49% and the Lipper Small-Cap Core Funds category posted a median return of 9.65%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 136. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisors' comments2
MetWest Capital
Primarily due to stock selection, our portion of the Portfolio outperformed our specific benchmark, the Russell 2000 Value Index, however it underperformed the Portfolio's index, the Russell 2500 Value Index, for the reporting period. In particular, holdings in the industrials and financials sectors enhanced results. In industrials, AerCap Holdings N.V., one of the world's largest aircraft leasing companies, was the top performer. Its shares continued to benefit from their recent acquisition of International Lease Finance Corp. This acquisition vastly increased AerCap Holdings' aircraft fleet size and positioned the company as the future leader of the industry. We eliminated our position in the company as its market capitalization exceeded an appropriate level for the Portfolio. Within Financials, E*TRADE Financial was our best-performing holding. Its shares appreciated after the company received approval to move capital from its bank subsidiary to its holding company. This capital was used by the holding company to pay down its debt. We sold our position in E*TRADE Financial as the company's stock price approached our intrinsic value target.
Stock selection in the consumer discretionary sector detracted from results during the reporting period, with DSW Inc. being the worst performer. DSW's share price came under pressure after the company fell short of earnings expectations, and subsequently lowered its annual earnings guidance. Taking
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
PACE Select Advisors Trust – PACE Small/Medium Co Value Equity Investments
Investment Sub-Advisors:
Metropolitan West Capital Management, LLC ("MetWest Capital"); Systematic Financial Management, L.P. ("Systematic") and Kayne Anderson Rudnick, LLC ("Kayne Anderson Rudnick")
Portfolio Managers:
MetWest Capital: Samir Sikka;
Systematic: Ronald M. Mushock and D. Kevin McCreesh;
Kayne Anderson Rudnick: Julie Kutasov and Craig Stone
Objective:
Capital appreciation
Investment process:
MetWest Capital utilizes a bottom-up, fundamental, research-driven style that it believes is well suited to the small cap market segment. MetWest Capital seeks to identify high-quality companies selling below intrinsic value with clear catalysts to realize full value within its investment time horizon and constructs a portfolio of its highest conviction ideas.
Systematic employs a two-pronged investment approach that utilizes both quantitative screening and fundamental research. Systematic's investment philosophy is predicated on its belief that stock prices reflect the market's estimates of earnings, and as revisions to those estimates are made by the market, stock prices will follow suit.
Systematic conducts a quantitative screening of all companies within the small/mid capitalization universe, and then uses fundamental research analysis to gauge investor expectations by focusing on
(continued on next page)
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Sub-Advisors' comments – continued
advantage of this weakness, we increased our position in DSW, as our investment thesis remains intact.
Over the longer term, we expect to continue to remain focused on researching individual businesses and investing in those companies with sustainable business models that are trading at a discount to our estimate of intrinsic value, with value drivers that we believe will help narrow the valuation gap. By adhering to our long-term investment process, we believe that we will be able to add value over our investment time horizon.
Derivatives were not used during the reporting period.
Systematic
Our portion of the Portfolio outperformed the benchmark during the reporting period. While the final months of 2013 were marred by the federal government shut down, an eventual compromise set the stage for a more material late-year agreement that afforded some budget certainty going forward. As the calendar flipped to 2014, the economy withstood a headwind from severe winter weather that gripped much of the country, putting a damper on retail traffic and sales. This dynamic was felt throughout much of the domestic supply chain. Nevertheless, underlying business fundamentals remained positive, as corporate America was increasingly willing to spend and invest as federal budget politics calmed down. As expected, economic signposts turned positive again after the thaw, as seen in a wide swath of macroeconomic data and our individual company research. This data points to a generally improving global supply chain, with particular strength in automobiles and aerospace, along with improved activity in technology. Internationally, our past predictions of geopolitical risk having less impact on the markets in 2014 have so far proved true. While ongoing turmoil in Ukraine and across the Middle East are grabbing headlines, market participants have largely taken the news in stride. This is a far cry from past years, when investors often treated any political or economic instability throughout the world as a potential crisis.
From an attribution standpoint, our outperformance was primarily due to stock selection. Sector allocation also contributed to results, albeit to a modest extent. From a stock selection perspective, the industrials sector was our largest contributor to results. Our holdings in the materials, consumer staples and energy sectors also had a positive impact on performance. Conversely, our stock selection in the financials and consumer discretionary sectors was negative for performance. In terms of sector allocation, our underweights to the financials and utilities sectors were additive to relative performance, while our overweight to the consumer staples sector offset some of those gains.
Derivatives were not used during the reporting period.
Kayne Anderson Rudnick
Equity markets continued to exhibit strong performance during the reporting period, with the riskiest stocks performing the best, as measured by beta and price-to-earnings ratios. Despite this headwind to our high-quality investment approach, our portion of the Portfolio slightly outperformed the benchmark, primarily due to stock selection. (Beta is a measure of volatility or risk relative to the market as a whole.)
Investment process (concluded)
key revenue and margin assumptions underlying earnings estimates.
Kayne Anderson Rudnick employs a fundamental, bottom-up, research-driven investment style and utilizes a disciplined investment process to identify high-quality companies that possess solid investment-grade balance sheets, generate positive cash flow and whose securities can be acquired at attractive valuations. Kayne Anderson Rudnick's first-hand fundamental research process involves carefully evaluating a company from a three-tiered perspective involving qualitative, financial and valuation analyses.
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Sub-Advisors' comments – concluded
Stock selection in the consumer discretionary and information technology sectors contributed the most to performance during the reporting period. Conversely, stock selection in health care as well as materials and processing were the greatest detractors from performance. Our underweights in financial services and utilities contributed to relative results, while an underweight in consumer staples was negative for performance relative to the benchmark.
The largest contributors during the reporting period were Advance Auto Parts, an auto parts retailer, and CARBO Ceramics, an oilfield services technology company. The announcement of the acquisition of General Parts International in October 2013 pushed shares of Advance Auto Parts higher. The acquisition gives Advance Auto Parts a more balanced national store footprint and the opportunity for significant cost reductions and synergies. We exited our position in Advance Auto Parts due to a heightened execution risk related to the company's large acquisition of General Parts International and a stock price that traded at the upper end of its valuation range. CARBO Ceramics' shares rose sharply in the second half of 2013 and continued to perform strongly. The company was supported by its better-than expected revenue growth and outlook for profit growth, which was driven by strong product demand and price stabilization.
The largest detractors during the reporting period included Eaton Vance, an investment management firm, and Village Super Market, a supermarket operator in the mid-Atlantic region. After healthy gains in 2012 and the first quarter of 2013, shares of Eaton Vance declined over the period due to poor performance in certain strategies, which led to weak trends in net flows. We view these challenges as mostly cyclical in nature and believe the company's brand and distribution strengths remain intact. Shares of Village Super Market remained under pressure due to concerns about the current competitive environment and management's modest near-term outlook for same-store sales growth. Elevated capital expenditures related to two new store openings also depressed free cash flow generation. We still believe the long-term prospects of its business are positive, and the company's balance sheet remains strong, with cash and investments equal to about one-third of its market capitalization.
Derivatives were not used during the reporting period.
Special considerations
The Portfolio may be appropriate for long-term investors seeking capital appreciation who are able to withstand short-term fluctuations in the equity markets in return for potentially higher returns over the long term. The value of the Portfolio changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the companies in whose securities the Portfolio invests. It is important to note that an investment in the Portfolio is only one component of a balanced investment plan. In addition, small- and mid-cap companies are typically subject to a greater degree of change in earnings and business prospects than are larger, more established companies. Therefore, they are considered to have a higher level of volatility and risk.
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Illustration of an assumed investment of $10,000 in Class P shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE Small/Medium Co Value Equity Investments Class P shares versus the Russell 2500 Value Index over the 10 years ended July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE Small/Medium Co Value Equity Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustration purposes only.
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Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 12.74 | % | 15.97 | % | 7.47 | % | |||||||||
Class C2 | 11.84 | % | 15.10 | % | 6.65 | % | |||||||||
Class Y3 | 12.84 | % | 16.18 | % | 7.77 | % | |||||||||
Class P4 | 12.77 | % | 16.13 | % | 7.63 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 6.54 | % | 14.66 | % | 6.86 | % | |||||||||
Class C2 | 10.86 | % | 15.10 | % | 6.65 | % | |||||||||
Russell 2500 Value Index5 | 12.49 | % | 18.07 | % | 9.31 | % | |||||||||
Lipper Small-Cap Core Funds median | 9.65 | % | 16.41 | % | 8.78 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 25.83 | % | 19.44 | % | 7.39 | % | |||||||||
Class C2 | 24.84 | % | 18.54 | % | 6.58 | % | |||||||||
Class Y3 | 25.95 | % | 19.66 | % | 7.69 | % | |||||||||
Class P4 | 25.92 | % | 19.62 | % | 7.56 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 18.91 | % | 18.10 | % | 6.79 | % | |||||||||
Class C2 | 23.84 | % | 18.54 | % | 6.58 | % |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—1.34% and 1.34%; Class C—2.09% and 2.09%; Class Y—1.25% and 1.22%; and Class P—1.22% and 1.22%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—1.41%; Class C—2.16%; Class Y—1.16%; and Class P—1.16%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.
2 Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
3 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
4 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
5 The Russell 2500 Value Index measures the performance of the small to mid-cap value segment of the US equity universe. It includes those Russell 2500 Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2500 Value Index is constructed to provide a comprehensive and unbiased barometer of the small to mid-cap value market. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small to mid-cap opportunity set and that the represented companies continue to reflect value characteristics. Investors should note that indices do not reflect the deduction of fees and expenses.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
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Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Net assets (mm) | $ | 548.4 | |||||
Number of holdings | 191 | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Common stocks | 96.8 | % | |||||
ADRs | 0.6 | ||||||
Cash equivalents and other assets less liabilities | 2.6 | ||||||
Total | 100.0 | % | |||||
Top five sectors1 | 07/31/14 | ||||||
Financials | 24.1 | % | |||||
Industrials | 16.3 | ||||||
Information technology | 15.3 | ||||||
Consumer discretionary | 14.9 | ||||||
Health care | 7.4 | ||||||
Total | 78.0 | % | |||||
Top ten equity holdings1 | 07/31/14 | ||||||
Landstar System, Inc. | 1.6 | % | |||||
KAR Auction Services, Inc. | 1.4 | ||||||
Office Depot, Inc. | 1.2 | ||||||
Eaton Vance Corp. | 1.2 | ||||||
Snap-on, Inc. | 1.1 | ||||||
Level 3 Communications, Inc. | 1.1 | ||||||
Syntel, Inc. | 1.0 | ||||||
Jack Henry & Associates, Inc. | 1.0 | ||||||
First Cash Financial Services, Inc. | 1.0 | ||||||
Raymond James Financial, Inc. | 1.0 | ||||||
Total | 11.6 | % |
For a listing of defined portfolio acronyms that are used throughout the Portfolio statistics, please refer to page 232.
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time.
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—97.40% | |||||||||||
Aerospace & defense—0.66% | |||||||||||
Alliant Techsystems, Inc. | 18,265 | $ | 2,373,172 | ||||||||
Huntington Ingalls Industries, Inc. | 13,735 | 1,248,786 | |||||||||
3,621,958 | |||||||||||
Air freight & logistics—0.94% | |||||||||||
Expeditors International of Washington, Inc. | 119,000 | 5,138,420 | |||||||||
Airlines—0.34% | |||||||||||
JetBlue Airways Corp.*,1 | 172,025 | 1,844,108 | |||||||||
Auto components—1.18% | |||||||||||
Dana Holding Corp. | 76,750 | 1,717,665 | |||||||||
Drew Industries, Inc. | 39,750 | 1,788,750 | |||||||||
The Goodyear Tire & Rubber Co. | 30,150 | 758,876 | |||||||||
Tower International, Inc.* | 69,325 | 2,183,737 | |||||||||
6,449,028 | |||||||||||
Banks—6.63% | |||||||||||
Associated Banc-Corp | 151,500 | 2,714,880 | |||||||||
Bank of Hawaii Corp. | 56,000 | 3,202,080 | |||||||||
Cathay General Bancorp | 81,200 | 2,077,908 | |||||||||
CIT Group, Inc. | 28,575 | 1,403,318 | |||||||||
Comerica, Inc. | 47,235 | 2,374,031 | |||||||||
FirstMerit Corp. | 131,285 | 2,310,616 | |||||||||
Hancock Holding Co. | 67,600 | 2,192,944 | |||||||||
Huntington Bancshares, Inc. | 310,075 | 3,044,937 | |||||||||
Prosperity Bancshares, Inc. | 19,025 | 1,105,923 | |||||||||
Umpqua Holdings Corp. | 222,950 | 3,772,314 | |||||||||
United Community Banks, Inc. | 139,550 | 2,309,553 | |||||||||
Webster Financial Corp. | 175,575 | 5,033,735 | |||||||||
Zions Bancorporation | 167,720 | 4,833,690 | |||||||||
36,375,929 | |||||||||||
Beverages—0.65% | |||||||||||
Treasury Wine Estates Ltd., ADR | 770,950 | 3,557,934 | |||||||||
Capital markets—3.04% | |||||||||||
Ares Capital Corp. | 135,664 | 2,266,945 | |||||||||
Cohen & Steers, Inc.1 | 56,200 | 2,332,862 | |||||||||
Eaton Vance Corp. | 190,500 | 6,692,265 | |||||||||
Raymond James Financial, Inc. | 105,620 | 5,381,339 | |||||||||
16,673,411 | |||||||||||
Chemicals—0.81% | |||||||||||
Celanese Corp., Series A | 18,470 | 1,075,139 | |||||||||
Huntsman Corp. | 130,300 | 3,394,315 | |||||||||
4,469,454 | |||||||||||
Commercial services & supplies—3.51% | |||||||||||
Herman Miller, Inc. | 81,000 | 2,368,440 | |||||||||
KAR Auction Services, Inc. | 258,750 | 7,583,963 | |||||||||
Pitney Bowes, Inc. | 84,500 | 2,286,570 | |||||||||
R.R. Donnelley & Sons Co. | 99,600 | 1,729,056 | |||||||||
Tetra Tech, Inc. | 86,871 | 2,109,228 | |||||||||
United Stationers, Inc. | 81,635 | 3,149,478 | |||||||||
19,226,735 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Communications equipment—1.28% | |||||||||||
ARRIS Group, Inc.* | 25,550 | $ | 873,044 | ||||||||
CommScope Holding Co., Inc.* | 74,600 | 1,838,144 | |||||||||
F5 Networks, Inc.* | 15,370 | 1,730,508 | |||||||||
Plantronics, Inc. | 54,920 | 2,579,592 | |||||||||
7,021,288 | |||||||||||
Construction & engineering—0.88% | |||||||||||
EMCOR Group, Inc. | 41,240 | 1,687,953 | |||||||||
Pike Corp.* | 391,900 | 3,158,714 | |||||||||
4,846,667 | |||||||||||
Consumer finance—1.01% | |||||||||||
First Cash Financial Services, Inc.* | 97,800 | 5,516,898 | |||||||||
Containers & packaging—2.24% | |||||||||||
AptarGroup, Inc. | 40,400 | 2,468,440 | |||||||||
Berry Plastics Group, Inc.* | 129,500 | 3,145,555 | |||||||||
Graphic Packaging Holding Co.* | 151,600 | 1,819,200 | |||||||||
Silgan Holdings, Inc. | 98,250 | 4,835,865 | |||||||||
12,269,060 | |||||||||||
Diversified financial services—1.52% | |||||||||||
MSCI, Inc.,* | 104,000 | 4,706,000 | |||||||||
Voya Financial, Inc. | 97,375 | 3,612,613 | |||||||||
8,318,613 | |||||||||||
Diversified telecommunication services—1.33% | |||||||||||
General Communication, Inc., Class A* | 84,233 | 929,932 | |||||||||
Level 3 Communications, Inc.* | 133,100 | 5,853,738 | |||||||||
magicJack VocalTec Ltd.*,1 | 34,050 | 485,894 | |||||||||
7,269,564 | |||||||||||
Electric utilities—0.46% | |||||||||||
Westar Energy, Inc.1 | 70,550 | 2,542,622 | |||||||||
Electrical equipment—0.60% | |||||||||||
EnerSys | 13,260 | 841,082 | |||||||||
Generac Holdings, Inc.*,1 | 34,875 | 1,513,575 | |||||||||
Regal-Beloit Corp. | 13,440 | 944,697 | |||||||||
3,299,354 | |||||||||||
Electronic equipment, instruments & components—1.26% | |||||||||||
Cognex Corp.* | 78,600 | 3,221,028 | |||||||||
Itron, Inc.* | 19,075 | 686,319 | |||||||||
Jabil Circuit, Inc. | 149,700 | 2,988,012 | |||||||||
6,895,359 | |||||||||||
Energy equipment & services—3.73% | |||||||||||
CARBO Ceramics, Inc.1 | 43,000 | 5,355,220 | |||||||||
Dresser-Rand Group, Inc.* | 77,000 | 4,582,270 | |||||||||
Forum Energy Technologies, Inc.* | 84,200 | 2,803,018 | |||||||||
Helix Energy Solutions Group, Inc.* | 140,740 | 3,579,018 | |||||||||
Precision Drilling Corp. | 333,720 | 4,158,151 | |||||||||
20,477,677 |
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Food & staples retailing—0.69% | |||||||||||
Rite Aid Corp.* | 443,075 | $ | 2,964,172 | ||||||||
Village Super Market, Inc., Class A | 33,900 | 797,328 | |||||||||
3,761,500 | |||||||||||
Food products—2.34% | |||||||||||
Brooklyn Cheesecake & Desserts Co., Inc.*,2 | 4,355 | 2,613 | |||||||||
Dean Foods Co.1 | 234,500 | 3,592,540 | |||||||||
Flowers Foods, Inc. | 157,593 | 3,008,450 | |||||||||
J&J Snack Foods Corp. | 21,350 | 1,923,421 | |||||||||
Pinnacle Foods, Inc. | 53,875 | 1,623,254 | |||||||||
Post Holdings, Inc.* | 59,941 | 2,692,550 | |||||||||
12,842,828 | |||||||||||
Gas utilities—1.48% | |||||||||||
Atmos Energy Corp. | 75,825 | 3,663,864 | |||||||||
Questar Corp. | 200,000 | 4,448,000 | |||||||||
8,111,864 | |||||||||||
Health care equipment & supplies—2.30% | |||||||||||
Hologic, Inc.* | 114,925 | 2,996,095 | |||||||||
Integra LifeSciences Holdings* | 64,950 | 3,079,929 | |||||||||
NuVasive, Inc.* | 48,750 | 1,822,275 | |||||||||
STERIS Corp. | 71,000 | 3,612,480 | |||||||||
The Cooper Cos., Inc. | 7,030 | 1,130,986 | |||||||||
12,641,765 | |||||||||||
Health care providers & services—2.98% | |||||||||||
AMN Healthcare Services, Inc.* | 360,950 | 4,728,445 | |||||||||
Centene Corp.* | 31,400 | 2,263,626 | |||||||||
Kindred Healthcare, Inc. | 100,425 | 2,400,158 | |||||||||
Patterson Cos., Inc. | 107,000 | 4,174,070 | |||||||||
Universal Health Services, Inc., Class B | 25,925 | 2,763,605 | |||||||||
16,329,904 | |||||||||||
Health care technology—0.83% | |||||||||||
Computer Programs & Systems, Inc. | 69,400 | 4,567,908 | |||||||||
Hotels, restaurants & leisure—3.07% | |||||||||||
Interval Leisure Group, Inc. | 184,650 | 3,910,887 | |||||||||
MGM Resorts International* | 60,875 | 1,633,885 | |||||||||
Royal Caribbean Cruises Ltd. | 46,725 | 2,787,146 | |||||||||
Six Flags Entertainment Corp. | 92,500 | 3,535,350 | |||||||||
The Cheesecake Factory, Inc. | 75,200 | 3,224,576 | |||||||||
The Wendy's Co. | 215,525 | 1,756,529 | |||||||||
16,848,373 | |||||||||||
Household durables—0.81% | |||||||||||
Garmin Ltd.1 | 15,800 | 869,632 | |||||||||
Harman International Industries, Inc. | 11,805 | 1,281,433 | |||||||||
Taylor Morrison Home Corp., Class A* | 128,998 | 2,293,584 | |||||||||
4,444,649 | |||||||||||
Household products—0.45% | |||||||||||
WD-40 Co. | 36,700 | 2,450,092 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Insurance—2.83% | |||||||||||
Allied World Assurance Co. Holdings AG | 51,525 | $ | 1,855,415 | ||||||||
Genworth Financial, Inc., Class A* | 126,900 | 1,662,390 | |||||||||
HCC Insurance Holdings, Inc. | 63,975 | 2,986,353 | |||||||||
Lincoln National Corp. | 55,075 | 2,885,379 | |||||||||
RLI Corp. | 108,200 | 4,624,468 | |||||||||
Validus Holdings Ltd. | 19,675 | 718,728 | |||||||||
XL Group PLC | 24,225 | 781,014 | |||||||||
15,513,747 | |||||||||||
Internet & catalog retail—0.20% | |||||||||||
Orbitz Worldwide, Inc.* | 127,175 | 1,125,499 | |||||||||
Internet software & services—0.45% | |||||||||||
Web.com Group, Inc.* | 92,250 | 2,449,238 | |||||||||
IT services—4.72% | |||||||||||
Computer Services, Inc. | 79,000 | 2,768,950 | |||||||||
CoreLogic, Inc.* | 143,530 | 3,904,016 | |||||||||
EVERTEC, Inc. | 170,623 | 3,815,130 | |||||||||
Jack Henry & Associates, Inc. | 94,900 | 5,537,415 | |||||||||
Syntel, Inc.* | 65,400 | 5,648,598 | |||||||||
VeriFone Systems, Inc.* | 125,500 | 4,205,505 | |||||||||
25,879,614 | |||||||||||
Life sciences tools & services—0.87% | |||||||||||
Bio-Rad Laboratories, Inc., Class A* | 26,000 | 2,989,740 | |||||||||
Charles River Laboratories International, Inc.* | 33,250 | 1,802,483 | |||||||||
4,792,223 | |||||||||||
Machinery—5.20% | |||||||||||
Allison Transmission Holdings, Inc. | 163,575 | 4,789,476 | |||||||||
Graco, Inc. | 57,100 | 4,233,965 | |||||||||
Harsco Corp. | 105,600 | 2,668,512 | |||||||||
IDEX Corp. | 25,420 | 1,927,344 | |||||||||
ITT Corp. | 74,325 | 3,416,720 | |||||||||
Oshkosh Corp. | 16,720 | 772,798 | |||||||||
RBC Bearings, Inc. | 52,500 | 2,912,700 | |||||||||
Snap-on, Inc. | 50,500 | 6,070,100 | |||||||||
The Greenbrier Cos, Inc.1 | 22,100 | 1,424,345 | |||||||||
Wabtec Corp. | 4,083 | 329,417 | |||||||||
28,545,377 | |||||||||||
Marine—0.19% | |||||||||||
Safe Bulkers, Inc. | 146,975 | 1,071,448 | |||||||||
Media—2.06% | |||||||||||
Cinemark Holdings, Inc., Class A | 133,000 | 4,362,400 | |||||||||
Cumulus Media, Inc.* | 119,850 | 620,823 | |||||||||
Entravision Communications Corp. Class A | 116,625 | 651,934 | |||||||||
Gannett Co., Inc. | 97,350 | 3,185,292 | |||||||||
Gray Television, Inc.* | 78,650 | 957,957 | |||||||||
Starz Class A* | 52,850 | 1,506,753 | |||||||||
11,285,159 |
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Metals & mining—1.32% | |||||||||||
Allegheny Technologies, Inc. | 91,715 | $ | 3,453,070 | ||||||||
Century Aluminum Co.* | 29,475 | 554,130 | |||||||||
Stillwater Mining Co.* | 180,950 | 3,239,005 | |||||||||
7,246,205 | |||||||||||
Multi-utilities—0.94% | |||||||||||
Ameren Corp. | 106,650 | 4,100,692 | |||||||||
CMS Energy Corp. | 37,050 | 1,071,857 | |||||||||
5,172,549 | |||||||||||
Multiline retail—0.36% | |||||||||||
Big Lots, Inc. | 44,700 | 1,955,625 | |||||||||
Oil, gas & consumable fuels—3.33% | |||||||||||
Cimarex Energy Co. | 34,785 | 4,835,811 | |||||||||
Comstock Resources, Inc. | 31,975 | 756,529 | |||||||||
Energy XXI (Bermuda) Ltd.1 | 95,350 | 1,903,186 | |||||||||
GasLog Ltd. | 28,875 | 736,313 | |||||||||
Oasis Petroleum, Inc.* | 55,650 | 2,974,492 | |||||||||
PBF Energy, Inc., Class A | 95,025 | 2,575,177 | |||||||||
Tsakos Energy Navigation Ltd. | 237,750 | 1,683,270 | |||||||||
Whiting Petroleum Corp.* | 31,715 | 2,806,460 | |||||||||
18,271,238 | |||||||||||
Pharmaceuticals—0.37% | |||||||||||
Mallinckrodt PLC*,1 | 28,955 | 2,015,847 | |||||||||
Professional services—1.53% | |||||||||||
Korn/Ferry International* | 115,945 | 3,411,102 | |||||||||
Manpowergroup, Inc. | 20,685 | 1,611,155 | |||||||||
Resources Connection, Inc. | 223,500 | 3,374,850 | |||||||||
8,397,107 | |||||||||||
Real estate investment trusts—6.53% | |||||||||||
BioMed Realty Trust, Inc. | 231,575 | 4,978,862 | |||||||||
Brandywine Realty Trust | 190,000 | 2,954,500 | |||||||||
CBL & Associates Properties, Inc. | 132,869 | 2,484,650 | |||||||||
DuPont Fabros Technology, Inc. | 191,375 | 5,245,589 | |||||||||
Equity Commonwealth | 92,800 | 2,492,608 | |||||||||
Liberty Property Trust | 130,500 | 4,589,685 | |||||||||
Parkway Properties, Inc. | 156,671 | 3,247,790 | |||||||||
PennyMac Mortgage Investment Trust | 156,000 | 3,339,960 | |||||||||
Redwood Trust, Inc.1 | 149,520 | 2,837,890 | |||||||||
Strategic Hotels & Resorts, Inc.* | 202,525 | 2,310,810 | |||||||||
Sunstone Hotel Investors, Inc. | 92,175 | 1,307,963 | |||||||||
35,790,307 | |||||||||||
Real estate management & development—1.53% | |||||||||||
CBRE Group, Inc., Class A* | 132,075 | 4,073,193 | |||||||||
Jones Lang LaSalle, Inc. | 35,100 | 4,341,870 | |||||||||
8,415,063 | |||||||||||
Road & rail—2.27% | |||||||||||
ArcBest Corp. | 38,075 | 1,208,120 | |||||||||
Con-way, Inc. | 50,880 | 2,510,928 | |||||||||
Landstar System, Inc. | 131,800 | 8,715,934 | |||||||||
12,434,982 |
Number of shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
Semiconductors & semiconductor equipment—3.26% | |||||||||||
First Solar, Inc.* | 32,910 | $ | 2,076,950 | ||||||||
GT Advanced Technologies, Inc.*,1 | 209,575 | 2,900,518 | |||||||||
International Rectifier Corp.* | 54,350 | 1,350,054 | |||||||||
Lam Research Corp. | 13,120 | 918,400 | |||||||||
Linear Technology Corp. | 119,400 | 5,269,719 | |||||||||
ON Semiconductor Corp.* | 334,000 | 2,859,040 | |||||||||
Skyworks Solutions, Inc. | 48,940 | 2,484,194 | |||||||||
17,858,875 | |||||||||||
Software—4.01% | |||||||||||
American Software, Inc., Class A | 418,700 | 3,898,097 | |||||||||
Electronic Arts, Inc.* | 50,375 | 1,692,600 | |||||||||
FactSet Research Systems, Inc.1 | 44,400 | 5,333,772 | |||||||||
Fair Isaac Corp. | 53,950 | 3,083,242 | |||||||||
Informatica Corp.* | 114,800 | 3,641,456 | |||||||||
PTC, Inc.* | 38,825 | 1,396,147 | |||||||||
TiVo, Inc.* | 220,500 | 2,967,930 | |||||||||
22,013,244 | |||||||||||
Specialty retail—4.80% | |||||||||||
Abercrombie & Fitch Co., Class A1 | 67,950 | 2,673,153 | |||||||||
Ascena Retail Group, Inc.* | 151,450 | 2,432,287 | |||||||||
Chico's FAS, Inc. | 246,100 | 3,890,841 | |||||||||
DSW, Inc., Class A | 169,100 | 4,496,369 | |||||||||
Foot Locker, Inc. | 28,175 | 1,339,158 | |||||||||
Office Depot, Inc.* | 1,347,500 | 6,750,975 | |||||||||
Ross Stores, Inc. | 73,300 | 4,720,520 | |||||||||
26,303,303 | |||||||||||
Technology hardware, storage & peripherals—0.35% | |||||||||||
Avid Technology, Inc.* | 259,500 | 1,933,275 | |||||||||
Textiles, apparel & luxury goods—0.42% | |||||||||||
Deckers Outdoor Corp.* | 8,360 | 739,944 | |||||||||
Hanesbrands, Inc. | 16,200 | 1,582,902 | |||||||||
2,322,846 | |||||||||||
Thrifts & mortgage finance—1.04% | |||||||||||
Essent Group Ltd.* | 163,199 | 2,971,854 | |||||||||
Ladder Capital Corp. Class A* | 154,700 | 2,722,720 | |||||||||
5,694,574 | |||||||||||
Trading companies & distributors—1.80% | |||||||||||
Beacon Roofing Supply, Inc.* | 32,644 | 902,280 | |||||||||
GATX Corp. | 63,975 | 3,966,450 | |||||||||
MSC Industrial Direct Co, Inc. | 58,900 | 5,023,581 | |||||||||
9,892,311 | |||||||||||
Total common stocks (cost—$477,905,511) | 534,192,618 |
140
PACE Select Advisors Trust
PACE Small/Medium Co Value Equity Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Repurchase agreement—1.99% | |||||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $11,243,892 US Treasury Note, 0.625% due 05/31/17; (value—$11,145,508); proceeds: $10,928,000 (cost—$10,928,000) | $ | 10,928,000 | $ | 10,928,000 |
Number of shares | Value | ||||||||||
Investment of cash collateral from securities loaned—5.83% | |||||||||||
Money market fund—5.83% | |||||||||||
UBS Private Money Market Fund LLC3 (cost—$31,962,048) | 31,962,048 | $ | 31,962,048 | ||||||||
Total investments (cost—$520,795,559)—105.22% | 577,082,666 | ||||||||||
Liabilities in excess of other assets—(5.22)% | (28,648,427 | ) | |||||||||
Net assets—100.00% | $ | 548,434,239 |
For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 232.
Aggregate cost for federal income tax purposes was $521,402,796; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 69,551,502 | |||||
Gross unrealized depreciation | (13,871,632 | ) | |||||
Net unrealized appreciation | $ | 55,679,870 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
Common stocks | $ | 534,190,005 | $ | — | $ | 2,613 | $ | 534,192,618 | |||||||||||
Repurchase agreement | — | 10,928,000 | — | 10,928,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 31,962,048 | — | 31,962,048 | |||||||||||||||
Total | $ | 534,190,005 | $ | 42,890,048 | $ | 2,613 | $ | 577,082,666 |
At July 31, 2014, there were no transfers between Level 1 and Level 2.
The following is a rollforward of the Portfolio's investment that was valued using unobservable inputs (Level 3) for the year ended July 31, 2014:
Common stock | |||||||
Beginning balance | $ | 871 | |||||
Purchases | — | ||||||
Sales | — | ||||||
Accrued discounts/(premiums) | — | ||||||
Total realized gain/(loss) | — | ||||||
Net change in unrealized appreciation/depreciation | 1,742 | ||||||
Transfers into Level 3 | — | ||||||
Transfers out of Level 3 | — | ||||||
Ending balance | $ | 2,613 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investment held at July 31, 2014 was $1,742.
141
PACE Select Advisors Trust
PACE Small/Medium Co Value Equity Investments
Portfolio of investments—July 31, 2014
Issuer breakdown by country or territory of origin (unaudited)
Percentage of total investments | |||||||
United States | 94.9 | % | |||||
Bermuda | 1.4 | ||||||
Canada | 0.7 | ||||||
Puerto Rico | 0.6 | ||||||
Australia | 0.6 | ||||||
Ireland | 0.5 | ||||||
Liberia | 0.5 | ||||||
Switzerland | 0.5 | ||||||
Marshall Islands | 0.2 | ||||||
Israel | 0.1 | ||||||
Total | 100.0 | % |
Portfolio footnotes
* Non-income producing security.
1 Security, or portion thereof, was on loan at July 31, 2014.
2 Illiquid investment as of July 31, 2014.
3 The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2014. The investment manager earns a management fee from UBS Private Money Market Fund LLC. Please see the Notes to financial statements for further information.
Security description | Value at 07/31/13 | Purchases during the year ended 07/31/14 | Sales during the year ended 07/31/14 | Value at 07/31/14 | Net income earned from affiliate for the year ended 07/31/14 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 30,367,763 | $ | 262,268,050 | $ | 260,673,765 | $ | 31,962,048 | $ | 2,601 |
See accompanying notes to financial statements.
142
PACE Select Advisors Trust
PACE Small/Medium Co Growth Equity Investments
Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 5.04% before the deduction of the maximum PACE Select program fee.1 In comparison, the Russell 2500 Growth Index (the "benchmark") returned 11.64%, and the Lipper Small-Cap Growth Funds category posted a median return of 7.89%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 148. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisor's comments2
Please note: On November 25, 2013, Lee Munder Capital Group LLC and Timpani Capital Management LLC began serving as sub-advisors for this Portfolio. Copper Rock was terminated as a sub-advisor for the Portfolio effective April 21, 2014 at the close of business.
Copper Rock
For the period from August 1, 2013 through April 21, 2014, when we managed a portion of the Portfolio, we underperformed the benchmark. We experienced some relative underperformance driven by stock selection within the energy, health care and information technology sectors. Specifically, our position in energy company Geospace Technologies was the leading detractor from performance. We owned this stock because the company is a leader in seismic investigative technology and offered three significant growth products in the market. We had believed that in fiscal year 2014 the company's major products would continue to grow and, with the onboarding of a new contract in its Permanent Reservoir Monitoring system, fiscal year 2015 earnings would rise above current consensus. However, the stock struggled in the first quarter of 2014, as the market awaited news about potential follow on orders with one of its major exploration projects. In addition, Geospace's offshore wireless product had some contract delays, which also negatively impacted the stock. The second largest detractor was our position in Employers Holdings, which reported disappointing results in the first quarter of 2014. The company underwrites workers compensation insurance and had been experiencing strong policy unit and pricing growth. However, in December 2013 the company began experiencing an abnormally high loss rate on business in the Los Angeles area. It turned out many of these cases were being litigated, resulting in much higher loss rates. This development was a material change to our thesis and we sold the stock.
PACE Select Advisors Trust – PACE Small/Medium Co Growth Equity Investments
Investment Sub-Advisors:
Copper Rock Capital Partners, LLC ("Copper Rock"); Riverbridge Partners, LLC ("Riverbridge"); Palisade Capital Management, L.L.C. ("Palisade"); Lee Munder Capital Group, LLC ("LMCG"), and Timpani Capital Management LLC ("Timpani")
Portfolio Managers:
Copper Rock: Tucker Walsh
Riverbridge: Mark Thompson;
Palisade: Sammy Oh;
LMCG: Andrew Morey
Timpani: Brandon Nelson
Objective:
Capital appreciation
Investment process:
Copper Rock employs a fundamental, bottom-up investment approach that focuses on identifying emerging companies that exhibit the potential for strong and sustainable revenue growth over each of the following two years. Copper Rock utilizes a "pure" growth investment style that emphasizes growth and momentum characteristics. Copper Rock attempts to manage risk by diversifying and understanding its holdings and employing a stringent sell discipline.
(continued on next page)
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
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PACE Small/Medium Co Growth Equity Investments
Sub-Advisors' comments – continued
Stock selection in the consumer staples and telecommunication services sectors contributed to returns. Significant individual contributors came from a broad swath of sectors and included Manhattan Associates, Inc., United Rentals, Inc., Signature Bank, Middleby Corp. and Under Armour, Inc. Manhattan Associates, a supply chain management software company, had good results in the second half of 2013 on continued strength in services revenues. The company's discipline in containing costs has led to improvement in incremental operating margins, and we believed the company's omni-channel retail opportunity would lead to sustained growth. United Rentals, Inc., an industrial tools and machinery rental company, delivered strong earnings during the third quarter of 2013, citing volume acceleration, strong utilization and solid rental rates. A share buyback announcement also contributed to positive earnings revisions and analyst upgrades. Industry surveys and macroeconomic data has confirmed a steady economic recovery and improving sentiment for the non-residential construction market in 2014, which also provided a good backdrop for this stock.
Derivatives were not used during the reporting period.
Riverbridge Partners
Our portion of the Portfolio underperformed the benchmark during the reporting period, as our conservative growth strategy was out of favor with investors. Somewhat paradoxically, our companies in aggregate had their strongest earnings reporting period in recent memory. Several of our companies exceeded their estimates and even raised guidance only to have their stock prices fall.
We look to invest in companies that have a high degree of recurring revenue and that are not dependent on debt. But the market rotated, from a preference for businesses that can sustain stable sales growth, to companies that have more volatile sales growth. Investors also preferred companies with higher debt levels. Generally speaking, more speculative companies with greater economic sensitivity performed the best. This trend may suggest economic growth may be more robust than current forecasts assume. Additionally, commodity-sensitive industries performed well, with the energy sector of the Russell 2000 Growth Index—an area in which we do not typically invest—returning over 30% during the fiscal year.
Our investment philosophy is rooted in the belief that a company's earnings power is what determines its value over the long run. We seek to invest in companies that are building their long-term earnings power, as we aim to
Investment process (concluded)
Riverbridge believes that earnings power determines the value of a franchise. Riverbridge focuses on companies that are viewed as building their earnings power and building the intrinsic value of the company over long periods of time. Riverbridge looks to invest in high-quality growth companies that demonstrate the ability to sustain strong secular earnings growth, regardless of overall economic conditions.
Palisade seeks fundamentally strong and dynamic small- and mid-cap companies that are trading at a discount to their growth rates. Palisade's goal is to ascertain a dynamic of change before it manifests in consensus estimates. Palisade believes that the small- and mid-cap market is inherently less efficient than the large-cap market, and attempts to gain an information advantage through fundamental research.
LMCG seeks to achieve competitive returns in small/medium capitalization companies by identifying unrecognized growth potential, wherever it exists across all industry sectors. Revenue growth, margin expansion, and the ability to positively surprise and revise earnings estimates are key characteristics LMCG seeks in its holdings.
Timpani seeks to invest in small cap companies where growth is robust, sustainable and underestimated by the market. Timpani uses fundamental research, focusing on companies that it believes have superior management and whose business models have a high potential for earnings upside. Timpani forms an investment decision based on this reasearch and an assessment of the market's perception of these companies.
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Sub-Advisors' comments – continued
populate our portion of the Portfolio with well-managed growth companies that are positioned for favorable performance over a 5-10 year period. Adaptable companies with sustainable competitive advantages that provide superior returns on invested capital for an extended period have historically overcome the inefficiencies of short-term pricing to outperform the broader market. We believe this remains the case today.
Derivatives were not used during the reporting period.
Palisade
Our portion of the Portfolio underperformed the benchmark during the reporting period. The end of the second quarter of 2014 marked the eighth consecutive quarter of positive returns for small-cap stocks. Unfortunately, we were unable to keep up with the strength in the market. Our best relative performing sectors were financials, consumer staples and energy. These contributions were more than countered by weak results in the information technology sector.
Within information technology, we were held back by an overweight in software, which underperformed. In particular, Imperva and CommVault were two of our weaker performers due to company-specific sales execution issues. We added to our position in both companies despite their poor results, as we believe in their competitive positioning and long-term prospects. Over the years we've had broad success within the software industry and believe we will be rewarded for our patience. We continue to overweight the software industry as significant changes, such as the shift to the "software as a service" model, are revolutionary and may result in some of the best secular growth dynamics.
Hain Celestial Group, a natural and organic food and personal product company, and our only holding in the consumer staples sector, delivered strong operating results, as consumer preferences continue to trend toward natural and organic products. Within financials, Lazard performed well, as its financial advisory business has benefited from a strong merger and acquisition environment. In energy, Magnum Hunter Resources, an oil and gas exploration company, was our best performing stock. Its shares rallied as accounting questions were positively resolved and the company improved its balance sheet through the divestiture of ancillary assets.
This reporting period has been among our most challenging from a relative performance standpoint. Through February 2014 of the period, due to valuation concerns, we failed to own positions in many of the areas that had the highest growth or had the strongest momentum, but which ended up being the best performers within growth. As growth stocks corrected in March and April 2014, we took the opportunity to add to our favorite positions. As the market hopefully becomes less impacted by risk-on or risk-off factors, stock-specific fundamentals and evaluations should become more impactful, which should bode well for our relative performance.
Derivatives were not used during the reporting period.
LMCG
Our portion of the Portfolio outperformed the benchmark during the period, from our inception as a sub-advisor on November 25, 2013 through July 31, 2014. Stock selection has driven our results over time. During the reporting period we had key contributions from a number of individual holdings. We also benefited from pockets of strong performance in several sectors and industry groups, such as specialty retailers in the consumer discretionary sector, and biotechnology holdings in health care. On the downside, we underperformed in the consumer staples and industrials sectors.
As a group, biotechnology was especially strong through most of 2013 and into the early part of this year. While we tend to limit our position sizes in the industry, two key holdings, Intercept Pharmaceuticals and Puma Biotechnology, turned out to be the largest individual contributors to our performance during the reporting period.
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Sub-Advisors' comments – concluded
Both companies reported positive clinical trial data (Intercept's liver disease drug and Puma in breast cancer), and the stocks more than tripled during our holding periods. In specialty retail, Lithia Motors (automobile dealerships) and Office Depot (office supplies retailer) were important contributors to performance as well, especially through the late spring and early summer of this year. Among individual holdings, Synchronoss Technologies, which provides cloud- and software-based activation solutions for connected devices, was another significant contributor to performance. The company has been successfully adding new carriers to its cloud based products.
On the negative side, Fairway Group Holdings, which we no longer own, was a notable detractor in the consumer staples sector. In industrials, Acuity Brands, a maker of specialty lighting products, and Hexcel Corp., a carbon fibers/materials producer for aerospace applications, generated weak results.
Derivatives were not used during the reporting period.
Timpani
Our portion of the Portfolio underperformed the benchmark during the reporting period, from our inception as a sub-advisor on November 25, 2013 through July 31, 2014. Our investment style was the largest driver of the negative relative results. More specifically, small capitalization stocks with above average growth prospects were hit especially hard during most of the reporting period. Broadly speaking, underlying fundamentals were not worsening prior to, or during this downturn. Instead, the correction was primarily driven by stock valuation. The rally in small-cap stocks in 2013 was largely driven by improving valuation or multiple expansion. Beginning in the spring of 2014 and continuing into the summer, we saw some of that multiple expansion unwind. We are not alarmed by this. While a digestion of the gains from 2013 is healthy from a long-term perspective, it can be modestly difficult to experience in the short term. All investment styles go in and out of favor at some point, and thus far in 2014, it has been our turn to face a style headwind.
Weak stock selection was a large detractor from performance, which should be expected during a style-led decline. Sector allocation had a modestly negative impact. Our stock selection within technology and producer durables was the most negative for performance, whereas stock selection within consumer discretionary and health care was the most positive for results. The largest company-specific detractors included Conn's, a consumer discretionary company, and PowerSecure International, an energy company. Both stocks were sold from our portion of the Portfolio given fundamentally deteriorating outlooks. Standout company-specific winners included health care companies BioDelivery Sciences and Repligen Corp., along with information technology winners Responsys and Super Micro Computer. Diamondback Energy was a notable strong performer within the energy sector. Responsys was sold from our portion of the Portfolio after it was announced it would be acquired by Oracle for a significant premium.
Derivatives were not used during the reporting period.
Special considerations
The Portfolio may be appropriate for long-term investors seeking capital appreciation who are able to withstand short-term fluctuations in the equity markets in return for potentially higher returns over the long term. The value of the Portfolio changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the companies in whose securities the Portfolio invests. It is important to note that an investment in the Portfolio is only one component of a balanced investment plan. In addition, small- and mid-cap companies are typically subject to a greater degree of change in earnings and business prospects than are larger, more established companies. Therefore, they are considered to have a higher level of volatility and risk. Also, to the extent the Portfolio invests a large portion of its assets in a particular sector, the Portfolio may experience greater volatility and risk of loss due to unfavorable developments in that sector.
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Illustration of an assumed investment of $10,000 in Class P shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE Small/Medium Co Growth Equity Investments Class P shares versus the Russell 2500 Growth Index over the 10 years ended July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE Small/Medium Co Growth Equity Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustration purposes only.
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Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 4.92 | % | 16.55 | % | 8.60 | % | |||||||||
Class C2 | 4.16 | % | 15.65 | % | 7.76 | % | |||||||||
Class Y3 | 5.09 | % | 16.73 | % | 8.89 | % | |||||||||
Class P4 | 5.04 | % | 16.74 | % | 8.80 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (0.87 | )% | 15.23 | % | 7.99 | % | |||||||||
Class C2 | 3.26 | % | 15.65 | % | 7.76 | % | |||||||||
Russell 2500 Growth Index5 | 11.64 | % | 18.61 | % | 10.27 | % | |||||||||
Lipper Small-Cap Growth Funds median | 7.89 | % | 16.98 | % | 8.90 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 18.05 | % | 19.45 | % | 8.40 | % | |||||||||
Class C2 | 17.16 | % | 18.53 | % | 7.56 | % | |||||||||
Class Y3 | 18.11 | % | 19.61 | % | 8.69 | % | |||||||||
Class P4 | 18.15 | % | 19.64 | % | 8.60 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 11.55 | % | 18.10 | % | 7.79 | % | |||||||||
Class C2 | 16.16 | % | 18.53 | % | 7.56 | % |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—1.26% and 1.26%; Class C—2.02% and 2.02%; Class Y—1.25% and 1.13%; and Class P—1.14% and 1.13%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—1.38%; Class C—2.13%; Class Y—1.13%; and Class P—1.13%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.
2 Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
3 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
4 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
5 The Russell 2500 Growth Index measures the performance of the small to mid-cap growth segment of the US equity universe. It includes those Russell 2500 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2500 Growth Index is constructed to provide a comprehensive and unbiased barometer of the small to mid-cap growth market. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small to mid-cap opportunity set and that the represented companies continue to reflect growth characteristics. Investors should note that indices do not reflect the deduction of fees and expenses.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
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Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Net assets (mm) | $ | 519.3 | |||||
Number of holdings | 250 | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Common stocks and warrants | 97.5 | % | |||||
Cash equivalents and other assets less liabilities | 2.5 | ||||||
Total | 100.0 | % | |||||
Top five sectors1 | 07/31/14 | ||||||
Information technology | 25.7 | % | |||||
Health care | 20.3 | ||||||
Industrials | 19.9 | ||||||
Consumer discretionary | 18.1 | ||||||
Financials | 4.1 | ||||||
Total | 88.1 | % | |||||
Top ten equity holdings1 | 07/31/14 | ||||||
Ultimate Software Group, Inc. | 2.0 | % | |||||
MAXIMUS, Inc. | 1.8 | ||||||
Grand Canyon Education, Inc. | 1.5 | ||||||
DealerTrack Holdings, Inc. | 1.3 | ||||||
CoStar Group, Inc. | 1.2 | ||||||
Cepheid, Inc. | 1.2 | ||||||
National Instruments Corp. | 1.1 | ||||||
Ritchie Brothers Auctioneers, Inc. | 1.1 | ||||||
MEDNAX, Inc. | 1.1 | ||||||
Proofpoint, Inc. | 1.1 | ||||||
Total | 13.4 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time.
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—97.54% | |||||||||||
Aerospace & defense—0.93% | |||||||||||
Hexcel Corp.* | 56,817 | $ | 2,116,434 | ||||||||
TransDigm Group, Inc. | 3,485 | 585,201 | |||||||||
Triumph Group, Inc. | 33,657 | 2,132,171 | |||||||||
4,833,806 | |||||||||||
Air freight & logistics—1.53% | |||||||||||
Forward Air Corp. | 58,651 | 2,625,805 | |||||||||
Hub Group, Inc., Class A* | 11,375 | 525,298 | |||||||||
XPO Logistics, Inc.*,1 | 155,791 | 4,812,384 | |||||||||
7,963,487 | |||||||||||
Airlines—0.09% | |||||||||||
Hawaiian Holdings, Inc.*,1 | 33,404 | 465,318 | |||||||||
Auto components—2.14% | |||||||||||
Dorman Products, Inc.*,1 | 84,753 | 3,676,585 | |||||||||
Gentex Corp. | 136,922 | 3,957,046 | |||||||||
Gentherm, Inc.* | 12,326 | 515,843 | |||||||||
Motorcar Parts of America, Inc.* | 38,202 | 850,377 | |||||||||
Tenneco, Inc.* | 33,359 | 2,124,968 | |||||||||
11,124,819 | |||||||||||
Biotechnology—3.55% | |||||||||||
ACADIA Pharmaceuticals, Inc.*,1 | 101,292 | 2,053,189 | |||||||||
Alnylam Pharmaceuticals, Inc.* | 19,903 | 1,075,757 | |||||||||
Cepheid, Inc.* | 162,742 | 6,125,609 | |||||||||
Intercept Pharmaceuticals, Inc.* | 2,028 | 471,226 | |||||||||
InterMune, Inc.* | 21,503 | 943,337 | |||||||||
Isis Pharmaceuticals, Inc.*,1 | 28,648 | 887,802 | |||||||||
Ligand Pharmaceuticals, Inc.* | 9,995 | 491,454 | |||||||||
Medivation, Inc.* | 26,662 | 1,979,120 | |||||||||
NPS Pharmaceuticals, Inc.* | 36,749 | 1,026,767 | |||||||||
Pharmacyclics, Inc.* | 9,669 | 1,164,534 | |||||||||
Puma Biotechnology, Inc.* | 2,246 | 497,983 | |||||||||
Repligen Corp.* | 25,240 | 529,283 | |||||||||
Sunesis Pharmaceuticals, Inc.*,1 | 183,230 | 1,205,653 | |||||||||
18,451,714 | |||||||||||
Building products—0.16% | |||||||||||
Continental Building Products, Inc.* | 64,902 | 856,057 | |||||||||
Capital markets—1.68% | |||||||||||
Financial Engines, Inc.1 | 90,578 | 3,528,013 | |||||||||
Lazard Ltd., Class A | 37,785 | 1,976,156 | |||||||||
Waddell & Reed Financial, Inc. Class A | 31,048 | 1,639,024 | |||||||||
WisdomTree Investments, Inc.*,1 | 154,544 | 1,585,621 | |||||||||
8,728,814 | |||||||||||
Chemicals—1.22% | |||||||||||
Axiall Corp. | 50,827 | 2,176,920 | |||||||||
H.B. Fuller Co. | 42,158 | 1,882,355 | |||||||||
RPM International, Inc. | 50,941 | 2,250,573 | |||||||||
6,309,848 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Commercial services & supplies—5.78% | |||||||||||
CyrusOne, Inc. | 77,201 | $ | 1,918,445 | ||||||||
Healthcare Services Group, Inc. | 111,265 | 2,908,467 | |||||||||
Herman Miller, Inc. | 21,941 | 641,555 | |||||||||
Innerworkings, Inc.* | 170,687 | 1,391,099 | |||||||||
Mobile Mini, Inc. | 131,239 | 4,955,584 | |||||||||
Portfolio Recovery Associates, Inc.* | 89,958 | 5,303,924 | |||||||||
Ritchie Brothers Auctioneers, Inc.1 | 231,758 | 5,613,179 | |||||||||
Rollins, Inc. | 188,490 | 5,336,152 | |||||||||
Waste Connections, Inc. | 40,991 | 1,940,514 | |||||||||
30,008,919 | |||||||||||
Communications equipment—0.63% | |||||||||||
Aruba Networks, Inc.* | 58,786 | 1,049,918 | |||||||||
AudioCodes Ltd.*,1 | 50,013 | 281,573 | |||||||||
Digi International, Inc.* | 165,927 | 1,370,557 | |||||||||
Ubiquiti Networks, Inc.*,1 | 14,887 | 569,130 | |||||||||
3,271,178 | |||||||||||
Construction materials—0.41% | |||||||||||
Martin Marietta Materials, Inc. | 17,125 | 2,127,439 | |||||||||
Consumer finance—0.55% | |||||||||||
Cardtronics, Inc.* | 73,736 | 2,843,260 | |||||||||
Containers & packaging—0.87% | |||||||||||
Berry Plastics Group, Inc.* | 94,604 | 2,297,931 | |||||||||
Crown Holdings, Inc.* | 47,133 | 2,194,041 | |||||||||
4,491,972 | |||||||||||
Diversified consumer services—3.05% | |||||||||||
Bright Horizons Family Solutions, Inc.* | 51,504 | 2,141,021 | |||||||||
Grand Canyon Education, Inc.* | 186,292 | 8,010,556 | |||||||||
K12, Inc.* | 107,525 | 2,506,408 | |||||||||
Sotheby's | 80,064 | 3,174,538 | |||||||||
15,832,523 | |||||||||||
Diversified financial services—0.28% | |||||||||||
CBOE Holdings, Inc. | 29,515 | 1,430,592 | |||||||||
Diversified telecommunication services—0.33% | |||||||||||
Cogent Communications Holdings, Inc. | 45,196 | 1,568,753 | |||||||||
inContact, Inc.* | 17,035 | 136,110 | |||||||||
1,704,863 | |||||||||||
Electrical equipment—0.92% | |||||||||||
Acuity Brands, Inc. | 12,983 | 1,392,687 | |||||||||
Generac Holdings, Inc.*,1 | 78,193 | 3,393,576 | |||||||||
4,786,263 | |||||||||||
Electronic equipment, instruments & components—2.24% | |||||||||||
Belden, Inc. | 28,628 | 1,943,841 | |||||||||
Cognex Corp.* | 52,614 | 2,156,122 | |||||||||
Coherent, Inc.* | 25,063 | 1,476,461 | |||||||||
CUI Global, Inc.*,1 | 30,512 | 189,479 | |||||||||
National Instruments Corp. | 184,690 | 5,880,530 | |||||||||
11,646,433 |
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Energy equipment & services—0.63% | |||||||||||
Basic Energy Services, Inc.* | 43,793 | $ | 1,050,594 | ||||||||
C&J Energy Services, Inc.* | 30,254 | 906,410 | |||||||||
Natural Gas Services Group, Inc.* | 16,435 | 512,772 | |||||||||
Precision Drilling Corp. | 63,120 | 786,475 | |||||||||
3,256,251 | |||||||||||
Food & staples retailing—1.44% | |||||||||||
Rite Aid Corp.* | 220,802 | 1,477,165 | |||||||||
The Fresh Market, Inc.*,1 | 47,341 | 1,416,916 | |||||||||
United Natural Foods, Inc.* | 77,788 | 4,559,933 | |||||||||
7,454,014 | |||||||||||
Food products—0.62% | |||||||||||
J&J Snack Foods Corp. | 8,538 | 769,188 | |||||||||
The Hain Celestial Group, Inc.* | 23,537 | 2,012,414 | |||||||||
TreeHouse Foods, Inc.* | 5,928 | 435,708 | |||||||||
3,217,310 | |||||||||||
Health care equipment & supplies—3.97% | |||||||||||
Abaxis, Inc. | 68,078 | 3,227,578 | |||||||||
Align Technology, Inc.* | 13,171 | 714,000 | |||||||||
Cantel Medical Corp. | 10,278 | 344,621 | |||||||||
Cardiovascular Systems, Inc.* | 19,929 | 538,083 | |||||||||
DexCom, Inc.* | 82,024 | 3,090,664 | |||||||||
Endologix, Inc.* | 156,649 | 2,216,583 | |||||||||
Neogen Corp.* | 107,192 | 4,680,003 | |||||||||
Novadaq Technologies, Inc.* | 11,006 | 168,832 | |||||||||
Sirona Dental Systems, Inc.* | 24,483 | 1,963,537 | |||||||||
The Spectranetics Corp.* | 88,038 | 2,258,175 | |||||||||
Thoratec Corp.* | 43,423 | 1,411,247 | |||||||||
20,613,323 | |||||||||||
Health care providers & services—8.38% | |||||||||||
Acadia Healthcare Co., Inc.* | 93,816 | 4,471,271 | |||||||||
Air Methods Corp.*,1 | 24,738 | 1,243,084 | |||||||||
Amsurg Corp.* | 27,856 | 1,330,403 | |||||||||
Bio-Reference Laboratories, Inc.*,1 | 107,229 | 3,365,918 | |||||||||
Catamaran Corp.* | 36,095 | 1,641,961 | |||||||||
Chemed Corp.1 | 36,935 | 3,761,830 | |||||||||
Community Health Systems, Inc.* | 84,138 | 4,013,383 | |||||||||
Envision Healthcare Holdings, Inc.* | 113,907 | 4,072,175 | |||||||||
IPC The Hospitalist Co.* | 60,445 | 2,972,685 | |||||||||
Magellan Health, Inc.* | 48,080 | 2,769,408 | |||||||||
MEDNAX, Inc.* | 93,610 | 5,539,840 | |||||||||
Premier, Inc., Class A* | 84,911 | 2,402,981 | |||||||||
Team Health Holdings, Inc.* | 62,309 | 3,523,574 | |||||||||
WellCare Health Plans, Inc.* | 38,219 | 2,384,101 | |||||||||
43,492,614 | |||||||||||
Health care technology—1.35% | |||||||||||
athenahealth, Inc.*,1 | 39,041 | 4,856,701 | |||||||||
Medidata Solutions, Inc.* | 12,992 | 582,561 | |||||||||
Merge Healthcare, Inc.*,1 | 637,068 | 1,567,187 | |||||||||
7,006,449 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Hotels, restaurants & leisure—3.95% | |||||||||||
Bloomin' Brands, Inc.* | 80,260 | $ | 1,572,294 | ||||||||
Del Frisco's Restaurant Group, Inc.* | 20,806 | 443,584 | |||||||||
Fiesta Restaurant Group, Inc.* | 21,613 | 980,798 | |||||||||
Jack in the Box, Inc. | 23,075 | 1,319,659 | |||||||||
Kona Grill, Inc.* | 36,139 | 666,042 | |||||||||
Multimedia Games Holding Co., Inc.* | 9,101 | 219,516 | |||||||||
Red Robin Gourmet Burgers, Inc.* | 83,576 | 5,378,951 | |||||||||
SeaWorld Entertainment, Inc. | 120,885 | 3,366,647 | |||||||||
The Cheesecake Factory, Inc. | 89,105 | 3,820,823 | |||||||||
Wyndham Worldwide Corp. | 36,633 | 2,767,623 | |||||||||
20,535,937 | |||||||||||
Household durables—0.59% | |||||||||||
Harman International Industries, Inc. | 28,080 | 3,048,084 | |||||||||
Industrial conglomerates—0.38% | |||||||||||
Carlisle Cos., Inc. | 24,846 | 1,988,177 | |||||||||
Internet & catalog retail—0.82% | |||||||||||
HomeAway, Inc.* | 86,567 | 3,005,606 | |||||||||
Shutterfly, Inc.* | 25,543 | 1,259,781 | |||||||||
4,265,387 | |||||||||||
Internet software & services—4.30% | |||||||||||
ChannelAdvisor Corp.* | 73,000 | 1,673,890 | |||||||||
DealerTrack Holdings, Inc.* | 173,403 | 6,514,751 | |||||||||
Internap Network Services Corp.* | 559,035 | 4,030,642 | |||||||||
Marchex, Inc., Class B | 121,424 | 1,335,664 | |||||||||
Marketo, Inc.*,1 | 62,006 | 1,695,864 | |||||||||
Perficient, Inc.* | 29,281 | 497,484 | |||||||||
SciQuest, Inc.* | 112,145 | 1,725,912 | |||||||||
Shutterstock, Inc.*,1 | 8,504 | 662,802 | |||||||||
SPS Commerce, Inc.* | 72,221 | 3,852,990 | |||||||||
TechTarget, Inc.* | 48,172 | 366,107 | |||||||||
22,356,106 | |||||||||||
IT services—4.21% | |||||||||||
Cass Information Systems, Inc. | 49,180 | 2,219,493 | |||||||||
Echo Global Logistics, Inc.* | 96,761 | 2,129,710 | |||||||||
Euronet Worldwide, Inc.* | 40,982 | 2,050,739 | |||||||||
ExlService Holdings, Inc.* | 87,929 | 2,466,409 | |||||||||
Heartland Payment Systems, Inc.1 | 67,830 | 3,221,925 | |||||||||
MAXIMUS, Inc. | 219,104 | 9,062,141 | |||||||||
Vantiv, Inc., Class A* | 21,437 | 702,705 | |||||||||
21,853,122 | |||||||||||
Leisure products—1.02% | |||||||||||
Brunswick Corp. | 40,457 | 1,631,631 | |||||||||
Nautilus, Inc.* | 47,231 | 470,421 | |||||||||
Polaris Industries, Inc. | 21,811 | 3,217,995 | |||||||||
5,320,047 | |||||||||||
Life sciences tools & services—1.72% | |||||||||||
ICON PLC* | 29,467 | 1,526,391 | |||||||||
PAREXEL International Corp.* | 67,311 | 3,605,177 | |||||||||
Techne Corp. | 40,670 | 3,795,324 | |||||||||
8,926,892 |
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Machinery—3.71% | |||||||||||
Colfax Corp.* | 30,990 | $ | 1,951,440 | ||||||||
ITT Corp. | 5,982 | 274,993 | |||||||||
Lincoln Electric Holdings, Inc. | 34,738 | 2,307,993 | |||||||||
Middleby Corp.* | 27,445 | 1,999,643 | |||||||||
Proto Labs, Inc.*,1 | 47,480 | 3,845,880 | |||||||||
Terex Corp. | 62,169 | 2,145,452 | |||||||||
Trimas Corp.* | 61,453 | 1,946,831 | |||||||||
Wabash National Corp* | 11,991 | 163,197 | |||||||||
Wabtec Corp. | 25,154 | 2,029,425 | |||||||||
Woodward, Inc. | 52,372 | 2,616,505 | |||||||||
19,281,359 | |||||||||||
Media—0.87% | |||||||||||
Cinemark Holdings, Inc. | 70,776 | 2,321,453 | |||||||||
Nexstar Broadcasting Group, Inc., Class A1 | 21,895 | 1,020,088 | |||||||||
Sinclair Broadcast Group, Inc., Class A1 | 36,080 | 1,165,745 | |||||||||
4,507,286 | |||||||||||
Multiline retail—0.20% | |||||||||||
Burlington Stores, Inc.* | 13,156 | 430,596 | |||||||||
Tuesday Morning Corp.* | 36,805 | 605,810 | |||||||||
1,036,406 | |||||||||||
Oil, gas & consumable fuels—3.00% | |||||||||||
American Eagle Energy Corp.* | 20,107 | 129,288 | |||||||||
Bill Barrett Corp.*,1 | 115,304 | 2,768,449 | |||||||||
Diamondback Energy, Inc.* | 19,790 | 1,627,332 | |||||||||
Gulfport Energy Corp.* | 14,311 | 764,350 | |||||||||
Halcon Resources Corp.*,1 | 146,906 | 874,091 | |||||||||
Kodiak Oil & Gas Corp.* | 75,407 | 1,171,825 | |||||||||
Magnum Hunter Resources Corp.*,1 | 270,290 | 1,737,965 | |||||||||
Oasis Petroleum, Inc.* | 45,387 | 2,425,935 | |||||||||
Rosetta Resources, Inc.* | 45,330 | 2,315,003 | |||||||||
Sanchez Energy Corp.*,1 | 37,013 | 1,174,052 | |||||||||
Vertex Energy, Inc.*,1 | 70,898 | 582,782 | |||||||||
15,571,072 | |||||||||||
Paper & forest products—1.01% | |||||||||||
Boise Cascade Co.* | 187,003 | 5,264,134 | |||||||||
Pharmaceuticals—1.31% | |||||||||||
Akorn, Inc.* | 25,699 | 871,967 | |||||||||
ANI Pharmaceuticals, Inc.* | 7,941 | 203,448 | |||||||||
BioDelivery Sciences International, Inc.*,1 | 128,205 | 1,634,614 | |||||||||
Dipexium Pharmaceuticals, Inc.* | 33,747 | 330,046 | |||||||||
Horizon Pharma, Inc.*,1 | 14,656 | 124,576 | |||||||||
Jazz Pharmaceuticals PLC* | 15,117 | 2,112,298 | |||||||||
Lannett Co., Inc.* | 39,121 | 1,314,857 | |||||||||
Sagent Pharmaceuticals, Inc.* | 9,025 | 229,957 | |||||||||
6,821,763 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Professional services—5.08% | |||||||||||
Acacia Research1 | 85,546 | $ | 1,459,415 | ||||||||
CoStar Group, Inc.* | 44,430 | 6,385,924 | |||||||||
Huron Consulting Group, Inc.* | 31,271 | 1,890,019 | |||||||||
Kelly Services, Inc., Class A | 61,486 | 980,087 | |||||||||
Kforce, Inc. | 174,440 | 3,469,611 | |||||||||
Korn/Ferry International* | 75,316 | 2,215,797 | |||||||||
Manpower, Inc. | 19,108 | 1,488,322 | |||||||||
On Assignment, Inc.* | 70,877 | 1,914,388 | |||||||||
The Advisory Board Co.* | 92,462 | 4,636,044 | |||||||||
WageWorks, Inc.* | 46,474 | 1,939,825 | |||||||||
26,379,432 | |||||||||||
Road & rail—1.30% | |||||||||||
Celadon Group, Inc. | 9,999 | 212,379 | |||||||||
Genesee & Wyoming, Inc., Class A* | 26,753 | 2,668,077 | |||||||||
Marten Transport Ltd. | 13,851 | 280,344 | |||||||||
Old Dominion Freight Line, Inc.* | 10,472 | 664,762 | |||||||||
Roadrunner Transportation Systems, Inc.* | 99,765 | 2,508,092 | |||||||||
Swift Transportation Co.* | 19,637 | 401,577 | |||||||||
6,735,231 | |||||||||||
Semiconductors & semiconductor equipment—3.65% | |||||||||||
Cabot Microelectronics Corp.* | 80,041 | 3,216,848 | |||||||||
Cavium, Inc.* | 22,524 | 1,050,745 | |||||||||
Diodes, Inc.* | 37,375 | 953,062 | |||||||||
MaxLinear, Inc., Class A* | 79,447 | 753,158 | |||||||||
Mellanox Technologies Ltd.*,1 | 37,562 | 1,564,457 | |||||||||
Power Integrations, Inc. | 91,065 | 4,902,029 | |||||||||
RF Micro Devices, Inc.* | 28,201 | 314,723 | |||||||||
Semtech Corp.* | 216,173 | 4,827,143 | |||||||||
Skyworks Solutions, Inc. | 26,800 | 1,360,368 | |||||||||
18,942,533 | |||||||||||
Software—9.84% | |||||||||||
Allot Communications Ltd.*,1 | 128,062 | 1,655,842 | |||||||||
Aspen Technology, Inc.* | 6,669 | 289,701 | |||||||||
Cadence Design Systems, Inc.* | 106,249 | 1,788,171 | |||||||||
Callidus Software, Inc.* | 33,806 | 362,400 | |||||||||
CommVault Systems, Inc.* | 57,924 | 2,781,511 | |||||||||
Concur Technologies, Inc.*,1 | 10,924 | 1,015,495 | |||||||||
FleetMatics Group PLC*,1 | 31,237 | 986,777 | |||||||||
Fortinet, Inc.* | 13,707 | 336,507 | |||||||||
Glu Mobile, Inc.*,1 | 81,050 | 454,691 | |||||||||
Imperva, Inc.*,1 | 91,775 | 2,034,652 | |||||||||
Informatica Corp.* | 55,238 | 1,752,149 | |||||||||
NetSuite, Inc.* | 17,020 | 1,434,956 | |||||||||
Pegasystems, Inc. | 145,914 | 3,118,182 | |||||||||
Proofpoint, Inc.* | 156,702 | 5,526,880 | |||||||||
PROS Holdings, Inc.* | 45,450 | 1,164,429 | |||||||||
QLIK Technologies, Inc.* | 85,295 | 2,256,906 | |||||||||
ServiceNow, Inc.* | 21,804 | 1,282,075 | |||||||||
SS&C Technologies Holdings, Inc.* | 52,939 | 2,292,788 | |||||||||
Synchronoss Technologies, Inc.* | 109,270 | 4,415,601 | |||||||||
Tableau Software, Inc., Class A* | 26,679 | 1,734,135 |
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Software—(concluded) | |||||||||||
Tyler Technologies, Inc.* | 10,673 | $ | 968,361 | ||||||||
Ultimate Software Group, Inc.* | 76,484 | 10,318,456 | |||||||||
Verint Systems, Inc.* | 66,260 | 3,110,244 | |||||||||
51,080,909 | |||||||||||
Specialty retail—4.75% | |||||||||||
Asbury Automotive Group, Inc.* | 23,215 | 1,567,709 | |||||||||
Ascena Retail Group, Inc.* | 102,171 | 1,640,866 | |||||||||
Five Below, Inc.*,1 | 94,335 | 3,454,548 | |||||||||
Francesca's Holdings Corp.*,1 | 18,984 | 242,615 | |||||||||
Hibbett Sports, Inc.*,1 | 25,553 | 1,275,350 | |||||||||
Lithia Motors, Inc., Class A | 37,309 | 3,314,905 | |||||||||
Office Depot, Inc.* | 297,470 | 1,490,325 | |||||||||
Penske Automotive Group, Inc. | 16,732 | 777,201 | |||||||||
Restoration Hardware Holdings, Inc.* | 22,544 | 1,843,874 | |||||||||
The Children's Place, Inc. | 43,455 | 2,181,441 | |||||||||
The Finish Line, Inc., Class A | 20,166 | 530,164 | |||||||||
Tile Shop Holdings, Inc.*,1 | 183,270 | 1,852,860 | |||||||||
Urban Outfitters, Inc.* | 67,675 | 2,418,028 | |||||||||
Vitamin Shoppe, Inc.* | 15,411 | 657,279 | |||||||||
Williams-Sonoma, Inc. | 21,064 | 1,412,762 | |||||||||
24,659,927 | |||||||||||
Technology hardware, storage & peripherals—1.17% | |||||||||||
Stratasys Ltd.*,1 | 35,810 | 3,600,337 | |||||||||
Super Micro Computer, Inc.* | 45,162 | 1,181,890 | |||||||||
Synaptics, Inc.* | 18,213 | 1,315,525 | |||||||||
6,097,752 | |||||||||||
Textiles, apparel & luxury goods—0.73% | |||||||||||
G-III Apparel Group Ltd.* | 9,473 | 735,768 | |||||||||
Hanesbrands, Inc. | 13,910 | 1,359,146 | |||||||||
Kate Spade & Co.* | 28,191 | 1,066,465 | |||||||||
Skechers USA, Inc., Class A* | 12,215 | 637,257 | |||||||||
3,798,636 | |||||||||||
Thrifts & mortgage finance—0.57% | |||||||||||
BankUnited, Inc. | 66,615 | 2,081,053 | |||||||||
Tree.com, Inc.* | 34,673 | 884,855 | |||||||||
2,965,908 |
Number of shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
Trading companies & distributors—0.61% | |||||||||||
Beacon Roofing Supply, Inc.* | 115,220 | $ | 3,184,681 | ||||||||
Total common stocks (cost—$434,397,764) | 506,538,047 | ||||||||||
Number of warrants | |||||||||||
Warrants—0.00%† | |||||||||||
Oil, gas & consumable fuels—0.00%† | |||||||||||
Magnum Hunter Resources Corp., strike price $8.50, expires 04/15/16*,1 (cost—$0) | 53,494 | 0 | |||||||||
Face amount | |||||||||||
Repurchase agreement—3.35% | |||||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $17,931,785 US Treasury Note, 0.625% due 05/31/17; (value—$17,774,882); proceeds: $17,428,000 (cost—$17,428,000) | $ | 17,428,000 | 17,428,000 | ||||||||
Number of shares | |||||||||||
Investment of cash collateral from securities loaned—13.63% | |||||||||||
Money market fund—13.63% | |||||||||||
UBS Private Money Market Fund LLC2 (cost—$70,777,816) | 70,777,816 | 70,777,816 | |||||||||
Total investments (cost—$522,603,580)—114.52% | 594,743,863 | ||||||||||
Liabilities in excess of other assets—(14.52)% | (75,421,838 | ) | |||||||||
Net assets—100.00% | $ | 519,322,025 |
For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 232.
Aggregate cost for federal income tax purposes was $525,288,851; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 89,732,324 | |||||
Gross unrealized depreciation | (20,277,312 | ) | |||||
Net unrealized appreciation | $ | 69,455,012 |
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Portfolio of investments—July 31, 2014
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
Common stocks | $ | 506,538,047 | $ | — | $ | — | $ | 506,538,047 | |||||||||||
Warrants | — | — | 0 | 0 | |||||||||||||||
Repurchase agreement | — | 17,428,000 | — | 17,428,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 70,777,816 | — | 70,777,816 | |||||||||||||||
Total | $ | 506,538,047 | $ | 88,205,816 | $ | 0 | $ | 594,743,863 |
At July 31, 2014, there were no transfers between Level 1 and Level 2.
The following is a rollforward of the Portfolio's investment that was valued using unobservable inputs (Level 3) for the year ended July 31, 2014
Warrants | |||||||
Beginning balance | $ | — | |||||
Purchases | 0 | ||||||
Sales | — | ||||||
Accrued discounts/(premiums) | — | ||||||
Total realized gain/(loss) | — | ||||||
Net change in unrealized appreciation/depreciation | — | ||||||
Transfers into Level 3 | — | ||||||
Transfers out of Level 3 | — | ||||||
Ending balance | $ | 0 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investment held at July 31, 2014 was $0.
Issuer breakdown by country or territory of origin (unaudited)
Percentage of total investments | |||||||
United States | 96.1 | % | |||||
Canada | 1.6 | ||||||
Israel | 1.2 | ||||||
Ireland | 0.8 | ||||||
Bermuda | 0.3 | ||||||
Total | 100.0 | % |
Portfolio footnotes
* Non-income producing security.
† Amount represents less than 0.005%.
1 Security, or portion thereof, was on loan at July 31, 2014.
2 The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2014. The investment manager earns a management fee from UBS Private Money Market Fund LLC. Please see the Notes to financial statements for further information.
Security description | Value at 07/31/13 | Purchases during the year ended 07/31/14 | Sales during the year ended 07/31/14 | Value at 07/31/14 | Net income earned from affiliate for the year ended 07/31/14 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 41,413,440 | $ | 325,137,194 | $ | 295,772,818 | $ | 70,777,816 | $ | 3,602 |
See accompanying notes to financial statements.
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Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 14.12% before the deduction of the maximum PACE Select program fee.1 In comparison, the MSCI EAFE Index (net) (the "benchmark") returned 15.07%, and the Lipper International Large-Cap Core Funds category posted a median return of 13.16%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 161. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisors' comments2
Please note: On August 5, 2013, Chautauqua Capital Management, LLC began serving as a sub-advisor for this Portfolio, replacing Martin Currie, which was terminated as a sub-advisor for the Portfolio effective August 2, 2013 at the close of business. On September 13, 2013, Los Angeles Capital Management and Equity Research, Inc. began serving as a sub-advisor for this Portfolio, replacing J.P. Morgan (International REI), which was terminated as a sub-advisor for the Portfolio effective September 13, 2013 at the close of business. J.P. Morgan (EAFE Opportunities) was terminated as a sub-advisor for the Portfolio effective February 25, 2014 at the close of business.
Mondrian
Our portion of the Portfolio outperformed the benchmark during the reporting period. Stock selection within markets was the dominant influence on our relative returns. This was driven, in particular, by strong stock selection in France, Germany and Japan. At the sector level, our overweight positions in the telecommunication services and information technology sectors added to returns. We also benefited from specific holdings in the utilities and energy sectors, including Total S.A. and Iberdrola. Stock selection in the health care sector weighed slightly on our return, due to the weak performance of GlaxoSmithKline and our lack of exposure to specific health care stocks that were subject to takeover bids.
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
PACE Select Advisors Trust –
PACE International Equity Investments
Investment Sub-Advisors:
Martin Currie Inc. ("Martin Currie") until August 2, 2013, Mondrian Investment Partners Limited ("Mondrian"); Chautauqua Capital Management, LLC ("Chautauqua") and Los Angeles Capital Management and Equity Research, Inc. ("Los Angeles Capital")
Portfolio Managers:
Martin Currie: Christine Montgomery;
Mondrian: Elizabeth A. Desmond, Nigel G. May and Russell J. Mackie; Chautauqua: Brian M. Beitner, CFA, Michael Mow, CFA and Amanda Prentiss
Los Angeles Capital: Thomas D. Stevens, CFA, Hal W. Reynolds, CFA and Daniel E. Allen, CFA
Objective:
Capital appreciation
Investment process:
Martin Currie has a highly active "conviction" approach, seeking the best opportunities for growth across global stock markets. At Martin Currie, they believe stock focused portfolios, driven by fundamental research, are the best way to exploit market inefficiencies and generate consistent outperformance. They use a consistent analytical framework to find undervalued stocks by assessing quality, value and growth characteristics over a three to five year time horizon. The result is the construction of portfolios which exhibit quality and growth characteristics and attractive valuations. In managing its segment of the Portfolio's assets, Martin Currie uses a fully integrated international investment process seeking to identify the connections that others miss. So rather than running distinct regional portfolios, it compares and ranks stock opportunities
(continued on next page)
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Sub-Advisors' comments – continued
Country allocation was neutral for performance during the reporting period. An overweight position in the strong Spanish equity market added to returns, but this was offset by an underweight position in Scandinavian equity markets. Currency allocation made a small contribution to returns, helped by an underweight exposure to the weak Japanese yen.
Other contributors to our portion of the Portfolio included an overweight in selected European markets; overweights in the telecommunications services, consumer staples and health care sectors; underweights in the materials and financials sectors; and a defensive currency hedge out of the Australian dollar.
The derivative exposure within our portion of the Portfolio was in the form of defensive forward currency contracts in an unleveraged and fully covered manner. At the end of the reporting period, we hedged 83% of our Australian dollar exposure. This hedging was undertaken using three-month forward currency contracts. We had chosen to hedge the Australian dollar, as our analysis showed that the currency was significantly overvalued, and we wished to protect the value of the underlying investment in these markets. During the period, our defensive currency hedging modestly detracted from performance.
Chautauqua
Our portion of the Portfolio underperformed the benchmark during the reporting period, from our inception as a sub-advisor on August 5, 2013 through July 31, 2014. Stock selection in the consumer discretionary and energy sectors were the largest detractors from performance. Additionally, value-oriented stocks in Europe outperformed growth over the period, which was a headwind for our portion of the Portfolio. A lack of exposure to utilities also hurt our results, as high yielding companies were some of the best performers in the benchmark. Utilities typically do not meet our investment criteria because the benefits of any cost structure advantage they attain tend to accrue to utility customers rather than to investors. Over this time period the least profitable, lower return on asset companies, outperformed the most profitable companies we tend to invest in. On the positive side, stock selection in financials and information technology was additive for performance. Stock selection in the emerging markets, in particular Brazil and South Korea, added value as well. Our portion of the Portfolio also benefited from having no exposure to Japan during the reporting period. However, an overweight to Switzerland, along with stock selection in the country, hurt performance.
Investment process (continued)
across the whole investment universe. To help identify and evaluate the best stock ideas, Martin Currie works closely with teams of dedicated regional and global sector research specialists with the sole objective of finding those companies that can deliver outperformance.
J.P. Morgan manages two separate segments of the Portfolio's assets, utilizing distinct principal investment strategies and portfolio management for each. In managing one segment of the Portfolio's assets, the International Research Enhanced Index Strategy segment ("International REI" segment), J.P. Morgan uses a bottom-up, research driven strategy that seeks to generate risk characteristics that closely match those of the Portfolio's benchmark yet at the same time capitalize on the information advantage created by the firm's proprietary research capabilities to generate outperformance. The strategy is driven by valuation based fundamental analysis, focused on normalized earnings and earnings growth. The J.P. Morgan team seeks to maintain regional weights and sector/industry weights close to those of the benchmark. Stock selection is the focus, being the expected primary source of added value.
In managing the second segment of the Portfolio's assets, the Europe, Australasia, and Far East Opportunities Strategy segment ("EAFE Opportunities" segment), J.P. Morgan uses an active equity strategy, which represents a partnership between portfolio management and the firm's proprietary network of analysts. J.P. Morgan applies a uniform valuation methodology across regions and sectors, and analysts conduct thorough analysis with a particular emphasis on a company's normalized (or mid-cycle) earnings and their intermediate growth rate. J.P. Morgan typically focuses
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Sub-Advisors' comments – continued
We believe that on a selective basis, taking into account macro-economic as well as company-specific dynamics, that there continue to be attractive opportunities. We believe our portion of the Portfolio is well positioned with high-quality, advantaged companies that benefit from long-term trends. We expect a gradual pick-up in economic growth and believe that companies with high value added products, minimal leverage and pricing power should outperform.
Derivatives were not used during the review period.
Los Angeles Capital
Our portion of the Portfolio outperformed the benchmark during the reporting period, from our inception as a sub-advisor on September 13, 2013 through July 31, 2014. Fundamental factors contributed significantly to returns and currency tilts were modestly beneficial, whereas country tilts detracted from results. In terms of fundamental factors, a tilt away from leverage in Japan was the largest contributor to performance. A tilt toward low volatility stocks also added value, while a tilt away from stocks touted by analysts detracted from results.
In Europe, a tilt toward smaller-capitalization, higher yielding companies that were favored by analysts contributed to performance, while tilts toward companies with higher earnings quality and higher expected earnings growth detracted from results. In the Pacific ex-Japan region, tilts toward companies with good breakup values and favorable analysts' views were additive, whereas a tilt toward companies with higher leverage was a headwind for performance.
In terms of sectors, in Europe, a tilt away from energy was rewarded, while a tilt away from health care and toward telecommunication services detracted. In Japan, a tilt toward consumer discretionary contributed to performance, while a tilt away from health care detracted from results. In the Pacific ex-Japan region, tilts away from utilities, telecommunication services, financials and consumer staples were all positive for results, whereas a tilt toward consumer discretionary detracted from performance. In terms of country exposure, an underweight to the Netherlands was rewarded, but underweights to Germany and Sweden detracted from performance. Within currencies, overweights to the euro and the Australian dollar were positive for results.
At the end of the reporting period, our portion of the Portfolio exhibited tilts toward consumer discretionary and utilities, and
Investment process (continued)
on the most attractive companies, within a sector, that possess a catalyst for share price appreciation in an effort to build a portfolio where stock selection is the primary source of added value.
Mondrian conducts research on a global basis in an effort to identify securities that have the potential for capital appreciation over a market cycle. The center of its research effort is a value-oriented dividend discount methodology toward individual securities and market analysis that attempts to identify value across country boundaries. This approach focuses on future anticipated dividends, and discounts the value of those dividends back to what they would be worth if they were being paid today.
Comparisons of the values of different possible investments are then made. In an international portfolio, currency returns can be an integral component of an investment's total return. Mondrian uses a purchasing power parity approach to assess the value of individual currencies. Purchasing power parity attempts to identify the amount of goods and services that a dollar will buy in the United States, and compares that to the amount of a foreign currency required to buy the same amount of goods and services in another country.
Chautauqua seeks to achieve consistent risk adjusted excess returns by managing a concentrated portfolio of 25-35 quality, growth companies generally headquartered outside of the United States. The portfolio consists of a carefully diversified set of best idea equities that Chautauqua believes will benefit from long-term trends, have sustainable competitive advantages and exhibit growth that should outpace the market. Companies are valued based on a forward looking cash flow analysis. When
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Sub-Advisors' comments – continued
away from financials and energy. Our portion of the Portfolio exhibited a lower price-to-earnings ratio, but a higher yield and a higher price-to-book ratio relative to the benchmark. Our portion of the Portfolio also exhibited a lower beta and weighted average market capitalization than the benchmark.
Derivatives were not used during the review period.
Martin Currie
We managed a portion of the Portfolio for the period from July 31, 2013 through August 2, 2013. Regionally, our largest overweight position was in emerging markets. Our allocation to developed Middle Eastern countries was also an overweight position. Pacific ex-Japan was our largest underweight position, followed by Pan Europe and Japan. At the sector level, our largest overweight position was in consumer discretionary. We were also overweight materials, financials and information technology. In contrast, we were underweight energy, industrials, consumer staples, health care, telecommunication services and utilities, the latter of which was our largest underweight.
Derivatives were not used during the review period.
J.P. Morgan (International REI)
For the period from August 1, 2013 through September 12, 2013, when we managed a portion of the Portfolio, we underperformed the benchmark. Stock selection in the health care, utilities, and industrial cyclical sectors detracted from results. These negatives were mostly offset by positive stock selection in the basic industries and media sectors. At the regional level, stock selection in Europe had a negative impact on performance, while stock selection in Japan contributed to results.
At the stock level, Otsuka Holdings, a Japanese pharmaceutical company, was a negative for our performance. In late August 2013, the Food and Drug Administration did not approve the kidney treatment drug Samsca, and it is now expected that the drug will undertake further trials that could last upwards of three years. On the upside, UPM Kymmene, a Finnish forestry service and paper product manufacturer, contributed to performance. The stock rose as the company announced better-than-expected earnings and profit improvement targets. The company has embarked on a major profitability program. In addition to reducing headcount, trimming costs and scaling back capacity in Europe, UPM Kymmene is also pursuing alternative sources of revenue. For example, it is building a bio refinery that will produce diesel using waste from its pulp mills. That project is expected to come on-line by the end of 2014.
The EAFE REI portfolio seeks to harness the stock-specific insights of J.P. Morgan's team of research analysts. Overall, the portfolio displayed characteristics very similar to that of the MSCI EAFE Index in terms of geographic breakdown, sector composition and exposure to various macro and factor risks. However, individual components of the benchmark were marginally overweighted or underweighted based on the fundamental research carried out by J.P. Morgan analysts in an effort to generate excess returns.
Investment process (concluded)
selecting investments, Chautauqua has a long-term horizon.
Los Angeles Capital employs a "long/short" or "130/30" equity strategy. Los Angeles Capital buys securities "long" that it believes will outperform the market or decrease portfolio risk, and sells securities "short" that it believes will underperform the market. Los Angeles Capital uses a proprietary quantitative model that includes fundamental data inputs for a universe of equity securities and, through the use of statistical tools, estimates expected returns based on each security's risk characteristics and the expected return to each characteristic in the current market environment.
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Sub-Advisors' comments – concluded
Our portion of the Portfolio used derivatives in the form of currency forwards and futures. Derivatives are only used for the efficient management of cash flow and to reduce currency deviations from the benchmark, where practical, for the purposes of risk management. Derivatives are not used as a source of excess returns. Exchange traded equity futures can be used to gain or reduce exposure to a market quickly and cheaply and, as such, are used for the efficient management of cash flows, subject to regulatory guidelines.
J.P. Morgan (EAFE Opportunities)
For the period from August 1, 2013 through February 25, 2014, when we managed a portion of the Portfolio, we underperformed the benchmark. During this period, the theme of European recovery dominated overseas markets and stocks geared toward that theme generally did well. In contrast, stocks geared toward Japan and/or the emerging markets lagged, weighed down by uncertainty about growth prospects in those areas.
We lost ground in sectors that had significant exposure to Japan and/or emerging markets. These sectors included banking, consumer nondurables and, to a lesser extent, energy. In contrast, stock selection added value in the automotive and basic industries sectors, where holdings geared toward the European economy figured prominently among our best performers.
Our portion of the Portfolio used derivatives in the form of currency forwards and futures. Derivatives are only used for the efficient management of cash flow and to reduce currency deviations from the benchmark, where practical, for the purposes of risk management. Derivatives are not used as a source of excess returns. Exchange traded equity futures can be used to gain or reduce exposure to a market quickly and cheaply and, as such, are used for the efficient management of cash flows, subject to regulatory guidelines.
Special considerations
The Portfolio may be appropriate for long-term investors seeking capital appreciation who are able to withstand short-term fluctuations in the equity markets in return for potentially higher returns over the long term. The value of the Portfolio changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the companies in whose securities the Portfolio invests. It is important to note that an investment in the Portfolio is only one component of a balanced investment plan. The value of the Portfolio'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 US dollar. These risks are greater for investments in emerging market issuers than for issuers in more developed countries.
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Illustration of an assumed investment of $10,000 in Class P shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE International Equity Investments Class P shares versus the MSCI EAFE Index (net) over the 10 years ended July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE International Equity Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustration purposes only.
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Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 13.78 | % | 8.18 | % | 6.06 | % | |||||||||
Class C2 | 12.93 | % | 7.28 | % | 5.19 | % | |||||||||
Class Y3 | 14.10 | % | 8.48 | % | 6.42 | % | |||||||||
Class P4 | 14.12 | % | 8.45 | % | 6.35 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 7.54 | % | 6.97 | % | 5.47 | % | |||||||||
Class C2 | 11.94 | % | 7.28 | % | 5.19 | % | |||||||||
MSCI EAFE Index (net)5 | 15.07 | % | 9.40 | % | 7.07 | % | |||||||||
Lipper International Large-Cap Core Funds median | 13.16 | % | 8.58 | % | 6.83 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 23.02 | % | 10.76 | % | 6.10 | % | |||||||||
Class C2 | 22.03 | % | 9.86 | % | 5.22 | % | |||||||||
Class Y3 | 23.38 | % | 11.07 | % | 6.46 | % | |||||||||
Class P4 | 23.34 | % | 11.06 | % | 6.38 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 16.29 | % | 9.53 | % | 5.50 | % | |||||||||
Class C2 | 21.03 | % | 9.86 | % | 5.22 | % |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—1.67% and 1.67%; Class C—2.51% and 2.51%; Class Y—1.41% and 1.41%; and Class P—1.42% and 1.42%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—1.55%; Class C—2.30%; Class Y—1.30%; and Class P—1.30%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.
2 Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
3 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
4 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
5 The MSCI EAFE Index (net) is an index of stocks designed to measure the investment returns of developed economies outside of North America. Net total return indices reinvest dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is constructed and managed with a view to being fully investable from the perspective of international institutional investors. Investors should note that indices do not reflect the deduction of fees and expenses.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
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Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Net assets (mm) | $ | 1,109.0 | |||||
Number of holdings | 551 | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Common stocks and preferred stocks | 106.4 | % | |||||
ADRs and SDRs | 4.4 | ||||||
Investments sold short | (11.9 | ) | |||||
Forward foreign currency contracts | 0.02 | ||||||
Cash equivalents and other assets less liabilities | 1.1 | ||||||
Total | 100.0 | % | |||||
Regional allocation (equity investments)1 | 07/31/14 | ||||||
Europe and European territories | 70.6 | % | |||||
Asia | 30.2 | ||||||
Oceania | 5.5 | ||||||
The Americas | 3.5 | ||||||
Curacao | 1.0 | ||||||
Total | 110.8 | % |
Top five countries (equity investments-long holdings)1 | 07/31/14 | ||||||
Japan | 18.7 | % | |||||
United Kingdom | 17.9 | ||||||
Switzerland | 11.9 | ||||||
France | 9.6 | ||||||
Germany | 5.9 | ||||||
Total | 64.0 | % | |||||
Top five sectors (long holdings)1 | 07/31/14 | ||||||
Financials | 22.1 | % | |||||
Health care | 13.6 | ||||||
Consumer discretionary | 12.5 | ||||||
Consumer staples | 11.8 | ||||||
Industrials | 11.6 | ||||||
Total | 71.6 | % | |||||
Top ten equity holdings (long holdings)1 | 07/31/14 | ||||||
Nestle SA | 2.2 | % | |||||
Sanofi SA | 1.7 | ||||||
Banco Santander SA | 1.7 | ||||||
Canon, Inc. | 1.5 | ||||||
GlaxoSmithKline PLC | 1.5 | ||||||
Novartis AG | 1.4 | ||||||
ASML Holding N.V., NY Registered Shares | 1.3 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 1.2 | ||||||
France Telecom SA | 1.2 | ||||||
National Grid PLC | 1.2 | ||||||
Total | 14.9 | % |
Top five countries (equity investments-short holdings)1 | 07/31/14 | ||||||
Japan | (3.9 | )% | |||||
Australia | (2.0 | ) | |||||
France | (0.8 | ) | |||||
Hong Kong | (0.7 | ) | |||||
Sweden | (0.7 | ) | |||||
Total | (8.1 | )% | |||||
Top five sectors (short holdings)1 | 07/31/14 | ||||||
Financials | (3.5 | )% | |||||
Consumer discretionary | (1.4 | ) | |||||
Information technology | (1.3 | ) | |||||
Industrials | (1.2 | ) | |||||
Materials | (1.1 | ) | |||||
Total | (8.5 | )% | |||||
Top ten equity holdings (short holdings)1 | 07/31/14 | ||||||
ASML Holding N.V. | (0.5 | )% | |||||
The Link REIT | (0.4 | ) | |||||
Svenska Cellulosa AB SCA, Class B | (0.3 | ) | |||||
AGL Energy Ltd. | (0.3 | ) | |||||
Sun Hung Kai Properties Ltd. | (0.3 | ) | |||||
Woolworths Ltd. | (0.3 | ) | |||||
Nintendo Co. Ltd. | (0.3 | ) | |||||
Investment AB Kinnevik, B Shares | (0.3 | ) | |||||
Hugo Boss AG | (0.2 | ) | |||||
Fujitsu Ltd. | (0.2 | ) | |||||
Total | (3.1 | )% |
For a listing of defined portfolio acronyms that are used throughout the Portfolio statistics, please refer to page 232.
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time.
2 Amount is less than 0.05%.
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Industry diversification—(unaudited)
As a percentage of net assets as of July 31, 2014
Common stocks
Aerospace & defense | 0.47 | % | |||||
Airlines | 0.41 | ||||||
Auto components | 1.56 | ||||||
Automobiles | 2.21 | ||||||
Banks | 6.75 | ||||||
Beverages | 1.58 | ||||||
Biotechnology | 0.92 | ||||||
Building products | 1.27 | ||||||
Capital markets | 2.34 | ||||||
Chemicals | 2.53 | ||||||
Commercial services & supplies | 1.14 | ||||||
Communications equipment | 0.62 | ||||||
Construction & engineering | 0.18 | ||||||
Construction materials | 0.30 | ||||||
Consumer finance | 0.03 | ||||||
Containers & packaging | 0.21 | ||||||
Diversified financial services | 1.34 | ||||||
Diversified telecommunication services | 6.95 | ||||||
Electric utilities | 3.49 | ||||||
Electrical equipment | 3.17 | ||||||
Electronic equipment, instruments & components | 0.91 | ||||||
Energy equipment & services | 1.96 | ||||||
Food & staples retailing | 3.69 | ||||||
Food products | 3.91 | ||||||
Gas utilities | 1.06 | ||||||
Health care equipment & supplies | 2.39 | ||||||
Health care providers & services | 0.14 | ||||||
Hotels, restaurants & leisure | 2.76 | ||||||
Household durables | 0.68 | ||||||
Household products | 0.46 | ||||||
Industrial conglomerates | 1.57 | ||||||
Insurance | 8.25 | ||||||
Internet software & services | 0.86 | ||||||
IT services | 0.54 | ||||||
Leisure products | 0.49 | ||||||
Life sciences tools & services | 0.33 | ||||||
Machinery | 2.17 | ||||||
Marine | 0.92 | ||||||
Media | 2.10 | ||||||
Metals & mining | 2.13 | ||||||
Multi-utilities | 2.29 | ||||||
Multiline retail | 0.24 |
Common stocks—(concluded)
Oil, gas & consumable fuels | 7.15 | % | |||||
Paper & forest products | 0.58 | ||||||
Personal products | 1.42 | ||||||
Pharmaceuticals | 9.86 | ||||||
Professional services | 0.73 | ||||||
Real estate investment trusts | 1.35 | ||||||
Real estate management & development | 2.07 | ||||||
Road & rail | 0.57 | ||||||
Semiconductors & semiconductor equipment | 3.36 | ||||||
Software | 0.97 | ||||||
Specialty retail | 0.57 | ||||||
Textiles, apparel & luxury goods | 1.80 | ||||||
Tobacco | 0.55 | ||||||
Trading companies & distributors | 0.19 | ||||||
Transportation infrastructure | 0.35 | ||||||
Wireless telecommunication services | 1.71 | ||||||
Total common stocks | 110.55 |
Preferred stocks
Chemicals | 0.03 | ||||||
Household products | 0.19 | ||||||
Total preferred stocks | 0.22 | ||||||
Repurchase agreement | 0.70 | ||||||
Investment of cash collateral from securities loaned | 2.23 |
Investments sold short
Common stocks
Aerospace & defense | (0.21 | ) | |||||
Auto components | (0.08 | ) | |||||
Automobiles | (0.19 | ) | |||||
Banks | (0.77 | ) | |||||
Beverages | (0.01 | ) | |||||
Biotechnology | (0.12 | ) | |||||
Capital markets | (0.17 | ) | |||||
Chemicals | (0.19 | ) | |||||
Commercial services & supplies | (0.04 | ) | |||||
Consumer finance | (0.02 | ) | |||||
Containers & packaging | (0.00 | )1 | |||||
Distributors | (0.10 | ) | |||||
Diversified consumer services | (0.04 | ) | |||||
Diversified financial services | (0.66 | ) | |||||
Diversified telecommunication services | (0.22 | ) |
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Industry diversification—(unaudited) (concluded)
As a percentage of net assets as of July 31, 2014
Investments sold short—(continued)
Common stocks—(continued)
Electric utilities | (0.67 | )% | |||||
Electrical equipment | (0.04 | ) | |||||
Electronic equipment, instruments & components | (0.00 | )1 | |||||
Energy equipment & services | (0.07 | ) | |||||
Food & staples retailing | (0.45 | ) | |||||
Food products | (0.12 | ) | |||||
Gas utilities | (0.05 | ) | |||||
Health care equipment & supplies | (0.07 | ) | |||||
Health care providers & services | (0.31 | ) | |||||
Health care technology | (0.00 | )1 | |||||
Hotels, restaurants & leisure | (0.01 | ) | |||||
Household durables | (0.06 | ) | |||||
Independent power and renewable electricity producers | (0.10 | ) | |||||
Insurance | (0.21 | ) | |||||
Internet & catalog retail | (0.21 | ) | |||||
Leisure products | (0.00 | )1 | |||||
Machinery | (0.26 | ) | |||||
Media | (0.30 | ) | |||||
Metals & mining | (0.63 | ) |
Investments sold short—(concluded)
Common stocks—(concluded)
Multi-utilities | (0.32 | )% | |||||
Oil, gas & consumable fuels | (0.63 | ) | |||||
Paper & forest products | (0.33 | ) | |||||
Pharmaceuticals | (0.02 | ) | |||||
Professional services | (0.26 | ) | |||||
Real estate investment trusts | (0.86 | ) | |||||
Real estate management & development | (0.84 | ) | |||||
Road & rail | (0.13 | ) | |||||
Semiconductors & semiconductor equipment | (0.76 | ) | |||||
Software | (0.31 | ) | |||||
Specialty retail | (0.10 | ) | |||||
Technology hardware, storage & peripherals | (0.24 | ) | |||||
Textiles, apparel & luxury goods | (0.36 | ) | |||||
Trading companies & distributors | (0.24 | ) | |||||
Transportation infrastructure | (0.04 | ) | |||||
Wireless telecommunication services | (0.11 | ) | |||||
Total investments sold short | (11.93 | ) | |||||
Liabilities in excess of other assets | (1.77 | ) | |||||
Net assets | 100.00 | % |
1 Weightings represent less than (0.05%) of the Portfolio's net assets as of July 31, 2014.
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—110.55% | |||||||||||
Australia—5.10% | |||||||||||
Amcor Ltd. | 246,387 | $ | 2,358,240 | ||||||||
AMP Ltd. | 1,562,034 | 7,884,981 | |||||||||
Australia & New Zealand Banking Group Ltd. | 6,793 | 212,088 | |||||||||
Bank of Queensland Ltd. | 42,855 | 494,591 | |||||||||
Bendigo and Adelaide Bank Ltd.1 | 136,202 | 1,602,443 | |||||||||
CFS Retail Property Trust Group | 998,038 | 2,000,353 | |||||||||
Commonwealth Bank of Australia | 42,287 | 3,261,585 | |||||||||
CSL Ltd. | 34,367 | 2,141,184 | |||||||||
Dexus Property Group | 254,437 | 279,553 | |||||||||
Fortescue Metals Group Ltd.1 | 130,445 | 584,816 | |||||||||
Goodman Group | 157,291 | 771,112 | |||||||||
GPT Group | 63,459 | 238,920 | |||||||||
Macquarie Group Ltd. | 49,095 | 2,627,543 | |||||||||
Metcash Ltd.1 | 255,697 | 690,717 | |||||||||
Newcrest Mining Ltd.*,1 | 431,605 | 4,311,672 | |||||||||
Origin Energy Ltd. | 91,705 | 1,207,725 | |||||||||
Qantas Airways Ltd.* | 702,447 | 860,724 | |||||||||
QBE Insurance Group Ltd.1 | 810,582 | 8,193,066 | |||||||||
REA Group Ltd. | 26,424 | 1,150,839 | |||||||||
Scentre Group* | 1,302,769 | 4,116,253 | |||||||||
SP AusNet* | 683,897 | 851,874 | |||||||||
Stockland | 528,663 | 1,980,241 | |||||||||
Suncorp Group Ltd. | 97,823 | 1,286,182 | |||||||||
Tabcorp Holdings Ltd.1 | 164,392 | 531,197 | |||||||||
TPG Telecom Ltd. | 2,674 | 13,580 | |||||||||
Transurban Group | 16,850 | 121,000 | |||||||||
Treasury Wine Estates Ltd. | 233,755 | 1,071,186 | |||||||||
Westpac Banking Corp. | 138,831 | 4,414,831 | |||||||||
WorleyParsons Ltd. | 76,589 | 1,261,558 | |||||||||
Total Australia common stocks | 56,520,054 | ||||||||||
Austria—0.18% | |||||||||||
Andritz AG2 | 8,489 | 459,482 | |||||||||
Telekom Austria AG2 | 46,260 | 443,573 | |||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 12,546 | 622,728 | |||||||||
Voestalpine AG | 9,971 | 438,801 | |||||||||
Total Austria common stocks | 1,964,584 | ||||||||||
Belgium—0.31% | |||||||||||
Ageas | 5,126 | 183,977 | |||||||||
Ageas STRIP VVPR*,3 | 7,563 | 10 | |||||||||
Belgacom SA1 | 14,554 | 475,606 | |||||||||
Colruyt SA | 3,412 | 165,232 | |||||||||
Delhaize Group SA1 | 3,449 | 225,072 | |||||||||
Groupe Bruxelles Lambert SA2 | 13,537 | 1,346,354 | |||||||||
Solvay SA | 4,509 | 728,056 | |||||||||
Telenet Group Holding N.V.* | 6,696 | 357,911 | |||||||||
Total Belgium common stocks | 3,482,218 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Bermuda—1.10% | |||||||||||
Cheung Kong Infrastructure Holdings Ltd. | 99,000 | $ | 697,460 | ||||||||
Jardine Matheson Holdings Ltd., ADR | 62,400 | 3,724,600 | |||||||||
Kerry Properties Ltd. | 49,500 | 180,677 | |||||||||
Kunlun Energy Co. Ltd.1 | 3,224,542 | 5,476,647 | |||||||||
Noble Group Ltd. | 1,876,000 | 2,123,694 | |||||||||
Total Bermuda common stocks | 12,203,078 | ||||||||||
Brazil—1.80% | |||||||||||
BB Seguridade Participacoes SA | 754,366 | 11,005,847 | |||||||||
BM&FBovespa SA | 1,684,425 | 8,991,024 | |||||||||
Total Brazil common stocks | 19,996,871 | ||||||||||
Canada—0.78% | |||||||||||
Pacific Rubiales Energy Corp. | 450,870 | 8,621,671 | |||||||||
Cayman Islands—0.95% | |||||||||||
Ctrip.com International Ltd., ADR* | 64,626 | 4,138,003 | |||||||||
Hengan International Group Co. Ltd.1 | 500,682 | 5,356,428 | |||||||||
MGM China Holdings Ltd. | 286,000 | 1,045,801 | |||||||||
Total Cayman Islands common stocks | 10,540,232 | ||||||||||
Curacao—0.96% | |||||||||||
Schlumberger Ltd. | 97,763 | 10,596,532 | |||||||||
Denmark—3.64% | |||||||||||
AP Moller - Maersk A/S, Class B | 3,169 | 7,387,947 | |||||||||
Carlsberg A/S, Class B | 6,288 | 601,626 | |||||||||
Coloplast A/S, Class B | 96,966 | 8,198,734 | |||||||||
DSV A/S | 66,670 | 2,105,406 | |||||||||
Novo Nordisk A/S, ADR | 215,701 | 9,933,031 | |||||||||
Novo Nordisk A/S, Class B | 123,044 | 5,663,980 | |||||||||
Novozymes A/S, B Shares | 12,416 | 613,963 | |||||||||
Pandora A/S | 9,268 | 634,218 | |||||||||
TDC A/S | 358,644 | 3,618,043 | |||||||||
Tryg A/S | 3,339 | 336,413 | |||||||||
William Demant Holding A/S* | 14,712 | 1,279,217 | |||||||||
Total Denmark common stocks | 40,372,578 | ||||||||||
Finland—1.18% | |||||||||||
Neste Oil Oyj | 77,258 | 1,425,772 | |||||||||
Nokia Oyj | 91,327 | 723,527 | |||||||||
Orion Oyj, Class B | 20,825 | 772,070 | |||||||||
Sampo Oyj, A Shares2 | 73,666 | 3,659,401 | |||||||||
Stora Enso Oyj, R Shares | 117,018 | 1,051,412 | |||||||||
UPM-Kymmene Oyj2 | 329,806 | 5,375,363 | |||||||||
Wartsila Oyj Abp | 1,349 | 67,938 | |||||||||
Total Finland common stocks | 13,075,483 | ||||||||||
France—9.63% | |||||||||||
Accor SA | 5,981 | 289,646 | |||||||||
Arkema SA | 625 | 57,949 | |||||||||
Atos Origin SA | 18,850 | 1,471,899 | |||||||||
AXA SA | 56,448 | 1,296,873 | |||||||||
Bureau Veritas SA | 17,047 | 439,663 | |||||||||
Cap Gemini SA | 12,965 | 940,135 | |||||||||
Carrefour SA | 46,699 | 1,612,738 |
165
PACE Select Advisors Trust
PACE International Equity Investments
Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
France—(concluded) | |||||||||||
Cie de Saint-Gobain | 141,167 | $ | 6,868,737 | ||||||||
Cie Generale des Etablissements Michelin | 8,561 | 939,138 | |||||||||
CNP Assurances | 1,889 | 37,112 | |||||||||
Dassault Systemes | 4,330 | 290,568 | |||||||||
Electricite de France (EDF)2 | 157,813 | 5,097,963 | |||||||||
Essilor International SA2 | 37,509 | 3,664,184 | |||||||||
Eutelsat Communications | 33,626 | 1,160,194 | |||||||||
France Telecom SA2 | 841,605 | 13,178,952 | |||||||||
GDF Suez | 3,401 | 87,693 | |||||||||
GDF Suez, STRIP VVPR*,3 | 23,226 | 31 | |||||||||
Groupe Danone | 19,389 | 1,400,482 | |||||||||
Iliad SA | 45,672 | 12,570,760 | |||||||||
Imerys SA | 2,751 | 214,805 | |||||||||
L'Oreal SA | 3,459 | 584,086 | |||||||||
LVMH Moet Hennessy Louis Vuitton SA | 5,757 | 990,331 | |||||||||
Pernod Ricard SA | 39,411 | 4,413,685 | |||||||||
Publicis Groupe SA | 18,560 | 1,346,589 | |||||||||
Sanofi SA | 184,178 | 19,337,000 | |||||||||
Societe BIC SA | 508 | 70,039 | |||||||||
Societe Generale SA | 87,182 | 4,376,749 | |||||||||
Sodexo | 7,024 | 698,101 | |||||||||
Total SA | 153,442 | 9,896,191 | |||||||||
Vallourec SA | 107,167 | 4,742,333 | |||||||||
Veolia Environnement SA2 | 204,088 | 3,614,782 | |||||||||
Vinci SA | 27,196 | 1,876,875 | |||||||||
Vivendi SA | 46,453 | 1,165,889 | |||||||||
Wendel SA | 15,465 | 2,028,746 | |||||||||
Total France common stocks | 106,760,918 | ||||||||||
Germany—5.64% | |||||||||||
Allianz SE2 | 27,178 | 4,524,758 | |||||||||
Daimler AG | 59,304 | 4,893,690 | |||||||||
Deutsche Lufthansa AG2 | 118,157 | 2,084,301 | |||||||||
Deutsche Telekom AG | 615,632 | 9,990,259 | |||||||||
E.ON SE | 302,125 | 5,703,613 | |||||||||
Fresenius Medical Care AG & Co. KGaA | 17,828 | 1,235,799 | |||||||||
GEA Group AG | 54,424 | 2,442,021 | |||||||||
Hochtief AG | 159 | 13,334 | |||||||||
K+S AG | 63,236 | 1,937,652 | |||||||||
Metro AG*,2 | 81,705 | 2,944,240 | |||||||||
ProSiebenSat.1 Media AG | 25,891 | 1,085,569 | |||||||||
RWE AG2 | 171,572 | 6,888,328 | |||||||||
SAP SE | 91,391 | 7,182,589 | |||||||||
Siemens AG | 52,832 | 6,524,547 | |||||||||
ThyssenKrupp AG* | 179,970 | 5,069,574 | |||||||||
Total Germany common stocks | 62,520,274 | ||||||||||
Guernsey—0.01% | |||||||||||
Friends Life Group Ltd. | 9,920 | 55,475 | |||||||||
Hong Kong—3.87% | |||||||||||
AIA Group Ltd. | 2,018,959 | 10,816,365 | |||||||||
Bank of East Asia Ltd. | 106,200 | 452,743 | |||||||||
BOC Hong Kong Holdings Ltd. | 639,500 | 2,005,704 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Hong Kong—(concluded) | |||||||||||
Cathay Pacific Airways Ltd. | 530,000 | $ | 1,001,288 | ||||||||
China Mobile Ltd. | 485,000 | 5,299,422 | |||||||||
CLP Holdings Ltd.2 | 476,500 | 3,963,837 | |||||||||
Hang Lung Properties Ltd. | 217,000 | 670,173 | |||||||||
Hang Seng Bank Ltd.2 | 214,523 | 3,634,140 | |||||||||
HKT Trust/HKT Ltd. | 856,000 | 1,010,988 | |||||||||
Hong Kong & China Gas Co. Ltd. | 706,200 | 1,542,026 | |||||||||
Hutchison Whampoa Ltd.2 | 252,491 | 3,425,151 | |||||||||
Hysan Development Co. Ltd. | 85,000 | 406,878 | |||||||||
MTR Corp. Ltd. | 579,500 | 2,276,593 | |||||||||
New World Development Co. Ltd. | 1,683,000 | 2,122,326 | |||||||||
PCCW Ltd. | 1,578,000 | 970,250 | |||||||||
SJM Holdings Ltd. | 1,259,000 | 3,363,624 | |||||||||
Total Hong Kong common stocks | 42,961,508 | ||||||||||
Indonesia—0.25% | |||||||||||
PT Bank Rakyat Indonesia Persero Tbk | 2,847,345 | 2,731,090 | |||||||||
Ireland—0.04% | |||||||||||
Bank of Ireland* | 1,218,550 | 426,603 | |||||||||
Israel—1.54% | |||||||||||
Bank Leumi Le-Israel* | 167,991 | 659,648 | |||||||||
Bezeq The Israeli Telecommunication Corp. Ltd. | 1,219,553 | 2,270,828 | |||||||||
Delek Group Ltd. | 1,358 | 532,839 | |||||||||
Israel Chemicals Ltd. | 276,104 | 2,245,071 | |||||||||
NICE Systems Ltd. | 3,276 | 130,075 | |||||||||
Teva Pharmaceutical Industries Ltd., ADR | 193,200 | 10,336,200 | |||||||||
The Israel Corp. Ltd.* | 1,585 | 932,860 | |||||||||
Total Israel common stocks | 17,107,521 | ||||||||||
Italy—2.98% | |||||||||||
Assicurazioni Generali SpA2 | 282,593 | 5,898,549 | |||||||||
Enel SpA | 686,600 | 3,908,800 | |||||||||
ENI SpA | 427,833 | 10,886,599 | |||||||||
Fiat SpA*,1 | 157,913 | 1,515,573 | |||||||||
Finmeccanica SpA* | 66,450 | 612,196 | |||||||||
Prysmian SpA | 11,719 | 249,196 | |||||||||
Snam SpA | 935,623 | 5,515,387 | |||||||||
Telecom Italia SpA*,1 | 553,280 | 637,540 | |||||||||
Terna Rete Elettrica Nazionale SpA | 725,363 | 3,814,821 | |||||||||
UnipolSai SpA | 13,745 | 41,609 | |||||||||
Total Italy common stocks | 33,080,270 | ||||||||||
Japan—18.73% | |||||||||||
Aeon Financial Service Co. Ltd.1 | 16,600 | 378,319 | |||||||||
AEON Mall Co. Ltd. | 70,300 | 1,647,374 | |||||||||
Air Water, Inc. | 35,000 | 559,756 | |||||||||
Aozora Bank Ltd. | 550,000 | 1,868,947 | |||||||||
Astellas Pharma, Inc. | 123,000 | 1,667,954 | |||||||||
Bridgestone Corp.2 | 111,300 | 4,016,857 | |||||||||
Calbee, Inc. | 47,400 | 1,407,646 | |||||||||
Canon, Inc. | 516,987 | 16,913,358 | |||||||||
Citizen Holdings Co. Ltd. | 45,200 | 359,381 | |||||||||
Dai Nippon Printing Co. Ltd. | 63,000 | 646,275 |
166
PACE Select Advisors Trust
PACE International Equity Investments
Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Japan—(continued) | |||||||||||
Daicel Corp. | 48,000 | $ | 484,436 | ||||||||
Daihatsu Motor Co. Ltd. | 72,000 | 1,278,006 | |||||||||
Daiichi Sankyo Co. Ltd. | 79,000 | 1,436,510 | |||||||||
Dainippon Pharmaceutical Co. Ltd.1 | 14,900 | 182,154 | |||||||||
Daito Trust Construction Co. Ltd. | 34,500 | 4,158,146 | |||||||||
Daiwa House Industry Co. Ltd. | 37,000 | 751,071 | |||||||||
Dena Co. Ltd.1 | 65,100 | 839,609 | |||||||||
Eisai Co. Ltd.2 | 74,000 | 3,134,629 | |||||||||
FamilyMart Co. Ltd.1 | 8,500 | 381,744 | |||||||||
FANUC Corp.2 | 30,600 | 5,288,606 | |||||||||
Fuji Heavy Industries Ltd.2 | 232,100 | 6,618,861 | |||||||||
Hamamatsu Photonics KK | 14,300 | 672,194 | |||||||||
Hino Motors Ltd. | 120,700 | 1,669,164 | |||||||||
Hirose Electric Co. Ltd. | 4,500 | 632,444 | |||||||||
Hitachi Metals Ltd. | 51,000 | 829,330 | |||||||||
Hokuhoku Financial Group, Inc. | 129,000 | 264,862 | |||||||||
Honda Motor Co. Ltd. | 114,200 | 3,975,423 | |||||||||
Hoya Corp. | 183,200 | 5,931,749 | |||||||||
Hulic Co. Ltd. | 63,000 | 741,989 | |||||||||
Idemitsu Kosan Co. Ltd. | 600 | 12,264 | |||||||||
Inpex Corp.1,2 | 478,500 | 7,091,681 | |||||||||
Isuzu Motors Ltd.1 | 233,000 | 1,617,162 | |||||||||
Itochu Techno-Science Corp. | 6,600 | 295,165 | |||||||||
Japan Airlines Co. Ltd. | 39,000 | 2,154,260 | |||||||||
Japan Real Estate Investment Corp. | 473 | 2,658,704 | |||||||||
JFE Holdings, Inc. | 50,507 | 1,066,003 | |||||||||
JSR Corp. | 33,400 | 575,881 | |||||||||
Kajima Corp.1 | 17,000 | 79,051 | |||||||||
Kamigumi Co. Ltd. | 35,000 | 334,746 | |||||||||
Kao Corp. | 229,800 | 9,450,342 | |||||||||
Kawasaki Heavy Industries Ltd.1 | 19,000 | 73,912 | |||||||||
Keio Corp.1 | 27,000 | 215,356 | |||||||||
Keyence Corp. | 2,400 | 1,045,547 | |||||||||
Kirin Holdings Co. Ltd. | 554,400 | 7,771,159 | |||||||||
Kobe Steel Ltd. | 1,667,000 | 2,713,573 | |||||||||
Kuraray Co. Ltd. | 9,400 | 123,126 | |||||||||
Kurita Water Industries Ltd.1 | 24,000 | 551,479 | |||||||||
Kyocera Corp. | 100 | 4,844 | |||||||||
Kyowa Hakko Kirin Co. Ltd. | 12,000 | 164,863 | |||||||||
Lawson, Inc.2 | 30,000 | 2,246,587 | |||||||||
Makita Corp. | 17,900 | 1,058,731 | |||||||||
Maruichi Steel Tube Ltd. | 30,600 | 847,047 | |||||||||
Mazda Motor Corp1 | 31,200 | 749,651 | |||||||||
McDonald's Holdings Co. Japan Ltd.1 | 43,400 | 1,092,354 | |||||||||
Miraca Holdings, Inc. | 7,800 | 360,983 | |||||||||
Mitsubishi Logistics Corp.1 | 75,000 | 1,137,130 | |||||||||
Mitsubishi Motors Corp.2 | 230,800 | 2,629,521 | |||||||||
Mitsubishi Tanabe Pharma Corp. | 1,000 | 14,526 | |||||||||
Mitsui Fudosan Co. Ltd. | 36,164 | 1,194,273 | |||||||||
Mitsui O.S.K. Lines Ltd. | 226,000 | 837,385 | |||||||||
Murata Manufacturing Co. Ltd. | 10,400 | 991,383 | |||||||||
Nippon Electric Glass Co. Ltd.1 | 30,000 | 168,074 | |||||||||
Nippon Express Co. Ltd. | 6,000 | 29,015 | |||||||||
Nippon Steel & Sumitomo Metal Corp.1 | 744,000 | 2,246,627 | |||||||||
Nippon Yusen Kabushiki Kaisha | 696,000 | 1,994,200 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Japan—(concluded) | |||||||||||
Nissin Foods Holdings Co. Ltd. | 15,500 | $ | 851,666 | ||||||||
Nitori Holdings Co. Ltd. | 22,500 | 1,263,843 | |||||||||
Nitto Denko Corp.1 | 41,798 | 1,865,296 | |||||||||
NKSJ Holdings, Inc. | 26,800 | 676,740 | |||||||||
Nomura Real Estate Holdings, Inc. | 80,400 | 1,493,837 | |||||||||
Nomura Research Institute Ltd. | 39,400 | 1,240,517 | |||||||||
NTT DoCoMo, Inc.2 | 425,200 | 7,456,370 | |||||||||
Odakyu Electric Railway Co. Ltd.1 | 176,000 | 1,724,140 | |||||||||
Olympus Corp.*,1 | 95,400 | 3,432,852 | |||||||||
Oracle Corp. Japan | 18,500 | 783,834 | |||||||||
Oriental Land Co. Ltd.2 | 15,000 | 2,816,795 | |||||||||
ORIX Corp. | 53,000 | 856,547 | |||||||||
Osaka Gas Co. Ltd. | 154,000 | 640,530 | |||||||||
Otsuka Corp. | 30,000 | 1,366,900 | |||||||||
Park24 Co. Ltd. | 39,700 | 728,312 | |||||||||
Rinnai Corp.1 | 17,700 | 1,611,496 | |||||||||
Sankyo Co. Ltd. | 23,300 | 906,672 | |||||||||
Sanrio Co. Ltd.1 | 2,000 | 57,643 | |||||||||
Santen Pharmaceutical Co. Ltd. | 23,000 | 1,355,868 | |||||||||
Sega Sammy Holdings, Inc. | 32,484 | 642,582 | |||||||||
Sekisui Chemical Co. Ltd. | 84,000 | 1,007,198 | |||||||||
Sekisui House Ltd.1 | 18,700 | 245,435 | |||||||||
Seven & I Holdings Co. Ltd. | 170,100 | 7,078,809 | |||||||||
Sharp Corp.*,1 | 34,000 | 105,903 | |||||||||
Shimadzu Corp. | 25,000 | 239,292 | |||||||||
Shimamura Co. Ltd. | 100 | 9,917 | |||||||||
Shimano, Inc.2 | 33,300 | 3,887,467 | |||||||||
Shin-Etsu Chemical Co. Ltd. | 6,000 | 380,569 | |||||||||
Shionogi & Co. Ltd. | 4,100 | 88,515 | |||||||||
Shiseido Co. Ltd. | 15,900 | 313,372 | |||||||||
Showa Shell Sekiyu K.K. | 110,300 | 1,244,015 | |||||||||
Sumitomo Rubber Industries Ltd. | 2,600 | 37,659 | |||||||||
Suntory Beverage & Food Ltd.2 | 90,700 | 3,398,931 | |||||||||
Suruga Bank Ltd. | 32,000 | 623,957 | |||||||||
Suzuki Motor Corp. | 1,700 | 56,729 | |||||||||
Sysmex Corp. | 6,300 | 244,569 | |||||||||
T&D Holdings, Inc.2 | 250,000 | 3,137,644 | |||||||||
Taiheiyo Cement Corp. | 270,000 | 1,045,385 | |||||||||
Takeda Pharmaceutical Co. Ltd.2 | 224,700 | 10,249,120 | |||||||||
The Dai-ichi Life Insurance Co. Ltd. | 16,100 | 226,795 | |||||||||
The Yokohama Rubber Co. Ltd. | 103,000 | 891,821 | |||||||||
Toho Gas Co. Ltd.1 | 163,000 | 900,677 | |||||||||
Tokio Marine Holdings, Inc. | 255,600 | 8,037,792 | |||||||||
Tokyo Electron Ltd. | 45,300 | 2,959,149 | |||||||||
Tokyo Gas Co. Ltd. | 30,000 | 171,381 | |||||||||
Toppan Printing Co. Ltd. | 24,000 | 182,817 | |||||||||
Toray Industries, Inc. | 58,000 | 392,593 | |||||||||
TOTO Ltd. | 5,000 | 62,674 | |||||||||
Toyo Suisan Kaisha Ltd. | 7,000 | 212,325 | |||||||||
Toyoda Gosei Co. Ltd. | 42,400 | 861,084 | |||||||||
Toyota Motor Corp. | 19,126 | 1,129,199 | |||||||||
Trend Micro, Inc. | 55,100 | 1,961,419 | |||||||||
USS Co. Ltd. | 9,900 | 172,948 | |||||||||
Yaskawa Electric Corp. | 100 | 1,303 | |||||||||
Total Japan common stocks | 207,664,302 |
167
PACE Select Advisors Trust
PACE International Equity Investments
Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Jersey—0.54% | |||||||||||
Delphi Automotive PLC | 80,964 | $ | 5,408,395 | ||||||||
Experian PLC | 31,110 | 532,315 | |||||||||
Total Jersey common stocks | 5,940,710 | ||||||||||
Luxembourg—0.31% | |||||||||||
ArcelorMittal2 | 158,226 | 2,402,653 | |||||||||
Millicom International Cellular SA, SDR | 8,603 | 731,954 | |||||||||
Tenaris SA | 12,708 | 273,567 | |||||||||
Total Luxembourg common stocks | 3,408,174 | ||||||||||
Netherlands—4.19% | |||||||||||
Aegon N.V. | 218,439 | 1,771,467 | |||||||||
ASML Holding N.V., NY Registered Shares | 148,720 | 14,003,475 | |||||||||
Corio N.V. | 18,959 | 1,007,224 | |||||||||
Delta Lloyd N.V. | 75,501 | 1,743,979 | |||||||||
Koninklijke Ahold N.V. | 519,680 | 9,061,307 | |||||||||
Reed Elsevier N.V. | 251,707 | 5,666,046 | |||||||||
Sensata Technologies Holding N.V.* | 171,735 | 7,941,026 | |||||||||
STMicroelectronics N.V. | 347,251 | 2,890,801 | |||||||||
Unilever N.V.1,2 | 58,686 | 2,415,281 | |||||||||
Total Netherlands common stocks | 46,500,606 | ||||||||||
New Zealand—0.40% | |||||||||||
Fletcher Building Ltd. | 264,616 | 2,036,746 | |||||||||
Telecom Corp. of New Zealand Ltd. | 995,423 | 2,397,679 | |||||||||
Total New Zealand common stocks | 4,434,425 | ||||||||||
Norway—0.59% | |||||||||||
DnB NOR ASA2 | 284,874 | 5,048,417 | |||||||||
Norsk Hydro ASA | 158,868 | 941,861 | |||||||||
Orkla ASA | 3,766 | 34,088 | |||||||||
Yara International ASA | 11,770 | 537,800 | |||||||||
Total Norway common stocks | 6,562,166 | ||||||||||
Portugal—0.11% | |||||||||||
EDP-Electricidade de Portugal SA | 28,478 | 133,365 | |||||||||
Jeronimo Martins, SGPS SA | 84,637 | 1,106,306 | |||||||||
Total Portugal common stocks | 1,239,671 | ||||||||||
Singapore—2.96% | |||||||||||
CapitaMall Trust | 295,000 | 464,796 | |||||||||
DBS Group Holdings Ltd. | 48,000 | 699,328 | |||||||||
Global Logistic Properties Ltd. | 3,256,697 | 7,249,950 | |||||||||
Hutchison Port Holdings Trust1 | 3,005,000 | 2,235,696 | |||||||||
Oversea-Chinese Banking Corp. Ltd. | 108,000 | 861,937 | |||||||||
SembCorp Industries Ltd. | 833,000 | 3,647,766 | |||||||||
Singapore Airlines Ltd. | 79,000 | 652,335 | |||||||||
Singapore Telecommunications Ltd. | 2,350,000 | 7,643,379 | |||||||||
StarHub Ltd. | 259,000 | 882,351 | |||||||||
United Overseas Bank Ltd. | 329,932 | 6,367,239 | |||||||||
Wilmar International Ltd. | 806,000 | 2,104,353 | |||||||||
Yangzijiang Shipbuilding Holdings Ltd. | 11,000 | 9,561 | |||||||||
Total Singapore common stocks | 32,818,691 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
South Korea—0.78% | |||||||||||
NAVER Corp. | 12,175 | $ | 8,693,512 | ||||||||
Spain—5.36% | |||||||||||
Amadeus IT Holding SA1 | 17,444 | 686,433 | |||||||||
Banco Bilbao Vizcaya Argentaria SA | 35,936 | 441,750 | |||||||||
Banco Santander SA | 1,849,822 | 18,585,695 | |||||||||
Distribuidora Internacional de Alimentacion SA | 174,707 | 1,448,100 | |||||||||
Enagas SA2 | 75,750 | 2,520,170 | |||||||||
Gas Natural SDG, SA | 13,784 | 423,482 | |||||||||
Grifols SA, ADR | 203,255 | 7,453,361 | |||||||||
Iberdrola SA | 1,758,260 | 13,080,912 | |||||||||
Red Electrica Corp. SA | 17,295 | 1,486,147 | |||||||||
Repsol SA | 15,787 | 393,689 | |||||||||
Telefonica SA | 784,767 | 12,793,666 | |||||||||
Zardoya Otis SA | 11,667 | 178,449 | |||||||||
Total Spain common stocks | 59,491,854 | ||||||||||
Sweden—4.39% | |||||||||||
Alfa Laval AB | 16,880 | 383,316 | |||||||||
Assa Abloy AB, B Shares | 6,196 | 304,443 | |||||||||
Atlas Copco AB, A Shares1 | 32,899 | 981,537 | |||||||||
Boliden AB | 79,616 | 1,289,790 | |||||||||
Electrolux AB, Series B2 | 110,017 | 2,728,644 | |||||||||
Elekta AB, B Shares1 | 727,591 | 8,915,402 | |||||||||
Getinge AB, B Shares | 2,773 | 67,828 | |||||||||
Hennes & Mauritz AB, B Shares2 | 118,319 | 4,837,050 | |||||||||
Husqvarna AB, B Shares | 226,702 | 1,788,097 | |||||||||
Industrivarden AB, C Shares | 18,166 | 337,677 | |||||||||
Investor AB, B Shares | 34,557 | 1,242,288 | |||||||||
Nordea Bank AB | 91,237 | 1,223,559 | |||||||||
Securitas AB, B Shares | 173,148 | 2,013,147 | |||||||||
Svenska Handelsbanken, A Shares | 37,107 | 1,787,088 | |||||||||
Swedbank AB, A Shares2 | 231,981 | 5,942,800 | |||||||||
Swedish Match AB2 | 90,367 | 2,958,031 | |||||||||
Tele2 AB, B Shares | 37,093 | 452,514 | |||||||||
Telefonaktiebolaget LM Ericsson, B Shares | 496,867 | 6,186,927 | |||||||||
TeliaSonera AB2 | 707,966 | 5,302,472 | |||||||||
Total Sweden common stocks | 48,742,610 | ||||||||||
Switzerland—11.92% | |||||||||||
ABB Ltd.* | 437,283 | 10,056,575 | |||||||||
Credit Suisse Group* | 46,205 | 1,253,438 | |||||||||
EMS-Chemie Holding AG | 102 | 43,951 | |||||||||
Geberit AG | 20,473 | 6,860,007 | |||||||||
Julius Baer Group Ltd.* | 231,751 | 9,831,367 | |||||||||
Lonza Group AG*,2 | 33,430 | 3,707,173 | |||||||||
Nestle SA2 | 321,837 | 23,828,813 | |||||||||
Novartis AG | 183,363 | 15,952,323 | |||||||||
Roche Holding AG | 42,557 | 12,350,279 | |||||||||
Schindler Holding AG | 3,866 | 577,766 | |||||||||
SGS SA | 3,162 | 6,888,237 | |||||||||
Sonova Holding AG | 4,274 | 663,129 | |||||||||
Sulzer AG | 2,938 | 388,501 | |||||||||
Swiss Life Holding AG* | 2,612 | 604,021 |
168
PACE Select Advisors Trust
PACE International Equity Investments
Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Switzerland—(concluded) | |||||||||||
Swiss Prime Site AG* | 29,710 | $ | 2,357,647 | ||||||||
Swiss Re AG2 | 60,186 | 5,116,261 | |||||||||
Swisscom AG | 3,512 | 1,949,864 | |||||||||
Syngenta AG | 23,503 | 8,326,037 | |||||||||
The Swatch Group AG | 13,979 | 7,454,754 | |||||||||
Transocean Ltd.1 | 111,544 | 4,482,319 | |||||||||
Zurich Insurance Group AG* | 32,844 | 9,541,500 | |||||||||
Total Switzerland common stocks | 132,233,962 | ||||||||||
Taiwan—1.54% | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 883,000 | 3,540,196 | |||||||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 678,024 | 13,560,480 | |||||||||
Total Taiwan common stocks | 17,100,676 | ||||||||||
United Kingdom—17.85% | |||||||||||
3i Group PLC | 95,719 | 607,956 | |||||||||
Aberdeen Asset Management PLC1 | 25,341 | 175,928 | |||||||||
Admiral Group PLC2 | 86,338 | 2,118,450 | |||||||||
AMEC PLC | 269,508 | 5,159,126 | |||||||||
Antofagasta PLC | 3,583 | 48,756 | |||||||||
ARM Holdings PLC | 25,202 | 358,787 | |||||||||
BAE Systems PLC | 29,680 | 213,902 | |||||||||
BG Group PLC | 411,936 | 8,123,064 | |||||||||
BP PLC | 1,001,698 | 8,157,568 | |||||||||
British American Tobacco PLC | 53,203 | 3,116,758 | |||||||||
British Sky Broadcasting Group PLC2 | 303,144 | 4,487,105 | |||||||||
BT Group PLC | 274,818 | 1,799,204 | |||||||||
Burberry Group PLC | 31,632 | 752,163 | |||||||||
Capita PLC | 12,983 | 262,885 | |||||||||
Centrica PLC | 307,666 | 1,603,081 | |||||||||
Compass Group PLC | 432,567 | 7,048,486 | |||||||||
Croda International PLC | 250,780 | 8,869,005 | |||||||||
Diageo PLC | 9,513 | 285,697 | |||||||||
Direct Line Insurance Group PLC | 500,969 | 2,404,747 | |||||||||
G4S PLC | 2,116,199 | 8,954,827 | |||||||||
GKN PLC | 887,753 | 5,107,834 | |||||||||
GlaxoSmithKline PLC | 692,841 | 16,696,589 | |||||||||
Hargreaves Lansdown PLC | 588,332 | 10,143,078 | |||||||||
HSBC Holdings PLC | 612,329 | 6,564,727 | |||||||||
ICAP PLC | 166,676 | 974,742 | |||||||||
IMI PLC2 | 100,809 | 2,404,384 | |||||||||
InterContinental Hotels Group PLC2 | 100,424 | 4,074,277 | |||||||||
Investec PLC | 40,054 | 346,444 | |||||||||
ITV PLC | 1,144,822 | 4,018,518 | |||||||||
J Sainsbury PLC1 | 205,244 | 1,081,814 | |||||||||
Lloyds Banking Group PLC* | 270,129 | 336,763 | |||||||||
Meggitt PLC | 262,637 | 2,248,843 | |||||||||
Melrose Industries PLC | 255,733 | 1,132,740 | |||||||||
National Grid PLC | 922,819 | 13,143,923 | |||||||||
Next PLC2 | 23,742 | 2,709,720 | |||||||||
Pearson PLC | 125,433 | 2,412,687 | |||||||||
Prudential PLC | 13,410 | 308,213 | |||||||||
Reckitt Benckiser Group PLC2 | 57,456 | 5,072,067 |
Number of shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
United Kingdom—(concluded) | |||||||||||
Reed Elsevier PLC | 23,768 | $ | 382,089 | ||||||||
Rio Tinto PLC | 14,945 | 854,167 | |||||||||
Royal Dutch Shell PLC, A Shares2,4 | 136,639 | 5,618,030 | |||||||||
Royal Dutch Shell PLC, A Shares5 | 259,055 | 10,652,899 | |||||||||
Segro PLC | 247,478 | 1,490,637 | |||||||||
Tate & Lyle PLC | 10,316 | 108,303 | |||||||||
Tesco PLC | 2,648,271 | 11,490,107 | |||||||||
The Sage Group PLC | 66,093 | 410,505 | |||||||||
The Weir Group PLC | 37,737 | 1,628,757 | |||||||||
TUI Travel PLC | 275,849 | 1,683,845 | |||||||||
Unilever PLC | 256,552 | 11,084,712 | |||||||||
Vodafone Group PLC | 1,243,503 | 4,140,978 | |||||||||
Whitbread PLC | 52,062 | 3,770,088 | |||||||||
WM Morrison Supermarkets PLC | 471,998 | 1,339,672 | |||||||||
Total United Kingdom common stocks | 197,979,647 | ||||||||||
United States—0.92% | |||||||||||
Lululemon Athletica, Inc.*,1 | 264,202 | 10,163,851 | |||||||||
Total common stocks (cost—$1,138,600,826) | 1,225,991,817 | ||||||||||
Preferred stocks—0.22% | |||||||||||
Germany—0.22% | |||||||||||
Fuchs Petrolub SE | 6,585 | 264,270 | |||||||||
Henkel AG & Co. KGaA Vorzug | 19,249 | 2,140,492 | |||||||||
Total preferred stocks (cost—$1,675,117) | 2,404,762 | ||||||||||
Face amount | |||||||||||
Repurchase agreement—0.70% | |||||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $7,975,055 US Treasury Note, 0.625% due 05/31/17; (value—$7,905,274); proceeds: $7,751,000 (cost—$7,751,000) | $ | 7,751,000 | 7,751,000 | ||||||||
Number of shares | |||||||||||
Investment of cash collateral from securities loaned—2.23% | |||||||||||
Money market fund—2.23% | |||||||||||
UBS Private Money Market Fund LLC6 (cost—$24,717,606) | 24,717,606 | 24,717,606 | |||||||||
Total investments before investments sold short (cost—$1,172,744,549)—113.74% | 1,260,865,185 |
169
PACE Select Advisors Trust
PACE International Equity Investments
Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Investments sold short—(11.93)% | |||||||||||
Common stocks—(11.93)% | |||||||||||
Australia—(2.03)% | |||||||||||
AGL Energy Ltd. | (263,096 | ) | $ | (3,586,245 | ) | ||||||
ALS Ltd. | (257,549 | ) | (1,846,639 | ) | |||||||
Alumina Ltd. | (1,087,708 | ) | (1,599,142 | ) | |||||||
APA Group | (77,239 | ) | (533,164 | ) | |||||||
ASX Ltd. | (67,349 | ) | (2,249,231 | ) | |||||||
Aurizon Holdings Ltd. | (1,115 | ) | (5,148 | ) | |||||||
BHP Billiton Ltd. | (17,218 | ) | (611,350 | ) | |||||||
Caltex Australia Ltd. | (48,225 | ) | (1,097,113 | ) | |||||||
Federation Centres Ltd. | (117,292 | ) | (278,841 | ) | |||||||
Iluka Resources Ltd. | (240,853 | ) | (1,951,321 | ) | |||||||
Insurance Australia Group Ltd. | (368,192 | ) | (2,142,832 | ) | |||||||
Santos Ltd. | (9,185 | ) | (123,052 | ) | |||||||
Seek Ltd. | (70,943 | ) | (1,072,334 | ) | |||||||
Telstra Corp. Ltd. | (125,545 | ) | (636,652 | ) | |||||||
Wesfarmers Ltd. | (38,182 | ) | (1,546,148 | ) | |||||||
Woolworths Ltd. | (96,218 | ) | (3,279,525 | ) | |||||||
Total Australia common stocks | (22,558,737 | ) | |||||||||
Austria—(0.04)% | |||||||||||
Erste Group Bank AG | (517 | ) | (13,276 | ) | |||||||
Raiffeisen Bank International AG | (15,034 | ) | (412,858 | ) | |||||||
Total Austria common stocks | (426,134 | ) | |||||||||
Bermuda—(0.24)% | |||||||||||
First Pacific Co. Ltd. | (1,452,000 | ) | (1,735,850 | ) | |||||||
Shangri-La Asia Ltd. | (52,000 | ) | (82,027 | ) | |||||||
Seadrill Ltd. | (22,916 | ) | (823,309 | ) | |||||||
Total Bermuda common stocks | (2,641,186 | ) | |||||||||
Cayman Islands—(0.11)% | |||||||||||
ASM Pacific Technology Ltd. | (110,100 | ) | (1,169,546 | ) | |||||||
Denmark—(0.10)% | |||||||||||
Coloplast A/S | (8,545 | ) | (722,503 | ) | |||||||
Danske Bank A/S | (10,376 | ) | (299,769 | ) | |||||||
Vestas Wind Systems A/S | (980 | ) | (44,185 | ) | |||||||
Total Denmark common stocks | (1,066,457 | ) | |||||||||
France—(0.81)% | |||||||||||
Iliad SA | (6,157 | ) | (1,694,652 | ) | |||||||
Lagardere S.C.A. | (42,389 | ) | (1,261,904 | ) | |||||||
Natixis | (169,490 | ) | (1,095,216 | ) | |||||||
PSA Peugeot Citroen | (59,647 | ) | (889,634 | ) | |||||||
Total SA | (20,898 | ) | (1,347,810 | ) | |||||||
Valeo SA | (4,219 | ) | (505,511 | ) | |||||||
Zodiac SA | (69,875 | ) | (2,187,896 | ) | |||||||
Total France common stocks | (8,982,623 | ) | |||||||||
Germany—(0.57)% | |||||||||||
Bayer AG | (1,732 | ) | (228,462 | ) | |||||||
Daimler AG | (4,258 | ) | (351,365 | ) | |||||||
Fraport AG Frankfurt Airport Services Worldwide | (7,079 | ) | (465,252 | ) | |||||||
Hugo Boss AG | (18,559 | ) | (2,662,956 | ) | |||||||
Infineon Technologies AG | (40,081 | ) | (441,633 | ) |
Number of shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Germany—(concluded) | |||||||||||
Lanxess AG | (3,568 | ) | $ | (226,727 | ) | ||||||
Porsche Automobil Holding SE | (9,057 | ) | (846,550 | ) | |||||||
SAP SE | (3,621 | ) | (284,581 | ) | |||||||
Sky Deutschland AG | (83,981 | ) | (755,338 | ) | |||||||
Total Germany common stocks | (6,262,864 | ) | |||||||||
Hong Kong—(0.74)% | |||||||||||
New World Development Co. Ltd. | (13,380 | ) | (16,873 | ) | |||||||
Sino Land Co. Ltd. | (410,236 | ) | (705,779 | ) | |||||||
Sun Hung Kai Properties Ltd. | (221,725 | ) | (3,365,622 | ) | |||||||
The Link REIT | (716,000 | ) | (4,062,262 | ) | |||||||
Total Hong Kong common stocks | (8,150,536 | ) | |||||||||
Italy—(0.17)% | |||||||||||
Intesa Sanpaolo SpA | (91,586 | ) | (271,976 | ) | |||||||
Luxottica Group SpA | (24,313 | ) | (1,341,327 | ) | |||||||
Mediobanca SpA | (33,742 | ) | (297,405 | ) | |||||||
Total Italy common stocks | (1,910,708 | ) | |||||||||
Japan—(3.92)% | |||||||||||
Advantest Corp. | (105,000 | ) | (1,172,273 | ) | |||||||
Aeon Co. Ltd. | (16,900 | ) | (189,755 | ) | |||||||
Alfresa Holdings Corp. | (26,600 | ) | (1,588,034 | ) | |||||||
Amada Co. Ltd. | (95,800 | ) | (930,511 | ) | |||||||
Benesse Holdings, Inc. | (10,300 | ) | (388,020 | ) | |||||||
Chubu Electric Power Co., Inc. | (70,500 | ) | (819,534 | ) | |||||||
Credit Saison Co Ltd | (12,600 | ) | (247,915 | ) | |||||||
Dentsu, Inc. | (100 | ) | (3,961 | ) | |||||||
Electric Power Development Co. Ltd. | (33,700 | ) | (1,085,721 | ) | |||||||
Fujitsu Ltd. | (324,000 | ) | (2,483,614 | ) | |||||||
Fukuoka Financial Group, Inc. | (460,000 | ) | (2,353,235 | ) | |||||||
Hitachi Ltd. | (2,000 | ) | (15,502 | ) | |||||||
Japan Prime Realty Investment Corp. | (470 | ) | (1,626,029 | ) | |||||||
Japan Retail Fund Investment Corp. | (678 | ) | (1,494,037 | ) | |||||||
Kyushu Electric Power Co., Inc. | (212,800 | ) | (2,362,813 | ) | |||||||
M3, Inc. | (100 | ) | (1,614 | ) | |||||||
Mabuchi Motor Co. Ltd. | (4,800 | ) | (378,562 | ) | |||||||
Marubeni Corp. | (240,000 | ) | (1,686,729 | ) | |||||||
Medipal Holdings Corp. | (50,800 | ) | (640,217 | ) | |||||||
MEIJI Holdings Co. Ltd. | (3,800 | ) | (272,370 | ) | |||||||
Mitsubishi Estate Co. Ltd. | (39,000 | ) | (953,670 | ) | |||||||
Mitsubishi Gas Chemical Co., Inc. | (131,000 | ) | (851,302 | ) | |||||||
Mitsui & Co. Ltd. | (58,500 | ) | (938,188 | ) | |||||||
Mizuho Financial Group, Inc. | (877,400 | ) | (1,703,447 | ) | |||||||
NEC Corp. | (8,000 | ) | (30,887 | ) | |||||||
Nintendo Co. Ltd. | (28,400 | ) | (3,154,955 | ) | |||||||
NTT Urban Development Corp. | (75,800 | ) | (825,807 | ) | |||||||
Ono Pharmaceutical Co. Ltd. | (500 | ) | (42,295 | ) | |||||||
Panasonic Corp. | (100 | ) | (1,247 | ) | |||||||
Rakuten, Inc. | (180,100 | ) | (2,365,247 | ) | |||||||
Resona Holdings, Inc. | (86,800 | ) | (483,700 | ) | |||||||
Seiko Epson Corp. | (3,400 | ) | (145,540 | ) | |||||||
Shikoku Electric Power Co., Inc. | (64,500 | ) | (850,474 | ) | |||||||
Softbank Corp. | (16,300 | ) | (1,171,778 | ) |
170
PACE Select Advisors Trust
PACE International Equity Investments
Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Japan—(concluded) | |||||||||||
Sony Corp. | (35,600 | ) | $ | (648,836 | ) | ||||||
Sumitomo Chemical Co. Ltd. | (11,000 | ) | (41,811 | ) | |||||||
Suzuken Co. Ltd. | (39,200 | ) | (1,249,821 | ) | |||||||
Taiyo Nippon Sanso Corp. | (105,000 | ) | (920,755 | ) | |||||||
The Chugoku Bank Ltd. | (15,400 | ) | (236,608 | ) | |||||||
The Chugoku Electric Power Co., Inc. | (94,000 | ) | (1,249,789 | ) | |||||||
The Hachijuni Bank Ltd. | (57,000 | ) | (350,406 | ) | |||||||
The Iyo Bank Ltd. | (64,300 | ) | (651,346 | ) | |||||||
The Kansai Electric Power Co., Inc. | (148,000 | ) | (1,351,855 | ) | |||||||
Tobu Railway Co. Ltd. | (270,000 | ) | (1,413,644 | ) | |||||||
Tohoku Electric Power Co., Inc. | (74,900 | ) | (817,866 | ) | |||||||
Tokyo Tatemono Co. Ltd. | (51,000 | ) | (435,582 | ) | |||||||
Toyo Seikan Group Holdings, Ltd. | (2,200 | ) | (34,263 | ) | |||||||
Toyota Industries Corp. | (7,200 | ) | (350,771 | ) | |||||||
United Urban Investment Corp. | (130 | ) | (208,762 | ) | |||||||
Yamada Denki Co. Ltd. | (58,900 | ) | (209,050 | ) | |||||||
Yamaha Corp. | (100 | ) | (1,524 | ) | |||||||
Total Japan common stocks | (43,431,672 | ) | |||||||||
Jersey—(0.13)% | |||||||||||
Randgold Resources Ltd. | (16,430 | ) | (1,414,735 | ) | |||||||
Luxembourg—(0.12)% | |||||||||||
SES SA | (36,763 | ) | (1,352,187 | ) | |||||||
Mauritius—(0.09)% | |||||||||||
Golden Agri-Resources Ltd. | (2,456,000 | ) | (1,048,445 | ) | |||||||
Netherlands—(0.68)% | |||||||||||
Akzo Nobel N.V. | (284 | ) | (20,455 | ) | |||||||
ASML Holding N.V. | (59,934 | ) | (5,652,388 | ) | |||||||
CNH Industrial N.V. | (206,752 | ) | (1,908,304 | ) | |||||||
Total Netherlands common stocks | (7,581,147 | ) | |||||||||
Norway—(0.14)% | |||||||||||
Statoil ASA | (55,506 | ) | (1,586,060 | ) | |||||||
Singapore—(0.55)% | |||||||||||
Ascendas Real Estate Investment Trust | (1,030,000 | ) | (1,921,828 | ) | |||||||
CapitaLand Ltd. | (586,000 | ) | (1,614,838 | ) | |||||||
City Developments Ltd. | (162,000 | ) | (1,368,225 | ) | |||||||
Jardine Cycle & Carriage Ltd. | (29,000 | ) | (1,077,636 | ) | |||||||
Singapore Technologies Engineering Ltd. | (41,000 | ) | (124,515 | ) | |||||||
United Overseas Bank Ltd. | (1,000 | ) | (19,299 | ) | |||||||
Total Singapore common stocks | (6,126,341 | ) |
Number of shares | Value | ||||||||||
Investments sold short—(concluded) | |||||||||||
Common stocks—(concluded) | |||||||||||
Spain—(0.16)% | |||||||||||
Grifols SA | (29,715 | ) | $ | (1,341,270 | ) | ||||||
Inditex SA | (16,045 | ) | (468,722 | ) | |||||||
Total Spain common stocks | (1,809,992 | ) | |||||||||
Sweden—(0.72)% | |||||||||||
Investment AB Kinnevik, B Shares | (66,290 | ) | (2,751,526 | ) | |||||||
Lundin Petroleum AB | (88,563 | ) | (1,587,374 | ) | |||||||
Svenska Cellulosa AB SCA, Class B | (149,850 | ) | (3,690,211 | ) | |||||||
Total Sweden common stocks | (8,029,111 | ) | |||||||||
Switzerland—(0.13)% | |||||||||||
Partners Group Holding AG | (5,569 | ) | (1,396,010 | ) | |||||||
United Kingdom—(0.48)% | |||||||||||
Aggreko PLC | (13,588 | ) | (393,490 | ) | |||||||
Anglo American PLC | (30,167 | ) | (810,164 | ) | |||||||
Associated British Foods PLC | (649 | ) | (30,381 | ) | |||||||
Barclays PLC | (179,999 | ) | (682,320 | ) | |||||||
BG Group PLC | (65,476 | ) | (1,291,137 | ) | |||||||
Fresnillo PLC | (33,392 | ) | (521,904 | ) | |||||||
Hargreaves Lansdown PLC | (12,162 | ) | (209,678 | ) | |||||||
Inmarsat PLC | (5,836 | ) | (71,581 | ) | |||||||
Legal & General Group PLC | (58,612 | ) | (231,228 | ) | |||||||
London Stock Exchange Group PLC | (16,762 | ) | (546,758 | ) | |||||||
SABMiller PLC | (1,338 | ) | (72,856 | ) | |||||||
Sports Direct International PLC | (40,912 | ) | (459,701 | ) | |||||||
Total United Kingdom common stocks | (5,321,198 | ) | |||||||||
Total investments sold short (proceeds—$128,622,741) | (132,265,689 | ) | |||||||||
Liabilities in excess of other assets—(1.77)% | (19,619,992 | ) | |||||||||
Net assets—100.00% | $ | 1,108,979,504 |
For a listing of defined portfolio acronyms, counterparty acronyms and currency abbreviations that are used throughout the Portfolio of ivestments as well as the tables that follow, please refer to page 232.
Aggregate cost for federal income tax purposes before investments sold short was $1,182,703,501; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 119,941,725 | |||||
Gross unrealized depreciation | (41,780,041 | ) | |||||
Net unrealized appreciation | $ | 78,161,684 |
171
PACE Select Advisors Trust
PACE International Equity Investments
Portfolio of investments—July 31, 2014
Forward foreign currency contracts
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation | |||||||||||||||
SSC | AUD | 8,039,000 | USD | 7,504,045 | 10/31/14 | $ | 78,260 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
Common stocks | $ | 126,269,149 | $ | 1,099,722,627 | $ | 41 | $ | 1,225,991,817 | |||||||||||
Preferred stocks | — | 2,404,762 | — | 2,404,762 | |||||||||||||||
Repurchase agreement | — | 7,751,000 | — | 7,751,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 24,717,606 | — | 24,717,606 | |||||||||||||||
Forward foreign currency contracts | — | 78,260 | — | 78,260 | |||||||||||||||
Total | $ | 126,269,149 | $ | 1,134,674,255 | $ | 41 | $ | 1,260,943,445 | |||||||||||
Liabilities | |||||||||||||||||||
Investments sold short | $ | — | $ | (132,265,689 | ) | $ | — | $ | (132,265,689 | ) |
At July 31, 2014, $1,102,127,389 of foreign investments and $(132,265,689) of foreign investments sold short were classified within Level 2 of the fair value hierarchy pursuant to the Portfolio's fair valuation procedures for foreign portfolio holdings as discussed in the Notes to financial statements.
The following is a rollforward of the Portfolio's investments that were valued using unobservable inputs (Level 3) for the year ended July 31, 2014:
Common stocks | |||||||
Beginning balance | $ | 41 | |||||
Purchases | — | ||||||
Sales | — | ||||||
Accrued discounts/(premiums) | — | ||||||
Total realized gain/(loss) | — | ||||||
Net change in unrealized appreciation/depreciation | 0 | ||||||
Transfers into Level 3 | — | ||||||
Transfers out of Level 3 | — | ||||||
Ending balance | $ | 41 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investment held at July 31, 2014 was $0.
172
PACE Select Advisors Trust
PACE International Equity Investments
Portfolio of investments—July 31, 2014
Portfolio footnotes
* Non-income producing security.
1 Security, or portion thereof, was on loan at July 31, 2014.
2 Security, or portion thereof, pledged as collateral for investments sold short.
3 Illiquid investments as of July 31, 2014.
4 Security is traded on the London Exchange.
5 Security is traded on the Amsterdam Exchange.
6 The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2014. The investment manager earns a management fee from UBS Private Money Market Fund LLC. Please see the Notes to financial statements for further information.
Security description | Value at 07/31/13 | Purchases during the year ended 07/31/14 | Sales during the year ended 07/31/14 | Value at 07/31/14 | Net income earned from affiliate for the year ended 07/31/14 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 5,492,556 | $ | 458,993,446 | $ | 439,768,396 | $ | 24,717,606 | $ | 30,109 |
See accompanying notes to financial statements.
173
PACE Select Advisors Trust
PACE International Emerging Markets Equity Investments
Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 10.86% before the deduction of the maximum PACE Select program fee.1 In comparison, the MSCI Emerging Markets Index (the "benchmark") returned 15.72%, and the Lipper Emerging Markets Funds category posted a median return of 12.70%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 178. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisors' comments2
Mondrian
Our portion of the Portfolio underperformed the benchmark during the reporting period. Country allocation and stock selection were negative during the fiscal year. Overweight positions in Chile, Turkey and Indonesia detracted from returns, as these markets underperformed the benchmark. An underweight to the strong Korean market was also a negative for relative results. Partly offsetting these impacts was the positive effect of an underweight in Russia, as that country's market suffered following the annexation of Crimea and the implementation of international sanctions. An overweight in India was additive, as the market rallied strongly in the run-up to the general election and the near-term outlook for the current account deficit improved, following previous weakness. From a sector perspective, an underweight in information technology detracted from relative results given the sector's outperformance. On the upside, an overweight in consumer discretionary was additive for results.
The information technology sector performed well, led by strong returns generated from large-cap Internet companies. Tencent of China, associated South African media company Naspers and South Korean Internet company NAVER each performed well during the reporting period. Not owning these companies in our portion of the Portfolio was the largest detractor from returns relative to the benchmark. In addition,
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
PACE Select Advisors Trust – PACE International Emerging Markets Equity Investments
Investment Sub-Advisors:
Mondrian Investment Partners Limited ("Mondrian"); William Blair & Company L.L.C. ("William Blair") and Lee Munder Capital Group, LLC ("LMCG")
Portfolio Managers:
Mondrian: Ginny Chong, Gregory Halton and Andrew Miller;
William Blair: Todd M. McClone and Jeffrey A. Urbina;
LMCG: Gordon Johnson, Shannon Ericson and Vikram Srimurthy
Objective:
Capital appreciation
Investment process:
Mondrian conducts research on a global basis in an effort to identify securities that have the potential for capital appreciation over a market cycle. The center of its research effort is a value-oriented dividend discount methodology toward individual securities and market analysis that attempts to identify value across country boundaries. This approach focuses on future anticipated dividends, and discounts the value of those dividends back to what they would be worth if they were being paid today. Comparisons of the values of different possible investments are then made. In an international portfolio, currency returns can be an integral component of an investment's total return. Mondrian uses a purchasing power parity approach to assess the value of individual currencies. Purchasing power parity attempts to identify the amount of goods and services that a dollar will buy in the United States, and compares that to the amount of a
(continued on next page)
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Sub-Advisors' comments – continued
not owning Taiwanese contract manufacturer Hon Hai was a negative for relative performance, while our position in Chinese medical device manufacturer Mindray detracted from results, as its shares exhibited weakness. Our holding in Sberbank was also a detractor from returns, given weakness tied to escalating geopolitical tensions between Russia and the West.
In India, Axis Bank and engineering company Larsen & Toubro were strong contributors to results given improving investor sentiment. Indian financial company Rural Electrification also added value, as did Turkish refiner Tupras and Indonesian micro-lending specialist Bank Rakyat. Elsewhere, casino operator Sands China and Chinese tobacco flavoring company Huabao were beneficial for performance.
Derivatives were not used during the review period.
William Blair
Our portion of the Portfolio underperformed the benchmark during the reporting period. Our style bias was a headwind to performance during the period, as lower quality, lower valuation emerging markets companies significantly outperformed higher quality, higher valuation companies with strong earnings trends. Stock selection detracted from returns, mainly driven by our holdings in the energy sector, as CNOOC lagged on concerns about production delays on several projects during 2014. We sold the stock as a result. While stock selection in materials also detracted from returns, an underweight to the sector, as well as in the energy sector, were additive for relative results. Elsewhere, stock selection in consumer staples and industrials dragged on performance. In consumer staples, Magnit, the largest retailer in Russia, was a key detractor due to weaker than expected financial results and broader Russia risk aversion amid the crisis in Ukraine.
Conversely, consumer discretionary stock selection added to returns, led by our overweight in the automotive industry, especially Indian manufacturers Tata Motors and Maruti Suzuki. Their shares rallied due to improved corporate performance, coupled with optimism surrounding government changes in India. Our consumer discretionary results were bolstered by continued strong returns from Kroton Educacional, a Brazilian for-profit educational company and Naspers, a South African media group. Information technology ("IT") stock selection benefited from an overweighting in Internet software/services companies, coupled with strong performance by Chinese firms
Investment process (continued)
foreign currency required to buy the same amount of goods and services in another country.
William Blair invests in a portfolio of mid cap and large cap equity securities issued by companies in emerging markets worldwide, according to a quality growth philosophy. William Blair's primary focus is on identifying such companies whose growth characteristics (rate and durability) are underestimated by the market and supported by quality management and strong competitive positioning. After screening the universe of emerging country issuers for certain quality, growth and liquidity characteristics to create a prospective list of investible securities, William Blair undertakes detailed fundamental analysis of these companies, focusing attention on areas where short- to intermediate-term earnings trends and overall operating performance are improving or are strong. Key considerations are the sustainability of a company's competitive advantage relative to peers, its industry and market conditions, a sound financial structure and high reinvestment rates that combine to create favorable conditions for prospective growth.
LMCG uses a bottom-up quantitative approach to investing in emerging markets equity securities. Inefficiencies in the market create opportunities, and LMCG believes that a quantitative process, which relies on sophisticated mathematical or statistical models in selecting investments, is well-suited to capture these inefficiencies and provide an opportunity to outperform the market. LMCG's stock selection model groups factors used to select investments into three major categories: market dynamics, value and quality.
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Sub-Advisors' comments – concluded
Tencent and Soufun, as well as Naver, a South Korean firm. In addition, IT services companies HCL Technologies (Indian IT outsourcing) and Cielo (Brazilian payment processor) performed strongly amid solid operating performance.
From a regional perspective, Latin America was the strongest contributor to returns, driven by strong stock selection coupled with overweighting to Brazil. EMEA (Europe, the Middle East and Africa) positioning was also additive, benefiting from our exposure to companies from the United Arab Emirates and Qatar, both of which rallied ahead of the inclusion of these countries in the MSCI EM Index. Conversely, an underweight to Asia detracted from relative performance during the reporting period.
Derivatives were not used during the reporting period.
LMCG
Our portion of the Portfolio underperformed the benchmark during the reporting period. Throughout 2013, we saw a substantial divergence in stock market performance between the emerging markets and the rest of the world. The MSCI Emerging Markets Index posted a -2.3% return for the full year of 2013, versus a 22.8% return for its developed market counterpart, the MSCI EAFE Index (net). More recently, emerging market equities have gained some ground in the first seven months of 2014. Despite geopolitical concerns in Russia and election uncertainty in several key emerging countries around the world, the MSCI Emerging Markets Index has gained 8.5% through the first seven months of 2014.
In our strategy, the payoffs to our three major quantitative factors (Market Dynamics, Quality and Valuation) fluctuated from month to month over the fiscal year, as emerging market investors focused less on company fundamentals and more on macroeconomic drivers and concerns. Our Market Dynamics factor, which ranks stocks versus their peers on earnings growth prospects and relative strength, was negative for performance. Our Quality factor, which assesses a company's earnings quality as well as its operating efficiency and use of capital, was essentially flat. Our Valuation factor, which evaluates stocks on several relative value measures, was slightly positive for results.
Stock selection detracted from our performance during the reporting period. Positive stock selection, particularly in Greece and Mexico, was offset by negative stock selection in Taiwan and Brazil. Country allocation provided a slight contribution to relative performance, due to overweight positions in India and South Africa, and underweights in Mexico and Chile, which were responsible for the majority of the positive results from country allocations. Sector allocation was a drag on performance for the fiscal year. In terms of sectors, positive stock selection in consumer staples and materials was offset by negative stock selection in financials and information technology.
Derivatives were not used during the reporting period.
Special considerations
The Portfolio may be appropriate for long-term investors seeking capital appreciation who are able to withstand short-term fluctuations in the equity markets in return for potentially higher returns over the long term. The value of the Portfolio changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the companies in whose securities the Portfolio invests. It is important to note that an investment in the Portfolio is only one component of a balanced investment plan. The value of the Portfolio'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 US dollar. These risks are greater for investments in emerging market issuers than for issuers in more developed countries.
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Illustration of an assumed investment of $10,000 in Class P shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE International Emerging Markets Equity Investments Class P shares versus the MSCI Emerging Markets Index over the 10 years ended July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE International Emerging Markets Equity Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustration purposes only.
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Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 10.71 | % | 6.21 | % | 10.45 | % | |||||||||
Class C2 | 9.93 | % | 5.44 | % | 9.62 | % | |||||||||
Class Y3 | 10.94 | % | 6.46 | % | 10.81 | % | |||||||||
Class P4 | 10.86 | % | 6.28 | % | 10.50 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 4.58 | % | 5.01 | % | 9.83 | % | |||||||||
Class C2 | 8.93 | % | 5.44 | % | 9.62 | % | |||||||||
MSCI Emerging Markets Index5 | 15.72 | % | 7.68 | % | 12.72 | % | |||||||||
Lipper Emerging Markets Funds median | 12.70 | % | 6.88 | % | 11.29 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 10.24 | % | 8.35 | % | 10.08 | % | |||||||||
Class C2 | 9.51 | % | 7.54 | % | 9.25 | % | |||||||||
Class Y3 | 10.56 | % | 8.61 | % | 10.45 | % | |||||||||
Class P4 | 10.48 | % | 8.41 | % | 10.14 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 4.21 | % | 7.14 | % | 9.46 | % | |||||||||
Class C2 | 8.51 | % | 7.54 | % | 9.25 | % |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—1.89% and 1.89%; Class C—2.64% and 2.64%; Class Y—1.65% and 1.65%; and Class P—1.82% and 1.77%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—1.95%; Class C—2.70%; Class Y—1.70%; and Class P—1.70%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.
2 Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
3 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
4 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
5 The MSCI Emerging Markets Index is a market capitalization-weighted index composed of different emerging market countries in Europe, Latin America, and the Pacific Basin. The index is constructed and managed with a view to being fully investable from the perspective of international institutional investors. Investors should note that indices do not reflect the deduction of fees and expenses.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
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Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Net assets (mm) | $ | 481.7 | |||||
Number of holdings | 248 | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Common stocks and preferred stocks | 85.3 | % | |||||
ADRs and GDRs | 11.5 | ||||||
Investment company | 1.2 | ||||||
Cash equivalents and other assets less liabilities | 2.0 | ||||||
Total | 100.0 | % | |||||
Regional allocation (equity investments)1 | 07/31/14 | ||||||
Asia | 56.4 | % | |||||
The Americas | 18.6 | ||||||
Europe and European territories | 10.5 | ||||||
Africa | 8.1 | ||||||
Russia | 3.1 | ||||||
Total | 96.7 | % |
Top five countries (equity investments)1,2 | 07/31/14 | ||||||
South Korea | 12.0 | % | |||||
Brazil | 10.5 | ||||||
India | 9.9 | ||||||
Taiwan | 8.4 | ||||||
South Africa | 7.7 | ||||||
Total | 48.5 | % | |||||
Top five sectors1,2 | 07/31/14 | ||||||
Financials | 23.1 | % | |||||
Information technology | 15.9 | ||||||
Consumer discretionary | 12.4 | ||||||
Consumer staples | 8.4 | ||||||
Industrials | 8.3 | ||||||
Total | 68.1 | % |
Top ten equity holdings1,2 | 07/31/14 | ||||||
Samsung Electronics Co. Ltd. | 3.1 | % | |||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 1.5 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 1.4 | ||||||
Tencent Holdings Ltd. | 1.4 | ||||||
MTN Group Ltd. | 1.3 | ||||||
Fibra Uno Administracion SA de C.V. | 1.2 | ||||||
Vale SA, ADR | 1.1 | ||||||
China Mobile Ltd | 1.1 | ||||||
Gazprom, ADR | 1.1 | ||||||
Hyundai Mobis | 1.0 | ||||||
Total | 14.2 | % |
For a listing of defined portfolio acronyms that are used throughout the Portfolio statistics, please refer to page 232.
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time.
2 Figures represent the breakdown of direct investments of PACE International Emerging Markets Equity Investments. Figures would be different if a breakdown of the underlying investment company was included.
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Industry diversification—(unaudited)
As a percentage of net assets as of July 31, 2014
Common stocks
Airlines | 0.39 | % | |||||
Auto components | 2.12 | ||||||
Automobiles | 3.94 | ||||||
Banks | 14.38 | ||||||
Beverages | 1.96 | ||||||
Building products | 0.33 | ||||||
Capital markets | 0.09 | ||||||
Chemicals | 1.09 | ||||||
Construction & engineering | 1.68 | ||||||
Construction materials | 0.91 | �� | |||||
Consumer finance | 0.15 | ||||||
Diversified consumer services | 0.38 | ||||||
Diversified financial services | 1.73 | ||||||
Diversified telecommunication services | 0.54 | ||||||
Electric utilities | 1.45 | ||||||
Electrical equipment | 0.57 | ||||||
Electronic equipment, instruments & components | 2.20 | ||||||
Food & staples retailing | 0.68 | ||||||
Food products | 3.75 | ||||||
Gas utilities | 1.47 | ||||||
Health care equipment & supplies | 0.46 | ||||||
Health care providers & services | 0.89 | ||||||
Hotels, restaurants & leisure | 1.44 | ||||||
Household durables | 1.19 | ||||||
Household products | 0.26 | ||||||
Independent power and renewable electricity producers | 1.30 | ||||||
Industrial conglomerates | 1.67 | ||||||
Insurance | 1.76 | ||||||
Internet & catalog retail | 0.39 | ||||||
Internet software & services | 2.44 | ||||||
IT services | 2.46 | ||||||
Machinery | 0.43 | ||||||
Media | 0.87 | ||||||
Metals & mining | 2.35 | ||||||
Multi-utilities | 0.55 | ||||||
Multiline retail | 0.48 |
Common stocks—(concluded)
Oil, gas & consumable fuels | 6.92 | % | |||||
Paper & forest products | 0.44 | ||||||
Personal products | 1.14 | ||||||
Pharmaceuticals | 1.70 | ||||||
Real estate investment trusts | 1.23 | ||||||
Real estate management & development | 2.15 | ||||||
Road & rail | 0.26 | ||||||
Semiconductors & semiconductor equipment | 7.44 | ||||||
Specialty retail | 1.31 | ||||||
Technology hardware, storage & peripherals | 1.33 | ||||||
Textiles, apparel & luxury goods | 0.24 | ||||||
Thrifts & mortgage finance | 0.89 | ||||||
Tobacco | 0.28 | ||||||
Trading companies & distributors | 0.32 | ||||||
Transportation infrastructure | 2.52 | ||||||
Water utilities | 0.06 | ||||||
Wireless telecommunication services | 5.90 | ||||||
Total common stocks | 92.88 |
Preferred stocks
Automobiles | 0.34 | ||||||
Banks | 0.74 | ||||||
Chemicals | 0.27 | ||||||
Food & staples retailing | 0.27 | ||||||
Media | 0.01 | ||||||
Metals & mining | 1.38 | ||||||
Oil, gas & consumable fuels | 0.46 | ||||||
Paper & forest products | 0.44 | ||||||
Total preferred stocks | 3.91 | ||||||
Investment company | 1.23 | ||||||
Repurchase agreement | 2.15 | ||||||
Investment of cash collateral from securities loaned | 6.77 | ||||||
Liabilities in excess of other assets | (6.94 | ) | |||||
Net assets | 100.00 | % |
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—92.88% | |||||||||||
Bermuda—2.66% | |||||||||||
Brilliance China Automotive Holdings Ltd. | 952,000 | $ | 1,788,974 | ||||||||
China Gas Holdings Ltd. | 926,000 | 1,786,467 | |||||||||
COSCO Pacific Ltd. | 1,084,000 | 1,628,911 | |||||||||
Credicorp Ltd. | 20,968 | 3,101,586 | |||||||||
GOME Electrical Appliances Holding Ltd.1 | 13,074,000 | 2,206,766 | |||||||||
Huabao International Holdings Ltd.1 | 1,986,000 | 1,442,125 | |||||||||
Sihuan Pharmaceutical Holdings Group Ltd. | 1,410,000 | 864,382 | |||||||||
Total Bermuda common stocks | 12,819,211 | ||||||||||
Brazil—6.96% | |||||||||||
AMBEV SA | 242,800 | 1,676,992 | |||||||||
AMBEV SA, ADR | 538,099 | 3,707,502 | |||||||||
Banco do Brasil SA | 181,000 | 2,211,491 | |||||||||
BB Seguridade Participacoes SA | 278,800 | 4,067,561 | |||||||||
BR Malls Participacoes SA | 139,250 | 1,202,997 | |||||||||
CETIP SA - Mercados Organizados | 30,600 | 428,097 | |||||||||
Cielo SA | 221,784 | 4,056,875 | |||||||||
Companhia de Concessoes Rodoviarias (CCR) | 378,000 | 2,972,350 | |||||||||
CPFL Energia SA | 163,800 | 1,429,527 | |||||||||
Cyrela Brazil Realty SA Empreendimentos e Participacoes | 208,800 | 1,156,856 | |||||||||
EcoRodovias Infraestrutura e Logistica SA | 210,500 | 1,271,119 | |||||||||
Hypermarcas SA* | 208,600 | 1,663,283 | |||||||||
JBS SA | 512,600 | 1,886,594 | |||||||||
Kroton Educacional SA | 69,600 | 1,853,546 | |||||||||
Porto Seguro SA | 119,500 | 1,639,685 | |||||||||
Transmissora Alianca de Energia Eletrica SA | 104,700 | 943,281 | |||||||||
Vale SA, ADR1 | 46,200 | 662,970 | |||||||||
Weg SA | 59,380 | 711,906 | |||||||||
Total Brazil common stocks | 33,542,632 | ||||||||||
British Virgin Islands—0.13% | |||||||||||
Mail.ru Group Ltd., GDR* | 20,143 | 600,907 | |||||||||
Cayman Islands—5.92% | |||||||||||
Baidu, Inc., ADR* | 15,664 | 3,384,207 | |||||||||
Belle International Holdings Ltd. | 2,320,976 | 2,874,843 | |||||||||
Chaoda Modern Agriculture Holdings Ltd.*,2,3 | 1,038,000 | 1,339 | |||||||||
China Huishan Dairy Holdings Co. Ltd.*,1 | 1,719,000 | 388,836 | |||||||||
China Resources Cement Holdings Ltd. | 2,340,000 | 1,689,752 | |||||||||
ENN Energy Holdings Ltd. | 302,000 | 2,136,107 | |||||||||
Evergrande Real Estate Group Ltd.1 | 3,643,000 | 1,579,073 | |||||||||
Golden Eagle Retail Group Ltd.1 | 1,098,000 | 1,413,894 | |||||||||
Hengan International Group Co. Ltd. | 180,500 | 1,931,037 | |||||||||
Mindray Medical International Ltd., ADR1 | 73,500 | 2,208,675 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Cayman Islands—(concluded) | |||||||||||
Sands China Ltd. | 104,400 | $ | 766,472 | ||||||||
Shimao Property Holdings Ltd.1 | 688,000 | 1,581,877 | |||||||||
Tencent Holdings Ltd. | 409,200 | 6,645,304 | |||||||||
Vipshop Holdings Ltd., ADR*,1 | 9,190 | 1,888,913 | |||||||||
Total Cayman Islands common stocks | 28,490,329 | ||||||||||
Chile—1.28% | |||||||||||
Banco Santander Chile, ADR1 | 88,841 | 2,259,226 | |||||||||
Cia Cervecerias Unidas SA | 83,640 | 940,243 | |||||||||
Enersis SA, ADR | 156,300 | 2,635,218 | |||||||||
Inversiones Aguas Metropolitanas SA (IAM), ADR4 | 9,800 | 309,095 | |||||||||
Total Chile common stocks | 6,143,782 | ||||||||||
China—6.09% | |||||||||||
Agricultural Bank of China, Class H | 3,413,000 | 1,653,429 | |||||||||
Angang Steel Co. Ltd., Class H1 | 2,288,000 | 1,694,391 | |||||||||
Bank of China Ltd., Class H | 7,594,000 | 3,629,087 | |||||||||
China Bluechemical Ltd., Class H | 1,658,000 | 853,956 | |||||||||
China CITIC Bank, Class H | 2,675,000 | 1,771,171 | |||||||||
China CNR Corp. Ltd.*,4 | 1,434,000 | 1,202,702 | |||||||||
China Construction Bank Corp., Class H | 2,726,000 | 2,085,716 | |||||||||
China Railway Construction Corp. Ltd., Class H1 | 1,629,000 | 1,561,362 | |||||||||
China Shenhua Energy Co. Ltd., Class H | 641,500 | 1,886,277 | |||||||||
China Vanke Co. Ltd.* | 264,400 | 585,429 | |||||||||
Chongqing Rural Commercial Bank, Class H | 3,405,000 | 1,684,144 | |||||||||
Dongfeng Motor Group Co. Ltd., Class H | 968,000 | 1,718,944 | |||||||||
Huaneng Power International, Inc., Class H1 | 1,600,000 | 1,776,073 | |||||||||
Industrial & Commercial Bank of China Ltd., Class H | 6,068,000 | 4,138,482 | |||||||||
Jiangsu Expressway Co. Ltd., Class H1 | 1,606,000 | 1,952,095 | |||||||||
Shanghai Fosun Pharmaceutical Group Co. Ltd., Class H* | 302,000 | 994,592 | |||||||||
Weichai Power Co. Ltd., Class H | 35,000 | 153,547 | |||||||||
Total China common stocks | 29,341,397 | ||||||||||
Colombia—0.14% | |||||||||||
Bancolombia SA, ADR1 | 10,800 | 674,028 | |||||||||
Egypt—0.28% | |||||||||||
Commercial International Bank Egypt SAE, GDR | 234,403 | 1,364,505 | |||||||||
Hong Kong—2.77% | |||||||||||
Beijing Enterprises Holdings Ltd. | 212,000 | 1,846,072 | |||||||||
China Mobile Ltd. | 465,000 | 5,080,889 | |||||||||
China Power International Development Ltd.1 | 3,684,000 | 1,544,737 | |||||||||
China Resources Power Holdings Co. Ltd. | 1,052,000 | 2,938,775 | |||||||||
Lenovo Group Ltd.1 | 1,416,000 | 1,931,546 | |||||||||
Total Hong Kong common stocks | 13,342,019 |
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
India—9.89% | |||||||||||
Amtek Auto Ltd. | 305,038 | $ | 1,292,453 | ||||||||
Axis Bank Ltd. | 309,140 | 2,000,491 | |||||||||
Cairn India Ltd. | 312,116 | 1,621,112 | |||||||||
Canara Bank | 197,171 | 1,284,767 | |||||||||
HCL Technologies Ltd. | 52,456 | 1,345,150 | |||||||||
HDFC Bank Ltd. | 210,621 | 2,880,546 | |||||||||
Hero Honda Motors Ltd. | 19,646 | 841,694 | |||||||||
Hindustan Petroleum Corp. Ltd. | 187,075 | 1,227,518 | |||||||||
Housing Development Finance Corp. | 244,683 | 4,287,445 | |||||||||
ICICI Bank Ltd., ADR | 51,366 | 2,569,327 | |||||||||
Infosys Ltd. | 28,336 | 1,566,816 | |||||||||
Infosys Ltd., ADR1 | 27,200 | 1,491,104 | |||||||||
IRB Infrastructure Developers Ltd. | 353,457 | 1,490,841 | |||||||||
ITC Ltd. | 229,761 | 1,345,292 | |||||||||
Larsen & Toubro Ltd. | 89,320 | 2,199,089 | |||||||||
Lupin Ltd. | 69,827 | 1,361,055 | |||||||||
Mahindra & Mahindra Ltd. | 45,871 | 903,495 | |||||||||
Maruti Suzuki India Ltd. | 46,456 | 1,927,491 | |||||||||
NMDC Ltd. | 416,159 | 1,166,080 | |||||||||
Reliance Industries Ltd., GDR4 | 82,287 | 2,720,470 | |||||||||
Rural Electrification Corp. Ltd. | 140,664 | 704,657 | |||||||||
Sun Pharmaceutical Industries Ltd. | 132,805 | 1,726,620 | |||||||||
Tata Consultancy Services Ltd. | 42,880 | 1,823,252 | |||||||||
Tata Motors Ltd. | 320,762 | 2,347,646 | |||||||||
Tata Motors Ltd., ADR | 54,807 | 2,155,011 | |||||||||
Ultratech Cement Ltd. | 25,499 | 1,015,006 | |||||||||
Wipro Ltd., ADR1 | 133,886 | 1,546,383 | |||||||||
Zee Entertainment Enterprises Ltd. | 163,875 | 783,487 | |||||||||
Total India common stocks | 47,624,298 | ||||||||||
Indonesia—4.59% | |||||||||||
Media Nusantara Citra Tbk PT | 1,769,900 | 392,694 | |||||||||
PT Adaro Energy Tbk | 16,501,200 | 1,660,127 | |||||||||
PT Astra International Tbk | 3,564,500 | 2,353,798 | |||||||||
PT Bank Mandiri (Persero) Tbk | 2,320,200 | 2,018,934 | |||||||||
PT Bank Negara Indonesia (Persero) Tbk | 4,847,900 | 2,099,857 | |||||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 7,170,200 | 6,877,447 | |||||||||
PT Indofood Sukses Makmur Tbk | 3,003,500 | 1,807,932 | |||||||||
PT Kalbe Farma Tbk | 10,239,700 | 1,512,244 | |||||||||
PT Perusahaan Gas Negara | 3,931,900 | 1,979,102 | |||||||||
PT Perusahaan Perkebunan London Sumatra Indonesia Tbk | 7,976,200 | 1,428,469 | |||||||||
Total Indonesia common stocks | 22,130,604 | ||||||||||
Kazakhstan—0.22% | |||||||||||
KazMunaiGas Exploration Production, GDR5 | 31,423 | 560,901 | |||||||||
KazMunaiGas Exploration Production, GDR6 | 28,996 | 517,561 | |||||||||
Total Kazakhstan common stocks | 1,078,462 | ||||||||||
Malaysia—3.48% | |||||||||||
AMMB Holdings Berhad | 1,543,100 | 3,342,195 | |||||||||
DiGi.Com Berhad | 1,111,300 | 1,973,676 | |||||||||
Genting Malaysia Berhad | 1,134,800 | 1,560,108 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Malaysia—(concluded) | |||||||||||
IJM Corp. Berhad | 836,600 | $ | 1,749,518 | ||||||||
Malayan Banking Berhad | 575,180 | 1,774,216 | |||||||||
RHB Capital Berhad | 611,800 | 1,729,999 | |||||||||
Tenaga Nasional Berhad | 505,500 | 1,961,911 | |||||||||
YTL Corp. Berhad | 3,080,400 | 1,512,186 | |||||||||
YTL Power International Berhad* | 2,469,660 | 1,141,451 | |||||||||
Total Malaysia common stocks | 16,745,260 | ||||||||||
Mexico—5.86% | |||||||||||
America Movil SA de C.V., ADR, Series L | 63,600 | 1,499,052 | |||||||||
America Movil SA de C.V., Series L | 3,411,500 | 4,028,254 | |||||||||
Arca Continental SAB de C.V. | 114,600 | 810,175 | |||||||||
Cemex SAB de C.V.*,1 | 1,350,900 | 1,699,355 | |||||||||
Compartamos SAB de C.V.1 | 352,000 | 712,787 | |||||||||
Fibra Uno Administracion SA de C.V. | 1,684,200 | 5,915,084 | |||||||||
Gruma SAB de C.V., Series B* | 140,600 | 1,543,197 | |||||||||
Grupo Aeroportuario del Pacifico SA de C.V., ADR | 16,300 | 1,097,316 | |||||||||
Grupo Aeroportuario del Pacifico SAB de C.V. | 272,100 | 1,831,221 | |||||||||
Grupo Financiero Banorte SAB de C.V., Series O1 | 298,350 | 1,984,862 | |||||||||
Grupo Financiero Santander Mexico SAB de C.V., Class B, ADR | 185,000 | 2,456,800 | |||||||||
Grupo Lala SAB de C.V. | 236,600 | 603,491 | |||||||||
Infraestructura Energetica Nova SAB de C.V.1 | 208,900 | 1,181,976 | |||||||||
Kimberly-Clark de Mexico SA de C.V., Series A | 503,100 | 1,276,397 | |||||||||
Promotora y Operadora de Infraestructura SAB de C.V.* | 81,300 | 1,097,242 | |||||||||
Wal-Mart de Mexico SAB de C.V., Series V1 | 203,400 | 505,115 | |||||||||
Total Mexico common stocks | 28,242,324 | ||||||||||
Nigeria—0.13% | |||||||||||
Guaranty Trust Bank PLC | 3,468,807 | 636,566 | |||||||||
Panama—0.12% | |||||||||||
Copa Holdings SA, Class A | 3,804 | 577,713 | |||||||||
Philippines—2.29% | |||||||||||
Alliance Global Group, Inc. | 2,421,700 | 1,454,552 | |||||||||
BDO Unibank, Inc. | 840,190 | 1,742,497 | |||||||||
International Container Terminal Services, Inc. | 225,220 | 584,474 | |||||||||
Metropolitan Bank & Trust Co. | 782,070 | 1,537,905 | |||||||||
Philippine Long Distance Telephone Co., ADR | 44,150 | 3,106,394 | |||||||||
Universal Robina Corp. | 704,700 | 2,610,542 | |||||||||
Total Philippines common stocks | 11,036,364 | ||||||||||
Poland—0.38% | |||||||||||
PKP Cargo SA | 54,910 | 1,253,845 | |||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 52,026 | 591,649 | |||||||||
1,845,494 |
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Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Qatar—0.07% | |||||||||||
Qatar National Bank | 7,035 | $ | 347,916 | ||||||||
Romania—0.16% | |||||||||||
Societatea Nationala de Gaze Naturale ROMGAZ SA | 73,520 | 771,225 | |||||||||
Russia—3.07% | |||||||||||
Gazprom, ADR1,6 | 690,783 | 5,063,439 | |||||||||
Gazprom, ADR5 | 196,431 | 1,433,296 | |||||||||
LUKOIL, ADR5 | 3,771 | 210,238 | |||||||||
LUKOIL, ADR1,6 | 27,722 | 1,546,888 | |||||||||
Magnit OJSC, GDR4 | 10,135 | 519,720 | |||||||||
MMC Norilsk Nickel OJSC | 10,139 | 1,982,416 | |||||||||
Sberbank, ADR6 | 272,147 | 2,253,377 | |||||||||
Sberbank, ADR5 | 12,655 | 104,983 | |||||||||
Tatneft, ADR6 | 20,912 | 747,395 | |||||||||
Tatneft, ADR5 | 25,947 | 922,255 | |||||||||
Total Russia common stocks | 14,784,007 | ||||||||||
South Africa—7.68% | |||||||||||
Aspen Pharmacare Holdings Ltd. | 64,878 | 1,753,433 | |||||||||
Barloworld Ltd. | 160,925 | 1,526,137 | |||||||||
Bidvest Group Ltd. | 128,059 | 3,444,962 | |||||||||
Clicks Group Ltd.1 | 106,360 | 651,957 | |||||||||
Discovery Ltd. | 133,948 | 1,171,278 | |||||||||
FirstRand Ltd. | 608,749 | 2,447,428 | |||||||||
Liberty Holdings Ltd. | 131,915 | 1,591,455 | |||||||||
Mediclinic International Ltd. | 266,663 | 2,122,025 | |||||||||
Mondi Ltd. | 80,243 | 1,411,174 | |||||||||
MTN Group Ltd. | 308,569 | 6,387,186 | |||||||||
Naspers Ltd., N Shares | 24,408 | 3,001,623 | |||||||||
Netcare Ltd. | 761,127 | 2,185,207 | |||||||||
Sasol Ltd. | 60,357 | 3,481,592 | |||||||||
Steinhoff International Holdings Ltd.1 | 379,384 | 1,895,181 | |||||||||
Tiger Brands Ltd. | 64,014 | 1,840,434 | |||||||||
Truworths International Ltd.1 | 173,356 | 1,213,778 | |||||||||
Woolworths Holdings Ltd/South Africa | 114,510 | 884,237 | |||||||||
Total South Africa common stocks | 37,009,087 | ||||||||||
South Korea—11.71% | |||||||||||
Amorepacific Corp. | 1,107 | 1,899,881 | |||||||||
Coway Co. Ltd. | 9,702 | 836,297 | |||||||||
E-Mart Co. Ltd. | 7,030 | 1,578,556 | |||||||||
Hankook Tire Co. Ltd. | 28,897 | 1,581,704 | |||||||||
Hanwha Corp. | 49,566 | 1,404,864 | |||||||||
Hyundai Hysco Co. Ltd.1 | 16,707 | 1,337,302 | |||||||||
Hyundai Mobis | 15,875 | 4,742,247 | |||||||||
Hyundai Motor Co. | 18,362 | 4,346,818 | |||||||||
Industrial Bank of Korea | 132,734 | 1,968,013 | |||||||||
Kangwon Land, Inc. | 45,279 | 1,501,323 | |||||||||
KCC Corp. | 2,685 | 1,580,579 | |||||||||
LG Display Co. Ltd.* | 58,610 | 1,924,031 | |||||||||
LG Electronics, Inc. | 24,925 | 1,846,506 | |||||||||
LS Corp. | 22,156 | 1,560,849 | |||||||||
NAVER Corp. | 1,573 | 1,123,195 | |||||||||
Nexen Tire Corp. | 79,433 | 1,278,190 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
South Korea—(concluded) | |||||||||||
Samsung Electronics Co. Ltd. | 11,412 | $ | 14,769,567 | ||||||||
Shinhan Financial Group Co. Ltd. | 45,613 | 2,252,722 | |||||||||
SK Holdings Co. Ltd | 7,557 | 1,279,975 | |||||||||
SK Hynix, Inc.* | 102,052 | 4,440,238 | |||||||||
SK Telecom Co. Ltd. | 7,169 | 1,840,294 | |||||||||
SL Corp. | 64,508 | 1,302,855 | |||||||||
Total South Korea common stocks | 56,396,006 | ||||||||||
Taiwan—8.37% | |||||||||||
Advanced Semiconductor Engineering, Inc.* | 1,678,000 | 1,992,781 | |||||||||
Asustek Computer, Inc. | 80,000 | 845,388 | |||||||||
AU Optronics Corp. | 3,810,000 | 1,716,872 | |||||||||
Catcher Technology Co. Ltd. | 280,000 | 2,288,562 | |||||||||
Cheng Uei Precision Industry Co. Ltd. | 713,000 | 1,327,302 | |||||||||
Delta Electronics, Inc. | 285,000 | 1,936,701 | |||||||||
Fubon Financial Holding Co. Ltd. | 1,159,000 | 1,819,417 | |||||||||
HON HAI Precision Industry Co. Ltd. | 1,073,000 | 3,676,835 | |||||||||
King Yuan Electronics Co. Ltd. | 1,520,000 | 1,244,978 | |||||||||
MediaTek, Inc. | 142,000 | 2,197,611 | |||||||||
POU Chen Corp. | 1,052,000 | 1,175,909 | |||||||||
Quanta Computer, Inc. | 479,000 | 1,337,808 | |||||||||
Ruentex Development Co. Ltd. | 858,000 | 1,537,181 | |||||||||
Taiwan Mobile Co. Ltd. | 874,000 | 2,674,907 | |||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 1,767,156 | 7,085,027 | |||||||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 115,365 | 2,307,300 | |||||||||
Teco Electric and Machinery Co. Ltd. | 947,000 | 1,200,438 | |||||||||
Uni-President Enterprises Corp. | 1,128,980 | 2,149,190 | |||||||||
United Microelectronics Corp. | 3,935,000 | 1,815,126 | |||||||||
Total Taiwan common stocks | 40,329,333 | ||||||||||
Thailand—2.25% | |||||||||||
Hemaraj Land and Development PCL | 11,074,300 | 1,269,088 | |||||||||
Kasikornbank Public Co. Ltd. | 89,700 | 587,763 | |||||||||
PTT Exploration & Production PCL | 297,300 | 1,497,793 | |||||||||
PTT Global Chemical PCL | 772,600 | 1,574,307 | |||||||||
PTT Public Co. Ltd.3 | 368,900 | 3,653,637 | |||||||||
Quality Houses PCL | 13,842,400 | 1,682,046 | |||||||||
Thai Beverage PCL | 1,204,000 | 590,299 | |||||||||
Total Thailand common stocks | 10,854,933 | ||||||||||
Turkey—3.73% | |||||||||||
Eregli Demir ve Celik Fabrikalari TAS (Erdemir) | 1,240,765 | 2,616,190 | |||||||||
Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS* | 1,737,149 | 1,876,541 | |||||||||
Tofas Turk Otomobil Fabrikasi A.S. | 93,116 | 576,587 | |||||||||
Tupras-Turkiye Petrol Rafinerileri A.S. | 155,778 | 3,806,964 | |||||||||
Turk Hava Yollari Anonim Ortakligi (THY)* | 434,592 | 1,304,035 | |||||||||
Turk Telekomunikasyon A.S. | 877,029 | 2,625,592 | |||||||||
Turkcell Iletisim Hizmetleri A.S. (Turkcell)* | 281,909 | 1,843,488 |
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
Turkey—(concluded) | |||||||||||
Turkiye Garanti Bankasi A.S. | 435,211 | $ | 1,792,296 | ||||||||
Turkiye Vakiflar Bankasi T.A.O., Class D | 639,966 | 1,503,188 | |||||||||
Total Turkey common stocks | 17,944,881 | ||||||||||
United Arab Emirates—0.70% | |||||||||||
DP World Ltd. | 39,995 | 791,832 | |||||||||
Emaar Properties PJSC | 340,424 | 901,820 | |||||||||
First Gulf Bank PJSC | 340,809 | 1,682,058 | |||||||||
Total United Arab Emirates common stocks | 3,375,710 | ||||||||||
United Kingdom—1.30% | |||||||||||
Mondi PLC | 40,785 | 715,125 | |||||||||
SABMiller PLC | 31,747 | 1,728,441 | |||||||||
Unilever PLC | 88,030 | 3,803,468 | |||||||||
Total United Kingdom common stocks | 6,247,034 | ||||||||||
United States—0.65% | |||||||||||
Yum! Brands, Inc. | 44,750 | 3,105,650 | |||||||||
Total common stocks (cost—$413,216,339) | 447,401,677 | ||||||||||
Preferred stocks—3.91% | |||||||||||
Brazil—3.56% | |||||||||||
Braskem SA | 210,700 | 1,302,973 | |||||||||
Companhia Brasileira de Distribuicao Grupo Pao de Acucar, ADR1 | 27,030 | 1,303,387 | |||||||||
Gerdau SA | 262,300 | 1,543,451 | |||||||||
Itau Unibanco Holding SA | 231,132 | 3,575,860 | |||||||||
Petroleo Brasileiro SA, ADR | 263,100 | 2,214,969 | |||||||||
Suzano Papel e Celulose SA | 537,800 | 2,086,012 | |||||||||
Vale SA, ADR | 399,391 | 5,112,205 | |||||||||
Total Brazil preferred stocks | 17,138,857 | ||||||||||
India—0.01% | |||||||||||
Zee Entertainment Enterprises Ltd. | 3,000,690 | 39,502 |
Number of shares | Value | ||||||||||
Preferred stocks—(concluded) | |||||||||||
South Korea—0.34% | |||||||||||
Hyundai Motor Co. | 9,797 | $ | 1,636,556 | ||||||||
Total preferred stocks (cost—$20,171,012) | 18,814,915 | ||||||||||
Investment company—1.23% | |||||||||||
United States—1.23% | |||||||||||
iShares MSCI Emerging Markets Index Fund (cost—$5,212,317) | 134,912 | 5,911,844 | |||||||||
Face amount | |||||||||||
Repurchase agreement—2.15% | |||||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $10,650,213 US Treasury Note, 0.625% due 05/31/17; (value—$10,557,023); proceeds: $10,351,000 (cost—$10,351,000) | $ | 10,351,000 | 10,351,000 | ||||||||
Number of shares | |||||||||||
Investment of cash collateral from securities loaned—6.77% | |||||||||||
Money market fund—6.77% | |||||||||||
UBS Private Money Market Fund LLC7 (cost—$32,623,715) | 32,623,715 | 32,623,715 | |||||||||
Total investments (cost—$481,574,383)—106.94% | 515,103,151 | ||||||||||
Liabilities in excess of other assets—(6.94)% | (33,407,934 | ) | |||||||||
Net assets—100.00% | $ | 481,695,217 |
For a listing of defined portfolio acronyms, counterparty acronyms and currency type abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 232.
Aggregate cost for federal income tax purposes was $485,216,937; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 48,539,463 | |||||
Gross unrealized depreciation | (18,653,249 | ) | |||||
Net unrealized appreciation | $ | 29,886,214 |
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Portfolio of investments—July 31, 2014
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
Common stocks | $ | 111,107,103 | $ | 336,293,235 | $ | 1,339 | $ | 447,401,677 | |||||||||||
Preferred stocks | 17,138,857 | 1,676,058 | — | 18,814,915 | |||||||||||||||
Investment company | 5,911,844 | — | — | 5,911,844 | |||||||||||||||
Repurchase agreement | — | 10,351,000 | — | 10,351,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 32,623,715 | — | 32,623,715 | |||||||||||||||
Total | $ | 134,157,804 | $ | 380,944,008 | $ | 1,339 | $ | 515,103,151 |
At July 31, 2014, $336,369,253 of foreign investments were classified within Level 2 of the fair value hierarchy pursuant to the Portfolio's fair valuation procedures for foreign portfolio holdings as discussed in the Notes to financial statements.
The following is a rollforward of the Portfolio's investment that was valued using unobservable inputs (Level 3) for the year ended July 31, 2014:
Common stock | |||||||
Beginning balance | $ | 1,338 | |||||
Purchases | — | ||||||
Sales | — | ||||||
Accrued discounts/(premiums) | — | ||||||
Total realized gain/(loss) | — | ||||||
Net change in unrealized appreciation/depreciation | 1 | ||||||
Transfers into Level 3 | — | ||||||
Transfers out of Level 3 | — | ||||||
Ending balance | $ | 1,339 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investment held at July 31, 2014 was $1.
Portfolio footnotes
* Non-income producing security.
1 Security, or portion thereof, was on loan at July 31, 2014.
2 Illiquid investment as of July 31, 2014.
3 Security is being fair valued by a valuation committee under the direction of the board of trustees.
4 Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities, which represent 0.99% of net assets as of July 31, 2014, are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers.
5 Security is traded on the Turquoise Exchange.
6 Security is traded on the over-the-counter ("OTC") market.
7 The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2014. The investment manager earns a management fee from UBS Private Money Market Fund LLC. Please see the Notes to financial statements for further information.
Security description | Value at 07/31/13 | Purchases during the year ended 07/31/14 | Sales during the year ended 07/31/14 | Value at 07/31/14 | Net income earned from affiliate for the year ended 07/31/14 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 34,204,798 | $ | 228,017,561 | $ | 229,598,644 | $ | 32,623,715 | $ | 2,888 |
See accompanying notes to financial statements.
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Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 15.00% before the deduction of the maximum PACE Select program fee.1 In comparison, the FTSE EPRA/NAREIT Developed Index (the "benchmark") returned 13.40%, while the Lipper Global Real Estate Funds category posted a median return of 12.43%. Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 189. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisors' comments2
CBRE Clarion
Our portion of the Portfolio outperformed the benchmark during the reporting period, driven by stock selection. Asset allocation was a modest detractor from performance, due to a combination of positioning in Asia and our allocation to cash in an "up" market. We generated a strong double-digit absolute return during the period as a result of the continued benign interest rate environment in the US and many markets worldwide, coupled with an improving economy, accommodative capital markets environment and the continued recovery of commercial property fundamentals.
Stock selection was positive in all major regions, led by our holdings in the Americas and Europe. Stock selection in the US was the top contributor to performance, primarily as a result of positioning across a number of property types, including our holdings in the office, residential and mall sectors. Overall, we are positive on US real estate investment trusts (REITs), which offer an attractive combination of yield and growth in an improving macro-economic environment. Host Hotels, a US hotel REIT, was our top contributor during the period. We remain positive on the lodging sector given that its cash flows respond most quickly to improving demand. In Europe, stock selection in the UK and on the continent contributed to performance. European positions are based on an improving
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
PACE Select Advisors Trust –
PACE Global Real Estate Securities Investments
Investment Sub-Advisors:
CBRE Clarion Securities, LLC ("CBRE Clarion") and Brookfield Investment Management Inc. ("Brookfield")
Portfolio Managers:
CBRE Clarion: T. Ritson Ferguson, Steven D. Burton & Joseph P. Smith;
Brookfield: Jason Baine and Bernhard Krieg
Objective:
Total Return
Investment process:
CBRE Clarion (formerly, ING Clarion Real Estate Securities) uses a multi-step investment process for constructing the investment portfolio. This process combines top-down region and sector allocation with bottom-up individual stock selection. First, CBRE Clarion selects property sectors and geographic regions in which to invest and determines the degree of representation of such sectors and regions, through a systematic evaluation of public and private real estate market trends and conditions. Second, CBRE Clarion uses a proprietary valuation process in an effort to identify investments with superior current income and growth potential relative to their peers.
Brookfield invests in a diversified portfolio of global securities of companies primarily in the real estate industry, including real estate investment trusts, real estate operating companies, companies whose value is significantly affected by the value of such companies' real estate holdings, and related entities and structures. Brookfield utilizes a fundamental, bottom-up, value-based stock selection methodology.
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Sub-Advisors' comments – concluded
economic framework and a sense of diminished risk in the eurozone. In Asia, favorable stock selection in Japan and, to a lesser extent Australia and Singapore, was mostly offset by the negative impact from our positioning in Hong Kong. We remain selective within the Asia-Pacific region, with a positive outlook for Japan, especially for Tokyo office companies, which are showing improved occupancies and accelerating rental growth after years of stagnation.
Derivatives were not used during the reporting period.
Brookfield
Our portion of the Portfolio outperformed the benchmark during the reporting period, driven by stock selection. Regional allocation also benefited performance, with significant contributions from stock selection in Asia Pacific and North America. An overweight exposure to Europe, which outperformed the benchmark, and an underweight to Asia Pacific, which underperformed, were also notable relative contributors.
By country, stock selection in the US was the largest contributor, led by exposure to non-benchmark security Iron Mountain (self-storage). The company generated strong results during the second quarter of 2014 following receipt of a Private Letter Ruling from the IRS that approved its conversion to REIT status. Stock selection in the UK was also a driver of results. An underweight allocation to underperforming Japan was also a notable relative contributor. However, an overweight exposure to underperforming Norway, driven by a single overweight position in diversified company Norwegian Property ASA, partially offset these gains. Stock selection in Singapore was also a modest detractor.
By security, the top contributor was an overweight exposure to Safestore Holdings plc (UK, Diversified.) The company generated weak 2013 same-store sales growth, caused by new value-added taxes assessed by the government, which were not fully passed through to tenants via increased rent. As this event passed, the stock performed well. This position was sold from our portion of the Portfolio during the first quarter of 2014 in order to take profits. An underweight exposure to Wharf Holdings Ltd. (Hong Kong, retail) was another notable contributor relative to the benchmark. Conversely, our underweight exposure to US diversified company Vornado Realty Trust was the leading detractor from relative performance. However, we increased our position in the company during the first quarter of 2014 due to a more attractive valuation.
Derivatives were not used during the reporting period.
Special considerations
The Portfolio may be appropriate for long-term investors seeking to diversify a portion of their assets into real estate related investments. Investors should be willing to withstand short-term fluctuations in the equity and real estate markets in return for potentially higher returns over the long term. The value of the Portfolio changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the companies or issuers in whose securities the Portfolio invests. The value of the Portfolio'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 US dollar. These risks are greater for investments in emerging market issuers than for issuers in more developed countries. There are certain risks associated with investing in real estate-related investments, including sensitivity to economic downturns, interest rates, declines in property values and variation in property management.
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Illustration of an assumed investment of $10,000 in Class A shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE Global Real Estate Securities Investments Class A shares versus the FTSE EPRA/NAREIT Developed Index from December 31, 2006, the month-end after the inception date of the Class A shares, through July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE Global Real Estate Securities Investments is a professionally managed portfolio while the Index is not available for investment and is unmanaged. The comparison is shown for illustration purposes only.
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Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | Since Inception1 | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A2 | 14.56 | % | 14.07 | % | 0.06 | % | |||||||||
Class C3 | 13.77 | % | 13.21 | % | (0.71 | )% | |||||||||
Class Y4 | 14.94 | % | 14.40 | % | 15.06 | % | |||||||||
Class P5 | 15.00 | % | 14.39 | % | (0.28 | )% | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A2 | 8.25 | % | 12.80 | % | (0.68 | )% | |||||||||
Class C3 | 12.77 | % | 13.21 | % | (0.71 | )% | |||||||||
FTSE EPRA/NAREIT Developed Index6 | 13.40 | % | 15.27 | % | 1.89 | % | |||||||||
Lipper Global Real Estate Funds median | 12.43 | % | 14.05 | % | 0.95 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | Since Inception1 | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A2 | 15.87 | % | 16.16 | % | 0.00 | % | |||||||||
Class C3 | 15.08 | % | 15.29 | % | (0.77 | )% | |||||||||
Class Y4 | 16.09 | % | 16.52 | % | 15.20 | % | |||||||||
Class P5 | 16.16 | % | 16.45 | % | (0.36 | )% | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A2 | 9.55 | % | 14.84 | % | (0.74 | )% | |||||||||
Class C3 | 14.08 | % | 15.29 | % | (0.77 | )% |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—1.56% and 1.45%; Class C—2.27% and 2.20%; Class Y—1.39% and 1.20%; and Class P—1.52% and 1.20%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—1.45%; Class C—2.20%; Class Y—1.20%; and Class P—1.20%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Since inception returns are calculated as of commencement of issuance on December 18, 2006 for Class A and C shares, and January 22, 2007 for Class P shares. Class Y shares commenced issuance on November 30, 2006 and had fully redeemed by February 15, 2007 remaining inactive through December 25, 2008. The inception return of Class Y shares is calculated from December 26, 2008, which is the date the Class Y shares recommenced investment operations. Since inception returns for the Index and Lipper median are shown as of December 31, 2006, which is the month-end after the inception date of the oldest share classes (Class A and Class C).
2 Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.
3 Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
4 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
5 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
6 The FTSE EPRA/NAREIT Developed Index is designed to track the performance of listed real estate companies and real estate investment trusts ("REITs") worldwide. By making the index constituents free-float adjusted, liquidity, size and revenue screened, the series is suitable for use as the basis for investment products, such as derivatives and exchange traded funds. Investors should note that indices do not reflect the deduction of fees and expenses.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
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Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Net assets (mm) | $ | 151.3 | |||||
Number of holdings | 122 | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Common stocks and warrants | 98.3 | % | |||||
Cash equivalents and other assets less liabilities | 1.7 | ||||||
100.0 | % | ||||||
Top five countries (equity investments)1 | 07/31/14 | ||||||
United States | 49.2 | % | |||||
Japan | 10.0 | ||||||
Australia | 9.8 | ||||||
Hong Kong | 6.1 | ||||||
United Kingdom | 5.6 | ||||||
Total | 80.7 | % | |||||
Top ten equity holdings1 | 07/31/14 | ||||||
Sun Hung Kai Properties Ltd. | 4.0 | % | |||||
Mitsubishi Estate Co. Ltd. | 3.7 | ||||||
Equity Residential | 3.1 | ||||||
Simon Property Group, Inc. | 3.0 | ||||||
Scentre Group | 3.0 | ||||||
AvalonBay Communities, Inc. | 2.6 | ||||||
Host Hotels & Resorts, Inc. | 2.4 | ||||||
Vornado Realty Trust | 2.3 | ||||||
Unibail Rodamco | 2.2 | ||||||
Westfield Corp. | 2.2 | ||||||
Total | 28.5 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time.
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Industry diversification—(unaudited)
As a percentage of net assets as of July 31, 2014
Common stocks
Commercial services & supplies | 1.33 | % | |||||
Hotels, restaurants & leisure | 0.45 | ||||||
Household durables | 0.78 | ||||||
Media | 1.53 | ||||||
Paper & forest products | 1.00 | ||||||
Real estate investment trusts | 70.69 | ||||||
Real estate management & development | 22.43 | ||||||
Total common stocks | 98.21 | ||||||
Warrants | 0.05 | ||||||
Repurchase agreement | 1.66 | ||||||
Investment of cash collateral from securities loaned | 2.26 | ||||||
Liabilities in excess of other assets | (2.18 | ) | |||||
Net assets | 100.00 | % |
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—98.21% | |||||||||||
Australia—9.78% | |||||||||||
Dexus Property Group | 1,723,977 | $ | 1,894,151 | ||||||||
Federation Centres1 | 259,900 | 617,867 | |||||||||
Goodman Group | 471,846 | 2,313,203 | |||||||||
Investa Office Fund | 118,550 | 390,238 | |||||||||
Mirvac Group | 578,521 | 967,760 | |||||||||
Scentre Group* | 1,416,486 | 4,475,557 | |||||||||
Stockland | 211,900 | 793,725 | |||||||||
Westfield Corp. | 482,136 | 3,351,406 | |||||||||
Total Australia common stocks | 14,803,907 | ||||||||||
Austria—0.61% | |||||||||||
Conwert Immobilien Invest SE*,1 | 74,789 | 917,254 | |||||||||
Bermuda—1.90% | |||||||||||
Hongkong Land Holdings Ltd. | 420,800 | 2,876,205 | |||||||||
Canada—0.80% | |||||||||||
Boardwalk Real Estate Investment Trust | 5,900 | 351,181 | |||||||||
Canadian Real Estate Investment Trust | 6,900 | 289,643 | |||||||||
Cominar Real Estate Investment Trust2,3 | 5,731 | 98,920 | |||||||||
RioCan Real Estate Investment Trust4 | 16,700 | 414,762 | |||||||||
RioCan Real Estate Investment Trust2,3,5 | 2,200 | 54,680 | |||||||||
Total Canada common stocks | 1,209,186 | ||||||||||
France—4.15% | |||||||||||
Fonciere des Regions | 2,834 | 284,334 | |||||||||
Gecina SA | 2,600 | 371,302 | |||||||||
ICADE | 3,036 | 293,165 | |||||||||
Klepierre | 21,249 | 1,005,212 | |||||||||
Mercialys SA | 41,050 | 973,792 | |||||||||
Unibail Rodamco | 12,496 | 3,354,376 | |||||||||
Total France common stocks | 6,282,181 | ||||||||||
Germany—2.58% | |||||||||||
Alstria Office REIT-AG* | 111,200 | 1,470,026 | |||||||||
DIC Asset AG | 65,790 | 621,905 | |||||||||
LEG Immobilien AG* | 25,790 | 1,805,863 | |||||||||
Total Germany common stocks | 3,897,794 | ||||||||||
Hong Kong—6.09% | |||||||||||
New World Development Co. Ltd. | 243,000 | 306,432 | |||||||||
Sun Hung Kai Properties Ltd. | 396,330 | 6,015,997 | |||||||||
Swire Properties Ltd. | 200,800 | 654,633 | |||||||||
The Link REIT | 73,300 | 415,871 | |||||||||
Wharf (Holdings) Ltd. | 229,070 | 1,825,684 | |||||||||
Total Hong Kong common stocks | 9,218,617 | ||||||||||
Japan—9.98% | |||||||||||
Activia Properties, Inc. | 33 | 293,556 | |||||||||
GLP J-Reit | 216 | 240,761 | |||||||||
Hulic Co. Ltd. | 11,600 | 136,620 | |||||||||
Japan Real Estate Investment Corp. | 150 | 843,141 | |||||||||
Japan Retail Fund Investment Corp.1 | 470 | 1,035,689 | |||||||||
Kenedix Realty Investment Corp. | 59 | 320,402 | |||||||||
Mitsubishi Estate Co. Ltd. | 226,989 | 5,550,580 | |||||||||
Mitsui Fudosan Co. Ltd. | 80,600 | 2,661,719 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Japan—(concluded) | |||||||||||
Nippon Prologis REIT, Inc. | 210 | $ | 488,462 | ||||||||
Nomura Real Estate Holdings, Inc. | 16,000 | 297,281 | |||||||||
NTT Urban Development Corp. | 7,000 | 76,262 | |||||||||
Orix JREIT, Inc. | 158 | 217,330 | |||||||||
Sekisui House Ltd.1 | 89,500 | 1,174,676 | |||||||||
Sumitomo Realty & Development Co. Ltd. | 26,900 | 1,110,652 | |||||||||
Tokyo Tatemono Co. Ltd. | 17,300 | 147,756 | |||||||||
United Urban Investment Corp.1 | 319 | 512,270 | |||||||||
Total Japan common stocks | 15,107,157 | ||||||||||
Jersey—0.94% | |||||||||||
Atrium European Real Estate Ltd.* | 253,300 | 1,413,894 | |||||||||
Luxembourg—0.74% | |||||||||||
GAGFAH SA* | 64,118 | 1,123,791 | |||||||||
Netherlands—0.65% | |||||||||||
Corio N.V. | 4,380 | 232,694 | |||||||||
Eurocommercial Properties N.V. | 6,561 | 327,804 | |||||||||
Nieuwe Steen Investments N.V. | 70,920 | 415,785 | |||||||||
Total Netherlands common stocks | 976,283 | ||||||||||
New Zealand—0.50% | |||||||||||
Precinct Properties New Zealand Ltd. | 796,800 | 751,056 | |||||||||
Norway—0.98% | |||||||||||
Norwegian Property ASA* | 1,017,814 | 1,486,214 | |||||||||
Singapore—2.93% | |||||||||||
CapitaCommercial Trust | 442,000 | 589,448 | |||||||||
CapitaLand Ltd. | 86,000 | 236,990 | |||||||||
CapitaMall Trust | 448,600 | 706,805 | |||||||||
Global Logistic Properties Ltd. | 422,000 | 939,442 | |||||||||
Keppel Land Ltd. | 523,200 | 1,521,679 | |||||||||
Suntec Real Estate Investment Trust | 304,000 | 435,617 | |||||||||
Total Singapore common stocks | 4,429,981 | ||||||||||
Sweden—0.50% | |||||||||||
Castellum AB | 24,936 | 418,411 | |||||||||
Fabege AB | 5,100 | 69,767 | |||||||||
Hufvudstaden AB, Class A | 19,677 | 269,693 | |||||||||
Total Sweden common stocks | 757,871 | ||||||||||
Switzerland—0.23% | |||||||||||
PSP Swiss Property AG* | 4,002 | 353,804 | |||||||||
United Kingdom—5.63% | |||||||||||
British Land Co. PLC | 79,704 | 942,961 | |||||||||
Derwent London PLC | 17,626 | 793,765 | |||||||||
Great Portland Estates PLC | 66,041 | 710,035 | |||||||||
Hammerson PLC | 255,514 | 2,583,733 | |||||||||
Land Securities Group PLC | 178,640 | 3,134,108 | |||||||||
Safestore Holdings PLC | 60,026 | 208,610 | |||||||||
Unite Group PLC | 21,375 | 146,286 | |||||||||
Total United Kingdom common stocks | 8,519,498 |
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Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
United States—49.22% | |||||||||||
American Homes 4 Rent, Class A | 7,800 | $ | 142,116 | ||||||||
American Realty Capital Properties, Inc. | 77,100 | 1,010,781 | |||||||||
AvalonBay Communities, Inc. | 27,000 | 3,998,160 | |||||||||
BioMed Realty Trust, Inc. | 31,300 | 672,950 | |||||||||
Boston Properties, Inc. | 9,480 | 1,132,386 | |||||||||
Brandywine Realty Trust | 124,000 | 1,928,200 | |||||||||
Brixmor Property Group, Inc. | 47,800 | 1,082,670 | |||||||||
Camden Property Trust | 15,600 | 1,128,816 | |||||||||
CBL & Associates Properties, Inc. | 116,500 | 2,178,550 | |||||||||
CBS Outdoor Americas, Inc. | 69,600 | 2,316,984 | |||||||||
Cousins Properties, Inc. | 15,900 | 196,842 | |||||||||
DCT Industrial Trust, Inc. | 189,500 | 1,483,785 | |||||||||
DDR Corp. | 100,100 | 1,755,754 | |||||||||
Douglas Emmett, Inc. | 80,000 | 2,279,200 | |||||||||
Duke Realty Corp. | 50,600 | 910,294 | |||||||||
DuPont Fabros Technology, Inc. | 31,700 | 868,897 | |||||||||
Equity Residential | 71,900 | 4,648,335 | |||||||||
Essex Property Trust, Inc. | 7,235 | 1,371,539 | |||||||||
Federal Realty Investment Trust1 | 1,200 | 146,520 | |||||||||
General Growth Properties, Inc. | 63,496 | 1,483,901 | |||||||||
HCP, Inc. | 40,400 | 1,677,812 | |||||||||
Health Care REIT, Inc. | 30,700 | 1,953,441 | |||||||||
Healthcare Realty Trust, Inc. | 21,100 | 521,170 | |||||||||
Healthcare Trust of America, Inc., Class A | 31,500 | 375,165 | |||||||||
Highwoods Properties, Inc. | 63,400 | 2,667,238 | |||||||||
Hilton Worldwide Holdings, Inc.* | 28,200 | 682,722 | |||||||||
Host Hotels & Resorts, Inc. | 168,783 | 3,669,342 | |||||||||
Iron Mountain, Inc. | 60,000 | 2,010,600 | |||||||||
Kilroy Realty Corp. | 18,200 | 1,125,488 | |||||||||
Kimco Realty Corp. | 32,570 | 728,917 | |||||||||
Lexington Realty Trust1 | 40,900 | 447,446 | |||||||||
Liberty Property Trust | 39,530 | 1,390,270 | |||||||||
Mid-America Apartment Communities, Inc. | 24,400 | 1,706,048 | |||||||||
Pebblebrook Hotel Trust | 8,600 | 313,040 | |||||||||
Post Properties, Inc. | 11,300 | 612,460 | |||||||||
ProLogis, Inc. | 43,891 | 1,791,192 | |||||||||
Public Storage, Inc. | 5,100 | 875,211 | |||||||||
Ramco-Gershenson Properties Trust | 18,100 | 300,460 | |||||||||
Simon Property Group, Inc. | 26,782 | 4,504,465 | |||||||||
SL Green Realty Corp. | 28,400 | 3,061,520 | |||||||||
Spirit Realty Capital, Inc. | 67,200 | 777,504 | |||||||||
Strategic Hotels & Resorts, Inc.* | 26,900 | 306,929 | |||||||||
Sunstone Hotel Investors, Inc. | 25,600 | 363,264 | |||||||||
Tanger Factory Outlet Centers, Inc. | 6,500 | 225,225 |
Number of shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
United States—(concluded) | |||||||||||
Taubman Centers, Inc. | 6,920 | $ | 509,035 | ||||||||
The Macerich Co. | 14,426 | 937,834 | |||||||||
UDR, Inc. | 45,400 | 1,320,232 | |||||||||
Ventas, Inc. | 46,900 | 2,978,150 | |||||||||
Vornado Realty Trust1 | 32,991 | 3,497,706 | |||||||||
Washington Prime Group, Inc.* | 47,490 | 897,086 | |||||||||
Weyerhaeuser Co. | 48,300 | 1,512,756 | |||||||||
Total United States common stocks | 74,476,408 | ||||||||||
Total common stocks (cost—$129,057,529) | 148,601,101 | ||||||||||
Number of warrants | |||||||||||
Warrants*—0.05% | |||||||||||
Hong Kong—0.05% | |||||||||||
Sun Hung Kai Properties Ltd., strike price $98.60, expires 04/22/16 (cost—$0) | 28,610 | 71,912 | |||||||||
Face amount | |||||||||||
Repurchase agreement—1.66% | |||||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $2,584,614 US Treasury Note, 0.625% due 05/31/17; (value—$2,561,998); proceeds: $2,512,000 (cost—$2,512,000) | $ | 2,512,000 | 2,512,000 | ||||||||
Number of shares | |||||||||||
Investment of cash collateral from securities loaned—2.26% | |||||||||||
Money market fund—2.26% | |||||||||||
UBS Private Money Market Fund LLC6 (cost—$3,424,337) | 3,424,337 | 3,424,337 | |||||||||
Total investments (cost—$134,993,866)—102.18% | 154,609,350 | ||||||||||
Liabilities in excess of other assets—(2.18)% | (3,299,068 | ) | |||||||||
Net assets—100.00% | $ | 151,310,282 |
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Portfolio of investments—July 31, 2014
For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow please refer to page 232.
Aggregate cost for federal income tax purposes was $138,508,904; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 16,205,770 | |||||
Gross unrealized depreciation | (105,324 | ) | |||||
Net unrealized appreciation | $ | 16,100,446 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
Common stocks | $ | 86,713,333 | $ | 61,887,768 | $ | — | $ | 148,601,101 | |||||||||||
Warrants | 71,912 | — | — | 71,912 | |||||||||||||||
Repurchase agreement | — | 2,512,000 | — | 2,512,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 3,424,337 | — | 3,424,337 | |||||||||||||||
Total | $ | 86,785,245 | $ | 67,824,105 | $ | — | $ | 154,609,350 |
At July 31, 2014, $61,734,168 of foreign investments were classified within Level 2 of the fair value hierarchy pursuant to the Portfolio's fair valuation procedures for foreign portfolio holdings as discussed in the Notes to financial statements.
The following is a rollforward of the Portfolio's investment that was valued using unobservable inputs (Level 3) for the year ended July 31, 2014:
Rights | |||||||
Beginning balance | $ | 0 | |||||
Purchases | — | ||||||
Sales | 0 | ||||||
Accrued discounts/(premiums) | — | ||||||
Total realized gain/(loss) | 0 | ||||||
Net change in unrealized appreciation/depreciation | — | ||||||
Transfers into Level 3 | — | ||||||
Transfers out of Level 3 | — | ||||||
Ending balance | $ | — |
Portfolio footnotes
* Non-income producing security.
1 Security, or portion thereof, was on loan at July 31, 2014.
2 Security is being fair valued by a valuation committee under the direction of the board of trustees.
3 Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities, which represent 0.10% of net assets as of July 31, 2014, are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers.
4 Security is traded on the Toronto Stock Exchange.
5 Security is traded on the over-the-counter ("OTC") market.
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Portfolio of investments—July 31, 2014
6 The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2014. The investment manager earns a management fee from UBS Private Money Market Fund LLC. Please see the Notes to financial statements for further information.
Security description | Value at 07/31/13 | Purchases during the year ended 07/31/14 | Sales during the year ended 07/31/14 | Value at 07/31/14 | Net income earned from affiliate for the year ended 07/31/14 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 3,476,030 | $ | 64,116,708 | $ | 64,168,401 | $ | 3,424,337 | $ | 10,148 |
See accompanying notes to financial statements.
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PACE Alternative Strategies Investments
Performance
For the 12 months ended July 31, 2014, the Portfolio's Class P shares returned 6.27% before the deduction of the maximum PACE Select program fee.1 In comparison, the Citigroup Three-Month US Treasury Bill Index (the "benchmark") returned 0.04%, the Barclays Global Aggregate Index returned 5.10%, the MSCI World Free Index (net) returned 15.96%, the HFRI Fund of Funds Composite Index (net) returned 5.94%, the Lipper Alternative Multi-Strategy Funds category posted a median return of 4.11% and the Lipper Absolute Return Funds category posted a median return of 4.09%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 202. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the reporting period, please refer to page 2.
Sub-Advisors' comments2
Please note: On July 15, 2014, AQR Capital Management, LLC began serving as a sub-advisor for this Portfolio.
Analytic Investors
Our portion of the Portfolio consists of long-short equity positions.3 Our process is based on the premise that investor behavior changes—although slowly—and is fairly persistent from month to month. To support this premise, our model is driven by specific security characteristics within seven groups (such as valuation, quality and liquidity) to help us identify potential investment opportunities.
Overall, characteristic positioning was favorable, as our overweight to the valuation category (predicted earnings-to-price and sales-to-price), quality category (asset utilization and return on assets) and revision category (earnings estimate revisions) all added value. Not all positioning helped, however, as
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
2 All sub-advisors discuss performance on a gross of fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.
3 When a long position is taken, a security is purchased with the expectation that it will rise in value. A short position is taken when we believe, based on our research, that securities are overpriced, and, therefore, we hope to make a profit when the security falls in value. When shorting an investment, we borrow the security, sell it, and then buy an equal number of shares later—hopefully at a lower price—to replace those we borrowed.
PACE Select Advisors Trust –
PACE Alternative Strategies Investments1
Investment Sub-Advisors:
Analytic Investors, LLC ("Analytic Investors"); First Quadrant L.P. ("First Quadrant") and Standard Life Investments (Corporate Funds) Limited ("Standard Life Investments")
AQR Capital Management, LLC ("AQR")
Portfolio Managers:
Analytic Investors: Dennis Bein, David Krider and Harindra de Silva;
First Quadrant: Dori Levanoni and Ed Peters
Standard Life Investments: Guy Stern
AQR: Clifford Asness, John Liew, Brian Hurst, Yao Hua Ooi and Ari Levine
Objective:
Long-term capital appreciation
Investment process:
Analytic Investors primarily employs a long/short global equity strategy. This strategy is implemented by taking long and short positions of equity securities publicly traded in the United States and in foreign markets both by direct equity investment and through derivatives. Analytic Investors' strategy may also employ the use of derivatives, such as swaps, futures, non-deliverable forwards ("NDFs"), and forward contracts.
First Quadrant employs a "global macro strategy" which is implemented by combining several different complex investment techniques. It uses a "tactical risk allocation" approach across global markets which increases investment risk where it believes opportunities for risk-adjusted profit are high and attempts to lower market risks when it believes gains have been realized and future gains are unlikely. First Quadrant also assesses the combination of local market and economic factors as well as global equity, fixed income or currency market factors and attempts to
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Sub-Advisors' comments – continued
an underweight position to the risk category (volatility of analyst earnings estimates) detracted from relative performance as investors rewarded riskier companies during the reporting period.
An emphasis on low beta stocks detracted from performance, as low beta securities underperformed high beta securities. (Beta is a measure of volatility or risk relative to the market as a whole.) Despite this emphasis, stock selection was strong.
During the period, the strategy experienced positive results in North America and Japan, but struggled in Europe. In North America, strong security selection and overweight positions in both the US and Canada helped performance. In Europe, underweight positions and poor stock selection in Germany and Finland negatively impacted results.
Top performing equities included long positions in US-based companies Micron Technology (manufacturer of semiconductor devices), Actavis (pharmaceutical company) and Forest Laboratories, Inc. (pharmaceutical company). Forest Laboratories was purchased in February, prior to a merger announcement in which Actavis was to acquire the company. We sold our position in Forest Laboratories before the end of the reporting period, as the stock began trading near Actavis' proposed acquisition price. Our worst performers were short positions in Finland-based Nokia (communications and information technology) and Australia-based Alumina Limited (aluminum mining), as well as a long position in US-based Best Buy Co, Inc. (electronics retailer). Best Buy was sold before the end of the reporting period to pursue other opportunities with better risk and return characteristics.
Derivatives were not used during the reporting period.
First Quadrant
First Quadrant manages two separate sleeves of Pace Alternative Investment Strategies: FQ Global Macro and FQ Equitized Global Macro. The FQ Global Macro sleeve has a targeted volatility of 6% and a benchmark of US Treasury bills. The FQ Equitized Global Macro sleeve has a targeted volatility of 4% and is benchmarked to the MSCI World Monthly Price Index (Unhedged).
During the reporting period, contribution to performance from currency selection and the option related strategy were more than offset by losses from bond and stock country selection, and a small contribution from global asset class selection.
Investment process (continued)
capture inefficiencies in those markets. First Quadrant's strategy is primarily implemented through the use of derivatives. First Quadrant presently manages two separate portions of the Fund's assets, using the aforementioned strategies and investments. With respect to the first portion, First Quadrant seeks positive absolute returns from its global macro strategy, and the returns of this portion are not expected to be closely correlated with those of global equity markets. With respect to the second portion, First Quadrant combines its global macro strategy with passive exposure to global equity markets while targeting a specific level of risk, which is expected to result in returns more closely correlated with those of global equity markets.
Standard Life Investments employs a "global multi-asset strategy" and seeks to achieve a total return by delivering a diversified global portfolio that makes use of multiple strategies across various asset classes. Standard Life Investments aims to exploit market cyclicality and a diverse array of inefficiencies across and within global markets to maximize risk adjusted absolute return. Standard Life Investments' portion of the Portfolio consists of listed equity, equity-related and debt securities, including exchange traded funds, and will routinely make use of derivatives or other instruments both for investment and hedging purposes. Standard Life Investments may take long and/or short positions, and its derivative investments may include, but are not restricted to, futures, options, swaps, and forward currency contracts.
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Sub-Advisors' comments – continued
Currency selection performance was the result of gains from underweights to the Canadian dollar and Swedish krona and an overweight to the British pound. Gains were partially offset by losses from overweights to the Australian dollar, Norwegian krone and Japanese yen, and an underweight to the New Zealand dollar. Performance was attributable primarily to gains from unhedged export flow and prospective equity flow factors, which were modestly offset by losses from the relative valuation factor during the latter part of the period.
The option related strategy benefited as a result of relatively modest volatility across markets that prevailed for most of the period. However, we experienced some short-lived setbacks due to sharp market reversals related predominantly to the Federal Reserve Board's taper of asset purchases and global growth sentiment. Our expansion into additional markets in the period helped, with gains in most markets.
Stock country selection had difficulty in most markets, largely from weakness in various risk and sentiment factors. Bond country selection had the greatest difficulty, with a US overweight, and German and Canadian underweights, as markets were overwhelmed by the influence of central bank policy.
The FQ Equitized Global Macro sleeve benefited during the period from the equitization process and hedging. (Equitization is the process by which hedged global equity market exposure is gained via index futures and exchanged-traded options.)
As a general rule, derivatives are the primary instrument used to implement all of the sleeves in our portion of the Portfolio. Specifically, we used futures in order to implement stock and bond country selection, as well as global asset class selection strategies. We used currency forwards to implement currency selection. Futures and forwards were used to gain economic exposure in a more cost-efficient manner relative to traditional instruments (e.g., physical stocks, bonds and currencies). The options related strategy was implemented using options on futures and indices. Options were used to exploit structural characteristics of options pricing. Overall, the liquidity and low transaction cost of these instruments offers the investment team the ability to be more nimble and to implement at a lower cost.
Standard Life Investments
Our largest contributors to performance were market return strategies—as we took advantage of the improved economic outlook for many regions—and continued yield compression of credit assets. Notable contributions were from our global equity strategy (which uses cash equity, futures and options to increase or decrease exposures to various markets), European Union corporate bonds and high yield corporate bonds (both of which use cash bonds and credit derivative indices), as well as global real estate investment trusts (REITs).
The technology sector in the US performed well relative to small-cap stocks. The latter underperformed, as future growth was not strong enough to help inflated small-cap valuations. However, growth is supportive of future capital expenditures and, therefore, positive for the technology sector. Against this backdrop, there was positive contribution from our US technology versus small-cap strategy. This strategy is implemented using equity index futures.
Investment process (continued)
AQR employs a Managed Futures strategy, which is an active trend-following strategy. Trend-following involves going long assets that have been rising in price and short assets that have been declining in price. The managed futures strategy is primarily implemented through the use of derivatives and invests across three major asset classes: equities, fixed income and currencies. The AQR Managed Futures strategy seeks to generate returns that are uncorrelated to traditional asset classes and may improve portfolio diversification.
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Sub-Advisors' comments – continued
Our currency positions (which use foreign-exchange forwards and options to gain exposure to moves between currencies) performed well in aggregate, but there was mixed performance from the individual strategies. On the positive side, there was strong contribution from being long US dollars against currencies such as the Canadian dollar and Japanese yen. Over the period there were fluctuations in both the US economic data and the value of the US dollar. However, the general trend over the period was one of an improving macro-economic landscape in the US, particularly with respect to indicators such as the unemployment rate, the broader labor market and GDP, which led to a stronger US dollar. In relation to the Japanese yen, the monetary stimulus and policies associated with Prime Minister Abe's reforms continued to help devalue Japan's currency. On the downside, there was negative performance from our long Mexican peso versus Australian dollar strategy, as recent data exceeded expectations and international demand for Australian dollar-denominated assets helped support the currency after recent weakness.
Elsewhere, there was a negative contribution from our long equity variance position, as central bank support for financial markets and relatively stable mid-cycle data continued to suppress the market-implied price of volatility and variance. This is implemented using variance swaps.
We made extensive use of derivatives in implementing our portion of the Portfolio. We typically utilized futures to gain long and short exposure to equity or bond markets, to vary our overall exposure and to create relative value positions. We used currency forwards to take explicit currency positions or to hedge unwanted currency risk on other strategies. Swaps were used primarily to express our views on interest rates, equity variance and credit default risk, as they can provide an efficient and direct way of accessing these asset classes. Swaps also allowed us to take risk exposures by targeting specific markets and/or points on a curve. We used options positions where we wanted to combine a view on volatility with a view on another asset class, typically equity or currency. Options were also used to mitigate risks within a strategy. Overall, derivatives were instrumental to the performance and operating efficiency of the Portfolio.
AQR
AQR managed a portion of the Portfolio from our inception as a sub-advisor, on July 15, 2014 to July 31, 2014. Our managed futures strategy employs a diverse portfolio of derivative instruments (primarily futures, swaps and forwards) to achieve exposure to various global markets. The short period during which we managed a portion of the Portfolio was challenging for trend-following strategies and we generated negative performance across all asset classes.
Overall, we experienced negative returns from our equity investments. Within developed market equities, US equity indices detracted from performance, whereas Australia and Canada contributed to results. The Fund entered and ended the period long all developed equities. Emerging market equities were up over the period, with China contributing to results and Taiwan detracting from performance. We entered and ended the period long all emerging equities.
In fixed income, we entered the period long all developed bonds and experienced losses in the asset class. Fixed income markets were largely flat over the period, with German bunds contributing to performance, whereas Australian developed bonds detracted from results. We ended the period long all developed bonds. Interest rates were flat over the period and the Portfolio had a mix of long and short positions.
Developed currencies detracted from performance over the period, with New Zealand being the largest detractor, while Norway and Sweden contributed to performance. We entered and ended the period with a mix of long and
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Sub-Advisors' comments – concluded
short positions. Emerging market currencies were also down over the period and we had a mix of longs and shorts over the period.
AQR implements its entire portion of the Portfolio utilizing derivatives.
Special considerations
The Portfolio may be appropriate for investors seeking long term capital appreciation who are able to withstand short-term fluctuations in the equity markets and fixed income markets in return for potentially higher returns over the long-term. The Portfolio may employ investment strategies that involve greater risks than the strategies used by many other mutual funds, including increased use of short sales (which involve the risk of an unlimited increase in the market value of the security sold short, which could result in a theoretically unlimited loss), leverage and derivative transactions, and hedging strategies. The value of the Portfolio changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as specific matters relating to the issuers of securities in which the Portfolio invests. The value of the Portfolio'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 US dollar. It is important to note that an investment in the Portfolio is only one component of a balanced investment plan.
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Illustration of an assumed investment of $10,000 in Class P shares of the Portfolio (unaudited)
The following graph depicts the performance of PACE Alternative Strategies Investments Class P shares versus the Citigroup Three-Month US Treasury Bill Index, the Barclays Global Aggregate Index, the MSCI World Free Index (net) and the HFRI Fund of Funds Composite Index (net) from April 30, 2006, the month-end after the inception date of the Class P shares, through July 31, 2014. Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance. The performance of the other classes will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption. It is important to note that PACE Alternative Strategies Investments is a professionally managed portfolio while the Indices are not available for investment and are unmanaged. The comparison is shown for illustration purposes only.
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Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | Since Inception1 | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A2 | 5.99 | % | 4.57 | % | 1.63 | % | |||||||||
Class C3 | 5.18 | % | 3.83 | % | 0.95 | % | |||||||||
Class Y4 | 6.18 | % | 4.83 | % | 1.24 | % | |||||||||
Class P5 | 6.27 | % | 4.85 | % | 1.90 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A2 | 0.20 | % | 3.40 | % | 0.94 | % | |||||||||
Class C3 | 4.18 | % | 3.83 | % | 0.95 | % | |||||||||
Citigroup Three-Month US Treasury Bill Index6 | 0.04 | % | 0.08 | % | 1.24 | % | |||||||||
Barclays Global Aggregate Index7 | 5.10 | % | 3.96 | % | 5.16 | % | |||||||||
MSCI World Free Index (net)8 | 15.96 | % | 12.77 | % | 4.92 | % | |||||||||
HFRI Fund of Funds Composite Index (net)9 | 5.94 | % | 3.81 | % | 1.74 | % | |||||||||
Lipper Alternative Multi-Strategy Funds median10 | 4.11 | % | 4.29 | % | 0.18 | % | |||||||||
Lipper Absolute Return Funds median10 | 4.09 | % | 2.84 | % | 1.65 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | Since Inception1 | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A2 | 7.23 | % | 5.25 | % | 1.70 | % | |||||||||
Class C3 | 6.45 | % | 4.50 | % | 1.00 | % | |||||||||
Class Y4 | 7.52 | % | 5.51 | % | 1.33 | % | |||||||||
Class P5 | 7.51 | % | 5.51 | % | 1.95 | % | |||||||||
After deducting maximum sales charge | |||||||||||||||
Class A2 | 1.33 | % | 4.06 | % | 1.00 | % | |||||||||
Class C3 | 5.45 | % | 4.50 | % | 1.00 | % |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2013 prospectuses, were as follows: Class A—2.01% and 1.96%; Class C—2.72% and 2.71%; Class Y—1.77% and 1.71%; and Class P—1.74% and 1.71%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2014 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—1.88%; Class C—2.63%; Class Y—1.63%; and Class P—1.63%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses to the extent that it can do so over the following three fiscal years without causing the Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by the Portfolio's board at any time and also will terminate automatically upon the expiration or termination of the Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.
1 Since inception returns are calculated as of commencement of issuance on April 10, 2006 for Class P and Class A shares, and April 11, 2006 for Class C shares. Class Y shares commenced issuance on April 3, 2006, and had fully redeemed by July 27, 2006 remaining inactive through July 22, 2008. The inception return of Class Y shares is calculated from July 23, 2008, which is the date the Class Y shares recommenced investment operations. Since inception returns for the Indices and Lipper median are shown as of April 30, 2006, which is the month-end after the inception date of the oldest share classes (Class P and Class A).
2 Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.
3 Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.
4 The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.
5 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
6 The Citigroup Three-Month US Treasury Bill Index is an unmanaged index reflecting monthly return equivalents of yield averages that are not marked to the market and an average of the last three 3-month T-bill month-end rates. 3-month T-bills are the short-term debt obligations of the US government. Investors should note that indices do not reflect the deduction of fees and expenses.
7 The Barclays Global Aggregate Index is an unmanaged broad-based, market capitalization weighted index which is designed to measure the broad global markets for US and non US corporate, government, governmental agency, supranational, mortgage-backed and asset-backed fixed income securities. Investors should note that indices do not reflect the deduction of fees and expenses.
8 The MSCI World Free Index (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. Net total return indices reinvest dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The index is constructed and managed with a view to being fully investable from the perspective of international institutional investors. Investors should note that indices do not reflect the deduction of fees and expenses.
9 The HFRI Fund of Funds Composite Index is a Fund of Funds index with multiple managers through funds or managed accounts. The strategy designs a diversified portfolio of managers with the objective of significantly lowering the risk (volatility) of investing with an individual manager. The Fund of Funds manager has discretion in choosing which strategies to invest in for the portfolio. A manager may allocate funds to numerous managers within a single strategy, or with numerous managers in multiple strategies. The minimum investment in a Fund of Funds may be lower than an investment in an individual hedge fund or managed account. The investor has the advantage of diversification among managers and styles with significantly less capital than investing with separate managers. Investors should note that indices do not reflect the deduction of fees and expenses.
10 On February 20, 2014, Lipper changed the peer group classification for PACE Alternative Strategies Investments from the Absolute Return Funds category to the Alternative Multi-Strategy Funds category.
If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectuses.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
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Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Net assets (mm) | $ | 699.7 | |||||
Number of holdings | 547 | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Common stocks and warrants | 31.5 | % | |||||
Bonds and notes | 6.0 | ||||||
ADRs | 0.6 | ||||||
Investments sold short | (4.5 | ) | |||||
Options, futures, swaps and forward foreign currency contracts | 1.3 | ||||||
Cash equivalents and other assets less liabilities | 65.1 | ||||||
Total | 100.0 | % |
Top five countries (long holdings)1 | 07/31/14 | ||||||
United States | 14.7 | % | |||||
Japan | 4.1 | ||||||
United Kingdom | 3.7 | ||||||
Mexico | 2.1 | ||||||
Canada | 2.0 | ||||||
Total | 26.6 | % | |||||
Top five equity sectors (long holdings)1 | 07/31/14 | ||||||
Financials | 7.1 | % | |||||
Information technology | 4.5 | ||||||
Consumer discretionary | 4.1 | ||||||
Industrials | 4.1 | ||||||
Energy | 3.7 | ||||||
Total | 23.5 | % |
Top five countries (short holdings)1 | 07/31/14 | ||||||
Japan | (1.4 | )% | |||||
United States | (1.2 | ) | |||||
Australia | (0.4 | ) | |||||
Canada | (0.3 | ) | |||||
United Kingdom | (0.3 | ) | |||||
Total | (3.6 | )% | |||||
Top five equity sectors (short holdings)1 | 07/31/14 | ||||||
Financials | (1.1 | )% | |||||
Materials | (1.0 | ) | |||||
Information technology | (0.8 | ) | |||||
Consumer discretionary | (0.5 | ) | |||||
Energy | (0.4 | ) | |||||
Total | (3.8 | )% |
For a listing of defined portfolio acronyms that are used throughout the Portfolio statistics, please refer to page 232.
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time.
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Portfolio statistics (unaudited) (concluded)
Top ten equity holdings (long holdings)1,2 | 07/31/14 | ||||||
Rio Tinto PLC | 0.4 | % | |||||
Entergy Corp. | 0.4 | ||||||
Raytheon Co. | 0.4 | ||||||
Exxon Mobil Corp. | 0.4 | ||||||
BHP Billiton PLC | 0.4 | ||||||
Navient Corp. | 0.4 | ||||||
National-Oilwell Varco, Inc. | 0.4 | ||||||
Exelon Corp. | 0.4 | ||||||
Cigna Corp. | 0.4 | ||||||
Noble Corp. PLC | 0.3 | ||||||
Total | 3.9 | % |
Top ten equity holdings (short holdings)1,2 | 07/31/14 | ||||||
ARM Holdings PLC | (0.3 | )% | |||||
Fast Retailing Co. Ltd. | (0.3 | ) | |||||
Nokia Oyj | (0.3 | ) | |||||
Cobalt International Energy, Inc. | (0.2 | ) | |||||
Vertex Pharmaceuticals, Inc. | (0.2 | ) | |||||
Alumina Ltd. | (0.2 | ) | |||||
American Realty Capital Properties, Inc. | (0.2 | ) | |||||
NTT Urban Development Corp. | (0.2 | ) | |||||
Banco Bilbao Vizcaya Argentaria SA | (0.2 | ) | |||||
The Japan Steel Works Ltd. | (0.2 | ) | |||||
Total | (2.3 | )% |
Top ten long-term fixed income holdings (long holdings)1,2 | 07/31/14 | ||||||
Mexican Bonos 8.500%, due 05/31/29 | 0.5 | % | |||||
Mexican Bonos 7.500%, due 06/03/27 | 0.5 | ||||||
Mexican Bonos 6.500%, due 06/10/21 | 0.5 | ||||||
Mexican Bonos 10.000%, due 12/05/24 | 0.5 | ||||||
Brazil Notas do Tesouro Nacional Series B 6.000%, due 08/15/22 | 0.5 | ||||||
Brazil Notas do Tesouro Nacional Series F 10.000%, due 01/01/23 | 0.3 | ||||||
Brazil Notas do Tesouro Nacional Series F 10.000%, due 01/01/17 | 0.3 | ||||||
Brazil Notas do Tesouro Nacional Series B 6.000%, due 08/15/50 | 0.2 | ||||||
Volkswagen Leasing GmbH 3.250%, due 05/10/18 | 0.1 | ||||||
Enel SpA 5.250%, due 06/20/17 | 0.0 | † | |||||
Total | 3.4 | % |
† Amount represents less than 0.05%.
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time.
2 Figures represent the breakdown of direct investments of PACE Alternative Strategies Investments. Figures would be different if a breakdown of the underlying investment companies was included.
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Industry diversification—(unaudited)
As a percentage of net assets as of July 31, 2014
Common stocks
Aerospace & defense | 1.41 | % | |||||
Airlines | 0.63 | ||||||
Auto components | 0.39 | ||||||
Banks | 1.37 | ||||||
Biotechnology | 0.45 | ||||||
Building products | 0.16 | ||||||
Capital markets | 0.36 | ||||||
Chemicals | 0.18 | ||||||
Construction & engineering | 0.14 | ||||||
Consumer finance | 0.64 | ||||||
Containers & packaging | 0.07 | ||||||
Diversified financial services | 0.15 | ||||||
Diversified telecommunication services | 0.27 | ||||||
Electric utilities | 1.59 | ||||||
Electrical equipment | 0.27 | ||||||
Electronic equipment, instruments & components | 0.27 | ||||||
Energy equipment & services | 1.28 | ||||||
Food & staples retailing | 0.94 | ||||||
Food products | 0.18 | ||||||
Health care equipment & supplies | 0.60 | ||||||
Health care providers & services | 0.35 | ||||||
Hotels, restaurants & leisure | 0.55 | ||||||
Household durables | 0.25 | ||||||
Independent power and renewable electricity producers | 0.20 | ||||||
Industrial conglomerates | 0.12 | ||||||
Insurance | 0.63 | ||||||
Internet software & services | 0.90 | ||||||
IT services | 0.53 | ||||||
Leisure products | 0.11 | ||||||
Life sciences tools & services | 0.27 | ||||||
Machinery | 0.38 | ||||||
Media | 0.77 | ||||||
Metals & mining | 1.86 | ||||||
Multiline retail | 0.62 | ||||||
Oil, gas & consumable fuels | 2.41 | ||||||
Paper & forest products | 0.02 | ||||||
Personal products | 0.18 | ||||||
Pharmaceuticals | 0.60 | ||||||
Professional services | 0.39 | ||||||
Real estate investment trusts | 3.04 | ||||||
Real estate management & development | 0.83 | ||||||
Road & rail | 0.57 |
Common stocks—(concluded)
Semiconductors & semiconductor equipment | 0.62 | % | |||||
Software | 1.14 | ||||||
Specialty retail | 0.92 | ||||||
Technology hardware, storage & peripherals | 1.03 | ||||||
Textiles, apparel & luxury goods | 0.53 | ||||||
Thrifts & mortgage finance | 0.04 | ||||||
Trading companies & distributors | 0.06 | ||||||
Wireless telecommunication services | 0.77 | ||||||
Total common stocks | 32.04 | ||||||
Warrants | 0.001 |
Corporate notes
Apparel | 0.02 | ||||||
Auto manufacturers | 0.09 | ||||||
Auto parts & equipment | 0.01 | ||||||
Banking non-US | 0.37 | ||||||
Building societies | 0.06 | ||||||
Chemicals | 0.04 | ||||||
Commercial services | 0.07 | ||||||
Diversified banking institution | 0.33 | ||||||
Diversified financial services | 0.03 | ||||||
Diversified operations | 0.09 | ||||||
Electric-generation | 0.08 | ||||||
Electric-integrated | 0.20 | ||||||
Energy-alternate sources | 0.02 | ||||||
Engineering & construction | 0.05 | ||||||
Entertainment | 0.01 | ||||||
Finance-auto loans | 0.05 | ||||||
Finance-consumer loans | 0.01 | ||||||
Food-retail | 0.02 | ||||||
Gas-distribution | 0.04 | ||||||
Insurance | 0.27 | ||||||
Investment companies | 0.02 | ||||||
Machinery-general | 0.07 | ||||||
Media | 0.04 | ||||||
Medical | 0.03 | ||||||
Mining | 0.06 | ||||||
Money center banks | 0.04 | ||||||
Multimedia | 0.01 | ||||||
Oil & gas | 0.08 | ||||||
Paper & forest products | 0.02 | ||||||
Pharmaceuticals | 0.02 |
205
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Industry diversification—(unaudited) (concluded)
As a percentage of net assets as of July 31, 2014
Corporate notes—(concluded)
REITS-diversified | 0.05 | % | |||||
REITS-shopping centers | 0.04 | ||||||
Software | 0.02 | ||||||
Telecommunications | 0.20 | ||||||
Tobacco | 0.05 | ||||||
Transportation | 0.03 | ||||||
Total corporate notes | 2.64 | ||||||
Non-US government obligations | 3.38 | ||||||
Time deposits | 15.84 | ||||||
Short-term US government obligations | 28.20 | ||||||
Repurchase agreement | 14.94 |
Options purchased
Call options purchased | 0.83 | ||||||
Put options purchased | 1.05 | ||||||
Total options purchased | 1.88 |
Investments sold short
Common stocks
Automobiles | (0.25 | ) | |||||
Banks | (0.31 | ) |
Investments sold short—(concluded)
Common stocks—(concluded)
Biotechnology | (0.24 | )% | |||||
Capital markets | (0.02 | ) | |||||
Communications equipment | (0.26 | ) | |||||
Diversified financial services | (0.18 | ) | |||||
Electric utilities | (0.11 | ) | |||||
Gas utilities | (0.08 | ) | |||||
Insurance | (0.07 | ) | |||||
Internet software & services | (0.12 | ) | |||||
Machinery | (0.18 | ) | |||||
Media | (0.00 | )1 | |||||
Metals & mining | (1.03 | ) | |||||
Oil, gas & consumable fuels | (0.39 | ) | |||||
Real estate investment trusts | (0.19 | ) | |||||
Real estate management & development | (0.35 | ) | |||||
Semiconductors & semiconductor equipment | (0.31 | ) | |||||
Software | (0.11 | ) | |||||
Specialty retail | (0.26 | ) | |||||
Total investments sold short | (4.46 | ) | |||||
Other assets in excess of liabilities | 5.54 | ||||||
Net assets | 100.00 | % |
1 Weighting represents less than 0.005% of the Portfolio's net assets as of July 31, 2014.
206
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—32.04% | |||||||||||
Australia—0.91% | |||||||||||
Dexus Property Group | 863,439 | $ | 948,669 | ||||||||
Federation Centres Ltd. | 610,406 | 1,451,134 | |||||||||
Fortescue Metals Group Ltd. | 45,700 | 204,884 | |||||||||
GPT Group | 20,364 | 76,670 | |||||||||
Mirvac Group | 180,956 | 302,706 | |||||||||
Santos Ltd. | 69,816 | 935,330 | |||||||||
Scentre Group* | 300,683 | 950,044 | |||||||||
Stockland | 5,004 | 18,744 | |||||||||
Westfield Corp. | 212,097 | 1,474,321 | |||||||||
Total Australia common stocks | 6,362,502 | ||||||||||
Belgium—0.14% | |||||||||||
UCB SA | 10,972 | 1,006,397 | |||||||||
Bermuda—0.60% | |||||||||||
Everest Re Group Ltd. | 345 | 53,789 | |||||||||
Hongkong Land Holdings Ltd. | 43,000 | 293,909 | |||||||||
Lazard Ltd., Class A | 22,911 | 1,198,245 | |||||||||
Marvell Technology Group Ltd.1 | 97,803 | 1,304,692 | |||||||||
PartnerRe Ltd. | 4,907 | 512,094 | |||||||||
Yue Yuen Industrial Holdings Ltd. | 253,500 | 847,156 | |||||||||
Total Bermuda common stocks | 4,209,885 | ||||||||||
Brazil—0.15% | |||||||||||
Vale SA, ADR | 75,300 | 1,080,555 | |||||||||
British Virgin Islands—0.21% | |||||||||||
Michael Kors Holdings Ltd.*,1 | 18,105 | 1,475,195 | |||||||||
Canada—1.99% | |||||||||||
Africa Oil Corp.* | 51,684 | 322,053 | |||||||||
Alimentation Couche Tard, Inc., Class B | 59,793 | 1,636,376 | |||||||||
Bell Aliant, Inc. | 16,300 | 461,934 | |||||||||
Bombardier, Inc., Class B | 475,600 | 1,626,990 | |||||||||
Dollarama, Inc. | 5,200 | 428,028 | |||||||||
Element Financial Corp.* | 61,799 | 802,562 | |||||||||
Empire Co. Ltd. | 6,200 | 438,467 | |||||||||
First Capital Realty, Inc. | 1,800 | 31,151 | |||||||||
First Quantum Minerals Ltd. | 8,660 | 205,391 | |||||||||
H&R Real Estate Investment Trust | 28,900 | 613,066 | |||||||||
Industrial Alliance Insurance & Financial Services, Inc. | 23,800 | 1,043,590 | |||||||||
Open Text Corp. | 28,000 | 1,557,225 | |||||||||
Rogers Communications, Inc., Class B | 56,800 | 2,218,135 | |||||||||
Suncor Energy, Inc. | 38,800 | 1,593,136 | |||||||||
Teck Resources Ltd., Class B | 8,450 | 202,462 | |||||||||
Vermilion Energy, Inc. | 11,700 | 772,167 | |||||||||
Total Canada common stocks | 13,952,733 | ||||||||||
Cayman Islands—0.59% | |||||||||||
51job, Inc., ADR* | 8,396 | 634,402 | |||||||||
China Mengniu Dairy Co. Ltd. | 252,000 | 1,219,941 | |||||||||
China Metal Recycling Holdings Ltd.*,2,3 | 352,200 | 0 | |||||||||
Herbalife Ltd.1 | 5,757 | 301,667 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Cayman Islands—(concluded) | |||||||||||
MGM China Holdings Ltd. | 309,200 | $ | 1,130,635 | ||||||||
Sands China Ltd. | 116,400 | 854,573 | |||||||||
Total Cayman Islands common stocks | 4,141,218 | ||||||||||
Denmark—0.24% | |||||||||||
Danske Bank A/S | 57,275 | 1,654,711 | |||||||||
Finland—0.16% | |||||||||||
UPM-Kymmene Oyj | 7,209 | 117,497 | |||||||||
Wartsila Oyj | 19,932 | 1,003,810 | |||||||||
Total Finland common stocks | 1,121,307 | ||||||||||
France—1.13% | |||||||||||
BNP Paribas SA | 20,543 | 1,363,099 | |||||||||
Electricite de France SA | 59,396 | 1,918,718 | |||||||||
ICADE | 1,088 | 105,060 | |||||||||
Klepierre | 7,821 | 369,983 | |||||||||
Lagardere SCA | 43,381 | 1,291,435 | |||||||||
Safran SA | 14,055 | 825,974 | |||||||||
SCOR SE | 10,542 | 339,124 | |||||||||
Thales SA | 3,311 | 188,312 | |||||||||
Total SA | 15,400 | 993,218 | |||||||||
Unibail-Rodamco SE | 1,815 | 487,211 | |||||||||
Total France common stocks | 7,882,134 | ||||||||||
Germany—0.00%† | |||||||||||
Merck KGaA | 280 | 24,760 | |||||||||
Hong Kong—0.30% | |||||||||||
Cheung Kong (Holdings) Ltd. | 9,000 | 173,875 | |||||||||
Henderson Land Development Co. Ltd. | 8,000 | 51,045 | |||||||||
Sun Hung Kai Properties Ltd. | 16,000 | 242,868 | |||||||||
Swire Pacific Ltd., Class A | 76,000 | 978,512 | |||||||||
The Link REIT | 114,500 | 649,622 | |||||||||
Total Hong Kong common stocks | 2,095,922 | ||||||||||
Ireland—0.19% | |||||||||||
Ryanair Holdings PLC, ADR* | 25,500 | 1,351,245 | |||||||||
Italy—0.16% | |||||||||||
Enel SpA | 82,405 | 469,130 | |||||||||
Eni SpA | 23,800 | 605,613 | |||||||||
Terna Rete Elettrica Nazionale SpA | 5,766 | 30,324 | |||||||||
Total Italy common stocks | 1,105,067 | ||||||||||
Japan—4.13% | |||||||||||
Advance Residence Investment Corp. | 31 | 73,817 | |||||||||
Asahi Kasei Corp. | 11,000 | 86,934 | |||||||||
Bandai Namco Holdings, Inc. | 30,600 | 774,449 | |||||||||
Cosmos Pharmaceutical Corp. | 3,300 | 404,403 | |||||||||
FamilyMart Co. Ltd. | 14,000 | 628,754 | |||||||||
Hikari Tsushin, Inc. | 8,100 | 593,028 | |||||||||
Japan Airlines Co. Ltd. | 28,800 | 1,590,838 | |||||||||
Japan Petroleum Exploration Co. Ltd. | 20,500 | 775,339 | |||||||||
Japan Prime Realty Investment Corp. | 143 | 494,728 | |||||||||
KDDI Corp. | 39,900 | 2,293,567 | |||||||||
Mitsubishi Estate Co. Ltd. | 18,000 | 440,155 | |||||||||
Mitsui Fudosan Co. Ltd. | 63,000 | 2,080,500 | |||||||||
NHK Spring Co. Ltd. | 8,700 | 85,199 |
207
PACE Select Advisors Trust
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Japan—(concluded) | |||||||||||
Nippon Prologis REIT, Inc. | 75 | $ | 174,451 | ||||||||
Nippon Steel & Sumitomo Metal | 341,000 | 1,029,704 | |||||||||
Nishimatsu Construction Co. Ltd. | 22,000 | 103,595 | |||||||||
Omron Corp. | 13,100 | 581,021 | |||||||||
Oracle Corp. Japan | 22,700 | 961,786 | |||||||||
ORIX Corp. | 59,200 | 956,747 | |||||||||
Otsuka Corp. | 46,500 | 2,118,696 | |||||||||
Panasonic Corp. | 104,100 | 1,297,963 | |||||||||
Resorttrust, Inc. | 38,400 | 793,089 | |||||||||
Seiko Epson Corp. | 54,300 | 2,324,359 | |||||||||
Sekisui Chemical Co. Ltd. | 6,000 | 71,943 | |||||||||
Sekisui House Ltd. | 30,700 | 402,934 | |||||||||
Seven & I Holdings Co. Ltd. | 22,000 | 915,543 | |||||||||
Sojitz Corp. | 254,600 | 433,056 | |||||||||
Sumitomo Mitsui Financial Group, Inc. | 33,100 | 1,349,304 | |||||||||
Sumitomo Realty & Development Co. Ltd. | 19,000 | 784,476 | |||||||||
Trend Micro, Inc. | 56,500 | 2,011,255 | |||||||||
Tsumura & Co. | 11,800 | 283,693 | |||||||||
West Japan Railway Co. | 23,100 | 1,047,730 | |||||||||
Yamada Denki Co. Ltd. | 263,200 | 934,159 | |||||||||
Total Japan common stocks | 28,897,215 | ||||||||||
Jersey—0.46% | |||||||||||
Glencore Xstrata PLC | 196,000 | 1,184,355 | |||||||||
Petrofac Ltd. | 43,735 | 805,962 | |||||||||
Shire PLC | 14,767 | 1,215,447 | |||||||||
Total Jersey common stocks | 3,205,764 | ||||||||||
Luxembourg—0.09% | |||||||||||
Millicom International Cellular SA, SDR | 6,325 | 538,139 | |||||||||
Subsea 7 SA | 3,915 | 65,355 | |||||||||
Total Luxembourg common stocks | 603,494 | ||||||||||
Netherlands—0.28% | |||||||||||
Koninklijke Philips N.V. | 27,211 | 838,658 | |||||||||
LyondellBasell Industries N.V., Class A | 10,858 | 1,153,663 | |||||||||
Total Netherlands common stocks | 1,992,321 | ||||||||||
Norway—0.20% | |||||||||||
DNB ASA | 78,740 | 1,395,397 | |||||||||
Papua New Guinea—0.14% | |||||||||||
Oil Search Ltd. | 108,647 | 950,271 | |||||||||
Portugal—0.32% | |||||||||||
Electricidade de Portugal SA | 276,810 | 1,296,324 | |||||||||
Galp Energia, SGPS SA | 54,825 | 973,100 | |||||||||
Total Portugal common stocks | 2,269,424 | ||||||||||
Russia—0.17% | |||||||||||
Magnit OJSC4 | 11,776 | 694,784 | |||||||||
Mining and Metallurgical Co. Norilsk Nickel, ADR | 23,400 | 459,810 | |||||||||
Total Russia common stocks | 1,154,594 |
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Singapore—0.35% | |||||||||||
Avago Technologies Ltd. | 18,300 | $ | 1,269,654 | ||||||||
CapitaCommercial Trust | 63,000 | 84,016 | |||||||||
CapitaMall Trust | 383,000 | 603,447 | |||||||||
Flextronics International Ltd.*,1 | 11,637 | 120,909 | |||||||||
StarHub Ltd. | 93,000 | 316,829 | |||||||||
Yangzijiang Shipbuilding Holdings Ltd. | 81,000 | 70,404 | |||||||||
Total Singapore common stocks | 2,465,259 | ||||||||||
South Korea—0.13% | |||||||||||
Samsung Engineering Co. Ltd.* | 13,341 | 893,932 | |||||||||
Spain—0.72% | |||||||||||
Banco Bilbao Vizcaya Argentaria SA | 144,303 | 1,773,873 | |||||||||
Grifols SA | 16,050 | 724,462 | |||||||||
International Consolidated Airlines Group SA* | 105,773 | 591,758 | |||||||||
Red Electrica Corp. SA | 22,658 | 1,946,986 | |||||||||
Total Spain common stocks | 5,037,079 | ||||||||||
Sweden—0.25% | |||||||||||
Castellum AB | 6,218 | 104,334 | |||||||||
Elekta AB, B Shares | 61,437 | 752,807 | |||||||||
Fabege AB | 8,668 | 118,578 | |||||||||
Industrivarden AB, C Shares | 13,400 | 249,085 | |||||||||
Lundin Petroleum AB* | 29,035 | 520,413 | |||||||||
Total Sweden common stocks | 1,745,217 | ||||||||||
Switzerland—0.47% | |||||||||||
Roche Holding AG | 5,734 | 1,664,039 | |||||||||
Swiss Prime Site AG* | 4,543 | 360,511 | |||||||||
Swiss Re AG* | 14,527 | 1,234,904 | |||||||||
Total Switzerland common stocks | 3,259,454 | ||||||||||
United Kingdom—3.21% | |||||||||||
Anglo American PLC | 20,400 | 547,862 | |||||||||
Antofagasta PLC | 14,600 | 198,670 | |||||||||
Barclays PLC | 238,707 | 904,864 | |||||||||
BHP Billiton PLC | 82,500 | 2,814,240 | |||||||||
BP PLC | 124,950 | 1,017,560 | |||||||||
British Land Co. PLC | 58,166 | 688,150 | |||||||||
British Sky Broadcasting Group PLC | 159,219 | 2,356,743 | |||||||||
BT Group PLC | 220,262 | 1,442,032 | |||||||||
Capital & Counties Properties PLC | 27,921 | 150,772 | |||||||||
Derwent London PLC | 8,889 | 400,305 | |||||||||
DS Smith PLC | 110,562 | 487,555 | |||||||||
Great Portland Estates PLC | 23,388 | 251,454 | |||||||||
Hammerson PLC | 38,365 | 387,943 | |||||||||
J Sainsbury PLC | 170,983 | 901,228 | |||||||||
Land Securities Group PLC | 30,193 | 529,714 | |||||||||
Noble Corp. PLC1 | 77,556 | 2,432,932 | |||||||||
Rio Tinto PLC | 53,935 | 3,082,602 | |||||||||
Rolls-Royce Holdings PLC* | 844 | 14,733 | |||||||||
Rowan Co. PLC, Class A1 | 62,711 | 1,913,940 | |||||||||
Royal Dutch Shell PLC, A Shares | 42,867 | 1,762,783 |
208
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Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
United Kingdom—(concluded) | |||||||||||
Tui Travel PLC | 1,137 | $ | 6,940 | ||||||||
Workspace Group PLC | 14,903 | 154,125 | |||||||||
Total United Kingdom common stocks | 22,447,147 | ||||||||||
United States—14.35% | |||||||||||
Activision Blizzard, Inc.1 | 75,778 | 1,695,912 | |||||||||
Acuity Brands, Inc. | 9,815 | 1,052,855 | |||||||||
Alliance Data Systems Corp.* | 6,135 | 1,609,149 | |||||||||
American Tower Corp. | 17,014 | 1,605,951 | |||||||||
Amgen, Inc. | 9,352 | 1,191,351 | |||||||||
Annaly Capital Management, Inc.1 | 154,888 | 1,719,257 | |||||||||
Assurant, Inc.1 | 19,571 | 1,240,019 | |||||||||
AvalonBay Communities, Inc. | 2,499 | 370,052 | |||||||||
Baxter International, Inc. | 14,449 | 1,079,196 | |||||||||
Bed, Bath & Beyond, Inc.*,1 | 29,314 | 1,855,283 | |||||||||
BorgWarner, Inc. | 20,896 | 1,300,776 | |||||||||
Boston Properties, Inc. | 5,072 | 605,850 | |||||||||
Brixmor Property Group, Inc. | 13,328 | 301,879 | |||||||||
C.R. Bard, Inc.1 | 15,948 | 2,379,920 | |||||||||
Calpine Corp.* | 63,291 | 1,394,934 | |||||||||
Capital One Financial Corp.1 | 9,710 | 772,333 | |||||||||
Celgene Corp.* | 13,880 | 1,209,642 | |||||||||
Chevron Corp. | 12,500 | 1,615,500 | |||||||||
Cigna Corp.1 | 27,405 | 2,467,546 | |||||||||
Comcast Corp., Class A | 4,654 | 250,059 | |||||||||
CVS Caremark Corp. | 12,545 | 957,936 | |||||||||
DDR Corp. | 9,010 | 158,035 | |||||||||
Delta Air Lines, Inc. | 22,792 | 853,788 | |||||||||
Dollar General Corp.*,1 | 10,532 | 581,682 | |||||||||
Electronic Arts, Inc.* | 31,704 | 1,065,254 | |||||||||
Entergy Corp.1 | 40,871 | 2,976,635 | |||||||||
EOG Resources, Inc. | 11,038 | 1,207,999 | |||||||||
Equinix, Inc.* | 4,084 | 876,100 | |||||||||
Equity Residential | 5,411 | 349,821 | |||||||||
Essex Property Trust, Inc. | 1,771 | 335,728 | |||||||||
Exelon Corp.1 | 80,891 | 2,514,092 | |||||||||
Exxon Mobil Corp. | 28,500 | 2,819,790 | |||||||||
Facebook, Inc., Class A* | 15,966 | 1,159,930 | |||||||||
Federal Realty Investment Trust | 2,268 | 276,923 | |||||||||
First Republic Bank | 25,037 | 1,169,729 | |||||||||
FLIR Systems, Inc. | 35,390 | 1,177,779 | |||||||||
Fortune Brands Home & Security, Inc. | 30,239 | 1,142,732 | |||||||||
Freeport-McMoRan Copper & Gold, Inc. | 15,200 | 565,744 | |||||||||
GameStop Corp., Class A1 | 12,986 | 545,022 | |||||||||
Generac Holdings, Inc.* | 19,034 | 826,076 | |||||||||
General Growth Properties, Inc. | 13,994 | 327,040 | |||||||||
Google, Inc., Class A* | 1,940 | 1,124,327 | |||||||||
Google, Inc., Class C* | 2,758 | 1,576,473 | |||||||||
Halliburton Co. | 15,457 | 1,066,378 | |||||||||
Hanesbrands, Inc. | 13,812 | 1,349,571 | |||||||||
Hewlett-Packard Co.1 | 44,084 | 1,569,831 | |||||||||
Hilton Worldwide Holdings, Inc.* | 6,694 | 162,062 | |||||||||
Host Hotels & Resorts, Inc. | 21,218 | 461,279 | |||||||||
Illumina, Inc.* | 6,813 | 1,089,467 |
Number of shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
United States—(concluded) | |||||||||||
J.B. Hunt Transport Services, Inc. | 22,533 | $ | 1,740,900 | ||||||||
Kansas City Southern | 10,690 | 1,165,851 | |||||||||
Kimco Realty Corp. | 10,936 | 244,748 | |||||||||
Kohl's Corp.1 | 44,880 | 2,402,875 | |||||||||
L-3 Communications Holdings, Inc.1 | 21,970 | 2,305,971 | |||||||||
Las Vegas Sands Corp. | 7,369 | 544,201 | |||||||||
Macy's, Inc. | 16,218 | 937,238 | |||||||||
Manpowergroup, Inc.1 | 26,689 | 2,078,806 | |||||||||
Marriott International, Inc., Class A | 2,378 | 153,880 | |||||||||
Micron Technology, Inc.*,1 | 57,065 | 1,743,336 | |||||||||
National-Oilwell Varco, Inc.1 | 33,018 | 2,675,779 | |||||||||
Navient Corp.1 | 160,248 | 2,756,266 | |||||||||
NetApp, Inc.1 | 51,674 | 2,007,018 | |||||||||
New York Community Bancorp, Inc. | 15,438 | 245,155 | |||||||||
News Corp., Class A* | 13,856 | 244,558 | |||||||||
Northrop Grumman Corp.1 | 16,550 | 2,040,119 | |||||||||
Pall Corp. | 20,470 | 1,585,811 | |||||||||
Pebblebrook Hotel Trust | 4,243 | 154,445 | |||||||||
PetSmart, Inc. | 4,831 | 329,184 | |||||||||
ProLogis, Inc. | 15,181 | 619,537 | |||||||||
Public Storage | 876 | 150,330 | |||||||||
Raytheon Co.1 | 31,529 | 2,861,887 | |||||||||
Simon Property Group, Inc. | 3,613 | 607,671 | |||||||||
SL Green Realty Corp. | 5,244 | 565,303 | |||||||||
Staples, Inc.1 | 66,306 | 768,487 | |||||||||
Starwood Hotels & Resorts Worldwide, Inc. | 2,484 | 190,871 | |||||||||
Stillwater Mining Co.* | 79,472 | 1,422,549 | |||||||||
Symantec Corp.1 | 95,631 | 2,262,629 | |||||||||
The Charles Schwab Corp. | 48,521 | 1,346,458 | |||||||||
The Estee Lauder Cos., Inc., Class A | 12,966 | 952,482 | |||||||||
The Macerich Co. | 5,209 | 338,637 | |||||||||
Time Warner, Inc. | 14,608 | 1,212,756 | |||||||||
Time, Inc.* | 1,826 | 44,007 | |||||||||
TJX Cos., Inc. | 26,386 | 1,406,110 | |||||||||
Tyson Foods, Inc., Class A | 575 | 21,396 | |||||||||
Ventas, Inc. | 2,364 | 150,114 | |||||||||
Visteon Corp.* | 14,005 | 1,337,478 | |||||||||
Vornado Realty Trust | 5,045 | 534,871 | |||||||||
Washington Prime Group, Inc.* | 5,659 | 106,899 | |||||||||
Waters Corp.* | 8,054 | 833,106 | |||||||||
Western Digital Corp. | 13,013 | 1,299,088 | |||||||||
Total United States common stocks | 100,393,494 | ||||||||||
Total common stocks (cost—$203,937,396) | 224,173,693 | ||||||||||
Number of warrants | |||||||||||
Warrants*—0.00%† | |||||||||||
Hong Kong—0.00%† | |||||||||||
Sun Hung Kai Properties Ltd., strike price $98.60, expires 04/22/16 (cost—$0) | 416 | 1,046 |
209
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Corporate notes—2.64% | |||||||||||
Australia—0.06% | |||||||||||
Santos Finance Ltd. 8.250%, due 09/22/705 | EUR | 100,000 | $ | 151,982 | |||||||
Scentre Group Trust 2 3.250%, due 09/11/234 | EUR | 100,000 | 147,601 | ||||||||
Telstra Corp. Ltd. 2.500%, due 09/15/23 | EUR | 100,000 | 142,101 | ||||||||
Total Australia corporate notes | 441,684 | ||||||||||
Austria—0.04% | |||||||||||
Raiffeisen Bank International AG 6.000%, due 10/16/234 | EUR | 100,000 | 139,087 | ||||||||
UniCredit Bank Austria AG 2.625%, due 01/30/184 | EUR | 100,000 | 139,363 | ||||||||
Total Austria corporate notes | 278,450 | ||||||||||
Canada—0.03% | |||||||||||
Great-West Lifeco, Inc. 2.500%, due 04/18/234 | EUR | 150,000 | 208,254 | ||||||||
Cayman Islands—0.04% | |||||||||||
Hutchison Whampoa Finance 09 Ltd. 4.750%, due 11/14/164 | EUR | 100,000 | 145,876 | ||||||||
IPIC GMTN Ltd. 5.875%, due 03/14/214 | EUR | 100,000 | 168,051 | ||||||||
Total Cayman Islands corporate notes | 313,927 | ||||||||||
Curacao—0.02% | |||||||||||
Teva Pharmaceutical Finance IV BV 2.875%, due 04/15/194 | EUR | 100,000 | 144,376 | ||||||||
Czech Republic—0.02% | |||||||||||
CEZ AS 5.000%, due 10/19/214 | EUR | 100,000 | 165,578 | ||||||||
Denmark—0.03% | |||||||||||
Danske Bank A/S 4.100%, due 03/16/185 | EUR | 60,000 | 81,379 | ||||||||
DONG Energy A/S 6.250%, due 06/26/30134,5 | EUR | 78,000 | 120,458 | ||||||||
Total Denmark corporate notes | 201,837 | ||||||||||
Finland—0.04% | |||||||||||
Fortum OYJ 6.000%, due 03/20/194 | EUR | 100,000 | 163,423 | ||||||||
Teollisuuden Voima OYJ 4.625%, due 02/04/194 | EUR | 100,000 | 152,778 | ||||||||
Total Finland corporate notes | 316,201 | ||||||||||
France—0.43% | |||||||||||
Alstom SA 4.500%, due 03/18/20 | EUR | 100,000 | 155,116 | ||||||||
Areva SA 3.500%, due 03/22/21 | EUR | 100,000 | 143,967 | ||||||||
ASF 7.375%, due 03/20/194 | EUR | 150,000 | 257,618 |
Face amount | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
France—(concluded) | |||||||||||
BNP Paribas SA 2.875%, due 11/27/174 | EUR | 60,000 | $ | 85,827 | |||||||
2.875%, due 09/26/23 | EUR | 60,000 | 87,216 | ||||||||
2.875%, due 03/20/264,5 | EUR | 100,000 | 137,419 | ||||||||
BPCE SA 2.125%, due 03/17/214 | EUR | 100,000 | 139,038 | ||||||||
Casino Guichard-Perrachon SA 3.311%, due 01/25/234 | EUR | 100,000 | 145,931 | ||||||||
Christian Dior SA 4.000%, due 05/12/16 | EUR | 100,000 | 141,282 | ||||||||
CNP Assurances 6.875%, due 09/30/415 | EUR | 100,000 | 161,021 | ||||||||
Credit Agricole SA 2.375%, due 11/27/204 | EUR | 100,000 | 141,752 | ||||||||
Credit Logement SA 1.392%, due 09/16/144,5,6 | EUR | 100,000 | 117,502 | ||||||||
Electricite de France 4.625%, due 04/26/30 | EUR | 50,000 | 84,365 | ||||||||
6.250%, due 01/25/21 | EUR | 150,000 | 260,840 | ||||||||
GDF Suez 3.875%, due 06/02/244,5,6 | EUR | 100,000 | 136,248 | ||||||||
Lagardere SCA 4.125%, due 10/31/174 | EUR | 100,000 | 143,887 | ||||||||
Orange SA 8.125%, due 01/28/33 | EUR | 70,000 | 153,746 | ||||||||
RCI Banque SA 4.000%, due 03/16/164 | EUR | 100,000 | 140,720 | ||||||||
4.250%, due 04/27/174 | EUR | 30,000 | 43,706 | ||||||||
Societe Generale SA 4.750%, due 03/02/21 | EUR | 100,000 | 162,079 | ||||||||
9.375%, due 09/04/194,5,6 | EUR | 50,000 | 82,670 | ||||||||
Vinci SA 6.250%, due 11/13/155,6 | EUR | 50,000 | 70,705 | ||||||||
Total France corporate notes | 2,992,655 | ||||||||||
Germany—0.15% | |||||||||||
Allianz SE 4.750%, due 10/24/234,5,6 | EUR | 200,000 | 291,511 | ||||||||
Commerzbank AG 7.750%, due 03/16/21 | EUR | 100,000 | 164,749 | ||||||||
Continental AG 3.125%, due 09/09/204 | EUR | 34,000 | 50,046 | ||||||||
Muenchener Rueckversicherungs AG 5.767%, due 06/12/174,5,6 | EUR | 50,000 | 72,919 | ||||||||
Volkswagen Leasing GmbH 3.250%, due 05/10/18 | EUR | 300,000 | 437,955 | ||||||||
Total Germany corporate notes | 1,017,180 | ||||||||||
Ireland—0.09% | |||||||||||
Bord Gais Eireann 3.625%, due 12/04/174 | EUR | 100,000 | 145,492 | ||||||||
FGA Capital Ireland PLC 4.375%, due 09/18/144 | EUR | 100,000 | 134,505 |
210
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Ireland—(concluded) | |||||||||||
GE Capital European Funding 5.375%, due 01/23/20 | EUR | 50,000 | $ | 82,337 | |||||||
Swisscom AG via Lunar Funding V 2.000%, due 09/30/204 | EUR | 100,000 | 139,406 | ||||||||
Willow No.2 Ireland PLC for Zurich Insurance Co. Ltd. 3.375%, due 06/27/224 | EUR | 100,000 | 149,384 | ||||||||
Total Ireland corporate notes | 651,124 | ||||||||||
Italy—0.16% | |||||||||||
Assicurazioni Generali SpA MTN 5.125%, due 09/16/244 | EUR | 75,000 | 121,543 | ||||||||
Enel SpA 5.250%, due 06/20/174 | EUR | 210,000 | 315,635 | ||||||||
GTECH SpA 5.375%, due 02/02/184 | EUR | 50,000 | 76,329 | ||||||||
Intesa Sanpaolo SpA 3.000%, due 01/28/194 | EUR | 100,000 | 142,619 | ||||||||
4.125%, due 01/14/164 | EUR | 100,000 | 140,038 | ||||||||
5.000%, due 02/28/174 | EUR | 100,000 | 147,092 | ||||||||
UniCredit SpA 4.875%, due 03/07/174 | EUR | 100,000 | 146,493 | ||||||||
Total Italy corporate notes | 1,089,749 | ||||||||||
Jersey—0.04% | |||||||||||
Heathrow Funding Ltd. 4.600%, due 02/15/184 | EUR | 100,000 | 151,048 | ||||||||
Prosecure Funding 4.668%, due 06/30/16 | EUR | 100,000 | 140,127 | ||||||||
Total Jersey corporate notes | 291,175 | ||||||||||
Luxembourg—0.08% | |||||||||||
CNH Industrial Finance Europe SA 2.750%, due 03/18/194 | EUR | 100,000 | 134,935 | ||||||||
Gazprom (Gaz Capital SA) 8.125%, due 02/04/15 | EUR | 50,000 | 68,375 | ||||||||
Glencore Finance Europe SA 4.625%, due 04/03/184,7 | EUR | 100,000 | 150,217 | ||||||||
Prologis International Funding II SA 2.875%, due 04/04/224 | EUR | 125,000 | 174,487 | ||||||||
Total Luxembourg corporate notes | 528,014 | ||||||||||
Mexico—0.04% | |||||||||||
America Movil SAB de CV 5.125%, due 09/06/734,5 | EUR | 100,000 | 145,019 | ||||||||
Petroleos Mexicanos 3.125%, due 11/27/204 | EUR | 100,000 | 143,781 | ||||||||
Total Mexico corporate notes | 288,800 | ||||||||||
Netherlands—0.35% | |||||||||||
ABN Amro Bank N.V. 4.310%, due 03/10/165,6 | EUR | 40,000 | 54,499 | ||||||||
6.375%, due 04/27/214 | EUR | 100,000 | 163,786 |
Face amount | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Netherlands—(concluded) | |||||||||||
Achmea BV 2.500%, due 11/19/204 | EUR | 100,000 | $ | 140,709 | |||||||
Bharti Airtel International Netherlands BV 4.000%, due 12/10/184 | EUR | 100,000 | 143,613 | ||||||||
Conti Gummi Finance BV 2.500%, due 03/20/174 | EUR | 30,000 | 41,888 | ||||||||
Deutsche Annington Finance BV 3.125%, due 07/25/19 | EUR | 100,000 | 144,729 | ||||||||
Deutsche Bahn Finance BV 3.000%, due 03/08/24 | EUR | 60,000 | 89,807 | ||||||||
ELM BV (Swiss Reinsurance Co.) 5.252%, due 05/25/164,5,6 | EUR | 100,000 | 140,266 | ||||||||
Enel Finance International N.V. 5.750%, due 10/24/18 | EUR | 100,000 | 158,972 | ||||||||
Fresenius Finance BV 4.250%, due 04/15/194 | EUR | 40,000 | 59,454 | ||||||||
ING Bank N.V. 3.500%, due 11/21/234,5 | EUR | 100,000 | 139,726 | ||||||||
Linde Finance BV 7.375%, due 07/14/665 | EUR | 100,000 | 149,264 | ||||||||
OI European Group BV 6.750%, due 09/15/204 | EUR | 100,000 | 156,669 | ||||||||
Rabobank Nederland 4.125%, due 01/14/20 | EUR | 200,000 | 310,841 | ||||||||
Repsol International Finance BV 4.250%, due 02/12/164 | EUR | 100,000 | 141,082 | ||||||||
SABIC Capital I BV 2.750%, due 11/20/204 | EUR | 100,000 | 141,270 | ||||||||
Telefonica Europe BV 5.875%, due 02/14/334 | EUR | 50,000 | 89,599 | ||||||||
Volkswagen International Finance N.V. 3.875%, due 09/04/184,5,6 | EUR | 50,000 | 70,552 | ||||||||
Ziggo Bond Co. 8.000%, due 05/15/184 | EUR | 70,000 | 98,120 | ||||||||
Total Netherlands corporate notes | 2,434,846 | ||||||||||
Norway—0.05% | |||||||||||
DnB NOR Bank ASA 4.375%, due 02/24/214 | EUR | 110,000 | 175,987 | ||||||||
Statkraft AS 2.500%, due 11/28/224 | EUR | 100,000 | 141,890 | ||||||||
Total Norway corporate notes | 317,877 | ||||||||||
Spain—0.14% | |||||||||||
Amadeus Capital Markets SA 4.875%, due 07/15/164 | EUR | 100,000 | 144,272 | ||||||||
Banco Bilbao Vizcaya Argentaria SA 3.500%, due 12/05/17 | EUR | 100,000 | 145,978 | ||||||||
Ferrovial Emisiones SA 3.375%, due 01/30/184 | EUR | 100,000 | 144,133 | ||||||||
Gas Natural Capital Markets SA 4.125%, due 01/26/184 | EUR | 100,000 | 148,208 |
211
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Spain—(concluded) | |||||||||||
Santander International Debt SAU 3.500%, due 08/12/144 | EUR | 50,000 | $ | 66,991 | |||||||
Telefonica Emisiones SAU 4.710%, due 01/20/204 | EUR | 100,000 | 156,060 | ||||||||
4.797%, due 02/21/184 | EUR | 100,000 | 151,061 | ||||||||
Total Spain corporate notes | 956,703 | ||||||||||
Sweden—0.05% | |||||||||||
Atlas Copco AB 2.500%, due 02/28/234 | EUR | 100,000 | 142,956 | ||||||||
Nordea Bank AB 4.000%, due 06/29/204 | EUR | 50,000 | 77,909 | ||||||||
Svenska Handelsbanken AB 4.375%, due 10/20/214 | EUR | 100,000 | 161,339 | ||||||||
Total Sweden corporate notes | 382,204 | ||||||||||
United Arab Emirates—0.02% | |||||||||||
Xstrata Finance Dubai Ltd. 1.750%, due 05/19/164,7 | EUR | 100,000 | 136,260 | ||||||||
United Kingdom—0.45% | |||||||||||
Anglo American Capital PLC 3.250%, due 04/03/234 | EUR | 100,000 | 143,003 | ||||||||
Aviva PLC 6.125%, due 07/05/434,5 | EUR | 100,000 | 157,339 | ||||||||
Barclays Bank PLC 6.625%, due 03/30/224 | EUR | 70,000 | 116,576 | ||||||||
BAT International Finance PLC 3.625%, due 11/09/214 | EUR | 100,000 | 152,494 | ||||||||
Brambles Finance PLC 4.625%, due 04/20/184 | EUR | 100,000 | 151,206 | ||||||||
Coventry Building Society 2.500%, due 11/18/204 | EUR | 100,000 | 140,891 | ||||||||
Experian Finance PLC 4.750%, due 02/04/204 | EUR | 50,000 | 78,512 | ||||||||
G4S International Finance PLC 2.625%, due 12/06/184 | EUR | 100,000 | 140,735 | ||||||||
Hammerson PLC 2.750%, due 09/26/194 | EUR | 100,000 | 143,607 | ||||||||
Imperial Tobacco Finance PLC 5.000%, due 12/02/194 | EUR | 100,000 | 157,707 | ||||||||
LBG Capital No. 2 PLC, Series 22 15.000%, due 12/21/194 | EUR | 50,000 | 102,431 | ||||||||
Legal & General Group PLC 4.000%, due 06/08/254,5 | EUR | 50,000 | 67,622 | ||||||||
Lloyds TSB Bank PLC 10.375%, due 02/12/244,5 | EUR | 50,000 | 87,430 | ||||||||
Mondi Finance PLC 3.375%, due 09/28/204 | EUR | 100,000 | 145,084 | ||||||||
Motability Operations Group PLC 3.250%, due 11/30/184 | EUR | 100,000 | 146,992 | ||||||||
Nationwide Building Society 3.125%, due 04/03/17 | EUR | 100,000 | 142,413 | ||||||||
NGG Finance PLC 4.250%, due 06/18/764,5 | EUR | 100,000 | 142,274 |
Face amount | Value | ||||||||||
Corporate notes—(concluded) | |||||||||||
United Kingdom—(concluded) | |||||||||||
Rentokil Initial PLC 3.250%, due 10/07/214 | EUR | 100,000 | $ | 146,319 | |||||||
Royal Bank of Scotland PLC 4.625%, due 09/22/215 | EUR | 65,000 | 89,606 | ||||||||
4.875%, due 01/20/17 | EUR | 170,000 | 249,878 | ||||||||
5.375%, due 09/30/194 | EUR | 50,000 | 80,379 | ||||||||
SSE PLC 5.025%, due 10/01/154,5,6 | EUR | 100,000 | 138,322 | ||||||||
Stagecoach Group PLC 5.750%, due 12/16/16 | GBP | 50,000 | 91,226 | ||||||||
Yorkshire Building Society 2.125%, due 03/18/194 | EUR | 100,000 | 137,579 | ||||||||
Total United Kingdom corporate notes | 3,149,625 | ||||||||||
United States—0.31% | |||||||||||
AT&T, Inc. 2.500%, due 03/15/23 | EUR | 100,000 | 141,257 | ||||||||
Bank of America Corp. 4.750%, due 04/03/174 | EUR | 100,000 | 147,771 | ||||||||
Citigroup, Inc. 0.839%, due 05/31/175 | EUR | 100,000 | 132,298 | ||||||||
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc. 2.750%, due 05/19/23 | EUR | 100,000 | 140,653 | ||||||||
GE Capital Trust II 5.500%, due 09/15/674,5 | EUR | 50,000 | 72,312 | ||||||||
JPMorgan Chase & Co. 2.625%, due 04/23/214 | EUR | 100,000 | 143,992 | ||||||||
Merrill Lynch & Co., Inc. 4.625%, due 09/14/18 | EUR | 50,000 | 74,652 | ||||||||
MetLife Global Funding I 4.625%, due 05/16/17 | EUR | 50,000 | 74,280 | ||||||||
Metropolitan Life Global Funding I 2.375%, due 09/30/194 | EUR | 200,000 | 284,236 | ||||||||
Morgan Stanley 4.000%, due 11/17/15 | EUR | 105,000 | 146,692 | ||||||||
4.500%, due 02/23/16 | EUR | 50,000 | 70,867 | ||||||||
5.500%, due 10/02/17 | EUR | 50,000 | 76,440 | ||||||||
Pemex Project Funding Master Trust 6.375%, due 08/05/164 | EUR | 50,000 | 74,403 | ||||||||
Roche Holdings, Inc. 6.500%, due 03/04/214 | EUR | 100,000 | 178,595 | ||||||||
Verizon Communications, Inc. 2.375%, due 02/17/22 | EUR | 100,000 | 140,835 | ||||||||
Wells Fargo & Co. 2.250%, due 09/03/204 | EUR | 200,000 | 284,717 | ||||||||
Total United States corporate notes | 2,184,000 | ||||||||||
Total corporate notes (cost—$17,480,298) | 18,490,519 |
212
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Face amount | Value | ||||||||||
Non-US government obligations—3.38% | |||||||||||
Brazil—1.30% | |||||||||||
Brazil Notas do Tesouro Nacional Series B 6.000%, due 08/15/22 | BRL | 2,940,000 | $ | 3,196,036 | |||||||
6.000%, due 08/15/50 | BRL | 1,320,000 | 1,404,312 | ||||||||
Brazil Notas do Tesouro Nacional Series F 10.000%, due 01/01/17 | BRL | 5,220,000 | 2,226,750 | ||||||||
10.000%, due 01/01/23 | BRL | 5,630,000 | 2,244,951 | ||||||||
Total Brazil | 9,072,049 | ||||||||||
Germany—0.05% | |||||||||||
Bundesrepublik Deutschland 1.500%, due 02/15/23 | EUR | 45,000 | 62,845 | ||||||||
1.500%, due 05/15/24 | EUR | 150,000 | 206,785 | ||||||||
4.750%, due 07/04/40 | EUR | 30,000 | 61,986 | ||||||||
Total Germany | 331,616 | ||||||||||
Mexico—2.02% | |||||||||||
Mexican Bonos 6.500%, due 06/10/21 | MXN | 43,700,000 | 3,506,429 | ||||||||
7.500%, due 06/03/27 | MXN | 41,810,000 | 3,546,974 | ||||||||
8.500%, due 05/31/29 | MXN | 39,250,000 | 3,585,704 | ||||||||
10.000%, due 12/05/24 | MXN | 34,890,000 | 3,492,798 | ||||||||
Total Mexico | 14,131,905 | ||||||||||
Spain—0.01% | |||||||||||
Spain Government Bond 5.500%, due 04/30/21 | EUR | 60,000 | 99,599 | ||||||||
Total non-US government obligations (cost—$23,923,589) | 23,635,169 | ||||||||||
Time deposits—15.84% | |||||||||||
Abbey National 0.080%, due 08/01/14 | USD | 1,298,680 | 1,298,680 | ||||||||
ABN Amro Bank N.V. 0.300%, due 10/10/14 | USD | 7,500,000 | 7,500,000 | ||||||||
0.340%, due 09/10/14 | USD | 5,000,000 | 5,000,000 | ||||||||
Agence Centrale Des Organismes 0.170%, due 08/04/14 | USD | 10,000,000 | 9,999,858 | ||||||||
Bank of China , Ltd. 0.350%, due 08/11/14 | USD | 5,000,000 | 5,000,000 | ||||||||
Commerzbank AG 0.280%, due 10/21/14 | USD | 5,000,000 | 4,996,852 | ||||||||
Credit Agricole 0.010%, due 10/16/14 | USD | 10,000,000 | 10,000,000 | ||||||||
0.260%, due 09/26/14 | USD | 2,500,000 | 2,500,000 | ||||||||
Credit Suisse AG Guernsey 0.210%, due 08/27/14 | USD | 7,000,000 | 7,000,000 | ||||||||
0.250%, due 11/04/14 | USD | 5,000,000 | 5,000,000 | ||||||||
DZ Bank AG 0.030%, due 08/01/14 | USD | 2,516,910 | 2,516,910 | ||||||||
ING Bank N.V. 0.240%, due 09/02/14 | USD | 10,000,000 | 10,000,000 | ||||||||
Nationwide Building Society 0.210%, due 08/15/14 | USD | 5,000,000 | 5,000,000 |
Face amount | Value | ||||||||||
Time deposits—(concluded) | |||||||||||
Nationwide Building Society 0.220%, due 11/17/14 | USD | 7,500,000 | $ | 7,500,000 | |||||||
Natixis 0.260%, due 09/02/14 | USD | 5,000,000 | 5,000,000 | ||||||||
0.320%, due 11/03/14 | USD | 7,500,000 | 7,500,000 | ||||||||
Nomura International PLC 0.470%, due 11/28/14 | USD | 5,000,000 | 4,992,244 | ||||||||
Societe Generale 0.700%, due 09/05/14 | USD | 2,500,000 | 2,500,000 | ||||||||
Sumitomo Mitsui Trust Bank Ltd. 0.250%, due 08/22/14 | USD | 7,500,000 | 7,500,000 | ||||||||
Total time deposits (cost—$110,804,544) | 110,804,544 | ||||||||||
Short-term US government obligations8—28.20% | |||||||||||
US Treasury Bills 0.020%, due 10/23/141 | USD | 7,500,000 | 7,499,610 | ||||||||
0.030%, due 10/16/14 | USD | 5,500,000 | 5,499,796 | ||||||||
0.045%, due 10/23/141 | USD | 51,100,000 | 51,097,343 | ||||||||
0.050%, due 11/28/141 | USD | 15,753,000 | 15,750,921 | ||||||||
0.065%, due 09/04/141 | USD | 38,000,000 | 37,999,658 | ||||||||
0.065%, due 09/25/141 | USD | 79,500,000 | 79,498,489 | ||||||||
Total short-term US government obligations (cost—$197,333,961) | 197,345,817 | ||||||||||
Repurchase agreement—14.94% | |||||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $107,526,919 US Treasury Note, 0.625% due 05/31/17; (value—$106,586,058); proceeds: $104,506,000 (cost—$104,506,000) | 104,506,000 | 104,506,000 | |||||||||
Number of contracts/ Notional amount | |||||||||||
Options purchased—1.88% | |||||||||||
Call options purchased—0.83% | |||||||||||
DAX Index, strike @ 10,000, expires 08/15/14 | 606 | 13,649 | |||||||||
DAX Index, strike @ 10,200, expires 08/15/14 | 303 | 2,232 | |||||||||
DAX Index, strike @ 10,250, expires 08/15/14 | 303 | 1,623 | |||||||||
DAX Index, strike @ 10,450, expires 09/19/14 | 303 | 6,289 | |||||||||
DAX Index, strike @ 10,500, expires 09/19/14 | 304 | 4,885 | |||||||||
DAX Index, strike @ 10,600, expires 08/15/14 | 228 | 305 |
213
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Number of contracts/ Notional amount | Value | ||||||||||
Options purchased—(continued) | |||||||||||
Call options purchased—(continued) | |||||||||||
Euro STOXX 50 Index, strike @ 3,350, expires 08/15/14 | 606 | $ | 2,434 | ||||||||
Euro STOXX 50 Index, strike @ 3,375, expires 08/15/14 | 606 | 1,623 | |||||||||
Euro STOXX 50 Index, strike @ 3,425, expires 09/19/14 | 303 | 5,680 | |||||||||
Euro STOXX 50 Index, strike @ 3,450, expires 09/19/14 | 303 | 3,652 | |||||||||
Euro STOXX 50 Index, strike @ 3,525, expires 08/15/14 | 228 | 305 | |||||||||
GBP Currency Futures, strike @ 170.5, expires 08/08/14 | 60 | 1,875 | |||||||||
GBP Currency Futures, strike @ 173.5, expires 09/05/14 | 332 | 8,300 | |||||||||
GBP Currency Futures, strike @ 174.5, expires 08/08/14 | 142 | 887 | |||||||||
GBP Currency Futures, strike @ 175, expires 08/08/14 | 139 | 869 | |||||||||
GBP Currency Futures, strike @ 175, expires 09/05/14 | 182 | 2,275 | |||||||||
GBP Currency Futures, strike @ 176, expires 08/08/14 | 171 | 1,069 | |||||||||
GBP Currency Futures, strike @ 176, expires 09/05/14 | 46 | 288 | |||||||||
GBP Currency Futures, strike @ 176.5, expires 09/05/14 | 364 | 2,275 | |||||||||
GBP Currency Futures, strike @ 177.5, expires 09/05/14 | 137 | 856 | |||||||||
GBP Currency Futures, strike @ 178, expires 09/05/14 | 136 | 850 | |||||||||
GBP Currency Futures, strike @ 178.5, expires 09/05/14 | 136 | 850 | |||||||||
JPY Currency Futures, strike @ 102, expires 08/08/14 | 211 | 1,319 | |||||||||
JPY Currency Futures, strike @ 102.5, expires 08/08/14 | 138 | 863 | |||||||||
JPY Currency Futures, strike @ 102.5, expires 09/05/14 | 121 | 3,025 | |||||||||
JPY Currency Futures, strike @ 103, expires 08/08/14 | 228 | 1,425 | |||||||||
JPY Currency Futures, strike @ 103, expires 09/05/14 | 91 | 1,706 | |||||||||
JPY Currency Futures, strike @ 103.5, expires 09/05/14 | 485 | 6,062 | |||||||||
JPY Currency Futures, strike @ 99, expires 08/08/14 | 30 | 937 | |||||||||
JPY Currency Futures, strike @ 99.5, expires 08/08/14 | 30 | 750 | |||||||||
S&P 500 Index, strike @ 1,850, expires 06/19/15 | 170 | 2,500,700 | |||||||||
S&P 500 Index, strike @ 1,930, expires 09/20/14 | 68 | 261,943 |
Number of contracts/ Notional amount | Value | ||||||||||
Options purchased—(continued) | |||||||||||
Call options purchased—(concluded) | |||||||||||
S&P 500 Index, strike @ 1,945, expires 09/20/14 | 50 | $ | 160,500 | ||||||||
S&P 500 Index, strike @ 1,955, expires 09/20/14 | 91 | 225,680 | |||||||||
S&P 500 Index, strike @ 1,960, expires 09/20/14 | 93 | 199,950 | |||||||||
S&P 500 Index, strike @ 1,970, expires 09/20/14 | 203 | 355,250 | |||||||||
S&P 500 Index, strike @ 1,975, expires 09/20/14 | 11 | 17,380 | |||||||||
US Treasury Note 10 Year Futures, strike @ 129.5, expires 08/22/14 | 177 | 2,766 | |||||||||
US Treasury Note 10 Year Futures, strike @ 130, expires 08/22/14 | 114 | 1,781 | |||||||||
US Treasury Note 10 Year Futures, strike @ 130.5, expires 08/22/14 | 57 | 891 | |||||||||
US Treasury Note 10 Year Futures, strike @ 131, expires 08/22/14 | 182 | 2,844 | |||||||||
USD Call/JPY Put, strike @ JPY 82, expires 02/09/15 | USD | 9,000,000 | 1,812,654 | ||||||||
USD Call/JPY Put, strike @ JPY 86, expires 12/10/15 | USD | 1,000,000 | 161,855 | ||||||||
Total call options purchased | 5,783,352 | ||||||||||
Put options & swaptions purchased—1.05% | |||||||||||
Apple, Inc., strike @ 95, expires 07/17/15 | 133 | 135,639 | |||||||||
DAX Index, strike @ 8,500, expires 08/15/14 | 1,046 | 36,417 | |||||||||
DAX Index, strike @ 8,800, expires 08/15/14 | 228 | 21,524 | |||||||||
DAX Index, strike @ 8,900, expires 08/15/14 | 303 | 40,573 | |||||||||
DAX Index, strike @ 8,900, expires 09/19/14 | 682 | 380,361 | |||||||||
Euro STOXX 50 Index, strike @ 2,750, expires 09/19/14 | 965 | 129,218 | |||||||||
Euro STOXX 50 Index, strike @ 2,775, expires 08/15/14 | 638 | 19,649 | |||||||||
Euro STOXX 50 Index, strike @ 3,000, expires 06/17/16 | 279 | 1,248,181 | |||||||||
Euro STOXX 50 Index, strike @ 2,800, expires 08/15/14 | 456 | 16,486 | |||||||||
Euro STOXX 50 Index, strike @ 2,850, expires 08/15/14 | 228 | 11,602 | |||||||||
Euro STOXX 50 Index, strike @ 2,900, expires 09/19/14 | 36 | 10,991 | |||||||||
Euro STOXX 50 Index, strike @ 2,925, expires 08/15/14 | 303 | 28,401 | |||||||||
Euro STOXX 50 Index, strike @ 3,050, expires 09/19/14 | 207 | 148,847 | |||||||||
Euro STOXX 50 Index, strike @ 3,125, expires 08/15/14 | 408 | 260,054 |
214
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Number of contracts/ Notional amount | Value | ||||||||||
Options purchased—(continued) | |||||||||||
Put options & swaptions purchased—(continued) | |||||||||||
FTSE 100 Index Futures, strike @ 6,400, expires 06/17/16 | 111 | $ | 1,002,597 | ||||||||
GBP Currency Futures, strike @ 161, expires 08/08/14 | 349 | 2,181 | |||||||||
GBP Currency Futures, strike @ 161.5, expires 08/08/14 | 348 | 2,175 | |||||||||
GBP Currency Futures, strike @ 163.5, expires 09/05/14 | 91 | 3,413 | |||||||||
GBP Currency Futures, strike @ 164, expires 09/05/14 | 182 | 9,100 | |||||||||
GBP Currency Futures, strike @ 164.5, expires 09/05/14 | 850 | 58,437 | |||||||||
GBP Currency Futures, strike @ 166.5, expires 08/08/14 | 364 | 6,825 | |||||||||
GBP Currency Futures, strike @ 169, expires 08/08/14 | 60 | 23,250 | |||||||||
JPY Currency Futures, strike @ 93, expires 08/08/14 | 116 | 725 | |||||||||
JPY Currency Futures, strike @ 93.5, expires 08/08/14 | 344 | 2,150 | |||||||||
JPY Currency Futures, strike @ 93.5, expires 09/05/14 | 91 | 5,688 | |||||||||
JPY Currency Futures, strike @ 94, expires 08/08/14 | 343 | 4,288 | |||||||||
JPY Currency Futures, strike @ 94, expires 09/05/14 | 243 | 21,262 | |||||||||
JPY Currency Futures, strike @ 94.5, expires 09/05/14 | 242 | 27,225 | |||||||||
JPY Currency Futures, strike @ 96, expires 08/08/14 | 121 | 10,588 | |||||||||
JPY Currency Futures, strike @ 96.5, expires 08/08/14 | 61 | 11,437 | |||||||||
JPY Currency Futures, strike @ 98, expires 08/08/14 | 30 | 32,625 | |||||||||
Kospi 200 Index, strike @ 253.20, expires 09/11/14 | KRW | 6,000,000 | 2,891 | ||||||||
Kospi 200 Index, strike @ 271.22, expires 09/11/14 | KRW | 30,512,204 | 140,404 | ||||||||
S&P 500 Index, strike @ 1,500, expires 09/20/14 | 243 | 16,308 | |||||||||
S&P 500 Index, strike @ 1,550, expires 08/16/14 | 114 | 4,560 | |||||||||
S&P 500 Index, strike @ 1,550, expires 09/20/14 | 394 | 63,040 | |||||||||
S&P 500 Index, strike @ 1,600, expires 08/16/14 | 886 | 53,160 | |||||||||
S&P 500 Index, strike @ 1,600, expires 09/20/14 | 182 | 39,130 | |||||||||
S&P 500 Index, strike @ 1,650, expires 08/16/14 | 334 | 30,060 |
Number of contracts/ Notional amount | Value | ||||||||||
Options purchased—(concluded) | |||||||||||
Put options & swaptions purchased—(concluded) | |||||||||||
S&P 500 Index, strike @ 1,700, expires 08/16/14 | 302 | $ | 42,280 | ||||||||
S&P 500 Index, strike @ 1,720, expires 08/16/14 | 69 | 11,040 | |||||||||
S&P 500 Index, strike @ 1,740, expires 08/16/14 | 38 | 4,180 | |||||||||
S&P 500 Index, strike @ 1,770, expires 08/16/14 | 693 | 166,320 | |||||||||
S&P 500 Index, strike @ 1,840, expires 09/20/14 | 103 | 165,315 | |||||||||
S&P 500 Index, strike @ 1,840, expires 10/18/14 | 1 | 2,655 | |||||||||
S&P 500 Index, strike @ 1,900, expires 08/16/14 | 136 | 190,400 | |||||||||
S&P 500 Index, strike @ 1,900, expires 09/20/14 | 151 | 463,889 | |||||||||
S&P 500 Index, strike @ 1,920, expires 08/16/14 | 182 | 369,460 | |||||||||
S&P 500 Index, strike @ 1,940, expires 08/16/14 | 302 | 827,480 | |||||||||
US Treasury Note 10 Year Futures, strike @ 117.5, expires 08/22/14 | 114 | 1,781 | |||||||||
US Treasury Note 10 Year Futures, strike @ 118, expires 08/22/14 | 171 | 2,672 | |||||||||
US Treasury Note 10 Year Futures, strike @ 118.5, expires 08/22/14 | 57 | 891 | |||||||||
US Treasury Note 10 Year Futures, strike @ 119.5, expires 08/22/14 | 121 | 1,891 | |||||||||
US Treasury Note 10 Year Futures, strike @ 121.5, expires 08/22/14 | 137 | 4,281 | |||||||||
6 Month EURIBOR Interest Rate Swap, strike @ 4.000%, expires 01/09/34 (counterparty: RBS; receive floating rate); underlying swap terminates 01/11/543 | EUR | 10,000,000 | 493,021 | ||||||||
6 Month EURIBOR Interest Rate Swap, strike @ 4.000%, expires 05/08/34 (counterparty: CITI; receive floating rate); underlying swap terminates 05/10/543 | EUR | 11,500,000 | 574,213 | ||||||||
Total put options & swaptions purchased | 7,383,231 | ||||||||||
Total options purchased (cost—$11,654,348) | 13,166,583 | ||||||||||
Total investments before investments sold short (cost—$669,640,136)—98.92% | 692,123,371 |
215
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Number of shares | Value | ||||||||||
Investments sold short—(4.46)% | |||||||||||
Common stocks—(4.46)% | |||||||||||
Australia—(0.42)% | |||||||||||
Alumina Ltd. | (969,266 | ) | $ | (1,425,009 | ) | ||||||
Iluka Resources Ltd. | (108,159 | ) | (876,273 | ) | |||||||
Newcrest Mining Ltd. | (62,447 | ) | (623,836 | ) | |||||||
Total Australia common stocks | (2,925,118 | ) | |||||||||
Austria—(0.13)% | |||||||||||
Erste Group Bank AG | (33,981 | ) | (872,578 | ) | |||||||
Canada—(0.32)% | |||||||||||
Eldorado Gold Corp. | (67,500 | ) | (500,825 | ) | |||||||
Kinross Gold Corp. | (76,400 | ) | (305,502 | ) | |||||||
Turquoise Hill Resources Ltd. | (181,400 | ) | (630,537 | ) | |||||||
Yamana Gold, Inc. | (96,900 | ) | (826,496 | ) | |||||||
Total Canada common stocks | (2,263,360 | ) | |||||||||
Finland—(0.26)% | |||||||||||
Nokia Oyj | (228,556 | ) | (1,810,706 | ) | |||||||
Germany—0.00%† | |||||||||||
Sky Deutschland AG | (1,463 | ) | (13,159 | ) | |||||||
Japan—(1.36)% | |||||||||||
Advantest Corp. | (11,600 | ) | (129,508 | ) | |||||||
Fast Retailing Co. Ltd. | (5,500 | ) | (1,815,813 | ) | |||||||
Isuzu Motors Ltd. | (111,000 | ) | (770,408 | ) | |||||||
Japan Exchange Group, Inc. | (55,100 | ) | (1,253,606 | ) | |||||||
Mitsubishi Logistics Corp. | (36,000 | ) | (545,822 | ) | |||||||
NKSJ Holdings, Inc. | (19,000 | ) | (479,778 | ) | |||||||
NTT Urban Development Corp. | (121,500 | ) | (1,323,688 | ) | |||||||
Shikoku Electric Power Co., Inc. | (57,100 | ) | (752,900 | ) | |||||||
The Japan Steel Works Ltd. | (293,000 | ) | (1,259,046 | ) | |||||||
Tokyo Tatemono Co. Ltd. | (39,000 | ) | (333,093 | ) | |||||||
Tokyu Fudosan Holdings Corp. | (108,600 | ) | (823,707 | ) | |||||||
Total Japan common stocks | (9,487,369 | ) |
Number of shares | Value | ||||||||||
Investments sold short—(concluded) | |||||||||||
Common stocks—(concluded) | |||||||||||
Jersey—(0.15)% | |||||||||||
Glencore Xstrata PLC | (177,315 | ) | $ | (1,071,448 | ) | ||||||
Norway—(0.13)% | |||||||||||
Norsk Hydro ASA | (154,894 | ) | (918,301 | ) | |||||||
Spain—(0.18)% | |||||||||||
Banco Bilbao Vizcaya Argentaria SA | (102,604 | ) | (1,261,280 | ) | |||||||
United Kingdom—(0.31)% | |||||||||||
Aberdeen Asset Management PLC | (19,114 | ) | (132,697 | ) | |||||||
ARM Holdings PLC | (140,715 | ) | (2,003,284 | ) | |||||||
Schroders PLC | (611 | ) | (24,550 | ) | |||||||
Total United Kingdom common stocks | (2,160,531 | ) | |||||||||
United States—(1.20)% | |||||||||||
American Realty Capital Properties, Inc. | (102,470 | ) | (1,343,382 | ) | |||||||
BioMarin Pharmaceutical, Inc. | (3,687 | ) | (227,930 | ) | |||||||
Cheniere Energy, Inc. | (17,227 | ) | (1,218,983 | ) | |||||||
Cobalt International Energy, Inc. | (96,319 | ) | (1,543,030 | ) | |||||||
NetSuite, Inc. | (8,691 | ) | (732,738 | ) | |||||||
Rackspace Hosting, Inc. | (27,621 | ) | (836,640 | ) | |||||||
Tesla Motors, Inc. | (4,515 | ) | (1,008,200 | ) | |||||||
Vertex Pharmaceuticals, Inc. | (16,603 | ) | (1,476,173 | ) | |||||||
Total United States common stocks | (8,387,076 | ) | |||||||||
Total investments sold short (proceeds—$30,507,447) | (31,170,926 | ) | |||||||||
Other assets in excess of liabilities—5.54% | 38,752,802 | ||||||||||
Net assets—100.00% | $ | 699,705,247 |
For a listing of defined portfolio acronyms, counterparty acronyms and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 232.
Aggregate cost for federal income tax purposes before investments sold short was $671,496,942; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 27,720,586 | |||||
Gross unrealized depreciation | (7,094,157 | ) | |||||
Net unrealized appreciation | $ | 20,626,429 |
Written options
Number of contracts/ Notional amount | Call options written | Expiration date | Premiums received | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||
133 | Apple Flex, Inc., strike @ 95 | 07/17/15 | $ | 112,409 | $ | (125,286 | ) | $ | (12,877 | ) | |||||||||||||
759 | DAX Index, strike @ 10,100 | 08/15/14 | 61,742 | (9,147 | ) | 52,595 | |||||||||||||||||
303 | DAX Index, strike @ 10,150 | 08/15/14 | 38,500 | (2,840 | ) | 35,660 | |||||||||||||||||
303 | DAX Index, strike @ 10,200 | 09/19/14 | 44,798 | (21,504 | ) | 23,294 | |||||||||||||||||
303 | DAX Index, strike @ 10,300 | 09/19/14 | 43,249 | (13,186 | ) | 30,063 |
216
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Written options—(continued)
Number of contracts/ Notional amount | Call options written | Expiration date | Premiums received | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||
228 | DAX Index, strike @ 10,450 | 08/15/14 | $ | 24,951 | $ | (610 | ) | $ | 24,341 | ||||||||||||||
319 | DAX Index, strike @ 9,750 | 08/15/14 | 35,568 | (36,422 | ) | (854 | ) | ||||||||||||||||
333 | DAX Index, strike @ 9,800 | 08/15/14 | 32,255 | (33,518 | ) | (1,263 | ) | ||||||||||||||||
440 | Euro STOXX 50 Index, strike @ 3,225 | 08/15/14 | 39,173 | (42,455 | ) | (3,282 | ) | ||||||||||||||||
121 | Euro STOXX 50 Index, strike @ 3,300 | 08/15/14 | 9,933 | (1,296 | ) | 8,637 | |||||||||||||||||
606 | Euro STOXX 50 Index, strike @ 3,325 | 08/15/14 | 37,612 | (4,058 | ) | 33,554 | |||||||||||||||||
36 | Euro STOXX 50 Index, strike @ 3,350 | 09/19/14 | 4,895 | (2,459 | ) | 2,436 | |||||||||||||||||
303 | Euro STOXX 50 Index, strike @ 3,375 | 09/19/14 | 28,967 | (13,389 | ) | 15,578 | |||||||||||||||||
303 | Euro STOXX 50 Index, strike @ 3,400 | 09/19/14 | 22,835 | (8,520 | ) | 14,315 | |||||||||||||||||
122 | Euro STOXX 50 Index, strike @ 3,450 | 08/15/14 | 14,754 | (163 | ) | 14,591 | |||||||||||||||||
514 | Euro STOXX 50 Index, strike @ 3,475 | 08/15/14 | 42,222 | (688 | ) | 41,534 | |||||||||||||||||
207 | Euro STOXX 50 Index, strike @ 3,525 | 09/19/14 | 31,801 | (832 | ) | 30,969 | |||||||||||||||||
278 | GBP Currency Futures, strike @ 172.5 | 08/08/14 | 27,737 | (1,738 | ) | 25,999 | |||||||||||||||||
393 | GBP Currency Futures, strike @ 172.5 | 09/05/14 | 33,427 | (22,106 | ) | 11,321 | |||||||||||||||||
139 | GBP Currency Futures, strike @ 173 | 08/08/14 | 13,310 | (869 | ) | 12,441 | |||||||||||||||||
185 | GBP Currency Futures, strike @ 173 | 09/05/14 | 15,703 | (6,938 | ) | 8,765 | |||||||||||||||||
179 | GBP Currency Futures, strike @ 174 | 09/05/14 | 16,312 | (3,356 | ) | 12,956 | |||||||||||||||||
303 | GBP Currency Futures, strike @ 174.5 | 09/05/14 | 27,411 | (3,787 | ) | 23,624 | |||||||||||||||||
35 | GBP Currency Futures, strike @ 175.5 | 08/08/14 | 332 | (219 | ) | 113 | |||||||||||||||||
273 | GBP Currency Futures, strike @ 175.5 | 09/05/14 | 29,078 | (1,706 | ) | 27,372 | |||||||||||||||||
30 | JPY Currency Futures, strike @ 100.5 | 08/08/14 | 4,418 | (375 | ) | 4,043 | |||||||||||||||||
138 | JPY Currency Futures, strike @ 101 | 08/08/14 | 21,498 | (1,725 | ) | 19,773 | |||||||||||||||||
212 | JPY Currency Futures, strike @ 101 | 09/05/14 | 30,821 | (11,925 | ) | 18,896 | |||||||||||||||||
318 | JPY Currency Futures, strike @ 101.5 | 08/08/14 | 52,487 | (1,987 | ) | 50,500 | |||||||||||||||||
485 | JPY Currency Futures, strike @ 101.5 | 09/05/14 | 61,690 | (21,219 | ) | 40,471 | |||||||||||||||||
KRW | 6,000,000 | Kospi 200 Index, strike @ 253.20 | 09/11/14 | 46,878 | (102,752 | ) | (55,874 | ) | |||||||||||||||
KRW | 30,512,204 | Kospi 200 Index, strike @ 271.22 | 09/11/14 | 462,394 | (117,787 | ) | 344,607 | ||||||||||||||||
38 | S&P 500 Index, strike @ 1,960 | 08/16/14 | 31,840 | (31,920 | ) | (80 | ) | ||||||||||||||||
272 | S&P 500 Index, strike @ 2,020 | 08/16/14 | 45,061 | (10,064 | ) | 34,997 | |||||||||||||||||
242 | S&P 500 Index, strike @ 2,025 | 08/16/14 | 21,269 | (6,050 | ) | 15,219 | |||||||||||||||||
69 | S&P 500 Index, strike @ 2,030 | 08/16/14 | 11,584 | (1,380 | ) | 10,204 | |||||||||||||||||
69 | S&P 500 Index, strike @ 2,040 | 08/16/14 | 6,754 | (1,380 | ) | 5,374 | |||||||||||||||||
103 | S&P 500 Index, strike @ 2,045 | 09/20/14 | 65,115 | (17,407 | ) | 47,708 | |||||||||||||||||
1 | S&P 500 Index, strike @ 2,050 | 10/18/14 | 678 | (450 | ) | 228 | |||||||||||||||||
121 | US Treasury Note 10 Year Futures, strike @ 126.5 | 08/22/14 | 16,735 | (5,672 | ) | 11,063 | |||||||||||||||||
182 | US Treasury Note 10 Year Futures, strike @ 127 | 08/22/14 | 25,136 | (5,688 | ) | 19,448 | |||||||||||||||||
$ | 1,693,332 | $ | (694,873 | ) | $ | 998,459 | |||||||||||||||||
Put options written | |||||||||||||||||||||||
198 | DAX Index, strike @ 9,050 | 08/15/14 | 47,374 | (47,374 | ) | — | |||||||||||||||||
1,026 | DAX Index, strike @ 9,100 | 08/15/14 | 237,484 | (283,016 | ) | (45,532 | ) | ||||||||||||||||
181 | DAX Index, strike @ 9,150 | 08/15/14 | 29,061 | (59,986 | ) | (30,925 | ) | ||||||||||||||||
228 | DAX Index, strike @ 9,650 | 09/19/14 | 233,841 | (529,854 | ) | (296,013 | ) | ||||||||||||||||
36 | Euro STOXX 50 Index, strike @ 2,775 | 09/19/14 | 5,658 | (5,544 | ) | 114 |
217
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Written options—(continued)
Number of contracts | Put options written | Expiration date | Premiums received | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||
727 | Euro STOXX 50 Index, strike @ 2,900 | 09/19/14 | $ | 132,097 | $ | (221,956 | ) | $ | (89,859 | ) | |||||||||||||
207 | Euro STOXX 50 Index, strike @ 2,925 | 09/19/14 | 36,867 | (72,622 | ) | (35,755 | ) | ||||||||||||||||
153 | Euro STOXX 50 Index, strike @ 2,950 | 08/15/14 | 22,132 | (17,824 | ) | 4,308 | |||||||||||||||||
850 | Euro STOXX 50 Index, strike @ 2,975 | 08/15/14 | 120,938 | (126,339 | ) | (5,401 | ) | ||||||||||||||||
531 | Euro STOXX 50 Index, strike @ 3,000 | 08/15/14 | 53,487 | (99,545 | ) | (46,058 | ) | ||||||||||||||||
90 | Euro STOXX 50 Index, strike @ 3,025 | 08/15/14 | 7,492 | (21,572 | ) | (14,080 | ) | ||||||||||||||||
408 | Euro STOXX 50 Index, strike @ 3,050 | 08/15/14 | 59,640 | (125,110 | ) | (65,470 | ) | ||||||||||||||||
349 | GBP Currency Futures, strike @ 163 | 08/08/14 | 37,956 | (2,181 | ) | 35,775 | |||||||||||||||||
348 | GBP Currency Futures, strike @ 163.5 | 08/08/14 | 37,065 | (2,175 | ) | 34,890 | |||||||||||||||||
457 | GBP Currency Futures, strike @ 165.5 | 09/05/14 | 42,506 | (54,269 | ) | (11,763 | ) | ||||||||||||||||
273 | GBP Currency Futures, strike @ 166 | 09/05/14 | 27,153 | (42,656 | ) | (15,503 | ) | ||||||||||||||||
393 | GBP Currency Futures, strike @ 166.5 | 09/05/14 | 41,900 | (81,056 | ) | (39,156 | ) | ||||||||||||||||
182 | GBP Currency Futures, strike @ 167.5 | 08/08/14 | 9,761 | (13,650 | ) | (3,889 | ) | ||||||||||||||||
182 | GBP Currency Futures, strike @ 168 | 08/08/14 | 11,654 | (25,025 | ) | (13,371 | ) | ||||||||||||||||
233 | JPY Currency Futures, strike @ 94.5 | 08/08/14 | 22,171 | (2,912 | ) | 19,259 | |||||||||||||||||
183 | JPY Currency Futures, strike @ 95 | 08/08/14 | 23,764 | (4,575 | ) | 19,189 | |||||||||||||||||
244 | JPY Currency Futures, strike @ 95.5 | 08/08/14 | 29,252 | (10,674 | ) | 18,578 | |||||||||||||||||
333 | JPY Currency Futures, strike @ 95.5 | 09/05/14 | 78,953 | (83,250 | ) | (4,297 | ) | ||||||||||||||||
243 | JPY Currency Futures, strike @ 96 | 09/05/14 | 37,289 | (94,163 | ) | (56,874 | ) | ||||||||||||||||
91 | JPY Currency Futures, strike @ 97 | 08/08/14 | 8,862 | (32,988 | ) | (24,126 | ) | ||||||||||||||||
38 | S&P 500 Index, strike @ 1,670 | 08/16/14 | 37,920 | (3,420 | ) | 34,500 | |||||||||||||||||
151 | S&P 500 Index, strike @ 1,700 | 09/20/14 | 54,041 | (77,010 | ) | (22,969 | ) | ||||||||||||||||
159 | S&P 500 Index, strike @ 1,740 | 08/16/14 | 37,084 | (17,490 | ) | 19,594 | |||||||||||||||||
250 | S&P 500 Index, strike @ 1,750 | 08/16/14 | 81,782 | (53,750 | ) | 28,032 | |||||||||||||||||
303 | S&P 500 Index, strike @ 1,750 | 09/20/14 | 142,371 | (240,885 | ) | (98,514 | ) | ||||||||||||||||
136 | S&P 500 Index, strike @ 1,760 | 08/16/14 | 56,833 | (30,600 | ) | 26,233 | |||||||||||||||||
121 | S&P 500 Index, strike @ 1,770 | 09/20/14 | 57,220 | (114,950 | ) | (57,730 | ) | ||||||||||||||||
103 | S&P 500 Index, strike @ 1,775 | 09/20/14 | 87,333 | (108,150 | ) | (20,817 | ) | ||||||||||||||||
371 | S&P 500 Index, strike @ 1,780 | 08/16/14 | 120,857 | (105,735 | ) | 15,122 | |||||||||||||||||
1 | S&P 500 Index, strike @ 1,780 | 10/18/14 | 1,098 | (1,640 | ) | (542 | ) | ||||||||||||||||
204 | S&P 500 Index, strike @ 1,790 | 08/16/14 | 61,430 | (63,240 | ) | (1,810 | ) | ||||||||||||||||
530 | S&P 500 Index, strike @ 1,800 | 08/16/14 | 132,967 | (185,500 | ) | (52,533 | ) | ||||||||||||||||
484 | S&P 500 Index, strike @ 1,820 | 08/16/14 | 149,174 | (213,928 | ) | (64,754 | ) | ||||||||||||||||
114 | S&P 500 Index, strike @ 1,830 | 08/16/14 | 39,659 | (56,430 | ) | (16,771 | ) | ||||||||||||||||
265 | S&P 500 Index, strike @ 1,840 | 08/16/14 | 91,051 | (148,400 | ) | (57,349 | ) | ||||||||||||||||
333 | S&P 500 Index, strike @ 1,850 | 08/16/14 | 104,387 | (223,110 | ) | (118,723 | ) | ||||||||||||||||
61 | S&P 500 Index, strike @ 1,880 | 08/16/14 | 109,111 | (68,625 | ) | 40,486 | |||||||||||||||||
68 | S&P 500 Index, strike @ 1,930 | 09/20/14 | 275,257 | (275,257 | ) | — | |||||||||||||||||
50 | S&P 500 Index, strike @ 1,945 | 09/20/14 | 199,894 | (227,000 | ) | (27,106 | ) | ||||||||||||||||
91 | S&P 500 Index, strike @ 1,955 | 09/20/14 | 372,908 | (467,285 | ) | (94,377 | ) | ||||||||||||||||
93 | S&P 500 Index, strike @ 1,960 | 09/20/14 | 339,204 | (505,920 | ) | (166,716 | ) | ||||||||||||||||
203 | S&P 500 Index, strike @ 1,970 | 09/20/14 | 750,672 | (1,236,270 | ) | (485,598 | ) | ||||||||||||||||
11 | S&P 500 Index, strike @ 1,975 | 09/20/14 | 39,577 | (70,180 | ) | (30,603 | ) | ||||||||||||||||
69 | US Treasury Note 10 Year Futures, strike @ 120.5 | 08/22/14 | 904 | (1,078 | ) | (174 | ) |
218
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Written options—(concluded)
Number of contracts | Put options written | Expiration date | Premiums received | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||
91 | US Treasury Note 10 Year Futures, strike @ 122 | 08/22/14 | $ | 16,869 | $ | (4,266 | ) | $ | 12,603 | ||||||||||||||
46 | US Treasury Note 10 Year Futures, strike @ 122.5 | 08/22/14 | 9,956 | (2,875 | ) | 7,081 | |||||||||||||||||
121 | US Treasury Note 10 Year Futures, strike @ 123 | 08/22/14 | 18,625 | (13,234 | ) | 5,391 | |||||||||||||||||
122 | US Treasury Note 10 Year Futures, strike @ 123.5 | 08/22/14 | 17,507 | (22,875 | ) | (5,368 | ) | ||||||||||||||||
$ | 4,800,048 | $ | (6,599,419 | ) | $ | (1,799,371 | ) | ||||||||||||||||
$ | 6,493,380 | $ | (7,294,292 | ) | $ | (800,912 | ) |
Written options activity for the year ended July 31, 2014 was as follows:
Number of contracts | Premiums received | ||||||||||
Options outstanding at July 31, 2013 | 25,386 | $ | 7,499,907 | ||||||||
Options written | 342,548 | 71,381,202 | |||||||||
Options exercised | (2,839 | ) | (3,459,011 | ) | |||||||
Options terminated in closing purchase transactions | (150,257 | ) | (35,984,182 | ) | |||||||
Options expired prior to exercise | (192,705 | ) | (33,453,808 | ) | |||||||
Options outstanding at July 31, 2014 | 22,133 | $ | 5,984,108 | ||||||||
Notional amount | Premiums received | ||||||||||
Options outstanding at July 31, 2013 | KRW | 35,100,000 | $ | 327,600 | |||||||
Options written | 36,512,204 | 509,272 | |||||||||
Options terminated in closing purchase transactions | (35,100,000 | ) | (327,600 | ) | |||||||
Options expired prior to exercise | — | — | |||||||||
Options outstanding at July 31, 2014 | KRW | 36,512,204 | $ | 509,272 |
Foreign exchange written options
Notional amount (000) | Puts written | Counterparty | Expiration date | Premiums received | Current value | Unrealized appreciation (depreciation) | |||||||||||||||||||||
USD | 9,000 | USD Put/JPY Call, strike @ JPY 67 | RBS | 02/09/15 | $ | 423,000 | $ | — | $ | 423,000 | |||||||||||||||||
USD | 1,000 | USD Put/JPY Call, strike @ JPY 68 | RBS | 12/10/15 | 84,275 | (711 | ) | 83,564 | |||||||||||||||||||
$ | 507,275 | $ | (711 | ) | $ | 506,564 |
Foreign exchange written options activity for the year ended July 31, 2014 was as follows:
Premiums received | |||||||
Foreign exchange options outstanding at July 31, 2013 | $ | 3,724,880 | |||||
Foreign exchange options written | 1,183,020 | ||||||
Foreign exchange options terminated in closing purchase transactions | (691,035 | ) | |||||
Foreign exchange options expired prior to exercise | (3,709,590 | ) | |||||
Foreign exchange options outstanding at July 31, 2014 | $ | 507,275 |
219
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Futures contracts
Number of contracts | Currency | Expiration date | Cost | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||
US Treasury futures buy contracts: | |||||||||||||||||||||||||||
38 | USD | US Long Bond Futures | September 2014 | $ | 5,197,415 | $ | 5,221,438 | $ | 24,023 | ||||||||||||||||||
101 | USD | US Treasury Note 2 Year Futures | September 2014 | 22,167,682 | 22,161,609 | (6,073 | ) | ||||||||||||||||||||
95 | USD | US Treasury Note 5 Year Futures | September 2014 | 11,319,317 | 11,289,415 | (29,902 | ) | ||||||||||||||||||||
1,028 | USD | US Treasury Note 10 Year Futures | September 2014 | 128,897,039 | 128,098,438 | (798,601 | ) | ||||||||||||||||||||
Index futures buy contracts: | |||||||||||||||||||||||||||
41 | AUD | ASX SPI 200 Index Futures | September 2014 | 5,219,183 | 5,305,605 | 86,422 | |||||||||||||||||||||
67 | CAD | S&P TSX 60 Index Futures | September 2014 | 10,630,608 | 10,857,562 | 226,954 | |||||||||||||||||||||
39 | CHF | Swiss Market Index Futures | September 2014 | 3,673,718 | 3,596,325 | (77,393 | ) | ||||||||||||||||||||
88 | EUR | Amsterdam Index Futures | August 2014 | 9,526,825 | 9,488,751 | (38,074 | ) | ||||||||||||||||||||
122 | EUR | CAC 40 Index Futures | August 2014 | 7,087,629 | 6,930,261 | (157,368 | ) | ||||||||||||||||||||
54 | EUR | DAX Index Futures | September 2014 | 17,882,967 | 17,014,123 | (868,844 | ) | ||||||||||||||||||||
133 | EUR | EURO STOXX 50 Index Futures | September 2014 | 5,753,616 | 5,551,991 | (201,625 | ) | ||||||||||||||||||||
400 | EUR | EURO STOXX Banks Futures | September 2014 | 3,992,072 | 3,850,765 | (141,307 | ) | ||||||||||||||||||||
21 | EUR | FTSE MIB Index Futures | September 2014 | 3,072,284 | 2,892,062 | (180,222 | ) | ||||||||||||||||||||
14 | EUR | IBEX 35 Index Futures | August 2014 | 1,986,040 | 2,006,085 | 20,045 | |||||||||||||||||||||
76 | GBP | FTSE 100 Index Futures | September 2014 | 8,594,634 | 8,574,367 | (20,267 | ) | ||||||||||||||||||||
31 | HKD | Hang Seng Index Futures | August 2014 | 4,955,680 | 4,930,681 | (24,999 | ) | ||||||||||||||||||||
16 | HKD | H-Shares Index Futures | August 2014 | 1,139,253 | 1,149,825 | 10,572 | |||||||||||||||||||||
65 | JPY | NIKKEI 225 Index Futures | September 2014 | 9,533,330 | 9,892,060 | 358,730 | |||||||||||||||||||||
32 | JPY | TOPIX Index Futures | September 2014 | 3,971,711 | 4,020,950 | 49,239 | |||||||||||||||||||||
8 | KRW | Kospi 200 Index Futures | September 2014 | 1,029,844 | 1,057,159 | 27,315 | |||||||||||||||||||||
38 | SEK | OMX 30 Index Futures | August 2014 | 761,792 | 760,446 | (1,346 | ) | ||||||||||||||||||||
23 | SGD | MSCI Singapore Index Future | August 2014 | 1,399,764 | 1,409,684 | 9,920 | |||||||||||||||||||||
63 | USD | Dow Jones E-Mini Index Futures | September 2014 | 5,347,611 | 5,195,610 | (152,001 | ) | ||||||||||||||||||||
351 | USD | MSCI EAFE Mini Index Futures | September 2014 | 34,472,741 | 33,611,760 | (860,981 | ) | ||||||||||||||||||||
50 | USD | MSCI Taiwan Index Futures | August 2014 | 1,693,073 | 1,662,000 | (31,073 | ) | ||||||||||||||||||||
485 | USD | NASDAQ 100 E-Mini Index Futures | September 2014 | 36,924,079 | 37,682,075 | 757,996 | |||||||||||||||||||||
14 | USD | Russell 2000 Mini Index Futures | September 2014 | 1,608,823 | 1,563,380 | (45,443 | ) | ||||||||||||||||||||
521 | USD | S&P 500 E-Mini Index Futures | September 2014 | 50,573,927 | 50,141,040 | (432,887 | ) | ||||||||||||||||||||
77 | USD | SGX CNX NIFTY Index Futures | August 2014 | 1,206,386 | 1,192,114 | (14,272 | ) | ||||||||||||||||||||
24 | USD | S&P Midcap 400 E-Mini Index Futures | September 2014 | 3,379,438 | 3,282,720 | (96,718 | ) | ||||||||||||||||||||
37 | ZAR | FTSE/JSE Africa Top 40 Tradeable Index Futures | September 2014 | 1,609,239 | 1,593,315 | (15,924 | ) | ||||||||||||||||||||
Interest rate futures buy contracts: | |||||||||||||||||||||||||||
165 | AUD | Australian Bond 3 Year Futures | September 2014 | 16,837,140 | 16,782,238 | (54,902 | ) | ||||||||||||||||||||
63 | AUD | Australian Bond 10 Year Futures | September 2014 | 7,107,380 | 7,077,854 | (29,526 | ) | ||||||||||||||||||||
3 | CAD | Canadian Bankers Acceptance Futures | March 2015 | 679,006 | 678,910 | (96 | ) | ||||||||||||||||||||
64 | CAD | Canada Government Bond 10 Year Futures | September 2014 | 7,998,725 | 8,035,585 | 36,860 | |||||||||||||||||||||
13 | EUR | 3 Month EURIBOR Futures | December 2014 | 4,343,872 | 4,343,209 | (663 | ) | ||||||||||||||||||||
52 | EUR | 3 Month EURIBOR Futures | March 2015 | 17,376,391 | 17,373,707 | (2,684 | ) | ||||||||||||||||||||
72 | EUR | 3 Month EURIBOR Futures | June 2015 | 24,060,624 | 24,055,903 | (4,721 | ) | ||||||||||||||||||||
90 | EUR | 3 Month EURIBOR Futures | September 2015 | 30,072,608 | 30,065,359 | (7,249 | ) | ||||||||||||||||||||
90 | EUR | 3 Month EURIBOR Futures | December 2015 | 30,064,933 | 30,057,827 | (7,106 | ) | ||||||||||||||||||||
91 | EUR | 3 Month EURIBOR Futures | March 2016 | 30,389,550 | 30,381,141 | (8,409 | ) | ||||||||||||||||||||
92 | EUR | 3 Month EURIBOR Futures | June 2016 | 30,708,858 | 30,702,680 | (6,178 | ) |
220
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Futures contracts—(concluded)
Number of contracts | Currency | Expiration date | Cost | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||
Interest rate futures buy contracts—(concluded) | |||||||||||||||||||||||||||
83 | EUR | German Euro BOBL Futures | September 2014 | $ | 14,265,070 | $ | 14,267,192 | $ | 2,122 | ||||||||||||||||||
40 | EUR | German Euro Bund Futures | September 2014 | 7,905,238 | 7,926,642 | 21,404 | |||||||||||||||||||||
23 | EUR | German Euro Buxl 30 Year Futures | September 2014 | 4,190,382 | 4,229,818 | 39,436 | |||||||||||||||||||||
238 | EUR | German Euro Schatz Futures | September 2014 | 35,275,149 | 35,266,672 | (8,477 | ) | ||||||||||||||||||||
148 | GBP | United Kingdom Long Gilt Bond Futures | September 2014 | 27,555,151 | 27,655,425 | 100,274 | |||||||||||||||||||||
11 | JPY | Japan Government Bond 10 Year Futures | September 2014 | 15,596,683 | 15,604,144 | 7,461 | |||||||||||||||||||||
27 | JPY | JGB MINI 10 Year Futures | September 2014 | 3,832,925 | 3,831,032 | (1,893 | ) | ||||||||||||||||||||
13 | USD | 90-Day Eurodollar Futures | June 2016 | 3,199,969 | 3,196,050 | (3,919 | ) | ||||||||||||||||||||
$ | 716,067,374 | $ | 713,515,004 | $ | (2,552,370 | ) | |||||||||||||||||||||
Proceeds | |||||||||||||||||||||||||||
Index futures sell contracts: | |||||||||||||||||||||||||||
72 | AUD | ASX SPI 200 Index Futures | September 2014 | $ | 9,022,792 | $ | 9,321,171 | $ | (298,379 | ) | |||||||||||||||||
14 | CAD | S&P TSX 60 Index Futures | September 2014 | 2,241,585 | 2,271,070 | (29,485 | ) | ||||||||||||||||||||
79 | CHF | Swiss Market Index Futures | September 2014 | 7,541,237 | 7,310,084 | 231,153 | |||||||||||||||||||||
246 | EUR | CAC 40 Index Futures | August 2014 | 14,329,214 | 13,972,335 | 356,879 | |||||||||||||||||||||
56 | HKD | Hang Seng Index Futures | August 2014 | 8,807,581 | 8,947,659 | (140,078 | ) | ||||||||||||||||||||
48 | JPY | TOPIX Index Futures | September 2014 | 5,722,788 | 6,032,966 | (310,178 | ) | ||||||||||||||||||||
258 | USD | Russell 2000 Mini Index Futures | September 2014 | 29,955,735 | 28,810,860 | 1,144,875 | |||||||||||||||||||||
1,153 | USD | S&P 500 E-Mini Index Futures | September 2014 | 112,379,041 | 110,964,720 | 1,414,321 | |||||||||||||||||||||
Interest rate futures sell contracts: | |||||||||||||||||||||||||||
217 | AUD | Australian Bond 10 Year Futures | September 2014 | 24,202,233 | 24,389,768 | (187,535 | ) | ||||||||||||||||||||
24 | CAD | Canadian Bankers Acceptance Futures | December 2014 | 5,432,903 | 5,432,934 | (31 | ) | ||||||||||||||||||||
461 | CAD | Canada Government Bond 10 Year Futures | September 2014 | 57,214,551 | 57,971,709 | (757,158 | ) | ||||||||||||||||||||
33 | CHF | 3 month Euroswiss Interest Rate Futures | December 2014 | 9,080,710 | 9,079,312 | 1,398 | |||||||||||||||||||||
4 | CHF | 3 month Euroswiss Interest Rate Futures | March 2015 | 1,100,702 | 1,100,743 | (41 | ) | ||||||||||||||||||||
313 | EUR | German Euro Bund Futures | September 2014 | 61,322,574 | 61,977,337 | (654,763 | ) | ||||||||||||||||||||
68 | GBP | 90-Day Sterling Pound Futures | December 2014 | 14,227,084 | 14,234,306 | (7,222 | ) | ||||||||||||||||||||
62 | GBP | 90-Day Sterling Pound Futures | June 2015 | 12,908,949 | 12,916,841 | (7,892 | ) | ||||||||||||||||||||
65 | GBP | 90-Day Sterling Pound Futures | September 2015 | 13,502,046 | 13,510,299 | (8,253 | ) | ||||||||||||||||||||
66 | GBP | 90-Day Sterling Pound Futures | March 2015 | 13,775,212 | 13,783,614 | (8,402 | ) | ||||||||||||||||||||
67 | GBP | 90-Day Sterling Pound Futures | December 2015 | 13,886,365 | 13,894,894 | (8,529 | ) | ||||||||||||||||||||
61 | GBP | 90-Day Sterling Pound Futures | March 2016 | 12,618,142 | 12,626,116 | (7,974 | ) | ||||||||||||||||||||
57 | GBP | 90-Day Sterling Pound Futures | June 2016 | 11,769,143 | 11,776,521 | (7,378 | ) | ||||||||||||||||||||
6 | USD | 90-Day Eurodollar Futures | December 2014 | 1,495,639 | 1,495,800 | (161 | ) | ||||||||||||||||||||
41 | USD | 90-Day Eurodollar Futures | March 2015 | 10,208,687 | 10,208,488 | 199 | |||||||||||||||||||||
53 | USD | 90-Day Eurodollar Futures | June 2015 | 13,170,034 | 13,168,513 | 1,521 | |||||||||||||||||||||
56 | USD | 90-Day Eurodollar Futures | September 2015 | 13,883,033 | 13,881,000 | 2,033 | |||||||||||||||||||||
34 | USD | 90-Day Eurodollar Futures | December 2015 | 8,406,611 | 8,406,075 | 536 | |||||||||||||||||||||
11 | USD | 90-Day Eurodollar Futures | March 2016 | 2,711,658 | 2,712,188 | (530 | ) | ||||||||||||||||||||
$ | 490,916,249 | $ | 490,197,323 | $ | 718,926 | ||||||||||||||||||||||
$ | (1,833,444 | ) |
221
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Forward foreign currency contracts
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
BB | AUD | 850,000 | USD | 797,530 | 08/13/14 | $ | 8,062 | ||||||||||||
BB | AUD | 266,968 | USD | 246,861 | 08/13/14 | (1,095 | ) | ||||||||||||
BB | AUD | 477,125 | USD | 439,275 | 09/11/14 | (2,984 | ) | ||||||||||||
BB | AUD | 196,445 | USD | 183,837 | 09/11/14 | 1,747 | |||||||||||||
BB | AUD | 16,559,243 | USD | 15,396,784 | 09/17/14 | 53,983 | |||||||||||||
BB | AUD | 4,118,372 | USD | 3,829,851 | 10/15/14 | 21,403 | |||||||||||||
BB | AUD | 12,646,561 | USD | 11,867,929 | 10/30/14 | 185,238 | |||||||||||||
BB | BRL | 10,431,000 | USD | 4,589,454 | 09/03/14 | 32,105 | |||||||||||||
BB | BRL | 11,235,000 | USD | 4,829,720 | 09/04/14 | (77,465 | ) | ||||||||||||
BB | CAD | 8,399,501 | USD | 7,731,212 | 09/02/14 | 33,511 | |||||||||||||
BB | CAD | 7,280,156 | USD | 6,701,687 | 09/03/14 | 29,963 | |||||||||||||
BB | CAD | 16,915,760 | USD | 15,433,368 | 09/12/14 | (65,413 | ) | ||||||||||||
BB | CAD | 6,008,727 | USD | 5,500,014 | 09/17/14 | (4,738 | ) | ||||||||||||
BB | CAD | 1,660,000 | USD | 1,550,125 | 10/10/14 | 30,184 | |||||||||||||
BB | CAD | 11,252,505 | USD | 10,523,870 | 10/14/14 | 221,763 | |||||||||||||
BB | CHF | 30,754,008 | USD | 34,256,336 | 09/17/14 | 404,131 | |||||||||||||
BB | EUR | 313,977 | USD | 425,549 | 09/03/14 | 5,078 | |||||||||||||
BB | EUR | 28,302,620 | USD | 38,536,486 | 09/17/14 | 632,569 | |||||||||||||
BB | EUR | 3,575,794 | USD | 4,883,604 | 10/10/14 | 94,392 | |||||||||||||
BB | EUR | 19,206,221 | USD | 26,015,006 | 10/22/14 | 290,032 | |||||||||||||
BB | GBP | 4,295,257 | USD | 7,276,375 | 08/13/14 | 25,220 | |||||||||||||
BB | GBP | 1,571,708 | USD | 2,631,957 | 09/11/14 | (20,741 | ) | ||||||||||||
BB | GBP | 4,521,763 | USD | 7,717,393 | 09/17/14 | 86,029 | |||||||||||||
BB | GBP | 475,000 | USD | 808,928 | 10/10/14 | 7,428 | |||||||||||||
BB | HKD | 2,600,000 | USD | 335,448 | 08/12/14 | (39 | ) | ||||||||||||
BB | HKD | 1,776,911 | USD | 229,218 | 09/11/14 | (75 | ) | ||||||||||||
BB | JPY | 221,465,127 | USD | 2,159,519 | 09/11/14 | 6,067 | |||||||||||||
BB | JPY | 36,979,061 | USD | 365,103 | 09/17/14 | 5,517 | |||||||||||||
BB | NOK | 44,492,570 | USD | 7,184,562 | 09/17/14 | 117,934 | |||||||||||||
BB | NZD | 31,080,253 | USD | 26,239,068 | 09/17/14 | (50,716 | ) | ||||||||||||
BB | NZD | 12,064,350 | USD | 10,426,092 | 09/17/14 | 221,248 | |||||||||||||
BB | SEK | 329,353,748 | USD | 49,249,998 | 09/17/14 | 1,514,289 | |||||||||||||
BB | SGD | 24,108,241 | USD | 19,280,624 | 09/17/14 | (44,683 | ) | ||||||||||||
BB | USD | 5,585,203 | AUD | 5,950,105 | 09/17/14 | (72,193 | ) | ||||||||||||
BB | USD | 26,355,729 | CAD | 28,246,383 | 09/17/14 | (478,480 | ) | ||||||||||||
BB | USD | 468,619 | CHF | 416,595 | 09/17/14 | (10,056 | ) | ||||||||||||
BB | USD | 166,585 | EUR | 124,303 | 09/11/14 | (117 | ) | ||||||||||||
BB | USD | 34,620,972 | EUR | 25,432,498 | 09/17/14 | (560,828 | ) | ||||||||||||
BB | USD | 6,688,275 | GBP | 3,924,558 | 09/17/14 | (64,812 | ) | ||||||||||||
BB | USD | 7,366,149 | GBP | 4,388,931 | 09/17/14 | 41,035 | |||||||||||||
BB | USD | 335,481 | HKD | 2,600,000 | 08/12/14 | 6 | |||||||||||||
BB | USD | 258,062 | HKD | 2,000,000 | 10/10/14 | 22 | |||||||||||||
BB | USD | 60,077,430 | JPY | 6,137,099,217 | 09/17/14 | (399,907 | ) | ||||||||||||
BB | USD | 1,702,062 | MXN | 22,200,000 | 08/19/14 | (24,661 | ) | ||||||||||||
BB | USD | 6,148,596 | MXN | 80,000,000 | 08/22/14 | (105,255 | ) |
222
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Forward foreign currency contracts—(continued)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
BB | USD | 49,401,926 | NOK | 298,211,426 | 09/17/14 | $ | (2,037,857 | ) | |||||||||||
BB | USD | 15,217,082 | SEK | 103,220,376 | 09/17/14 | (256,578 | ) | ||||||||||||
BB | USD | 4,601,113 | SGD | 5,749,269 | 09/17/14 | 7,534 | |||||||||||||
BB | USD | 11,235,336 | SGD | 13,945,258 | 09/17/14 | (56,736 | ) | ||||||||||||
BNP | AUD | 900,000 | USD | 828,438 | 08/12/14 | (7,526 | ) | ||||||||||||
BNP | AUD | 2,800,000 | USD | 2,612,333 | 10/10/14 | 22,145 | |||||||||||||
BNP | AUD | 4,109,851 | USD | 3,831,039 | 10/28/14 | 33,897 | |||||||||||||
BNP | AUD | 3,162,341 | USD | 2,949,866 | 10/29/14 | 28,344 | |||||||||||||
BNP | CAD | 1,950,000 | USD | 1,772,969 | 08/12/14 | (14,985 | ) | ||||||||||||
BNP | CAD | 186,080 | USD | 169,605 | 08/13/14 | (1,007 | ) | ||||||||||||
BNP | CAD | 4,600,000 | USD | 4,205,780 | 09/17/14 | (8,401 | ) | ||||||||||||
BNP | DKK | 1,200,000 | USD | 219,893 | 10/10/14 | 4,290 | |||||||||||||
BNP | EUR | 662,000 | USD | 901,919 | 08/12/14 | 15,445 | |||||||||||||
BNP | EUR | 2,660,012 | USD | 3,641,445 | 09/03/14 | 79,221 | |||||||||||||
BNP | EUR | 859,190 | USD | 1,169,938 | 09/11/14 | 19,302 | |||||||||||||
BNP | EUR | 5,073,804 | USD | 6,911,764 | 10/03/14 | 116,383 | |||||||||||||
BNP | EUR | 1,570,000 | USD | 2,125,397 | 10/23/14 | 22,517 | |||||||||||||
BNP | EUR | 11,700,000 | USD | 15,757,092 | 10/31/14 | 85,432 | |||||||||||||
BNP | GBP | 54,482 | USD | 92,383 | 09/03/14 | 422 | |||||||||||||
BNP | JPY | 398,000,000 | USD | 3,905,847 | 08/12/14 | 36,522 | |||||||||||||
BNP | JPY | 580,035,550 | USD | 5,737,878 | 08/28/14 | 98,302 | |||||||||||||
BNP | JPY | 6,910,015 | USD | 67,695 | 09/11/14 | 505 | |||||||||||||
BNP | JPY | 323,000,000 | USD | 3,189,840 | 10/10/14 | 48,472 | |||||||||||||
BNP | MXN | 89,101,630 | USD | 6,825,867 | 10/08/14 | 117,632 | |||||||||||||
BNP | NOK | 1,000,000 | USD | 161,714 | 10/10/14 | 3,018 | |||||||||||||
BNP | NZD | 5,000,000 | USD | 4,299,220 | 10/21/14 | 83,757 | |||||||||||||
BNP | NZD | 4,120,000 | USD | 3,550,974 | 10/22/14 | 77,770 | |||||||||||||
BNP | RUB | 13,595,425 | USD | 371,166 | 08/13/14 | (8,476 | ) | ||||||||||||
BNP | SEK | 2,400,000 | USD | 365,848 | 08/12/14 | 17,944 | |||||||||||||
BNP | SEK | 1,757,449 | USD | 263,632 | 09/11/14 | 8,905 | |||||||||||||
BNP | SEK | 3,800,000 | USD | 564,757 | 10/10/14 | 14,045 | |||||||||||||
BNP | SGD | 450,000 | USD | 360,607 | 10/10/14 | (118 | ) | ||||||||||||
BNP | USD | 11,921,204 | EUR | 8,785,015 | 09/03/14 | (156,524 | ) | ||||||||||||
BNP | USD | 142,222 | GBP | 83,841 | 09/11/14 | (716 | ) | ||||||||||||
BNP | USD | 15,717,319 | INR | 955,000,000 | 10/31/14 | (257,063 | ) | ||||||||||||
BNP | USD | 31,226 | JPY | 3,181,976 | 09/11/14 | (286 | ) | ||||||||||||
BNP | USD | 1,727,248 | MXN | 22,500,000 | 08/20/14 | (27,306 | ) | ||||||||||||
BNP | USD | 7,030,620 | MXN | 91,500,000 | 08/26/14 | (120,602 | ) | ||||||||||||
BNP | USD | 30,306 | SEK | 207,505 | 09/11/14 | (230 | ) | ||||||||||||
CITI | BRL | 50,000 | USD | 22,143 | 09/17/14 | 380 | |||||||||||||
CITI | CAD | 2,981,000 | USD | 2,757,434 | 09/17/14 | 26,462 | |||||||||||||
CITI | CAD | 1,244,500 | USD | 1,139,858 | 09/17/14 | (261 | ) | ||||||||||||
CITI | CZK | 14,650,000 | USD | 724,475 | 09/17/14 | 15,354 | |||||||||||||
CITI | EUR | 7,764,500 | USD | 10,467,043 | 09/17/14 | 68,537 | |||||||||||||
CITI | GBP | 687,500 | USD | 1,170,215 | 09/17/14 | 9,924 |
223
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Forward foreign currency contracts—(continued)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
CITI | ILS | 505,000 | USD | 147,312 | 09/17/14 | $ | (142 | ) | |||||||||||
CITI | JPY | 1,102,219,500 | USD | 10,839,282 | 09/17/14 | 121,233 | |||||||||||||
CITI | KRW | 780,000,000 | USD | 754,879 | 09/17/14 | (2,263 | ) | ||||||||||||
CITI | KRW | 50,000,000 | USD | 48,664 | 09/17/14 | 129 | |||||||||||||
CITI | MXN | 2,950,000 | USD | 222,346 | 09/17/14 | (82 | ) | ||||||||||||
CITI | MYR | 40,000 | USD | 12,536 | 09/17/14 | 65 | |||||||||||||
CITI | NOK | 80,687,500 | USD | 12,951,376 | 09/17/14 | 136,011 | |||||||||||||
CITI | NZD | 8,075,000 | USD | 6,868,567 | 09/17/14 | 38,185 | |||||||||||||
CITI | RUB | 20,700,000 | USD | 581,528 | 09/17/14 | 8,491 | |||||||||||||
CITI | SEK | 72,681,000 | USD | 10,648,883 | 09/17/14 | 114,681 | |||||||||||||
CITI | TWD | 27,050,000 | USD | 901,061 | 09/17/14 | (1,185 | ) | ||||||||||||
CITI | USD | 9,763,937 | AUD | 10,423,000 | 09/17/14 | (106,610 | ) | ||||||||||||
CITI | USD | 986,328 | BRL | 2,230,000 | 09/17/14 | (15,692 | ) | ||||||||||||
CITI | USD | 3,453,405 | CAD | 3,719,500 | 09/17/14 | (45,874 | ) | ||||||||||||
CITI | USD | 848,328 | EUR | 633,500 | 09/17/14 | 79 | |||||||||||||
CITI | USD | 5,086,452 | EUR | 3,747,500 | 09/17/14 | (67,661 | ) | ||||||||||||
CITI | USD | 13,414,879 | GBP | 7,824,500 | 09/17/14 | (209,498 | ) | ||||||||||||
CITI | USD | 13,091 | HUF | 3,000,000 | 09/17/14 | (315 | ) | ||||||||||||
CITI | USD | 1,250,554 | ILS | 4,260,000 | 09/17/14 | (6,683 | ) | ||||||||||||
CITI | USD | 71,636 | INR | 4,350,000 | 09/17/14 | (496 | ) | ||||||||||||
CITI | USD | 3,392,657 | JPY | 344,161,500 | 09/17/14 | (46,009 | ) | ||||||||||||
CITI | USD | 2,376,348 | KRW | 2,450,000,000 | 09/17/14 | 1,856 | |||||||||||||
CITI | USD | 188,295 | MXN | 2,450,000 | 09/17/14 | (3,567 | ) | ||||||||||||
CITI | USD | 679,555 | MYR | 2,180,000 | 09/17/14 | 131 | |||||||||||||
CITI | USD | 9,418 | MYR | 30,000 | 09/17/14 | (65 | ) | ||||||||||||
CITI | USD | 2,154,681 | NOK | 13,417,000 | 09/17/14 | (23,697 | ) | ||||||||||||
CITI | USD | 14,503,899 | NZD | 16,638,500 | 09/17/14 | (429,928 | ) | ||||||||||||
CITI | USD | 512,296 | PHP | 22,400,000 | 09/17/14 | 2,316 | |||||||||||||
CITI | USD | 1,638,038 | PLN | 5,015,000 | 09/17/14 | (35,283 | ) | ||||||||||||
CITI | USD | 1,069,670 | RUB | 37,350,000 | 09/17/14 | (35,714 | ) | ||||||||||||
CITI | USD | 108,051 | SEK | 737,500 | 09/17/14 | (1,159 | ) | ||||||||||||
CITI | USD | 2,655,082 | SGD | 3,300,000 | 09/17/14 | (9,783 | ) | ||||||||||||
CITI | USD | 349,058 | TRY | 745,000 | 09/17/14 | (4,874 | ) | ||||||||||||
CITI | USD | 36,691 | TWD | 1,100,000 | 09/17/14 | (1 | ) | ||||||||||||
CITI | USD | 615,344 | ZAR | 6,550,000 | 09/17/14 | (8,913 | ) | ||||||||||||
CSI | BRL | 50,000 | USD | 22,143 | 09/17/14 | 380 | |||||||||||||
CSI | CAD | 2,981,000 | USD | 2,757,473 | 09/17/14 | 26,501 | |||||||||||||
CSI | CAD | 1,244,500 | USD | 1,139,866 | 09/17/14 | (253 | ) | ||||||||||||
CSI | CLP | 99,000,000 | USD | 176,644 | 09/17/14 | 4,372 | |||||||||||||
CSI | COP | 10,000,000 | USD | 5,379 | 09/17/14 | 76 | |||||||||||||
CSI | CZK | 14,650,000 | USD | 724,447 | 09/17/14 | 15,326 | |||||||||||||
CSI | EUR | 7,764,500 | USD | 10,467,179 | 09/17/14 | 68,673 | |||||||||||||
CSI | GBP | 687,500 | USD | 1,170,226 | 09/17/14 | 9,934 | |||||||||||||
CSI | HUF | 203,000,000 | USD | 886,850 | 09/17/14 | 22,328 | |||||||||||||
CSI | IDR | 6,400,000,000 | USD | 535,565 | 09/17/14 | (12,970 | ) |
224
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Forward foreign currency contracts—(continued)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
CSI | ILS | 505,000 | USD | 147,336 | 09/17/14 | $ | (118 | ) | |||||||||||
CSI | JPY | 1,102,219,500 | USD | 10,839,525 | 09/17/14 | 121,476 | |||||||||||||
CSI | KRW | 780,000,000 | USD | 754,861 | 09/17/14 | (2,281 | ) | ||||||||||||
CSI | KRW | 50,000,000 | USD | 48,664 | 09/17/14 | 129 | |||||||||||||
CSI | MXN | 2,950,000 | USD | 222,342 | 09/17/14 | (86 | ) | ||||||||||||
CSI | MYR | 40,000 | USD | 12,536 | 09/17/14 | 65 | |||||||||||||
CSI | NOK | 80,687,500 | USD | 12,951,991 | 09/17/14 | 136,626 | |||||||||||||
CSI | NZD | 8,075,000 | USD | 6,868,913 | 09/17/14 | 38,531 | |||||||||||||
CSI | RUB | 20,700,000 | USD | 581,530 | 09/17/14 | 8,494 | |||||||||||||
CSI | SEK | 72,681,000 | USD | 10,649,183 | 09/17/14 | 114,981 | |||||||||||||
CSI | TWD | 27,050,000 | USD | 901,066 | 09/17/14 | (1,180 | ) | ||||||||||||
CSI | USD | 9,763,811 | AUD | 10,423,000 | 09/17/14 | (106,485 | ) | ||||||||||||
CSI | USD | 999,555 | BRL | 2,260,000 | 09/17/14 | (15,861 | ) | ||||||||||||
CSI | USD | 3,453,379 | CAD | 3,719,500 | 09/17/14 | (45,848 | ) | ||||||||||||
CSI | USD | 17,827 | CHF | 16,000 | 09/17/14 | (215 | ) | ||||||||||||
CSI | USD | 851,064 | COP | 1,600,000,000 | 09/17/14 | (2,565 | ) | ||||||||||||
CSI | USD | 848,318 | EUR | 633,500 | 09/17/14 | 89 | |||||||||||||
CSI | USD | 5,086,423 | EUR | 3,747,500 | 09/17/14 | (67,632 | ) | ||||||||||||
CSI | USD | 13,415,525 | GBP | 7,824,500 | 09/17/14 | (210,143 | ) | ||||||||||||
CSI | USD | 252,443 | HUF | 58,000,000 | 09/17/14 | (5,437 | ) | ||||||||||||
CSI | USD | 1,250,521 | ILS | 4,260,000 | 09/17/14 | (6,650 | ) | ||||||||||||
CSI | USD | 1,041,933 | INR | 63,150,000 | 09/17/14 | (9,174 | ) | ||||||||||||
CSI | USD | 3,392,594 | JPY | 344,161,500 | 09/17/14 | (45,947 | ) | ||||||||||||
CSI | USD | 2,376,348 | KRW | 2,450,000,000 | 09/17/14 | 1,856 | |||||||||||||
CSI | USD | 1,025,793 | MXN | 13,350,000 | 09/17/14 | (19,213 | ) | ||||||||||||
CSI | USD | 679,555 | MYR | 2,180,000 | 09/17/14 | 131 | |||||||||||||
CSI | USD | 9,418 | MYR | 30,000 | 09/17/14 | (65 | ) | ||||||||||||
CSI | USD | 2,154,537 | NOK | 13,417,000 | 09/17/14 | (23,553 | ) | ||||||||||||
CSI | USD | 14,503,095 | NZD | 16,638,500 | 09/17/14 | (429,124 | ) | ||||||||||||
CSI | USD | 512,296 | PHP | 22,400,000 | 09/17/14 | 2,316 | |||||||||||||
CSI | USD | 1,638,149 | PLN | 5,015,000 | 09/17/14 | (35,394 | ) | ||||||||||||
CSI | USD | 1,069,671 | RUB | 37,350,000 | 09/17/14 | (35,714 | ) | ||||||||||||
CSI | USD | 108,049 | SEK | 737,500 | 09/17/14 | (1,157 | ) | ||||||||||||
CSI | USD | 2,655,191 | SGD | 3,300,000 | 09/17/14 | (9,892 | ) | ||||||||||||
CSI | USD | 995,289 | TRY | 2,135,000 | 09/17/14 | (8,935 | ) | ||||||||||||
CSI | USD | 113,682 | TWD | 3,400,000 | 09/17/14 | (275 | ) | ||||||||||||
CSI | USD | 615,354 | ZAR | 6,550,000 | 09/17/14 | (8,923 | ) | ||||||||||||
CSI | ZAR | 8,900,000 | USD | 822,779 | 09/17/14 | (1,226 | ) | ||||||||||||
MSCI | AUD | 7,042,137 | USD | 6,606,251 | 09/17/14 | 81,430 | |||||||||||||
MSCI | CAD | 10,113,410 | USD | 9,407,699 | 09/17/14 | 142,539 | |||||||||||||
MSCI | CAD | 19,450,655 | USD | 17,800,615 | 09/17/14 | (18,639 | ) | ||||||||||||
MSCI | CHF | 35,416,737 | USD | 39,506,805 | 09/17/14 | 522,142 | |||||||||||||
MSCI | EUR | 40,203,225 | USD | 54,750,237 | 09/17/14 | 908,588 | |||||||||||||
MSCI | GBP | 3,891,015 | USD | 6,659,012 | 09/17/14 | 92,159 | |||||||||||||
MSCI | JPY | 1,522,997,847 | USD | 15,012,949 | 09/17/14 | 203,226 |
225
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Forward foreign currency contracts—(concluded)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
MSCI | NOK | 97,545,079 | USD | 15,957,567 | 09/17/14 | $ | 464,761 | ||||||||||||
MSCI | NZD | 27,809,886 | USD | 23,956,638 | 09/17/14 | 433,152 | |||||||||||||
MSCI | SEK | 174,978,324 | USD | 26,067,507 | 09/17/14 | 706,586 | |||||||||||||
MSCI | SGD | 36,189,267 | USD | 28,945,161 | 09/17/14 | (64,365 | ) | ||||||||||||
MSCI | USD | 17,737,909 | AUD | 19,038,616 | 09/17/14 | (97,870 | ) | ||||||||||||
MSCI | USD | 40,534,521 | CAD | 43,491,599 | 09/17/14 | (690,731 | ) | ||||||||||||
MSCI | USD | 8,748,286 | CAD | 9,557,203 | 09/17/14 | 7,318 | |||||||||||||
MSCI | USD | 15,114,305 | CHF | 13,454,779 | 09/17/14 | (304,075 | ) | ||||||||||||
MSCI | USD | 15,993 | EUR | 11,770 | 09/17/14 | (230 | ) | ||||||||||||
MSCI | USD | 23,094,608 | GBP | 13,750,895 | 09/17/14 | 112,731 | |||||||||||||
MSCI | USD | 13,110,183 | JPY | 1,340,683,088 | 09/17/14 | (73,300 | ) | ||||||||||||
MSCI | USD | 15,273,435 | NOK | 91,858,045 | 09/17/14 | (683,885 | ) | ||||||||||||
MSCI | USD | 39,942,695 | NZD | 47,310,557 | 09/17/14 | 75,781 | |||||||||||||
MSCI | USD | 14,519,329 | NZD | 16,687,969 | 09/17/14 | (403,514 | ) | ||||||||||||
MSCI | USD | 2,542,018 | SEK | 17,378,521 | 09/17/14 | (23,219 | ) | ||||||||||||
MSCI | USD | 1,836,308 | SGD | 2,279,420 | 09/17/14 | (9,112 | ) | ||||||||||||
RBS | CHF | 1,030,000 | USD | 1,174,156 | 08/12/14 | 40,678 | |||||||||||||
RBS | CHF | 1,700,000 | USD | 1,911,357 | 10/10/14 | 39,771 | |||||||||||||
RBS | EUR | 8,949,465 | USD | 12,393,859 | 08/12/14 | 409,777 | |||||||||||||
RBS | EUR | 20,018,128 | USD | 27,887,870 | 09/03/14 | 1,080,074 | |||||||||||||
RBS | GBP | 4,898,523 | USD | 8,257,422 | 08/12/14 | (12,221 | ) | ||||||||||||
RBS | HKD | 109,182 | USD | 14,089 | 09/11/14 | — | |||||||||||||
RBS | HKD | 3,900,000 | USD | 503,022 | 10/10/14 | (243 | ) | ||||||||||||
RBS | JPY | 35,854,495 | USD | 350,938 | 09/11/14 | 2,301 | |||||||||||||
RBS | SGD | 104,106 | USD | 82,785 | 09/11/14 | (667 | ) | ||||||||||||
RBS | USD | 149,888 | JPY | 15,391,548 | 09/11/14 | (226 | ) | ||||||||||||
RBS | USD | 5,463,053 | MXN | 71,100,000 | 08/21/14 | (91,634 | ) | ||||||||||||
$ | 1,875,221 |
Variance swaps3,9
Counterparty | Notional amount (000) | Termination date | Pay/ receive variance | Reference entity | Volatility strike price | Upfront payments received (made) | Value | Unrealized appreciation (depreciation) | |||||||||||||||||||||||||||
BB | EUR | 5 | 08/15/14 | Receive | DJ EuroStoxx 50 Index | 18.95 | % | $ | — | $ | (32,887 | ) | $ | (32,887 | ) | ||||||||||||||||||||
BB | GBP | 7 | 09/19/14 | Receive | FTSE 100 Index | 14.25 | — | (34,799 | ) | (34,799 | ) | ||||||||||||||||||||||||
BNP | EUR | 5 | 08/15/14 | Receive | DJ EuroStoxx 50 Index | 18.35 | — | (29,719 | ) | (29,719 | ) | ||||||||||||||||||||||||
BNP | EUR | 3 | 08/15/14 | Receive | DJ EuroStoxx 50 Index | 18.45 | — | (18,316 | ) | (18,316 | ) | ||||||||||||||||||||||||
BNP | EUR | 1 | 08/15/14 | Receive | DJ EuroStoxx 50 Index | 18.65 | — | (9,487 | ) | (9,487 | ) | ||||||||||||||||||||||||
BNP | EUR | 12 | 10/17/14 | Receive | DJ EuroStoxx 50 Index | 15.90 | — | 42,388 | 42,388 | ||||||||||||||||||||||||||
BNP | EUR | 5 | 11/21/14 | Receive | DJ EuroStoxx 50 Index | 17.50 | — | 9,411 | 9,411 | ||||||||||||||||||||||||||
BNP | GBP | 12 | 08/15/14 | Receive | FTSE 100 Index | 14.15 | — | (83,100 | ) | (83,100 | ) | ||||||||||||||||||||||||
BNP | GBP | 2 | 08/15/14 | Receive | FTSE 100 Index | 14.25 | — | (14,010 | ) | (14,010 | ) | ||||||||||||||||||||||||
BNP | GBP | 12 | 09/19/14 | Receive | FTSE 100 Index | 13.90 | — | (32,619 | ) | (32,619 | ) | ||||||||||||||||||||||||
BNP | GBP | 5 | 09/19/14 | Receive | FTSE 100 Index | 14.10 | — | (18,932 | ) | (18,932 | ) | ||||||||||||||||||||||||
BNP | GBP | 5 | 09/19/14 | Receive | FTSE 100 Index | 14.40 | — | (25,495 | ) | (25,495 | ) | ||||||||||||||||||||||||
BNP | GBP | 5 | 10/17/14 | Receive | FTSE 100 Index | 13.35 | — | 3,472 | 3,472 |
226
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Variance swaps3,9—(concluded)
Counterparty | Notional amount (000) | Termination date | Pay/ receive variance | Reference entity | Volatility strike price | Upfront payments received (made) | Value | Unrealized appreciation (depreciation) | |||||||||||||||||||||||||||
BNP | GBP | 3 | 10/17/14 | Receive | FTSE 100 Index | 14.30 | % | $ | — | $ | (5,845 | ) | $ | (5,845 | ) | ||||||||||||||||||||
BNP | GBP | 5 | 11/21/14 | Receive | FTSE 100 Index | 14.10 | — | 9,325 | 9,325 | ||||||||||||||||||||||||||
BNP | GBP | 9 | 12/19/14 | Pay | FTSE 100 Index | 18.10 | — | 75,646 | 75,646 | ||||||||||||||||||||||||||
BNP | GBP | 5 | 12/19/14 | Pay | FTSE 100 Index | 25.00 | — | 80,451 | 80,451 | ||||||||||||||||||||||||||
BNP | GBP | 10 | 12/19/14 | Pay | FTSE 100 Index | 25.20 | — | 163,025 | 163,025 | ||||||||||||||||||||||||||
BNP | GBP | 13 | 12/19/14 | Pay | FTSE 100 Index | 26.90 | — | 235,035 | 235,035 | ||||||||||||||||||||||||||
BNP | GBP | 2 | 12/19/14 | Pay | FTSE 100 Index | 28.20 | — | 46,252 | 46,252 | ||||||||||||||||||||||||||
BNP | GBP | 4 | 12/19/14 | Pay | FTSE 100 Index | 28.50 | — | 81,179 | 81,179 | ||||||||||||||||||||||||||
BNP | GBP | 38 | 12/18/15 | Pay | FTSE 100 Index | 16.60 | — | (92,149 | ) | (92,149 | ) | ||||||||||||||||||||||||
BNP | GBP | 3 | 12/18/15 | Pay | FTSE 100 Index | 16.85 | — | (2,946 | ) | (2,946 | ) | ||||||||||||||||||||||||
BNP | GBP | 17 | 12/18/15 | Pay | FTSE 100 Index | 17.00 | — | (3,435 | ) | (3,435 | ) | ||||||||||||||||||||||||
BNP | HKD | 194 | 12/30/14 | Receive | China Enterprises Index (Hang Seng) | 28.90 | — | (182,024 | ) | (182,024 | ) | ||||||||||||||||||||||||
BNP | HKD | 85 | 12/30/14 | Receive | China Enterprises Index (Hang Seng) | 33.30 | — | (116,612 | ) | (116,612 | ) | ||||||||||||||||||||||||
BNP | HKD | 15 | 12/30/14 | Receive | China Enterprises Index (Hang Seng) | 33.50 | — | (20,767 | ) | (20,767 | ) | ||||||||||||||||||||||||
BNP | HKD | 129 | 12/30/14 | Receive | China Enterprises Index (Hang Seng) | 33.65 | — | (180,433 | ) | (180,433 | ) | ||||||||||||||||||||||||
BNP | HKD | 53 | 12/30/14 | Receive | China Enterprises Index (Hang Seng) | 34.00 | — | (75,369 | ) | (75,369 | ) | ||||||||||||||||||||||||
BNP | HKD | 41 | 12/30/14 | Receive | China Enterprises Index (Hang Seng) | 34.25 | — | (58,940 | ) | (58,940 | ) | ||||||||||||||||||||||||
BNP | HKD | 500 | 12/30/15 | Receive | China Enterprises Index (Hang Seng) | 25.60 | — | 15,771 | 15,771 | ||||||||||||||||||||||||||
BNP | HKD | 40 | 12/30/15 | Receive | China Enterprises Index (Hang Seng) | 25.85 | — | (4,235 | ) | (4,235 | ) | ||||||||||||||||||||||||
BNP | HKD | 220 | 12/30/15 | Receive | China Enterprises Index (Hang Seng) | 26.00 | — | (37,232 | ) | (37,232 | ) | ||||||||||||||||||||||||
BNP | HKD | 112 | 12/30/14 | Receive | Hang Seng Index | 22.45 | — | (84,000 | ) | (84,000 | ) | ||||||||||||||||||||||||
BNP | HKD | 155 | 12/30/14 | Receive | Hang Seng Index | 23.00 | — | (120,392 | ) | (120,392 | ) | ||||||||||||||||||||||||
BNP | JPY | 750 | 11/14/14 | Receive | Nikkei 225 Index | 19.00 | — | 1,930 | 1,930 | ||||||||||||||||||||||||||
BNP | KRW | 8,000 | 10/08/14 | Receive | Kospi 2 Index | 13.25 | — | 7,176 | 7,176 | ||||||||||||||||||||||||||
BNP | KRW | 38,614 | 12/11/14 | Receive | Kospi 2 Index | 22.70 | — | (285,209 | ) | (285,209 | ) | ||||||||||||||||||||||||
BNP | KRW | 2,500 | 12/10/15 | Receive | Kospi 2 Index | 19.50 | — | 1,310 | 1,310 | ||||||||||||||||||||||||||
BNP | KRW | 6,000 | 12/10/15 | Receive | Kospi 2 Index | 19.70 | — | 3,012 | 3,012 | ||||||||||||||||||||||||||
BNP | KRW | 55,000 | 12/10/15 | Receive | Kospi 2 Index | 20.05 | — | (39,713 | ) | (39,713 | ) | ||||||||||||||||||||||||
BNP | KRW | 43,000 | 12/10/15 | Receive | Kospi 2 Index | 22.50 | — | (155,229 | ) | (155,229 | ) | ||||||||||||||||||||||||
BNP | KRW | 40,000 | 12/08/16 | Receive | Kospi 2 Index | 21.00 | — | 19,396 | 19,396 | ||||||||||||||||||||||||||
BNP | USD | 10 | 08/15/14 | Receive | S&P 500 Index | 14.40 | — | (34,938 | ) | (34,938 | ) | ||||||||||||||||||||||||
BNP | USD | 6 | 09/19/14 | Receive | S&P 500 Index | 12.80 | — | 3,886 | 3,886 | ||||||||||||||||||||||||||
BNP | USD | 7 | 10/17/14 | Receive | S&P 500 Index | 13.50 | — | 9,901 | 9,901 | ||||||||||||||||||||||||||
BNP | USD | 13 | 10/17/14 | Receive | S&P 500 Index | 13.90 | — | 10,765 | 10,765 | ||||||||||||||||||||||||||
BNP | USD | 25 | 12/19/14 | Pay | S&P 500 Index | 20.80 | — | 162,878 | 162,878 | ||||||||||||||||||||||||||
BNP | USD | 10 | 12/19/14 | Pay | S&P 500 Index | 21.00 | — | 66,812 | 66,812 | ||||||||||||||||||||||||||
BNP | USD | 20 | 12/19/14 | Pay | S&P 500 Index | 21.40 | — | 139,570 | 139,570 | ||||||||||||||||||||||||||
BNP | USD | 25 | 12/19/14 | Pay | S&P 500 Index | 21.60 | — | 178,334 | 178,334 | ||||||||||||||||||||||||||
BNP | USD | 6 | 12/18/15 | Pay | S&P 500 Index | 17.85 | — | (9,632 | ) | (9,632 | ) | ||||||||||||||||||||||||
BNP | USD | 52 | 12/18/15 | Pay | S&P 500 Index | 18.20 | — | (11,976 | ) | (11,976 | ) | ||||||||||||||||||||||||
BNP | USD | 40 | 12/18/15 | Pay | S&P 500 Index | 20.60 | — | 113,401 | 113,401 | ||||||||||||||||||||||||||
BNP | USD | 26 | 12/16/16 | Pay | S&P 500 Index | 19.20 | �� | (45,052 | ) | (45,052 | ) | ||||||||||||||||||||||||
CITI | GBP | 17 | 08/15/14 | Receive | FTSE 100 Index | 14.60 | — | (129,265 | ) | (129,265 | ) | ||||||||||||||||||||||||
CITI | HKD | 43 | 12/30/15 | Receive | Hang Seng Index | 20.80 | — | 2,785 | 2,785 | ||||||||||||||||||||||||||
CITI | USD | 27 | 09/19/14 | Receive | S&P 500 Index | 13.50 | — | (16,995 | ) | (16,995 | ) | ||||||||||||||||||||||||
CITI | USD | 32 | 12/18/15 | Pay | S&P 500 Index | 18.00 | — | (32,538 | ) | (32,538 | ) | ||||||||||||||||||||||||
$ | — | $ | (561,179 | ) | $ | (561,179 | ) |
227
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Portfolio of investments—July 31, 2014
Centrally cleared interest rate swap agreements
Notional amount (000) | Termination date | Payments made by the Portfolio10 | Payments received by the Portfolio10 | Value | Unrealized appreciation (depreciation) | ||||||||||||||||||
AUD | 11,250 | 12/04/17 | 6 Month AUD Bank Bill Rate | 4.215 | % | $ | 188,471 | $ | 188,471 | ||||||||||||||
AUD | 22,500 | 12/07/17 | 6 Month AUD Bank Bill Rate | 4.200 | 369,996 | 369,996 | |||||||||||||||||
AUD | 11,250 | 12/11/17 | 6 Month AUD Bank Bill Rate | 4.200 | 184,014 | 184,014 | |||||||||||||||||
AUD | 10,000 | 03/21/18 | 6 Month AUD Bank Bill Rate | 4.015 | 113,523 | 113,523 | |||||||||||||||||
AUD | 10,000 | 03/21/18 | 6 Month AUD Bank Bill Rate | 4.015 | 113,523 | 113,523 | |||||||||||||||||
AUD | 10,000 | 03/21/18 | 6 Month AUD Bank Bill Rate | 4.063 | 121,597 | 121,597 | |||||||||||||||||
AUD | 40,000 | 04/04/18 | 6 Month AUD Bank Bill Rate | 4.078 | 486,561 | 486,561 | |||||||||||||||||
EUR | 5,719 | 06/26/16 | 1.380 | % | 6 Month EURIBOR | (78,982 | ) | (18,814 | ) | ||||||||||||||
EUR | 5,719 | 06/26/16 | 6 Month EURIBOR | 1.380 | 78,982 | 78,982 | |||||||||||||||||
EUR | 5,719 | 06/29/16 | 1.250 | 6 Month EURIBOR | (68,786 | ) | (17,305 | ) | |||||||||||||||
EUR | 5,719 | 06/29/16 | 1.250 | 6 Month EURIBOR | (68,786 | ) | (17,803 | ) | |||||||||||||||
EUR | 5,719 | 06/29/16 | 6 Month EURIBOR | 1.250 | 68,786 | 68,786 | |||||||||||||||||
EUR | 5,719 | 06/29/16 | 6 Month EURIBOR | 1.250 | 68,786 | 68,786 | |||||||||||||||||
EUR | 5,098 | 08/17/16 | 1.204 | 6 Month EURIBOR | (57,072 | ) | (16,759 | ) | |||||||||||||||
EUR | 7,765 | 08/17/16 | 1.208 | 6 Month EURIBOR | (87,292 | ) | (26,681 | ) | |||||||||||||||
EUR | 7,765 | 08/17/16 | 1.220 | 6 Month EURIBOR | (88,588 | ) | (26,098 | ) | |||||||||||||||
EUR | 7,765 | 08/17/16 | 1.210 | 6 Month EURIBOR | (87,551 | ) | (26,063 | ) | |||||||||||||||
EUR | 5,719 | 08/17/16 | 1.200 | 6 Month EURIBOR | (63,716 | ) | (18,898 | ) | |||||||||||||||
EUR | 7,765 | 08/17/16 | 6 Month EURIBOR | 1.220 | 88,588 | 88,588 | |||||||||||||||||
EUR | 7,765 | 08/17/16 | 6 Month EURIBOR | 1.210 | 87,551 | 87,551 | |||||||||||||||||
EUR | 5,719 | 08/17/16 | 6 Month EURIBOR | 1.200 | 63,716 | 63,716 | |||||||||||||||||
EUR | 5,098 | 08/17/16 | 6 Month EURIBOR | 1.204 | 57,072 | 57,072 | |||||||||||||||||
EUR | 7,765 | 08/17/16 | 6 Month EURIBOR | 1.208 | 87,292 | 87,292 | |||||||||||||||||
EUR | 5,098 | 08/19/16 | 1.244 | 6 Month EURIBOR | (59,746 | ) | (18,836 | ) | |||||||||||||||
EUR | 5,098 | 08/19/16 | 1.239 | 6 Month EURIBOR | (59,405 | ) | (18,121 | ) | |||||||||||||||
EUR | 5,098 | 08/19/16 | 1.207 | 6 Month EURIBOR | (57,227 | ) | (17,153 | ) | |||||||||||||||
EUR | 5,098 | 08/19/16 | 1.202 | 6 Month EURIBOR | (56,886 | ) | (16,938 | ) | |||||||||||||||
EUR | 4,546 | 08/19/16 | 1.270 | 6 Month EURIBOR | (54,855 | ) | (17,188 | ) | |||||||||||||||
EUR | 5,098 | 08/19/16 | 1.212 | 6 Month EURIBOR | (57,567 | ) | (18,119 | ) | |||||||||||||||
EUR | 5,098 | 08/19/16 | 1.255 | 6 Month EURIBOR | (60,494 | ) | (19,335 | ) | |||||||||||||||
EUR | 5,098 | 08/19/16 | 1.252 | 6 Month EURIBOR | (60,290 | ) | (19,256 | ) | |||||||||||||||
EUR | 5,098 | 08/19/16 | 6 Month EURIBOR | 1.244 | 59,746 | 59,746 | |||||||||||||||||
EUR | 5,098 | 08/19/16 | 6 Month EURIBOR | 1.207 | 57,227 | 57,227 | |||||||||||||||||
EUR | 5,098 | 08/19/16 | 6 Month EURIBOR | 1.239 | 59,405 | 59,405 | |||||||||||||||||
EUR | 5,098 | 08/19/16 | 6 Month EURIBOR | 1.212 | 57,567 | 57,567 | |||||||||||||||||
EUR | 5,098 | 08/19/16 | 6 Month EURIBOR | 1.202 | 56,886 | 56,886 | |||||||||||||||||
EUR | 5,098 | 08/19/16 | 6 Month EURIBOR | 1.255 | 60,494 | 60,494 | |||||||||||||||||
EUR | 5,098 | 08/19/16 | 6 Month EURIBOR | 1.252 | 60,290 | 60,290 | |||||||||||||||||
EUR | 4,546 | 08/19/16 | 6 Month EURIBOR | 1.270 | 54,855 | 54,855 | |||||||||||||||||
EUR | 21,500 | 11/28/24 | 6 Month EURIBOR | 2.263 | 2,247,290 | 2,247,290 | |||||||||||||||||
EUR | 745 | 01/16/25 | 6 Month EURIBOR | 2.402 | 88,083 | 88,083 | |||||||||||||||||
EUR | 1,000 | 06/06/27 | 2.784 | 6 Month EURIBOR | (91,164 | ) | (91,164 | ) | |||||||||||||||
EUR | 1,000 | 06/06/27 | 6 Month EURIBOR | 2.784 | 91,164 | 121,611 | |||||||||||||||||
EUR | 600 | 08/21/27 | 6 Month EURIBOR | 3.216 | 82,720 | 82,720 | |||||||||||||||||
EUR | 600 | 08/21/27 | 6 Month EURIBOR | 3.219 | 82,940 | 82,940 | |||||||||||||||||
EUR | 600 | 08/21/27 | 6 Month EURIBOR | 3.227 | 83,525 | 83,525 | |||||||||||||||||
EUR | 700 | 08/21/27 | 6 Month EURIBOR | 3.219 | 96,763 | 96,763 | |||||||||||||||||
EUR | 700 | 08/21/27 | 3.219 | 6 Month EURIBOR | (96,763 | ) | (90,414 | ) | |||||||||||||||
EUR | 600 | 08/21/27 | 3.219 | 6 Month EURIBOR | (82,940 | ) | (77,828 | ) | |||||||||||||||
EUR | 600 | 08/21/27 | 3.216 | 6 Month EURIBOR | (82,720 | ) | (77,608 | ) | |||||||||||||||
EUR | 600 | 08/21/27 | 3.227 | 6 Month EURIBOR | (83,525 | ) | (77,135 | ) | |||||||||||||||
EUR | 1,420 | 11/16/35 | 6 Month EURIBOR | 3.006 | 278,369 | 278,369 | |||||||||||||||||
EUR | 2,230 | 11/16/35 | 6 Month EURIBOR | 2.960 | 414,037 | 414,037 | |||||||||||||||||
EUR | 2,230 | 11/18/35 | 6 Month EURIBOR | 2.950 | 408,666 | 408,666 |
228
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Centrally cleared interest rate swap agreements—(concluded)
Notional amount (000) | Termination date | Payments made by the Portfolio10 | Payments received by the Portfolio10 | Value | Unrealized appreciation (depreciation) | ||||||||||||||||||
EUR | 2,230 | 11/19/35 | 6 Month EURIBOR | 2.915 | % | $ | 390,903 | $ | 390,903 | ||||||||||||||
EUR | 3,917 | 11/20/35 | 6 Month EURIBOR | 2.925 | 695,218 | 695,218 | |||||||||||||||||
EUR | 574 | 11/25/35 | 6 Month EURIBOR | 2.960 | 106,155 | 106,155 | |||||||||||||||||
EUR | 300 | 06/06/47 | 6 Month EURIBOR | 2.790 | 43,104 | 43,104 | |||||||||||||||||
EUR | 300 | 06/06/47 | 2.790 | % | 6 Month EURIBOR | (43,104 | ) | (64,095 | ) | ||||||||||||||
EUR | 348 | 08/21/47 | 3.027 | 6 Month EURIBOR | (72,203 | ) | (72,203 | ) | |||||||||||||||
EUR | 348 | 08/21/47 | 3.030 | 6 Month EURIBOR | (72,507 | ) | (72,507 | ) | |||||||||||||||
EUR | 348 | 08/21/47 | 3.038 | 6 Month EURIBOR | (73,318 | ) | (73,318 | ) | |||||||||||||||
EUR | 406 | 08/21/47 | 3.030 | 6 Month EURIBOR | (84,592 | ) | (84,592 | ) | |||||||||||||||
EUR | 406 | 08/21/47 | 6 Month EURIBOR | 3.030 | 84,592 | 90,497 | |||||||||||||||||
EUR | 348 | 08/21/47 | 6 Month EURIBOR | 3.030 | 72,507 | 75,145 | |||||||||||||||||
EUR | 348 | 08/21/47 | 6 Month EURIBOR | 3.027 | 72,203 | 74,841 | |||||||||||||||||
EUR | 348 | 08/21/47 | 6 Month EURIBOR | 3.038 | 73,318 | 74,637 | |||||||||||||||||
EUR | 890 | 11/16/55 | 2.986 | 6 Month EURIBOR | (257,456 | ) | (257,456 | ) | |||||||||||||||
EUR | 1,391 | 11/16/55 | 2.938 | 6 Month EURIBOR | (378,124 | ) | (378,124 | ) | |||||||||||||||
EUR | 1,391 | 11/18/55 | 2.928 | 6 Month EURIBOR | (372,811 | ) | (372,811 | ) | |||||||||||||||
EUR | 1,391 | 11/19/55 | 2.891 | 6 Month EURIBOR | (353,917 | ) | (353,917 | ) | |||||||||||||||
EUR | 2,449 | 11/20/55 | 2.903 | 6 Month EURIBOR | (633,537 | ) | (633,537 | ) | |||||||||||||||
EUR | 597 | 11/25/55 | 2.900 | 6 Month EURIBOR | (153,523 | ) | (153,523 | ) | |||||||||||||||
GBP | 50 | 02/17/44 | 3.340 | 6 Month GBP LIBOR | (5,278 | ) | (5,278 | ) | |||||||||||||||
GBP | 5,850 | 02/19/44 | 3.294 | 6 Month GBP LIBOR | (523,265 | ) | (523,265 | ) | |||||||||||||||
JPY | 1,250,000 | 11/28/24 | 0.950 | 6 Month JPY LIBOR | (284,628 | ) | (284,628 | ) | |||||||||||||||
JPY | 92,900 | 01/16/25 | 1.015 | 6 Month JPY LIBOR | (25,318 | ) | (25,318 | ) | |||||||||||||||
USD | 16,500 | 11/28/24 | 3.250 | 3 Month USD LIBOR | (647,573 | ) | (647,573 | ) | |||||||||||||||
USD | 780 | 01/16/25 | 3.391 | 3 Month USD LIBOR | (36,667 | ) | (36,667 | ) | |||||||||||||||
$ | 2,534,309 | $ | 3,333,104 |
Centrally cleared credit default swaps—buy protection11
Referenced obligations12 | Notional amount (000) | Termination date | Payments made by the Portfolio10 | Upfront payments received | Value | Unrealized depreciation | |||||||||||||||||||||
CDX North America High Yield Series 20 Index | USD | 990 | 06/20/18 | 5.000 | % | $ | 49,713 | $ | (84,818 | ) | $ | (35,105 | ) | ||||||||||||||
CDX North America High Yield Series 21 Index | USD | 24,156 | 12/20/18 | 5.000 | 1,700,208 | (1,923,383 | ) | (223,175 | ) | ||||||||||||||||||
$ | 1,749,921 | $ | (2,008,201 | ) | $ | (258,280 | ) |
Centrally cleared credit default swap agreements—sell protection13
Referenced obligations12 | Notional amount (000) | Termination date | Payments received by the Portfolio10 | Upfront payments made | Value | Unrealized appreciation (depreciation) | Credit spread14 | ||||||||||||||||||||||||
CDX North America High Yield Series 20 Index | USD | 990 | 06/20/18 | 5.000 | % | $ | (39,584 | ) | $ | 84,818 | $ | 45,234 | 2.78 | ||||||||||||||||||
CDX North America High Yield Series 21 Index | USD | 24,156 | 12/20/18 | 5.000 | (915,664 | ) | 1,923,383 | 1,007,719 | 3.12 | ||||||||||||||||||||||
CDX North America High Yield Series 22 Index | USD | 14,741 | 06/20/19 | 5.000 | (1,084,651 | ) | 1,082,184 | (2,467 | ) | 3.42 | |||||||||||||||||||||
$ | (2,039,899 | ) | $ | 3,090,385 | $ | 1,050,486 |
229
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
Common stocks | $ | 132,944,371 | $ | 91,229,322 | $ | 0 | $ | 224,173,693 | |||||||||||
Warrants | 1,046 | — | — | 1,046 | |||||||||||||||
Corporate notes | — | 18,490,519 | — | 18,490,519 | |||||||||||||||
Non-US government obligations | — | 23,635,169 | — | 23,635,169 | |||||||||||||||
Time deposits | — | 110,804,544 | — | 110,804,544 | |||||||||||||||
Short-term US government obligations | — | 197,345,817 | — | 197,345,817 | |||||||||||||||
Repurchase agreement | — | 104,506,000 | — | 104,506,000 | |||||||||||||||
Options and swaptions purchased | 9,845,906 | 3,320,677 | — | 13,166,583 | |||||||||||||||
Futures contracts | 3,741,977 | 1,189,711 | — | 4,931,688 | |||||||||||||||
Forward foreign currency contracts | — | 11,449,892 | — | 11,449,892 | |||||||||||||||
Swap agreements | — | 12,629,981 | — | 12,629,981 | |||||||||||||||
Total | $ | 146,533,300 | $ | 574,601,632 | $ | 0 | $ | 721,134,932 | |||||||||||
Liabilities | |||||||||||||||||||
Investments sold short | $ | (10,650,436 | ) | $ | (20,520,490 | ) | $ | — | $ | (31,170,926 | ) | ||||||||
Written options | (6,948,467 | ) | (345,825 | ) | — | (7,294,292 | ) | ||||||||||||
Foreign exchange written options | — | (711 | ) | — | (711 | ) | |||||||||||||
Futures contracts | (4,289,128 | ) | (2,476,004 | ) | — | (6,765,132 | ) | ||||||||||||
Forward foreign currency contracts | — | (9,574,671 | ) | — | (9,574,671 | ) | |||||||||||||
Swap agreements | — | (9,574,667 | ) | — | (9,574,667 | ) | |||||||||||||
Total | $ | (21,888,031 | ) | $ | (42,492,368 | ) | $ | — | $ | (64,380,399 | ) |
At July 31, 2014, $89,943,029 of foreign investments and $(20,520,490) of foreign investments sold short were classified within Level 2 of the fair value hierarchy pursuant to the Portfolio's fair valuation procedures for foreign portfolio holdings as discussed in the Notes to financial statements.
The following is a rollforward of the Portfolio's investments that were valued using unobservable inputs (Level 3) for the year ended July 31, 2014:
Common stocks | Rights | Total | |||||||||||||
Beginning balance | $ | 0 | $ | 0 | $ | 0 | |||||||||
Purchases | — | — | — | ||||||||||||
Sales | — | 0 | 0 | ||||||||||||
Accrued discounts/(premiums) | — | — | — | ||||||||||||
Total realized gain/(loss) | — | 0 | 0 | ||||||||||||
Net change in unrealized appreciation/depreciation | — | — | — | ||||||||||||
Transfers into Level 3 | — | — | — | ||||||||||||
Transfers out of Level 3 | — | — | — | ||||||||||||
Ending balance | $ | 0 | $ | — | $ | 0 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investment held at July 31, 2014, was $0.
230
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Portfolio of investments—July 31, 2014
Portfolio footnotes
* Non-income producing security.
† Amount represents less than 0.005%.
1 Security, or portion thereof, pledged as collateral for investments sold short, written options or futures.
2 Security is being fair valued by a valuation committee under the direction of the board of trustees.
3 Illiquid investments as of July 31, 2014.
4 Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. At July 31, 2014, the value of these securities amounted to 1.98% of net assets.
5 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2014 and changes periodically.
6 Perpetual investment. Date shown reflects the next call date.
7 Step bond that converts to the noted fixed rate at a designated future date.
8 Rate shown is the discount rate at date of purchase.
9 At the maturity date, a net cash flow is exchanged, where the payoff amount is equivalent to the difference between the realized price variance of the reference entity and the strike price multiplied by the notional amount. As a receiver of the realized price variance, the Portfolio would receive the payoff amount when the realized price variance of the reference entity is greater than the strike price and would owe the payoff amount when the variance is less than the strike price. As a payer of the realized price variance, the Portfolio would owe the payoff amount when the realized price variance of the reference entity is greater than the strike price and would receive the payoff amount when the variance is less than the strike price.
10 Payments made/received are based on the notional amount.
11 If the Portfolio is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) receive from the seller of protection an amount equal to the notional value of the swap and deliver the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.
12 Payments from/to the counterparty will be received/made upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation.
13 If the Portfolio is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Portfolio will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.
14 Credit spreads, represented in absolute terms, utilized in determining the market value as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity's credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. A credit spread identified as "Defaulted" indicates a credit event has occurred for the referenced entity. Credit spreads are unaudited.
See accompanying notes to financial statements.
231
PACE Select Advisors Trust
Portfolio acronyms:
ABS Asset-backed Security
ADR American Depositary Receipt
AGM Assured Guaranty Municipal Corporation
AMBAC American Municipal Bond Assurance Corporation
ARM Adjustable Rate Mortgage—The interest rate shown is the current rate as of July 31, 2014.
ASX Australian Securities Exchange
BHAC Berkshire Hathaway Assurance Corporation
BOBL Bundesobligationen
CAC French Stock Market Index
CDO Collateralized Debt Obligation
CLO Collateralized Loan Obligation
CETIP Central of Custody and Settlement of Private Bonds
COFI Cost of Funds Index
DAX German Stock Index
EURIBOR Euro Interbank Offered Rate
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Administration
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FTSE London Stock Exchange Index
GDR Global Depositary Receipt
GMAC General Motors Acceptance Corporation
GMTN Global Medium Term Note
GNMA Government National Mortgage Association
GTD Guaranteed
IBC Insured Bond Certificate
IBEX Spanish Exchange Index
JGB Japan Government Bond
JSE Johannesburg Stock Exchange
KOSPI Korea Composite Stock Price Index
LIBOR London Interbank Offered Rate
MTN Medium Term Note
NATL-RE National Reinsurance
NCUA National Credit Union Administration
NIKKEI Tokyo Stock Exchange Index
OAT Obligation Assimilables du Trésor
OJSC Open Joint Stock Company
OMX 30 Stockholm Stock Exchange
PSF Permanent School Fund
REIT Real Estate Investment Trust
REMIC Real Estate Mortgage Investment Conduit
SBA Small Business Administration
S&P Standard and Poor's
S&P TSX S&P/Toronto Stock Exchange Index
SCSDE South Carolina School District Enhancement
SDR Special Drawing Rights
SPI Swiss Performance Index
STOXX A series of market indexes that are representative of the European and global markets.
STRIP Separate Trading of Registered Interest and Principal of Securities
TBA (To Be Announced) Security is purchased on a forward commitment basis with an approximate principal amount (generally +/- 1.0%) and no definite maturity date. The actual principal amount and maturity date will be determined upon settlement when the specific mortgage pools are assigned.
TIPS Treasury inflation protected securities ("TIPS") are debt securities issued by the US Treasury whose principal and/or interest payments are adjusted for inflation, unlike debt securities that make fixed principal and interest payments. The interest rate paid by the TIPS is fixed, while the principal value rises or falls based on changes in a published Consumer Price Index ("CPI"). Thus, if inflation occurs, the principal and interest payments on the TIPS are adjusted accordingly to protect investors from inflationary loss. During a deflationary period, the principal and interest payments decrease, although the TIPS principal amounts will not drop below their face amounts at maturity. In exchange for the inflation protection, the TIPS generally pay lower interest rates than typical US Treasury securities. Only if inflation occurs will TIPS offer a higher real yield than a conventional Treasury bond of the same maturity.
TOPIX Tokyo Stock Price Index
VVPR Verminderde Voorheffing Precompte Reduit (Belgium dividend coupon)
See accompanying notes to financial statements.
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Currency type abbreviations:
AUD Australian Dollar
BRL Brazilian Real
CAD Canadian Dollar
CHF Swiss Franc
CLP Chilean Peso
CNY Chinese Yuan Renminbi
COP Colombian Peso
CZK Czech Koruna
DKK Danish Krone
EUR Euro
GBP Great Britain Pound
HKD Hong Kong Dollar
HUF Hungarian Forint
IDR Indonesian Rupiah
ILS Israeli Shekel
INR Indian Rupee
JPY Japanese Yen
KRW South Korean Won
MXN Mexican Peso
MYR Malaysian Ringgit
NOK Norwegian Krone
NZD New Zealand Dollar
PHP Philippine Peso
PLN Polish Zloty
RUB Russian Ruble
SEK Swedish Krona
SGD Singapore Dollar
TRY Turkish Lira
TWD Taiwan Dollar
USD United States Dollar
ZAR South African Rand
Counterparty acronyms:
BB Barclays Bank PLC
BNP BNP Paribas
BOA Bank of America
CITI Citibank NA
CSI Credit Suisse International
DB Deutsche Bank AG
GS Goldman Sachs
GSB Goldman Sachs Bank USA
GSCM Goldman Sachs Capital Management
GSI Goldman Sachs International
HSBC HSBC Bank PLC
JPMCB JPMorgan Chase Bank
MSC Morgan Stanley & Co., Inc.
MSCI Morgan Stanley & Co. International PLC
RBC Royal Bank of Canada
RBS Royal Bank of Scotland PLC
SSC State Street Bank and Trust Co.
See accompanying notes to financial statements.
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Understanding your Portfolio's expenses (unaudited)
As a shareholder of a Portfolio, you incur two types of costs: (1) transactional costs (as applicable), including sales charges (loads), or ongoing program fees; and (2) ongoing Portfolio costs, including management fees; service and/or distribution (12b-1) fees (if applicable); and other Portfolio expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in each Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples below are based on an investment of $1,000 invested at the beginning of the period and held for the entire period, February 1, 2014 to July 31, 2014.
Actual expenses (unaudited)
The first line for each class of shares in the table below for each Portfolio provides information about its actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over a period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line for each class of shares for each respective Portfolio under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during the period.
Hypothetical example for comparison purposes (unaudited)
The second line for each class of shares in the table below for each Portfolio provides information about hypothetical account values and hypothetical expenses based on that Portfolio's actual expense ratios for each class of shares and an assumed rate of return of 5% per year before expenses, which is not that Portfolio's actual return for each class of shares. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing Portfolio costs only and do not reflect any transactional costs (as applicable), such as sales charges (loads), or program fees. Therefore, the second line in the table for each class of shares for each Portfolio is useful in comparing ongoing Portfolio costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs or program fees were included, your costs would have been higher.
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Beginning account value February 1, 2014 | Ending account value July 31, 2014 | Expenses paid during period1 02/01/14 to 07/31/14 | Expense ratio during the period | ||||||||||||||||||||
PACE Money Market Investments | |||||||||||||||||||||||
Class P | Actual | $ | 1,000.00 | $ | 1,000.00 | $ | 0.64 | 0.13 | % | ||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,024.15 | 0.65 | 0.13 | |||||||||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,015.70 | 4.85 | 0.97 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.98 | 4.86 | 0.97 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,014.00 | 7.34 | 1.47 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.51 | 7.35 | 1.47 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,017.00 | 3.60 | 0.72 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,021.22 | 3.61 | 0.72 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,017.80 | 3.60 | 0.72 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,021.22 | 3.61 | 0.72 | |||||||||||||||||||
PACE Intermediate Fixed Income Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,010.10 | 3.69 | 0.74 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,021.12 | 3.71 | 0.74 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,007.60 | 5.62 | 1.15 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.09 | 5.66 | 1.15 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,011.40 | 1.65 | 0.33 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,023.16 | 1.66 | 0.33 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,010.60 | 3.24 | 0.65 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,021.57 | 3.26 | 0.65 | |||||||||||||||||||
PACE Strategic Fixed Income Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,021.90 | 5.21 | 1.04 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.64 | 5.21 | 1.04 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,019.60 | 7.56 | 1.51 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.31 | 7.55 | 1.51 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,023.70 | 4.06 | 0.81 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.78 | 4.06 | 0.81 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,023.20 | 4.06 | 0.81 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.78 | 4.06 | 0.81 |
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Beginning account value February 1, 2014 | Ending account value July 31, 2014 | Expenses paid during period1 02/01/14 to 07/31/14 | Expense ratio during the period | ||||||||||||||||||||
PACE Municipal Fixed Income Investments | |||||||||||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,029.10 | $ | 4.53 | 0.90 | % | ||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.33 | 4.51 | 0.90 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,026.50 | 7.03 | 1.40 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.85 | 7.00 | 1.40 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,030.40 | 3.27 | 0.65 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,021.57 | 3.26 | 0.65 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,029.60 | 3.27 | 0.65 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,021.57 | 3.26 | 0.65 | |||||||||||||||||||
PACE International Fixed Income Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,037.40 | 6.16 | 1.22 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.79 | 6.11 | 1.22 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,034.90 | 8.58 | 1.70 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,016.41 | 8.50 | 1.70 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,038.70 | 5.05 | 1.00 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.84 | 5.01 | 1.00 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,038.50 | 5.05 | 1.00 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.84 | 5.01 | 1.00 | |||||||||||||||||||
PACE High Yield Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,032.80 | 6.35 | 1.26 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.55 | 6.31 | 1.26 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,031.40 | 8.66 | 1.72 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,016.27 | 8.60 | 1.72 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,034.90 | 5.10 | 1.01 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.79 | 5.06 | 1.01 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,034.80 | 5.20 | 1.03 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.69 | 5.16 | 1.03 |
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Beginning account value February 1, 2014 | Ending account value July 31, 2014 | Expenses paid during period1 02/01/14 to 07/31/14 | Expense ratio during the period | ||||||||||||||||||||
PACE Large Co Value Equity Investments | |||||||||||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,081.40 | $ | 6.92 | 1.34 | % | ||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.15 | 6.71 | 1.34 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,076.90 | 10.92 | 2.12 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,014.28 | 10.59 | 2.12 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,082.50 | 5.58 | 1.08 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.44 | 5.41 | 1.08 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,082.40 | 5.68 | 1.10 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.34 | 5.51 | 1.10 | |||||||||||||||||||
PACE Large Co Growth Equity Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,076.50 | 6.08 | 1.18 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.94 | 5.91 | 1.18 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,072.10 | 10.33 | 2.01 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,014.83 | 10.04 | 2.01 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,078.00 | 4.69 | 0.91 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.28 | 4.56 | 0.91 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,078.00 | 4.79 | 0.93 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.18 | 4.66 | 0.93 | |||||||||||||||||||
PACE Small/Medium Co Value Equity Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,045.50 | 6.29 | 1.24 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.65 | 6.21 | 1.24 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,041.10 | 10.12 | 2.00 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,014.88 | 9.99 | 2.00 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,046.00 | 5.58 | 1.10 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.34 | 5.51 | 1.10 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,045.50 | 5.88 | 1.16 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.04 | 5.81 | 1.16 |
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Beginning account value February 1, 2014 | Ending account value July 31, 2014 | Expenses paid during period1 02/01/14 to 07/31/14 | Expense ratio during the period | ||||||||||||||||||||
PACE Small/Medium Co Growth Equity Investments | |||||||||||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 952.20 | $ | 6.10 | 1.26 | % | ||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.55 | 6.31 | 1.26 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 948.90 | 9.71 | 2.01 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,014.83 | 10.04 | 2.01 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 953.10 | 5.47 | 1.13 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.19 | 5.66 | 1.13 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 952.60 | 5.47 | 1.13 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.19 | 5.66 | 1.13 | |||||||||||||||||||
PACE International Equity Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,076.60 | 9.37 | 1.82 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,015.77 | 9.10 | 1.82 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,073.00 | 13.47 | 2.62 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,011.80 | 13.07 | 2.62 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,078.10 | 7.88 | 1.53 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.21 | 7.65 | 1.53 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,078.30 | 8.04 | 1.56 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.06 | 7.80 | 1.56 | |||||||||||||||||||
PACE International Emerging Markets Equity Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,142.40 | 8.98 | 1.69 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,016.41 | 8.45 | 1.69 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,138.00 | 12.93 | 2.44 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,012.69 | 12.18 | 2.44 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,144.00 | 7.55 | 1.42 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.75 | 7.10 | 1.42 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,143.00 | 8.08 | 1.52 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.26 | 7.60 | 1.52 |
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Beginning account value February 1, 2014 | Ending account value July 31, 2014 | Expenses paid during period1 02/01/14 to 07/31/14 | Expense ratio during the period | ||||||||||||||||||||
PACE Global Real Estate Securities Investments | |||||||||||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,134.70 | $ | 7.67 | 1.45 | % | ||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.60 | 7.25 | 1.45 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,132.00 | 11.63 | 2.20 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,013.88 | 10.99 | 2.20 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,137.30 | 6.36 | 1.20 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.84 | 6.01 | 1.20 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,137.80 | 6.36 | 1.20 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.84 | 6.01 | 1.20 | |||||||||||||||||||
PACE Alternative Strategies Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,031.10 | 10.07 | 2.00 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,014.88 | 9.99 | 2.00 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,026.90 | 13.52 | 2.69 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,011.46 | 13.42 | 2.69 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,031.80 | 8.82 | 1.75 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,016.12 | 8.75 | 1.75 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,032.80 | 8.77 | 1.74 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,016.17 | 8.70 | 1.74 |
1 Expenses are equal to the Portfolios' annualized net expense ratios, multiplied by the average account value over the period, multiplied by 181 divided by 365 (to reflect the one-half year period).
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Statement of assets and liabilities
July 31, 2014
PACE Money Market Investments | PACE Mortgage-Backed Securities Fixed Income Investments | PACE Intermediate Fixed Income Investments | PACE Strategic Fixed Income Investments | ||||||||||||||||
Assets: | |||||||||||||||||||
Investments in unaffiliated securities, at value (cost—$176,327,840; $681,492,764; $442,538,335; $978,523,165; $395,810,570; $547,257,460 and $425,006,496, respectively)1 | $ | 176,327,840 | $ | 685,232,136 | $ | 444,349,379 | $ | 1,008,560,860 | |||||||||||
Investments in affiliated security, at value (cost—$0; $0; $66,357,164; $1,125,765; $0; $1,325,980 and $34,618,990, respectively) | — | — | 66,357,164 | 1,125,765 | |||||||||||||||
Repurchase agreements, at value (cost—$35,847,000; $143,923,000; $4,427,000; $40,042,000; $0; $15,884,000 and $3,689,000, respectively) | 35,847,000 | 143,923,000 | 4,427,000 | 40,042,000 | |||||||||||||||
Total investments in securities, at value (cost—$212,174,840; $825,415,764; $513,322,499; $1,019,690,930; $395,810,570; $564,467,440 and $463,314,486, respectively) | $ | 212,174,840 | $ | 829,155,136 | $ | 515,133,543 | $ | 1,049,728,625 | |||||||||||
Cash | 497 | 953 | 243,748 | 640,160 | |||||||||||||||
Cash collateral on futures | — | — | 277,594 | 1,184,810 | |||||||||||||||
Cash collateral on swap agreements | — | — | 720,000 | — | |||||||||||||||
Foreign currency, at value (cost—$0; $0; $741,107; $3,409,381; $0; $9,942,802 and $39,898, respectively) | — | — | 748,257 | 3,364,712 | |||||||||||||||
Receivable for investments sold | — | 15,853,159 | 27,790,329 | 69,239,221 | |||||||||||||||
Receivable for investments sold short | — | 47,120,547 | — | 538,281 | |||||||||||||||
Receivable for shares of beneficial interest sold | 234,398 | 652,629 | 627,391 | 1,229,964 | |||||||||||||||
Receivable for interest | 62,855 | 1,284,465 | 1,945,384 | 7,597,358 | |||||||||||||||
Receivable from affiliate | 61,010 | — | — | — | |||||||||||||||
Receivable for when issued TBA securities | — | 150,925,118 | — | 539,219 | |||||||||||||||
Swap agreements, at value2 | — | — | — | 2,381,096 | |||||||||||||||
Due from broker | — | — | — | 1,548,664 | |||||||||||||||
Receivable for variation margin on swap agreements | — | — | 204,829 | 551,652 | |||||||||||||||
Unrealized appreciation on forward foreign currency contracts | — | — | 104,497 | 1,810,563 | |||||||||||||||
Receivable for variation margin on futures contracts | — | — | 41,164 | — | |||||||||||||||
Receivable for foreign tax reclaims | — | — | 1,139 | 9,649 | |||||||||||||||
Other assets | 17,608 | 26,808 | 22,229 | 30,742 | |||||||||||||||
Total assets | 212,551,208 | 1,045,018,815 | 547,860,104 | 1,140,394,716 | |||||||||||||||
Liabilities: | |||||||||||||||||||
Payable for shares of beneficial interest repurchased | 301,721 | 1,064,594 | 422,761 | 1,210,226 | |||||||||||||||
Payable to custodian | 3,773 | 36,887 | 35,119 | 82,357 | |||||||||||||||
Dividends payable to shareholders | 987 | — | — | — | |||||||||||||||
Payable for variation margin on futures contracts | — | — | 228,902 | 1,641,322 | |||||||||||||||
Payable for when issued TBA securities | — | 422,092,433 | 1,361,990 | 6,405,391 | |||||||||||||||
Investments sold short, at value (proceeds—$0; $34,127,109; $0; $538,281; $0; $0 and $0, respectively) | — | 34,141,109 | — | 537,102 | |||||||||||||||
Payable for investments purchased | — | 30,005,002 | 30,794,275 | 13,339,729 | |||||||||||||||
Due to broker | — | 293,000 | 13,152 | 2,932,439 | |||||||||||||||
Payable to affiliate | — | 204,967 | 103,494 | 504,199 | |||||||||||||||
Options and swaptions written, at value (premiums received $0; $111,641; $612,602; $294,415; $0; $0 and $0, respectively) | — | 65,331 | 344,554 | 21,683 | |||||||||||||||
Swap agreements, at value2 | — | 1,118 | — | 478,229 | |||||||||||||||
Payable for cash collateral from securities loaned | — | — | 66,357,164 | 1,125,765 | |||||||||||||||
Unrealized depreciation on forward foreign currency contracts | — | — | 55,558 | 1,622,929 | |||||||||||||||
Payable for dollar roll transactions | — | — | — | 157,956,156 | |||||||||||||||
Deferred payable for dollar roll transactions | — | — | — | 48,152 | |||||||||||||||
Payable for foreign withholding taxes and foreign capital gains taxes | — | — | — | 8,221 | |||||||||||||||
Accrued expenses and other liabilities | 219,606 | 300,779 | 248,616 | 312,853 | |||||||||||||||
Total liabilities | 526,087 | 488,205,220 | 99,965,585 | 188,226,753 |
1 Includes $0; $0; $65,024,901; $1,101,355; $0; $1,283,255 and $33,632,456, respectively, of investments in securities on loan, at value plus accrued interest and dividends, if any.
2 Net upfront payments received by PACE Mortgage-Backed Securities Fixed Income Investments was $18,110. Net upfront payments made by PACE Strategic Fixed Income Investments was $1,113,379.
240
PACE Municipal Fixed Income Investments | PACE International Fixed Income Investments | PACE High Yield Investments | |||||||||||||
Assets: | |||||||||||||||
Investments in unaffiliated securities, at value (cost—$176,327,840; $681,492,764; $442,538,335; $978,523,165; $395,810,570; $547,257,460 and $425,006,496, respectively)1 | $ | 413,792,661 | $ | 564,110,685 | $ | 450,523,739 | |||||||||
Investments in affiliated security, at value (cost—$0; $0; $66,357,164; $1,125,765; $0; $1,325,980 and $34,618,990, respectively) | — | 1,325,980 | 34,618,990 | ||||||||||||
Repurchase agreements, at value (cost—$35,847,000; $143,923,000; $4,427,000; $40,042,000; $0; $15,884,000 and $3,689,000, respectively) | — | 15,884,000 | 3,689,000 | ||||||||||||
Total investments in securities, at value (cost—$212,174,840; $825,415,764; $513,322,499; $1,019,690,930; $395,810,570; $564,467,440 and $463,314,486, respectively) | $ | 413,792,661 | $ | 581,320,665 | $ | 488,831,729 | |||||||||
Cash | — | — | 182,689 | ||||||||||||
Cash collateral on futures | — | 4,248,461 | — | ||||||||||||
Cash collateral on swap agreements | — | — | — | ||||||||||||
Foreign currency, at value (cost—$0; $0; $741,107; $3,409,381; $0; $9,942,802 and $39,898, respectively) | — | 9,899,159 | 39,487 | ||||||||||||
Receivable for investments sold | 9,733,827 | 16,240,000 | 1,770,887 | ||||||||||||
Receivable for investments sold short | — | — | — | ||||||||||||
Receivable for shares of beneficial interest sold | 460,037 | 646,143 | 602,561 | ||||||||||||
Receivable for interest | 4,153,837 | 6,538,081 | 8,415,812 | ||||||||||||
Receivable from affiliate | — | — | — | ||||||||||||
Receivable for when issued TBA securities | — | — | — | ||||||||||||
Swap agreements, at value2 | — | — | — | ||||||||||||
Due from broker | — | 807,865 | — | ||||||||||||
Receivable for variation margin on swap agreements | — | — | — | ||||||||||||
Unrealized appreciation on forward foreign currency contracts | — | 3,700,594 | 1,171,408 | ||||||||||||
Receivable for variation margin on futures contracts | — | 1,963,218 | 246,938 | ||||||||||||
Receivable for foreign tax reclaims | — | 19,267 | 91,426 | ||||||||||||
Other assets | 20,498 | 24,050 | 26,353 | ||||||||||||
Total assets | 428,160,860 | 625,407,503 | 501,379,290 | ||||||||||||
Liabilities: | |||||||||||||||
Payable for shares of beneficial interest repurchased | 386,453 | 1,017,352 | 1,211,428 | ||||||||||||
Payable to custodian | 2,876,545 | 413,869 | 33,393 | ||||||||||||
Dividends payable to shareholders | — | — | — | ||||||||||||
Payable for variation margin on futures contracts | — | — | — | ||||||||||||
Payable for when issued TBA securities | — | — | — | ||||||||||||
Investments sold short, at value (proceeds—$0; $34,127,109; $0; $538,281; $0; $0 and $0, respectively) | — | — | — | ||||||||||||
Payable for investments purchased | 15,249,064 | 20,975,401 | 2,275,666 | ||||||||||||
Due to broker | — | — | 96,352 | ||||||||||||
Payable to affiliate | 191,903 | 348,740 | 290,317 | ||||||||||||
Options and swaptions written, at value (premiums received $0; $111,641; $612,602; $294,415; $0; $0 and $0, respectively) | — | — | — | ||||||||||||
Swap agreements, at value2 | — | — | — | ||||||||||||
Payable for cash collateral from securities loaned | — | 1,325,980 | 34,618,990 | ||||||||||||
Unrealized depreciation on forward foreign currency contracts | — | 1,858,569 | — | ||||||||||||
Payable for dollar roll transactions | — | — | — | ||||||||||||
Deferred payable for dollar roll transactions | — | — | — | ||||||||||||
Payable for foreign withholding taxes and foreign capital gains taxes | — | — | 4,500 | ||||||||||||
Accrued expenses and other liabilities | 117,603 | 309,466 | 223,250 | ||||||||||||
Total liabilities | 18,821,568 | 26,249,377 | 38,753,896 |
See accompanying notes to financial statements.
241
PACE Select Advisors Trust
Statement of assets and liabilities (continued)
July 31, 2014
PACE Money Market Investments | PACE Mortgage-Backed Securities Fixed Income Investments | PACE Intermediate Fixed Income Investments | PACE Strategic Fixed Income Investments | ||||||||||||||||
Net assets: | |||||||||||||||||||
Beneficial interest shares of $0.001 par value (unlimited amount authorized) | $ | 212,026,323 | $ | 571,361,389 | $ | 444,676,864 | $ | 951,948,111 | |||||||||||
Accumulated undistributed (distributions in excess of) net investment income | — | 322,900 | 1,527,813 | 1,992,690 | |||||||||||||||
Accumulated net realized gain (loss) | (1,202 | ) | (18,659,368 | ) | (319,118 | ) | (33,604,094 | ) | |||||||||||
Net unrealized appreciation | — | 3,788,674 | 2,008,960 | 31,831,256 | |||||||||||||||
Net assets | $ | 212,025,121 | $ | 556,813,595 | $ | 447,894,519 | $ | 952,167,963 | |||||||||||
Class A | |||||||||||||||||||
Net assets | $ | — | $ | 59,833,866 | $ | 28,080,190 | $ | 44,464,861 | |||||||||||
Shares outstanding | — | 4,666,847 | 2,277,456 | 3,198,894 | |||||||||||||||
Net asset value per share | $ | — | $ | 12.82 | $ | 12.33 | $ | 13.90 | |||||||||||
Maximum offering price per share | $ | — | $ | 13.42 | $ | 12.91 | $ | 14.55 | |||||||||||
Class C | |||||||||||||||||||
Net assets | $ | — | $ | 13,957,861 | $ | 2,260,156 | $ | 15,143,167 | |||||||||||
Shares outstanding | — | 1,087,320 | 183,052 | 1,088,847 | |||||||||||||||
Net asset value and offering price per share | $ | — | $ | 12.84 | $ | 12.35 | $ | 13.91 | |||||||||||
Class Y | |||||||||||||||||||
Net assets | $ | — | $ | 47,959,127 | $ | 543,043 | $ | 3,157,709 | |||||||||||
Shares outstanding | — | 3,739,916 | 44,041 | 227,427 | |||||||||||||||
Net asset value, offering price and redemption value per share1 | $ | — | $ | 12.82 | $ | 12.33 | $ | 13.89 | |||||||||||
Class P | |||||||||||||||||||
Net assets | $ | 212,025,121 | $ | 435,062,741 | $ | 417,011,130 | $ | 889,402,226 | |||||||||||
Shares outstanding | 212,025,120 | 33,915,472 | 33,814,882 | 63,990,867 | |||||||||||||||
Net asset value, offering price and redemption value per share1 | $ | 1.00 | $ | 12.83 | $ | 12.33 | $ | 13.90 |
1 Assumes shares were held a sufficient period or are otherwise not subject to a redemption fee.
242
PACE Municipal Fixed Income Investments | PACE International Fixed Income Investments | PACE High Yield Investments | |||||||||||||
Net assets: | |||||||||||||||
Beneficial interest shares of $0.001 par value (unlimited amount authorized) | $ | 392,161,354 | $ | 616,503,536 | $ | 438,863,636 | |||||||||
Accumulated undistributed (distributions in excess of) net investment income | — | (19,812,550 | ) | 239,635 | |||||||||||
Accumulated net realized gain (loss) | (804,153 | ) | (18,068,217 | ) | (3,393,855 | ) | |||||||||
Net unrealized appreciation | 17,982,091 | 20,535,357 | 26,915,978 | ||||||||||||
Net assets | $ | 409,339,292 | $ | 599,158,126 | $ | 462,625,394 | |||||||||
Class A | |||||||||||||||
Net assets | $ | 63,224,985 | $ | 62,807,648 | $ | 23,515,570 | |||||||||
Shares outstanding | 4,794,620 | 5,806,146 | 2,213,302 | ||||||||||||
Net asset value per share | $ | 13.19 | $ | 10.82 | $ | 10.62 | |||||||||
Maximum offering price per share | $ | 13.81 | $ | 11.33 | $ | 11.12 | |||||||||
Class C | |||||||||||||||
Net assets | $ | 11,032,672 | $ | 4,559,270 | $ | 5,606,799 | |||||||||
Shares outstanding | 836,556 | 421,252 | 528,178 | ||||||||||||
Net asset value and offering price per share | $ | 13.19 | $ | 10.82 | $ | 10.62 | |||||||||
Class Y | |||||||||||||||
Net assets | $ | 82,725 | $ | 5,478,779 | $ | 1,691,500 | |||||||||
Shares outstanding | 6,269 | 507,874 | 158,682 | ||||||||||||
Net asset value, offering price and redemption value per share1 | $ | 13.20 | $ | 10.79 | $ | 10.66 | |||||||||
Class P | |||||||||||||||
Net assets | $ | 334,998,910 | $ | 526,312,429 | $ | 431,811,525 | |||||||||
Shares outstanding | 25,397,045 | 48,650,315 | 40,554,641 | ||||||||||||
Net asset value, offering price and redemption value per share1 | $ | 13.19 | $ | 10.82 | $ | 10.65 |
See accompanying notes to financial statements.
243
PACE Select Advisors Trust
Statement of assets and liabilities (continued)
July 31, 2014
PACE Large Co Value Equity Investments | PACE Large Co Growth Equity Investments | PACE Small/Medium Co Value Equity Investments | PACE Small/Medium Co Growth Equity Investments | ||||||||||||||||
Assets: | |||||||||||||||||||
Investments in unaffiliated securities, at value (cost—$1,416,824,355; $964,560,850; $477,905,511; $434,397,764; $1,140,275,943; $438,599,668; $129,057,529 and $565,134,136, respectively)1 | $ | 1,620,564,816 | $ | 1,319,427,720 | $ | 534,192,618 | $ | 506,538,047 | |||||||||||
Investments in affiliated security, at value (cost—$1,130,800; $0; $31,962,048; $70,777,816; $24,717,606; $32,623,715; $3,424,337 and $0, respectively) | 1,130,800 | — | 31,962,048 | 70,777,816 | |||||||||||||||
Repurchase agreements, at value (cost—$25,439,000; $54,715,000; $10,928,000; $17,428,000; $7,751,000; $10,351,000; $2,512,000 and $104,506,000, respectively) | 25,439,000 | 54,715,000 | 10,928,000 | 17,428,000 | |||||||||||||||
Total investments in securities, at value (cost—$1,443,394,155; $1,019,275,850; $520,795,559; $522,603,580; $1,172,744,549; $481,574,383; $134,993,866 and $669,640,136, respectively) | $ | 1,647,134,616 | $ | 1,374,142,720 | $ | 577,082,666 | $ | 594,743,863 | |||||||||||
Cash | — | 2,041 | 2,035 | 1,880 | |||||||||||||||
Cash collateral on futures | — | — | — | — | |||||||||||||||
Cash collateral on swap agreements | — | — | — | — | |||||||||||||||
Cash collateral on forward foreign currency contracts | — | — | — | — | |||||||||||||||
Cash collateral on investments sold short | — | — | — | — | |||||||||||||||
Foreign currency, at value (cost—$0; $0; $0; $0; $4,966,121; $1,389,866; $16,651 and $275,488, respectively) | — | — | — | — | |||||||||||||||
Receivable for investments sold | 16,187,745 | 6,541,745 | 9,855,742 | 7,419,379 | |||||||||||||||
Receivable for dividends and interest | 2,064,344 | 120,435 | 149,140 | 84,022 | |||||||||||||||
Receivable for investments sold short | 1,104,426 | — | — | — | |||||||||||||||
Receivable for shares of beneficial interest sold | 1,010,475 | 975,693 | 556,631 | 501,750 | |||||||||||||||
Swap agreements, at value | — | — | — | — | |||||||||||||||
Receivable for variation margin on futures contracts | — | — | — | — | |||||||||||||||
Due from broker | — | — | — | — | |||||||||||||||
Unrealized appreciation on forward foreign currency contracts | — | — | — | — | |||||||||||||||
Receivable for foreign tax reclaims | 51,866 | 55,959 | — | — | |||||||||||||||
Other assets | 36,082 | 35,837 | 23,750 | 23,987 | |||||||||||||||
Total assets | 1,667,589,554 | 1,381,874,430 | 587,669,964 | 602,774,881 | |||||||||||||||
Liabilities: | |||||||||||||||||||
Investments sold short, at value (proceeds—$194,247,057; $0; $0; $0; $128,622,741; $0; $0 and $30,507,447, respectively) | 192,250,755 | — | — | — | |||||||||||||||
Payable for investments purchased | 16,552,176 | 762,175 | 5,629,592 | 11,229,475 | |||||||||||||||
Payable for shares of beneficial interest repurchased | 1,966,998 | 1,924,318 | 899,168 | 790,277 | |||||||||||||||
Payable for cash collateral from securities loaned | 1,130,800 | — | 31,962,048 | 70,777,816 | |||||||||||||||
Payable to affiliate | 983,232 | 945,660 | 422,975 | 334,209 | |||||||||||||||
Payable for dividend and interest expense on investments sold short | 193,552 | — | — | — | |||||||||||||||
Payable to custodian | 129,110 | 90,214 | 36,616 | 34,578 | |||||||||||||||
Payable for foreign withholding taxes and foreign capital gains taxes | — | — | — | — | |||||||||||||||
Deferred foreign capital gain taxes payable | — | — | — | — | |||||||||||||||
Swap agreements, at value | — | — | — | — | |||||||||||||||
Unrealized depreciation on forward foreign currency contracts | — | — | — | — | |||||||||||||||
Due to broker | — | — | — | — | |||||||||||||||
Options and swaptions written, at value (premiums received $0; $0; $0; $0; $0; $0; $0 and $7,000,655, respectively) | — | — | — | — | |||||||||||||||
Payable for variation margin on futures contracts | — | — | — | — | |||||||||||||||
Payable for variation margin on swap agreements | — | — | — | — | |||||||||||||||
Accrued expenses and other liabilities | 461,327 | 306,495 | 285,326 | 286,501 | |||||||||||||||
Total liabilities | 213,667,950 | 4,028,862 | 39,235,725 | 83,452,856 |
1 Includes $6,800,502; $0; $29,921,147; $67,405,475; $24,017,144; $30,648,952; $3,251,156 and $0, respectively, of investments in securities on loan, at value plus accrued interest and dividends, if any.
244
PACE International Equity Investments | PACE International Emerging Markets Equity Investments | PACE Global Real Estate Securities Investments | PACE Alternative Strategies Investments | ||||||||||||||||
Assets: | |||||||||||||||||||
Investments in unaffiliated securities, at value (cost—$1,416,824,355; $964,560,850; $477,905,511; $434,397,764; $1,140,275,943; $438,599,668; $129,057,529 and $565,134,136, respectively)1 | $ | 1,228,396,579 | $ | 472,128,436 | $ | 148,673,013 | $ | 587,617,371 | |||||||||||
Investments in affiliated security, at value (cost—$1,130,800; $0; $31,962,048; $70,777,816; $24,717,606; $32,623,715; $3,424,337 and $0, respectively) | 24,717,606 | 32,623,715 | 3,424,337 | — | |||||||||||||||
Repurchase agreements, at value (cost—$25,439,000; $54,715,000; $10,928,000; $17,428,000; $7,751,000; $10,351,000; $2,512,000 and $104,506,000, respectively) | 7,751,000 | 10,351,000 | 2,512,000 | 104,506,000 | |||||||||||||||
Total investments in securities, at value (cost—$1,443,394,155; $1,019,275,850; $520,795,559; $522,603,580; $1,172,744,549; $481,574,383; $134,993,866 and $669,640,136, respectively) | $ | 1,260,865,185 | $ | 515,103,151 | $ | 154,609,350 | $ | 692,123,371 | |||||||||||
Cash | 786 | 6,374 | 1,547 | — | |||||||||||||||
Cash collateral on futures | — | — | — | 9,656,580 | |||||||||||||||
Cash collateral on swap agreements | — | — | — | 296 | |||||||||||||||
Cash collateral on forward foreign currency contracts | — | — | — | 520,000 | |||||||||||||||
Cash collateral on investments sold short | — | — | — | 31,726,982 | |||||||||||||||
Foreign currency, at value (cost—$0; $0; $0; $0; $4,966,121; $1,389,866; $16,651 and $275,488, respectively) | 4,904,796 | 1,383,187 | 16,509 | 290,705 | |||||||||||||||
Receivable for investments sold | 954,254 | 2,495,508 | 1,739,312 | 15,668,911 | |||||||||||||||
Receivable for dividends and interest | 2,113,980 | 1,925,867 | 487,418 | 972,598 | |||||||||||||||
Receivable for investments sold short | — | — | — | — | |||||||||||||||
Receivable for shares of beneficial interest sold | 1,237,035 | 649,894 | 171,416 | 1,039,519 | |||||||||||||||
Swap agreements, at value | — | — | — | 1,483,111 | |||||||||||||||
Receivable for variation margin on futures contracts | — | — | — | 1,641,394 | |||||||||||||||
Due from broker | — | — | — | 967,626 | |||||||||||||||
Unrealized appreciation on forward foreign currency contracts | 78,260 | — | — | 11,449,892 | |||||||||||||||
Receivable for foreign tax reclaims | 850,274 | — | 4,696 | 44,956 | |||||||||||||||
Other assets | 32,118 | 23,189 | 10,780 | 37,148 | |||||||||||||||
Total assets | 1,271,036,688 | 521,587,170 | 157,041,028 | 767,623,089 | |||||||||||||||
Liabilities: | |||||||||||||||||||
Investments sold short, at value (proceeds—$194,247,057; $0; $0; $0; $128,622,741; $0; $0 and $30,507,447, respectively) | 132,265,689 | — | — | 31,170,926 | |||||||||||||||
Payable for investments purchased | 1,170,041 | 3,810,245 | 1,427,166 | 2,523,316 | |||||||||||||||
Payable for shares of beneficial interest repurchased | 2,127,379 | 1,167,184 | 415,148 | 1,226,140 | |||||||||||||||
Payable for cash collateral from securities loaned | 24,717,606 | 32,623,715 | 3,424,337 | — | |||||||||||||||
Payable to affiliate | 839,700 | 420,066 | 42,178 | 846,167 | |||||||||||||||
Payable for dividend and interest expense on investments sold short | 66,232 | — | — | 1,516 | |||||||||||||||
Payable to custodian | 177,639 | 147,734 | 18,913 | 980,409 | |||||||||||||||
Payable for foreign withholding taxes and foreign capital gains taxes | 286,892 | 453,640 | 178,399 | 66,772 | |||||||||||||||
Deferred foreign capital gain taxes payable | — | 825,816 | — | — | |||||||||||||||
Swap agreements, at value | — | — | — | 2,044,290 | |||||||||||||||
Unrealized depreciation on forward foreign currency contracts | — | — | — | 9,574,671 | |||||||||||||||
Due to broker | — | — | — | 8,278,135 | |||||||||||||||
Options and swaptions written, at value (premiums received $0; $0; $0; $0; $0; $0; $0 and $7,000,655, respectively) | — | — | — | 7,295,003 | |||||||||||||||
Payable for variation margin on futures contracts | — | — | — | 3,462,686 | |||||||||||||||
Payable for variation margin on swap agreements | — | — | — | 192,644 | |||||||||||||||
Accrued expenses and other liabilities | 406,006 | 443,553 | 224,605 | 255,167 | |||||||||||||||
Total liabilities | 162,057,184 | 39,891,953 | 5,730,746 | 67,917,842 |
See accompanying notes to financial statements.
245
PACE Select Advisors Trust
Statement of assets and liabilities (concluded)
July 31, 2014
PACE Large Co Value Equity Investments | PACE Large Co Growth Equity Investments | PACE Small/Medium Co Value Equity Investments | PACE Small/Medium Co Growth Equity Investments | ||||||||||||||||
Net assets: | |||||||||||||||||||
Beneficial interest shares of $0.001 par value (unlimited amount authorized) | $ | 1,118,493,031 | $ | 922,814,983 | $ | 432,505,904 | $ | 376,595,845 | |||||||||||
Accumulated undistributed (distributions in excess of) net investment income | 14,041,734 | 5,976,682 | 845,212 | 68,773 | |||||||||||||||
Accumulated net realized gain (loss) | 115,650,076 | 94,187,033 | 58,796,016 | 70,517,124 | |||||||||||||||
Net unrealized appreciation | 205,736,763 | 354,866,870 | 56,287,107 | 72,140,283 | |||||||||||||||
Net assets | $ | 1,453,921,604 | $ | 1,377,845,568 | $ | 548,434,239 | $ | 519,322,025 | |||||||||||
Class A | |||||||||||||||||||
Net assets | $ | 155,479,936 | $ | 68,206,803 | $ | 32,038,723 | $ | 40,209,849 | |||||||||||
Shares outstanding | 6,157,970 | 2,648,544 | 1,453,142 | 2,038,809 | |||||||||||||||
Net asset value per share | $ | 25.25 | $ | 25.75 | $ | 22.05 | $ | 19.72 | |||||||||||
Maximum offering price per share | $ | 26.72 | $ | 27.25 | $ | 23.33 | $ | 20.87 | |||||||||||
Class C | |||||||||||||||||||
Net assets | $ | 15,380,256 | $ | 4,203,629 | $ | 5,105,726 | $ | 3,976,844 | |||||||||||
Shares outstanding | 609,711 | 183,457 | 261,540 | 232,988 | |||||||||||||||
Net asset value and offering price per share | $ | 25.23 | $ | 22.91 | $ | 19.52 | $ | 17.07 | |||||||||||
Class Y | |||||||||||||||||||
Net assets | $ | 19,765,290 | $ | 15,857,795 | $ | 912,454 | $ | 667,378 | |||||||||||
Shares outstanding | 780,492 | 600,814 | 40,151 | 32,214 | |||||||||||||||
Net asset value, offering price and redemption value per share1 | $ | 25.32 | $ | 26.39 | $ | 22.73 | $ | 20.72 | |||||||||||
Class P | |||||||||||||||||||
Net assets | $ | 1,263,296,122 | $ | 1,289,577,341 | $ | 510,377,336 | $ | 474,467,954 | |||||||||||
Shares outstanding | 50,061,017 | 49,110,795 | 22,641,465 | 23,154,249 | |||||||||||||||
Net asset value, offering price and redemption value per share1 | $ | 25.24 | $ | 26.26 | $ | 22.54 | $ | 20.49 |
1 Assumes shares were held a sufficient period or are otherwise not subject to a redemption fee.
246
PACE International Equity Investments | PACE International Emerging Markets Equity Investments | PACE Global Real Estate Securities Investments | PACE Alternative Strategies Investments | ||||||||||||||||
Net assets: | |||||||||||||||||||
Beneficial interest shares of $0.001 par value (unlimited amount authorized) | $ | 1,159,154,263 | $ | 466,296,102 | $ | 152,985,122 | $ | 729,729,093 | |||||||||||
Accumulated undistributed (distributions in excess of) net investment income | 22,091,154 | 4,764,967 | 75,386 | (9,175,530 | ) | ||||||||||||||
Accumulated net realized gain (loss) | (156,749,031 | ) | (22,056,931 | ) | (21,362,527 | ) | (45,981,161 | ) | |||||||||||
Net unrealized appreciation | 84,483,118 | 32,691,079 | 19,612,301 | 25,132,845 | |||||||||||||||
Net assets | $ | 1,108,979,504 | $ | 481,695,217 | $ | 151,310,282 | $ | 699,705,247 | |||||||||||
Class A | |||||||||||||||||||
Net assets | $ | 57,388,500 | $ | 17,200,313 | $ | 5,692,162 | $ | 77,331,430 | |||||||||||
Shares outstanding | 3,678,125 | 1,268,851 | 776,143 | 7,282,317 | |||||||||||||||
Net asset value per share | $ | 15.60 | $ | 13.56 | $ | 7.33 | $ | 10.62 | |||||||||||
Maximum offering price per share | $ | 16.51 | $ | 14.35 | $ | 7.76 | $ | 11.24 | |||||||||||
Class C | |||||||||||||||||||
Net assets | $ | 2,919,349 | $ | 2,079,325 | $ | 271,688 | $ | 6,345,554 | |||||||||||
Shares outstanding | 190,917 | 164,880 | 37,292 | 616,556 | |||||||||||||||
Net asset value and offering price per share | $ | 15.29 | $ | 12.61 | $ | 7.29 | $ | 10.29 | |||||||||||
Class Y | |||||||||||||||||||
Net assets | $ | 22,914,572 | $ | 11,977,717 | $ | 279,725 | $ | 4,628,787 | |||||||||||
Shares outstanding | 1,469,677 | 866,889 | 37,966 | 432,037 | |||||||||||||||
Net asset value, offering price and redemption value per share1 | $ | 15.59 | $ | 13.82 | $ | 7.37 | $ | 10.71 | |||||||||||
Class P | |||||||||||||||||||
Net assets | $ | 1,025,757,083 | $ | 450,437,862 | $ | 145,066,707 | $ | 611,399,476 | |||||||||||
Shares outstanding | 65,934,270 | 32,761,850 | 19,747,557 | 57,210,838 | |||||||||||||||
Net asset value, offering price and redemption value per share1 | $ | 15.56 | $ | 13.75 | $ | 7.35 | $ | 10.69 |
See accompanying notes to financial statements.
247
PACE Select Advisors Trust
Statement of operations
For the year ended July 31, 2014
PACE Money Market Investments | PACE Mortgage-Backed Securities Fixed Income Investments | PACE Intermediate Fixed Income Investments | PACE Strategic Fixed Income Investments | ||||||||||||||||
Investment income: | |||||||||||||||||||
Dividends | $ | — | $ | — | $ | 65,345 | $ | 480,000 | |||||||||||
Interest (net of foreign withholding taxes of $0; $932; $0; $1,328; $0; $0 and $4,500, respectively) | 402,230 | 12,099,271 | 9,291,691 | 34,026,138 | |||||||||||||||
Securities lending income (includes $0; $0; $2,279; $343; $0; $105 and $3,133, respectively earned from an affiliated entity) | — | — | 78,032 | 11,155 | |||||||||||||||
402,230 | 12,099,271 | 9,435,068 | 34,517,293 | ||||||||||||||||
Expenses: | |||||||||||||||||||
Investment management and administration fees | 953,646 | 3,520,277 | 2,355,282 | 5,551,403 | |||||||||||||||
Service fees–Class A | — | 156,451 | 73,515 | 135,469 | |||||||||||||||
Service and distribution fees–Class C | — | 110,793 | 19,217 | 129,400 | |||||||||||||||
Transfer agency and related services fees | 1,153,703 | 891,453 | 667,536 | 1,006,093 | |||||||||||||||
Reports and notices to shareholders | 133,892 | 89,310 | 59,274 | 70,523 | |||||||||||||||
Professional fees | 126,024 | 207,830 | 214,863 | 197,494 | |||||||||||||||
State registration fees | 36,465 | 69,148 | 72,630 | 76,583 | |||||||||||||||
Custody and accounting fees | 25,786 | 201,110 | 199,569 | 480,966 | |||||||||||||||
Trustees' fees | 25,279 | 26,758 | 25,064 | 32,007 | |||||||||||||||
Insurance expense | 7,523 | 14,474 | 11,125 | 22,883 | |||||||||||||||
Interest expense | — | — | — | 44,311 | |||||||||||||||
Other expenses | 27,993 | 11,378 | 33,900 | 29,063 | |||||||||||||||
2,490,311 | 5,298,982 | 3,731,975 | 7,776,195 | ||||||||||||||||
Fee waivers and/or expense reimbursements | (2,115,413 | ) | (961,700 | ) | (598,261 | ) | (3,235 | ) | |||||||||||
Recoupment of fees waived or expenses previously reimbursed | — | — | — | 54,127 | |||||||||||||||
Net expenses | 374,898 | 4,337,282 | 3,133,714 | 7,827,087 | |||||||||||||||
Net investment income | 27,332 | 7,761,989 | 6,301,354 | 26,690,206 | |||||||||||||||
Net realized and unrealized gains (losses) from investment activities: | |||||||||||||||||||
Net realized gains (losses) from: | |||||||||||||||||||
Investments | — | 7,116,340 | 933,923 | (32,722,506 | ) | ||||||||||||||
Futures | — | — | 15,491 | (1,310,310 | ) | ||||||||||||||
Options and swaptions written | — | 811,250 | 985,723 | 1,007,241 | |||||||||||||||
Investments sold short | — | 4,460 | — | 391 | |||||||||||||||
Swap agreements | — | (6,956 | ) | 588,094 | (16,965,748 | ) | |||||||||||||
Forward foreign currency contracts | — | — | 351,022 | (1,337,936 | ) | ||||||||||||||
Foreign currency transactions | — | — | (5,934 | ) | (339,500 | ) | |||||||||||||
Net realized gain (loss) | — | 7,925,094 | 2,868,319 | (51,668,368 | ) | ||||||||||||||
Net change in unrealized appreciation/depreciation of: | |||||||||||||||||||
Investments | — | 5,981,014 | 2,939,578 | 43,920,400 | |||||||||||||||
Futures | — | — | (428,084 | ) | (1,648,515 | ) | |||||||||||||
Options and swaptions written | — | 46,310 | 282,132 | 272,732 | |||||||||||||||
Investments sold short | — | 284,243 | — | 10,124 | |||||||||||||||
Swap agreements | — | 16,992 | (889,763 | ) | 16,284,037 | ||||||||||||||
Forward foreign currency contracts | — | — | (88,785 | ) | (140,595 | ) | |||||||||||||
Other assets and liabilities denominated in foreign currency | — | — | 14,493 | 43,487 | |||||||||||||||
Net change in unrealized appreciation/depreciation | — | 6,328,559 | 1,829,571 | 58,741,670 | |||||||||||||||
Net realized and unrealized gain from investment activities | — | 14,253,653 | 4,697,890 | 7,073,302 | |||||||||||||||
Net increase in net assets resulting from operations | $ | 27,332 | $ | 22,015,642 | $ | 10,999,244 | $ | 33,763,508 |
248
PACE Municipal Fixed Income Investments | PACE International Fixed Income Investments | PACE High Yield Investments | |||||||||||||
Investment income: | |||||||||||||||
Dividends | $ | — | $ | — | $ | 26,666 | |||||||||
Interest (net of foreign withholding taxes of $0; $932; $0; $1,328; $0; $0 and $4,500, respectively) | 13,463,406 | 17,065,972 | 27,743,865 | ||||||||||||
Securities lending income (includes $0; $0; $2,279; $343; $0; $105 and $3,133, respectively earned from an affiliated entity) | — | 4,933 | 168,216 | ||||||||||||
13,463,406 | 17,070,905 | 27,938,747 | |||||||||||||
Expenses: | |||||||||||||||
Investment management and administration fees | 2,055,541 | 4,237,256 | 3,421,149 | ||||||||||||
Service fees–Class A | 157,484 | 163,077 | 59,633 | ||||||||||||
Service and distribution fees–Class C | 87,253 | 38,293 | 43,342 | ||||||||||||
Transfer agency and related services fees | 159,834 | 1,000,750 | 720,993 | ||||||||||||
Reports and notices to shareholders | 15,760 | 67,255 | 44,778 | ||||||||||||
Professional fees | 155,659 | 200,068 | 160,666 | ||||||||||||
State registration fees | 60,461 | 65,432 | 65,655 | ||||||||||||
Custody and accounting fees | 130,542 | 515,566 | 185,198 | ||||||||||||
Trustees' fees | 24,198 | 30,150 | 24,714 | ||||||||||||
Insurance expense | 8,708 | 13,498 | 9,203 | ||||||||||||
Interest expense | — | 18,648 | — | ||||||||||||
Other expenses | 25,563 | 28,941 | 26,145 | ||||||||||||
2,881,003 | 6,378,934 | 4,761,476 | |||||||||||||
Fee waivers and/or expense reimbursements | (126,563 | ) | (509,681 | ) | (262,766 | ) | |||||||||
Recoupment of fees waived or expenses previously reimbursed | — | — | — | ||||||||||||
Net expenses | 2,754,440 | 5,869,253 | 4,498,710 | ||||||||||||
Net investment income | 10,708,966 | 11,201,652 | 23,440,037 | ||||||||||||
Net realized and unrealized gains (losses) from investment activities: | |||||||||||||||
Net realized gains (losses) from: | |||||||||||||||
Investments | (211,790 | ) | 4,405,344 | 1,938,958 | |||||||||||
Futures | — | 433,027 | (21,305 | ) | |||||||||||
Options and swaptions written | — | — | — | ||||||||||||
Investments sold short | — | — | — | ||||||||||||
Swap agreements | — | — | — | ||||||||||||
Forward foreign currency contracts | — | (9,768,980 | ) | (3,198,557 | ) | ||||||||||
Foreign currency transactions | — | 352,701 | 233,898 | ||||||||||||
Net realized gain (loss) | (211,790 | ) | (4,577,908 | ) | (1,047,006 | ) | |||||||||
Net change in unrealized appreciation/depreciation of: | |||||||||||||||
Investments | 11,172,886 | 15,580,270 | 10,109,588 | ||||||||||||
Futures | — | (925,668 | ) | (645,109 | ) | ||||||||||
Options and swaptions written | — | — | — | ||||||||||||
Investments sold short | — | — | — | ||||||||||||
Swap agreements | — | — | — | ||||||||||||
Forward foreign currency contracts | — | 7,878,767 | 187,605 | ||||||||||||
Other assets and liabilities denominated in foreign currency | — | (248,591 | ) | (84,807 | ) | ||||||||||
Net change in unrealized appreciation/depreciation | 11,172,886 | 22,284,778 | 9,567,277 | ||||||||||||
Net realized and unrealized gain from investment activities | 10,961,096 | 17,706,870 | 8,520,271 | ||||||||||||
Net increase in net assets resulting from operations | $ | 21,670,062 | $ | 28,908,522 | $ | 31,960,308 |
See accompanying notes to financial statements.
249
PACE Select Advisors Trust
Statement of operations (concluded)
For the year ended July 31, 2014
PACE Large Co Value Equity Investments | PACE Large Co Growth Equity Investments | PACE Small/Medium Co Value Equity Investments | PACE Small/Medium Co Growth Equity Investments | ||||||||||||||||
Investment income: | |||||||||||||||||||
Dividends (net of foreign withholding taxes of $66,951; $85,685; $11,171; $13,995; $2,961,025; $1,262,988; $281,261 and $330,864, respectively) | $ | 35,689,347 | $ | 19,239,978 | $ | 7,663,753 | $ | 2,179,769 | |||||||||||
Interest (net of foreign withholding taxes of $0; $0; $0; $0; $0; $227; $0 and $153, respectively) | — | — | — | 5 | |||||||||||||||
Securities lending income (includes $6,330; $1,004; $2,601; $3,602; $30,109; $2,888; $10,148 and $0, respectively earned from an affiliated entity) | 17,881 | 22,100 | 216,973 | 366,842 | |||||||||||||||
35,707,228 | 19,262,078 | 7,880,726 | 2,546,616 | ||||||||||||||||
Expenses: | |||||||||||||||||||
Investment management and administration fees | 10,327,301 | 10,224,907 | 4,242,190 | 4,269,254 | |||||||||||||||
Service fees–Class A | 383,920 | 167,950 | 82,327 | 107,993 | |||||||||||||||
Service and distribution fees–Class C | 150,704 | 43,750 | 52,143 | 43,788 | |||||||||||||||
Transfer agency and related services fees | 1,161,174 | 1,095,480 | 1,033,724 | 1,041,863 | |||||||||||||||
Custody and accounting fees | 540,678 | 509,675 | 206,169 | 207,540 | |||||||||||||||
Professional fees | 248,343 | 173,038 | 156,840 | 168,669 | |||||||||||||||
Reports and notices to shareholders | 175,774 | 75,353 | 75,171 | 115,076 | |||||||||||||||
State registration fees | 69,153 | 67,758 | 57,279 | 56,614 | |||||||||||||||
Trustees' fees | 38,796 | 37,462 | 26,165 | 25,795 | |||||||||||||||
Insurance expense | 32,203 | 30,489 | 11,762 | 12,369 | |||||||||||||||
Interest expense | — | — | — | — | |||||||||||||||
Dividend expense, interest expense and other borrowing costs for investments sold short | 2,434,239 | — | — | — | |||||||||||||||
Other expenses | 49,244 | 40,547 | 27,989 | 27,279 | |||||||||||||||
15,611,529 | 12,466,409 | 5,971,759 | 6,076,240 | ||||||||||||||||
Fee waivers and/or expense reimbursements | (177,925 | ) | — | — | (36,409 | ) | |||||||||||||
Recoupment of fees waived or expenses previously reimbursed | — | 1,228 | 256,238 | 91,278 | |||||||||||||||
Net expenses | 15,433,604 | 12,467,637 | 6,227,997 | 6,131,109 | |||||||||||||||
Net investment income (loss) | 20,273,624 | 6,794,441 | 1,652,729 | (3,584,493 | ) | ||||||||||||||
Net realized and unrealized gains (losses) from investment activities: | |||||||||||||||||||
Net realized gains (losses) from: | |||||||||||||||||||
Investments (net of foreign tax expense of $0; $0; $0; $0; $77,377; $573,342; $0 and $0, respectively) | 205,957,301 | 135,121,323 | 81,410,101 | 95,557,889 | |||||||||||||||
Futures | — | — | — | — | |||||||||||||||
Options and swaptions written | — | — | — | — | |||||||||||||||
Investments sold short | (7,149,522 | ) | — | — | — | ||||||||||||||
Swap agreements | — | — | — | — | |||||||||||||||
Forward foreign currency contracts | — | — | — | — | |||||||||||||||
Foreign currency transactions | 21 | — | 15 | 6 | |||||||||||||||
Net realized gain (loss) | 198,807,800 | 135,121,323 | 81,410,116 | 95,557,895 | |||||||||||||||
Net change in unrealized appreciation/depreciation of: | |||||||||||||||||||
Investments (net of change in deferred foreign capital gains taxes of $0, $0, $0, $0, $0, $825,816, $0, $0) | (32,148,746 | ) | 92,163,332 | (20,855,506 | ) | (66,221,815 | ) | ||||||||||||
Futures | — | — | — | — | |||||||||||||||
Options and swaptions written | — | — | — | — | |||||||||||||||
Investments sold short | 1,996,302 | — | — | — | |||||||||||||||
Swap agreements | — | — | — | — | |||||||||||||||
Forward foreign currency contracts | — | — | — | — | |||||||||||||||
Other assets and liabilities denominated in foreign currency | — | — | — | — | |||||||||||||||
Net change in unrealized appreciation/depreciation | (30,152,444 | ) | 92,163,332 | (20,855,506 | ) | (66,221,815 | ) | ||||||||||||
Net realized and unrealized gain (loss) from investment activities | 168,655,356 | 227,284,655 | 60,554,610 | 29,336,080 | |||||||||||||||
Net increase in net assets resulting from operations | $ | 188,928,980 | $ | 234,079,096 | $ | 62,207,339 | $ | 25,751,587 |
250
PACE International Equity Investments | PACE International Emerging Markets Equity Investments | PACE Global Real Estate Securities Investments | PACE Alternative Strategies Investments | ||||||||||||||||
Investment income: | |||||||||||||||||||
Dividends (net of foreign withholding taxes of $66,951; $85,685; $11,171; $13,995; $2,961,025; $1,262,988; $281,261 and $330,864, respectively) | $ | 42,135,147 | $ | 11,894,667 | $ | 3,986,756 | $ | 4,789,228 | |||||||||||
Interest (net of foreign withholding taxes of $0; $0; $0; $0; $0; $227; $0 and $153, respectively) | — | 876 | — | 2,142,988 | |||||||||||||||
Securities lending income (includes $6,330; $1,004; $2,601; $3,602; $30,109; $2,888; $10,148 and $0, respectively earned from an affiliated entity) | 534,042 | 247,162 | 34,113 | — | |||||||||||||||
42,669,189 | 12,142,705 | 4,020,869 | 6,932,216 | ||||||||||||||||
Expenses: | |||||||||||||||||||
Investment management and administration fees | 9,325,293 | 4,612,417 | 1,075,176 | 8,740,822 | |||||||||||||||
Service fees–Class A | 144,347 | 41,685 | 13,424 | 166,990 | |||||||||||||||
Service and distribution fees–Class C | 29,084 | 20,571 | 2,346 | 52,779 | |||||||||||||||
Transfer agency and related services fees | 1,058,748 | 967,712 | 666,319 | 508,790 | |||||||||||||||
Custody and accounting fees | 1,003,236 | 775,725 | 100,798 | 455,515 | |||||||||||||||
Professional fees | 210,184 | 273,651 | 168,530 | 229,333 | |||||||||||||||
Reports and notices to shareholders | 156,987 | 65,502 | 39,586 | 74,480 | |||||||||||||||
State registration fees | 69,053 | 63,242 | 51,051 | 80,117 | |||||||||||||||
Trustees' fees | 33,858 | 24,610 | 20,325 | 27,614 | |||||||||||||||
Insurance expense | 23,415 | 8,640 | 3,032 | 13,897 | |||||||||||||||
Interest expense | 641 | — | — | 45,833 | |||||||||||||||
Dividend expense, interest expense and other borrowing costs for investments sold short | 3,294,024 | — | — | 682,557 | |||||||||||||||
Other expenses | 57,802 | 47,706 | 43,407 | 73,740 | |||||||||||||||
15,406,672 | 6,901,461 | 2,183,994 | 11,152,467 | ||||||||||||||||
Fee waivers and/or expense reimbursements | (217,897 | ) | (446,443 | ) | (555,459 | ) | (94,343 | ) | |||||||||||
Recoupment of fees waived or expenses previously reimbursed | — | — | — | 102,477 | |||||||||||||||
Net expenses | 15,188,775 | 6,455,018 | 1,628,535 | 11,160,601 | |||||||||||||||
Net investment income (loss) | 27,480,414 | 5,687,687 | 2,392,334 | (4,228,385 | ) | ||||||||||||||
Net realized and unrealized gains (losses) from investment activities: | |||||||||||||||||||
Net realized gains (losses) from: | |||||||||||||||||||
Investments (net of foreign tax expense of $0; $0; $0; $0; $77,377; $573,342; $0 and $0, respectively) | 124,629,599 | 3,264,902 | 7,857,623 | 2,387,731 | |||||||||||||||
Futures | 149,034 | — | — | 1,129,157 | |||||||||||||||
Options and swaptions written | — | — | — | 32,778,733 | |||||||||||||||
Investments sold short | (2,919,078 | ) | — | — | (2,490,739 | ) | |||||||||||||
Swap agreements | — | — | — | (570,089 | ) | ||||||||||||||
Forward foreign currency contracts | (249,463 | ) | (1,660 | ) | — | 1,327,646 | |||||||||||||
Foreign currency transactions | 266,286 | (383,393 | ) | (54,869 | ) | (13,405 | ) | ||||||||||||
Net realized gain (loss) | 121,876,378 | 2,879,849 | 7,802,754 | 34,549,034 | |||||||||||||||
Net change in unrealized appreciation/depreciation of: | |||||||||||||||||||
Investments (net of change in deferred foreign capital gains taxes of $0, $0, $0, $0, $0, $825,816, $0, $0) | (11,972,406 | ) | 36,452,402 | 9,095,868 | 4,920,748 | ||||||||||||||
Futures | (65,856 | ) | — | — | (620,152 | ) | |||||||||||||
Options and swaptions written | — | — | — | (1,729,898 | ) | ||||||||||||||
Investments sold short | (3,642,948 | ) | — | — | 221,760 | ||||||||||||||
Swap agreements | — | — | — | 2,979,415 | |||||||||||||||
Forward foreign currency contracts | 603,302 | — | — | 974,123 | |||||||||||||||
Other assets and liabilities denominated in foreign currency | 53,615 | 118,586 | 1,927 | 19,023 | |||||||||||||||
Net change in unrealized appreciation/depreciation | (15,024,293 | ) | 36,570,988 | 9,097,795 | 6,765,019 | ||||||||||||||
Net realized and unrealized gain (loss) from investment activities | 106,852,085 | 39,450,837 | 16,900,549 | 41,314,053 | |||||||||||||||
Net increase in net assets resulting from operations | $ | 134,332,499 | $ | 45,138,524 | $ | 19,292,883 | $ | 37,085,668 |
See accompanying notes to financial statements.
251
PACE Select Advisors Trust
Statement of changes in net assets
PACE Money Market Investments | PACE Mortgage-Backed Securities Fixed Income Investments | PACE Intermediate Fixed Income Investments | |||||||||||||||||||||||||
For the years ended July 31, | For the years ended July 31, | For the years ended July 31, | |||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
From operations: | |||||||||||||||||||||||||||
Net investment income | $ | 27,332 | $ | 32,607 | $ | 7,761,989 | $ | 6,202,812 | $ | 6,301,354 | $ | 5,510,729 | |||||||||||||||
Net realized gain (loss) | — | 42 | 7,925,094 | (11,915,337 | ) | 2,868,319 | 3,142,040 | ||||||||||||||||||||
Net change in unrealized appreciation/depreciation | — | — | 6,328,559 | (7,072,820 | ) | 1,829,571 | (11,752,593 | ) | |||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 27,332 | 32,649 | 22,015,642 | (12,785,345 | ) | 10,999,244 | (3,099,824 | ) | |||||||||||||||||||
Dividends and distributions to shareholders from: | |||||||||||||||||||||||||||
Net investment income–Class A | — | — | (1,312,855 | ) | (1,718,895 | ) | (355,486 | ) | (319,974 | ) | |||||||||||||||||
Net investment income–Class C | — | — | (233,826 | ) | (347,567 | ) | (17,962 | ) | (13,195 | ) | |||||||||||||||||
Net investment income–Class Y | — | — | (1,221,484 | ) | (1,574,730 | ) | (9,032 | ) | (10,111 | ) | |||||||||||||||||
Net investment income–Class P | (27,332 | ) | (32,607 | ) | (10,322,100 | ) | (11,699,549 | ) | (6,061,851 | ) | (4,999,341 | ) | |||||||||||||||
Net realized gains–Class A | — | — | — | (1,394,346 | ) | — | — | ||||||||||||||||||||
Net realized gains–Class C | — | — | — | (361,507 | ) | — | — | ||||||||||||||||||||
Net realized gains–Class Y | — | — | — | (1,154,929 | ) | — | — | ||||||||||||||||||||
Net realized gains–Class P | (664 | ) | — | — | (8,342,666 | ) | — | — | |||||||||||||||||||
Return of capital–Class A | — | — | — | — | — | — | |||||||||||||||||||||
Return of capital–Class C | — | — | — | — | — | — | |||||||||||||||||||||
Return of capital–Class Y | — | — | — | — | — | — | |||||||||||||||||||||
Return of capital–Class P | — | — | — | — | — | — | |||||||||||||||||||||
(27,996 | ) | (32,607 | ) | (13,090,265 | ) | (26,594,189 | ) | (6,444,331 | ) | (5,342,621 | ) | ||||||||||||||||
From beneficial interest transactions: | |||||||||||||||||||||||||||
Net proceeds from shares sold | 228,597,765 | 350,456,561 | 112,353,502 | 172,704,074 | 92,027,450 | 162,546,504 | |||||||||||||||||||||
Cost of shares repurchased | (326,432,653 | ) | (377,723,554 | ) | (165,018,741 | ) | (184,404,522 | ) | (105,261,785 | ) | (171,188,613 | ) | |||||||||||||||
Proceeds from dividends reinvested | 16,299 | 17,850 | 12,128,536 | 24,671,779 | 5,926,805 | 4,891,984 | |||||||||||||||||||||
Net increase (decrease) in net assets from beneficial interest transactions | (97,818,589 | ) | (27,249,143 | ) | (40,536,703 | ) | 12,971,331 | (7,307,530 | ) | (3,750,125 | ) | ||||||||||||||||
Redemption fees | — | — | 34,876 | 54,968 | 38,890 | 53,602 | |||||||||||||||||||||
Cash payment from investment advisor | 2,430 | — | — | — | — | — | |||||||||||||||||||||
Net increase (decrease) in net assets | (97,816,823 | ) | (27,249,101 | ) | (31,576,450 | ) | (26,353,235 | ) | (2,713,727 | ) | (12,138,968 | ) | |||||||||||||||
Net assets: | |||||||||||||||||||||||||||
Beginning of year | 309,841,944 | 337,091,045 | 588,390,045 | 614,743,280 | 450,608,246 | 462,747,214 | |||||||||||||||||||||
End of year | $ | 212,025,121 | $ | 309,841,944 | $ | 556,813,595 | $ | 588,390,045 | $ | 447,894,519 | $ | 450,608,246 | |||||||||||||||
Accumulated undistributed (distributions in excess of) net investment income | $ | — | $ | — | $ | 322,900 | $ | 275,474 | $ | 1,527,813 | $ | 1,328,417 |
252
PACE Strategic Fixed Income Investments | PACE Municipal Fixed Income Investments | ||||||||||||||||||
For the years ended July 31, | For the years ended July 31, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||
From operations: | |||||||||||||||||||
Net investment income | $ | 26,690,206 | $ | 27,199,798 | $ | 10,708,966 | $ | 8,694,451 | |||||||||||
Net realized gain (loss) | (51,668,368 | ) | 35,445,990 | (211,790 | ) | 2,793,293 | |||||||||||||
Net change in unrealized appreciation/depreciation | 58,741,670 | (86,803,008 | ) | 11,172,886 | (19,944,620 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from operations | 33,763,508 | (24,157,220 | ) | 21,670,062 | (8,456,876 | ) | |||||||||||||
Dividends and distributions to shareholders from: | |||||||||||||||||||
Net investment income–Class A | (1,093,304 | ) | (2,312,004 | ) | (1,629,590 | ) | (1,679,750 | ) | |||||||||||
Net investment income–Class C | (284,606 | ) | (548,567 | ) | (242,152 | ) | (256,306 | ) | |||||||||||
Net investment income–Class Y | (64,062 | ) | (188,996 | ) | (2,344 | ) | (2,994 | ) | |||||||||||
Net investment income–Class P | (18,535,802 | ) | (25,143,925 | ) | (8,835,545 | ) | (6,755,976 | ) | |||||||||||
Net realized gains–Class A | (1,489,110 | ) | (1,859,515 | ) | (470,526 | ) | (315,355 | ) | |||||||||||
Net realized gains–Class C | (461,758 | ) | (518,187 | ) | (87,525 | ) | (61,126 | ) | |||||||||||
Net realized gains–Class Y | (68,122 | ) | (147,902 | ) | (611 | ) | (549 | ) | |||||||||||
Net realized gains–Class P | (22,126,780 | ) | (17,500,726 | ) | (2,253,307 | ) | (1,038,308 | ) | |||||||||||
Return of capital–Class A | (325,239 | ) | — | — | — | ||||||||||||||
Return of capital–Class C | (86,293 | ) | — | — | — | ||||||||||||||
Return of capital–Class Y | (21,117 | ) | — | — | — | ||||||||||||||
Return of capital–Class P | (6,271,593 | ) | — | — | — | ||||||||||||||
(50,827,786 | ) | (48,219,822 | ) | (13,521,600 | ) | (10,110,364 | ) | ||||||||||||
From beneficial interest transactions: | |||||||||||||||||||
Net proceeds from shares sold | 192,427,019 | 260,174,318 | 104,146,434 | 136,283,919 | |||||||||||||||
Cost of shares repurchased | (196,510,676 | ) | (215,719,231 | ) | (91,324,849 | ) | (65,939,182 | ) | |||||||||||
Proceeds from dividends reinvested | 47,858,156 | 44,765,797 | 11,528,562 | 8,527,192 | |||||||||||||||
Net increase (decrease) in net assets from beneficial interest transactions | 43,774,499 | 89,220,884 | 24,350,147 | 78,871,929 | |||||||||||||||
Redemption fees | 58,134 | 56,084 | 44,631 | 36,761 | |||||||||||||||
Cash payment from investment advisor | — | — | — | — | |||||||||||||||
Net increase (decrease) in net assets | 26,768,355 | 16,899,926 | 32,543,240 | 60,341,450 | |||||||||||||||
Net assets: | |||||||||||||||||||
Beginning of year | 925,399,608 | 908,499,682 | 376,796,052 | 316,454,602 | |||||||||||||||
End of year | $ | 952,167,963 | $ | 925,399,608 | $ | 409,339,292 | $ | 376,796,052 | |||||||||||
Accumulated undistributed (distributions in excess of) net investment income | $ | 1,992,690 | $ | 7,614,796 | $ | — | $ | — |
See accompanying notes to financial statements.
253
PACE Select Advisors Trust
Statement of changes in net assets (continued)
PACE International Fixed Income Investments | PACE High Yield Investments | PACE Large Co Value Equity Investments | |||||||||||||||||||||||||
For the years ended July 31, | For the years ended July 31, | For the years ended July 31, | |||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
From operations: | |||||||||||||||||||||||||||
Net investment income | $ | 11,201,652 | $ | 9,846,328 | $ | 23,440,037 | $ | 21,171,947 | $ | 20,273,624 | $ | 17,134,258 | |||||||||||||||
Net realized gain (loss) | (4,577,908 | ) | (10,412,404 | ) | (1,047,006 | ) | (1,911,325 | ) | 198,807,800 | 167,042,721 | |||||||||||||||||
Net change in unrealized appreciation/depreciation | 22,284,778 | (24,760,463 | ) | 9,567,277 | 11,901,373 | (30,152,444 | ) | 172,907,385 | |||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 28,908,522 | (25,326,539 | ) | 31,960,308 | 31,161,995 | 188,928,980 | 357,084,364 | ||||||||||||||||||||
Dividends and distributions to shareholders from: | |||||||||||||||||||||||||||
Net investment income–Class A | (833,795 | ) | (1,138,791 | ) | (1,268,377 | ) | (1,421,528 | ) | (1,315,722 | ) | (1,715,660 | ) | |||||||||||||||
Net investment income–Class C | (54,066 | ) | (81,329 | ) | (280,907 | ) | (321,743 | ) | (19,938 | ) | (58,764 | ) | |||||||||||||||
Net investment income–Class Y | (71,009 | ) | (72,062 | ) | (92,661 | ) | (66,755 | ) | (207,331 | ) | (240,829 | ) | |||||||||||||||
Net investment income–Class P | (6,550,277 | ) | (6,391,654 | ) | (21,950,316 | ) | (18,981,394 | ) | (13,005,353 | ) | (15,927,508 | ) | |||||||||||||||
Net realized gains–Class A | — | — | — | (333,992 | ) | (1,838,160 | ) | — | |||||||||||||||||||
Net realized gains–Class C | — | — | — | (80,332 | ) | (180,129 | ) | — | |||||||||||||||||||
Net realized gains–Class Y | — | — | — | (14,168 | ) | (227,508 | ) | — | |||||||||||||||||||
Net realized gains–Class P | — | — | — | (4,036,170 | ) | (14,281,952 | ) | — | |||||||||||||||||||
Return of capital–Class A | (806,051 | ) | (1,023,864 | ) | — | (27,894 | ) | — | — | ||||||||||||||||||
Return of capital–Class C | (49,250 | ) | (68,111 | ) | — | (6,125 | ) | — | — | ||||||||||||||||||
Return of capital–Class Y | (72,295 | ) | (73,857 | ) | — | (1,614 | ) | — | — | ||||||||||||||||||
Return of capital–Class P | (6,947,465 | ) | (6,775,328 | ) | — | (395,975 | ) | — | — | ||||||||||||||||||
(15,384,208 | ) | (15,624,996 | ) | (23,592,261 | ) | (25,687,690 | ) | (31,076,093 | ) | (17,942,761 | ) | ||||||||||||||||
From beneficial interest transactions: | |||||||||||||||||||||||||||
Net proceeds from shares sold | 125,801,209 | 156,802,544 | 112,560,344 | 157,057,758 | 162,005,183 | 150,537,298 | |||||||||||||||||||||
Cost of shares repurchased | (102,673,820 | ) | (108,693,581 | ) | (68,545,516 | ) | (98,356,565 | ) | (215,055,013 | ) | (339,465,707 | ) | |||||||||||||||
Proceeds from dividends reinvested | 14,273,058 | 14,421,847 | 21,936,286 | 23,918,169 | 29,528,230 | 17,003,690 | |||||||||||||||||||||
Net increase (decrease) in net assets from beneficial interest transactions | 37,400,447 | 62,530,810 | 65,951,114 | 82,619,362 | (23,521,600 | ) | (171,924,719 | ) | |||||||||||||||||||
Redemption fees | 27,701 | 27,787 | 20,704 | 31,407 | 21,338 | 30,063 | |||||||||||||||||||||
Net increase in net assets | 50,952,462 | 21,607,062 | 74,339,865 | 88,125,074 | 134,352,625 | 167,246,947 | |||||||||||||||||||||
Net assets: | |||||||||||||||||||||||||||
Beginning of year | 548,205,664 | 526,598,602 | 388,285,529 | 300,160,455 | 1,319,568,979 | 1,152,322,032 | |||||||||||||||||||||
End of year | $ | 599,158,126 | $ | 548,205,664 | $ | 462,625,394 | $ | 388,285,529 | $ | 1,453,921,604 | $ | 1,319,568,979 | |||||||||||||||
Accumulated undistributed (distributions in excess of) net investment income | $ | (19,812,550 | ) | $ | (17,359,961 | ) | $ | 239,635 | $ | — | $ | 14,041,734 | $ | 8,400,806 |
254
PACE Large Co Growth Equity Investments | PACE Small/Medium Co Value Equity Investments | ||||||||||||||||||
For the years ended July 31, | For the years ended July 31, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||
From operations: | |||||||||||||||||||
Net investment income | $ | 6,794,441 | $ | 7,450,158 | $ | 1,652,729 | $ | 3,379,955 | |||||||||||
Net realized gain (loss) | 135,121,323 | 148,428,436 | 81,410,116 | 64,525,410 | |||||||||||||||
Net change in unrealized appreciation/depreciation | 92,163,332 | 79,047,355 | (20,855,506 | ) | 61,853,898 | ||||||||||||||
Net increase (decrease) in net assets resulting from operations | 234,079,096 | 234,925,949 | 62,207,339 | 129,759,263 | |||||||||||||||
Dividends and distributions to shareholders from: | |||||||||||||||||||
Net investment income–Class A | (93,180 | ) | (104,343 | ) | (123,184 | ) | (146,859 | ) | |||||||||||
Net investment income–Class C | — | — | — | — | |||||||||||||||
Net investment income–Class Y | (56,520 | ) | (68,046 | ) | (4,125 | ) | (3,299 | ) | |||||||||||
Net investment income–Class P | (4,519,165 | ) | (5,649,791 | ) | (2,270,922 | ) | (2,622,888 | ) | |||||||||||
Net realized gains–Class A | (5,660,146 | ) | — | (3,844,514 | ) | — | |||||||||||||
Net realized gains–Class C | (411,158 | ) | — | (678,374 | ) | — | |||||||||||||
Net realized gains–Class Y | (1,274,197 | ) | — | (98,053 | ) | — | |||||||||||||
Net realized gains–Class P | (100,636,569 | ) | — | (55,352,971 | ) | — | |||||||||||||
Return of capital–Class A | — | — | — | — | |||||||||||||||
Return of capital–Class C | — | — | — | — | |||||||||||||||
Return of capital–Class Y | — | — | — | — | |||||||||||||||
Return of capital–Class P | — | — | — | — | |||||||||||||||
(112,650,935 | ) | (5,822,180 | ) | (62,372,143 | ) | (2,773,046 | ) | ||||||||||||
From beneficial interest transactions: | |||||||||||||||||||
Net proceeds from shares sold | 161,742,711 | 154,641,555 | 82,288,030 | 69,360,098 | |||||||||||||||
Cost of shares repurchased | (208,911,465 | ) | (306,901,653 | ) | (80,325,500 | ) | (99,257,811 | ) | |||||||||||
Proceeds from dividends reinvested | 108,102,059 | 5,549,008 | 60,066,647 | 2,658,999 | |||||||||||||||
Net increase (decrease) in net assets from beneficial interest transactions | 60,933,305 | (146,711,090 | ) | 62,029,177 | (27,238,714 | ) | |||||||||||||
Redemption fees | 15,144 | 26,946 | 9,880 | 8,801 | |||||||||||||||
Net increase in net assets | 182,376,610 | 82,419,625 | 61,874,253 | 99,756,304 | |||||||||||||||
Net assets: | |||||||||||||||||||
Beginning of year | 1,195,468,958 | 1,113,049,333 | 486,559,986 | 386,803,682 | |||||||||||||||
End of year | $ | 1,377,845,568 | $ | 1,195,468,958 | $ | 548,434,239 | $ | 486,559,986 | |||||||||||
Accumulated undistributed (distributions in excess of) net investment income | $ | 5,976,682 | $ | 4,082,837 | $ | 845,212 | $ | 1,862,609 |
See accompanying notes to financial statements.
255
PACE Select Advisors Trust
Statement of changes in net assets (concluded)
PACE Small/Medium Co Growth Equity Investments | PACE International Equity Investments | PACE International Emerging Markets Equity Investments | |||||||||||||||||||||||||
For the years ended July 31, | For the years ended July 31, | For the years ended July 31, | |||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
From operations: | |||||||||||||||||||||||||||
Net investment income (loss) | $ | (3,584,493 | ) | $ | (1,445,440 | ) | $ | 27,480,414 | $ | 18,225,332 | $ | 5,687,687 | $ | 2,691,736 | |||||||||||||
Net realized gain (loss) | 95,557,895 | 55,506,406 | 121,876,378 | 29,506,227 | 2,879,849 | (15,509,489 | ) | ||||||||||||||||||||
Net change in unrealized appreciation/depreciation | (66,221,815 | ) | 77,571,558 | (15,024,293 | ) | 127,016,723 | 36,570,988 | 13,771,800 | |||||||||||||||||||
Net increase in net assets resulting from operations | 25,751,587 | 131,632,524 | 134,332,499 | 174,748,282 | 45,138,524 | 954,047 | |||||||||||||||||||||
Dividends and distributions to shareholders from: | |||||||||||||||||||||||||||
Net investment income–Class A | — | — | (1,012,743 | ) | (1,151,644 | ) | (56,842 | ) | (133,643 | ) | |||||||||||||||||
Net investment income–Class C | — | — | (29,289 | ) | (35,675 | ) | — | — | |||||||||||||||||||
Net investment income–Class Y | — | — | (450,709 | ) | (451,927 | ) | (71,062 | ) | (138,544 | ) | |||||||||||||||||
Net investment income–Class P | — | — | (19,226,294 | ) | (18,291,738 | ) | (2,015,608 | ) | (1,787,929 | ) | |||||||||||||||||
Net realized gains–Class A | (5,458,589 | ) | (623,754 | ) | — | — | — | — | |||||||||||||||||||
Net realized gains–Class C | (647,674 | ) | (63,671 | ) | — | — | — | — | |||||||||||||||||||
Net realized gains–Class Y | (80,208 | ) | (4,434 | ) | — | — | — | — | |||||||||||||||||||
Net realized gains–Class P | (59,054,952 | ) | (6,538,198 | ) | — | — | — | — | |||||||||||||||||||
(65,241,423 | ) | (7,230,057 | ) | (20,719,035 | ) | (19,930,984 | ) | (2,143,512 | ) | (2,060,116 | ) | ||||||||||||||||
From beneficial interest transactions: | |||||||||||||||||||||||||||
Net proceeds from shares sold | 77,387,031 | 66,510,686 | 181,513,316 | 172,911,160 | 131,706,820 | 167,350,314 | |||||||||||||||||||||
Cost of shares repurchased | (84,716,724 | ) | (118,229,752 | ) | (148,140,850 | ) | (174,721,550 | ) | (61,459,183 | ) | (53,864,836 | ) | |||||||||||||||
Proceeds from dividends reinvested | 62,774,773 | 6,954,318 | 19,763,258 | 19,040,236 | 2,057,646 | 1,980,763 | |||||||||||||||||||||
Net increase (decrease) in net assets from beneficial interest transactions | 55,445,080 | (44,764,748 | ) | 53,135,724 | 17,229,846 | 72,305,283 | 115,466,241 | ||||||||||||||||||||
Redemption fees | 9,429 | 17,669 | 22,296 | 33,777 | 23,103 | 26,311 | |||||||||||||||||||||
Net increase in net assets | 15,964,673 | 79,655,388 | 166,771,484 | 172,080,921 | 115,323,398 | 114,386,483 | |||||||||||||||||||||
Net assets: | |||||||||||||||||||||||||||
Beginning of year | 503,357,352 | 423,701,964 | 942,208,020 | 770,127,099 | 366,371,819 | 251,985,336 | |||||||||||||||||||||
End of year | $ | 519,322,025 | $ | 503,357,352 | $ | 1,108,979,504 | $ | 942,208,020 | $ | 481,695,217 | $ | 366,371,819 | |||||||||||||||
Accumulated undistributed (distributions in excess of) net investment income | $ | 68,773 | $ | 64,038 | $ | 22,091,154 | $ | 12,643,178 | $ | 4,764,967 | $ | 2,082,021 |
256
PACE Global Real Estate Securities Investments | PACE Alternative Strategies Investments | ||||||||||||||||||
For the years ended July 31, | For the years ended July 31, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||
From operations: | |||||||||||||||||||
Net investment income (loss) | $ | 2,392,334 | $ | 1,816,091 | $ | (4,228,385 | ) | $ | (1,304,156 | ) | |||||||||
Net realized gain (loss) | 7,802,754 | 18,704,372 | 34,549,034 | 26,185,227 | |||||||||||||||
Net change in unrealized appreciation/depreciation | 9,097,795 | (5,344,478 | ) | 6,765,019 | 24,900,392 | ||||||||||||||
Net increase in net assets resulting from operations | 19,292,883 | 15,175,985 | 37,085,668 | 49,781,463 | |||||||||||||||
Dividends and distributions to shareholders from: | |||||||||||||||||||
Net investment income–Class A | (94,946 | ) | (205,882 | ) | (1,162,407 | ) | (173,223 | ) | |||||||||||
Net investment income–Class C | (2,423 | ) | (6,960 | ) | (59,766 | ) | — | ||||||||||||
Net investment income–Class Y | (5,667 | ) | (11,611 | ) | (101,008 | ) | (12,562 | ) | |||||||||||
Net investment income–Class P | (2,570,365 | ) | (4,990,785 | ) | (10,975,679 | ) | (3,346,509 | ) | |||||||||||
Net realized gains–Class A | — | — | — | — | |||||||||||||||
Net realized gains–Class C | — | — | — | — | |||||||||||||||
Net realized gains–Class Y | — | — | — | — | |||||||||||||||
Net realized gains–Class P | — | — | — | — | |||||||||||||||
(2,673,401 | ) | (5,215,238 | ) | (12,298,860 | ) | (3,532,294 | ) | ||||||||||||
From beneficial interest transactions: | |||||||||||||||||||
Net proceeds from shares sold | 30,881,013 | 39,031,765 | 197,094,073 | 140,092,032 | |||||||||||||||
Cost of shares repurchased | (21,004,857 | ) | (45,062,966 | ) | (88,629,959 | ) | (135,183,027 | ) | |||||||||||
Proceeds from dividends reinvested | 2,551,689 | 5,001,250 | 11,607,572 | 3,405,704 | |||||||||||||||
Net increase (decrease) in net assets from beneficial interest transactions | 12,427,845 | (1,029,951 | ) | 120,071,686 | 8,314,709 | ||||||||||||||
Redemption fees | 4,868 | 6,250 | 37,185 | 19,888 | |||||||||||||||
Net increase in net assets | 29,052,195 | 8,937,046 | 144,895,679 | 54,583,766 | |||||||||||||||
Net assets: | |||||||||||||||||||
Beginning of year | 122,258,087 | 113,321,041 | 554,809,568 | 500,225,802 | |||||||||||||||
End of year | $ | 151,310,282 | $ | 122,258,087 | $ | 699,705,247 | $ | 554,809,568 | |||||||||||
Accumulated undistributed (distributions in excess of) net investment income | $ | 75,386 | $ | (681,537 | ) | $ | (9,175,530 | ) | $ | 8,236,335 |
See accompanying notes to financial statements.
257
PACE Select Advisors Trust
PACE Money Market Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Net investment income | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 | ||||||||||||||||||
Dividends from net investment income | (0.000 | )1 | (0.000 | )1 | (0.000 | )1 | (0.000 | )1 | (0.000 | )1 | |||||||||||||
Distributions from net realized gains | (0.000 | )1 | — | — | (0.000 | )1 | (0.000 | )1 | |||||||||||||||
Total dividends and distributions | (0.000 | )1 | (0.000 | )1 | (0.000 | )1 | (0.000 | )1 | (0.000 | )1 | |||||||||||||
Net asset value, end of year | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total investment return2 | 0.01 | %3 | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.91 | % | 0.88 | % | 0.89 | % | 0.88 | % | 0.90 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.14 | % | 0.19 | % | 0.19 | % | 0.25 | % | 0.27 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | |||||||||||||
Supplemental data: | �� | ||||||||||||||||||||||
Net assets, end of year (000's) | $ | 212,025 | $ | 309,842 | $ | 337,091 | $ | 365,844 | $ | 386,217 |
1 Amount represents less than $0.0005 per share.
2 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the payable dates, and a sale at net asset value on the last day of each year reported. The figures do not include program fees; results would be lower if these were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions.
3 Payment from investment advisor as disclosed on page 313 had no impact on the Portfolio's total investment return and represents less than $0.0005 per share.
See accompanying notes to financial statements.
258
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259
PACE Select Advisors Trust
PACE Mortgage-Backed Securities Fixed Income Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.62 | $ | 13.46 | $ | 13.31 | $ | 13.71 | $ | 13.36 | |||||||||||||
Net investment income1 | 0.15 | 0.11 | 0.22 | 0.29 | 0.41 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.32 | (0.39 | ) | 0.34 | 0.20 | 0.86 | |||||||||||||||||
Net increase (decrease) from operations | 0.47 | (0.28 | ) | 0.56 | 0.49 | 1.27 | |||||||||||||||||
Dividends from net investment income | (0.27 | ) | (0.31 | ) | (0.34 | ) | (0.38 | ) | (0.46 | ) | |||||||||||||
Distributions from net realized gains | — | (0.25 | ) | (0.07 | ) | (0.51 | ) | (0.46 | ) | ||||||||||||||
Total dividends and distributions | (0.27 | ) | (0.56 | ) | (0.41 | ) | (0.89 | ) | (0.92 | ) | |||||||||||||
Net asset value, end of year | $ | 12.82 | $ | 12.62 | $ | 13.46 | $ | 13.31 | $ | 13.71 | |||||||||||||
Total investment return2 | 3.74 | % | (2.29 | )% | 4.34 | % | 3.74 | % | 9.92 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.07 | % | 1.05 | % | 1.05 | % | 1.06 | %3 | 1.08 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.97 | % | 0.99 | % | 1.02 | % | 1.02 | %3 | 1.02 | %3 | |||||||||||||
Net investment income | 1.17 | % | 0.83 | % | 1.68 | % | 2.16 | % | 3.06 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 59,834 | $ | 66,554 | $ | 78,764 | $ | 80,727 | $ | 92,416 | |||||||||||||
Portfolio turnover | 1,117 | % | 1,336 | % | 1,046 | % | 1,105 | % | 1,065 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.62 | $ | 13.47 | $ | 13.31 | $ | 13.71 | $ | 13.36 | |||||||||||||
Net investment income1 | 0.18 | 0.14 | 0.26 | 0.32 | 0.44 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.32 | (0.40 | ) | 0.35 | 0.20 | 0.86 | |||||||||||||||||
Net increase (decrease) from operations | 0.50 | (0.26 | ) | 0.61 | 0.52 | 1.30 | |||||||||||||||||
Dividends from net investment income | (0.30 | ) | (0.34 | ) | (0.38 | ) | (0.41 | ) | (0.49 | ) | |||||||||||||
Distributions from net realized gains | — | (0.25 | ) | (0.07 | ) | (0.51 | ) | (0.46 | ) | ||||||||||||||
Total dividends and distributions | (0.30 | ) | (0.59 | ) | (0.45 | ) | (0.92 | ) | (0.95 | ) | |||||||||||||
Net asset value, end of year | $ | 12.82 | $ | 12.62 | $ | 13.47 | $ | 13.31 | $ | 13.71 | |||||||||||||
Total investment return2 | 4.00 | % | (2.05 | )% | 4.60 | % | 4.00 | % | 10.20 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.87 | % | 0.85 | % | 0.86 | % | 0.88 | %3 | 0.89 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.72 | % | 0.74 | % | 0.77 | % | 0.77 | %3 | 0.77 | %3 | |||||||||||||
Net investment income | 1.42 | % | 1.08 | % | 1.92 | % | 2.42 | % | 3.29 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 47,959 | $ | 57,567 | $ | 61,428 | $ | 50,830 | $ | 49,486 | |||||||||||||
Portfolio turnover | 1,117 | % | 1,336 | % | 1,046 | % | 1,105 | % | 1,065 | % |
1 Calculated using the average shares method.
2 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
3 Includes interest expense representing less than 0.005%.
260
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.63 | $ | 13.48 | $ | 13.32 | $ | 13.72 | $ | 13.37 | |||||||||||||
Net investment income1 | 0.09 | 0.04 | 0.16 | 0.22 | 0.35 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.32 | (0.40 | ) | 0.34 | 0.20 | 0.85 | |||||||||||||||||
Net increase (decrease) from operations | 0.41 | (0.36 | ) | 0.50 | 0.42 | 1.20 | |||||||||||||||||
Dividends from net investment income | (0.20 | ) | (0.24 | ) | (0.27 | ) | (0.31 | ) | (0.39 | ) | |||||||||||||
Distributions from net realized gains | — | (0.25 | ) | (0.07 | ) | (0.51 | ) | (0.46 | ) | ||||||||||||||
Total dividends and distributions | (0.20 | ) | (0.49 | ) | (0.34 | ) | (0.82 | ) | (0.85 | ) | |||||||||||||
Net asset value, end of year | $ | 12.84 | $ | 12.63 | $ | 13.48 | $ | 13.32 | $ | 13.72 | |||||||||||||
Total investment return2 | 3.29 | % | (2.78 | )% | 3.81 | % | 3.22 | % | 9.37 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.59 | % | 1.56 | % | 1.56 | % | 1.58 | %3 | 1.61 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.47 | % | 1.49 | % | 1.52 | % | 1.52 | %3 | 1.52 | %3 | |||||||||||||
Net investment income | 0.67 | % | 0.33 | % | 1.19 | % | 1.66 | % | 2.56 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 13,958 | $ | 16,907 | $ | 20,710 | $ | 22,064 | $ | 24,394 | |||||||||||||
Portfolio turnover | 1,117 | % | 1,336 | % | 1,046 | % | 1,105 | % | 1,065 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.63 | $ | 13.47 | $ | 13.32 | $ | 13.71 | $ | 13.36 | |||||||||||||
Net investment income1 | 0.18 | 0.14 | 0.26 | 0.32 | 0.44 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.32 | (0.39 | ) | 0.34 | 0.21 | 0.86 | |||||||||||||||||
Net increase (decrease) from operations | 0.50 | (0.25 | ) | 0.60 | 0.53 | 1.30 | |||||||||||||||||
Dividends from net investment income | (0.30 | ) | (0.34 | ) | (0.38 | ) | (0.41 | ) | (0.49 | ) | |||||||||||||
Distributions from net realized gains | — | (0.25 | ) | (0.07 | ) | (0.51 | ) | (0.46 | ) | ||||||||||||||
Total dividends and distributions | (0.30 | ) | (0.59 | ) | (0.45 | ) | (0.92 | ) | (0.95 | ) | |||||||||||||
Net asset value, end of year | $ | 12.83 | $ | 12.63 | $ | 13.47 | $ | 13.32 | $ | 13.71 | |||||||||||||
Total investment return2 | 4.00 | % | (1.97 | )% | 4.52 | % | 4.08 | % | 10.20 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.90 | % | 0.86 | % | 0.85 | % | 0.86 | %3 | 0.88 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.72 | % | 0.74 | % | 0.77 | % | 0.77 | %3 | 0.77 | %3 | |||||||||||||
Net investment income | 1.41 | % | 1.08 | % | 1.93 | % | 2.41 | % | 3.30 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 435,063 | $ | 447,362 | $ | 453,841 | $ | 453,931 | $ | 477,172 | |||||||||||||
Portfolio turnover | 1,117 | % | 1,336 | % | 1,046 | % | 1,105 | % | 1,065 | % |
See accompanying notes to financial statements.
261
PACE Select Advisors Trust
PACE Intermediate Fixed Income Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.20 | $ | 12.42 | $ | 12.15 | $ | 12.02 | $ | 11.58 | |||||||||||||
Net investment income2 | 0.14 | 0.12 | 0.21 | 0.26 | 0.34 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.14 | (0.22 | ) | 0.28 | 0.12 | 0.49 | |||||||||||||||||
Net increase (decrease) from operations | 0.28 | (0.10 | ) | 0.49 | 0.38 | 0.83 | |||||||||||||||||
Dividends from net investment income | (0.15 | ) | (0.12 | ) | (0.22 | ) | (0.25 | ) | (0.39 | ) | |||||||||||||
Net asset value, end of year | $ | 12.33 | $ | 12.20 | $ | 12.42 | $ | 12.15 | $ | 12.02 | |||||||||||||
Total investment return3 | 2.30 | % | (0.93 | )% | 4.16 | % | 3.24 | % | 7.24 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.03 | % | 0.99 | %4 | 1.00 | % | 0.99 | %4 | 1.00 | %4 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.93 | % | 0.93 | %4 | 0.93 | % | 0.93 | %4 | 0.93 | %4 | |||||||||||||
Net investment income | 1.18 | % | 0.98 | % | 1.73 | % | 2.18 | % | 2.93 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 28,080 | $ | 31,355 | $ | 36,665 | $ | 39,022 | $ | 42,905 | |||||||||||||
Portfolio turnover | 827 | % | 818 | % | 398 | % | 664 | % | 974 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.20 | $ | 12.43 | $ | 12.15 | $ | 12.02 | $ | 11.59 | |||||||||||||
Net investment income2 | 0.18 | 0.15 | 0.24 | 0.29 | 0.38 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.13 | (0.23 | ) | 0.29 | 0.12 | 0.48 | |||||||||||||||||
Net increase (decrease) from operations | 0.31 | (0.08 | ) | 0.53 | 0.41 | 0.86 | |||||||||||||||||
Dividends from net investment income | (0.18 | ) | (0.15 | ) | (0.25 | ) | (0.28 | ) | (0.43 | ) | |||||||||||||
Net asset value, end of year | $ | 12.33 | $ | 12.20 | $ | 12.43 | $ | 12.15 | $ | 12.02 | |||||||||||||
Total investment return3 | 2.56 | % | (0.68 | )% | 4.42 | % | 3.49 | % | 7.53 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.05 | % | 0.89 | %4 | 0.88 | % | 0.83 | %4 | 0.74 | %4 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.68 | % | 0.68 | %4 | 0.68 | % | 0.68 | %4 | 0.68 | %4 | |||||||||||||
Net investment income | 1.43 | % | 1.24 | % | 1.99 | % | 2.42 | % | 3.19 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 543 | $ | 674 | $ | 990 | $ | 1,277 | $ | 1,997 | |||||||||||||
Portfolio turnover | 827 | % | 818 | % | 398 | % | 664 | % | 974 | % |
1 As of the close of business, June 5, 2014, Babson Capital Management, LLC became an investment sub-advisor of the Portfolio.
2 Calculated using the average shares method.
3 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
4 Includes interest expense representing less than 0.005%.
262
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.22 | $ | 12.44 | $ | 12.17 | $ | 12.03 | $ | 11.59 | |||||||||||||
Net investment income2 | 0.08 | 0.06 | 0.15 | 0.20 | 0.29 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.14 | (0.23 | ) | 0.28 | 0.13 | 0.48 | |||||||||||||||||
Net increase (decrease) from operations | 0.22 | (0.17 | ) | 0.43 | 0.33 | 0.77 | |||||||||||||||||
Dividends from net investment income | (0.09 | ) | (0.05 | ) | (0.16 | ) | (0.19 | ) | (0.33 | ) | |||||||||||||
Net asset value, end of year | $ | 12.35 | $ | 12.22 | $ | 12.44 | $ | 12.17 | $ | 12.03 | |||||||||||||
Total investment return3 | 1.78 | % | (1.34 | )% | 3.55 | % | 2.80 | % | 6.70 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.52 | % | 1.49 | %4 | 1.51 | % | 1.49 | %4 | 1.50 | %4 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.43 | % | 1.43 | %4 | 1.43 | % | 1.43 | %4 | 1.43 | %4 | |||||||||||||
Net investment income | 0.68 | % | 0.48 | % | 1.23 | % | 1.67 | % | 2.43 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 2,260 | $ | 2,685 | $ | 3,270 | $ | 3,474 | $ | 4,646 | |||||||||||||
Portfolio turnover | 827 | % | 818 | % | 398 | % | 664 | % | 974 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.20 | $ | 12.43 | $ | 12.16 | $ | 12.02 | $ | 11.59 | |||||||||||||
Net investment income2 | 0.18 | 0.15 | 0.24 | 0.29 | 0.37 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.13 | (0.23 | ) | 0.28 | 0.13 | 0.48 | |||||||||||||||||
Net increase (decrease) from operations | 0.31 | (0.08 | ) | 0.52 | 0.42 | 0.85 | |||||||||||||||||
Dividends from net investment income | (0.18 | ) | (0.15 | ) | (0.25 | ) | (0.28 | ) | (0.42 | ) | |||||||||||||
Net asset value, end of year | $ | 12.33 | $ | 12.20 | $ | 12.43 | $ | 12.16 | $ | 12.02 | |||||||||||||
Total investment return3 | 2.56 | % | (0.68 | )% | 4.33 | % | 3.58 | % | 7.51 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.82 | % | 0.74 | %4 | 0.74 | % | 0.72 | %4 | 0.73 | %4 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.68 | % | 0.68 | %4 | 0.68 | % | 0.68 | %4 | 0.68 | %4 | |||||||||||||
Net investment income | 1.43 | % | 1.22 | % | 1.97 | % | 2.43 | % | 3.16 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 417,011 | $ | 415,894 | $ | 421,822 | $ | 411,723 | $ | 420,801 | |||||||||||||
Portfolio turnover | 827 | % | 818 | % | 398 | % | 664 | % | 974 | % |
See accompanying notes to financial statements.
263
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 14.16 | $ | 15.29 | $ | 14.55 | $ | 14.56 | $ | 13.09 | |||||||||||||
Net investment income1 | 0.37 | 0.41 | 0.42 | 0.48 | 0.47 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.11 | (0.78 | ) | 1.11 | 0.43 | 1.60 | |||||||||||||||||
Net increase (decrease) from operations | 0.48 | (0.37 | ) | 1.53 | 0.91 | 2.07 | |||||||||||||||||
Dividends from net investment income | (0.28 | ) | (0.43 | ) | (0.52 | ) | (0.51 | ) | (0.58 | ) | |||||||||||||
Distributions from net realized gains | (0.37 | ) | (0.33 | ) | (0.27 | ) | (0.41 | ) | (0.02 | ) | |||||||||||||
Return of capital | (0.09 | ) | — | — | — | — | |||||||||||||||||
Total dividends, distributions and return of capital | (0.74 | ) | (0.76 | ) | (0.79 | ) | (0.92 | ) | (0.60 | ) | |||||||||||||
Net asset value, end of year | $ | 13.90 | $ | 14.16 | $ | 15.29 | $ | 14.55 | $ | 14.56 | |||||||||||||
Total investment return2 | 3.51 | % | (2.60 | )% | 10.86 | % | 6.54 | % | 16.09 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments, including interest expense | 1.06 | %3 | 1.03 | %3 | 1.04 | %3 | 1.09 | % | 1.09 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including interest expense | 1.06 | %3 | 1.06 | %3,4 | 1.06 | %3,4 | 1.06 | % | 1.06 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding interest expense | 1.05 | % | 1.05 | %4 | 1.06 | %4 | 1.06 | % | 1.06 | % | |||||||||||||
Net investment income | 2.63 | % | 2.72 | % | 2.85 | % | 3.38 | % | 3.36 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 44,465 | $ | 67,417 | $ | 85,571 | $ | 56,151 | $ | 45,499 | |||||||||||||
Portfolio turnover | 154 | % | 186 | % | 162 | % | 444 | % | 239 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 14.15 | $ | 15.28 | $ | 14.54 | $ | 14.54 | $ | 13.08 | |||||||||||||
Net investment income1 | 0.40 | 0.42 | 0.46 | 0.52 | 0.51 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.12 | (0.76 | ) | 1.10 | 0.44 | 1.59 | |||||||||||||||||
Net increase (decrease) from operations | 0.52 | (0.34 | ) | 1.56 | 0.96 | 2.10 | |||||||||||||||||
Dividends from net investment income | (0.31 | ) | (0.46 | ) | (0.55 | ) | (0.55 | ) | (0.62 | ) | |||||||||||||
Distributions from net realized gains | (0.37 | ) | (0.33 | ) | (0.27 | ) | (0.41 | ) | (0.02 | ) | |||||||||||||
Return of capital | (0.10 | ) | — | — | — | — | |||||||||||||||||
Total dividends, distributions and return of capital | (0.78 | ) | (0.79 | ) | (0.82 | ) | (0.96 | ) | (0.64 | ) | |||||||||||||
Net asset value, end of year | $ | 13.89 | $ | 14.15 | $ | 15.28 | $ | 14.54 | $ | 14.54 | |||||||||||||
Total investment return2 | 3.82 | % | (2.38 | )% | 11.10 | % | 6.80 | % | 16.47 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments, including interest expense | 0.93 | %3 | 0.90 | %3 | 0.89 | %3 | 0.96 | % | 0.85 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including interest expense | 0.81 | %3 | 0.81 | %3 | 0.81 | %3 | 0.81 | % | 0.81 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding interest expense | 0.81 | % | 0.81 | % | 0.81 | % | 0.81 | % | 0.81 | % | |||||||||||||
Net investment income | 2.90 | % | 2.80 | % | 3.09 | % | 3.62 | % | 3.63 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 3,158 | $ | 3,638 | $ | 5,907 | $ | 2,810 | $ | 3,058 | |||||||||||||
Portfolio turnover | 154 | % | 186 | % | 162 | % | 444 | % | 239 | % |
1 Calculated using the average shares method.
2 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
264
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 14.17 | $ | 15.29 | $ | 14.56 | $ | 14.56 | $ | 13.09 | |||||||||||||
Net investment income1 | 0.30 | 0.34 | 0.35 | 0.42 | 0.40 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.11 | (0.78 | ) | 1.10 | 0.43 | 1.60 | |||||||||||||||||
Net increase (decrease) from operations | 0.41 | (0.44 | ) | 1.45 | 0.85 | 2.00 | |||||||||||||||||
Dividends from net investment income | (0.23 | ) | (0.35 | ) | (0.45 | ) | (0.44 | ) | (0.51 | ) | |||||||||||||
Distributions from net realized gains | (0.37 | ) | (0.33 | ) | (0.27 | ) | (0.41 | ) | (0.02 | ) | |||||||||||||
Return of capital | (0.07 | ) | — | — | — | — | |||||||||||||||||
Total dividends, distributions and return of capital | (0.67 | ) | (0.68 | ) | (0.72 | ) | (0.85 | ) | (0.53 | ) | |||||||||||||
Net asset value, end of year | $ | 13.91 | $ | 14.17 | $ | 15.29 | $ | 14.56 | $ | 14.56 | |||||||||||||
Total investment return2 | 3.03 | % | (2.99 | )% | 10.25 | % | 6.10 | % | 15.52 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments, including interest expense | 1.53 | %3 | 1.51 | %3 | 1.52 | %3 | 1.53 | % | 1.56 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including interest expense | 1.53 | %3 | 1.51 | %3 | 1.52 | %3 | 1.55 | %4 | 1.56 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding interest expense | 1.52 | % | 1.51 | % | 1.52 | % | 1.55 | %4 | 1.56 | % | |||||||||||||
Net investment income | 2.17 | % | 2.26 | % | 2.38 | % | 2.88 | % | 2.86 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 15,143 | $ | 20,992 | $ | 21,193 | $ | 12,856 | $ | 12,289 | |||||||||||||
Portfolio turnover | 154 | % | 186 | % | 162 | % | 444 | % | 239 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 14.16 | $ | 15.29 | $ | 14.55 | $ | 14.55 | $ | 13.08 | |||||||||||||
Net investment income1 | 0.40 | 0.44 | 0.46 | 0.52 | 0.50 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.11 | (0.78 | ) | 1.10 | 0.44 | 1.60 | |||||||||||||||||
Net increase (decrease) from operations | 0.51 | (0.34 | ) | 1.56 | 0.96 | 2.10 | |||||||||||||||||
Dividends from net investment income | (0.30 | ) | (0.46 | ) | (0.55 | ) | (0.55 | ) | (0.61 | ) | |||||||||||||
Distributions from net realized gains | (0.37 | ) | (0.33 | ) | (0.27 | ) | (0.41 | ) | (0.02 | ) | |||||||||||||
Return of capital | (0.10 | ) | — | — | — | — | |||||||||||||||||
Total dividends, distributions and return of capital | (0.77 | ) | (0.79 | ) | (0.82 | ) | (0.96 | ) | (0.63 | ) | |||||||||||||
Net asset value, end of year | $ | 13.90 | $ | 14.16 | $ | 15.29 | $ | 14.55 | $ | 14.55 | |||||||||||||
Total investment return2 | 3.77 | % | (2.37 | )% | 11.09 | % | 6.88 | % | 16.39 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments, including interest expense | 0.81 | %3 | 0.81 | %3 | 0.82 | %3 | 0.84 | % | 0.87 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including interest expense | 0.81 | %3,4 | 0.81 | %3 | 0.81 | %3 | 0.81 | % | 0.81 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding interest expense | 0.81 | %4 | 0.81 | % | 0.81 | % | 0.81 | % | 0.81 | % | |||||||||||||
Net investment income | 2.90 | % | 2.96 | % | 3.10 | % | 3.63 | % | 3.62 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 889,402 | $ | 833,352 | $ | 795,829 | $ | 746,653 | $ | 691,186 | |||||||||||||
Portfolio turnover | 154 | % | 186 | % | 162 | % | 444 | % | 239 | % |
3 Includes interest expense representing less than 0.005%.
4 The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Portfolio, not to exceed the expense cap.
See accompanying notes to financial statements.
265
PACE Select Advisors Trust
PACE Municipal Fixed Income Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.91 | $ | 13.56 | $ | 13.00 | $ | 12.94 | $ | 12.45 | |||||||||||||
Net investment income1 | 0.34 | 0.33 | 0.37 | 0.38 | 0.39 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.38 | (0.59 | ) | 0.56 | 0.06 | 0.49 | |||||||||||||||||
Net increase (decrease) from operations | 0.72 | (0.26 | ) | 0.93 | 0.44 | 0.88 | |||||||||||||||||
Dividends from net investment income | (0.34 | ) | (0.33 | ) | (0.37 | ) | (0.38 | ) | (0.39 | ) | |||||||||||||
Distributions from net realized gains | (0.10 | ) | (0.06 | ) | — | — | — | ||||||||||||||||
Total dividends and distributions | (0.44 | ) | (0.39 | ) | (0.37 | ) | (0.38 | ) | (0.39 | ) | |||||||||||||
Net asset value, end of year | $ | 13.19 | $ | 12.91 | $ | 13.56 | $ | 13.00 | $ | 12.94 | |||||||||||||
Total investment return2 | 5.64 | % | (1.99 | )% | 7.21 | % | 3.49 | % | 7.18 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.92 | % | 0.93 | % | 0.95 | % | 0.94 | % | 0.95 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.90 | % | 0.91 | % | 0.93 | % | 0.93 | % | 0.93 | % | |||||||||||||
Net investment income | 2.59 | % | 2.47 | % | 2.75 | % | 2.96 | % | 3.08 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 63,225 | $ | 63,540 | $ | 71,639 | $ | 73,528 | $ | 83,501 | |||||||||||||
Portfolio turnover | 30 | % | 69 | % | 32 | % | 34 | % | 10 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.92 | $ | 13.57 | $ | 13.00 | $ | 12.95 | $ | 12.45 | |||||||||||||
Net investment income1 | 0.37 | 0.37 | 0.40 | 0.41 | 0.42 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.38 | (0.60 | ) | 0.57 | 0.05 | 0.50 | |||||||||||||||||
Net increase (decrease) from operations | 0.75 | (0.23 | ) | 0.97 | 0.46 | 0.92 | |||||||||||||||||
Dividends from net investment income | (0.37 | ) | (0.36 | ) | (0.40 | ) | (0.41 | ) | (0.42 | ) | |||||||||||||
Distributions from net realized gains | (0.10 | ) | (0.06 | ) | — | — | — | ||||||||||||||||
Total dividends and distributions | (0.47 | ) | (0.42 | ) | (0.40 | ) | (0.41 | ) | (0.42 | ) | |||||||||||||
Net asset value, end of year | $ | 13.20 | $ | 12.92 | $ | 13.57 | $ | 13.00 | $ | 12.95 | |||||||||||||
Total investment return2 | 5.89 | % | (1.74 | )% | 7.56 | % | 3.67 | % | 7.45 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.72 | % | 0.72 | % | 0.73 | % | 0.74 | % | 0.74 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.65 | % | 0.66 | % | 0.68 | % | 0.68 | % | 0.68 | % | |||||||||||||
Net investment income | 2.84 | % | 2.72 | % | 3.00 | % | 3.21 | % | 3.33 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 83 | $ | 82 | $ | 121 | $ | 118 | $ | 123 | |||||||||||||
Portfolio turnover | 30 | % | 69 | % | 32 | % | 34 | % | 10 | % |
1 Calculated using the average shares method.
2 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder could pay on Portfolio distributions or the redemption of Portfolio shares.
266
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.91 | $ | 13.57 | $ | 13.00 | $ | 12.94 | $ | 12.45 | |||||||||||||
Net investment income1 | 0.27 | 0.26 | 0.30 | 0.32 | 0.33 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.38 | (0.60 | ) | 0.57 | 0.06 | 0.49 | |||||||||||||||||
Net increase (decrease) from operations | 0.65 | (0.34 | ) | 0.87 | 0.38 | 0.82 | |||||||||||||||||
Dividends from net investment income | (0.27 | ) | (0.26 | ) | (0.30 | ) | (0.32 | ) | (0.33 | ) | |||||||||||||
Distributions from net realized gains | (0.10 | ) | (0.06 | ) | — | — | — | ||||||||||||||||
Total dividends and distributions | (0.37 | ) | (0.32 | ) | (0.30 | ) | (0.32 | ) | (0.33 | ) | |||||||||||||
Net asset value, end of year | $ | 13.19 | $ | 12.91 | $ | 13.57 | $ | 13.00 | $ | 12.94 | |||||||||||||
Total investment return2 | 5.10 | % | (2.56 | )% | 6.76 | % | 2.97 | % | 6.65 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.43 | % | 1.44 | % | 1.45 | % | 1.45 | % | 1.46 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.40 | % | 1.41 | % | 1.43 | % | 1.43 | % | 1.43 | % | |||||||||||||
Net investment income | 2.09 | % | 1.97 | % | 2.25 | % | 2.46 | % | 2.58 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 11,033 | $ | 12,336 | $ | 13,684 | $ | 13,943 | $ | 15,767 | |||||||||||||
Portfolio turnover | 30 | % | 69 | % | 32 | % | 34 | % | 10 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.91 | $ | 13.57 | $ | 13.00 | $ | 12.95 | $ | 12.45 | |||||||||||||
Net investment income1 | 0.37 | 0.36 | 0.40 | 0.41 | 0.42 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.38 | (0.60 | ) | 0.57 | 0.05 | 0.50 | |||||||||||||||||
Net increase (decrease) from operations | 0.75 | (0.24 | ) | 0.97 | 0.46 | 0.92 | |||||||||||||||||
Dividends from net investment income | (0.37 | ) | (0.36 | ) | (0.40 | ) | (0.41 | ) | (0.42 | ) | |||||||||||||
Distributions from net realized gains | (0.10 | ) | (0.06 | ) | — | — | — | ||||||||||||||||
Total dividends and distributions | (0.47 | ) | (0.42 | ) | (0.40 | ) | (0.41 | ) | (0.42 | ) | |||||||||||||
Net asset value, end of year | $ | 13.19 | $ | 12.91 | $ | 13.57 | $ | 13.00 | $ | 12.95 | |||||||||||||
Total investment return2 | 5.90 | % | (1.82 | )% | 7.56 | % | 3.67 | % | 7.54 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.68 | % | 0.70 | % | 0.72 | % | 0.72 | % | 0.74 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.65 | % | 0.66 | % | 0.68 | % | 0.68 | % | 0.68 | % | |||||||||||||
Net investment income | 2.84 | % | 2.70 | % | 3.00 | % | 3.21 | % | 3.33 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 334,999 | $ | 300,838 | $ | 231,010 | $ | 229,062 | $ | 229,028 | |||||||||||||
Portfolio turnover | 30 | % | 69 | % | 32 | % | 34 | % | 10 | % |
See accompanying notes to financial statements.
267
PACE Select Advisors Trust
PACE International Fixed Income Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 10.56 | $ | 11.40 | $ | 12.52 | $ | 11.43 | $ | 11.64 | |||||||||||||
Net investment income1 | 0.19 | 0.19 | 0.25 | 0.26 | 0.27 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.34 | (0.72 | ) | (0.56 | ) | 1.13 | 0.24 | ||||||||||||||||
Net increase (decrease) from operations | 0.53 | (0.53 | ) | (0.31 | ) | 1.39 | 0.51 | ||||||||||||||||
Dividends from net investment income | (0.14 | ) | (0.16 | ) | (0.81 | ) | (0.30 | ) | (0.70 | ) | |||||||||||||
Return of capital | (0.13 | ) | (0.15 | ) | — | — | (0.02 | ) | |||||||||||||||
Total dividends and return of capital | (0.27 | ) | (0.31 | ) | (0.81 | ) | (0.30 | ) | (0.72 | ) | |||||||||||||
Net asset value, end of year | $ | 10.82 | $ | 10.56 | $ | 11.40 | $ | 12.52 | $ | 11.43 | |||||||||||||
Total investment return2 | 5.08 | % | (4.80 | )% | (2.33 | )% | 12.36 | % | 4.32 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.28 | %3 | 1.27 | %3 | 1.27 | % | 1.26 | % | 1.30 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.22 | %3 | 1.22 | %3 | 1.21 | %4 | 1.22 | %4 | 1.25 | %4 | |||||||||||||
Net investment income | 1.79 | % | 1.65 | % | 2.16 | % | 2.16 | % | 2.30 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 62,808 | $ | 70,052 | $ | 84,661 | $ | 98,636 | $ | 98,039 | |||||||||||||
Portfolio turnover | 46 | % | 63 | % | 40 | % | 66 | % | 67 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 10.54 | $ | 11.37 | $ | 12.49 | $ | 11.40 | $ | 11.63 | |||||||||||||
Net investment income1 | 0.21 | 0.21 | 0.28 | 0.28 | 0.30 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.33 | (0.71 | ) | (0.57 | ) | 1.14 | 0.23 | ||||||||||||||||
Net increase (decrease) from operations | 0.54 | (0.50 | ) | (0.29 | ) | 1.42 | 0.53 | ||||||||||||||||
Dividends from net investment income | (0.14 | ) | (0.17 | ) | (0.83 | ) | (0.33 | ) | (0.74 | ) | |||||||||||||
Return of capital | (0.15 | ) | (0.16 | ) | — | — | (0.02 | ) | |||||||||||||||
Total dividends and return of capital | (0.29 | ) | (0.33 | ) | (0.83 | ) | (0.33 | ) | (0.76 | ) | |||||||||||||
Net asset value, end of year | $ | 10.79 | $ | 10.54 | $ | 11.37 | $ | 12.49 | $ | 11.40 | |||||||||||||
Total investment return2 | 5.23 | % | (4.60 | )% | (2.04 | )% | 12.54 | % | 4.68 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.07 | %3 | 1.09 | %3 | 1.11 | % | 1.11 | % | 1.01 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.00 | %3 | 1.00 | %3 | 1.00 | % | 1.00 | % | 0.96 | % | |||||||||||||
Net investment income | 2.01 | % | 1.88 | % | 2.37 | % | 2.38 | % | 2.57 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 5,479 | $ | 5,171 | $ | 4,720 | $ | 5,216 | $ | 5,825 | |||||||||||||
Portfolio turnover | 46 | % | 63 | % | 40 | % | 66 | % | 67 | % |
1 Calculated using the average shares method.
2 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
3 Includes interest expense representing less than 0.005%.
4 The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Portfolio, not to exceed the expense cap.
268
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 10.57 | $ | 11.41 | $ | 12.52 | $ | 11.43 | $ | 11.64 | |||||||||||||
Net investment income1 | 0.14 | 0.13 | 0.20 | 0.20 | 0.21 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.33 | (0.72 | ) | (0.56 | ) | 1.14 | 0.24 | ||||||||||||||||
Net increase (decrease) from operations | 0.47 | (0.59 | ) | (0.36 | ) | 1.34 | 0.45 | ||||||||||||||||
Dividends from net investment income | (0.12 | ) | (0.13 | ) | (0.75 | ) | (0.25 | ) | (0.64 | ) | |||||||||||||
Return of capital | (0.10 | ) | (0.12 | ) | — | — | (0.02 | ) | |||||||||||||||
Total dividends and return of capital | (0.22 | ) | (0.25 | ) | (0.75 | ) | (0.25 | ) | (0.66 | ) | |||||||||||||
Net asset value, end of year | $ | 10.82 | $ | 10.57 | $ | 11.41 | $ | 12.52 | $ | 11.43 | |||||||||||||
Total investment return2 | 4.47 | % | (5.26 | )% | (2.72 | )% | 11.83 | % | 3.81 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.76 | %3 | 1.75 | %3 | 1.75 | % | 1.74 | % | 1.77 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.70 | %3 | 1.69 | %3 | 1.69 | % | 1.69 | % | 1.72 | %4 | |||||||||||||
Net investment income | 1.31 | % | 1.17 | % | 1.68 | % | 1.69 | % | 1.83 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 4,559 | $ | 5,862 | $ | 6,949 | $ | 8,034 | $ | 7,154 | |||||||||||||
Portfolio turnover | 46 | % | 63 | % | 40 | % | 66 | % | 67 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 10.56 | $ | 11.40 | $ | 12.52 | $ | 11.43 | $ | 11.64 | |||||||||||||
Net investment income1 | 0.21 | 0.21 | 0.28 | 0.28 | 0.30 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.34 | (0.72 | ) | (0.57 | ) | 1.14 | 0.23 | ||||||||||||||||
Net increase (decrease) from operations | 0.55 | (0.51 | ) | (0.29 | ) | 1.42 | 0.53 | ||||||||||||||||
Dividends from net investment income | (0.14 | ) | (0.17 | ) | (0.83 | ) | (0.33 | ) | (0.72 | ) | |||||||||||||
Return of capital | (0.15 | ) | (0.16 | ) | — | — | (0.02 | ) | |||||||||||||||
Total dividends and return of capital | (0.29 | ) | (0.33 | ) | (0.83 | ) | (0.33 | ) | (0.74 | ) | |||||||||||||
Net asset value, end of year | $ | 10.82 | $ | 10.56 | $ | 11.40 | $ | 12.52 | $ | 11.43 | |||||||||||||
Total investment return2 | 5.31 | % | (4.59 | )% | (2.12 | )% | 12.60 | % | 4.65 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.10 | %3 | 1.10 | %3 | 1.11 | % | 1.11 | % | 1.15 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.00 | %3 | 1.00 | %3 | 1.00 | % | 1.00 | % | 1.00 | % | |||||||||||||
Net investment income | 2.01 | % | 1.88 | % | 2.37 | % | 2.38 | % | 2.56 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 526,312 | $ | 467,121 | $ | 430,268 | $ | 465,625 | $ | 404,680 | |||||||||||||
Portfolio turnover | 46 | % | 63 | % | 40 | % | 66 | % | 67 | % |
See accompanying notes to financial statements.
269
PACE Select Advisors Trust
PACE High Yield Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 10.41 | $ | 10.15 | $ | 10.39 | $ | 10.17 | $ | 8.94 | |||||||||||||
Net investment income1 | 0.56 | 0.64 | 0.69 | 0.75 | 0.82 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.21 | 0.41 | (0.12 | ) | 0.25 | 1.21 | |||||||||||||||||
Net increase from operations | 0.77 | 1.05 | 0.57 | 1.00 | 2.03 | ||||||||||||||||||
Dividends from net investment income | (0.56 | ) | (0.63 | ) | (0.70 | ) | (0.73 | ) | (0.74 | ) | |||||||||||||
Distributions from net realized gains | — | (0.15 | ) | (0.11 | ) | (0.05 | ) | (0.06 | ) | ||||||||||||||
Return of capital | — | (0.01 | ) | — | — | — | |||||||||||||||||
Total dividends, distributions and return of capital | (0.56 | ) | (0.79 | ) | (0.81 | ) | (0.78 | ) | (0.80 | ) | |||||||||||||
Net asset value, end of year | $ | 10.62 | $ | 10.41 | $ | 10.15 | $ | 10.39 | $ | 10.17 | |||||||||||||
Total investment return2 | 7.59 | % | 10.48 | % | 5.97 | % | 10.00 | % | 23.35 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.26 | % | 1.27 | % | 1.32 | % | 1.31 | % | 1.35 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.26 | % | 1.27 | % | 1.33 | %3 | 1.33 | %3 | 1.35 | %3 | |||||||||||||
Net investment income | 5.28 | % | 6.07 | % | 7.01 | % | 7.11 | % | 8.36 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 23,516 | $ | 23,400 | $ | 22,405 | $ | 25,550 | $ | 13,158 | |||||||||||||
Portfolio turnover | 20 | % | 26 | % | 20 | % | 36 | % | 30 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 10.44 | $ | 10.18 | $ | 10.42 | $ | 10.20 | $ | 8.95 | |||||||||||||
Net investment income1 | 0.59 | 0.66 | 0.72 | 0.74 | 0.85 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.22 | 0.41 | (0.12 | ) | 0.28 | 1.22 | |||||||||||||||||
Net increase from operations | 0.81 | 1.07 | 0.60 | 1.02 | 2.07 | ||||||||||||||||||
Dividends from net investment income | (0.59 | ) | (0.65 | ) | (0.73 | ) | (0.75 | ) | (0.76 | ) | |||||||||||||
Distributions from net realized gains | — | (0.15 | ) | (0.11 | ) | (0.05 | ) | (0.06 | ) | ||||||||||||||
Return of capital | — | (0.01 | ) | — | — | — | |||||||||||||||||
Total dividends, distributions and return of capital | (0.59 | ) | (0.81 | ) | (0.84 | ) | (0.80 | ) | (0.82 | ) | |||||||||||||
Net asset value, end of year | $ | 10.66 | $ | 10.44 | $ | 10.18 | $ | 10.42 | $ | 10.20 | |||||||||||||
Total investment return2 | 7.94 | % | 10.74 | % | 6.29 | % | 10.24 | % | 23.82 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.00 | % | 1.02 | % | 1.03 | % | 1.03 | % | 1.10 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.00 | % | 1.02 | % | 1.03 | % | 1.05 | %3 | 1.10 | % | |||||||||||||
Net investment income | 5.54 | % | 6.26 | % | 7.25 | % | 7.86 | % | 8.61 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 1,692 | $ | 1,552 | $ | 572 | $ | 385 | $ | 9 | |||||||||||||
Portfolio turnover | 20 | % | 26 | % | 20 | % | 36 | % | 30 | % |
1 Calculated using the average shares method.
2 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
3 The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Portfolio, not to exceed the expense cap.
270
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 10.40 | $ | 10.14 | $ | 10.38 | $ | 10.16 | $ | 8.93 | |||||||||||||
Net investment income1 | 0.51 | 0.59 | 0.64 | 0.71 | 0.77 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.22 | 0.41 | (0.12 | ) | 0.24 | 1.21 | |||||||||||||||||
Net increase from operations | 0.73 | 1.00 | 0.52 | 0.95 | 1.98 | ||||||||||||||||||
Dividends from net investment income | (0.51 | ) | (0.58 | ) | (0.65 | ) | (0.68 | ) | (0.69 | ) | |||||||||||||
Distributions from net realized gains | — | (0.15 | ) | (0.11 | ) | (0.05 | ) | (0.06 | ) | ||||||||||||||
Return of capital | — | (0.01 | ) | — | — | — | |||||||||||||||||
Total dividends, distributions and return of capital | (0.51 | ) | (0.74 | ) | (0.76 | ) | (0.73 | ) | (0.75 | ) | |||||||||||||
Net asset value, end of year | $ | 10.62 | $ | 10.40 | $ | 10.14 | $ | 10.38 | $ | 10.16 | |||||||||||||
Total investment return2 | 7.20 | % | 9.98 | % | 5.51 | % | 9.50 | % | 22.81 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.72 | % | 1.73 | % | 1.77 | % | 1.77 | % | 1.81 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.72 | % | 1.73 | % | 1.77 | % | 1.77 | % | 1.81 | %3 | |||||||||||||
Net investment income | 4.82 | % | 5.61 | % | 6.49 | % | 6.69 | % | 7.91 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 5,607 | $ | 5,607 | $ | 5,832 | $ | 3,791 | $ | 2,834 | |||||||||||||
Portfolio turnover | 20 | % | 26 | % | 20 | % | 36 | % | 30 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 10.43 | $ | 10.17 | $ | 10.41 | $ | 10.18 | $ | 8.95 | |||||||||||||
Net investment income1 | 0.58 | 0.66 | 0.72 | 0.77 | 0.85 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.23 | 0.41 | (0.14 | ) | 0.26 | 1.20 | |||||||||||||||||
Net increase from operations | 0.81 | 1.07 | 0.58 | 1.03 | 2.05 | ||||||||||||||||||
Dividends from net investment income | (0.59 | ) | (0.65 | ) | (0.71 | ) | (0.75 | ) | (0.76 | ) | |||||||||||||
Distributions from net realized gains | — | (0.15 | ) | (0.11 | ) | (0.05 | ) | (0.06 | ) | ||||||||||||||
Return of capital | — | (0.01 | ) | — | — | — | |||||||||||||||||
Total dividends, distributions and return of capital | (0.59 | ) | (0.81 | ) | (0.82 | ) | (0.80 | ) | (0.82 | ) | |||||||||||||
Net asset value, end of year | $ | 10.65 | $ | 10.43 | $ | 10.17 | $ | 10.41 | $ | 10.18 | |||||||||||||
Total investment return2 | 7.92 | % | 10.70 | % | 6.19 | % | 10.30 | % | 23.60 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.10 | % | 1.11 | % | 1.15 | % | 1.15 | % | 1.19 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.03 | % | 1.05 | % | 1.10 | % | 1.10 | % | 1.10 | % | |||||||||||||
Net investment income | 5.50 | % | 6.28 | % | 7.21 | % | 7.36 | % | 8.60 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 431,812 | $ | 357,726 | $ | 271,352 | $ | 248,197 | $ | 209,650 | |||||||||||||
Portfolio turnover | 20 | % | 26 | % | 20 | % | 36 | % | 30 | % |
See accompanying notes to financial statements.
271
PACE Select Advisors Trust
PACE Large Co Value Equity Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 20132 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 22.53 | $ | 17.27 | $ | 17.10 | $ | 14.76 | $ | 13.16 | |||||||||||||
Net investment income (loss)3 | 0.30 | 0.23 | 0.24 | 0.16 | 0.12 | ||||||||||||||||||
Net realized and unrealized gains | 2.92 | 5.27 | 0.15 | 2.31 | 1.62 | ||||||||||||||||||
Net increase from operations | 3.22 | 5.50 | 0.39 | 2.47 | 1.74 | ||||||||||||||||||
Dividends from net investment income | (0.21 | ) | (0.24 | ) | (0.22 | ) | (0.13 | ) | (0.14 | ) | |||||||||||||
Distributions from net realized gains | (0.29 | ) | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (0.50 | ) | (0.24 | ) | (0.22 | ) | (0.13 | ) | (0.14 | ) | |||||||||||||
Net asset value, end of year | $ | 25.25 | $ | 22.53 | $ | 17.27 | $ | 17.10 | $ | 14.76 | |||||||||||||
Total investment return5 | 14.39 | % | 32.12 | % | 2.41 | % | 16.79 | % | 13.20 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.32 | % | 1.16 | % | 1.18 | % | 1.17 | % | 1.20 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.31 | % | 1.15 | % | 1.18 | % | 1.17 | % | 1.20 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.13 | % | 1.15 | % | 1.18 | % | 1.17 | % | 1.20 | % | |||||||||||||
Net investment income (loss) | 1.25 | % | 1.16 | % | 1.43 | % | 0.94 | % | 0.81 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 155,480 | $ | 151,583 | $ | 132,417 | $ | 147,471 | $ | 143,284 | |||||||||||||
Portfolio turnover | 71 | % | 71 | % | 62 | % | 49 | % | 61 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 20132 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 22.60 | $ | 17.32 | $ | 17.15 | $ | 14.81 | $ | 13.21 | |||||||||||||
Net investment income3 | 0.36 | 0.27 | 0.28 | 0.20 | 0.16 | ||||||||||||||||||
Net realized and unrealized gains | 2.91 | 5.29 | 0.15 | 2.31 | 1.63 | ||||||||||||||||||
Net increase from operations | 3.27 | 5.56 | 0.43 | 2.51 | 1.79 | ||||||||||||||||||
Dividends from net investment income | (0.26 | ) | (0.28 | ) | (0.26 | ) | (0.17 | ) | (0.19 | ) | |||||||||||||
Distributions from net realized gains | (0.29 | ) | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (0.55 | ) | (0.28 | ) | (0.26 | ) | (0.17 | ) | (0.19 | ) | |||||||||||||
Net asset value, end of year | $ | 25.32 | $ | 22.60 | $ | 17.32 | $ | 17.15 | $ | 14.81 | |||||||||||||
Total investment return5 | 14.62 | % | 32.46 | % | 2.68 | % | 17.00 | % | 13.55 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.07 | % | 0.92 | % | 0.94 | % | 0.94 | % | 0.89 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.06 | % | 0.91 | % | 0.94 | % | 0.94 | % | 0.89 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 0.89 | % | 0.91 | % | 0.94 | % | 0.94 | % | 0.89 | % | |||||||||||||
Net investment income | 1.50 | % | 1.40 | % | 1.66 | % | 1.17 | % | 1.11 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 19,765 | $ | 18,536 | $ | 15,642 | $ | 16,984 | $ | 17,345 | |||||||||||||
Portfolio turnover | 71 | % | 71 | % | 62 | % | 49 | % | 61 | % |
1 A portion of the investment advisory function for the Portfolio was transferred to Los Angeles Capital on September 11, 2013. Institutional Capital LLC, Pzena Investment Management LLC and Robeco Investment Management also continue to provide a portion of the investment advisory function.
2 As of the close of business, May 28, 2013, Westwood Management Corp. was terminated as an investment sub-advisor and Robeco Investment Management became an investment sub-advisor of the Portfolio on May 29, 2013.
3 Calculated using the average shares method.
4 Amount represents less than $0.005 per share.
272
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 20132 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 22.53 | $ | 17.26 | $ | 17.07 | $ | 14.73 | $ | 13.15 | |||||||||||||
Net investment income (loss)3 | 0.11 | 0.07 | 0.10 | 0.02 | (0.00 | )4 | |||||||||||||||||
Net realized and unrealized gains | 2.91 | 5.29 | 0.16 | 2.32 | 1.61 | ||||||||||||||||||
Net increase from operations | 3.02 | 5.36 | 0.26 | 2.34 | 1.61 | ||||||||||||||||||
Dividends from net investment income | (0.03 | ) | (0.09 | ) | (0.07 | ) | — | (0.03 | ) | ||||||||||||||
Distributions from net realized gains | (0.29 | ) | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (0.32 | ) | (0.09 | ) | (0.07 | ) | — | (0.03 | ) | ||||||||||||||
Net asset value, end of year | $ | 25.23 | $ | 22.53 | $ | 17.26 | $ | 17.07 | $ | 14.73 | |||||||||||||
Total investment return5 | 13.43 | % | 31.13 | % | 1.55 | % | 15.81 | % | 12.31 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 2.10 | % | 1.95 | % | 1.98 | % | 1.96 | % | 2.02 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 2.09 | % | 1.95 | % | 1.98 | % | 1.98 | %6 | 2.02 | %6 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.92 | % | 1.95 | % | 1.98 | % | 1.98 | %6 | 2.02 | %6 | |||||||||||||
Net investment income (loss) | 0.47 | % | 0.36 | % | 0.63 | % | 0.13 | % | (0.01 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 15,380 | $ | 14,437 | $ | 12,439 | $ | 14,807 | $ | 15,272 | |||||||||||||
Portfolio turnover | 71 | % | 71 | % | 62 | % | 49 | % | 61 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 20132 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 22.52 | $ | 17.26 | $ | 17.10 | $ | 14.76 | $ | 13.16 | |||||||||||||
Net investment income3 | 0.36 | 0.27 | 0.28 | 0.20 | 0.16 | ||||||||||||||||||
Net realized and unrealized gains | 2.91 | 5.27 | 0.14 | 2.31 | 1.61 | ||||||||||||||||||
Net increase from operations | 3.27 | 5.54 | 0.42 | 2.51 | 1.77 | ||||||||||||||||||
Dividends from net investment income | (0.26 | ) | (0.28 | ) | (0.26 | ) | (0.17 | ) | (0.17 | ) | |||||||||||||
Distributions from net realized gains | (0.29 | ) | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (0.55 | ) | (0.28 | ) | (0.26 | ) | (0.17 | ) | (0.17 | ) | |||||||||||||
Net asset value, end of year | $ | 25.24 | $ | 22.52 | $ | 17.26 | $ | 17.10 | $ | 14.76 | |||||||||||||
Total investment return5 | 14.62 | % | 32.47 | % | 2.64 | % | 17.07 | % | 13.48 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.08 | % | 0.91 | % | 0.93 | % | 0.93 | % | 0.95 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.07 | % | 0.91 | % | 0.93 | % | 0.93 | % | 0.95 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 0.90 | % | 0.91 | % | 0.93 | % | 0.93 | % | 0.95 | % | |||||||||||||
Net investment income | 1.49 | % | 1.40 | % | 1.66 | % | 1.18 | % | 1.05 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 1,263,296 | $ | 1,135,014 | $ | 991,824 | $ | 1,020,412 | $ | 899,926 | |||||||||||||
Portfolio turnover | 71 | % | 71 | % | 62 | % | 49 | % | 61 | % |
5 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
6 The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Portfolio, not to exceed the expense cap.
See accompanying notes to financial statements.
273
PACE Select Advisors Trust
PACE Large Co Growth Equity Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 20131 | 2012 | 20112 | 20103 | |||||||||||||||||||
Net asset value, beginning of year | $ | 23.52 | $ | 19.40 | $ | 18.62 | $ | 14.95 | $ | 13.36 | |||||||||||||
Net investment income (loss)4 | 0.07 | 0.08 | (0.00 | )5 | (0.00 | )5 | (0.01 | ) | |||||||||||||||
Net realized and unrealized gains | 4.39 | 4.08 | 0.78 | 3.67 | 1.63 | ||||||||||||||||||
Net increase from operations | 4.46 | 4.16 | 0.78 | 3.67 | 1.62 | ||||||||||||||||||
Dividends from net investment income | (0.04 | ) | (0.04 | ) | — | — | (0.03 | ) | |||||||||||||||
Distributions from net realized gains | (2.19 | ) | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (2.23 | ) | (0.04 | ) | — | — | (0.03 | ) | |||||||||||||||
Net asset value, end of year | $ | 25.75 | $ | 23.52 | $ | 19.40 | $ | 18.62 | $ | 14.95 | |||||||||||||
Total investment return6 | 19.60 | % | 21.45 | % | 4.19 | % | 24.55 | % | 12.12 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.18 | % | 1.21 | % | 1.23 | % | 1.23 | % | 1.26 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.18 | % | 1.21 | % | 1.23 | % | 1.22 | % | 1.23 | % | |||||||||||||
Net investment income (loss) | 0.28 | % | 0.40 | % | (0.02 | )% | (0.02 | )% | (0.08 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 68,207 | $ | 63,108 | $ | 59,435 | $ | 64,315 | $ | 55,978 | |||||||||||||
Portfolio turnover | 40 | % | 76 | % | 54 | % | 84 | % | 91 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 20131 | 2012 | 20112 | 20103 | |||||||||||||||||||
Net asset value, beginning of year | $ | 24.06 | $ | 19.86 | $ | 19.05 | $ | 15.29 | $ | 13.67 | |||||||||||||
Net investment income4 | 0.14 | 0.14 | 0.04 | 0.04 | 0.04 | ||||||||||||||||||
Net realized and unrealized gains | 4.48 | 4.17 | 0.81 | 3.75 | 1.67 | ||||||||||||||||||
Net increase from operations | 4.62 | 4.31 | 0.85 | 3.79 | 1.71 | ||||||||||||||||||
Dividends from net investment income | (0.10 | ) | (0.11 | ) | (0.04 | ) | (0.03 | ) | (0.09 | ) | |||||||||||||
Distributions from net realized gains | (2.19 | ) | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (2.29 | ) | (0.11 | ) | (0.04 | ) | (0.03 | ) | (0.09 | ) | |||||||||||||
Net asset value, end of year | $ | 26.39 | $ | 24.06 | $ | 19.86 | $ | 19.05 | $ | 15.29 | |||||||||||||
Total investment return6 | 19.86 | % | 21.77 | % | 4.49 | % | 24.83 | % | 12.49 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.93 | % | 0.96 | % | 0.97 | % | 0.99 | % | 0.94 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.93 | % | 0.96 | % | 0.97 | % | 0.98 | % | 0.91 | % | |||||||||||||
Net investment income | 0.53 | % | 0.66 | % | 0.23 | % | 0.22 | % | 0.25 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 15,858 | $ | 14,814 | $ | 13,258 | $ | 13,858 | $ | 12,619 | |||||||||||||
Portfolio turnover | 40 | % | 76 | % | 54 | % | 84 | % | 91 | % |
1 As of the close of business, October 4, 2012, Marsico Capital Management, LLC and Wellington Management Company, LLP were terminated as investment sub-advisors to the Portfolio and J.P. Morgan Investment Management became an investment sub-advisor of the Portfolio on October 5, 2012. Jackson Square Partners, LLC (formerly Delaware Management Company) and Roxbury Capital Management, LLC also continue to provide a portion of the investment advisory function.
2 A portion of the investment advisory function for the Portfolio was transferred from SSgA Funds Management, Inc. to Roxbury Capital Management, LLC and Jackson Square Partners, LLC (formerly Delaware Management Company) at the close of business on November 29, 2010.
3 A portion of the investment advisory function for the Portfolio was transferred to Roxbury Capital Management, LLC on May 25, 2010.
4 Calculated using the average shares method.
5 Amount represents less than $0.005 per share.
6 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
7 The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Portfolio, not to exceed the expense cap.
274
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 20131 | 2012 | 20112 | 20103 | |||||||||||||||||||
Net asset value, beginning of year | $ | 21.29 | $ | 17.67 | $ | 17.10 | $ | 13.84 | $ | 12.45 | |||||||||||||
Net investment income (loss)4 | (0.13 | ) | (0.08 | ) | (0.14 | ) | (0.14 | ) | (0.12 | ) | |||||||||||||
Net realized and unrealized gains | 3.94 | 3.70 | 0.71 | 3.40 | 1.51 | ||||||||||||||||||
Net increase from operations | 3.81 | 3.62 | 0.57 | 3.26 | 1.39 | ||||||||||||||||||
Dividends from net investment income | — | — | — | — | — | ||||||||||||||||||
Distributions from net realized gains | (2.19 | ) | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (2.19 | ) | — | — | — | — | |||||||||||||||||
Net asset value, end of year | $ | 22.91 | $ | 21.29 | $ | 17.67 | $ | 17.10 | $ | 13.84 | |||||||||||||
Total investment return6 | 18.54 | % | 20.49 | % | 3.33 | % | 23.47 | % | 11.24 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 2.00 | % | 2.04 | % | 2.07 | % | 2.07 | % | 2.13 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 2.03 | %7 | 2.05 | %7 | 2.05 | % | 2.05 | % | 2.05 | % | |||||||||||||
Net investment income (loss) | (0.57 | )% | (0.43 | )% | (0.84 | )% | (0.84 | )% | (0.90 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 4,204 | $ | 4,033 | $ | 3,720 | $ | 4,209 | $ | 3,956 | |||||||||||||
Portfolio turnover | 40 | % | 76 | % | 54 | % | 84 | % | 91 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 20131 | 2012 | 20112 | 20103 | |||||||||||||||||||
Net asset value, beginning of year | $ | 23.95 | $ | 19.77 | $ | 18.97 | $ | 15.21 | $ | 13.59 | |||||||||||||
Net investment income4 | 0.14 | 0.14 | 0.05 | 0.04 | 0.03 | ||||||||||||||||||
Net realized and unrealized gains | 4.46 | 4.15 | 0.79 | 3.75 | 1.66 | ||||||||||||||||||
Net increase from operations | 4.60 | 4.29 | 0.84 | 3.79 | 1.69 | ||||||||||||||||||
Dividends from net investment income | (0.10 | ) | (0.11 | ) | (0.04 | ) | (0.03 | ) | (0.07 | ) | |||||||||||||
Distributions from net realized gains | (2.19 | ) | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (2.29 | ) | (0.11 | ) | (0.04 | ) | (0.03 | ) | (0.07 | ) | |||||||||||||
Net asset value, end of year | $ | 26.26 | $ | 23.95 | $ | 19.77 | $ | 18.97 | $ | 15.21 | |||||||||||||
Total investment return6 | 19.87 | % | 21.79 | % | 4.48 | % | 24.92 | % | 12.42 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.93 | % | 0.95 | % | 0.96 | % | 0.97 | % | 0.99 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.93 | % | 0.95 | % | 0.96 | % | 0.96 | % | 0.96 | % | |||||||||||||
Net investment income | 0.53 | % | 0.65 | % | 0.24 | % | 0.24 | % | 0.19 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 1,289,577 | $ | 1,113,514 | $ | 1,036,636 | $ | 1,068,052 | $ | 895,889 | |||||||||||||
Portfolio turnover | 40 | % | 76 | % | 54 | % | 84 | % | 91 | % |
See accompanying notes to financial statements.
275
PACE Select Advisors Trust
PACE Small/Medium Co Value Equity Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 20131 | 20122 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 22.19 | $ | 16.61 | $ | 17.05 | $ | 14.28 | $ | 11.99 | |||||||||||||
Net investment income (loss)3 | 0.05 | 0.13 | 0.03 | (0.03 | ) | (0.01 | ) | ||||||||||||||||
Net realized and unrealized gains (losses) | 2.67 | 5.55 | (0.47 | ) | 2.80 | 2.31 | |||||||||||||||||
Net increase (decrease) from operations | 2.72 | 5.68 | (0.44 | ) | 2.77 | 2.30 | |||||||||||||||||
Dividends from net investment income | (0.09 | ) | (0.10 | ) | — | — | (0.01 | ) | |||||||||||||||
Distributions from net realized gains | (2.77 | ) | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (2.86 | ) | (0.10 | ) | — | — | (0.01 | ) | |||||||||||||||
Net asset value, end of year | $ | 22.05 | $ | 22.19 | $ | 16.61 | $ | 17.05 | $ | 14.28 | |||||||||||||
Total investment return4 | 12.74 | % | 34.23 | % | (2.58 | )% | 19.40 | % | 19.17 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.24 | % | 1.28 | % | 1.32 | % | 1.29 | % | 1.35 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.24 | % | 1.28 | % | 1.32 | % | 1.29 | % | 1.35 | % | |||||||||||||
Net investment income (loss) | 0.24 | % | 0.68 | % | 0.21 | % | (0.18 | )% | (0.05 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 32,039 | $ | 31,930 | $ | 27,101 | $ | 32,166 | $ | 27,920 | |||||||||||||
Portfolio turnover | 86 | % | 97 | % | 72 | % | 70 | % | 81 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 20131 | 20122 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 22.79 | $ | 17.06 | $ | 17.51 | $ | 14.63 | $ | 12.29 | |||||||||||||
Net investment income (loss)3 | 0.08 | 0.16 | 0.06 | 0.01 | 0.07 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 2.75 | 5.70 | (0.50 | ) | 2.88 | 2.32 | |||||||||||||||||
Net increase (decrease) from operations | 2.83 | 5.86 | (0.44 | ) | 2.89 | 2.39 | |||||||||||||||||
Dividends from net investment income | (0.12 | ) | (0.13 | ) | (0.01 | ) | (0.01 | ) | (0.05 | ) | |||||||||||||
Distributions from net realized gains | (2.77 | ) | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (2.89 | ) | (0.13 | ) | (0.01 | ) | (0.01 | ) | (0.05 | ) | |||||||||||||
Net asset value, end of year | $ | 22.73 | $ | 22.79 | $ | 17.06 | $ | 17.51 | $ | 14.63 | |||||||||||||
Total investment return4 | 12.84 | % | 34.41 | % | (2.45 | )% | 19.74 | % | 19.50 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.11 | % | 1.19 | % | 1.16 | % | 1.08 | % | 0.97 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.13 | %6 | 1.16 | % | 1.16 | % | 1.08 | % | 0.97 | % | |||||||||||||
Net investment income (loss) | 0.35 | % | 0.80 | % | 0.36 | % | 0.03 | % | 0.47 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 912 | $ | 768 | $ | 443 | $ | 371 | $ | 318 | |||||||||||||
Portfolio turnover | 86 | % | 97 | % | 72 | % | 70 | % | 81 | % |
1 As of the close of business, October 2, 2012, Buckhead Capital Management, LLC was terminated as an investment sub-advisor to the Portfolio. Cash from the sale of securities from the portfolio managed by Buckhead Capital Management, LLC was transferred to Kayne Anderson Rudnick Management, LLC, Systematic Financial Management, L.P. and Metropolitan West Capital Management, LLC; which continue to provide a portion of the investment advisory function.
2 A portion of the investment advisory function for the Portfolio was transferred to Kayne Anderson Rudnick Management, LLC on March 6, 2012.
3 Calculated using the average shares method.
4 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
5 Amount represents less than $0.005 per share.
6 The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Portfolio, not to exceed the expense cap.
276
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 20131 | 20122 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 20.00 | $ | 15.00 | $ | 15.53 | $ | 13.10 | $ | 11.07 | |||||||||||||
Net investment income (loss)3 | (0.10 | ) | (0.01 | ) | (0.08 | ) | (0.14 | ) | (0.10 | ) | |||||||||||||
Net realized and unrealized gains (losses) | 2.39 | 5.01 | (0.45 | ) | 2.57 | 2.13 | |||||||||||||||||
Net increase (decrease) from operations | 2.29 | 5.00 | (0.53 | ) | 2.43 | 2.03 | |||||||||||||||||
Dividends from net investment income | — | — | — | — | — | ||||||||||||||||||
Distributions from net realized gains | (2.77 | ) | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (2.77 | ) | — | — | — | — | |||||||||||||||||
Net asset value, end of year | $ | 19.52 | $ | 20.00 | $ | 15.00 | $ | 15.53 | $ | 13.10 | |||||||||||||
Total investment return4 | 11.84 | % | 33.24 | % | (3.35 | )% | 18.55 | % | 18.34 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 2.00 | % | 2.03 | % | 2.07 | % | 2.05 | % | 2.11 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 2.00 | % | 2.03 | % | 2.07 | % | 2.05 | % | 2.11 | % | |||||||||||||
Net investment income (loss) | (0.51 | )% | (0.08 | )% | (0.54 | )% | (0.93 | )% | (0.80 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 5,106 | $ | 4,983 | $ | 4,325 | $ | 5,109 | $ | 5,178 | |||||||||||||
Portfolio turnover | 86 | % | 97 | % | 72 | % | 70 | % | 81 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 20131 | 20122 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 22.63 | $ | 16.94 | $ | 17.38 | $ | 14.53 | $ | 12.20 | |||||||||||||
Net investment income (loss)3 | 0.07 | 0.15 | 0.06 | (0.01 | ) | 0.02 | |||||||||||||||||
Net realized and unrealized gains (losses) | 2.72 | 5.67 | (0.50 | ) | 2.87 | 2.34 | |||||||||||||||||
Net increase (decrease) from operations | 2.79 | 5.82 | (0.44 | ) | 2.86 | 2.36 | |||||||||||||||||
Dividends from net investment income | (0.11 | ) | (0.13 | ) | (0.00 | )5 | (0.01 | ) | (0.03 | ) | |||||||||||||
Distributions from net realized gains | (2.77 | ) | — | — | — | — | |||||||||||||||||
Total dividends and distributions | (2.88 | ) | (0.13 | ) | (0.00 | )5 | (0.01 | ) | (0.03 | ) | |||||||||||||
Net asset value, end of year | $ | 22.54 | $ | 22.63 | $ | 16.94 | $ | 17.38 | $ | 14.53 | |||||||||||||
Total investment return4 | 12.77 | % | 34.51 | % | (2.51 | )% | 19.66 | % | 19.38 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.11 | % | 1.15 | % | 1.22 | % | 1.17 | % | 1.25 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.16 | %6 | 1.16 | %6 | 1.16 | % | 1.16 | % | 1.16 | % | |||||||||||||
Net investment income (loss) | 0.32 | % | 0.79 | % | 0.37 | % | (0.05 | )% | 0.14 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 510,377 | $ | 448,879 | $ | 354,936 | $ | 387,634 | $ | 345,494 | |||||||||||||
Portfolio turnover | 86 | % | 97 | % | 72 | % | 70 | % | 81 | % |
See accompanying notes to financial statements.
277
PACE Select Advisors Trust
PACE Small/Medium Co Growth Equity Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 21.42 | $ | 16.45 | $ | 16.66 | $ | 12.28 | $ | 10.63 | |||||||||||||
Net investment loss2 | (0.16 | ) | (0.08 | ) | (0.12 | ) | (0.13 | ) | (0.09 | ) | |||||||||||||
Net realized and unrealized gains (losses) | 1.34 | 5.35 | (0.09 | ) | 4.51 | 1.74 | |||||||||||||||||
Net increase (decrease) from operations | 1.18 | 5.27 | (0.21 | ) | 4.38 | 1.65 | |||||||||||||||||
Distributions from net realized gains | (2.88 | ) | (0.30 | ) | — | — | — | ||||||||||||||||
Net asset value, end of year | $ | 19.72 | $ | 21.42 | $ | 16.45 | $ | 16.66 | $ | 12.28 | |||||||||||||
Total investment return3 | 4.92 | % | 32.44 | % | (1.26 | )% | 35.67 | % | 15.52 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.25 | % | 1.26 | % | 1.30 | % | 1.28 | % | 1.35 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.25 | % | 1.26 | % | 1.30 | % | 1.28 | % | 1.35 | %4 | |||||||||||||
Net investment loss | (0.77 | )% | (0.43 | )% | (0.73 | )% | (0.83 | )% | (0.71 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 40,210 | $ | 41,721 | $ | 36,620 | $ | 40,992 | $ | 32,053 | |||||||||||||
Portfolio turnover | 94 | % | 60 | % | 94 | % | 103 | % | 133 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 22.34 | $ | 17.13 | $ | 17.31 | $ | 12.74 | $ | 11.02 | |||||||||||||
Net investment loss2 | (0.15 | ) | (0.07 | ) | (0.10 | ) | (0.10 | ) | (0.02 | ) | |||||||||||||
Net realized and unrealized gains (losses) | 1.41 | 5.58 | (0.08 | ) | 4.67 | 1.74 | |||||||||||||||||
Net increase (decrease) from operations | 1.26 | 5.51 | (0.18 | ) | 4.57 | 1.72 | |||||||||||||||||
Distributions from net realized gains | (2.88 | ) | (0.30 | ) | — | — | — | ||||||||||||||||
Net asset value, end of year | $ | 20.72 | $ | 22.34 | $ | 17.13 | $ | 17.31 | $ | 12.74 | |||||||||||||
Total investment return3 | 5.09 | % | 32.55 | % | (1.04 | )% | 35.87 | % | 15.71 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.14 | % | 1.25 | % | 1.25 | % | 1.08 | % | 0.94 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.13 | % | 1.13 | % | 1.13 | % | 1.08 | % | 0.94 | % | |||||||||||||
Net investment loss | (0.65 | )% | (0.33 | )% | (0.59 | )% | (0.61 | )% | (0.14 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 667 | $ | 588 | $ | 224 | $ | 98 | $ | 62 | |||||||||||||
Portfolio turnover | 94 | % | 60 | % | 94 | % | 103 | % | 133 | % |
1 A portion of the investment advisory function for the Portfolio was transferred to Lee Munder Capital Group, LLC and Timpani Capital Management LLC on November 25, 2013. Copper Rock Capital Partners, LLC, was terminated as an investment sub-adviser as of the close of business April 21, 2014. Palisade Capital Management, LLC and Riverbridge Partners, LLC continue to provide a portion of the investment advisory function.
2 Calculated using the average shares method.
3 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
4 The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Portfolio, not to exceed the expense cap.
278
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 19.02 | $ | 14.75 | $ | 15.05 | $ | 11.19 | $ | 9.76 | |||||||||||||
Net investment loss2 | (0.28 | ) | (0.20 | ) | (0.21 | ) | (0.23 | ) | (0.16 | ) | |||||||||||||
Net realized and unrealized gains (losses) | 1.21 | 4.77 | (0.09 | ) | 4.09 | 1.59 | |||||||||||||||||
Net increase (decrease) from operations | 0.93 | 4.57 | (0.30 | ) | 3.86 | 1.43 | |||||||||||||||||
Distributions from net realized gains | (2.88 | ) | (0.30 | ) | — | — | — | ||||||||||||||||
Net asset value, end of year | $ | 17.07 | $ | 19.02 | $ | 14.75 | $ | 15.05 | $ | 11.19 | |||||||||||||
Total investment return3 | 4.16 | % | 31.42 | % | (1.99 | )% | 34.50 | % | 14.65 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 2.01 | % | 2.02 | % | 2.05 | % | 2.05 | % | 2.13 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 2.00 | % | 2.02 | % | 2.05 | % | 2.09 | %3 | 2.13 | %3 | |||||||||||||
Net investment loss | (1.52 | )% | (1.19 | )% | (1.49 | )% | (1.63 | )% | (1.49 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 3,977 | $ | 4,038 | $ | 3,529 | $ | 4,158 | $ | 3,217 | |||||||||||||
Portfolio turnover | 94 | % | 60 | % | 94 | % | 103 | % | 133 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 22.13 | $ | 16.97 | $ | 17.14 | $ | 12.62 | $ | 10.90 | |||||||||||||
Net investment loss2 | (0.14 | ) | (0.06 | ) | (0.09 | ) | (0.11 | ) | (0.06 | ) | |||||||||||||
Net realized and unrealized gains (losses) | 1.38 | 5.52 | (0.08 | ) | 4.63 | 1.78 | |||||||||||||||||
Net increase (decrease) from operations | 1.24 | 5.46 | (0.17 | ) | 4.52 | 1.72 | |||||||||||||||||
Distributions from net realized gains | (2.88 | ) | (0.30 | ) | — | — | — | ||||||||||||||||
Net asset value, end of year | $ | 20.49 | $ | 22.13 | $ | 16.97 | $ | 17.14 | $ | 12.62 | |||||||||||||
Total investment return3 | 5.04 | % | 32.57 | % | (0.99 | )% | 35.82 | % | 15.78 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.12 | % | 1.14 | % | 1.18 | % | 1.16 | % | 1.23 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.13 | %4 | 1.13 | % | 1.13 | % | 1.13 | % | 1.13 | % | |||||||||||||
Net investment loss | (0.65 | )% | (0.30 | )% | (0.56 | )% | (0.67 | )% | (0.50 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 474,468 | $ | 457,011 | $ | 383,330 | $ | 423,310 | $ | 338,951 | |||||||||||||
Portfolio turnover | 94 | % | 60 | % | 94 | % | 103 | % | 133 | % |
See accompanying notes to financial statements.
279
PACE Select Advisors Trust
PACE International Equity Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 2013 | 2012 | 20112 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 13.96 | $ | 11.63 | $ | 13.41 | $ | 11.72 | $ | 11.72 | |||||||||||||
Net investment income3 | 0.35 | 0.24 | 0.26 | 0.25 | 0.19 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 1.56 | 2.36 | (1.71 | ) | 1.66 | 0.06 | |||||||||||||||||
Net increase (decrease) from operations | 1.91 | 2.60 | (1.45 | ) | 1.91 | 0.25 | |||||||||||||||||
Dividends from net investment income | (0.27 | ) | (0.27 | ) | (0.33 | ) | (0.22 | ) | (0.25 | ) | |||||||||||||
Net asset value, end of year | $ | 15.60 | $ | 13.96 | $ | 11.63 | $ | 13.41 | $ | 11.72 | |||||||||||||
Total investment return4 | 13.78 | % | 22.63 | % | (10.58 | )% | 16.37 | % | 2.05 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.70 | % | 1.42 | % | 1.43 | %5 | 1.40 | % | 1.43 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.68 | % | 1.42 | %6 | 1.43 | %5 | 1.40 | %6 | 1.43 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.37 | % | 1.42 | %6 | 1.43 | % | 1.40 | %6 | 1.43 | % | |||||||||||||
Net investment income | 2.33 | % | 1.84 | % | 2.27 | % | 1.91 | % | 1.54 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 57,389 | $ | 55,533 | $ | 51,294 | $ | 66,904 | $ | 66,355 | |||||||||||||
Portfolio turnover | 86 | % | 36 | % | 44 | % | 66 | % | 60 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 2013 | 2012 | 20112 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 13.95 | $ | 11.63 | $ | 13.41 | $ | 11.71 | $ | 11.72 | |||||||||||||
Net investment income3 | 0.40 | 0.28 | 0.29 | 0.28 | 0.22 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 1.55 | 2.35 | (1.70 | ) | 1.67 | 0.07 | |||||||||||||||||
Net increase (decrease) from operations | 1.95 | 2.63 | (1.41 | ) | 1.95 | 0.29 | |||||||||||||||||
Dividends from net investment income | (0.31 | ) | (0.31 | ) | (0.37 | ) | (0.25 | ) | (0.30 | ) | |||||||||||||
Net asset value, end of year | $ | 15.59 | $ | 13.95 | $ | 11.63 | $ | 13.41 | $ | 11.71 | |||||||||||||
Total investment return4 | 14.10 | % | 22.97 | % | (10.37 | )% | 16.65 | % | 2.43 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.42 | % | 1.16 | % | 1.18 | %5 | 1.16 | % | 1.10 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.40 | % | 1.16 | %6 | 1.18 | %5 | 1.16 | %6 | 1.10 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.09 | % | 1.16 | %6 | 1.18 | % | 1.16 | %6 | 1.10 | % | |||||||||||||
Net investment income | 2.63 | % | 2.13 | % | 2.51 | % | 2.14 | % | 1.77 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 22,915 | $ | 20,865 | $ | 18,004 | $ | 21,046 | $ | 23,368 | |||||||||||||
Portfolio turnover | 86 | % | 36 | % | 44 | % | 66 | % | 60 | % |
1 As of the close of business, August 4, 2013, Martin Currie Inc. was terminated as an investment sub-advisor and Chautauqua Capital became an investment sub-advisor of the Portfolio on August 5, 2013. As of the close of business, September 12, 2013, J.P. Morgan Investment Management Inc.—International REI segment was terminated as an investment sub-advisor and Los Angeles Capital Management and Equity Research, Inc. became an investment sub-advisor of the Portfolio on September 13, 2013. Mondrian Investment Partners Limited continues to provide a portion of the investment advisory function. J.P. Morgan Investment Management Inc.—EAFE Opportunities segment also provided a portion of the investment advisory function during this period and then was subsequently terminated as an investment sub-advisor to the Portfolio at the close of business on February 25, 2014.
2 A portion of the investment advisory function for the Portfolio was transferred to J.P. Morgan Investment Management Inc. (EAFE Opportunities Segment) on November 8, 2010. Martin Currie Inc., Mondrian Investment Partners Limited and J.P. Morgan Investment Management Inc. (REI Segment) continue to provide a portion of the investment advisory function.
3 Calculated using the average shares method.
280
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 2013 | 2012 | 20112 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 13.68 | $ | 11.41 | $ | 13.14 | $ | 11.47 | $ | 11.49 | |||||||||||||
Net investment income3 | 0.23 | 0.13 | 0.16 | 0.14 | 0.08 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 1.53 | 2.31 | (1.67 | ) | 1.64 | 0.05 | |||||||||||||||||
Net increase (decrease) from operations | 1.76 | 2.44 | (1.51 | ) | 1.78 | 0.13 | |||||||||||||||||
Dividends from net investment income | (0.15 | ) | (0.17 | ) | (0.22 | ) | (0.11 | ) | (0.15 | ) | |||||||||||||
Net asset value, end of year | $ | 15.29 | $ | 13.68 | $ | 11.41 | $ | 13.14 | $ | 11.47 | |||||||||||||
Total investment return4 | 12.93 | % | 21.50 | % | (11.35 | )% | 15.57 | % | 1.10 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements, including dividend expense, interest expense and other borrowing costs for investments sold short | 2.51 | % | 2.26 | % | 2.27 | %5 | 2.23 | % | 2.26 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements, including dividend expense, interest expense and other borrowing costs for investments sold short | 2.49 | % | 2.25 | % | 2.27 | %5 | 2.23 | %6 | 2.26 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 2.18 | % | 2.25 | % | 2.27 | % | 2.23 | %6 | 2.26 | % | |||||||||||||
Net investment income | 1.52 | % | 1.01 | % | 1.41 | % | 1.08 | % | 0.69 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 2,919 | $ | 2,746 | $ | 2,573 | $ | 3,601 | $ | 3,769 | |||||||||||||
Portfolio turnover | 86 | % | 36 | % | 44 | % | 66 | % | 60 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 2013 | 2012 | 20112 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 13.92 | $ | 11.60 | $ | 13.39 | $ | 11.69 | $ | 11.70 | |||||||||||||
Net investment income3 | 0.40 | 0.28 | 0.29 | 0.29 | 0.22 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 1.54 | 2.35 | (1.71 | ) | 1.66 | 0.05 | |||||||||||||||||
Net increase (decrease) from operations | 1.94 | 2.63 | (1.42 | ) | 1.95 | 0.27 | |||||||||||||||||
Dividends from net investment income | (0.30 | ) | (0.31 | ) | (0.37 | ) | (0.25 | ) | (0.28 | ) | |||||||||||||
Net asset value, end of year | $ | 15.56 | $ | 13.92 | $ | 11.60 | $ | 13.39 | $ | 11.69 | |||||||||||||
Total investment return4 | 14.12 | % | 22.92 | % | (10.39 | )% | 16.79 | % | 2.21 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.45 | % | 1.17 | % | 1.18 | %5 | 1.16 | % | 1.18 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.43 | % | 1.17 | %6 | 1.18 | %5 | 1.16 | %6 | 1.18 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.11 | % | 1.17 | %6 | 1.18 | % | 1.16 | %6 | 1.18 | % | |||||||||||||
Net investment income | 2.63 | % | 2.12 | % | 2.54 | % | 2.20 | % | 1.80 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 1,025,757 | $ | 863,063 | $ | 698,255 | $ | 817,011 | $ | 698,546 | |||||||||||||
Portfolio turnover | 86 | % | 36 | % | 44 | % | 66 | % | 60 | % |
4 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
5 Includes interest expense representing less than 0.005%.
6 The ratios after and before fee waivers and/or expense reimbursements are the same since the fee waiver/reimbursement for the fiscal year represents less than 0.01%.
See accompanying notes to financial statements.
281
PACE Select Advisors Trust
PACE International Emerging Markets Equity Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 20131 | 2012 | 20112 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.29 | $ | 11.81 | $ | 13.80 | $ | 12.19 | $ | 10.58 | |||||||||||||
Net investment income (loss)3 | 0.14 | 0.09 | 0.11 | 0.12 | 0.09 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 1.17 | 0.49 | (1.86 | ) | 1.59 | 1.68 | |||||||||||||||||
Net increase (decrease) from operations | 1.31 | 0.58 | (1.75 | ) | 1.71 | 1.77 | |||||||||||||||||
Dividends from net investment income | (0.04 | ) | (0.10 | ) | (0.11 | ) | (0.10 | ) | (0.16 | ) | |||||||||||||
Distributions from net realized gains | — | — | (0.13 | ) | — | — | |||||||||||||||||
Total dividends and distributions | (0.04 | ) | (0.10 | ) | (0.24 | ) | (0.10 | ) | (0.16 | ) | |||||||||||||
Net asset value, end of year | $ | 13.56 | $ | 12.29 | $ | 11.81 | $ | 13.80 | $ | 12.19 | |||||||||||||
Total investment return5 | 10.71 | % | 4.81 | % | (12.52 | )% | 14.01 | % | 16.81 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.80 | % | 1.82 | % | 1.90 | % | 1.84 | % | 1.87 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.69 | % | 1.75 | % | 1.90 | % | 1.84 | %6 | 1.87 | % | |||||||||||||
Net investment income (loss) | 1.14 | % | 0.72 | % | 0.93 | % | 0.87 | % | 0.75 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 17,200 | $ | 16,810 | $ | 17,559 | $ | 22,648 | $ | 19,111 | |||||||||||||
Portfolio turnover | 74 | % | 158 | % | 30 | % | 111 | % | 60 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 20131 | 2012 | 20112 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.53 | $ | 12.03 | $ | 14.06 | $ | 12.41 | $ | 10.78 | |||||||||||||
Net investment income3 | 0.18 | 0.12 | 0.14 | 0.15 | 0.10 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 1.18 | 0.51 | (1.90 | ) | 1.61 | 1.74 | |||||||||||||||||
Net increase (decrease) from operations | 1.36 | 0.63 | (1.76 | ) | 1.76 | 1.84 | |||||||||||||||||
Dividends from net investment income | (0.07 | ) | (0.13 | ) | (0.14 | ) | (0.11 | ) | (0.21 | ) | |||||||||||||
Distributions from net realized gains | — | — | (0.13 | ) | — | — | |||||||||||||||||
Total dividends and distributions | (0.07 | ) | (0.13 | ) | (0.27 | ) | (0.11 | ) | (0.21 | ) | |||||||||||||
Net asset value, end of year | $ | 13.82 | $ | 12.53 | $ | 12.03 | $ | 14.06 | $ | 12.41 | |||||||||||||
Total investment return5 | 10.94 | % | 5.13 | % | (12.35 | )% | 14.22 | % | 17.15 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.55 | % | 1.58 | % | 1.67 | % | 1.61 | % | 1.62 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.44 | % | 1.51 | % | 1.67 | % | 1.61 | %6 | 1.62 | % | |||||||||||||
Net investment income | 1.37 | % | 0.94 | % | 1.17 | % | 1.08 | % | 0.88 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 11,978 | $ | 12,835 | $ | 13,835 | $ | 17,808 | $ | 21,524 | |||||||||||||
Portfolio turnover | 74 | % | 158 | % | 30 | % | 111 | % | 60 | % |
1 As of the close of business, October 15, 2012, Delaware Management Company and Pzena Investment Management, LLC were terminated as investment sub-advisors to the Portfolio and Lee Munder Capital Group, LLC became an investment advisor of the Portfolio on October 16, 2012. Mondrian Investment Partners Limited and William Blair & Company LLC also continue to provide a portion of the investment advisory function.
2 Portions of the investment advisory function for the Portfolio were transferred to Delaware Management Company and Pzena Investment Management, LLC, respectively, on November 4, 2010 and to William Blair & Company LLC on March 23, 2011. Gartmore Global Partners provided a portion of the investment advisory function during this period and then was subsequently terminated as a sub-advisor to the Portfolio at the close of business on March 22, 2011.
3 Calculated using the average shares method.
4 Amount represents less than $0.005 per share.
5 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
6 The ratios after and before fee waivers and/or expense reimbursements are the same since the fee waiver/reimbursement represents less than 0.01%.
282
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 20131 | 2012 | 20112 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 11.48 | $ | 11.04 | $ | 12.87 | $ | 11.38 | $ | 9.90 | |||||||||||||
Net investment income (loss)3 | 0.04 | (0.00 | )4 | 0.02 | 0.01 | (0.00 | )4 | ||||||||||||||||
Net realized and unrealized gains (losses) | 1.09 | 0.44 | (1.72 | ) | 1.48 | 1.58 | |||||||||||||||||
Net increase (decrease) from operations | 1.13 | 0.44 | (1.70 | ) | 1.49 | 1.58 | |||||||||||||||||
Dividends from net investment income | — | — | — | — | (0.10 | ) | |||||||||||||||||
Distributions from net realized gains | — | — | (0.13 | ) | — | — | |||||||||||||||||
Total dividends and distributions | — | — | (0.13 | ) | — | (0.10 | ) | ||||||||||||||||
Net asset value, end of year | $ | 12.61 | $ | 11.48 | $ | 11.04 | $ | 12.87 | $ | 11.38 | |||||||||||||
Total investment return5 | 9.93 | % | 3.99 | % | (13.13 | )% | 13.19 | % | 15.96 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 2.55 | % | 2.57 | % | 2.65 | % | 2.58 | % | 2.61 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 2.44 | % | 2.49 | % | 2.65 | % | 2.58 | %6 | 2.61 | % | |||||||||||||
Net investment income (loss) | 0.37 | % | (0.04 | )% | 0.16 | % | 0.11 | % | (0.01 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 2,079 | $ | 2,201 | $ | 2,396 | $ | 3,373 | $ | 3,682 | |||||||||||||
Portfolio turnover | 74 | % | 158 | % | 30 | % | 111 | % | 60 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 20131 | 2012 | 20112 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.47 | $ | 11.98 | $ | 14.00 | $ | 12.36 | $ | 10.72 | |||||||||||||
Net investment income3 | 0.18 | 0.12 | 0.12 | 0.13 | 0.09 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 1.17 | 0.47 | (1.89 | ) | 1.60 | 1.71 | |||||||||||||||||
Net increase (decrease) from operations | 1.35 | 0.59 | (1.77 | ) | 1.73 | 1.80 | |||||||||||||||||
Dividends from net investment income | (0.07 | ) | (0.10 | ) | (0.12 | ) | (0.09 | ) | (0.16 | ) | |||||||||||||
Distributions from net realized gains | — | — | (0.13 | ) | — | — | |||||||||||||||||
Total dividends and distributions | (0.07 | ) | (0.10 | ) | (0.25 | ) | (0.09 | ) | (0.16 | ) | |||||||||||||
Net asset value, end of year | $ | 13.75 | $ | 12.47 | $ | 11.98 | $ | 14.00 | $ | 12.36 | |||||||||||||
Total investment return5 | 10.86 | % | 4.87 | % | (12.49 | )% | 14.04 | % | 16.85 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.64 | % | 1.75 | % | 1.88 | % | 1.79 | % | 1.85 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.53 | % | 1.67 | % | 1.88 | % | 1.79 | %6 | 1.85 | % | |||||||||||||
Net investment income | 1.37 | % | 0.92 | % | 0.97 | % | 0.95 | % | 0.78 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 450,438 | $ | 334,525 | $ | 218,196 | $ | 264,991 | $ | 232,908 | |||||||||||||
Portfolio turnover | 74 | % | 158 | % | 30 | % | 111 | % | 60 | % |
See accompanying notes to financial statements.
283
PACE Select Advisors Trust
PACE Global Real Estate Securities Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 20101 | |||||||||||||||||||
Net asset value, beginning of year | $ | 6.52 | $ | 6.05 | $ | 6.02 | $ | 5.31 | $ | 4.86 | |||||||||||||
Net investment income2 | 0.10 | 0.08 | 0.09 | 0.09 | 0.11 | ||||||||||||||||||
Net realized and unrealized gains | 0.83 | 0.65 | 0.08 | 1.01 | 0.83 | ||||||||||||||||||
Net increase from operations | 0.93 | 0.73 | 0.17 | 1.10 | 0.94 | ||||||||||||||||||
Dividends from net investment income | (0.12 | ) | (0.26 | ) | (0.14 | ) | (0.39 | ) | (0.49 | ) | |||||||||||||
Net asset value, end of year | $ | 7.33 | $ | 6.52 | $ | 6.05 | $ | 6.02 | $ | 5.31 | |||||||||||||
Total investment return3 | 14.56 | % | 12.24 | % | 3.28 | % | 21.49 | % | 19.70 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.59 | % | 1.56 | % | 1.69 | % | 1.68 | % | 1.89 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.45 | % | 1.45 | % | 1.45 | % | 1.45 | % | 1.45 | % | |||||||||||||
Net investment income | 1.55 | % | 1.19 | % | 1.61 | % | 1.54 | % | 2.13 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 5,692 | $ | 5,233 | $ | 4,838 | $ | 4,566 | $ | 3,975 | |||||||||||||
Portfolio turnover | 53 | % | 92 | % | 66 | % | 51 | % | 117 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 20101 | |||||||||||||||||||
Net asset value, beginning of year | $ | 6.55 | $ | 6.08 | $ | 6.05 | $ | 5.33 | $ | 4.87 | |||||||||||||
Net investment income2 | 0.12 | 0.09 | 0.11 | 0.10 | 0.12 | ||||||||||||||||||
Net realized and unrealized gains | 0.84 | 0.66 | 0.07 | 1.02 | 0.84 | ||||||||||||||||||
Net increase from operations | 0.96 | 0.75 | 0.18 | 1.12 | 0.96 | ||||||||||||||||||
Dividends from net investment income | (0.14 | ) | (0.28 | ) | (0.15 | ) | (0.40 | ) | (0.50 | ) | |||||||||||||
Net asset value, end of year | $ | 7.37 | $ | 6.55 | $ | 6.08 | $ | 6.05 | $ | 5.33 | |||||||||||||
Total investment return3 | 14.94 | % | 12.53 | % | 3.46 | % | 21.89 | % | 20.15 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.38 | % | 1.39 | % | 1.39 | % | 1.34 | % | 1.51 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.20 | % | 1.20 | % | 1.20 | % | 1.20 | % | 1.20 | % | |||||||||||||
Net investment income | 1.81 | % | 1.43 | % | 1.90 | % | 1.74 | % | 2.34 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 280 | $ | 294 | $ | 210 | $ | 195 | $ | 111 | |||||||||||||
Portfolio turnover | 53 | % | 92 | % | 66 | % | 51 | % | 117 | % |
1 Investment advisory functions for the Portfolio were transferred from Goldman Sachs Asset Management, L.P. to Brookfield Investment Management Inc. and CBRE Clarion Services, LLC (formerly ING Clarion Real Estate Securities, LLC) on November 17, 2009.
2 Calculated using the average shares method.
3 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
284
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 20101 | |||||||||||||||||||
Net asset value, beginning of year | $ | 6.48 | $ | 6.00 | $ | 5.99 | $ | 5.29 | $ | 4.85 | |||||||||||||
Net investment income2 | 0.05 | 0.03 | 0.05 | 0.05 | 0.07 | ||||||||||||||||||
Net realized and unrealized gains | 0.83 | 0.65 | 0.07 | 1.00 | 0.82 | ||||||||||||||||||
Net increase from operations | 0.88 | 0.68 | 0.12 | 1.05 | 0.89 | ||||||||||||||||||
Dividends from net investment income | (0.07 | ) | (0.20 | ) | (0.11 | ) | (0.35 | ) | (0.45 | ) | |||||||||||||
Net asset value, end of year | $ | 7.29 | $ | 6.48 | $ | 6.00 | $ | 5.99 | $ | 5.29 | |||||||||||||
Total investment return3 | 13.77 | % | 11.52 | % | 2.42 | % | 20.51 | % | 18.74 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 2.30 | % | 2.27 | % | 2.44 | % | 2.45 | % | 2.69 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 2.20 | % | 2.20 | % | 2.20 | % | 2.20 | % | 2.20 | % | |||||||||||||
Net investment income | 0.78 | % | 0.40 | % | 0.92 | % | 0.79 | % | 1.37 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 272 | $ | 222 | $ | 172 | $ | 220 | $ | 171 | |||||||||||||
Portfolio turnover | 53 | % | 92 | % | 66 | % | 51 | % | 117 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 20101 | |||||||||||||||||||
Net asset value, beginning of year | $ | 6.53 | $ | 6.06 | $ | 6.03 | $ | 5.32 | $ | 4.86 | |||||||||||||
Net investment income2 | 0.12 | 0.10 | 0.10 | 0.10 | 0.12 | ||||||||||||||||||
Net realized and unrealized gains | 0.84 | 0.65 | 0.08 | 1.01 | 0.83 | ||||||||||||||||||
Net increase from operations | 0.96 | 0.75 | 0.18 | 1.11 | 0.95 | ||||||||||||||||||
Dividends from net investment income | (0.14 | ) | (0.28 | ) | (0.15 | ) | (0.40 | ) | (0.49 | ) | |||||||||||||
Net asset value, end of year | $ | 7.35 | $ | 6.53 | $ | 6.06 | $ | 6.03 | $ | 5.32 | |||||||||||||
Total investment return3 | 15.00 | % | 12.57 | % | 3.47 | % | 21.74 | % | 20.10 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.63 | % | 1.52 | % | 1.65 | % | 1.65 | % | 1.91 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.20 | % | 1.20 | % | 1.20 | % | 1.20 | % | 1.20 | % | |||||||||||||
Net investment income | 1.79 | % | 1.47 | % | 1.88 | % | 1.77 | % | 2.36 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 145,067 | $ | 116,509 | $ | 108,101 | $ | 101,008 | $ | 73,866 | |||||||||||||
Portfolio turnover | 53 | % | 92 | % | 66 | % | 51 | % | 117 | % |
See accompanying notes to financial statements.
285
PACE Select Advisors Trust
PACE Alternative Strategies Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Class A | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 20132 | 20123 | 20114 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 10.21 | $ | 9.35 | $ | 9.32 | $ | 9.16 | $ | 8.79 | |||||||||||||
Net investment income (loss)5 | (0.09 | ) | (0.05 | ) | (0.02 | ) | (0.00 | )6 | 0.006 | ||||||||||||||
Net realized and unrealized gains | 0.70 | 0.95 | 0.05 | 0.25 | 0.40 | ||||||||||||||||||
Net increase from operations | 0.61 | 0.90 | 0.03 | 0.25 | 0.40 | ||||||||||||||||||
Dividends from net investment income | (0.20 | ) | (0.04 | ) | — | (0.09 | ) | (0.03 | ) | ||||||||||||||
Net asset value, end of year | $ | 10.62 | $ | 10.21 | $ | 9.35 | $ | 9.32 | $ | 9.16 | |||||||||||||
Total investment return7 | 5.99 | % | 9.54 | % | 0.43 | % | 2.69 | % | 4.41 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.97 | % | 2.01 | % | 2.12 | % | 2.08 | % | 2.06 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.99 | %9 | 1.98 | %9 | 2.10 | %9 | 2.05 | % | 2.00 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.88 | %9 | 1.90 | %9 | 1.95 | %9 | 1.95 | % | 1.95 | % | |||||||||||||
Net investment income (loss) | (0.89 | )% | (0.49 | )% | (0.23 | )% | (0.02 | )% | 0.04 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 77,331 | $ | 53,728 | $ | 43,644 | $ | 63,767 | $ | 56,772 | |||||||||||||
Portfolio turnover | 114 | % | 140 | % | 242 | % | 295 | % | 244 | % | |||||||||||||
Class Y | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 20132 | 20123 | 20114 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 10.30 | $ | 9.43 | $ | 9.38 | $ | 9.19 | $ | 8.80 | |||||||||||||
Net investment income (loss)5 | (0.07 | ) | (0.03 | ) | 0.006 | 0.02 | 0.03 | ||||||||||||||||
Net realized and unrealized gains | 0.70 | 0.97 | 0.05 | 0.25 | 0.40 | ||||||||||||||||||
Net increase from operations | 0.63 | 0.94 | 0.05 | 0.27 | 0.43 | ||||||||||||||||||
Dividends from net investment income | (0.22 | ) | (0.07 | ) | — | (0.08 | ) | (0.04 | ) | ||||||||||||||
Net asset value, end of year | $ | 10.71 | $ | 10.30 | $ | 9.43 | $ | 9.38 | $ | 9.19 | |||||||||||||
Total investment return7 | 6.18 | % | 9.89 | % | 0.64 | % | 2.84 | % | 4.83 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.74 | % | 1.77 | % | 1.91 | % | 1.85 | % | 1.76 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.75 | %9 | 1.73 | %9 | 1.86 | %9 | 1.80 | % | 1.76 | %9 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.63 | %9 | 1.65 | %9 | 1.70 | %9 | 1.70 | % | 1.70 | %9 | |||||||||||||
Net investment income (loss) | (0.65 | )% | (0.25 | )% | 0.00 | %10 | 0.21 | % | 0.37 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 4,629 | $ | 2,732 | $ | 1,668 | $ | 1,565 | $ | 1,977 | |||||||||||||
Portfolio turnover | 114 | % | 140 | % | 242 | % | 295 | % | 244 | % |
1 As of the close of business, July 15, 2014, AQR Capital Management LLC became an investment sub-advisor of the Portfolio.
2 As of the close of business, November 30, 2012, Wellington Management Company, LLP ("Wellington") was terminated as an investment sub-advisor to the Portfolio. Cash from the sale of securities from the portfolio previously managed by Wellington was transferred to First Quadrant L.P., an existing sub-advisor of the Portfolio on December 3, 2012. Analytic Investors, LLC and Standard Life Investments (Corporate Funds) Limited also continue to provide a portion of the investment advisory function.
3 As of the close of business, February 10, 2012, Goldman Sachs Asset Management, L.P. ("Goldman Sachs") was terminated as an investment sub-advisor to the Portfolio. Cash from sale of securities from the portfolio previously managed by Goldman Sachs was transferred to Standard Life Investments (Corporate Funds) Limited, an existing sub-advisor of the Portfolio.
4 A portion of the investment advisory function for the Portfolio was transferred to Standard Life Investments (Corporate Funds) Limited on August 5, 2010.
5 Calculated using the average shares method.
286
Class C | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 20132 | 20123 | 20114 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 9.90 | $ | 9.09 | $ | 9.13 | $ | 8.97 | $ | 8.64 | |||||||||||||
Net investment income (loss)5 | (0.16 | ) | (0.11 | ) | (0.08 | ) | (0.07 | ) | (0.06 | ) | |||||||||||||
Net realized and unrealized gains | 0.67 | 0.92 | 0.04 | 0.25 | 0.39 | ||||||||||||||||||
Net increase from operations | 0.51 | 0.81 | (0.04 | ) | 0.18 | 0.33 | |||||||||||||||||
Dividends from net investment income | (0.12 | ) | — | — | (0.02 | ) | — | ||||||||||||||||
Net asset value, end of year | $ | 10.29 | $ | 9.90 | $ | 9.09 | $ | 9.13 | $ | 8.97 | |||||||||||||
Total investment return7 | 5.18 | % | 8.79 | % | (0.22 | )% | 1.93 | % | 3.70 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 2.71 | % | 2.72 | % | 2.82 | % | 2.78 | %8 | 2.75 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 2.70 | % | 2.70 | % | 2.78 | % | 2.78 | %8,9 | 2.75 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 2.58 | % | 2.62 | % | 2.63 | % | 2.68 | %9 | 2.70 | % | |||||||||||||
Net investment income (loss) | (1.60 | )% | (1.20 | )% | (0.91 | )% | (0.77 | )% | (0.72 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 6,346 | $ | 4,827 | $ | 4,989 | $ | 6,479 | $ | 6,887 | |||||||||||||
Portfolio turnover | 114 | % | 140 | % | 242 | % | 295 | % | 244 | % | |||||||||||||
Class P | |||||||||||||||||||||||
Years ended July 31, | |||||||||||||||||||||||
20141 | 20132 | 20123 | 20114 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 10.27 | $ | 9.41 | $ | 9.36 | $ | 9.19 | $ | 8.82 | |||||||||||||
Net investment income (loss)5 | (0.07 | ) | (0.02 | ) | 0.006 | 0.02 | 0.03 | ||||||||||||||||
Net realized and unrealized gains | 0.71 | 0.95 | 0.05 | 0.26 | 0.40 | ||||||||||||||||||
Net increase from operations | 0.64 | 0.93 | 0.05 | 0.28 | 0.43 | ||||||||||||||||||
Dividends from net investment income | (0.22 | ) | (0.07 | ) | — | (0.11 | ) | (0.06 | ) | ||||||||||||||
Net asset value, end of year | $ | 10.69 | $ | 10.27 | $ | 9.41 | $ | 9.36 | $ | 9.19 | |||||||||||||
Total investment return7 | 6.27 | % | 9.93 | % | 0.64 | % | 2.94 | % | 4.71 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.74 | %8 | 1.74 | % | 1.85 | % | 1.81 | % | 1.79 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.74 | %8,9 | 1.71 | % | 1.85 | %9 | 1.80 | % | 1.75 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.62 | %9 | 1.63 | % | 1.69 | %9 | 1.70 | % | 1.70 | % | |||||||||||||
Net investment income (loss) | (0.64 | )% | (0.21 | )% | 0.02 | % | 0.22 | % | 0.28 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 611,399 | $ | 493,524 | $ | 449,925 | $ | 476,544 | $ | 399,477 | |||||||||||||
Portfolio turnover | 114 | % | 140 | % | 242 | % | 295 | % | 244 | % |
6 Amount represents less than $0.005 per share.
7 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges, redemption fees or program fees; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.
8 The ratios after and before fee waivers and/or expense reimbursements by and recoupments to manager are the same since the recoupments to manager represent less than 0.01%.
9 The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Portfolio, not to exceed the expense cap.
10 Amount represents less than 0.005%.
See accompanying notes to financial statements.
287
PACE Select Advisors Trust
Notes to financial statements
Organization and significant accounting policies
PACE Select Advisors Trust (the "Trust") is registered with the US Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940 (the "1940 Act"), as amended, as an open-end management investment company currently composed of fifteen separate investment portfolios and was organized as a Delaware statutory trust under the laws of the State of Delaware by Certificate of Trust dated September 9, 1994, as amended June 9, 1995 and thereafter. The trustees of the Trust have authority to issue an unlimited number of shares of beneficial interest, par value $0.001 per share.
The Trust has fifteen portfolios available for investment, each having its own investment objectives and policies: PACE Money Market Investments, PACE Mortgage-Backed Securities Fixed Income Investments (formerly, PACE Government Securities Fixed Income Investments), PACE Intermediate Fixed Income Investments, PACE Strategic Fixed Income Investments, PACE Municipal Fixed Income Investments, PACE International Fixed Income Investments, PACE High Yield Investments, PACE Large Co Value Equity Investments, PACE Large Co Growth Equity Investments, PACE Small/Medium Co Value Equity Investments, PACE Small/Medium Co Growth Equity Investments, PACE International Equity Investments, PACE International Emerging Markets Equity Investments, PACE Global Real Estate Securities Investments and PACE Alternative Strategies Investments (each a "Portfolio" and collectively, the "Portfolios").
Each of the Portfolios is classified as a diversified investment company with the exception of PACE Intermediate Fixed Income Investments, PACE International Fixed Income Investments, PACE Global Real Estate Securities Investments and PACE Alternative Strategies Investments. With the exception of PACE Money Market Investments (which currently offers Class P shares only) each Portfolio currently offers Class A, Class C, Class Y and Class P shares. Each class represents interests in the same assets of the applicable Portfolio and the classes are identical except for differences in their sales charge structures, ongoing service and distribution charges and certain transfer agency and related services expenses. All classes of shares have equal voting privileges except that each class has exclusive voting rights with respect to its service and/or distribution plan, if any. Class Y and Class P shares have no service or distribution plan. The Portfolios' Class P shares currently are available for purchase only to participants in the PACESM Select Advisors Program, except that PACE Money Market Investments shares are also available to participants in the PACESM Multi Advisor Program.
The Trust accounts separately for the assets, liabilities and operations of each Portfolio. Expenses directly attributable to each Portfolio are charged to that Portfolio's operations; expenses which are applicable to all Portfolios are allocated among them on a pro rata basis.
In the normal course of business, the Portfolios may enter into contracts that contain a variety of representations or that provide indemnification for certain liabilities. The Portfolios' maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Portfolios that have not yet occurred. However, the Portfolios have not had such claims or losses through July 31, 2014 pursuant to these contracts and expect the risk of loss to be remote.
PACE Money Market Investments attempts to maintain a stable net asset value of $1.00 per share; the Portfolio has adopted certain investment, portfolio valuation and dividend/distribution policies in an attempt to enable it to do so. As with any money market portfolio, there is no assurance, however, that the Portfolio will be able to maintain a stable net asset value of $1.00 per share.
The Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") is the exclusive reference of authoritative US generally accepted accounting principles ("US GAAP") recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal laws are also sources of authoritative US GAAP for SEC registrants. The Portfolios' financial statements are prepared in
288
PACE Select Advisors Trust
Notes to financial statements
accordance with US GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates. The following is a summary of significant accounting policies:
Valuation of investments
Each Portfolio calculates its net asset value on days that the New York Stock Exchange ("NYSE") is open. A Portfolio calculates net asset value separately for each class as of the close of regular trading on the NYSE (generally, 4:00 p.m., Eastern time). If trading on the NYSE is halted for the day before 4:00 p.m., Eastern time, a Portfolio'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 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.
Each Portfolio (other than PACE Money Market Investments) calculates its net asset value based on the current market value, where available, for its portfolio securities. The Portfolios normally obtain market values for their investments from independent pricing sources and broker-dealers. Independent pricing sources may use reported last sale prices, official market closing prices, current market quotations or valuations from computerized evaluation systems that derive values based on comparable investments. An evaluation system incorporates parameters such as security quality, maturity and coupon, and/or research and evaluations by its staff, including review of broker-dealer market price quotations, if available, in determining the valuation of the portfolio investments. If a market value is not readily available from an independent pricing source for a particular investment, that investment is valued at fair value as determined in good faith by or under the direction of the board of trustees (the "board").
The amortized cost method of valuation, which approximates market value, generally is used to value short-term debt instruments with 60 days or less remaining to maturity, unless the board determines that this does not represent fair value. Investments in open-end investment companies are valued at the daily closing net asset value of the respective investment company. Pursuant to the Portfolios' use of the practical expedient within ASC Topic 820, investments in non-registered investment companies are also valued at the daily closing net asset value. All investments quoted in foreign currencies will be valued daily in US dollars on the basis of the foreign currency exchange rates prevailing at the time such valuation is determined by the Portfolios' custodian and accounting agent. Foreign currency exchange rates are generally determined as of the close of the NYSE.
Investments traded in the over-the-counter ("OTC") market and listed on The NASDAQ Stock Market, Inc. ("NASDAQ") normally are valued at the NASDAQ Official Closing Price. Other OTC securities are valued at the last bid price on the valuation date available prior to valuation. Investments which are listed on US and foreign stock exchanges are normally valued at the market closing price, the last sale price on the day the securities are valued or, lacking any sales on such day, at the last available bid price.
The board has delegated to the UBS Global Asset Management (Americas) Inc. Global Valuation Committee ("GVC") the responsibility for making fair value determinations with respect to the Portfolios' holdings. The GVC is comprised of representatives of management, including members of the investment team. The GVC provides reports to the board at each quarterly meeting regarding any investments that have been fair valued, valued pursuant to standing instructions approved by the GVC, or where non-vendor pricing sources had been used to make fair value determinations when sufficient information exists during the prior quarter. Fair valuation determinations are subject to review at least monthly by the GVC during scheduled meetings. Pricing decisions, processes, and controls over fair value determinations are subject to internal and external reviews, including annual internal compliance reviews and periodic internal audit reviews of securities valuations.
289
PACE Select Advisors Trust
Notes to financial statements
The types of investments for which such fair value pricing may be necessary include, but are not limited to: foreign investments under some circumstances, as discussed below; securities of an issuer that has entered into a restructuring; investments whose trading has been halted or suspended; fixed income securities that are in default and for which there is no current market value quotation; and investments that are restricted as to transfer or resale. Various factors may be reviewed in order to make a good faith determination of an investment's fair value. These factors include, but are not limited to, fundamental analytical data relating to the investment; the nature and duration of restrictions on disposition of the investments; and the evaluation of forces which influence the market in which the investments are purchased and sold. Valuing investments at fair value involves greater reliance on judgment than valuing investments that have readily available market quotations. Fair value determinations can also involve reliance on quantitative models employed by an independent third party.
Each Portfolio expects to price most of its portfolio holdings based on current market value, as discussed previously. Investments for which market quotations are not readily available may be valued based upon appraisals received from a pricing service using a computerized evaluation system or formula method that takes into consideration market indices, matrices, yield curves and other specific adjustments. Investments also may be valued based on appraisals derived from information concerning the investment or similar investments received from recognized dealers in those holdings. If a Portfolio concludes that a market quotation is not readily available for a portfolio investment for any number of reasons, including the occurrence of a "significant event" (e.g., natural disaster or governmental action), after the close of trading in its principal domestic or foreign market but before the close of regular trading on the NYSE, the Portfolio will use fair value methods to reflect those events. This policy is intended to assure that each Portfolio's net asset value fairly reflects the value of its portfolio holdings as of the time of pricing. PACE International Equity Investments, PACE International Emerging Markets Equity Investments, PACE Global Real Estate Securities Investments and PACE Alternative Strategies Investments may use a systematic fair valuation model provided by an independent third party to value investments principally traded in foreign markets in order to adjust for possible stale pricing that may occur between the close of the foreign exchanges and the time for valuation. If an investment is valued at a "fair value," that value is likely to be different from the last quoted market price for the investment. The use of the fair valuation model may result in investments being transferred between Level 1 and Level 2 of the fair value hierarchy at reporting period ends. In cases where investments are traded on more than one exchange, the investments are valued on the exchange designated as the primary market by UBS Global Asset Management (Americas) Inc. ("UBS Global AM"), the investment manager of the Portfolios.
Futures contracts are generally valued at the settlement price established each day on the exchange on which they are traded. Forward foreign currency contracts are valued daily using forward exchange rates quoted by independent pricing services. Swaps and other OTC derivatives are marked to market daily based upon values from third party vendors or quotations from market makers to the extent available. In the event that market quotations are not readily available or deemed unreliable, the swap is valued at fair value as determined in good faith by or under the direction of the board.
US GAAP requires disclosure regarding the various inputs that are used in determining the value of each Portfolio's investments. These inputs are summarized into the three broad levels listed below:
Level 1—Unadjusted quoted prices in active markets for identical investments.
Level 2—Other significant observable inputs, including but not limited to, quoted prices for similar investments, interest rates, prepayment speeds and credit risks.
Level 3—Unobservable inputs inclusive of each Portfolio's own assumptions in determining the fair value of investments.
290
PACE Select Advisors Trust
Notes to financial statements
In accordance with the requirements of US GAAP, a fair value hierarchy has been included near the end of each Portfolio's Portfolio of investments.
The provisions of ASC Topic 815 "Derivatives and Hedging" ("ASC Topic 815") require qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk related contingent features in derivative agreements. Since investment companies value their derivatives at fair value and recognize changes in fair value through the Statement of operations, they do not qualify for hedge accounting under ASC Topic 815. Accordingly, even though a Portfolio's investments in derivatives may represent economic hedges, they are considered to be non-hedge transactions for purposes of disclosure under ASC Topic 815. ASC Topic 815 requires (1) objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation, (2) the fair values of derivative instruments and their gains and losses be disclosed in a tabular format, and (3) information be disclosed about credit-risk contingent features of derivatives contracts. Details of this disclosure can be found below as well as in the Portfolio of investments. Swap agreements, forward foreign currency contracts, swaptions and options written entered into by the Portfolios may contain credit-risk related contingent features that could be triggered subject to certain circumstances. Such circumstances include agreed upon net asset value thresholds. If triggered, the derivative counterparty could request additional cash margin and/or terminate the derivative contract. The aggregate fair value of the derivative contracts that are in a net liability position that contain these triggers can be found in the applicable Portfolio of investments. The aggregate fair value of assets that are already posted as collateral as of July 31, 2014 is reflected in the Statement of assets and liabilities. If the applicable credit-risk related contingent features were triggered as of July 31, 2014, a Portfolio would be required to post additional collateral or may be required to terminate the contract and settle any amounts outstanding. The Portfolios are not aware of any additional credit-risk contingent features on other derivative contracts held by the Portfolios (other than those described earlier). The volume of derivatives that is presented in the Portfolio of investments of each Portfolio is consistent with the derivative activity during the year ended July 31, 2014.
At July 31, 2014, the Portfolios had the following derivatives categorized by underlying risk:
Asset derivatives1
Interest rate risk | Foreign exchange risk | Credit risk | Equity risk | Total | |||||||||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | |||||||||||||||||||||||
Options purchased | $ | 678 | $ | — | $ | — | $ | — | $ | 678 | |||||||||||||
Total value | $ | 678 | $ | — | $ | — | $ | — | $ | 678 | |||||||||||||
PACE Intermediate Fixed Income Investments | |||||||||||||||||||||||
Futures contracts | $ | 15,554 | $ | — | $ | — | $ | — | $ | 15,554 | |||||||||||||
Options and swaptions purchased | 435,351 | 49,956 | — | — | 485,307 | ||||||||||||||||||
Forward foreign currency contracts | — | 104,497 | — | — | 104,497 | ||||||||||||||||||
Swap agreements | 214,342 | — | — | — | 214,342 | ||||||||||||||||||
Total value | $ | 665,247 | $ | 154,453 | $ | — | $ | — | $ | 819,700 | |||||||||||||
PACE Strategic Fixed Income Investments | |||||||||||||||||||||||
Options and swaptions purchased | $ | 3,906 | $ | — | $ | — | $ | — | $ | 3,906 | |||||||||||||
Forward foreign currency contracts | — | 1,810,563 | — | — | 1,810,563 | ||||||||||||||||||
Swap agreements | 4,808,175 | — | 2,381,096 | — | 7,189,271 | ||||||||||||||||||
Total value | $ | 4,812,081 | $ | 1,810,563 | $ | 2,381,096 | $ | — | $ | 9,003,740 |
291
PACE Select Advisors Trust
Notes to financial statements
Asset derivatives1
Interest rate risk | Foreign exchange risk | Credit risk | Equity risk | Total | |||||||||||||||||||
PACE International Fixed Income Investments | |||||||||||||||||||||||
Futures contracts | $ | 2,175,411 | $ | — | $ | — | $ | — | $ | 2,175,411 | |||||||||||||
Forward foreign currency contracts | — | 3,700,594 | — | — | 3,700,594 | ||||||||||||||||||
Total value | $ | 2,175,411 | $ | 3,700,594 | $ | — | $ | — | $ | 5,876,005 | |||||||||||||
PACE High Yield Investments | |||||||||||||||||||||||
Futures contracts | $ | 245,048 | $ | — | $ | — | $ | — | $ | 245,048 | |||||||||||||
Forward foreign currency contracts | — | 1,171,408 | — | — | 1,171,408 | ||||||||||||||||||
Total value | $ | 245,048 | $ | 1,171,408 | $ | — | $ | — | $ | 1,416,456 | |||||||||||||
PACE International Equity Investments | |||||||||||||||||||||||
Forward foreign currency contracts | $ | — | $ | 78,260 | $ | — | $ | — | $ | 78,260 | |||||||||||||
Total value | $ | — | $ | 78,260 | $ | — | $ | — | $ | 78,260 | |||||||||||||
PACE Alternative Strategies Investments | |||||||||||||||||||||||
Futures contracts | $ | 237,267 | $ | — | $ | — | $ | 4,694,421 | $ | 4,931,688 | |||||||||||||
Options and swaptions purchased | 1,087,032 | 2,232,359 | — | 9,847,192 | 13,166,583 | ||||||||||||||||||
Forward foreign currency contracts | — | 11,449,892 | — | — | 11,449,892 | ||||||||||||||||||
Swap agreements | 8,056,485 | — | 3,090,385 | 1,483,111 | 12,629,981 | ||||||||||||||||||
Total value | $ | 9,380,784 | $ | 13,682,251 | $ | 3,090,385 | $ | 16,024,724 | $ | 42,178,144 |
Liability derivatives2
Interest rate risk | Foreign exchange risk | Credit risk | Equity risk | Total | |||||||||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | |||||||||||||||||||||||
Swap agreements | $ | (1,118 | ) | $ | — | $ | — | $ | — | $ | (1,118 | ) | |||||||||||
Options and swaptions written | (65,331 | ) | — | — | — | (65,331 | ) | ||||||||||||||||
Total value | $ | (66,449 | ) | $ | — | $ | — | $ | — | $ | (66,449 | ) | |||||||||||
PACE Intermediate Fixed Income Investments | |||||||||||||||||||||||
Futures contracts | $ | (204,414 | ) | $ | — | $ | — | $ | — | $ | (204,414 | ) | |||||||||||
Forward foreign currency contracts | — | (55,558 | ) | — | — | (55,558 | ) | ||||||||||||||||
Swap agreements | (151,017 | ) | — | — | — | (151,017 | ) | ||||||||||||||||
Options and swaptions written | (344,554 | ) | — | — | — | (344,554 | ) | ||||||||||||||||
Total value | $ | (699,985 | ) | $ | (55,558 | ) | $ | — | $ | — | $ | (755,543 | ) | ||||||||||
PACE Strategic Fixed Income Investments | |||||||||||||||||||||||
Futures contracts | $ | (1,641,849 | ) | $ | — | $ | — | $ | — | $ | (1,641,849 | ) | |||||||||||
Options and swaptions written | (21,683 | ) | — | — | — | (21,683 | ) | ||||||||||||||||
Forward foreign currency contracts | — | (1,622,929 | ) | — | — | (1,622,929 | ) | ||||||||||||||||
Swap agreements | (5,444,861 | ) | — | (213,112 | ) | — | (5,657,973 | ) | |||||||||||||||
Total value | $ | (7,108,393 | ) | $ | (1,622,929 | ) | $ | (213,112 | ) | $ | — | $ | (8,944,434 | ) | |||||||||
PACE International Fixed Income Investments | |||||||||||||||||||||||
Futures contracts | $ | (218,519 | ) | $ | — | $ | — | $ | — | $ | (218,519 | ) | |||||||||||
Forward foreign currency contracts | — | (1,858,569 | ) | — | — | (1,858,569 | ) | ||||||||||||||||
Total value | $ | (218,519 | ) | $ | (1,858,569 | ) | $ | — | $ | — | $ | (2,077,088 | ) |
292
PACE Select Advisors Trust
Notes to financial statements
Liability derivatives2
Interest rate risk | Foreign exchange risk | Credit risk | Equity risk | Total | |||||||||||||||||||
PACE Alternative Strategies Investments | |||||||||||||||||||||||
Futures contracts | $ | (2,626,268 | ) | $ | — | $ | — | $ | (4,138,864 | ) | $ | (6,765,132 | ) | ||||||||||
Written options and foreign exchange options | (55,688 | ) | (528,235 | ) | — | (6,711,080 | ) | (7,295,003 | ) | ||||||||||||||
Forward foreign currency contracts | — | (9,574,671 | ) | — | — | (9,574,671 | ) | ||||||||||||||||
Swap agreements | (5,522,176 | ) | — | (2,008,201 | ) | (2,044,290 | ) | (9,574,667 | ) | ||||||||||||||
Total value | $ | (8,204,132 | ) | $ | (10,102,906 | ) | $ | (2,008,201 | ) | $ | (12,894,234 | ) | $ | (33,209,473 | ) |
1 In the Statement of assets and liabilities, options and swaptions purchased are shown within Investments in securities of unaffiliated issuers, at value, swap agreements are shown at value while forward foreign currency contracts are shown using unrealized appreciation. Futures contracts are reported in the table above using the cumulative appreciation as detailed in the futures contracts and centrally cleared swaps tables at the end of the Portfolio of investments, respectively, but only the variation margin to be received, if any, is reported within the Statement of assets and liabilities.
2 In the Statement of assets and liabilities, swap agreements and written options and swaptions are shown at value while forward foreign currency contracts are shown using unrealized depreciation. Futures contracts and centrally cleared swaps are reported in the table above using the cumulative appreciation/depreciation as detailed in the futures contracts and centrally cleared swaps tables at the end of the Portfolio of investments, but only the variation margin to be paid, if any, is reported within the Statement of assets and liabilities.
Net realized and unrealized gains (losses) from derivative instruments during the year ended July 31, 2014, were as follows:
Interest rate risk | Foreign exchange risk | Credit risk | Equity risk | Total | |||||||||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Swap agreements | $ | (6,956 | ) | $ | — | $ | — | $ | — | $ | (6,956 | ) | |||||||||||
Options and swaptions written | 811,250 | — | — | — | 811,250 | ||||||||||||||||||
Total net realized gain (loss) | $ | 804,294 | $ | — | $ | — | $ | — | $ | 804,294 | |||||||||||||
Net change in unrealized appreciation/depreciation5 | |||||||||||||||||||||||
Options and swaptions purchased4 | $ | (108,572 | ) | $ | — | $ | — | $ | — | $ | (108,572 | ) | |||||||||||
Swap agreements | 16,992 | — | — | — | 16,992 | ||||||||||||||||||
Options and swaptions written | 46,310 | — | — | — | 46,310 | ||||||||||||||||||
Total net change in unrealized appreciation/depreciation | $ | (45,270 | ) | $ | — | $ | — | $ | — | $ | (45,270 | ) |
293
PACE Select Advisors Trust
Notes to financial statements
Interest rate risk | Foreign exchange risk | Credit risk | Equity risk | Total | |||||||||||||||||||
PACE Intermediate Fixed Income Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Futures contracts | $ | 15,491 | $ | — | $ | — | $ | — | $ | 15,491 | |||||||||||||
Options and swaptions purchased4 | (1,156,838 | ) | (161,766 | ) | — | — | (1,318,604 | ) | |||||||||||||||
Forward foreign currency contracts | — | 351,022 | — | — | 351,022 | ||||||||||||||||||
Swap agreements | 538,010 | — | 50,084 | — | 588,094 | ||||||||||||||||||
Options and swaptions written | 684,498 | 301,225 | — | — | 985,723 | ||||||||||||||||||
Total net realized gain (loss) | $ | 81,161 | $ | 490,481 | $ | 50,084 | $ | — | $ | 621,726 | |||||||||||||
Net change in unrealized appreciation/depreciation5 | |||||||||||||||||||||||
Futures contracts | $ | (428,084 | ) | $ | — | $ | — | $ | — | $ | (428,084 | ) | |||||||||||
Options and swaptions purchased4 | 87,784 | (857 | ) | — | — | 86,927 | |||||||||||||||||
Forward foreign currency contracts | — | (88,785 | ) | — | — | (88,785 | ) | ||||||||||||||||
Swap agreements | (889,763 | ) | — | — | — | (889,763 | ) | ||||||||||||||||
Options and swaptions written | 282,132 | — | — | — | 282,132 | ||||||||||||||||||
Total net change in unrealized appreciation/depreciation | $ | (947,931 | ) | $ | (89,642 | ) | $ | — | $ | — | $ | (1,037,573 | ) | ||||||||||
PACE Strategic Fixed Income Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Futures contracts | $ | (1,310,310 | ) | $ | — | $ | — | $ | — | $ | (1,310,310 | ) | |||||||||||
Options and swaptions written | 1,007,241 | — | — | — | 1,007,241 | ||||||||||||||||||
Swap agreements | (17,588,289 | ) | — | 622,541 | — | (16,965,748 | ) | ||||||||||||||||
Forward foreign currency contracts | — | (1,337,936 | ) | — | — | (1,337,936 | ) | ||||||||||||||||
Total net realized gain (loss) | $ | (17,891,358 | ) | $ | (1,337,936 | ) | $ | 622,541 | $ | — | $ | (18,606,753 | ) | ||||||||||
Net change in unrealized appreciation/depreciation5 | |||||||||||||||||||||||
Futures contracts | $ | (1,648,515 | ) | $ | — | $ | — | $ | — | $ | (1,648,515 | ) | |||||||||||
Options and swaptions purchased4 | (6,764 | ) | — | — | — | (6,764 | ) | ||||||||||||||||
Options and swaptions written | 272,732 | — | — | — | 272,732 | ||||||||||||||||||
Swap agreements | 15,652,754 | — | 631,283 | — | 16,284,037 | ||||||||||||||||||
Forward foreign currency contracts | — | (140,595 | ) | — | — | (140,595 | ) | ||||||||||||||||
Total net change in unrealized appreciation/depreciation | $ | 14,270,207 | $ | (140,595 | ) | $ | 631,283 | $ | — | $ | 14,760,895 | ||||||||||||
PACE International Fixed Income Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Futures contracts | $ | 433,027 | $ | — | $ | — | $ | — | $ | 433,027 | |||||||||||||
Forward foreign currency contracts | — | (9,768,980 | ) | — | — | (9,768,980 | ) | ||||||||||||||||
Total net realized gain (loss) | $ | 433,027 | $ | (9,768,980 | ) | $ | — | $ | — | $ | (9,335,953 | ) | |||||||||||
Net change in unrealized appreciation/depreciation5 | |||||||||||||||||||||||
Futures contracts | $ | (925,668 | ) | $ | — | $ | — | $ | — | $ | (925,668 | ) | |||||||||||
Forward foreign currency contracts | — | 7,878,767 | — | — | 7,878,767 | ||||||||||||||||||
Total net change in unrealized appreciation/depreciation | $ | (925,668 | ) | $ | 7,878,767 | $ | — | $ | — | $ | 6,953,099 |
294
PACE Select Advisors Trust
Notes to financial statements
Interest rate risk | Foreign exchange risk | Credit risk | Equity risk | Total | |||||||||||||||||||
PACE High Yield Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Futures contracts | $ | (21,305 | ) | $ | — | $ | — | $ | — | $ | (21,305 | ) | |||||||||||
Forward foreign currency contracts | — | (3,198,557 | ) | — | — | (3,198,557 | ) | ||||||||||||||||
Total net realized gain (loss) | $ | (21,305 | ) | $ | (3,198,557 | ) | $ | — | $ | — | $ | (3,219,862 | ) | ||||||||||
Net change in unrealized appreciation/depreciation5 | |||||||||||||||||||||||
Futures contracts | $ | (645,109 | ) | $ | — | $ | — | $ | — | $ | (645,109 | ) | |||||||||||
Forward foreign currency contracts | — | 187,605 | — | — | 187,605 | ||||||||||||||||||
Total net change in unrealized appreciation/depreciation | $ | (645,109 | ) | $ | 187,605 | $ | — | $ | — | $ | (457,504 | ) | |||||||||||
PACE International Equity Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | — | $ | 149,034 | $ | 149,034 | |||||||||||||
Forward foreign currency contracts | — | (249,463 | ) | — | — | (249,463 | ) | ||||||||||||||||
Total net realized gain (loss) | $ | — | $ | (249,463 | ) | $ | — | $ | 149,034 | $ | (100,429 | ) | |||||||||||
Net change in unrealized appreciation/depreciation5 | |||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | — | $ | (65,856 | ) | $ | (65,856 | ) | |||||||||||
Forward foreign currency contracts | — | 603,302 | — | — | 603,302 | ||||||||||||||||||
Total net change in unrealized appreciation/depreciation | $ | — | $ | 603,302 | $ | — | $ | (65,856 | ) | $ | 537,446 | ||||||||||||
PACE Alternative Strategies Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Futures contracts | $ | (6,823,984 | ) | $ | 8,474 | $ | — | $ | 7,944,667 | $ | 1,129,157 | ||||||||||||
Options and swaptions purchased4 | (426,021 | ) | (6,563,891 | ) | — | (13,943,503 | ) | (20,933,415 | ) | ||||||||||||||
Options and swaptions written | 1,490,115 | 7,616,193 | — | 23,672,425 | 32,778,733 | ||||||||||||||||||
Forward foreign currency contracts | — | 1,327,646 | — | — | 1,327,646 | ||||||||||||||||||
Swap agreements | (95,246 | ) | — | 1,317,836 | (1,792,679 | ) | (570,089 | ) | |||||||||||||||
Total net realized gain (loss) | $ | (5,855,136 | ) | $ | 2,388,422 | $ | 1,317,836 | $ | 15,880,910 | $ | 13,732,032 | ||||||||||||
Net change in unrealized appreciation/depreciation5 | |||||||||||||||||||||||
Futures contracts | $ | (1,652,339 | ) | $ | — | $ | — | $ | 1,032,187 | $ | (620,152 | ) | |||||||||||
Options and swaptions purchased4 | (81,608 | ) | 250,924 | — | (165,123 | ) | 4,193 | ||||||||||||||||
Written options and foreign exchange options written | 8,446 | 1,410,866 | — | (3,149,210 | ) | (1,729,898 | ) | ||||||||||||||||
Forward foreign currency contracts | — | 974,123 | — | — | 974,123 | ||||||||||||||||||
Swap agreements | 3,732,662 | — | 114,617 | (867,864 | ) | 2,979,415 | |||||||||||||||||
Total net change in unrealized appreciation/depreciation | $ | 2,007,161 | $ | 2,635,913 | $ | 114,617 | $ | (3,150,010 | ) | $ | 1,607,681 |
3 The net realized gains (losses) are shown in the Statement of operations in net realized gains (losses) from futures, options and swaptions written, swap agreements and forward foreign currency contracts.
4 Realized and unrealized gain (loss) is included in net realized gain (loss) from investments and net change in unrealized appreciation/depreciation on investments.
5 The net change in unrealized appreciation/depreciation is shown in the Statement of operations in net change in unrealized appreciation/depreciation on futures, options and swaptions written, swap agreements and forward foreign currency contracts.
295
PACE Select Advisors Trust
Notes to financial statements
In January 2013, Accounting Standards Update 2013-01 ("ASU 2013-01"), "Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities", replaced Accounting Standards Update 2011-11 ("ASU 2011-11"), "Disclosures about Offsetting Assets and Liabilities". ASU 2013-01 is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. ASU 2011-11 was intended to enhance disclosure requirements on the offsetting of financial assets and liabilities. ASU 2013-01 limits the scope of the new balance sheet offsetting disclosures to derivatives, repurchase and reverse repurchase agreements, and securities lending and borrowing transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting arrangement or similar agreement.
The Portfolios typically enter into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its OTC derivative contract counterparties in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Portfolios typically may offset with the counterparty certain derivative financial instrument's payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default or termination.
At July 31, 2014, derivative assets and liabilities (by type) on a gross basis were as follows:
PACE Mortgage-Backed Securities Fixed Income Investments | |||||||||||
Derivative Financial Instruments: | Assets ($) | Liabilities ($) | |||||||||
Options and swaptions purchased | 678 | — | |||||||||
Options and swaptions written | — | (65,331 | ) | ||||||||
Swap agreements | — | (1,118 | ) | ||||||||
Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities | 678 | (66,449 | ) | ||||||||
Derivatives not subject to a master netting agreement or similar agreement ("MNA") | — | — | |||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements | 678 | (66,449 | ) |
The following tables present the Portfolio's derivative assets and liabilities by counterparty net of amounts available for offset under a MNA and net of the related collateral received/pledged by the Portfolio as of July 31, 2014.
PACE Mortgage-Backed Securities Fixed Income Investments | |||||||||||||||||||
Counterparty | Gross Amount of Assets ($) | Financial Instruments and Derivatives Available for Offset ($) | Collateral Received ($)* | Net Amount of Assets ($) | |||||||||||||||
Citibank NA | 678 | — | — | 678 |
296
PACE Select Advisors Trust
Notes to financial statements
Counterparty | Gross Amount of Liabilities ($) | Financial Instruments and Derivatives Available for Offset ($) | Collateral Pledged ($)* | Net Amount of Liabilities ($) | |||||||||||||||
Bank of America | (4,738 | ) | — | — | (4,738 | ) | |||||||||||||
Barclays Bank PLC | (11,098 | ) | — | — | (11,098 | ) | |||||||||||||
Credit Suisse International | (1,118 | ) | — | — | (1,118 | ) | |||||||||||||
JP Morgan Chase Bank N.A. | (49,495 | ) | — | — | (49,495 | ) | |||||||||||||
Total | (66,449 | ) | — | — | (66,449 | ) |
* In some instances, the actual collateral received and/or pledged may be more than the amount shown.
PACE Intermediate Fixed Income Investments | |||||||||||
Derivative Financial Instruments: | Assets ($) | Liabilities ($) | |||||||||
Forward foreign currency contracts | 104,497 | (55,558 | ) | ||||||||
Futures contracts | 15,554 | (204,414 | ) | ||||||||
Options and swaptions purchased | 485,307 | — | |||||||||
Options and swaptions written | — | (344,554 | ) | ||||||||
Swap agreements | 214,342 | (151,017 | ) | ||||||||
Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities | 819,700 | (755,543 | ) | ||||||||
Derivatives not subject to a master netting agreement or similar agreement ("MNA") | (298,664 | ) | 355,431 | ||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements | 521,036 | (400,112 | ) |
The following tables present the Portfolio's derivative assets and liabilities by counterparty net of amounts available for offset under a MNA and net of the related collateral received/pledged by the Portfolio as of July 31, 2014.
PACE Intermediate Fixed Income Investments | |||||||||||||||||||
Counterparty | Gross Amount of Assets ($) | Financial Instruments and Derivatives Available for Offset ($) | Collateral Received ($)* | Net Amount of Assets ($) | |||||||||||||||
Barclays Bank PLC | 5,424 | — | — | 5,424 | |||||||||||||||
Citigroup Global Markets | 67,377 | (44,195 | ) | — | 23,182 | ||||||||||||||
Credit Suisse International | 435,869 | (295,550 | ) | — | 140,319 | ||||||||||||||
Deutsche Bank Securities | 5,221 | — | — | 5,221 | |||||||||||||||
JP Morgan Chase Bank N.A. | 7,145 | — | — | 7,145 | |||||||||||||||
Total | 521,036 | (339,745 | ) | — | 181,291 | ||||||||||||||
Counterparty | Gross Amount of Liabilities ($) | Financial Instruments and Derivatives Available for Offset ($) | Collateral Pledged ($)* | Net Amount of Liabilities ($) | |||||||||||||||
Bank of America NA | (59,504 | ) | — | — | (59,504 | ) | |||||||||||||
Citigroup Global Markets | (44,195 | ) | 44,195 | — | 0 | ||||||||||||||
Credit Suisse International | (295,550 | ) | 295,550 | — | 0 | ||||||||||||||
Goldman Sachs Bank USA | (863 | ) | — | — | (863 | ) | |||||||||||||
Total | (400,112 | ) | 339,745 | — | (60,367 | ) |
* In some instances, the actual collateral received and/or pledged may be more than the amount shown.
297
PACE Select Advisors Trust
Notes to financial statements
PACE Strategic Fixed Income Investments | |||||||||||
Derivative Financial Instruments: | Assets ($) | Liabilities ($) | |||||||||
Forward foreign currency contracts | 1,810,563 | (1,622,929 | ) | ||||||||
Futures contracts | — | (1,641,849 | ) | ||||||||
Options and swaptions purchased | 3,906 | — | |||||||||
Options and swaptions written | — | (21,683 | ) | ||||||||
Swap agreements | 7,189,271 | (5,657,973 | ) | ||||||||
Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities | 9,003,740 | (8,944,434 | ) | ||||||||
Derivatives not subject to a master netting agreement or similar agreement ("MNA") | (4,812,081 | ) | 6,822,374 | ||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements | 4,191,659 | (2,122,060 | ) |
The following tables present the Portfolio's derivative assets and liabilities by counterparty net of amounts available for offset under a MNA and net of the related collateral received/pledged by the Portfolio as of July 31, 2014.
PACE Strategic Fixed Income Investments | |||||||||||||||||||
Counterparty | Gross Amount of Assets ($) | Financial Instruments and Derivatives Available for Offset ($) | Collateral Received ($)* | Net Amount of Assets ($) | |||||||||||||||
Bank of America NA | 490,767 | (262,923 | ) | (227,844 | ) | 0 | |||||||||||||
Barclays Bank PLC | 270,493 | (185,268 | ) | — | 85,225 | ||||||||||||||
BNP Paribas SA | 31,345 | (6,777 | ) | — | 24,568 | ||||||||||||||
Citibank NA | 296,278 | (296,278 | ) | — | 0 | ||||||||||||||
Credit Suisse International | 1,358,478 | (27,776 | ) | (1,330,702 | ) | 0 | |||||||||||||
Deutsche Bank AG | 1,519,361 | (554,528 | ) | (964,833 | ) | 0 | |||||||||||||
Goldman Sachs Capital Management | 4,333 | (4,333 | ) | — | 0 | ||||||||||||||
HSBC Bank USA, N.A. | 45,381 | — | — | 45,381 | |||||||||||||||
JPMorgan Chase Bank, N.A. | 86,161 | (86,161 | ) | — | 0 | ||||||||||||||
Morgan Stanley Capital Services, LLC | 89,062 | — | (23,000 | ) | 66,062 | ||||||||||||||
Total | 4,191,659 | (1,424,044 | ) | (2,546,379 | ) | 221,236 | |||||||||||||
Counterparty | Gross Amount of Liabilities ($) | Financial Instruments and Derivatives Available for Offset ($) | Collateral Pledged ($)* | Net Amount of Liabilities ($) | |||||||||||||||
Bank of America NA | (262,923 | ) | 262,923 | — | 0 | ||||||||||||||
Barclays Bank PLC | (185,268 | ) | 185,268 | — | 0 | ||||||||||||||
BNP Paribas SA | (6,777 | ) | 6,777 | — | 0 | ||||||||||||||
Citibank N.A. | (317,065 | ) | 296,278 | — | (20,787 | ) | |||||||||||||
Credit Suisse International | (27,776 | ) | 27,776 | — | 0 | ||||||||||||||
Deutsche Bank AG | (554,528 | ) | 554,528 | — | 0 | ||||||||||||||
Goldman Sachs Bank USA | (2,184 | ) | — | — | (2,184 | ) | |||||||||||||
Goldman Sachs Capital Management | (233,979 | ) | 4,333 | — | (229,646 | ) | |||||||||||||
Goldman Sachs International | (36,531 | ) | — | — | (36,531 | ) | |||||||||||||
JPMorgan Chase Bank, N.A. | (495,029 | ) | 86,161 | 297,441 | (111,427 | ) | |||||||||||||
Total | (2,122,060 | ) | 1,424,044 | 297,441 | (400,575 | ) |
* In some instances, the actual collateral received and/or pledged may be more than the amount shown.
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PACE International Fixed Income Investments | |||||||||||
Derivative Financial Instruments: | Assets ($) | Liabilities ($) | |||||||||
Forward foreign currency contracts | 3,700,594 | (1,858,569 | ) | ||||||||
Futures contracts | 2,175,411 | (218,519 | ) | ||||||||
Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities | 5,876,005 | (2,077,088 | ) | ||||||||
Derivatives not subject to a master netting agreement or similar agreement ("MNA") | (5,876,005 | ) | 2,077,088 | ||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements | 0 | 0 | |||||||||
PACE High Yield Investments | |||||||||||
Derivative Financial Instruments: | Assets ($) | Liabilities ($) | |||||||||
Forward foreign currency contracts | 1,171,408 | — | |||||||||
Futures contracts | 245,048 | — | |||||||||
Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities | 1,416,456 | — | |||||||||
Derivatives not subject to a master netting agreement or similar agreement ("MNA") | (1,416,456 | ) | — | ||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements | 0 | — | |||||||||
PACE International Equity Investments | |||||||||||
Derivative Financial Instruments: | Assets ($) | Liabilities ($) | |||||||||
Forward foreign currency contracts | 78,260 | — | |||||||||
Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities | 78,260 | — | |||||||||
Derivatives not subject to a master netting agreement or similar agreement ("MNA") | (78,260 | ) | — | ||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements | 0 | — | |||||||||
PACE Alternative Strategies Investments | |||||||||||
Derivative Financial Instruments: | Assets ($) | Liabilities ($) | |||||||||
Forward foreign currency contracts | 11,449,892 | (9,574,671 | ) | ||||||||
Futures contracts | 4,931,688 | (6,765,132 | ) | ||||||||
Options and swaptions purchased | 13,166,583 | — | |||||||||
Options and swaptions written | — | (7,295,003 | ) | ||||||||
Swap agreements | 12,629,981 | (9,574,667 | ) | ||||||||
Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities | 42,178,144 | (33,209,473 | ) | ||||||||
Derivatives not subject to a master netting agreement or similar agreement ("MNA") | (24,459,729 | ) | 21,243,976 | ||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements | 17,718,415 | (11,965,497 | ) |
The following tables present the Portfolio's derivative assets and liabilities by counterparty net of amounts available for offset under a MNA and net of the related collateral received/pledged by the Portfolio as of July 31, 2014
PACE Alternative Strategies Investments | |||||||||||||||||||
Counterparty | Gross Amount of Assets ($) | Financial Instruments and Derivatives Available for Offset ($) | Collateral Received ($) | Net Amount of Assets ($) | |||||||||||||||
Barclays Bank PLC | 4,076,490 | (4,076,490 | ) | — | 0 | ||||||||||||||
BNP Paribas SA | 2,557,891 | (2,557,891 | ) | — | 0 | ||||||||||||||
Citibank NA | 1,120,832 | (1,120,832 | ) | — | 0 | ||||||||||||||
Credit Suisse International | 572,284 | (572,284 | ) | — | 0 | ||||||||||||||
Morgan Stanley Capital Services | 3,966,967 | (2,368,940 | ) | — | 1,598,027 | ||||||||||||||
The Royal Bank of Scotland | 5,423,951 | (230,987 | ) | — | 5,192,964 | ||||||||||||||
Total | 17,718,415 | (10,927,424 | ) | — | 6,790,991 |
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Counterparty | Gross Amount of Liabilities ($) | Financial Instruments and Derivatives Available for Offset ($) | Collateral Pledged ($) | Net Amounts of Liabilities ($) | |||||||||||||||
Barclays Bank PLC | (4,335,429 | ) | 4,076,490 | — | (258,939 | ) | |||||||||||||
BNP Paribas SA | (2,689,272 | ) | 2,557,891 | — | (131,381 | ) | |||||||||||||
Citibank NA | (1,234,553 | ) | 1,120,832 | — | (113,721 | ) | |||||||||||||
Credit Suisse International | (1,106,316 | ) | 572,284 | — | (534,032 | ) | |||||||||||||
Morgan Stanley Capital Services | (2,368,940 | ) | 2,368,940 | — | 0 | ||||||||||||||
The Royal Bank of Scotland | (230,987 | ) | 230,987 | — | 0 | ||||||||||||||
Total | (11,965,497 | ) | 10,927,424 | — | (1,038,073 | ) |
Repurchase agreements—The Portfolios may purchase securities or other obligations from a bank or securities dealer (or its affiliate), subject to the seller's agreement to repurchase them at an agreed upon date (or upon demand) and price. The Portfolios maintain custody of the underlying obligations prior to their repurchase, either through its regular custodian or through a special "tri-party" custodian or sub-custodian that maintains a separate account for both the Portfolios and their counterparty. The underlying collateral is valued daily in an effort to ensure that the value, including accrued interest, is at least equal to the repurchase price. In the event of default of the obligation to repurchase, the Portfolios generally have the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Repurchase agreements involving obligations other than US government securities (such as commercial paper, corporate bonds, equities and mortgage loans) may be subject to special risks and may not have the benefit of certain protections in the event of counterparty insolvency. Moreover, repurchase agreements secured by obligations that are not eligible for direct investment under Rule 2a-7 under the Investment Company Act or a Portfolio's investment strategies and limitations, may require the Portfolio to promptly dispose of such collateral if the seller or guarantor becomes insolvent. If the seller (or seller's guarantor, if any) becomes insolvent, the Portfolios may suffer delays, costs and possible losses in connection with the disposition or retention of the collateral. Under certain circumstances, in the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. Each Portfolio (with the exception of PACE Municipal Fixed Income Investments) may participate in joint repurchase agreement transactions with other funds managed, advised or sub-advised by UBS Global AM.
Under certain circumstances, the Portfolios may engage in a repurchase agreement transaction with a yield of zero in order to invest cash amounts remaining in its portfolio at the end of the day in order to avoid having the Portfolios potentially exposed to a fee for uninvested cash held in a business account at a bank.
Restricted securities—The Portfolios may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included at the end of each Portfolio's Portfolio of investments.
Investment transactions, investment income and expenses—Investment transactions are recorded on the trade date. Realized gains and losses from investment transactions and foreign exchange transactions are calculated using the identified cost method. Dividend income is recorded net of withholding taxes on the ex-dividend date ("ex-date") (except in the case of certain dividends from foreign securities which are recorded as soon after the ex-date as the respective Portfolio, using reasonable diligence, becomes aware of such dividends). Interest income is recorded on an accrual basis. Discounts are accreted and premiums are amortized as adjustments to interest income and the identified cost of investments.
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Notes to financial statements
Income, expenses (excluding class-specific expenses) and realized/unrealized gains/losses are allocated proportionately to each class of shares based upon the relative net asset value of outstanding shares (or the value of dividend-eligible shares, as appropriate) of each class at the beginning of the day (after adjusting for current capital share activity of the respective classes). Class-specific expenses are charged directly to the applicable class of shares.
Foreign currency translation—The books and records of the Portfolios are maintained in US dollars. Foreign currency amounts are translated into US dollars as follows: (1) the foreign currency market value of investment securities and other assets and liabilities stated in foreign currencies are translated into US dollars based on the current exchange rates each business day; and (2) purchases, sales, income and expenses are translated at the rate of exchange prevailing on the respective dates of such transactions. The resulting exchange gains and losses are included in the Statement of operations.
The Portfolios do not generally isolate the effects of fluctuations in foreign exchange rates from the effects of fluctuations in the market prices of securities. However, the Portfolios do isolate the effects of fluctuations in foreign exchange rates when determining the realized gain or loss upon the sale or maturity of foreign currency-denominated debt obligations pursuant to US federal income tax regulations. Net realized foreign currency transaction gain (loss) is treated as ordinary income (loss) for income tax reporting purposes.
Forward foreign currency contracts—Certain Portfolios may enter into forward foreign currency contracts ("forward contracts") as part of its investment strategy, in connection with planned purchases or sales of securities or to hedge the US dollar value of portfolio securities denominated in a particular currency. The Portfolios may also engage in cross-hedging by using forward contracts in one currency to hedge fluctuations in the value of securities denominated in a different currency if the applicable investment sub-advisor anticipates that there is a correlation between the two currencies. Forward contracts may also be used to shift a Portfolio's exposure to foreign currency fluctuations from one country to another.
The Portfolios have no specific limitation on the percentage of assets which may be committed to such contracts; however, the value of all forward contracts will not exceed the value of a Portfolio's total assets. The Portfolios may enter into forward contracts or maintain a net exposure to forward contracts only if (1) the consummation of the contracts would not obligate the Portfolios to deliver an amount of foreign currency in excess of the value of the positions being hedged by such contracts or (2) the Portfolios maintain cash or liquid securities in a segregated account in an amount determined pursuant to the Portfolios' segregation policies as disclosed in the Trust's Statement of Additional Information.
Risks may arise upon entering into forward contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of foreign currencies relative to the US dollar or each other.
Fluctuations in the value of open forward contracts are recorded for book purposes as unrealized gains or losses on forward foreign currency contracts by the Portfolios. Realized gains and losses on forward foreign currency contracts include net gains or losses recognized by the Portfolios on contracts which have matured.
Securities traded on to-be-announced basis—The Portfolios may from time to time purchase securities on a to-be-announced ("TBA") basis. In a TBA transaction, the Portfolio commits to purchasing or selling securities for which all specific information is not yet known at the time of the trade, particularly the face amount and maturity date of the underlying security transactions. Securities purchased on a TBA basis are not settled until they are delivered to the Portfolio, normally 15 to 45 days later. Beginning on the date the Portfolio enters into a TBA transaction, cash, US government securities or other liquid securities are segregated in an amount equal in value to
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the purchase price of the TBA security. These transactions are subject to market fluctuations, and their current value is determined in the same manner as for other securities.
Option writing—Certain Portfolios may write (sell) put and call options on securities or derivative instruments in order to gain exposure to or protect against changes in the markets. When a Portfolio writes a call or a put option, an amount equal to the premium received by the Portfolio is included on the Portfolio's Statement of assets and liabilities as an asset and as an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. If an option which the Portfolio has written either expires on its stipulated expiration date or the Portfolio enters into a closing purchase transaction, the Portfolio realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security or derivative instrument, and the liability related to such option is extinguished. If a call option which the Portfolio has written is exercised, the Portfolio recognizes a realized gain or loss (long-term or short-term, depending on the holding period of the underlying security) from the sale of the underlying security or derivative instrument and the proceeds from the sale are increased by the premium originally received. If a put option which the Portfolio has written is exercised, the amount of the premium originally received reduces the cost of the security or derivative instrument which the Portfolio purchases upon exercise of the option.
In writing an option, the Portfolios bear the market risk of an unfavorable change in the price of the derivative instrument, security or currency underlying the written option. Exercise of an option written by a Portfolio could result in the Portfolio selling or buying a derivative instrument, security or currency at a price different from current market value.
Purchased options—Certain Portfolios may also purchase put and call options. Purchasing call options tends to increase exposure to the underlying instrument. Purchasing put options tends to decrease exposure to the underlying instrument. The Portfolio pays a premium which is included on the Statement of assets and liabilities as an investment and subsequently marked to market to reflect the current value of the option. Premiums paid for purchasing options which expire are treated as realized losses. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying future, security or currency transaction to determine the realized gain or loss. Purchased options are shown as portfolio holdings within the Portfolio of investments and are included in the Statement of assets and liabilities in investments in unaffiliated securities, at value.
Futures contracts—Certain Portfolios may purchase or sell futures contracts to increase or reduce their exposure to an asset class without purchasing or selling the underlying securities. They may do this to enhance or realize gains, as a hedge and/or to manage the average duration of the Portfolio. Using futures contracts involves various market risks, including interest rate and equity risk as well as the risks that there may be an illiquid market or that a change in the value of the contract may not correlate with changes in the value of the underlying securities.
Upon entering into a futures contract, a Portfolio is required to deliver to a broker an amount of cash and/or government securities equal to a certain percentage of the contract amount. This amount is known as the "initial margin". Subsequent payments, known as "variation margin", generally are made or received by the Portfolio each day depending on the fluctuations in the value of the underlying futures contracts, except that in the case of certain futures contracts payments may be made or received at settlement. Such variation margin is recorded for financial statement purposes on a daily basis as an unrealized gain or loss on futures until the futures contract is closed or expires, at which time the net gain or loss is reclassified to realized gain or loss on futures.
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Notes to financial statements
Loan assignments—Certain Portfolios may invest in secured or unsecured fixed or floating rate loans ("Loans") arranged through private negotiations between a borrowing corporation, government or other entity and one or more financial institutions ("Lenders") which may be in the form of participations ("Participations") in Loans or assignments ("Assignments") of all or a portion of Loans from third parties. A Portfolio may invest in multiple series or tranches of a Loan, which may have varying terms and carry different associated risks. Participations typically result in a Portfolio having a contractual relationship only with the Lender, not with the borrower. A Portfolio has the right to receive payments of principal, interest and any fees to which it is entitled only from the Lender selling the Participation and only upon receipt by the Lender of the payments from the borrower. In connection with purchasing Participations, a Portfolio generally has no direct right to enforce compliance by the borrower with the terms of the loan agreement relating to the Loan, or any rights of set-off against the borrower, and a Portfolio may not directly benefit from any collateral supporting the Loan in which it has purchased the Participation. As a result, a Portfolio assumes the credit risk of both the borrower and the Lender that is selling the Participation. In the event of the insolvency of the selling Lender, the Portfolio may be treated as a general creditor of that Lender and may not benefit from any set-off between the Lender and the borrower. A Portfolio will acquire Participations only if its sub-advisor determines that the selling Lender is creditworthy. When a Portfolio purchases Assignments from Lenders, it acquires direct rights against the borrower on the Loan. In an Assignment, the Portfolio is entitled to receive payments directly from the borrower and, therefore, does not depend on the selling bank to pass these payments onto the Portfolio. However, because Assignments are arranged through private negotiations between potential assignees and assignors, the rights and obligations acquired by a Portfolio as the purchaser of an Assignment may differ from, and be more limited than, those held by the assigning Lender.
Short sales "Against the Box"—Each Portfolio (other than PACE Money Market Investments and PACE Municipal Fixed Income Investments) may engage in short sales of securities it owns or has the right to acquire at no added cost through conversion or exchange of other securities it owns (short sales "against the box"). To make delivery to the purchaser in a short sale, the executing broker borrows the securities being sold short on behalf of a Portfolio, and that Portfolio is obligated to replace the securities borrowed at a date in the future. When a Portfolio sells short, it establishes a margin account with the broker effecting the short sale and deposits collateral with the broker. In addition, the Portfolio maintains, in a segregated account with its custodian, the securities that could be used to cover the short sale. Each Portfolio may incur transaction costs, including dividend and interest expense, in connection with opening, maintaining and closing short sales "against the box".
A Portfolio might make a short sale "against the box" to hedge against market risks when its sub-advisor believes that the price of a security may decline, thereby causing a decline in the value of a security owned by the Portfolio or a security convertible into or exchangeable for a security owned by the Portfolio. In such case, any loss in the Portfolio's long position after the short sale should be reduced by a corresponding gain in the short position. Conversely, any gain in the long position after the short sale should be reduced by a corresponding loss in the short position. The extent to which gains or losses in the long position are reduced will depend upon the amount of the securities sold short relative to the amount of the securities a Portfolio owns, either directly or indirectly, and in the case where the Portfolio owns convertible securities, changes in the investment values or conversion premiums of such securities.
Uncovered short sales—PACE Mortgage-Backed Securities Fixed Income Investments (with respect to securities issued by the US Treasury and TBA securities coupon trades), PACE International Equity Investments, PACE Large Co Value Equity Investments, PACE Global Real Estate Securities Investments and PACE Alternative Strategies Investments may engage in short sale transactions in which the Portfolio sells a security it does not own (or does not have the right to acquire at no added cost). The Portfolio must borrow the security to make delivery to the buyer. In a short sale where a Portfolio is not holding a position in the same security (or convertible into the same security), the Portfolio will maintain an account containing cash or liquid assets at such a level that the amount
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deposited in the account plus that amount deposited with the broker as collateral will, at minimum, equal the current value of the investment sold short. The initial amount of a short sale is recorded as a liability which is marked to market daily. Fluctuations in the value of this liability are recorded as unrealized gains or losses on the Statement of operations. A Portfolio incurs transaction costs, including interest expense, in connection with opening, maintaining and closing short sales. Because PACE Large Co Value Equity Investments, PACE International Equity Investments, PACE Global Real Estate Securities Investments and PACE Alternative Strategies Investments are multi-managed and have the ability to engage in short sales, one investment advisor may take a short position and another advisor may take a long position in the same security. A Portfolio will be required to pay the buyer for any dividends or other corporate actions and interest payable on securities while those securities are in a short position. These dividends and interest are booked as an expense or liability to the Portfolio on an accrual basis. A Portfolio will incur a loss as a result of the short sale if the price of the security increases between the date of the short sale and the date on which the Portfolio replaces the borrowed security, and a Portfolio will realize a gain if the security declines in price between those same dates. Because a Portfolio's loss on a short sale arises from increases in the value of the investment sold short, such loss, like the potential increase in price of the security sold short, is theoretically unlimited. In addition, a Portfolio's investments held long could decline in value at the same time the value of the investment sold short increases, thereby increasing the Portfolio's potential for loss. PACE Global Real Estate Securities Investments did not engage in uncovered short sales during the year ended July 31, 2014.
Treasury roll transactions—Certain Portfolios may enter into treasury roll transactions. In a treasury roll transaction, a Portfolio sells a Treasury security to a counterparty with a simultaneous agreement to repurchase the same security at an agreed upon price and date. The Portfolio receives cash from the sale of the Treasury security to use for other investment purposes. For US GAAP purposes, a treasury roll transaction is accounted for as a secured borrowing and not as a purchase and sale. The difference between the sale price and repurchase price represents net interest income or net interest expense reflective of an agreed upon rate between the Portfolio and the counterparty over the term of the borrowing. The Portfolio will benefit from the transaction if the income earned on the investment purchased with the cash received in the treasury roll transaction exceeds the interest expense incurred by the Portfolio. If the interest expense exceeds the income earned, the Portfolio's net investment income and dividends to shareholders may be adversely impacted. Treasury roll transactions involve the risk that the market value of the securities that the Portfolio is required to repurchase may decline below the agreed upon repurchase price of those securities. During the year ended July 31, 2014, the only Portfolios that utilized treasury roll transactions were PACE Intermediate Fixed Income Investments and PACE Strategic Fixed Income Investments.
Reverse repurchase agreements—Certain Portfolios may enter into reverse repurchase agreements with qualified third party banks, securities dealers or their affiliates. Interest on the value of reverse repurchase agreements issued and outstanding is based upon competitive market rates at the time of issuance. At the time a Portfolio enters into a reverse repurchase agreement, the Portfolio establishes and maintains a segregated account with the Portfolio's custodian containing liquid securities having a value not less than the repurchase price, including accrued interest, of the reverse repurchase agreement. For the year ended July 31, 2014, PACE Mortgage-Backed Securities Fixed Income Investments had a reverse repurchase agreement of $2,673,000 for 1 day with an annualized interest rate of 0.40%, which resulted in $30 of interest expense. PACE Strategic Fixed Income Investments had average daily reverse repurchase agreements of $41,979,438 for 2 days with a related weighted average annualized interest rate of 2.96%, which resulted in $6,893 of interest expense. There were no reverse repurchase agreements outstanding at July 31, 2014.
Swap agreements—Certain Portfolios may enter into interest rate swap agreements. This type of swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to a specified interest rate(s) for a specified amount. The payment flows are usually netted against each other, with the difference being paid by one party to the other.
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Risks may arise as a result of the failure of the counterparty to the swap agreement to comply with the terms of the agreement. The loss incurred by the failure of a counterparty is generally limited to the net interest payment to be received by the Portfolio. Therefore, the Portfolio considers the creditworthiness of the counterparty to a swap agreement in evaluating potential credit risk.
The Portfolios accrue for interim payments on swap agreements on a daily basis, with the net amount recorded within swap agreements on the Statement of assets and liabilities. Once interim payments are settled in cash, the net amount is recorded as realized gain/loss on swaps, in addition to realized gain/loss recorded upon the termination of swap contracts on the Statement of operations. Fluctuations in the value of swap agreements are recorded for financial statement purposes as unrealized appreciation or depreciation of swaps within the Statement of operations.
Inflation swap agreements are used to hedge inflation risk by transferring inflation risk from one party to another through an exchange of cash flows. In an inflation swap, one party pays a fixed rate on a notional principal amount while the other party pays a floating rate linked to an inflation index on that same notional amount. The party paying the floating rate pays the inflation adjusted rate multiplied by the notional principal amount. If the average inflation rate over the term of the swap is the same as the fixed rate of the swap, the two legs will have the same value and the swap will break even.
Credit default swap agreements involve commitments to make or receive payments in the event of a default of a security or a credit event. As a buyer, the Portfolio would make periodic payments to the counterparty, and the Portfolio would receive payments only upon the occurrence of a credit event. If no credit event occurs, the Portfolio will lose its periodic stream of payments over the term of the contract. However, if a credit event does occur, the Portfolio typically would receive full notional value for a reference obligation that may have little or no value. As a seller, the Portfolio would receive periodic payments from the counterparty, and the Portfolio would make payments only upon the occurrence of a credit event. If no default or credit event occurs, the Portfolio will gain the periodic stream of payments it received over the term of the contract and the counterparty will lose its periodic stream of payments over the term of the contract. However, if a default or credit event occurs, the Portfolio typically pays full notional value for a reference obligation that may have little or no value. Credit default swaps may involve greater risks than if the Portfolio had invested in the reference obligation directly and are subject to general market risk, liquidity risk and credit risk.
Credit default swap agreements on credit indices involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising the credit index. A credit index is a list of a basket of credit instruments or exposures designed to be representative of some part of the credit market as a whole. These indices are made up of referenced credits that are judged by a poll of dealers to be the most liquid entities in the credit default swap market based on the sector of the index. Components of the indices may include, but are not limited to, investment grade securities, high yield securities, asset backed securities, emerging markets, and/or various credit ratings within each sector. Credit indices are traded using credit default swaps with standardized terms including a fixed spread and standard maturity dates. An index credit default swap references all the names in the index, and if there is a default, the credit event is settled based on that name's weight in the index. The composition of the indices changes periodically, usually every six months, and for most indices, each name has an equal weight in the index. A Portfolio may use credit default swaps on credit indices to hedge a portfolio of credit default swaps or bonds with a credit default swap on indices which is less expensive than it would be to buy many credit default swaps to achieve a similar effect. Credit default swaps on indices are benchmarks for protecting investors owning bonds against default, and traders use them to speculate on changes in credit quality.
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Notes to financial statements
Credit default swap agreements on corporate issues or sovereign issues of an emerging country involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default or other credit event. If a credit event occurs and cash settlement is not elected, a variety of other deliverable obligations may be delivered in lieu of the specific referenced obligation. The ability to deliver other obligations may result in a cheapest-to-deliver option (the buyer of protection's right to choose the deliverable obligation with the lowest value following a credit event). The Portfolio may use credit default swaps on corporate issues or sovereign issues of an emerging country to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where the Portfolio owns or has exposure to the referenced obligation) or to take an active long or short position with respect to the likelihood of a particular issuer's default.
The maximum potential amount of future payments (undiscounted) that a Portfolio as a seller of protection could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement which may exceed the amount of the value reflected on the Statement of assets and liabilities. Notional amounts of all credit default swap agreements outstanding as of July 31, 2014 for which a Portfolio is the seller of protection are disclosed under the sections "Credit default swaps on credit indices—sell protection" and "Credit default swaps on corporate and sovereign issues—sell protection" in the Portfolios of investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into, if any, by a Portfolio for the same referenced entity or entities.
Total return swap contracts involve commitments to pay interest in exchange for a market-linked return both based on notional amounts. To the extent the total return of the security or index underlying the transactions exceeds or falls short of the offsetting interest rate obligation, the Portfolio will receive a payment from or make a payment to the counterparty.
Variance swap agreements involve two parties agreeing to exchange cash flows based on the measured variance (or square of volatility) of a specified underlying asset. One party agrees to exchange a "fixed rate" or strike price payment for the "floating rate" or realized price variance on the underlying asset with respect to the notional amount. At inception, the strike price is generally chosen such that the fair value of the swap is zero. At the maturity date, a net cash flow is exchanged, where the payoff amount is equivalent to the difference between the realized price variance of the underlying asset and the strike price multiplied by the notional amount. As a receiver of the realized price variance, the Portfolio would receive the payoff amount when the realized price variance of the underlying asset is greater than the strike price and would owe the payoff amount when the variance is less than the strike price. As a payer of the realized price variance the Portfolio would owe the payoff amount when the realized price variance of the underlying asset is greater than the strike price and would receive the payoff amount when the variance is less than the strike price.
Certain clearinghouses currently offer clearing for limited types of derivatives transactions, such as interest and credit derivatives. In a cleared derivative transaction, a Portfolio typically enters into the transaction with a financial institution counterparty, and performance of the transaction is effectively guaranteed by a central clearinghouse, thereby reducing or eliminating the Portfolio's exposure to the credit risk of its original counterparty. The Portfolio will be required to post specified levels of margin with the clearinghouse or at the instruction of the clearinghouse; the margin required by a clearinghouse may be greater than the margin the Portfolio would be required to post in an uncleared transaction. Only a limited number of transactions are currently eligible for clearing. Centrally cleared swaps, if any, are reported on the Statement of assets and liabilities based on variation margin received or paid, if any.
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Notes to financial statements
The use of swaps involves investment techniques and risks different from those associated with ordinary portfolio security transactions. If a Portfolio's sub-adviser is incorrect in its forecast of market values, interest rates and other applicable factors, the investment performance of the Portfolios will be less favorable than it would have been if this investment technique was never used. Swaps do not involve the delivery of securities and are subject to counterparty risk. If the other party to a swap defaults and fails to consummate the transaction, a Portfolio's risk of loss will consist of the net amount of interest or other payments that the Portfolio is contractually entitled to receive. Therefore, the Portfolio would consider the creditworthiness of the counterparty to a swap agreement in evaluating potential credit risk.
Dividends and distributions—Dividends and distributions to shareholders are recorded on the ex-dividend date. The amounts of dividends and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification.
Concentration of risk—Investing in securities of foreign issuers and currency transactions may involve certain considerations and risks not typically associated with investments in the United States. These risks include revaluation of currencies, adverse fluctuations in foreign currency values and possible adverse political, social and economic developments, including those particular to a specific industry, country or region, which could cause the securities and their markets to be less liquid and prices more volatile than those of comparable US companies and US government securities. These risks are greater with respect to securities of issuers located in emerging market countries in which PACE International Fixed Income Investments, PACE High Yield Investments, PACE International Equity Investments, PACE International Emerging Markets Equity Investments, PACE Global Real Estate Securities Investments and PACE Alternative Strategies Investments are authorized to invest.
Small capitalization ("small cap") companies may be more vulnerable than larger capitalization companies to adverse business or economic developments. Small cap companies may also have limited product lines, markets or financial resources, and may be dependent on a relatively small management group. Securities of such companies may be less liquid and more volatile than securities of larger capitalization companies or the market averages in general and therefore may involve greater risk than investing in larger capitalization companies. In addition, small cap companies may not be well-known to the investing public, may not have institutional ownership and may have only cyclical, static or moderate growth prospects. These risks are greater with respect to the securities in which PACE Small/Medium Co Value Equity Investments and PACE Small/Medium Co Growth Equity Investments tend to invest.
Investments in bonds with ratings of BB (Standard & Poor's Ratings Group) or Ba (Moody's Investors Service, Inc.) or below (commonly referred to as "high yield" bonds), or deemed of equivalent quality, have an increased risk of defaulting or otherwise being unable to honor a financial obligation. These securities are considered to be predominantly speculative with respect to an issuer's capacity to pay interest and repay principal in accordance with the terms of the obligations. Lower-quality bonds are more likely to be subject to an issuer's default or downgrade than investment grade (higher-quality) bonds.
The ability of the issuers of debt securities held by the Portfolios to meet their obligations may be affected by economic and political developments particular to a specific industry, country, state or region.
Investment management and administration fees and other transactions with affiliates
The Trust has entered into an investment management and administration contract ("Management Contract") with UBS Global AM. In accordance with the Management Contract, each Portfolio paid UBS Global AM investment
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Notes to financial statements
management and administration fees, which were accrued daily and paid monthly, in accordance with the following schedule as of July 31, 2014:
Portfolio | Annual rate as a percentage of each Portfolio's average daily net assets | ||||||
PACE Money Market Investments | 0.350 | % | |||||
PACE Mortgage-Backed Securities Fixed Income Investments | 0.650% up to $250 million 0.600% above $250 million up to $500 million 0.575% above $500 million up to $750 million 0.550% above $750 million up to $1 billion 0.525% above $1 billion | ||||||
PACE Intermediate Fixed Income Investments | 0.550% up to $250 million 0.500% above $250 million up to $500 million 0.475% above $500 million up to $750 million 0.450% above $750 million up to $1 billion 0.425% above $1 billion | ||||||
PACE Strategic Fixed Income Investments | 0.650% up to $250 million 0.600% above $250 million up to $500 million 0.575% above $500 million up to $750 million 0.550% above $750 million up to $1 billion 0.525% above $1 billion up to $1.25 billion 0.500% above $1.25 billion | ||||||
PACE Municipal Fixed Income Investments | 0.550% up to $250 million 0.500% above $250 million up to $500 million 0.475% above $500 million up to $750 million 0.450% above $750 million up to $1 billion 0.425% above $1 billion | ||||||
PACE International Fixed Income Investments | 0.750% up to $500 million 0.725% above $500 million up to $1 billion 0.700% above $1 billion | ||||||
PACE High Yield Investments | 0.800% up to $500 million 0.750% above $500 million up to $1 billion 0.725% above $1 billion up to $1.5 billion 0.700% above $1.5 billion up to $2 billion 0.675% above $2 billion | ||||||
PACE Large Co Value Equity Investments | 0.800% up to $250 million 0.770% above $250 million up to $500 million 0.730% above $500 million up to $1 billion 0.700% above $1 billion | ||||||
PACE Large Co Growth Equity Investments | 0.800% up to $500 million 0.775% above $500 million up to $1 billion 0.750% above $1 billion up to $1.5 billion 0.725% above $1.5 billion up to $2 billion 0.700% above $2 billion | ||||||
PACE Small/Medium Co Value Equity Investments | 0.800% up to $500 million 0.775% above $500 million | ||||||
PACE Small/Medium Co Growth Equity Investments | 0.800% up to $500 million 0.775% above $500 million | ||||||
PACE International Equity Investments | 0.900% up to $500 million 0.875% above $500 million up to $1 billion 0.850% above $1 billion up to $1.5 billion 0.825% above $1.5 billion up to $2 billion 0.800% above $2 billion |
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PACE Select Advisors Trust
Notes to financial statements
Portfolio | Annual rate as a percentage of each Portfolio's average daily net assets | ||||||
PACE International Emerging Markets Equity Investments | 1.100% up to $500 million 1.075% above $500 million up to $1 billion 1.050% above $1 billion up to $1.5 billion 1.025% above $1.5 billion up to $2 billion 1.000% above $2 billion | ||||||
PACE Global Real Estate Securities Investments | 0.800% up to $500 million 0.750% above $500 million up to $1 billion 0.725% above $1 billion up to $1.5 billion 0.700% above $1.5 billion up to $2 billion 0.675% above $2 billion | ||||||
PACE Alternative Strategies Investments | 1.400% up to $500 million 1.350% above $500 million up to $1 billion 1.300% above $1 billion up to $1.5 billion 1.275% above $1.5 billion up to $2 billion 1.250% above $2 billion |
Under separate Sub-Advisory Agreements, with the exception of PACE Money Market Investments, UBS Global AM (not the Portfolios) pays the following investment sub-advisors a fee from the investment management and administration fees which UBS Global AM receives, which is accrued daily and paid monthly:
Portfolio | Investment sub-advisor | ||||||
PACE Mortgage-Backed Securities Fixed Income Investments | Pacific Investment Management Company LLC | ||||||
PACE Intermediate Fixed Income Investments | Babson Capital Management LLC1 BlackRock Financial Management, Inc. | ||||||
PACE Strategic Fixed Income Investments | Pacific Investment Management Company LLC | ||||||
PACE Municipal Fixed Income Investments | Standish Mellon Asset Management Company LLC | ||||||
PACE International Fixed Income Investments | Rogge Global Partners plc | ||||||
PACE High Yield Investments | MacKay Shields LLC | ||||||
PACE Large Co Value Equity Investments | Institutional Capital LLC Los Angeles Capital Management and Equity Research, Inc.2 Pzena Investment Management, LLC Robeco Investment Management | ||||||
PACE Large Co Growth Equity Investments | Jackson Square Partners, LLC (formerly known as Delaware Management Company) J.P. Morgan Investment Management Roxbury Capital Management, LLC | ||||||
PACE Small/Medium Co Value Equity Investments | Kayne Anderson Rudnick Investment Management, LLC Metropolitan West Capital Management, LLC Systematic Financial Management, L.P. | ||||||
PACE Small/Medium Co Growth Equity Investments | Copper Rock Capital Partners, LLC3 Lee Munder Capital Group, LLC4 Palisade Capital Management, LLC Riverbridge Partners, LLC Timpani Capital Management LLC4 | ||||||
PACE International Equity Investments | Chautauqua Capital Management, LLC5 J.P. Morgan Investment Management Inc.—EAFE Opportunities segment6 Los Angeles Capital Management and Equity Research, Inc.7 Mondrian Investment Partners Ltd. |
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Notes to financial statements
Portfolio | Investment sub-advisor | ||||||
PACE International Emerging Markets Equity Investments | Lee Munder Capital Group, LLC Mondrian Investment Partners Ltd. William Blair & Company L.L.C | ||||||
PACE Global Real Estate Securities Investments | Brookfield Investment Management Inc. CBRE Clarion Securities, LLC | ||||||
PACE Alternative Strategies Investments | Analytic Investors, LLC AQR Capital Management LLC8 First Quadrant L.P. Standard Life investments (Corporate Funds) Limited |
1 As of the close of business June 5, 2014, Babson Capital Management LLC became an investment sub-advisor of the Portfolio.
2 As of the close of business September 11, 2013, Los Angeles Capital Management and Equity Research, Inc. became an investment sub-advisor of the Portfolio.
3 As of the close of business April 21, 2014, Copper Rock Capital Partners, LLC was terminated as an investment sub-advisor to the Portfolio.
4 Lee Munder Capital Group, LLC and Timpani Capital Management LLC became investment sub-advisors of the Portfolio on November 25, 2013.
5 As of the close of business August 4, 2013, Martin Currie Inc. was terminated as an investment sub-advisor and Chautauqua Capital became an investment sub-advisor of the Portfolio on August 5, 2013.
6 As of the close of business February 25, 2014, J.P. Morgan Investment Management Inc.—EAFE Opportunities Segment ("J.P. Morgan") was terminated as an investment sub-advisor to the Portfolio. Cash from the sale of securities previously managed by J.P. Morgan was transferred to Los Angeles Capital Management and Equity Research, Inc.
7 As of the close of business September 12, 2013, J.P. Morgan Investment Management Inc.—International REI segment was terminated as an investment sub-advisor and Los Angeles Capital Management and Equity Research, Inc. became an investment sub-advisor of the Portfolio on September 13, 2013.
8 As of the close of business July 15, 2014, AQR Capital Management LLC became an investment sub-advisor of the Portfolio.
At July 31, 2014, certain Portfolios owe or are owed by UBS Global AM for investment management and administration fees, net of fee waivers/expense reimbursements and/or recoupments as follows:
Portfolio | Amounts due to (owed by) UBS Global AM | ||||||
PACE Money Market Investments | $ | (61,010 | ) | ||||
PACE Mortgage-Backed Securities Fixed Income Investments | 183,237 | ||||||
PACE Intermediate Fixed Income Investments | 95,980 | ||||||
PACE Strategic Fixed Income Investments | 485,002 | ||||||
PACE Municipal Fixed Income Investments | 171,456 | ||||||
PACE International Fixed Income Investments | 332,334 | ||||||
PACE High Yield Investments | 281,445 | ||||||
PACE Large Co Value Equity Investments | 936,065 | ||||||
PACE Large Co Growth Equity Investments | 926,993 | ||||||
PACE Small/Medium Co Value Equity Investments | 411,351 | ||||||
PACE Small/Medium Co Growth Equity Investments | 321,794 | ||||||
PACE International Equity Investments | 824,577 | ||||||
PACE International Emerging Markets Equity Investments | 414,599 | ||||||
PACE Global Real Estate Securities Investments | 40,722 | ||||||
PACE Alternative Strategies Investments | 824,187 |
UBS Global AM has entered into a written fee waiver agreement with each of PACE Mortgage-Backed Securities Fixed Income Investments and PACE International Fixed Income Investments, under which UBS Global AM is contractually obligated to waive its management fees to the extent necessary to reflect the lower sub-advisory fees paid by UBS Global AM to each of these Portfolio's sub-advisors: Pacific Investment Management Company LLC
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Notes to financial statements
and Rogge Global Partners plc. For the year ended July 31, 2014, UBS Global AM was contractually obligated to waive $142,186 and $312,208 in investment management and administration fees for PACE Mortgage-Backed Securities Fixed Income Investments and PACE International Fixed Income Investments respectively. These management fee waivers will not be subject to future recoupment.
With respect to the following Portfolios, UBS Global AM may voluntarily waive its management fees to the extent necessary to reflect lower sub-advisory fees paid. This management fee waiver will not be subject to future recoupment. Once started, there is no guarantee that UBS Global AM would continue to voluntarily waive a portion of its management fees. For the year ended July 31, 2014, UBS Global AM voluntarily waived fees of:
Management fees waived | |||||||
PACE Municipal Fixed Income Investments | $ | 73,120 | |||||
PACE High Yield Investments | 6,911 | ||||||
PACE Large Co Value Equity Investments | 177,925 | ||||||
PACE Small/Medium Co Growth Equity Investments | 36,409 | ||||||
PACE International Equity Investments | 217,897 | ||||||
PACE International Emerging Markets Equity Investments | 446,443 | ||||||
PACE Alternative Strategies Investments | 94,343 |
Additionally, with respect to PACE Money Market Investments, UBS Global AM may voluntarily waive fees and/or reimburse expenses from time to time in the event that the Portfolio's yield falls below a certain level. Once started, there is no guarantee that UBS Global AM would continue to voluntarily waive an additional portion of its fees and/or reimburse expenses. For the year ended July 31, 2014, UBS Global AM voluntarily waived and/or reimbursed expenses of $878,476 for PACE Money Market Investments for that purpose.
UBS Global AM is contractually obligated to waive all or a portion of its investment management and administration fees and/or to reimburse the Portfolios for certain operating expenses in order to maintain the total annual ordinary operating expenses of each class (with certain exclusions such as dividend expense, borrowing costs and interest expense, if any) through November 30, 2014 at a level not to exceed the amounts in the table below.
Each Portfolio will repay UBS Global AM for any such waived fees/reimbursed expenses during a three-year period following July 31, 2012, to the extent that ordinary operating expenses (with certain exclusions such as dividend expense, borrowing costs and interest expense) are otherwise below the applicable expense cap in effect at the time the fees or expenses were waived/reimbursed. For the year ended July 31, 2014, UBS Global AM had the following voluntary fee waivers/expense reimbursements, and recoupments. The fee waivers/expense reimbursements, portions of which are subject to repayment by the Portfolios through July 31, 2017, and recoupments for the year ended July 31, 2014, were as follows:
Portfolio | Class A expense cap | Class C expense cap | Class Y expense cap | Class P expense cap | Fee waivers/ expense reimbursements | Recoupments | |||||||||||||||||||||
PACE Money Market Investments | N/A | N/A | N/A | 0.60 | % | $ | 855,490 | $ | — | ||||||||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | 0.97 | % | 1.47 | % | 0.72 | % | 0.72 | 819,514 | — | ||||||||||||||||||
PACE Intermediate Fixed Income Investments | 0.93 | 1.43 | 0.68 | 0.68 | 598,261 | — | |||||||||||||||||||||
PACE Strategic Fixed Income Investments | 1.06 | 1.56 | 0.81 | 0.81 | 3,235 | 54,127 | |||||||||||||||||||||
PACE Municipal Fixed Income Investments | 0.90 | 1.40 | 0.65 | 0.65 | 53,443 | — | |||||||||||||||||||||
PACE International Fixed Income Investments | 1.25 | 1.75 | 1.00 | 1.00 | 197,473 | — |
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PACE Select Advisors Trust
Notes to financial statements
Portfolio | Class A expense cap | Class C expense cap | Class Y expense cap | Class P expense cap | Fee waivers/ expense reimbursements | Recoupments | |||||||||||||||||||||
PACE High Yield Investments | 1.28 | % | 1.78 | % | 1.03 | % | 1.03 | % | $ | 255,855 | $ | — | |||||||||||||||
PACE Large Co Value Equity Investments | 1.27 | 2.02 | 1.02 | 1.02 | — | — | |||||||||||||||||||||
PACE Large Co Growth Equity Investments | 1.30 | 2.05 | 1.05 | 1.05 | — | 1,228 | |||||||||||||||||||||
PACE Small/Medium Co Value Equity Investments | 1.41 | 2.16 | 1.16 | 1.16 | — | 256,238 | |||||||||||||||||||||
PACE Small/Medium Co Growth Equity Investments | 1.38 | 2.13 | 1.13 | 1.13 | 38 | 91,278 | |||||||||||||||||||||
PACE International Equity Investments | 1.55 | 2.30 | 1.30 | 1.30 | — | — | |||||||||||||||||||||
PACE International Emerging Markets Equity Investments1 | 1.95 | 2.70 | 1.70 | 1.70 | — | — | |||||||||||||||||||||
PACE Global Real Estate Securities Investments | 1.45 | 2.20 | 1.20 | 1.20 | 555,459 | — | |||||||||||||||||||||
PACE Alternative Strategies Investments | 1.88 | 2.63 | 1.63 | 1.63 | — | 102,477 |
1 Expense caps in the table above became effective on December 1, 2013. Prior to December 1, 2013, expense caps were as follows:
Class A | Class C | Class Y | Class P | ||||||||||||||||
PACE International Emerging Markets Equity Investments | 2.15 | % | 2.90 | % | 1.90 | % | 1.90 | % |
At July 31, 2014, the following Portfolios had remaining fee waivers/expense reimbursements subject to repayment to UBS Global AM and respective dates of expiration as follows:
Portfolio | Fee waivers/ expense reimbursements subject to repayment | Expires July 31, 2015 | Expires July 31, 2016 | Expires July 31, 2017 | |||||||||||||||
PACE Money Market Investments | $ | 2,949,316 | $ | 1,175,570 | $ | 918,256 | $ | 855,490 | |||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments—Class A | 83,519 | 5,842 | 27,848 | 49,829 | |||||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments—Class C | 27,776 | 3,791 | 9,140 | 14,845 | |||||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments—Class Y | 161,125 | 38,637 | 54,177 | 68,311 | |||||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments—Class P | 1,377,546 | 259,797 | 431,220 | 686,529 | |||||||||||||||
PACE Intermediate Fixed Income Investments—Class A | 75,612 | 27,123 | 20,670 | 27,819 | |||||||||||||||
PACE Intermediate Fixed Income Investments—Class C | 6,733 | 2,597 | 1,853 | 2,283 | |||||||||||||||
PACE Intermediate Fixed Income Investments—Class Y | 6,170 | 2,171 | 1,707 | 2,292 | |||||||||||||||
PACE Intermediate Fixed Income Investments—Class P | 1,019,404 | 223,059 | 230,478 | 565,867 | |||||||||||||||
PACE Strategic Fixed Income Investments—Class Y | 11,313 | 2,992 | 5,086 | 3,235 | |||||||||||||||
PACE Municipal Fixed Income Investments—Class A | 29,800 | 11,866 | 14,740 | 3,194 | |||||||||||||||
PACE Municipal Fixed Income Investments—Class C | 7,731 | 2,848 | 3,528 | 1,355 | |||||||||||||||
PACE Municipal Fixed Income Investments—Class Y | 167 | 58 | 69 | 40 | |||||||||||||||
PACE Municipal Fixed Income Investments—Class P | 255,524 | 103,000 | 103,670 | 48,854 | |||||||||||||||
PACE International Fixed Income Investments—Class Y | 5,493 | 2,912 | 1,946 | 635 | |||||||||||||||
PACE International Fixed Income Investments—Class P | 690,585 | 262,956 | 230,791 | 196,838 | |||||||||||||||
PACE High Yield Investments—Class P | 556,331 | 127,772 | 172,704 | 255,855 | |||||||||||||||
PACE Small/Medium Co Growth Equity Investments—Class Y | 595 | 154 | 403 | 38 | |||||||||||||||
PACE Small/Medium Co Growth Equity Investments—Class P | 216,120 | 188,454 | 27,666 | — | |||||||||||||||
PACE Global Real Estate Securities Investments—Class A | 23,153 | 9,971 | 5,638 | 7,544 | |||||||||||||||
PACE Global Real Estate Securities Investments—Class C | 802 | 416 | 157 | 229 | |||||||||||||||
PACE Global Real Estate Securities Investments—Class Y | 1,401 | 385 | 519 | 497 | |||||||||||||||
PACE Global Real Estate Securities Investments—Class P | 1,357,120 | 428,805 | 381,126 | 547,189 | |||||||||||||||
PACE Alternative Strategies Investments—Class Y | 626 | — | 626 | — |
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Notes to financial statements
Note: In connection with the Board's approval of the annual contract renewal at the July board meeting, UBS Global AM agreed to waive the right to recoup the remaining balance of $261,266 related to PACE Strategic Fixed Income Investments—Class P.
Under normal conditions, the Portfolios invest cash collateral from securities lending activities into an affiliated private money market fund, UBS Private Money Market Fund LLC ("Private Money Market"), which operates in compliance with most of the substantive provisions of Rule 2a-7 of the 1940 Act. Private Money Market is managed by UBS Global AM and is currently offered as a cash management option to mutual funds and certain other accounts managed by the Portfolios' Investment Manager. UBS Global AM acts as managing member and receives a management fee from Private Money Market payable monthly in arrears at the annual rate of 0.10% of Private Money Market's average daily members' equity, minus the aggregate operating expenses of, and incurred by, Private Money Market during each such related month, not including investment expenses (including brokerage commissions, taxes, interest charges and other costs with respect to transactions in securities) and extraordinary expenses including litigation expenses, if any. UBS Global AM may, in its sole discretion, waive all or any portion of the management fee to which it may be entitled from time to time in order to maintain operating expenses at a certain level. Distributions received from Private Money Market, net of fee rebates paid to borrowers, are reflected as securities lending income in the Statement of operations.
In August 2013, UBS Global AM made a voluntary cash payment of $2,430 to PACE Money Market Investments in order to address a differential between the number of shares outstanding and the Portfolio's net assets. The differential was attributable to historical, embedded capital losses that were experienced by the Portfolio over several years prior to the credit crisis of 2008. The voluntary payment to the Portfolio was not required to maintain a stable net asset value per share. The payment has removed a small, historical deviation that was reflected in the Portfolio's market price based and amortized cost net asset value per share.
During the year ended July 31, 2014, the Portfolios listed below paid broker commissions to affiliates of the investment manager as follows:
Affiliated broker | PACE Large Co Value Equity Investments | PACE Small/Medium Co Value Equity Investments | PACE Small/Medium Co Growth Equity Investments | PACE International Equity Investments | PACE International Emerging Markets Equity Investments | PACE Alternative Strategies Investments | |||||||||||||||||||||
UBS AG | $ | — | $ | — | $ | — | $ | 13,151 | $ | 930 | $ | 3,688 | |||||||||||||||
UBS Securities Asia Ltd. | — | — | — | — | 6,069 | — | |||||||||||||||||||||
UBS Securities Australia Ltd. | — | — | — | — | — | — | |||||||||||||||||||||
UBS Securities Canada Inc. | — | — | — | — | — | — | |||||||||||||||||||||
UBS Securities LLC | 193 | 6,045 | 2,753 | 915 | 633 | — | |||||||||||||||||||||
UBS Securities Pte Ltd. | — | — | — | — | 1,008 | — | |||||||||||||||||||||
UBS Warburg LLC | — | — | — | 2,333 | 572 | — |
Additional information regarding compensation to affiliate of a board member
Professor Meyer Feldberg serves as a senior advisor to Morgan Stanley, a financial services firm with which the Portfolios may conduct transactions, resulting in him being an interested trustee of the Portfolios. The Portfolios' have been informed that Professor Feldberg's role at Morgan Stanley does not involve matters directly affecting any UBS funds. Portfolio transactions are executed through Morgan Stanley based on that firm's ability to provide best
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Notes to financial statements
execution of the transactions. For the year ended July 31, 2014, the following Portfolios paid brokerage commissions to Morgan Stanley in the amounts as follows:
PACE Intermediate Fixed Income Investments | $ | 4,744 | |||||
PACE Large Co Value Equity Investments | 39,089 | ||||||
PACE Large Co Growth Equity Investments | 32,581 | ||||||
PACE Small/Medium Co Value Equity Investments | 8,924 | ||||||
PACE Small/Medium Co Growth Equity Investments | 4,676 | ||||||
PACE International Equity Investments | 85,458 | ||||||
PACE International Emerging Markets Equity Investments | 32,267 | ||||||
PACE Global Real Estate Securities Investments | 6,126 | ||||||
PACE Alternative Strategies Investments | 1,617,621 |
During the year ended July 31, 2014, the following Portfolios purchased and sold certain securities (e.g., fixed income securities) in principal trades with Morgan Stanley having aggregate values as follows:
PACE Money Market Investments | $ | 121,907,714 | |||||
PACE Mortgage-Backed Securities Fixed Income Investments | 2,614,764,374 | ||||||
PACE Intermediate Fixed Income Investments | 1,250,225,705 | ||||||
PACE Strategic Fixed Income Investments | 6,791,269,003 | ||||||
PACE Municipal Fixed Income Investments | 13,180,030 | ||||||
PACE International Fixed Income Investments | 34,776,506 | ||||||
PACE High Yield Investments | 6,762,643 | ||||||
PACE Small/Medium Co Value Equity Investments | 1,080,426 | ||||||
PACE Global Real Estate Securities Investments | 66,278 | ||||||
PACE Alternative Strategies Investments | 43,731,879 |
Morgan Stanley received compensation in connection with these trades, which may have been in the form of a "mark-up" or "mark-down" of the price of the securities, a fee from the issuer for maintaining a commercial paper program, or some other form of compensation. Although the precise amount of this compensation is not generally known by the investment manager, it is believed that under normal circumstances it represents a small portion of the total value of the transactions.
Service and distribution plans
UBS Global Asset Management (US) Inc. ("UBS Global AM (US)") is the principal underwriter of each Portfolio's shares. Under separate plans of service and/or distribution pertaining to Class A and Class C shares, the Portfolios (with the exception of PACE Money Market Investments, which only offers Class P shares), pay UBS Global AM (US) monthly service fees at the annual rate of 0.25% of the average daily net assets of Class A and Class C shares and monthly distribution fees (1) at the annual rate of 0.75% of the average daily net assets of Class C shares for PACE Large Co Value Equity Investments, PACE Large Co Growth Equity Investments, PACE Small/Medium Co Value Equity Investments, PACE Small/Medium Co Growth Equity Investments, PACE International Equity Investments, PACE International Emerging Markets Equity Investments, PACE Global Real Estate Securities Investments and PACE Alternative Strategies Investments and (2) at the annual rate of 0.50% of the average daily net assets of Class C shares for PACE Mortgage-Backed Securities Fixed Income Investments, PACE Intermediate Fixed Income Investments, PACE Strategic Fixed Income Investments, PACE Municipal Fixed Income Investments, PACE International Fixed Income Investments and PACE High Yield Investments.
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PACE Select Advisors Trust
Notes to financial statements
UBS Global AM (US) also receives the proceeds of the initial sales charges paid upon the purchase of Class A shares and the contingent deferred sales charges paid by shareholders upon certain redemptions of Class A and Class C shares.
At July 31, 2014, certain Portfolios owed UBS Global AM (US) service and distribution fees, and for the year ended July 31, 2014, certain Portfolios were informed by UBS Global AM (US) that it had earned sales charges as follows:
Portfolio | Service and distribution fees owed | Sales charges earned by distributor | |||||||||
PACE Mortgage-Backed Securities Fixed Income Investments—Class A | $ | 12,799 | $ | 712 | |||||||
PACE Mortgage-Backed Securities Fixed Income Investments—Class C | 8,931 | 2,616 | |||||||||
PACE Intermediate Fixed Income Investments—Class A | 6,000 | 1,007 | |||||||||
PACE Intermediate Fixed Income Investments—Class C | 1,514 | — | |||||||||
PACE Strategic Fixed Income Investments—Class A | 9,533 | 976 | |||||||||
PACE Strategic Fixed Income Investments—Class C | 9,664 | 2,386 | |||||||||
PACE Municipal Fixed Income Investments—Class A | 13,438 | 17,333 | |||||||||
PACE Municipal Fixed Income Investments—Class C | 7,009 | — | |||||||||
PACE International Fixed Income Investments—Class A | 13,411 | 1,236 | |||||||||
PACE International Fixed Income Investments—Class C | 2,995 | — | |||||||||
PACE High Yield Investments—Class A | 5,097 | 9,797 | |||||||||
PACE High Yield Investments—Class C | 3,775 | 20 | |||||||||
PACE Large Co Value Equity Investments—Class A | 33,790 | 9,514 | |||||||||
PACE Large Co Value Equity Investments—Class C | 13,377 | 794 | |||||||||
PACE Large Co Growth Equity Investments—Class A | 14,864 | 4,904 | |||||||||
PACE Large Co Growth Equity Investments—Class C | 3,803 | 8 | |||||||||
PACE Small/Medium Co Value Equity Investments—Class A | 7,128 | 5,509 | |||||||||
PACE Small/Medium Co Value Equity Investments—Class C | 4,496 | 20 | |||||||||
PACE Small/Medium Co Growth Equity Investments—Class A | 8,876 | 5,163 | |||||||||
PACE Small/Medium Co Growth Equity Investments—Class C | 3,539 | 156 | |||||||||
PACE International Equity Investments—Class A | 12,567 | 3,129 | |||||||||
PACE International Equity Investments—Class C | 2,556 | — | |||||||||
PACE International Emerging Markets Equity Investments—Class A | 3,697 | 1,272 | |||||||||
PACE International Emerging Markets Equity Investments—Class C | 1,770 | 2 | |||||||||
PACE Global Real Estate Securities Investments—Class A | 1,224 | 200 | |||||||||
PACE Global Real Estate Securities Investments—Class C | 232 | — | |||||||||
PACE Alternative Strategies Investments—Class A | 16,528 | 27,211 | |||||||||
PACE Alternative Strategies Investments—Class C | 5,452 | 80 |
Transfer agency and related services fees
UBS Financial Services Inc. provides certain services to the Portfolios pursuant to a delegation of authority from BNY Mellon Investment Servicing (US) Inc. ("BNY Mellon"), the Portfolios' transfer agent, and is compensated for these services by BNY Mellon, not the Portfolios.
Effective July 1, 2013, UBS Financial Services Inc. voluntarily agreed to waive a portion of the fee that it would otherwise have received from BNY Mellon with respect to PACE Money Market Investments so that BNY Mellon would correspondingly reduce the fees it would have charged to that Portfolio. Given that UBS Global AM has voluntarily undertaken to reduce its fees and/or reimburse expenses to keep the Portfolio's yield at or above a certain level, and that such amount exceeds the reduction in BNY Mellon's fees, the net effect of BNY Mellon's pass
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through of the waiver by UBS Financial Services Inc. is to partially reduce the amount that UBS Global AM would have otherwise voluntarily waived/reimbursed. For the year ended July 31, 2014, the amount of the reduction in transfer agency and related services fees charged by BNY Mellon to the Portfolio was $381,447, which reflected an equal amount of compensation that was voluntarily waived by UBS Financial Services Inc. Voluntary fee waiver/expense reimbursement arrangements may end at any time.
For the year ended July 31, 2014, UBS Financial Services Inc. received from BNY Mellon, not the Portfolios, total delegated services fees as follows:
Portfolio | Delegated services fees earned | ||||||
PACE Money Market Investments | $ | 194,184 | |||||
PACE Mortgage-Backed Securities Fixed Income Investments | 457,351 | ||||||
PACE Intermediate Fixed Income Investments | 377,813 | ||||||
PACE Strategic Fixed Income Investments | 551,702 | ||||||
PACE Municipal Fixed Income Investments | 85,708 | ||||||
PACE International Fixed Income Investments | 560,816 | ||||||
PACE High Yield Investments | 412,506 | ||||||
PACE Large Co Value Equity Investments | 647,273 | ||||||
PACE Large Co Growth Equity Investments | 620,135 | ||||||
PACE Small/Medium Co Value Equity Investments | 596,561 | ||||||
PACE Small/Medium Co Growth Equity Investments | 598,511 | ||||||
PACE International Equity Investments | 595,838 | ||||||
PACE International Emerging Markets Equity Investments | 548,901 | ||||||
PACE Global Real Estate Securities Investments | 388,301 | ||||||
PACE Alternative Strategies Investments | 293,963 |
For the year ended July 31, 2014, each Portfolio accrued transfer agency and related services fees payable to BNY Mellon on each class as follows:
Portfolio | Class A | Class C | Class Y | Class P | |||||||||||||||
PACE Money Market Investments | $ | — | $ | — | $ | — | $ | 1,153,703 | |||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | 57,935 | 16,791 | 75,259 | 741,468 | |||||||||||||||
PACE Intermediate Fixed Income Investments | 32,635 | 2,720 | 2,400 | 629,781 | |||||||||||||||
PACE Strategic Fixed Income Investments | 58,453 | 13,393 | 6,567 | 927,680 | |||||||||||||||
PACE Municipal Fixed Income Investments | 20,595 | 4,578 | 62 | 134,599 | |||||||||||||||
PACE International Fixed Income Investments | 74,837 | 4,803 | 8,237 | 912,873 | |||||||||||||||
PACE High Yield Investments | 21,310 | 3,081 | 1,364 | 695,238 | |||||||||||||||
PACE Large Co Value Equity Investments | 112,107 | 15,938 | 14,350 | 1,018,779 | |||||||||||||||
PACE Large Co Growth Equity Investments | 57,053 | 6,633 | 11,767 | 1,020,027 | |||||||||||||||
PACE Small/Medium Co Value Equity Investments | 29,679 | 4,942 | 1,787 | 997,316 | |||||||||||||||
PACE Small/Medium Co Growth Equity Investments | 39,262 | 4,072 | 1,510 | 997,019 | |||||||||||||||
PACE International Equity Investments | 62,908 | 4,940 | 17,974 | 972,926 | |||||||||||||||
PACE International Emerging Markets Equity Investments | 25,026 | 3,088 | 17,844 | 921,754 | |||||||||||||||
PACE Global Real Estate Securities Investments | 12,005 | 421 | 734 | 653,159 | |||||||||||||||
PACE Alternative Strategies Investments | 43,782 | 3,041 | 3,390 | 458,577 |
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Notes to financial statements
Securities lending
Each Portfolio may lend securities up to 331/3% of its total assets to qualified broker-dealers or institutional investors. The loans are secured at all times by cash, US government securities or irrevocable letters of credit in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. The Portfolio will regain ownership of loaned securities to exercise certain beneficial rights; however, each Portfolio may bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower fail financially. Each Portfolio receives compensation for lending its securities from interest or dividends earned on the cash, US government securities or irrevocable letters of credit held as collateral, net of fee rebates paid to the borrower plus reasonable administrative and custody fees. State Street Bank and Trust Company serves as the Portfolios' lending agent.
At July 31, 2014, the following Portfolios had securities on loan at value, cash collateral and non-cash collateral as follows:
Portfolio | Value of securities on loan | Cash collateral | Non-cash collateral* | Total collateral | Security types held as non-cash collateral | ||||||||||||||||||
PACE Intermediate Fixed Income Investments | $ | 65,024,901 | $ | 66,357,164 | $ | — | $ | 66,357,164 | n/a | ||||||||||||||
PACE Strategic Fixed Income Investments | 1,101,355 | 1,125,765 | — | 1,125,765 | n/a | ||||||||||||||||||
PACE International Fixed Income Investments | 1,283,255 | 1,325,980 | — | 1,325,980 | n/a | ||||||||||||||||||
PACE High Yield Investments | 33,632,456 | 34,618,990 | — | 34,618,990 | n/a | ||||||||||||||||||
PACE Large Co Value Equity Investments | 6,800,502 | 1,130,800 | 5,850,845 | 6,981,645 | US Treasury Notes and US Treasury Bills | ||||||||||||||||||
PACE Small/Medium Co Value Equity Investments | 29,921,147 | 31,962,048 | — | 31,962,048 | n/a | ||||||||||||||||||
PACE Small/Medium Co Growth Equity Investments | 67,405,475 | 70,777,816 | 7,836 | 70,785,652 | US Government Agency Obligations | ||||||||||||||||||
PACE International Equity Investments | 24,017,144 | 24,717,606 | 518,959 | 25,236,565 | US Treasury Notes | ||||||||||||||||||
PACE International Emerging Markets Equity Investments | 30,648,952 | 32,623,715 | 14,000 | 32,637,715 | US Treasury Notes | ||||||||||||||||||
PACE Global Real Estate Securities Investments | 3,251,156 | 3,424,337 | — | 3,424,337 | n/a |
* These securities are held for the benefit of the Portfolio at the Portfolio's custodian. The Portfolio cannot repledge or resell this collateral. As such, this collateral is excluded from the Statement of assets and liabilities.
Bank line of credit
Each Portfolio, other than PACE Money Market Investments, participates with other funds managed, advised or sub-advised by UBS Global AM in a $75 million committed credit facility with State Street Bank and Trust Company ("Committed Credit Facility"), to be utilized for temporary financing until the settlement of sales or purchases of portfolio securities, the repurchase or redemption of shares of each Portfolio at the request of shareholders and other temporary or emergency purposes. Under the Committed Credit Facility arrangement, each Portfolio has agreed to pay commitment fees, pro rata, based on the relative asset size of the funds in the Committed Credit Facility. Effective November 19, 2013, the committed credit facility was reduced from $100 million to $75 million.
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Notes to financial statements
Each Portfolio borrows at prevailing rates in effect at the time of borrowings. For the year ended July 31, 2014, the following Portfolios had borrowings as follows:
Portfolio | Average daily amount of borrowings outstanding | Days outstanding | Interest expense | Weighted average annualized interest rate | |||||||||||||||
PACE International Equity Investments | $ | 3,021,050 | 7 | $ | 641 | 1.090 | % |
At July 31, 2014, there were no borrowings outstanding.
Purchases and sales of securities
For the year ended July 31, 2014, aggregate purchases and sales of portfolio securities, excluding purchased options, short-term securities and US Government and agency securities, were as follows:
Portfolio | Purchases | Sales | |||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | $ | 50,151,482 | $ | 24,470,710 | |||||||
PACE Intermediate Fixed Income Investments | 212,363,076 | 159,248,437 | |||||||||
PACE Strategic Fixed Income Investments | 241,472,940 | 187,517,146 | |||||||||
PACE Municipal Fixed Income Investments | 140,517,010 | 114,073,328 | |||||||||
PACE International Fixed Income Investments | 265,569,772 | 254,020,929 | |||||||||
PACE High Yield Investments | 143,201,065 | 81,012,327 | |||||||||
PACE Large Co Value Equity Investments (long transactions) | 1,204,377,184 | 1,035,301,502 | |||||||||
PACE Large Co Value Equity Investments (short sale transactions) | 87,017,232 | 274,114,767 | |||||||||
PACE Large Co Growth Equity Investments | 512,600,626 | 580,974,180 | |||||||||
PACE Small/Medium Co Value Equity Investments | 449,440,991 | 439,625,504 | |||||||||
PACE Small/Medium Co Growth Equity Investments | 488,866,481 | 507,265,093 | |||||||||
PACE International Equity Investments (long transactions) | 1,158,533,228 | 970,739,602 | |||||||||
PACE International Equity Investments (short sale transactions) | 89,838,605 | 215,542,267 | |||||||||
PACE International Emerging Markets Equity Investments | 377,865,696 | 303,091,719 | |||||||||
PACE Global Real Estate Securities Investments | 81,995,583 | 69,477,301 | |||||||||
PACE Alternative Strategies Investments (long transactions) | 318,103,306 | 281,397,503 | |||||||||
PACE Alternative Strategies Investments (short sale transactions) | 83,717,562 | 84,799,508 |
For the year ended July 31, 2014, aggregate purchases and sales of US Government and agency securities, excluding short-term securities, were as follows:
Portfolio | Purchases | Sales | |||||||||
PACE Mortgage-Backed Securities Fixed Income Investments (long transactions) | $ | 7,857,325,377 | $ | 7,992,246,007 | |||||||
PACE Mortgage-Backed Securities Fixed Income Investments (short sale transactions) | 21,104,208 | 47,019,929 | |||||||||
PACE Intermediate Fixed Income Investments (long transactions) | 3,568,435,090 | 3,666,800,366 | |||||||||
PACE Strategic Fixed Income Investments (long transactions) | 1,373,384,503 | 1,324,927,242 | |||||||||
PACE Strategic Fixed Income Investments (short sale transactions) | 530,703 | 500,000 |
Commission recapture program
The following Portfolios participate in a brokerage commission recapture program: PACE Large Co Value Equity Investments, PACE Large Co Growth Equity Investments, PACE Small/Medium Co Value Equity Investments, PACE Small/Medium Co Growth Equity Investments, PACE International Equity Investments, PACE International Emerging Markets Equity Investments, PACE Global Real Estate Securities Investments and PACE Alternative Strategies Investments. These Portfolios have established commission recapture arrangements with certain participating
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Notes to financial statements
brokers or dealers. If a Portfolio's investment sub-advisor chooses to execute a transaction through a participating broker subject to best price and execution, the broker will rebate a portion of the commission back to the Portfolio. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Portfolio. For the year ended July 31, 2014, the following Portfolios recorded recaptured commissions which are reflected in the Statement of operations within the net realized gains (losses) on investment activities:
Portfolio | Amount | ||||||
PACE Large Co Value Equity Investments | $ | 41,069 | |||||
PACE Large Co Growth Equity Investments | 62,278 | ||||||
PACE Small/Medium Co Value Equity Investments | 151,869 | ||||||
PACE Small/Medium Co Growth Equity Investments | 37,699 | ||||||
PACE International Equity Investments | 64,166 | ||||||
PACE International Emerging Markets Equity Investments | 4,366 | ||||||
PACE Global Real Estate Securities Investments | 36,046 |
Shares of beneficial interest
There is an unlimited amount of $0.001 par value shares of beneficial interest authorized. Transactions in shares of beneficial interest for each of the Portfolios, except PACE Money Market Investments, about which similar information is provided on the Statement of changes in net assets, were as follows:
PACE Mortgage-Backed Securities Fixed Income Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 135,760 | $ | 1,727,928 | 4,500 | $ | 57,462 | |||||||||||||
Shares repurchased | (822,783 | ) | (10,448,463 | ) | (270,214 | ) | (3,425,556 | ) | |||||||||||
Dividends reinvested | 79,799 | 1,012,888 | 14,748 | 187,371 | |||||||||||||||
Net decrease | (607,224 | ) | $ | (7,707,647 | ) | (250,966 | ) | $ | (3,180,723 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 862,458 | $ | 10,944,560 | 7,828,428 | $ | 99,623,552 | |||||||||||||
Shares repurchased | (1,779,838 | ) | (22,579,962 | ) | (10,110,106 | ) | (128,564,760 | ) | |||||||||||
Dividends reinvested | 96,240 | 1,221,484 | 764,291 | 9,706,793 | |||||||||||||||
Net decrease | (821,140 | ) | $ | (10,413,918 | ) | (1,517,387 | ) | $ | (19,234,415 | ) |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 236,874 | $ | 3,130,040 | 23,926 | $ | 316,962 | |||||||||||||
Shares repurchased | (994,923 | ) | (13,053,892 | ) | (266,545 | ) | (3,491,433 | ) | |||||||||||
Dividends reinvested | 182,565 | 2,391,892 | 44,417 | 582,953 | |||||||||||||||
Net decrease | (575,484 | ) | $ | (7,531,960 | ) | (198,202 | ) | $ | (2,591,518 | ) |
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Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 1,703,229 | $ | 22,428,776 | 11,225,548 | $ | 146,828,296 | |||||||||||||
Shares repurchased | (1,911,437 | ) | (25,083,392 | ) | (10,928,195 | ) | (142,775,805 | ) | |||||||||||
Dividends reinvested | 208,162 | 2,727,464 | 1,447,463 | 18,969,470 | |||||||||||||||
Net increase (decrease) | (46 | ) | $ | 72,848 | 1,744,816 | $ | 23,021,961 |
PACE Intermediate Fixed Income Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 137,367 | $ | 1,685,157 | 5,955 | $ | 72,869 | |||||||||||||
Shares repurchased | (450,475 | ) | (5,520,593 | ) | (43,809 | ) | (538,955 | ) | |||||||||||
Dividends reinvested | 20,669 | 253,651 | 1,106 | 13,588 | |||||||||||||||
Net decrease | (292,439 | ) | $ | (3,581,785 | ) | (36,748 | ) | $ | (452,498 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 407 | $ | 5,012 | 7,348,586 | $ | 90,264,412 | |||||||||||||
Shares repurchased | (12,355 | ) | (152,052 | ) | (8,070,814 | ) | (99,050,185 | ) | |||||||||||
Dividends reinvested | 736 | 9,032 | 460,327 | 5,650,534 | |||||||||||||||
Net decrease | (11,212 | ) | $ | (138,008 | ) | (261,901 | ) | $ | (3,135,239 | ) |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 133,266 | $ | 1,653,049 | 9,808 | $ | 121,786 | |||||||||||||
Shares repurchased | (533,492 | ) | (6,609,843 | ) | (53,672 | ) | (668,114 | ) | |||||||||||
Dividends reinvested | 18,882 | 233,957 | 819 | 10,174 | |||||||||||||||
Net decrease | (381,344 | ) | $ | (4,722,837 | ) | (43,045 | ) | $ | (536,154 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 2,101 | $ | 25,873 | 12,951,674 | $ | 160,745,796 | |||||||||||||
Shares repurchased | (27,351 | ) | (339,829 | ) | (13,191,170 | ) | (163,570,827 | ) | |||||||||||
Dividends reinvested | 816 | 10,119 | 374,358 | 4,637,734 | |||||||||||||||
Net increase (decrease) | (24,434 | ) | $ | (303,837 | ) | 134,862 | $ | 1,812,703 |
PACE Strategic Fixed Income Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 457,256 | $ | 6,368,555 | 56,627 | $ | 785,975 | |||||||||||||
Shares repurchased | (2,195,550 | ) | (30,574,747 | ) | (491,046 | ) | (6,842,706 | ) | |||||||||||
Dividends reinvested | 176,412 | 2,429,917 | 41,632 | 573,431 | |||||||||||||||
Net decrease | (1,561,882 | ) | $ | (21,776,275 | ) | (392,787 | ) | $ | (5,483,300 | ) |
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Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 78,466 | $ | 1,087,674 | 13,195,775 | $ | 184,184,815 | |||||||||||||
Shares repurchased | (118,643 | ) | (1,657,906 | ) | (11,296,836 | ) | (157,435,317 | ) | |||||||||||
Dividends reinvested | 10,522 | 145,050 | 3,243,921 | 44,709,758 | |||||||||||||||
Net increase (decrease) | (29,655 | ) | $ | (425,182 | ) | 5,142,860 | $ | 71,459,256 |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 1,271,239 | $ | 19,215,814 | 377,265 | $ | 5,720,971 | |||||||||||||
Shares repurchased | (2,336,703 | ) | (34,800,415 | ) | (330,458 | ) | (4,876,452 | ) | |||||||||||
Dividends reinvested | 228,170 | 3,409,656 | 48,798 | 729,504 | |||||||||||||||
Net increase (decrease) | (837,294 | ) | $ | (12,174,945 | ) | 95,605 | $ | 1,574,023 |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 180,374 | $ | 2,716,342 | 15,533,571 | $ | 232,521,191 | |||||||||||||
Shares repurchased | (325,514 | ) | (4,756,357 | ) | (11,456,321 | ) | (171,286,007 | ) | |||||||||||
Dividends reinvested | 15,573 | 232,613 | 2,705,675 | 40,394,024 | |||||||||||||||
Net increase (decrease) | (129,567 | ) | $ | (1,807,402 | ) | 6,782,925 | $ | 101,629,208 |
PACE Municipal Fixed Income Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 519,213 | $ | 6,731,389 | 28,522 | $ | 373,050 | |||||||||||||
Shares repurchased | (759,265 | ) | (9,828,293 | ) | (162,906 | ) | (2,117,828 | ) | |||||||||||
Dividends reinvested | 113,061 | 1,463,462 | 15,503 | 200,476 | |||||||||||||||
Net decrease | (126,991 | ) | $ | (1,633,442 | ) | (118,881 | ) | $ | (1,544,302 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | — | $ | — | 7,457,402 | $ | 97,041,995 | |||||||||||||
Shares repurchased | (162 | ) | (2,129 | ) | (6,116,730 | ) | (79,376,599 | ) | |||||||||||
Dividends reinvested | 56 | 729 | 761,107 | 9,863,895 | |||||||||||||||
Net increase (decrease) | (106 | ) | $ | (1,400 | ) | 2,101,779 | $ | 27,529,291 |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 110,954 | $ | 1,498,338 | 49,387 | $ | 669,858 | |||||||||||||
Shares repurchased | (579,860 | ) | (7,772,607 | ) | (117,167 | ) | (1,585,182 | ) | |||||||||||
Dividends reinvested | 109,068 | 1,463,784 | 14,459 | 194,124 | |||||||||||||||
Net decrease | (359,838 | ) | $ | (4,810,485 | ) | (53,321 | ) | $ | (721,200 | ) |
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Notes to financial statements
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 26 | $ | 356 | 9,968,281 | $ | 134,115,367 | |||||||||||||
Shares repurchased | (2,627 | ) | (35,373 | ) | (4,211,642 | ) | (56,546,020 | ) | |||||||||||
Dividends reinvested | 73 | 974 | 512,605 | 6,868,310 | |||||||||||||||
Net increase (decrease) | (2,528 | ) | $ | (34,043 | ) | 6,269,244 | $ | 84,437,657 |
PACE International Fixed Income Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 149,342 | $ | 1,590,209 | 953 | $ | 10,078 | |||||||||||||
Shares repurchased | (1,096,763 | ) | (11,639,665 | ) | (140,871 | ) | (1,495,348 | ) | |||||||||||
Dividends reinvested | 121,991 | 1,297,893 | 6,458 | 68,740 | |||||||||||||||
Net decrease | (825,430 | ) | $ | (8,751,563 | ) | (133,460 | ) | $ | (1,416,530 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 64,369 | $ | 688,660 | 11,602,434 | $ | 123,512,262 | |||||||||||||
Shares repurchased | (60,676 | ) | (644,084 | ) | (8,367,262 | ) | (88,894,723 | ) | |||||||||||
Dividends reinvested | 13,381 | 142,063 | 1,198,732 | 12,764,362 | |||||||||||||||
Net increase | 17,074 | $ | 186,639 | 4,433,904 | $ | 47,381,901 |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 139,851 | $ | 1,568,506 | 13,765 | $ | 155,407 | |||||||||||||
Shares repurchased | (1,085,450 | ) | (12,170,548 | ) | (77,120 | ) | (854,879 | ) | |||||||||||
Dividends reinvested | 152,000 | 1,709,650 | 8,770 | 98,799 | |||||||||||||||
Net decrease | (793,599 | ) | $ | (8,892,392 | ) | (54,585 | ) | $ | (600,673 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 135,369 | $ | 1,483,231 | 13,905,232 | $ | 153,595,400 | |||||||||||||
Shares repurchased | (72,271 | ) | (797,296 | ) | (8,532,354 | ) | (94,870,858 | ) | |||||||||||
Dividends reinvested | 12,711 | 142,224 | 1,112,273 | 12,471,174 | |||||||||||||||
Net increase | 75,809 | $ | 828,159 | 6,485,151 | $ | 71,195,716 |
PACE High Yield Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 257,770 | $ | 2,726,554 | 39,000 | $ | 408,882 | |||||||||||||
Shares repurchased | (384,449 | ) | (4,073,314 | ) | (64,010 | ) | (675,675 | ) | |||||||||||
Dividends reinvested | 91,121 | 963,515 | 13,934 | 147,176 | |||||||||||||||
Net decrease | (35,558 | ) | $ | (383,245 | ) | (11,076 | ) | $ | (119,617 | ) |
322
PACE Select Advisors Trust
Notes to financial statements
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 21,256 | $ | 225,559 | 10,287,549 | $ | 109,199,349 | |||||||||||||
Shares repurchased | (20,033 | ) | (214,471 | ) | (5,997,261 | ) | (63,582,056 | ) | |||||||||||
Dividends reinvested | 8,733 | 92,661 | 1,955,256 | 20,732,934 | |||||||||||||||
Net increase | 9,956 | $ | 103,749 | 6,245,544 | $ | 66,350,227 |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 603,917 | $ | 6,361,704 | 44,412 | $ | 464,141 | |||||||||||||
Shares repurchased | (697,651 | ) | (7,344,207 | ) | (103,160 | ) | (1,085,461 | ) | |||||||||||
Dividends reinvested | 135,225 | 1,419,444 | 22,934 | 240,357 | |||||||||||||||
Net increase (decrease) | 41,491 | $ | 436,941 | (35,814 | ) | $ | (380,963 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 98,653 | $ | 1,042,000 | 13,969,493 | $ | 149,189,913 | |||||||||||||
Shares repurchased | (13,911 | ) | (147,240 | ) | (8,450,693 | ) | (89,779,657 | ) | |||||||||||
Dividends reinvested | 7,829 | 82,536 | 2,108,331 | 22,175,832 | |||||||||||||||
Net increase | 92,571 | $ | 977,296 | 7,627,131 | $ | 81,586,088 |
PACE Large Co Value Equity Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 138,875 | $ | 3,313,455 | 15,073 | $ | 349,412 | |||||||||||||
Shares repurchased | (825,664 | ) | (19,618,213 | ) | (53,717 | ) | (1,281,114 | ) | |||||||||||
Dividends reinvested | 117,852 | 2,796,627 | 7,485 | 178,312 | |||||||||||||||
Net decrease | (568,937 | ) | $ | (13,508,131 | ) | (31,159 | ) | $ | (753,390 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 21,406 | $ | 512,965 | 6,611,809 | $ | 157,829,351 | |||||||||||||
Shares repurchased | (78,848 | ) | (1,885,982 | ) | (8,051,978 | ) | (192,269,704 | ) | |||||||||||
Dividends reinvested | 17,655 | 419,481 | 1,103,624 | 26,133,810 | |||||||||||||||
Net decrease | (39,787 | ) | $ | (953,536 | ) | (336,545 | ) | $ | (8,306,543 | ) |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 175,040 | $ | 3,434,403 | 26,182 | $ | 549,789 | |||||||||||||
Shares repurchased | (1,197,776 | ) | (23,265,563 | ) | (108,766 | ) | (2,118,774 | ) | |||||||||||
Dividends reinvested | 82,290 | 1,528,957 | 2,890 | 53,922 | |||||||||||||||
Net decrease | (940,446 | ) | $ | (18,302,203 | ) | (79,694 | ) | $ | (1,515,063 | ) |
323
PACE Select Advisors Trust
Notes to financial statements
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 62,979 | $ | 1,290,137 | 7,426,463 | $ | 145,262,969 | |||||||||||||
Shares repurchased | (158,831 | ) | (3,121,235 | ) | (15,306,648 | ) | (310,960,135 | ) | |||||||||||
Dividends reinvested | 12,928 | 240,457 | 818,790 | 15,180,354 | |||||||||||||||
Net decrease | (82,924 | ) | $ | (1,590,641 | ) | (7,061,395 | ) | $ | (150,516,812 | ) |
PACE Large Co Growth Equity Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 100,924 | $ | 2,521,260 | 7,604 | $ | 167,300 | |||||||||||||
Shares repurchased | (357,271 | ) | (8,893,628 | ) | (31,255 | ) | (711,299 | ) | |||||||||||
Dividends reinvested | 222,204 | 5,346,236 | 17,667 | 380,192 | |||||||||||||||
Net decrease | (34,143 | ) | $ | (1,026,132 | ) | (5,984 | ) | $ | (163,807 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 15,807 | $ | 397,993 | 6,259,563 | $ | 158,656,158 | |||||||||||||
Shares repurchased | (84,881 | ) | (2,146,436 | ) | (7,775,654 | ) | (197,160,102 | ) | |||||||||||
Dividends reinvested | 54,050 | 1,330,717 | 4,125,967 | 101,044,914 | |||||||||||||||
Net increase (decrease) | (15,024 | ) | $ | (417,726 | ) | 2,609,876 | $ | 62,540,970 |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 153,218 | $ | 3,209,919 | 10,775 | $ | 220,850 | |||||||||||||
Shares repurchased | (538,915 | ) | (11,499,521 | ) | (31,819 | ) | (603,270 | ) | |||||||||||
Dividends reinvested | 4,781 | 96,811 | — | — | |||||||||||||||
Net decrease | (380,916 | ) | $ | (8,192,791 | ) | (21,044 | ) | $ | (382,420 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 32,417 | $ | 718,161 | 6,982,350 | $ | 150,492,625 | |||||||||||||
Shares repurchased | (87,566 | ) | (1,883,848 | ) | (13,181,109 | ) | (292,915,014 | ) | |||||||||||
Dividends reinvested | 3,292 | 68,046 | 261,620 | 5,384,151 | |||||||||||||||
Net decrease | (51,857 | ) | $ | (1,097,641 | ) | (5,937,139 | ) | $ | (137,038,238 | ) |
PACE Small/Medium Co Value Equity Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 63,212 | $ | 1,427,365 | 7,742 | $ | 154,808 | |||||||||||||
Shares repurchased | (218,356 | ) | (4,888,494 | ) | (29,357 | ) | (579,750 | ) | |||||||||||
Dividends reinvested | 169,018 | 3,608,529 | 33,980 | 645,613 | |||||||||||||||
Net increase | 13,874 | $ | 147,400 | 12,365 | $ | 220,671 |
324
PACE Select Advisors Trust
Notes to financial statements
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 5,929 | $ | 135,231 | 3,528,915 | $ | 80,570,626 | |||||||||||||
Shares repurchased | (4,046 | ) | (92,686 | ) | (3,278,447 | ) | (74,764,570 | ) | |||||||||||
Dividends reinvested | 4,575 | 100,610 | 2,553,249 | 55,711,895 | |||||||||||||||
Net increase | 6,458 | $ | 143,155 | 2,803,717 | $ | 61,517,951 |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 105,403 | $ | 2,069,444 | 1,427 | $ | 26,404 | |||||||||||||
Shares repurchased | (305,512 | ) | (5,944,498 | ) | (40,470 | ) | (685,315 | ) | |||||||||||
Dividends reinvested | 7,341 | 134,550 | — | — | |||||||||||||||
Net decrease | (192,768 | ) | $ | (3,740,504 | ) | (39,043 | ) | $ | (658,911 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 17,951 | $ | 370,770 | 3,346,884 | $ | 66,893,480 | |||||||||||||
Shares repurchased | (10,376 | ) | (204,301 | ) | (4,590,581 | ) | (92,423,697 | ) | |||||||||||
Dividends reinvested | 170 | 3,199 | 134,898 | 2,521,250 | |||||||||||||||
Net increase (decrease) | 7,745 | $ | 169,668 | (1,108,799 | ) | $ | (23,008,967 | ) |
PACE Small/Medium Co Growth Equity Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 112,552 | $ | 2,436,630 | 15,563 | $ | 310,048 | |||||||||||||
Shares repurchased | (267,342 | ) | (5,685,945 | ) | (26,534 | ) | (470,702 | ) | |||||||||||
Dividends reinvested | 245,623 | 5,069,662 | 31,669 | 568,452 | |||||||||||||||
Net increase | 90,833 | $ | 1,820,347 | 20,698 | $ | 407,798 |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 7,083 | $ | 158,288 | 3,380,210 | $ | 74,482,065 | |||||||||||||
Shares repurchased | (4,874 | ) | (108,202 | ) | (3,543,072 | ) | (78,451,875 | ) | |||||||||||
Dividends reinvested | 3,701 | 80,208 | 2,662,457 | 57,056,451 | |||||||||||||||
Net increase | 5,910 | $ | 130,294 | 2,499,595 | $ | 53,086,641 |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 157,216 | $ | 2,904,369 | 11,126 | $ | 189,302 | |||||||||||||
Shares repurchased | (468,233 | ) | (8,663,338 | ) | (41,648 | ) | (654,594 | ) | |||||||||||
Dividends reinvested | 33,516 | 583,850 | 3,618 | 56,228 | |||||||||||||||
Net decrease | (277,501 | ) | $ | (5,175,119 | ) | (26,904 | ) | $ | (409,064 | ) |
325
PACE Select Advisors Trust
Notes to financial statements
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 18,856 | $ | 376,504 | 3,277,242 | $ | 63,040,511 | |||||||||||||
Shares repurchased | (5,849 | ) | (115,230 | ) | (5,566,751 | ) | (108,796,590 | ) | |||||||||||
Dividends reinvested | 245 | 4,434 | 350,935 | 6,309,806 | |||||||||||||||
Net increase (decrease) | 13,252 | $ | 265,708 | (1,938,574 | ) | $ | (39,446,273 | ) |
PACE International Equity Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 155,807 | $ | 2,361,902 | 11,841 | $ | 175,923 | |||||||||||||
Shares repurchased | (519,389 | ) | (7,823,421 | ) | (23,585 | ) | (350,027 | ) | |||||||||||
Dividends reinvested | 62,442 | 911,655 | 1,960 | 28,185 | |||||||||||||||
Net decrease | (301,140 | ) | $ | (4,549,864 | ) | (9,784 | ) | $ | (145,919 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 110,070 | $ | 1,632,704 | 11,779,394 | $ | 177,342,787 | |||||||||||||
Shares repurchased | (167,314 | ) | (2,544,663 | ) | (9,125,315 | ) | (137,422,739 | ) | |||||||||||
Dividends reinvested | 30,704 | 447,047 | 1,264,719 | 18,376,371 | |||||||||||||||
Net increase (decrease) | (26,540 | ) | $ | (464,912 | ) | 3,918,798 | $ | 58,296,419 |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 181,900 | $ | 2,416,147 | 2,755 | $ | 33,990 | |||||||||||||
Shares repurchased | (693,920 | ) | (9,056,688 | ) | (30,249 | ) | (379,121 | ) | |||||||||||
Dividends reinvested | 82,561 | 1,047,748 | 2,683 | 33,563 | |||||||||||||||
Net decrease | (429,459 | ) | $ | (5,592,793 | ) | (24,811 | ) | $ | (311,568 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 254,069 | $ | 3,355,213 | 12,662,088 | $ | 167,105,810 | |||||||||||||
Shares repurchased | (341,845 | ) | (4,454,025 | ) | (12,209,023 | ) | (160,831,716 | ) | |||||||||||
Dividends reinvested | 35,303 | 446,962 | 1,385,385 | 17,511,963 | |||||||||||||||
Net increase (decrease) | (52,473 | ) | $ | (651,850 | ) | 1,838,450 | $ | 23,786,057 |
PACE International Emerging Markets Equity Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 123,262 | $ | 1,571,651 | 3,592 | $ | 44,328 | |||||||||||||
Shares repurchased | (226,329 | ) | (2,875,805 | ) | (30,455 | ) | (357,357 | ) | |||||||||||
Dividends reinvested | 4,158 | 52,505 | — | — | |||||||||||||||
Net decrease | (98,909 | ) | $ | (1,251,649 | ) | (26,863 | ) | $ | (313,029 | ) |
326
PACE Select Advisors Trust
Notes to financial statements
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 46,210 | $ | 587,917 | 10,101,508 | $ | 129,502,924 | |||||||||||||
Shares repurchased | (209,590 | ) | (2,682,375 | ) | (4,318,210 | ) | (55,543,646 | ) | |||||||||||
Dividends reinvested | 5,520 | 70,938 | 151,110 | 1,934,203 | |||||||||||||||
Net increase (decrease) | (157,860 | ) | $ | (2,023,520 | ) | 5,934,408 | $ | 75,893,481 |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 172,306 | $ | 2,281,095 | 10,554 | $ | 127,024 | |||||||||||||
Shares repurchased | (300,660 | ) | (3,875,486 | ) | (35,899 | ) | (427,383 | ) | |||||||||||
Dividends reinvested | 9,393 | 124,180 | — | — | |||||||||||||||
Net decrease | (118,961 | ) | $ | (1,470,211 | ) | (25,345 | ) | $ | (300,359 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 100,939 | $ | 1,350,865 | 12,031,720 | $ | 163,591,330 | |||||||||||||
Shares repurchased | (236,258 | ) | (3,121,985 | ) | (3,548,434 | ) | (46,439,982 | ) | |||||||||||
Dividends reinvested | 10,286 | 138,345 | 128,227 | 1,718,238 | |||||||||||||||
Net increase (decrease) | (125,033 | ) | $ | (1,632,775 | ) | 8,611,513 | $ | 118,869,586 |
PACE Global Real Estate Securities Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 103,095 | $ | 692,811 | 4,337 | $ | 29,972 | |||||||||||||
Shares repurchased | (143,242 | ) | (960,149 | ) | (1,759 | ) | (11,990 | ) | |||||||||||
Dividends reinvested | 13,786 | 88,095 | 380 | 2,423 | |||||||||||||||
Net increase (decrease) | (26,361 | ) | $ | (179,243 | ) | 2,958 | $ | 20,405 |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 3,653 | $ | 24,378 | 4,483,611 | $ | 30,133,852 | |||||||||||||
Shares repurchased | (11,372 | ) | (77,968 | ) | (2,953,321 | ) | (19,954,750 | ) | |||||||||||
Dividends reinvested | 884 | 5,667 | 384,273 | 2,455,504 | |||||||||||||||
Net increase (decrease) | (6,835 | ) | $ | (47,923 | ) | 1,914,563 | $ | 12,634,606 |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 151,236 | $ | 1,017,300 | 8,230 | $ | 50,989 | |||||||||||||
Shares repurchased | (179,874 | ) | (1,181,148 | ) | (3,635 | ) | (23,072 | ) | |||||||||||
Dividends reinvested | 31,185 | 194,597 | 1,057 | 6,586 | |||||||||||||||
Net increase | 2,547 | $ | 30,749 | 5,652 | $ | 34,503 |
327
PACE Select Advisors Trust
Notes to financial statements
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 13,561 | $ | 86,525 | 5,689,380 | $ | 37,876,951 | |||||||||||||
Shares repurchased | (5,222 | ) | (35,371 | ) | (6,456,188 | ) | (43,823,375 | ) | |||||||||||
Dividends reinvested | 1,854 | 11,611 | 767,381 | 4,788,456 | |||||||||||||||
Net increase (decrease) | 10,193 | $ | 62,765 | 573 | $ | (1,157,968 | ) |
PACE Alternative Strategies Investments
For the year ended July 31, 2014:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 2,877,286 | $ | 30,020,983 | 187,052 | $ | 1,916,702 | |||||||||||||
Shares repurchased | (947,453 | ) | (9,905,664 | ) | (63,673 | ) | (648,893 | ) | |||||||||||
Dividends reinvested | 90,328 | 934,895 | 5,488 | 55,321 | |||||||||||||||
Net increase | 2,020,161 | $ | 21,050,214 | 128,867 | $ | 1,323,130 |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 350,112 | $ | 3,704,129 | 15,396,469 | $ | 161,452,259 | |||||||||||||
Shares repurchased | (189,146 | ) | (1,990,288 | ) | (7,260,819 | ) | (76,085,114 | ) | |||||||||||
Dividends reinvested | 5,742 | 59,887 | 1,015,142 | 10,557,469 | |||||||||||||||
Net increase | 166,708 | $ | 1,773,728 | 9,150,792 | $ | 95,924,614 |
For the year ended July 31, 2013:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 2,070,414 | $ | 20,789,043 | 59,740 | $ | 575,821 | |||||||||||||
Shares repurchased | (1,491,744 | ) | (14,705,573 | ) | (120,702 | ) | (1,161,430 | ) | |||||||||||
Dividends reinvested | 17,054 | 164,739 | — | — | |||||||||||||||
Net increase (decrease) | 595,724 | $ | 6,248,209 | (60,962 | ) | $ | (585,609 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 168,552 | $ | 1,695,712 | 11,681,050 | $ | 117,031,456 | |||||||||||||
Shares repurchased | (81,354 | ) | (810,749 | ) | (11,771,143 | ) | (118,505,275 | ) | |||||||||||
Dividends reinvested | 1,292 | 12,562 | 332,825 | 3,228,403 | |||||||||||||||
Net increase | 88,490 | $ | 897,525 | 242,732 | $ | 1,754,584 |
Redemption fees
Each class of each series of the Trust, with the exception of PACE Money Market Investments, will impose a 1% redemption fee on shares sold or exchanged within 90 days of their purchase date, subject to limited exemptions as noted in the prospectuses. This amount is paid to the applicable Portfolio. The redemption fees retained by the Portfolios are disclosed in the Statement of changes in net assets. For the year ended July 31, 2014, redemption fees represent less than $0.005 per share.
Federal tax status
Each of the Portfolios intends to distribute substantially all of its income and to comply with the other requirements of the Internal Revenue Code applicable to regulated investment companies. Accordingly, no provision for federal income taxes is required. In addition, by distributing during each calendar year substantially all of its net investment
328
PACE Select Advisors Trust
Notes to financial statements
income, net realized capital gains and certain other amounts, if any, each Portfolio intends not to be subject to a federal excise tax.
The tax character of distributions paid during the fiscal years ended July 31, 2014 and July 31, 2013 were as follows:
2014 | 2013 | ||||||||||||||||||||||||||||||||||
Portfolio | Tax- exempt income | Ordinary income | Long-term realized capital gains | Return of capital | Tax- exempt income | Ordinary income | Long-term realized capital gains | Return of capital | |||||||||||||||||||||||||||
PACE Money Market Investments | $ | — | $ | 27,996 | $ | — | $ | — | $ | — | $ | 32,607 | $ | — | $ | — | |||||||||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | — | 13,090,265 | — | — | — | 25,224,699 | 1,369,490 | — | |||||||||||||||||||||||||||
PACE Intermediate Fixed Income Investments | — | 6,444,331 | — | — | — | 5,342,621 | — | — | |||||||||||||||||||||||||||
PACE Strategic Fixed Income Investments | — | 20,937,737 | 23,185,807 | 6,704,242 | — | 47,208,681 | 1,011,141 | — | |||||||||||||||||||||||||||
PACE Municipal Fixed Income Investments | 10,689,173 | 20,458 | 2,811,969 | — | 8,685,325 | 9,701 | 1,415,338 | — | |||||||||||||||||||||||||||
PACE International Fixed Income Investments | — | 7,509,147 | — | 7,875,061 | — | 7,683,836 | — | 7,941,160 | |||||||||||||||||||||||||||
PACE High Yield Investments | — | 23,592,261 | — | — | — | 21,801,123 | 3,454,959 | 431,608 | |||||||||||||||||||||||||||
PACE Large Co Value Equity Investments | — | 14,548,344 | 16,527,749 | — | — | 17,942,761 | — | — | |||||||||||||||||||||||||||
PACE Large Co Growth Equity Investments | — | 14,515,044 | 98,135,891 | — | — | 5,822,180 | — | — | |||||||||||||||||||||||||||
PACE Small/Medium Co Value Equity Investments | — | 13,484,554 | 48,887,589 | — | — | 2,773,046 | — | — | |||||||||||||||||||||||||||
PACE Small/Medium Co Growth Equity Investments | — | 10,730,601 | 54,510,822 | — | — | 3,770,117 | 3,529,940 | — | |||||||||||||||||||||||||||
PACE International Equity Investments | — | 20,719,035 | — | — | — | 19,930,984 | — | — | |||||||||||||||||||||||||||
PACE International Emerging Markets Equity Investments | — | 2,143,512 | — | — | — | 2,060,116 | — | — | |||||||||||||||||||||||||||
PACE Global Real Estate Securities Investments | — | 2,673,401 | — | — | — | 5,215,238 | — | — | |||||||||||||||||||||||||||
PACE Alternative Strategies Investments | — | 12,298,860 | — | — | — | 3,532,294 | — | — |
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PACE Select Advisors Trust
Notes to financial statements
At July 31, 2014, the components of accumulated earnings (deficit) on a tax basis were as follows:
Undistributed ordinary income | Undistributed long-term capital gains | Accumulated realized capital and other losses | Unrealized appreciation (depreciation) | Total | |||||||||||||||||||
PACE Money Market Investments | $ | — | $ | — | $ | (215 | ) | $ | — | $ | (215 | ) | |||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | 330,425 | — | (18,332,094 | ) | 3,453,875 | (14,547,794 | ) | ||||||||||||||||
PACE Intermediate Fixed Income Investments | 718,039 | 415,022 | (962 | ) | 2,085,556 | 3,217,655 | |||||||||||||||||
PACE Strategic Fixed Income Investments | — | — | (25,959,087 | ) | 26,178,939 | 219,852 | |||||||||||||||||
PACE Municipal Fixed Income Investments | — | — | (804,153 | ) | 17,982,091 | 17,177,938 | |||||||||||||||||
PACE International Fixed Income Investments | — | — | (29,039,934 | ) | 11,694,524 | (17,345,410 | ) | ||||||||||||||||
PACE High Yield Investments | 239,635 | — | (1,977,398 | ) | 25,499,521 | 23,761,758 | |||||||||||||||||
PACE Large Co Value Equity Investments | 19,483,457 | 118,818,949 | (329,528 | ) | 197,455,695 | 335,428,573 | |||||||||||||||||
PACE Large Co Growth Equity Investments | 18,702,634 | 83,860,572 | — | 352,467,379 | 455,030,585 | ||||||||||||||||||
PACE Small/Medium Co Value Equity Investments | 22,543,813 | 37,704,652 | — | 55,679,870 | 115,928,335 | ||||||||||||||||||
PACE Small/Medium Co Growth Equity Investments | 10,967,028 | 62,304,140 | — | 69,455,012 | 142,726,180 | ||||||||||||||||||
PACE International Equity Investments | 23,642,436 | — | (148,263,098 | ) | 74,445,903 | (50,174,759 | ) | ||||||||||||||||
PACE International Emerging Markets Equity Investments | 5,371,198 | — | (18,835,221 | ) | 28,863,138 | 15,399,115 | |||||||||||||||||
PACE Global Real Estate Securities Investments | 2,937,723 | — | (20,709,826 | ) | 16,097,263 | (1,674,840 | ) | ||||||||||||||||
PACE Alternative Strategies Investments | — | — | (52,387,884 | ) | 22,364,038 | (30,023,846 | ) |
Under the Regulated Investment Company Modernization Act of 2010 (the "Act"), net capital losses recognized by the Portfolios after December 22, 2010, may be carried forward indefinitely, and retain their character as short-term and/or long-term losses. The Act requires that post-enactment net capital losses be used before pre-enactment net capital losses. Post enactment losses incurred that will be carried forward indefinitely are as follows:
Short-term | Long-term | Total | |||||||||||||
PACE Money Market Investments | $ | 98 | $ | — | $ | 98 | |||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | 8,197,697 | 10,134,397 | 18,332,094 | ||||||||||||
PACE Strategic Fixed Income Investments | 25,959,087 | — | 25,959,087 | ||||||||||||
PACE High Yield Investments | 1,387,675 | 589,723 | 1,977,398 | ||||||||||||
PACE International Fixed Income Investments | 4,471,195 | — | 4,471,195 | ||||||||||||
PACE International Emerging Markets Equity Investments | 15,197,253 | 3,637,968 | 18,835,221 |
330
PACE Select Advisors Trust
Notes to financial statements
At July 31, 2014, the following Portfolios had pre-enactment capital loss carryforwards for federal income tax purposes available to offset future capital gains through the indicated expiration dates.
July 31, 2015 | July 31, 2016 | July 31, 2017 | July 31, 2018 | July 31, 2019 | Total | ||||||||||||||||||||||
PACE Money Market Investments | $ | — | $ | — | $ | — | $ | 94 | $ | 23 | $ | 117 | |||||||||||||||
PACE International Fixed Income Investments | 1,422,528 | 2,354,563 | 765,140 | 7,784,695 | — | 12,326,926 | |||||||||||||||||||||
PACE International Equity Investments | — | — | — | 148,263,098 | — | 148,263,098 | |||||||||||||||||||||
PACE Global Real Estate Securities Investments | — | — | — | 20,709,826 | — | 20,709,826 | |||||||||||||||||||||
PACE Alternative Strategies Investments | — | — | — | 46,571,526 | — | 46,571,526 |
During the fiscal year, the following Portfolios utilized capital loss carryforwards to offset current year realized gains:
Capital loss carryforwards utilized | |||||||
PACE Large Co Value Equity Investments | $ | 41,391,491 | |||||
PACE International Equity Investments | 117,812,220 | ||||||
PACE International Emerging Markets Equity Investments | 1,081,680 | ||||||
PACE Global Real Estate Securities Investments | 6,932,597 | ||||||
PACE Alternative Strategies Investments | 36,371,981 |
Qualified late year losses are deemed to arise on the first business day of a Portfolio's next taxable year. For the year ended July 31, 2014, the following Portfolios incurred, and elected to defer losses of the following:
Late year ordinary | Post-October capital losses | ||||||||||||||
losses | Short-term | Long-term | |||||||||||||
PACE Municipal Fixed Income Investments | — | $ | 804,153 | — | |||||||||||
PACE Alternative Strategies Investments | $ | 5,651,336 | — | — |
331
PACE Select Advisors Trust
Notes to financial statements
At July 31, 2014, the effect of permanent "book/tax" reclassification resulted in increases and decreases to components of each Portfolio's net assets as follows:
Accumulated (distributions in excess of) net investment income | Accumulated net realized gain/loss | Beneficial interest | |||||||||||||
PACE Money Market Investments | $ | — | $ | 937 | $ | (937 | ) | ||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | 5,375,702 | (5,375,702 | ) | — | |||||||||||
PACE Intermediate Fixed Income Investments | 342,373 | (342,373 | ) | — | |||||||||||
PACE Strategic Fixed Income Investments | (12,334,539 | ) | 12,334,539 | — | |||||||||||
PACE Municipal Fixed Income Investments | 665 | 1 | (666 | ) | |||||||||||
PACE International Fixed Income Investments | (6,145,094 | ) | 6,145,094 | — | |||||||||||
PACE High Yield Investments | 391,859 | (391,859 | ) | — | |||||||||||
PACE Large Co Value Equity Investments | (84,352 | ) | 84,352 | — | |||||||||||
PACE Large Co Growth Equity Investments | (231,731 | ) | 231,731 | — | |||||||||||
PACE Small/Medium Co Value Equity Investments | (271,895 | ) | 271,895 | — | |||||||||||
PACE Small/Medium Co Growth Equity Investments | 3,589,228 | (3,589,228 | ) | — | |||||||||||
PACE International Equity Investments | 2,686,597 | (2,686,597 | ) | — | |||||||||||
PACE International Emerging Markets Equity Investments | (861,229 | ) | 861,229 | — | |||||||||||
PACE Global Real Estate Securities Investments | 1,037,990 | (1,037,990 | ) | — | |||||||||||
PACE Alternative Strategies Investments | (884,620 | ) | 6,106,229 | (5,221,609 | ) |
These differences are primarily due to tax treatment of foreign currency and futures transactions, net operating losses, paydown gains and losses, distributions in excess of net investment income, disposition of PFIC investments, swap adjustments, REIT adjustments, tax character of distributions and adjustments for certain debt obligations.
ASC 740-10 "Income Taxes—Overall" sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken. The Portfolios have analyzed and concluded as of July 31, 2014 that, other than PACE International Emerging Markets Equity Investments, there are no significant uncertain tax positions taken or expected to be taken that would require recognition in the financial statements. At July 31, 2014, PACE International Emerging Markets Equity Investments has recognized a liability of $415,376 related to uncertain tax positions of which $185,389 is included in payable for foreign withholding taxes and foreign capital gains taxes and $229,987 is included in deferred foreign capital gain taxes payable in the Statement of assets and liabilities. The Portfolios recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of operations. During the year ended July 31, 2014, the Portfolios did not incur any interest or penalties. Capital gains realized by the Portfolios on securities issued in or by certain foreign countries may be subject to capital gains tax imposed by those countries.
Each of the tax years in the four year period ended July 31, 2014, remains subject to examination by the Internal Revenue Service and state taxing authorities.
Regulatory developments
On July 23, 2014, the SEC amended certain regulations that govern money market funds registered under the 1940 Act, as amended. The most significant changes will not become mandatory until October 2016. The most significant change with respect to general "prime" money market funds is a requirement that institutional prime money market funds move to a floating net asset value and change an accounting methodology that had been used for decades. In addition, all such funds will be subject to potential redemption fees/gates under limited circumstances prescribed in the new regulations. Retail prime money market funds will continue to be permitted to
332
PACE Select Advisors Trust
Notes to financial statements
transact at a stable $1.00 share price; however, "retail" is narrowly defined. UBS Global AM is currently evaluating the potential impact of these changes on PACE Money Market Investments and expects to update shareholders further in advance of the October 2016 deadline.
Subsequent event
Effective August 1, 2014, the board approved and updated the investment management and administration contract ("Management Contract") with UBS Global AM. In accordance with the Management Contract, each Portfolio listed below will pay UBS Global AM investment management and administration fees, which will be accrued daily and paid monthly, in accordance with the following schedule:
Portfolio | Annual rate as a percentage of each Portfolio's average daily net assets | ||||||
PACE Strategic Fixed Income Investments | 0.600% up to $500 million 0.550% above $500 million up to $1 billion 0.525% above $1 billion up to $1.25 billion 0.500% above $1.25 billion up to $1.5 billion 0.475% above $1.5 billion | ||||||
PACE International Fixed Income Investments | 0.700% up to $500 million 0.675% above $500 million up to $1 billion 0.65% above $1 billion |
333
PACE Select Advisors Trust
Report of Ernst & Young LLP, independent registered public accounting firm
The Board of Trustees and Shareholders of
PACE Select Advisors Trust
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of PACE Select Advisors Trust (comprising, respectively, PACE Money Market Investments, PACE Mortgage-Backed Securities Fixed Income Investments (formerly, PACE Government Securities Fixed Income Investments), PACE Intermediate Fixed Income Investments, PACE Strategic Fixed Income Investments, PACE Municipal Fixed Income Investments, PACE International Fixed Income Investments, PACE High Yield Investments, PACE Large Co Value Equity Investments, PACE Large Co Growth Equity Investments, PACE Small/Medium Co Value Equity Investments, PACE Small/Medium Co Growth Equity Investments, PACE International Equity Investments, PACE International Emerging Markets Equity Investments, PACE Global Real Estate Securities Investments and PACE Alternative Strategies Investments, collectively the "Trust") as of July 31, 2014, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Trust's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2014, by correspondence with the custodian and others, or by other appropriate auditing procedures where replies from others were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective series constituting PACE Select Advisors Trust at July 31, 2014, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with US generally accepted accounting principles.
New York, New York
September 29, 2014
334
PACE Select Advisors Trust
Tax information (unaudited)
We are required by Subchapter M of the Internal Revenue Code of 1986, as amended, to advise you in writing as to the federal tax status of distributions received by shareholders during the fiscal year. Accordingly, the percentage of ordinary dividends paid that qualify for the dividends received deduction for corporate shareholders and the amount of foreign tax credit to be passed through to shareholders are as follows:
Portfolio | Dividends received deduction | Foreign tax credit | |||||||||
PACE Large Co Value Equity Investments | 96.86 | % | — | ||||||||
PACE Large Co Growth Equity Investments | 58.29 | — | |||||||||
PACE Small/Medium Co Value Equity Investments | 24.84 | — | |||||||||
PACE Small/Medium Co Growth Equity Investments | 18.81 | ||||||||||
PACE International Equity Investments | — | $ | 1,628,147 | ||||||||
PACE International Emerging Markets Equity Investments | — | 1,673,423 | |||||||||
PACE Global Real Estate Securities Investments | 1.29 | — | |||||||||
PACE Alternative Strategies Investments | 9.67 | — |
Also, for the fiscal year ended July 31, 2014, the foreign source income for information reporting purposes for PACE International Equity Investments and PACE International Emerging Markets Equity Investments is $30,636,394 and $11,515,106, respectively.
For the period ended July 31, 2014, certain dividends paid by the Portfolios below may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. Of the distributions paid during the period, the amounts below represent the maximum amount that may be considered qualified dividend income.
Portfolio | Maximum amount considered qualified dividend income | ||||||
PACE Large Co Value Equity Investments | $ | 14,548,344 | |||||
PACE Large Co Growth Equity Investments | 14,515,044 | ||||||
PACE Small/Medium Co Value Equity Investments | 5,338,131 | ||||||
PACE Small/Medium Co Growth Equity Investments | 1,735,169 | ||||||
PACE International Equity Investments | 22,347,182 | ||||||
PACE International Emerging Markets Equity Investments | 3,816,935 | ||||||
PACE Global Real Estate Securities Investments | 233,162 | ||||||
PACE Alternative Strategies Investments | 3,561,964 |
Dividends received by tax-exempt recipients (e.g., IRAs and Keoghs) need not be reported as taxable income. Some retirement trusts (e.g., corporate, Keogh and 403(b)(7) plans) may need this information for their annual information reporting.
Shareholders should not use the above information to prepare their tax returns. Since each Portfolio's fiscal year is not the calendar year, another notification will be sent with respect to calendar year 2014. Such notification, which will reflect the amount to be used by calendar year taxpayers on their federal income tax returns, will be made in conjunction with Form 1099 DIV and will be mailed in February 2015. Shareholders are advised to consult their own tax advisers with respect to the tax consequences of their investment in each of the Portfolios.
335
PACE Select Advisors Trust
General information (unaudited)
Monthly and quarterly portfolio holdings disclosure
Each Portfolio will file its complete schedule of portfolio holdings with the Securities and Exchange Commission ("SEC") for the first and third quarters of each fiscal year on Form N-Q. The Portfolios' Forms N-Q are available on the SEC's Web site at http://www.sec.gov. The Portfolios' Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC 0330. Additionally, you may obtain copies of Forms N-Q from the Portfolios upon request by calling 1-800-647 1568.
In addition, PACE Money Market Investments discloses, on a monthly basis: (a) a complete schedule of its portfolio holdings; and (b) information regarding its weighted average maturity and weighted average life on UBS's Web site at the following internet address: www.ubs.com/usmoneymarketfundsholdings. In addition, at this location, you will find a link to more detailed Portfolio information appearing in filings with the SEC on Form N-MFP.
Proxy voting policies, procedures and record
You may obtain a description of each Portfolio's (1) proxy voting policies, (2) proxy voting procedures and (3) information regarding how a Portfolio voted any proxies related to portfolio securities during the most recent 12-month period ended June 30 for which an SEC filing has been made, without charge, upon request by contacting a Portfolio directly at 1-800-647 1568, online on a Portfolio's Web site: www.ubs.com/ubsglobalam-proxy, or on the EDGAR Database on the SEC's Web site (http://www.sec.gov).
336
PACE Select Advisors Trust
Board approvals of sub-advisory agreements (unaudited)
April 2014 Board Meeting
Jackson Square Partners, LLC
Trustees' considerations
Background—At a meeting of the board of PACE Select Advisors Trust (the "Trust") on April 10, 2014, the members of the board, including the trustees who are not "interested persons" of the Trust (the "Independent Trustees") as defined in the Investment Company Act of 1940, as amended, considered and approved the proposed sub-advisory agreement between UBS Global Asset Management (Americas) Inc. ("UBS Global AM") and Jackson Square Partners, LLC ("JSP") (the "JSP Sub-Advisory Agreement") with respect to PACE Large Co Growth Equity Investments (the "Portfolio"). Management explained to the board that, as of February 18, 2014, Delaware Investments, a sub-advisor to the Portfolio, and its Focus Growth team had entered into an agreement to create a new joint venture: Jackson Square Partners, LLC. Management stated that the Focus Growth team will have a majority ownership (slightly more than 50%) in the new firm, and Delaware Investments will have the remaining ownership. The transaction was expected to close in late April 2014. Management further stated that because the completion of the transaction establishing the new joint venture, with the related change in ownership, would constitute an "assignment," the current sub-advisory agreement with Delaware Investments would terminate automatically upon consummation of the transaction and, if approved by the board, the JSP Sub-Advisory Agreement would then become effective. The board recognized its familiarity with UBS Global AM and the investment management and sub-advisory agreements for this and the other portfolios of the Trust, including the extensive materials the board had previously reviewed in connection with the annual reconsideration of the contracts for the portfolios. The board also received a memorandum from UBS Global AM discussing UBS Global AM's reasons for recommending JSP as a sub-advisor to the Portfolio.
In its consideration of the approval of the JSP Sub-Advisory Agreement, the board considered the following factors:
Nature, extent and quality of the services under the JSP Sub-Advisory Agreement—The board's evaluation of the services to be provided by JSP to the Portfolio took into account the board's knowledge and familiarity gained as board members of funds in the UBS New York fund complex, including the Trust and its portfolios. The board considered management's reasons for recommending the appointment of JSP as a sub-advisor to the Portfolio, including that the Focus Growth team at Delaware Investments currently manages a portion of the Portfolio's assets and would continue to manage those assets in a materially similar manner. UBS Global AM noted that all members of the Focus Growth team are expected to become part of the new joint venture, JSP. Management noted that it did not expect the investment team, philosophy or process to be affected by this change in ownership structure. The board also received materials from JSP discussing the implications of the transaction. In considering the approval of the JSP Sub-Advisory Agreement, the board was able to draw on its knowledge of the Trust, its portfolios and UBS Global AM. The board concluded that, overall, it was satisfied with the nature, extent and quality of services expected to be provided to the Portfolio under the proposed JSP Sub-Advisory Agreement.
Sub-Advisory fee—The board reviewed and considered the proposed contractual sub-advisory fee to be payable by UBS Global AM to JSP in light of the nature, extent and quality of the sub-advisory services anticipated to be provided by JSP. The board noted that JSP has agreed to the same fee schedule as that currently in place for Delaware Investments, and that the proposed contractual sub-advisory fee was generally in line with the sub-advisory fees paid to the Portfolio's other current sub-advisors. The board determined that the proposed sub-advisory fee was reasonable in light of the nature, extent and quality of the services proposed to be provided to the Portfolio under the JSP Sub-Advisory Agreement.
337
PACE Select Advisors Trust
Board approvals of sub-advisory agreements (unaudited)
Fund performance—The board received and considered composite performance information provided by JSP. The board also noted that UBS Global AM believes that the investment team will continue to perform at its current level after the transaction. The board concluded that, overall, it was satisfied with the performance of the Portfolio.
Advisor profitability—Profitability of JSP or its affiliates or UBS Global AM or its affiliates in providing services to the Portfolio was not a significant factor considered by the board, as the sub-advisory fee would be paid by UBS Global AM out of the management fee paid to it by the Portfolio, and not by the Portfolio.
Economies of scale—The board noted that, as the sub-advisory fee for the Portfolio would be paid by UBS Global AM, not by the Portfolio, consideration of economies of scale with respect specifically to the sub-advisory fee was not relevant.
Other benefits to JSP—The board was informed by management that JSP's relationship with the Portfolio would be limited to its provision of sub-advisory services to the Portfolio and that therefore management believed that JSP would not receive tangible ancillary benefits as a result of its relationship with the Portfolio, with the exception of possible benefits from soft dollars (e.g., research credits related to transaction commissions) for the Portfolio (which would also potentially benefit the Portfolio). The board recognized that JSP could receive intangible benefits from its association with the Portfolio, such as increased name recognition or publicity from being selected as a sub-advisor to the Portfolio after an extensive review process. Similarly, the Portfolio could benefit from having a sub-advisor with an established or well-regarded reputation.
In light of all of the foregoing, the board approved the proposed JSP Sub-Advisory Agreement for the Portfolio. No single factor reviewed by the board was identified by the board as the principal factor in determining whether to approve the JSP Sub-Advisory Agreement. The Independent Trustees were advised by separate independent legal counsel throughout the process.
338
PACE Select Advisors Trust
Board approvals of sub-advisory agreements (unaudited)
May 2014 Board Meeting
Babson Capital Management LLC
Trustees' considerations
Background—At a meeting of the board of PACE Select Advisors Trust (the "Trust") on May 20-21, 2014, the members of the board, including the trustees who are not "interested persons" of the Trust (the "Independent Trustees") as defined in the Investment Company Act of 1940, as amended, considered and approved the proposed sub-advisory agreement between UBS Global Asset Management (Americas) Inc. ("UBS Global AM") and Babson Capital Management LLC ("Babson") (the "Sub-Advisory Agreement") with respect to PACE Intermediate Fixed Income Investments (the "Portfolio"). The Board recognized its familiarity with UBS Global AM and the investment management and sub-advisory agreements for this and the other portfolios of the Trust, including the extensive materials the board had previously reviewed in connection with the annual reconsideration of the contracts for the portfolios. The board also received a memorandum from UBS Global AM discussing UBS Global AM's reasons for recommending Babson as a sub-advisor to the Portfolio.
In its consideration of the approval of the Sub-Advisory Agreement, the board considered the following factors:
Nature, extent and quality of the services under the Sub-Advisory Agreement—The board's evaluation of the services to be provided by Babson to the Portfolio took into account the board's knowledge and familiarity gained as board members of funds in the UBS New York fund complex, including the Trust and its portfolios. The board considered management's reasons for recommending the appointment of Babson as a sub-advisor to the Portfolio, including (1) its belief that Babson's Active Short Duration strategy would benefit the Portfolio by, among other reasons, further diversifying the Portfolio (it was also noted that the Portfolio had a single sub-advisor before retaining Babson), (2) reducing sensitivity to possible rising interest rates (i.e., reducing portfolio duration risk), and (3) introducing to the Portfolio an active short duration strategy, improving the Portfolio's prospective "downside capture." The board also received materials from Babson discussing its investment strategy. In considering the approval of the Sub-Advisory Agreement, the board was able to draw on its knowledge of the Trust, its portfolios and UBS Global AM. The board concluded that, overall, it was satisfied with the nature, extent and quality of services expected to be provided to the Portfolio under the proposed Sub-Advisory Agreement.
Sub Advisory fee—The board reviewed and considered the proposed contractual sub-advisory fee to be payable by UBS Global AM to Babson in light of the nature, extent and quality of the sub-advisory services anticipated to be provided by Babson. The board noted that although the proposed contractual sub-advisory fee would result in a net increase in the sub-advisory fees paid by UBS Global AM with respect to the Portfolio, the net increase in the sub-advisory fees would have no impact on the fees paid by the Portfolio's investors to UBS Global AM. The board determined that the proposed sub-advisory fee was reasonable in light of the nature, extent and quality of the services proposed to be provided to the Portfolio under the Sub-Advisory Agreement.
Fund performance—The board received and considered composite past performance information provided by Babson. The board also noted that, as Babson would be a new sub-advisor to the Portfolio, the current performance of the Portfolio was not a significant factor in the consideration of the approval of the Sub-Advisory Agreement.
Advisor profitability—Profitability of Babson or its affiliates or UBS Global AM or its affiliates in providing services to the Portfolio was not a significant factor considered by the board, as the sub-advisory fee would be paid by UBS Global AM out of the management fee paid to it by the Portfolio, and not by the Portfolio.
339
PACE Select Advisors Trust
Board approvals of sub-advisory agreements (unaudited)
Economies of scale—The board noted that, as the sub-advisory fee for the Portfolio would be paid by UBS Global AM, not by the Portfolio, consideration of economies of scale with respect specifically to the sub-advisory fee was not highly relevant.
Other benefits to Babson—The board was informed by management that Babson's relationship with the Portfolio would be limited to its provision of sub-advisory services to the Portfolio and that, therefore, management believed that Babson would not receive tangible ancillary benefits as a result of its relationship with the Portfolio, with the exception of possible benefits from soft dollars (e.g., research credits related to transaction commissions) for the Portfolio (which would also potentially benefit the Portfolio). The board recognized that Babson could receive intangible benefits from its association with the Portfolio, such as increased name recognition or publicity from being selected as sub-advisor to the Portfolio after an extensive review process. Similarly, the Portfolio could benefit from having a sub-advisor with an established or well-regarded reputation.
In light of all of the foregoing, the board approved the proposed Sub-Advisory Agreement for the Portfolio. No single factor reviewed by the board was identified by the board as the principal factor in determining whether to approve the Sub-Advisory Agreement. The Independent Trustees were advised by separate independent legal counsel throughout the process.
340
PACE Select Advisors Trust
Board approvals of sub-advisory agreements (unaudited)
AQR Capital Management, LLC
Trustees' considerations
Background—At a meeting of the board of PACE Select Advisors Trust (the "Trust") on May 20-21, 2014, the members of the board, including the trustees who are not "interested persons" of the Trust (the "Independent Trustees") as defined in the Investment Company Act of 1940, as amended, considered and approved the proposed sub-advisory agreement between UBS Global Asset Management (Americas) Inc. ("UBS Global AM") and AQR Capital Management, LLC ("AQR") (the "Sub-Advisory Agreement") with respect to PACE Alternative Strategies Investments (the "Portfolio"). The board recognized its familiarity with UBS Global AM and the investment management and sub-advisory agreements for this and the other portfolios of the Trust, including the extensive materials the board had previously reviewed in connection with the annual reconsideration of the contracts for the portfolios. The board also received a memorandum from UBS Global AM discussing UBS Global AM's reasons for recommending AQR as a sub-advisor to the Portfolio.
In its consideration of the approval of the Sub-Advisory Agreement, the board considered the following factors:
Nature, extent and quality of the services under the Sub-Advisory Agreement—The board's evaluation of the services to be provided by AQR to the Portfolio took into account the board's knowledge and familiarity gained as board members of funds in the UBS New York fund complex, including the Trust and its portfolios. It reviewed the purposes and investment objective of the Portfolio, and UBS Global AM's overall plan to meet the Portfolio's stated purposes and objective. The board considered management's reasons for recommending the appointment of AQR as a sub-advisor to the Portfolio, including its "due diligence" concerning AQR and its belief that AQR's managed futures ex-commodities strategy would benefit the Portfolio by, among other reasons, (1) further diversifying the Portfolio, reducing the Portfolio's overall correlation with the broad equity market (i.e., reducing systemic risk) and (2) improving the Portfolio's prospective "downside capture" by introducing to the Portfolio a managed futures strategy and reducing the Portfolio's allocation to a strategy employed by another sub-advisor. The board also received materials from AQR discussing its investment strategy. In considering the approval of the Sub-Advisory Agreement, the board was able to draw on its knowledge of the Trust, its portfolios and UBS Global AM. The board concluded that, overall, it was satisfied with the nature, extent and quality of services expected to be provided to the Portfolio under the proposed Sub-Advisory Agreement.
Sub-advisory fee—The board reviewed and considered the proposed contractual sub-advisory fee to be payable by UBS Global AM to AQR in light of the nature, extent and quality of the sub-advisory services anticipated to be provided by AQR. The board noted that although the proposed contractual sub-advisory fee would result in a net increase in the sub-advisory fees paid by UBS Global AM with respect to the Portfolio, the net increase in the sub-advisory fees would have no impact on the fees paid by the Portfolio's investors to UBS Global AM. The board determined that the proposed sub-advisory fee was reasonable in light of the nature, extent and quality of the services proposed to be provided to the Portfolio under the Sub-Advisory Agreement.
Fund performance—The board received and considered composite past performance information provided by AQR. The board also noted that, as AQR would be a new sub-advisor to the Portfolio, the current performance of the Portfolio was not a significant factor in the consideration of the approval of the Sub-Advisory Agreement.
Advisor profitability—Profitability of AQR or its affiliates or UBS Global AM or its affiliates in providing services to the Portfolio was not a significant factor considered by the board, as the sub-advisory fee would be paid by UBS Global AM out of the management fee paid to it by the Portfolio, and not by the Portfolio.
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Board approvals of sub-advisory agreements (unaudited)
Economies of scale—The board noted that, as the sub-advisory fee for the Portfolio would be paid by UBS Global AM, not by the Portfolio, consideration of economies of scale with respect specifically to the sub-advisory fee was not highly relevant.
Other benefits to AQR—The board was informed by management that AQR's relationship with the Portfolio would be limited to its provision of sub-advisory services to the Portfolio and that therefore management believed that AQR would not receive tangible ancillary benefits as a result of its relationship with the Portfolio, with the exception of possible benefits from soft dollars (e.g., research credits related to transaction commissions) for the Portfolio (which would also potentially benefit the Portfolio). The board recognized that AQR could receive intangible benefits from its association with the Portfolio, such as increased name recognition or publicity from being selected as a sub-advisor to the Portfolio after an extensive review process. Similarly, the Portfolio could benefit from having a sub-advisor with an established or well-regarded reputation.
In light of all of the foregoing, the board approved the proposed Sub-Advisory Agreement for the Portfolio. No single factor reviewed by the board was identified by the board as the principal factor in determining whether to approve the Sub-Advisory Agreement. The Independent Trustees were advised by separate independent legal counsel throughout the process.
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PACE Select Advisors Trust
Board approvals of sub-advisory agreements (unaudited)
Robeco Investment Management, Inc.
Trustees' considerations
Background—At a meeting of the board of PACE Select Advisors Trust (the "Trust") on May 20-21, 2014, the members of the board, including the trustees who are not "interested persons" of the Trust (the "Independent Trustees") as defined in the Investment Company Act of 1940, as amended, considered and approved the proposed sub-advisory agreement between UBS Global Asset Management (Americas) Inc. ("UBS Global AM") and Robeco Investment Management, Inc. ("Robeco") (the "Sub-Advisory Agreement") with respect to PACE Large Co Value Equity Investments (the "Portfolio"). Management explained to the board that it was proposing to replace Robeco's long-only strategy with Robeco's 130/30 "long-short" strategy ("130/30 strategy"), which would require approval of the Sub-Advisory Agreement. The board recognized its familiarity with UBS Global AM and the investment management and sub-advisory agreements for this and the other portfolios of the Trust, including the extensive materials the board had previously reviewed in connection with the annual reconsideration of the contracts for the portfolios. The board also received a memorandum from UBS Global AM discussing UBS Global AM's reasons for recommending Robeco as a sub-advisor to the Portfolio.
In its consideration of the approval of the Sub-Advisory Agreement, the board reviewed the following factors:
Nature, extent and quality of the services under the Sub-Advisory Agreement—The board's evaluation of the services to be provided by Robeco, under the new 130/30 strategy, to the Portfolio took into account the board's knowledge and familiarity gained as board members of funds in the UBS New York fund complex, including the Trust and its portfolios. The board considered management's reasons for recommending the appointment of Robeco as a sub-advisor to the Portfolio, including its belief that Robeco's 130/30 strategy, with its greater flexibility, would further enhance the downside characteristics of the Portfolio and further improve its risk/return profile. Management noted that Robeco is one of the few fundamentally driven active managers which has developed a successful track record in managing a 130/30 strategy. The board also received materials from Robeco discussing its 130/30 strategy. In considering the approval of the Sub-Advisory Agreement, the board was able to draw on its knowledge of Robeco, the Trust, its portfolios and UBS Global AM. The board concluded that, overall, it was satisfied with the nature, extent and quality of services expected to be provided to the Portfolio under the proposed Sub-Advisory Agreement.
Sub-Advisory fee—The board reviewed and considered the proposed contractual sub-advisory fee to be payable by UBS Global AM to Robeco in light of the nature, extent and quality of the sub-advisory services anticipated to be provided by Robeco. The board noted that although Robeco's fee for its 130/30 strategy is higher than the fee it charged for its long-only strategy (which was currently employed by the Portfolio), the proposed contractual sub-advisory fee for the 130/30 strategy would be paid by UBS Global AM out of the management fee it received from the Portfolio, and not by the Portfolio. In this regard, it was also noted that UBS Global AM was proposing other changes to the allocation of the Portfolio's assets among sub-advisors which would result is a smaller percentage of the portfolio being allocated to Robeco at its new, higher sub-advisory fee rate. The expected net impact of the changes was that while the dollar amount that UBS Global AM would pay to Robeco was expected to decrease (i.e., a higher sub-advisory fee but paid with respect to a smaller portion of the Portfolio), the proposed overall reallocation of assets among all the Portfolio's sub-advisors would result in an overall net increase in the aggregate sub-advisory fees paid by UBS Global AM with respect to the Portfolio. It was also noted that the proposed contractual sub-advisory fee was generally in line with the sub-advisory fees paid to the Portfolio's other current sub-advisors. The board determined that the proposed sub-advisory fee was reasonable in light of the nature, extent and quality of the services proposed to be provided to the Portfolio under the Sub-Advisory Agreement.
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Board approvals of sub-advisory agreements (unaudited)
Fund performance—The board received and considered composite performance information provided by Robeco. The board also noted that, as Robeco would manage its allocation to the Portfolio with a new investment strategy, the current performance of the Portfolio was not a significant factor in the consideration of the approval of the Sub-Advisory Agreement.
Advisor profitability—Profitability of Robeco or its affiliates or UBS Global AM or its affiliates in providing services to the Portfolio was not a significant factor considered by the board, as the sub-advisory fee would be paid by UBS Global AM out of the management fee paid to it by the Portfolio, and not by the Portfolio.
Economies of scale—The board noted that, as the sub-advisory fee for the Portfolio would be paid by UBS Global AM, not by the Portfolio, consideration of economies of scale with respect specifically to the sub-advisory fee was not highly relevant.
Other benefits to Robeco—The board was informed by management that Robeco's relationship with the Portfolio would be limited to its provision of sub-advisory services to the Portfolio and that therefore management believed that Robeco would not receive tangible ancillary benefits as a result of its relationship with the Portfolio, with the exception of possible benefits from soft dollars (e.g., research credits related to transaction commissions) for the Portfolio (which would also potentially benefit the Portfolio). The board recognized that Robeco could receive intangible benefits from its association with the Portfolio, such as increased name recognition or publicity from being selected as a sub-advisor to the Portfolio after an extensive review process. Similarly, the Portfolio could benefit from having a sub-advisor with an established or well-regarded reputation.
In light of all of the foregoing, the board approved the proposed Sub-Advisory Agreement for the Portfolio. No single factor reviewed by the board was identified by the board as the principal factor in determining whether to approve the Sub-Advisory Agreement. The Independent Trustees were advised by separate independent legal counsel throughout the process.
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PACE Select Advisors Trust
Board approvals of investment management and administration agreement and sub-advisory agreements (unaudited)
July 2014 Board Meeting
Background—At a meeting of the board of PACE Select Advisors Trust (the "Trust") on July 15-16, 2014, the members of the board, including the trustees who are not "interested persons," as defined in the Investment Company Act of 1940, as amended, of the Trust (the "Independent Trustees"), considered and approved the continuance of the investment management and administration agreement (the "Investment Management and Administration Agreement") between UBS Global Asset Management (Americas) Inc. ("UBS Global AM") and the Trust, on behalf of each series of the Trust (each a "Portfolio" and together the "Portfolios"), and, for those Portfolios with sub-advisors, the sub-advisory agreements for the Portfolios. (Throughout this discussion, each sub-advisor to a Portfolio is referred to as a "Sub-Advisor" and each sub-advisory agreement is referred to as a "Sub-Advisory Agreement.") In preparing for the meeting, the board members had requested and received extensive information from UBS Global AM to assist them, including information about UBS Global AM and the Portfolios' Sub-Advisors, as well as the management, sub-advisory, administrative and distribution arrangements for the Portfolios. The Independent Trustees discussed the materials initially provided by management on several occasions prior to the scheduled board meeting. The Independent Trustees also met in executive session after management's presentation was completed to review the disclosure that had been made to them at the meeting. At these sessions the Independent Trustees were joined by their independent legal counsel. The Independent Trustees also received a memorandum from their independent legal counsel discussing the duties of board members in considering the approval of management, sub-advisory, administration and distribution agreements.
In its consideration of the approval of the Investment Management and Administration Agreement and the Sub-Advisory Agreements, the board considered the following factors:
Nature, extent and quality of the services under the Investment Management and Administration Agreement and the Sub-Advisory Agreements—The board received and considered information regarding the nature, extent and quality of management services provided to the Portfolios by UBS Global AM and, for those Portfolios with Sub-Advisor(s), sub-advisory services provided by each Sub-Advisor during the past year. The board also considered the nature, extent and quality of administrative, distribution and shareholder services performed by UBS Global AM and its affiliates for the Portfolios and the resources devoted to, and the record of compliance with, each Portfolio's compliance policies and procedures. The board noted that it received information at regular meetings throughout the year regarding the services rendered by UBS Global AM concerning the management of each Portfolio's affairs and UBS Global AM's role in coordinating and overseeing providers of other services to the Portfolios. The board noted the complexity of this process for the Portfolios, given their broad range of investment strategies. The board noted that UBS Global AM provided extensive oversight of the Sub-Advisors for the Portfolios and reported to the board at each regular meeting on the Sub-Advisors' performance and compliance with applicable requirements and made recommendations with respect to Sub-Advisor changes (both in terms of the allocation of Portfolio assets to Sub-Advisors and their hiring and termination) from time to time based on the performance of the Sub-Advisors and other relevant factors. The board's evaluation of the services provided by UBS Global AM and the Sub-Advisors took into account the board's knowledge and familiarity gained as board members of funds in the UBS New York fund complex, including the scope and quality of UBS Global AM's investment management and other capabilities and the quality of its administrative and other services. The board observed that the scope of services provided by UBS Global AM had expanded over time as a result of regulatory and other developments, including maintaining and monitoring its own and the Portfolios' expanded compliance programs. The board also took note of UBS Global AM's responsibilities in hiring and replacing Sub-Advisors, monitoring current Sub-Advisors (including adjusting their Portfolio asset allocations) and coordinating strategies among Sub-Advisors in an effort to continue to optimize implementation and effectuation of the Portfolios investment strategies. It also was noted that the Investment Management and Administration Agreement under consideration had been approved by shareholders at a special meeting of shareholders of the Trust held in 2008.
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PACE Select Advisors Trust
Board approvals of investment management and administration agreement and sub-advisory agreements (unaudited)
The board had available to it the qualifications, backgrounds and responsibilities of the senior personnel at UBS Global AM responsible for the Portfolios and had previously met with and received information regarding the person(s) or portfolio management team from each Sub-Advisor primarily responsible for the day-to-day management of each Portfolio. The board recognized that the Portfolios' senior personnel at UBS Global AM report to the board regularly, and that at each regular meeting the board receives a detailed report from UBS Global AM on each Portfolio's performance and receives more extensive information periodically from each Sub-Advisor. The board also considered, based on its knowledge of UBS Global AM and its affiliates, the financial resources available to UBS Global AM and its parent organization, UBS AG. In that regard, the board received extensive financial information regarding UBS Global AM and noted that it was a wholly owned, indirect subsidiary of one of the largest financial services firms in the world. It also was noted that UBS Global AM had approximately $158 billion in assets under management as of March 31, 2014 and was part of the UBS Global Asset Management Division, which had approximately $674 billion in assets under management worldwide as of March 31, 2014. The board also was cognizant of, and considered, the regulatory and litigation actions and investigations occurring in the past few years involving UBS AG, UBS Global AM and certain of their affiliates.
The board concluded that, overall, it was satisfied with the nature, extent and quality of services provided (and expected to be provided) to the Portfolios under the Investment Management and Administration Agreement as well as under the Sub-Advisory Agreements.
Management and sub-advisory fees and expense ratios—For each Portfolio, the board reviewed and considered the contractual management fee (the "Contractual Management Fee") payable by the Portfolio to UBS Global AM in light of the nature, extent and quality of the services provided by UBS Global AM pursuant to the Investment Management and Administration Agreement. The board also reviewed and considered the fee waiver and/or expense reimbursement arrangements for each Portfolio (if any) and considered the actual fee rate (after taking any waivers and reimbursements into account) (the "Actual Management Fee") payable by the Portfolio. The board considered whether UBS Global AM had entered into one or more fee waiver and/or expense reimbursement agreements with respect to a Portfolio under which UBS Global AM was contractually obligated to waive its management fees and/or reimburse the Portfolio so that the ordinary total operating expenses of certain or all classes of that Portfolio through March 31, 2015 (excluding dividend expense, borrowing costs, interest expense relating to short sales, expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed specified limits for each class (or, with respect to certain Portfolios, an agreement to waive a portion of its management fee). The board also considered that each Portfolio with such a fee waiver/reimbursement agreement had agreed to repay UBS Global AM for those waived fees and/or reimbursed expenses if the Portfolio can do so over the following three fiscal years without causing its expenses in any of those years to exceed the expense caps. Moreover, the board considered that, in addition to continuing to waive fees/cap expenses as in past years, UBS Global AM also offered specific new waivers or expense caps for certain Portfolios as discussed below. Additionally, the board received and considered information comparing each Portfolio's Contractual Management Fee, Actual Management Fee and overall expenses with those of funds in a group of funds selected and provided by Lipper, an independent provider of investment company data (the "Expense Group"), and, for each sub-advised Fund, the board also received comparative data on a supplemental expense group of sub-advised peers (which may include certain of the sub-advised peers contained within the primary Expense Group) (the "Supplemental Expense Group"). The board also received and considered information from JDL Consultants ("JDL"), who, after discussion and agreement between the board and management, was retained to provide an additional perspective of the expense group peers for certain Portfolios (the "JDL Expense Group"), as well as the supplemental expense groups of sub-advised peers (which may include certain of the sub-advised peers contained within the primary JDL Expense Group) (the "JDL Supplemental Expense Group"). A discussion of the board's considerations with respect to each Portfolio's fees is set forth below.
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Board approvals of investment management and administration agreement and sub-advisory agreements (unaudited)
In connection with its consideration of each Portfolio's management fees, the board also received information on UBS Global AM's standard institutional account fees for accounts of a similar investment type to each of the Portfolios. The board noted management's explanation that comparisons with such accounts may be of limited relevance given the different structures and regulatory requirements of mutual funds, such as the Portfolios, versus those accounts and the differences in the levels of services required by the Portfolios and those accounts. The board also received information on fees charged to other mutual funds managed by UBS Global AM. The board observed that it had received certain information regarding fees, profitability, compensation from other similar funds, and economies of scale from certain Sub-Advisors as part of the summary of each Sub-Advisor's responses to requests for due diligence materials in connection with the board's annual reconsideration of the Sub-Advisory Agreements; however, the board also observed that the compensation paid to a Sub-Advisor is paid by UBS Global AM, not by the particular Portfolio and, accordingly, that the retention of a Sub-Advisor generally does not increase the fees otherwise incurred by a Portfolio's shareholders (unless a management fee waiver/expense cap level was affected by a sub-advisory fee increase or a reallocation of assets).
Portfolio performance—For each Portfolio, the board received and considered (a) annualized total return information of the Portfolio compared to other funds (the "Performance Universe") selected by Lipper over the one-, three-, five-, ten-year (or shorter for newer Portfolios) and since inception periods ended April 30, 2014, and (b) annualized performance information for each year in the ten-year (or shorter) period ended April 30, 2014. Although the board received information for the ten-year and since inception periods, in its analysis, it generally placed greater emphasis on the one-, three- and five-year periods. The board was provided with a description of the methodology Lipper used to determine the similarity of a Portfolio with the funds included in its Performance Universe. The board also received updated supplemental data showing each Portfolio's performance through June 30, 2014 (except that information with respect to Money Market Investments was through May 31, 2014). The board also considered UBS Global AM's statement that while management believed that the Lipper peer groups were useful in evaluating Portfolio expenses relative to peers, they were less useful in evaluating performance, as in many cases they were broad-based and consisted of funds that did not necessarily have similar investment parameters to the applicable Portfolio. The board also noted that it had received information throughout the year at periodic intervals with respect to each Portfolio's performance, in most cases with respect to certain benchmark indices, including with respect to each Sub-Advisor's performance. Further discussion of the board's considerations with respect to each Portfolio's performance is set forth below.
Advisor profitability—The board received and considered a profitability analysis of UBS Global AM and its affiliates in providing services to each Portfolio. The board also received profitability information with respect to the UBS New York fund complex as a whole. UBS Global AM's profitability was considered not excessive in light of the nature, extent and quality of the services provided to the Portfolios. To the extent provided by a Sub-Advisor, the board also reviewed information with respect to the Sub-Advisor's profitability in providing services to a Portfolio. The board did not consider such Sub-Advisor profitability information highly relevant as the sub-advisory fees are paid by UBS Global AM, not by the relevant Portfolio.
Economies of scale—The board received and considered information from management regarding whether UBS Global AM realized economies of scale as the Portfolios' assets grew, whether the Portfolios have appropriately benefited from any economies of scale, and whether there is potential for realization of any further economies of scale for the Portfolios. The board considered whether economies of scale in the provision of services to the Portfolios were being passed along to the shareholders. The board noted that each Portfolio's Contractual Management Fee contained breakpoints, with the exception of PACE Money Market Investments. The board also noted that as of April 30, 2014, with the exception of PACE International Emerging Markets Equity Investments, PACE Global Real Estate Securities Investments and PACE High Yield Investments, for those Portfolios having breakpoints each Portfolio's asset level exceeded at least its first breakpoint. Accordingly, the board determined that actual economies of scale existed for those Portfolios whose assets had reached the first breakpoint level and
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potential economies of scale existed for those Portfolios whose assets had not yet reached their first breakpoint level. The board also noted that to the extent a Portfolio's assets have increased over time, it has realized other economies of scale as certain expenses, such as fees for Trustees, auditor and legal fees and printing and postage, become a smaller percentage of overall assets. The board also took note of the relationship between any breakpoints in a sub-advisory fee and the breakpoints in fees paid by the Portfolios to UBS Global AM.
Generally, in light of UBS Global AM's profitability data, the Actual Management Fee, the Contractual Management Fee, the breakpoints currently in place for the Portfolios and the current assets of the Portfolios, the board believed that UBS Global AM's sharing of potential and current economies of scale with the Portfolios was acceptable.
Other benefits to UBS Global AM and the Sub-Advisors—The board was informed by management that the Sub-Advisors' relationships with the Portfolios were limited to their provision of sub-advisory services to these Portfolios, and that therefore, management believed that the Sub-Advisors and their affiliates did not receive tangible ancillary benefits as a result of the Sub-Advisors' relationships with the Portfolios, with the exception of possible benefits from soft dollars (e.g., research credits related to transaction commissions) for the equity Portfolios (which also would potentially benefit such Portfolios) and possible limited benefits to certain affiliates of a Sub-Advisor, such as broker-dealers (e.g., an affiliate's execution of portfolio transactions subject to detailed restrictions in SEC rules and board oversight procedures). The board recognized that certain Sub-Advisors could receive intangible benefits from their association with the Trust, such as increased name recognition or publicity from being selected as Sub-Advisors to the Trust after an extensive review process. Similarly, a Portfolio could benefit from having a Sub-Advisor with an established or well-regarded reputation. In light of the costs of providing investment management, administrative and other services to the Portfolios and UBS Global AM's ongoing commitment to the Portfolios, the profits and other ancillary benefits that UBS Global AM and its affiliates received were considered reasonable.
In the discussions that follow, reference is made to the "median" in the Lipper and JDL Expense Group and Lipper Performance Universe categories. With respect to expenses, below median expenses represents fees or expenses that are lower relative to the median, and above median expenses represents fees or expenses that are higher relative to the median of the funds in the applicable Expense Group. With respect to performance, below median performance represents performance that is worse relative to the median, and above median performance represents performance that is better relative to the median. Lipper information is calculated on a share class basis. References appearing below relate to Class A shares; the board also had information relevant to other share classes (e.g., Class P shares) during its considerations.
PACE Large Co Growth Equity Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreements with each of Jackson Square Partners, LLC, J.P. Morgan Investment Management Inc. and Roxbury Capital Management LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was above the Performance Universe median in each of the one-, three-, five- and ten-year periods, but that the Portfolio's performance since inception was below the Performance Universe median.
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee, Actual Management Fee and total expenses were above the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report. Management noted that the Portfolio's total expenses were within a few basis points (that is, hundredths of a percent) of the median. Management also noted that, compared to the Supplemental Expense Group, consisting of nine other sub-advised
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funds, the Portfolio's Contractual Management Fee, Actual Management Fee and total expenses were even more closely aligned with its peers.
PACE Large Co Value Equity Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreements with each of Pzena Investment Management, LLC, Robeco Investment Management, Inc. ("Robeco"), Institutional Capital LLC and Los Angeles Capital Management and Equity Research, Inc., the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was above the Performance Universe median for the various periods, except for the three-year period when the Portfolio's performance was slightly below the median for the Performance Universe.
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee and Actual Management Fee were above the median and its total expenses were below the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report. Management noted that, compared to the Supplemental Expense Group, consisting of eight other sub-advised funds, the Portfolio's Contractual Management Fee, Actual Management Fee and total expenses were near the respective medians.
PACE Small/Medium Co Growth Equity Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreements with each of Palisade Capital Management, L.L.C., Riverbridge Partners, LLC, Lee Munder Capital Group, LLC and Timpani Capital Management LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was below the Performance Universe median for the various periods. Management noted that, regarding performance relative to peers, neither Lipper nor Morningstar offer a Small/Mid classification, nor do they differentiate further into growth and value. Management noted that, as such, the Portfolio is at times classified into Lipper Small Cap Growth or Lipper Mid Cap Growth, depending on the "rules" established by Lipper/Morningstar. Management explained that much of the Portfolio's underperformance over the one-year period, which also negatively impacted longer-term performance rankings, was driven by the underperformance of one of its Sub-Advisors, which was under re-evaluation by UBS Global AM. Management further noted that, at the April 2014 board meeting, the board approved changes to the Sub-Advisor line-up of this Portfolio, which it expects to be beneficial to the Portfolio's performance going forward.
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee, Actual Management Fee and total expenses were below the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report (with the Portfolio's total expenses the lowest in the Expense Group). Management noted that, effective April 22, 2014, a voluntary management fee waiver of 2.5 basis points (i.e., 0.025%) was implemented in connection with the board's approval of changes to the Sub-Advisor allocations and Sub-Advisor line-up of this Portfolio, which are expected to result in even lower total expenses.
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PACE Small/Medium Co Value Equity Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreements with each of Metropolitan West Capital Management, LLC, Systematic Financial Management, L.P. and Kayne Anderson Rudnick Investment Management, LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was below the Performance Universe median for the various periods. Management noted that the Portfolio underperformed its benchmark by less than one percent during the three- and five-year periods and that the significant driver for the underperformance during these periods was a sub-adviser who is no longer a sub-advisor for the Portfolio. Management further noted the performance improvement during the one-year period.
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee and total expenses were below the median, and its Actual Management Fee was at the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report.
PACE International Equity Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreements with each of Mondrian Investment Partners Limited, Los Angeles Capital Management and Equity Research, Inc. and Chautauqua Capital Management, LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was above the median for the one- and three-year periods and below the median for the five- and ten-year periods and since inception. Management pointed to several changes in Sub-Advisors made at its behest during recent years.
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee, Actual Management Fee and total expenses were above the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report. Management noted that, compared to the Supplemental Expense Group, consisting of five other sub-advised funds, the Portfolio's Contractual Management Fee, Actual Management Fee and total expenses were near the respective medians. Management also noted that the Lipper report reflects a voluntary fee waiver of approximately 1.5 basis points (i.e., 0.015%) and that the current fee waiver rate is 3 basis points (i.e., 0.03%) due to recent Sub-Advisor reallocations within the Portfolio. Management explained that, therefore, the Portfolio's expenses currently are approximately 1.5 basis points (i.e., 0.015%) lower than what is being reflected in the Lipper report for the period subject to its review.
PACE International Emerging Markets Equity Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreements with each of Mondrian Investment Partners Limited, Lee Munder Capital Group, LLC and William Blair & Company L.L.C., the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was below the median for the one-, five- and ten-year periods and since inception and above the median for the three-year period. Management noted that many funds classified in the Lipper Emerging Markets Equity
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universe are single country/region funds (e.g., China fund, BRIC fund, etc.), which can have very different performance relative to a broad emerging markets equity fund such as the Portfolio. Management noted that the Portfolio outperformed its benchmark for the three- and five-year periods. Management explained that the Portfolio underperformed its benchmark over the one-year period mainly due to the underperformance of two Sub-Advisors to the Portfolio, but that it continues to have confidence in these Sub-Advisors, which have both provided strong returns over longer periods.
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee was at the median and its Actual Management Fee and total expenses were above the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report. Management noted that most of the variance in the Portfolio's total expenses relative to the peer median was attributable to custody fees, driven mainly by fees charged for the safekeeping of assets in local markets. Management explained that these sub-custody fees can vary widely based on the countries of the investments within the respective funds in the peer group (as evidenced by the wide range of fees across them), and that investments in less developed or frontier-type markets are more costly than investments in developing or developed countries. Management stated that it reviews sub-custody fees relative to the markets the Portfolio invests in on an annual basis and will seek to make changes to the "all in" basis point custody fee if warranted. Management also noted that there are two funds within the Supplemental Expense Group, consisting of eight other sub-advised funds, that utilize affiliated sub-advisors and that if these two funds were excluded from the group, it would increase the actual management fee median to within a few basis points (that is, hundredths of a percent) of the Portfolio's Actual Management Fee.
PACE Alternative Strategies Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreements with each of Analytic Investors, LLC, AQR Capital Management, LLC, First Quadrant L.P. and Standard Life Investments (Corporate Funds) Limited, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was above the median for the one- and three-year periods and since inception and slightly below the median for the five-year period.
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee and total expenses were below the median and its Actual Management Fee was above the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report. Management noted that, in February 2014, the Portfolio was moved from the Lipper Absolute Return category to the Alternative Multi-Strategy category as a result of Lipper's annual review. Management noted that, compared to the Supplemental Expense Group, consisting of six other sub-advised funds, the Portfolio's Contractual Management Fee and total expenses were below the respective medians, while its Actual Management Fee was very close to the median. Management also noted that the Portfolio's Actual Management Fee and total expenses were at the median of the JDL Expense Group, and total expenses were well below the median for the JDL Supplemental Expense Group.
PACE Global Real Estate Securities Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreement with each of CBRE Clarion Securities, LLC and Brookfield Investment Management Inc., the board, including the Independent Trustees, also considered the following factors:
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Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was above the median for the one- and three-year periods and below the median for the five-year period (by one basis point—that is, 0.01%) and since inception.
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee and Actual Management Fee were below the median and its total expenses were above the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report (with the Portfolio's total expenses the highest in the Expense Group). Management noted that the Portfolio's total expenses were five basis points (i.e., 0.05%) above the median of the Portfolio's Expense Group and within a few basis points of the median of the Supplemental Expense Group, consisting of three other sub-advised funds. Management further noted that the Portfolio's Contractual Management Fee and Actual Management Fee were well below the respective medians of the Supplemental Expense Group. Management explained that the Portfolio's transfer agency fees are the main driver of the Portfolio's higher total expenses, which is the result of the very small average account sizes within the Portfolio.
PACE Mortgage-Backed Securities Fixed Income Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreement with Pacific Investment Management Company LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was below the median for the one-, three- and five-year periods and above the median for the ten-year period and since inception. Management noted that, effective March 31, 2014, the Portfolio's name changed from PACE Government Securities Fixed Income Investments to PACE Mortgage-Backed Securities Fixed Income Investments and that this had no impact on the Portfolio's investment objective or its overall management. Management observed that the Portfolio's guidelines, however, were changed to allow for greater flexibility with respect to investing in non-investment grade securities (e.g., non-agency mortgage-backed securities).
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee and total expenses were above the median (with the Portfolio's Contractual Management Fee and total expenses the highest in the Expense Group), and its Actual Management Fee was at the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report. Management further noted that total expenses, although above the median, were reasonably close to the respective median of the Expense Group and the JDL Expense Group.
PACE High Yield Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreement with MacKay Shields LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was below the median for the one-, three- and five-year periods but above the median since inception.
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee, Actual Management Fee and total expenses were above the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report. Management noted that, compared to the Supplemental Expense Group, consisting of six other sub-advised funds, the Portfolio's Actual Management Fee was only four basis points (i.e., 0.04%) above the median, with a similar result from the JDL
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Expense Group. Management also noted that the Portfolio's total expenses are at the median of the JDL Supplemental Expense Group. Management explained that transfer agency fees are slightly higher for the Portfolio relative to most peers, which partially explains the higher relative total expenses. Management further explained that the Portfolio's higher transfer agency fees are the result of the very low average account balances within the Portfolio, as transfer agency fees are a fixed amount per account. Management stated that UBS Wealth Management's strategic asset allocation advice across various programs, including the one focused on the Trust, has had a very low allocation to high yield, but that recent changes to the strategic asset allocation advice have increased the allocation to high yield, which should increase the average account sizes in the Portfolio over time.
PACE Intermediate Fixed Income Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreement with each of BlackRock Financial Management, Inc., and Babson Capital Management LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was above the median for the one-year period and below the median for the three-, five- and ten-year periods and since inception. Management explained that the Portfolio's peer ranking is largely the result of duration differences versus the broader Lipper Core Bond category. Management stated that over 90% of the Portfolio's peers have durations that are longer than the Portfolio and that yields in the US Treasury market have increased over the one-year period, with resulting price declines, whereas yields had decreased and prices had increased over the three- and five-year periods. Management further stated that, from an absolute return perspective, the duration differences between the Portfolio and its peers would have placed the Portfolio at a disadvantage over the three- and five-year periods but helped over the past one-year period, which has been the primary driver of peer relative performance for this Portfolio. Management noted that, relative to the Sub-Advisor's performance objective, the Portfolio has met expectations. Management stated that the Portfolio has outperformed its benchmark over each of the one-, three- and five-year periods, noting that one-year performance was particularly strong. Management noted that longer-term performance has been reasonable.
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee and total expenses were above the median and its Actual Management Fee was below the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report. Management noted that the Portfolio's Actual Management Fee across peer groups was in line with the medians, and its total expenses across all were reasonably close to the respective medians. Management noted that, compared to the JDL Supplemental Expense Group, the Portfolio's Actual Management Fee and total expenses were both below the respective medians.
PACE International Fixed Income Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreement with Rogge Global Partners plc, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was below the median for the one-, three-, five- and ten-year periods and since inception. Management stated that the Portfolio has met its objective based on longer-term benchmark performance, while one-year performance has disappointed. Management noted that it has been a difficult year for international portfolios, particularly those that have emerging markets exposure, and that currency hedging treatment differences have also had an impact on performance, both relative and absolute. Management noted that the Sub-Advisor outperformed its
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benchmark by 29 basis points (i.e., 0.29%) year to date through April 30, 2014. Management stated that it continues to believe in the Sub-Advisor's ability to add value longer-term.
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee, Actual Management Fee and total expenses were above the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report. Management stated that the peer expense analysis for this Portfolio was problematic. Management noted that median total expenses for this year's peer group compared to the prior year's group have declined more dramatically than fund expenses across the industry, which suggests that the expense comparisons are sensitive to the particular peer funds that are selected. Management also noted that the Portfolio's Contractual Management Fee is close to the median, which suggests that actual management fees were driven down dramatically by aggressive fee waivers by selected peers, and that there is, in fact, a large variation in the median for total expense across all peer groups. In addition, management explained that the Portfolio may appear expensive versus its peers because there may be large fee waivers for some of its newer peers, which have remarkably low actual management fees which are not believed to be sustainable. Management further noted that the JDL Supplemental Expense Group is very small so differences in any member of the group can have a significant impact on the median. Management stated that, accounting for these differences, the Portfolio may be closer to the median than an initial analysis may suggest. Management further stated that it continues to believe that the International Fixed Income asset class is a very broad category which makes it difficult to select a pure set of peers to properly compare the Portfolio and that, taking this into consideration, along with the dramatic decline in Lipper's total expense median from last year and the very large fee waivers of this year's peers, it does not consider the Portfolio's expenses to be an outlier. Although management did not believe that the Portfolio was an expense outlier based on the information discussed at the meeting, as a result of discussions with the board prior to, and at the meeting, management offered to reduce the Portfolio's Contractual Management Fee by 0.05% at each breakpoint in the fee schedule, achieved via fee waivers for a set time period. Management noted that, based on the Portfolio's current assets, this would reduce the Portfolio's Contractual Management Fee by several hundreds of thousands of dollars. After further discussions, the board agreed to accept management's proposal, but noted that it would continue to closely monitor the Portfolio's expenses over the next year to assess whether, in light of the Portfolio's asset base and its absolute and relative expenses, further reductions might be appropriate.
PACE Municipal Fixed Income Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreement with Standish Mellon Asset Management Company LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was above the median for the one-year period and below the median for the three-, five- and ten-year periods and since inception.
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee, Actual Management Fee and total expenses were above the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report. Management noted that, compared to the Supplemental Expense Group, consisting of eight other sub-advised funds, the Portfolio's Contractual Management Fee was at the median, while its Actual Management Fee and total expenses were reasonably close the respective medians of the Supplemental Expense Group and JDL Expense Group.
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PACE Strategic Fixed Income Investments
In approving the Investment Management and Administration Agreement and the Sub-Advisory Agreement with Pacific Investment Management Company LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was below the median for the one-year period and above the median for the three-, five- and ten-year periods and since inception. Management noted that the duration of the Portfolio is longer than 80% of its peers, which helped the Portfolio versus its peers over the longer periods but hurt the Portfolio in the one-year period. Management noted that while the Portfolio underperformed over the past year, more recent performance since the close of the period examined by Lipper has shown signs of improvement, and, based on the Sub-Advisor's strong, long-term track record, it continues to have confidence in the Sub-Advisor.
Management and sub-advisory fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee, Actual Management Fee and total expenses were above the median in the Portfolio's Expense Group for the comparison period utilized in the Lipper report (with the Portfolio's Actual Management Fee and total expenses the highest in the Expense Group). Management noted that two of the peers in the Expense Group have very low actual management fees, as they are very small funds with large fee waivers in place, which significantly lowered the median of the Expense Group. Management noted that the Portfolio's Actual Management Fee and total expenses were at the median of the JDL Supplemental Expense Group. Management stated its view that the Portfolio was not classified in the most appropriate category, and that the peers' risk and return was not consistent with that of the Portfolio. As a result of discussions with the board prior to, and at the meeting, management offered to reduce the Portfolio's Contractual Management Fee by amending the breakpoints in the fee schedule as follows, achieved via fee waivers for a set time period: first $500 million: 0.60%; second $500 million: 0.55%; the next $250 million: 0.525%; the next $250 million: 0.500%; and assets over $1.5 billion: 0.475%. Management noted that, based on the Portfolio's current assets, this would reduce the Portfolio's Contractual Management Fee by nearly two hundred thousand dollars. Management also offered to waive permanently an additional amount of approximately a quarter of a million dollars in recoupable fees under the Portfolio's current expense cap arrangement. After further discussions, the board agreed to accept management's proposal, but noted that it would continue, resulting in a potential net reduction of close to a half million dollars to closely monitor the Portfolio's expenses over the next year to assess whether, in light of the Portfolio's asset base and its absolute and relative expenses, further reductions might be appropriate.
PACE Money Market Investments
In approving the Investment Management and Administration Agreement, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Lipper information showed that the Portfolio's performance was at or above the median for the one-, three-, five- and ten-year periods and since inception.
Management fees and expense ratios—The comparative Lipper information showed that the Portfolio's Contractual Management Fee, Actual Management Fee and its total expenses were at or below the median in the Portfolio's Expense Group for the comparison periods utilized in the Lipper report.
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Conclusion
Based on its review and, in certain instances, management's explanations upon further questioning, the board concluded that each Portfolio's investment performance was satisfactory or acceptable and that each management fee and sub-advisory fee, as proposed by management after questions and/or suggestions proposed by the board, was reasonable in light of the nature, extent and quality of the services provided to the Portfolio under the applicable Investment Management and Administration Agreement and Sub-Advisory Agreement or Sub-Advisory Agreements, respectively. However, there were certain Portfolios that the board determined to continue to monitor more closely over the next year.
In light of all of the foregoing, the board approved the Investment Management and Administration Agreement for each Portfolio and, for those Portfolios with Sub-Advisors, the Sub-Advisory Agreement(s). No single factor reviewed by the board was identified by the board as the principal factor in determining whether to approve the Investment Management and Administration Agreement or, for the sub-advised Portfolios, the Sub-Advisory Agreement(s). The Independent Trustees were advised by separate independent legal counsel throughout the process. The board discussed the proposed continuance of the Investment Management and Administration Agreement and the Sub-Advisory Agreements in private sessions with their independent legal counsel at which no representatives of UBS Global AM or the Sub-Advisors were present.
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Board of Trustees & Officers
The Trust is governed by a Board of Trustees which oversees the Portfolios' operations. Each Trustee serves an indefinite term of office. Officers are appointed by the trustees and serve at the pleasure of the Board. The table below shows, for each trustee and officer, his or her name, address and age, the position held with the Trust, the length of time served as a trustee or officer of the Trust, the trustee's or officer's principal occupations during the last five years, the number of portfolios in the UBS fund complex overseen by the trustee or for which a person served as an officer, and other directorships held by the trustee.
The Trust's Statement of Additional Information contains additional information about the trustees and is available, without charge, upon request by calling 1-800-647 1568.
Interested Trustees:
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years | Number of portfolios in fund complex overseen by trustee | Other directorships held by trustee | ||||||||||||||||||
Meyer Feldberg2; 72 Morgan Stanley 1585 Broadway 36th Floor New York, NY 10036 | Trustee | Since 2001 | Professor Feldberg is Dean Emeritus and Professor of Leadership and Ethics at Columbia Business School, although on an extended leave of absence. He is also a senior advisor to Morgan Stanley (financial services) (since 2005). Professor Feldberg also serves as president of New York City Global Partners (an organization located in part of the Office of the Mayor of the City of New York that promotes interaction with other cities around the world) (since 2007). Prior to 2004, he was Dean and Professor of Management and Ethics of the Graduate School of Business at Columbia University (since 1989). | Professor Feldberg is a director or trustee of 19 investment companies (consisting of 51 portfolios) for which UBS Global AM or one of its affiliates serves as investment advisor, sub-advisor or manager. | Professor Feldberg is also a director of Macy's, Inc. (operator of department stores), Revlon, Inc. (cosmetics), and the New York City Ballet. |
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Independent Trustees:
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years | Number of portfolios in fund complex overseen by trustee | Other directorships held by trustee | ||||||||||||||||||
Richard Q. Armstrong; 79 c/o Keith Weller Assistant Fund Secretary UBS Global Asset Management (Americas) Inc. 1285 Avenue of the Americas, New York, NY 10019 | Trustee and Chairman of the Board of Trustees | Since 2001 (Trustee) Since 2004 (Chairman of the Board of Trustees) | Mr. Armstrong is chairman and principal of R.Q.A. Enterprises (management consulting firm) (since 1991 and principal occupation since 1995). Mr. Armstrong was president or chairman of a number of packaged goods companies (responsible for such brands as Canada Dry, Dr. Pepper, Adirondack Beverages and Moët Hennessy) (from 1982 until 1995). | Mr. Armstrong is a director or trustee of 11 investment companies (consisting of 43 portfolios) for which UBS Global AM serves as investment advisor or manager. | None | ||||||||||||||||||
Alan S. Bernikow; 73 207 Benedict Ave. Staten Island, NY 10314 | Trustee | Since 2005 | Mr. Bernikow is retired. He was a consultant on non-management matters for the firm of Deloitte & Touche (international accounting and consulting firm) (from 2003 to 2007). Previously, he was deputy chief executive officer at Deloitte & Touche. | Mr. Bernikow is a director or trustee of 11 investment companies (consisting of 43 portfolios) for which UBS Global AM serves as investment advisor or manager. | Mr. Bernikow is also a director of Revlon, Inc. (cosmetics) (and serves as the chair of its audit committee and as the chair of its compensation committee), a director of Mack-Cali Realty Corporation (real estate investment trust) (and serves as the chair of its audit committee); and a director of the Casual Male Retail Group, Inc. (menswear) (and serves as a member of its audit committee and as a member of its nominating and corporate governance committee). He is also a director of Premier American Bank, N.A. |
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Independent Trustees (continued):
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years | Number of portfolios in fund complex overseen by trustee | Other directorships held by trustee | ||||||||||||||||||
Richard R. Burt; 67 McLarty Associates 900 17th Street, 8th Floor Washington, D.C. 20006 | Trustee | Since 2001 | Mr. Burt is a managing director to McLarty Associates (a consulting firm) with which he has been employed since 2007. He was chairman of IEP Advisors (international investments and consulting firm) until 2009. Prior to 2007, he was chairman of Diligence Inc. (information and risk management firm). | Mr. Burt is a director or trustee of 11 investment companies (consisting of 43 portfolios) for which UBS Global AM serves as investment advisor or manager. | Mr. Burt is also a director of Central Europe & Russia Fund, Inc., European Equity Fund, Inc. and The New Germany Fund, Inc. (and serves as a member of each such fund's audit, nominating and governance committees). | ||||||||||||||||||
Bernard H. Garil; 74 6754 Casa Grande Way Delray Beach, FL 33446 | Trustee | Since 2005 | Mr. Garil is retired (since 2001). He was a managing director at PIMCO Advisory Services (from 1999 to 2001) where he served as president of closed-end funds and vice-president of the variable insurance product funds advised by OpCap Advisors (until 2001). | Mr. Garil is a director or trustee of 11 investment companies (consisting of 43 portfolios) for which UBS Global AM serves as investment advisor or manager. | Mr. Garil is also a director of OFI Global Trust Company (commercial trust company), the Leukemia and Lymphoma Society (voluntary health organization) and a trustee for the Brooklyn College Foundation, Inc. (charitable foundation). | ||||||||||||||||||
Heather R. Higgins; 55 255 E. 49th St., Suite 23D New York, NY 10017 | Trustee | Since 2005 | Ms. Higgins is the president and director of The Randolph Foundation (charitable foundation) (since 1991). Ms. Higgins also serves (or had served) on the boards of several non-profit charitable groups, including the Independent Women's Forum (chairman) and the Philanthropy Roundtable (vice chairman). She also serves on the board of the Hoover Institution (from 2001 to 2007 and since 2009). | Ms. Higgins is a director or trustee of 11 investment companies (consisting of 43 portfolios) for which UBS Global AM serves as investment advisor or manager. | None |
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Independent Trustees (concluded):
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years | Number of portfolios in fund complex overseen by trustee | Other directorships held by trustee | ||||||||||||||||||
David Malpass*; 58 Encima Global, LLC 645 Madison Avenue, 5th Floor, New York, NY 10022 | Trustee | Since May 2014 | Mr. Malpass is the president and founder of Encima Global, LLC (economic research and consulting) (since 2008). From 1993 until 2008, he was Chief Economist and Senior Managing Director of Bear, Stearns & Co. (financial services firm). | Mr. Malpass is a director or trustee of 11 investment companies (consisting of 43 portfolios) for which UBS Global AM serves as investment advisor or manager. | Mr. Malpass is also a director of New Mountain Finance Corp. (business development company) (and serves as a member of its audit committee). |
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Officers:
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer | ||||||||||||
Joseph Allessie*; 49 | Vice President, Assistant Secretary and Chief Compliance Officer | Since 2005 (Vice President and Assistant Secretary) Since July 2014 (Chief Compliance Officer) | Mr. Allessie is an executive director (since 2007) (prior to which he was a director) at UBS Global Asset Management (US) Inc. and UBS Global AM (collectively, "UBS Global AM—Americas region"). Mr. Allessie is head of compliance and operational risk control for the UBS Global Asset Management Division in the Americas with oversight for traditional and alternative investment businesses in Canada, the US and Cayman Islands. Prior to that he served as deputy general counsel (from 2005 to 2014). Mr. Allessie is a vice president, assistant secretary and chief compliance officer (prior to which he was interim chief compliance officer) (from January to July 2014) of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Rose Ann Bubloski*; 46 | Vice President and Assistant Treasurer | Since 2011 | Ms. Bubloski is a director (since 2012) (prior to which she was an associate director) and senior manager of the US mutual fund treasury administration department of UBS Global AM—Americas region. She is vice president and assistant treasurer of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Mark E. Carver*; 51 | President | Since 2010 | Mr. Carver is a managing director and Head of Product Development and Management-Americas for UBS Global AM—Americas region (since 2008). In this role, he oversees product development and management for both wholesale and institutional businesses. He is a member of the Americas Management Committee (since 2008) and the Regional Operating Committee (since 2008). Prior to 2008, Mr. Carver held a number of product-related or sales responsibilities with respect to funds, advisory programs and separately managed accounts. Mr. Carver joined a predecessor of an affiliated firm in 1985 and has been with UBS Global AM—Americas region (or its affiliates) since 1996. Mr. Carver is president of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Thomas Disbrow*; 48 | Vice President and Treasurer | Since 2000 (Vice President) Since 2004 (Treasurer) | Mr. Disbrow is a managing director (since 2011) (prior to which he was an executive director) (since 2007) and head of North America Fund Treasury (since 2011) of UBS Global AM—Americas region. Mr. Disbrow is a vice president and treasurer and/or principal accounting officer of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Michael J. Flook*; 49 | Vice President and Assistant Treasurer | Since 2006 | Mr. Flook is a director (since 2010) (prior to which he was an associate director) (since 2006) and a senior manager of the US mutual fund treasury administration department of UBS Global AM—Americas region. Mr. Flook is a vice president and assistant treasurer of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. |
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Officers (continued):
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer | ||||||||||||
Christopher S. Ha*; 34 | Vice President and Assistant Secretary | Since 2012 | Mr. Ha is a director and associate general counsel (since September 2012) at UBS Global AM—Americas region. Prior to joining UBS Global AM—Americas region, Mr. Ha was of counsel at Buhler, Duggal & Henry LLP (law firm)(from March 2012 to July 2012) and an associate attorney at Dechert LLP (law firm)(from 2007 to 2009). Mr. Ha is a vice president and assistant secretary of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Mark F. Kemper**; 56 | Vice President and Secretary | Since 2004 | Mr. Kemper is a managing director (since 2006) and head of the legal department of UBS Global AM—Americas region (since 2004). He has been secretary of UBS Global AM—Americas region (since 2004), secretary of UBS Global Asset Management Trust Company (since 1993) and secretary of UBS AM Holdings (USA) Inc. (since 2001). Mr. Kemper is vice president and secretary of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Joanne M. Kilkeary*; 46 | Vice President and Assistant Treasurer | Since 1999 | Ms. Kilkeary is an executive director (since March 2013) (prior to which she was a director) (since 2008) and a senior manager (since 2004) of the US mutual fund treasury administration department of UBS Global AM—Americas region. Ms. Kilkeary is a vice president and assistant treasurer of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Tammie Lee*; 43 | Vice President and Assistant Secretary | Since 2005 | Ms. Lee is an executive director (since 2010) (prior to which she was a director) and associate general counsel of UBS Global AM—Americas region (since 2005). Ms. Lee is a vice president and assistant secretary of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Nancy D. Osborn*; 48 | Vice President and Assistant Treasurer | Since 2007 | Mrs. Osborn is a director (since 2010) (prior to which she was an associate director) and a senior manager of the US mutual fund treasury administration department of UBS Global AM—Americas region (since 2006). Mrs. Osborn is a vice president and assistant treasurer of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Robert Sabatino**; 41 | Vice President | Since 2001 | Mr. Sabatino is a managing director (since 2010) (prior to which he was an executive director) (since 2007), head of US taxable money markets (since 2009), and portfolio manager of UBS Global AM—Americas region in the short duration fixed income group (since 2001). Mr. Sabatino is a vice president of 5 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Eric Sanders*; 48 | Vice President and Assistant Secretary | Since 2005 | Mr. Sanders is a director and associate general counsel of UBS Global AM—Americas region (since 2005). Mr. Sanders is a vice president and assistant secretary of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. |
362
PACE Select Advisors Trust
Supplemental information (unaudited)
Officers (concluded):
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer | ||||||||||||
Andrew Shoup*; 58 | Vice President and Chief Operating Officer | Since 2006 | Mr. Shoup is a managing director and global head of the treasury administration department of UBS Global AM—Americas region (since 2006). Mr. Shoup is also a director of UBS (IRL) Fund p.l.c. (since 2008). Mr. Shoup is a vice president and chief operating officer of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Keith A. Weller*; 53 | Vice President and Assistant Secretary | Since 2000 | Mr. Weller is an executive director and senior associate general counsel of UBS Global AM—Americas region (since 2005) and has been an attorney with affiliated entities since 1995. Mr. Weller is a vice president and assistant secretary of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Mandy Yu*; 30 | Vice President | Since February 2013 | Ms. Yu is an authorized officer (since 2012) and tax compliance manager (since March 2013) of the US mutual fund treasury administration department of UBS Global AM—Americas region. She was a Fund Treasury Manager (from 2012 to March 2013) and a Mutual Fund Administrator (from 2007 to 2012) for UBS Global AM—Americas region. Ms. Yu is a vice president of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. |
1 Each trustee holds office for an indefinite term. Officers are appointed by the trustees and serve at the pleasure of the Board.
2 Professor Feldberg is deemed an "interested person" of the Trust as defined in the Investment Company Act of 1940, as amended, because he is a senior advisor to Morgan Stanley, a financial services firm with which the Trust may conduct transactions.
* This person's business address is 1285 Avenue of the Americas, New York, New York 10019-6028.
** This person's business address is One North Wacker Drive, Chicago, Illinois 60606.
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364
Trustees
Richard Q. Armstrong Chairman Alan S. Bernikow Richard R. Burt | Meyer Feldberg Bernard H. Garil Heather R. Higgins David Malpass |
Principal Officers
Mark E. Carver President | Thomas Disbrow Vice President and Treasurer | ||||||
Mark F. Kemper Vice President and Secretary |
Investment Manager and
Administrator
UBS Global Asset Management (Americas) Inc.
1285 Avenue of the Americas
New York, New York 10019-6028
Principal Underwriter
UBS Global Asset Management (US) Inc.
1285 Avenue of the Americas
New York, New York 10019-6028
This report is not to be used in connection with the offering of shares of the Portfolios unless accompanied or preceded by an effective prospectus.
© UBS 2014. All rights reserved.
UBS Global Asset Management (Americas) Inc.
PRESORTED
STANDARD
U.S. POSTAGE
PAID
COMPUTERSHARE
UBS Global Asset Management (Americas) Inc.
1285 Avenue of the Americas
New York, NY 10019-6028
S003
Money Market Funds
PACE® Money Market Investments
Annual Report
July 31, 2014
PACE Money Market Investments
September 14, 2014
Dear Shareholder,
Performance
For the 12 months ended July 31, 2014, the Portfolio returned 0.01% before the deduction of the maximum PACE program fee.1 Please remember that the PACE program fee is assessed outside the Portfolio at the PACE program account level. The program fee does not impact the determination of the Portfolio's net asset value per share. For comparison purposes, the median return of the Lipper Money Market Funds category was 0.01%. (Returns over various time periods are shown in the "Performance at a glance" table on page 3. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions.)
Advisor's Comments
In December 2013, the Federal Reserve Board (the "Fed") announced that it would begin tapering its asset purchase program in January 2014. However, the Fed continued to hold the federal funds rate—or the "fed funds rate," which is the rate banks charge one another for funds they borrow on an overnight basis—at a historically low range between 0% and 0.25%. This con-
PACE Money
Market Investments
Investment Advisor:
UBS Global Asset Management (Americas) Inc.
Portfolio Manager:
Robert Sabatino
Objective:
Current income consistent with preservation of capital and liquidity.
Investment process:
The Portfolio is a money market mutual fund and seeks to maintain a stable price of $1.00 per share, although it may be possible to lose money by investing in this Portfolio. The Portfolio invests in a diversified portfolio of high-quality money market instruments of governmental and private issuers. Security selection is based on the assessment of relative values and changes in market and economic conditions.
1 Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.
1
PACE Money Market Investments
tinued to depress yields on a wide range of short-term investments and kept the yields of the securities in which the Portfolio invests extremely low. As a result, the Portfolio's yield remained low during the reporting period.
We tactically adjusted the Portfolio's weighted average maturity ("WAM") throughout the 12-month review period. When the reporting period began, the Portfolio had a WAM of 29 days. This was increased to 40 days at the end of the reporting period.
At the issuer level, we maintained a high level of diversification, investing in smaller positions with the goal of reducing risk and keeping the Portfolio highly liquid. To that end, we typically purchased up to 3% in single nongovernment issuers throughout the reporting period. (The Portfolio is generally able to hold up to 5% in any one issuer, subject to certain exceptions.)
Several adjustments were made to the Portfolio's sector positioning during the 12-month period. We increased the Portfolio's exposure to certificates of deposit and, to a lesser extents, short-term corporate obligations and repurchase agreements. Conversely, we reduced our allocation to commercial paper and modestly pared our exposure to US government and agency obligations. (Repurchase agreements are transactions in which the seller of a security agrees to buy it back at a predetermined time and price or upon demand.)
Sincerely,
Mark E. Carver President, PACE Select Advisors Trust Managing Director, UBS Global Asset Management (Americas) Inc. | Robert Sabatino Portfolio Manager, PACE Money Market Investments Managing Director, UBS Global Asset Management (Americas) Inc. |
2
PACE Money Market Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/14 | 1 year | 5 years | 10 years | ||||||||||||
PACE Money Market Investments1 | 0.01 | % | 0.01 | % | 1.47 | % | |||||||||
Lipper Money Market Funds median | 0.01 | % | 0.01 | % | 1.43 | % |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/14 | 1 year | 5 years | 10 years | ||||||||||||
PACE Money Market Investments1 | 0.01 | % | 0.01 | % | 1.47 | % |
For PACE Money Market Investments1, the 7-day current yield for the period ended July 31, 2014 was 0.01% after fee waivers and/or expense reimbursements; the yield was (0.84)% before fee waivers and/or expense reimbursements. The Portfolio's yield quotation more closely reflects the current earnings of the Portfolio than the total return quotation. Yields will fluctuate and reflect fee waivers and/or expense reimbursements.
1 Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions. The return of an investment will fluctuate. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the payable dates. Current performance may be higher or lower than the performance data quoted.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.
An investment in PACE Money Market Investments is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Portfolio seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Portfolio.
Not FDIC Insured. May lose value. No bank guarantee.
3
PACE Money Market Investments
Understanding your Portfolio's expenses (unaudited)
As a shareholder of the Portfolio, you incur two types of costs: (1) on-going program fees; and (2) ongoing Portfolio costs, including management fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.
The example below is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, February 1, 2014 to July 31, 2014.
Actual expenses
The first line in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over a period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading "Expenses paid during period" to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The second line in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate your actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
4
PACE Money Market Investments
Understanding your Portfolio's expenses (unaudited) (concluded)
Please note that the expenses shown in the table are meant to highlight your ongoing Portfolio costs only and do not reflect any program fees. Therefore, the second line in the table is useful in comparing ongoing Portfolio costs only, and will not help you determine the relative total costs of owning different funds. In addition, if program fees were included, your costs would have been higher.
Beginning account value February 1, 2014 | Ending account value July 31, 2014 | Expenses paid during period1 02/01/14 to 07/31/14 | Expense ratio during the period | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,000.00 | $ | 0.64 | 0.13 | % | |||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,024.15 | 0.65 | 0.13 |
1 Expenses are equal to the Portfolio's annualized net expense ratio, multiplied by the average account value over the period, multiplied by 181 divided by 365 (to reflect the one-half year period).
5
PACE Money Market Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/14 | ||||||
Net assets (mm) | $ | 212.0 | |||||
Number of holdings | 62 | ||||||
Weighted average maturity | 40 days | ||||||
Portfolio composition1 | 07/31/14 | ||||||
Commercial paper | 50.6 | % | |||||
Repurchase agreements | 16.9 | ||||||
Certificates of deposit | 18.4 | ||||||
US government and agency obligations | 12.3 | ||||||
Short-term corporate obligation | 1.9 | ||||||
Other assets less liabilities | (0.1 | ) | |||||
Total | 100.0 | % | |||||
Top 10 holdings1 | 07/31/14 | ||||||
Repurchase agreement with Barclays Capital, Inc., 0.060% due 08/01/14 | 9.4 | % | |||||
Repurchase agreement with Deutsche Bank Securities, Inc., 0.090% due 08/01/14 | 7.3 | ||||||
Federal Home Loan Bank, 0.120% due 05/15/15 | 3.3 | ||||||
MetLife Short Term Funding LLC, 0.110% due 08/19/14 | 3.1 | ||||||
US Treasury Note, 0.500% due 10/15/14 | 2.8 | ||||||
Caisse Centrale Desjardins, 0.175% due 10/14/14 | 2.8 | ||||||
Sumitomo Mitsui Banking Corp., 0.150% due 08/11/14 | 2.4 | ||||||
Gemini Securitization Corp. LLC, 0.220% due 08/01/14 | 2.4 | ||||||
Erste Finance LLC, 0.160% due 08/01/14 | 2.4 | ||||||
Nrw. Bank, 0.100% due 08/11/14 | 2.4 | ||||||
Total | 38.3 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2014. The Portfolio is actively managed and its composition will vary over time.
6
PACE Money Market Investments
Statement of net assets—July 31, 2014
Face amount | Value | ||||||||||
US government and agency obligations—12.33% | |||||||||||
Federal Home Loan Bank | |||||||||||
0.065%, due 08/08/141 | $ | 3,000,000 | $ | 2,999,962 | |||||||
0.095%, due 12/24/101 | 5,000,000 | 4,998,087 | |||||||||
0.120%, due 05/15/151 | 7,000,000 | 6,993,303 | |||||||||
0.125%, due 06/02/15 | 3,000,000 | 2,999,000 | |||||||||
Federal National Mortgage Association* | |||||||||||
0.500%, due 07/02/15 | 2,000,000 | 2,005,532 | |||||||||
US Treasury Notes | |||||||||||
0.250%, due 09/15/14 | 150,000 | 150,039 | |||||||||
0.500%, due 10/15/14 | 6,000,000 | 6,005,458 | |||||||||
Total US government and agency obligations (cost—$26,151,381) | 26,151,381 | ||||||||||
Certificates of deposit—18.39% | |||||||||||
Banking-non-US—10.85% | |||||||||||
Bank of Tokyo-Mitsubishi UFJ Ltd. | |||||||||||
0.100%, due 08/01/14 | 3,000,000 | 3,000,000 | |||||||||
Credit Industriel et Commercial | |||||||||||
0.160%, due 09/09/14 | 3,000,000 | 3,000,000 | |||||||||
0.170%, due 09/15/14 | 3,000,000 | 3,000,000 | |||||||||
Natixis | |||||||||||
0.210%, due 09/03/142 | 2,000,000 | 2,000,000 | |||||||||
Norinchukin Bank | |||||||||||
0.100%, due 08/05/14 | 3,000,000 | 3,000,000 | |||||||||
Rabobank Nederland NV | |||||||||||
0.284%, due 10/10/142 | 1,000,000 | 1,000,000 | |||||||||
Societe Generale | |||||||||||
0.275%, due 08/29/142 | 2,000,000 | 2,000,000 | |||||||||
Sumitomo Mitsui Banking Corp. | |||||||||||
0.150%, due 08/11/14 | 5,000,000 | 5,000,000 | |||||||||
Toronto-Dominion Bank | |||||||||||
0.230%, due 02/24/15 | 1,000,000 | 1,000,000 | |||||||||
23,000,000 |
7
PACE Money Market Investments
Statement of net assets—July 31, 2014
Face amount | Value | ||||||||||
Certificates of deposit—(concluded) | |||||||||||
Banking-US—7.54% | |||||||||||
BMO Harris Bank N.A. | |||||||||||
0.190%, due 08/11/14 | $ | 4,000,000 | $ | 4,000,000 | |||||||
Branch Banking & Trust Co. | |||||||||||
0.150%, due 09/26/14 | 2,000,000 | 2,000,000 | |||||||||
Citibank N.A. | |||||||||||
0.160%, due 08/06/14 | 2,000,000 | 2,000,000 | |||||||||
0.170%, due 10/02/14 | 3,000,000 | 3,000,000 | |||||||||
PNC Bank N.A. | |||||||||||
0.230%, due 09/15/14 | 3,000,000 | 3,000,000 | |||||||||
Wells Fargo Bank N.A. | |||||||||||
0.210%, due 12/08/14 | 2,000,000 | 2,000,000 | |||||||||
16,000,000 | |||||||||||
Total certificates of deposit (cost—$39,000,000) | 39,000,000 | ||||||||||
Commercial paper1—50.55% | |||||||||||
Asset backed-miscellaneous—24.05% | |||||||||||
Albion Capital Corp. | |||||||||||
0.190%, due 08/15/14 | 3,000,000 | 2,999,778 | |||||||||
Antalis US Funding Corp. | |||||||||||
0.160%, due 08/04/14 | 3,000,000 | 2,999,960 | |||||||||
Atlantic Asset Securitization LLC | |||||||||||
0.120%, due 08/14/14 | 5,000,000 | 4,999,784 | |||||||||
Gemini Securitization Corp. LLC | |||||||||||
0.220%, due 08/01/14 | 5,000,000 | 5,000,000 | |||||||||
Gotham Funding Corp. | |||||||||||
0.150%, due 08/07/14 | 2,000,000 | 1,999,950 | |||||||||
LMA Americas LLC | |||||||||||
0.140%, due 08/12/14 | 5,000,000 | 4,999,786 | |||||||||
Manhattan Asset Funding Co. LLC | |||||||||||
0.150%, due 08/05/14 | 4,000,000 | 3,999,934 | |||||||||
0.170%, due 09/12/14 | 2,000,000 | 1,999,603 | |||||||||
Old Line Funding LLC | |||||||||||
0.190%, due 09/15/14 | 2,000,000 | 1,999,525 | |||||||||
0.220%, due 10/15/14 | 2,000,000 | 1,999,083 |
8
PACE Money Market Investments
Statement of net assets—July 31, 2014
Face amount | Value | ||||||||||
Commercial paper1—(continued) | |||||||||||
Asset backed-miscellaneous—(concluded) | |||||||||||
Regency Markets No. 1 LLC | |||||||||||
0.140%, due 08/14/14 | $ | 3,000,000 | $ | 2,999,848 | |||||||
0.140%, due 08/15/14 | 2,000,000 | 1,999,891 | |||||||||
0.140%, due 08/20/14 | 1,000,000 | 999,926 | |||||||||
Salisbury Receivables Co. LLC | |||||||||||
0.130%, due 08/15/14 | 2,000,000 | 1,999,899 | |||||||||
Sheffield Receivables Corp. | |||||||||||
0.180%, due 08/14/14 | 2,000,000 | 1,999,870 | |||||||||
Versailles Commercial Paper LLC | |||||||||||
0.100%, due 08/01/14 | 4,000,000 | 4,000,000 | |||||||||
Victory Receivables Corp. | |||||||||||
0.140%, due 08/19/14 | 4,000,000 | 3,999,720 | |||||||||
50,996,557 | |||||||||||
Banking-non-US—9.43% | |||||||||||
ASB Finance Ltd. | |||||||||||
0.245%, due 08/25/142 | 1,000,000 | 1,000,000 | |||||||||
Caisse Centrale Desjardins | |||||||||||
0.175%, due 10/14/14 | 6,000,000 | 5,997,842 | |||||||||
Credit Suisse | |||||||||||
0.175%, due 08/01/14 | 3,000,000 | 3,000,000 | |||||||||
0.210%, due 08/14/14 | 3,000,000 | 2,999,773 | |||||||||
Mitsubishi UFJ Trust & Banking Corp. | |||||||||||
0.200%, due 08/08/14 | 2,000,000 | 1,999,922 | |||||||||
Nrw. Bank | |||||||||||
0.100%, due 08/11/14 | 5,000,000 | 4,999,861 | |||||||||
19,997,398 | |||||||||||
Banking-US—4.72% | |||||||||||
Erste Finance LLC | |||||||||||
0.160%, due 08/01/14 | 5,000,000 | 5,000,000 | |||||||||
ING (US) Funding LLC | |||||||||||
0.200%, due 08/11/14 | 1,000,000 | 999,944 | |||||||||
0.160%, due 08/15/14 | 2,000,000 | 1,999,876 | |||||||||
0.200%, due 08/15/14 | 2,000,000 | 1,999,844 | |||||||||
9,999,664 |
9
PACE Money Market Investments
Statement of net assets—July 31, 2014
Face amount | Value | ||||||||||
Commercial paper1—(concluded) | |||||||||||
Brokerage—1.42% | |||||||||||
Prudential Funding LLC | |||||||||||
0.090%, due 08/05/14 | $ | 3,000,000 | $ | 2,999,970 | |||||||
Energy-integrated—0.94% | |||||||||||
CNPC Finance HK Ltd. | |||||||||||
0.280%, due 08/06/14 | 2,000,000 | 1,999,922 | |||||||||
Finance-captive automotive—0.47% | |||||||||||
Toyota Motor Credit Corp. | |||||||||||
0.210%, due 10/21/14 | 1,000,000 | 999,528 | |||||||||
Finance-non-captive diversified—0.94% | |||||||||||
General Electric Capital Corp. | |||||||||||
0.210%, due 01/05/15 | 2,000,000 | 1,998,168 | |||||||||
Insurance-life—4.15% | |||||||||||
MetLife Short Term Funding LLC | |||||||||||
0.110%, due 08/19/14 | 6,500,000 | 6,499,643 | |||||||||
Prudential PLC | |||||||||||
0.170%, due 08/18/14 | 2,286,000 | 2,285,816 | |||||||||
8,785,459 | |||||||||||
Retail-discount—1.60% | |||||||||||
Wal-Mart Stores, Inc. | |||||||||||
0.080%, due 08/18/14 | 3,400,000 | 3,399,872 | |||||||||
Tobacco—2.83% | |||||||||||
Philip Morris International Co. | |||||||||||
0.090%, due 08/06/14 | 3,000,000 | 2,999,963 | |||||||||
0.100%, due 08/06/14 | 3,000,000 | 2,999,958 | |||||||||
5,999,921 | |||||||||||
Total commercial paper (cost—$107,176,459) | 107,176,459 | ||||||||||
Short-term corporate obligation—1.89% | |||||||||||
Banking-non-US—1.89% | |||||||||||
Barclays Bank PLC | |||||||||||
0.360%, due 08/07/143 (cost—$4,000,000) | 4,000,000 | 4,000,000 |
10
PACE Money Market Investments
Statement of net assets—July 31, 2014
Face amount | Value | ||||||||||
Repurchase agreements—16.91% | |||||||||||
Repurchase agreement dated 07/31/14 with Barclays Capital, Inc., 0.060% due 08/01/14, collateralized by $20,387,300 US Treasury Note, 2.250% due 07/31/21; (value—$20,400,042); proceeds: $20,000,033 | $ | 20,000,000 | $ | 20,000,000 | |||||||
Repurchase agreement dated 07/31/14 with Deutsche Bank Securities, Inc., 0.090% due 08/01/14, collateralized by $14,031,000 Federal Home Loan Mortgage Corp. obligations, 5.000% due 02/16/17; (value—$15,810,365); proceeds: $15,500,039 | 15,500,000 | 15,500,000 | |||||||||
Repurchase agreement dated 07/31/14 with State Street Bank and Trust Co., 0.000% due 08/01/14, collateralized by $354,146 US Treasury Note, 0.875% due 05/15/17; (value—$354,146); proceeds: $347,000 | 347,000 | 347,000 | |||||||||
Total repurchase agreements (cost—$35,847,000) | 35,847,000 | ||||||||||
Total investments (cost—$212,174,840 which approximates cost for federal income tax purposes)—100.07% | 212,174,840 | ||||||||||
Liabilities in excess of other assets—(0.07)% | (149,719 | ) | |||||||||
Net assets (applicable to 212,025,120 shares of beneficial interest outstanding equivalent to $1.00 per share)—100.00% | $ | 212,025,121 |
11
PACE Money Market Investments
Statement of net assets—July 31, 2014
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2014 in valuing the Portfolio's investments:
Assets Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
US government and agency obligations | $ | — | $ | 26,151,381 | $ | — | $ | 26,151,381 | |||||||||||
Certificates of deposit | — | 39,000,000 | — | 39,000,000 | |||||||||||||||
Commercial paper | — | 107,176,459 | — | 107,176,459 | |||||||||||||||
Short-term corporate obligation | — | 4,000,000 | — | 4,000,000 | |||||||||||||||
Repurchase agreements | — | 35,847,000 | — | 35,847,000 | |||||||||||||||
Total | $ | — | $ | 212,174,840 | $ | — | $ | 212,174,840 |
At July 31, 2014, there were no transfers between Level 1 and Level 2.
Issuer breakdown by country or territory of origin (unaudited)
Percentage of total investments | |||||||
United States | 75.4 | % | |||||
Japan | 6.6 | ||||||
France | 4.7 | ||||||
Canada | 3.3 | ||||||
United Kingdom | 3.0 | ||||||
Switzerland | 2.8 | ||||||
Germany | 2.3 | ||||||
China | 0.9 | ||||||
Netherlands | 0.5 | ||||||
New Zealand | 0.5 | ||||||
Total | 100.0 | % |
12
PACE Money Market Investments
Statement of net assets—July 31, 2014
Portfolio footnotes
* On September 7, 2008, the Federal Housing Finance Agency placed the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.
1 Rates shown are the discount rates at date of purchase.
2 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2014 and changes periodically. The maturity date reflects earlier of reset date or stated maturity date.
3 Illiquid investment as of July 31, 2014.
See accompanying notes to financial statements
13
PACE Money Market Investments
Statement of operations
For the year ended July 31, 2014 | |||||||
Investment income: | |||||||
Interest | $ | 402,230 | |||||
Expenses: | |||||||
Transfer agency and related services fees | 1,153,703 | ||||||
Investment management and administration fees | 953,646 | ||||||
Reports and notices to shareholders | 133,892 | ||||||
Professional fees | 126,024 | ||||||
State registration fees | 36,465 | ||||||
Custody and accounting fees | 25,786 | ||||||
Trustees' fees | 25,279 | ||||||
Insurance expense | 7,523 | ||||||
Other expenses | 27,993 | ||||||
2,490,311 | |||||||
Fee waivers and/or expense reimbursements | (2,115,413 | ) | |||||
Net expenses | 374,898 | ||||||
Net investment income | 27,332 | ||||||
Net increase in net assets resulting from operations | $ | 27,332 |
See accompanying notes to financial statements
14
PACE Money Market Investments
Statement of changes in net assets
For the years ended July 31, | |||||||||||
2014 | 2013 | ||||||||||
From operations: | |||||||||||
Net investment income | $ | 27,332 | $ | 32,607 | |||||||
Net realized gain | — | 42 | |||||||||
Net increase in net assets resulting from operations | 27,332 | 32,649 | |||||||||
Dividends and distributions to shareholders from: | |||||||||||
Net investment income | (27,332 | ) | (32,607 | ) | |||||||
Net realized gains | (664 | ) | — | ||||||||
(27,996 | ) | (32,607 | ) | ||||||||
Net decrease in net assets from beneficial interest transactions | (97,818,589 | ) | (27,249,143 | ) | |||||||
Cash payment from investment advisor | 2,430 | — | |||||||||
Net decrease in net assets | (97,816,823 | ) | (27,249,101 | ) | |||||||
Net assets: | |||||||||||
Beginning of year | 309,841,944 | 337,091,045 | |||||||||
End of year | $ | 212,025,121 | $ | 309,841,944 | |||||||
Accumulated undistributed net investment income | $ | — | $ | — |
See accompanying notes to financial statements
15
PACE Money Market Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
Years ended July 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||||||
Net asset value, beginning of year | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Net investment income | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 | ||||||||||||||||||
Dividends from net investment income | (0.000 | )1 | (0.000 | )1 | (0.000 | )1 | (0.000 | )1 | (0.000 | )1 | |||||||||||||
Distributions from net realized gains | (0.000 | )1 | — | — | (0.000 | )1 | (0.000 | )1 | |||||||||||||||
Total dividends and distributions | (0.000 | )1 | (0.000 | )1 | (0.000 | )1 | (0.000 | )1 | (0.000 | )1 | |||||||||||||
Net asset value, end of year | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total investment return2 | 0.01 | %3 | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.91 | % | 0.88 | % | 0.89 | % | 0.88 | % | 0.90 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.14 | % | 0.19 | % | 0.19 | % | 0.25 | % | 0.27 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 212,025 | $ | 309,842 | $ | 337,091 | $ | 365,844 | $ | 386,217 |
1 Amount represents less than $0.0005 per share.
2 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and other distributions, if any, at net asset value on the payable dates, and a sale at net asset value on the last day of each year reported. The figures do not include program fees; results would be lower if these were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions.
3 Payment from investment advisor as disclosed on page 22 had no impact on the Portfolio's total investment return and represents less than $0.0005 per share.
See accompanying notes to financial statements
16
PACE Money Market Investments
Notes to financial statements
Organization and significant accounting policies
PACE Money Market Investments (the "Portfolio") is a diversified portfolio of PACE Select Advisors Trust (the "Trust"), which was organized as a Delaware statutory trust under the laws of the State of Delaware by Certificate of Trust dated September 9, 1994, as amended June 9, 1995 and thereafter, and is registered with the Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. The trustees of the Trust have authority to issue an unlimited number of shares of beneficial interest, par value $0.001 per share.
The Trust has fifteen Portfolios available for investment, each having its own investment objectives and policies. Shares of the Portfolio currently are available only to participants in the PACESM Select Advisors Program and the PACESM Multi Advisor Program.
The Trust accounts separately for the assets, liabilities and operations of each Portfolio. Expenses directly attributable to each Portfolio are charged to that Portfolio's operations; expenses which are applicable to all Portfolios are allocated among them on a pro rata basis.
In the normal course of business, the Portfolio may enter into contracts that contain a variety of representations or that provide indemnification for certain liabilities. The Portfolio's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Portfolio that have not yet occurred. However, the Portfolio has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
The Portfolio attempts to maintain a stable net asset value of $1.00 per share; the Portfolio has adopted certain investment, portfolio valuation and dividend/distribution policies in an attempt to enable it to do so. As with any money market fund, there is no assurance, however, that the Portfolio will be able to maintain a stable net asset value of $1.00 per share.
17
PACE Money Market Investments
Notes to financial statements
The Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") is the exclusive reference of authoritative US generally accepted accounting principles ("US GAAP") recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal laws are also sources of authoritative US GAAP for SEC registrants. The Portfolio's financial statements are prepared in accordance with US GAAP, which may require the use of management estimates and assumptions. The following is a summary of significant accounting policies:
Valuation of investments—Investments are valued at amortized cost. Periodic review and monitoring of the valuation of the securities held by the Portfolio is performed in an effort to ensure that amortized cost approximates market value.
US GAAP requires disclosure surrounding the various inputs that are used in determining the value of the Portfolio's investments. These inputs are summarized into the three broad levels listed below:
Level 1—Unadjusted quoted prices in active markets for identical investments.
Level 2—Other significant observable inputs, including but not limited to, quoted prices for similar investments, interest rates, prepayment speeds and credit risks.
Level 3—Unobservable inputs inclusive of the Portfolio's own assumptions in determining the fair value of investments.
In accordance with the requirements of US GAAP, a fair value hierarchy has been included near the end of the Portfolio's Statement of net assets.
Repurchase agreements—The Portfolio may purchase securities or other obligations from a bank or securities dealer (or its affiliate), subject to the seller's agreement to repurchase them at an agreed upon date (or upon demand) and price. The Portfolio maintains custody of the underlying obligations prior to their repurchase, either through its
18
PACE Money Market Investments
Notes to financial statements
regular custodian or through a special "tri-party" custodian or sub-custodian that maintains a separate account for both the Portfolio and its counterparty. The underlying collateral is valued daily in an effort to ensure that the value, including accrued interest, is at least equal to the repurchase price. In the event of default of the obligation to repurchase, the Portfolio generally has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Repurchase agreements involving obligations other than US government securities (such as commercial paper, corporate bonds, equities and mortgage loans) may be subject to special risks and may not have the benefit of certain protections in the event of counterparty insolvency. Moreover, repurchase agreements secured by obligations that are not eligible for direct investment under Rule 2a-7 under the 1940 Act or a Portfolio's investment strategies and limitations, may require the Portfolio to promptly dispose of such collateral if the seller or guarantor becomes insolvent. If the seller (or seller's guarantor, if any) becomes insolvent, the Portfolio may suffer delays, costs and possible losses in connection with the disposition or retention of the collateral. Under certain circumstances, in the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. The Portfolio may participate in joint repurchase agreement transactions with other funds managed, advised or sub-advised by UBS Global Asset Management (Americas) Inc. ("UBS Global AM").
Under certain circumstances, the Portfolio may engage in a repurchase agreement transaction with a yield of zero in order to invest cash amounts remaining in its portfolio at the end of the day in order to avoid having the Portfolio potentially exposed to a fee for uninvested cash held in a business account at a bank.
Investment transactions and investment income—Investment transactions are recorded on the trade date. Realized gains and losses from investment transactions are calculated using the identified cost method. Interest income is recorded on an accrual basis. Discounts are accreted and premiums are amortized as adjustments to interest income and the identified cost of investments.
19
PACE Money Market Investments
Notes to financial statements
Dividends and distributions—Dividends and distributions to shareholders are recorded on the ex-dividend date. The amount of dividends and distributions is determined in accordance with federal income tax regulations, which may differ from US GAAP. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification.
Concentration of risk—The ability of the issuers of debt securities held by the Portfolio to meet their obligations may be affected by economic and political developments particular to a specific industry, country, state or region.
Investment management and administration fees and other transactions with affiliates—The Portfolio's Board of Trustees has approved an investment management and administration contract ("Management Contract") with UBS Global AM. In accordance with the Management Contract, the Portfolio pays UBS Global AM an investment management and administration fee, which is accrued daily and paid monthly, at an annual rate of 0.35% of the Portfolio's average daily net assets. At July 31, 2014, the Portfolio is owed $61,010 from UBS Global AM, representing investment management and administration fees net of fee waivers/expense reimbursements.
UBS Global AM has contractually undertaken to waive a portion of the Portfolio's investment management and administration fees and/or reimburse a portion of the Portfolio's other expenses, when necessary, to maintain the total ordinary annual operating expenses (excluding dividend expense, borrowing costs and interest expense, if any) through November 30, 2014 at a level not to exceed 0.60%. The Portfolio will make a payment to UBS Global AM for any previously waived fees/reimbursed expenses during the following three fiscal years to the extent that operating expenses are otherwise below the expense cap.
20
PACE Money Market Investments
Notes to financial statements
At July 31, 2014, the Portfolio had remaining fee waivers/expense reimbursements subject to repayment to UBS Global AM and respective dates of expiration as follows:
Fee waivers/expense reimbursements subject to repayment | Expires July 31, 2015 | Expires July 31, 2016 | Expires July 31, 2017 | ||||||||||||
$ | 2,949,316 | $ | 1,175,570 | $ | 918,256 | $ | 855,490 |
UBS Global AM may voluntarily waive fees and/or reimburse expenses from time to time in the event that the Portfolio's yield falls below a certain level. Once started, there is no guarantee that UBS Global AM would continue to voluntarily waive an additional portion of its fees and/or reimburse expenses. This management fee waiver will not be subject to future recoupment. For the year ended July 31, 2014, UBS Global AM voluntarily waived and/or reimbursed expenses of $878,476 for that purpose.
Under normal conditions, the Portfolio invests cash collateral from securities lending activities into an affiliated private money market fund, UBS Private Money Market Fund LLC ("Private Money Market"), which operates in compliance with most of the substantive provisions of Rule 2a-7 of the 1940 Act. Private Money Market is managed by UBS Global AM and is currently offered as a cash management option to mutual funds and certain other accounts managed by the Portfolio's Investment Manager. UBS Global AM acts as managing member and receives a management fee from Private Money Market payable monthly in arrears at the annual rate of 0.10% of Private Money Market's average daily members' equity, minus the aggregate operating expenses of, and incurred by, Private Money Market during each such related month, not including investment expenses (including brokerage commissions, taxes, interest charges and other costs with respect to transactions in securities) and extraordinary expenses including litigation expenses, if any. UBS Global AM may, in its sole discretion, waive all or any portion of the management fee to which it may be entitled from time to time in order to maintain operating expenses at a certain level. Distributions received from Private Money Market, net of fee rebates
21
PACE Money Market Investments
Notes to financial statements
paid to borrowers, are reflected as securities lending income in the Statement of operations.
In August 2013, UBS Global AM made a voluntary cash payment of $2,430 to the Portfolio in order to address a differential between the number of shares outstanding and the Portfolio's net assets. The differential was attributable to historical, embedded capital losses that were experienced by the Portfolio over several years prior to the credit crisis of 2008. The voluntary payment to the Portfolio was not required to maintain a stable net asset value per share. The payment has removed a small, historical deviation that was reflected in the Portfolio's market price based and amortized cost net asset value per share.
Additional information regarding compensation to affiliate of a board member
Professor Meyer Feldberg serves as a senior advisor to Morgan Stanley, a financial services firm with which the Portfolio may conduct transactions, resulting in him being an interested trustee of the Portfolio. The Portfolio has been informed that Professor Feldberg's role at Morgan Stanley does not involve matters directly affecting any UBS funds. Portfolio transactions are executed through Morgan Stanley based on that firm's ability to provide best execution of the transactions. During the year ended July 31, 2014, the Portfolio purchased and sold certain securities (e.g., fixed income securities) in principal trades with Morgan Stanley, having an aggregate value of $121,907,714. Morgan Stanley received compensation in connection with these trades, which may have been in the form of a "mark-up" or "mark-down" of the price of the securities, a fee from the issuer for maintaining a commercial paper program, or some other form of compensation. Although the precise amount of this compensation is not generally known by the Portfolio's investment manager, it is believed that under normal circumstances it represents a small portion of the total value of the transactions.
22
PACE Money Market Investments
Notes to financial statements
Transfer agency and related services fees
UBS Financial Services Inc. provides certain services to the Portfolio pursuant to a delegation of authority from BNY Mellon Investment Servicing (US) Inc. ("BNY Mellon"), the Portfolio's transfer agent, and is compensated for these services by BNY Mellon, not the Portfolio.
Effective July 1, 2013, UBS Financial Services Inc. voluntarily agreed to waive a portion of the fee that it would otherwise have received from BNY Mellon with respect to PACE Money Market Investments so that BNY Mellon would correspondingly reduce the fees it would have charged to that Portfolio. Given that UBS Global AM has voluntarily undertaken to reduce its fees and/or reimburse expenses to keep the Portfolio's yield at or above a certain level, and that such amount exceeds the reduction in BNY Mellon's fees, the net effect of BNY Mellon's pass through of the waiver by UBS Financial Services Inc. is to partially reduce the amount that UBS Global AM would have otherwise voluntarily waived/reimbursed. For the year ended July 31, 2014, the amount of the reduction in transfer agency and related services fees charged by BNY Mellon to the Portfolio was $381,447, which reflected an equal amount of compensation that was voluntarily waived by UBS Financial Services Inc. Voluntary fee waiver/expense reimbursement arrangements may end at any time.
For the year ended July 31, 2014, UBS Financial Services Inc. received from BNY Mellon, not the Portfolio, $194,184 of the total transfer agency and related services fees paid by the Portfolio to BNY Mellon.
Securities lending
The Portfolio may lend securities up to 331/3% of its total assets to qualified broker-dealers or institutional investors. The loans are secured at all times by cash, US government securities or irrevocable letters of credit in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. The Portfolio will regain ownership of loaned securities to exercise certain beneficial rights; however, the Portfolio may bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower fail financially. The Portfolio
23
PACE Money Market Investments
Notes to financial statements
receives compensation for lending its securities from interest or dividends earned on the cash, US government securities or irrevocable letters of credit held as collateral, net of fee rebates paid to the borrower plus reasonable administrative and custody fees. State Street Bank and Trust Company serves as the Portfolio's lending agent. At July 31, 2014, there were no borrowings outstanding.
Other liabilities and components of net assets
At July 31, 2014, the Portfolio had the following liabilities outstanding:
Payable for shares of beneficial interest repurchased | $ | 301,721 | |||||
Payable to custodian | 3,773 | ||||||
Dividends payable to shareholders | 987 | ||||||
Other accrued expenses* | 219,606 |
* Excludes investment management and administration fees.
At July 31, 2014, the components of net assets were as follows:
Accumulated paid in capital | $ | 212,026,323 | |||||
Accumulated net realized loss | (1,202 | ) | |||||
Net assets | $ | 212,025,121 |
Shares of beneficial interest
There is an unlimited amount of $0.001 par value shares of beneficial interest authorized. Transactions in shares of beneficial interest, at $1.00 per share, were as follows:
Years ended July 31, | |||||||||||
2014 | 2013 | ||||||||||
Shares sold | 228,597,765 | 350,456,561 | |||||||||
Shares repurchased | (326,432,653 | ) | (377,723,554 | ) | |||||||
Dividends reinvested | 16,299 | 17,850 | |||||||||
Net decrease in shares outstanding | (97,818,589 | ) | (27,249,143 | ) |
24
PACE Money Market Investments
Notes to financial statements
Federal tax status
The Portfolio intends to distribute substantially all of its income and to comply with the other requirements of the Internal Revenue Code applicable to regulated investment companies. Accordingly, no provision for federal income taxes is required. In addition, by distributing during each calendar year substantially all of its net investment income, net realized capital gains and certain other amounts, if any, the Portfolio intends not to be subject to a federal excise tax.
The tax character of distributions paid to shareholders by the Portfolio during the fiscal years ended July 31, 2014 and July 31, 2013 was ordinary income.
At July 31, 2014 the components of accumulated earnings on a tax basis were accumulated realized capital and other losses of $215.
To reflect reclassifications arising from permanent "book/tax" differences for the year ended July 31, 2014, accumulated net realized loss was decreased by $937 and paid in capital was decreased by $937. This difference was due to distributions in excess of net investment income.
Under the Regulated Investment Company Modernization Act of 2010 (the "Act"), net capital losses recognized by the Portfolio after December 22, 2010, may be carried forward indefinitely, and retain their character as short-term and/or long-term losses. The Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.
At July 31, 2014, the Portfolio had post-enactment short-term capital loss carryforwards of $98 and the following pre-enactment capital loss
25
PACE Money Market Investments
Notes to financial statements
carryforwards through the indicated expiration dates for federal income tax purposes available to offset future capital gains:
Expiration dates | |||||||||||||||
Portfolio | July 31, 2018 | July 31, 2019 | Total | ||||||||||||
PACE Money Market Investments | $ | 94 | $ | 23 | $ | 117 |
As of and during the year ended July 31, 2014, the Portfolio did not have any liabilities for any uncertain tax positions. The Portfolio recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of operations. During the year ended July 31, 2014, the Portfolio did not incur any interest or penalties related to uncertain tax positions.
Each of the tax years in the four year period ended July 31, 2014, remains subject to examination by the Internal Revenue Service and state taxing authorities.
Regulatory developments
On July 23, 2014, the SEC amended certain regulations that govern money market funds registered under the 1940 Act. The most significant changes will not become mandatory until October 2016. The most significant change with respect to general "prime" money market funds is a requirement that institutional prime money market funds move to a floating net asset value and change an accounting methodology that had been used for decades. In addition, such funds will be subject to potential redemption fees/gates under limited circumstances prescribed in the new regulations. Retail prime money market funds will continue to be permitted to transact at a stable $1.00 share price; however, "retail" is narrowly defined. UBS Global AM is currently evaluating the potential impact of these changes on PACE Money Market Investments and expects to update shareholders further in advance of the October 2016 deadline.
26
PACE Money Market Investments
Report of Ernst & Young LLP, independent registered public accounting firm
The Board of Trustees and Shareholders of
PACE Select Advisors Trust
We have audited the accompanying statement of net assets of PACE Money Market Investments (one of the series comprising PACE Select Advisors Trust) (the "Portfolio") as of July 31, 2014, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Portfolio's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2014, by correspondence with the custodian and others. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of PACE Money Market Investments at July 31, 2014, the results of its
27
PACE Money Market Investments
Report of Ernst & Young LLP, independent registered public accounting firm (concluded)
operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with US generally accepted accounting principles.
New York, New York
September 29, 2014
28
PACE Money Market Investments
General information (unaudited)
Monthly and quarterly portfolio holdings disclosure
The Portfolio will file its complete schedule of portfolio holdings with the Securities and Exchange Commission ("SEC") for the first and third quarters of each fiscal year on Form N-Q. The Portfolio's Forms N-Q are available on the SEC's Web site at http://www.sec.gov. The Portfolio's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC 0330. Additionally, you may obtain copies of Forms N-Q from the Portfolio upon request by calling 1-800-647 1568.
In addition, the Portfolio discloses, on a monthly basis: (a) a complete schedule of its portfolio holdings; and (b) information regarding its weighted average maturity and weighted average life on UBS's Web site at the following internet address: www.ubs.com/usmoneymarketfundsholdings. In addition, at this location, you will find a link to more detailed Portfolio information appearing in filings with the SEC on Form N-MFP.
Proxy voting policies, procedures and record
You may obtain a description of the Portfolio's (1) proxy voting policies, (2) proxy voting procedures and (3) information regarding how the Portfolio voted any proxies related to portfolio securities during the most recent 12-month period ended June 30 for which an SEC filing has been made, without charge, upon request by contacting the Portfolio directly at 1-800-647 1568, online on the Portfolio's Web site: www.ubs.com/ubsglobalam-proxy, or on the EDGAR Database on SEC's Web site (http://www.sec.gov).
29
PACE Money Market Investments
Board approval of investment management and administration agreement (unaudited)
Background—At a meeting of the board of PACE Select Advisors Trust (the "Trust") on July 15-16, 2014, the members of the board, including the trustees who are not "interested persons," as defined in the Investment Company Act of 1940, as amended, of the Trust (the "Independent Trustees"), considered and approved the continuance of the investment management and administration agreement (the "Investment Management and Administration Agreement") between UBS Global Asset Management (Americas) Inc. ("UBS Global AM") and the Trust, on behalf of PACE Money Market Investments (the "Portfolio"). In preparing for the meeting, the board members had requested and received extensive information from UBS Global AM to assist them, including information about UBS Global AM, as well as the management, administrative and distribution arrangements for the Portfolio. The Independent Trustees discussed the materials initially provided by management on several occasions prior to the scheduled board meeting. The Independent Trustees also met in executive session after management's presentation was completed to review the disclosure that had been made to them at the meeting. At these sessions the Independent Trustees were joined by their independent legal counsel. The Independent Trustees also received a memorandum from their independent legal counsel discussing the duties of board members in considering the approval of management, administration and distribution agreements.
In its consideration of the approval of the Investment Management and Administration Agreement, the board considered the following factors:
Nature, extent and quality of the services under the Investment Management and Administration Agreement—The board received and considered information regarding the nature, extent and quality of management services provided to the Portfolio by UBS Global AM. The board also considered the nature, extent and quality of administrative, distribution and shareholder services performed by UBS Global AM and its affiliates for the Portfolio and the resources devoted to, and the record of compliance with, the Portfolio's compliance policies and procedures. The board noted that it received
30
PACE Money Market Investments
Board approval of investment management and administration agreement (unaudited)
information at regular meetings throughout the year regarding the services rendered by UBS Global AM concerning the management of the Portfolio's affairs and UBS Global AM's role in coordinating and overseeing providers of other services to the Portfolio. The board's evaluation of the services provided by UBS Global AM took into account the board's knowledge and familiarity gained as board members of funds in the UBS New York fund complex, including the scope and quality of UBS Global AM's investment management and other capabilities and the quality of its administrative and other services. The board observed that the scope of services provided by UBS Global AM had expanded over time as a result of regulatory and other developments, including maintaining and monitoring its own and the Portfolio's expanded compliance programs.
The board had available to it the qualifications, backgrounds and responsibilities of the senior personnel at UBS Global AM responsible for the Portfolio and had previously met with and received information regarding the person primarily responsible for the day-to-day management of the Portfolio. The board recognized that the Portfolio's senior personnel at UBS Global AM report to the board regularly, and that at each regular meeting the board receives a detailed report from UBS Global AM on the Portfolio's performance. The board also considered, based on its knowledge of UBS Global AM and its affiliates, the financial resources available to UBS Global AM and its parent organization, UBS AG. In that regard, the board received extensive financial information regarding UBS Global AM and noted that it was a wholly owned, indirect subsidiary of one of the largest financial services firms in the world. It also was noted that UBS Global AM had approximately $158 billion in assets under management as of March 31, 2014 and was part of the UBS Global Asset Management Division, which had approximately $674 billion in assets under management worldwide as of March 31, 2014. The board also was cognizant of, and considered, the regulatory and litigation actions and investigations occurring in the past few years involving UBS AG, UBS Global AM and certain of their affiliates.
31
PACE Money Market Investments
Board approval of investment management and administration agreement (unaudited)
The board concluded that, overall, it was satisfied with the nature, extent and quality of services provided (and expected to be provided) to the Portfolio under the Investment Management and Administration Agreement.
Management fees and expense ratios—The board reviewed and considered the contractual management fee (the "Contractual Management Fee") payable by the Portfolio to UBS Global AM in light of the nature, extent and quality of the services provided by UBS Global AM pursuant to the Investment Management and Administration Agreement. The board also reviewed and considered the fee waiver and/or expense reimbursement arrangements for the Portfolio and considered the actual fee rate (after taking any waivers and reimbursements into account) (the "Actual Management Fee") payable by the Portfolio. The board considered that UBS Global AM had entered into a fee waiver and/or expense reimbursement agreement with the Portfolio under which UBS Global AM was contractually obligated to waive its management fees and/or reimburse the Portfolio so that the ordinary total operating expenses of the Portfolio through March 31, 2015 (excluding certain miscellaneous items) would not exceed a specified limit. The board also considered that the Portfolio had agreed to repay UBS Global AM for those waived fees and/or reimbursed expenses if the Portfolio can do so over the following three fiscal years without causing its expenses in any of those years to exceed the expense cap. Additionally, the board received and considered information comparing the Portfolio's Contractual Management Fee, Actual Management Fee and overall expenses with those of funds in a group of funds selected and provided by Lipper, an independent provider of investment company data (the "Expense Group").
In connection with its consideration of the Portfolio's management fees, the board also received information on UBS Global AM with respect to fees paid by institutional or separate accounts; however, in management's view, such fee information was not very relevant to the Portfolio because, among other reasons, separately managed and institutional accounts with a "cash" mandate (a) were not sub-
32
PACE Money Market Investments
Board approval of investment management and administration agreement (unaudited)
ject to all of the constraints of Rule 2a-7 under the 1940 Act to which the Portfolio is subject and (b) do not involve the management responsibilities attendant to the operation of a 1940 Act regulated fund, and, therefore, were not totally comparable. The board also received information on fees charged to other mutual funds managed by UBS Global AM.
The comparative Lipper information showed that the Portfolio's Contractual Management Fee, Actual Management Fee and its total expenses were below the median in the Portfolio's Expense Group for the comparison periods utilized in the Lipper report. (Below median expenses represents fees or expenses that are lower relative to the median, and above median expenses represents fees or expenses that are higher relative to the median of the funds in the applicable Expense Group.)
In light of the foregoing, the board determined that the proposed contractual management fee payable by the Portfolio to UBS Global AM was reasonable in light of the nature, extent and quality of services expected to be provided to the Portfolio under the Investment Management and Administration Agreement.
Portfolio performance—The board received and considered (a) annualized total return information of the Portfolio compared to other funds (the "Performance Universe") selected by Lipper over the one-, three-, five-, ten-year and since inception periods ended April 30, 2014, and (b) annualized performance information for each year in the ten-year period ended April 30, 2014. Although the board received information for the ten-year and since inception periods, in its analysis, it generally placed greater emphasis on the one-, three- and five-year periods. The board was provided with a description of the methodology Lipper used to determine the similarity of the Portfolio with the funds included in its Performance Universe. The board also received updated supplemental data showing the Portfolio's performance through May 31, 2014. The board also noted that it had received information throughout the year at periodic intervals with respect to the Portfolio's performance.
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PACE Money Market Investments
Board approval of investment management and administration agreement (unaudited)
The comparative Lipper information showed that the Portfolio's performance was at or above the median for the one-, three-, five- and ten-year periods and since inception. (Below median performance represents performance that is worse relative to the median, and above median performance represents performance that is better relative to the median.) Based on its review of the Portfolio, the board concluded that the Portfolio's investment performance was acceptable.
Advisor profitability—The board received and considered a profitability analysis of UBS Global AM and its affiliates in providing services to the Portfolio. The board also received profitability information with respect to the UBS New York fund complex as a whole. UBS Global AM's profitability was considered not excessive in light of the nature, extent and quality of the services provided to the Portfolio.
Economies of scale—The board received and considered information from management regarding whether UBS Global AM realized economies of scale as the Portfolio's assets grew, whether the Portfolio has appropriately benefited from any economies of scale, and whether there is potential for realization of any further economies of scale for the Portfolio. The board considered whether economies of scale in the provision of services to the Portfolio were being passed along to the shareholders. The board noted that the Portfolio's Contractual Management Fee did not contain breakpoints. However, the board also noted that to the extent the Portfolio's assets increase over time, it will realize economies of scale as certain expenses, such as fees for trustees, auditor and legal fees and printing and postage, become a smaller percentage of overall assets.
In light of UBS Global AM's profitability data, the Actual Management Fee, the Contractual Management Fee and the current assets of the Portfolio, the board believed that UBS Global AM's sharing of potential and current economies of scale with the Portfolio was acceptable.
Other benefits to UBS Global AM—The board considered other benefits received by UBS Global AM and its affiliates as a result of its
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PACE Money Market Investments
Board approval of investment management and administration agreement (unaudited)
relationship with the Portfolio, including the opportunity to offer additional products and services to Portfolio shareholders. In light of the costs of providing investment management, administrative and other services to the Portfolio and UBS Global AM's ongoing commitment to the Portfolio, the profits and other ancillary benefits that UBS Global AM and its affiliates received were considered reasonable.
In light of all of the foregoing, the board approved the Investment Management and Administration Agreement for the Portfolio. No single factor reviewed by the board was identified by the board as the principal factor in determining whether to approve the Investment Management and Administration Agreement. The Independent Trustees were advised by separate independent legal counsel throughout the process. The board discussed the proposed continuance of the Investment Management and Administration Agreement in private sessions with their independent legal counsel at which no representatives of UBS Global AM were present.
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PACE Money Market Investments
Supplemental information (unaudited)
Board of Trustees & Officers
The Trust is governed by a Board of Trustees which oversees the Portfolios' operations. Each Trustee serves an indefinite term of office. Officers are appointed by the trustees and serve at the pleasure of the Board. The table below shows, for each trustee and officer, his or her name, address and age, the position held with the Trust, the length of time served as a trustee or officer of the Trust, the trustee's or officer's principal occupations during the last five years, the number of portfolios in the UBS fund complex overseen by the trustee or for which a person served as an officer, and other directorships held by the trustee.
The Trust's Statement of Additional Information contains additional information about the trustees and is available, without charge, upon request by calling 1-800-647 1568.
Interested Trustees
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years | ||||||||||||
Meyer Feldberg2; 72 Morgan Stanley 1585 Broadway 36th Floor New York, NY 10036 | Trustee | Since 2001 | Professor Feldberg is Dean Emeritus and Professor of Leadership and Ethics at Columbia Business School, although on an extended leave of absence. He is also a senior advisor to Morgan Stanley (financial services) (since 2005). Professor Feldberg also serves as president of New York City Global Partners (an organization located in part of the Office of the Mayor of the City of New York that promotes interaction with other cities around the world) (since 2007). Prior to 2004, he was Dean and Professor of Management and Ethics of the Graduate School of Business at Columbia University (since 1989). |
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PACE Money Market Investments
Supplemental information (unaudited)
Name, address, and age | Number of portfolios in fund complex overseen by trustee | Other directorships held by trustee | |||||||||
Meyer Feldberg2; 72 Morgan Stanley 1585 Broadway 36th Floor New York, NY 10036 | Professor Feldberg is a director or trustee of 19 investment companies (consisting of 51 portfolios) for which UBS Global AM or one of its affiliates serves as investment advisor, sub-advisor or manager. | Professor Feldberg is also a director of Macy's, Inc. (operator of department stores), Revlon, Inc. (cosmetics), and the New York City Ballet. |
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Supplemental information (unaudited)
Independent Trustees
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years | ||||||||||||
Richard Q. Armstrong; 79 c/o Keith Weller Assistant Fund Secretary UBS Global Asset Management (Americas) Inc. 1285 Avenue of the Americas New York, NY, 10019 | Trustee and Chairman of the Board of Trustees | Since 2001 (Trustee) Since 2004 (Chairman of the Board of Trustees) | Mr. Armstrong is chairman and principal of R.Q.A. Enterprises (management consulting firm) (since 1991 and principal occupation since 1995). Mr. Armstrong was president or chairman of a number of packaged goods companies (responsible for such brands as Canada Dry, Dr. Pepper, Adirondack Beverages and Moët Hennessy) (from 1982 until 1995). | ||||||||||||
Alan S. Bernikow; 73 207 Benedict Ave. Staten Island, NY 10314 | Trustee | Since 2005 | Mr. Bernikow is retired. He was a consultant on non-management matters for the firm of Deloitte & Touche (international accounting and consulting firm) (from 2003 to 2007). Previously, he was deputy chief executive officer at Deloitte & Touche. |
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PACE Money Market Investments
Supplemental information (unaudited)
Name, address, and age | Number of portfolios in fund complex overseen by trustee | Other directorships held by trustee | |||||||||
Richard Q. Armstrong; 79 c/o Keith Weller Assistant Fund Secretary UBS Global Asset Management (Americas) Inc. 1285 Avenue of the Americas New York, NY, 10019 | Mr. Armstrong is a director or trustee of 11 investment companies (consisting of 43 portfolios) for which UBS Global AM serves as investment advisor or manager. | None | |||||||||
Alan S. Bernikow; 73 207 Benedict Ave. Staten Island, NY 10314 | Mr. Bernikow is a director or trustee of 11 investment companies (consisting of 43 portfolios) for which UBS Global AM serves as investment advisor or manager. | Mr. Bernikow is also a director of Revlon, Inc. (cosmetics) (and serves as the chair of its audit committee and as the chair of its compensation committee), a director of Mack-Cali Realty Corporation (real estate investment trust) (and serves as the chair of its audit committee); and a director of the Casual Male Retail Group, Inc. (menswear) (and serves as a member of its audit committee and as a member of its nominating and corporate governance committee). He is also a director of Premier American Bank, N.A. |
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PACE Money Market Investments
Supplemental information (unaudited)
Independent Trustees (continued)
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years | ||||||||||||
Richard R. Burt; 67 McLarty Associates 900 17th Street, 8th Floor Washington, D.C. 20006 | Trustee | Since 2001 | Mr. Burt is a managing director to McLarty Associates (a consulting firm) with which he has been employed since 2007. He was chairman of IEP Advisors (international investments and consulting firm) until 2009. Prior to 2007, he was chairman of Diligence Inc. (information and risk management firm). | ||||||||||||
Bernard H. Garil; 74 6754 Casa Grande Way Delray Beach, FL 33446 | Trustee | Since 2005 | Mr. Garil is retired (since 2001). He was a managing director at PIMCO Advisory Services (from 1999 to 2001) where he served as president of closed-end funds and vice-president of the variable insurance product funds advised by OpCap Advisors (until 2001). | ||||||||||||
Heather R. Higgins; 55 255 E. 49th St., Suite 23D New York, NY 10017 | Trustee | Since 2005 | Ms. Higgins is the president and director of The Randolph Foundation (charitable foundation) (since 1991). Ms. Higgins also serves (or had served) on the boards of several non-profit charitable groups, including the Independent Women's Forum (chairman) and the Philanthropy Roundtable (vice chairman). She also serves on the board of the Hoover Institution (from 2001 to 2007 and since 2009). |
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PACE Money Market Investments
Supplemental information (unaudited)
Name, address, and age | Number of portfolios in fund complex overseen by trustee | Other directorships held by trustee | |||||||||
Richard R. Burt; 67 McLarty Associates 900 17th Street, 8th Floor Washington, D.C. 20006 | Mr. Burt is a director or trustee of 11 investment companies (consisting of 43 portfolios) for which UBS Global AM serves as investment advisor or manager. | Mr. Burt is also a director of Central Europe & Russia Fund, Inc., European Equity Fund, Inc. and The New Germany Fund, Inc. (and serves as a member of each such fund's audit, nominating and governance committees). | |||||||||
Bernard H. Garil; 74 6754 Casa Grande Way Delray Beach, FL 33446 | Mr. Garil is a director or trustee of 11 investment companies (consisting of 43 portfolios) for which UBS Global AM serves as investment advisor or manager. | Mr. Garil is also a director of OFI Global Trust Company (commercial trust company), the Leukemia and Lymphoma Society (voluntary health organization) and a trustee for the Brooklyn College Foundation, Inc. (charitable foundation). | |||||||||
Heather R. Higgins; 55 255 E. 49th St., Suite 23D New York, NY 10017 | Ms. Higgins is a director or trustee of 11 investment companies (consisting of 43 portfolios) for which UBS Global AM serves as investment advisor or manager. | None |
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PACE Money Market Investments
Supplemental information (unaudited)
Independent Trustees (concluded)
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years | ||||||||||||
David Malpass*; 58 Encima Global, LLC 645 Madison Avenue, 5th Floor, New York, NY 10022 | Trustee | Since May 2014 | Mr. Malpass is the president and founder of Encima Global, LLC (economic research and consulting) (since 2008). From 1993 until 2008, he was Chief Economist and Senior Managing Director of Bear, Stearns & Co. (financial services firm). |
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PACE Money Market Investments
Supplemental information (unaudited)
Name, address, and age | Number of portfolios in fund complex overseen by trustee | Other directorships held by trustee | |||||||||
David Malpass*; 58 Encima Global, LLC 645 Madison Avenue, 5th Floor, New York, NY 10022 | Mr. Malpass is a director or trustee of 11 investment companies (consisting of 43 portfolios) for which UBS Global AM serves as investment advisor or manager. | Mr. Malpass is also a director of New Mountain Finance Corp. (business development company) (and serves as a member of its audit committee). |
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PACE Money Market Investments
Supplemental information (unaudited)
Officers
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer | ||||||||||||
Joseph Allessie*; 49 | Vice President, Assistant Secretary and Chief Compliance Officer | Since 2005 (Vice President and Assistant Secretary) Since July 2014 (Chief Compliance Officer) | Mr. Allessie is an executive director (since 2007) (prior to which he was a director) at UBS Global Asset Management (US) Inc. and UBS Global AM (collectively, "UBS Global AM—Americas region"). Mr. Allessie is head of compliance and operational risk control for the UBS Global Asset Management Division in the Americas with oversight for traditional and alternative investment businesses in Canada, the US and Cayman Islands. Prior to that he served as deputy general counsel (from 2005 to 2014). Mr. Allessie is a vice president, assistant secretary and chief compliance officer (prior to which he was interim chief compliance officer) (from January to July 2014) of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Rose Ann Bubloski*; 46 | Vice President and Assistant Treasurer | Since 2011 | Ms. Bubloski is a director (since 2012) (prior to which she was an associate director) and senior manager of the US mutual fund treasury administration department of UBS Global AM—Americas region. She is vice president and assistant treasurer of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. |
44
PACE Money Market Investments
Supplemental information (unaudited)
Officers (continued)
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer | ||||||||||||
Mark E. Carver*; 51 | President | Since 2010 | Mr. Carver is a managing director and Head of Product Development and Management-Americas for UBS Global AM—Americas region (since 2008). In this role, he oversees product development and management for both wholesale and institutional businesses. He is a member of the Americas Management Committee (since 2008) and the Regional Operating Committee (since 2008). Prior to 2008, Mr. Carver held a number of product-related or sales responsibilities with respect to funds, advisory programs and separately managed accounts. Mr. Carver joined a predecessor of an affiliated firm in 1985 and has been with UBS Global AM—Americas region (or its affiliates) since 1996. Mr. Carver is president of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. |
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PACE Money Market Investments
Supplemental information (unaudited)
Officers (continued)
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer | ||||||||||||
Thomas Disbrow*; 48 | Vice President and Treasurer | Since 2000 (Vice President) Since 2004 (Treasurer) | Mr. Disbrow is a managing director (since 2011) (prior to which he was an executive director) (since 2007) and head of North America Fund Treasury (since 2011) of UBS Global AM—Americas region. Mr. Disbrow is a vice president and treasurer and/or principal accounting officer of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Michael J. Flook*; 49 | Vice President and Assistant Treasurer | Since 2006 | Mr. Flook is a director (since 2010) (prior to which he was an associate director) (since 2006) and a senior manager of the US mutual fund treasury administration department of UBS Global AM—Americas region. Mr. Flook is a vice president and assistant treasurer of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. |
46
PACE Money Market Investments
Supplemental information (unaudited)
Officers (continued)
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer | ||||||||||||
Christopher S. Ha*; 34 | Vice President and Assistant Secretary | Since 2012 | Mr. Ha is a director and associate general counsel (since September 2012) at UBS Global AM—Americas region. Prior to joining UBS Global AM—Americas region, Mr. Ha was of counsel at Buhler, Duggal & Henry LLP (law firm) (from March 2012 to July 2012) and an associate attorney at Dechert LLP (law firm) (from 2007 to 2009). Mr. Ha is a vice president and assistant secretary of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Mark F. Kemper**; 56 | Vice President and Secretary | Since 2004 | Mr. Kemper is a managing director (since 2006) and head of the legal department of UBS Global AM—Americas region (since 2004). He has been secretary of UBS Global AM—Americas region (since 2004), secretary of UBS Global Asset Management Trust Company (since 1993) and secretary of UBS AM Holdings (USA) Inc. (since 2001). Mr. Kemper is vice president and secretary of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. |
47
PACE Money Market Investments
Supplemental information (unaudited)
Officers (continued)
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer | ||||||||||||
Joanne M. Kilkeary*; 46 | Vice President and Assistant Treasurer | Since 1999 | Ms. Kilkeary is an executive director (since March 2013) (prior to which she was a director) (since 2008) and a senior manager (since 2004) of the US mutual fund treasury administration department of UBS Global AM—Americas region. Ms. Kilkeary is a vice president and assistant treasurer of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Tammie Lee*; 43 | Vice President and Assistant Secretary | Since 2005 | Ms. Lee is an executive director (since 2010) (prior to which she was a director) and associate general counsel of UBS Global AM—Americas region (since 2005). Ms. Lee is a vice president and assistant secretary of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. |
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PACE Money Market Investments
Supplemental information (unaudited)
Officers (continued)
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer | ||||||||||||
Nancy D. Osborn*; 48 | Vice President and Assistant Treasurer | Since 2007 | Mrs. Osborn is a director (since 2010) (prior to which she was an associate director) and a senior manager of the US mutual fund treasury administration department of UBS Global AM—Americas region (since 2006). Mrs. Osborn is a vice president and assistant treasurer of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Robert Sabatino**; 41 | Vice President | Since 2001 | Mr. Sabatino is a managing director (since 2010) (prior to which he was an executive director) (since 2007), head of US taxable money markets (since 2009), and portfolio manager of UBS Global AM—Americas region in the short duration fixed income group (since 2001). Mr. Sabatino is a vice president of 5 investment companies (consisting of 36 portfolios) for which UBS Global AM serves as investment advisor or manager. |
49
PACE Money Market Investments
Supplemental information (unaudited)
Officers (continued)
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer | ||||||||||||
Eric Sanders*; 48 | Vice President and Assistant Secretary | Since 2005 | Mr. Sanders is a director and associate general counsel of UBS Global AM—Americas region (since 2005). Mr. Sanders is a vice president and assistant secretary of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Andrew Shoup*; 58 | Vice President and Chief Operating Officer | Since 2006 | Mr. Shoup is a managing director and global head of the treasury administration department of UBS Global AM—Americas region (since 2006). Mr. Shoup is also a director of UBS (IRL) Fund p.l.c. (since 2008). Mr. Shoup is a vice president and chief operating officer of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. | ||||||||||||
Keith A. Weller*; 53 | Vice President and Assistant Secretary | Since 2000 | Mr. Weller is an executive director and senior associate general counsel of UBS Global AM—Americas region (since 2005) and has been an attorney with affiliated entities since 1995. Mr. Weller is a vice president and assistant secretary of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. |
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PACE Money Market Investments
Supplemental information (unaudited)
Officers (concluded)
Name, address, and age | Position(s) held with Trust | Term of office1 and length of time served | Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer | ||||||||||||
Mandy Yu*; 30 | Vice President | Since February 2013 | Ms. Yu is an authorized officer (since 2012) and tax compliance manager (since March 2013) of the US mutual fund treasury administration department of UBS Global AM—Americas region. She was a Fund Treasury Manager (from 2012 to March 2013) and a Mutual Fund Administrator (from 2007 to 2012) for UBS Global AM—Americas region. Ms. Yu is a vice president of 15 investment companies (consisting of 75 portfolios) for which UBS Global AM serves as investment advisor or manager. |
1 Each trustee holds office for an indefinite term. Officers are appointed by the trustees and serve at the pleasure of the Board.
2 Professor Feldberg is deemed an "interested person" of the Trust as defined in the Investment Company Act of 1940, as amended, because he is a senior advisor to Morgan Stanley, a financial services firm with which the Trust may conduct transactions.
* This person's business address is 1285 Avenue of the Americas, New York, New York 10019-6028.
** This person's business address is One North Wacker Drive, Chicago, Illinois 60606.
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Trustees
Richard Q. Armstrong Chairman Alan S. Bernikow Richard R. Burt | Meyer Feldberg Bernard H. Garil Heather R. Higgins David Malpass |
Principal Officers
Mark E. Carver President | Thomas Disbrow Vice President and Treasurer | ||||||
Mark F. Kemper Vice President and Secretary | Robert Sabatino Vice President |
Investment Manager and
Administrator
UBS Global Asset Management (Americas) Inc.
1285 Avenue of the Americas
New York, New York 10019-6028
Principal Underwriter
UBS Global Asset Management (US) Inc.
1285 Avenue of the Americas
New York, New York 10019-6028
This report is not to be used in connection with the offering of shares of the Portfolio unless accompanied or preceded by an effective prospectus.
© UBS 2014. All rights reserved.
PRESORTED
STANDARD
U.S. POSTAGE
PAID
COMPUTERSHARE
UBS Global Asset Management (Americas) Inc.
1285 Avenue of the Americas
New York, New York 10019-6028
S026
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions pursuant to Section 406 of the Sarbanes-Oxley Act of 2002. (The registrant has designated the code of ethics adopted pursuant to Sarbanes-Oxley as a “Code of Conduct” to lessen the risk of confusion with its separate code of ethics adopted pursuant to Rule 17j-1 under the Investment Company Act of 1940, as amended.)
Item 3. Audit Committee Financial Expert.
The registrant’s Board has determined that the following person serving on the registrant’s Audit Committee is an “audit committee financial expert” as defined in item 3 of Form N-CSR: Alan S. Bernikow. Mr. Bernikow is independent as defined in item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees:
For the fiscal years ended July 31, 2014 and July 31, 2013, the aggregate Ernst & Young LLP (E&Y) audit fees for professional services rendered to the registrant were approximately $989,940 and $954,750, respectively.
Fees included in the audit fees category are those associated with the annual audits of financial statements and services that are normally provided in connection with statutory and regulatory filings.
(b) Audit-Related Fees:
In each of the fiscal years ended July 31, 2014 and July 31, 2013, the aggregate audit-related fees billed by E&Y for services rendered to the registrant that are reasonably related to the performance of the audits of the financial statements, but not reported as audit fees, were approximately $66,505 and $65,806, respectively.
Fees included in the audit-related fees category are those associated with (1) the reading and providing of comments on the 2014 and 2013 semiannual financial statements and (2) review of the consolidated 2013 and 2012 reports on the profitability of the UBS Funds to UBS Global Asset Management (Americas) Inc. and its affiliates to assist the board members in their annual advisory/administration contract and service/distribution plan reviews.
There were no audit-related fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years indicated above.
(c) Tax Fees:
In each of the fiscal years ended July 31, 2014 and July 31, 2013, the aggregate tax fees billed by E&Y for professional services rendered to the registrant were approximately $312,822 and $435,890, respectively.
Fees included in the tax fees category comprise all services performed by professional staff in the independent accountant’s tax division except those services related to the audits. This category comprises fees for review of tax compliance, tax return preparation and excise tax calculations.
There were no tax fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years indicated above.
(d) All Other Fees:
In each of the fiscal years ended July 31, 2014 and July 31, 2013, there were no fees billed by E&Y for products and services, other than the services reported in Item 4(a)-(c) above, rendered to the registrant.
Fees included in the all other fees category would consist of services related to internal control reviews, strategy and other consulting, financial information systems design and implementation, consulting on other information systems, and other tax services unrelated to the registrant.
There were no “all other fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years indicated above.
(e) (1) Audit Committee Pre-Approval Policies and Procedures:
The registrant’s Audit Committee (“audit committee”) has adopted an “Audit Committee Charter (Amended and Restated as of May 12, 2004 — with revisions through July 2008)” (the “charter”). The charter contains the audit committee’s pre-approval policies and procedures. Reproduced below is an excerpt from the charter regarding pre-approval policies and procedures:
The [audit] Committee shall:
…
2. Pre-approve (a) all audit and permissible non-audit services(1) to be provided to the Fund and (b) all permissible non-audit services to be provided by the Fund’s independent auditors to UBS Global [Asset Management (Americas) Inc. (“UBS Global AM”)] and any Covered Service Providers, if the engagement relates directly to the operations and financial reporting of the Fund. In carrying out this responsibility, the Committee shall seek periodically from UBS Global [AM] and from the independent auditors a list of such audit and permissible non-audit services that can be expected to be rendered to the Fund, UBS Global [AM] or any Covered Service Providers by the Fund’s independent auditors, and an estimate of the fees sought to be paid in connection with such services. The Committee may delegate its responsibility to pre-approve any such audit and permissible non-audit services to a sub-committee consisting of the Chairperson of the Committee
and two other members of the Committee as the Chairperson, from time to time, may determine and appoint, and such sub-committee shall report to the Committee, at its next regularly scheduled meeting after the sub-committee’s meeting, its decision(s). From year to year, the Committee shall report to the Board whether this system of pre-approval has been effective and efficient or whether this Charter should be amended to allow for pre-approval pursuant to such policies and procedures as the Committee shall approve, including the delegation of some or all of the Committee’s pre-approval responsibilities to other persons (other than UBS Global [AM] or the Fund’s officers).
(1) The Committee will not approve non-audit services that the Committee believes may taint the independence of the auditors. Currently, permissible non-audit services include any professional services (including tax services) that are not prohibited services as described below, provided to the Fund by the independent auditors, other than those provided to the Fund in connection with an audit or a review of the financial statements of the Fund. Permissible non-audit services may not include: (i) bookkeeping or other services related to the accounting records or financial statements of the Fund; (ii) financial information systems design and implementation; (iii) appraisal or valuation services, fairness opinions or contribution-in-kind reports; (iv) actuarial services; (v) internal audit outsourcing services; (vi) management functions or human resources; (vii) broker or dealer, investment adviser or investment banking services; (viii) legal services and expert services unrelated to the audit; and (ix) any other service the Public Company Accounting Oversight Board determines, by regulation, is impermissible.
Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the Fund, UBS Global [AM] and any service providers controlling, controlled by or under common control with UBS Global [AM] that provide ongoing services to the Fund (“Covered Service Providers”) constitutes not more than 5% of the total amount of revenues paid to the independent auditors (during the fiscal year in which the permissible non-audit services are provided) by (a) the Fund, (b) its investment adviser and (c) any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Fund during the fiscal year in which the services are provided that would have to be approved by the Committee; (ii) the permissible non-audit services were not recognized by the Fund at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee (or its delegate(s)) prior to the completion of the audit.
(e) (2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
Audit-Related Fees:
There were no amounts that were approved by the audit committee pursuant to the de minimis exception for the fiscal years ended July 31, 2014 and July 31, 2013 on behalf of the registrant.
There were no amounts that were required to be approved by the audit committee pursuant to the de minimis exception for the fiscal years ended July 31, 2014 and July 31, 2013 on behalf of the registrant’s service providers that relate directly to the operations and financial reporting of the registrant.
Tax Fees:
There were no amounts that were approved by the audit committee pursuant to the de minimis exception for the fiscal years ended July 31, 2014 and July 31, 2013 on behalf of the registrant.
There were no amounts that were required to be approved by the audit committee pursuant to the de minimis exception for the fiscal years ended July 31, 2014 and July 31, 2013 on behalf of the registrant’s service providers that relate directly to the operations and financial reporting of the registrant.
All Other Fees:
There were no amounts that were approved by the audit committee pursuant to the de minimis exception for the fiscal years ended July 31, 2014 and July 31, 2013 on behalf of the registrant.
There were no amounts that were required to be approved by the audit committee pursuant to the de minimis exception for the fiscal years ended July 31, 2014 and July 31, 2013 on behalf of the registrant’s service providers that relate directly to the operations and financial reporting of the registrant.
(f) For the fiscal year ended July 31, 2014, if greater than 50%, specify the percentage of hours spent on the audit of the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons who are not full-time, permanent employees of E&Y. According to E&Y, such amount was below 50%; therefore, disclosure item not applicable for this filing.
(g) For the fiscal years ended July 31, 2014 and July 31, 2013, the aggregate fees billed by E&Y of $557,667 and $674,821, respectively, for non-audit services rendered on behalf of the registrant (“covered”), its investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser (“non-covered”) that provides ongoing services to the registrant for each of the last two fiscal years of the registrant is shown in the table below:
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| 2014 |
| 2013 |
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Covered Services |
| $ | 379,327 |
| $ | 501,696 |
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Non-Covered Services |
| 178,340 |
| 173,125 |
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(h) The registrant’s audit committee was not required to consider whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or
overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable to the registrant.
Item 6. Investments.
(a) Included as part of the report to shareholders filed under Item 1 of this form.
(b) On June 19, 2014 all shares (52,600) of Toyota Tsusho Corp. (sedol 6900580, ticker 8015) were divested from PACE International Equity Investments under the “Sudan Accountability and Divestment Act of 2007.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to the registrant.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to the registrant.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to the registrant.
Item 10. Submission of Matters to a Vote of Security Holders.
The registrant’s Board has established a Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will consider nominees recommended by shareholders if a vacancy occurs among those board members who are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended. In order to recommend a nominee, a shareholder should send a letter to the chairperson of the Nominating and Corporate Governance Committee, Richard R. Burt, care of the Secretary of the registrant at UBS Global Asset Management, UBS Building, One North Wacker Drive, Chicago, IL 60606, Attn: Mark Kemper, Secretary, and indicate on the envelope “Nominating and Corporate Governance Committee.” The shareholder’s letter should state the nominee’s name and should include the nominee’s resume or curriculum vitae, and must be accompanied by a written consent of the individual to stand for election if nominated for the Board and to serve if elected by shareholders.
Item 11. Controls and Procedures.
(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.
(b) The registrant’s principal executive officer and principal financial officer are aware of no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a) (1) Code of Ethics as required pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 (and designated by registrant as a “Code of Conduct”) is filed herewith as Exhibit EX-99.CODE ETH.
(a) (2) Certifications of principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto as Exhibit EX-99.CERT.
(a) (3) Written solicitation to purchase securities under Rule 23c-1 under the Investment Company Act of 1940 sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons — not applicable to the registrant.
(b) Certifications of principal executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto as Exhibit EX-99.906CERT.
(c) Disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934, as amended, is attached hereto as Exhibit EX-99.IRANNOTICE.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PACE Select Advisors Trust |
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By: | /s/ Mark E. Carver |
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| Mark E. Carver |
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| President |
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Date: | October 9, 2014 |
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Mark E. Carver |
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| Mark E. Carver |
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| President |
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Date: | October 9, 2014 |
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By: | /s/ Thomas Disbrow |
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| Thomas Disbrow |
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| Vice President and Treasurer |
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Date: | October 9, 2014 |
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