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 |
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(Address of principal executive offices) |
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Mark F. Kemper, Esq. | ||||||||
(Name and address of agent for service) | ||||||||
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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, 2016 |
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Item 1. Reports to Stockholders.
PACE® Select Advisors Trust
Annual Report | July 31, 2016
Table of contents | Page | ||||||
Introduction | 3 | ||||||
Portfolio Advisor's and Subadvisors' commentaries and Portfolios of investments | |||||||
PACE® Government Money Market Investments (formerly, PACE® Money Market Investments) | 6 | ||||||
PACE® Mortgage-Backed Securities Fixed Income Investments | 11 | ||||||
PACE® Intermediate Fixed Income Investments | 30 | ||||||
PACE® Strategic Fixed Income Investments | 59 | ||||||
PACE® Municipal Fixed Income Investments | 92 | ||||||
PACE® International Fixed Income Investments | 104 | ||||||
PACE® High Yield Investments | 116 | ||||||
PACE® Large Co Value Equity Investments | 138 | ||||||
PACE® Large Co Growth Equity Investments | 155 | ||||||
PACE® Small/Medium Co Value Equity Investments | 164 | ||||||
PACE® Small/Medium Co Growth Equity Investments | 174 | ||||||
PACE® International Equity Investments | 185 | ||||||
PACE® International Emerging Markets Equity Investments | 201 | ||||||
PACE® Global Real Estate Securities Investments | 213 | ||||||
PACE® Alternative Strategies Investments | 221 | ||||||
Understanding your Portfolio's expenses | 264 | ||||||
Statement of assets and liabilities | 268 | ||||||
Statement of operations | 276 | ||||||
Statement of changes in net assets | 280 | ||||||
Statement of cash flows | 286 | ||||||
Financial highlights | 289 | ||||||
Notes to financial statements | 318 | ||||||
Report of independent registered public accounting firm | 366 | ||||||
Tax information | 367 | ||||||
General information | 368 | ||||||
Board approvals of investment management and administration agreement and subadvisory agreements | 369 | ||||||
Supplemental information, trustees and officers | 386 |
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Introduction
September 19, 2016
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 subadvisors regarding the events that affected Portfolio performance during the 12 months ended July 31, 2016. Please note that the opinions of the subadvisors do not necessarily represent those of UBS Asset Management (Americas) Inc.
Overall tepid global growth
The US economy was resilient and continued to expand during the reporting period. The US Commerce Department reported that gross domestic product ("GDP") expanded at a 2.0% seasonally adjusted annualized rate during the third quarter of 2015. Economic activity in the US then moderated, as GDP growth was a revised 0.9% during the fourth quarter of 2015 and 0.8% for the first quarter of 2016. However, the pace of growth then slightly accelerated, as the Commerce Department's initial estimate for second-quarter 2016 GDP growth was 1.2%.
After taking its first step toward normalizing monetary policy in late 2015, the US Federal Reserve Board (the "Fed") has since been in a holding pattern. Looking back, in December 2015, the Fed raised the fed funds rates from a range of 0% to 0.25% to a range between 0.25% and 0.50%. This marked the Fed's first rate hike in almost a decade. However, the Fed remained on hold during its first five meetings in 2016. In its official statement following its July 2016 meeting, the Fed said: "The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data."
From a global perspective, International Monetary Fund ("IMF") forecasts paint a picture of overall modest growth, which could moderate further following the United Kingdom's vote to leave the European Union ("Brexit"). In the IMF's July 2016 World Economic Outlook Update it said: "With 'Brexit' still very much unfolding, the extent of uncertainty complicates the already difficult task of macroeconomic forecasting. The baseline global growth forecast has been revised down modestly relative to the April 2016 World Economic Outlook." More specifically, the IMF estimates that 2016 growth in the eurozone will be 1.6%, slightly slower than its 1.7% expansion in 2015. Japan's economy is projected to grow a tepid 0.3% in 2016, versus 0.5% in 2015. Among emerging markets countries, the IMF believes that growth will be 4.1% in 2016, a slight improvement from 4.0% in 2015.
Global equities generate mixed results
The global equity market was highly volatile at times and produced mixed results during the reporting period. Investors in both the US and abroad were confronted with mixed economic data, questions regarding future monetary policy, fluctuating oil prices and, in June 2016, the Brexit vote. All told, the US stock market, as measured by the S&P 500 Index, gained 5.61% for the 12 months ended July 31, 2016.1 Meanwhile, international equities generated weak results, as they were unable to overcome several bouts of investor risk aversion. International developed equities, as measured by the MSCI EAFE Index (net), fell 7.53% during the period.2
1 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.
2 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.
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Emerging markets equities, as measured by the MSCI Emerging Markets Index (net), declined 0.75% over the same period.3
Overall strong period in the fixed income market
Many of the issues holding back equities triggered a number of "flights to quality" that supported global fixed income markets. The yield on the US 10-year Treasury fell from 2.20% to 1.46% during the reporting period (bond yields and prices move in the opposite direction). Demand for US Treasuries was generally strong from both domestic and international investors. In addition, at the Fed's June 2016 meeting they lowered their projections of how much they expect to raise rates in the coming years. The overall US bond market, as measured by the Barclays US Aggregate Index, gained 5.94% for the 12 months ended July 31, 2016.4 Returns of riskier fixed income securities were mixed. Thanks to a strong rally over the second half of the period, high yield bonds, as measured by the BofA Merrill Lynch US High Yield Cash Pay Constrained Index gained 4.93%.5 Meanwhile, emerging market debt, as measured by the J.P. Morgan Emerging Markets Bond Index Global (EMBI Global), rose 11.58% during the reporting period.6
Sincerely,
Mark E. Carver
President, PACE Select Advisors Trust
Managing Director, UBS Asset Management (Americas) Inc.
3 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.
4 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.
5 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.
6 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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This report is intended to assist investors in understanding how the Portfolios performed during the 12-month period ended July 31, 2016. The views expressed in the Advisor's and Subadvisors' 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 Government Money Market Investments only) and subadvisors. Subadvisors' comments on Portfolios that have more than one subadvisor are reflective of their portion of the Portfolio only. The views and opinions in this report were current as of September 19, 2016. 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 subadvisors 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.
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PACE Government Money Market Investments
On September 22, 2015, the Portfolio's Board of Trustees ("the Board") approved a new policy on behalf of the Portfolio to invest at least 99.5% of its total assets in cash, government securities and/or repurchase agreements that are collateralized fully by cash or government securities to allow the Portfolio to qualify as a government money market fund, as defined under the amended Rule 2a-7 of the Investment Company Act of 1940, as amended. In addition, the Board approved changing the Portfolio's name to PACE Government Money Market Investments to ensure that the Portfolio is understood to be a government money market fund. In connection with the change to the Portfolio's name, the Portfolio also adopted a non-fundamental investment policy that the Portfolio invests, under normal circumstances, at least 80% of its net assets (plus the amount of any borrowing for investment purposes) in government securities, including government securities subject to repurchase agreements. The changes became effective on November 28, 2015.
Performance (Unaudited)
For the 12 months ended July 31, 2016, 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 U.S. Government Money Market Funds category was 0.01%. (Returns over various time periods are shown in the "Performance at a glance" table on page 7. 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 period, please refer to page 3.
Advisor's Comments (Unaudited)
In December 2015, the US Federal Reserve Board (the "Fed") modestly raised the federal funds rate from a historically low range between 0% and 0.25% to a range between 0.25% and 0.50%.The federal funds rate or the "fed funds rate," is the rate US banks charge one another for funds they borrow on an overnight basis. (For more details on the Fed's actions, see page 3.) However, during the Fed's first five meetings in 2016, it has kept the federal funds rate on hold. While the yields on a wide range of short-term investments moved higher over the period, yields still remain low by historical comparison. 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 38 days. This was increased to 57 days at the end of the reporting period.
Several adjustments were made to the Portfolio's sector and issuer positioning during the 12-month period due to the Fund's aforementioned change to a government money market fund. We significantly increased the Portfolio's exposure to US government and agency obligations and added to its repurchase agreement allocation. Conversely, we eliminated our allocation to commercial paper, certificates of deposit and short-term corporate 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 Government Money Market Investments
Investment Advisor:
UBS 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 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 Government Money Market Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | ||||||||||||
PACE Government Money Market Investments1 | 0.01 | % | 0.01 | % | 0.90 | % | |||||||||
Lipper U.S. Government Money Market Funds median | 0.01 | 0.01 | 0.86 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | ||||||||||||
PACE Government Money Market Investments1 | 0.01 | % | 0.01 | % | 0.94 | % |
The annualized gross and net expense ratios in the November 28, 2015 prospectus were 0.93% and 0.60%, respectively. Net expenses reflect fee waivers and/or expense reimbursement, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS 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, 2016 (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 0.60%. The Portfolio has agreed to repay UBS 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 and that UBS AM has not waived the right to do so. 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 AM. Upon termination of the agreement, however, UBS AM's three year recoupment rights will survive.
For PACE Government Money Market Investments1, the 7-day current yield for the period ended July 31, 2016 was 0.01% after fee waivers and/or expense reimbursements; the yield was (0.77)% 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 Government 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 Government Money Market Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Net assets (mm) | $ | 183 | |||||
Number of holdings | 32 | ||||||
Weighted average maturity | 57 days | ||||||
Portfolio composition1 | 07/31/16 | ||||||
US government and agency obligations | 75.2 | % | |||||
Repurchase agreements | 25.1 | ||||||
Other assets less liabilities | (0.3 | ) | |||||
Total | 100.0 | % | |||||
Top 10 holdings1 | 07/31/16 | ||||||
Repurchase agreement with Goldman Sachs, Inc., 0.300% due 08/1/16 | 24.9 | % | |||||
US Treasury Notes, 3.125% due 10/31/16 | 6.8 | ||||||
Federal Home Loan Bank, 0.330% due 08/19/16 | 5.5 | ||||||
Federal Home Loan Bank, 0.325% due 09/14/16 | 5.5 | ||||||
US Treasury Bills, 0.515% due 09/15/16 | 5.5 | ||||||
US Treasury Notes, 0.510% due 08/02/16 | 3.3 | ||||||
US Treasury Notes, 0.500% due 09/30/16 | 2.7 | ||||||
Federal Home Loan Bank,0.577% due 08/22/16 | 2.7 | ||||||
Federal Home Loan Bank, 0.406% due 08/12/16 | 2.7 | ||||||
Federal Home Loan Bank, 0.300% due 08/19/16 | 2.7 | ||||||
Total | 62.3 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
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PACE Government Money Market Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
US government and agency obligations—75.15% | |||||||||||
Federal Farm Credit Bank 0.586%, due 08/29/161 | $ | 3,000,000 | $ | 3,000,000 | |||||||
Federal Home Loan Bank 0.300%, due 08/19/162 | 5,000,000 | 4,999,250 | |||||||||
0.320%, due 09/15/162 | 3,000,000 | 2,998,800 | |||||||||
0.320%, due 09/30/162 | 5,000,000 | 4,997,333 | |||||||||
0.325%, due 09/14/162 | 10,000,000 | 9,996,028 | |||||||||
0.330%, due 08/19/162 | 10,000,000 | 9,998,350 | |||||||||
0.350%, due 09/27/162 | 2,593,000 | 2,591,563 | |||||||||
0.370%, due 10/14/162 | 2,000,000 | 1,998,479 | |||||||||
0.379%, due 10/21/162 | 5,000,000 | 4,995,736 | |||||||||
0.400%, due 09/23/162 | 2,000,000 | 1,998,822 | |||||||||
0.400%, due 10/28/16 | 3,000,000 | 2,999,795 | |||||||||
0.406%, due 08/12/161 | 5,000,000 | 5,000,000 | |||||||||
0.455%, due 08/31/162 | 5,000,000 | 4,998,104 | |||||||||
0.480%, due 10/21/162 | 5,000,000 | 4,994,600 | |||||||||
0.500%, due 10/17/162 | 5,000,000 | 4,994,653 | |||||||||
0.577%, due 08/22/161 | 5,000,000 | 5,000,000 | |||||||||
0.586%, due 10/10/161 | 3,500,000 | 3,499,781 | |||||||||
Federal Home Loan Mortgage Corp. 0.350%, due 12/05/162 | 3,000,000 | 2,996,325 | |||||||||
0.410%, due 01/06/172 | 2,000,000 | 1,996,401 | |||||||||
Federal National Mortgage Association 0.609%, due 06/01/17 | 2,000,000 | 1,989,921 | |||||||||
0.635%, due 10/11/161 | 2,000,000 | 2,000,000 | |||||||||
US Treasury Bills 0.390%, due 11/03/162 | 4,000,000 | 3,995,927 | |||||||||
0.515%, due 09/15/162 | 10,000,000 | 9,993,562 | |||||||||
0.568%, due 04/27/172 | 4,000,000 | 3,983,023 | |||||||||
US Treasury Notes 0.500%, due 09/30/16 | 5,000,000 | 5,001,028 |
Face Amount | Value | ||||||||||
US government and agency obligations—(concluded) | |||||||||||
0.500%, due 01/31/17 | $ | 3,000,000 | $ | 2,999,854 | |||||||
0.510%, due 08/02/161 | 6,000,000 | 6,001,759 | |||||||||
0.750%, due 01/15/17 | 3,000,000 | 3,002,963 | |||||||||
0.875%, due 02/28/17 | 2,000,000 | 2,004,445 | |||||||||
3.125%, due 10/31/16 | 12,400,000 | 12,484,896 | |||||||||
Total US government and agency obligations (cost—$137,511,398) | 137,511,398 | ||||||||||
Repurchase agreements—25.10% | |||||||||||
Repurchase agreement dated 07/29/16 with Goldman Sachs & Co., 0.300% due 08/01/16, collateralized by $85,724,000 US Treasury Bonds Principal STRIPs, zero coupon due 08/15/43 to 11/15/43; (value—$46,410,009); proceeds: $45,501,138 | 45,500,000 | 45,500,000 | |||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $423,077 US Treasury Note, 1.625% due 04/30/19; (value—$434,707); proceeds:$425,000 | 425,000 | 425,000 | |||||||||
Total repurchase agreements (cost—$45,925,000) | 45,925,000 | ||||||||||
Total investments (cost—$183,436,398 which approximates cost for federal income tax purposes)—100.25% | 183,436,398 | ||||||||||
Liabilities in excess of other assets—(0.25)% | (459,853 | ) | |||||||||
Net assets (applicable to 182,975,935 shares of beneficial interest outstanding equivalent to $1.00 per share)—100.00% | $ | 182,976,545 |
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 262.
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | — | $ | 137,511,398 | $ | — | $ | 137,511,398 | |||||||||||
Repurchase agreements | — | 45,925,000 | — | 45,925,000 | |||||||||||||||
Total | $ | — | $ | 183,436,398 | $ | — | $ | 183,436,398 |
At July 31, 2016, there were no transfers between Level 1 and Level 2.
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PACE Government Money Market Investments
Portfolio of investments—July 31, 2016
Portfolio footnotes
1 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2016 and changes periodically.
2 Rates shown are the discount rates at date of purchase unless otherwise noted.
See accompanying notes to financial statements.
10
PACE Mortgage-Backed Securities Fixed Income Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares gained 4.10% before the deduction of the maximum PACE Select program fee.1 In comparison, the Barclays US Mortgage-Backed Securities Index (the "benchmark") rose 3.90%, and the Lipper US Mortgage Funds category posted a median return of 3.47%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 13. 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 3.
Subadvisor's comments (Unaudited)2
The Portfolio outperformed the benchmark during the reporting period. Relative value positioning within agency MBS added to returns, as lower coupons generally outperformed higher-coupon securities. A focus on 30-year conventional securities (Fannie Mae and Freddie Mac) was also beneficial as this segment outperformed 15-year conventional securities. Additionally, holdings of inverse interest-only agency collateralized mortgages added to performance as these securities benefited from declining interest rates. Holdings of mortgage credit, especially non-agency MBS and commercial mortgage-backed securities, were additive for returns as they benefited from strong demand. On the downside, an underweight to US duration detracted from relative performance as US Treasury yields generally fell during the period. (Duration measures a portfolio's sensitivity to interest rate changes.)
Overall, derivative usage was negative during the period as the Portfolio was short swap rates, which outperformed Treasury rates. The selling of interest rate swaps to adjust interest rate and yield curve exposures detracted from performance as swap spreads tightened. The Portfolio benefited from the income generated from selling mortgage pool options as a way to manage interest rate and volatility risk within the sector. Additionally, options on swaps were used to manage interest rate and volatility exposures, as well as to generate income in expected interest rate scenarios. Finally, government futures were utilized to adjust interest rate exposures and replicate government bond positions.
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 subadvisors 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 Mortgage-Backed Securities Fixed
Income Investments
Investment Manager:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisor:
Pacific Investment Management Company LLC ("PIMCO")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Gina Toth, CFA, Fred Lee, CFA, Diana To and Anthony Karaminas
PIMCO: 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 effec-
(continued on next page)
11
PACE Mortgage-Backed Securities Fixed Income Investments
Investment process
(concluded)
tive duration of the Portfolio's benchmark index. (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.
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 Mortgage-Backed Securities Fixed Income Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 3.76 | % | 2.45 | % | 4.47 | % | |||||||||
Class C2 | 3.32 | 1.95 | 3.95 | ||||||||||||
Class Y3 | 4.03 | 2.71 | 4.74 | ||||||||||||
Class P4 | 4.10 | 2.71 | 4.73 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (0.09 | ) | 1.67 | 4.07 | |||||||||||
Class C2 | 2.57 | 1.95 | 3.95 | ||||||||||||
Barclays US Mortgage-Backed Securities Index5 | 3.90 | 2.86 | 4.83 | ||||||||||||
Lipper US Mortgage Funds median | 3.47 | 2.84 | 4.30 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 4.10 | % | 2.60 | % | 4.61 | % | |||||||||
Class C2 | 3.58 | 2.08 | 4.08 | ||||||||||||
Class Y3 | 4.36 | 2.86 | 4.88 | ||||||||||||
Class P4 | 4.36 | 2.84 | 4.87 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 0.22 | 1.81 | 4.21 | ||||||||||||
Class C2 | 2.83 | 2.08 | 4.08 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, were as follows: Class A—1.07% and 0.97%; Class C—1.59% and 1.47%; Class Y—0.86% and 0.72%; and Class P—0.91% 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS AM is contractually obligated to: (1) waive its management fees through November 30, 2016 to the extent necessary to reflect the lower subadvisory fee paid by UBS 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 through November 30, 2016 (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 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 this expense cap and that UBS AM has not waived the right to do so. 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 AM. Upon termination of the agreement, however, UBS AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 3.75%. Class A shares bear ongoing 12b-1 service fees of 0.25% annually.
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 of 0.25% and 0.50% annually, respectively.
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 mortgage-backed pass-through securities issued by Ginnie Mae (formally known as the 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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualfundperformance.
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.
13
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, 2016. 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.
PACE Mortgage-Backed Securities Fixed Income Investments
14
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Weighted average duration | 2.34 yrs. | ||||||
Weighted average maturity | 3.26 yrs. | ||||||
Average coupon | 2.91 | % | |||||
Net assets (mm) | $ | 510.6 | |||||
Number of holdings | 819 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Bonds | 160.2 | % | |||||
Options and swaps | (0.5 | ) | |||||
Investments sold short | (18.1 | ) | |||||
Cash equivalents and other assets less liabilities | (41.6 | ) | |||||
Total | 100.0 | % | |||||
Asset allocation1 | 07/31/16 | ||||||
US government agency mortgage pass-through certificates | 124.7 | % | |||||
Collateralized mortgage obligations | 21.2 | ||||||
Asset-backed securities | 9.2 | ||||||
US government obligations | 2.5 | ||||||
Stripped mortgage-backed securities | 1.9 | ||||||
Commercial mortgage-backed securities | 0.7 | ||||||
Short-term US government obligation | 0.0 | * | |||||
Options and swaps | (0.5 | ) | |||||
Investments sold short | (18.1 | ) | |||||
Cash equivalents and other assets less liabilities | (41.6 | ) | |||||
Total | 100.0 | % |
* Amount is less than 0.05%
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
15
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
US government obligations—2.46% | |||||||||||
US Treasury Notes 1.375%, due 06/30/231 | $ | 4,850,000 | $ | 4,879,556 | |||||||
1.625%, due 04/30/23 | 7,500,000 | 7,671,975 | |||||||||
Total US government obligations (cost—$12,372,723) | 12,551,531 | ||||||||||
Government national mortgage association certificates—38.32% | |||||||||||
GNMA 3.000%, due 11/15/42 | 154,303 | 162,495 | |||||||||
3.000%, due 02/15/43 | 705,716 | 743,301 | |||||||||
3.000%, due 05/15/431 | 2,360,920 | 2,480,136 | |||||||||
3.000%, due 06/15/43 | 735,374 | 773,126 | |||||||||
3.000%, due 07/15/43 | 252,035 | 264,698 | |||||||||
3.000%, due 01/15/45 | 455,875 | 479,961 | |||||||||
3.000%, due 02/15/45 | 55,184 | 58,066 | |||||||||
3.000%, due 07/15/45 | 739,263 | 777,949 | |||||||||
3.000%, due 08/15/45 | 52,788 | 55,441 | |||||||||
3.000%, due 10/15/451 | 1,214,451 | 1,278,407 | |||||||||
3.000%, due 12/15/451 | 890,368 | 935,102 | |||||||||
3.500%, due 11/15/42 | 1,079,707 | 1,148,615 | |||||||||
3.500%, due 09/15/44 | 124,192 | 132,044 | |||||||||
3.500%, due 11/15/441 | 6,287,448 | 6,685,280 | |||||||||
3.500%, due 03/15/451 | 2,411,648 | 2,569,398 | |||||||||
3.500%, due 04/15/451 | 6,970,667 | 7,413,750 | |||||||||
3.500%, due 06/15/45 | 656,550 | 699,036 | |||||||||
3.500%, due 07/15/45 | 168,828 | 179,567 | |||||||||
3.500%, due 09/15/451 | 1,212,468 | 1,290,809 | |||||||||
4.000%, due 12/15/41 | 1,815,382 | 1,950,243 | |||||||||
4.500%, due 09/15/39 | 1,107,895 | 1,233,485 | |||||||||
4.500%, due 06/15/40 | 510,630 | 562,003 | |||||||||
5.000%, due 12/15/34 | 260,091 | 292,328 | |||||||||
5.000%, due 04/15/38 | 194,845 | 216,432 | |||||||||
5.000%, due 05/15/38 | 6,389 | 7,164 | |||||||||
5.000%, due 08/15/39 | 242,557 | 269,430 | |||||||||
5.000%, due 09/15/39 | 595,339 | 663,019 | |||||||||
5.000%, due 10/15/39 | 6,261 | 6,967 | |||||||||
5.000%, due 12/15/39 | 16,834 | 18,756 | |||||||||
5.000%, due 05/15/40 | 480,402 | 536,306 | |||||||||
5.000%, due 09/15/40 | 11,356 | 12,680 | |||||||||
5.000%, due 05/15/41 | 102,839 | 114,233 | |||||||||
5.500%, due 08/15/35 | 39,570 | 44,824 | |||||||||
5.500%, due 02/15/38 | 4,727 | 5,339 | |||||||||
5.500%, due 04/15/38 | 401,737 | 451,401 | |||||||||
5.500%, due 05/15/38 | 410,578 | 462,251 | |||||||||
5.500%, due 06/15/38 | 198,886 | 224,273 | |||||||||
5.500%, due 10/15/38 | 1,053,755 | 1,186,367 | |||||||||
5.500%, due 11/15/38 | 63,922 | 72,041 | |||||||||
5.500%, due 12/15/38 | 12,304 | 13,852 | |||||||||
5.500%, due 03/15/39 | 189,969 | 213,453 | |||||||||
5.500%, due 05/15/39 | 101,151 | 113,881 | |||||||||
5.500%, due 09/15/39 | 519,219 | 584,513 | |||||||||
5.500%, due 01/15/40 | 10,374 | 11,691 | |||||||||
5.500%, due 03/15/40 | 675,327 | 760,067 | |||||||||
5.500%, due 05/15/40 | 801 | 803 | |||||||||
6.500%, due 02/15/29 | 936 | 1,075 | |||||||||
6.500%, due 01/15/36 | 11,875 | 13,641 | |||||||||
6.500%, due 09/15/36 | 247,044 | 289,883 |
Face Amount | Value | ||||||||||
Government national mortgage association certificates—(continued) | |||||||||||
6.500%, due 02/15/37 | $ | 14,115 | $ | 16,458 | |||||||
6.500%, due 04/15/37 | 12,162 | 14,285 | |||||||||
6.500%, due 01/15/38 | 11,778 | 13,661 | |||||||||
6.500%, due 06/15/38 | 40,382 | 47,210 | |||||||||
6.500%, due 07/15/38 | 31,607 | 37,574 | |||||||||
6.500%, due 11/15/38 | 9,624 | 11,978 | |||||||||
7.500%, due 08/15/21 | 1,959 | 1,984 | |||||||||
8.000%, due 02/15/23 | 480 | 525 | |||||||||
8.250%, due 04/15/19 | 45,232 | 47,039 | |||||||||
10.500%, due 02/15/19 | 11,677 | 11,747 | |||||||||
10.500%, due 06/15/19 | 15,179 | 15,270 | |||||||||
10.500%, due 07/15/19 | 9,037 | 9,090 | |||||||||
10.500%, due 07/15/20 | 1,774 | 1,784 | |||||||||
10.500%, due 08/15/20 | 10,627 | 10,811 | |||||||||
GNMA I 3.000%, due 12/15/45 | 80,857 | 85,105 | |||||||||
GNMA II 3.500%, due 04/20/45 | 18,425 | 19,764 | |||||||||
3.500%, due 11/20/45 | 968,689 | 1,042,163 | |||||||||
3.500%, due 05/20/46 | 13,413,393 | 14,274,321 | |||||||||
4.000%, due 07/20/41 | 53,046 | 56,707 | |||||||||
4.000%, due 09/20/451 | 24,810,766 | 26,500,451 | |||||||||
4.500%, due 08/20/45 | 626,851 | 671,345 | |||||||||
5.000%, due 12/20/33 | 380,091 | 427,930 | |||||||||
5.000%, due 01/20/34 | 202,345 | 225,327 | |||||||||
5.000%, due 02/20/38 | 241,774 | 269,024 | |||||||||
5.000%, due 04/20/38 | 312,078 | 351,157 | |||||||||
5.000%, due 08/20/41 | 38,216 | 42,528 | |||||||||
5.000%, due 12/20/42 | 54,078 | 58,943 | |||||||||
5.000%, due 08/20/43 | 4,734,357 | 5,155,761 | |||||||||
6.000%, due 10/20/38 | 8,500 | 9,231 | |||||||||
6.500%, due 09/20/32 | 10,444 | 12,056 | |||||||||
6.500%, due 11/20/38 | 11,670 | 12,361 | |||||||||
7.000%, due 03/20/28 | 51,493 | 52,762 | |||||||||
9.000%, due 04/20/25 | 8,438 | 9,633 | |||||||||
9.000%, due 12/20/26 | 3,323 | 3,514 | |||||||||
9.000%, due 01/20/27 | 10,282 | 10,568 | |||||||||
9.000%, due 09/20/30 | 1,138 | 1,144 | |||||||||
9.000%, due 10/20/30 | 3,720 | 3,884 | |||||||||
9.000%, due 11/20/30 | 5,026 | 5,116 | |||||||||
GNMA II ARM 1.750%, due 06/20/222 | 50,834 | 52,085 | |||||||||
1.750%, due 04/20/242 | 64,460 | 64,845 | |||||||||
1.750%, due 04/20/262 | 117,759 | 121,006 | |||||||||
1.750%, due 06/20/262 | 49,152 | 50,720 | |||||||||
1.750%, due 04/20/272 | 29,983 | 31,067 | |||||||||
1.750%, due 04/20/302 | 9,774 | 10,149 | |||||||||
1.750%, due 05/20/302 | 112,233 | 116,508 | |||||||||
1.875%, due 07/20/172 | 577 | 579 | |||||||||
1.875%, due 09/20/212 | 63,068 | 64,698 | |||||||||
1.875%, due 08/20/252 | 17,743 | 18,312 | |||||||||
1.875%, due 09/20/252 | 23,572 | 24,322 | |||||||||
1.875%, due 08/20/262 | 26,277 | 27,155 | |||||||||
1.875%, due 07/20/272 | 9,637 | 9,969 | |||||||||
1.875%, due 07/20/302 | 54,195 | 56,166 | |||||||||
2.000%, due 01/20/232 | 39,346 | 40,454 | |||||||||
2.000%, due 03/20/232 | 19,236 | 19,763 |
16
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Government national mortgage association certificates—(concluded) | |||||||||||
2.000%, due 01/20/242 | $ | 52,158 | $ | 53,362 | |||||||
2.000%, due 01/20/252 | 5,955 | 6,148 | |||||||||
2.000%, due 02/20/252 | 12,151 | 12,499 | |||||||||
2.000%, due 05/20/252 | 6,831 | 7,076 | |||||||||
2.000%, due 03/20/262 | 13,084 | 13,556 | |||||||||
2.000%, due 09/20/262 | 4,127 | 4,274 | |||||||||
2.000%, due 01/20/272 | 81,739 | 82,197 | |||||||||
2.000%, due 02/20/272 | 10,391 | 10,707 | |||||||||
2.000%, due 04/20/272 | 3,225 | 3,319 | |||||||||
2.000%, due 08/20/272 | 27,929 | 28,823 | |||||||||
2.000%, due 01/20/282 | 12,361 | 12,835 | |||||||||
2.000%, due 02/20/282 | 8,144 | 8,318 | |||||||||
2.000%, due 04/20/302 | 10,644 | 11,098 | |||||||||
2.000%, due 05/20/302 | 336,012 | 350,193 | |||||||||
2.000%, due 07/20/302 | 19,011 | 19,734 | |||||||||
2.000%, due 08/20/302 | 95,649 | 99,325 | |||||||||
2.500%, due 04/20/182 | 1,257 | 1,258 | |||||||||
2.500%, due 11/20/212 | 13,893 | 14,268 | |||||||||
2.500%, due 03/20/25 | 21,146 | 22,135 | |||||||||
2.500%, due 07/20/302 | 36,395 | 37,917 | |||||||||
2.500%, due 08/20/302 | 2,031 | 2,099 | |||||||||
2.500%, due 10/20/302 | 13,728 | 14,330 | |||||||||
3.000%, due 04/20/182 | 1,356 | 1,373 | |||||||||
3.000%, due 05/20/252 | 42,084 | 44,365 | |||||||||
3.000%, due 06/20/252 | 16,483 | 17,208 | |||||||||
3.500%, due 03/20/252 | 8,331 | 8,369 | |||||||||
4.000%, due 01/20/182 | 16,690 | 17,003 | |||||||||
4.000%, due 05/20/182 | 1,242 | 1,249 | |||||||||
4.000%, due 06/20/192 | 10,738 | 10,853 | |||||||||
GNMA TBA 4.000% | 6,000,000 | 6,445,898 | |||||||||
4.500% | 4,500,000 | 4,943,749 | |||||||||
GNMA II TBA 2.500% | 1,000,000 | 1,025,697 | |||||||||
3.000% | 41,500,000 | 43,576,288 | |||||||||
3.500% | 26,000,000 | 27,613,711 | |||||||||
4.000% | 2,000,000 | 2,135,547 | |||||||||
4.500% | 19,000,000 | 20,329,509 | |||||||||
Total government national mortgage association certificates (cost—$193,744,016) | 195,693,881 | ||||||||||
Federal home loan mortgage corporation certificates—28.18% | |||||||||||
FHLMC 2.500%, due 01/01/31 | 469,336 | 488,473 | |||||||||
2.500%, due 07/01/43 | 227,762 | 230,852 | |||||||||
2.500%, due 03/01/45 | 122,892 | 124,611 | |||||||||
2.500%, due 04/01/45 | 866,554 | 878,585 | |||||||||
2.500%, due 05/01/45 | 933,999 | 946,966 | |||||||||
2.500%, due 07/01/45 | 95,309 | 96,617 | |||||||||
2.500%, due 01/01/46 | 279,101 | 282,890 | |||||||||
2.500%, due 04/01/46 | 211,397 | 214,267 | |||||||||
2.500%, due 06/01/46 | 448,353 | 454,440 | |||||||||
3.000%, due 04/01/43 | 410,125 | 427,174 | |||||||||
3.000%, due 05/01/43 | 376,035 | 391,658 | |||||||||
3.000%, due 12/01/44 | 327,082 | 340,371 | |||||||||
3.000%, due 04/01/45 | 2,157,857 | 2,254,791 |
Face Amount | Value | ||||||||||
Federal home loan mortgage corporation certificates—(continued) | |||||||||||
3.500%, due 09/01/32 | $ | 740,303 | $ | 794,067 | |||||||
4.000%, due 01/01/37 | 476,516 | 514,618 | |||||||||
4.000%, due 07/01/43 | 322,899 | 349,701 | |||||||||
4.000%, due 06/01/44 | 1,461,614 | 1,564,583 | |||||||||
4.000%, due 08/01/44 | 4,685,369 | 5,128,187 | |||||||||
4.000%, due 03/01/46 | 26,801,932 | 28,668,533 | |||||||||
4.500%, due 05/01/38 | 78,274 | 83,193 | |||||||||
5.000%, due 10/01/25 | 87,379 | 96,142 | |||||||||
5.000%, due 11/01/27 | 9,412 | 10,378 | |||||||||
5.000%, due 07/01/33 | 11,304 | 11,832 | |||||||||
5.000%, due 09/01/33 | 303,239 | 341,466 | |||||||||
5.000%, due 01/01/34 | 47,390 | 52,544 | |||||||||
5.000%, due 06/01/34 | 16,466 | 18,268 | |||||||||
5.000%, due 04/01/35 | 57,553 | 63,342 | |||||||||
5.000%, due 05/01/35 | 177,605 | 197,157 | |||||||||
5.000%, due 07/01/35 | 1,457,540 | 1,619,581 | |||||||||
5.000%, due 08/01/35 | 52,436 | 58,247 | |||||||||
5.000%, due 10/01/35 | 43,517 | 48,329 | |||||||||
5.000%, due 12/01/35 | 4,480 | 4,974 | |||||||||
5.000%, due 02/01/37 | 111,267 | 122,424 | |||||||||
5.000%, due 06/01/37 | 78,297 | 86,523 | |||||||||
5.000%, due 07/01/38 | 376,272 | 414,004 | |||||||||
5.000%, due 11/01/38 | 391,070 | 430,628 | |||||||||
5.000%, due 06/01/39 | 96,150 | 105,792 | |||||||||
5.000%, due 08/01/39 | 38,379 | 42,227 | |||||||||
5.000%, due 03/01/40 | 12,092 | 13,420 | |||||||||
5.000%, due 07/01/40 | 582,415 | 642,173 | |||||||||
5.000%, due 08/01/40 | 90,342 | 99,813 | |||||||||
5.000%, due 09/01/40 | 261,007 | 287,196 | |||||||||
5.000%, due 11/01/40 | 359,691 | 397,212 | |||||||||
5.000%, due 02/01/41 | 720,626 | 795,060 | |||||||||
5.000%, due 03/01/41 | 46,301 | 50,952 | |||||||||
5.000%, due 04/01/41 | 1,638,903 | 1,812,444 | |||||||||
5.000%, due 05/01/41 | 318,442 | 351,981 | |||||||||
5.000%, due 06/01/41 | 90,312 | 99,606 | |||||||||
5.000%, due 07/01/41 | 64,130 | 70,903 | |||||||||
5.000%, due 08/01/44 | 136,062 | 151,352 | |||||||||
5.500%, due 06/01/28 | 2,162 | 2,408 | |||||||||
5.500%, due 02/01/32 | 3,012 | 3,403 | |||||||||
5.500%, due 12/01/32 | 4,161 | 4,699 | |||||||||
5.500%, due 02/01/33 | 91,466 | 101,891 | |||||||||
5.500%, due 05/01/33 | 1,437 | 1,617 | |||||||||
5.500%, due 06/01/33 | 259,062 | 292,744 | |||||||||
5.500%, due 12/01/33 | 81,512 | 92,239 | |||||||||
5.500%, due 07/01/34 | 58,052 | 61,884 | |||||||||
5.500%, due 12/01/34 | 71,018 | 80,273 | |||||||||
5.500%, due 06/01/351 | 1,216,121 | 1,372,733 | |||||||||
5.500%, due 07/01/35 | 8,467 | 9,514 | |||||||||
5.500%, due 10/01/35 | 286,381 | 324,149 | |||||||||
5.500%, due 12/01/35 | 191,149 | 215,154 | |||||||||
5.500%, due 06/01/36 | 685,653 | 773,790 | |||||||||
5.500%, due 07/01/36 | 48,349 | 53,067 | |||||||||
5.500%, due 12/01/361 | 1,106,896 | 1,238,729 | |||||||||
5.500%, due 03/01/37 | 126,147 | 141,744 | |||||||||
5.500%, due 07/01/37 | 66,735 | 70,352 | |||||||||
5.500%, due 10/01/37 | 6,669 | 7,489 | |||||||||
5.500%, due 04/01/38 | 223,254 | 250,682 |
17
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Federal home loan mortgage corporation certificates—(concluded) | |||||||||||
5.500%, due 05/01/38 | $ | 21,953 | $ | 24,572 | |||||||
5.500%, due 12/01/38 | 4,129 | 4,619 | |||||||||
5.500%, due 01/01/39 | 95,023 | 106,858 | |||||||||
5.500%, due 09/01/39 | 284,636 | 321,330 | |||||||||
5.500%, due 02/01/40 | 14,441 | 16,222 | |||||||||
5.500%, due 03/01/40 | 11,952 | 13,354 | |||||||||
5.500%, due 05/01/40 | 187,688 | 211,198 | |||||||||
5.500%, due 02/01/41 | 72,911 | 81,221 | |||||||||
5.500%, due 03/01/41 | 198,296 | 223,130 | |||||||||
6.000%, due 11/01/37 | 1,775,466 | 2,026,629 | |||||||||
7.000%, due 08/01/25 | 291 | 333 | |||||||||
9.000%, due 04/01/25 | 28,209 | 28,348 | |||||||||
11.000%, due 06/01/19 | 175 | 176 | |||||||||
11.000%, due 09/01/20 | 140 | 142 | |||||||||
11.500%, due 06/01/19 | 9,149 | 9,199 | |||||||||
FHLMC ARM 2.472%, due 01/01/282 | 15,084 | 15,602 | |||||||||
2.520%, due 09/01/342 | 1,914,734 | 2,025,007 | |||||||||
2.555%, due 11/01/362 | 741,465 | 782,524 | |||||||||
2.568%, due 04/01/292 | 89,994 | 91,703 | |||||||||
2.605%, due 11/01/272 | 71,112 | 72,618 | |||||||||
2.638%, due 10/01/232 | 37,384 | 38,396 | |||||||||
2.684%, due 07/01/242 | 98,904 | 100,298 | |||||||||
2.708%, due 06/01/282 | 228,613 | 240,545 | |||||||||
2.745%, due 11/01/292 | 268,300 | 280,780 | |||||||||
2.780%, due 10/01/272 | 167,316 | 177,776 | |||||||||
2.808%, due 10/01/392 | 3,400,614 | 3,573,384 | |||||||||
2.845%, due 12/01/292 | 53,592 | 55,845 | |||||||||
2.861%, due 10/01/272 | 176,223 | 185,866 | |||||||||
2.882%, due 01/01/292 | 156,985 | 166,941 | |||||||||
2.892%, due 07/01/282 | 96,691 | 101,101 | |||||||||
2.975%, due 11/01/252 | 145,070 | 154,436 | |||||||||
3.000%, due 01/01/302 | 28,591 | 28,824 | |||||||||
3.372%, due 11/01/412 | 4,897,322 | 5,131,078 | |||||||||
FHLMC TBA 3.000% | 19,000,000 | 19,713,985 | |||||||||
3.500% | 32,000,000 | 33,732,090 | |||||||||
4.500% | 15,000,000 | 16,341,527 | |||||||||
Total federal home loan mortgage corporation certificates (cost—$142,541,041) | 143,906,765 | ||||||||||
Federal housing administration certificates—0.04% | |||||||||||
FHA GMAC 7.400%, due 02/01/213,4 | 47,273 | 46,213 | |||||||||
FHA Reilly 6.896%, due 07/01/203,4 | 169,843 | 166,307 | |||||||||
Total federal housing administration certificates (cost—$217,316) | 212,520 | ||||||||||
Federal national mortgage association certificates—58.22% | |||||||||||
FNMA 2.000%, due 05/01/28 | 270,895 | 277,001 | |||||||||
2.000%, due 08/01/28 | 354,327 | 362,297 | |||||||||
2.000%, due 10/01/28 | 1,732,932 | 1,771,888 | |||||||||
2.500%, due 06/01/28 | 363,839 | 378,758 | |||||||||
2.500%, due 07/01/28 | 2,715,206 | 2,823,677 |
Face Amount | Value | ||||||||||
Federal national mortgage association certificates—(continued) | |||||||||||
2.500%, due 08/01/28 | $ | 829,478 | $ | 864,115 | |||||||
2.500%, due 09/01/28 | 21,358 | 22,164 | |||||||||
2.500%, due 09/01/30 | 56,425 | 58,593 | |||||||||
2.500%, due 11/01/30 | 624,005 | 647,008 | |||||||||
2.500%, due 01/01/31 | 2,817,702 | 2,920,976 | |||||||||
2.621%, due 10/01/372 | 4,799,486 | 5,079,416 | |||||||||
2.624%, due 09/01/412 | 1,313,084 | 1,384,934 | |||||||||
2.699%, due 02/01/422 | 1,090,796 | 1,132,725 | |||||||||
2.737%, due 05/01/382 | 3,086,793 | 3,259,621 | |||||||||
2.749%, due 05/01/352 | 345,899 | 364,139 | |||||||||
3.000%, due 05/01/28 | 363,917 | 382,739 | |||||||||
3.000%, due 08/01/30 | 344,068 | 360,998 | |||||||||
3.000%, due 10/01/30 | 55,751 | 58,494 | |||||||||
3.000%, due 11/01/30 | 360,268 | 378,204 | |||||||||
3.000%, due 12/01/30 | 414,789 | 435,435 | |||||||||
3.000%, due 10/01/42 | 787,706 | 822,877 | |||||||||
3.000%, due 01/01/431 | 2,998,112 | 3,128,567 | |||||||||
3.000%, due 04/01/43 | 1,167,122 | 1,218,144 | |||||||||
3.000%, due 05/01/43 | 1,226,548 | 1,280,155 | |||||||||
3.000%, due 06/01/43 | 172,487 | 180,023 | |||||||||
3.000%, due 09/01/43 | 1,357,809 | 1,421,071 | |||||||||
3.330%, due 07/01/221 | 3,886,000 | 4,249,387 | |||||||||
3.440%, due 02/01/321 | 4,000,000 | 4,484,499 | |||||||||
3.500%, due 11/01/22 | 372,128 | 394,640 | |||||||||
3.500%, due 10/01/23 | 24,106 | 25,560 | |||||||||
3.500%, due 01/01/24 | 184,752 | 195,921 | |||||||||
3.500%, due 07/01/25 | 617,485 | 654,533 | |||||||||
3.500%, due 11/01/25 | 764,516 | 815,527 | |||||||||
3.500%, due 12/01/25 | 44,183 | 46,812 | |||||||||
3.500%, due 01/01/26 | 398,924 | 422,696 | |||||||||
3.500%, due 07/01/26 | 2,204,491 | 2,335,315 | |||||||||
3.500%, due 03/01/27 | 20,943 | 22,470 | |||||||||
3.500%, due 08/01/29 | 117,688 | 125,822 | |||||||||
3.500%, due 06/01/30 | 271,962 | 288,176 | |||||||||
3.500%, due 08/01/30 | 25,786 | 27,401 | |||||||||
3.500%, due 10/01/40 | 1,855,102 | 1,965,607 | |||||||||
3.500%, due 12/01/41 | 1,577,768 | 1,694,832 | |||||||||
3.500%, due 03/01/42 | 685,345 | 732,815 | |||||||||
3.500%, due 04/01/42 | 91,831 | 97,042 | |||||||||
3.500%, due 12/01/42 | 2,664,265 | 2,850,408 | |||||||||
3.500%, due 03/01/43 | 1,451,986 | 1,551,358 | |||||||||
3.500%, due 05/01/43 | 5,583,248 | 5,990,817 | |||||||||
3.500%, due 07/01/43 | 465,696 | 497,105 | |||||||||
3.500%, due 07/01/45 | 1,057,510 | 1,118,597 | |||||||||
3.500%, due 08/01/45 | 137,369 | 145,353 | |||||||||
3.500%, due 05/01/46 | 7,949,502 | 8,397,548 | |||||||||
3.600%, due 08/01/23 | 817,000 | 908,819 | |||||||||
3.765%, due 12/01/25 | 3,000,000 | 3,400,588 | |||||||||
4.000%, due 03/01/19 | 15,502 | 16,062 | |||||||||
4.000%, due 06/01/19 | 21,411 | 22,188 | |||||||||
4.000%, due 07/01/25 | 27,300 | 28,854 | |||||||||
4.000%, due 08/01/25 | 72,818 | 77,723 | |||||||||
4.000%, due 09/01/25 | 67,477 | 71,854 | |||||||||
4.000%, due 10/01/25 | 26,408 | 27,933 | |||||||||
4.000%, due 11/01/25 | 222,243 | 238,261 | |||||||||
4.000%, due 01/01/26 | 443,221 | 470,237 | |||||||||
4.000%, due 02/01/261 | 1,603,413 | 1,703,447 |
18
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Federal national mortgage association certificates—(continued) | |||||||||||
4.000%, due 03/01/26 | $ | 1,299,008 | $ | 1,392,535 | |||||||
4.000%, due 04/01/26 | 2,979,086 | 3,195,563 | |||||||||
4.000%, due 08/01/32 | 12,857 | 13,969 | |||||||||
4.000%, due 06/01/33 | 247,390 | 268,800 | |||||||||
4.000%, due 07/01/33 | 728,014 | 790,244 | |||||||||
4.000%, due 07/01/34 | 1,267,967 | 1,377,678 | |||||||||
4.000%, due 05/01/39 | 206,676 | 225,407 | |||||||||
4.000%, due 09/01/39 | 471,363 | 516,702 | |||||||||
4.000%, due 08/01/40 | 2,348,313 | 2,515,349 | |||||||||
4.000%, due 09/01/401 | 5,200,007 | 5,594,537 | |||||||||
4.000%, due 12/01/401 | 6,152,840 | 6,722,888 | |||||||||
4.000%, due 04/01/41 | 1,474,759 | 1,607,051 | |||||||||
4.000%, due 11/01/41 | 1,134,653 | 1,243,402 | |||||||||
4.000%, due 12/01/41 | 1,404,932 | 1,539,075 | |||||||||
4.000%, due 07/01/421 | 6,376,386 | 6,987,179 | |||||||||
4.000%, due 09/01/42 | 8,590,028 | 9,418,480 | |||||||||
4.000%, due 10/01/42 | 6,312,303 | 6,919,000 | |||||||||
4.500%, due 02/01/18 | 74,901 | 76,704 | |||||||||
4.500%, due 03/01/18 | 53,911 | 55,208 | |||||||||
4.500%, due 04/01/18 | 824,487 | 844,433 | |||||||||
4.500%, due 04/01/181 | 1,193,700 | 1,222,998 | |||||||||
4.500%, due 05/01/181 | 2,602,394 | 2,666,452 | |||||||||
4.500%, due 05/01/18 | 33,407 | 34,211 | |||||||||
4.500%, due 06/01/18 | 1,847,756 | 1,893,012 | |||||||||
4.500%, due 08/01/18 | 3,261 | 3,340 | |||||||||
4.500%, due 11/01/18 | 2,258 | 2,313 | |||||||||
4.500%, due 12/01/18 | 74,079 | 75,872 | |||||||||
4.500%, due 01/01/19 | 2,787 | 2,858 | |||||||||
4.500%, due 04/01/19 | 164,488 | 168,448 | |||||||||
4.500%, due 05/01/19 | 3,427 | 3,514 | |||||||||
4.500%, due 09/01/19 | 80,382 | 82,380 | |||||||||
4.500%, due 01/01/20 | 343,079 | 351,484 | |||||||||
4.500%, due 08/01/20 | 37,258 | 38,177 | |||||||||
4.500%, due 01/01/21 | 292,943 | 300,092 | |||||||||
4.500%, due 05/01/21 | 194,794 | 199,558 | |||||||||
4.500%, due 12/01/22 | 256,907 | 263,192 | |||||||||
4.500%, due 03/01/23 | 10,285 | 11,053 | |||||||||
4.500%, due 06/01/35 | 17,804 | 18,810 | |||||||||
4.500%, due 01/01/39 | 2,766 | 3,035 | |||||||||
4.500%, due 03/01/39 | 17,874 | 19,786 | |||||||||
4.500%, due 06/01/39 | 117,138 | 129,668 | |||||||||
4.500%, due 07/01/39 | 3,100 | 3,379 | |||||||||
4.500%, due 08/01/39 | 186,930 | 204,226 | |||||||||
4.500%, due 10/01/39 | 8,117 | 8,985 | |||||||||
4.500%, due 12/01/39 | 669,236 | 744,665 | |||||||||
4.500%, due 01/01/40 | 5,576 | 6,217 | |||||||||
4.500%, due 02/01/40 | 6,679 | 7,427 | |||||||||
4.500%, due 03/01/40 | 125,855 | 138,476 | |||||||||
4.500%, due 08/01/40 | 110,347 | 122,074 | |||||||||
4.500%, due 11/01/40 | 611,313 | 679,697 | |||||||||
4.500%, due 07/01/41 | 764,174 | 843,263 | |||||||||
4.500%, due 08/01/411 | 1,260,145 | 1,403,483 | |||||||||
4.500%, due 09/01/41 | 43,549 | 47,725 | |||||||||
4.500%, due 08/01/42 | 4,899 | 5,337 | |||||||||
4.500%, due 09/01/43 | 483,331 | 540,476 | |||||||||
4.500%, due 11/01/43 | 107,033 | 118,971 | |||||||||
4.500%, due 07/01/44 | 516,343 | 573,782 |
Face Amount | Value | ||||||||||
Federal national mortgage association certificates—(continued) | |||||||||||
4.500%, due 12/01/44 | $ | 3,246 | $ | 3,584 | |||||||
5.000%, due 05/01/17 | 43,503 | 44,657 | |||||||||
5.000%, due 12/01/17 | 187,074 | 192,037 | |||||||||
5.000%, due 03/01/23 | 5,083 | 5,442 | |||||||||
5.000%, due 05/01/23 | 127,264 | 136,177 | |||||||||
5.000%, due 09/01/23 | 494,059 | 546,362 | |||||||||
5.000%, due 07/01/24 | 705,338 | 780,007 | |||||||||
5.000%, due 03/01/25 | 31,345 | 34,663 | |||||||||
5.000%, due 07/01/27 | 723,849 | 800,478 | |||||||||
5.000%, due 03/01/33 | 91,591 | 100,404 | |||||||||
5.000%, due 05/01/37 | 42,099 | 45,674 | |||||||||
5.000%, due 09/01/37 | 50,178 | 54,921 | |||||||||
5.000%, due 06/01/38 | 124,718 | 136,475 | |||||||||
5.000%, due 08/01/41 | 50,618 | 56,175 | |||||||||
5.500%, due 06/01/23 | 804,180 | 900,948 | |||||||||
5.500%, due 10/01/24 | 11,666 | 13,070 | |||||||||
5.500%, due 11/01/25 | 15,487 | 17,351 | |||||||||
5.500%, due 07/01/27 | 194,566 | 217,979 | |||||||||
5.500%, due 11/01/32 | 132,246 | 149,630 | |||||||||
5.500%, due 12/01/33 | 1,516 | 1,715 | |||||||||
5.500%, due 04/01/34 | 89,352 | 100,879 | |||||||||
5.500%, due 01/01/35 | 132,534 | 148,482 | |||||||||
5.500%, due 04/01/36 | 90,629 | 101,564 | |||||||||
5.500%, due 04/01/37 | 56,827 | 60,606 | |||||||||
5.500%, due 05/01/37 | 340,555 | 386,893 | |||||||||
5.500%, due 07/01/37 | 171,292 | 193,854 | |||||||||
5.500%, due 06/01/38 | 320,756 | 362,158 | |||||||||
5.500%, due 06/01/39 | 1,675,621 | 1,904,720 | |||||||||
5.500%, due 11/01/39 | 647,356 | 734,448 | |||||||||
5.500%, due 07/01/40 | 816,344 | 917,938 | |||||||||
5.500%, due 02/01/42 | 499,858 | 561,283 | |||||||||
6.000%, due 11/01/21 | 60,556 | 64,834 | |||||||||
6.000%, due 01/01/23 | 188,281 | 201,285 | |||||||||
6.000%, due 03/01/23 | 282,029 | 307,479 | |||||||||
6.000%, due 11/01/26 | 37,654 | 42,884 | |||||||||
6.000%, due 02/01/32 | 81,476 | 92,793 | |||||||||
6.000%, due 12/01/32 | 21,870 | 25,322 | |||||||||
6.000%, due 01/01/33 | 130,928 | 149,114 | |||||||||
6.000%, due 02/01/33 | 31,305 | 35,959 | |||||||||
6.000%, due 09/01/34 | 178,194 | 205,704 | |||||||||
6.000%, due 04/01/35 | 693 | 789 | |||||||||
6.000%, due 05/01/35 | 80,525 | 91,929 | |||||||||
6.000%, due 06/01/35 | 27,607 | 31,693 | |||||||||
6.000%, due 07/01/35 | 58,561 | 66,777 | |||||||||
6.000%, due 09/01/35 | 2,247 | 2,574 | |||||||||
6.000%, due 01/01/36 | 55,512 | 63,990 | |||||||||
6.000%, due 06/01/36 | 563 | 643 | |||||||||
6.000%, due 09/01/36 | 64,681 | 74,489 | |||||||||
6.000%, due 10/01/36 | 26,702 | 30,466 | |||||||||
6.000%, due 12/01/36 | 254,597 | 293,378 | |||||||||
6.000%, due 03/01/37 | 29,508 | 33,991 | |||||||||
6.000%, due 09/01/37 | 39,434 | 40,757 | |||||||||
6.000%, due 10/01/37 | 116,163 | 131,285 | |||||||||
6.000%, due 12/01/37 | 133,305 | 151,869 | |||||||||
6.000%, due 08/01/38 | 2,229 | 2,539 | |||||||||
6.000%, due 11/01/38 | 639,340 | 733,003 | |||||||||
6.000%, due 05/01/39 | 81,079 | 93,518 |
19
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Federal national mortgage association certificates—(concluded) | |||||||||||
6.000%, due 11/01/40 | $ | 919,075 | $ | 1,063,787 | |||||||
6.500%, due 07/01/19 | 7,945 | 9,151 | |||||||||
6.500%, due 10/01/36 | 560,326 | 645,357 | |||||||||
6.500%, due 02/01/37 | 8,478 | 10,240 | |||||||||
6.500%, due 07/01/37 | 33,954 | 39,106 | |||||||||
6.500%, due 08/01/37 | 133,507 | 161,400 | |||||||||
6.500%, due 09/01/37 | 113,215 | 132,015 | |||||||||
6.500%, due 12/01/37 | 236,140 | 285,127 | |||||||||
6.500%, due 08/01/38 | 2,077 | 2,392 | |||||||||
6.500%, due 05/01/40 | 1,905,304 | 2,291,870 | |||||||||
7.500%, due 11/01/26 | 18,580 | 18,865 | |||||||||
8.000%, due 11/01/26 | 12,330 | 12,759 | |||||||||
9.000%, due 02/01/26 | 12,622 | 13,799 | |||||||||
FNMA ARM 1.638%, due 03/01/442 | 297,533 | 303,368 | |||||||||
1.895%, due 07/01/302 | 20,220 | 20,520 | |||||||||
1.980%, due 10/01/262 | 90,535 | 91,589 | |||||||||
2.345%, due 09/01/262 | 20,047 | 20,125 | |||||||||
2.491%, due 02/01/262 | 33,888 | 34,016 | |||||||||
2.540%, due 05/01/302 | 39,822 | 41,446 | |||||||||
2.625%, due 02/01/302 | 4,081 | 4,100 | |||||||||
2.774%, due 12/01/272 | 20,944 | 21,791 | |||||||||
2.837%, due 03/01/252 | 59,831 | 62,416 | |||||||||
FNMA TBA 2.500% | 39,000,000 | 40,334,531 | |||||||||
3.000%1 | 7,000,000 | 7,295,401 | |||||||||
3.500% | 68,900,000 | 72,845,970 | |||||||||
4.000% | 7,000,000 | 7,503,125 | |||||||||
4.500%1 | 3,500,000 | 3,682,340 | |||||||||
5.000% | 4,700,000 | 5,143,826 | |||||||||
6.000% | 1,000,000 | 1,140,555 | |||||||||
Total federal national mortgage association certificates (cost—$292,678,782) | 297,263,491 | ||||||||||
Collateralized mortgage obligations—21.16% | |||||||||||
Alternative Loan Trust, Series 2003-16T1, Class A2 0.958%, due 09/25/332 | 44,370 | 43,894 | |||||||||
Series 2004-J7, Class 2A1 1.268%, due 09/25/342 | 56,826 | 55,327 | |||||||||
ARM Trust, Series 2005-8, Class 3A21 3.145%, due 11/25/352 | 1,123,361 | 946,035 | |||||||||
BAMLL Commercial Mortgage Securities Trust, Series 2015-ASHF, Class A 1.701%, due 01/15/282,5 | 500,000 | 500,702 | |||||||||
BAMLL Re-REMIC Trust, Series 2011-07C1, Class A3A 5.383%, due 11/15/165 | 253,318 | 253,091 | |||||||||
BCAP LLC 2010-RR1 Trust, Series 2010-RR1, Class 1A4 3.005%, due 03/26/372,5 | 270,029 | 214,172 | |||||||||
BCAP LLC 2011-RR10 Trust, Series 2011-RR10, Class 3A5 2.909%, due 06/26/352,5 | 294,593 | 292,343 |
Face Amount | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
BCAP LLC 2011-RR11 Trust, Series 2011-R11, Class 22A1 2.228%, due 10/26/352,5 | $ | 147,887 | $ | 147,390 | |||||||
Series 2011-R11, Class 8A5 0.648%, due 07/26/362,5 | 317,777 | 299,379 | |||||||||
BCAP LLC 2013-RR1 Trust, Series 2013-RR1, Class 3A4 6.448%, due 10/26/372,5 | 491,092 | 463,784 | |||||||||
BCAP LLC 2013-RR5 Trust, Series 2013-RR5, Class 5A1 1.278%, due 11/26/462,5 | 315,738 | 302,073 | |||||||||
BCAP LLC 2014-RR1 Trust, Series 2014-RR1, Class 3A1 0.613%, due 03/26/372,5 | 54,322 | 53,721 | |||||||||
Bear Stearns ARM Trust, Series 2002-011, Class 1A2 3.002%, due 02/25/332 | 9,949 | 9,409 | |||||||||
Series 2004-002, Class 12A2 3.077%, due 05/25/342 | 71,638 | 70,228 | |||||||||
Bear Stearns Asset-Backed Securities Trust, Series 2003-AC5, Class A1 5.750%, due 10/25/336 | 938,506 | 964,045 | |||||||||
Series 2004-AC3, Class A2 5.500%, due 06/25/346 | 1,227,309 | 1,233,598 | |||||||||
Bear Stearns Commercial Mortgage Securities, Series 2007-PWR17, Class A4 5.694%, due 06/11/502 | 1,832,923 | 1,891,039 | |||||||||
Chevy Chase Mortgage Funding Corp., Series 2004-1, Class A1 0.768%, due 01/25/352,5 | 135,685 | 121,394 | |||||||||
CHL Mortgage Pass-Through Trust, Series 2003-HYB1, Class 1A1 3.062%, due 05/19/332 | 5,981 | 5,888 | |||||||||
Commercial Mortgage Trust, Series 2015-CR26, Class ASB 3.373%, due 10/10/48 | 5,000,000 | 5,393,984 | |||||||||
Countrywide Commercial Mortgage Trust 2007-MF1, Class A 6.077%, due 11/12/432,5 | 2,517,172 | 2,573,735 | |||||||||
Credit Suisse Commercial Mortgage Trust, Series 2007-C1, Class A1A 5.361%, due 02/15/40 | 1,970,870 | 1,986,229 | |||||||||
CSMC Trust, Series 2009-RR3, Class A5A 5.342%, due 12/15/432,5 | 200,000 | 200,654 | |||||||||
Series 2013-5R, Class 1A1 0.754%, due 02/27/362,5 | 447,988 | 427,190 | |||||||||
Series 2013-MH1, Class A 4.791%, due 05/27/532,4 | 1,065,829 | 1,170,194 | |||||||||
FHLMC REMIC, Series 0023, Class KZ 6.500%, due 11/25/23 | 24,162 | 27,077 | |||||||||
Series 0159, Class H 4.500%, due 09/15/21 | 5,034 | 5,239 | |||||||||
Series 1003, Class H 1.231%, due 10/15/202 | 8,673 | 8,769 |
20
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Series 1349, Class PS 7.500%, due 08/15/22 | $ | 1,136 | $ | 1,268 | |||||||
Series 1502, Class PX 7.000%, due 04/15/23 | 162,187 | 177,066 | |||||||||
Series 1534, Class Z 5.000%, due 06/15/23 | 74,978 | 79,973 | |||||||||
Series 1573, Class PZ 7.000%, due 09/15/23 | 23,953 | 26,509 | |||||||||
Series 1658, Class GZ 7.000%, due 01/15/24 | 11,933 | 13,343 | |||||||||
Series 1694, Class Z 6.500%, due 03/15/24 | 106,120 | 117,530 | |||||||||
Series 1775, Class Z 8.500%, due 03/15/25 | 3,312 | 3,830 | |||||||||
Series 2012-122, Class LI 4.500%, due 07/25/417 | 1,587,843 | 260,238 | |||||||||
Series 2012-77, Class IO 1.791%, due 07/25/522,7 | 817,913 | 61,016 | |||||||||
Series 2014-42, Class SA 1.751%, due 07/25/442,7 | 774,869 | 48,139 | |||||||||
Series 2014-43, Class BS 1.794%, due 07/25/442,7 | 1,352,438 | 82,041 | |||||||||
Series 2014-47, Class BI 1.917%, due 08/25/542,7 | 333,633 | 22,519 | |||||||||
Series 2015-10, Class SA 1.851%, due 03/25/452,7 | 756,366 | 56,907 | |||||||||
Series 2015-19, Class AI 1.819%, due 04/25/552,7 | 1,220,596 | 81,224 | |||||||||
Series 2015-50, Class SB 1.877%, due 07/25/452,7 | 2,337,027 | 157,790 | |||||||||
Series 2015-58, Class AI 1.942%, due 08/25/552,7 | 761,932 | 48,894 | |||||||||
Series 2015-64, Class KS 1.851%, due 09/25/452,7 | 893,297 | 55,580 | |||||||||
Series 2015-74, Class BI 1.937%, due 10/25/457 | 1,036,367 | 62,167 | |||||||||
Series 2016-14, Class IO 3.000%, due 03/25/467 | 2,041,800 | 246,853 | |||||||||
Series 2016-20, Class EI 3.000%, due 04/25/467 | 703,445 | 104,209 | |||||||||
Series 2016-52, Class PI 3.000%, due 04/25/463,4,7 | 2,000,000 | 230,465 | |||||||||
Series 2400, Class FQ 0.981%, due 01/15/322 | 226,900 | 227,782 | |||||||||
Series 2411, Class FJ 0.831%, due 12/15/292 | 25,454 | 25,453 | |||||||||
Series 2614, Class WO 0.000%, due 05/15/335,8 | 1,577,707 | 1,507,603 | |||||||||
Series 3096, Class FL 0.881%, due 01/15/362 | 215,476 | 215,561 | |||||||||
Series 3114, Class PF 0.881%, due 02/15/362 | 1,103,479 | 1,100,224 | |||||||||
Series 3153, Class UF 0.911%, due 05/15/362 | 259,771 | 260,048 | |||||||||
Series 3339, Class LI 5.999%, due 07/15/372,5,7 | 1,324,733 | 204,329 |
Face Amount | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Series 3442, Class MT 0.481%, due 07/15/342,5 | $ | 132,599 | $ | 130,298 | |||||||
Series 3598, Class JI 1.588%, due 10/15/372,7 | 97,590 | 5,150 | |||||||||
Series 3621, Class WI 1.786%, due 05/15/372,7 | 187,456 | 12,651 | |||||||||
Series 3635, Class IB 1.487%, due 10/15/37 | 385,328 | 18,371 | |||||||||
Series 3667, Class FW 1.031%, due 02/15/382 | 195,015 | 195,424 | |||||||||
Series 3671, Class FQ 1.331%, due 12/15/362 | 2,099,731 | 2,128,906 | |||||||||
Series 3684, Class JI 1.909%, due 11/15/362,7 | 836,447 | 58,079 | |||||||||
Series 3864, Class NT 5.500%, due 03/15/392,5 | 1,050,383 | 1,156,855 | |||||||||
Series 4037, Class PI 3.000%, due 04/15/275,7 | 4,884,991 | 451,812 | |||||||||
Series 4131, Class AI 2.500%, due 10/15/227 | 2,863,118 | 146,581 | |||||||||
Series 4136, Class EZ 3.000%, due 11/15/42 | 1,840,017 | 1,879,609 | |||||||||
Series 4156, Class SA 5.719%, due 01/15/332,5,7 | 2,975,931 | 581,481 | |||||||||
Series 4165, Class TI 3.000%, due 12/15/427 | 3,005,338 | 314,291 | |||||||||
Series 4182, Class YI 2.500%, due 03/15/285,7 | 7,197,789 | 652,629 | |||||||||
Series 4255, Class SN 11.023%, due 05/15/352,5 | 445,114 | 498,119 | |||||||||
Series 4263, Class SD 10.983%, due 11/15/432,5 | 539,720 | 661,840 | |||||||||
Series 4265, Class ES 12.267%, due 11/15/432,5 | 1,278,694 | 1,404,424 | |||||||||
Series 4324, Class IO 2.114%, due 08/15/362,7 | 506,763 | 34,981 | |||||||||
Series 4326, Class SB 10.889%, due 04/15/442,5 | 201,705 | 204,943 | |||||||||
Series 4338, Class SB 1.893%, due 10/15/412,7 | 591,616 | 42,215 | |||||||||
FHLMC Strips, Series 320, Class S4 1.821%, due 10/15/372,7 | 2,890,079 | 189,068 | |||||||||
Series 328, Class S4 2.008%, due 02/15/382,7 | 489,610 | 32,195 | |||||||||
FNMA REMIC, Trust 1988-007, Class Z 9.250%, due 04/25/18 | 25,039 | 26,027 | |||||||||
Trust 1992-129, Class L 6.000%, due 07/25/22 | 3,150 | 3,396 | |||||||||
Trust 1992-158, Class ZZ 7.750%, due 08/25/22 | 7,200 | 7,983 | |||||||||
Trust 1993-037, Class PX 7.000%, due 03/25/23 | 123,916 | 136,755 | |||||||||
Trust 1997-022, Class F 0.893%, due 03/25/272 | 127,727 | 125,958 |
21
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Trust 2002-060, Class F1 0.888%, due 06/25/322 | $ | 108,230 | $ | 108,111 | |||||||
Trust 2003-070, Class SH 13.024%, due 07/25/232,5 | 68,428 | 82,994 | |||||||||
Trust 2006-112, Class LF 1.038%, due 11/25/362 | 3,221,409 | 3,245,133 | |||||||||
Trust 2007-067, Class FB 0.808%, due 07/25/372 | 847,928 | 844,966 | |||||||||
Trust 2009-033, Class FB 1.308%, due 03/25/372 | 1,290,645 | 1,311,454 | |||||||||
Trust 2010-035, Class EF 1.038%, due 04/25/402 | 910,271 | 912,041 | |||||||||
Trust 2010-141, Class FA 0.988%, due 12/25/402 | 706,269 | 707,547 | |||||||||
Trust 2012-090, Class FB 0.928%, due 08/25/422 | 375,204 | 374,761 | |||||||||
Trust 2012-111, Class HS 3.260%, due 10/25/422,5 | 401,137 | 398,596 | |||||||||
Trust 2012-128, Class FK 0.838%, due 11/25/422 | 599,591 | 596,469 | |||||||||
Trust 2013-010, Class US 7.021%, due 02/25/432,5 | 223,110 | 227,740 | |||||||||
Trust 2013-028, Class YS 5.662%, due 07/25/422,5,7 | 1,516,716 | 269,784 | |||||||||
Trust 2013-030, Class GI 3.000%, due 01/25/435,7 | 4,122,394 | 582,682 | |||||||||
Trust 2013-030, Class JI 3.000%, due 04/25/435,7 | 1,578,439 | 228,315 | |||||||||
Trust 2013-034, Class PS 5.662%, due 08/25/422,5,7 | 1,185,567 | 248,035 | |||||||||
Trust 2013-044, Class ZG 3.500%, due 03/25/42 | 899,373 | 911,437 | |||||||||
Trust 2013-045, Class IK 3.000%, due 02/25/435,7 | 2,788,683 | 376,850 | |||||||||
Trust 2013-116, Class IY 3.000%, due 09/25/435,7 | 856,365 | 68,857 | |||||||||
Trust 2015-073, Class ES 8.245%, due 10/25/452,5 | 1,211,898 | 1,233,727 | |||||||||
Trust 2015-M13, Class A2 2.711%, due 06/25/252 | 1,500,000 | 1,581,936 | |||||||||
Trust G92-040, Class ZC 7.000%, due 07/25/22 | 12,374 | 13,502 | |||||||||
Trust G94-006, Class PJ 8.000%, due 05/17/24 | 17,918 | 20,456 | |||||||||
GMAC Mortgage Loan Trust, Series 2004-AR1, Class 12A 3.440%, due 06/25/342 | 31,081 | 31,541 | |||||||||
GNMA REMIC, Trust 2000-009, Class FH 0.982%, due 02/16/302 | 13,402 | 13,470 | |||||||||
Trust 2000-035, Class F 1.032%, due 12/16/252 | 116,460 | 117,857 | |||||||||
Trust 2007-018, Class CO 0.010%, due 03/20/355,8 | 30,012 | 27,224 | |||||||||
Trust 2010-H01, Class FA 1.269%, due 01/20/602 | 4,068,279 | 4,089,465 |
Face Amount | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Trust 2013-84, Class SC 6.118%, due 03/16/402,7 | $ | 1,275,470 | $ | 230,434 | |||||||
Trust 2013-H19, Class DF 1.120%, due 05/20/632 | 1,640,543 | 1,639,916 | |||||||||
Trust 2013-H20, Class FB 1.470%, due 08/20/632 | 2,633,111 | 2,669,700 | |||||||||
Trust 2013-H23, Class TA 1.190%, due 09/20/632 | 1,031,226 | 1,034,461 | |||||||||
Trust 2015-126, Class GS 8.245%, due 09/20/452,5 | 2,733,387 | 2,811,501 | |||||||||
Trust 2015-H27, Class FA 1.220%, due 09/20/652 | 3,198,447 | 3,192,242 | |||||||||
Trust 2015-H29, Class FA 1.170%, due 10/20/652 | 2,471,126 | 2,472,390 | |||||||||
Trust 2015-H29, Class FJ 1.150%, due 11/20/652 | 2,596,482 | 2,580,625 | |||||||||
Trust 2015-H30, Class FA 1.150%, due 08/20/612 | 2,137,519 | 2,136,303 | |||||||||
Trust 2015-H30, Class FB 1.150%, due 03/20/622 | 359,306 | 359,929 | |||||||||
Trust 2016-H04, Class FG 1.170%, due 12/20/612 | 2,929,435 | 2,925,097 | |||||||||
Trust 2016-H11, Class F 1.270%, due 05/20/662 | 4,766,725 | 4,771,681 | |||||||||
Trust 2016-H14, Class FA 1.287%, due 06/20/662 | 700,313 | 701,064 | |||||||||
GS Mortgage Securities Corp. II, Series 2015-GC30, Class A3 3.119%, due 05/10/50 | 5,000,000 | 5,308,469 | |||||||||
GS Mortgage Securities Trust, Series 2015-GC28, Class AAB 3.206%, due 02/10/48 | 1,200,000 | 1,256,980 | |||||||||
GSR Mortgage Loan Trust, Series 2004-14, Class 2A1 0.818%, due 12/25/342 | 8,439 | 7,567 | |||||||||
Indymac Index Mortgage Loan Trust, Series 2005-AR2, Class 2A1A 1.128%, due 02/25/352 | 708,809 | 651,940 | |||||||||
JPMorgan Alternative Loan Trust, Series 2008-R4, Class 2A1 0.953%, due 06/27/372,5 | 1,919,937 | 1,454,891 | |||||||||
JPMorgan Resecuritization Trust, Series 2009-7, Class 1A1 3.083%, due 08/27/372,5 | 68,287 | 68,459 | |||||||||
LB Commercial Conduit Mortgage Trust, Series 2007-C3, Class A4 5.918%, due 07/15/442 | 2,140,320 | 2,211,730 | |||||||||
Merrill Lynch Mortgage Investors Trust, Series 2004-1, Class 2A2 2.600%, due 12/25/342 | 429,694 | 429,133 | |||||||||
Series 2004-A, Class A1 0.948%, due 04/25/292 | 95,045 | 89,041 | |||||||||
Morgan Stanley Mortgage Loan Trust, Series 2004-11AR, Class 1A1 0.808%, due 01/25/352 | 80,617 | 74,523 | |||||||||
Series 2005-6AR, Class 1A1 0.768%, due 11/25/352 | 122,961 | 120,020 |
22
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Collateralized mortgage obligations—(concluded) | |||||||||||
Morgan Stanley Re-REMIC Trust, Series 2010-R4, Class 4B 0.864%, due 02/26/372,5 | $ | 359,457 | $ | 242,905 | |||||||
Series 2013-R10, Class 3A 0.763%, due 01/26/512,5 | 529,661 | 502,317 | |||||||||
Mortgage Equity Conversion Asset Trust, Series 2007-FF3, Class A 1.117%, due 05/25/422,5 | 4,570,199 | 4,008,064 | |||||||||
Motel 6 Trust, Series 2015-MTL6, Class B 3.298%, due 02/05/305 | 5,000,000 | 5,061,384 | |||||||||
Opteum Mortgage Acceptance Corp., Asset Backed Pass-Through Certificates, Series 2005-2, Class AII2 0.798%, due 04/25/352 | 68,552 | 68,019 | |||||||||
RALI, Series 2005-QA1 Trust, Series 2005-FQA1, Class A1 0.788%, due 01/25/352 | 168,521 | 160,427 | |||||||||
RBSSP Resecuritization Trust Certificate, Series 2009-6, Class 18A1 0.990%, due 12/26/362,5 | 898,676 | 875,486 | |||||||||
Sequoia Mortgage Trust, Series 5, Class A 1.183%, due 10/19/262 | 139,615 | 135,799 | |||||||||
Structured ARM Loan, Series 2007-4, Class 1A2 0.708%, due 05/25/372 | 325,102 | 269,634 | |||||||||
Structured Asset Mortgage Investments, Inc., Series 2006-AR3, Class 11A1 0.698%, due 04/25/362 | 1,064,557 | 772,506 | |||||||||
Thornburg Mortgage Securities Trust, Series 2005-1, Class A3 2.542%, due 04/25/452 | 140,442 | 140,644 | |||||||||
Washington Mutual Commercial Mortgage Securities Trust, Series 2007-SL3, Class A1A 5.457%, due 03/23/452,5 | 70,977 | 71,072 | |||||||||
Washington Mutual Mortgage Pass-Through Certificates, Series 2003-AR9, Class 1A6 2.516%, due 09/25/332 | 1,346,422 | 1,354,564 | |||||||||
Series 2003-AR9, Class 2A 2.594%, due 09/25/332 | 322,817 | 316,167 | |||||||||
Total collateralized mortgage obligations (cost—$107,672,090) | 108,041,219 | ||||||||||
Asset-backed securities—9.23% | |||||||||||
Ameriquest Mortgage Securities, Inc., Asset-Backed Pass-Through Certificates, Series 2004-R9, Class M2 1.463%, due 10/25/342 | 1,125,669 | 1,114,489 | |||||||||
Series 2005-R1, Class M4 1.598%, due 03/25/352 | 200,000 | 160,010 | |||||||||
Series 2005-R11, Class M1 0.938%, due 01/25/362 | 400,000 | 376,328 |
Face Amount | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Amortizing Residential Collateral Trust, Series 2004-1, Class A5 1.488%, due 10/25/342 | $ | 284,547 | $ | 272,128 | |||||||
Ares IIIR/IVR CLO Ltd., Series 2007-3RA, Class A2 0.899%, due 04/16/212,5 | 1,595,286 | 1,577,358 | |||||||||
Bear Stearns Asset-Backed Securities Trust, Series 2004-2, Class M1 1.688%, due 08/25/342 | 7,485,131 | 6,891,632 | |||||||||
Series 2006-2, Class M1 0.908%, due 07/25/362 | 143,637 | 142,065 | |||||||||
Chase Funding Trust, Series 2002-3, Class 2A1 1.128%, due 08/25/322 | 173,966 | 158,503 | |||||||||
Series 2002-4, Class 2A1 1.228%, due 10/25/322 | 11,166 | 10,430 | |||||||||
Countrywide Asset-Backed Certificates, Series 2004-2, Class 3A4 0.988%, due 07/25/342 | 80,086 | 70,935 | |||||||||
Series 2004-4, Class M1 1.208%, due 07/25/342 | 236,434 | 221,075 | |||||||||
Series 2004-6, Class M1 1.388%, due 10/25/342 | 279,733 | 258,776 | |||||||||
Denali Capital CLO VII Ltd., Series 2007-1A, Class A1L 0.932%, due 01/22/222,5 | 763,306 | 745,493 | |||||||||
Dryden Senior Loan Fund, Series 2011-22A, Class A1R 1.850%, due 01/15/222,5 | 424,936 | 423,380 | |||||||||
Eastland CLO Ltd., Series 2007-1A, Class A2A 0.867%, due 05/01/222,5 | 1,136,623 | 1,128,304 | |||||||||
EMC Mortgage Loan Trust, Series 2003-A, Class A2 1.238%, due 08/25/402,5 | 125,898 | 116,113 | |||||||||
FBR Securitization Trust, Series 2005-5, Class AV24 1.228%, due 11/25/352 | 166,573 | 165,055 | |||||||||
First Franklin Mortgage Loan Trust, Series 2005-FFH1, Class M1 1.163%, due 06/25/362 | 170,802 | 164,764 | |||||||||
Fremont Home Loan Trust, Series 2004-A, Class M1 1.313%, due 01/25/342 | 699,507 | 640,046 | |||||||||
GCAT 2015-3 LLC, Series 2015-3, Class A1 4.250%, due 10/25/195,6 | 935,297 | 937,930 | |||||||||
Green Tree Financial Corp., Series 1998-2, Class A5 6.240%, due 12/01/282 | 16,159 | 16,840 | |||||||||
GSAA Home Equity Trust, Series 2005-4, Class A5 0.708%, due 03/25/352 | 441,646 | 434,697 | |||||||||
JP Morgan Mortgage Acquisition Corp., Series 2005-FRE1, Class A2F3 3.748%, due 10/25/356 | 148,141 | 141,663 |
23
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Series 2006-FRE1, Class A1 0.718%, due 05/25/352 | $ | 424,797 | $ | 413,450 | |||||||
Series 2006-FRE1, Class A3 0.678%, due 05/25/352 | 347,271 | 341,817 | |||||||||
Series 2006-FRE2, Class A1 0.668%, due 02/25/362 | 337,153 | 323,976 | |||||||||
JP Morgan Mortgage Acquisition Trust, Series 2006-ACC1, Class A1 0.648%, due 05/25/362 | 408,341 | 395,098 | |||||||||
Series 2006-ACC1, Class M1 0.758%, due 05/25/362 | 300,000 | 255,767 | |||||||||
Series 2006-CH1, Class A5 0.718%, due 07/25/362 | 225,000 | 215,786 | |||||||||
Series 2007-CH2, Class AV1 0.648%, due 01/25/372 | 656,966 | 640,063 | |||||||||
KVK CLO Ltd., Series 2012-2A, Class A 2.080%, due 02/10/252,5 | 4,400,000 | 4,400,110 | |||||||||
Merrill Lynch Mortgage Investors Trust, Series 2006-FF1, Class M3 0.798%, due 08/25/362 | 300,000 | 283,590 | |||||||||
Morgan Stanley ABS Capital I, Inc., Series 2005-WMC6, Class M3 1.253%, due 07/25/352 | 350,000 | 330,280 | |||||||||
Morgan Stanley Home Equity Loan Trust, Series 2005-1, Class M4 1.538%, due 12/25/342 | 400,000 | 344,108 | |||||||||
Muir Grove CLO Ltd., Series 2007-2A, Class A 1.335%, due 03/25/202,5 | 559,067 | 555,041 | |||||||||
Northwoods Capital IX Ltd., Series 2012-9A, Class A 2.099%, due 01/18/242,5 | 2,500,000 | 2,499,882 | |||||||||
NYMT Residential, Series 2016-RP1, Class A 4.000%, due 03/25/215,6 | 1,142,812 | 1,143,043 | |||||||||
Ocean Trails CLO II, Series 2007-2A, Class A1V2 0.904%, due 06/27/222,5 | 2,147,247 | 2,115,940 | |||||||||
Park Place Securities, Inc., Asset-Backed Pass Through Certificates, Series 2005-WHQ3, Class M4 1.433%, due 06/25/352 | 200,000 | 176,429 | |||||||||
RAAC, Series 2005-SP3 Trust, Series 2005-SP3, Class M1 1.018%, due 12/25/352 | 1,500,000 | 1,436,945 | |||||||||
RASC, Series 2005-KS11 Trust, Series 2005-KS11, Class M2 0.908%, due 12/25/352 | 400,000 | 349,336 | |||||||||
Renaissance Home Equity Loan Trust, Series 2003-2, Class A 1.368%, due 08/25/332 | 178,221 | 166,027 | |||||||||
SLM Student Loan Trust, Series 2008-9, Class A 2.215%, due 04/25/232 | 3,028,147 | 3,022,502 |
Face Amount | Value | ||||||||||
Asset-backed securities—(concluded) | |||||||||||
Series 2010-A, Class 2A 3.731%, due 05/16/442,5 | $ | 857,369 | $ | 884,888 | |||||||
Specialty Underwriting & Residential Financing, Series 2003-BC1, Class A 1.168%, due 01/25/342 | 63,563 | 58,437 | |||||||||
Stone Tower CLO Ltd., Series 2007-6A, Class A1 0.909%, due 04/17/212,5 | 66,195 | 65,797 | |||||||||
Symphony CLO Ltd., Series 2012-10AR, Class AR 1.586%, due 07/23/232,5 | 5,000,000 | 4,990,370 | |||||||||
US Residential Opportunity Fund III Trust, Series 2016-1III, Class A 3.475%, due 07/27/363,5 | 1,900,000 | 1,902,142 | |||||||||
Vericrest Opportunity Loan Trust, 2014-NP10, Class A1 3.375%, due 10/25/545,6 | 154,323 | 153,544 | |||||||||
Vericrest Opportunity Loan Trust, 2014-NP11, Class A1 3.875%, due 04/25/555,6 | 85,027 | 85,057 | |||||||||
Vericrest Opportunity Loan Trust, 2014-NPL9, Class A1 3.375%, due 11/25/545,6 | 106,664 | 106,134 | |||||||||
Vericrest Opportunity Loan Trust, 2015-NPL1, Class A1 3.625%, due 10/25/575,6 | 227,515 | 226,753 | |||||||||
Vericrest Opportunity Loan Trust, 2015-NPL2, Class A1 3.375%, due 02/25/555,6 | 147,812 | 146,964 | |||||||||
Vericrest Opportunity Loan Trust, 2016-NPL3, Class A1 4.250%, due 03/26/465,6 | 1,995,143 | 2,020,529 | |||||||||
VOLT XLII LLC, Series 2016-NPL2, Class A1 4.250%, due 03/26/465,6 | 928,705 | 934,875 | |||||||||
Total asset-backed securities (cost—$46,972,191) | 47,152,694 | ||||||||||
Commercial mortgage-backed securities—0.68% | |||||||||||
FNMA Aces, Trust 2013-M5, Class X2 2.301%, due 01/25/222,5,7 | 2,025,441 | 174,082 | |||||||||
Trust 2015-M17, Class FA 1.369%, due 11/25/222 | 3,293,269 | 3,302,516 | |||||||||
Total commercial mortgage-backed securities (cost—$3,432,927) | 3,476,598 | ||||||||||
Stripped mortgage-backed securities—1.87% | |||||||||||
FHLMC Multifamily Structured Pass-Through Certificates, Series K005, Class AX 1.366%, due 11/25/192,5,7 | 23,346,053 | 907,391 | |||||||||
Series K006, Class AX1 1.000%, due 01/25/202,5,7 | 13,218,143 | 377,114 | |||||||||
Series K014, Class X1 1.209%, due 04/25/212,5,7 | 7,614,590 | 373,931 |
24
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Stripped mortgage-backed securities—(concluded) | |||||||||||
Series K027, Class X1 0.825%, due 01/25/232,5,7 | $ | 6,913,129 | $ | 290,365 | |||||||
Series K712, Class X1 1.362%, due 11/25/192,5,7 | 4,352,209 | 151,101 | |||||||||
Series KAIV, Class X1 1.330%, due 06/25/212,5,7 | 4,633,116 | 232,746 | |||||||||
Series KP03, Class A2 1.780%, due 07/25/19 | 5,000,000 | 5,064,439 | |||||||||
FHLMC REMIC, Series 0013, Class B 7.000%, due 06/25/235,7 | 52,888 | 8,859 | |||||||||
Series 2136, Class GD 7.000%, due 03/15/295,7 | 4,518 | 1,087 | |||||||||
Series 2178, Class PI 7.500%, due 08/15/295,7 | 23,830 | 5,123 | |||||||||
GNMA REMIC, Trust 2011-92, Class IX 0.672%, due 11/16/442,5,7 | 5,742,054 | 373,463 | |||||||||
KGS Alpha SBA, Series 2012 1.005%, due 04/25/382,3,4,7 | 47,001,681 | 1,740,531 | |||||||||
Total stripped mortgage-backed securities (cost—$9,490,277) | 9,526,150 | ||||||||||
Short-term US government obligation9—0.01% | |||||||||||
US Treasury Bill 0.295%, due 10/13/161 (cost—$63,962) | 64,000 | 63,969 |
Face Amount | Value | ||||||||||
Repurchase agreement—0.24% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $100,675 US Treasury Bond, 7.875% due 02/15/2021 and $1,108,447 US Treasury Notes, 0.750% to 2.250%, due 12/31/17 to 07/31/21; (value—$1,272,982); proceeds: $1,248,001 (cost—$1,248,000) | $ | 1,248,000 | $ | 1,248,000 | |||||||
Total investments before investments sold short (cost—$810,433,325)—160.41% | 819,136,818 | ||||||||||
Investments sold short—(18.05)% | |||||||||||
FHLMC TBA 2.500% | (3,000,000 | ) | (3,039,369 | ) | |||||||
4.000 | % | (14,000,000 | ) | (14,984,922 | ) | ||||||
5.500 | % | (2,000,000 | ) | (2,229,844 | ) | ||||||
FNMA TBA 3.000% (6,000,000) (6,243,985) 4.000% | (23,500,000 | ) | (25,145,993 | ) | |||||||
4.500 | % | (10,000,000 | ) | (10,240,380 | ) | ||||||
GNMA I TBA 3.000% | (4,000,000 | ) | (4,197,109 | ) | |||||||
3.500 | % | (16,500,000 | ) | (17,547,577 | ) | ||||||
GNMA II TBA 4.000% | (8,000,000 | ) | (8,542,187 | ) | |||||||
Total investments sold short (proceeds—$92,047,266) | (92,171,366 | ) | |||||||||
Liabilities in excess of other assets—(42.36)% | (216,330,049 | ) | |||||||||
Net assets—100.00% | $ | 510,635,403 |
25
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
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 262.
Aggregate cost for federal income tax purposes before investments sold short was $810,580,005; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 11,582,356 | |||||
Gross unrealized depreciation | (3,025,543 | ) | |||||
Net unrealized appreciation | $ | 8,556,813 |
Written options
Notional amount | Call options written | Expiration date | Premiums received | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||
$ | 5,000,000 | FNMA TBA, 3.000%, strike @ 103.58 | 08/04/16 | $ | 14,258 | $ | (26,097 | ) | $ | (11,839 | ) | ||||||||||||
2,000,000 | FNMA TBA, 3.000%, strike @ 103.64 | 08/04/16 | 5,547 | (9,302 | ) | (3,755 | ) | ||||||||||||||||
500,000 | FNMA TBA, 3.000%, strike @ 103.79 | 09/07/16 | 1,094 | (2,110 | ) | (1,016 | ) | ||||||||||||||||
2,500,000 | FNMA TBA, 3.000%, strike @ 103.83 | 09/07/16 | 6,542 | (10,003 | ) | (3,461 | ) | ||||||||||||||||
1,500,000 | FNMA TBA, 3.000%, strike @ 104.15 | 08/04/16 | 1,172 | (1,648 | ) | (476 | ) | ||||||||||||||||
8,000,000 | FNMA TBA, 3.000%, strike @ 104.17 | 08/04/16 | 8,750 | (7,988 | ) | 762 | |||||||||||||||||
1,500,000 | FNMA TBA, 3.000%, strike @ 104.18 | 08/04/16 | 1,406 | (1,450 | ) | (44 | ) | ||||||||||||||||
6,000,000 | FNMA TBA, 3.000%, strike @ 104.64 | 08/04/16 | 10,078 | (413 | ) | 9,665 | |||||||||||||||||
8,000,000 | FNMA TBA, 3.500%, strike @ 104.81 | 08/04/16 | 28,125 | (65,625 | ) | (37,500 | ) | ||||||||||||||||
3,500,000 | FNMA TBA, 3.500%, strike @ 104.94 | 08/04/16 | 12,852 | (24,339 | ) | (11,487 | ) | ||||||||||||||||
$ | 89,824 | $ | (148,975 | ) | $ | (59,151 | ) | ||||||||||||||||
Put options written | |||||||||||||||||||||||
$ | 500,000 | FNMA TBA, 3.000%, strike @ $102.79 | 09/07/16 | $ | 1,211 | $ | (416 | ) | $ | 795 | |||||||||||||
2,000,000 | FNMA TBA, 3.000%, strike @ $103.48 | 08/04/16 | 6,250 | (166 | ) | 6,084 | |||||||||||||||||
9,000,000 | FNMA TBA, 3.000%, strike @ $103.52 | 08/04/16 | 15,468 | (897 | ) | 14,571 | |||||||||||||||||
2,000,000 | FNMA TBA, 3.000%, strike @ $103.66 | 08/04/16 | 6,250 | (447 | ) | 5,803 | |||||||||||||||||
8,000,000 | FNMA TBA, 3.500%, strike @ $104.81 | 08/04/16 | 28,125 | (2 | ) | 28,123 | |||||||||||||||||
3,500,000 | FNMA TBA, 3.500%, strike @ $104.94 | 08/04/16 | 12,852 | (4 | ) | 12,848 | |||||||||||||||||
$ | 70,156 | $ | (1,932 | ) | $ | 68,224 | |||||||||||||||||
$ | 159,980 | $ | (150,907 | ) | $ | 9,073 |
Written option activity for the year ended July 31, 2016 was as follows:
Notional amount | Premiums received | ||||||||||
Options outstanding at July 31, 2015 | $ | 52,000,000 | $ | 137,501 | |||||||
Options written | 320,500,000 | 803,045 | |||||||||
Options terminated in closing purchase transactions | (30,000,000 | ) | (64,219 | ) | |||||||
Options exercised | (164,000,000 | ) | (461,152 | ) | |||||||
Options expired prior to exercise | (115,000,000 | ) | (255,195 | ) | |||||||
Options outstanding at July 31, 2016 | $ | 63,500,000 | $ | 159,980 |
26
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
Written swaptions
Written swaptions activity for the year ended July 31, 2016 was as follows:
Premiums received | |||||||
Swaption outstanding at July 31, 2015 | $ | 1,945,600 | |||||
Swaption written | 112,490 | ||||||
Swaption terminated in closing purchase transactions | (35,990 | ) | |||||
Swaption exercised | (1,049,300 | ) | |||||
Swaption expired prior to exercise | (972,800 | ) | |||||
Swaption outstanding at July 31, 2016 | $ | — |
Centrally cleared interest rate swap agreements
Notional amount (000) | Termination date | Payments made by the Portfolio10 | Payments received by the Portfolio10 | Value | Unrealized depreciation | ||||||||||||||||||
USD | 16,000 | 06/30/25 | 2.400 | % | 3 Month USD LIBOR | $ | (1,517,939 | ) | $ | (1,517,939 | ) | ||||||||||||
USD | 6,450 | 12/21/46 | 2.250 | 3 Month USD LIBOR | (747,991 | ) | (198,889 | ) | |||||||||||||||
$ | (2,265,930 | ) | $ | (1,716,828 | ) |
Total return swap agreements4
Counterparty | Notional amount (000) | Termination date | Payments made by the Portfolio10 | Payments received by the Portfolio10 | Upfront payments received | Value | Unrealized appreciation | ||||||||||||||||||||||||
CSI | USD | 1,652 | 01/12/43 | 1 Month USD LIBOR | 3.000 | % | $ | 8,500 | $ | 1,146 | $ | 9,646 | |||||||||||||||||||
GS | USD | 1,795 | 01/12/43 | 1 Month USD LIBOR | 3.000 | 8,379 | 1,246 | 9,625 | |||||||||||||||||||||||
$ | 16,879 | $ | 2,392 | $ | 19,271 |
27
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | — | $ | 12,551,531 | $ | — | $ | 12,551,531 | |||||||||||
Government national mortgage association certificates | — | 195,693,881 | — | 195,693,881 | |||||||||||||||
Federal home loan mortgage corporation certificates | — | 143,906,765 | — | 143,906,765 | |||||||||||||||
Federal housing administration certificates | — | — | 212,520 | 212,520 | |||||||||||||||
Federal national mortgage association certificates | — | 297,263,491 | — | 297,263,491 | |||||||||||||||
Collateralized mortgage obligations | — | 104,033,155 | 4,008,064 | 108,041,219 | |||||||||||||||
Asset-backed securities | — | 45,250,552 | 1,902,142 | 47,152,694 | |||||||||||||||
Commercial mortgage-backed securities | — | 3,476,598 | — | 3,476,598 | |||||||||||||||
Stripped mortgage-backed securities | — | 7,785,619 | 1,740,531 | 9,526,150 | |||||||||||||||
Short-term US government obligation | — | 63,969 | — | 63,969 | |||||||||||||||
Repurchase agreement | — | 1,248,000 | — | 1,248,000 | |||||||||||||||
Swap agreements | — | 2,392 | — | 2,392 | |||||||||||||||
Total | $ | — | $ | 811,275,953 | $ | 7,863,257 | $ | 819,139,210 | |||||||||||
Liabilities | |||||||||||||||||||
Investments sold short | — | (92,171,366 | ) | — | (92,171,366 | ) | |||||||||||||
Written options | — | (150,907 | ) | — | (150,907 | ) | |||||||||||||
Swap agreements | — | (2,265,930 | ) | — | (2,265,930 | ) | |||||||||||||
Total | $ | — | $ | (94,588,203 | ) | $ | — | $ | (94,588,203 | ) |
At July 31, 2016, there were no transfers between Level 1 and Level 2.
The following is a rollforward of the Portfolio's investments that was valued using unobservable inputs (Level 3) for the year ended July 31, 2016:
Federal housing administration certificates | Asset-backed securities | Collateralized mortgage obligations | Stripped mortgage-backed securities | Total | |||||||||||||||||||
Beginning balance | $ | 306,338 | $ | — | $ | 5,123,963 | $ | 2,512,091 | $ | 7,942,392 | |||||||||||||
Purchases | — | 1,900,000 | — | — | 1,900,000 | ||||||||||||||||||
Sales/paydown | (89,332 | ) | — | (1,386,898 | ) | (551,180 | ) | (2,027,410 | ) | ||||||||||||||
Accrued discounts/(premiums) | (68 | ) | — | 50,733 | (46,721 | ) | 3,944 | ||||||||||||||||
Total realized gain/(loss) | (87 | ) | — | 25,201 | (54,765 | ) | (29,651 | ) | |||||||||||||||
Net change in unrealized appreciation/depreciation | (4,331 | ) | 2,142 | 195,065 | (118,894 | ) | 73,982 | ||||||||||||||||
Transfers into Level 3 | — | — | — | — | — | ||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | — | ||||||||||||||||||
Ending balance | $ | 212,520 | $ | 1,902,142 | $ | 4,008,064 | $ | 1,740,531 | $ | 7,863,257 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investments held at July 31, 2016 was $(239,923).
28
PACE Mortgage-Backed Securities Fixed Income Investments
Portfolio of investments—July 31, 2016
Portfolio footnotes
1 Security, or portion thereof, pledged as collateral for investments sold short or written options.
2 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2016 and changes periodically.
3 Security is being fair valued by a valuation committee under the direction of the board of trustees.
4 Illiquid investment as of July 31, 2016.
5 Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities, which represent 12.18% of net assets as of July 31, 2016, 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 Interest only security.
8 Principal only security.
9 Rates shown are the discount rates at date of purchase unless otherwise noted.
10 Payments made or received are based on the notional amount.
See accompanying notes to financial statements.
29
PACE Intermediate Fixed Income Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares gained 3.11% before the deduction of the maximum PACE Select program fee.1 In comparison, the Barclays US Intermediate Government/Credit Index (the "benchmark") rose 4.25%, and the Lipper Core Bond Funds category posted a median return of 5.40%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 33. 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 3.
Special note: Effective September 12, 2016, after the end of the reporting period, Babson Capital Management LLC changed its name to Barings LLC.
Subadvisors' comments (Unaudited)2
BlackRock
Our portion of the Portfolio modestly outperformed its benchmark during the reporting period. This was driven by out-of-benchmark allocations to US high yield corporate bonds, securitized products and interest rate derivative strategies, including trades placed in European peripheral markets and US swap spreads. Security selection within investment grade corporate credit and emerging markets also augmented returns. Our overweight of financials versus industrials contributed early in the fiscal year, while more recently an overweight to midstream energy names aided returns. Corporate spreads were generally flat over the period, although this hides the amplitude of moves we experienced over the last 12 months. Our portion of the Portfolio took advantage of several opportunities given the volatility in markets, including attractive trades in derivatives, emerging markets and high yield corporate bonds.
Detracting from performance was an allocation to Treasury Inflation-Protected Securities ("TIPS"), a sector that has lagged the broader risk-on sentiment of late and still appears fundamentally attractive at current valuations. Another detractor from relative performance was a predominantly underweight position in investment grade credit. Investment grade credit has seen strong flows from international buyers year to date. However, we continue to feel that deteriorating fundamentals outweigh the technical bid for the sector from abroad in the medium term. Duration and curve positioning was relatively flat over the period, reflecting well-timed trades given a largely underweight position in place during a period of falling yields. Our portion of the Portfolio maintains a strong carry profile and is
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 subadvisors 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 Intermediate Fixed Income Investments
Investment Manager:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisors:
BlackRock Financial Management, Inc. ("BlackRock");
Barings LLC (f/k/a Babson Capital Management LLC) ("Barings")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Gina Toth, CFA, Fred Lee, CFA, Diana To and Anthony Karaminas
BlackRock: Harrison Segall and Akiva Dickstein;
Barings: 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 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.
(continued on next page)
30
PACE Intermediate Fixed Income Investments
Subadvisors' comments (Unaudited) – continued
cautious of valuations going into a period of uncertainty given the upcoming Italian and US elections.
A number of derivative instruments were used during the reporting period, primarily to adjust our duration and curve exposure, as well as to hedge risk. We believe that derivatives are beneficial for performance as they help us manage our portion of the Portfolio more efficiently. Interest rate swaps are the most common type of swap and were useful in managing exposure to interest rates by adding duration or subtracting it at particular points on the yield curve. Credit default swaps were used to provide insurance or protection against a particular issuer or basket of issuers defaulting. Credit default swaps were used as a way to express a negative or positive view on an issuer's or group of issuers' credit strength. Options on interest rate swaps (swaptions) were used to hedge convexity, as well as take a view on volatility and interest rates. Options on futures were most often used to take a view on volatility and/or interest rates. Foreign exchange options were used to give us the right, but not the obligation, to buy (call) or sell (put) a currency at a specified price for a specified period of time. Foreign exchange forwards were typically used to hedge non-US dollar currency risk back to the US dollar, as well as to implement active currency positions.
Barings
Our portion of the Portfolio outperformed this sleeve's benchmark, the Barclays US Government 1-3 year Index, during the reporting period, primarily due to the Portfolio having a lower duration than the benchmark. Our portion underperformed the Fund's benchmark, the Barclays US Intermediate Government/Credit Index, during the reporting period and this was the main driver of underperformance at the Fund level. Investment grade bond markets were captivated in June 2016 by "Brexit," which capped what was already a fairly volatile 12-month reporting period. Global growth continues at a modest pace and uncertainty still surrounds the sustainability of China's economic expansion. The short-end of the US Treasury curve flattened and this benefited spread sectors (non-US Treasury fixed income securities). Our returns have been supported by the relentless decline in government bond yields. Our allocation to investment grade corporate bonds helped performance, while an allocation to convertible securities detracted from results, driven largely by the sell-off in metals & mining and oil & gas producers during the first quarter of 2016. From a positioning standpoint, caution is warranted given macroeconomic headwinds. Our allocation to the banking sector has been reduced through sales of European paper and we exited the energy sector in the first quarter of 2016. Opportunities are in specific single names, often post-merger and acquisition ("M&A") event new issuance, where we believe the company fundamentals and spreads provide attractive opportunities.
The securitized sector positively impacted performance over the period. Asset-backed securities ("ABS") with allocations to student loans and commercial collateral were the largest contributing subsectors. Allocations to US agency mortgage-backed securities ("MBS") and commercial mortgage-backed securities ("CMBS") also benefited our results.
The front-end of the yield curve (between one to three years) flattened substantially as the market priced in a lower probability of an extended series of Federal Reserve Board interest rate hikes following its rate hike in
Investment process
(concluded)
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.
Barings 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.
31
PACE Intermediate Fixed Income Investments
Subadvisors' comments (Unaudited) – concluded
December 2015. Our portion of the Portfolio was at its maximum duration of approximately 2.90 years during much of 2015. However, over the last seven months of 2016, as the short-end of the yield curve flattened, our duration has shortened to 1.70 years in accordance with our process.
Our portion of the Portfolio uses derivative instruments for yield curve, duration and credit risk management. During the period, Treasury futures and options on credit default swaps were used to manage our portion of the Portfolio. Derivatives 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.
32
PACE Intermediate Fixed Income Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 2.85 | % | 1.99 | % | 3.54 | % | |||||||||
Class C2 | 2.41 | 1.48 | 3.02 | ||||||||||||
Class Y3 | 3.11 | 2.25 | 3.80 | ||||||||||||
Class P4 | 3.11 | 2.23 | 3.79 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (1.00 | ) | 1.22 | 3.14 | |||||||||||
Class C2 | 1.66 | 1.48 | 3.02 | ||||||||||||
Barclays US Intermediate Government/Credit Index5 | 4.25 | 2.66 | 4.39 | ||||||||||||
Lipper Core Bond Funds median | 5.40 | 3.47 | 4.80 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 2.79 | % | 2.14 | % | 3.60 | % | |||||||||
Class C2 | 2.36 | 1.64 | 3.08 | ||||||||||||
Class Y3 | 3.05 | 2.40 | 3.87 | ||||||||||||
Class P4 | 3.14 | 2.41 | 3.87 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (1.05 | ) | 1.36 | 3.20 | |||||||||||
Class C2 | 1.61 | 1.64 | 3.08 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, were as follows: Class A—1.03% and 0.93%; Class C—1.53% and 1.43%; Class Y—0.86% and 0.68%; and Class P—0.83% 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS 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, 2016 (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 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 and that UBS AM has not waived the right to do so. 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 AM. Upon termination of the agreement, however, UBS AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 3.75%. Class A shares bear ongoing 12b-1 service fees of 0.25% annually.
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 of 0.25% and 0.50% annually, respectively.
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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualfundperformance.
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.
33
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, 2016. 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.
PACE Intermediate Fixed Income Investments
34
PACE Intermediate Fixed Income Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Weighted average duration | 3.27 yrs. | ||||||
Weighted average maturity | 4.49 yrs. | ||||||
Average coupon | 2.45 | % | |||||
Net assets (mm) | $ | 431.9 | |||||
Number of holdings | 873 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Bonds and notes | 99.1 | % | |||||
Options, futures, swaps, and forward foreign currency contracts | (0.3 | ) | |||||
Cash equivalents and other assets less liabilities | 1.2 | ||||||
Total | 100.0 | % | |||||
Quality diversification1,2 | 07/31/16 | ||||||
US government and agency securities | 46.2 | % | |||||
AAA | 5.4 | ||||||
AA | 4.0 | ||||||
A | 9.0 | ||||||
BBB and below/non-rated | 34.5 | ||||||
Options, futures, swaps, and forward foreign currency contracts | (0.3 | ) | |||||
Cash equivalents and other assets less liabilities | 1.2 | ||||||
Total | 100.0 | % | |||||
Asset allocation1 | 07/31/16 | ||||||
US government obligations | 45.7 | % | |||||
Corporate notes | 30.0 | ||||||
Asset-backed securities | 15.9 | ||||||
Collateralized mortgage obligations | 6.9 | ||||||
US government agency mortgage pass-through certificates | 0.5 | ||||||
Non-US government obligations | 0.1 | ||||||
Municipal bonds and notes | 0.0 | * | |||||
Options, futures, swaps, and forward foreign currency contracts | (0.3 | ) | |||||
Cash equivalents and other assets less liabilities | 1.2 | ||||||
Total | 100.0 | % |
* Amount represents less than 0.005%
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
2 Credit quality ratings shown are based on the ratings assigned to portfolio holdings by Standard & Poor's Ratings Group, an independent rating agency.
35
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
US government obligations—45.68% | |||||||||||
US Treasury Bonds 2.500%, due 05/15/46 | 480,000 | $ | 513,225 | ||||||||
2.875%, due 08/15/45 | 785,000 | 901,462 | |||||||||
3.000%, due 05/15/45 | 475,000 | 558,589 | |||||||||
3.000%, due 11/15/45 | 300,000 | 353,051 | |||||||||
3.125%, due 11/15/41 | 980,000 | 1,180,862 | |||||||||
US Treasury Inflation Index Bonds (TIPS) 0.625%, due 01/15/26 | 3,078,221 | 3,246,439 | |||||||||
US Treasury Notes 0.625%, due 06/30/18 | 1,865,000 | 1,863,907 | |||||||||
0.750%, due 02/28/18 | 1,100,000 | 1,101,718 | |||||||||
0.750%, due 04/30/18 | 6,630,000 | 6,639,839 | |||||||||
0.750%, due 07/31/18 | 11,375,000 | 11,394,554 | |||||||||
0.750%, due 07/15/19 | 6,925,000 | 6,924,190 | |||||||||
0.875%, due 05/31/18 | 17,940,000 | 18,010,773 | |||||||||
0.875%, due 07/15/18 | 6,150,000 | 6,174,741 | |||||||||
0.875%, due 06/15/19 | 18,005,000 | 18,064,776 | |||||||||
0.875%, due 07/31/19 | 2,100,000 | 2,107,384 | |||||||||
1.000%, due 12/15/17 | 600,000 | 603,023 | |||||||||
1.125%, due 06/30/21 | 23,715,000 | 23,828,026 | |||||||||
1.125%, due 07/31/21 | 3,565,000 | 3,581,713 | |||||||||
1.250%, due 03/31/21 | 25,645,000 | 25,929,506 | |||||||||
1.375%, due 04/30/21 | 3,605,000 | 3,664,706 | |||||||||
1.375%, due 06/30/23 | 1,965,000 | 1,976,975 | |||||||||
1.375%, due 07/31/23 | 800,000 | 797,782 | |||||||||
1.500%, due 03/31/23 | 7,265,000 | 7,373,975 | |||||||||
1.625%, due 04/30/19 | 480,000 | 491,588 | |||||||||
1.625%, due 06/30/20 | 4,555,000 | 4,678,304 | |||||||||
1.625%, due 04/30/23 | 22,130,800 | 22,638,259 | |||||||||
1.625%, due 05/31/23 | 1,340,000 | 1,370,674 | |||||||||
1.625%, due 02/15/26 | 5,940,000 | 6,029,825 | |||||||||
1.625%, due 05/15/26 | 2,010,000 | 2,040,936 | |||||||||
1.750%, due 10/31/18 | 4,010,000 | 4,104,299 | |||||||||
2.000%, due 09/30/20 | 1,225,000 | 1,277,445 | |||||||||
2.125%, due 08/31/20 | 2,900,000 | 3,036,729 | |||||||||
2.125%, due 12/31/21 | 2,380,000 | 2,507,832 | |||||||||
2.250%, due 11/15/25 | 1,430,000 | 1,529,988 | |||||||||
2.750%, due 12/31/17 | 747,500 | 769,574 | |||||||||
Total US government obligations (cost—$195,046,337) | 197,266,669 | ||||||||||
Federal home loan bank certificate—0.19% | |||||||||||
FHLB 4.000%, due 09/01/28 (cost—$679,016) | 680,000 | 819,066 | |||||||||
Federal home loan mortgage corporation certificates—0.14% | |||||||||||
FHLMC 6.250%, due 07/15/32 | 302,000 | 462,826 | |||||||||
6.750%, due 03/15/31 | 82,000 | 128,090 | |||||||||
Total federal home loan mortgage corporation certificates (cost—$487,250) | 590,916 |
Face Amount1 | Value | ||||||||||
Federal national mortgage association certificate—0.12% | |||||||||||
FNMA TBA 3.000% (cost—$524,551) | 500,000 | $ | 524,473 | ||||||||
Collateralized mortgage obligations—6.92% | |||||||||||
Banc of America Commercial Mortgage Trust, Series 2007-4, Class AM 5.808%, due 02/10/512 | 400,000 | 414,997 | |||||||||
Series 2008-1, Class A4 6.227%, due 02/10/512 | 215,865 | 226,100 | |||||||||
BHMS Mortgage Trust, Series 2014-ATLS, Class AFL 1.968%, due 07/05/332,3 | 965,000 | 954,104 | |||||||||
Commercial Mortgage Pass-Through Certificates, Series 2006-C8, Class AM 5.347%, due 12/10/46 | 655,000 | 660,909 | |||||||||
Series 2006-GG7, Class AM 5.773%, due 07/10/382 | 111,002 | 110,899 | |||||||||
Series 2013-GAM, Class A2 3.367%, due 02/10/283 | 1,090,000 | 1,143,605 | |||||||||
Series 2014-CR16, Class A4 4.051%, due 04/10/47 | 145,000 | 163,512 | |||||||||
Series 2014-CR17, Class A5 3.977%, due 05/10/47 | 155,000 | 174,239 | |||||||||
Series 2014-PAT, Class A 1.278%, due 08/13/272,3 | 915,000 | 910,970 | |||||||||
Series 2014-TWC, Class A 1.328%, due 02/13/322,3 | 1,395,000 | 1,392,421 | |||||||||
Series 2015-RUM, Class B 2.592%, due 07/15/302,3 | 775,000 | 758,362 | |||||||||
Credit Suisse Commercial Mortgage Trust, Series 2006-C5, Class AM 5.343%, due 12/15/39 | 840,000 | 845,289 | |||||||||
Series 2007-C4, Class A1AM 5.939%, due 09/15/392 | 1,110,000 | 1,121,482 | |||||||||
CSAIL Commercial Mortgage Trust, Series 2015-C1, Class D 3.801%, due 04/15/502,3 | 515,000 | 428,949 | |||||||||
DBRR Trust, Series 2013-EZ3, Class A 1.636%, due 12/18/492,3 | 204,348 | 202,938 | |||||||||
DBUBS Mortgage Trust, Series 2011-LC1A, Class A1 3.742%, due 11/10/463 | 2,992 | 3,009 | |||||||||
FHLMC Multifamily Structured Pass Through Certificates, Series K038, Class X1 1.191%, due 03/25/242,4 | 2,677,127 | 194,055 | |||||||||
FHLMC REMIC, Trust 2626, Class A 4.000%, due 06/15/33 | 179,321 | 194,547 | |||||||||
Trust 3990, Class VA 3.500%, due 01/15/25 | 295,614 | 315,402 | |||||||||
Trust 4213, Class VE 3.500%, due 06/15/26 | 276,678 | 296,978 | |||||||||
Trust 4248, Class FL 0.931%, due 05/15/412 | 429,333 | 429,935 |
36
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Trust 4316, Class XZ 4.500%, due 03/15/44 | 338,700 | $ | 412,537 | ||||||||
Trust 4323, Class CA 4.000%, due 03/15/40 | 360,826 | 382,786 | |||||||||
Trust 4325, Class MA 4.000%, due 09/15/39 | 1,041,968 | 1,087,373 | |||||||||
Trust 4328, Class DA 4.000%, due 01/15/36 | 1,059,062 | 1,111,590 | |||||||||
Trust 4336, Class MA 4.000%, due 01/15/40 | 942,537 | 984,693 | |||||||||
Trust 4443, Class BA 3.500%, due 04/15/41 | 155,526 | 163,211 | |||||||||
Trust 4447, Class PA 3.000%, due 12/15/44 | 125,953 | 133,676 | |||||||||
FHLMC Structured Agency Credit Risk, Series 2016-DNA1, Class M1 1.938%, due 07/25/282 | 239,479 | 240,792 | |||||||||
FNMA Connecticut Avenue Securities, Series 2015-C02, Class 1M1 1.638%, due 05/25/252 | 95,340 | 95,435 | |||||||||
Series 2015-C03, Class 1M1 1.988%, due 07/25/252 | 347,969 | 348,944 | |||||||||
Series 2015-C04, Class 1M1 2.088%, due 04/25/282 | 236,079 | 236,566 | |||||||||
Series 2016-C04, Class 1M1 1.943%, due 01/25/292 | 220,000 | 220,717 | |||||||||
FNMA REMIC, Trust 2005-109, Class PV 6.000%, due 10/25/32 | 161,439 | 167,335 | |||||||||
Trust 2013-112, Class HQ 4.000%, due 11/25/43 | 113,191 | 121,947 | |||||||||
Trust 2014-12, Class GV 3.500%, due 03/25/27 | 169,207 | 183,017 | |||||||||
Trust 2014-48, Class AB 4.000%, due 10/25/40 | 286,227 | 303,919 | |||||||||
Trust 2015-20, Class EV 3.500%, due 07/25/26 | 315,137 | 340,560 | |||||||||
Trust 2015-58, Class JP 2.500%, due 03/25/37 | 214,165 | 221,806 | |||||||||
Trust 2015-62, Class VA 4.000%, due 10/25/26 | 92,707 | 102,715 | |||||||||
Trust 2016-48, Class UF 0.845%, due 08/25/462 | 960,000 | 959,818 | |||||||||
FREMF Mortgage Trust, Series 2013-K712, Class B 3.369%, due 05/25/452,3 | 110,000 | 112,997 | |||||||||
GAHR Commericial Mortgage Trust, Series 2015-NRF, Class DFX 3.382%, due 12/15/342,3 | 1,025,000 | 1,033,526 | |||||||||
GNMA, Trust 2014-131, Class BW 3.864%, due 05/20/412 | 136,634 | 139,228 | |||||||||
Trust 2015-3, Class ZD 4.000%, due 01/20/45 | 608,467 | 705,438 | |||||||||
GS Mortgage Securities Corp., Series 2014-4R, Class 1A, 0.633%, due 01/26/342,3 | 28,398 | 28,089 |
Face Amount1 | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
GS Mortgage Securities Trust, Series 2015-GS1, Class XA 0.841%, due 11/10/482,4 | 7,585,277 | $ | 462,395 | ||||||||
Hilton USA Trust, Series 2013-HLT, Class AFX 2.662%, due 11/05/303 | 875,000 | 880,388 | |||||||||
JPMBB Commercial Mortgage Securities Trust, Series 2014-C22, Class XA 0.964%, due 09/15/472,4 | 14,119,408 | 802,846 | |||||||||
JPMorgan Chase Commercial Mortgage Securities, Series 2006-LDP8, Class AJ 5.480%, due 05/15/452 | 125,000 | 124,906 | |||||||||
Series 2006-LDP9, Class A3 5.336%, due 05/15/47 | 756,083 | 760,540 | |||||||||
Series 2007-CB18, Class A1A 5.431%, due 06/12/472 | 956,279 | 964,997 | |||||||||
Series 2007-CB20, Class AM 5.881%, due 02/12/512 | 150,000 | 156,206 | |||||||||
Series 2007-LDPX, Class A1A 5.439%, due 01/15/49 | 148,388 | 150,574 | |||||||||
LSTAR Securities Investment Trust, Series 2014-1, Class NOTE 3.567%, due 09/01/212,3 | 634,795 | 631,798 | |||||||||
Series 2014-2, Class A 2.457%, due 12/01/212,3 | 635,657 | 630,902 | |||||||||
ML-CFC Commercial Mortgage Trust, Series 2006-4, Class A1A 5.166%, due 12/12/49 | 212,835 | 213,506 | |||||||||
Series 2007-9, Class AM 5.856%, due 09/12/492 | 350,000 | 361,541 | |||||||||
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C13, Class C 4.892%, due 11/15/462 | 205,000 | 227,757 | |||||||||
Morgan Stanley Capital I, Series 2007-HQ11, Class AJ 5.508%, due 02/12/442 | 110,000 | 108,074 | |||||||||
Series 2007-IQ14, Class A1A 5.665%, due 04/15/492 | 665,997 | 681,112 | |||||||||
SFAVE Commercial Mortgage Securities Trust, Series 2015-5AVE, Class A2B 4.144%, due 01/05/432,3 | 540,000 | 569,276 | |||||||||
STRPS 2012-1 Ltd., Series 2012-1A, Class A 1.500%, due 12/25/443 | 65,810 | 65,728 | |||||||||
VFC LLC, Series 2015-3, Class A 2.750%, due 12/20/315 | 1,798 | 1,798 | |||||||||
Wachovia Bank Commercial Mortgage Trust, Series 2006-C29, Class AM 5.339%, due 11/15/48 | 260,000 | 261,980 | |||||||||
Series 2007-C33, Class AM 5.948%, due 02/15/512 | 250,000 | 256,520 | |||||||||
Wells Fargo Commercial Mortgage Trust, Series 2015-C27, Class XA 0.995%, due 02/15/482,4 | 12,549,460 | 789,914 |
37
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Collateralized mortgage obligations—(concluded) | |||||||||||
Wells Fargo Resecuritization Trust, Series 2012-IO, Class A 1.750%, due 08/20/213 | 3,087 | $ | 3,086 | ||||||||
Total collateralized mortgage obligations (cost—$30,330,657) | 29,887,261 | ||||||||||
Asset-backed securities—15.88% | |||||||||||
321 Henderson Receivables I LLC, Series 2006-1A, Class A1 0.681%, due 03/15/412,3 | 78,417 | 75,904 | |||||||||
Series 2007-1A, Class A1 0.681%, due 03/15/422,3 | 337,674 | 305,881 | |||||||||
Access Group, Inc., Series 2002-A, Class A2 1.784%, due 09/25/372 | 950,000 | 897,750 | |||||||||
Series 2015-1, Class A 1.188%, due 07/25/562,3 | 220,614 | 217,014 | |||||||||
Series 2015-1, Class B 1.988%, due 07/25/582,3 | 100,000 | 84,538 | |||||||||
ACE Securities Corp. Home Equity Loan Trust, Series 2005-RM1, Class M2 1.238%, due 03/25/352 | 21,240 | 21,199 | |||||||||
ALM VIII Ltd., Series 2013-8A, Class A1A 2.146%, due 01/20/262,3 | 540,000 | 539,219 | |||||||||
Alterna Funding I LLC, Series 2014-1A, Class NOTE 1.639%, due 02/15/213 | 268,845 | 261,619 | |||||||||
American Credit Acceptance Receivables Trust, Series 2015-2, Class A 1.570%, due 06/12/193 | 85,807 | 85,807 | |||||||||
Series 2015-3, Class A 1.950%, due 09/12/193 | 161,817 | 162,117 | |||||||||
Series 2016-1A, Class A 2.370%, due 05/12/203 | 84,727 | 85,198 | |||||||||
Series 2016-2, Class A 2.220%, due 07/13/203 | 236,520 | 237,678 | |||||||||
Series 2016-3, Class A 1.700%, due 11/12/203 | 190,000 | 189,993 | |||||||||
American Homes 4 Rent, Series 2014-SFR2, Class A 3.786%, due 10/17/363 | 286,218 | 310,153 | |||||||||
Series 2014-SFR3, Class A 3.678%, due 12/17/363 | 491,049 | 529,417 | |||||||||
AmeriCredit Automobile Receivables Trust, Series 2013-5, Class D 2.860%, due 12/09/19 | 585,000 | 594,301 | |||||||||
Series 2014-1, Class D 2.540%, due 06/08/20 | 130,000 | 131,248 | |||||||||
Series 2015-3, Class A2A 1.070%, due 01/08/19 | 669,811 | 669,621 | |||||||||
Series 2016-2, Class A3 1.600%, due 11/09/20 | 250,000 | 250,874 | |||||||||
Arbys Funding LLC, Series 2015-1A, Class A2 4.969%, due 10/30/453 | 168,725 | 175,096 |
Face Amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
ARL First LLC, Series 2012-1A, Class A1 2.231%, due 12/15/422,3 | 159,932 | $ | 154,956 | ||||||||
ARL Second LLC, Series 2014-1A, Class A1 2.920%, due 06/15/443 | 313,102 | 304,518 | |||||||||
Avery Point V CLO Ltd., Series 2014-5A, Class A 2.139%, due 07/17/262,3 | 250,000 | 250,004 | |||||||||
Avis Budget Rental Car Funding AESOP LLC, Series 2012-3A, Class A 2.100%, due 03/20/193 | 100,000 | 100,380 | |||||||||
Series 2016-1A, Class A 2.990%, due 06/20/223 | 120,000 | 123,536 | |||||||||
B2R Mortgage Trust, Series 2015-2, Class A 3.336%, due 11/15/483 | 632,923 | 651,372 | |||||||||
BCC Funding VIII LLC, Series 2014-1A, Class A 1.794%, due 06/20/203 | 41,709 | 41,448 | |||||||||
BCC Funding X LLC, Series 2015-1, Class A2 2.224%, due 10/20/203 | 196,185 | 195,731 | |||||||||
Bear Stearns Asset Backed Securities I Trust, Series 2005-HE12, Class M1 0.968%, due 12/25/352 | 149,679 | 146,926 | |||||||||
Series 2006-HE3, Class A2 0.668%, due 04/25/362 | 5,439 | 5,432 | |||||||||
Birchwood Park CLO Ltd., Series 2014-1A, Class A 2.120%, due 07/15/262,3 | 250,000 | 249,999 | |||||||||
Blue Hill CLO Ltd., Series 2013-1A, Class A 2.160%, due 01/15/262,3 | 450,000 | 449,342 | |||||||||
BlueMountain CLO Ltd., Series 2015-2A, Class A1 2.109%, due 07/18/272,3 | 280,000 | 279,718 | |||||||||
BlueVirgo Trust, Series 2015-1A, Class NOTE 3.000%, due 12/15/223 | 378,780 | 377,659 | |||||||||
CAN Capital Funding LLC, Series 2014-1A, Class A 3.117%, due 04/15/203 | 150,000 | 148,670 | |||||||||
Capital Automotive REIT, Series 2010-1A, Class A 5.730%, due 12/15/383 | 91,439 | 93,296 | |||||||||
CarFinance Capital Auto Trust, Series 2014-2A, Class A 1.440%, due 11/16/203 | 47,494 | 47,286 | |||||||||
Series 2015-1A, Class A 1.750%, due 06/15/213 | 79,845 | 79,488 | |||||||||
Carlyle Global Market Strategies CLO Ltd., Series 2013-4A, Class A1 2.150%, due 10/15/252,3 | 250,000 | 249,983 | |||||||||
Cazenovia Creek Funding I LLC, Series 2015-1A, Class A 2.000%, due 12/10/233 | 215,195 | 214,119 |
38
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Chase Issuance Trust, Series 2014-A1, Class A1 1.150%, due 01/15/19 | 2,640,000 | $ | 2,643,238 | ||||||||
Chesapeake Funding LLC, Series 2015-1A, Class B 1.420%, due 02/07/272,3 | 200,000 | 198,448 | |||||||||
Chrysler Capital Auto Receivables Trust, Series 2013-BA, Class A4 1.270%, due 03/15/193 | 796,354 | 796,786 | |||||||||
Citi Held For Asset Issuance, Series 2015-PM1, Class A 1.850%, due 12/15/213 | 29,455 | 29,403 | |||||||||
Series 2015-PM2, Class A 2.350%, due 03/15/223 | 90,977 | 90,923 | |||||||||
Series 2015-PM3, Class A 2.560%, due 05/16/223 | 58,353 | 58,344 | |||||||||
CKE Restaurant Holdings, Inc., Series 2013-1A, Class A2 4.474%, due 03/20/433 | 294,888 | 296,596 | |||||||||
CLI Funding V LLC, Series 2014-1A, Class A 3.290%, due 06/18/293 | 304,767 | 294,500 | |||||||||
College Loan Corp. Trust I, Series 2005-2, Class B 1.170%, due 01/15/372 | 161,382 | 135,023 | |||||||||
Colony American Homes, Series 2015-1A, Class A 1.682%, due 07/17/322,3 | 822,577 | 819,173 | |||||||||
CPS Auto Receivables Trust, Series 2013-A, Class A 1.310%, due 06/15/203 | 22,555 | 22,366 | |||||||||
Series 2013-C, Class A 1.640%, due 04/16/183 | 9,951 | 9,952 | |||||||||
Series 2014-B, Class A 1.110%, due 11/15/183 | 81,479 | 81,297 | |||||||||
Series 2014-C, Class A 1.310%, due 02/15/193 | 58,694 | 58,625 | |||||||||
Series 2015-C, Class A 1.770%, due 06/17/193 | 67,925 | 67,993 | |||||||||
Series 2015-C, Class B 2.550%, due 02/18/203 | 150,000 | 150,378 | |||||||||
Series 2016-C, Class B 2.480%, due 09/15/203 | 120,000 | 119,988 | |||||||||
CPS Auto Trust, Series 2012-C, Class A 1.820%, due 12/16/193 | 57,152 | 57,088 | |||||||||
Credit Acceptance Auto Loan Trust, Series 2013-2A, Class B 2.260%, due 10/15/213 | 840,000 | 840,367 | |||||||||
Series 2014-2A, Class A 1.880%, due 03/15/223 | 1,190,000 | 1,191,952 | |||||||||
Series 2015-2A, Class B 3.040%, due 08/15/233 | 840,000 | 847,078 | |||||||||
Series 2016-2A, Class A 2.420%, due 11/15/233 | 900,000 | 905,293 |
Face Amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Credit Suisse ABS Repackaging Trust, Series 2013-A, Class B 2.500%, due 01/25/303 | 132,242 | $ | 125,409 | ||||||||
Credit Suisse Seasoned Loan Trust, Series 2006-1, Class A 0.728%, due 10/25/342,3 | 132,183 | 125,460 | |||||||||
Credit-Based Asset Servicing and Securitization LLC, Series 2006-RP2, Class A3 0.788%, due 07/25/362,3 | 92,013 | 91,639 | |||||||||
DB Master Finance LLC, Series 2015-1A, Class A2I 3.262%, due 02/20/453 | 395,000 | 397,869 | |||||||||
DCP Rights LLC, Series 2014-1A, Class A 5.463%, due 10/25/443 | 1,759,500 | 1,747,610 | |||||||||
Diamond Resorts Owner Trust, Series 2013-2, Class A 2.270%, due 05/20/263 | 215,310 | 214,748 | |||||||||
Series 2014-1, Class A 2.540%, due 05/20/273 | 41,576 | 41,658 | |||||||||
Series 2014-1, Class B 2.980%, due 05/20/273 | 91,467 | 91,662 | |||||||||
Series 2015-1, Class A 2.730%, due 07/20/273 | 114,604 | 115,499 | |||||||||
Series 2015-2, Class A 2.990%, due 05/22/283 | 152,479 | 152,668 | |||||||||
Series 2015-2, Class B 3.540%, due 05/22/283 | 92,813 | 94,251 | |||||||||
Domino's Pizza Master Issuer LLC, Series 2012-1A, Class A2 5.216%, due 01/25/423 | 193,401 | 199,062 | |||||||||
Series 2015-1A, Class A2I 3.484%, due 10/25/453 | 258,050 | 259,340 | |||||||||
Dong Fang Container Finance II SPV Ltd., Series 2014-1A, Class A1 1.950%, due 11/25/393 | 145,833 | 144,142 | |||||||||
DRB Prime Student Loan Trust, Series 2015-A, Class A2 3.060%, due 07/25/313 | 118,145 | 119,947 | |||||||||
Series 2015-A, Class A3 2.320%, due 04/25/30 | 131,089 | 130,979 | |||||||||
Series 2015-B, Class A3 2.540%, due 04/27/263 | 104,776 | 105,036 | |||||||||
Series 2015-D, Class A1 2.188%, due 01/25/402,3 | 228,854 | 229,274 | |||||||||
Series 2015-D, Class A2 3.200%, due 01/25/403 | 86,968 | 88,797 | |||||||||
Series 2016-A, Class A1 2.453%, due 04/25/402,3 | 92,219 | 93,329 | |||||||||
Series 2016-B, Class A2 2.890%, due 06/25/403 | 196,973 | 197,625 | |||||||||
Drive Auto Receivables Trust, Series 2016-BA, Class B 2.560%, due 06/15/203 | 100,000 | 100,662 | |||||||||
Drug Royalty II LP 2, Series 2014-1, Class A1 3.530%, due 07/15/232,3 | 174,089 | 175,548 |
39
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Drug Royalty LP 1, Series 2012-1, Class A1 5.878%, due 07/15/242,3 | 57,846 | $ | 59,042 | ||||||||
DT Auto Owner Trust, Series 2015-3A, Class A 1.660%, due 03/15/193 | 71,264 | 71,337 | |||||||||
Series 2016-1A, Class A 2.000%, due 09/16/193 | 240,106 | 240,748 | |||||||||
Series 2016-1A, Class B 2.790%, due 05/15/203 | 270,000 | 271,288 | |||||||||
Series 2016-2A, Class B 2.920%, due 05/15/203 | 130,000 | 130,913 | |||||||||
Earnest Student Loan Program LLC, Series 2016-B, Class A1 2.538%, due 02/26/352,3 | 316,331 | 316,332 | |||||||||
Series 2016-C, Class A2 2.680%, due 07/25/353 | 400,000 | 397,627 | |||||||||
Eaton Vance CLO Ltd., Series 2014-1A, Class A 2.130%, due 07/15/262,3 | 500,000 | 495,590 | |||||||||
Education Funding Capital Trust IV, Series 2004-1, Class A4 1.920%, due 06/15/432 | 250,000 | 248,687 | |||||||||
Elara HGV Timeshare Issuer LLC, Series 2014-A, Class B 3.020%, due 02/25/273 | 97,864 | 98,688 | |||||||||
Series 2016-A, Class A 2.810%, due 04/25/283 | 240,000 | 242,790 | |||||||||
Element Rail Leasing II LLC, Series 2015-1A, Class A1 2.707%, due 02/19/453 | 79,807 | 78,082 | |||||||||
Series 2016-1A, Class A1 3.968%, due 03/19/463 | 123,754 | 124,054 | |||||||||
Enterprise Fleet Financing LLC, Series 2016-1, Class A2 1.830%, due 09/20/213 | 250,000 | 250,544 | |||||||||
Series 2016-2A, Class A1 0.850%, due 07/20/173 | 350,000 | 350,002 | |||||||||
Exeter Automobile Receivables Trust, Series 2013-2A, Class B 3.090%, due 07/16/183 | 34,969 | 35,045 | |||||||||
Series 2014-3A, Class A 1.320%, due 01/15/193 | 19,638 | 19,614 | |||||||||
Series 2015-2A, Class A 1.540%, due 11/15/193 | 62,179 | 62,051 | |||||||||
Series 2015-3A, Class A 2.000%, due 03/16/203 | 102,300 | 102,328 | |||||||||
First Investors Auto Owner Trust, Series 2013-3A, Class A3 1.440%, due 10/15/193 | 42,473 | 42,455 | |||||||||
Series 2016-1A, Class A1 1.920%, due 05/15/203 | 191,393 | 191,900 | |||||||||
Flagship Credit Auto Trust, Series 2013-2, Class B 3.210%, due 08/15/193 | 170,000 | 171,858 | |||||||||
Series 2014-1, Class A 1.210%, due 04/15/193 | 27,354 | 27,285 |
Face Amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Series 2014-2, Class A 1.430%, due 12/16/193 | 52,100 | $ | 51,871 | ||||||||
Series 2015-2, Class A 1.980%, due 10/15/203 | 99,912 | 99,813 | |||||||||
Series 2015-3, Class A 2.380%, due 10/15/203 | 352,077 | 354,089 | |||||||||
Series 2016-1, Class A 2.770%, due 12/15/203 | 225,024 | 226,691 | |||||||||
FNA Trust, Series 2014-1A, Class A 1.296%, due 12/10/223 | 139,586 | 138,560 | |||||||||
Series 2015-1, Class A 3.240%, due 12/10/233 | 101,692 | 101,368 | |||||||||
Ford Credit Floorplan Master Owner Trust, Series 2012-2, Class A 1.920%, due 01/15/19 | 1,900,000 | 1,907,577 | |||||||||
Fremont Home Loan Trust, Series 2005-2, Class M2 1.208%, due 06/25/352 | 93,295 | 91,654 | |||||||||
Galaxy XX CLO Ltd., Series 2015-20A, Class A 2.146%, due 07/20/272,3 | 280,000 | 279,294 | |||||||||
GLS Auto Receivables Trust, Series 2015-1A, Class A 2.250%, due 12/15/203 | 53,075 | 53,013 | |||||||||
GO Financial Auto Securitization Trust, Series 2015-1, Class A 1.810%, due 03/15/183 | 13,587 | 13,576 | |||||||||
GoldenTree Loan Opportunities VII Ltd., Series 2013-7A, Class A 1.865%, due 04/25/252,3 | 285,000 | 282,663 | |||||||||
Green Tree Agency Advance Funding Trust I, Series 2015-T2, Class AT2 3.095%, due 10/15/483 | 200,000 | 200,076 | |||||||||
Hilton Grand Vacations Trust, Series 2013-A, Class A 2.280%, due 01/25/263 | 70,369 | 70,580 | |||||||||
Series 2014-AA, Class A 1.770%, due 11/25/263 | 273,196 | 271,207 | |||||||||
Home Equity Mortgage Trust, Series 2005-HF1, Class A1 1.008%, due 02/25/362 | 8,812 | 8,757 | |||||||||
Series 2005-HF1, Class A2B 1.188%, due 02/25/362 | 9,894 | 9,833 | |||||||||
HSBC Home Equity Loan Trust USA, Series 2007-3, Class A4 1.987%, due 11/20/362 | 50,932 | 50,985 | |||||||||
Icon Brands Holdings LLC, Series 2012-1A, Class A 4.229%, due 01/25/435 | 120,550 | 108,482 | |||||||||
ING Investment Management CLO V Ltd., Series 2007-5A, Class A1A 0.867%, due 05/01/222,3 | 174,706 | 173,615 | |||||||||
JP Morgan Mortgage Acquisition Corp., Series 2005-FRE1, Class A2V2 0.708%, due 10/25/352 | 122,597 | 121,548 |
40
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Kentucky Higher Education Student Loan Corp., Series 2015-1, Class A1 1.217%, due 12/01/312 | 142,811 | $ | 138,947 | ||||||||
KeyCorp Student Loan Trust, Series 2006-A, Class 2A4 0.950%, due 09/27/352 | 246,789 | 243,464 | |||||||||
LCM XI LP, Series 11A, Class A 1.988%, due 04/19/222,3 | 589,793 | 589,791 | |||||||||
Leaf Receivables Funding LLC, Series 2016-1, Class A1 1.000%, due 06/15/173 | 290,767 | 290,769 | |||||||||
Lehman XS Trust, Series 2005-6, Class 1A1 1.008%, due 11/25/352 | 269,196 | 176,779 | |||||||||
Madison Park Funding XII Ltd., Series 2014-12A, Class A 2.196%, due 07/20/262,3 | 250,000 | 250,026 | |||||||||
Madison Park Funding XIV Ltd., Series 2014-14A, Class A2 2.146%, due 07/20/262,3 | 250,000 | 250,026 | |||||||||
Marlette Funding Trust, Series 2016-1A, Class A 3.060%, due 10/15/213 | 250,000 | 250,239 | |||||||||
Mercedes-Benz Master Owner Trust, Series 2016-AA, Class A 1.061%, due 05/15/202,3 | 896,000 | 898,357 | |||||||||
Miramax LLC, Series 2014-1A, Class A2 3.340%, due 07/20/263 | 66,680 | 66,933 | |||||||||
MVW Owner Trust, Series 2014-1A, Class A 2.250%, due 09/22/313 | 155,271 | 154,990 | |||||||||
National Collegiate Student Loan Trust, Series 2005-1, Class A4 0.693%, due 11/27/282 | 77,967 | 77,073 | |||||||||
Series 2006-3, Class A3 0.603%, due 10/25/272 | 48,330 | 48,183 | |||||||||
Series 2007-1, Class A2 0.583%, due 11/27/282 | 12,662 | 12,645 | |||||||||
Nations Equipment Finance Funding II LLC, Series 2014-1A, Class A 1.558%, due 07/20/183 | 31,866 | 31,839 | |||||||||
Nations Equipment Finance Funding III LLC, Series 2016-1A, Class A 3.610%, due 02/20/213 | 196,953 | 197,154 | |||||||||
Navient Private Education Loan Trust, Series 2015-AA, Class A1 0.981%, due 12/15/212,3 | 296,681 | 296,411 | |||||||||
Series 2015-BA, Class A1 1.081%, due 05/15/232,3 | 194,066 | 193,850 | |||||||||
Navient Student Loan Trust, Series 2014-AA, Class A1 0.961%, due 05/16/222,3 | 97,546 | 97,526 | |||||||||
Series 2016-5A, Class A 1.737%, due 07/25/652,3 | 600,000 | 600,000 |
Face Amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Series 2016-AA, Class A2A 3.910%, due 12/15/453 | 700,000 | $ | 744,482 | ||||||||
Navitas Equipment Receivables LLC, Series 2015-1, Class A2 2.120%, due 11/15/183 | 198,081 | 198,005 | |||||||||
NCF Dealer Floorplan Master Trust, Series 2014-1A, Class A 1.987%, due 10/20/202,3 | 110,000 | 107,758 | |||||||||
Nelnet Student Loan Trust, Series 2005-1, Class A5 0.825%, due 10/25/332 | 154,843 | 146,663 | |||||||||
Series 2006-3, Class B 0.890%, due 06/25/412 | 157,647 | 128,500 | |||||||||
Series 2014-1A, Class B 1.988%, due 10/25/472,3 | 100,000 | 79,413 | |||||||||
Series 2015-3A, Class B 1.953%, due 07/27/502,3 | 100,000 | 79,163 | |||||||||
NextGear Floorplan Master Owner Trust, Series 2014-1A, Class A 1.920%, due 10/15/193 | 800,000 | 798,220 | |||||||||
Series 2015-2A, Class A 2.380%, due 10/15/203 | 140,000 | 139,980 | |||||||||
Series 2016-1A, Class A1 2.142%, due 04/15/212,3 | 230,000 | 230,436 | |||||||||
North Carolina State Education Assistance Authority, Series 2011-2, Class A3 1.515%, due 07/25/362 | 130,000 | 125,598 | |||||||||
NovaStar Mortgage Funding Trust, Series 2005-3, Class A2D 0.858%, due 01/25/362 | 89,114 | 88,480 | |||||||||
NRZ Advance Receivables Trust Advance Receivables Backed, Series 2015-T3, Class AT3 2.540%, due 11/15/463 | 140,000 | 140,079 | |||||||||
Ocwen Master Advance Receivables Trust, Series 2015-1, Class AT1 2.537%, due 09/17/463 | 100,000 | 99,991 | |||||||||
Series 2015-T2, Class AT2 2.532%, due 11/15/463 | 170,000 | 170,242 | |||||||||
OnDeck Asset Securitization Trust II LLC, Series 2016-1A Class A 4.210%, due 05/17/203 | 100,000 | 100,201 | |||||||||
OneMain Direct Auto Receivables Trust, Series 2016-1A, Class A 2.040%, due 01/15/213 | 117,000 | 116,907 | |||||||||
OneMain Financial Issuance Trust, Series 2014-1, Class A 2.430%, due 06/18/243 | 73,585 | 73,720 | |||||||||
Series 2015-1A, Class A 3.190%, due 03/18/263 | 1,655,000 | 1,677,044 | |||||||||
Series 2015-2A, Class A 2.570%, due 07/18/253 | 452,000 | 453,562 | |||||||||
Option One Mortgage Loan Trust Asset-Backed Certificates, Series 2005-5, Class A3 0.698%, due 12/25/352 | 143,399 | 142,468 |
41
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Orange Lake Timeshare Trust, Series 2014-AA, Class A 2.290%, due 07/09/293 | 52,749 | $ | 52,382 | ||||||||
Oscar US Funding Trust II, Series 2015-1A, Class A4 2.440%, due 06/15/223 | 200,000 | 197,551 | |||||||||
Oscar US Funding Trust IV, Series 2016-1A, Class A1 0.950%, due 04/17/173 | 38,003 | 37,961 | |||||||||
Series 2016-1A, Class A2B 2.181%, due 07/15/202,3 | 150,000 | 149,889 | |||||||||
Ownit Mortgage Loan Trust, Series 2005-2, Class M4 1.418%, due 03/25/362 | 54,766 | 54,040 | |||||||||
Oxford Finance Funding LLC, Series 2016-1A, Class A 3.968%, due 06/17/243 | 120,000 | 120,216 | |||||||||
PFS Financing Corp., Series 2016-1A, Class A 1.681%, due 02/18/202,3 | 1,095,000 | 1,097,006 | |||||||||
PHEAA Student Loan Trust I, Series 2003-1, Class A3 0.000%, due 07/25/422 | 150,000 | 150,040 | |||||||||
Popular ABS Mortgage Pass-Through Trust, Series 2006-B, Class A3 0.768%, due 05/25/362 | 155,269 | 149,872 | |||||||||
Prestige Auto Receivables Trust, Series 2015-1, Class B 2.040%, due 04/15/213 | 180,000 | 180,318 | |||||||||
Progress Residential Trust, Series 2015-SFR2, Class A 2.740%, due 06/12/323 | 1,050,062 | 1,064,434 | |||||||||
RAAC Trust, Series 2006-RP2, Class A 0.703%, due 02/25/372,3 | 169,321 | 167,582 | |||||||||
RASC Trust, Series 2005-AHL3, Class A2 0.728%, due 11/25/352 | 123,388 | 122,094 | |||||||||
Santander Drive Auto Receivables Trust, Series 2012-3, Class E 5.130%, due 06/17/19 | 900,000 | 912,039 | |||||||||
Series 2012-5, Class C 2.700%, due 08/15/18 | 327,050 | 327,949 | |||||||||
Series 2013-4, Class B 2.160%, due 01/15/20 | 3,746 | 3,748 | |||||||||
Series 2014-4, Class C 2.600%, due 11/16/20 | 865,000 | 874,765 | |||||||||
Series 2014-4, Class D 3.100%, due 11/16/20 | 120,000 | 122,092 | |||||||||
Series 2015-2, Class C 2.440%, due 04/15/21 | 280,000 | 281,827 | |||||||||
Series 2015-5, Class A2A 1.120%, due 12/17/18 | 679,299 | 679,190 | |||||||||
Series 2015-S2, Class R1 1.840%, due 11/18/193 | 12,387 | 12,375 | |||||||||
Series 2016-1, Class A3 1.620%, due 03/16/20 | 1,280,000 | 1,283,010 |
Face Amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Series 2016-1, Class B 2.470%, due 12/15/20 | 1,150,000 | $ | 1,165,741 | ||||||||
Series 2016-1, Class D 4.020%, due 04/15/22 | 300,000 | 313,004 | |||||||||
Series 2016-2, Class A3 1.560%, due 05/15/20 | 190,000 | 190,099 | |||||||||
SBA Tower Trust, Series 2014-1A, Class C 2.898%, due 10/15/443,6 | 170,000 | 172,122 | |||||||||
Seneca Park CLO Ltd., Series 2014-1A, Class A 2.159%, due 07/17/262,3 | 250,000 | 250,035 | |||||||||
Sierra Timeshare Receivables Funding Co. LLC, Series 2012-2A, Class A 2.380%, due 03/20/293 | 137,900 | 138,166 | |||||||||
Series 2014-2A, Class A 2.050%, due 06/20/313 | 66,295 | 66,269 | |||||||||
Series 2014-3A, Class A 2.300%, due 10/20/313 | 147,061 | 147,430 | |||||||||
Series 2015-1A, Class A 2.400%, due 03/22/323 | 252,325 | 253,296 | |||||||||
Series 2015-3A, Class A 2.580%, due 09/20/323 | 96,797 | 97,458 | |||||||||
Series 2015-3A, Class B 3.080%, due 09/20/323 | 64,531 | 65,035 | |||||||||
SLM Student Loan Trust, Series 2003-14, Class A6 1.015%, due 07/25/252 | 100,000 | 94,872 | |||||||||
Series 2004-10, Class B 1.085%, due 01/25/402 | 119,885 | 94,254 | |||||||||
Series 2005-5, Class A4 0.855%, due 10/25/282 | 160,000 | 151,806 | |||||||||
Series 2005-8, Class B 1.025%, due 01/25/402 | 130,422 | 103,292 | |||||||||
Series 2012-A, Class A1 1.881%, due 08/15/252,3 | 212,692 | 213,205 | |||||||||
SMB Private Education Loan Trust, Series 2014-A, Class A2B 1.631%, due 05/15/262,3 | 570,000 | 571,424 | |||||||||
Series 2015-C, Class B 3.500%, due 09/15/433 | 630,000 | 615,858 | |||||||||
Series 2016-A, Class A1 1.181%, due 05/15/232,3 | 651,282 | 651,283 | |||||||||
Series 2016-A, Class A2A 2.700%, due 05/15/313 | 110,000 | 111,169 | |||||||||
Series 2016-B, Class A2A 2.430%, due 02/17/323 | 147,000 | 146,995 | |||||||||
SoFi Consumer Loan Program LLC, Series 2016-1A, Class A 3.260%, due 08/25/253 | 400,000 | 402,906 | |||||||||
Series 2016-2A, Class A 3.090%, due 10/27/253 | 380,000 | 379,940 | |||||||||
SoFi Professional Loan Program LLC, Series 2014-A, Class A2 3.020%, due 10/25/273 | 46,661 | 47,545 | |||||||||
Series 2015-C, Class A2 2.510%, due 08/25/333 | 778,962 | 788,116 |
42
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Series 2015-D, Class A2 2.720%, due 10/27/363 | 805,342 | $ | 820,445 | ||||||||
Series 2016-A, Class A1 2.238%, due 08/25/362,3 | 228,807 | 233,303 | |||||||||
Series 2016-A, Class A2 2.760%, due 12/26/363 | 250,319 | 255,278 | |||||||||
Series 2016-B, Class A1 1.643%, due 06/25/332,3 | 234,590 | 235,712 | |||||||||
Series 2016-B, Class A2A 1.680%, due 03/25/313 | 219,972 | 220,257 | |||||||||
Series 2016-C, Class A2A 1.480%, due 05/25/313 | 660,000 | 659,742 | |||||||||
Specialty Underwriting & Residential Finance Trust, Series 2005-AB2, Class M1 0.938%, due 06/25/362 | 40,000 | 38,700 | |||||||||
SpringCastle America Funding LLC, Series 2014-AA, Class A 2.700%, due 05/25/233 | 330,351 | 331,286 | |||||||||
SPS Servicer Advance Receivables Trust, Series 2015-T3, Class AT3 2.920%, due 07/15/473 | 100,000 | 100,242 | |||||||||
Store Master Funding I LLC, Series 2015-1A, Class A1 3.750%, due 04/20/453 | 99,375 | 96,086 | |||||||||
SWAY Residential Trust, Series 2014-1, Class A 1.782%, due 01/17/322,3 | 752,957 | 751,167 | |||||||||
Symphony CLO XV Ltd., Series 2014-15A, Class A 2.129%, due 10/17/262,3 | 250,000 | 250,015 | |||||||||
Synchrony Credit Card Master Note Trust, Series 2016-1, Class A 2.040%, due 03/15/22 | 1,050,000 | 1,064,077 | |||||||||
Taco Bell Funding LLC, Series 2016-1A, Class A2I 3.832%, due 05/25/463 | 220,000 | 222,407 | |||||||||
Trade MAPS 1 Ltd., Series 2013-1A, Class A 1.174%, due 12/10/182,3 | 250,000 | 249,231 | |||||||||
Tricon American Homes, Series 2015 SFR1, Class A 1.732%, due 05/17/322,3 | 1,025,191 | 1,014,641 | |||||||||
United Auto Credit Securitization Trust, Series 2016-1, Class A 2.000%, due 10/15/173 | 84,850 | 84,839 | |||||||||
Welk Resorts LLC, Series 2015-AA, Class A 2.790%, due 06/16/313 | 82,243 | 82,332 | |||||||||
Wendys Funding LLC, Series 2015-1A Class-A2I 3.371%, due 06/15/453 | 545,875 | 547,342 | |||||||||
Westgate Resorts LLC, Series 2013-1A, Class A 2.250%, due 08/20/253 | 52,075 | 51,827 | |||||||||
Series 2014-1A, Class A 2.150%, due 12/20/263 | 134,891 | 133,036 |
Face Amount1 | Value | ||||||||||
Asset-backed securities—(concluded) | |||||||||||
Series 2015-2A, Class A 3.200%, due 07/20/283 | 206,881 | $ | 206,968 | ||||||||
Westlake Automobile Receivables Trust, Series 2016-1A, Class A2B 1.531%, due 01/15/192,3 | 489,889 | 490,919 | |||||||||
Series 2016-2A, Class A2 1.570%, due 06/17/193 | 200,000 | 199,936 | |||||||||
World Financial Network Credit Card Master Trust, Series 2016-A, Class A 2.030%, due 04/15/25 | 880,000 | 884,125 | |||||||||
Total asset-backed securities (cost—$68,359,987) | 68,590,554 | ||||||||||
Corporate notes—30.04% | |||||||||||
Aerospace & defense—0.23% | |||||||||||
BAE Systems Holdings, Inc. 2.850%, due 12/15/203 | 50,000 | 51,429 | |||||||||
3.850%, due 12/15/253 | 20,000 | 21,426 | |||||||||
Lockheed Martin Corp. 3.100%, due 01/15/23 | 15,000 | 15,950 | |||||||||
3.350%, due 09/15/21 | 170,000 | 182,921 | |||||||||
3.550%, due 01/15/26 | 35,000 | 38,477 | |||||||||
4.500%, due 05/15/36 | 25,000 | 29,207 | |||||||||
4.700%, due 05/15/46 | 50,000 | 60,792 | |||||||||
United Technologies Corp. 1.778%, due 05/04/186 | 599,000 | 604,039 | |||||||||
1,004,241 | |||||||||||
Airlines—0.25% | |||||||||||
American Airlines Group, Inc. 4.625%, due 03/01/203 | 270,000 | 265,950 | |||||||||
American Airlines Pass Through Trust 2014-1, Class B 4.375%, due 10/01/22 | 17,292 | 17,594 | |||||||||
American Airlines Pass Through Trust 2015-1, Class A 3.375%, due 05/01/27 | 458,416 | 474,461 | |||||||||
WestJet Airlines Ltd. 3.500%, due 06/16/213 | 330,000 | 336,575 | |||||||||
1,094,580 | |||||||||||
Auto & truck—0.16% | |||||||||||
Delphi Corp. 4.150%, due 03/15/24 | 31,000 | 33,328 | |||||||||
General Motors Co. 3.500%, due 10/02/18 | 630,000 | 650,586 | |||||||||
683,914 | |||||||||||
Auto parts & equipment—0.24% | |||||||||||
Lear Corp. 4.750%, due 01/15/23 | 500,000 | 517,500 | |||||||||
The Goodyear Tire & Rubber Co. 5.125%, due 11/15/23 | 500,000 | 528,750 | |||||||||
1,046,250 |
43
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Automotive—0.08% | |||||||||||
Asciano Finance Ltd. 5.000%, due 04/07/183 | 320,000 | $ | 330,543 | ||||||||
Banking-non-US—1.39% | |||||||||||
ANZ New Zealand International Ltd. 2.250%, due 02/01/193 | 520,000 | 529,142 | |||||||||
Bancolombia SA 5.950%, due 06/03/21 | 220,000 | 240,900 | |||||||||
BNP Paribas SA 4.375%, due 05/12/263,7 | 240,000 | 247,046 | |||||||||
Citizens Financial Group, Inc. 2.375%, due 07/28/21 | 15,000 | 15,073 | |||||||||
Credit Suisse Group Funding Guernsey Ltd. 2.750%, due 03/26/20 | 345,000 | 345,347 | |||||||||
3.450%, due 04/16/213 | 250,000 | 253,879 | |||||||||
3.800%, due 06/09/233 | 254,000 | 257,802 | |||||||||
Credit Suisse New York 1.700%, due 04/27/18 | 395,000 | 394,646 | |||||||||
Deutsche Bank AG GMTN 2.850%, due 05/10/197 | 455,000 | 454,957 | |||||||||
Discover Financial Services 3.750%, due 03/04/25 | 35,000 | 35,877 | |||||||||
ING Bank N.V. 5.800%, due 09/25/233 | 200,000 | 222,768 | |||||||||
Itau Unibanco Holding SA 2.850%, due 05/26/183 | 200,000 | 199,800 | |||||||||
KFW 1.500%, due 02/06/197 | 509,000 | 516,439 | |||||||||
Lloyds Banking Group PLC 4.650%, due 03/24/267 | 201,000 | 207,496 | |||||||||
Mitsubishi UFJ Trust & Banking Corp. 2.650%, due 10/19/203 | 540,000 | 555,118 | |||||||||
Nordea Bank AB 1.875%, due 09/17/183,7 | 200,000 | 201,964 | |||||||||
Royal Bank of Canada GMTN 2.500%, due 01/19/21 | 240,000 | 249,009 | |||||||||
Royal Bank of Scotland Group PLC 4.800%, due 04/05/26 | 200,000 | 208,036 | |||||||||
5.125%, due 05/28/247 | 179,000 | 179,670 | |||||||||
6.000%, due 12/19/23 | 205,000 | 214,890 | |||||||||
6.125%, due 12/15/22 | 25,000 | 26,576 | |||||||||
Santander UK Group Holdings PLC 2.875%, due 10/16/20 | 245,000 | 247,122 | |||||||||
Turkiye Garanti Bankasi A.S. 4.750%, due 10/17/193 | 220,000 | 220,000 | |||||||||
6,023,557 | |||||||||||
Banking-US—4.89% | |||||||||||
Aviation Capital Group Corp. 2.875%, due 09/17/183 | 630,000 | 639,450 | |||||||||
Bank of America Corp. 2.000%, due 01/11/18 | 178,000 | 179,191 | |||||||||
2.250%, due 04/21/207 | 677,000 | 684,427 | |||||||||
3.875%, due 08/01/25 | 930,000 | 997,594 | |||||||||
3.950%, due 04/21/257 | 340,000 | 351,314 | |||||||||
4.000%, due 01/22/25 | 410,000 | 426,045 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Banking-US—(continued) | |||||||||||
4.450%, due 03/03/26 | 391,000 | $ | 420,085 | ||||||||
5.625%, due 10/14/16 | 330,000 | 333,175 | |||||||||
6.100%, due 03/17/252,8 | 524,000 | 547,858 | |||||||||
6.500%, due 08/01/16 | 1,370,000 | 1,370,000 | |||||||||
Bank of America Corp. MTN 1.717%, due 03/22/182 | 770,000 | 775,600 | |||||||||
1.950%, due 05/12/18 | 137,000 | 137,910 | |||||||||
6.875%, due 04/25/18 | 63,000 | 68,614 | |||||||||
Branch Banking & Trust Co. 3.625%, due 09/16/25 | 250,000 | 270,388 | |||||||||
Capital One Bank USA N.A. 1.300%, due 06/05/17 | 250,000 | 249,981 | |||||||||
Capital One Financial Corp. 3.200%, due 02/05/25 | 210,000 | 213,853 | |||||||||
3.500%, due 06/15/237 | 123,000 | 128,310 | |||||||||
3.750%, due 07/28/26 | 360,000 | 362,560 | |||||||||
4.200%, due 10/29/25 | 232,000 | 241,975 | |||||||||
Capital One NA/Mclean VA 2.950%, due 07/23/21 | 260,000 | 270,569 | |||||||||
CIT Group, Inc. 3.875%, due 02/19/19 | 295,000 | 300,900 | |||||||||
5.250%, due 03/15/18 | 100,000 | 104,000 | |||||||||
5.500%, due 02/15/193 | 405,000 | 429,300 | |||||||||
Discover Bank/Greenwood DE 2.600%, due 11/13/18 | 330,000 | 335,464 | |||||||||
3.100%, due 06/04/20 | 250,000 | 257,871 | |||||||||
4.200%, due 08/08/23 | 270,000 | 290,288 | |||||||||
Fifth Third Bank MTN 2.150%, due 08/20/18 | 206,000 | 209,032 | |||||||||
First Horizon National Corp. 3.500%, due 12/15/20 | 580,000 | 588,607 | |||||||||
Goldman Sachs Group, Inc. 1.952%, due 04/30/182 | 530,000 | 534,399 | |||||||||
2.375%, due 01/22/18 | 591,000 | 598,783 | |||||||||
2.550%, due 10/23/197 | 231,000 | 236,700 | |||||||||
2.600%, due 04/23/207 | 349,000 | 357,205 | |||||||||
3.500%, due 01/23/25 | 40,000 | 41,648 | |||||||||
3.750%, due 05/22/25 | 455,000 | 480,387 | |||||||||
3.750%, due 02/25/26 | 100,000 | 105,796 | |||||||||
4.250%, due 10/21/25 | 195,000 | 206,097 | |||||||||
5.300%, due 11/10/262,8 | 65,000 | 66,056 | |||||||||
5.375%, due 05/10/202,8 | 475,000 | 482,270 | |||||||||
5.950%, due 01/18/18 | 1,030,000 | 1,096,064 | |||||||||
HSBC USA, Inc. 1.700%, due 03/05/18 | 100,000 | 100,060 | |||||||||
JPMorgan Chase & Co. 1.615%, due 01/25/182 | 525,000 | 528,651 | |||||||||
2.700%, due 05/18/23 | 150,000 | 152,364 | |||||||||
2.950%, due 10/01/26 | 480,000 | 484,852 | |||||||||
3.200%, due 06/15/267 | 150,000 | 154,911 | |||||||||
3.250%, due 09/23/22 | 105,000 | 110,885 | |||||||||
4.250%, due 10/01/277 | 343,000 | 369,803 | |||||||||
4.500%, due 01/24/22 | 130,000 | 145,436 | |||||||||
KeyCorp MTN 2.900%, due 09/15/20 | 100,000 | 104,139 | |||||||||
Regions Financial Corp. 3.200%, due 02/08/21 | 180,000 | 186,052 |
44
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Banking-US—(concluded) | |||||||||||
Santander Holdings USA, Inc. 2.700%, due 05/24/19 | 210,000 | $ | 211,516 | ||||||||
4.500%, due 07/17/25 | 160,000 | 167,352 | |||||||||
State Street Capital Trust IV 1.653%, due 06/15/372 | 197,000 | 169,420 | |||||||||
State Street Corp. 2.550%, due 08/18/207 | 195,000 | 202,919 | |||||||||
The Bank of New York Mellon Corp. 2.050%, due 05/03/21 | 175,000 | 177,931 | |||||||||
2.800%, due 05/04/267 | 90,000 | 93,776 | |||||||||
3.000%, due 02/24/25 | 160,000 | 170,032 | |||||||||
4.625%, due 09/20/262,8 | 120,000 | 119,700 | |||||||||
4.950%, due 06/20/202,8 | 279,000 | 284,580 | |||||||||
Wells Fargo & Co. 1.345%, due 04/23/182 | 685,000 | 686,891 | |||||||||
2.100%, due 07/26/21 | 540,000 | 542,756 | |||||||||
3.000%, due 04/22/26 | 234,000 | 240,459 | |||||||||
Wells Fargo & Co. GMTN 4.300%, due 07/22/277 | 175,000 | 191,691 | |||||||||
Wells Fargo & Co. MTN 3.550%, due 09/29/257 | 104,000 | 111,782 | |||||||||
21,097,724 | |||||||||||
Beverages—0.49% | |||||||||||
Anheuser-Busch InBev Finance, Inc. 2.650%, due 02/01/217 | 736,000 | 762,723 | |||||||||
3.300%, due 02/01/237 | 448,000 | 472,539 | |||||||||
3.650%, due 02/01/267 | 414,000 | 443,495 | |||||||||
Coca-Cola Femsa SAB de CV 2.375%, due 11/26/18 | 422,000 | 431,378 | |||||||||
2,110,135 | |||||||||||
Biotechnology—0.28% | |||||||||||
Amgen, Inc. 3.125%, due 05/01/25 | 40,000 | 42,333 | |||||||||
4.563%, due 06/15/483 | 26,000 | 28,421 | |||||||||
4.663%, due 06/15/513 | 83,000 | 89,363 | |||||||||
Celgene Corp. 2.250%, due 05/15/19 | 50,000 | 51,031 | |||||||||
2.875%, due 08/15/20 | 465,000 | 483,492 | |||||||||
3.250%, due 08/15/22 | 90,000 | 94,457 | |||||||||
Gilead Sciences, Inc. 3.250%, due 09/01/227 | 80,000 | 85,353 | |||||||||
3.650%, due 03/01/26 | 104,000 | 113,502 | |||||||||
3.700%, due 04/01/247 | 205,000 | 222,827 | |||||||||
1,210,779 | |||||||||||
Building & construction—0.15% | |||||||||||
Lennar Corp. 4.125%, due 12/01/18 | 302,000 | 310,305 | |||||||||
4.500%, due 11/15/19 | 115,000 | 120,894 | |||||||||
4.750%, due 04/01/21 | 95,000 | 99,987 | |||||||||
SBA Tower Trust 3.598%, due 04/15/183 | 130,000 | 130,881 | |||||||||
662,067 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Building products—0.20% | |||||||||||
Cemex SAB de CV 5.875%, due 03/25/193 | 200,000 | $ | 205,750 | ||||||||
Martin Marietta Materials, Inc. 1.731%, due 06/30/172 | 110,000 | 109,680 | |||||||||
Masco Corp. 3.500%, due 04/01/21 | 240,000 | 249,307 | |||||||||
7.125%, due 03/15/20 | 250,000 | 290,625 | |||||||||
855,362 | |||||||||||
Chemicals—0.46% | |||||||||||
CF Industries, Inc. 3.450%, due 06/01/237 | 225,000 | 227,051 | |||||||||
Eastman Chemical Co. 2.700%, due 01/15/20 | 420,000 | 433,958 | |||||||||
3.800%, due 03/15/257 | 255,000 | 270,525 | |||||||||
LYB International Finance BV 4.000%, due 07/15/23 | 125,000 | 136,563 | |||||||||
LyondellBasell Industries N.V. 5.000%, due 04/15/19 | 500,000 | 541,766 | |||||||||
Monsanto Co. 3.375%, due 07/15/24 | 77,000 | 80,021 | |||||||||
RPM International, Inc. 6.125%, due 10/15/19 | 259,000 | 287,958 | |||||||||
1,977,842 | |||||||||||
Commercial services—0.41% | |||||||||||
Air Lease Corp. 3.375%, due 06/01/21 | 100,000 | 103,902 | |||||||||
5.625%, due 04/01/17 | 1,000,000 | 1,023,750 | |||||||||
Duke University 4.077%, due 10/01/48 | 91,000 | 106,297 | |||||||||
Republic Services, Inc. 2.900%, due 07/01/26 | 35,000 | 35,935 | |||||||||
3.200%, due 03/15/25 | 180,000 | 188,883 | |||||||||
The Hertz Corp. 6.750%, due 04/15/197 | 290,000 | 295,075 | |||||||||
1,753,842 | |||||||||||
Communications equipment—0.30% | |||||||||||
Apple, Inc. 2.000%, due 05/06/20 | 225,000 | 230,894 | |||||||||
2.450%, due 08/04/26 | 75,000 | 74,868 | |||||||||
2.850%, due 05/06/217 | 560,000 | 592,356 | |||||||||
3.250%, due 02/23/267 | 241,000 | 257,892 | |||||||||
QUALCOMM, Inc. 3.450%, due 05/20/25 | 145,000 | 156,784 | |||||||||
1,312,794 | |||||||||||
Computers—0.29% | |||||||||||
Hewlett Packard Enterprise Co. 2.450%, due 10/05/173 | 370,000 | 374,466 | |||||||||
2.850%, due 10/05/183 | 250,000 | 255,911 | |||||||||
3.600%, due 10/15/203,7 | 285,000 | 300,710 | |||||||||
Leidos Holdings, Inc. 4.450%, due 12/01/20 | 300,000 | 304,875 | |||||||||
1,235,962 |
45
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Consumer products—0.01% | |||||||||||
Enbridge, Inc. 3.500%, due 06/10/24 | 40,000 | $ | 38,439 | ||||||||
Containers & packaging—0.01% | |||||||||||
WestRock RKT Co. 4.900%, due 03/01/22 | 43,000 | 47,926 | |||||||||
Diversified financial services—0.52% | |||||||||||
BGC Partners, Inc. 5.125%, due 05/27/213 | 330,000 | 337,715 | |||||||||
Fidelity National Information Services, Inc. 3.500%, due 04/15/23 | 130,000 | 136,020 | |||||||||
5.000%, due 10/15/25 | 51,000 | 59,040 | |||||||||
GE Capital International Funding Co. 2.342%, due 11/15/20 | 384,000 | 398,327 | |||||||||
General Electric Capital Corp. 5.500%, due 01/08/20 | 134,000 | 152,497 | |||||||||
General Electric Capital Corp. MTN 4.375%, due 09/16/207 | 138,000 | 153,856 | |||||||||
Intercontinental Exchange, Inc. 3.750%, due 12/01/257 | 100,000 | 109,578 | |||||||||
S&P Global, Inc. 3.300%, due 08/14/20 | 370,000 | 386,774 | |||||||||
Visa, Inc. 3.150%, due 12/14/25 | 79,000 | 84,879 | |||||||||
4.150%, due 12/14/35 | 304,000 | 349,536 | |||||||||
4.300%, due 12/14/45 | 50,000 | 59,385 | |||||||||
2,227,607 | |||||||||||
Electric utilities—0.17% | |||||||||||
Ameren Corp. 2.700%, due 11/15/20 | 220,000 | 228,860 | |||||||||
Duke Energy Corp. 3.750%, due 04/15/24 | 110,000 | 119,958 | |||||||||
4.800%, due 12/15/45 | 190,000 | 228,560 | |||||||||
Exelon Generation Co. LLC 4.250%, due 06/15/227 | 128,000 | 137,261 | |||||||||
714,639 | |||||||||||
Electric-generation—0.05% | |||||||||||
Emera US Finance LP 2.150%, due 06/15/193 | 50,000 | 50,709 | |||||||||
2.700%, due 06/15/213,7 | 60,000 | 61,444 | |||||||||
3.550%, due 06/15/263 | 80,000 | 84,012 | |||||||||
196,165 | |||||||||||
Electric-integrated—1.23% | |||||||||||
CMS Energy Corp. 3.000%, due 05/15/26 | 30,000 | 31,051 | |||||||||
Eaton Corp. 1.500%, due 11/02/17 | 605,000 | 607,093 | |||||||||
2.750%, due 11/02/22 | 308,000 | 318,340 | |||||||||
EDP Finance BV 4.125%, due 01/15/203 | 460,000 | 481,194 | |||||||||
4.900%, due 10/01/193 | 63,000 | 67,483 | |||||||||
Entergy Corp. 4.000%, due 07/15/22 | 195,000 | 211,617 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Electric-integrated—(concluded) | |||||||||||
Entergy Texas, Inc. 2.550%, due 06/01/21 | 45,000 | $ | 46,413 | ||||||||
7.125%, due 02/01/19 | 340,000 | 386,199 | |||||||||
Exelon Corp. 2.450%, due 04/15/21 | 5,000 | 5,104 | |||||||||
2.850%, due 06/15/20 | 70,000 | 72,770 | |||||||||
3.400%, due 04/15/267 | 10,000 | 10,524 | |||||||||
Israel Electric Corp. Ltd. 7.250%, due 01/15/193 | 220,000 | 244,200 | |||||||||
Jabil Circuit, Inc. 8.250%, due 03/15/18 | 620,000 | 674,250 | |||||||||
Majapahit Holding BV 7.750%, due 01/20/203 | 210,000 | 241,763 | |||||||||
Pacificorp 5.500%, due 01/15/19 | 486,000 | 534,012 | |||||||||
5.750%, due 04/01/37 | 275,000 | 367,988 | |||||||||
Puget Energy, Inc. 5.625%, due 07/15/22 | 450,000 | 515,912 | |||||||||
6.000%, due 09/01/21 | 75,000 | 87,348 | |||||||||
Virginia Electric & Power Co. 3.100%, due 05/15/257 | 185,000 | 197,101 | |||||||||
3.150%, due 01/15/267 | 30,000 | 32,213 | |||||||||
WEC Energy Group, Inc. 2.450%, due 06/15/20 | 170,000 | 175,244 | |||||||||
5,307,819 | |||||||||||
Electronic equipment & instruments—0.13% | |||||||||||
FLIR Systems, Inc. 3.125%, due 06/15/21 | 110,000 | 114,103 | |||||||||
Thermo Fisher Scientific, Inc. 3.000%, due 04/15/23 | 30,000 | 30,964 | |||||||||
3.600%, due 08/15/21 | 150,000 | 159,318 | |||||||||
Tyco Electronics Group SA 6.550%, due 10/01/17 | 250,000 | 264,753 | |||||||||
569,138 | |||||||||||
Environmental—0.06% | |||||||||||
Clean Harbors, Inc. 5.250%, due 08/01/20 | 255,000 | 261,885 | |||||||||
Finance-captive automotive—1.49% | |||||||||||
American Honda Finance Corp. 1.700%, due 02/22/19 | 315,000 | 319,279 | |||||||||
Ares Capital Corp. 3.875%, due 01/15/20 | 275,000 | 285,918 | |||||||||
CDP Financial, Inc. 4.400%, due 11/25/193 | 860,000 | 943,353 | |||||||||
Ford Motor Credit Co. LLC 2.240%, due 06/15/18 | 200,000 | 202,273 | |||||||||
2.943%, due 01/08/19 | 330,000 | 339,168 | |||||||||
6.625%, due 08/15/17 | 220,000 | 231,007 | |||||||||
FS Investment Corp. 4.000%, due 07/15/197 | 200,000 | 201,915 | |||||||||
General Motors Financial Co., Inc. 2.400%, due 05/09/19 | 105,000 | 105,565 | |||||||||
3.100%, due 01/15/19 | 175,000 | 178,905 |
46
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Finance-captive automotive—(concluded) | |||||||||||
3.200%, due 07/13/20 | 240,000 | $ | 244,618 | ||||||||
3.200%, due 07/06/21 | 277,000 | 281,271 | |||||||||
3.450%, due 04/10/22 | 350,000 | 357,235 | |||||||||
3.500%, due 07/10/19 | 675,000 | 698,249 | |||||||||
Hyundai Capital America 2.400%, due 10/30/183 | 105,000 | 106,479 | |||||||||
2.500%, due 03/18/193 | 30,000 | 30,611 | |||||||||
2.550%, due 02/06/193 | 550,000 | 559,881 | |||||||||
3.000%, due 10/30/203 | 300,000 | 311,699 | |||||||||
Lazard Group LLC 4.250%, due 11/14/20 | 300,000 | 321,489 | |||||||||
Regions Bank 7.500%, due 05/15/18 | 450,000 | 493,406 | |||||||||
Synchrony Financial 2.600%, due 01/15/19 | 120,000 | 121,560 | |||||||||
4.500%, due 07/23/257 | 75,000 | 80,219 | |||||||||
6,414,100 | |||||||||||
Finance-other—0.25% | |||||||||||
FMS Wertmanagement AoeR 1.125%, due 09/05/17 | 525,000 | 526,603 | |||||||||
International Lease Finance Corp. 3.875%, due 04/15/18 | 550,000 | 566,500 | |||||||||
1,093,103 | |||||||||||
Financial services—3.74% | |||||||||||
Ally Financial, Inc. 3.250%, due 02/13/18 | 690,000 | 696,900 | |||||||||
5.500%, due 02/15/177 | 1,150,000 | 1,170,125 | |||||||||
Barclays PLC 2.750%, due 11/08/19 | 200,000 | 201,319 | |||||||||
4.375%, due 01/12/26 | 205,000 | 212,269 | |||||||||
5.200%, due 05/12/267 | 225,000 | 236,910 | |||||||||
Citigroup, Inc. 1.800%, due 02/05/18 | 700,000 | 703,135 | |||||||||
2.050%, due 12/07/18 | 161,000 | 162,705 | |||||||||
2.350%, due 08/02/21 | 455,000 | 457,094 | |||||||||
3.700%, due 01/12/267 | 446,000 | 473,334 | |||||||||
5.950%, due 05/15/252,8 | 205,000 | 211,089 | |||||||||
Doric Nimrod Air Alpha Ltd. 2013-1 Pass Through Trust 5.250%, due 05/30/233 | 306,246 | 319,645 | |||||||||
Icahn Enterprises LP/Icahn Enterprises Finance Corp. 3.500%, due 03/15/177 | 855,000 | 852,862 | |||||||||
6.000%, due 08/01/20 | 375,000 | 374,063 | |||||||||
Intesa Sanpaolo SpA 5.710%, due 01/15/263 | 200,000 | 199,377 | |||||||||
JPMorgan Chase & Co. 1.700%, due 03/01/18 | 835,000 | 841,097 | |||||||||
2.200%, due 10/22/19 | 410,000 | 418,692 | |||||||||
2.250%, due 01/23/20 | 215,000 | 219,289 | |||||||||
2.750%, due 06/23/20 | 720,000 | 745,095 | |||||||||
Morgan Stanley 1.875%, due 01/05/18 | 450,000 | 452,950 | |||||||||
2.125%, due 04/25/18 | 860,000 | 868,769 | |||||||||
2.450%, due 02/01/19 | 240,000 | 245,402 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Financial services—(concluded) | |||||||||||
2.500%, due 04/21/21 | 95,000 | $ | 96,123 | ||||||||
2.650%, due 01/27/20 | 595,000 | 609,849 | |||||||||
2.800%, due 06/16/207 | 880,000 | 906,595 | |||||||||
3.750%, due 02/25/23 | 275,000 | 293,917 | |||||||||
3.875%, due 01/27/26 | 114,000 | 121,723 | |||||||||
3.950%, due 04/23/27 | 325,000 | 335,858 | |||||||||
6.625%, due 04/01/18 | 860,000 | 931,782 | |||||||||
Morgan Stanley MTN 2.200%, due 12/07/18 | 125,000 | 126,413 | |||||||||
3.125%, due 07/27/26 | 250,000 | 252,619 | |||||||||
SteelRiver Transmission Co. LLC 4.710%, due 06/30/173 | 612,096 | 618,302 | |||||||||
The Hartford Financial Services Group, Inc. 5.125%, due 04/15/22 | 284,000 | 324,859 | |||||||||
8.125%, due 06/15/382 | 380,000 | 416,100 | |||||||||
The Western Union Co. 5.930%, due 10/01/16 | 500,000 | 503,851 | |||||||||
US Bancorp MTN 1.950%, due 11/15/187 | 560,000 | 570,709 | |||||||||
16,170,821 | |||||||||||
Food & drug retailing—0.18% | |||||||||||
CVS Health Corp. 2.125%, due 06/01/21 | 385,000 | 392,610 | |||||||||
3.375%, due 08/12/24 | 315,000 | 337,610 | |||||||||
3.875%, due 07/20/25 | 52,000 | 57,764 | |||||||||
787,984 | |||||||||||
Food processors/beverage/bottling—0.06% | |||||||||||
Ecolab, Inc. 2.000%, due 01/14/19 | 270,000 | 274,237 | |||||||||
Food products—0.01% | |||||||||||
Kraft Heinz Foods Co. 3.000%, due 06/01/263 | 50,000 | 51,157 | |||||||||
Food/beverage—0.16% | |||||||||||
JBS Investments GmbH 7.750%, due 10/28/203 | 525,000 | 557,156 | |||||||||
Molson Coors Brewing Co. 3.000%, due 07/15/26 | 140,000 | 143,009 | |||||||||
700,165 | |||||||||||
Gas pipelines—0.29% | |||||||||||
Kinder Morgan, Inc. 7.000%, due 06/15/17 | 680,000 | 707,237 | |||||||||
Plains All American Pipeline LP/PAA Finance Corp. 2.600%, due 12/15/197 | 370,000 | 369,303 | |||||||||
3.600%, due 11/01/24 | 40,000 | 38,357 | |||||||||
4.650%, due 10/15/257 | 145,000 | 145,264 | |||||||||
1,260,161 | |||||||||||
Health care equipment & supplies—0.21% | |||||||||||
Becton Dickinson and Co. 1.800%, due 12/15/17 | 110,000 | 110,804 | |||||||||
2.675%, due 12/15/19 | 55,000 | 57,046 | |||||||||
3.734%, due 12/15/24 | 85,000 | 92,505 |
47
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Health care equipment & supplies—(concluded) | |||||||||||
Boston Scientific Corp. 2.850%, due 05/15/20 | 150,000 | $ | 155,181 | ||||||||
3.850%, due 05/15/25 | 70,000 | 75,247 | |||||||||
Crimson Merger Sub, Inc. 6.625%, due 05/15/223,7 | 150,000 | 127,875 | |||||||||
St. Jude Medical, Inc. 2.000%, due 09/15/18 | 105,000 | 106,782 | |||||||||
2.800%, due 09/15/20 | 140,000 | 145,212 | |||||||||
3.875%, due 09/15/25 | 15,000 | 16,277 | |||||||||
886,929 | |||||||||||
Health care providers & services—0.36% | |||||||||||
Aetna, Inc. 1.900%, due 06/07/19 | 360,000 | 364,770 | |||||||||
2.400%, due 06/15/21 | 40,000 | 40,793 | |||||||||
2.750%, due 11/15/22 | 215,000 | 220,169 | |||||||||
3.500%, due 11/15/24 | 44,000 | 47,051 | |||||||||
Cigna Corp. 3.250%, due 04/15/25 | 140,000 | 146,022 | |||||||||
4.000%, due 02/15/22 | 167,000 | 180,108 | |||||||||
4.500%, due 03/15/21 | 295,000 | 325,645 | |||||||||
Zimmer Biomet Holdings, Inc. 2.000%, due 04/01/18 | 232,000 | 233,409 | |||||||||
1,557,967 | |||||||||||
Hotels, restaurants & leisure—0.16% | |||||||||||
Brunswick Corp. 4.625%, due 05/15/213 | 188,000 | 192,700 | |||||||||
Marriott International Inc. 2.300%, due 01/15/22 | 45,000 | 45,457 | |||||||||
Marriott International, Inc. 2.875%, due 03/01/21 | 355,000 | 367,176 | |||||||||
McDonald's Corp. 2.750%, due 12/09/20 | 25,000 | 26,190 | |||||||||
McDonald's Corp. MTN 3.700%, due 01/30/26 | 45,000 | 49,335 | |||||||||
680,858 | |||||||||||
Household durables—0.17% | |||||||||||
Newell Brands, Inc. 2.600%, due 03/29/19 | 335,000 | 344,566 | |||||||||
Stanley Black & Decker, Inc. 2.451%, due 11/17/18 | 360,000 | 368,538 | |||||||||
713,104 | |||||||||||
Industrial conglomerates—0.05% | |||||||||||
General Electric Co. 3.375%, due 03/11/24 | 190,000 | 208,954 | |||||||||
Insurance—0.95% | |||||||||||
American International Group, Inc. 3.300%, due 03/01/21 | 315,000 | 330,434 | |||||||||
3.750%, due 07/10/25 | 190,000 | 198,121 | |||||||||
3.900%, due 04/01/26 | 222,000 | 232,591 | |||||||||
Aon PLC 3.875%, due 12/15/25 | 95,000 | 101,721 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Insurance—(concluded) | |||||||||||
Berkshire Hathaway, Inc. 2.750%, due 03/15/237 | 50,000 | $ | 52,133 | ||||||||
3.125%, due 03/15/26 | 35,000 | 37,266 | |||||||||
CNA Financial Corp. 5.750%, due 08/15/21 | 241,000 | 279,144 | |||||||||
Lincoln National Corp. 6.250%, due 02/15/20 | 235,000 | 264,890 | |||||||||
Marsh & McLennan Cos., Inc. 3.750%, due 03/14/26 | 405,000 | 435,479 | |||||||||
MetLife, Inc. 3.000%, due 03/01/257 | 155,000 | 158,834 | |||||||||
Pacific LifeCorp. 5.125%, due 01/30/433 | 360,000 | 407,465 | |||||||||
Principal Financial Group, Inc. 3.125%, due 05/15/23 | 57,000 | 58,267 | |||||||||
Reinsurance Group of America, Inc. 5.625%, due 03/15/17 | 245,000 | 251,042 | |||||||||
TIAA Asset Management Finance Co. LLC 2.950%, due 11/01/193 | 550,000 | 564,461 | |||||||||
Trinity Acquisition PLC 3.500%, due 09/15/21 | 45,000 | 47,202 | |||||||||
Unum Group 3.000%, due 05/15/21 | 80,000 | 82,180 | |||||||||
Willis North America, Inc. 6.200%, due 03/28/17 | 185,000 | 191,079 | |||||||||
Willis Towers Watson PLC 5.750%, due 03/15/21 | 145,000 | 161,568 | |||||||||
XLIT Ltd. 5.750%, due 10/01/21 | 235,000 | 269,607 | |||||||||
4,123,484 | |||||||||||
Media—1.32% | |||||||||||
Charter Communications Operating LLC/Charter Communications Operating Capital 3.579%, due 07/23/203 | 1,500,000 | 1,578,875 | |||||||||
4.464%, due 07/23/223 | 415,000 | 450,717 | |||||||||
6.484%, due 10/23/453 | 175,000 | 210,099 | |||||||||
Clear Channel Worldwide Holdings, Inc. 6.500%, due 11/15/22 | 215,000 | 222,525 | |||||||||
Comcast Corp. 1.625%, due 01/15/227 | 80,000 | 79,984 | |||||||||
2.350%, due 01/15/27 | 85,000 | 85,253 | |||||||||
4.250%, due 01/15/33 | 240,000 | 269,840 | |||||||||
Discovery Communications LLC 3.450%, due 03/15/25 | 171,000 | 169,070 | |||||||||
4.900%, due 03/11/26 | 90,000 | 97,286 | |||||||||
5.050%, due 06/01/20 | 6,000 | 6,547 | |||||||||
Expedia, Inc. 7.456%, due 08/15/18 | 465,000 | 514,268 | |||||||||
iHeartCommunications, Inc. 9.000%, due 09/15/227 | 220,000 | 161,700 | |||||||||
NBCUniversal Enterprise, Inc. 5.250%, due 03/19/213,8 | 375,000 | 393,938 | |||||||||
SFR Group SA 7.375%, due 05/01/263 | 200,000 | 199,750 |
48
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Media—(concluded) | |||||||||||
Sirius XM Radio, Inc. 4.250%, due 05/15/203 | 500,000 | $ | 510,000 | ||||||||
Time Warner Cable, Inc. 5.000%, due 02/01/20 | 265,000 | 289,815 | |||||||||
Viacom, Inc. 4.250%, due 09/01/237 | 130,000 | 138,136 | |||||||||
6.125%, due 10/05/17 | 315,000 | 330,508 | |||||||||
5,708,311 | |||||||||||
Medical providers—0.66% | |||||||||||
Anthem, Inc. 3.300%, due 01/15/23 | 83,000 | 87,082 | |||||||||
3.500%, due 08/15/24 | 79,000 | 83,261 | |||||||||
HCA, Inc. 3.750%, due 03/15/19 | 515,000 | 534,312 | |||||||||
Laboratory Corp. of America Holdings 2.625%, due 02/01/20 | 255,000 | 261,604 | |||||||||
Stryker Corp. 2.625%, due 03/15/21 | 45,000 | 46,720 | |||||||||
3.500%, due 03/15/26 | 190,000 | 203,884 | |||||||||
UnitedHealth Group, Inc. 1.700%, due 02/15/19 | 525,000 | 531,665 | |||||||||
2.700%, due 07/15/20 | 641,000 | 671,487 | |||||||||
2.875%, due 12/15/21 | 134,000 | 141,878 | |||||||||
2.875%, due 03/15/22 | 144,000 | 151,409 | |||||||||
3.100%, due 03/15/267 | 110,000 | 116,934 | |||||||||
2,830,236 | |||||||||||
Metals & mining—0.12% | |||||||||||
Glencore Canada Corp. 5.500%, due 06/15/17 | 396,000 | 409,860 | |||||||||
Glencore Finance Canada Ltd. 2.700%, due 10/25/173 | 92,000 | 92,414 | |||||||||
502,274 | |||||||||||
Multi-line insurance—0.06% | |||||||||||
American International Group, Inc. 4.875%, due 06/01/22 | 245,000 | 274,892 | |||||||||
Oil & gas—0.68% | |||||||||||
Airgas, Inc. 3.050%, due 08/01/20 | 525,000 | 546,142 | |||||||||
Anadarko Petroleum Corp. 5.550%, due 03/15/267 | 105,000 | 114,663 | |||||||||
Apache Corp. 2.625%, due 01/15/23 | 62,000 | 61,114 | |||||||||
3.625%, due 02/01/217 | 305,000 | 319,683 | |||||||||
Canadian Natural Resources Ltd. 3.900%, due 02/01/25 | 50,000 | 50,061 | |||||||||
Devon Energy Corp. 3.250%, due 05/15/227 | 165,000 | 161,359 | |||||||||
Dominion Gas Holdings LLC 3.600%, due 12/15/24 | 133,000 | 142,688 | |||||||||
Ecopetrol SA 4.125%, due 01/16/25 | 195,000 | 179,361 | |||||||||
Kinder Morgan Energy Partners LP 4.250%, due 09/01/24 | 180,000 | 184,246 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Oil & gas—(concluded) | |||||||||||
Nabors Industries, Inc. 4.625%, due 09/15/21 | 121,000 | $ | 107,397 | ||||||||
Petroleos Mexicanos 8.000%, due 05/03/197 | 75,000 | 84,323 | |||||||||
Pioneer Natural Resources Co. 6.875%, due 05/01/18 | 650,000 | 703,791 | |||||||||
Shell International Finance BV 2.125%, due 05/11/20 | 252,000 | 258,230 | |||||||||
3.250%, due 05/11/25 | 30,000 | 31,644 | |||||||||
2,944,702 | |||||||||||
Oil field equipment & services—0.04% | |||||||||||
Cameron International Corp. 1.400%, due 06/15/17 | 170,000 | 169,851 | |||||||||
Oil Services—0.06% | |||||||||||
BP Capital Markets PLC 3.062%, due 03/17/22 | 265,000 | 278,381 | |||||||||
Packaging & containers—0.12% | |||||||||||
Graphic Packaging International, Inc. 4.750%, due 04/15/21 | 500,000 | 531,250 | |||||||||
Paper & forest products—0.15% | |||||||||||
International Paper Co. 3.650%, due 06/15/247 | 125,000 | 133,215 | |||||||||
Sappi Papier Holding GmbH 7.750%, due 07/15/173 | 498,000 | 510,450 | |||||||||
643,665 | |||||||||||
Pharmaceuticals—1.71% | |||||||||||
AbbVie, Inc. 1.800%, due 05/14/18 | 600,000 | 604,914 | |||||||||
2.300%, due 05/14/21 | 70,000 | 71,277 | |||||||||
2.500%, due 05/14/20 | 312,000 | 320,317 | |||||||||
2.850%, due 05/14/237 | 236,000 | 241,013 | |||||||||
2.900%, due 11/06/22 | 415,000 | 429,344 | |||||||||
3.200%, due 05/14/26 | 45,000 | 46,172 | |||||||||
3.600%, due 05/14/25 | 105,000 | 111,385 | |||||||||
Actavis Funding SCS 2.350%, due 03/12/18 | 300,000 | 304,415 | |||||||||
3.450%, due 03/15/22 | 230,000 | 242,022 | |||||||||
Baxalta, Inc. 2.875%, due 06/23/20 | 160,000 | 162,211 | |||||||||
4.000%, due 06/23/257 | 254,000 | 270,351 | |||||||||
Express Scripts Holding Co. 3.300%, due 02/25/21 | 525,000 | 554,824 | |||||||||
Forest Laboratories, Inc. 5.000%, due 12/15/213 | 510,000 | 577,548 | |||||||||
Johnson & Johnson 2.450%, due 03/01/26 | 25,000 | 26,027 | |||||||||
Medtronic, Inc. 4.625%, due 03/15/45 | 170,000 | 208,145 | |||||||||
Mylan N.V. 2.500%, due 06/07/193 | 220,000 | 224,226 | |||||||||
3.150%, due 06/15/213 | 430,000 | 443,681 | |||||||||
3.950%, due 06/15/263 | 195,000 | 204,420 |
49
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Pharmaceuticals—(concluded) | |||||||||||
Mylan, Inc. 3.125%, due 01/15/233 | 340,000 | $ | 341,127 | ||||||||
Pfizer, Inc. 3.400%, due 05/15/247 | 210,000 | 230,834 | |||||||||
Teva Pharmaceutical Finance Co. BV 2.950%, due 12/18/22 | 200,000 | 206,825 | |||||||||
Teva Pharmaceutical Finance Netherlands III BV 1.400%, due 07/20/187 | 160,000 | 160,458 | |||||||||
2.200%, due 07/21/21 | 525,000 | 528,051 | |||||||||
2.800%, due 07/21/23 | 135,000 | 137,390 | |||||||||
3.150%, due 10/01/267 | 35,000 | 35,765 | |||||||||
Valeant Pharmaceuticals International, Inc. 5.375%, due 03/15/203,7 | 165,000 | 147,159 | |||||||||
5.875%, due 05/15/233,7 | 175,000 | 145,688 | |||||||||
Zoetis, Inc. 1.875%, due 02/01/18 | 420,000 | 421,816 | |||||||||
7,397,405 | |||||||||||
Pipelines—0.35% | |||||||||||
El Paso Pipeline Partners Operating Co. LLC 4.300%, due 05/01/24 | 80,000 | 81,251 | |||||||||
Enbridge Energy Partners LP 5.875%, due 10/15/257 | 22,000 | 24,210 | |||||||||
Energy Transfer Partners LP 4.050%, due 03/15/25 | 616,000 | 603,899 | |||||||||
4.750%, due 01/15/267 | 139,000 | 141,547 | |||||||||
Enterprise Products Operating LLC 3.700%, due 02/15/267 | 65,000 | 67,721 | |||||||||
3.750%, due 02/15/257 | 65,000 | 67,779 | |||||||||
4.465%, due 08/01/662 | 245,000 | 226,319 | |||||||||
Sunoco Logistics Partners Operations LP 3.450%, due 01/15/23 | 215,000 | 212,437 | |||||||||
5.950%, due 12/01/25 | 93,000 | 106,549 | |||||||||
1,531,712 | |||||||||||
Real estate investment trusts—0.67% | |||||||||||
American Tower Corp. 3.300%, due 02/15/21 | 384,000 | 403,917 | |||||||||
4.000%, due 06/01/25 | 71,000 | 77,219 | |||||||||
4.400%, due 02/15/26 | 174,000 | 192,795 | |||||||||
DDR Corp. 4.750%, due 04/15/18 | 575,000 | 601,128 | |||||||||
Digital Realty Trust LP 3.400%, due 10/01/20 | 185,000 | 192,691 | |||||||||
HCP, Inc. 6.000%, due 01/30/17 | 300,000 | 306,768 | |||||||||
Highwoods Realty LP 7.500%, due 04/15/18 | 400,000 | 435,476 | |||||||||
Simon Property Group LP 3.375%, due 03/15/22 | 375,000 | 402,043 | |||||||||
Weyerhaeuser Co. 7.375%, due 10/01/19 | 230,000 | 265,063 | |||||||||
2,877,100 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Retail—0.39% | |||||||||||
AutoNation, Inc. 3.350%, due 01/15/21 | 150,000 | $ | 153,461 | ||||||||
Dollar Tree, Inc. 5.750%, due 03/01/23 | 500,000 | 538,750 | |||||||||
Lowe's Cos., Inc. 2.500%, due 04/15/26 | 60,000 | 61,541 | |||||||||
QVC, Inc. 3.125%, due 04/01/19 | 70,000 | 71,992 | |||||||||
The Home Depot, Inc. 2.000%, due 04/01/217 | 275,000 | 282,461 | |||||||||
Walgreens Boots Alliance, Inc. 2.600%, due 06/01/217 | 40,000 | 41,022 | |||||||||
3.100%, due 06/01/237 | 20,000 | 20,666 | |||||||||
3.450%, due 06/01/26 | 490,000 | 513,435 | |||||||||
1,683,328 | |||||||||||
Semiconductor equipment & products—0.21% | |||||||||||
Applied Materials, Inc. 2.625%, due 10/01/20 | 80,000 | 83,167 | |||||||||
3.900%, due 10/01/25 | 60,000 | 67,177 | |||||||||
KLA-Tencor Corp. 2.375%, due 11/01/17 | 265,000 | 266,847 | |||||||||
4.650%, due 11/01/24 | 4,000 | 4,414 | |||||||||
Lam Research Corp. 2.800%, due 06/15/21 | 27,000 | 27,863 | |||||||||
3.450%, due 06/15/23 | 51,000 | 53,195 | |||||||||
3.900%, due 06/15/26 | 32,000 | 34,348 | |||||||||
NXP BV/NXP Funding LLC 4.125%, due 06/01/213 | 345,000 | 357,075 | |||||||||
894,086 | |||||||||||
Software & services—0.28% | |||||||||||
Microsoft Corp. 2.650%, due 11/03/22 | 25,000 | 26,195 | |||||||||
Oracle Corp. 2.650%, due 07/15/26 | 480,000 | 484,381 | |||||||||
2.800%, due 07/08/21 | 340,000 | 357,585 | |||||||||
2.950%, due 05/15/257 | 295,000 | 306,662 | |||||||||
3.400%, due 07/08/24 | 44,000 | 47,303 | |||||||||
1,222,126 | |||||||||||
Special purpose entity—0.73% | |||||||||||
Bunge Ltd. Finance Corp. 3.200%, due 06/15/17 | 1,127,000 | 1,143,889 | |||||||||
CC Holdings GS V LLC/Crown Castle GS III Corp. 3.849%, due 04/15/23 | 43,000 | 46,482 | |||||||||
CNH Industrial Capital LLC 3.375%, due 07/15/19 | 580,000 | 578,550 | |||||||||
Crown Castle Towers LLC 6.113%, due 01/15/203 | 495,000 | 551,696 | |||||||||
Penske Truck Leasing Co. LP/PTL Finance Corp. 2.500%, due 06/15/193 | 220,000 | 222,527 | |||||||||
3.050%, due 01/09/203 | 315,000 | 320,899 | |||||||||
3.375%, due 02/01/223 | 265,000 | 270,524 | |||||||||
3,134,567 |
50
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Technology, hardware & equipment—0.39% | |||||||||||
Diamond 1 Finance Corp./Diamond 2 Finance Corp. 3.480%, due 06/01/193 | 225,000 | $ | 231,452 | ||||||||
4.420%, due 06/15/213 | 125,000 | 130,674 | |||||||||
5.450%, due 06/15/233 | 105,000 | 111,227 | |||||||||
6.020%, due 06/15/263 | 145,000 | 155,564 | |||||||||
Pitney Bowes, Inc. MTN 5.750%, due 09/15/17 | 994,000 | 1,036,285 | |||||||||
1,665,202 | |||||||||||
Telecommunications—0.52% | |||||||||||
Cisco Systems, Inc. 2.200%, due 02/28/21 | 285,000 | 294,499 | |||||||||
Harris Corp. 1.999%, due 04/27/18 | 550,000 | 553,659 | |||||||||
2.700%, due 04/27/207 | 45,000 | 46,087 | |||||||||
3.832%, due 04/27/257 | 400,000 | 431,078 | |||||||||
Verizon Communications, Inc. 1.750%, due 08/15/21 | 160,000 | 160,049 | |||||||||
2.625%, due 02/21/20 | 130,000 | 134,943 | |||||||||
3.000%, due 11/01/21 | 31,000 | 32,789 | |||||||||
3.450%, due 03/15/21 | 64,000 | 68,720 | |||||||||
4.400%, due 11/01/34 | 350,000 | 371,030 | |||||||||
5.150%, due 09/15/23 | 149,000 | 174,723 | |||||||||
2,267,577 | |||||||||||
Tobacco—0.27% | |||||||||||
Altria Group, Inc. 2.850%, due 08/09/22 | 150,000 | 158,195 | |||||||||
4.000%, due 01/31/24 | 54,000 | 60,944 | |||||||||
Imperial Brands Finance PLC 2.950%, due 07/21/203 | 532,000 | 551,352 | |||||||||
Reynolds American, Inc. 2.300%, due 06/12/18 | 165,000 | 167,943 | |||||||||
3.250%, due 06/12/20 | 46,000 | 48,654 | |||||||||
4.450%, due 06/12/25 | 177,000 | 199,835 | |||||||||
1,186,923 | |||||||||||
Transportation—0.40% | |||||||||||
Burlington Northern Santa Fe LLC 3.000%, due 04/01/257 | 165,000 | 175,803 | |||||||||
FedEx Corp. 3.250%, due 04/01/267 | 25,000 | 26,499 | |||||||||
GATX Corp. 2.600%, due 03/30/207 | 275,000 | 276,423 | |||||||||
Ryder System, Inc. MTN 2.450%, due 09/03/19 | 180,000 | 183,316 | |||||||||
2.550%, due 06/01/19 | 10,000 | 10,134 | |||||||||
2.650%, due 03/02/20 | 130,000 | 132,729 | |||||||||
2.875%, due 09/01/20 | 300,000 | 305,681 | |||||||||
TTX Co. 2.250%, due 02/01/193 | 250,000 | 254,057 | |||||||||
Union Pacific Railroad Co. 2014-1 Pass Through Trust 3.227%, due 05/14/26 | 186,241 | 196,950 |
Face Amount1 | Value | ||||||||||
Corporate notes—(concluded) | |||||||||||
Transportation—(concluded) | |||||||||||
Virgin Australia 2013-1B Trust 6.000%, due 10/23/203 | 177,920 | $ | 180,589 | ||||||||
1,742,181 | |||||||||||
Utilities—0.29% | |||||||||||
HD Supply, Inc. 7.500%, due 07/15/20 | 1,125,000 | 1,175,625 | |||||||||
IPALCO Enterprises, Inc. 5.000%, due 05/01/18 | 69,000 | 72,450 | |||||||||
1,248,075 | |||||||||||
Wireless telecommunications—0.54% | |||||||||||
AT&T, Inc. 2.300%, due 03/11/19 | 110,000 | 112,431 | |||||||||
2.375%, due 11/27/18 | 110,000 | 112,309 | |||||||||
2.450%, due 06/30/207 | 190,000 | 194,607 | |||||||||
2.625%, due 12/01/22 | 320,000 | 324,627 | |||||||||
3.800%, due 03/15/22 | 73,000 | 78,736 | |||||||||
3.950%, due 01/15/25 | 70,000 | 75,587 | |||||||||
4.450%, due 04/01/24 | 206,000 | 228,046 | |||||||||
4.600%, due 02/15/21 | 118,000 | 130,577 | |||||||||
Crown Castle International Corp. 3.400%, due 02/15/21 | 273,000 | 287,024 | |||||||||
3.700%, due 06/15/26 | 20,000 | 21,074 | |||||||||
T-Mobile USA, Inc. 6.464%, due 04/28/19 | 755,000 | 769,156 | |||||||||
2,334,174 | |||||||||||
Total corporate notes (cost—$126,294,965) | 129,754,252 | ||||||||||
Non-US government obligations—0.10% | |||||||||||
South Africa Government International Bond 5.375%, due 07/24/447 | 200,000 | 217,250 | |||||||||
Uruguay Government International Bond 4.500%, due 08/14/247 | 85,000 | 93,500 | |||||||||
4.375%, due 10/27/277 | 110,000 | 116,600 | |||||||||
Total non-US government obligations (cost—$395,556) | 427,350 | ||||||||||
Municipal bonds and notes—0.01% | |||||||||||
California—0.01% | |||||||||||
Access to Loans for Learning Student Loan Corp. Revenue, Student Loan Program, Series A13 0.838%, due 04/25/242 (cost—$42,364) | 43,021 | 42,998 | |||||||||
Repurchase agreement—3.68% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $1,282,155 US Treasury Bond, 7.875% due 02/15/21 and $14,116,712 US Treasury Notes, 0.750% to 2.250%, due 12/31/17 to 07/31/21; (value—$16,212,166); proceeds: $15,894,013 (cost—$15,894,000) | 15,894,000 | 15,894,000 |
51
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Notional Amount | Value | ||||||||||
Options purchased9—0.09% | |||||||||||
Call swaptions purchased—0.06% | |||||||||||
3 Month USD LIBOR 30 Year Swap, strike @ 2.200%, expires 02/12/21 (Counterparty: GS; pay floating rate); underlying swap terminates 02/16/51 | $ | 800,000 | $ | 145,082 | |||||||
3 Month USD LIBOR 30 Year Swap, strike @ 2.380%, expires 02/19/21 (Counterparty: GS; pay floating rate); underlying swap terminates 02/23/51 | 560,000 | 107,839 | |||||||||
Total call swaptions purchased | 252,921 | ||||||||||
Put swaptions purchased—0.03% | |||||||||||
3 Month USD LIBOR 30 Year Swap, strike @ 2.200%, expires 02/12/21 (Counterparty: GS; receive floating rate); underlying swap terminates 02/16/51 | 800,000 | 86,278 |
Notional Amount | Value | ||||||||||
Put swaptions purchased—(concluded) | |||||||||||
3 Month USD LIBOR 30 Year Swap, strike @ 2.380%, expires 02/19/21 (Counterparty: GS; receive floating rate); underlying swap terminates 02/23/51 | $ | 560,000 | $ | 48,599 | |||||||
Total put swaptions purchased | 134,877 | ||||||||||
Total options purchased (cost—$404,520) | 387,798 | ||||||||||
Number of Shares | |||||||||||
Investment of cash collateral from securities loaned—2.52% | |||||||||||
Money market fund—2.52% | |||||||||||
State Street Institutional U.S. Government Money Market Fund (cost—$10,884,573) | 10,884,573 | 10,884,573 | |||||||||
Total investments (cost—$449,343,776)—105.37% | 455,069,910 | ||||||||||
Liabilities in excess of other assets—(5.37)% | (23,195,501 | ) | |||||||||
Net assets—100.00% | $ | 431,874,409 |
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 262.
Aggregate cost for federal income tax purposes was $449,405,484; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 6,778,628 | |||||
Gross unrealized depreciation | (1,114,202 | ) | |||||
Net unrealized appreciation | $ | 5,664,426 |
Written options activity for the year ended July 31, 2016 was as follows:
Number of contracts | Premiums received | ||||||||||
Options outstanding at July 31, 2015 | 334 | $ | 66,282 | ||||||||
Options written | — | — | |||||||||
Options terminated in closing purchase transactions | — | — | |||||||||
Options expired prior to exercise | (334 | ) | (66,282 | ) | |||||||
Options outstanding at July 31, 2016 | — | $ | — |
52
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Written swaptions9
Notional amount (000) | Call swaptions written | Counterparty | Pay/ receive floating rate | Expiration date | Premiums received | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||||
USD | 7,650 | 3 Month USD LIBOR Interest Rate Swap strike @ 0.80%, terminating 03/19/20 | BOA | Receive | 03/15/18 | $ | 35,379 | $ | (32,786 | ) | $ | 2,593 | |||||||||||||||||||
USD | 7,635 | 3 Month USD LIBOR Interest Rate Swap strike @ 1.47%, terminating 03/21/20 | BOA | Receive | 03/19/18 | 67,760 | (87,515) | (19,755) | |||||||||||||||||||||||
USD | 21,490 | 3 Month USD LIBOR Interest Rate Swap strike @ 1.00%, terminating 06/06/20 | GS | Receive | 06/04/18 | 99,458 | (137,169) | (37,711) | |||||||||||||||||||||||
USD | 7,000 | 3 Month USD LIBOR Interest Rate Swap strike @ 1.32%, terminating 02/27/20 | GS | Receive | 02/23/18 | 63,876 | (66,142) | (2,266) | |||||||||||||||||||||||
EUR | 5,220 | 6 Month EURIBOR Interest Rate Swap strike @ 0.01%, terminating 11/01/22 | GS | Receive | 10/30/17 | 45,443 | (62,539) | (17,096) | |||||||||||||||||||||||
$ | 311,916 | $ | (386,151 | ) | $ | (74,235 | ) | ||||||||||||||||||||||||
Put swaptions written | |||||||||||||||||||||||||||||||
USD | 7,635 | 3 Month USD LIBOR Interest Rate Swap strike @ 1.47%, terminating 03/21/20 | BOA | Pay | 03/19/18 | $67,760 | $(26,846) | $40,914 | |||||||||||||||||||||||
USD | 7,650 | 3 Month USD LIBOR Interest Rate Swap strike @ 1.80%, terminating 03/19/20 | BOA | Pay | 03/15/18 | 34,683 | (14,738) | 19,945 | |||||||||||||||||||||||
EUR | 1,880 | 6 Month EURIBOR Interest Rate Swap strike @ 0.03%, terminating 03/02/22 | BOA | Pay | 02/28/17 | 13,024 | (2,318) | 10,706 | |||||||||||||||||||||||
USD | 7,000 | 3 Month USD LIBOR Interest Rate Swap strike @ 1.32%, terminating 02/27/20 | GS | Pay | 02/23/18 | 63,875 | (29,630) | 34,245 | |||||||||||||||||||||||
USD | 21,490 | 3 Month USD LIBOR Interest Rate Swap strike @ 2.00%, terminating 06/06/20 | GS | Pay | 06/04/18 | 102,061 | (37,442) | 64,619 | |||||||||||||||||||||||
EUR | 2,610 | 6 Month EURIBOR Interest Rate Swap strike @ 0.05%, terminating 11/01/22 | GS | Pay | 10/30/17 | 31,056 | (7,597) | 23,459 | |||||||||||||||||||||||
EUR | 10,430 | 6 Month EURIBOR Interest Rate Swap strike @ 1.00%, terminating 11/01/22 | GS | Pay | 10/30/17 | 101,939 | (9,994) | 91,945 | |||||||||||||||||||||||
EUR | 5,285 | 6 Month EURIBOR Interest Rate Swap strike @ 0.40%, terminating 07/10/21 | JPMCB | Pay | 07/08/19 | 20,464 | (18,631) | 1,833 | |||||||||||||||||||||||
$ | 434,862 | $ | (147,196 | ) | $ | 287,666 | |||||||||||||||||||||||||
$ | 746,778 | $ | (533,347 | ) | $ | 213,431 |
53
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Written swaptions activity for the year ended July 31, 2016 was as follows:
Premiums received | |||||||
Swaptions and foreign exchange options outstanding at July 31, 2015 | $ | 780,961 | |||||
Swaptions written | 995,199 | ||||||
Swaptions exercised | (1,005,485 | ) | |||||
Foreign exchange options terminated in closing purchase transactions | (23,897 | ) | |||||
Swaptions outstanding at July 31, 2016 | $ | 746,778 |
Futures contracts
Number of contracts | Currency | Expiration date | Cost | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||
Interest rate futures buy contracts: | |||||||||||||||||||||||
132 | USD90-Day Eurodollar Futures | December 2016 | $ | 32,697,999 | $ | 32,724,450 | $ | 26,451 | |||||||||||||||
US treasury futures buy contracts: | |||||||||||||||||||||||
422 | USDUS Treasury Note 2 Year Futures | September 2016 | 91,962,893 | 92,418,000 | 455,107 | ||||||||||||||||||
25 | USDUS Treasury Note 5 Year Futures | September 2016 | 3,002,887 | 3,050,391 | 47,504 | ||||||||||||||||||
18 | USDUS Treasury Note 10 Year Futures | September 2016 | 2,365,451 | 2,394,844 | 29,393 | ||||||||||||||||||
$ | 130,029,230 | $ | 130,587,685 | $ | 558,455 | ||||||||||||||||||
Proceeds | |||||||||||||||||||||||
Interest rate futures sell contracts: | |||||||||||||||||||||||
131 | USD90-Day Eurodollar Futures | December 2017 | $ | 32,316,890 | $ | 32,437,238 | $ | (120,348 | ) | ||||||||||||||
US treasury futures sell contracts: | |||||||||||||||||||||||
4 | USDUltra Long US Treasury Bond 10 Year Futures | September 2016 | 580,736 | 584,812 | (4,076 | ) | |||||||||||||||||
32 | USDUltra US Treasury Bond Futures | September 2016 | 5,793,934 | 6,097,000 | (303,066 | ) | |||||||||||||||||
33 | USDUS Long Bond Futures | September 2016 | 5,361,171 | 5,756,437 | (395,266 | ) | |||||||||||||||||
70 | USDUS Treasury Note 5 Year Futures | September 2016 | 8,423,645 | 8,541,094 | (117,449 | ) | |||||||||||||||||
52 | USDUS Treasury Note 10 Year Futures | September 2016 | 6,764,193 | 6,918,438 | (154,245 | ) | |||||||||||||||||
$ | 59,240,569 | $ | 60,335,019 | $ | (1,094,450 | ) | |||||||||||||||||
$ | (535,995 | ) |
Forward foreign currency contracts
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
BB | CHF | 784,461 | USD | 820,000 | 09/23/16 | $ | 8,324 | ||||||||||||
CSI | USD | 820,000 | CHF | 796,133 | 09/23/16 | 3,752 | |||||||||||||
MSCI | EUR | 30,000 | USD | 33,333 | 08/03/16 | (208 | ) | ||||||||||||
MSCI | JPY | 41,140,740 | USD | 410,000 | 10/11/16 | 5,718 | |||||||||||||
MSCI | JPY | 344,420,000 | USD | 3,301,350 | 10/28/16 | (85,252 | ) | ||||||||||||
MSCI | JPY | 39,260,486 | USD | 385,000 | 11/02/16 | (1,108 | ) | ||||||||||||
MSCI | USD | 410,000 | JPY | 41,999,096 | 10/11/16 | 2,717 | |||||||||||||
RBS | EUR | 11,000 | USD | 12,249 | 09/06/16 | (66 | ) | ||||||||||||
$ | (66,123 | ) |
54
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
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) | ||||||||||||||||||
USD740 | 07/13/20 | 3 Month USD LIBOR | 1.082% | $ | (468 | ) | $ | (480 | ) | ||||||||||||||
USD19,450 | 11/30/20 | 1.390% | 3 Month USD LIBOR | (282,332 | ) | (282,657 | ) | ||||||||||||||||
USD3,650 | 11/30/20 | 3 Month USD LIBOR | 1.144 | 16,299 | 16,235 | ||||||||||||||||||
$ | (266,501 | ) | $ | (266,902 | ) |
Centrally cleared credit default swap agreements on credit indices—buy protection11
Referenced obligations13 | Notional amount (000) | Termination date | Payments made by the Portfolio10 | Upfront payments (made) | Value | Unrealized depreciation | |||||||||||||||||||||
CDX North America High Yield | USD 3,740 | 06/20/21 | 5.000 | % | $ | 154,644 | $ | (186,141 | ) | $ | (31,497 | ) | |||||||||||||||
CDX.NA | USD 1,170 | 06/20/21 | 1.000 | 8,331 | (16,118 | ) | (7,787 | ) | |||||||||||||||||||
$ | 162,975 | $ | (202,259 | ) | $ | (39,284 | ) |
Credit default swap agreements on credit indices—sell protection12
Counterparty | Referenced obligations13 | Notional amount (000) | Termination dates | Payments received by the Portfolio | Upfront payments received | Value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||||
CSI | Markit CMBX NA Series 8, Class AAA Index | USD 435 | 10/17/57 | 0.500 | % | $ | (19,238 | ) | $ | 12,872 | $ | (6,366 | ) | ||||||||||||||||||
GS | Markit CMBX NA Series 6 Index | USD 260 | 05/11/63 | 3.000 | 20,606 | (12,445 | ) | 8,161 | |||||||||||||||||||||||
JPMCB | Markit CMBX NA Series 6 Index | USD 300 | 05/11/63 | 3.000 | 380 | (14,359 | ) | (13,979 | ) | ||||||||||||||||||||||
$ | 1,748 | $ | (13,932 | ) | $ | (12,184 | ) |
Affiliated issuer activity
The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2016. 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 07/31/15 | Purchases during the year ended 07/31/16 | Sales during the year ended 07/31/16 | Value at 07/31/16 | Net income earned from affiliate for the year ended 07/31/16 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 15,390,673 | $ | 381,594,179 | $ | 396,984,852 | $ | — | $ | 25,211 |
55
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | — | $ | 197,266,669 | $ | — | $ | 197,266,669 | |||||||||||
Federal home loan bank certificate | — | 819,066 | — | 819,066 | |||||||||||||||
Federal home loan mortgage corporation certificates | — | 590,916 | — | 590,916 | |||||||||||||||
Federal national mortgage association certificate | — | 524,473 | — | 524,473 | |||||||||||||||
Collateralized mortgage obligations | — | 29,821,533 | 65,728 | 29,887,261 | |||||||||||||||
Asset-backed securities | — | 64,845,451 | 3,745,103 | 68,590,554 | |||||||||||||||
Corporate notes | — | 129,754,252 | — | 129,754,252 | |||||||||||||||
Non-US government obligations | — | 427,350 | — | 427,350 | |||||||||||||||
Municipal bonds and notes | — | 42,998 | — | 42,998 | |||||||||||||||
Repurchase agreement | — | 15,894,000 | — | 15,894,000 | |||||||||||||||
Options purchased | — | 387,798 | — | 387,798 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 10,884,573 | — | 10,884,573 | |||||||||||||||
Futures contracts | 558,455 | — | — | 558,455 | |||||||||||||||
Forward foreign currency contracts | — | 20,511 | — | 20,511 | |||||||||||||||
Swap agreements | — | 29,171 | — | 29,171 | |||||||||||||||
Total | $ | 558,455 | $ | 451,308,761 | $ | 3,810,831 | $ | 455,678,047 | |||||||||||
Liabilities | |||||||||||||||||||
Written swaptions | — | (533,347 | ) | — | (533,347 | ) | |||||||||||||
Futures contracts | (1,094,450 | ) | — | — | (1,094,450 | ) | |||||||||||||
Forward foreign currency contracts | — | (86,634 | ) | — | (86,634 | ) | |||||||||||||
Swap agreements | — | (511,863 | ) | — | (511,863 | ) | |||||||||||||
Total | $ | (1,094,450 | ) | $ | (1,131,844 | ) | $ | — | $ | (2,226,294 | ) |
At July 31, 2016, there were no transfers between Level 1 and Level 2.
The following is a rollforward of the Portfolio's investments that was valued using unobservable inputs (Level 3) for the year ended July 31, 2016:
Collateralized mortgage obligations | Asset-backed securities | Total | |||||||||||||
Beginning balance | $ | 236,631 | $ | 2,311,517 | $ | 2,548,148 | |||||||||
Purchases | — | 1,671,038 | 1,671,038 | ||||||||||||
Sales | (175,650 | ) | (500,700 | ) | (676,350 | ) | |||||||||
Accrued discounts/(premiums) | — | 1,316 | 1,316 | ||||||||||||
Total realized gain/(loss) | 2,031 | 9,413 | 11,444 | ||||||||||||
Net change in unrealized appreciation/depreciation | 2,716 | (2,843 | ) | (127 | ) | ||||||||||
Transfers into Level 3 | — | 495,590 | 495,590 | ||||||||||||
Transfers out of Level 3 | — | (240,228 | ) | (240,228 | ) | ||||||||||
Ending balance | $ | 65,728 | $ | 3,745,103 | $ | 3,810,831 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investments held at July 31, 2016 was $(9,746). Transfers into and out of Level 3 represent the value at the end of the period. At July 31, 2016, securities were transferred from Level 2 to Level 3 as the
56
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
valuation is based primarily on unobservable inputs. Additionally, securities were transferred from Level 3 to Level 2 as the valuation is based primarily on observable inputs from an established pricing source.
Issuer breakdown by country or territory of origin (unaudited)
Percentage of total investments | |||||||
United States | 94.7 | % | |||||
Cayman Islands | 1.0 | ||||||
Netherlands | 0.9 | ||||||
Canada | 0.5 | ||||||
United Kingdom | 0.4 | ||||||
Germany | 0.3 | ||||||
Guernsey | 0.3 | ||||||
Austria | 0.2 | ||||||
Mexico | 0.2 | ||||||
Venezuela | 0.2 | ||||||
Ireland | 0.1 | ||||||
Japan | 0.1 | ||||||
Argentina | 0.1 | ||||||
New Zealand | 0.1 | ||||||
Australia | 0.1 | ||||||
France | 0.1 | ||||||
Colombia | 0.1 | ||||||
Switzerland | 0.1 | ||||||
Luxembourg | 0.1 | ||||||
Israel | 0.1 | ||||||
Turkey | 0.1 | ||||||
South Africa | 0.1 | ||||||
Uruguay | 0.1 | ||||||
Curacao | 0.0 | † | |||||
Sweden | 0.0 | † | |||||
Brazil | 0.0 | † | |||||
Italy | 0.0 | † | |||||
United States Virgin Islands | 0.0 | † | |||||
Total | 100.0 | % |
† Amount represents less than 0.05%
Portfolio footnotes
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, 2016 and changes periodically.
3 Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities, which represent 18.95% of net assets as of July 31, 2016, are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers.
4 Interest only security.
5 Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities, which represent 0.03% of net assets as of July 31, 2016, are considered illiquid and restricted (see table below for more information).
57
PACE Intermediate Fixed Income Investments
Portfolio of investments—July 31, 2016
Portfolio footnotes—(concluded)
Illiquid & restricted security | Acquisition date | Acquisition cost | Acquisition cost as a percentage of net asset | Value at 07/31/16 | Value as a percentage of net asset | ||||||||||||||||||
VFC LLC, Series 2015-3, Class A 2.750%, due 12/20/31 | 3/25/15 | $ | 250,000 | 0.06 | % | $ | 1,798 | 0.00 | % | ||||||||||||||
Icon Brands Holdings LLC, Series 2012-1A, Class A, 4.229%, due 01/25/43 | 7/10/14 | 124,625 | 0.03 | 108,482 | 0.03 | ||||||||||||||||||
$ | 110,280 | 0.03 | % |
6 Step bond that converts to the noted fixed rate at a designated future date.
7 Security, or portion thereof, was on loan at July 31, 2016.
8 Perpetual investment. The maturity date reflects the next call date.
9 Illiquid investment as of July 31, 2016.
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 with 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) 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.
12 If the Portfolio is a seller of protection and a credit event occurs, as defined under the terms of the 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.
13 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.
14 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.
See accompanying notes to financial statements.
58
PACE Strategic Fixed Income Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares gained 5.68% before the deduction of the maximum PACE Select program fee.1 In comparison, the Barclays US Government/Credit Index (the "benchmark") rose 6.78% and the Lipper Core Plus Bond Funds category posted a median return of 5.10%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 61. 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 3.
Subadvisors' comments (Unaudited)2
PIMCO
Our portion of the Portfolio underperformed its benchmark during the reporting period. An underweight to US duration was negative for relative performance as US Treasury yields fell during the period. (Duration measures a portfolio's sensitivity to interest rate changes.) Additionally, yield curve positioning, with an overall underweight to the long end of the yield curve, was negative for relative returns as long rates outperformed short rates. European interest rate strategies were also headwinds for results. A short exposure to front-end UK rates detracted from returns as yields fell in this region. This was partially offset by an allocation to European peripherals, especially Italy, as yields in this region also fell. An allocation to Mexican local rates was positive for performance as these securities benefited from declining yields and high coupon payments.
An underweight to corporate bonds was negative for relative results as the sector outperformed like-duration Treasuries. However, this was more than offset by a focus on financials and positive security selection within industrials. Holdings of mortgage credit, especially non-agency mortgage-backed securities and commercial mortgage-backed securities, added to returns as they benefited from strong demand. An allocation to US Treasury Inflation-Protected Securities ("TIPS") detracted from performance as inflation expectations declined during the period. Lastly, a long US dollar bias versus the Japanese yen detracted from returns as the yen appreciated relative to the US dollar during the period.
Overall, derivative usage was negative during the period as our portion of the Portfolio was short swap rates, which outperformed Treasury rates. The selling of interest rate swaps to adjust interest rate and yield curve exposures, as well as to substitute for physical securities, detracted from performance as swap spreads tightened. Credit default swaps were also utilized to manage
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 subadvisors 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 Strategic Fixed Income Investments
Investment Manager:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisor:
Pacific Investment Management Company LLC ("PIMCO");
Neuberger Berman Investment Advisers LLC ("Neuberger Berman")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Gina Toth, CFA, Fred Lee, CFA, Diana To and Anthony Karaminas
PIMCO: Scott Mather;
Neuberger Berman: Thanos Bardas, David M. Brown, Andrew A. Johnson, Thomas J. Marthaler, Bradley C. Tank
Objective:
Total return consisting of income and capital appreciation
Investment process:
PIMCO 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. 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
(continued on next page)
59
PACE Strategic Fixed Income Investments
Subadvisors' comments (Unaudited) – concluded
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. Currency options and forwards were used to gain exposure to foreign currency markets. Government futures were utilized to adjust interest rate exposures and replicate government bond positions.
Neuberger Berman
Our portion of the Portfolio underperformed its benchmark during the reporting period. We maintained an overweight to spread sectors (non-US Treasury fixed income securities) versus US Treasury securities, as spread sectors can provide an incremental source of yield and they generally perform better in an expanding economy. The largest detractor from performance was our defensive duration positioning. In particular, having a duration that was shorter than the benchmark detracted from results as yields moved lower during the period. Overweight allocations to investment grade corporate bonds and US Treasury Inflation-Protected Securities (TIPS) were also drags on results. Conversely, overweight allocations to non-agency mortgage-backed securities (MBS) and high yield corporate bonds, along with security selection of investment grade corporate bonds, were positive for performance.
Several adjustments were made to our portion of the Portfolio during the reporting period. We increased our allocations to US Treasuries and non-agency MBS. Conversely, we pared our allocations to investment grade corporate bonds, emerging market debt and global sovereigns.
Financial derivatives were used during the reporting period to manage interest rate risk and shorten our overall portfolio duration relative to the benchmark. The use of these instruments detracted from performance.
Investment process
(concluded)
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.
Neuberger Berman employs a consistently applied, risk-managed approach to portfolio management that leverages its proprietary fundamental research capabilities, decision-making frameworks, and quantitative risk management tools. Neuberger Berman establishes the investment profile for its portion of the Portfolio's assets, which it monitors on an ongoing basis, including exposures to sectors and duration/yield curve positioning, utilizing internally generated data that are produced by specialty sector investment teams in conjunction with asset allocation tools. Once the investment profile is established, Neuberger Berman determines industry/sub-sector weightings and makes securities selections.
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.
60
PACE Strategic Fixed Income Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 5.43 | % | 3.89 | % | 6.25 | % | |||||||||
Class C2 | 4.98 | 3.39 | 5.74 | ||||||||||||
Class Y3 | 5.68 | 4.11 | 6.53 | ||||||||||||
Class P4 | 5.68 | 4.12 | 6.51 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 1.50 | 3.09 | 5.84 | ||||||||||||
Class C2 | 4.23 | 3.39 | 5.74 | ||||||||||||
Barclays US Government/Credit Index5 | 6.78 | 3.88 | 5.17 | ||||||||||||
Lipper Core Plus Bond Funds median | 5.10 | 3.90 | 5.47 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 4.54 | % | 4.01 | % | 6.27 | % | |||||||||
Class C2 | 4.01 | 3.52 | 5.75 | ||||||||||||
Class Y3 | 4.70 | 4.22 | 6.53 | ||||||||||||
Class P4 | 4.78 | 4.26 | 6.52 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 0.63 | 3.22 | 5.86 | ||||||||||||
Class C2 | 3.26 | 3.52 | 5.75 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, supplemented from time to time, were as follows: Class A—1.07% and 0.98%; Class C—1.54% and 1.45%; Class Y— 0.93% and 0.81%; and Class P—0.82% and 0.73%. 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS AM is contractually obligated to: (1) waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2016 (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, prior to August 1, 2016, 1.06% for Class A, 1.56% for Class C, 0.81% for Class Y, and 0.81% for Class P; and (2) waive its management fees through November 30, 2016 to reflect a lower management fee paid by the Portfolio to UBS AM. Effective August 1, 2016, the expense caps noted in item (1) of the previous sentence are as follows: 0.96% for Class A, 1.46% for Class C, 0.71% for Class Y, and 0.71% for Class P, and the waiver of management fees noted in item (2) of the previous sentence is terminated. The Portfolio has agreed to repay UBS AM for any waived fees/reimbursed expenses (pursuant to item (1)) 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 and that UBS AM has not waived the right to do so. 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 AM. Upon termination of the agreement, however, UBS AM's three year recoupment rights will survive. "Management fee waiver/expense reimbursements" and "Total annual Portfolio operating expenses after fee waiver and/or expense reimbursements" are restated to reflect current contractual arrangements as of December 1, 2015.
1 Maximum sales charge for Class A shares is 3.75%. Class A shares bear ongoing 12b-1 service fees of 0.25% annually.
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 of 0.25% and 0.50% annually, respectively.
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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualPortfolioperformance.
Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the Portfolio that places in the middle of a Lipper peer group.
61
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, 2016. 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.
PACE Strategic Fixed Income Investments
62
PACE Strategic Fixed Income Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Weighted average duration | 6.56 yrs. | ||||||
Weighted average maturity | 10.21 yrs. | ||||||
Average coupon | 3.37 | % | |||||
Net assets (mm) | $ | 882.5 | |||||
Number of holdings | 827 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Bonds, notes and loan assignments | 120.0 | % | |||||
Options, futures, swaps and forward foreign currency contracts | (2.6 | ) | |||||
Cash equivalents and other assets less liabilities | (17.4 | ) | |||||
Total | 100.0 | % | |||||
Quality diversification1,2 | 07/31/16 | ||||||
US government and agency securities | 47.3 | % | |||||
AAA | 3.8 | ||||||
AA | 3.4 | ||||||
A | 11.1 | ||||||
BBB | 27.6 | ||||||
BB | 7.1 | ||||||
B | 4.7 | ||||||
Below B/non-rated | 15.0 | ||||||
Options, futures, swaps and forward foreign currency contracts | (2.6 | ) | |||||
Cash equivalents and other assets less liabilities | (17.4 | ) | |||||
Total | 100.0 | % | |||||
Asset allocation1 | 07/31/16 | ||||||
Corporate notes | 44.2 | % | |||||
US government obligations | 40.4 | ||||||
Collateralized mortgage obligations | 13.7 | ||||||
Asset-backed securities | 9.6 | ||||||
US government agency mortgage pass-through certificates | 6.9 | ||||||
Non-US government obligations | 2.7 | ||||||
Municipal bonds and notes | 1.7 | ||||||
Loan assignments | 0.8 | ||||||
Options, futures, swaps and forward foreign currency contracts | (2.6 | ) | |||||
Cash equivalents and other assets less liabilities | (17.4 | ) | |||||
Total | 100.0 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
2 Credit quality ratings shown are based on the ratings assigned to portfolio holdings by Standard & Poor's Ratings Group, an independent rating agency.
63
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
US government obligations—40.40% | |||||||||||
US Treasury Bonds 2.500%, due 02/15/45 | 55,700,000 | $ | 59,394,470 | ||||||||
2.500%, due 02/15/46 | 5,500,000 | 5,871,894 | |||||||||
2.750%, due 08/15/42 | 1,000,000 | 1,126,367 | |||||||||
2.750%, due 11/15/42 | 9,700,000 | 10,912,122 | |||||||||
2.875%, due 05/15/432 | 1,800,000 | 2,069,296 | |||||||||
2.875%, due 08/15/45 | 13,100,000 | 15,043,503 | |||||||||
3.000%, due 05/15/42 | 5,200,000 | 6,136,608 | |||||||||
3.000%, due 11/15/44 | 16,300,000 | 19,165,866 | |||||||||
3.000%, due 05/15/45 | 4,500,000 | 5,291,897 | |||||||||
3.125%, due 08/15/44 | 16,800,000 | 20,217,758 | |||||||||
3.875%, due 08/15/40 | 730,000 | 985,443 | |||||||||
4.375%, due 05/15/40 | 100,000 | 144,508 | |||||||||
US Treasury Inflation Index Bonds (TIPS) 0.750%, due 02/15/42 | 1,684,918 | 1,745,624 | |||||||||
0.750%, due 02/15/45 | 5,100,300 | 5,307,964 | |||||||||
1.375%, due 02/15/44 | 1,442,924 | 1,723,167 | |||||||||
1.750%, due 01/15/28 | 20,667,105 | 24,296,765 | |||||||||
2.000%, due 01/15/26 | 4,375,018 | 5,153,123 | |||||||||
2.375%, due 01/15/25 | 3,313,232 | 3,958,017 | |||||||||
2.375%, due 01/15/27 | 5,240,884 | 6,446,355 | |||||||||
2.500%, due 01/15/29 | 15,998,697 | 20,392,083 | |||||||||
3.875%, due 04/15/29 | 1,534,218 | 2,221,360 | |||||||||
US Treasury Inflation Index Notes (TIPS) 0.125%, due 04/15/20 | 7,692,900 | 7,829,026 | |||||||||
0.125%, due 07/15/22 | 2,297,988 | 2,343,410 | |||||||||
0.125%, due 07/15/24 | 43,196,174 | 43,724,334 | |||||||||
0.250%, due 01/15/25 | 4,294,925 | 4,375,288 | |||||||||
0.375%, due 07/15/25 | 3,747,767 | 3,873,377 | |||||||||
0.625%, due 01/15/26 | 1,415,274 | 1,492,616 | |||||||||
1.000%, due 02/15/46 | 1,520,640 | 1,700,939 | |||||||||
US Treasury Notes 1.500%, due 02/28/23 | 460,000 | 467,116 | |||||||||
1.625%, due 02/15/26 | 3,265,000 | 3,314,373 | |||||||||
2.000%, due 02/28/212 | 18,100,000 | 18,903,893 | |||||||||
2.125%, due 09/30/212 | 27,500,000 | 28,951,258 | |||||||||
2.250%, due 04/30/212 | 17,400,000 | 18,390,982 | |||||||||
2.750%, due 02/15/24 | 880,000 | 971,163 | |||||||||
3.625%, due 08/15/19 | 2,375,000 | 2,578,359 | |||||||||
Total US government obligations (cost—$338,171,659) | 356,520,324 | ||||||||||
Government national mortgage association certificates—0.00%†† | |||||||||||
GNMA II ARM 1.750%, due 05/20/263 | 13,724 | 14,194 | |||||||||
1.875%, due 07/20/253 | 4,086 | 4,215 | |||||||||
2.000%, due 11/20/233 | 2,978 | 3,057 | |||||||||
2.000%, due 01/20/263 | 7,443 | 7,707 | |||||||||
Total government national mortgage association certificates (cost—$28,516) | 29,173 |
Face Amount1 | Value | ||||||||||
Federal home loan mortgage corporation certificates—0.34% | |||||||||||
FHLMC 7.645%, due 05/01/254,5 | 998,015 | $ | 1,060,265 | ||||||||
FHLMC ARM 2.940%, due 03/01/363 | 39,018 | 39,645 | |||||||||
FHLMC TBA 4.000%, VRD | 1,800,000 | 1,926,633 | |||||||||
Total federal home loan mortgage corporation certificates (cost—$2,965,055) | 3,026,543 | ||||||||||
Federal housing administration certificates—0.00%†† | |||||||||||
FHA GMAC 7.430%, due 06/01/214,5 | 7,472 | 7,320 | |||||||||
FHA Reilly 7.430%, due 10/01/204,5 | 2,449 | 2,397 | |||||||||
Total federal housing administration certificates (cost—$10,277) | 9,717 | ||||||||||
Federal national mortgage association certificates—6.55% | |||||||||||
FNMA 0.875%, due 08/02/19 | 515,000 | 514,423 | |||||||||
3.500%, due 11/01/21 | 1,102,760 | 1,201,091 | |||||||||
3.500%, due 12/01/25 | 60,222 | 63,856 | |||||||||
4.500%, due 04/01/29 | 300,476 | 327,229 | |||||||||
5.401%, due 11/01/34 | 8,088,825 | 10,143,803 | |||||||||
FNMA ARM 1.810%, due 08/01/403 | 45,005 | 45,360 | |||||||||
2.112%, due 01/01/363 | 47,402 | 49,692 | |||||||||
2.500%, due 12/01/353 | 79,213 | 83,494 | |||||||||
2.518%, due 10/01/353 | 33,463 | 35,461 | |||||||||
2.539%, due 05/01/303 | 39,822 | 41,446 | |||||||||
2.655%, due 11/01/353 | 83,591 | 88,105 | |||||||||
2.687%, due 09/01/353 | 53,630 | 56,698 | |||||||||
2.718%, due 04/01/273 | 11,896 | 12,505 | |||||||||
2.787%, due 02/01/363 | 79,148 | 83,699 | |||||||||
2.805%, due 03/01/363 | 72,183 | 75,441 | |||||||||
2.822%, due 01/01/363 | 42,909 | 45,748 | |||||||||
2.912%, due 03/01/363 | 56,223 | 58,808 | |||||||||
2.972%, due 03/01/363 | 37,838 | 40,160 | |||||||||
2.975%, due 05/01/273 | 8,202 | 8,397 | |||||||||
3.037%, due 03/01/363 | 25,379 | 26,693 | |||||||||
3.265%, due 06/01/363 | 8,990 | 8,998 | |||||||||
FNMA ARM COFI 3.250%, due 11/01/264,5 | 20,430 | 18,660 | |||||||||
FNMA TBA 2.500% | 520,000 | 538,688 | |||||||||
3.500% | 21,000,000 | 22,170,704 | |||||||||
4.000% | 19,550,000 | 20,940,508 | |||||||||
4.500% | 1,000,000 | 1,089,509 | |||||||||
Total federal national mortgage association certificates (cost—$55,581,702) | 57,769,176 |
64
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Collateralized mortgage obligations—13.74% | |||||||||||
Alba PLC, Series 2007-1, Class A3 0.759%, due 03/17/393,6 | GBP | 610,232 | $ | 707,061 | |||||||
ARM Trust, Series 2005-5, Class 2A1 3.110%, due 09/25/353 | 241,296 | 199,366 | |||||||||
Banc of America Commercial Mortgage Trust, Series 2007-2, Class A1A 5.739%, due 04/10/493 | 394,354 | 400,826 | |||||||||
Banc of America Funding Corp., Series 2005-D, Class A1 2.898%, due 05/25/353 | 1,102,164 | 1,125,174 | |||||||||
Banc of America Large Loan, Series 2010-UB5, Class A4A 5.650%, due 02/17/513,7 | 1,682,675 | 1,696,877 | |||||||||
Banc of America Merrill Lynch Large Loan, Series 2012-PARK, Class A 2.959%, due 12/10/307 | 1,000,000 | 1,053,019 | |||||||||
Bank of America Mortgage Securities, Inc., Series 2002-G, Class 1A3 3.546%, due 07/20/323 | 898 | 905 | |||||||||
Series 2004-H, Class 2A2 2.858%, due 09/25/343 | 1,193,530 | 1,162,027 | |||||||||
BBCCRE Trust, Series 2015-GTP, Class A 3.966%, due 08/10/337 | 3,600,000 | 3,889,724 | |||||||||
BBCMS Trust, Series 2015-RRI, Class A 1.592%, due 05/15/323,7 | 3,593,065 | 3,590,245 | |||||||||
BCAP LLC 2011-RR10 Trust, Class 3A5 2.878%, due 06/26/353,7 | 830,217 | 823,875 | |||||||||
Bear Stearns Alternative Loan Trust-A Trust, Series 2003-3, Class 1A 2.384%, due 10/25/333 | 32,260 | 29,864 | |||||||||
Series 2004-9, Class 2A1 2.721%, due 09/25/343 | 616,410 | 574,587 | |||||||||
Series 2005-7, Class 22A1 2.880%, due 09/25/353 | 890,431 | 743,651 | |||||||||
Series 2006-1, Class 21A2 2.674%, due 02/25/363 | 923,321 | 644,416 | |||||||||
Bear Stearns ARM Trust, Series 2003-1, Class 6A1 2.797%, due 04/25/333 | 39,090 | 39,120 | |||||||||
Series 2003-5, Class 2A1 2.703%, due 08/25/333 | 243,682 | 242,727 | |||||||||
Series 2004-3, Class 1A2 3.038%, due 07/25/343 | 175,967 | 169,897 | |||||||||
Series 2004-6, Class 2A1 3.027%, due 09/25/343 | 1,082,045 | 987,493 | |||||||||
Series 2004-7, Class 1A1 3.000%, due 10/25/343 | 334,598 | 305,903 | |||||||||
Series 2005-2, Class A1 3.090%, due 03/25/353 | 682,871 | 685,620 | |||||||||
Series 2005-5, Class A2 2.460%, due 08/25/353 | 2,173,585 | 2,165,598 | |||||||||
Chase Mortgage Finance Corp., Series 2005-S3, Class A10 5.500%, due 11/25/35 | 2,527,000 | 2,407,135 |
Face Amount1 | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Series 2007-S6, Class 2A1 5.500%, due 12/25/22 | 915,943 | $ | 774,341 | ||||||||
Citigroup Commercial Mortgage Trust, Series 2013-GC15, Class XA 1.396%, due 09/10/463,7,8 | 4,341,107 | 214,919 | |||||||||
Series 2013-GC17, Class XA 1.586%, due 02/10/483,7,8 | 3,645,474 | 330,154 | |||||||||
Series 2013-GC17, Class XA 1.636%, due 11/10/463,7,8 | 12,570,115 | 717,925 | |||||||||
Series 2015-GC29, Class XA 1.310%, due 04/10/483,7,8 | 3,323,677 | 234,395 | |||||||||
Citigroup Mortgage Loan Trust, Inc., Series 2005-11, Class A1A 3.040%, due 05/25/353 | 400,065 | 392,820 | |||||||||
Series 2005-4, Class A 2.799%, due 08/25/353 | 957,601 | 935,419 | |||||||||
Series 2005-6, Class A2 2.760%, due 09/25/353 | 79,417 | 79,316 | |||||||||
Series 2005-6, Class A3 2.410%, due 09/25/353 | 14,176 | 13,684 | |||||||||
COMM Mortgage Trust, Series 2014-LC15, Class XA 1.544%, due 04/10/473,7,8 | 12,644,513 | 823,641 | |||||||||
Series 2014-UBS3, Class XA 1.498%, due 06/10/473,7,8 | 3,601,820 | 249,191 | |||||||||
Countrywide Alternative Loan Trust, Series 2003-J3, Class 2A1 6.250%, due 12/25/33 | 84,611 | 86,555 | |||||||||
Series 2005-62, Class 2A1 1.410%, due 12/25/353 | 268,363 | 215,989 | |||||||||
Series 2006-41CB, Class 1A9 6.000%, due 01/25/37 | 725,962 | 608,863 | |||||||||
Countrywide Home Loan Mortgage Pass Through Trust, Series 2003-R4, Class 2A 5.325%, due 01/25/343,7 | 789,589 | 781,940 | |||||||||
Series 2004-12, Class 11A1 2.832%, due 08/25/343 | 288,031 | 244,734 | |||||||||
Series 2004-12, Class 11A2 2.832%, due 08/25/343 | 184,295 | 164,415 | |||||||||
Series 2004-12, Class 12A1 2.761%, due 08/25/343 | 59,541 | 50,714 | |||||||||
Series 2005-HYB9, Class 5A1 2.602%, due 02/20/363 | 259,291 | 227,634 | |||||||||
Credit Suisse Commercial Mortgage Trust, Series 2007-C5, Class A4 5.695%, due 09/15/403 | 328,141 | 337,711 | |||||||||
DSLA Mortgage Loan Trust, Series 2005-AR4, Class 2A1A 0.699%, due 08/19/453 | 433,699 | 368,590 | |||||||||
FHLMC REMIC, Series 0023, Class KZ 6.500%, due 11/25/23 | 54,913 | 61,539 | |||||||||
Series 1278, Class K 7.000%, due 05/15/22 | 19,543 | 20,951 | |||||||||
Series 1367, Class KA 6.500%, due 09/15/22 | 602 | 666 |
65
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Series 1502, Class PX 7.000%, due 04/15/23 | 180,424 | $ | 196,976 | ||||||||
Series 1503, Class PZ 7.000%, due 05/15/23 | 54,241 | 60,538 | |||||||||
Series 1534, Class Z 5.000%, due 06/15/23 | 59,982 | 63,978 | |||||||||
Series 1548, Class Z 7.000%, due 07/15/23 | 40,459 | 44,967 | |||||||||
Series 1562, Class Z 7.000%, due 07/15/23 | 69,421 | 77,483 | |||||||||
Series 1694, Class Z 6.500%, due 03/15/24 | 32,332 | 35,808 | |||||||||
Series 2061, Class Z 6.500%, due 06/15/28 | 110,890 | 126,718 | |||||||||
Series 2400, Class FQ 0.942%, due 01/15/323 | 75,550 | 75,843 | |||||||||
Series 2764, Class LZ 4.500%, due 03/15/34 | 1,088,312 | 1,185,366 | |||||||||
Series 2764, Class ZG 5.500%, due 03/15/34 | 2,493,414 | 2,810,516 | |||||||||
Series 2835, Class JZ 5.000%, due 08/15/34 | 545,016 | 603,308 | |||||||||
Series 2921, Class PG 5.000%, due 01/15/35 | 4,007,222 | 4,502,547 | |||||||||
Series 2983, Class TZ 6.000%, due 05/15/35 | 2,118,318 | 2,453,365 | |||||||||
Series 3149, Class CZ 6.000%, due 05/15/36 | 2,604,426 | 2,993,230 | |||||||||
Series T-054, Class 2A 6.500%, due 02/25/43 | 597,247 | 726,048 | |||||||||
Series T-058, Class 2A 6.500%, due 09/25/43 | 2,148,688 | 2,560,967 | |||||||||
Series T-075, Class A1 0.486%, due 12/25/363 | 698,469 | 693,910 | |||||||||
First Horizon Mortgage Pass-Through Trust, Series 2005-AR3, Class 2A1 2.758%, due 08/25/353 | 45,837 | 39,958 | |||||||||
FNMA REMIC, Series 1991-065, Class Z 6.500%, due 06/25/21 | 1,405 | 1,484 | |||||||||
Series 1992-129, Class L 6.000%, due 07/25/22 | 3,054 | 3,294 | |||||||||
Series 1993-060, Class Z 7.000%, due 05/25/23 | 48,304 | 52,844 | |||||||||
Series 1993-070, Class Z 6.900%, due 05/25/23 | 7,932 | 8,825 | |||||||||
Series 1993-096, Class PZ 7.000%, due 06/25/23 | 41,265 | 45,190 | |||||||||
Series 1993-160, Class ZB 6.500%, due 09/25/23 | 16,541 | 17,991 | |||||||||
Series 1993-163, Class ZB 7.000%, due 09/25/23 | 4,156 | 4,626 | |||||||||
Series 1998-066, Class FG 0.746%, due 12/25/283 | 28,985 | 29,140 | |||||||||
Series 1999-W4, Class A9 6.250%, due 02/25/29 | 279,665 | 310,689 |
Face Amount1 | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
Series 2000-034, Class F 0.896%, due 10/25/303 | 5,679 | $ | 5,700 | ||||||||
Series 2002-080, Class A1 6.500%, due 11/25/42 | 916,163 | 1,054,302 | |||||||||
Series 2003-064, Class AH 6.000%, due 07/25/33 | 2,349,831 | 2,703,841 | |||||||||
Series 2003-W8, Class 2A 7.000%, due 10/25/42 | 49,938 | 59,507 | |||||||||
Series 2004-T1, Class 1A1 6.000%, due 01/25/44 | 732,686 | 856,148 | |||||||||
Series 2004-W8, Class 2A 6.500%, due 06/25/44 | 819,344 | 939,568 | |||||||||
Series 2005-024, Class ZE 5.000%, due 04/25/35 | 1,128,301 | 1,257,409 | |||||||||
Series 2005-120, Class ZU 5.500%, due 01/25/36 | 2,928,358 | 3,317,195 | |||||||||
Series 2006-065, Class GD 6.000%, due 07/25/26 | 1,132,757 | 1,283,721 | |||||||||
Trust 1993-037, Class PX 7.000%, due 03/25/23 | 8,591 | 9,482 | |||||||||
Trust G92-040, Class ZC 7.000%, due 07/25/22 | 6,205 | 6,771 | |||||||||
German Residential Funding Ltd., Series 2013-1, Class A 0.892%, due 08/27/243,6 | EUR | 1,798,496 | 2,040,880 | ||||||||
GNMA REMIC, Trust Series 2000-009, Class FG 1.042%, due 02/16/303 | 53,680 | 54,095 | |||||||||
Trust Series 2002-031, Class FW 0.842%, due 06/16/313 | 56,009 | 56,262 | |||||||||
Trust Series 2003-98, Class Z 6.000%, due 11/20/33 | 6,827,695 | 7,875,552 | |||||||||
Trust Series 2005-26, Class ZA 5.500%, due 01/20/35 | 8,939,906 | 10,559,944 | |||||||||
Trust Series 2015-H20, Class FB 1.036%, due 08/20/653 | 1,785,017 | 1,765,919 | |||||||||
Trust Series 2016-H11, Class F 1.236%, due 05/20/663 | 1,197,585 | 1,198,830 | |||||||||
Trust Series 2016-H15, Class FA 1.271%, due 07/20/663,4,5 | 2,200,000 | 2,194,500 | |||||||||
GS Residential Mortgage Loan Trust, Series 2005-AR6, Class 2A1 2.874%, due 09/25/353 | 690,071 | 693,587 | |||||||||
Harborview Mortgage Loan Trust, Series 2004-11, Class 3A1A 1.139%, due 01/19/353 | 74,441 | 51,558 | |||||||||
Series 2005-4, Class 3A1 3.034%, due 07/19/353 | 384,303 | 332,160 | |||||||||
Housing Security, Inc., Series 1992-8, Class B 2.044%, due 06/25/243 | 19,316 | 19,272 | |||||||||
JPMorgan Alternative Loan Trust, Series 2007-A2, Class 12A3 0.636%, due 06/25/373 | 359,631 | 343,446 |
66
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Collateralized mortgage obligations—(continued) | |||||||||||
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP9, Class A1A 5.257%, due 05/15/47 | 1,562,775 | $ | 1,571,072 | ||||||||
JPMorgan Mortgage Trust, Series 2005-A8, Class 1A1 2.668%, due 11/25/353 | 1,480,505 | 1,393,630 | |||||||||
JPMorgan Mortgage Trust, Series 2006-A4, Class 2A2 2.791%, due 06/25/363 | 595,065 | 533,670 | |||||||||
Ludgate Funding PLC, Series 2007-1, Class A2A 0.748%, due 01/01/613,6 | GBP | 2,124,251 | 2,414,274 | ||||||||
Series 2008-W1X, Class A1 1.188%, due 01/01/613,6 | GBP | 992,037 | 1,179,605 | ||||||||
Mansard Mortgages Parent Ltd, Series 2007-1X, Class A2 0.768%, due 04/15/473,6 | GBP | 1,396,722 | 1,624,090 | ||||||||
Morgan Stanley Capital I Trust, Series 2014-CPT, Class B 3.560%, due 07/13/293,5 | 1,800,000 | 1,901,730 | |||||||||
NAAC Reperforming Loan REMIC Trust, Series 2004-R3, Class A1 6.500%, due 02/25/357 | 970,204 | 957,038 | |||||||||
Nomura Resecuritization Trust, Series 2014-7R, Class 2A3 0.639%, due 12/26/353,7 | 2,172,685 | 1,948,484 | |||||||||
Reperforming Loan REMIC Trust, Series 2006-R1, Class AF1 0.786%, due 01/25/363,7 | 1,486,086 | 1,296,993 | |||||||||
Residential Accredit Loans, Inc., Series 2006-Q03, Class A1 0.656%, due 04/25/463 | 1,326,816 | 584,436 | |||||||||
Residential Asset Securitization Trust, Series 2006-A14C, Class 2A6 0.896%, due 12/25/363 | 1,183,365 | 315,117 | |||||||||
Residential Funding Mortgage Security I, Series 2004-S9, Class 1A23 5.500%, due 12/25/34 | 1,103,485 | 1,103,999 | |||||||||
Sequoia Mortgage Trust, Series 2007-3, Class 1A1 0.639%, due 07/20/363 | 297,751 | 268,937 | |||||||||
Structured ARM Loan Trust, Series 2004-8, Class 3A 2.642%, due 07/25/343 | 639,612 | 636,379 | |||||||||
Structured Asset Mortgage Investments, Inc., Series 2002-AR3, Class A1 1.099%, due 09/19/323 | 162,228 | 157,495 | |||||||||
Series 2006-AR3, Class 11A1 0.656%, due 04/25/363 | 2,342,026 | 1,699,513 | |||||||||
United States Small Business Administration, Series 1999-20K, Class 1 7.060%, due 11/01/19 | 50,785 | 52,782 | |||||||||
Series 2002-20K, Class 1 5.080%, due 11/01/22 | 390,840 | 419,032 | |||||||||
Series 2005-20H, Class 1 5.110%, due 08/01/25 | 478,443 | 519,110 |
Face Amount1 | Value | ||||||||||
Collateralized mortgage obligations—(concluded) | |||||||||||
Series 2007-20D, Class 1 5.320%, due 04/01/27 | 1,843,382 | $ | 2,038,124 | ||||||||
Wachovia Bank Commercial Mortgage Trust, Series 2007-C32, Class A3, 5.889%, due 06/15/493 | 359,000 | 367,693 | |||||||||
WaMu Mortgage Pass Through Certificates, Series 2002-AR6, Class A 1.810%, due 06/25/423 | 34,213 | 32,827 | |||||||||
Series 2005-AR13, Class A1A1 0.736%, due 10/25/453 | 995,912 | 926,635 | |||||||||
Series 2005-AR15, Class A1A1 0.706%, due 11/25/453 | 118,352 | 110,297 | |||||||||
Series 2006-AR2, Class 2A1 2.395%, due 03/25/363 | 966,021 | 861,300 | |||||||||
Series 2006-AR7, Class 3A 2.178%, due 07/25/463 | 1,635,906 | 1,457,705 | |||||||||
Series 2006-AR9, Class 1A 1.410%, due 08/25/463 | 1,124,590 | 948,076 | |||||||||
Series 2006-AR9, Class 2A 2.178%, due 08/25/463 | 894,133 | 791,901 | |||||||||
Wells Fargo Mortgage Backed Securities Trust, Series 2003-M, Class A1 2.787%, due 12/25/333 | 194,267 | 194,514 | |||||||||
Series 2004-CC, Class A1 2.840%, due 01/25/353 | 119,069 | 119,846 | |||||||||
Series 2004-DD, Class 2A6 2.833%, due 01/25/353 | 1,234,679 | 1,226,291 | |||||||||
Series 2006-AR2, Class 2A1 2.843%, due 03/25/363 | 946,355 | 929,488 | |||||||||
WFRBS Commercial Mortgage Trust, Series 2014-C22, Class XA 0.942%, due 09/15/573,8 | 7,346,599 | 385,196 | |||||||||
Series 2014-LC14, Class XA 1.403%, due 03/15/473,7,8 | 4,547,916 | 302,688 | |||||||||
Total collateralized mortgage obligations (cost—$116,970,346) | 121,256,441 | ||||||||||
Asset-backed securities—9.61% | |||||||||||
Accredited Mortgage Loan Trust, Series 2005-3, Class M3 0.920%, due 09/25/353 | 1,825,000 | 1,560,400 | |||||||||
Series 2005-4, Class M1 0.846%, due 12/25/353 | 1,017,500 | 862,609 | |||||||||
Aegis Asset Backed Securities Trust, Series 2005-3, Class M2 | |||||||||||
0.926%, due 08/25/353 | 1,640,000 | 1,429,675 | |||||||||
AmeriCredit Automobile Receivables, Series 2016-1, Class A2A 1.520%, due 06/10/19 | 900,000 | 901,277 | |||||||||
Ameriquest Mortgage Securities, Inc. Asset-Backed Pass-Through Certificates, Series 2005-R5, Class M3 0.936%, due 07/25/353 | 1,590,000 | 1,443,453 | |||||||||
Series 2005-R8, Class M1 0.916%, due 10/25/353 | 1,000,000 | 989,474 |
67
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
Series 2005-R8, Class M3 0.956%, due 10/25/353 | 1,700,000 | $ | 1,426,151 | ||||||||
Ares Enhanced Loan Investment Strategy IR Ltd., Series 2013-IRAR, Class A1BR 2.465%, due 07/23/253,5 | 2,500,000 | 2,500,000 | |||||||||
Argent Securities, Inc. Asset-Backed Pass-Through Certificates, Series 2005-W2, Class M1 0.936%, due 10/25/353 | 770,000 | 637,721 | |||||||||
Bosphorus CLO, Series 1A, Class A 0.894%, due 11/10/233,7 | EUR | 873,242 | 975,286 | ||||||||
Capital One Multi-Asset Execution Trust, Series 2016-A1, Class A1 0.900%, due 02/15/223 | 1,800,000 | 1,804,762 | |||||||||
Carlyle Global Market Strategies CLO 2012-1 Ltd, Series 2012-1A, Class AR 1.864%, due 04/20/223,7 | 1,524,457 | 1,523,169 | |||||||||
Carrington Mortgage Loan Trust, Series 2005-NC2, Class M4 1.466%, due 05/25/353 | 1,051,778 | 1,025,107 | |||||||||
Centex Home Equity Loan Trust, Series 2005-D, Class M3 0.926%, due 10/25/353 | 1,100,000 | 987,990 | |||||||||
CHEC Loan Trust, Series 2004-2, Class M1 1.086%, due 06/25/343 | 1,408,951 | 1,226,508 | |||||||||
CIFC Funding Ltd., Series 2012-1A, Class A1R2 1.920%, due 08/14/243,4,5 | 1,600,000 | 1,599,938 | |||||||||
Citigroup Mortgage Loan Trust, Inc. Series 2006-WFH4, Class M1 0.726%, due 11/25/363 | 488,000 | 410,157 | |||||||||
Cork Street CLO Designated Activity Co. Series 1A, Class A1BE 1.350%, due 11/27/283,7 | EUR | 2,400,000 | 2,685,898 | ||||||||
Countrywide Asset-Backed Certificates, 0.626%, due 07/25/363 | 37,653 | 37,457 | |||||||||
Credit Suisse Mortgage Capital Certificate, Series 2010-UD1 5.775%, due 12/16/493,7 | 869,024 | 877,459 | |||||||||
CSAB Mortgage Backed Trust, Series 2006-1, Class A6A 6.172%, due 06/25/369 | 456,206 | 260,711 | |||||||||
Dell Equipment Finance Trust, Series 2015-2, Class A1 0.530%, due 10/24/167 | 69,263 | 69,263 | |||||||||
Delta Funding Home Equity Loan Trust, Series 1999-003, Class A1A 1.262%, due 09/15/293 | 49,764 | 45,834 | |||||||||
Dryden Senior Loan Fund, Series 2011-22A, Class A1R 1.798%, due 01/15/223,7 | 6,713,983 | 6,689,404 |
Face Amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
EFS Volunteer LLC, Series 2010-1, Class A1 1.488%, due 10/26/263,7 | 93,649 | $ | 93,698 | ||||||||
FBR Securitization Trust, Series 2005-2, Class M2 1.189%, due 09/25/353 | 1,625,000 | 1,442,829 | |||||||||
First Frankin Mortgage Loan Trust, Series 2005-FFH3, Class M2 0.976%, due 09/25/353 | 1,000,000 | 952,196 | |||||||||
Fremont Home Loan Trust, Series 2005-2, Class M3 1.196%, due 06/25/353 | 620,000 | 537,957 | |||||||||
GSAA Trust, Series 2005-10, Class M4 1.096%, due 06/25/353 | 570,000 | 515,988 | |||||||||
GSAMP Trust, Series 2006-HE4, Class A1 0.586%, due 06/25/363 | 2,708,584 | 2,323,302 | |||||||||
Home Equity Asset Trust, Series 2005-2, Class M5 1.541%, due 07/25/353 | 1,000,000 | 911,763 | |||||||||
Series 2005-8, Class M1 0.876%, due 02/25/363 | 234,000 | 218,679 | |||||||||
Home Equity Mortgage Loan Asset-Backed Trust, Series 2005-D, Class AII4 0.796%, due 03/25/363 | 1,610,000 | 1,423,587 | |||||||||
HSI Asset Securitization Corp. Trust, Series 2006-OPT2, Class M2 0.836%, due 01/25/363 | 1,745,000 | 1,476,398 | |||||||||
JPMorgan Mortgage Acquisition Corp., Series 2006-FRE1, Class M1 0.843%, due 05/25/353 | 2,400,000 | 1,979,166 | |||||||||
Series 2006-WMC1, Class A1 0.668%, due 03/25/36 | 1,583,930 | 1,521,354 | |||||||||
JPMorgan Mortgage Acquisition Trust, Series 2006-NC1, Class A1 0.609%, due 04/25/363 | 2,056,527 | 1,940,371 | |||||||||
Series 2007-CH1, Class MV2 0.719%, due 11/25/363 | 1,680,000 | 1,497,110 | |||||||||
Series 2007-CH2, Class AV1 0.606%, due 01/25/373 | 1,878,922 | 1,830,580 | |||||||||
KVK CLO Ltd., Series 2012-2A, Class A 2.080%, due 02/10/253,7 | 2,100,000 | 2,100,053 | |||||||||
Madison Park Funding X Ltd., Series 2012-10A, Class A1A 2.066%, due 01/20/253,7 | 1,800,000 | 1,799,487 | |||||||||
Morgan Stanley ABS Capital I, Inc. Trust, Series 2005-HE1, Class M2 1.151%, due 12/25/343 | 307,502 | 264,021 | |||||||||
Series 2006-NC1, Class M1 0.826%, due 12/25/353 | 1,700,000 | 1,430,929 | |||||||||
Morgan Stanley Home Equity Loan Trust, Series 2005-4, Class M1 1.061%, due 09/25/353 | 1,660,000 | 1,459,560 |
68
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Asset-backed securities—(continued) | |||||||||||
New Century Home Equity Loan Trust, Series 2005-D, Class A2D 0.776%, due 02/25/363 | 1,933,312 | $ | 1,819,884 | ||||||||
Nomura Home Equity Loan, Inc. Home Equity Loan Trust, Series 2005-HE1, Class M4 1.331%, due 09/25/353 | 1,650,000 | 1,473,273 | |||||||||
Series 2006-HE1, Class M1 0.856%, due 02/25/363 | 1,600,000 | 1,485,384 | |||||||||
Palmer Square CLO Ltd., Series 2013-2A, Class A1A 2.033%, due 10/17/253,7 | 1,800,000 | 1,799,955 | |||||||||
Park Place Securities, Inc. Asset-Backed Pass-Through Certificates, Series 2004-WHQ1, Class M4 2.171%, due 09/25/343 | 220,733 | 190,781 | |||||||||
RAMP, Series 2006-RZ1 Trust, Class M2 0.866%, due 03/25/363 | 1,110,000 | 983,244 | |||||||||
RASC, Series 2005-KS11 Trust, Class M2 0.866%, due 12/25/353 | 1,100,000 | 960,675 | |||||||||
Series 2005-KS12 Trust, Class M2 0.906%, due 01/25/363 | 1,700,000 | 1,455,390 | |||||||||
Series 2005-KS4 Trust, Class M3 1.391%, due 05/25/353 | 1,690,000 | 1,460,053 | |||||||||
SASCO Mortgage Loan Trust, Series 2005-GEL1, Class M2 1.789%, due 12/25/343 | 753,022 | 672,378 | |||||||||
Saxon Asset Securities Trust, Series 2004-1, Class M1 1.234%, due 03/25/353 | 801,878 | 730,371 | |||||||||
Securitized Asset-Backed Receivables LLC Trust, Series 2005-FR2, Class M2 1.421%, due 03/25/353 | 367,746 | 352,971 | |||||||||
Series 2006-OP1, Class M2 0.836%, due 10/25/353 | 1,655,000 | 1,462,549 | |||||||||
SLM Student Loan Trust, Series 2008-9, Class A 2.138%, due 04/25/233 | 2,346,814 | 2,342,439 | |||||||||
Soundview Home Loan Trust, Series 2005-OPT1, Class M2 1.121%, due 06/25/353 | 1,110,000 | 1,013,613 | |||||||||
Series 2005-OPT3, Class M1 0.916%, due 11/25/353 | 640,000 | 545,306 | |||||||||
Series 2006-1, Class A4 0.746%, due 02/25/363 | 600,000 | 558,834 | |||||||||
Series 2006-OPT2, Class A3 0.626%, due 05/25/363 | 1,366,459 | 1,299,554 | |||||||||
Series 2006-WF2, Class M1 0.666%, due 12/25/363 | 1,720,000 | 1,462,527 | |||||||||
Stoney Lane Funding I Corp. Series 2007-1A, Class A1 0.919%, due 04/18/223,7 | 747,576 | 736,969 |
Face Amount1 | Value | ||||||||||
Asset-backed securities—(concluded) | |||||||||||
Structured Asset Securities Corp., Series 2001-SB1, Class A2 3.375%, due 08/25/31 | 637,468 | $ | 630,338 | ||||||||
Series 2005-WF1, Class M1 1.106%, due 02/25/353 | 171,474 | 146,699 | |||||||||
Sunrise SRL, Series 09, Class A 0.242%, due 08/27/313 | EUR | 227,075 | 253,863 | ||||||||
Vericrest Opportunity Loan Trust, Series 2016-NPL3, Class A1 4.250%, due 03/26/467,9 | 1,330,095 | 1,347,019 | |||||||||
VOLT XLVIII LLC, Series 2016-NPL8, Class A1 3.500%, due 07/25/467,9 | 1,900,000 | 1,898,039 | |||||||||
Total asset-backed securities (cost—$84,198,578) | 84,770,839 | ||||||||||
Corporate notes—44.18% | |||||||||||
Aerospace & defense—0.22% | |||||||||||
Lockheed Martin Corp. 2.500%, due 11/23/20 | 1,900,000 | 1,974,645 | |||||||||
Airlines—1.10% | |||||||||||
Air Canada 2013-1, Class B Pass Through Trust 5.375%, due 05/15/215 | 1,858,254 | 1,886,128 | |||||||||
American Airlines 2013-2, Class A Pass Through Trust 4.950%, due 01/15/23 | 2,077,696 | 2,275,078 | |||||||||
American Airlines 2014-1, Class B Pass Through Trust 4.375%, due 10/01/22 | 1,729,159 | 1,759,419 | |||||||||
Continental Airlines 2009-2, Series A Pass Through Trust 7.250%, due 11/10/19 | 830,851 | 950,328 | |||||||||
Continental Airlines 2012-2, Class A Pass Through Trust 4.000%, due 10/29/24 | 1,395,336 | 1,472,079 | |||||||||
Northwest Airlines, Series 2000-1, Class G 7.150%, due 10/01/19 | 1,240,830 | 1,328,432 | |||||||||
9,671,464 | |||||||||||
Apparel—0.01% | |||||||||||
Hanesbrands, Inc. 4.875%, due 05/15/267 | 85,000 | 87,550 | |||||||||
Auto & truck—0.77% | |||||||||||
General Motors Co. 5.000%, due 04/01/35 | 3,400,000 | 3,594,422 | |||||||||
6.750%, due 04/01/46 | 510,000 | 663,103 | |||||||||
General Motors Financial Co., Inc. 3.200%, due 07/06/21 | 2,495,000 | 2,533,468 | |||||||||
6,790,993 | |||||||||||
Auto parts & equipment—0.01% | |||||||||||
The Goodyear Tire & Rubber Co. 5.125%, due 11/15/23 | 60,000 | 63,450 |
69
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Auto parts & equipment—(concluded) | |||||||||||
ZF North America Capital, Inc. 4.000%, due 04/29/207 | 45,000 | $ | 46,856 | ||||||||
110,306 | |||||||||||
Banking-non-US—7.72% | |||||||||||
ABN AMRO Bank NV 2.450%, due 06/04/207 | 5,700,000 | 5,857,485 | |||||||||
Australia & New Zealand Banking Group Ltd. MTN 2.300%, due 06/01/21 | 3,500,000 | 3,569,069 | |||||||||
Bank of Scotland PLC MTN 6.375%, due 08/16/19 | GBP | 1,100,000 | 1,623,015 | ||||||||
Barclays Bank PLC 7.625%, due 11/21/22 | 1,600,000 | 1,788,480 | |||||||||
7.750%, due 04/10/233 | 1,700,000 | 1,806,250 | |||||||||
BPE Financiaciones SA 2.500%, due 02/01/17 | EUR | 3,600,000 | 4,066,821 | ||||||||
Cooperatieve Rabobank UA 6.875%, due 03/19/206 | EUR | 1,400,000 | 1,866,727 | ||||||||
Cooperatieve Rabobank UA MTN 8.400%, due 06/29/173,6,11 | 1,600,000 | 1,681,600 | |||||||||
Credit Agricole SA 7.875%, due 01/23/243,6,11 | 1,000,000 | 990,000 | |||||||||
7.875%, due 01/23/243,7,11 | 700,000 | 693,000 | |||||||||
Credit Suisse Group Funding Guernsey Ltd. 3.750%, due 03/26/2510 | 2,000,000 | 1,999,288 | |||||||||
3.800%, due 09/15/22 | 1,900,000 | 1,935,061 | |||||||||
3.800%, due 06/09/237 | 3,200,000 | 3,247,898 | |||||||||
Credit Suisse Group Guernsey I Ltd. 7.875%, due 02/24/413,6 | 1,700,000 | 1,706,630 | |||||||||
Deutsche Bank AG 2.538%, due 05/10/193 | 3,500,000 | 3,515,491 | |||||||||
DNB Bank ASA 3.200%, due 04/03/177 | 3,900,000 | 3,951,406 | |||||||||
Eksportfinans ASA 2.875%, due 11/16/16 | CHF | 100,000 | 103,673 | ||||||||
5.500%, due 06/26/17 | 400,000 | 412,556 | |||||||||
Export-Import Bank of Korea 4.375%, due 09/15/21 | 1,300,000 | 1,455,108 | |||||||||
5.000%, due 04/11/22 | 3,300,000 | 3,836,404 | |||||||||
5.125%, due 06/29/20 | 400,000 | 449,687 | |||||||||
HSBC Holdings PLC 3.400%, due 03/08/21 | 1,700,000 | 1,763,257 | |||||||||
KBC Bank NV 8.000%, due 01/25/233,6 | 2,200,000 | 2,359,500 | |||||||||
Lloyds Bank PLC 1.408%, due 08/17/183 | 1,600,000 | 1,591,952 | |||||||||
Lloyds Banking Group PLC 3.100%, due 07/06/21 | 1,800,000 | 1,823,652 | |||||||||
Novo Banco SA 5.000%, due 05/21/196 | EUR | 1,629,000 | 1,365,917 | ||||||||
Royal Bank of Scotland Group PLC MTN 2.500%, due 03/22/236 | EUR | 1,800,000 | 2,043,402 | ||||||||
Royal Bank of Scotland PLC MTN 6.934%, due 04/09/18 | EUR | 1,000,000 | 1,215,853 | ||||||||
9.500%, due 03/16/223,6 | 1,600,000 | 1,669,925 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Banking-non-US—(concluded) | |||||||||||
Santander UK Group Holdings PLC 3.125%, due 01/08/21 | 1,700,000 | $ | 1,727,164 | ||||||||
Societe Generale SA 4.250%, due 04/14/257,10 | 1,000,000 | 1,013,668 | |||||||||
5.625%, due 11/24/457 | 580,000 | 647,641 | |||||||||
8.000%, due 09/29/253,7,11 | 1,800,000 | 1,777,500 | |||||||||
Westpac Banking Corp. 2.100%, due 02/25/217 | 2,500,000 | 2,533,130 | |||||||||
68,088,210 | |||||||||||
Banking-US—3.98% | |||||||||||
Aviation Capital Group Corp. 6.750%, due 04/06/215,10 | 4,820,000 | 5,632,170 | |||||||||
Bank of America Corp. 2.600%, due 01/15/19 | 500,000 | 511,767 | |||||||||
5.750%, due 12/01/17 | 500,000 | 527,806 | |||||||||
6.100%, due 03/17/253,11 | 1,385,000 | 1,448,059 | |||||||||
7.625%, due 06/01/19 | 2,900,000 | 3,362,205 | |||||||||
Bank of America Corp. GMTN 3.300%, due 01/11/23 | 400,000 | 416,983 | |||||||||
Bank of America Corp. MTN 4.000%, due 04/01/24 | 975,000 | 1,051,991 | |||||||||
4.000%, due 01/22/25 | 1,500,000 | 1,558,699 | |||||||||
4.125%, due 01/22/2410 | 3,700,000 | 4,017,741 | |||||||||
Capital One Financial Corp. 5.550%, due 06/01/203,11 | 1,065,000 | 1,080,176 | |||||||||
CIT Group, Inc. 5.000%, due 05/15/17 | 800,000 | 817,184 | |||||||||
5.250%, due 03/15/18 | 180,000 | 187,200 | |||||||||
6.625%, due 04/01/187 | 200,000 | 212,500 | |||||||||
Citizens Bank N.A. MTN 2.550%, due 05/13/2110 | 1,700,000 | 1,735,833 | |||||||||
JPMorgan Chase & Co. 6.300%, due 04/23/19 | 400,000 | 450,297 | |||||||||
JPMorgan Chase Bank N.A. 4.375%, due 11/30/213,6 | EUR | 500,000 | 562,634 | ||||||||
6.000%, due 10/01/17 | 2,700,000 | 2,842,879 | |||||||||
Regions Financial Corp. 3.200%, due 02/08/21 | 1,800,000 | 1,860,516 | |||||||||
Santander Holdings USA, Inc. 2.115%, due 11/24/173 | 1,800,000 | 1,799,764 | |||||||||
Synchrony Financial 2.700%, due 02/03/20 | 500,000 | 506,592 | |||||||||
Wells Fargo & Co. 5.875%, due 06/15/253,11 | 1,000,000 | 1,101,250 | |||||||||
Wells Fargo & Co. GMTN 2.600%, due 07/22/20 | 3,300,000 | 3,409,738 | |||||||||
35,093,984 | |||||||||||
Beverages—0.13% | |||||||||||
Anheuser-Busch InBev Finance, Inc. 4.900%, due 02/01/46 | 765,000 | 937,068 | |||||||||
Constellation Brands, Inc. 6.000%, due 05/01/22 | 130,000 | 150,943 | |||||||||
7.250%, due 05/15/17 | 65,000 | 67,600 | |||||||||
1,155,611 |
70
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Building & construction—0.11% | |||||||||||
D.R. Horton, Inc. 5.750%, due 08/15/23 | 110,000 | $ | 122,650 | ||||||||
Lennar Corp. 4.750%, due 12/15/17 | 100,000 | 102,875 | |||||||||
4.750%, due 11/15/229 | 150,000 | 157,500 | |||||||||
Meritage Homes Corp. 6.000%, due 06/01/25 | 15,000 | 15,628 | |||||||||
7.000%, due 04/01/22 | 50,000 | 54,875 | |||||||||
Odebrecht Offshore Drilling Finance Ltd. 6.625%, due 10/01/227 | 1,506,880 | 250,519 | |||||||||
PulteGroup, Inc. 4.250%, due 03/01/21 | 45,000 | 46,519 | |||||||||
6.000%, due 02/15/35 | 30,000 | 30,825 | |||||||||
Taylor Morrison Communities, Inc./Monarch Communities, Inc. 5.250%, due 04/15/217 | 80,000 | 81,400 | |||||||||
5.625%, due 03/01/247 | 70,000 | 70,350 | |||||||||
Toll Brothers Finance Corp. 4.000%, due 12/31/18 | 25,000 | 26,125 | |||||||||
4.875%, due 11/15/25 | 50,000 | 51,125 | |||||||||
1,010,391 | |||||||||||
Building products—0.04% | |||||||||||
CalAtlantic Group, Inc. 5.250%, due 06/01/26 | 35,000 | 35,350 | |||||||||
5.375%, due 10/01/22 | 35,000 | 36,312 | |||||||||
8.375%, due 05/15/18 | 95,000 | 104,500 | |||||||||
USG Corp. 5.500%, due 03/01/257 | 80,000 | 85,400 | |||||||||
5.875%, due 11/01/217 | 25,000 | 26,250 | |||||||||
7.875%, due 03/30/207 | 50,000 | 52,219 | |||||||||
340,031 | |||||||||||
Cable—0.09% | |||||||||||
CCO Holdings LLC/CCO Holdings Capital Corp. 5.125%, due 05/01/237 | 75,000 | 77,531 | |||||||||
5.250%, due 09/30/22 | 190,000 | 197,838 | |||||||||
5.500%, due 05/01/267 | 40,000 | 41,750 | |||||||||
5.750%, due 02/15/267 | 210,000 | 221,550 | |||||||||
Neptune Finco Corp. 6.625%, due 10/15/257 | 200,000 | 215,500 | |||||||||
754,169 | |||||||||||
Chemicals—0.04% | |||||||||||
Huntsman International LLC 5.125%, due 11/15/22 | 120,000 | 121,800 | |||||||||
NOVA Chemicals Corp. 5.000%, due 05/01/257 | 220,000 | 223,300 | |||||||||
345,100 | |||||||||||
Commercial services—0.60% | |||||||||||
Aircastle Ltd. 4.625%, due 12/15/18 | 210,000 | 220,500 | |||||||||
5.000%, due 04/01/23 | 40,000 | 42,048 | |||||||||
ERAC USA Finance LLC 2.350%, due 10/15/195 | 1,650,000 | 1,679,157 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Commercial services—(concluded) | |||||||||||
IHS Markit Ltd. 5.000%, due 11/01/227 | 110,000 | $ | 113,025 | ||||||||
Iron Mountain US Holdings, Inc. 5.375%, due 06/01/267 | 30,000 | 30,375 | |||||||||
Iron Mountain, Inc. 5.750%, due 08/15/24 | 140,000 | 143,806 | |||||||||
6.000%, due 08/15/23 | 100,000 | 106,250 | |||||||||
R.R. Donnelley & Sons Co. 7.000%, due 02/15/22 | 115,000 | 116,725 | |||||||||
8.250%, due 03/15/19 | 110,000 | 121,000 | |||||||||
Republic Services, Inc. 3.550%, due 06/01/22 | 2,100,000 | 2,270,749 | |||||||||
Service Corp. International 5.375%, due 01/15/22 | 140,000 | 147,000 | |||||||||
Team Health, Inc. 7.250%, due 12/15/237 | 115,000 | 125,350 | |||||||||
The ADT Corp. 4.125%, due 06/15/23 | 25,000 | 23,969 | |||||||||
The Hertz Corp. 4.250%, due 04/01/18 | 30,000 | 30,900 | |||||||||
5.875%, due 10/15/20 | 30,000 | 30,975 | |||||||||
6.750%, due 04/15/19 | 60,000 | 61,050 | |||||||||
5,262,879 | |||||||||||
Communications equipment—0.25% | |||||||||||
QUALCOMM, Inc. 4.800%, due 05/20/45 | 2,000,000 | 2,225,096 | |||||||||
Computers—0.80% | |||||||||||
Apple, Inc. 4.650%, due 02/23/46 | 825,000 | 938,587 | |||||||||
Diamond 1 Finance Corp./Diamond 2 Finance Corp. 4.420%, due 06/15/217,10 | 3,700,000 | 3,867,954 | |||||||||
5.875%, due 06/15/217 | 55,000 | 57,496 | |||||||||
6.020%, due 06/15/267 | 170,000 | 182,386 | |||||||||
Seagate HDD Cayman 4.750%, due 06/01/23 | 1,500,000 | 1,399,050 | |||||||||
4.875%, due 06/01/27 | 565,000 | 473,964 | |||||||||
Western Digital Corp. 10.500%, due 04/01/247 | 155,000 | 174,762 | |||||||||
7,094,199 | |||||||||||
Construction & engineering—0.02% | |||||||||||
AECOM 5.875%, due 10/15/24 | 120,000 | 128,700 | |||||||||
Consumer products—0.00%†† | |||||||||||
Spectrum Brands, Inc. 6.625%, due 11/15/22 | 35,000 | 37,144 | |||||||||
Diversified financials—2.77% | |||||||||||
American Express Co. 5.200%, due 11/15/193,11 | 1,000,000 | 982,500 | |||||||||
Doric Nimrod Air Finance Alpha Ltd. 2012-1, Class A Pass Through Trust 5.125%, due 11/30/227 | 462,686 | 481,141 |
71
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Diversified financials—(concluded) | |||||||||||
First Data Corp. 5.000%, due 01/15/247 | 35,000 | $ | 35,263 | ||||||||
6.750%, due 11/01/207 | 110,000 | 114,675 | |||||||||
Goldman Sachs Group, Inc. 1.798%, due 04/23/203 | 1,800,000 | 1,805,400 | |||||||||
3.750%, due 05/22/2510 | 1,900,000 | 2,006,013 | |||||||||
5.150%, due 05/22/45 | 715,000 | 784,690 | |||||||||
5.700%, due 05/10/193,11 | 1,500,000 | 1,522,500 | |||||||||
5.950%, due 01/18/1810 | 2,500,000 | 2,660,350 | |||||||||
6.000%, due 06/15/2010 | 3,400,000 | 3,894,717 | |||||||||
Lehman Brothers Holdings, Inc. MTN 0.000%, due 12/30/165,12 | 1,900,000 | 134,900 | |||||||||
1.000%, due 12/30/165,12 | 900,000 | 63,900 | |||||||||
1.000%, due 01/24/495,12 | 4,500,000 | 320,625 | |||||||||
Merrill Lynch & Co. MTN 6.875%, due 04/25/18 | 5,300,000 | 5,772,304 | |||||||||
Navient Corp. MTN 4.875%, due 06/17/19 | 180,000 | 180,900 | |||||||||
Rio Oil Finance Trust, Series 2014-1 9.250%, due 07/06/247,9 | 1,833,730 | 1,586,176 | |||||||||
Springleaf Finance Corp. 5.250%, due 12/15/19 | 2,200,000 | 2,134,000 | |||||||||
24,480,054 | |||||||||||
Diversified manufacturing—0.13% | |||||||||||
General Electric Co. 5.000%, due 01/21/213,11 | 1,094,000 | 1,176,734 | |||||||||
Electric utilities—0.99% | |||||||||||
Duke Energy Corp. 3.750%, due 04/15/24 | 1,700,000 | 1,853,901 | |||||||||
Dynegy, Inc. 5.875%, due 06/01/23 | 40,000 | 36,000 | |||||||||
6.750%, due 11/01/19 | 100,000 | 101,875 | |||||||||
7.625%, due 11/01/24 | 30,000 | 29,325 | |||||||||
Exelon Corp. 2.850%, due 06/15/20 | 1,900,000 | 1,975,185 | |||||||||
Exelon Generation Co. LLC 2.950%, due 01/15/20 | 2,000,000 | 2,056,784 | |||||||||
FirstEnergy Corp. Series B 4.250%, due 03/15/23 | 1,700,000 | 1,806,556 | |||||||||
NRG Energy, Inc. 6.250%, due 07/15/22 | 270,000 | 271,350 | |||||||||
6.625%, due 03/15/23 | 55,000 | 55,275 | |||||||||
6.625%, due 01/15/277 | 145,000 | 143,369 | |||||||||
7.250%, due 05/15/267 | 60,000 | 61,575 | |||||||||
7.875%, due 05/15/21 | 10,000 | 10,375 | |||||||||
Talen Energy Supply LLC 4.600%, due 12/15/21 | 55,000 | 44,000 | |||||||||
4.625%, due 07/15/197,9 | 270,000 | 255,825 | |||||||||
6.500%, due 06/01/25 | 50,000 | 44,000 | |||||||||
8,745,395 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Electric-generation—0.03% | |||||||||||
Calpine Corp. 5.375%, due 01/15/23 | 210,000 | $ | 209,475 | ||||||||
6.000%, due 01/15/227 | 65,000 | 67,925 | |||||||||
277,400 | |||||||||||
Electric-integrated—1.10% | |||||||||||
Entergy Gulf States Louisiana LLC 5.590%, due 10/01/24 | 2,207,000 | 2,679,283 | |||||||||
Puget Energy, Inc. 6.500%, due 12/15/20 | 6,000,000 | 6,979,944 | |||||||||
9,659,227 | |||||||||||
Electronics—0.26% | |||||||||||
Allegion PLC 5.875%, due 09/15/23 | 75,000 | 79,875 | |||||||||
Amkor Technology, Inc. 6.375%, due 10/01/22 | 40,000 | 40,543 | |||||||||
Flextronics International Ltd. 4.750%, due 06/15/25 | 1,900,000 | 2,001,688 | |||||||||
5.000%, due 02/15/23 | 50,000 | 53,353 | |||||||||
Freescale Semiconductor, Inc. 6.000%, due 01/15/227 | 50,000 | 52,800 | |||||||||
Micron Technology, Inc. 5.250%, due 08/01/237 | 15,000 | 13,462 | |||||||||
5.500%, due 02/01/25 | 15,000 | 13,463 | |||||||||
5.625%, due 01/15/267 | 5,000 | 4,438 | |||||||||
2,259,622 | |||||||||||
Energy-exploration & production—0.06% | |||||||||||
Antero Resources Corp. 5.125%, due 12/01/22 | 30,000 | 27,975 | |||||||||
5.375%, due 11/01/21 | 160,000 | 153,200 | |||||||||
Apache Corp. 4.750%, due 04/15/43 | 390,000 | 387,755 | |||||||||
568,930 | |||||||||||
Finance-captive automotive—0.95% | |||||||||||
Bank of America NA 0.953%, due 06/15/173 | 2,800,000 | 2,791,653 | |||||||||
Denali International LLC/Denali Finance Corp. 5.625%, due 10/15/207 | 1,460,000 | 1,531,248 | |||||||||
Ford Motor Credit Co. LLC 8.000%, due 12/15/16 | 600,000 | 615,211 | |||||||||
International Lease Finance Corp. 5.875%, due 08/15/22 | 280,000 | 319,200 | |||||||||
8.875%, due 09/01/17 | 290,000 | 311,025 | |||||||||
Schaeffler Holding Finance BV 6.875%, due 08/15/187,13 | 800,000 | 817,000 | |||||||||
The Depository Trust & Clearing Corp. 4.875%, due 06/15/203,7,11 | 2,000,000 | 2,025,000 | |||||||||
8,410,337 |
72
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Finance-non-captive diversified—0.92% | |||||||||||
Ford Motor Credit Co. LLC 2.459%, due 03/27/2010 | 2,800,000 | $ | 2,829,994 | ||||||||
2.597%, due 11/04/19 | 1,000,000 | 1,021,839 | |||||||||
3.200%, due 01/15/21 | 1,000,000 | 1,039,052 | |||||||||
4.250%, due 02/03/17 | 3,200,000 | 3,246,944 | |||||||||
8,137,829 | |||||||||||
Financial services—4.67% | |||||||||||
Ally Financial, Inc. 3.250%, due 09/29/17 | 100,000 | 101,000 | |||||||||
3.250%, due 02/13/18 | 1,045,000 | 1,055,450 | |||||||||
3.750%, due 11/18/19 | 345,000 | 350,606 | |||||||||
4.625%, due 03/30/25 | 85,000 | 87,125 | |||||||||
4.750%, due 09/10/18 | 1,400,000 | 1,449,000 | |||||||||
6.250%, due 12/01/17 | 145,000 | 152,221 | |||||||||
Argos Merger Sub, Inc. 7.125%, due 03/15/237 | 280,000 | 292,950 | |||||||||
Citicorp Lease Pass-Through Trust 1999-1 8.040%, due 12/15/195 | 1,000,000 | 1,179,873 | |||||||||
Citigroup, Inc. 1.324%, due 04/27/183 | 5,800,000 | 5,796,613 | |||||||||
2.326%, due 05/15/183 | 300,000 | 305,748 | |||||||||
4.000%, due 08/05/24 | 1,500,000 | 1,567,983 | |||||||||
HSBC Finance Corp. 6.676%, due 01/15/2110 | 1,400,000 | 1,589,837 | |||||||||
Icahn Enterprises LP/Icahn Enterprises Finance Corp. 4.875%, due 03/15/19 | 85,000 | 84,363 | |||||||||
JPMorgan Chase & Co. 2.250%, due 01/23/20 | 3,900,000 | 3,977,793 | |||||||||
2.750%, due 06/23/20 | 1,400,000 | 1,448,796 | |||||||||
3.125%, due 01/23/25 | 1,700,000 | 1,747,309 | |||||||||
4.250%, due 10/15/20 | 2,800,000 | 3,047,254 | |||||||||
4.400%, due 07/22/2010 | 600,000 | 657,520 | |||||||||
5.300%, due 05/01/203,11 | 1,800,000 | 1,853,100 | |||||||||
6.000%, due 08/01/233,11 | 425,000 | 444,550 | |||||||||
Morgan Stanley 5.450%, due 07/15/193,11 | 1,500,000 | 1,473,750 | |||||||||
5.550%, due 07/15/203,11 | 980,000 | 992,250 | |||||||||
Morgan Stanley GMTN 2.097%, due 04/21/213 | 3,500,000 | 3,534,353 | |||||||||
2.450%, due 02/01/19 | 3,500,000 | 3,578,781 | |||||||||
4.350%, due 09/08/26 | 1,270,000 | 1,352,550 | |||||||||
7.300%, due 05/13/19 | 2,570,000 | 2,948,787 | |||||||||
The Nielsen Co. Luxembourg SARL 5.500%, due 10/01/217 | 125,000 | 130,000 | |||||||||
41,199,562 | |||||||||||
Food products—0.37% | |||||||||||
Albertsons Cos. LLC/Safeway, Inc./New Albertson's, Inc./Albertson's LLC 6.625%, due 06/15/247 | 80,000 | 85,000 | |||||||||
Aramark Services, Inc. 5.125%, due 01/15/24 | 125,000 | 129,062 | |||||||||
5.125%, due 01/15/247 | 55,000 | 56,788 | |||||||||
Grupo Bimbo SAB de CV 4.875%, due 06/27/447 | 675,000 | 688,682 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Food products—(concluded) | |||||||||||
Kraft Heinz Foods Co. 5.000%, due 07/15/357,10 | 1,800,000 | $ | 2,122,911 | ||||||||
Post Holdings, Inc. 6.000%, due 12/15/227 | 140,000 | 147,700 | |||||||||
7.750%, due 03/15/247 | 30,000 | 33,188 | |||||||||
8.000%, due 07/15/257 | 30,000 | 34,425 | |||||||||
3,297,756 | |||||||||||
Gaming—0.17% | |||||||||||
AMC Entertainment, Inc. 5.750%, due 06/15/25 | 15,000 | 15,000 | |||||||||
5.875%, due 02/15/22 | 50,000 | 50,875 | |||||||||
Boyd Gaming Corp. 6.375%, due 04/01/267 | 100,000 | 106,625 | |||||||||
Cedar Fair LP/Canada's Wonderland Co./Magnum Management Corp. 5.375%, due 06/01/24 | 60,000 | 62,400 | |||||||||
GLP Capital LP/GLP Financing II, Inc. 4.875%, due 11/01/20 | 160,000 | 169,219 | |||||||||
5.375%, due 11/01/23 | 220,000 | 235,950 | |||||||||
Isle of Capri Casinos, Inc. 5.875%, due 03/15/21 | 125,000 | 130,312 | |||||||||
MGM Growth Properties Operating Partnership LP/MGP Escrow Co-Issuer, Inc. 5.625%, due 05/01/247 | 40,000 | 42,840 | |||||||||
MGM Resorts International 6.625%, due 12/15/21 | 50,000 | 55,344 | |||||||||
7.625%, due 01/15/17 | 90,000 | 92,250 | |||||||||
8.625%, due 02/01/19 | 50,000 | 56,625 | |||||||||
Regal Entertainment Group 5.750%, due 03/15/22 | 165,000 | 171,600 | |||||||||
Scientific Games International, Inc. 7.000%, due 01/01/227 | 150,000 | 156,000 | |||||||||
Shingle Springs Tribal Gaming Authority 9.750%, due 09/01/217 | 55,000 | 60,638 | |||||||||
Six Flags Entertainment Corp. 5.250%, due 01/15/217 | 60,000 | 61,800 | |||||||||
1,467,478 | |||||||||||
Gas pipelines—0.30% | |||||||||||
Kinder Morgan, Inc. 3.050%, due 12/01/19 | 500,000 | 512,730 | |||||||||
5.000%, due 02/15/217,10 | 2,000,000 | 2,147,416 | |||||||||
2,660,146 | |||||||||||
Health care providers & services—0.09% | |||||||||||
Amsurg Corp. 5.625%, due 07/15/22 | 35,000 | 36,750 | |||||||||
Fresenius Medical Care US Finance II, Inc. 5.875%, due 01/31/227 | 115,000 | 129,662 | |||||||||
Fresenius Medical Care US Finance, Inc. 5.750%, due 02/15/217 | 110,000 | 123,750 | |||||||||
Fresenius US Finance II, Inc. 4.500%, due 01/15/237 | 125,000 | 132,031 | |||||||||
Hologic, Inc. 5.250%, due 07/15/227 | 65,000 | 68,900 |
73
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Health care providers & services—(concluded) | |||||||||||
IMS Health, Inc. 6.000%, due 11/01/207 | 45,000 | $ | 45,862 | ||||||||
LifePoint Health, Inc. 5.500%, due 12/01/21 | 115,000 | 120,703 | |||||||||
5.875%, due 12/01/23 | 35,000 | 36,925 | |||||||||
Mallinckrodt International Finance SA/Mallinckrodt CB LLC 5.500%, due 04/15/257 | 95,000 | 87,638 | |||||||||
782,221 | |||||||||||
Health facilities—0.06% | |||||||||||
CHS/Community Health Systems, Inc. 5.125%, due 08/01/21 | 65,000 | 64,675 | |||||||||
DaVita HealthCare Partners, Inc. 5.000%, due 05/01/25 | 175,000 | 176,969 | |||||||||
5.125%, due 07/15/24 | 40,000 | 41,292 | |||||||||
5.750%, due 08/15/22 | 85,000 | 89,781 | |||||||||
Universal Health Services, Inc. 4.750%, due 08/01/227 | 40,000 | 41,200 | |||||||||
5.000%, due 06/01/267 | 110,000 | 113,300 | |||||||||
527,217 | |||||||||||
Hotels, restaurants & leisure—0.49% | |||||||||||
Starbucks Corp. 2.700%, due 06/15/22 | 1,900,000 | 2,006,455 | |||||||||
4.300%, due 06/15/4510 | 1,900,000 | 2,302,152 | |||||||||
4,308,607 | |||||||||||
Insurance—1.03% | |||||||||||
American International Group, Inc. 3.375%, due 08/15/2010 | 1,500,000 | 1,578,869 | |||||||||
MetLife, Inc. 5.250%, due 06/15/203,11 | 2,735,000 | 2,737,188 | |||||||||
Progressive Corp. 6.700%, due 06/15/373 | 2,200,000 | 2,046,000 | |||||||||
Prudential Financial, Inc. 5.200%, due 03/15/443 | 1,000,000 | 1,012,500 | |||||||||
5.375%, due 05/15/453 | 715,000 | 742,706 | |||||||||
Voya Financial, Inc. 5.650%, due 05/15/533 | 1,000,000 | 965,000 | |||||||||
9,082,263 | |||||||||||
IT consulting & services—0.11% | |||||||||||
Hewlett Packard Enterprise Co. 4.900%, due 10/15/257 | 900,000 | 965,503 | |||||||||
Lodging—0.05% | |||||||||||
Hilton Worldwide Finance LLC/Hilton Worldwide Finance Corp. 5.625%, due 10/15/21 | 175,000 | 181,344 | |||||||||
NCL Corp. Ltd. 4.625%, due 11/15/207 | 195,000 | 196,950 | |||||||||
5.250%, due 11/15/197 | 25,000 | 25,562 | |||||||||
Royal Caribbean Cruises Ltd. 5.250%, due 11/15/22 | 60,000 | 64,500 | |||||||||
468,356 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Machinery—0.04% | |||||||||||
Case New Holland Industrial, Inc. 7.875%, due 12/01/17 | 115,000 | $ | 123,481 | ||||||||
Oshkosh Corp. 5.375%, due 03/01/22 | 15,000 | 15,619 | |||||||||
5.375%, due 03/01/25 | 15,000 | 15,525 | |||||||||
Sensata Technologies BV 4.875%, due 10/15/237 | 70,000 | 72,100 | |||||||||
Terex Corp. 6.500%, due 04/01/20 | 135,000 | 137,362 | |||||||||
Zebra Technologies Corp. 7.250%, due 10/15/22 | 25,000 | 26,688 | |||||||||
390,775 | |||||||||||
Media—1.65% | |||||||||||
Altice Luxembourg SA 7.750%, due 05/15/227 | 260,000 | 263,744 | |||||||||
Charter Communications Operating LLC/Charter Communications Operating Capital 4.464%, due 07/23/227 | 3,400,000 | 3,692,618 | |||||||||
4.908%, due 07/23/257 | 885,000 | 977,507 | |||||||||
6.484%, due 10/23/457 | 845,000 | 1,014,477 | |||||||||
Clear Channel Worldwide Holdings, Inc. 6.500%, due 11/15/22 | 205,000 | 212,175 | |||||||||
CSC Holdings LLC 7.625%, due 07/15/18 | 50,000 | 54,125 | |||||||||
DISH DBS Corp. 5.000%, due 03/15/23 | 65,000 | 61,262 | |||||||||
5.875%, due 11/15/24 | 110,000 | 106,150 | |||||||||
7.875%, due 09/01/19 | 105,000 | 116,025 | |||||||||
Lamar Media Corp. 5.750%, due 02/01/267 | 10,000 | 10,725 | |||||||||
Liberty Interactive LLC 8.500%, due 07/15/29 | 25,000 | 27,500 | |||||||||
Netflix, Inc. 5.500%, due 02/15/22 | 85,000 | 90,312 | |||||||||
Nielsen Finance LLC/Nielsen Finance Co. 5.000%, due 04/15/227 | 125,000 | 128,906 | |||||||||
Sirius XM Radio, Inc. 4.250%, due 05/15/207 | 65,000 | 66,300 | |||||||||
5.250%, due 08/15/227 | 80,000 | 84,000 | |||||||||
5.375%, due 07/15/267 | 120,000 | 122,326 | |||||||||
TEGNA, Inc. 5.125%, due 10/15/19 | 140,000 | 144,725 | |||||||||
Time Warner Cable, Inc. 5.850%, due 05/01/17 | 200,000 | 206,243 | |||||||||
6.750%, due 07/01/18 | 1,700,000 | 1,864,094 | |||||||||
6.750%, due 06/15/39 | 700,000 | 867,838 | |||||||||
7.300%, due 07/01/38 | 2,000,000 | 2,620,072 | |||||||||
Univision Communications, Inc. 5.125%, due 05/15/237 | 215,000 | 220,912 | |||||||||
UPCB Finance IV Ltd. 5.375%, due 01/15/257 | 200,000 | 201,516 | |||||||||
Viacom, Inc. 3.875%, due 04/01/24 | 875,000 | 898,901 | |||||||||
5.250%, due 04/01/44 | 480,000 | 478,748 | |||||||||
14,531,201 |
74
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Media-cable—0.18% | |||||||||||
Time Warner Entertainment Co. LP 8.375%, due 03/15/23 | 1,200,000 | $ | 1,572,238 | ||||||||
Medical providers—0.52% | |||||||||||
HCA, Inc. 5.000%, due 03/15/24 | 190,000 | 199,500 | |||||||||
5.250%, due 06/15/26 | 90,000 | 95,400 | |||||||||
5.875%, due 03/15/22 | 200,000 | 220,000 | |||||||||
6.500%, due 02/15/20 | 3,129,000 | 3,445,811 | |||||||||
7.500%, due 02/15/22 | 105,000 | 119,175 | |||||||||
Tenet Healthcare Corp. 4.375%, due 10/01/21 | 95,000 | 94,763 | |||||||||
4.750%, due 06/01/20 | 120,000 | 121,950 | |||||||||
6.000%, due 10/01/20 | 240,000 | 253,800 | |||||||||
4,550,399 | |||||||||||
Metals & mining—0.23% | |||||||||||
Alcoa, Inc. 5.870%, due 02/23/22 | 100,000 | 107,750 | |||||||||
Anglo American Capital PLC 4.450%, due 09/27/207 | 100,000 | 99,250 | |||||||||
FMG Resources August 2006 Pty Ltd. 9.750%, due 03/01/227 | 115,000 | 128,800 | |||||||||
Freeport-McMoRan, Inc. 3.550%, due 03/01/22 | 45,000 | 38,475 | |||||||||
3.875%, due 03/15/23 | 85,000 | 73,104 | |||||||||
4.000%, due 11/14/21 | 25,000 | 22,313 | |||||||||
4.550%, due 11/14/24 | 50,000 | 42,875 | |||||||||
5.400%, due 11/14/34 | 110,000 | 85,250 | |||||||||
Glencore Funding LLC 2.875%, due 04/16/207 | 475,000 | 461,781 | |||||||||
4.000%, due 04/16/257 | 900,000 | 842,954 | |||||||||
Teck Resources Ltd. 4.750%, due 01/15/22 | 35,000 | 31,194 | |||||||||
6.250%, due 07/15/41 | 95,000 | 73,150 | |||||||||
2,006,896 | |||||||||||
Oil & gas—1.63% | |||||||||||
BP Capital Markets PLC 3.506%, due 03/17/2510 | 2,800,000 | 2,954,420 | |||||||||
Concho Resources, Inc. 5.500%, due 04/01/23 | 130,000 | 128,375 | |||||||||
Continental Resources, Inc. 3.800%, due 06/01/24 | 140,000 | 119,700 | |||||||||
4.500%, due 04/15/23 | 45,000 | 40,725 | |||||||||
4.900%, due 06/01/44 | 40,000 | 31,900 | |||||||||
Crestwood Midstream Partners LP/ Crestwood Midstream Finance Corp. 6.000%, due 12/15/20 | 25,000 | 23,750 | |||||||||
6.250%, due 04/01/23 | 175,000 | 164,062 | |||||||||
Ecopetrol SA 5.375%, due 06/26/2610 | 2,100,000 | 2,073,120 | |||||||||
Encana Corp. 3.900%, due 11/15/21 | 30,000 | 29,727 | |||||||||
6.500%, due 08/15/34 | 80,000 | 83,494 | |||||||||
6.500%, due 02/01/38 | 50,000 | 50,509 | |||||||||
6.625%, due 08/15/37 | 45,000 | 45,940 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Oil & gas—(concluded) | |||||||||||
Energy Transfer Equity LP 7.500%, due 10/15/20 | 155,000 | $ | 167,012 | ||||||||
Ferrellgas LP/Ferrellgas Finance Corp. 6.750%, due 01/15/22 | 70,000 | 63,350 | |||||||||
6.750%, due 06/15/239 | 40,000 | 35,100 | |||||||||
KazMunayGas National Co. JSC 7.000%, due 05/05/206 | 250,000 | 272,500 | |||||||||
Kinder Morgan Energy Partners LP 5.000%, due 10/01/21 | 1,800,000 | 1,938,100 | |||||||||
6.500%, due 09/01/39 | 1,500,000 | 1,631,568 | |||||||||
6.850%, due 02/15/20 | 1,000,000 | 1,127,905 | |||||||||
Laredo Petroleum, Inc. 5.625%, due 01/15/22 | 70,000 | 63,350 | |||||||||
6.250%, due 03/15/23 | 55,000 | 50,050 | |||||||||
Marathon Oil Corp. 3.850%, due 06/01/25 | 705,000 | 639,976 | |||||||||
Newfield Exploration Co. 5.375%, due 01/01/26 | 30,000 | 28,650 | |||||||||
5.625%, due 07/01/24 | 25,000 | 24,688 | |||||||||
5.750%, due 01/30/22 | 40,000 | 39,800 | |||||||||
Petrobras Global Finance BV 4.375%, due 05/20/2310 | 100,000 | 85,750 | |||||||||
5.750%, due 01/20/20 | 400,000 | 399,240 | |||||||||
6.750%, due 01/27/41 | 500,000 | 410,000 | |||||||||
6.875%, due 01/20/40 | 700,000 | 575,050 | |||||||||
8.375%, due 05/23/21 | 200,000 | 211,450 | |||||||||
Petroleos Mexicanos 6.875%, due 08/04/267 | 28,000 | 31,430 | |||||||||
Precision Drilling Corp. 5.250%, due 11/15/24 | 75,000 | 62,250 | |||||||||
6.500%, due 12/15/21 | 25,000 | 22,750 | |||||||||
6.625%, due 11/15/20 | 35,000 | 32,371 | |||||||||
Range Resources Corp. 4.875%, due 05/15/25 | 15,000 | 14,250 | |||||||||
5.000%, due 08/15/22 | 40,000 | 36,700 | |||||||||
5.000%, due 03/15/23 | 285,000 | 259,350 | |||||||||
5.750%, due 06/01/21 | 50,000 | 48,500 | |||||||||
SM Energy Co. 5.000%, due 01/15/24 | 155,000 | 124,000 | |||||||||
6.125%, due 11/15/22 | 20,000 | 16,950 | |||||||||
6.500%, due 11/15/21 | 25,000 | 21,938 | |||||||||
6.500%, due 01/01/23 | 55,000 | 46,750 | |||||||||
Targa Resources Partners LP/ Targa Resources Partners Finance Corp. 4.250%, due 11/15/23 | 165,000 | 153,450 | |||||||||
14,379,950 | |||||||||||
Packaging & containers—0.16% | |||||||||||
Ball Corp. 4.375%, due 12/15/20 | 65,000 | 69,388 | |||||||||
5.000%, due 03/15/22 | 120,000 | 128,400 | |||||||||
Berry Plastics Corp. 5.125%, due 07/15/23 | 65,000 | 67,194 | |||||||||
5.500%, due 05/15/22 | 210,000 | 219,712 | |||||||||
Owens-Brockway Glass Container, Inc. 5.375%, due 01/15/257 | 60,000 | 62,325 |
75
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Packaging & containers—(concluded) | |||||||||||
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC 4.127%, due 07/15/213,7 | 135,000 | $ | 136,013 | ||||||||
5.125%, due 07/15/237 | 70,000 | 72,188 | |||||||||
5.750%, due 10/15/20 | 355,000 | 366,537 | |||||||||
6.875%, due 02/15/219 | 150,000 | 155,992 | |||||||||
Sealed Air Corp. 5.500%, due 09/15/257 | 140,000 | 149,625 | |||||||||
1,427,374 | |||||||||||
Personal & household products—0.02% | |||||||||||
Edgewell Personal Care Co. 4.700%, due 05/19/21 | 25,000 | 26,604 | |||||||||
4.700%, due 05/24/22 | 140,000 | 146,563 | |||||||||
173,167 | |||||||||||
Pharmaceuticals—1.58% | |||||||||||
AbbVie, Inc. 3.200%, due 05/14/26 | 3,500,000 | 3,591,157 | |||||||||
4.450%, due 05/14/46 | 1,085,000 | 1,155,014 | |||||||||
Actavis Funding SCS 3.450%, due 03/15/2210 | 4,000,000 | 4,209,084 | |||||||||
3.800%, due 03/15/25 | 1,700,000 | 1,807,229 | |||||||||
Endo Finance LLC/Endo Finco, Inc. 5.875%, due 01/15/237,9 | 295,000 | 255,912 | |||||||||
Mylan NV 3.150%, due 06/15/217 | 845,000 | 871,885 | |||||||||
3.950%, due 06/15/267 | 875,000 | 917,268 | |||||||||
Valeant Pharmaceuticals International 6.375%, due 10/15/207 | 100,000 | 90,250 | |||||||||
Valeant Pharmaceuticals International, Inc. 4.500%, due 05/15/236 | EUR | 500,000 | 439,095 | ||||||||
5.625%, due 12/01/217 | 135,000 | 115,256 | |||||||||
5.875%, due 05/15/237 | 410,000 | 341,325 | |||||||||
6.125%, due 04/15/257 | 175,000 | 145,250 | |||||||||
13,938,725 | |||||||||||
Pipelines—2.35% | |||||||||||
DCP Midstream LLC 4.750%, due 09/30/217 | 30,000 | 28,725 | |||||||||
5.350%, due 03/15/207 | 25,000 | 25,125 | |||||||||
8.125%, due 08/16/30 | 15,000 | 15,188 | |||||||||
DCP Midstream Operating LP 2.500%, due 12/01/17 | 40,000 | 39,576 | |||||||||
5.600%, due 04/01/44 | 35,000 | 31,850 | |||||||||
Energy Transfer Partners LP 6.125%, due 12/15/4510 | 1,100,000 | 1,148,188 | |||||||||
6.500%, due 02/01/42 | 1,000,000 | 1,058,305 | |||||||||
MPLX LP 4.500%, due 07/15/237 | 180,000 | 176,447 | |||||||||
4.875%, due 06/01/257 | 3,800,000 | 3,797,853 | |||||||||
Plains All American Pipeline LP/PAA Finance Corp. 3.650%, due 06/01/22 | 2,100,000 | 2,064,712 | |||||||||
Regency Energy Partners LP/Regency Energy Finance Corp. 5.500%, due 04/15/23 | 135,000 | 139,941 | |||||||||
5.750%, due 09/01/20 | 1,000,000 | 1,079,230 | |||||||||
5.875%, due 03/01/22 | 75,000 | 81,839 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Pipelines—(concluded) | |||||||||||
Rockies Express Pipeline LLC 5.625%, due 04/15/207 | 110,000 | $ | 113,300 | ||||||||
7.500%, due 07/15/387 | 130,000 | 128,700 | |||||||||
Rose Rock Midstream LP/Rose Rock Finance Corp. 5.625%, due 11/15/23 | 105,000 | 93,712 | |||||||||
Sabine Pass Liquefaction LLC 5.625%, due 02/01/219 | 100,000 | 103,250 | |||||||||
5.625%, due 03/01/25 | 250,000 | 255,235 | |||||||||
5.750%, due 05/15/24 | 7,425,000 | 7,610,625 | |||||||||
5.875%, due 06/30/267 | 65,000 | 66,706 | |||||||||
Southern Gas Corridor CJSC 6.875%, due 03/24/266 | 200,000 | 217,750 | |||||||||
Tesoro Logistics LP/Tesoro Logistics Finance Corp. 5.500%, due 10/15/19 | 25,000 | 26,562 | |||||||||
6.250%, due 10/15/22 | 45,000 | 46,800 | |||||||||
6.375%, due 05/01/24 | 25,000 | 26,360 | |||||||||
The Williams Cos., Inc. 3.700%, due 01/15/23 | 10,000 | 9,125 | |||||||||
5.750%, due 06/24/44 | 160,000 | 146,800 | |||||||||
The Williams Cos., Inc., Series A 7.500%, due 01/15/31 | 30,000 | 32,250 | |||||||||
Transcanada Trust 5.625%, due 05/20/753 | 1,055,000 | 1,020,712 | |||||||||
Williams Partners LP 3.600%, due 03/15/22 | 1,100,000 | 1,071,353 | |||||||||
6.125%, due 07/15/22 | 80,000 | 81,837 | |||||||||
20,738,056 | |||||||||||
Real estate—0.57% | |||||||||||
EPR Properties 5.750%, due 08/15/22 | 1,500,000 | 1,658,170 | |||||||||
Equinix, Inc. 5.875%, due 01/15/26 | 70,000 | 75,425 | |||||||||
ESH Hospitality, Inc. 5.250%, due 05/01/257 | 145,000 | 144,638 | |||||||||
MPT Operating Partnership LP/MPT Finance Corp. 5.250%, due 08/01/26 | 35,000 | 36,794 | |||||||||
5.500%, due 05/01/24 | 150,000 | 155,250 | |||||||||
6.375%, due 02/15/22 | 25,000 | 26,250 | |||||||||
6.375%, due 03/01/24 | 40,000 | 43,600 | |||||||||
6.875%, due 05/01/21 | 50,000 | 51,765 | |||||||||
Omega Healthcare Investors, Inc. 4.500%, due 01/15/25 | 1,250,000 | 1,263,232 | |||||||||
5.875%, due 03/15/24 | 35,000 | 36,702 | |||||||||
Realogy Group LLC/Realogy Co-Issuer Corp. 4.875%, due 06/01/237 | 90,000 | 91,350 | |||||||||
Sabra Health Care LP/Sabra Capital Corp. 5.500%, due 02/01/21 | 220,000 | 229,350 | |||||||||
Vesteda Finance BV MTN 2.500%, due 10/27/226 | EUR | 1,000,000 | 1,238,664 | ||||||||
5,051,190 | |||||||||||
Rental auto/equipment—0.01% | |||||||||||
United Rentals North America, Inc. 5.750%, due 11/15/24 | 55,000 | 57,062 | |||||||||
7.375%, due 05/15/20 | 32,000 | 33,245 | |||||||||
90,307 |
76
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Retail—0.08% | |||||||||||
1011778 BC ULC/New Red Finance, Inc. 4.625%, due 01/15/227 | 35,000 | $ | 36,050 | ||||||||
Dollar Tree, Inc. 5.250%, due 03/01/20 | 90,000 | 93,600 | |||||||||
5.750%, due 03/01/23 | 95,000 | 102,363 | |||||||||
KFC Holding Co./Pizza Hut Holdings LLC/ Taco Bell of America LLC 5.250%, due 06/01/267 | 60,000 | 63,487 | |||||||||
L Brands, Inc. 5.625%, due 10/15/23 | 190,000 | 210,387 | |||||||||
QVC, Inc. 5.125%, due 07/02/22 | 70,000 | 75,410 | |||||||||
5.450%, due 08/15/34 | 50,000 | 47,652 | |||||||||
Suburban Propane Partners LP/Suburban Energy Finance Corp. 7.375%, due 08/01/21 | 75,000 | 78,000 | |||||||||
706,949 | |||||||||||
Retail-specialty—0.01% | |||||||||||
Sally Holdings LLC/Sally Capital, Inc. 5.750%, due 06/01/22 | 110,000 | 114,675 | |||||||||
Software—0.06% | |||||||||||
MSCI, Inc. 5.250%, due 11/15/247 | 130,000 | 137,800 | |||||||||
5.750%, due 08/15/257 | 100,000 | 108,920 | |||||||||
Nuance Communications, Inc. 5.375%, due 08/15/207 | 100,000 | 102,500 | |||||||||
6.000%, due 07/01/247 | 105,000 | 108,675 | |||||||||
Open Text Corp. 5.875%, due 06/01/267 | 95,000 | 98,742 | |||||||||
556,637 | |||||||||||
Special purpose entity—1.57% | |||||||||||
CC Holdings GS V LLC/Crown Castle GS III Corp. 3.849%, due 04/15/23 | 3,200,000 | 3,459,082 | |||||||||
CVS Pass-Through Trust 4.704%, due 01/10/367 | 3,344,730 | 3,614,065 | |||||||||
Daimler Finance North America LLC 1.347%, due 08/03/173,7 | 3,800,000 | 3,807,752 | |||||||||
2.000%, due 08/03/187 | 2,900,000 | 2,935,647 | |||||||||
13,816,546 | |||||||||||
Steel producers/products—0.03% | |||||||||||
ArcelorMittal 8.000%, due 10/15/399 | 245,000 | 259,700 | |||||||||
Telecom-integrated/services—0.06% | |||||||||||
Frontier Communications Corp. 6.250%, due 09/15/21 | 15,000 | 14,588 | |||||||||
7.125%, due 01/15/23 | 225,000 | 208,687 | |||||||||
7.625%, due 04/15/24 | 120,000 | 110,700 | |||||||||
9.000%, due 08/15/31 | 10,000 | 9,375 | |||||||||
9.250%, due 07/01/21 | 50,000 | 54,412 | |||||||||
11.000%, due 09/15/25 | 115,000 | 122,906 |
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Telecom-integrated/services—(concluded) | |||||||||||
Hughes Satellite Systems Corp. 6.500%, due 06/15/19 | 45,000 | $ | 48,881 | ||||||||
569,549 | |||||||||||
Telecommunication services—0.09% | |||||||||||
Altice US Finance I Corp. 5.500%, due 05/15/267 | 200,000 | 207,000 | |||||||||
CommScope Technologies Finance LLC 6.000%, due 06/15/257 | 30,000 | 31,650 | |||||||||
CommScope, Inc. 5.000%, due 06/15/217 | 85,000 | 88,081 | |||||||||
Sprint Capital Corp. 6.900%, due 05/01/19 | 320,000 | 316,400 | |||||||||
8.750%, due 03/15/32 | 125,000 | 117,500 | |||||||||
760,631 | |||||||||||
Telecommunications—0.88% | |||||||||||
Embarq Corp. 7.995%, due 06/01/36 | 90,000 | 93,713 | |||||||||
Qwest Corp. 6.750%, due 12/01/21 | 800,000 | 878,000 | |||||||||
6.875%, due 09/15/33 | 105,000 | 104,914 | |||||||||
SBA Telecommunications, Inc. 5.750%, due 07/15/20 | 45,000 | 46,350 | |||||||||
SFR Group SA 6.000%, due 05/15/227 | 200,000 | 195,500 | |||||||||
7.375%, due 05/01/267 | 3,500,000 | 3,495,625 | |||||||||
Telecom Italia Capital SA 7.175%, due 06/18/19 | 65,000 | 73,450 | |||||||||
Verizon Communications, Inc. 4.600%, due 04/01/21 | 1,000,000 | 1,129,380 | |||||||||
6.550%, due 09/15/43 | 1,000,000 | 1,361,530 | |||||||||
Virgin Media Secured Finance PLC 5.375%, due 04/15/217 | 202,500 | 210,600 | |||||||||
Wind Acquisition Finance SA 4.750%, due 07/15/207 | 215,000 | 214,060 | |||||||||
7,803,122 | |||||||||||
Telephone-integrated—0.04% | |||||||||||
Level 3 Financing, Inc. 5.375%, due 08/15/22 | 155,000 | 162,750 | |||||||||
6.125%, due 01/15/21 | 205,000 | 213,456 | |||||||||
376,206 | |||||||||||
Tobacco—0.94% | |||||||||||
Imperial Brands Finance PLC 3.500%, due 02/11/237 | 3,755,000 | 3,925,207 | |||||||||
Reynolds American, Inc. 4.450%, due 06/12/25 | 1,400,000 | 1,580,618 | |||||||||
5.850%, due 08/15/45 | 2,100,000 | 2,774,140 | |||||||||
8,279,965 | |||||||||||
Transportation services—0.02% | |||||||||||
Transnet SOC Ltd. 4.000%, due 07/26/226 | 200,000 | 195,000 |
77
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Utilities—0.47% | |||||||||||
Dominion Resources, Inc. 5.750%, due 10/01/543 | 1,000,000 | $ | 1,027,500 | ||||||||
HD Supply, Inc. 5.250%, due 12/15/217 | 120,000 | 127,050 | |||||||||
5.750%, due 04/15/247 | 40,000 | 42,594 | |||||||||
IPALCO Enterprises, Inc. 3.450%, due 07/15/20 | 2,800,000 | 2,877,000 | |||||||||
5.000%, due 05/01/18 | 40,000 | 42,000 | |||||||||
4,116,144 | |||||||||||
Wireless telecommunication services—0.05% | |||||||||||
CenturyLink, Inc. 5.625%, due 04/01/20 | 70,000 | 74,025 | |||||||||
5.800%, due 03/15/22 | 25,000 | 25,563 | |||||||||
Sprint Corp. 7.125%, due 06/15/24 | 115,000 | 102,350 | |||||||||
7.250%, due 09/15/21 | 150,000 | 139,969 | |||||||||
Windstream Services LLC 7.750%, due 10/01/21 | 60,000 | 57,000 | |||||||||
398,907 | |||||||||||
Wireless telecommunications—0.50% | |||||||||||
AT&T, Inc. 3.800%, due 03/15/22 | 1,500,000 | 1,617,870 | |||||||||
4.750%, due 05/15/46 | 995,000 | 1,054,482 | |||||||||
5.350%, due 09/01/40 | 1,155,000 | 1,312,178 | |||||||||
T-Mobile USA, Inc. 5.250%, due 09/01/18 | 50,000 | 51,000 | |||||||||
6.000%, due 03/01/23 | 65,000 | 68,721 | |||||||||
6.125%, due 01/15/22 | 90,000 | 94,781 | |||||||||
6.542%, due 04/28/20 | 55,000 | 56,788 | |||||||||
6.633%, due 04/28/21 | 80,000 | 84,100 | |||||||||
6.731%, due 04/28/22 | 85,000 | 89,037 | |||||||||
4,428,957 | |||||||||||
Total corporate notes (cost—$379,487,808) | 389,878,375 | ||||||||||
Loan assignments—0.79% | |||||||||||
Broadcast—0.27% | |||||||||||
Avago Technologies Cayman Ltd. Term Loan B1 3.500%, due 02/01/23 | 2,337,340 | 2,336,966 | |||||||||
Lodging—0.52% | |||||||||||
Hilton Worldwide Finance LLC Term Loan B2 2.500%, due 10/26/20 | 4,595,614 | 4,606,230 | |||||||||
Total loan assignments (cost—$6,879,438) | 6,943,196 | ||||||||||
Non-US government obligations—2.74% | |||||||||||
Bermuda Government International Bond 4.854%, due 02/06/246 | 200,000 | 218,500 | |||||||||
Brazilian Government International Bond 4.875%, due 01/22/21 | 220,000 | 233,530 | |||||||||
8.250%, due 01/20/34 | 100,000 | 125,750 |
Face Amount1 | Value | ||||||||||
Non-US government obligations—(continued) | |||||||||||
Colombia Government International Bond 8.125%, due 05/21/24 | 100,000 | $ | 130,000 | ||||||||
6.125%, due 01/18/41 | 100,000 | 114,750 | |||||||||
Croatia Government International Bond 6.750%, due 11/05/196 | 200,000 | 219,250 | |||||||||
6.625%, due 07/14/206 | 100,000 | 110,250 | |||||||||
Dominican Republic International Bond 6.600%, due 01/28/247 | 100,000 | 109,500 | |||||||||
6.600%, due 01/28/246 | 100,000 | 109,500 | |||||||||
Ecuador Government International Bond 7.950%, due 06/20/246 | 200,000 | 176,250 | |||||||||
El Salvador Government International Bond 6.375%, due 01/18/276 | 114,000 | 114,855 | |||||||||
Hungary Government International Bond 7.625%, due 03/29/41 | 150,000 | 221,598 | |||||||||
Indonesia Government International Bond 4.125%, due 01/15/256 | 200,000 | 212,000 | |||||||||
7.750%, due 01/17/386 | 100,000 | 143,875 | |||||||||
Ivory Coast Government International Bond 5.750%, due 12/31/326,9 | 237,600 | 228,096 | |||||||||
Japan Finance Organization for Municipalities 2.125%, due 04/13/217 | 2,000,000 | 2,040,052 | |||||||||
Mexican Bonos, Series M 8.000%, due 06/11/20 | MXN | 1,700,000 | 98,289 | ||||||||
7.750%, due 11/13/42 | MXN | 46,025,000 | 2,879,697 | ||||||||
Mexico Government International Bond 5.550%, due 01/21/45 | 260,000 | 312,000 | |||||||||
Mongolia Government International Bond 5.125%, due 12/05/226 | 200,000 | 180,427 | |||||||||
Morocco Government International Bond 4.250%, due 12/11/226 | 200,000 | 214,750 | |||||||||
New Zealand Government Bond 2.519%, due 09/20/356 | NZD | 900,000 | 752,618 | ||||||||
Panama Government International Bond 6.700%, due 01/26/36 | 50,000 | 67,688 | |||||||||
Poland Government International Bond 3.250%, due 04/06/26 | 200,000 | 210,356 | |||||||||
Romanian Government International Bond 4.875%, due 01/22/246 | 50,000 | 56,063 | |||||||||
Russian Foreign Bond 5.000%, due 04/29/206 | 200,000 | 213,000 | |||||||||
Senegal Government International Bond 6.250%, due 07/30/246 | 200,000 | 196,000 | |||||||||
Serbia International Bond 4.875%, due 02/25/206 | 200,000 | 207,682 | |||||||||
Slovenia Government International Bond 5.500%, due 10/26/226 | 3,400,000 | 3,875,101 | |||||||||
5.850%, due 05/10/236 | 4,100,000 | 4,797,000 | |||||||||
5.250%, due 02/18/246 | 200,000 | 228,274 | |||||||||
South Africa Government Bond 6.500%, due 02/28/41 | ZAR | 46,500,000 | 2,459,789 | ||||||||
Spain Government Bond 2.900%, due 10/31/466 | EUR | 1,710,000 | 2,258,004 | ||||||||
Sri Lanka Government International Bond 6.250%, due 10/04/206 | 100,000 | 105,750 | |||||||||
6.250%, due 07/27/216 | 200,000 | 210,750 |
78
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Non-US government obligations—(concluded) | |||||||||||
Turkey Government International Bond 5.125%, due 03/25/22 | 250,000 | $ | 260,312 | ||||||||
7.375%, due 02/05/25 | 90,000 | 107,100 | |||||||||
Total non-US government obligations (cost—$24,588,211) | 24,198,406 | ||||||||||
Municipal bonds and notes—1.67% | |||||||||||
Education—0.10% | |||||||||||
New York City Transitional Finance Authority Building Aid Revenue Fiscal 2008, Series S-1 5.000%, due 01/15/25 | 100,000 | 106,359 | |||||||||
Will County Community High School District No. 210 Lincoln-Way (Capital Appreciation) (AGM Insured) 0.000%, due 01/01/2114 | 780,000 | 743,722 | |||||||||
850,081 | |||||||||||
General obligation—0.19% | |||||||||||
California State (Build America Bonds) 7.500%, due 04/01/34 | 1,100,000 | 1,720,730 | |||||||||
Media & Photography—0.43% | |||||||||||
City of Chicago, Series B 7.375%, due 01/01/33 | 2,200,000 | 2,352,482 | |||||||||
State of Illinois 5.877%, due 03/01/19 | 1,335,000 | 1,453,975 | |||||||||
3,806,457 | |||||||||||
Transportation—0.72% | |||||||||||
Bay Area Toll Authority Toll Bridge Revenue (Build America Bonds) 6.263%, due 04/01/49 | 1,200,000 | 1,871,748 | |||||||||
Harris County Metropolitan Transportation Authority (Build America Bonds), Series C 6.875%, due 11/01/38 | 3,100,000 | 3,616,522 | |||||||||
Port Authority of New York & New Jersey Consolidated (One Hundred Fifty-Eight) 5.859%, due 12/01/24 | 700,000 | 898,590 | |||||||||
6,386,860 | |||||||||||
Utilities—0.23% | |||||||||||
Cincinnati Water System Revenue (Build America Bonds), Series B 6.458%, due 12/01/34 | 100,000 | 116,784 | |||||||||
Metropolitan Water District Southern California (Build America Bonds) 5.906%, due 07/01/25 | 1,700,000 | 1,908,148 | |||||||||
2,024,932 | |||||||||||
Total municipal bonds and notes (cost—$12,276,621) | 14,789,060 |
Face Amount1 | Value | ||||||||||
Repurchase agreement—0.61% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $434,161 US Treasury Bond, 7.875% due 02/15/21 and $4,780,178 US Treasury Notes, 0.750% to 2.250%, due 12/31/17 to 07/31/21; (value—$5,489,737); proceeds: $5,382,004 (cost—$5,382,000) | 5,382,000 | $ | 5,382,000 | ||||||||
Notional amount | |||||||||||
Options purchased—0.05% | |||||||||||
Call swaptions purchased5—0.04% | |||||||||||
3 Month USD LIBOR Interest Rate Swap, strike @ 1.000%, expires 12/13/16 (Counterparty: MSCI; pay floating rate); underlying swap terminates 12/15/21 | USD | 7,500,000 | 43,605 | ||||||||
3 Month USD LIBOR Interest Rate Swap, strike @ 1.000%, expires 12/21/16 (Counterparty: CITI; pay floating rate); underlying swap terminates 12/23/21 | USD | 7,600,000 | 45,881 | ||||||||
3 Month USD LIBOR Interest Rate Swap, strike @ 1.000%, expires 12/21/16 (Counterparty: MSCI; pay floating rate); underlying swap terminates 12/23/21 | USD | 11,200,000 | 67,614 | ||||||||
3 Month USD LIBOR Interest Rate Swap, strike @ 2.100%, expires 01/30/18 (Counterparty: JPMCB; pay floating rate); underlying swap terminates 02/01/20 | USD | 7,900,000 | 169,574 | ||||||||
Total call swaptions purchased | 326,674 | ||||||||||
Put swaptions purchased5—0.01% | |||||||||||
3 Month USD LIBOR Interest Rate Swap, strike @ 2.905%, expires 08/20/18 (Counterparty: MSCI; pay floating rate); underlying swap terminates 08/22/48 | USD | 3,600,000 | 73,733 | ||||||||
3 Month USD LIBOR Interest Rate Swap, strike @ 2.940%, expires 08/20/18 (Counterparty: GSB; pay floating rate); underlying swap terminates 08/22/48 | USD | 1,200,000 | 23,197 | ||||||||
Total put swaptions purchased | 96,930 | ||||||||||
Total options purchased (cost—$809,314) | 423,604 | ||||||||||
Number of shares | |||||||||||
Investment of cash collateral from securities loaned—2.01% | |||||||||||
Money market fund—2.01% | |||||||||||
State Street Institutional U.S. Government Money Market Fund (cost—$17,724,928) | 17,724,928 | 17,724,928 | |||||||||
Total investments (cost—$1,045,074,453)—122.69% | 1,082,721,782 | ||||||||||
Liabilities in excess of other assets—(22.69)% | (200,239,663 | ) | |||||||||
Net assets—100.00% | $ | 882,482,119 |
79
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
For a listing of defined portfolio acronyms, counterparty acronyms and currency type abbreviation that are used throughout the Schedule of investments as well as the tables that follow, please refer to page 262.
Aggregate cost for federal income tax purposes was $1,058,317,201; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 37,091,356 | |||||
Gross unrealized depreciation | (12,686,775 | ) | |||||
Net unrealized appreciation | $ | 24,404,581 |
Written options
Number of contracts | Call options written | Expiration date | Premiums received | Current value | Unrealized depreciation | ||||||||||||||||||
290 | US Treasury Note 10 Year Futures, strike @ $133.50 | 08/26/16 | $ | 100,791 | $ | (135,937 | ) | $ | (35,146 | ) |
Written options activity for the year ended July 31, 2016 was as follows:
Number of Contracts | Premiums received | ||||||||||
Options outstanding at July 31, 2015 | 90 | $ | 32,587 | ||||||||
Options written | 2,949 | 934,382 | |||||||||
Options exercised | (868 | ) | (314,430 | ) | |||||||
Options terminated in closing purchase transactions | (1,789 | ) | (517,612 | ) | |||||||
Options expired prior to exercise | (92 | ) | (34,136 | ) | |||||||
Options outstanding at July 31, 2016 | 290 | $ | 100,791 |
Written swaptions and foreign exchange written options5
Notional amount (000) | Call swaptions written | Counterparty | Pay/ receive floating rate | Expiration date | Premiums received | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||||
USD | 15,000 | 3 Month USD LIBOR Interest Rate Swap strike @ 0.765%, terminating 12/15/21 | MSCI | Receive | 12/13/16 | $ | 63,938 | $ | (36,345 | ) | $ | 27,593 | |||||||||||||||||||
USD | 15,200 | 3 Month USD LIBOR Interest Rate Swap strike @ 0.770%, terminating 12/23/21 | CITI | Receive | 12/21/16 | 63,145 | (40,326 | ) | 22,819 | ||||||||||||||||||||||
USD | 22,400 | 3 Month USD LIBOR Interest Rate Swap strike @ 0.770%, terminating 12/23/21 | MSCI | Receive | 12/21/16 | 98,802 | (59,427 | ) | 39,375 | ||||||||||||||||||||||
USD | 7,900 | 3 Month USD LIBOR Interest Rate Swap strike @ 1.100%, terminating 02/01/20 | JPMCB | Receive | 01/30/18 | 41,080 | (53,285 | ) | (12,205 | ) | |||||||||||||||||||||
USD | 7,900 | 3 Month USD LIBOR Interest Rate Swap strike @ 1.600%, terminating 02/01/20 | JPMCB | Receive | 01/30/18 | 71,495 | (104,240 | ) | (32,745 | ) | |||||||||||||||||||||
$ | 338,460 | $ | (293,623 | ) | $ | 44,837 |
80
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Written swaptions and foreign exchange written options5—(concluded)
Notional amount (000) | Call options written | Counterparty | Expiration date | Premiums received | Current value | Unrealized appreciation (depreciation) | |||||||||||||||||||||
AUD | 4,300 | AUD Call/USD Put, strike @ USD 0.76 | GSI | 09/02/16 | $ | 15,728 | $ | (15,728 | ) | $ | — | ||||||||||||||||
AUD | 1,600 | AUD Call/USD Put, strike @ USD 0.77 | WBC | 08/16/16 | 6,560 | (4,766 | ) | 1,794 | |||||||||||||||||||
GBP | 1,600 | GBP Call/USD Put, strike @ USD 1.35 | GSI | 09/08/16 | 11,757 | (14,302 | ) | (2,545 | ) | ||||||||||||||||||
GBP | 1,000 | GBP Call/USD Put, strike @ USD 1.38 | BOA | 08/09/16 | 8,974 | (470 | ) | 8,504 | |||||||||||||||||||
USD | 2,000 | USD Call/BRL Put, strike @ BRL 6.30 | CSI | 01/11/18 | 106,500 | (17,584 | ) | 88,916 | |||||||||||||||||||
USD | 2,700 | USD Call/JPY Put, strike @ JPY 109.00 | BOA | 08/25/16 | 19,251 | (726 | ) | 18,525 | |||||||||||||||||||
USD | 1,800 | USD Call/KRW Put, strike @ KRW 1,207.00 | BNP | 08/02/16 | 8,946 | — | 8,946 | ||||||||||||||||||||
USD | 1,600 | USD Call/KRW Put, strike @ KRW 1,209.00 | BNP | 09/29/16 | 13,136 | (2,154 | ) | 10,982 | |||||||||||||||||||
USD | 5,700 | USD Call/KRW Put, strike @ KRW 1,222.00 | JPMCB | 08/10/16 | 28,643 | — | 28,643 | ||||||||||||||||||||
USD | 2,900 | USD Call/MXN Put, strike @ MXN 19.30 | GSI | 09/08/16 | 25,593 | (21,791 | ) | 3,802 | |||||||||||||||||||
USD | 800 | USD Call/MXN Put, strike @ MXN 19.35 | CSI | 09/15/16 | 8,720 | (6,665 | ) | 2,055 | |||||||||||||||||||
USD | 4,800 | USD Call/MXN Put, strike @ MXN 19.50 | CSI | 08/18/16 | 40,320 | (7,824 | ) | 32,496 | |||||||||||||||||||
USD | 2,400 | USD Call/MXN Put, strike @ MXN 19.50 | CSI | 09/02/16 | 18,600 | (10,464 | ) | 8,136 | |||||||||||||||||||
USD | 2,700 | USD Call/MXN Put, strike @ MXN 19.75 | BOA | 09/06/16 | 20,972 | (8,078 | ) | 12,894 | |||||||||||||||||||
USD | 2,600 | USD Call/MXN Put, strike @ MXN 19.80 | CSI | 08/09/16 | 17,550 | (177 | ) | 17,373 | |||||||||||||||||||
$ | 351,250 | $ | (110,729 | ) | $ | 240,521 |
Notional amount (000) | Put swaptions written | Counterparty | Pay/ receive floating rate | Expiration date | Premiums received | Current value | Unrealized appreciation | ||||||||||||||||||||||||
USD | 15,800 | 3 Month USD LIBOR Interest Rate Swap strike @ 2.800%, terminating 08/22/23 | MSCI | Pay | 08/20/18 | $ | 352,560 | $ | (43,235 | ) | $ | 309,325 | |||||||||||||||||||
USD | 5,100 | 3 Month USD LIBOR Interest Rate Swap strike @ 2.800%, terminating 08/22/23 | GSB | Pay | 08/20/18 | 113,591 | (13,956 | ) | 99,635 | ||||||||||||||||||||||
$ | 466,151 | $ | (57,191 | ) | $ | 408,960 |
Notional amount (000) | Put options written | Counterparty | Expiration date | Premiums received | Current value | Unrealized appreciation (depreciation) | |||||||||||||||||||||
AUD | 2,700 | AUD Put/USD Call, strike @ USD 0.73 | HSBC | 08/10/16 | $ | 15,314 | $ | (341 | ) | $ | 14,973 | ||||||||||||||||
AUD | 4,300 | AUD Put/USD Call, strike @ USD 0.73 | GSI | 09/02/16 | 13,823 | (13,823 | ) | — | |||||||||||||||||||
USD | 1,700 | USD Put/CAD Call, strike @ CAD 1.29 | CITI | 09/05/16 | 6,094 | (10,618 | ) | (4,524 | ) | ||||||||||||||||||
USD | 3,700 | USD Put/JPY Call, strike @ JPY 102.00 | CSI | 09/06/16 | 31,154 | (55,870 | ) | (24,716 | ) | ||||||||||||||||||
USD | 1,800 | USD Put/KRW Call, strike @ KRW 1,149.00 | BNP | 08/02/16 | 10,278 | (59,018 | ) | (48,740 | ) | ||||||||||||||||||
USD | 5,700 | USD Put/KRW Call, strike @ KRW 1,153.00 | JPMCB | 08/10/16 | 36,908 | (208,575 | ) | (171,667 | ) | ||||||||||||||||||
USD | 1,500 | USD Put/MXN Call, strike @ MXN 17.90 | CSI | 09/14/16 | 9,945 | (2,379 | ) | 7,566 | |||||||||||||||||||
USD | 2,600 | USD Put/MXN Call, strike @ MXN 18.00 | HSBC | 09/16/16 | 17,160 | (6,388 | ) | 10,772 | |||||||||||||||||||
USD | 2,400 | USD Put/MXN Call, strike @ MXN 18.05 | CSI | 09/02/16 | 18,300 | (4,051 | ) | 14,249 | |||||||||||||||||||
USD | 2,600 | USD Put/MXN Call, strike @ MXN 18.30 | CSI | 08/09/16 | 20,605 | (1,682 | ) | 18,923 | |||||||||||||||||||
$ | 179,581 | $ | (362,745 | ) | $ | (183,164 | ) | ||||||||||||||||||||
$ | 1,335,442 | $ | (824,288 | ) | $ | 511,154 |
81
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Swaptions and foreign exchange written options activity for the year ended July 31, 2016 was as follows:
Premiums received | |||||||
Swaptions and foreign exchange options outstanding at July 31, 2015 | $ | 918,430 | |||||
Swaption and foreign exchange options written | 3,576,437 | ||||||
Swaptions and foreign exchange options exercised | (423,710 | ) | |||||
Swaption and foreign exchange options terminated in closing purchase transactions | (2,414,496 | ) | |||||
Swaption and foreign exchange options expired prior to exercise | (321,219 | ) | |||||
Swaption and foreign exchange options outstanding at July 31, 2016 | $ | 1,335,442 |
Futures contracts
Number of contracts | Currency | Expiration date | Cost | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||
US Treasury futures buy contracts: | |||||||||||||||||||||||
173 | USDUS Long Bond Futures | September 2016 | $ | 28,955,412 | $ | 30,177,687 | $ | 1,222,275 | |||||||||||||||
1,227 | USDUS Treasury Note 10 Year Futures | September 2016 | 161,107,984 | 163,248,516 | 2,140,532 | ||||||||||||||||||
35 | USDUS Treasury Note 2 Year Futures | September 2016 | 7,658,888 | 7,665,000 | 6,112 | ||||||||||||||||||
670 | USDUS Treasury Note 5 Year Futures | September 2016 | 80,559,784 | 81,750,469 | 1,190,685 | ||||||||||||||||||
28 | USDUS Ultra Long Bond Futures | September 2016 | 4,890,745 | 5,334,875 | 444,130 | ||||||||||||||||||
59 | USDUS Ultra Treasury Note 10 Year Futures | September 2016 | 8,460,721 | 8,625,984 | 165,263 | ||||||||||||||||||
Interest rate futures buy contracts: | |||||||||||||||||||||||
84 | CADCanadian Bankers Acceptance Futures | June 2017 | 15,975,838 | 15,937,579 | (38,259 | ) | |||||||||||||||||
11 | EURGerman Euro Bund Futures | September 2016 | 2,041,870 | 2,063,728 | 21,858 | ||||||||||||||||||
49 | USDAustralian Dollar Future | September 2016 | 3,595,561 | 3,719,590 | 124,029 | ||||||||||||||||||
62 | USDMexican Peso Future | September 2016 | 1,658,018 | 1,643,310 | (14,708 | ) | |||||||||||||||||
23 | USDSouth African Rand Future | September 2016 | 746,667 | 820,238 | 73,571 | ||||||||||||||||||
$ | 315,651,488 | $ | 320,986,976 | $ | 5,335,488 | ||||||||||||||||||
Proceeds | |||||||||||||||||||||||
Interest rate futures sell contracts: | |||||||||||||||||||||||
29 | EURGerman Euro Buxl 30 Year Futures | September 2016 | $ | 5,788,966 | $ | 6,388,434 | $ | (599,468 | ) | ||||||||||||||
12 | EURMid-Term Euro-OAT Futures | September 2016 | 2,149,477 | 2,175,405 | (25,928 | ) | |||||||||||||||||
35 | GBP90-Day Sterling Pound Futures | September 2017 | 5,721,338 | 5,773,302 | (51,964 | ) | |||||||||||||||||
706 | GBP90-Day Sterling Pound Futures | March 2018 | 115,518,369 | 116,432,383 | (914,014 | ) | |||||||||||||||||
246 | GBP90-Day Sterling Pound Futures | June 2018 | 40,398,872 | 40,565,854 | (166,982 | ) | |||||||||||||||||
70 | JPYJGB MINI 10 Year Futures | September 2016 | 10,453,582 | 10,481,305 | (27,723 | ) | |||||||||||||||||
136 | USD90-Day Eurodollar Futures | September 2017 | 33,587,730 | 33,688,900 | (101,170 | ) | |||||||||||||||||
327 | USD90-Day Eurodollar Futures | December 2017 | 80,752,456 | 80,969,287 | (216,831 | ) | |||||||||||||||||
490 | USD90-Day Eurodollar Futures | March 2018 | 121,136,745 | 121,299,500 | (162,755 | ) | |||||||||||||||||
201 | USD90-Day Eurodollar Futures | June 2018 | 49,678,522 | 49,742,475 | (63,953 | ) | |||||||||||||||||
198 | USD90-Day Eurodollar Futures | September 2018 | 48,807,040 | 48,985,200 | (178,160 | ) | |||||||||||||||||
491 | USD90-Day Eurodollar Futures | December 2018 | 120,876,704 | 121,424,300 | (547,596 | ) | |||||||||||||||||
5 | USDBritish Pound Future | September 2016 | 453,888 | 413,969 | 39,919 | ||||||||||||||||||
49 | USDEuro Fx Future with American Style Options | September 2016 | 6,973,458 | 6,860,919 | 112,539 | ||||||||||||||||||
53 | USDNew Zealand Dollar Futures | September 2016 | 3,666,339 | 3,819,710 | (153,371 | ) | |||||||||||||||||
$ | 645,963,486 | $ | 649,020,943 | $ | (3,057,457 | ) | |||||||||||||||||
$ | 2,278,031 |
82
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Forward foreign currency contracts
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
BB | KRW | 1,006,576,200 | USD | 859,000 | 08/18/16 | $ | (39,498 | ) | |||||||||||
BB | USD | 774,250 | AUD | 1,044,000 | 08/12/16 | 18,910 | |||||||||||||
BB | USD | 137,857 | MXN | 2,571,000 | 08/25/16 | (1,067 | ) | ||||||||||||
BB | USD | 320,000 | MYR | 1,310,400 | 08/10/16 | 1,765 | |||||||||||||
BNP | CNY | 7,079,542 | USD | 1,076,000 | 09/14/16 | 13,587 | |||||||||||||
BNP | CNY | 8,583,325 | USD | 1,266,444 | 09/14/16 | (21,639 | ) | ||||||||||||
BNP | CNY | 14,721,932 | USD | 2,166,395 | 10/11/16 | (41,109 | ) | ||||||||||||
BNP | EUR | 8,700,000 | USD | 9,693,183 | 08/02/16 | (33,421 | ) | ||||||||||||
BNP | JPY | 333,400,000 | USD | 3,055,251 | 08/12/16 | (213,239 | ) | ||||||||||||
BNP | USD | 830,914 | AUD | 1,125,000 | 08/12/16 | 23,785 | |||||||||||||
BNP | USD | 3,380,333 | CNY | 22,989,645 | 09/14/16 | 69,679 | |||||||||||||
BNP | USD | 1,263,182 | CNY | 8,583,325 | 10/11/16 | 23,858 | |||||||||||||
BNP | USD | 294,523 | CNY | 2,011,003 | 12/05/16 | 6,625 | |||||||||||||
BNP | USD | 1,859,954 | CNY | 12,710,929 | 12/07/16 | 43,416 | |||||||||||||
BOA | AUD | 12,406,000 | USD | 9,258,100 | 08/12/16 | (167,133 | ) | ||||||||||||
BOA | CNY | 2,535,957 | USD | 373,072 | 10/11/16 | (7,186 | ) | ||||||||||||
BOA | EUR | 19,721,000 | USD | 21,757,935 | 08/02/16 | (290,153 | ) | ||||||||||||
BOA | EUR | 18,346,000 | USD | 20,205,734 | 09/02/16 | (329,319 | ) | ||||||||||||
BOA | GBP | 10,432,000 | USD | 13,877,809 | 08/02/16 | 71,580 | |||||||||||||
BOA | GBP | 601,000 | USD | 774,694 | 08/02/16 | (20,699 | ) | ||||||||||||
BOA | USD | 1,348,110 | AUD | 1,829,000 | 08/12/16 | 41,439 | |||||||||||||
BOA | USD | 372,617 | CNY | 2,535,957 | 10/24/16 | 7,531 | |||||||||||||
BOA | USD | 20,180,600 | EUR | 18,346,000 | 08/02/16 | 330,237 | |||||||||||||
BOA | USD | 8,667,120 | JPY | 903,600,000 | 08/12/16 | 191,331 | |||||||||||||
BOA | USD | 952,000 | KRW | 1,124,010,900 | 08/18/16 | 51,324 | |||||||||||||
CITI | AUD | 285,000 | USD | 208,447 | 08/12/16 | (8,076 | ) | ||||||||||||
CITI | CAD | 198,000 | USD | 154,225 | 08/12/16 | 2,564 | |||||||||||||
CITI | KRW | 870,873,200 | USD | 743,652 | 08/18/16 | (33,714 | ) | ||||||||||||
CITI | MXN | 52,101,000 | USD | 2,805,452 | 08/25/16 | 33,422 | |||||||||||||
CITI | MYR | 13,167,738 | USD | 3,186,000 | 08/10/16 | (47,302 | ) | ||||||||||||
CITI | SGD | 13,011,368 | USD | 9,562,079 | 08/18/16 | (141,572 | ) | ||||||||||||
CITI | USD | 837,698 | CNY | 5,482,731 | 08/19/16 | (14,280 | ) | ||||||||||||
CITI | USD | 1,900,000 | CNY | 12,952,300 | 09/26/16 | 42,986 | |||||||||||||
CITI | USD | 302,296 | INR | 20,439,741 | 08/18/16 | 2,020 | |||||||||||||
CITI | USD | 12,320,657 | JPY | 1,282,700,000 | 08/12/16 | 254,304 | |||||||||||||
CITI | USD | 395,000 | KRW | 465,547,000 | 08/18/16 | 20,560 | |||||||||||||
CITI | USD | 3,143,862 | MXN | 58,432,000 | 08/25/16 | (34,991 | ) | ||||||||||||
CITI | USD | 771,334 | SGD | 1,051,000 | 08/18/16 | 12,484 | |||||||||||||
DB | USD | 2,030,458 | CNY | 13,826,000 | 12/05/16 | 39,989 | |||||||||||||
DB | USD | 3,468,764 | GBP | 2,588,000 | 08/02/16 | (43,676 | ) | ||||||||||||
DB | USD | 1,072,368 | GBP | 729,125 | 09/08/16 | (106,829 | ) | ||||||||||||
DB | USD | 166,000 | KRW | 195,448,400 | 08/18/16 | 8,463 | |||||||||||||
DB | USD | 485,635 | MYR | 1,930,786 | 08/10/16 | (11,535 | ) | ||||||||||||
GSB | AUD | 2,443,000 | USD | 1,789,773 | 08/12/16 | (66,252 | ) | ||||||||||||
GSB | CNY | 12,952,300 | USD | 1,909,524 | 09/26/16 | (33,462 | ) |
83
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Forward foreign currency contracts—(continued)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
GSB | GBP | 7,069,000 | USD | 9,193,697 | 08/02/16 | $ | (161,769 | ) | |||||||||||
GSB | GBP | 1,568,000 | USD | 2,083,789 | 08/02/16 | 8,619 | |||||||||||||
GSB | JPY | 335,200,000 | USD | 3,045,362 | 08/12/16 | (240,774 | ) | ||||||||||||
GSB | KRW | 11,038,582,050 | USD | 9,485,007 | 08/18/16 | (368,341 | ) | ||||||||||||
GSB | TWD | 38,508,120 | USD | 1,191,280 | 08/18/16 | (15,319 | ) | ||||||||||||
GSB | TWD | 59,920,345 | USD | 1,876,322 | 11/10/16 | (4,369 | ) | ||||||||||||
GSB | USD | 1,297,399 | AUD | 1,749,000 | 08/12/16 | 31,372 | |||||||||||||
GSB | USD | 6,686,990 | CNY | 45,639,833 | 10/11/16 | 156,548 | |||||||||||||
GSB | USD | 9,603,417 | EUR | 8,648,000 | 08/02/16 | 65,051 | |||||||||||||
GSB | USD | 1,760,120 | JPY | 185,800,000 | 08/12/16 | 61,372 | |||||||||||||
GSB | USD | 1,874,268 | TWD | 59,920,345 | 08/18/16 | 3,254 | |||||||||||||
HSBC | CNY | 14,307,340 | USD | 2,180,000 | 10/11/16 | 34,663 | |||||||||||||
HSBC | CNY | 12,710,929 | USD | 1,913,000 | 12/07/16 | 9,629 | |||||||||||||
HSBC | GBP | 17,082,000 | USD | 22,580,952 | 09/02/16 | (37,150 | ) | ||||||||||||
HSBC | JPY | 2,516,393,769 | USD | 23,307,841 | 08/12/16 | (1,361,649 | ) | ||||||||||||
HSBC | KRW | 1,158,974,500 | USD | 991,000 | 08/18/16 | (43,533 | ) | ||||||||||||
HSBC | USD | 736,237 | AUD | 985,000 | 08/12/16 | 12,098 | |||||||||||||
HSBC | USD | 211,626 | CNY | 1,412,000 | 10/11/16 | 98 | |||||||||||||
HSBC | USD | 1,590,499 | EUR | 1,427,000 | 08/02/16 | 4,888 | |||||||||||||
HSBC | USD | 22,570,447 | GBP | 17,082,000 | 08/02/16 | 36,723 | |||||||||||||
HSBC | USD | 4,323,428 | JPY | 471,200,000 | 08/12/16 | 295,986 | |||||||||||||
HSBC | USD | 495,000 | KRW | 586,822,500 | 08/18/16 | 28,814 | |||||||||||||
JPMCB | AUD | 1,191,000 | USD | 907,800 | 08/12/16 | 2,960 | |||||||||||||
JPMCB | AUD | 680,000 | USD | 490,024 | 08/12/16 | (26,593 | ) | ||||||||||||
JPMCB | CHF | 135,000 | USD | 139,750 | 08/12/16 | 394 | |||||||||||||
JPMCB | CNY | 7,326,778 | USD | 1,114,000 | 09/14/16 | 14,484 | |||||||||||||
JPMCB | CNY | 16,697,745 | USD | 2,545,000 | 09/30/16 | 40,475 | |||||||||||||
JPMCB | CNY | 24,798,634 | USD | 3,793,000 | 10/11/16 | 74,529 | |||||||||||||
JPMCB | CNY | 4,853,521 | USD | 714,331 | 10/11/16 | (13,438 | ) | ||||||||||||
JPMCB | CNY | 2,535,957 | USD | 389,698 | 10/24/16 | 9,549 | |||||||||||||
JPMCB | CNY | 15,837,003 | USD | 2,379,000 | 12/05/16 | 7,404 | |||||||||||||
JPMCB | KRW | 3,703,928,950 | USD | 3,129,143 | 08/18/16 | (177,088 | ) | ||||||||||||
JPMCB | MXN | 20,988,848 | USD | 1,158,902 | 08/25/16 | 42,192 | |||||||||||||
JPMCB | SGD | 1,609,033 | USD | 1,166,000 | 08/18/16 | (33,989 | ) | ||||||||||||
JPMCB | TWD | 51,488,425 | USD | 1,592,590 | 08/18/16 | (20,729 | ) | ||||||||||||
JPMCB | USD | 6,039,310 | AUD | 8,117,000 | 08/12/16 | 127,433 | |||||||||||||
JPMCB | USD | 2,455,894 | CNY | 16,697,745 | 09/30/16 | 48,632 | |||||||||||||
JPMCB | USD | 8,340,103 | JPY | 896,600,000 | 08/12/16 | 449,724 | |||||||||||||
JPMCB | USD | 186,086 | MXN | 3,464,000 | 08/25/16 | (1,785 | ) | ||||||||||||
JPMCB | USD | 360,000 | MYR | 1,485,720 | 08/10/16 | 4,814 | |||||||||||||
JPMCB | USD | 930,000 | TWD | 30,076,200 | 08/18/16 | 12,396 | |||||||||||||
RBC | AUD | 119,219 | USD | 90,689 | 09/08/16 | 192 | |||||||||||||
RBC | EUR | 334,995 | USD | 372,400 | 09/08/16 | (2,672 | ) | ||||||||||||
RBC | EUR | 524,053 | USD | 588,054 | 09/08/16 | 1,306 | |||||||||||||
RBC | MXN | 3,317,298 | USD | 178,071 | 09/08/16 | 1,833 |
84
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Forward foreign currency contracts—(concluded)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
RBC | NZD | 6,380,197 | USD | 4,283,664 | 09/08/16 | $ | (316,292 | ) | |||||||||||
RBC | USD | 290,247 | EUR | 257,219 | 09/08/16 | (2,256 | ) | ||||||||||||
RBC | USD | 1,762,080 | EUR | 1,591,000 | 09/08/16 | 19,257 | |||||||||||||
RBC | USD | 94,999 | JPY | 10,397,080 | 09/08/16 | 7,031 | |||||||||||||
RBC | USD | 92,692 | NZD | 129,854 | 09/08/16 | 930 | |||||||||||||
RBC | ZAR | 28,354,874 | USD | 1,778,159 | 09/08/16 | (249,645 | ) | ||||||||||||
RBS | MXN | 20,456,280 | USD | 1,116,000 | 08/25/16 | 27,625 | |||||||||||||
SG | AUD | 153,319 | USD | 114,159 | 09/08/16 | (2,223 | ) | ||||||||||||
SG | EUR | 321,726 | USD | 362,759 | 09/08/16 | 2,544 | |||||||||||||
SG | MXN | 16,116,643 | USD | 867,186 | 09/08/16 | 10,954 | |||||||||||||
SG | USD | 103,257 | EUR | 92,851 | 09/08/16 | 702 | |||||||||||||
SG | USD | 93,270 | JPY | 10,227,420 | 09/08/16 | 7,095 | |||||||||||||
SG | USD | 3,487,118 | NZD | 5,198,447 | 09/08/16 | 260,827 | |||||||||||||
SG | ZAR | 222,297 | USD | 13,829 | 09/08/16 | (2,069 | ) | ||||||||||||
SSC | EUR | 135,332 | USD | 151,350 | 09/08/16 | (172 | ) | ||||||||||||
SSC | EUR | 602,127 | USD | 676,765 | 09/08/16 | 2,603 | |||||||||||||
SSC | GBP | 372,529 | USD | 545,746 | 09/08/16 | 52,427 | |||||||||||||
SSC | MXN | 15,730,218 | USD | 845,711 | 09/08/16 | 10,008 | |||||||||||||
SSC | NZD | 137,599 | USD | 95,914 | 09/08/16 | (3,291 | ) | ||||||||||||
SSC | USD | 53,807 | AUD | 74,483 | 09/08/16 | 2,732 | |||||||||||||
SSC | USD | 290,954 | EUR | 255,811 | 09/08/16 | (4,539 | ) | ||||||||||||
SSC | USD | 294,736 | EUR | 266,180 | 09/08/16 | 3,288 | |||||||||||||
SSC | USD | 107,494 | JPY | 10,908,850 | 09/08/16 | (441 | ) | ||||||||||||
SSC | USD | 99,442 | NZD | 140,562 | 09/08/16 | 1,899 | |||||||||||||
SSC | ZAR | 4,709,762 | USD | 305,755 | 09/08/16 | (31,065 | ) | ||||||||||||
WBC | USD | 1,276,201 | SGD | 1,720,000 | 08/18/16 | 6,545 | |||||||||||||
$ | (1,511,585 | ) |
Credit default swap agreements on corporate issues—sell protection15
Counterparty | Referenced obligations16 | Notional amount (000) | Termination date | Payments received by the Portfolio17 | Upfront payments received (made) | Value | Unrealized appreciation (depreciation) | Credit spread18 | |||||||||||||||||||||||||||
BB | Anadarko Petroleum Corp. bond, 6.950%, due 06/15/19 | USD | 2,400 | 06/20/21 | 1.000 | % | $ | 181,713 | $ | (202,865 | ) | $ | (21,152 | ) | 2.94 | % | |||||||||||||||||||
BNP | Barclays Bank PLC | EUR | 1,900 | 06/20/17 | 1.000 | — | 6,705 | 6,705 | 0.78 | ||||||||||||||||||||||||||
BNP | Petroleo Brasileiro SA, bond, 8.375%, due 12/10/18 | USD | 1,300 | 03/20/20 | 1.000 | 139,512 | (175,662 | ) | (36,150 | ) | 5.12 | ||||||||||||||||||||||||
BNP | Volkswagen International Finance N.V. bond, 5.375%, due 05/22/18 | EUR | 500 | 12/20/16 | 1.000 | 2,293 | 2,381 | 4,674 | 0.22 | ||||||||||||||||||||||||||
BOA | Italy Government International bond, 6.875%, due 09/27/23 | USD | 600 | 06/20/21 | 1.000 | 9,644 | (4,826 | ) | 4,818 | 1.20 |
85
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Credit default swap agreements on corporate issues—sell protection15—(concluded)
Counterparty | Referenced obligations16 | Notional amount (000) | Termination date | Payments received by the Portfolio17 | Upfront payments received (made) | Value | Unrealized appreciation (depreciation) | Credit spread18 | |||||||||||||||||||||||||||
BOA | Sprint Communications, Inc. bond, 8.375%, due 08/15/17 | USD | 2,800 | 12/20/19 | 5.000 | % | $ | (163,172 | ) | $ | (63,876 | ) | $ | (227,048 | ) | 5.96 | % | ||||||||||||||||||
CITI | Anadarko Petroleum Corp. bond, 6.950%, due 06/15/19 | USD | 1,400 | 06/20/21 | 1.000 | 101,359 | (118,338 | ) | (16,979 | ) | 2.94 | ||||||||||||||||||||||||
CITI | BMW Finance N.V. bond, 5.000%, due 08/06/18 | EUR | 2,000 | 12/20/20 | 1.000 | 26,083 | 56,400 | 82,483 | 0.46 | ||||||||||||||||||||||||||
CITI | Italy Government International bond, 6.875%, due 09/27/23 | USD | 15,100 | 06/20/21 | 1.000 | 293,493 | (121,704 | ) | 171,789 | 1.20 | |||||||||||||||||||||||||
CITI | Tesco PLC, bond, 6.000%, due 12/14/29 | EUR | 1,500 | 12/20/20 | 1.000 | 121,815 | (88,853 | ) | 32,962 | 2.28 | |||||||||||||||||||||||||
GSI | Italy Government International bond, 6.875%, due 09/27/23 | USD | 600 | 06/20/21 | 1.000 | 13,035 | (4,826 | ) | 8,209 | 1.20 | |||||||||||||||||||||||||
GSI | MetLife, Inc. bond, 4.750%, due 02/08/21 | USD | 200 | 12/20/20 | 1.000 | (834 | ) | (760 | ) | (1,594 | ) | 1.12 | |||||||||||||||||||||||
GSI | MetLife, Inc. bond, 4.750%, due 02/08/21 | USD | 1,700 | 06/20/21 | 1.000 | 25,262 | (18,066 | ) | 7,196 | 1.25 | |||||||||||||||||||||||||
GSI | Petroleo Brasileiro SA, bond, 8.375%, due 12/10/18 | USD | 1,500 | 03/20/20 | 1.000 | 167,391 | (202,688 | ) | (35,297 | ) | 5.12 | ||||||||||||||||||||||||
JPMCB | Italy Government International bond, 6.875%, due 09/27/23 | USD | 2,900 | 06/20/21 | 1.000 | 46,317 | (23,321 | ) | 22,996 | 1.20 | |||||||||||||||||||||||||
JPMCB | Volkswagen International Finance N.V. bond, 5.375%, due 05/22/18 | EUR | 2,000 | 12/20/17 | 1.000 | 24,988 | 21,789 | 46,777 | 0.39 | ||||||||||||||||||||||||||
MSCI | United Mexican States, bond, 5.950%, due 03/19/19 | USD | 10,400 | 12/20/19 | 1.000 | (67,295 | ) | (18,716 | ) | (86,011 | ) | 1.09 | |||||||||||||||||||||||
$ | 921,604 | $ | (957,226 | ) | $ | (35,622 | ) |
Credit default swap agreements on credit indices—buy protection19
Counterparty | Referenced obligations16 | Notional amount (000) | Termination date | Payments made by the Portfolio17 | Upfront payments received | Value | Unrealized appreciation | ||||||||||||||||||||||||
CSI | CMBX.NA.AAA.8 Index | USD | 600 | 10/17/57 | 0.500 | % | $ | 40,613 | $ | (17,754 | ) | $ | 22,859 |
Credit default swap agreements on credit indices—sell protection15
Counterparty | Referenced obligations16 | Notional amount (000) | Termination date | Payments received by the Portfolio17 | Upfront payments received | Value | Unrealized appreciation | ||||||||||||||||||||||||
BOA | CMBX.NA.AAA.8 Index | USD | 5,300 | 10/17/57 | 0.500 | % | $ | 406,803 | $ | (156,828 | ) | $ | 249,975 | ||||||||||||||||||
BOA | CMBX.NA.AAA.9 Index | USD | 3,200 | 09/17/58 | 0.500 | 247,288 | (139,689 | ) | 107,599 | ||||||||||||||||||||||
BOA | CMBX.NA.BBB-.6 Index | USD | 1,000 | 05/11/63 | 3.000 | 92,164 | (47,698 | ) | 44,466 | ||||||||||||||||||||||
DB | CMBX.NA.AAA.8 Index | USD | 2,900 | 10/17/57 | 0.500 | 197,190 | (85,814 | ) | 111,376 | ||||||||||||||||||||||
GSI | CMBX.NA.AAA.7 Index | USD | 3,800 | 01/17/47 | 0.500 | 166,742 | (72,663 | ) | 94,079 | ||||||||||||||||||||||
GSI | CMBX.NA.AAA.8 Index | USD | 4,000 | 10/17/57 | 0.500 | 313,457 | (118,366 | ) | 195,091 |
86
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Credit default swap agreements on credit indices—sell protection15—(concluded)
Counterparty | Referenced obligations16 | Notional amount (000) | Termination date | Payments received by the Portfolio17 | Upfront payments received | Value | Unrealized appreciation | ||||||||||||||||||||||||
GSI | CMBX.NA.AAA.9 Index | USD | 5,000 | 09/17/58 | 0.500 | % | $ | 322,479 | $ | (218,276 | ) | $ | 104,203 | ||||||||||||||||||
MSCI | CMBX.NA.AAA.3 Index | USD | 2,350 | 12/13/49 | 0.080 | 15,722 | (3,635 | ) | 12,087 | ||||||||||||||||||||||
MSCI | CMBX.NA.BBB-.6 Index | USD | 1,200 | 05/11/63 | 3.000 | 99,091 | (57,238 | ) | 41,853 | ||||||||||||||||||||||
MSCI | CMBX.NA.BBB-.7 Index | USD | 2,000 | 01/17/47 | 3.000 | 235,765 | (140,115 | ) | 95,650 | ||||||||||||||||||||||
$ | 2,096,701 | $ | (1,040,322 | ) | $ | 1,056,379 |
Centrally cleared credit default swap agreements on credit indices—sell protection15
Referenced obligations16 | Notional amount (000) | Termination date | Payments received by the Portfolio17 | Upfront payments (made) | Value | Unrealized appreciation | Credit spread18 | ||||||||||||||||||||||||
MSCI CDX NA High Yield Series 26 Index | USD | 5,200 | 06/20/21 | 5.000 | % | $ | (80,345 | ) | $ | 259,651 | $ | 179,306 | 3.95 | % | |||||||||||||||||
MSCI iTraxx Europe Crossover Series 25 Index | EUR | 13,600 | 06/20/21 | 5.000 | (840,313 | ) | 1,300,443 | 460,130 | 3.18 | ||||||||||||||||||||||
MSCI iTraxx Europe Crossover Series 25 Index | EUR | 22,000 | 06/20/21 | 1.000 | (266,796 | ) | 412,519 | 145,723 | 0.68 | ||||||||||||||||||||||
$ | (1,187,454 | ) | $ | 1,972,613 | $ | 785,159 |
Centrally cleared interest rate swap agreements
Notional amount (000) | Termination date | Payments made by the Portfolio17 | Payments received by the Portfolio17 | Value | Unrealized depreciation | ||||||||||||||||||
GBP | 2,000 | 12/16/17 | 1.500 | % | 6 Month EURIBOR | $ | (38,419 | ) | $ | (36,156 | ) | ||||||||||||
GBP | 3,000 | 09/21/18 | 1.500 | 6 Month EURIBOR | (82,044 | ) | (78,350 | ) | |||||||||||||||
GBP | 7,500 | 09/21/18 | 1.000 | 6 Month EURIBOR | (106,021 | ) | (91,979 | ) | |||||||||||||||
GBP | 7,500 | 12/21/18 | 0.750 | 6 Month EURIBOR | (59,097 | ) | (51,375 | ) | |||||||||||||||
MXN | 9,900 | 01/16/20 | Mexico Interbank TIIE 28 Days | 4.975% | (13,028 | ) | (12,899 | ) | |||||||||||||||
USD | 25,000 | 12/16/19 | 2.000 | 3 Month USD LIBOR | (906,848 | ) | (449,685 | ) | |||||||||||||||
USD | 4,400 | 12/16/20 | 2.000 | 3 Month USD LIBOR | (192,117 | ) | (123,762 | ) | |||||||||||||||
USD | 18,300 | 06/15/21 | 2.000 | 3 Month USD LIBOR | (869,122 | ) | (299,327 | ) | |||||||||||||||
USD | 16,700 | 06/15/21 | 2.000 | 3 Month USD LIBOR | (783,182 | ) | (260,818 | ) | |||||||||||||||
USD | 23,100 | 06/28/21 | 1.450 | 3 Month USD LIBOR | (96,497 | ) | (96,497 | ) | |||||||||||||||
USD | 37,400 | 12/16/22 | 2.250 | 3 Month USD LIBOR | (2,645,635 | ) | (2,843,573 | ) | |||||||||||||||
USD | 800 | 08/05/25 | 2.350 | 3 Month USD LIBOR | (79,355 | ) | (79,355 | ) | |||||||||||||||
USD | 3,500 | 12/16/25 | 2.500 | 3 Month USD LIBOR | (380,261 | ) | (378,112 | ) | |||||||||||||||
USD | 13,400 | 06/15/26 | 2.250 | 3 Month USD LIBOR | (1,180,277 | ) | (1,157,534 | ) | |||||||||||||||
USD | 300 | 06/15/26 | 2.250 | 3 Month USD LIBOR | (25,660 | ) | (26,607 | ) | |||||||||||||||
USD | 11,100 | 12/21/26 | 1.750 | 3 Month USD LIBOR | (374,044 | ) | (86,500 | ) | |||||||||||||||
USD | 57,800 | 12/16/45 | 2.750 | 3 Month USD LIBOR | (14,177,003 | ) | (17,143,109 | ) | |||||||||||||||
USD | 4,700 | 06/15/46 | 2.500 | 3 Month USD LIBOR | (904,737 | ) | (740,325 | ) | |||||||||||||||
USD | 2,900 | 06/15/46 | 2.500 | 3 Month USD LIBOR | (537,561 | ) | (414,675 | ) | |||||||||||||||
$ | (23,450,908 | ) | $ | (24,370,638 | ) |
87
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Affiliated issuer activity
The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2016. 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 07/31/15 | Purchases during the year ended 07/31/16 | Sales during the year ended 07/31/16 | Value at 07/31/16 | Net income earned from affiliate for the year ended 07/31/16 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 14,444,243 | $ | 196,286,742 | $ | 210,730,985 | $ | — | $ | 28,664 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 in valuing the Portfolio's investments:
Description | Unadjusted quoted prices in active markets for identical investments (Level 1) | Other significant observable inputs (Level 2) | Unobservable inputs (Level 3) | Total | |||||||||||||||
Assets | |||||||||||||||||||
US government obligations | $ | — | $ | 356,520,324 | $ | — | $ | 356,520,324 | |||||||||||
Government national mortgage association certificates | — | 29,173 | — | 29,173 | |||||||||||||||
Federal home loan mortgage corporation certificates | — | 1,966,278 | 1,060,265 | 3,026,543 | |||||||||||||||
Federal housing administration certificates | — | — | 9,717 | 9,717 | |||||||||||||||
Federal national mortgage association certificates | — | 57,750,516 | 18,660 | 57,769,176 | |||||||||||||||
Collateralized mortgage obligations | — | 121,256,441 | — | 121,256,441 | |||||||||||||||
Asset-backed securities | — | 83,170,901 | 1,599,938 | 84,770,839 | |||||||||||||||
Corporate notes | — | 389,878,375 | — | 389,878,375 | |||||||||||||||
Loan assignments | — | 6,943,196 | — | 6,943,196 | |||||||||||||||
Non-US government obligations | — | 24,198,406 | — | 24,198,406 | |||||||||||||||
Municipal bonds and notes | — | 14,789,060 | — | 14,789,060 | |||||||||||||||
Repurchase agreement | — | 5,382,000 | — | 5,382,000 | |||||||||||||||
Options purchased | — | 423,604 | — | 423,604 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 17,724,928 | — | 17,724,928 | |||||||||||||||
Futures contracts | 5,540,913 | — | — | 5,540,913 | |||||||||||||||
Forward foreign currency contracts | — | 3,315,758 | — | 3,315,758 | |||||||||||||||
Swap agreements | — | 2,059,888 | — | 2,059,888 | |||||||||||||||
Total | $ | 5,540,913 | $ | 1,085,408,848 | $ | 2,688,580 | $ | 1,093,638,341 | |||||||||||
Liabilities | |||||||||||||||||||
Written options | (135,937 | ) | — | — | (135,937 | ) | |||||||||||||
Written swaptions | — | (824,288 | ) | — | (824,288 | ) | |||||||||||||
Futures contracts | (3,262,882 | ) | — | — | (3,262,882 | ) | |||||||||||||
Forward foreign currency contracts | — | (4,827,343 | ) | — | (4,827,343 | ) | |||||||||||||
Swap agreements | — | (25,553,485 | ) | — | (25,553,485 | ) | |||||||||||||
Total | $ | (3,398,819 | ) | $ | (31,205,116 | ) | $ | — | $ | (34,603,935 | ) |
At July 31, 2016, there were no transfers between Level 1 and Level 2.
88
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
The following is a rollforward of Portfolio's investments that was valued using unobservable inputs (Level 3) for the year ended July 31, 2016:
Federal home loan mortgage corporation certificates | Federal housing administration certificates | Federal national mortgage association certificates | Asset-backed securities | Collateralized mortgage obligations | Total | ||||||||||||||||||||||
Beginning balance | $ | 1,145,044 | $ | 15,936 | $ | 24,519 | $ | — | $ | 18,837 | $ | 1,204,336 | |||||||||||||||
Purchases | — | — | — | 1,600,000 | — | 1,600,000 | |||||||||||||||||||||
Sales | (74,544 | ) | (6,016 | ) | (7,666 | ) | — | (18,765 | ) | (106,991 | ) | ||||||||||||||||
Accrued discounts/(premiums) | — | (98 | ) | — | — | — | (98 | ) | |||||||||||||||||||
Total realized gain/(loss) | (47 | ) | (270 | ) | — | — | — | (317 | ) | ||||||||||||||||||
Net change in unrealized appreciation/depreciation | (10,188 | ) | 165 | 1,807 | (62 | ) | (72 | ) | (8,350 | ) | |||||||||||||||||
Transfers into Level 3 | — | — | — | — | — | — | |||||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | — | — | |||||||||||||||||||||
Ending balance | $ | 1,060,265 | $ | 9,717 | $ | 18,660 | $ | 1,599,938 | $ | — | $ | 2,688,580 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investments held at July 31, 2016, was $(4,507).
Issuer breakdown by country or territory of origin (unaudited)
Percentage of total investments | |||||||
United States | 85.9 | % | |||||
Cayman Islands | 1.8 | ||||||
Netherlands | 1.4 | ||||||
United Kingdom | 1.3 | ||||||
Venezuela | 1.0 | ||||||
Guernsey | 0.9 | ||||||
Slovenia | 0.8 | ||||||
France | 0.8 | ||||||
Luxembourg | 0.7 | ||||||
Spain | 0.6 | ||||||
Australia | 0.6 | ||||||
Ireland | 0.6 | ||||||
South Korea | 0.5 | ||||||
Canada | 0.5 | ||||||
Norway | 0.4 | ||||||
Mexico | 0.4 | ||||||
Germany | 0.3 | ||||||
South Africa | 0.3 | ||||||
Belgium | 0.2 | ||||||
Colombia | 0.2 | ||||||
Singapore | 0.2 | ||||||
Japan | 0.2 | ||||||
Portugal | 0.1 | ||||||
New Zealand | 0.1 | ||||||
Bermuda | 0.1 | ||||||
Turkey | 0.1 |
89
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
Issuer breakdown by country or territory of origin (unaudited)—(concluded)
Percentage of total investments | |||||||
Brazil | 0.0 | †% | |||||
Indonesia | 0.0 | † | |||||
Croatia | 0.0 | † | |||||
Sri Lanka | 0.0 | † | |||||
Kazakhstan | 0.0 | † | |||||
Italy | 0.0 | † | |||||
Ivory Coast | 0.0 | † | |||||
Hungary | 0.0 | † | |||||
Dominican Republic | 0.0 | † | |||||
Azerbaijan | 0.0 | † | |||||
Morocco | 0.0 | † | |||||
Russia | 0.0 | † | |||||
Poland | 0.0 | † | |||||
Serbia | 0.0 | † | |||||
Senegal | 0.0 | † | |||||
Mongolia | 0.0 | † | |||||
Ecuador | 0.0 | † | |||||
El Salvador | 0.0 | † | |||||
Argentina | 0.0 | † | |||||
Panama | 0.0 | † | |||||
Liberia | 0.0 | † | |||||
Romania | 0.0 | † | |||||
Total | 100.0 | % |
† Amount represents less than 0.05%
Portfolio footnotes
†† Amount represents less than 0.005%.
1 In US dollars unless otherwise indicated.
2 Security, or portion thereof, pledged as collateral for swaps or futures.
3 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2016 and changes periodically.
4 Security is being fair valued by a valuation committee under the direction of the board of trustees.
5 Illiquid investment as of July 31, 2016.
6 Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At July 31, 2016, the value of these securities amounted to 4.46% of net assets.
7 Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities, which represent 13.67% of net assets as of July 31, 2016, are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers.
8 Interest only security.
9 Step bond that converts to the noted fixed rate at a designated future date.
10 Security, or portion thereof, was on loan at July 31, 2016.
11 Perpetual investment. The maturity date reflects the next call date.
12 Bond interest in default.
13 Payment-in-kind security for which interest may be paid in cash or additional principal, at the discretion of the issuer.
14 Zero coupon bond. The rate shown represents annualized yield at the date of purchase.
See accompanying notes to financial statements.
90
PACE Strategic Fixed Income Investments
Portfolio of investments—July 31, 2016
15 If the Portfolio is a seller of protection and a credit event occurs, as defined under the terms of the 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.
16 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.
17 Payments made or received are based on the notional amount.
18 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.
19 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.
See accompanying notes to financial statements.
91
PACE Municipal Fixed Income Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares gained 6.51% before the deduction of the maximum PACE Select program fee.1 In comparison, the Barclays US Municipal 3-15 Year Blend Index (the "benchmark") rose 6.11%, and the Lipper Intermediate Municipal Debt Funds category posted a median return of 5.55%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 94. 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 3.
Subadvisor's comments (Unaudited)2
The Portfolio outperformed its benchmark during the reporting period. The primary drivers of performance were contributions from both security selection and yield curve positioning. Sector allocation was also a modest contributor for the period.
From a sector standpoint, an emphasis toward revenue bonds was beneficial. They outperformed general obligation and pre-refunded bonds, both of which were underweight positions in the Portfolio. Within the revenue bond sector, the strongest performance was generated by hospital, airport and tobacco securitization revenue bonds, where the Portfolio was overweight. On the weaker side of performance were essential service power and education revenue bonds, which were also Portfolio overweights. Our security selection strategy benefited from strong results among high grade special tax revenue bonds providing natural catastrophe insurance, as well as A-rated airport bonds. A mitigating factor was weaker security performance among floating rate securities which did not keep pace in the market rally.
Municipal credit quality continued to be quite solid overall. State and local tax revenues—including property, sales and income tax collections—experienced positive growth during the reporting period. Historically low interest rates and a thirst for income among fixed income investors drove strong performance among revenue bonds that offer excess yield. The Portfolio benefited from being underweight state general obligation bonds versus the benchmark, with a greater emphasis toward stable quality revenue bonds. A trend of strong demand for higher yielding bonds drove lower investment grade A and BBB-rated securities to outperform higher quality AAA and AA rated bonds. The Portfolio benefited from being overweight A-rated bonds versus the benchmark, while our BBB-rated bond exposure was relatively neutral.
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 subadvisors 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 Municipal Fixed Income Investments
Investment Manager:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisor:
Standish Mellon Asset Management Company LLC ("Standish")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Gina Toth, CFA, Fred Lee, CFA, Diana To and Anthony Karaminas
Standish: 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.
92
PACE Municipal Fixed Income Investments
Subadvisor's comments (Unaudited) – concluded
Municipal yields rallied lower across the maturity spectrum keeping pace with Treasury bond rate declines. The strongest municipal bond returns were produced by the longest maturities, while shorter duration assets produced positive, but less robust, total returns. A modest long duration posture was additive to returns versus the benchmark during the market rally, which saw 10-year AAA municipal yields decline by 0.79% during the prior year. Yield curve exposure was also additive to performance due to the Portfolio's relatively higher exposure to longer bond maturities, particularly within the 12-to-17-year range, and a correspondingly lower exposure to shorter maturities inside of five years.
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.
93
PACE Municipal Fixed Income Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 6.26 | % | 3.78 | % | 4.11 | % | |||||||||
Class C2 | 5.72 | 3.26 | 3.59 | ||||||||||||
Class Y3 | 6.49 | 4.05 | 4.36 | ||||||||||||
Class P4 | 6.51 | 4.05 | 4.38 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 3.88 | 3.30 | 3.87 | ||||||||||||
Class C2 | 4.97 | 3.26 | 3.59 | ||||||||||||
Barclays US Municipal 3-15 Year Blend Index5 | 6.11 | 4.42 | 4.92 | ||||||||||||
Lipper Intermediate Municipal Debt Funds median | 5.55 | 3.94 | 4.13 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 7.15 | % | 4.03 | % | 4.21 | % | |||||||||
Class C2 | 6.61 | 3.49 | 3.69 | ||||||||||||
Class Y3 | 7.30 | 4.26 | 4.45 | ||||||||||||
Class P4 | 7.41 | 4.27 | 4.47 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 4.74 | 3.55 | 3.97 | ||||||||||||
Class C2 | 5.86 | 3.49 | 3.69 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, were as follows: Class A—0.92% and 0.87%; Class C—1.42% and 1.37%; Class Y—0.70% and 0.65%; and Class P—0.67% and 0.62%. 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS AM is contractually obligated to: (1) waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2016 (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% ; and (2) waive its management fees through November 30, 2016 to reflect a lower management fee paid by the Portfolio to UBS AM. The Portfolio has agreed to repay UBS AM for any waived fees/reimbursed expenses (pursuant to item (1)) 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 and that UBS AM has not waived the right to do so. 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 AM. Upon termination of the agreement, however, UBS AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 2.25%. Class A shares bear ongoing 12b-1 service fees of 0.25% annually.
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 of 0.25% and 0.50% annually, respectively.
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 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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualfundperformance.
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.
94
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, 2016. 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.
PACE Municipal Fixed Income Investments
95
PACE Municipal Fixed Income Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Weighted average duration | 5.02 yrs. | ||||||
Weighted average maturity | 9.02 yrs. | ||||||
Average coupon | 5.0 | % | |||||
Net assets (mm) | $ | 412.1 | |||||
Number of holdings | 166 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Municipal bonds and notes | 98.8 | % | |||||
Cash equivalents and other assets less liabilities | 1.2 | ||||||
Total | 100.00 | % | |||||
Top five sectors1 | 07/31/16 | ||||||
Revenue | 56.7 | % | |||||
General obligations | 23.0 | ||||||
Lease revenue/special revenue | 17.2 | ||||||
Pre-refunded | 3.1 | ||||||
Total | 100.0 | % | |||||
Top five states1 | 07/31/16 | ||||||
Texas | 15.1 | % | |||||
Illinois | 12.9 | ||||||
New York | 11.4 | ||||||
California | 8.4 | ||||||
Florida | 5.0 | ||||||
Total | 52.8 | % | |||||
Quality diversification1,2 | 07/31/16 | ||||||
AAA and agency backed securities | 11.5 | % | |||||
AA | 40.2 | ||||||
A | 33.2 | ||||||
BBB | 4.3 | ||||||
Non-rated | 9.6 | ||||||
Cash equivalents and other assets less liabilities | 1.2 | ||||||
Total | 100.0 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
2 Credit quality ratings shown are based on the ratings assigned to portfolio holdings by Standard & Poor's Ratings Group, an independent rating agency.
96
PACE Municipal Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Municipal bonds and notes—98.84% | |||||||||||
Alabama—1.00% | |||||||||||
Birmingham Waterworks Board Water Revenue, Series A (Assured Guaranty Insured) 5.000%, due 01/01/24 | $ | 2,005,000 | $ | 2,214,763 | |||||||
Lower Alabama Gas District Gas Project Revenue, Series A 5.000%, due 09/01/31 | 1,500,000 | 1,905,945 | |||||||||
4,120,708 | |||||||||||
Arizona—0.42% | |||||||||||
Pima County Sewer Revenue System (AGM Insured) 5.000%, due 07/01/23 | 1,500,000 | 1,740,255 | |||||||||
Arkansas—0.42% | |||||||||||
University of Arkansas, (Fayetteville Campus), Series A 5.000%, due 11/01/29 | 1,385,000 | 1,711,168 | |||||||||
California—8.42% | |||||||||||
California Infrastructure & Economic Development Bank Revenue Refunding (Academy of Motion Picture Arts) 5.000%, due 11/01/28 | 1,205,000 | 1,498,405 | |||||||||
California State 5.000%, due 09/01/23 | 1,000,000 | 1,230,390 | |||||||||
5.000%, due 12/01/24 | 2,000,000 | 2,523,520 | |||||||||
5.000%, due 09/01/25 | 1,725,000 | 1,876,662 | |||||||||
5.250%, due 10/01/20 | 1,000,000 | 1,143,850 | |||||||||
5.500%, due 04/01/21 | 3,000,000 | 3,383,940 | |||||||||
California State Department of Water Resources Power Supply Revenue Unrefunded, Series H (AGM Insured) 5.000%, due 05/01/22 | 400,000 | 430,540 | |||||||||
California State Public Works Board Lease Revenue (Judicial Council Project), Series A 5.000%, due 03/01/24 | 1,750,000 | 2,148,300 | |||||||||
California State Public Works Board Lease Revenue Refunding Series H 5.000%, due 12/01/23 | 2,705,000 | 3,400,104 | |||||||||
California Statewide Communities Development Authority Revenue Kaiser Permanente, Series A 5.000%, due 04/01/19 | 2,000,000 | 2,231,500 | |||||||||
Los Angeles Department of Airports (Los Angeles International Airport), Series A 5.000%, due 05/15/321 | 2,000,000 | 2,372,360 | |||||||||
Los Angeles Department of Water & Power Revenue Power Systems, Series B 5.000%, due 07/01/25 | 5,000,000 | 5,815,600 |
Face Amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
California—(concluded) | |||||||||||
North Natomas Community Facilities District No. 4 Special Tax, Series E 5.000%, due 09/01/19 | $ | 1,385,000 | $ | 1,547,225 | |||||||
Northern California Power Agency Refunding (Hydroelectric Project 1), Series A 5.000%, due 07/01/28 | 1,845,000 | 2,214,830 | |||||||||
Orange County Transportation Authority Toll Road Revenue Refunding (Senior Lien 91 Express Lanes) 5.000%, due 08/15/29 | 1,000,000 | 1,225,290 | |||||||||
Stockton Unified School District (AGM Insured) 5.000%, due 07/01/23 | 1,270,000 | 1,547,127 | |||||||||
University of California Revenue Unrefunded General, Series Q 5.250%, due 05/15/23 | 110,000 | 115,259 | |||||||||
34,704,902 | |||||||||||
Colorado—3.17% | |||||||||||
Colorado Health Facilities Authority Revenue Boulder Community Hospital Project, Series A 4.000%, due 10/01/18 | 1,500,000 | 1,597,770 | |||||||||
Denver City & County Airport Revenue Series A 5.500%, due 11/15/191 | 2,500,000 | 2,873,775 | |||||||||
Subseries A 5.500%, due 11/15/261 | 7,000,000 | 8,597,050 | |||||||||
13,068,595 | |||||||||||
Connecticut—0.57% | |||||||||||
Hartford County Metropolitan District Revenue (Green Bonds), Series A 5.000%, due 11/01/29 | 1,870,000 | 2,326,018 | |||||||||
District of Columbia—0.58% | |||||||||||
Metropolitan Washington, Airport Authority Airport System Revenue, Series A 5.000%, due 10/01/221 | 2,000,000 | 2,405,260 | |||||||||
Florida—5.05% | |||||||||||
Broward Port Facilities Revenue Refunding, Series B 5.000%, due 09/01/211 | 2,000,000 | 2,348,060 | |||||||||
Citizens Property Insurance Corp. Revenue, Series A-1 5.000%, due 06/01/25 | 10,000,000 | 12,503,300 | |||||||||
Florida State Board of Education Lottery Revenue Refunding, Series E 5.000%, due 07/01/19 | 1,000,000 | 1,124,470 | |||||||||
Florida State Municipal Power Agency Revenue All Requirements Power, Series A 5.250%, due 10/01/20 | 1,555,000 | 1,775,779 |
97
PACE Municipal Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Florida—(concluded) | |||||||||||
Florida State Municipal Power Agency Revenue Unrefined All Requirements Power, Series A 5.250%, due 10/01/21 | $ | 300,000 | $ | 329,082 | |||||||
JEA Electric System Revenue, Series A 5.000%, due 10/01/24 | 1,200,000 | 1,498,668 | |||||||||
Miami Beach Redevelopment Agency Tax Increment Revenue Refunding 5.000%, due 02/01/28 | 1,000,000 | 1,217,830 | |||||||||
20,797,189 | |||||||||||
Georgia—1.46% | |||||||||||
Atlanta Development Authority Revenue Senior Lien, Series A-1 5.000%, due 07/01/32 | 2,000,000 | 2,444,140 | |||||||||
Main Street Natural Gas, Inc. Revenue, Series A 5.500%, due 09/15/28 | 1,500,000 | 1,966,395 | |||||||||
Municipal Electric Authority of Georgia Revenue Prerefunded Project One, Subseries D 5.750%, due 01/01/19 | 1,000,000 | 1,098,680 | |||||||||
Municipal Electric Authority of Georgia Revenue Unrefunded Project One, Subseries D 5.750%, due 01/01/19 | 455,000 | 499,899 | |||||||||
6,009,114 | |||||||||||
Illinois—12.91% | |||||||||||
Chicago O'Hare International Airport Revenue Refunding, Series A 5.000%, due 01/01/291 | 2,500,000 | 2,984,525 | |||||||||
Chicago O'Hare International Airport Revenue, Series A 5.000%, due 01/01/231 | 1,150,000 | 1,356,218 | |||||||||
Chicago Park District Refunding Limited Tax, Series C 5.000%, due 01/01/27 | 1,625,000 | 1,889,062 | |||||||||
Chicago Wastewater Transmission Revenue Second Lien 5.000%, due 01/01/25 | 1,000,000 | 1,176,530 | |||||||||
Chicago Waterworks Revenue Second Lien 5.000%, due 11/01/25 | 1,300,000 | 1,583,790 | |||||||||
Series A (AMBAC Insured) 5.000%, due 11/01/32 | 1,500,000 | 1,516,155 | |||||||||
Cook County Forest Preservation District (AMBAC Insured) 5.000%, due 11/15/19 | 5,180,000 | 5,796,938 | |||||||||
Illinois Development Finance Authority Revenue School District Program School District No. U-46 (AGM Insured) 5.150%, due 01/01/19 | 2,000,000 | 2,186,020 |
Face Amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Illinois—(concluded) | |||||||||||
Illinois Finance Authority Revenue Advocate Health Care Network 5.000%, due 06/01/27 | $ | 3,000,000 | $ | 3,577,320 | |||||||
Illinois Finance Authority Revenue University of Chicago, Series A 5.000%, due 10/01/29 | 2,440,000 | 2,869,074 | |||||||||
Illinois Health Facilities Authority Revenue Evangelical Hospital, Series A (Escrowed to Maturity) 6.750%, due 04/15/17 | 150,000 | 156,590 | |||||||||
Illinois Municipal Electric Agency Power Supply System Revenue Refunding, Series A 5.000%, due 02/01/32 | 2,500,000 | 3,023,600 | |||||||||
Illinois Toll Highway Authority Toll Highway Revenue Refunding Senior, Series A-1 5.000%, due 01/01/25 | 1,250,000 | 1,408,338 | |||||||||
Metropolitan Pier & Exposition Authority Revenue (Mccormick Place Project), Series B 5.000%, due 12/15/22 | 1,000,000 | 1,162,820 | |||||||||
5.000%, due 12/15/28 | 2,800,000 | 3,130,428 | |||||||||
Railsplitter Tobacco Settlement Authority 5.500%, due 06/01/23 | 6,115,000 | 7,203,164 | |||||||||
6.000%, due 06/01/28 | 2,500,000 | 2,997,900 | |||||||||
Regional Transportation Authority, Series A (AGM Insured) 5.750%, due 06/01/18 | 3,000,000 | 3,277,170 | |||||||||
University of Illinois, (Auxiliary Facilities System), Series A 5.000%, due 04/01/27 | 4,000,000 | 4,719,320 | |||||||||
University of Illinois, Series A 5.000%, due 04/01/30 | 1,000,000 | 1,185,020 | |||||||||
53,199,982 | |||||||||||
Indiana—0.90% | |||||||||||
Indiana Finance Authority Revenue Refunding (Stadium Project), Series A 5.250%, due 02/01/35 | 1,000,000 | 1,228,670 | |||||||||
Richmond Hospital Authority Revenue Refunding Reid Hospital & Health Care, Series A 5.000%, due 01/01/30 | 2,055,000 | 2,484,598 | |||||||||
3,713,268 | |||||||||||
Kansas—0.42% | |||||||||||
Kansas State Department of Transportation Highway Revenue Refunding (Libor Index), Series B-5 0.713%, due 09/01/192 | 1,750,000 | 1,737,155 |
98
PACE Municipal Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Kentucky—0.59% | |||||||||||
Pikeville Hospital Revenue Refunding & Improvement (Pikeville Medical Center) 6.000%, due 03/01/22 | $ | 2,055,000 | $ | 2,429,359 | |||||||
Louisiana—2.79% | |||||||||||
East Baton Rouge Sewerage Commission Revenue Refunding, Series B 5.000%, due 02/01/28 | 1,000,000 | 1,242,770 | |||||||||
New Orleans Aviation Board Revenue, Series B (AGM Insured) 5.000%, due 01/01/281 | 1,500,000 | 1,817,415 | |||||||||
State of Louisiana State Highway Improvement Revenue, Series A 5.000%, due 06/15/29 | 3,500,000 | 4,313,610 | |||||||||
Tobacco Settlement Funding Corp., (Asset-Backed Refunding Bonds), Series A 5.000%, due 05/15/27 | 4,000,000 | 4,139,520 | |||||||||
11,513,315 | |||||||||||
Maryland—1.72% | |||||||||||
Maryland Economic Development Corp. (Purple Line Light Rail Project) Revenue Bonds, Series A 5.000%, due 03/31/241 | 1,000,000 | 1,173,510 | |||||||||
Maryland Health & Higher Educational Facilities Authority Revenue Peninsula Regional Medical Center 5.000%, due 07/01/32 | 1,500,000 | 1,800,180 | |||||||||
State of Maryland Second, Series C 5.250%, due 08/01/20 | 3,500,000 | 4,123,630 | |||||||||
7,097,320 | |||||||||||
Massachusetts—4.66% | |||||||||||
Commonwealth of Massachusetts Federal Highway Grant Anticipation Notes (Accelerated Bridge Program), Series A 5.000%, due 06/15/23 | 2,500,000 | 3,046,225 | |||||||||
Massachusetts Development Finance Agency Revenue Unrefunded-Partners Healthcare System 5.000%, due 07/01/19 | 475,000 | 494,280 | |||||||||
Massachusetts Educational Financing Authority, Series K 5.000%, due 07/01/221 | 2,500,000 | 2,877,700 | |||||||||
Massachusetts State College Building Authority Revenue Refunding, Series B 5.000%, due 05/01/29 | 2,500,000 | 3,001,075 | |||||||||
Massachusetts State School Building Authority Dedicated Sales Tax Revenue, Series B 5.000%, due 08/15/28 | 3,000,000 | 3,655,440 | |||||||||
Massachusetts State, Series B 5.000%, due 08/01/22 | 5,000,000 | 6,130,000 | |||||||||
19,204,720 |
Face Amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Michigan—3.42% | |||||||||||
Detroit Sewer Disposal Revenue Senior Lien, Series A (AGM Insured) 5.250%, due 07/01/19 | $ | 2,500,000 | $ | 2,802,900 | |||||||
Michigan State Finance Authority Revenue Refunding (Beaumont Health Credit Group) 5.000%, due 08/01/33 | 2,415,000 | 2,879,549 | |||||||||
Michigan State Finance Authority Revenue Refunding (Detroit School District), Series A 5.000%, due 05/01/22 | 1,485,000 | 1,744,593 | |||||||||
Michigan State Finance Authority Revenue Refunding (Unemployment Obligation Assessment), Series B 5.000%, due 07/01/21 | 4,000,000 | 4,329,040 | |||||||||
Michigan State Finance Authority Revenue Refunding Senior Lien (Detroit Water And Sewerage), Series C-3 (AGM Insured) 5.000%, due 07/01/30 | 1,500,000 | 1,795,365 | |||||||||
Wayne County Airport Authority Revenue Refunding Detroit Metropolitan Airport, Series D 5.000%, due 12/01/17 | 510,000 | 538,851 | |||||||||
14,090,298 | |||||||||||
Missouri—3.46% | |||||||||||
City of Kansas City, Missouri Airport Revenue, Series A 5.000%, due 09/01/231 | 5,000,000 | 5,852,450 | |||||||||
Missouri Joint Municipal Electric Utility Commission Revenue Refunding Prairie State Project, Series A 5.000%, due 12/01/25 | 2,300,000 | 2,893,883 | |||||||||
Missouri State Health & Educational Facilities Authority Health Facilities Revenue Coxhealth, Series A 5.000%, due 11/15/34 | 2,000,000 | 2,393,980 | |||||||||
Missouri State Health & Educational Facilities Authority Health Facilities Revenue Saint Luke's Health System 5.000%, due 11/15/28 | 1,000,000 | 1,262,700 | |||||||||
Missouri State Health & Educational Facilities Authority Health Facilities Revenue SSM Health Care, Series A 5.000%, due 06/01/27 | 1,500,000 | 1,838,070 | |||||||||
14,241,083 | |||||||||||
Nebraska—1.86% | |||||||||||
City of Lincoln, Nebraska Electric System Revenue 5.000%, due 09/01/22 | 3,790,000 | 4,644,797 | |||||||||
Public Power Generation Agency Revenue Refunding Whelan Energy Center Unit 2, Series A 5.000%, due 01/01/30 | 2,500,000 | 3,037,575 | |||||||||
7,682,372 |
99
PACE Municipal Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Nevada—1.37% | |||||||||||
Las Vegas Valley Water District Refunding, Series A 5.000%, due 06/01/21 | $ | 2,000,000 | $ | 2,379,720 | |||||||
Las Vegas Valley Water District, Series B 5.000%, due 06/01/25 | 2,700,000 | 3,271,752 | |||||||||
5,651,472 | |||||||||||
New Jersey—3.21% | |||||||||||
New Jersey Economic Development Authority Revenue Refunding, Series WW 5.250%, due 06/15/31 | 2,100,000 | 2,392,026 | |||||||||
Series XX 5.000%, due 06/15/26 | 1,600,000 | 1,822,208 | |||||||||
New Jersey Economic Development Authority Water Facilities Revenue Refunding American Water Co., Series C 5.100%, due 06/01/231 | 1,000,000 | 1,123,380 | |||||||||
New Jersey Health Care Facilities Financing Authority Revenue Refunding (Virtua Health) 5.000%, due 07/01/25 | 1,500,000 | 1,832,100 | |||||||||
New Jersey State Higher Education Assistance Authority Revenue, Series 1A 5.000%, due 12/01/181 | 1,000,000 | 1,082,930 | |||||||||
5.000%, due 12/01/211 | 2,550,000 | 2,917,379 | |||||||||
Rutgers State University Revenue, Series J 5.000%, due 05/01/19 | 1,860,000 | 2,076,076 | |||||||||
13,246,099 | |||||||||||
New Mexico—0.91% | |||||||||||
New Mexico Municipal Energy Acquisition Authority Gas Supply Revenue, Subseries B 0.963%, due 02/01/192 | 1,000,000 | 1,000,000 | |||||||||
1.063%, due 11/01/392 | 2,750,000 | 2,732,592 | |||||||||
3,732,592 | |||||||||||
New York—11.37% | |||||||||||
Metropolitan Transportation Authority New York Dedicated Tax Fund, Subseries B-1 5.000%, due 11/15/29 | 2,500,000 | 3,074,275 | |||||||||
Metropolitan Transportation Authority Revenue Transportation, Series D 5.000%, due 11/15/23 | 1,400,000 | 1,479,394 | |||||||||
Nassau County New York Industrial Development, Series B 5.000%, due 10/01/21 | 4,045,000 | 4,805,703 | |||||||||
New York City Health & Hospital Corp. Revenue Health System, Series A 5.000%, due 02/15/22 | 3,500,000 | 4,010,720 |
Face Amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
New York—(concluded) | |||||||||||
New York City Municipal Finance Authority Water & Sewer Systems Revenue Refunding, Series DD 5.000%, due 06/15/29 | $ | 1,500,000 | $ | 1,882,590 | |||||||
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 | 2,954,100 | |||||||||
New York City, Series E 5.000%, due 08/01/24 | 3,065,000 | 3,801,152 | |||||||||
Series H 5.000%, due 08/01/25 | 2,990,000 | 3,750,357 | |||||||||
New York City Transitional Finance Authority Future Tax Secured Revenue, Series B 5.000%, due 02/01/23 | 2,500,000 | 2,947,825 | |||||||||
Subseries I 5.000%, due 05/01/23 | 2,435,000 | 3,037,882 | |||||||||
New York State Dorm Authority State Personal Income Tax Revenue General Purpose, Series C 5.000%, due 03/15/25 | 2,320,000 | 2,741,381 | |||||||||
New York State Thruway Authority General Revenue Junior Indebtedness, Series A 5.000%, due 05/01/19 | 3,000,000 | 3,351,720 | |||||||||
New York State Thruway Authority General Revenue, Series I 5.000%, due 01/01/20 | 1,500,000 | 1,712,790 | |||||||||
New York Transportation Development Corp. Special Facility Revenue Refunding (Laguardia Airport Terminal B Redevelopment), Series A 5.000%, due 07/01/341 | 1,000,000 | 1,162,260 | |||||||||
New York Transportation Development Corp. Special Facility Revenue Refunding (Terminal One Group Association) 5.000%, due 01/01/221 | 1,500,000 | 1,779,270 | |||||||||
Port Authority of New York & New Jersey Revenue Consolidated (One Hundred Eighty-Fifth) 5.000%, due 09/01/221 | 2,400,000 | 2,898,912 | |||||||||
Triborough Bridge & Tunnel Authority Revenue, Subseries 2003B-2 0.663%, due 01/01/332 | 1,500,000 | 1,485,840 | |||||||||
46,876,171 | |||||||||||
North Carolina—0.88% | |||||||||||
North Carolina Capital Improvement Obligations, Series C | |||||||||||
5.000%, due 05/01/30 | 1,000,000 | 1,172,450 | |||||||||
University of North Carolina Chapel Hill Revenue, Series A 5.000%, due 12/01/27 | 2,160,000 | 2,451,060 | |||||||||
3,623,510 |
100
PACE Municipal Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Ohio—0.81% | |||||||||||
Kent State University Prerefunded Revenue General Receipts, Series B (Assured Guaranty Insured) 5.000%, due 05/01/21 | $ | 2,750,000 | $ | 3,075,627 | |||||||
Kent State University Unrefunded Revenue General Receipts, Series B (Assured Guaranty Insured) 5.000%, due 05/01/21 | 250,000 | 278,173 | |||||||||
3,353,800 | |||||||||||
Pennsylvania—2.05% | |||||||||||
Allegheny County Port Authority Special Revenue Refunding Transportation 5.000%, due 03/01/25 | 1,000,000 | 1,166,670 | |||||||||
Pennsylvania Turnpike Commission Turnpike Refunding Subordinated Revenue 5.000%, due 06/01/28 | 2,000,000 | 2,444,740 | |||||||||
Pennsylvania Turnpike Commission Turnpike Revenue, Series B 5.000%, due 12/01/32 | 1,250,000 | 1,523,925 | |||||||||
Philadelphia School District Refunding, Series E 5.000%, due 09/01/18 | 1,000,000 | 1,068,700 | |||||||||
University of Pittsburgh of the Commonwealth System of Higher Education Capital Project, Series B 5.500%, due 09/15/21 | 2,000,000 | 2,252,640 | |||||||||
8,456,675 | |||||||||||
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 | 4,296,320 | |||||||||
South Carolina—0.72% | |||||||||||
Columbia Waterworks & Sewer Systems Refunding 5.000%, due 02/01/28 | 2,500,000 | 2,985,275 | |||||||||
Tennessee—1.87% | |||||||||||
Metropolitan Government of Nashville & Davidson County, Series D 5.000%, due 07/01/23 | 5,000,000 | 5,794,550 | |||||||||
Tennessee Energy Acquisition Corp. Gas Revenue, Series A 5.250%, due 09/01/26 | 1,500,000 | 1,896,360 | |||||||||
7,690,910 | |||||||||||
Texas—15.12% | |||||||||||
Arlington Independent School District School Building Bond, Series A (PSF-GTD) 5.000%, due 02/15/25 | 1,400,000 | 1,734,250 | |||||||||
5.000%, due 02/15/26 | 1,295,000 | 1,595,815 | |||||||||
Central Texas Regional Mobility Authority Senior Lien Revenue, Series A 5.000%, due 01/01/35 | 1,100,000 | 1,316,733 |
Face Amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Texas—(continued) | |||||||||||
Central Texas Turnpike System, Series C 5.000%, due 08/15/31 | $ | 2,000,000 | $ | 2,370,300 | |||||||
City of Brownsville, Texas Utilities System Revenue, Series A 5.000%, due 09/01/28 | 2,225,000 | �� | 2,672,759 | ||||||||
City of Rockwall, Texas Combination Tax and Surplus Revenue 5.000%, due 08/01/21 | 1,000,000 | 1,191,480 | |||||||||
City of Waco, Texas Combination Tax And Revenue Certificates of Obligation 5.000%, due 02/01/20 | 1,550,000 | 1,771,495 | |||||||||
Clifton Higher Education Finance Corp. Revenue Refunding Idea Public Schools (PSF-GTD) 5.000%, due 08/15/28 | 1,100,000 | 1,338,381 | |||||||||
Cypress-Fairbanks Independent School District (PSF-GTD) 5.000%, due 02/15/25 | 2,500,000 | 3,096,875 | |||||||||
Dickinson Independent School District (PSF-GTD) 5.000%, due 02/15/30 | 2,500,000 | 3,034,475 | |||||||||
EL Paso County Hospital District 5.000%, due 08/15/29 | 2,000,000 | 2,337,980 | |||||||||
Harris County Metropolitan Transportation Authority Sales & Use Tax Revenue Contractual Obligations 5.000%, due 11/01/23 | 2,000,000 | 2,527,580 | |||||||||
Harris County Metropolitan Transportation Authority Sales & Use Tax Revenue, Series A 5.000%, due 11/01/29 | 2,000,000 | 2,419,580 | |||||||||
Harris County Tax Revenue Refunding Road, Series A 5.000%, due 10/01/28 | 2,700,000 | 3,433,968 | |||||||||
Harris County-Houston Sports Authority Revenue Refunding Senior Lien, Series A 5.000%, due 11/15/29 | 1,000,000 | 1,215,010 | |||||||||
Houston Utility System Revenue First Lien, Series D 5.000%, due 11/15/29 | 2,000,000 | 2,382,640 | |||||||||
Love Field Airport Modernization Corp. General Airport Revenue 5.000%, due 11/01/351 | 1,700,000 | 2,018,257 | |||||||||
Lower Colorado River Authority Refunding LCRA Transmission Services (BHAC Insured) 5.000%, due 05/15/20 | 1,765,000 | 1,901,364 | |||||||||
North Texas Health Facilities Development Corp. Hospital Revenue United Regional Health Care Systems (AGM Insured) 5.000%, due 09/01/21 | 1,450,000 | 1,516,149 | |||||||||
5.000%, due 09/01/22 | 1,400,000 | 1,463,868 |
101
PACE Municipal Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Municipal bonds and notes—(continued) | |||||||||||
Texas—(concluded) | |||||||||||
North Texas Tollway Authority Revenue Refunding, Series A 5.000%, due 01/01/31 | $ | 2,750,000 | $ | 3,334,265 | |||||||
5.000%, due 01/01/34 | 2,775,000 | 3,326,864 | |||||||||
San Antonio Texas Refunding & Improvement 5.000%, due 02/01/20 | 4,370,000 | 5,012,434 | |||||||||
Socorro Independent School District Refunding, Series A (PSF-GTD) 5.000%, due 08/15/28 | 3,885,000 | 4,788,457 | |||||||||
Tarrant County Cultural Education Facilities Finance Corp. Hospital Revenue Refunding (Baylor Scott and White Memorial Hospital), Series B 5.000%, due 11/15/32 | 1,000,000 | 1,242,480 | |||||||||
University of Texas University Revenues Financing System, Series E 5.000%, due 08/15/23 | 1,500,000 | 1,878,345 | |||||||||
University of Texas University Revenues Refunding Financing System, Series D Unrefunded Balance 5.000%, due 08/15/17 | 195,000 | 199,828 | |||||||||
West Travis County Public Utility Agency Revenue 5.500%, due 08/15/24 | 1,000,000 | 1,201,670 | |||||||||
62,323,302 | |||||||||||
Washington—2.94% | |||||||||||
Port of Seattle Revenue Refunding 5.500%, due 12/01/221 | 500,000 | 601,070 | |||||||||
Port of Seattle Revenue, Series C 5.000%, due 04/01/321 | 1,955,000 | 2,330,907 | |||||||||
Seattle Municipal Lighting & Power Revenue Refunding & Improvement, Series A 5.000%, due 02/01/22 | 2,500,000 | 2,946,600 | |||||||||
Washington State, Series A-1 5.000%, due 08/01/31 | 5,000,000 | 6,235,200 | |||||||||
12,113,777 |
Face Amount | Value | ||||||||||
Municipal bonds and notes—(concluded) | |||||||||||
Wisconsin—2.73% | |||||||||||
Public Finance Authority lease Development Revenue (Central District Development Project) 5.000%, due 03/01/34 | $ | 1,500,000 | $ | 1,815,090 | |||||||
Wisconsin Health & Educational Facilities Authority Revenue (Aspirus, Inc. Obligated Group) 5.000%, due 08/15/27 | 1,000,000 | 1,191,230 | |||||||||
Wisconsin Health & Educational Facilities Authority Revenue (Aurora Health Care, Inc.), Series A 5.125%, due 04/15/31 | 3,000,000 | 3,487,680 | |||||||||
Wisconsin Health & Educational Facilities Authority Revenue (Unitypoint Health), Series A 5.000%, due 12/01/26 | 1,175,000 | 1,451,807 | |||||||||
WPPI Energy Power Supply Revenue, Series A 5.000%, due 07/01/32 | 2,760,000 | 3,292,735 | |||||||||
11,238,542 | |||||||||||
Total municipal bonds and notes (cost—$381,458,281) | 407,380,526 | ||||||||||
Repurchase agreement—0.13% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $515,000 US Treasury Note, 1.625% due 04/30/19; (value—$529,157); proceeds: $518,000 (cost—$518,000) | 518,000 | 518,000 | |||||||||
Total investments (cost—$381,976,281)—98.97% | 407,898,526 | ||||||||||
Other assets in excess of liabilities—1.03% | 4,243,554 | ||||||||||
Net assets—100.00% | $ | 412,142,080 |
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 262.
Aggregate cost for federal income tax purposes was $381,976,281; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 26,259,768 | |||||
Gross unrealized depreciation | (337,523 | ) | |||||
Net unrealized appreciation | $ | 25,922,245 |
102
PACE Municipal Fixed Income Investments
Portfolio of investments—July 31, 2016
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | — | $ | 407,380,526 | $ | — | $ | 407,380,526 | |||||||||||
Repurchase agreement | — | 518,000 | — | 518,000 | |||||||||||||||
Total | $ | — | $ | 407,898,526 | $ | — | $ | 407,898,526 |
At July 31, 2016 there were no transfers between Level 1 and Level 2.
Portfolio footnotes
1 Security subject to alternative minimum tax.
2 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2016 and changes periodically.
See accompanying notes to financial statements.
103
PACE International Fixed Income Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares returned 11.99% before the deduction of the maximum PACE Select program fee.1 In comparison, the Barclays Global Aggregate ex US Index (the "benchmark") returned 12.32%, the Barclays Global Aggregate ex USD 50% Hedged Index gained 10.10%, and the Lipper International Income Funds category posted a median return of 7.22%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 106. 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 3.
Subadvisor's comments (Unaudited)2
The Portfolio modestly outperformed its benchmark on a gross of fees basis but underperformed its benchmark on a net of fees basis during the reporting period. The 12 months ended July 31, 2016 was a positive one for the global bond markets as yields generally fell across the developed markets. Market action early in the period was driven by speculation as to when the US Federal Reserve Board would begin to raise interest rates. While this finally occurred in December 2015, the economic optimism that led to the move disappeared quickly as 2016 began due to renewed fears about a Chinese and US growth slowdown and banking sector vulnerabilities. Both the European Central Bank and Bank of Japan subsequently introduced policies which included negative interest rates. The UK's surprise "Brexit" vote to leave the European Union in June 2016 provided further impetus to send global yields lower.
Against this backdrop, the Portfolio's performance was negatively impacted by a bias to be underweight duration over the period, particularly among Japanese bonds. However, overall country selection was beneficial, especially a short position in US bonds early in the period and an exposure to Mexican local currency bonds.
While a weakening US dollar had a significant positive contribution to overall returns, currency selection detracted from relative performance, including our preference for the Norwegian krone versus the euro early in the period. Emerging market currency exposures also detracted on a relative basis, including an overweight to the Mexican peso and an underweight to the Taiwanese dollar. Partially offsetting these negative impacts was our tactical exposure to the Russian ruble.
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 subadvisors 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 Fixed Income Investments
Investment Manager:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisor:
Rogge Global Partners Ltd ("Rogge Global Partners")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Gina Toth, CFA, Fred Lee, CFA, Diana To and Anthony Karaminas
Rogge Global Partners: Olaf Rogge, John Graham, Malie Conway and David Jacob
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 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.
104
PACE International Fixed Income Investments
Subadvisor's comments (Unaudited) – concluded
Sector selection was positive overall, as the decision to be overweight credit, including maintaining an exposure to high yield corporate bonds, was positive. During 2016, our preference for financials versus industrials detracted from results and more than offset earlier gains from this positioning.
We utilize derivatives in the Portfolio, mainly interest rate futures and forward foreign exchange contracts. This allowed the Portfolio to take positions in various government bond markets, hedge interest rate exposure and take long and short positions in currencies. Overall, the use of derivatives was beneficial to the Portfolio.
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.
105
PACE International Fixed Income Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 11.77 | % | 0.70 | % | 3.87 | % | |||||||||
Class C2 | 11.12 | 0.21 | 3.37 | ||||||||||||
Class Y3 | 11.93 | 0.90 | 4.13 | ||||||||||||
Class P4 | 11.99 | 0.91 | 4.10 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 7.55 | (0.07 | ) | 3.47 | |||||||||||
Class C2 | 10.37 | 0.21 | 3.37 | ||||||||||||
Barclays Global Aggregate ex US Index5 | 12.32 | 0.04 | 3.84 | ||||||||||||
Barclays Global Aggregate ex USD 50% Hedged Index6 | 10.10 | 2.74 | 4.45 | ||||||||||||
Lipper International Income Funds median | 7.22 | 0.59 | 4.30 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 10.54 | % | 0.94 | % | 3.80 | % | |||||||||
Class C2 | 10.00 | 0.47 | 3.30 | ||||||||||||
Class Y3 | 10.78 | 1.16 | 4.07 | ||||||||||||
Class P4 | 10.75 | 1.15 | 4.04 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | 6.37 | 0.17 | 3.41 | ||||||||||||
Class C2 | 9.25 | 0.47 | 3.30 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, were as follows: Class A—1.27% and 1.04%; Class C—1.76% and 1.53%; Class Y—1.09% and 0.86%; and Class P—1.08% and 0.85%. 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS AM is contractually obligated to: (1) waive its management fees through November 30, 2016 to the extent necessary to reflect the lower subadvisory fee paid by UBS AM to Rogge Global Partners plc, the Portfolio's investment subadvisor; (2) waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2016 (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%; and (3) waive its management fees through November 30, 2016 to reflect a lower management fee paid by the Portfolio to UBS AM. The Portfolio has agreed to repay UBS 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 and that UBS AM has not waived the right to do so. 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 AM. Upon termination of the agreement, however, UBS AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 3.75%. Class A shares bear ongoing 12b-1 service fees of 0.25% annually.
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 of 0.25% and 0.50% annually, respectively.
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 USD 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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualfundperformance.
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.
106
PACE International 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 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, 2016. 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.
PACE International Fixed Income Investments
107
PACE International Fixed Income Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Weighted average duration | 7.87 yrs. | ||||||
Weighted average maturity | 10.80 yrs. | ||||||
Average coupon | 3.31 | % | |||||
Net assets (mm) | $ | 565.5 | |||||
Number of holdings | 188 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Long-term global debt securities | 97.3 | % | |||||
Futures and forward foreign currency contracts | 0.7 | ||||||
Cash equivalents and other assets less liabilities | 2.0 | ||||||
Total | 100.0 | % | |||||
Quality diversification1,2 | 07/31/16 | ||||||
AAA | 5.1 | % | |||||
AA | 6.9 | ||||||
A | 22.4 | ||||||
BBB | 22.3 | ||||||
BB | 2.0 | ||||||
B | 0.9 | ||||||
Non-rated | 37.7 | ||||||
Futures and forward foreign currency contracts | 0.7 | ||||||
Cash equivalents and other assets less liabilities | 2.0 | ||||||
Total | 100.0 | % | |||||
Top five countries of incorporation1 | 07/31/16 | ||||||
United States | 25.8 | % | |||||
Japan | 17.0 | ||||||
United Kingdom | 10.4 | ||||||
France | 6.9 | ||||||
Italy | 6.8 | ||||||
Total | 66.9 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
2 Credit quality ratings shown are based on the ratings assigned to portfolio holdings by Standard & Poor's Ratings Group, an independent rating agency.
108
PACE International Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Long-term global debt securities—97.26% | |||||||||||
Argentina—0.07% | |||||||||||
Argentine Republic Government International Bond 6.875%, due 04/22/211 | USD | 350,000 | $ | 376,250 | |||||||
Austria—0.84% | |||||||||||
Austria Government Bond 1.200%, due 10/20/252 | EUR | 3,800,000 | 4,752,309 | ||||||||
Belgium—1.62% | |||||||||||
Belgium Government Bond 4.250%, due 09/28/222 | EUR | 4,400,000 | 6,347,738 | ||||||||
5.000%, due 03/28/352 | EUR | 1,400,000 | 2,817,831 | ||||||||
9,165,569 | |||||||||||
Canada—5.84% | |||||||||||
Canadian Government Bond 5.750%, due 06/01/33 | CAD | 3,460,000 | 4,307,318 | ||||||||
Province of British Columbia Canada 4.700%, due 06/18/37 | CAD | 1,450,000 | 1,503,251 | ||||||||
4.950%, due 06/18/40 | CAD | 2,250,000 | 2,462,274 | ||||||||
Province of Ontario Canada 2.400%, due 06/02/26 | CAD | 9,450,000 | 7,590,543 | ||||||||
Royal Bank of Canada 1.400%, due 10/13/17 | USD | 2,450,000 | 2,455,836 | ||||||||
2.350%, due 10/30/20 | USD | 5,950,000 | 6,149,016 | ||||||||
The Bank of Nova Scotia 2.450%, due 03/22/21 | USD | 2,400,000 | 2,470,994 | ||||||||
Toronto-Dominion Bank 1.400%, due 04/30/18 | USD | 6,050,000 | 6,078,096 | ||||||||
33,017,328 | |||||||||||
Denmark—0.43% | |||||||||||
Denmark Government Bond 1.500%, due 11/15/23 | DKK | 14,450,000 | 2,432,968 | ||||||||
Dominican Republic—0.15% | |||||||||||
Dominican Republic International Bond 6.875%, due 01/29/261 | USD | 750,000 | 843,750 | ||||||||
France—6.92% | |||||||||||
BNP Paribas SA 2.375%, due 09/14/17 | USD | 5,700,000 | 5,770,874 | ||||||||
Engie SA 2.875%, due 10/10/222 | USD | 2,369,000 | 2,450,150 | ||||||||
France Government Bond OAT 2.250%, due 05/25/242 | EUR | 7,750,000 | 10,309,928 | ||||||||
3.250%, due 10/25/212 | EUR | 5,200,000 | 6,933,093 | ||||||||
4.750%, due 04/25/352 | EUR | 3,300,000 | 6,457,973 | ||||||||
Numericable-SFR SA 5.375%, due 05/15/222 | EUR | 950,000 | 1,093,963 | ||||||||
Republic of France 4.000%, due 04/25/552 | EUR | 450,000 | 984,990 | ||||||||
Societe Generale SA 2.750%, due 10/12/17 | USD | 4,150,000 | 4,213,453 | ||||||||
5.200%, due 04/15/212 | USD | 800,000 | 917,331 | ||||||||
39,131,755 |
Face Amount | Value | ||||||||||
Long-term global debt securities—(continued) | |||||||||||
Germany—0.16% | |||||||||||
Trionista Holdco GmbH 5.000%, due 04/30/202 | EUR | 800,000 | $ | 917,878 | |||||||
Indonesia—0.47% | |||||||||||
Indonesia Government International Bond 3.375%, due 04/15/232 | USD | 2,600,000 | 2,652,000 | ||||||||
Ireland—1.59% | |||||||||||
Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc. 4.250%, due 01/15/221 | EUR | 1,000,000 | 1,153,497 | ||||||||
German Residential Funding PLC 0.892%, due 08/27/242,3 | EUR | 3,282,254 | 3,724,606 | ||||||||
Ireland Government Bond 5.400%, due 03/13/25 | EUR | 1,450,000 | 2,315,872 | ||||||||
Willow No.2 Ireland PLC for Zurich Insurance Co. Ltd. 3.375%, due 06/27/222 | EUR | 1,350,000 | 1,770,343 | ||||||||
8,964,318 | |||||||||||
Italy—6.76% | |||||||||||
Assicurazioni Generali SpA 2.875%, due 01/14/202 | EUR | 100,000 | 122,270 | ||||||||
7.750%, due 12/12/422,3 | EUR | 1,000,000 | 1,325,110 | ||||||||
Buoni Poliennali Del Tesoro 4.500%, due 02/01/202 | EUR | 7,200,000 | 9,295,682 | ||||||||
4.750%, due 09/01/21 | EUR | 3,700,000 | 5,062,373 | ||||||||
Enel SpA 6.500%, due 01/10/742,3 | EUR | 900,000 | 1,096,759 | ||||||||
Intesa Sanpaolo SpA 4.375%, due 10/15/192 | EUR | 1,200,000 | 1,501,974 | ||||||||
Italy Buoni Poliennali Del Tesoro 1.500%, due 06/01/25 | EUR | 650,000 | 757,004 | ||||||||
3.750%, due 09/01/24 | EUR | 2,000,000 | 2,724,344 | ||||||||
4.500%, due 03/01/24 | EUR | 4,950,000 | 7,018,459 | ||||||||
4.750%, due 09/01/442 | EUR | 500,000 | 871,919 | ||||||||
5.000%, due 09/01/402 | EUR | 4,000,000 | 7,002,395 | ||||||||
Sunrise Srl, Series 2015-3, Class A1 0.529%, due 05/27/352,3 | EUR | 1,300,000 | 1,460,487 | ||||||||
38,238,776 | |||||||||||
Japan—16.97% | |||||||||||
Development Bank of Japan 2.300%, due 03/19/26 | JPY | 500,000,000 | 5,956,353 | ||||||||
Government of Japan 2.200%, due 09/20/26 | JPY | 467,500,000 | 5,683,079 | ||||||||
2.300%, due 06/20/35 | JPY | 1,177,000,000 | 16,087,878 | ||||||||
2.300%, due 12/20/36 | JPY | 480,000,000 | 6,647,601 | ||||||||
Japan Government Thirty Year Bond 2.000%, due 09/20/41 | JPY | 1,167,100,000 | 16,274,088 | ||||||||
Japan Government Twenty Year Bond 1.000%, due 12/20/35 | JPY | 118,900,000 | 1,346,675 | ||||||||
2.100%, due 09/20/29 | JPY | 2,269,200,000 | 28,533,186 | ||||||||
Mizuho Bank Ltd. 1.300%, due 04/16/171 | USD | 5,900,000 | 5,898,147 |
109
PACE International Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Long-term global debt securities—(continued) | |||||||||||
Japan—(concluded) | |||||||||||
Sumitomo Mitsui Banking Corp. 1.950%, due 07/23/18 | USD | 800,000 | $ | 806,536 | |||||||
3.200%, due 07/18/22 | USD | 2,600,000 | 2,743,653 | ||||||||
The Bank of Tokyo-Mitsubishi UFJ Ltd. 1.450%, due 09/08/171 | USD | 6,000,000 | 6,003,108 | ||||||||
95,980,304 | |||||||||||
Kazakhstan—0.18% | |||||||||||
Kazakhstan Government International Bond 5.125%, due 07/21/252 | USD | 950,000 | 1,037,875 | ||||||||
Liberia—0.07% | |||||||||||
Royal Caribbean Cruises Ltd. 5.250%, due 11/15/224 | USD | 350,000 | 376,250 | ||||||||
Luxembourg—0.27% | |||||||||||
Fiat Chrysler Finance Europe 4.750%, due 07/15/222 | EUR | 100,000 | 122,298 | ||||||||
Wind Acquisition Finance SA 4.000%, due 07/15/202 | EUR | 1,250,000 | 1,400,994 | ||||||||
1,523,292 | |||||||||||
Malaysia—0.86% | |||||||||||
Malaysia Government Bond, 4.160%, due 07/15/21 | MYR | 5,800,000 | 1,482,237 | ||||||||
3.955%, due 09/15/25 | MYR | 13,600,000 | 3,405,402 | ||||||||
4,887,639 | |||||||||||
Mexico—2.76% | |||||||||||
Mexican Bonos 5.750%, due 03/05/26 | MXN | 132,400,000 | 6,961,127 | ||||||||
10.000%, due 12/05/24 | MXN | 127,150,000 | 8,629,819 | ||||||||
15,590,946 | |||||||||||
Netherlands—4.67% | |||||||||||
ABN AMRO Bank N.V. 4.250%, due 02/02/172 | USD | 4,000,000 | 4,059,568 | ||||||||
6.375%, due 04/27/212 | EUR | 1,950,000 | 2,669,449 | ||||||||
Deutsche Telekom International Finance BV 2.250%, due 03/06/171 | USD | 2,650,000 | 2,666,830 | ||||||||
EDP Finance BV 4.125%, due 01/15/201 | USD | 800,000 | 836,859 | ||||||||
Enel Finance International N.V. 1.966%, due 01/27/25 | EUR | 1,014,000 | 1,282,278 | ||||||||
5.000%, due 09/14/222 | EUR | 1,100,000 | 1,591,827 | ||||||||
ING Bank N.V. 3.750%, due 03/07/171 | USD | 3,150,000 | 3,197,184 | ||||||||
Linde Finance BV 3.125%, due 12/12/18 | EUR | 2,050,000 | 2,469,413 | ||||||||
Netherlands Government Bond 1.750%, due 07/15/232 | EUR | 1,450,000 | 1,863,206 | ||||||||
4.000%, due 01/15/372 | EUR | 1,900,000 | 3,726,137 | ||||||||
Teva Pharmaceutical Finance Netherlands III BV 2.800%, due 07/21/23 | USD | 1,100,000 | 1,119,473 | ||||||||
UPC Holding BV 6.750%, due 03/15/231 | EUR | 750,000 | 906,628 | ||||||||
26,388,852 |
Face Amount | Value | ||||||||||
Long-term global debt securities—(continued) | |||||||||||
Norway—0.13% | |||||||||||
DnB Bank ASA 4.375%, due 02/24/212 | EUR | 570,000 | $ | 760,063 | |||||||
Panama—0.21% | |||||||||||
Carnival Corp. 1.125%, due 11/06/19 | EUR | 1,050,000 | 1,208,485 | ||||||||
Poland—0.21% | |||||||||||
Poland Government Bond 5.750%, due 09/23/22 | PLN | 3,850,000 | 1,174,799 | ||||||||
Romania—0.49% | |||||||||||
Romanian Government International Bond 2.875%, due 10/28/242 | EUR | 850,000 | 1,010,882 | ||||||||
3.625%, due 04/24/242 | EUR | 1,400,000 | 1,756,938 | ||||||||
2,767,820 | |||||||||||
South Korea—2.20% | |||||||||||
Korea Treasury Bond 3.000%, due 09/10/24 | KRW | 4,709,000,000 | 4,731,651 | ||||||||
5.750%, due 09/10/18 | KRW | 7,924,710,000 | 7,733,650 | ||||||||
12,465,301 | |||||||||||
Spain—4.83% | |||||||||||
Bankinter S.A. 0.000%, due 06/21/432,3 | EUR | 1,753,434 | 1,920,896 | ||||||||
BBVA Senior Finance SAU 2.375%, due 01/22/192 | EUR | 2,000,000 | 2,358,869 | ||||||||
Fondo de Titulizacion de Activos Santander Hipotecario, Series 2 0.007%, due 01/18/492,3 | EUR | 1,468,138 | 1,603,516 | ||||||||
Iberdrola Finanzas SAU 4.125%, due 03/23/20 | EUR | 1,800,000 | 2,316,930 | ||||||||
Spain Government Bond 1.600%, due 04/30/252 | EUR | 600,000 | 712,053 | ||||||||
3.800%, due 04/30/242 | EUR | 2,150,000 | 2,954,810 | ||||||||
4.400%, due 10/31/232 | EUR | 2,250,000 | 3,194,440 | ||||||||
4.900%, due 07/30/402 | EUR | 1,250,000 | 2,210,921 | ||||||||
5.150%, due 10/31/442 | EUR | 400,000 | 748,086 | ||||||||
5.850%, due 01/31/222 | EUR | 6,350,000 | 9,266,827 | ||||||||
27,287,348 | |||||||||||
Sweden—2.36% | |||||||||||
Government of Sweden 3.500%, due 06/01/22 | SEK | 18,225,000 | 2,616,754 | ||||||||
4.250%, due 03/12/19 | SEK | 14,830,000 | 1,957,914 | ||||||||
Nordea Bank AB 3.125%, due 03/20/171 | USD | 5,200,000 | 5,267,283 | ||||||||
Swedbank AB 2.125%, due 09/29/171 | USD | 3,450,000 | 3,483,713 | ||||||||
13,325,664 | |||||||||||
United Kingdom—10.39% | |||||||||||
Anglo American Capital PLC 2.500%, due 04/29/212 | EUR | 1,400,000 | 1,504,731 |
110
PACE International Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Long-term global debt securities—(continued) | |||||||||||
United Kingdom—(concluded) | |||||||||||
Arkle Master Issuer PLC 3.986%, due 08/17/172 | GBP | 1,050,000 | $ | 1,426,617 | |||||||
4.681%, due 02/17/172 | GBP | 700,000 | 945,112 | ||||||||
Aviva PLC 3.375%, due 12/04/452,3 | EUR | 1,900,000 | 2,042,152 | ||||||||
Barclays Bank PLC 5.140%, due 10/14/20 | USD | 1,100,000 | 1,186,580 | ||||||||
BAT International Finance PLC 3.625%, due 11/09/212 | EUR | 1,050,000 | 1,378,687 | ||||||||
Coventry Building Society 2.250%, due 12/04/172 | EUR | 4,200,000 | 4,818,631 | ||||||||
FCE Bank PLC 1.875%, due 06/24/212 | EUR | 500,000 | 594,903 | ||||||||
Hutchison Whampoa International 14 Ltd. 1.625%, due 10/31/171 | USD | 3,450,000 | 3,461,146 | ||||||||
Imperial Brands Finance PLC 2.950%, due 07/21/201 | USD | 3,900,000 | 4,041,862 | ||||||||
Lloyds Banking Group PLC 4.500%, due 11/04/24 | USD | 1,450,000 | 1,504,575 | ||||||||
Lloyds TSB Bank PLC 6.500%, due 03/24/202 | EUR | 1,400,000 | 1,839,984 | ||||||||
Penarth Master Issuer PLC 0.882%, due 05/18/191,3 | USD | 3,300,000 | 3,285,520 | ||||||||
Santander UK Group Holdings PLC 3.125%, due 01/08/21 | USD | 1,300,000 | 1,320,773 | ||||||||
Silverstone Master Issuer PLC 0.896%, due 01/21/701,3 | GBP | 1,400,000 | 1,844,044 | ||||||||
5.063%, due 01/21/552,3 | GBP | 1,400,000 | 1,870,374 | ||||||||
Taurus 2013 GMF1 PLC, Class A 0.792%, due 05/21/242,3 | EUR | 1,862,542 | 2,101,064 | ||||||||
United Kingdom Gilt 3.250%, due 01/22/442 | GBP | 4,600,000 | 8,379,684 | ||||||||
4.500%, due 09/07/342 | GBP | 5,200,000 | 10,369,898 | ||||||||
United Kingdom Treasury Bonds 4.250%, due 12/07/552 | GBP | 1,970,000 | 4,842,658 | ||||||||
58,758,995 | |||||||||||
United States—25.81% | |||||||||||
AbbVie, Inc. 2.850%, due 05/14/23 | USD | 3,350,000 | 3,421,161 | ||||||||
Activision Blizzard, Inc. 5.625%, due 09/15/211 | USD | 1,350,000 | 1,412,437 | ||||||||
AES Corp. 3.673%, due 06/01/193 | USD | 513,000 | 511,718 | ||||||||
Aetna, Inc. 2.750%, due 11/15/22 | USD | 1,050,000 | 1,075,244 | ||||||||
2.800%, due 06/15/23 | USD | 1,250,000 | 1,287,025 | ||||||||
American International Group, Inc. 4.875%, due 06/01/22 | USD | 1,150,000 | 1,290,308 | ||||||||
Anheuser-Busch InBev Finance, Inc. 2.650%, due 02/01/21 | USD | 7,950,000 | 8,238,649 | ||||||||
AT&T, Inc. 1.300%, due 09/05/23 | EUR | 550,000 | 648,767 | ||||||||
2.400%, due 03/15/24 | EUR | 900,000 | 1,133,481 | ||||||||
2.500%, due 03/15/23 | EUR | 1,300,000 | 1,634,509 | ||||||||
3.800%, due 03/15/22 | USD | 750,000 | 808,935 |
Face Amount | Value | ||||||||||
Long-term global debt securities—(continued) | |||||||||||
United States—(continued) | |||||||||||
Bank of America Corp. 2.000%, due 01/11/18 | USD | 3,850,000 | $ | 3,875,768 | |||||||
Bank of America NA 2.050%, due 12/07/18 | USD | 500,000 | 507,791 | ||||||||
BMW US Capital LLC 2.000%, due 04/11/211 | USD | 1,900,000 | 1,932,644 | ||||||||
Branch Banking & Trust Co. 3.800%, due 10/30/26 | USD | 1,600,000 | 1,761,459 | ||||||||
Capital One NA/Mclean VA 1.500%, due 09/05/17 | USD | 1,800,000 | 1,802,867 | ||||||||
Celgene Corp. 2.875%, due 08/15/20 | USD | 2,800,000 | 2,911,350 | ||||||||
Cemex Finance LLC 5.250%, due 04/01/212 | EUR | 800,000 | 931,643 | ||||||||
Charter Communications Operating LLC/ Charter Communications Operating Capital 3.579%, due 07/23/201 | USD | 1,150,000 | 1,210,470 | ||||||||
Chubb INA Holdings, Inc. 2.875%, due 11/03/22 | USD | 950,000 | 1,002,120 | ||||||||
Cigna Corp. 3.250%, due 04/15/25 | USD | 2,850,000 | 2,972,596 | ||||||||
Citigroup, Inc. 2.050%, due 12/07/18 | USD | 3,000,000 | 3,031,767 | ||||||||
2.150%, due 07/30/18 | USD | 1,050,000 | 1,062,356 | ||||||||
Comcast Corp. 3.150%, due 03/01/26 | USD | 3,450,000 | 3,692,566 | ||||||||
Commercial Mortgage Pass-Through Certificates, Series 2012-9W57, Class A 2.365%, due 02/10/291 | USD | 1,250,000 | 1,255,276 | ||||||||
Constellation Energy Group, Inc. 5.150%, due 12/01/20 | USD | 2,600,000 | 2,898,410 | ||||||||
CVS Health Corp. 2.125%, due 06/01/21 | USD | 800,000 | 815,813 | ||||||||
2.800%, due 07/20/20 | USD | 2,700,000 | 2,824,683 | ||||||||
Daimler Finance North America LLC 1.125%, due 03/10/171 | USD | 2,850,000 | 2,851,425 | ||||||||
DB Master Finance LLC, Series 2015-1A, Class A2I 3.262%, due 02/20/451 | USD | 3,555,000 | 3,580,824 | ||||||||
Duke Energy Corp. 2.100%, due 06/15/18 | USD | 550,000 | 555,583 | ||||||||
3.050%, due 08/15/22 | USD | 1,150,000 | 1,197,788 | ||||||||
Ford Credit Auto Owner Trust, Series 2014-2, Class A 2.310%, due 04/15/261 | USD | 3,750,000 | 3,832,836 | ||||||||
Ford Motor Credit Co. LLC 1.684%, due 09/08/17 | USD | 2,850,000 | 2,855,344 | ||||||||
2.943%, due 01/08/19 | USD | 800,000 | 822,225 | ||||||||
General Motors Financial Co., Inc. 4.200%, due 03/01/21 | USD | 1,100,000 | 1,161,235 | ||||||||
GRACE 2014-GRCE Mortgage Trust, Class A 3.369%, due 06/10/281 | USD | 2,550,000 | 2,731,548 | ||||||||
HD Supply, Inc. 5.250%, due 12/15/211 | USD | 492,000 | 520,905 |
111
PACE International Fixed Income Investments
Portfolio of investments—July 31, 2016
Face Amount | Value | ||||||||||
Long-term global debt securities—(continued) | |||||||||||
United States—(continued) | |||||||||||
Hilton USA Trust, Series 2013-HLT 2.662%, due 11/05/301 | USD | 2,980,000 | $ | 2,998,350 | |||||||
International Lease Finance Corp. 8.875%, due 09/01/174 | USD | 1,100,000 | 1,179,750 | ||||||||
Kraft Heinz Foods Co. 3.500%, due 07/15/221 | USD | 1,000,000 | 1,073,961 | ||||||||
MasterCard, Inc. 1.100%, due 12/01/22 | EUR | 1,400,000 | 1,636,805 | ||||||||
MetLife, Inc. 3.600%, due 11/13/25 | USD | 1,950,000 | 2,070,428 | ||||||||
Molson Coors Brewing Co. 1.450%, due 07/15/19 | USD | 900,000 | 905,251 | ||||||||
Morgan Stanley 5.500%, due 07/28/21 | USD | 2,400,000 | 2,756,129 | ||||||||
Morgan Stanley Capital I Trust 2014-CPT, Class A 3.350%, due 07/13/291 | USD | 3,850,000 | 4,106,559 | ||||||||
Navient LLC 8.450%, due 06/15/18 | USD | 1,300,000 | 1,413,750 | ||||||||
Newell Brands, Inc. 3.750%, due 10/01/211 | EUR | 1,100,000 | 1,371,842 | ||||||||
OBP Depositor LLC Trust, Series 2010-OBP, Class A 4.646%, due 07/15/451 | USD | 1,348,000 | 1,484,216 | ||||||||
PNC Bank NA 1.950%, due 03/04/19 | USD | 2,250,000 | 2,286,619 | ||||||||
PPG Industries, Inc. 0.875%, due 03/13/22 | EUR | 2,200,000 | 2,543,965 | ||||||||
PPL Capital Funding, Inc. 3.950%, due 03/15/24 | USD | 700,000 | 758,308 | ||||||||
Prologis LP 3.375%, due 02/20/24 | EUR | 2,100,000 | 2,781,205 | ||||||||
Reliance Holding USA, Inc. 5.400%, due 02/14/221 | USD | 2,300,000 | 2,589,906 | ||||||||
Reynolds American, Inc. 2.300%, due 06/12/18 | USD | 350,000 | 356,243 | ||||||||
4.450%, due 06/12/25 | USD | 3,000,000 | 3,387,039 | ||||||||
Sempra Energy 3.550%, due 06/15/24 | USD | 2,900,000 | 3,065,477 | ||||||||
Southern Power Co. 1.000%, due 06/20/22 | EUR | 2,600,000 | 2,983,829 | ||||||||
Starbucks Corp. 2.450%, due 06/15/26 | USD | 2,350,000 | 2,425,287 | ||||||||
SunTrust Banks, Inc. 2.350%, due 11/01/18 | USD | 1,900,000 | 1,934,960 | ||||||||
Synchrony Financial 1.875%, due 08/15/17 | USD | 1,750,000 | 1,752,604 | ||||||||
2.700%, due 02/03/20 | USD | 1,300,000 | 1,317,138 |
Face Amount | Value | ||||||||||
Long-term global debt securities—(concluded) | |||||||||||
United States—(concluded) | |||||||||||
The Brooklyn Union Gas Co. 3.407%, due 03/10/261 | USD | 1,400,000 | $ | 1,510,032 | |||||||
The Coca-Cola Co. 0.014%, due 09/09/193 | EUR | 1,200,000 | 1,341,964 | ||||||||
The Goldman Sachs Group, Inc. 2.750%, due 09/15/20 | USD | 300,000 | 308,008 | ||||||||
3.750%, due 05/22/25 | USD | 600,000 | 633,478 | ||||||||
5.750%, due 01/24/22 | USD | 2,350,000 | 2,735,623 | ||||||||
UnitedHealth Group, Inc. 2.700%, due 07/15/20 | USD | 1,450,000 | 1,518,963 | ||||||||
2.750%, due 02/15/23 | USD | 1,500,000 | 1,564,212 | ||||||||
Verizon Communications, Inc. 2.375%, due 02/17/22 | EUR | 3,200,000 | 3,999,472 | ||||||||
Virginia Electric & Power Co. 3.150%, due 01/15/26 | USD | 1,650,000 | 1,771,725 | ||||||||
Wells Fargo & Co. 3.000%, due 04/22/26 | USD | 1,000,000 | 1,027,604 | ||||||||
4.100%, due 06/03/26 | USD | 3,950,000 | 4,280,737 | ||||||||
145,932,965 | |||||||||||
Total long-term global debt securities (cost—$529,859,674) | 549,959,499 | ||||||||||
Repurchase agreement—0.33% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $150,529 US Treasury Bond, 7.875% due 02/15/21 and $1,657,341 US Treasury Notes, 0.750% to 2.250% due 12/31/17 to 07/31/21; (value—$1,903,354); proceeds: $1,866,002 (cost—$1,866,000) | 1,866,000 | 1,866,000 | |||||||||
Number of Shares | |||||||||||
Investment of cash collateral from securities loaned—0.22% | |||||||||||
Money market fund—0.22% | |||||||||||
State Street Institutional U.S. Government Money Market Fund (cost—$1,220,380) | 1,220,380 | 1,220,380 | |||||||||
Total investments (cost—$532,946,054)—97.81% | 553,045,879 | ||||||||||
Other assets in excess of liabilities—2.19% | 12,408,847 | ||||||||||
Net assets—100.00% | $ | 565,454,726 |
112
PACE International Fixed Income Investments
Portfolio of investments—July 31, 2016
For a listing of defined portfolio acronyms and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 262.
Aggregate cost for federal income tax purposes was $538,680,564; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 28,022,340 | |||||
Gross unrealized depreciation | (13,657,025 | ) | |||||
Net unrealized appreciation | $ | 14,365,315 |
Futures contracts
Number of contracts | Currency | Expiration date | Cost | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||
Interest rate futures buy contracts: | |||||||||||||||||||||||||||
87 | AUD | Australian Bond 10 Year Futures | September 2016 | $ | 8,912,432 | $ | 9,080,626 | $ | 168,194 | ||||||||||||||||||
24 | CAD | Canada Government Bond 10 Year Futures | September 2016 | 2,656,578 | 2,729,307 | 72,729 | |||||||||||||||||||||
63 | EUR | German Euro BOBL Futures | September 2016 | 9,321,328 | 9,414,917 | 93,589 | |||||||||||||||||||||
145 | EUR | German Euro Bund Futures | September 2016 | 26,700,014 | 27,203,691 | 503,677 | |||||||||||||||||||||
58 | EUR | German Euro Buxl 30 Year Futures | September 2016 | 11,524,162 | 12,776,867 | 1,252,705 | |||||||||||||||||||||
361 | EUR | German Euro Schatz Futures | September 2016 | 45,116,726 | 45,211,067 | 94,341 | |||||||||||||||||||||
118 | GBP | United Kingdom Long Gilt Bond Futures | September 2016 | 19,155,591 | 20,450,079 | 1,294,488 | |||||||||||||||||||||
21 | JPY | Japan Government Bond 10 Year Futures | September 2016 | 31,294,864 | 31,406,870 | 112,006 | |||||||||||||||||||||
$ | 154,681,695 | $ | 158,273,424 | $ | 3,591,729 | ||||||||||||||||||||||
Proceeds | |||||||||||||||||||||||||||
US Treasury futures sell contracts: | |||||||||||||||||||||||||||
623 | USD | US Treasury Note 5 Year Futures | September 2016 | $ | 76,101,711 | $ | 76,015,734 | $ | 85,977 | ||||||||||||||||||
316 | USD | US Treasury Note 10 Year Futures | September 2016 | 41,060,599 | 42,042,813 | (982,214 | ) | ||||||||||||||||||||
184 | USD | US Treasury Note 2 Year Futures | September 2016 | 40,068,496 | 40,296,000 | (227,504 | ) | ||||||||||||||||||||
8 | USD | US 30 Year Long Bond Futures | September 2016 | 1,301,295 | 1,395,500 | (94,205 | ) | ||||||||||||||||||||
$ | 158,532,101 | $ | 159,750,047 | $ | (1,217,946 | ) | |||||||||||||||||||||
$ | 2,373,783 |
Forward foreign currency contracts
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
CITI | MXN | 141,125,636 | USD | 7,537,555 | 09/08/16 | $ | 39,947 | ||||||||||||
CITI | MYR | 9,520,000 | USD | 2,290,774 | 09/08/16 | (42,803 | ) | ||||||||||||
CITI | RUB | 750,560,000 | USD | 11,406,646 | 09/08/16 | 140,354 | |||||||||||||
CITI | USD | 887,542 | EUR | 800,000 | 08/18/16 | 7,399 | |||||||||||||
CITI | USD | 86,774,583 | EUR | 76,122,262 | 08/18/16 | (1,618,397 | ) | ||||||||||||
CITI | USD | 429,491 | GBP | 330,000 | 08/18/16 | 7,350 | |||||||||||||
CITI | USD | 14,981,930 | JPY | 1,599,013,925 | 08/18/16 | 697,342 | |||||||||||||
CITI | USD | 4,401,321 | MXN | 82,666,377 | 09/08/16 | (9,489 | ) | ||||||||||||
CITI | USD | 6,807,469 | RUB | 468,095,178 | 09/08/16 | 218,881 | |||||||||||||
CITI | USD | 1,287,375 | TRY | 3,888,000 | 09/08/16 | 2,650 |
113
PACE International Fixed Income Investments
Portfolio of investments—July 31, 2016
Forward foreign currency contracts—(concluded)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
CITI | USD | 5,423,335 | TWD | 172,820,000 | 09/08/16 | $ | (6,158 | ) | |||||||||||
GSI | CAD | 9,175,102 | USD | 7,231,437 | 08/18/16 | 203,393 | |||||||||||||
GSI | KRW | 558,944,000 | USD | 468,323 | 09/08/16 | (30,552 | ) | ||||||||||||
GSI | MXN | 36,574,999 | USD | 1,953,313 | 09/08/16 | 10,186 | |||||||||||||
GSI | TWD | 215,752,939 | USD | 6,612,428 | 09/08/16 | (150,515 | ) | ||||||||||||
GSI | USD | 12,234,020 | AUD | 16,468,588 | 08/18/16 | 275,311 | |||||||||||||
GSI | USD | 639,030 | GBP | 435,037 | 08/18/16 | (63,146 | ) | ||||||||||||
GSI | USD | 5,283,408 | IDR | 73,300,000,000 | 09/08/16 | 282,496 | |||||||||||||
GSI | USD | 4,886,267 | RUB | 335,952,822 | 09/08/16 | 156,558 | |||||||||||||
GSI | USD | 1,388,216 | SGD | 1,916,779 | 09/08/16 | 41,056 | |||||||||||||
JPMCB | EUR | 6,783,996 | CHF | 7,429,527 | 08/18/16 | 82,618 | |||||||||||||
JPMCB | EUR | 731,914 | DKK | 5,442,582 | 08/18/16 | (267 | ) | ||||||||||||
JPMCB | EUR | 1,178,073 | NOK | 10,880,564 | 08/18/16 | (28,216 | ) | ||||||||||||
JPMCB | EUR | 1,230,000 | USD | 1,372,641 | 08/18/16 | (3,331 | ) | ||||||||||||
JPMCB | EUR | 6,908,661 | USD | 7,798,142 | 08/18/16 | 69,586 | |||||||||||||
JPMCB | GBP | 1,430,000 | USD | 1,988,061 | 08/18/16 | 95,086 | |||||||||||||
JPMCB | JPY | 677,897,748 | EUR | 5,940,000 | 08/18/16 | (2,248 | ) | ||||||||||||
JPMCB | JPY | 787,685,402 | USD | 7,500,000 | 08/18/16 | (223,719 | ) | ||||||||||||
JPMCB | USD | 17,086,850 | CAD | 21,739,001 | 08/18/16 | (434,976 | ) | ||||||||||||
JPMCB | USD | 26,019,440 | GBP | 17,896,183 | 08/18/16 | (2,329,215 | ) | ||||||||||||
JPMCB | USD | 86,811,970 | JPY | 9,265,311,319 | 08/18/16 | 4,039,858 | |||||||||||||
JPMCB | USD | 693,482 | MXN | 13,195,228 | 09/08/16 | 7,543 | |||||||||||||
JPMCB | USD | 1,242,849 | NZD | 1,784,421 | 08/18/16 | 44,873 | |||||||||||||
MSCI | EUR | 610,338 | CZK | 16,500,000 | 09/08/16 | (21 | ) | ||||||||||||
MSCI | EUR | 679,609 | PLN | 3,000,000 | 09/08/16 | 8,194 | |||||||||||||
MSCI | EUR | 2,526,000 | USD | 2,849,126 | 08/18/16 | 23,350 | |||||||||||||
MSCI | TWD | 496,789,061 | USD | 15,225,664 | 09/08/16 | (346,574 | ) | ||||||||||||
MSCI | USD | 1,131,970 | EUR | 1,015,000 | 08/18/16 | 3,486 | |||||||||||||
MSCI | USD | 1,542,617 | ZAR | 24,670,000 | 09/08/16 | 221,662 | |||||||||||||
$ | 1,389,552 |
Affiliated issuer activity
The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2016. 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 07/31/15 | Purchases during the year ended 07/31/16 | Sales during the year ended 07/31/16 | Value at 07/31/16 | Net income earned from affiliate for the year ended 07/31/16 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 3,074,700 | $ | 41,636,513 | $ | 44,711,213 | $ | — | $ | 2,370 |
114
PACE International Fixed Income Investments
Portfolio of investments—July 31, 2016
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | — | $ | 549,959,499 | $ | — | $ | 549,959,499 | |||||||||||
Repurchase agreement | — | 1,866,000 | — | 1,866,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 1,220,380 | — | 1,220,380 | |||||||||||||||
Futures contracts | 3,677,706 | — | — | 3,677,706 | |||||||||||||||
Forward foreign currency contracts | — | 6,679,179 | — | 6,679,179 | |||||||||||||||
Total | $ | 3,677,706 | $ | 559,725,058 | $ | — | $ | 563,402,764 | |||||||||||
Liabilities | |||||||||||||||||||
Futures contracts | (1,303,923 | ) | — | (1,303,923 | ) | ||||||||||||||
Forward foreign currency contracts | — | (5,289,627 | ) | — | (5,289,627 | ) | |||||||||||||
Total | $ | (1,303,923 | ) | $ | (5,289,627 | ) | $ | — | $ | (6,593,550 | ) |
At July 31, 2016, 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 | 47.41 | % | — | % | |||||||
Repurchase agreement | — | 0.34 | |||||||||
Banks and other financial institutions | 32.90 | — | |||||||||
Industrial | 19.13 | — | |||||||||
Investment of cash collateral from securities loaned | — | 0.22 | |||||||||
99.44 | % | 0.56 | % |
Portfolio footnotes
1 Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities, which represent 13.75% of net assets as of July 31, 2016, are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers.
2 Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At July 31, 2016, the value of these securities amounted to 28.79% of net assets.
3 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2016 and changes periodically.
4 Security, or portion thereof, was on loan at July 31, 2016.
See accompanying notes to financial statements.
115
PACE High Yield Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares returned 5.03% 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") gained 5.86%, and the Lipper High Yield Funds category posted a median return of 2.63%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 118. 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 3.
Subadvisor's comments (Unaudited)2
The Portfolio outperformed its benchmark on a gross of fees basis but underperformed its benchmark on a net of fees basis during the reporting period. There were several factors that drove volatility in the global credit markets during the second half of 2015. Oil prices fell from roughly $45 per barrel to about $37 per barrel and continued to put more pressure on already price-sensitive energy companies. Liquidity concerns came to the fore in high yield markets as several high yield funds announced that they would be suspending redemptions or liquidating. Over the fourth quarter of 2015, we saw the US dollar strengthen and, in December, the US Federal Reserve Board (the "Fed") raised the federal funds rate by 0.25%, putting an official end to the "zero interest rate policy." Although the market initially rallied on the news of a rate increase, a stronger US dollar and the resultant collapsing of commodity prices saw equity and high yield volatility return toward the end of 2015. The concern continued to be that higher interest rates in the US and a stronger US dollar would have a negative impact on already tepid US economic growth, particularly in the commodity and industrial sectors, pushing the broader US economy into a recession.
Throughout the fourth quarter of 2015, our large underweight to the industrial and energy sectors significantly contributed relative to performance. We have also been underweight commodity sectors, such as coal, metals and mining, and oil field equipment and services. Early in 2016, the high-yield rally was based on easing fears about oil, China and the US dollar. More recently, the rally has been driven by an acceptance that central bank stimulus will remain for some time, strong investor demand and encouraging economic data. The United Kingdom's decision to leave the European Union has led markets to conclude the European Central Bank will likely be providing stimulus for a least 1-2 more years, thereby driving the yield on the 10-year German bund to -0.10%. With bunds at this level,
PACE Select Advisors Trust – PACE High Yield Investments
Investment Manager:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisor:
Nomura Corporate Research and Asset Management Inc. and Nomura Asset Management Management Singapore Limited ("NCRAM")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Gina Toth, CFA, Fred Lee, CFA, Diana To and Anthony Karaminas
NCRAM: David Crall, CFA, Stephen Kotsen, CFA, Steven Rosenthal, CFA, Elizabeth Gunning, CFA, Simon Tan, CFA
Objective:
Total return
Investment process:
NCRAM seeks to capture the global high yield bond market's attractive total returns while minimizing losses by identifying "Strong Horse" companies that can carry their debt load through the economic cycle. NCRAM invests in the debt of such companies to seek yield and capital appreciation while managing the overall risk 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 subadvisors 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.
116
PACE High Yield Investments
Subadvisor's comments (Unaudited) – concluded
markets believe the Fed will need to move very slowly to prevent the US dollar from getting much stronger. Meanwhile, global economic data and corporate outlooks support the view that global economic growth is stable and perhaps improving a little. In summary, low Treasury yields in conjunction with stable economic growth have pushed investors into global high yield and other risk markets.
During the reporting period as a whole, an overweight and positive issuer selection in the packaging sector contributed the most to performance. Overweights and positive issuer selection in the wireless and gaming sectors were also additive for performance. These positives were offset by overweights to the support services and cable and satellite sectors. From a ratings perspective, an underweight and positive issuer selection in BB-rated bonds, coupled with an overweight and positive issuer selection in B-rated bonds, contributed to relative performance, while an overweight to CCC-rated bonds slightly detracted from results. From a regional perspective, an overweight and positive issuer selection in US high yield added the most value, while underweights to European high yield and emerging market ex-Asia high yield provided slight drags on results during the fiscal year.
Currency forwards were used during the reporting period to hedge the currency exposure of the Portfolio into US dollars. Overall, derivatives detracted from performance during the reporting period.
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.
117
PACE High Yield Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | Since inception1 | |||||||||||||||
Before deducting maximum sales charge | |||||||||||||||||||
Class A2 | 4.88 | % | 5.24 | % | 7.18 | % | 7.01 | % | |||||||||||
Class C3 | 4.38 | 4.76 | N/A | 10.55 | |||||||||||||||
Class Y4 | 5.11 | 5.50 | N/A | 12.61 | |||||||||||||||
Class P5 | 5.03 | 5.45 | 7.42 | 7.25 | |||||||||||||||
After deducting maximum sales charge | |||||||||||||||||||
Class A2 | 0.93 | 4.45 | 6.77 | 6.61 | |||||||||||||||
Class C3 | 3.64 | 4.76 | N/A | 10.55 | |||||||||||||||
BofA Merrill Lynch Global High Yield Index (Hedged in USD)6 | 5.86 | 6.77 | 8.04 | 7.92 | |||||||||||||||
Lipper High Yield Funds median | 2.63 | 4.96 | 6.21 | 6.06 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | Since inception1 | |||||||||||||||
Before deducting maximum sales charge | |||||||||||||||||||
Class A2 | 1.81 | % | 4.76 | % | 7.00 | % | 6.80 | % | |||||||||||
Class C3 | 1.32 | 4.28 | N/A | 10.30 | |||||||||||||||
Class Y4 | 1.93 | 5.03 | N/A | 12.37 | |||||||||||||||
Class P5 | 1.97 | 4.98 | 7.24 | 7.04 | |||||||||||||||
After deducting maximum sales charge | |||||||||||||||||||
Class A2 | (1.99 | ) | 3.96 | 6.59 | 6.39 | ||||||||||||||
Class C3 | 0.60 | 4.28 | N/A | 10.30 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, were as follows: Class A—1.26% and 1.16%; Class C—1.73% and 1.63%; Class Y—1.03% and 0.93%; and Class P—1.09% and 0.99%. 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS AM is contractually obligated to: (1) waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2016 (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%; and (2) waive its management fees through November 30, 2016 to reflect a lower management fee paid by the Portfolio to UBS AM. The Portfolio has agreed to repay UBS AM for any waived fees/reimbursed expenses (pursuant to item (1)) 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 and that UBS AM has not waived the right to do so. 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 AM. Upon termination of the agreement, however, UBS 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 3.75%. Class A shares bear ongoing 12b-1 service fees of 0.25% annually.
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 of 0.25% and 0.50% annually, respectively.
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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualfundperformance.
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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PACE High Yield 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 High Yield Investments Class P shares versus the BofA Merrill Lynch Global High Yield Index (Hedged in USD) over the 10 years ended July 31, 2016. 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.
PACE High Yield Investments
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PACE High Yield Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Weighted average duration | 3.92 yrs. | ||||||
Weighted average maturity | 6.35 yrs. | ||||||
Average coupon | 6.61 | % | |||||
Net assets (mm) | $ | 420.7 | |||||
Number of holdings | 734 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Bonds and loan assignments | 96.8 | % | |||||
Common stocks, preferred stock and warrants | 0.4 | ||||||
Forward foreign currency contracts | (0.4 | ) | |||||
Cash equivalents and other assets less liabilities | 3.2 | ||||||
Total | 100.0 | % | |||||
Quality diversification1,2 | 07/31/16 | ||||||
BB & higher | 38.5 | % | |||||
B | 40.7 | ||||||
CCC & lower | 11.1 | ||||||
Not rated | 6.9 | ||||||
Forward foreign currency contracts | (0.4 | ) | |||||
Cash equivalents and other assets less liabilities | 3.2 | ||||||
Total | 100.0 | % | |||||
Asset allocation1 | 07/31/16 | ||||||
Corporate bonds | 95.5 | % | |||||
Loan assignments | 1.1 | ||||||
Common stocks, preferred stock and warrants | 0.4 | ||||||
Non-US government obligation | 0.2 | ||||||
Forward foreign currency contracts | (0.4 | ) | |||||
Cash equivalents and other assets less liabilities | 3.2 | ||||||
Total | 100.0 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
2 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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PACE High Yield Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate bonds—95.47% | |||||||||||
Aerospace & defense—0.75% | |||||||||||
KLX, Inc. 5.875%, due 12/01/222 | 270,000 | $ | 273,375 | ||||||||
TA MFG. Ltd. 3.625%, due 04/15/233 | EUR | 825,000 | 877,318 | ||||||||
TransDigm, Inc. 6.000%, due 07/15/22 | 1,610,000 | 1,666,350 | |||||||||
6.375%, due 06/15/262 | 175,000 | 179,813 | |||||||||
7.500%, due 07/15/21 | 150,000 | 158,625 | |||||||||
3,155,481 | |||||||||||
Airlines—0.82% | |||||||||||
Air Canada 7.750%, due 04/15/212 | 225,000 | 235,125 | |||||||||
8.750%, due 04/01/202 | 425,000 | 453,687 | |||||||||
American Airlines Group, Inc. 4.625%, due 03/01/202,4 | 2,250,000 | 2,216,250 | |||||||||
US Airways Pass Through Trust 2012-1, Class B 8.000%, due 10/01/19 | 476,734 | 529,175 | |||||||||
3,434,237 | |||||||||||
Auto & truck—0.56% | |||||||||||
Accuride Corp. 9.500%, due 08/01/184 | 150,000 | 143,250 | |||||||||
Autodis SA 6.500%, due 02/01/193 | EUR | 562,500 | 651,200 | ||||||||
GIE PSA Tresorerie 6.000%, due 09/19/33 | EUR | 850,000 | 1,161,706 | ||||||||
Navistar International Corp. 8.250%, due 11/01/214 | 537,000 | 397,380 | |||||||||
2,353,536 | |||||||||||
Automotive parts—0.42% | |||||||||||
MPG Holdco I, Inc. 7.375%, due 10/15/224 | 1,305,000 | 1,337,625 | |||||||||
The Goodyear Tire & Rubber Co. 5.000%, due 05/31/26 | 400,000 | 421,500 | |||||||||
1,759,125 | |||||||||||
Banking-non-US—3.35% | |||||||||||
Australia & New Zealand Banking Group Ltd. 6.750%, due 06/15/263,5,6 | 1,000,000 | 1,087,223 | |||||||||
Banco Bilbao Vizcaya Argentaria SA 6.750%, due 02/18/203,5,6 | EUR | 1,000,000 | 1,014,675 | ||||||||
Banco do Brasil SA 3.875%, due 10/10/22 | 300,000 | 280,650 | |||||||||
5.875%, due 01/26/222 | 450,000 | 451,688 | |||||||||
Banco Nacional de Costa Rica 5.875%, due 04/25/212 | 300,000 | 313,125 | |||||||||
6.250%, due 11/01/233 | 450,000 | 467,437 | |||||||||
Bankia SA 4.000%, due 05/22/243,5 | EUR | 800,000 | 878,485 | ||||||||
Credit Suisse AG 5.750%, due 09/18/253,5 | EUR | 1,125,000 | 1,359,974 | ||||||||
Credit Suisse Group AG 6.250%, due 12/18/242,5,6 | 200,000 | 193,252 | |||||||||
HBOS Capital Funding LP 6.461%, due 11/30/183,5,6 | GBP | 450,000 | 633,370 |
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Banking-non-US—(concluded) | |||||||||||
ICICI Bank Ltd. 6.375%, due 04/30/223,5 | 1,300,000 | $ | 1,320,371 | ||||||||
Royal Bank of Scotland Group PLC 3.625%, due 03/25/243,5 | EUR | 400,000 | 442,633 | ||||||||
7.092%, due 09/29/173,5,6 | EUR | 600,000 | 655,909 | ||||||||
7.500%, due 08/10/205,6 | 400,000 | 389,000 | |||||||||
8.000%, due 08/10/255,6 | 200,000 | 198,750 | |||||||||
Royal Capital BV 5.500%, due 05/05/213,5,6 | 500,000 | 517,692 | |||||||||
Sberbank of Russia Via SB Capital SA 5.125%, due 10/29/223 | 1,500,000 | 1,513,500 | |||||||||
5.250%, due 05/23/233 | 300,000 | 292,620 | |||||||||
Turkiye Vakiflar Bankasi TAO 6.000%, due 11/01/223 | 700,000 | 676,900 | |||||||||
UniCredit SpA 6.950%, due 10/31/223 | EUR | 725,000 | 919,500 | ||||||||
Yapi ve Kredi Bankasi AS 5.500%, due 12/06/223,4 | 500,000 | 479,945 | |||||||||
14,086,699 | |||||||||||
Banking-US—1.03% | |||||||||||
JPMorgan Chase & Co. 6.125%, due 04/30/245,6 | 900,000 | 958,500 | |||||||||
6.750%, due 02/01/245,6 | 1,200,000 | 1,351,380 | |||||||||
The Goldman Sachs Group, Inc. 5.375%, due 05/10/205,6 | 375,000 | 380,739 | |||||||||
Washington Mutual Bank 3.283%, due 05/01/097 | 500,000 | 103,750 | |||||||||
Wells Fargo & Co. 5.900%, due 06/15/245,6 | 1,430,000 | 1,524,738 | |||||||||
4,319,107 | |||||||||||
Building & construction—1.83% | |||||||||||
Beazer Homes USA, Inc. 5.750%, due 06/15/194 | 950,000 | 927,438 | |||||||||
K. Hovnanian Enterprises, Inc. 7.250%, due 10/15/202 | 1,240,000 | 1,131,500 | |||||||||
KB Home 7.500%, due 09/15/22 | 1,340,000 | 1,413,700 | |||||||||
Lennar Corp. 4.875%, due 12/15/23 | 200,000 | 206,500 | |||||||||
Mattamy Group Corp. 6.500%, due 11/15/202 | 375,000 | 370,781 | |||||||||
Meritage Homes Corp. 6.000%, due 06/01/25 | 1,165,000 | 1,213,790 | |||||||||
Shea Homes LP/Shea Homes Funding Corp. 6.125%, due 04/01/252 | 2,225,000 | 2,270,879 | |||||||||
William Lyon Homes, Inc. 7.000%, due 08/15/22 | 175,000 | 176,750 | |||||||||
7,711,338 | |||||||||||
Building products—1.46% | |||||||||||
Associated Materials LLC 9.125%, due 11/01/17 | 535,000 | 500,225 | |||||||||
Builders FirstSource, Inc. 10.750%, due 08/15/232 | 1,450,000 | 1,609,500 |
121
PACE High Yield Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Building products—(concluded) | |||||||||||
Building Materials Holding Corp. 9.000%, due 09/15/182 | 675,000 | $ | 702,000 | ||||||||
7.750%, due 04/16/262 | 800,000 | 888,000 | |||||||||
CPG Merger Sub LLC 8.000%, due 10/01/212 | 125,000 | 126,250 | |||||||||
Eagle Materials, Inc. 4.500%, due 08/01/26 | 150,000 | 152,437 | |||||||||
Griffon Corp. 5.250%, due 03/01/22 | 100,000 | 100,125 | |||||||||
James Hardie International Finance Ltd. 5.875%, due 02/15/232 | 200,000 | 208,500 | |||||||||
Nortek, Inc. 8.500%, due 04/15/214 | 375,000 | 393,750 | |||||||||
Standard Industries, Inc. 5.125%, due 02/15/212 | 225,000 | 235,125 | |||||||||
5.375%, due 11/15/242,4 | 25,000 | 26,219 | |||||||||
5.500%, due 02/15/232 | 175,000 | 182,437 | |||||||||
Summit Materials LLC/Summit Materials Finance Corp. 8.500%, due 04/15/222 | 75,000 | 80,813 | |||||||||
Wienerberger AG 6.500%, due 02/09/215,6 | EUR | 800,000 | 938,196 | ||||||||
6,143,577 | |||||||||||
Building products-cement—0.75% | |||||||||||
HeidelbergCement Finance BV 7.500%, due 04/03/203 | EUR | 395,000 | 547,597 | ||||||||
New Enterprise Stone & Lime Co., Inc. 11.000%, due 09/01/18 | 825,000 | 810,562 | |||||||||
Union Andina de Cementos SAA 5.875%, due 10/30/213 | 750,000 | 779,063 | |||||||||
West China Cement Ltd. 6.500%, due 09/11/193 | 1,000,000 | 1,018,750 | |||||||||
3,155,972 | |||||||||||
Cable—3.73% | |||||||||||
Cablevision SA 6.500%, due 06/15/212 | 900,000 | 927,000 | |||||||||
Cablevision Systems Corp. 5.875%, due 09/15/22 | 375,000 | 344,063 | |||||||||
8.625%, due 09/15/17 | 350,000 | 371,875 | |||||||||
CCO Holdings LLC/CCO Holdings Capital Corp. 5.500%, due 05/01/262 | 125,000 | 130,469 | |||||||||
5.750%, due 09/01/23 | 675,000 | 705,375 | |||||||||
5.750%, due 02/15/262 | 575,000 | 606,625 | |||||||||
Cequel Communications Holdings I LLC/ Cequel Capital Corp. 5.125%, due 12/15/212 | 50,000 | 49,875 | |||||||||
6.375%, due 09/15/202,4 | 1,200,000 | 1,237,500 | |||||||||
7.750%, due 07/15/252 | 200,000 | 213,000 | |||||||||
Dish DBS Corp. 5.875%, due 07/15/22 | 730,000 | 729,547 | |||||||||
5.875%, due 11/15/244 | 200,000 | 193,000 | |||||||||
6.750%, due 06/01/214 | 860,000 | 913,750 | |||||||||
7.750%, due 07/01/262 | 500,000 | 518,438 |
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Cable—(concluded) | |||||||||||
Midcontinent Communications & Midcontinent Finance Corp. 6.875%, due 08/15/232 | 425,000 | $ | 444,125 | ||||||||
SFR Group SA 5.625%, due 05/15/243 | EUR | 1,150,000 | 1,308,843 | ||||||||
6.000%, due 05/15/222 | 3,200,000 | 3,128,000 | |||||||||
7.375%, due 05/01/262 | 800,000 | 799,000 | |||||||||
Unitymedia GmbH 6.125%, due 01/15/252,4 | 400,000 | 422,000 | |||||||||
Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH 4.000%, due 01/15/253 | EUR | 600,000 | 697,632 | ||||||||
4.625%, due 02/15/263 | EUR | 600,000 | 711,048 | ||||||||
5.500%, due 01/15/232,4 | 400,000 | 418,000 | |||||||||
5.625%, due 04/15/233 | EUR | 680,000 | 814,255 | ||||||||
15,683,420 | |||||||||||
Car rental—0.40% | |||||||||||
Avis Budget Car Rental LLC/Avis Budget Finance, Inc. 5.125%, due 06/01/222,4 | 1,600,000 | 1,570,000 | |||||||||
Flexi-Van Leasing, Inc. 7.875%, due 08/15/182 | 100,000 | 98,000 | |||||||||
1,668,000 | |||||||||||
Chemicals—3.58% | |||||||||||
A Schulman, Inc. 6.875%, due 06/01/232,4 | 250,000 | 253,750 | |||||||||
Blue Cube Spinco, Inc. 10.000%, due 10/15/252 | 325,000 | 371,312 | |||||||||
Braskem Finance Ltd. 5.375%, due 05/02/223 | 2,000,000 | 2,035,000 | |||||||||
Consolidated Energy Finance SA 6.750%, due 10/15/192,4 | 400,000 | 397,000 | |||||||||
CVR Partners LP/CVR Nitrogen Finance Corp. 9.250%, due 06/15/232,4 | 375,000 | 383,437 | |||||||||
Hexion, Inc. 6.625%, due 04/15/20 | 250,000 | 211,250 | |||||||||
8.875%, due 02/01/18 | 300,000 | 267,750 | |||||||||
10.000%, due 04/15/20 | 25,000 | 24,500 | |||||||||
Hexion, Inc./Hexion Nova Scotia Finance ULC 9.000%, due 11/15/20 | 425,000 | 294,313 | |||||||||
Huntsman International LLC 4.250%, due 04/01/25 | EUR | 300,000 | 321,146 | ||||||||
5.125%, due 04/15/21 | EUR | 1,150,000 | 1,352,583 | ||||||||
INEOS Group Holdings SA 5.375%, due 08/01/242 | EUR | 1,725,000 | 1,909,020 | ||||||||
5.875%, due 02/15/192,4 | 200,000 | 205,500 | |||||||||
6.125%, due 08/15/182,4 | 200,000 | 203,480 | |||||||||
Kissner Milling Co. Ltd. 7.250%, due 06/01/192 | 150,000 | 151,500 | |||||||||
Perstorp Holding AB 11.000%, due 08/15/172 | 1,750,000 | 1,750,000 | |||||||||
Platform Specialty Products Corp. 6.500%, due 02/01/222,4 | 150,000 | 130,125 | |||||||||
10.375%, due 05/01/212 | 475,000 | 477,375 |
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Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Chemicals—(concluded) | |||||||||||
PSPC Escrow Corp. 6.000%, due 02/01/233 | EUR | 325,000 | $ | 316,104 | |||||||
SPCM SA 6.000%, due 01/15/222 | 1,720,000 | 1,788,800 | |||||||||
The Chemours Co. 6.125%, due 05/15/23 | EUR | 500,000 | 454,838 | ||||||||
7.000%, due 05/15/254 | 375,000 | 318,750 | |||||||||
TPC Group, Inc. 8.750%, due 12/15/202 | 1,075,000 | 854,625 | |||||||||
Valvoline, Inc. 5.500%, due 07/15/242 | 200,000 | 208,750 | |||||||||
Yingde Gases Investment Ltd. 8.125%, due 04/22/183 | 400,000 | 367,000 | |||||||||
15,047,908 | |||||||||||
Coal—0.04% | |||||||||||
Cloud Peak Energy Resources LLC/Cloud Peak Energy Finance Corp. 6.375%, due 03/15/24 | 325,000 | 152,750 | |||||||||
Commercial services—2.52% | |||||||||||
AA Bond Co. Ltd. 5.500%, due 07/31/223 | GBP | 775,000 | 1,000,746 | ||||||||
Acosta, Inc. 7.750%, due 10/01/222 | 800,000 | 732,000 | |||||||||
Advanced Disposal Services, Inc. 8.250%, due 10/01/20 | 200,000 | 207,000 | |||||||||
Aircastle Ltd. 5.000%, due 04/01/23 | 50,000 | 52,560 | |||||||||
5.125%, due 03/15/214 | 500,000 | 533,750 | |||||||||
Ancestry.com Holdings LLC 9.625%, due 10/15/182,8 | 800,000 | 816,000 | |||||||||
Ashtead Capital, Inc. 5.625%, due 10/01/242 | 400,000 | 416,500 | |||||||||
CEB, Inc. 5.625%, due 06/15/232 | 275,000 | 278,437 | |||||||||
Harland Clarke Holdings Corp. 6.875%, due 03/01/202 | 250,000 | 240,313 | |||||||||
9.250%, due 03/01/212 | 1,025,000 | 867,406 | |||||||||
Iron Mountain Europe PLC 6.125%, due 09/15/223 | GBP | 1,242,000 | 1,707,008 | ||||||||
Iron Mountain, Inc. 5.750%, due 08/15/24 | 1,465,000 | 1,504,833 | |||||||||
Live Nation Entertainment, Inc. 5.375%, due 06/15/222 | 425,000 | 442,000 | |||||||||
Manutencoop Facility Management SpA 8.500%, due 08/01/203 | EUR | 1,100,000 | 1,092,678 | ||||||||
MDC Partners, Inc. 6.500%, due 05/01/242,4 | 250,000 | 241,875 | |||||||||
Waste Italia SpA 10.500%, due 11/15/193,7 | EUR | 1,425,000 | 468,386 | ||||||||
10,601,492 | |||||||||||
Communications equipment—0.20% | |||||||||||
NXP BV/NXP Funding LLC 4.125%, due 06/01/212 | 800,000 | 828,000 |
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Computer software & services—1.82% | |||||||||||
BMC Software Finance, Inc. 8.125%, due 07/15/212,4 | 500,000 | $ | 407,500 | ||||||||
Change Healthcare Holdings, Inc. 6.000%, due 02/15/212 | 375,000 | 397,500 | |||||||||
Diamond 1 Finance Corp./Diamond 2 Finance Corp. 5.450%, due 06/15/232 | 75,000 | 79,448 | |||||||||
5.875%, due 06/15/212,4 | 175,000 | 182,941 | |||||||||
7.125%, due 06/15/242,4 | 500,000 | 538,107 | |||||||||
8.100%, due 07/15/362 | 250,000 | 284,345 | |||||||||
Diebold, Inc. 8.500%, due 04/15/242,4 | 100,000 | 100,125 | |||||||||
Infor Software Parent LLC/Infor Software Parent, Inc. 7.125%, due 05/01/212,4,8 | 700,000 | 652,750 | |||||||||
Infor US, Inc. 5.750%, due 05/15/22 | EUR | 575,000 | 584,544 | ||||||||
6.500%, due 05/15/22 | 900,000 | 893,250 | |||||||||
NCR Corp. 6.375%, due 12/15/23 | 780,000 | 807,300 | |||||||||
Oberthur Technologies Holding SAS 9.250%, due 04/30/203 | EUR | 744,000 | 876,917 | ||||||||
Open Text Corp. 5.875%, due 06/01/262,4 | 400,000 | 415,756 | |||||||||
Solera LLC/Solera Finance, Inc. 10.500%, due 03/01/242 | 350,000 | 377,783 | |||||||||
Southern Graphics, Inc. 8.375%, due 10/15/202 | 200,000 | 203,000 | |||||||||
SS&C Technologies Holdings, Inc. 5.875%, due 07/15/23 | 150,000 | 155,625 | |||||||||
Western Digital Corp. 7.375%, due 04/01/232 | 425,000 | 462,719 | |||||||||
10.500%, due 04/01/242 | 200,000 | 225,500 | |||||||||
7,645,110 | |||||||||||
Consumer products—1.47% | |||||||||||
Albea Beauty Holdings SA 8.375%, due 11/01/192 | 1,800,000 | 1,894,500 | |||||||||
Central Garden & Pet Co. 6.125%, due 11/15/23 | 275,000 | 291,500 | |||||||||
Icon Health & Fitness, Inc. 11.875%, due 10/15/162 | 550,000 | 552,200 | |||||||||
NBTY, Inc. 7.625%, due 05/15/212,4 | 300,000 | 306,000 | |||||||||
Prestige Brands, Inc. 5.375%, due 12/15/212 | 200,000 | 204,250 | |||||||||
6.375%, due 03/01/242 | 225,000 | 237,375 | |||||||||
Revlon Escrow Corp. 6.250%, due 08/01/242 | 450,000 | 455,625 | |||||||||
Tempur Sealy International, Inc. 5.500%, due 06/15/262,4 | 400,000 | 404,752 | |||||||||
5.625%, due 10/15/23 | 200,000 | 207,000 | |||||||||
TRI Pointe Holdings, Inc. 5.875%, due 06/15/24 | 1,575,000 | 1,622,250 | |||||||||
6,175,452 |
123
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Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Containers & packaging—2.88% | |||||||||||
Ardagh Finance Holdings SA 8.375%, due 06/15/193,8 | EUR | 374,165 | $ | 433,920 | |||||||
Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc. 6.750%, due 01/31/212,4 | 3,050,000 | 3,137,840 | |||||||||
Ardagh Packaging Finance PLC/Ardagh MP Holdings USA, Inc. 4.125%, due 05/15/232 | EUR | 675,000 | 781,063 | ||||||||
6.750%, due 05/15/242 | EUR | 900,000 | 1,053,995 | ||||||||
7.000%, due 11/15/202 | 290,294 | 291,746 | |||||||||
Ball Corp. 4.375%, due 12/15/204 | 350,000 | 373,625 | |||||||||
Berry Plastics Corp. 6.000%, due 10/15/224 | 300,000 | 318,375 | |||||||||
Crown European Holdings SA 4.000%, due 07/15/223 | EUR | 500,000 | 607,913 | ||||||||
Horizon Holdings III SASU 5.125%, due 08/01/223 | EUR | 1,250,000 | 1,472,616 | ||||||||
Multi-Color Corp. 6.125%, due 12/01/222 | 100,000 | 103,000 | |||||||||
Owens-Brockway Glass Container, Inc. 5.375%, due 01/15/252 | 225,000 | 233,719 | |||||||||
6.375%, due 08/15/252 | 575,000 | 630,703 | |||||||||
ProGroup AG 5.125%, due 05/01/223 | EUR | 800,000 | 953,878 | ||||||||
5.125%, due 05/01/22 | EUR | 100,000 | 119,235 | ||||||||
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer Lu 5.125%, due 07/15/232,4 | 450,000 | 464,062 | |||||||||
7.000%, due 07/15/242,4 | 325,000 | 343,484 | |||||||||
Sealed Air Corp. 5.250%, due 04/01/232 | 425,000 | 450,500 | |||||||||
SIG Combibloc Holdings SCA 7.750%, due 02/15/233 | EUR | 300,000 | 358,040 | ||||||||
12,127,714 | |||||||||||
Diversified financial services—4.23% | |||||||||||
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust 4.625%, due 10/30/20 | 600,000 | 641,250 | |||||||||
Alliance Automotive Finance PLC 6.250%, due 12/01/213 | EUR | 350,000 | 420,648 | ||||||||
Alliance Data Systems Corp. 5.250%, due 11/15/233 | EUR | 785,000 | 878,666 | ||||||||
5.375%, due 08/01/222 | 200,000 | 196,000 | |||||||||
Ally Financial, Inc. 3.250%, due 02/13/18 | 75,000 | 75,750 | |||||||||
3.250%, due 11/05/18 | 1,100,000 | 1,112,375 | |||||||||
8.000%, due 12/31/18 | 475,000 | 527,844 | |||||||||
8.000%, due 11/01/31 | 1,117,000 | 1,359,947 | |||||||||
8.000%, due 11/01/31 | 285,000 | 346,987 | |||||||||
Bank of America Corp. 6.250%, due 09/05/245,6 | 1,350,000 | 1,414,125 | |||||||||
6.300%, due 03/10/265,6 | 175,000 | 190,695 | |||||||||
8.000%, due 01/30/185,6 | 345,000 | 350,565 |
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Diversified financial services—(concluded) | |||||||||||
Barclays PLC 8.000%, due 12/15/205,6 | EUR | 900,000 | $ | 1,009,541 | |||||||
8.250%, due 12/15/185,6 | 1,300,000 | 1,322,750 | |||||||||
Citigroup, Inc. 5.900%, due 02/15/235,6 | 925,000 | 949,281 | |||||||||
5.950%, due 08/15/205,6 | 175,000 | 175,438 | |||||||||
5.950%, due 01/30/235,6 | 175,000 | 179,435 | |||||||||
6.250%, due 08/15/265,6 | 150,000 | 161,625 | |||||||||
First Data Corp. 6.750%, due 11/01/202 | 25,000 | 26,063 | |||||||||
7.000%, due 12/01/232 | 1,000,000 | 1,030,000 | |||||||||
Garfunkelux Holdco 3 SA 8.500%, due 11/01/223 | GBP | 625,000 | 818,885 | ||||||||
Jefferies Finance LLC/JFIN Co-Issuer Corp. 7.375%, due 04/01/202 | 400,000 | 374,000 | |||||||||
KCG Holdings, Inc. 6.875%, due 03/15/202 | 75,000 | 72,563 | |||||||||
Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp. 7.375%, due 10/01/17 | 300,000 | 303,750 | |||||||||
Lehman Brothers Holdings, Inc. 5.375%, due 10/17/127 | EUR | 4,000,000 | 389,959 | ||||||||
LKQ Italia Bondco SpA 3.875%, due 04/01/242 | EUR | 475,000 | 560,258 | ||||||||
3.875%, due 04/01/243 | EUR | 500,000 | 589,745 | ||||||||
National Financial Partners Corp. 9.000%, due 07/15/212 | 900,000 | 904,500 | |||||||||
Nationstar Mortgage LLC/Nationstar Capital Corp. 6.500%, due 06/01/22 | 275,000 | 231,000 | |||||||||
Worldpay Finance PLC 3.750%, due 11/15/223 | EUR | 1,000,000 | 1,168,310 | ||||||||
17,781,955 | |||||||||||
Electric utilities—0.78% | |||||||||||
Dynegy, Inc. 6.750%, due 11/01/19 | 275,000 | 280,156 | |||||||||
7.375%, due 11/01/22 | 1,175,000 | 1,154,437 | |||||||||
7.625%, due 11/01/244 | 300,000 | 293,250 | |||||||||
NRG Energy, Inc. 6.625%, due 01/15/272 | 700,000 | 692,125 | |||||||||
7.250%, due 05/15/262,4 | 150,000 | 153,938 | |||||||||
7.875%, due 05/15/214 | 200,000 | 207,500 | |||||||||
8.250%, due 09/01/204 | 468,000 | 483,105 | |||||||||
3,264,511 | |||||||||||
Electric-generation—0.90% | |||||||||||
AmeriGas Partners LP/AmeriGas Finance Corp. 5.625%, due 05/20/24 | 75,000 | 77,625 | |||||||||
Calpine Corp. 5.375%, due 01/15/234 | 400,000 | 399,000 | |||||||||
5.750%, due 01/15/25 | 150,000 | 149,812 | |||||||||
7.875%, due 01/15/232 | 75,000 | 79,313 | |||||||||
ContourGlobal Power Holdings SA 5.125%, due 06/15/212 | EUR | 1,100,000 | 1,262,698 |
124
PACE High Yield Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Electric-generation—(concluded) | |||||||||||
GenOn Energy, Inc. 7.875%, due 06/15/17 | 325,000 | $ | 275,437 | ||||||||
Senvion Holding GmbH 6.625%, due 11/15/203 | EUR | 800,000 | 935,418 | ||||||||
SK E&S Co. Ltd. 4.875%, due 11/26/193,5,6 | 200,000 | 197,000 | |||||||||
Tenaska Alabama Partners LP 7.000%, due 06/30/212 | 126,249 | 130,037 | |||||||||
TerraForm Power Operating LLC 9.750%, due 08/15/222,4 | 300,000 | 300,750 | |||||||||
3,807,090 | |||||||||||
Electric-integrated—0.46% | |||||||||||
AES Corp. 6.000%, due 05/15/264 | 75,000 | 79,031 | |||||||||
Eskom Holdings SOC Ltd. 5.750%, due 01/26/213 | 500,000 | 496,350 | |||||||||
6.750%, due 08/06/233 | 500,000 | 511,875 | |||||||||
Hrvatska Elektroprivreda 5.875%, due 10/23/222 | 800,000 | 856,179 | |||||||||
1,943,435 | |||||||||||
Electronics—1.02% | |||||||||||
Advanced Micro Devices, Inc. 6.750%, due 03/01/19 | 350,000 | 348,579 | |||||||||
7.000%, due 07/01/244 | 325,000 | 298,188 | |||||||||
7.500%, due 08/15/22 | 425,000 | 411,187 | |||||||||
7.750%, due 08/01/204 | 75,000 | 74,063 | |||||||||
Allegion PLC 5.875%, due 09/15/23 | 275,000 | 292,875 | |||||||||
Micron Technology, Inc. 5.250%, due 01/15/242 | 2,525,000 | 2,266,187 | |||||||||
5.875%, due 02/15/22 | 50,000 | 48,250 | |||||||||
Microsemi Corp. 9.125%, due 04/15/232 | 125,000 | 141,875 | |||||||||
Qorvo, Inc. 6.750%, due 12/01/232 | 100,000 | 107,500 | |||||||||
7.000%, due 12/01/252 | 300,000 | 325,125 | |||||||||
4,313,829 | |||||||||||
Energy—0.27% | |||||||||||
Ence Energia y Celulosa SA 5.375%, due 11/01/223 | EUR | 750,000 | 901,489 | ||||||||
Greenko Dutch BV 8.000%, due 08/01/193 | 200,000 | 215,607 | |||||||||
1,117,096 | |||||||||||
Energy-exploration & production—1.12% | |||||||||||
Alta Mesa Holdings LP/Alta Mesa Finance Services Corp. 9.625%, due 10/15/18 | 600,000 | 498,000 | |||||||||
Antero Resources Corp. 5.125%, due 12/01/22 | 150,000 | 139,875 | |||||||||
5.375%, due 11/01/21 | 300,000 | 287,250 | |||||||||
5.625%, due 06/01/234 | 250,000 | 236,562 | |||||||||
6.000%, due 12/01/20 | 450,000 | 445,500 |
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Energy-exploration & production—(concluded) | |||||||||||
Chaparral Energy, Inc. 7.625%, due 11/15/227 | 350,000 | $ | 190,750 | ||||||||
8.250%, due 09/01/217 | 1,475,000 | 811,250 | |||||||||
9.875%, due 10/01/207 | 250,000 | 136,250 | |||||||||
Continental Resources, Inc. 5.000%, due 09/15/224 | 1,275,000 | 1,192,125 | |||||||||
7.125%, due 04/01/21 | 250,000 | 255,625 | |||||||||
Midstates Petroleum Co., Inc./Midstates Petroleum Co. LLC 10.750%, due 10/01/207 | 850,000 | 10,625 | |||||||||
Range Resources Corp. 5.000%, due 08/15/22 | 150,000 | 137,625 | |||||||||
5.000%, due 03/15/234 | 125,000 | 113,750 | |||||||||
5.750%, due 06/01/21 | 275,000 | 266,750 | |||||||||
4,721,937 | |||||||||||
Finance-captive automotive—2.42% | |||||||||||
Ausdrill Finance Pty Ltd. 6.875%, due 11/01/192 | 880,000 | 809,600 | |||||||||
Cabot Financial Luxembourg II SA 5.875%, due 11/15/213,5 | EUR | 550,000 | 575,178 | ||||||||
Cabot Financial Luxembourg SA 6.500%, due 04/01/213 | GBP | 700,000 | 866,198 | ||||||||
Communications Sales & Leasing, Inc./ CSL Capital LLC 6.000%, due 04/15/232 | 100,000 | 103,188 | |||||||||
8.250%, due 10/15/23 | 350,000 | 357,437 | |||||||||
Credit Agricole SA 6.500%, due 06/23/213,5,6 | EUR | 800,000 | 887,022 | ||||||||
HRG Group, Inc. 7.750%, due 01/15/22 | 395,000 | 402,900 | |||||||||
HT1 Funding GmbH 6.352%, due 06/30/175,6 | EUR | 800,000 | 896,905 | ||||||||
Icahn Enterprises LP/Icahn Enterprises Finance Corp. 5.875%, due 02/01/22 | 485,000 | 463,175 | |||||||||
6.000%, due 08/01/204 | 2,180,000 | 2,174,550 | |||||||||
iStar, Inc. 6.500%, due 07/01/21 | 50,000 | 49,687 | |||||||||
Lock AS 7.000%, due 08/15/213 | EUR | 750,000 | 879,704 | ||||||||
Midas Intermediate Holdco II LLC/Midas Intermediate Holdco II Finance, Inc. 7.875%, due 10/01/222 | 300,000 | 298,689 | |||||||||
NWH Escrow Corp. 7.500%, due 08/01/212 | 250,000 | 185,000 | |||||||||
Prime Security Services Borrower LLC/ Prime Finance, Inc. 9.250%, due 05/15/232 | 300,000 | 320,250 | |||||||||
Radian Group, Inc. 7.000%, due 03/15/21 | 275,000 | 304,219 | |||||||||
Schaeffler Holding Finance BV 5.750%, due 11/15/213,8 | EUR | 345,000 | 416,567 | ||||||||
Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc. 6.750%, due 05/01/222,4 | 200,000 | 209,000 | |||||||||
10,199,269 |
125
PACE High Yield Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Finance-noncaptive consumer—0.23% | |||||||||||
CIT Group, Inc. 5.000%, due 08/15/22 | 940,000 | $ | 989,350 | ||||||||
Finance-other—1.28% | |||||||||||
Navient Corp. 6.625%, due 07/26/21 | 75,000 | 75,900 | |||||||||
8.000%, due 03/25/20 | 2,000,000 | 2,137,500 | |||||||||
8.450%, due 06/15/18 | 600,000 | 652,500 | |||||||||
Springleaf Finance Corp. 5.250%, due 12/15/19 | 545,000 | 528,650 | |||||||||
6.000%, due 06/01/20 | 2,050,000 | 1,988,500 | |||||||||
5,383,050 | |||||||||||
Financial services—1.60% | |||||||||||
Banco de Bogota SA 5.375%, due 02/19/232,4 | 1,000,000 | 1,020,000 | |||||||||
Cemex Finance LLC 4.625%, due 06/15/242 | EUR | 700,000 | 779,666 | ||||||||
5.250%, due 04/01/213 | EUR | 500,000 | 582,277 | ||||||||
6.000%, due 04/01/242,4 | 400,000 | 409,000 | |||||||||
6.000%, due 04/01/243 | 750,000 | 768,750 | |||||||||
Intesa Sanpaolo SpA 8.047%, due 06/20/185,6 | EUR | 950,000 | 1,145,979 | ||||||||
Milacron LLC/Mcron Finance Corp. 7.750%, due 02/15/212 | 865,000 | 908,250 | |||||||||
Monitchem HoldCo 2 SA 6.875%, due 06/15/223 | EUR | 600,000 | 597,079 | ||||||||
VTB Bank OJSC Via VTB Capital SA 6.950%, due 10/17/223 | 500,000 | 518,500 | |||||||||
6,729,501 | |||||||||||
Food products—1.62% | |||||||||||
Constellation Brands, Inc. 7.250%, due 05/15/17 | 425,000 | 442,000 | |||||||||
Cott Beverages, Inc. 6.750%, due 01/01/20 | 125,000 | 131,094 | |||||||||
Cott Finance Corp. 5.500%, due 07/01/242 | EUR | 750,000 | 885,666 | ||||||||
JBS USA LLC/JBS USA Finance, Inc. 8.250%, due 02/01/202 | 1,210,000 | 1,258,400 | |||||||||
Marfrig Holdings Europe BV 8.000%, due 06/08/232 | 300,000 | 308,160 | |||||||||
8.000%, due 06/08/233 | 600,000 | 616,320 | |||||||||
Minerva Luxembourg SA 7.750%, due 01/31/232 | 300,000 | 315,000 | |||||||||
7.750%, due 01/31/233 | 850,000 | 892,500 | |||||||||
Moy Park Bondco PLC 6.250%, due 05/29/213 | GBP | 1,225,000 | 1,675,942 | ||||||||
TreeHouse Foods, Inc. 6.000%, due 02/15/242 | 275,000 | 295,625 | |||||||||
6,820,707 | |||||||||||
Food-wholesale—1.35% | |||||||||||
Albertsons Cos. LLC/Safeway, Inc./ New Albertson's, Inc./Albertson's LLC 6.625%, due 06/15/242,4 | 450,000 | 478,125 |
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Food-wholesale—(concluded) | |||||||||||
Aramark Services, Inc. 4.750%, due 06/01/262,4 | 150,000 | $ | 151,500 | ||||||||
5.125%, due 01/15/244 | 150,000 | 154,875 | |||||||||
5.125%, due 01/15/242 | 400,000 | 413,000 | |||||||||
Casino Guichard Perrachon SA 2.798%, due 08/05/263 | EUR | 300,000 | 363,071 | ||||||||
4.870%, due 01/31/193,5,6 | EUR | 500,000 | 531,609 | ||||||||
Cosan Luxembourg SA 7.000%, due 01/20/272 | 1,100,000 | 1,115,125 | |||||||||
Iceland Bondco PLC 6.250%, due 07/15/213 | GBP | 400,000 | 480,174 | ||||||||
Matalan Finance PLC 6.875%, due 06/01/193 | GBP | 250,000 | 260,389 | ||||||||
Pinnacle Foods Finance LLC/ Pinnacle Foods Finance Corp. 5.875%, due 01/15/242 | 150,000 | 159,375 | |||||||||
Post Holdings, Inc. 6.750%, due 12/01/212 | 1,050,000 | 1,120,875 | |||||||||
7.750%, due 03/15/242,4 | 400,000 | 442,500 | |||||||||
5,670,618 | |||||||||||
Gaming—3.19% | |||||||||||
Boyd Gaming Corp. 6.375%, due 04/01/262 | 925,000 | 986,281 | |||||||||
6.875%, due 05/15/23 | 1,825,000 | 1,952,750 | |||||||||
Cedar Fair LP/Canada's Wonderland Co./ Magnum Management Corp. 5.375%, due 06/01/24 | 100,000 | 104,000 | |||||||||
Churchill Downs, Inc. 5.375%, due 12/15/21 | 350,000 | 358,750 | |||||||||
5.375%, due 12/15/212 | 350,000 | 358,750 | |||||||||
Cirsa Funding Luxembourg SA 5.875%, due 05/15/233 | EUR | 925,000 | 1,068,536 | ||||||||
Isle of Capri Casinos, Inc. 8.875%, due 06/15/20 | 3,295,000 | 3,451,513 | |||||||||
MGM Resorts International 6.750%, due 10/01/20 | 263,000 | 290,615 | |||||||||
7.750%, due 03/15/22 | 740,000 | 853,153 | |||||||||
Penn National Gaming, Inc. 5.875%, due 11/01/21 | 125,000 | 129,844 | |||||||||
Regal Entertainment Group 5.750%, due 03/15/22 | 500,000 | 520,000 | |||||||||
Safari Holding Verwaltungs GmbH 8.250%, due 02/15/213 | EUR | 1,500,000 | 1,769,236 | ||||||||
Schumann SpA 6.625%, due 07/31/222,5 | EUR | 300,000 | 333,723 | ||||||||
7.000%, due 07/31/232 | EUR | 650,000 | 734,800 | ||||||||
William Hill PLC 4.875%, due 09/07/233 | GBP | 300,000 | 404,142 | ||||||||
WMG Acquisition Corp. 5.000%, due 08/01/232 | 125,000 | 126,875 | |||||||||
13,442,968 | |||||||||||
Health care equipment & supplies—0.05% | |||||||||||
Crimson Merger Sub, Inc. 6.625%, due 05/15/222,4 | 250,000 | 213,125 |
126
PACE High Yield Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Health care providers & services—6.09% | |||||||||||
Alere, Inc. 6.375%, due 07/01/232 | 370,000 | $ | 370,463 | ||||||||
6.500%, due 06/15/20 | 375,000 | 368,438 | |||||||||
Amsurg Corp. 5.625%, due 07/15/224 | 175,000 | 183,750 | |||||||||
Capsugel SA 7.000%, due 05/15/192,8 | 203,000 | 205,030 | |||||||||
Centene Corp. 4.750%, due 05/15/22 | 50,000 | 51,500 | |||||||||
CHS/Community Health Systems, Inc. 6.875%, due 02/01/224 | 2,275,000 | 1,956,500 | |||||||||
7.125%, due 07/15/204 | 425,000 | 386,486 | |||||||||
Concordia Healthcare Corp. 7.000%, due 04/15/232 | 500,000 | 412,500 | |||||||||
9.500%, due 10/21/222,4 | 575,000 | 524,687 | |||||||||
DJO Finco, Inc./DJO Finance LLC/DJO Finance Corp. 8.125%, due 06/15/212 | 500,000 | 455,000 | |||||||||
Endo Finance LLC 5.750%, due 01/15/222 | 75,000 | 67,500 | |||||||||
Endo Finance LLC/Endo Finco, Inc. 5.375%, due 01/15/232 | 150,000 | 130,125 | |||||||||
Endo Ltd./Endo Finance LLC/Endo Finco, Inc. 6.000%, due 07/15/232,4 | 1,100,000 | 959,068 | |||||||||
6.000%, due 02/01/252 | 200,000 | 172,500 | |||||||||
HCA, Inc. 5.000%, due 03/15/24 | 3,120,000 | 3,276,000 | |||||||||
7.500%, due 02/15/22 | 2,750,000 | 3,121,250 | |||||||||
HealthSouth Corp. 5.750%, due 11/01/24 | 625,000 | 648,437 | |||||||||
Hill-Rom Holdings, Inc. 5.750%, due 09/01/232,4 | 150,000 | 156,563 | |||||||||
Holding Medi-Partenaires SAS 7.000%, due 05/15/203 | EUR | 975,000 | 1,145,262 | ||||||||
HomeVi SAS 6.875%, due 08/15/213 | EUR | 800,000 | 952,581 | ||||||||
inVentiv Health, Inc. 10.000%, due 08/15/18 | 175,000 | 173,906 | |||||||||
JLL/Delta Dutch Pledgeco BV 8.750%, due 05/01/202,8 | 525,000 | 535,500 | |||||||||
Kindred Healthcare, Inc. 8.000%, due 01/15/20 | 820,000 | 838,450 | |||||||||
LifePoint Health, Inc. 5.500%, due 12/01/21 | 125,000 | 131,199 | |||||||||
Mallinckrodt International Finance SA/ Mallinckrodt CB LLC 5.625%, due 10/15/232,4 | 275,000 | 264,000 | |||||||||
5.750%, due 08/01/222,4 | 750,000 | 733,125 | |||||||||
MPH Acquisition Holdings LLC 7.125%, due 06/01/242 | 300,000 | 320,250 | |||||||||
Select Medical Corp. 6.375%, due 06/01/214 | 625,000 | 618,362 | |||||||||
Tenet Healthcare Corp. 5.500%, due 03/01/19 | 1,200,000 | 1,170,000 | |||||||||
Universal Hospital Services, Inc. 7.625%, due 08/15/20 | 475,000 | 441,750 |
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Health care providers & services—(concluded) | |||||||||||
Valeant Pharmaceuticals International, Inc. 4.500%, due 05/15/233 | EUR | 1,300,000 | $ | 1,141,646 | |||||||
5.875%, due 05/15/232,4 | 600,000 | 499,500 | |||||||||
6.125%, due 04/15/252,4 | 955,000 | 792,650 | |||||||||
6.375%, due 10/15/202,4 | 325,000 | 293,313 | |||||||||
7.000%, due 10/01/202 | 300,000 | 278,250 | |||||||||
7.250%, due 07/15/222,4 | 300,000 | 267,750 | |||||||||
7.500%, due 07/15/212,4 | 1,720,000 | 1,599,600 | |||||||||
25,642,891 | |||||||||||
Hotels, restaurants & leisure—1.59% | |||||||||||
Carlson Travel Holdings, Inc. 7.500%, due 08/15/192,8 | 400,000 | 394,000 | |||||||||
Choctaw Resort Development Enterprise 7.250%, due 11/15/192 | 800,000 | 788,000 | |||||||||
Eldorado Resorts, Inc. 7.000%, due 08/01/234 | 375,000 | 393,750 | |||||||||
FelCor Lodging LP 6.000%, due 06/01/25 | 1,575,000 | 1,626,187 | |||||||||
Golden Nugget Escrow, Inc. 8.500%, due 12/01/212 | 325,000 | 337,188 | |||||||||
KFC Holding Co./Pizza Hut Holdings LLC/ Taco Bell of America LLC 5.000%, due 06/01/242,4 | 300,000 | 313,500 | |||||||||
Landry's, Inc. 9.375%, due 05/01/202 | 100,000 | 105,250 | |||||||||
LTF Merger Sub, Inc. 8.500%, due 06/15/232 | 1,642,000 | 1,588,635 | |||||||||
NPC International, Inc./NPC Operating Co. A&B, Inc. 10.500%, due 01/15/20 | 300,000 | 315,375 | |||||||||
Rivers Pittsburgh Borrower LP/Rivers Pittsburgh Finance Corp. 6.125%, due 08/15/212 | 125,000 | 128,125 | |||||||||
Viking Cruises Ltd. 8.500%, due 10/15/222 | 150,000 | 132,375 | |||||||||
Wynn Macau Ltd. 5.250%, due 10/15/212,4 | 500,000 | 502,500 | |||||||||
Yum! Brands, Inc. 6.250%, due 03/15/18 | 75,000 | 79,969 | |||||||||
6,704,854 | |||||||||||
Insurance—0.50% | |||||||||||
Hub Holdings LLC/Hub Holdings Finance, Inc. 8.125%, due 07/15/192,8 | 400,000 | 386,000 | |||||||||
HUB International Ltd. 7.875%, due 10/01/212 | 400,000 | 401,000 | |||||||||
Mapfre SA 5.921%, due 07/24/375 | EUR | 250,000 | 287,986 | ||||||||
Meiji Yasuda Life Insurance co. 5.200%, due 10/20/453,5 | 500,000 | 554,850 | |||||||||
USI, Inc. 7.750%, due 01/15/212 | 475,000 | 479,750 | |||||||||
2,109,586 |
127
PACE High Yield Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Lodging—0.05% | |||||||||||
NCL Corp. Ltd. 4.625%, due 11/15/202 | 225,000 | $ | 227,250 | ||||||||
Machinery—0.29% | |||||||||||
Areva SA 4.875%, due 09/23/24 | EUR | 950,000 | 919,673 | ||||||||
Manitowoc Foodservice, Inc. 9.500%, due 02/15/242 | 275,000 | 311,781 | |||||||||
1,231,454 | |||||||||||
Machinery-construction & mining—0.03% | |||||||||||
BlueLine Rental Finance Corp. 7.000%, due 02/01/192 | 150,000 | 138,000 | |||||||||
Manufacturing-diversified—0.36% | |||||||||||
Bombardier, Inc. 6.000%, due 10/15/222,4 | 275,000 | 242,687 | |||||||||
6.125%, due 01/15/232 | 125,000 | 108,528 | |||||||||
Cloud Crane LLC 10.125%, due 08/01/242 | 300,000 | 309,000 | |||||||||
RSI Home Products, Inc. 6.500%, due 03/15/232 | 575,000 | 602,312 | |||||||||
The Scotts Miracle-Gro Co. 6.000%, due 10/15/232 | 225,000 | 240,188 | |||||||||
1,502,715 | |||||||||||
Media—3.14% | |||||||||||
Carmike Cinemas, Inc. 6.000%, due 06/15/232 | 300,000 | 314,250 | |||||||||
Cinemark USA, Inc. 5.125%, due 12/15/22 | 125,000 | 129,063 | |||||||||
Clear Channel Worldwide Holdings, Inc. 6.500%, due 11/15/22 | 278,000 | 287,730 | |||||||||
7.625%, due 03/15/20 | 127,000 | 120,650 | |||||||||
7.625%, due 03/15/20 | 1,423,000 | 1,415,885 | |||||||||
Gray Television, Inc. 5.875%, due 07/15/262 | 300,000 | 308,400 | |||||||||
7.500%, due 10/01/20 | 575,000 | 600,156 | |||||||||
iHeartCommunications, Inc. 9.000%, due 12/15/19 | 525,000 | 423,937 | |||||||||
10.000%, due 01/15/18 | 150,000 | 96,375 | |||||||||
14.000%, due 02/01/214,8 | 325,000 | 137,313 | |||||||||
International Game Technology PLC 4.750%, due 02/15/233 | EUR | 525,000 | 632,439 | ||||||||
Mediacom Broadband LLC/Mediacom Broadband Corp. 6.375%, due 04/01/234 | 525,000 | 548,625 | |||||||||
Nexstar Escrow Corp. 5.625%, due 08/01/242 | 550,000 | 558,937 | |||||||||
Ottawa Holdings Pte Ltd. 5.875%, due 05/16/183 | 700,000 | 516,250 | |||||||||
Quebecor Media, Inc. 5.750%, due 01/15/23 | 450,000 | 470,250 | |||||||||
RCN Telecom Services LLC/RCN Capital Corp. 8.500%, due 08/15/202 | 315,000 | 329,963 | |||||||||
Sinclair Television Group, Inc. 5.875%, due 03/15/262 | 225,000 | 236,250 | |||||||||
6.125%, due 10/01/22 | 142,000 | 149,100 |
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Media—(concluded) | |||||||||||
Sirius XM Radio, Inc. 5.375%, due 07/15/262 | 525,000 | $ | 535,174 | ||||||||
6.000%, due 07/15/242,4 | 725,000 | 771,219 | |||||||||
Time, Inc. 5.750%, due 04/15/222 | 550,000 | 537,625 | |||||||||
Townsquare Media, Inc. 6.500%, due 04/01/232,4 | 125,000 | 125,000 | |||||||||
Trader Corp. 9.875%, due 08/15/182 | 200,000 | 204,750 | |||||||||
Univision Communications, Inc. 6.750%, due 09/15/222 | 700,000 | 747,250 | |||||||||
8.500%, due 05/15/212 | 442,000 | 463,936 | |||||||||
Vougeot Bidco PLC 7.875%, due 07/15/203 | GBP | 750,000 | 1,032,291 | ||||||||
VTR Finance BV 6.875%, due 01/15/243 | 1,200,000 | 1,236,000 | |||||||||
Wave Holdco LLC/Wave Holdco Corp. 8.250%, due 07/15/192,8 | 287,375 | 287,375 | |||||||||
13,216,193 | |||||||||||
Metals—0.90% | |||||||||||
Aleris International, Inc. 6.000%, due 06/01/209,10 | 13,347 | 11,918 | |||||||||
7.875%, due 11/01/20 | 641,000 | 593,053 | |||||||||
Cia Brasileira de Aluminio 4.750%, due 06/17/243 | 1,100,000 | 1,036,750 | |||||||||
Coeur Mining, Inc. 7.875%, due 02/01/21 | 225,000 | 224,156 | |||||||||
Constellium NV 5.750%, due 05/15/242,4 | 250,000 | 205,625 | |||||||||
7.000%, due 01/15/233 | EUR | 200,000 | 196,768 | ||||||||
First Quantum Minerals Ltd. 6.750%, due 02/15/202 | 200,000 | 184,100 | |||||||||
7.000%, due 02/15/212,4 | 300,000 | 267,690 | |||||||||
7.250%, due 10/15/192,4 | 400,000 | 376,000 | |||||||||
Novelis, Inc. 8.375%, due 12/15/17 | 368,000 | 375,820 | |||||||||
8.750%, due 12/15/204 | 75,000 | 78,188 | |||||||||
Vedanta Resources PLC 8.250%, due 06/07/212 | 250,000 | 231,336 | |||||||||
3,781,404 | |||||||||||
Metals & mining—1.71% | |||||||||||
Anglo American Capital PLC 2.750%, due 06/07/193 | EUR | 225,000 | 255,600 | ||||||||
3.500%, due 03/28/223 | EUR | 700,000 | 778,452 | ||||||||
4.125%, due 04/15/212 | 200,000 | 194,000 | |||||||||
4.125%, due 09/27/222 | 400,000 | 384,000 | |||||||||
4.875%, due 05/14/252,4 | 400,000 | 389,000 | |||||||||
ArcelorMittal 3.125%, due 01/14/223 | EUR | 525,000 | 589,839 | ||||||||
7.250%, due 02/25/224 | 100,000 | 109,500 | |||||||||
8.000%, due 10/15/39 | 355,000 | 376,300 | |||||||||
BHP Billiton Finance USA Ltd. 6.250%, due 10/19/753,5 | 250,000 | 270,625 |
128
PACE High Yield Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Metals & mining—(concluded) | |||||||||||
Freeport-McMoRan, Inc. 2.375%, due 03/15/18 | 400,000 | $ | 395,000 | ||||||||
5.450%, due 03/15/43 | 350,000 | 268,625 | |||||||||
Hecla Mining Co. 6.875%, due 05/01/21 | 275,000 | 275,000 | |||||||||
IAMGOLD Corp. 6.750%, due 10/01/202 | 325,000 | 303,875 | |||||||||
JSW Steel Ltd. 4.750%, due 11/12/193 | 250,000 | 240,500 | |||||||||
Ovako AB 6.500%, due 06/01/193 | EUR | 460,000 | 390,853 | ||||||||
Teck Resources Ltd. 3.000%, due 03/01/194 | 101,000 | 96,713 | |||||||||
4.750%, due 01/15/224 | 75,000 | 66,844 | |||||||||
6.000%, due 08/15/40 | 75,000 | 56,625 | |||||||||
6.125%, due 10/01/35 | 375,000 | 292,500 | |||||||||
6.250%, due 07/15/41 | 75,000 | 57,750 | |||||||||
Vale Overseas Ltd. 5.875%, due 06/10/21 | 700,000 | 726,250 | |||||||||
Wise Metals Group LLC/Wise Alloys Finance Corp. 8.750%, due 12/15/182 | 525,000 | 498,750 | |||||||||
Zekelman Industries, Inc. 9.875%, due 06/15/232 | 175,000 | 183,750 | |||||||||
7,200,351 | |||||||||||
Oil & gas—9.88% | |||||||||||
Bill Barrett Corp. 7.000%, due 10/15/22 | 25,000 | 17,875 | |||||||||
7.625%, due 10/01/19 | 50,000 | 40,000 | |||||||||
Blue Racer Midstream LLC/Blue Racer Finance Corp. 6.125%, due 11/15/222 | 325,000 | 305,500 | |||||||||
Bonanza Creek Energy, Inc. 5.750%, due 02/01/23 | 200,000 | 88,000 | |||||||||
6.750%, due 04/15/21 | 175,000 | 77,000 | |||||||||
California Resources Corp. 8.000%, due 12/15/222 | 891,000 | 570,418 | |||||||||
Carrizo Oil & Gas, Inc. 6.250%, due 04/15/234 | 400,000 | 378,000 | |||||||||
Cheniere Corpus Christi Holdings LLC 7.000%, due 06/30/242 | 400,000 | 418,000 | |||||||||
Chesapeake Energy Corp. 6.250%, due 01/15/17 | EUR | 650,000 | 697,632 | ||||||||
6.500%, due 08/15/174 | 500,000 | 483,750 | |||||||||
6.625%, due 08/15/204 | 1,540,000 | 1,170,400 | |||||||||
6.875%, due 11/15/20 | 75,000 | 56,250 | |||||||||
8.000%, due 12/15/222,4 | 375,000 | 338,906 | |||||||||
Crestwood Midstream Partners LP/ Crestwood Midstream Finance Corp. 6.250%, due 04/01/23 | 1,345,000 | 1,260,937 | |||||||||
Denbury Resources, Inc. 9.000%, due 05/15/212,4 | 510,000 | 510,000 | |||||||||
Drill Rigs Holdings, Inc. 6.500%, due 10/01/172,4 | 100,000 | 45,000 |
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Oil & gas—(continued) | |||||||||||
Energy Transfer Equity LP 5.875%, due 01/15/244 | 1,700,000 | $ | 1,705,253 | ||||||||
7.500%, due 10/15/20 | 825,000 | 888,937 | |||||||||
Ensco PLC 5.200%, due 03/15/254 | 25,000 | 17,000 | |||||||||
5.750%, due 10/01/444 | 125,000 | 73,125 | |||||||||
EP Energy LLC/Everest Acquisition Finance, Inc. 6.375%, due 06/15/234 | 125,000 | 62,500 | |||||||||
9.375%, due 05/01/204 | 1,010,000 | 575,700 | |||||||||
Ferrellgas LP/Ferrellgas Finance Corp. 6.500%, due 05/01/21 | 430,000 | 391,300 | |||||||||
6.750%, due 06/15/23 | 225,000 | 197,438 | |||||||||
Freeport-McMoran Oil & Gas LLC/ FCX Oil & Gas, Inc. 6.500%, due 11/15/20 | 225,000 | 222,750 | |||||||||
6.625%, due 05/01/21 | 525,000 | 517,125 | |||||||||
6.750%, due 02/01/22 | 975,000 | 948,187 | |||||||||
Gazprom OAO Via Gaz Capital SA 3.600%, due 02/26/213 | EUR | 1,000,000 | 1,157,130 | ||||||||
4.950%, due 07/19/223 | 500,000 | 507,500 | |||||||||
4.950%, due 02/06/283,4 | 700,000 | 679,000 | |||||||||
Halcon Resources Corp. 8.625%, due 02/01/202,4,7 | 500,000 | 460,000 | |||||||||
13.000%, due 02/15/222,4,7 | 1,275,000 | 675,750 | |||||||||
Hilcorp Energy I LP/Hilcorp Finance Co. 7.625%, due 04/15/212 | 525,000 | 536,813 | |||||||||
Holly Energy Partners LP/Holly Energy Finance Corp. 6.000%, due 08/01/242 | 125,000 | 126,563 | |||||||||
Kinder Morgan, Inc. 2.250%, due 03/16/27 | EUR | 600,000 | 654,835 | ||||||||
5.000%, due 02/15/212 | 3,370,000 | 3,618,396 | |||||||||
Laredo Petroleum, Inc. 5.625%, due 01/15/224 | 275,000 | 248,875 | |||||||||
Linn Energy LLC/Linn Energy Finance Corp. 6.250%, due 11/01/197 | 775,000 | 129,813 | |||||||||
6.500%, due 05/15/197 | 400,000 | 68,000 | |||||||||
8.625%, due 04/15/207 | 180,000 | 30,600 | |||||||||
Lukoil International Finance BV 4.563%, due 04/24/233 | 800,000 | 810,000 | |||||||||
MEG Energy Corp. 6.375%, due 01/30/232,4 | 325,000 | 233,188 | |||||||||
7.000%, due 03/31/242,4 | 50,000 | 36,625 | |||||||||
Memorial Resource Development Corp. 5.875%, due 07/01/22 | 500,000 | 500,105 | |||||||||
Murphy Oil Corp. 4.000%, due 06/01/224 | 50,000 | 43,488 | |||||||||
4.700%, due 12/01/224 | 900,000 | 812,677 | |||||||||
Newfield Exploration Co. 5.625%, due 07/01/24 | 50,000 | 49,375 | |||||||||
5.750%, due 01/30/22 | 700,000 | 696,500 | |||||||||
Noble Holding International Ltd. 4.900%, due 08/01/204 | 50,000 | 43,094 | |||||||||
Oasis Petroleum, Inc. 6.500%, due 11/01/214 | 425,000 | 357,000 | |||||||||
6.875%, due 03/15/224 | 350,000 | 305,375 | |||||||||
6.875%, due 01/15/234 | 175,000 | 147,656 |
129
PACE High Yield Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Oil & gas—(continued) | |||||||||||
Paramount Resources Ltd. 6.875%, due 06/30/232 | 250,000 | $ | 250,000 | ||||||||
Petrobras Global Finance BV 3.750%, due 01/14/21 | EUR | 325,000 | 337,975 | ||||||||
4.250%, due 10/02/23 | EUR | 525,000 | 513,581 | ||||||||
4.375%, due 05/20/23 | 900,000 | 771,750 | |||||||||
4.875%, due 03/17/20 | 250,000 | 243,528 | |||||||||
5.375%, due 01/27/21 | 300,000 | 284,625 | |||||||||
5.875%, due 03/07/22 | EUR | 300,000 | 327,015 | ||||||||
6.250%, due 03/17/244 | 665,000 | 618,856 | |||||||||
7.250%, due 03/17/44 | 700,000 | 590,733 | |||||||||
8.375%, due 05/23/21 | 375,000 | 396,469 | |||||||||
8.750%, due 05/23/26 | 400,000 | 415,880 | |||||||||
Petroleos de Venezuela SA 6.000%, due 11/15/263 | 850,000 | 308,125 | |||||||||
8.500%, due 11/02/173 | 200,000 | 155,250 | |||||||||
9.000%, due 11/17/213 | 1,920,000 | 928,704 | |||||||||
Precision Drilling Corp. 5.250%, due 11/15/24 | 75,000 | 62,250 | |||||||||
6.500%, due 12/15/21 | 225,000 | 204,750 | |||||||||
Regency Energy Partners LP/ Regency Energy Finance Corp. 5.000%, due 10/01/22 | 500,000 | 526,967 | |||||||||
Rice Energy, Inc. 6.250%, due 05/01/224 | 425,000 | 414,375 | |||||||||
Sanchez Energy Corp. 6.125%, due 01/15/234 | 750,000 | 504,375 | |||||||||
7.750%, due 06/15/214 | 125,000 | 95,625 | |||||||||
SandRidge Energy, Inc. 7.500%, due 03/15/217 | 1,800,000 | 90,000 | |||||||||
SM Energy Co. 5.000%, due 01/15/244 | 150,000 | 120,000 | |||||||||
6.125%, due 11/15/224 | 400,000 | 339,000 | |||||||||
6.500%, due 01/01/234 | 125,000 | 106,250 | |||||||||
Southwestern Energy Co. 4.100%, due 03/15/224 | 200,000 | 177,000 | |||||||||
7.500%, due 02/01/184 | 119,000 | 124,831 | |||||||||
State Oil Co. of the Azerbaijan Republic 4.750%, due 03/13/233 | 800,000 | 753,070 | |||||||||
Summit Midstream Holdings LLC/ Summit Midstream Finance Corp. 5.500%, due 08/15/22 | 575,000 | 530,438 | |||||||||
7.500%, due 07/01/21 | 200,000 | 198,500 | |||||||||
Sunoco LP/Sunoco Finance Corp. 5.500%, due 08/01/202 | 1,000,000 | 1,012,500 | |||||||||
6.250%, due 04/15/212,4 | 1,050,000 | 1,071,000 | |||||||||
6.375%, due 04/01/232 | 795,000 | 808,912 | |||||||||
Targa Resources Partners LP/ Targa Resources Partners Finance Corp. 4.125%, due 11/15/19 | 675,000 | 672,469 | |||||||||
6.625%, due 10/01/20 | 400,000 | 409,000 | |||||||||
6.750%, due 03/15/242 | 50,000 | 52,125 | |||||||||
6.875%, due 02/01/21 | 50,000 | 51,250 | |||||||||
Transocean, Inc. 6.000%, due 03/15/184 | 550,000 | 536,250 |
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Oil & gas—(concluded) | |||||||||||
Tullow Oil PLC 6.250%, due 04/15/222 | 400,000 | $ | 327,000 | ||||||||
WPX Energy, Inc. 6.000%, due 01/15/224 | 225,000 | 203,625 | |||||||||
7.500%, due 08/01/20 | 300,000 | 295,500 | |||||||||
YPF SA 8.500%, due 03/23/212 | 100,000 | 107,250 | |||||||||
8.500%, due 07/28/253 | 300,000 | 316,125 | |||||||||
8.750%, due 04/04/243 | 315,000 | 336,735 | |||||||||
41,575,004 | |||||||||||
Oil services—1.54% | |||||||||||
Cie Generale de Geophysique-Veritas 6.500%, due 06/01/21 | 1,375,000 | 618,750 | |||||||||
Citgo Holding, Inc. 10.750%, due 02/15/202 | 750,000 | 740,625 | |||||||||
CITGO Petroleum Corp. 6.250%, due 08/15/222 | 2,205,000 | 2,127,825 | |||||||||
Petron Corp. 7.500%, due 08/06/183,5,6 | 1,400,000 | 1,490,958 | |||||||||
Tesoro Corp. 5.375%, due 10/01/224 | 675,000 | 693,563 | |||||||||
Williams Partners LP/ACMP Finance Corp. 4.875%, due 05/15/234 | 75,000 | 74,510 | |||||||||
4.875%, due 03/15/244 | 250,000 | 249,472 | |||||||||
6.125%, due 07/15/224 | 475,000 | 485,907 | |||||||||
6,481,610 | |||||||||||
Packaging—0.54% | |||||||||||
Reynolds Group Issuer 8.250%, due 02/15/214 | 1,550,000 | 1,612,000 | |||||||||
9.875%, due 08/15/19 | 645,000 | 662,738 | |||||||||
2,274,738 | |||||||||||
Paper & forest products—0.64% | |||||||||||
Appvion, Inc. 9.000%, due 06/01/202 | 400,000 | 240,000 | |||||||||
Fibria Overseas Finance Ltd. 5.250%, due 05/12/244 | 400,000 | 410,400 | |||||||||
Lecta SA 6.375%, due 08/01/222,5 | EUR | 500,000 | 550,615 | ||||||||
6.500%, due 08/01/232 | EUR | 500,000 | 557,446 | ||||||||
WEPA Hygieneprodukte GmbH 3.750%, due 05/15/242 | EUR | 525,000 | 613,331 | ||||||||
3.750%, due 05/15/243 | EUR | 275,000 | 321,269 | ||||||||
2,693,061 | |||||||||||
Pipelines—1.68% | |||||||||||
EnLink Midstream Partners LP 4.400%, due 04/01/24 | 300,000 | 292,291 | |||||||||
5.050%, due 04/01/45 | 250,000 | 208,736 | |||||||||
Martin Midstream Partners LP/ Martin Midstream Finance Corp. 7.250%, due 02/15/21 | 500,000 | 476,250 | |||||||||
MPLX LP 5.500%, due 02/15/232 | 645,000 | 664,749 |
130
PACE High Yield Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Pipelines—(concluded) | |||||||||||
PBF Logistics LP/PBF Logistics Finance Corp. 6.875%, due 05/15/23 | 325,000 | $ | 325,000 | ||||||||
Rose Rock Midstream LP/Rose Rock Finance Corp. 5.625%, due 07/15/22 | 475,000 | 426,312 | |||||||||
Sabine Pass Liquefaction LLC 5.625%, due 04/15/23 | 475,000 | 484,500 | |||||||||
5.625%, due 03/01/254 | 325,000 | 331,806 | |||||||||
6.250%, due 03/15/22 | 600,000 | 627,750 | |||||||||
Tesoro Logistics LP/Tesoro Logistics Finance Corp. 5.500%, due 10/15/194 | 75,000 | 79,688 | |||||||||
5.875%, due 10/01/20 | 600,000 | 615,000 | |||||||||
6.375%, due 05/01/244 | 50,000 | 52,719 | |||||||||
The Williams Cos., Inc. 3.700%, due 01/15/234 | 425,000 | 387,812 | |||||||||
4.550%, due 06/24/24 | 450,000 | 428,625 | |||||||||
5.750%, due 06/24/444 | 825,000 | 756,937 | |||||||||
7.500%, due 01/15/31 | 125,000 | 134,375 | |||||||||
7.750%, due 06/15/31 | 75,000 | 81,375 | |||||||||
7.875%, due 09/01/21 | 625,000 | 687,500 | |||||||||
7,061,425 | |||||||||||
Real estate investment trusts—2.47% | |||||||||||
China SCE Property Holdings Ltd. 10.000%, due 07/02/203 | 200,000 | 227,022 | |||||||||
CIFI Holdings Group Co. Ltd. 7.750%, due 06/05/203 | 500,000 | 547,747 | |||||||||
DuPont Fabros Technology LP 5.625%, due 06/15/23 | 200,000 | 209,250 | |||||||||
Equinix, Inc. 5.375%, due 04/01/23 | 325,000 | 339,732 | |||||||||
Franshion Development Ltd. 6.750%, due 04/15/213 | 500,000 | 574,934 | |||||||||
Greystar Real Estate Partners LLC 8.250%, due 12/01/222 | 375,000 | 398,205 | |||||||||
Kennedy-Wilson, Inc. 5.875%, due 04/01/24 | 450,000 | 454,500 | |||||||||
KWG Property Holding Ltd. 13.250%, due 03/22/173 | 900,000 | 956,250 | |||||||||
Longfor Properties Co. Ltd. 6.750%, due 01/29/233 | 500,000 | 540,124 | |||||||||
Moon Wise Global Ltd. 9.000%, due 01/28/193,5,6 | 450,000 | 493,982 | |||||||||
MPT Operating Partnership LP/ MPT Finance Corp. 4.000%, due 08/19/22 | EUR | 575,000 | 681,743 | ||||||||
5.750%, due 10/01/20 | EUR | 350,000 | 410,474 | ||||||||
6.375%, due 03/01/24 | 325,000 | 354,250 | |||||||||
Realogy Group LLC/Realogy Co-Issuer Corp. 4.500%, due 04/15/192,4 | 225,000 | 233,438 | |||||||||
4.875%, due 06/01/232 | 625,000 | 634,375 | |||||||||
5.250%, due 12/01/212 | 150,000 | 156,750 | |||||||||
Tesco Property Finance 3 PLC 5.744%, due 04/13/403 | GBP | 1,470,678 | 1,930,387 |
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Real estate investment trusts—(concluded) | |||||||||||
The GEO Group, Inc. 6.000%, due 04/15/26 | 200,000 | $ | 205,250 | ||||||||
Theta Capital Pte Ltd. 7.000%, due 04/11/223 | 200,000 | 209,000 | |||||||||
Yuzhou Properties Co. Ltd. 9.000%, due 12/08/193 | 750,000 | 830,692 | |||||||||
10,388,105 | |||||||||||
Retail—1.36% | |||||||||||
1011778 BC ULC/New Red Finance, Inc. 6.000%, due 04/01/222 | 75,000 | 78,656 | |||||||||
99 Cents Only Stores LLC 11.000%, due 12/15/19 | 225,000 | 122,063 | |||||||||
Asbury Automotive Group, Inc. 6.000%, due 12/15/24 | 100,000 | 102,550 | |||||||||
Beacon Roofing Supply, Inc. 6.375%, due 10/01/234 | 250,000 | 268,750 | |||||||||
Group 1 Automotive, Inc. 5.250%, due 12/15/232,4 | 225,000 | 223,312 | |||||||||
JC Penney Corp., Inc. 5.650%, due 06/01/204 | 375,000 | 360,469 | |||||||||
5.875%, due 07/01/232,4 | 125,000 | 128,137 | |||||||||
Nathan's Famous, Inc. 10.000%, due 03/15/202 | 425,000 | 456,875 | |||||||||
Neiman Marcus Group Ltd. LLC 8.000%, due 10/15/212,4 | 125,000 | 105,950 | |||||||||
New Look Secured Issuer PLC 6.500%, due 07/01/223 | GBP | 400,000 | 498,411 | ||||||||
Radio Systems Corp. 8.375%, due 11/01/192 | 300,000 | 315,375 | |||||||||
Rite Aid Corp. 6.125%, due 04/01/232 | 400,000 | 424,500 | |||||||||
6.750%, due 06/15/214 | 175,000 | 183,969 | |||||||||
rue21, Inc. 9.000%, due 10/15/212 | 525,000 | 178,500 | |||||||||
Sonic Automotive, Inc. 7.000%, due 07/15/22 | 300,000 | 315,750 | |||||||||
Suburban Propane Partners LP/ Suburban Energy Finance Corp. 5.500%, due 06/01/24 | 1,800,000 | 1,777,500 | |||||||||
The Hillman Group, Inc. 6.375%, due 07/15/222 | 200,000 | 182,000 | |||||||||
5,722,767 | |||||||||||
Specialty retail—1.15% | |||||||||||
Hanesbrands Finance Luxembourg SCA 3.500%, due 06/15/242 | EUR | 1,100,000 | 1,276,225 | ||||||||
L Brands, Inc. 6.750%, due 07/01/364 | 475,000 | 497,862 | |||||||||
6.875%, due 11/01/35 | 725,000 | 768,862 | |||||||||
Outerwall, Inc. 5.875%, due 06/15/21 | 425,000 | 430,313 | |||||||||
Penske Automotive Group, Inc. 5.500%, due 05/15/26 | 325,000 | 320,938 | |||||||||
PVH Corp. 3.625%, due 07/15/242 | EUR | 800,000 | 935,856 |
131
PACE High Yield Investments
Portfolio of investments—July 31, 2016
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Specialty retail—(concluded) | |||||||||||
Sally Holdings LLC/Sally Capital, Inc. 5.625%, due 12/01/25 | 575,000 | $ | 618,125 | ||||||||
4,848,181 | |||||||||||
Steel—0.62% | |||||||||||
AK Steel Corp. 7.500%, due 07/15/234 | 25,000 | 26,375 | |||||||||
7.625%, due 05/15/204 | 706,000 | 695,410 | |||||||||
8.375%, due 04/01/224 | 275,000 | 272,937 | |||||||||
Severstal OAO Via Steel Capital SA 5.900%, due 10/17/222 | 1,500,000 | 1,616,250 | |||||||||
2,610,972 | |||||||||||
Telecom-integrated/services—0.75% | |||||||||||
GCX Ltd. 7.000%, due 08/01/193 | 950,000 | 959,740 | |||||||||
Hughes Satellite Systems Corp. 5.250%, due 08/01/262 | 475,000 | 473,813 | |||||||||
6.625%, due 08/01/262,4 | 675,000 | 669,937 | |||||||||
Intelsat Luxembourg SA 6.750%, due 06/01/18 | 175,000 | 107,625 | |||||||||
8.125%, due 06/01/23 | 4,040,000 | 939,300 | |||||||||
3,150,415 | |||||||||||
Telecommunication services—4.30% | |||||||||||
Alcatel-Lucent USA, Inc. 6.500%, due 01/15/28 | 350,000 | 367,500 | |||||||||
Altice Financing SA 5.250%, due 02/15/233 | EUR | 675,000 | 773,517 | ||||||||
6.625%, due 02/15/232,4 | 200,000 | 200,376 | |||||||||
7.500%, due 05/15/262 | 200,000 | 202,000 | |||||||||
Altice Luxembourg SA 6.250%, due 02/15/253 | EUR | 400,000 | 415,802 | ||||||||
7.250%, due 05/15/223 | EUR | 943,000 | 1,066,209 | ||||||||
7.625%, due 02/15/252 | 200,000 | 196,750 | |||||||||
7.750%, due 05/15/222,4 | 1,000,000 | 1,014,400 | |||||||||
Avaya, Inc. 7.000%, due 04/01/192,4 | 200,000 | 150,500 | |||||||||
9.000%, due 04/01/192,4 | 50,000 | 38,000 | |||||||||
10.500%, due 03/01/212 | 150,000 | 40,500 | |||||||||
CommScope Technologies Finance LLC 6.000%, due 06/15/252 | 725,000 | 764,875 | |||||||||
CyrusOne LP/CyrusOne Finance Corp. 6.375%, due 11/15/22 | 200,000 | 209,500 | |||||||||
Digicel Ltd. 6.000%, due 04/15/213 | 500,000 | 467,500 | |||||||||
6.000%, due 04/15/212,4 | 500,000 | 467,500 | |||||||||
6.750%, due 03/01/233 | 500,000 | 463,500 | |||||||||
EarthLink Holdings Corp. 7.375%, due 06/01/20 | 600,000 | 627,000 | |||||||||
eircom Finance DAC 4.500%, due 05/31/222 | EUR | 900,000 | 1,013,644 | ||||||||
Neptune Finco Corp. 10.125%, due 01/15/232 | 1,400,000 | 1,604,750 | |||||||||
Play Finance 2 SA 5.250%, due 02/01/193 | EUR | 725,000 | 831,706 |
Face Amount1 | Value | ||||||||||
Corporate bonds—(continued) | |||||||||||
Telecommunication services—(concluded) | |||||||||||
Play Topco SA 7.750%, due 02/28/203,8 | EUR | 450,000 | $ | 512,257 | |||||||
Telenet Finance VI Luxembourg SCA 4.875%, due 07/15/273 | EUR | 500,000 | 581,360 | ||||||||
UPC Holding BV 6.375%, due 09/15/223 | EUR | 700,000 | 838,791 | ||||||||
UPCB Finance IV Ltd. 4.000%, due 01/15/273 | EUR | 825,000 | 913,127 | ||||||||
Vimpel Communications Via VIP Finance Ireland Ltd. OJSC 7.748%, due 02/02/213 | 500,000 | 551,870 | |||||||||
VimpelCom Holdings BV 5.950%, due 02/13/233 | 1,250,000 | 1,278,062 | |||||||||
Wind Acquisition Finance SA 4.000%, due 07/15/203 | EUR | 525,000 | 588,418 | ||||||||
7.000%, due 04/23/213 | EUR | 1,000,000 | 1,113,305 | ||||||||
7.375%, due 04/23/212,4 | 800,000 | 796,000 | |||||||||
18,088,719 | |||||||||||
Telecommunications equipment—0.03% | |||||||||||
CDW LLC/CDW Finance Corp. 6.000%, due 08/15/22 | 125,000 | 133,438 | |||||||||
Telephone-integrated—2.75% | |||||||||||
Frontier Communications Corp. 10.500%, due 09/15/22 | 725,000 | 781,188 | |||||||||
11.000%, due 09/15/254 | 2,450,000 | 2,618,437 | |||||||||
Level 3 Financing, Inc. 5.375%, due 08/15/22 | 325,000 | 341,250 | |||||||||
5.375%, due 01/15/24 | 500,000 | 524,375 | |||||||||
5.625%, due 02/01/23 | 175,000 | 183,750 | |||||||||
6.125%, due 01/15/21 | 475,000 | 494,594 | |||||||||
Sprint Capital Corp. 8.750%, due 03/15/32 | 3,220,000 | 3,026,800 | |||||||||
Telecom Italia Finance SA 7.750%, due 01/24/33 | EUR | 450,000 | 685,494 | ||||||||
Virgin Media Finance PLC 5.750%, due 01/15/252 | 200,000 | 199,250 | |||||||||
6.000%, due 10/15/242 | 400,000 | 405,000 | |||||||||
6.375%, due 04/15/232 | 200,000 | 205,500 | |||||||||
6.375%, due 10/15/243 | GBP | 1,050,000 | 1,441,733 | ||||||||
Virgin Media Secured Finance PLC 4.875%, due 01/15/273 | GBP | 500,000 | 656,762 | ||||||||
11,564,133 | |||||||||||
Trading companies & distributors—0.05% | |||||||||||
Golden Legacy Pte Ltd. 9.000%, due 04/24/193 | 200,000 | 212,440 | |||||||||
Transportation services—0.79% | |||||||||||
Global Ship Lease, Inc. 10.000%, due 04/01/192 | 200,000 | 177,000 | |||||||||
Hapag-Lloyd AG 9.750%, due 10/15/172 | 635,000 | 633,412 | |||||||||
ICTSI Treasury BV 4.625%, due 01/16/233 | 1,000,000 | 1,030,000 |
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Face Amount1 | Value | ||||||||||
Corporate bonds—(concluded) | |||||||||||
Transportation services—(concluded) | |||||||||||
WFS Global Holding SAS 9.500%, due 07/15/223 | EUR | 650,000 | $ | 682,226 | |||||||
12.500%, due 12/30/223 | EUR | 550,000 | 522,727 | ||||||||
XPO Logistics, Inc. 6.500%, due 06/15/222,4 | 269,000 | 266,310 | |||||||||
3,311,675 | |||||||||||
Utilities—0.06% | |||||||||||
HD Supply, Inc. 7.500%, due 07/15/204 | 225,000 | 235,125 | |||||||||
Wireless telecommunication services—4.07% | |||||||||||
CenturyLink, Inc. 5.625%, due 04/01/204 | 200,000 | 211,500 | |||||||||
5.800%, due 03/15/224 | 575,000 | 587,937 | |||||||||
6.750%, due 12/01/23 | 350,000 | 364,000 | |||||||||
7.500%, due 04/01/244 | 225,000 | 240,188 | |||||||||
7.600%, due 09/15/39 | 1,700,000 | 1,521,500 | |||||||||
Comunicaciones Celulares SA 6.875%, due 02/06/242 | 300,000 | 311,625 | |||||||||
Digicel Group Ltd. 8.250%, due 09/30/202 | 1,350,000 | 1,231,875 | |||||||||
Geo Debt Finance SCA 7.500%, due 08/01/183 | EUR | 450,000 | 489,265 | ||||||||
Intelsat Jackson Holdings SA 7.250%, due 04/01/194 | 425,000 | 317,688 | |||||||||
Match Group, Inc. 6.375%, due 06/01/242 | 425,000 | 454,219 | |||||||||
Millicom International Cellular SA 6.625%, due 10/15/213 | 300,000 | 313,110 | |||||||||
Sable International Finance Ltd. 6.875%, due 08/01/222 | 400,000 | 410,000 | |||||||||
Sprint Communications, Inc. 8.375%, due 08/15/17 | 475,000 | 492,219 | |||||||||
Sprint Corp. 7.875%, due 09/15/23 | 1,375,000 | 1,255,554 | |||||||||
T-Mobile USA, Inc. 6.125%, due 01/15/22 | 1,250,000 | 1,316,406 | |||||||||
6.375%, due 03/01/25 | 2,135,000 | 2,284,450 | |||||||||
TBG Global Pte Ltd. 5.250%, due 02/10/223 | 500,000 | 512,720 | |||||||||
ViaSat, Inc. 6.875%, due 06/15/20 | 1,984,000 | 2,048,678 | |||||||||
Windstream Services LLC 6.375%, due 08/01/234 | 750,000 | 648,750 | |||||||||
7.500%, due 06/01/224 | 300,000 | 276,000 | |||||||||
7.750%, due 10/15/204 | 375,000 | 373,828 | |||||||||
Zayo Group LLC/Zayo Capital, Inc. 6.000%, due 04/01/234 | 1,325,000 | 1,378,000 | |||||||||
6.375%, due 05/15/25 | 100,000 | 104,625 | |||||||||
17,144,137 | |||||||||||
Total corporate bonds (cost—$400,977,040) | 401,698,002 |
Face Amount1 | Value | ||||||||||
Non-US government obligations—0.20% | |||||||||||
Republic of Sri Lanka 6.825%, due 07/18/262 | 300,000 | $ | 312,715 | ||||||||
6.850%, due 11/03/252 | 500,000 | 525,625 | |||||||||
Total non-US government obligations (cost—$800,000) | 838,340 | ||||||||||
Loan assignments5—1.14% | |||||||||||
Broadcast—0.39% | |||||||||||
Ancestry.com, Inc. 2015 Term Loan B 5.000%, due 08/17/22 | 74,438 | 74,600 | |||||||||
Asurion LLC Term Loan B4 | |||||||||||
5.000%, due 08/04/22 | 934,284 | 935,256 | |||||||||
Hercules Offshore LLC Exit Term Loan 10.500%, due 05/06/20 | 507,325 | 304,395 | |||||||||
Jaguar Holding Company II 2015 Term Loan B 4.250%, due 08/18/22 | 321,750 | 321,509 | |||||||||
1,635,760 | |||||||||||
Building products—0.04% | |||||||||||
Builders FirstSource, Inc. Term Loan B 6.000%, due 07/31/22 | 174,196 | 174,719 | |||||||||
Consumer products—0.10% | |||||||||||
Revlon Consumer Products Corp. 2016 Term Loan B11 0.000%, due 07/22/23 | 425,000 | 424,337 | |||||||||
Food-wholesale—0.02% | |||||||||||
Pinnacle Foods Finance LLC 2016 Term Loan I 3.240%, due 01/13/23 | 74,625 | 74,812 | |||||||||
Gaming—0.42% | |||||||||||
Scientific Games International, Inc. 2014 Term Loan B1 6.000%, due 10/18/20 | 1,755,000 | 1,752,806 | |||||||||
Hotels, restaurants & leisure—0.05% | |||||||||||
LTF Merger Sub, Inc. Term Loan B 4.250%, due 06/10/22 | 198,496 | 197,958 | |||||||||
Oil Services—0.09% | |||||||||||
Citgo Holding Inc. 2015 Term Loan B 9.500%, due 05/12/18 | 392,161 | 395,839 | |||||||||
Real estate investment trusts—0.03% | |||||||||||
RHP Hotel Properties, LP Term Loan B 3.500%, due 01/15/21 | 124,051 | 124,237 | |||||||||
Total loan assignments (cost—$4,954,340) | 4,780,468 | ||||||||||
Number of Shares | |||||||||||
Common stocks—0.29% | |||||||||||
Automobiles—0.26% | |||||||||||
General Motors Co. | 34,350 | 1,083,399 | |||||||||
Motors Liquidation Co. GUC Trust12 | 3,014 | 33,335 | |||||||||
1,116,734 |
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Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Oil, gas & consumable fuels—0.03% | |||||||||||
Denbury Resources, Inc.4 | 37,000 | $ | 107,300 | ||||||||
Total common stocks (cost—$1,176,998) | 1,224,034 | ||||||||||
Preferred stock—0.07% | |||||||||||
Transportation infrastructure—0.07% | |||||||||||
Seaspan Corp.4 (cost—$284,308) | 11,327 | 285,554 | |||||||||
Number of Warrants | |||||||||||
Warrants—0.10% | |||||||||||
Automobiles—0.10% | |||||||||||
General Motors Co., strike price $18.33, expires 07/10/19* (cost—$276,822) | 30,621 | 417,058 | |||||||||
Face Amount | |||||||||||
Repurchase agreement—1.65% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $561,054 US Treasury Bond, 7.875% due 02/15/21 and $6,177,283 US Treasury Notes, 0.750% to 2.250% due 12/31/17 to 07/31/21; (value—$7,094,225); proceeds: $6,955,006. (cost—$6,955,000) | $ | 6,955,000 | 6,955,000 |
Number of Shares | Value | ||||||||||
Investment of cash collateral from securities loaned—14.02% | |||||||||||
Money market fund—14.01% | |||||||||||
State Street Institutional U.S. Government Money Market Fund (cost—$58,971,210) | 58,971,210 | $ | 58,971,210 | ||||||||
Total investments (cost—$474,395,718)—112.93% | 475,169,666 | ||||||||||
Liabilities in excess of other assets—(12.93)% | (54,395,759 | ) | |||||||||
Net assets—100.00% | $ | 420,773,907 |
For a listing of defined portfolio acronyms and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 262.
Aggregate cost for federal income tax purposes was $475,693,511; and net unrealized depreciation consisted of:
Gross unrealized appreciation | $ | 12,969,262 | |||||
Gross unrealized depreciation | (13,493,107 | ) | |||||
Net unrealized depreciation | $ | (523,845 | ) |
Forward foreign currency contracts
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
SSC | EUR | 500,000 | GBP | 425,524 | 08/01/16 | $ | 4,159 | ||||||||||||
SSC | EUR | 68,003,330 | USD | 75,311,580 | 08/01/16 | (716,176 | ) | ||||||||||||
SSC | EUR | 68,016,174 | USD | 74,946,750 | 09/01/16 | (1,182,225 | ) | ||||||||||||
SSC | GBP | 10,911,308 | USD | 14,606,827 | 08/01/16 | 166,258 | |||||||||||||
SSC | GBP | 10,622,078 | USD | 13,958,207 | 09/01/16 | (106,144 | ) | ||||||||||||
SSC | USD | 2,749,573 | EUR | 2,500,000 | 08/01/16 | 45,429 | |||||||||||||
SSC | USD | 504,532 | EUR | 456,115 | 08/01/16 | 5,405 | |||||||||||||
SSC | USD | 492,874 | GBP | 375,000 | 08/01/16 | 3,420 | |||||||||||||
SSC | USD | 95,468 | GBP | 73,683 | 08/01/16 | 2,048 | |||||||||||||
SSC | USD | 400,000 | GBP | 303,994 | 09/01/16 | 2,509 | |||||||||||||
$ | (1,775,317 | ) |
134
PACE High Yield Investments
Portfolio of investments—July 31, 2016
Affiliated issuer activity
The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2016. 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 07/31/15 | Purchases during the year ended 07/31/16 | Sales during the year ended 07/31/16 | Value at 07/31/16 | Net income earned from affiliate for the year ended 07/31/16 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 84,978,673 | $ | 264,642,105 | $ | 349,620,778 | $ | — | $ | 83,191 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | — | $ | 401,686,084 | $ | 11,918 | $ | 401,698,002 | |||||||||||
Non-US government obligations | — | 838,340 | — | 838,340 | |||||||||||||||
Loan assignments | — | 4,780,468 | — | 4,780,468 | |||||||||||||||
Common stocks | 1,224,034 | — | — | 1,224,034 | |||||||||||||||
Preferred stock | 285,554 | — | — | 285,554 | |||||||||||||||
Warrants | 417,058 | — | — | 417,058 | |||||||||||||||
Repurchase agreement | — | 6,955,000 | — | 6,955,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 58,971,210 | — | 58,971,210 | |||||||||||||||
Forward foreign currency contracts | — | 229,228 | — | 229,228 | |||||||||||||||
Total | $ | 1,926,646 | $ | 473,460,330 | $ | 11,918 | $ | 475,398,894 | |||||||||||
Liabilities | |||||||||||||||||||
Forward foreign currency contracts | $ | — | $ | (2,004,545 | ) | $ | — | $ | (2,004,545 | ) |
At July 31, 2016, there was a transfer between Level 1 and Level 2.
The following is a rollforward of the Portfolio's investments that valued using unobservable inputs (Level 3) for the year ended July 31, 2016:
Corporate bonds | |||||||
Beginning balance | $ | 11,689 | |||||
Purchases | — | ||||||
Sales | — | ||||||
Accrued discounts/(premiums) | (107 | ) | |||||
Total realized gain/(loss) | — | ||||||
Net change in unrealized appreciation/depreciation | 336 | ||||||
Transfers into Level 3 | — | ||||||
Transfers out of Level 3 | — | ||||||
Ending balance | $ | 11,918 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investments held at July 31, 2016, was $336.
135
PACE High Yield Investments
Portfolio of investments—July 31, 2016
Issuer breakdown by country or territory of origin (unaudited)
Percentage of total investments | |||||||
United States | 64.3 | % | |||||
Luxembourg | 4.6 | ||||||
France | 3.9 | ||||||
Argentina | 3.3 | ||||||
Netherlands | 2.8 | ||||||
United Kingdom | 2.5 | ||||||
Venezuela | 2.2 | ||||||
Canada | 2.1 | ||||||
Cayman Islands | 2.1 | ||||||
Germany | 2.0 | ||||||
Ireland | 1.9 | ||||||
Italy | 1.2 | ||||||
Bermuda | 0.9 | ||||||
Spain | 0.6 | ||||||
Jersey | 0.6 | ||||||
Australia | 0.5 | ||||||
Sweden | 0.4 | ||||||
Brazil | 0.4 | ||||||
India | 0.3 | ||||||
Switzerland | 0.3 | ||||||
Philippines | 0.3 | ||||||
Singapore | 0.3 | ||||||
Turkey | 0.2 | ||||||
Colombia | 0.2 | ||||||
South Africa | 0.2 | ||||||
British Virgin Islands | 0.2 | ||||||
Austria | 0.2 | ||||||
Mexico | 0.2 | ||||||
Norway | 0.2 | ||||||
Croatia | 0.2 | ||||||
Sri Lanka | 0.2 | ||||||
Costa Rica | 0.2 | ||||||
Peru | 0.2 | ||||||
Azerbaijan | 0.2 | ||||||
Japan | 0.1 | ||||||
South Korea | 0.0 | † | |||||
Marshall Islands | 0.0 | † | |||||
Total | 100.0 | % |
† Amount represents less than 0.05%
136
PACE High Yield Investments
Portfolio of investments—July 31, 2016
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 33.11% of net assets as of July 31, 2016, are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers.
3 Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At July 31, 2016, the value of these securities amounted to 22.68% of net assets.
4 Security, or portion thereof, was on loan at July 31, 2016.
5 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2016 and changes periodically.
6 Perpetual investment. The maturity date reflects the next call date.
7 Bond interest in default.
8 Payment-in-kind security for which interest may be paid in cash or additional principal, at the discretion of the issuer.
9 Security is being fair valued by a valuation committee under the direction of the board of trustees.
10 Illiquid investment as of July 31, 2016.
11 Position is unsettled. Contract rate was not determined at July 31, 2016 and does not take effect until settlement.
12 Security exchanged on 04/21/11; position represents remaining escrow balance expected to be received upon finalization of debt restructuring.
See accompanying notes to financial statements.
137
PACE Large Co Value Equity Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares returned 3.17% before the deduction of the maximum PACE Select program fee.1 In comparison, the Russell 1000 Value Index (the "benchmark") gained 5.38%, and the Lipper Large-Cap Value Funds category posted a median return of 1.04%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 142. 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 3.
Subadvisors' comments (Unaudited)2
Pzena
Our portion of the Portfolio underperformed the benchmark during the reporting period. The main detractors from results were driven by our holdings in money center and investment banks. A lack of exposure to utilities was also a headwind for returns, as the sector generated strong returns as investors continued to seek stability. However, we have few value opportunities within the sector.
Financials were negatively impacted by a range of fears and uncertainties during the period, including declining interest rates, increased regulation and weakening capital markets. Our largest individual detractors were Voya and Citigroup. In our view, fears are overblown as these companies have massively strengthened their capitalization and liquidity over levels prior to the financial crisis (both recently passed the Federal Reserve's "stress test"), they have multiple paths to earnings normalization. They are also increasing capital returns to shareholders while trading at significant discounts to book value. We see financials, banks and diversified financials in particular as offering the most attractive risk/reward opportunity in the market.
Our top contributors to performance were the energy and information technology sectors, with Hewlett-Packard Enterprise, Microsoft and Halliburton being the largest individual contributors. We believe Hewlett-Packard Enterprise remains a compelling investment because of its leading competitive positions and solid balance sheet. We also anticipate that increased operational focus enabled by its split into two companies will continue to unlock value. Microsoft has demonstrated the ability to divorce itself from the personal computing cycle through strong expense control and substantial increases in cloud-computing revenue. Halliburton, the second largest oil services company globally with a dominant North American franchise, performed well given the rally in crude oil prices. We expect the company to further benefit when US shale production recovers.
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 subadvisors 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 Manager:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisors:
Pzena Investment Management, LLC ("Pzena");
Boston Partners (f/k/a Robeco Investment Management, Inc.) ("Boston Partners");
Los Angeles Capital Management and Equity Research, Inc. ("Los Angeles Capital");
River Road Asset Management, LLC ("River Road")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Fred Lee, CFA, Vincent Russo, Mayoor Joshi and Diana To
Pzena: Richard S. Pzena, John P. Goetz and Benjamin Silver;
Boston Partners: Martin P. MacDonnell, CFA and Mark Donovan, CFA;
Los Angeles Capital: Thomas D. Stevens, CFA, Hal W. Reynolds, CFA and Daniel E. Allen, CFA;
River Road: Henry W. Sanders III, Thomas S. Forsha, James C. Shircliff
Objective:
Capital appreciation and dividend income
Investment process:
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
(continued on next page)
138
PACE Large Co Value Equity Investments
Subadvisors' comments (Unaudited) – continued
Current valuation spreads in global stock markets between the cheapest and most expensive stocks are at extreme levels last seen during the "tech bubble." When spreads are wide, history has shown strong outperformance for deep value over the course of the subsequent three to five years. We believe valuations in the US continue to be attractive and we see significant opportunities with our portion of the Portfolio invested across a range of economically sensitive industries, with the largest exposure in financials, energy and information technology.
No derivatives were used in the portfolio during the reporting period.
Boston Partners
Our portion of the Portfolio underperformed the benchmark during the reporting period, mainly driven by stock selection. The majority of the detractors came from stock selection in the health care and communications sectors. In the health care sector, shares of non-benchmark holding Gilead Sciences declined sharply during the period. This biotechnology company was negatively impacted as its Hepatitis-C business missed estimates due to lower pricing. However, this is only a small part of Gilead Sciences' business. The majority of the company—primarily HIV drugs—is growing, and we believe represents exceptional value. In the communications sector, shares of Liberty Global traded down after the Brexit vote. They provide cable and broadband access across the globe, with 35% to 40% of its business in the UK and 20% in Germany. These cash flows have not meaningfully changed except for a currency translation effect. Also detracting from results were some short positions in the real estate investment trust ("REIT") and communications sectors. Shares of Realty Income Corp. and telecommunications company Sprint moved sharply higher during the period. As such, our short positions detracted from our returns.
The consumer non-durables sector was our largest contributor to performance. Shares of Tyson Foods rallied sharply and were additive to results. Management has done a commendable job improving the profitability and balance sheet of the business. Short positions for our portion of the Portfolio that did well came from the capital goods and finance sectors. In particular, we had short positions in machinery companies that were down double-digits. Shares of Texas Capital Bancshares, a regional bank, and Mobile Mini, a financial services company, fell sharply. Therefore, these short positions added value during the period.
Derivatives were not used during the reporting period.
Los Angeles Capital
Our portion of the Portfolio outperformed the benchmark during the reporting period, with fundamental factor exposures contributing to performance, whereas sector tilts detracted from results. Over the period, our high quality posture, expressed through overweights to securities with positive analyst insight, superior earnings quality, better profitability and low volatility, was a significant contributor to returns. Additionally, companies
Investment process
(continued)
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.
Boston Partners employs a "long/short" or "130/30" equity strategy that invests primarily in a diversified portfolio of common stocks of issuers identified as having attractive value characteristics with strong fundamentals and positive business momentum. Boston Partners 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
(continued on next page)
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Subadvisors' comments (Unaudited) – continued
with larger dividend yields rallied during the period, and our tilt toward higher-yielding stocks further contributed to performance.
In terms of detracting factors, companies with larger market capitalizations rallied during the period. As such, our tilt toward smaller cap companies in the Russell 1000 Value Index negatively impacted performance. Additionally, companies with larger earnings yields performed poorly over the period and our increased exposure to these companies hurt results. Within industries, energy and pharmaceuticals & biotechnology posted negative returns for the period, making our underweight to these sectors relatively beneficial. In terms of detracting sector exposures, an overweight to banks and an underweight to semiconductors held performance back.
As of the end of the reporting period, our portion of the Portfolio was overweight basic materials, energy and health care, while being underweight information technology, retail and transportation. Our portion of the Portfolio exhibited a higher price-to-earnings multiple, higher price-to-book multiples and a higher dividend yield relative to the Russell 1000 Value Index. Additionally, we had a lower beta and were tilted toward smaller companies within the benchmark (Beta is a measure of volatility or risk relative to the market as a whole).
Derivatives were not used during the reporting period.
River Road Asset Management
Our portion of the Portfolio outperformed the benchmark during the reporting period. Stock selection and sector allocation were both responsible for our outperformance and resulted in a positive total effect in seven of the 10 sectors within the benchmark. The most significant positive impacts on performance were from stock selection in the financials and consumer staples sectors. Positive results in the financials sector were driven by the strong returns of our real estate investment trust ("REIT") holdings, most notably in Iron Mountain, which was our top contributor during the period. Of our six holdings in consumer staples, four significantly outperformed the broader sector, including Molson Coors Brewing Co., the third-highest contributor in our portion of the Portfolio. We sold our position in Molson Coors Brewing Co. prior to the end of the reporting period, as the stock was trading at a premium to our valuation of the company. Our second-highest contributor during the period was our largest holding, Microsoft Corp.
Investment process
(concluded)
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.
River Road utilizes a fundamentally driven research process to identify attractive purchase candidates from an all cap universe of high yielding equity securities. The firm invests in well-managed, financially strong companies with high and growing dividends, targeting companies that are also trading at a meaningful discount to River Road's assessed valuation. The stock selection process is complemented by a risk averse approach that employs balanced diversification and a structured sell discipline.
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Subadvisors' comments (Unaudited) – concluded
The most significant detractors from results were from stock selection in materials and an overweight in the consumer discretionary sector. Among our five holdings in materials, three significantly underperformed the broader sector return, including Compass Minerals International, Inc. Meanwhile, two of our largest detractors came from the consumer discretionary sector: Kohl's Corp. and Macy's, Inc. Both securities were eliminated from our portion of the Portfolio due to accumulated unrealized losses. PNC Financial Services Group Inc. was our second-largest detractor during the period.
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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Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 2.87 | % | 11.08 | % | 5.68 | % | |||||||||
Class C2 | 2.11 | 10.21 | 4.85 | ||||||||||||
Class Y3 | 3.16 | 11.36 | 5.98 | ||||||||||||
Class P4 | 3.17 | 11.35 | 5.94 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (2.78 | ) | 9.83 | 5.08 | |||||||||||
Class C2 | 1.21 | 10.21 | 4.85 | ||||||||||||
Russell 1000 Value Index5 | 5.38 | 12.75 | 6.18 | ||||||||||||
Lipper Large-Cap Value Funds median | 1.04 | 10.82 | 5.46 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 0.40 | % | 9.65 | % | 5.50 | % | |||||||||
Class C2 | (0.38 | ) | 8.80 | 4.67 | |||||||||||
Class Y3 | 0.64 | 9.92 | 5.80 | ||||||||||||
Class P4 | 0.64 | 9.92 | 5.76 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (5.12 | ) | 8.42 | 4.91 | |||||||||||
Class C2 | (1.26 | ) | 8.80 | 4.67 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, were as follows: Class A—1.48% and 1.48%; Class C—2.25% and 2.25%; Class Y—1.23% and 1.23%; and Class P—1.24% and 1.24%. 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS 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, 2016 (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 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 AM. Upon termination of the agreement, however, UBS 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 of 0.25% annually.
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 of 0.25% and 0.75% annually, respectively.
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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualfundperformance.
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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PACE Large Co Value Equity 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 Large Co Value Equity Investments Class P shares versus the Russell 1000 Value Index over the 10 years ended July 31, 2016. 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.
PACE Large Co Value Equity Investments
143
PACE Large Co Value Equity Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Net assets (mm) | $ | 1,302.6 | |||||
Number of holdings | 513 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Common stocks, ADRs and rights | 112.3 | % | |||||
Investments sold short | (13.0 | ) | |||||
Cash equivalents and other assets less liabilities | 0.7 | ||||||
Total | 100.0 | % | |||||
Top five sectors (long holdings)1 | 07/31/16 | ||||||
Financials | 30.5 | % | |||||
Information Technology | 17.6 | ||||||
Energy | 13.5 | ||||||
Consumer Discretionary | 12.3 | ||||||
Health Care | 11.0 | ||||||
Total | 84.9 | % | |||||
Top ten equity holdings (long holdings)1 | 07/31/16 | ||||||
JPMorgan Chase & Co. | 2.3 | % | |||||
Microsoft Corp. | 2.1 | ||||||
Intel Corp. | 2.0 | ||||||
Johnson & Johnson | 1.9 | ||||||
Bank of America Corp. | 1.9 | ||||||
Exxon Mobil Corp. | 1.9 | ||||||
Verizon Communications, Inc. | 1.7 | ||||||
Omnicom Group, Inc. | 1.6 | ||||||
Occidental Petroleum Corp. | 1.6 | ||||||
Citigroup, Inc. | 1.5 | ||||||
Total | 18.5 | % | |||||
Top five sectors (short holdings)1 | 07/31/16 | ||||||
Financials | (2.9 | )% | |||||
Consumer Discretionary | (2.0 | ) | |||||
Information Technology | (1.8 | ) | |||||
Industrials | (1.7 | ) | |||||
Energy | (1.4 | ) | |||||
Total | (9.8 | )% | |||||
Top ten equity holdings (short holdings)1 | 07/31/16 | ||||||
Tyson Foods, Inc., Class A | (0.3 | )% | |||||
MGM Resorts International | (0.3 | ) | |||||
Assurant, Inc. | (0.2 | ) | |||||
Level 3 Communications, Inc. | (0.2 | ) | |||||
Welltower, Inc. | (0.2 | ) | |||||
T-Mobile US, Inc. | (0.2 | ) | |||||
Sprint Corp. | (0.2 | ) | |||||
NetSuite, Inc. | (0.2 | ) | |||||
The Cooper Cos., Inc. | (0.2 | ) | |||||
Navient Corp. | (0.2 | ) | |||||
Total | (2.2 | )% |
For a listing of defined portfolio acronyms that are used throughout the Portfolio statistics, please refer to page 262.
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
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PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—112.33% | |||||||||||
Aerospace & defense—2.91% | |||||||||||
General Dynamics Corp.1 | 78,644 | $ | 11,552,017 | ||||||||
Honeywell International, Inc. | 25,068 | 2,916,161 | |||||||||
Huntington Ingalls Industries, Inc. | 13,005 | 2,244,403 | |||||||||
Lockheed Martin Corp. | 18,710 | 4,728,578 | |||||||||
Raytheon Co.1 | 83,912 | 11,708,241 | |||||||||
United Technologies Corp. | 44,487 | 4,789,026 | |||||||||
37,938,426 | |||||||||||
Air freight & logistics—0.80% | |||||||||||
United Parcel Service, Inc., Class B | 96,403 | 10,421,164 | |||||||||
Airlines—0.52% | |||||||||||
Delta Air Lines, Inc.1 | 125,131 | 4,848,826 | |||||||||
United Continental Holdings, Inc.* | 40,789 | 1,912,596 | |||||||||
6,761,422 | |||||||||||
Auto components—0.84% | |||||||||||
Gentex Corp.2 | 80,260 | 1,418,194 | |||||||||
Johnson Controls, Inc.2 | 165,744 | 7,610,965 | |||||||||
Lear Corp. | 16,353 | 1,855,248 | |||||||||
10,884,407 | |||||||||||
Automobiles—0.97% | |||||||||||
Ford Motor Co.2 | 877,216 | 11,105,555 | |||||||||
General Motors Co. | 49,425 | 1,558,864 | |||||||||
12,664,419 | |||||||||||
Banks—6.01% | |||||||||||
BB&T Corp.2 | 403,908 | 14,892,088 | |||||||||
Commerce Bancshares, Inc. | 42,324 | 2,001,502 | |||||||||
East West Bancorp, Inc. | 56,572 | 1,935,894 | |||||||||
Fifth Third Bancorp | 248,653 | 4,719,434 | |||||||||
Huntington Bancshares, Inc. | 86,895 | 825,502 | |||||||||
PacWest Bancorp2 | 8,380 | 346,513 | |||||||||
People's United Financial, Inc.2 | 101,830 | 1,543,743 | |||||||||
Popular, Inc. | 53,554 | 1,804,234 | |||||||||
Regions Financial Corp. | 891,700 | 8,176,889 | |||||||||
SunTrust Banks, Inc. | 32,258 | 1,364,191 | |||||||||
Synovus Financial Corp. | 65,580 | 1,996,255 | |||||||||
TCF Financial Corp.2 | 36,403 | 494,717 | |||||||||
The PNC Financial Services Group, Inc. | 130,012 | 10,745,492 | |||||||||
US Bancorp | 269,410 | 11,361,019 | |||||||||
Wells Fargo & Co.1 | 335,202 | 16,079,640 | |||||||||
78,287,113 | |||||||||||
Beverages—0.38% | |||||||||||
PepsiCo, Inc. | 45,366 | 4,941,265 | |||||||||
Biotechnology—1.00% | |||||||||||
Alnylam Pharmaceuticals, Inc.*,2 | 3,940 | 268,235 | |||||||||
Amgen, Inc. | 44,743 | 7,697,139 | |||||||||
Gilead Sciences, Inc. | 63,113 | 5,015,590 | |||||||||
12,980,964 | |||||||||||
Building products—0.09% | |||||||||||
Owens Corning | 22,820 | 1,207,406 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Capital markets—3.27% | |||||||||||
BlackRock, Inc. | 2,806 | $ | 1,027,698 | ||||||||
Franklin Resources, Inc. | 331,049 | 11,980,663 | |||||||||
Invesco Ltd. | 21,080 | 615,114 | |||||||||
Morgan Stanley | 353,067 | 10,143,615 | |||||||||
State Street Corp. | 143,756 | 9,456,270 | |||||||||
The Goldman Sachs Group, Inc. | 58,680 | 9,318,971 | |||||||||
42,542,331 | |||||||||||
Chemicals—2.62% | |||||||||||
Air Products & Chemicals, Inc. | 7,911 | 1,182,062 | |||||||||
Ashland, Inc. | 33,320 | 3,773,157 | |||||||||
CF Industries Holdings, Inc. | 16,690 | 411,909 | |||||||||
Eastman Chemical Co. | 7,670 | 500,314 | |||||||||
FMC Corp.2 | 9,422 | 447,922 | |||||||||
Huntsman Corp. | 83,706 | 1,294,095 | |||||||||
Ingevity Corp.*,2 | 5,475 | 209,528 | |||||||||
LyondellBasell Industries N.V., Class A | 41,344 | 3,111,549 | |||||||||
Methanex Corp. | 59,688 | 1,672,458 | |||||||||
PPG Industries, Inc. | 37,132 | 3,888,092 | |||||||||
Praxair, Inc. | 80,360 | 9,365,154 | |||||||||
The Dow Chemical Co. | 123,694 | 6,638,657 | |||||||||
The Mosaic Co.2 | 28,172 | 760,644 | |||||||||
The Valspar Corp. | 7,682 | 817,902 | |||||||||
34,073,443 | |||||||||||
Commercial services & supplies—0.61% | |||||||||||
Corrections Corp. of America | 16,170 | 518,249 | |||||||||
KAR Auction Services, Inc. | 26,960 | 1,153,079 | |||||||||
Republic Services, Inc. | 58,404 | 2,993,789 | |||||||||
Stericycle, Inc.*,2 | 3,740 | 337,610 | |||||||||
Waste Management, Inc. | 45,118 | 2,983,202 | |||||||||
7,985,929 | |||||||||||
Communications equipment—1.72% | |||||||||||
Brocade Communications Systems, Inc.2 | 359,831 | 3,346,428 | |||||||||
Cisco Systems, Inc. | 46,950 | 1,433,383 | |||||||||
Harris Corp. | 59,964 | 5,194,082 | |||||||||
Juniper Networks, Inc. | 87,829 | 1,992,840 | |||||||||
Motorola Solutions, Inc. | 151,018 | 10,477,629 | |||||||||
22,444,362 | |||||||||||
Construction & engineering—0.26% | |||||||||||
Chicago Bridge & Iron Co. N.V. | 11,398 | 385,366 | |||||||||
Fluor Corp. | 7,156 | 382,989 | |||||||||
Jacobs Engineering Group, Inc.*,2 | 49,559 | 2,652,398 | |||||||||
3,420,753 | |||||||||||
Construction materials—0.26% | |||||||||||
CRH PLC, ADR2 | 110,665 | 3,404,055 | |||||||||
Consumer finance—1.94% | |||||||||||
Ally Financial, Inc. | 175,023 | 3,157,415 | |||||||||
Capital One Financial Corp. | 162,614 | 10,908,147 | |||||||||
Discover Financial Services1 | 146,051 | 8,301,539 | |||||||||
Navient Corp. | 159,091 | 2,259,092 | |||||||||
OneMain Holdings, Inc.*,2 | 22,140 | 638,518 | |||||||||
25,264,711 |
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PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Containers & packaging—0.98% | |||||||||||
AptarGroup, Inc.2 | 9,820 | $ | 767,728 | ||||||||
Bemis Co., Inc.2 | 14,200 | 724,768 | |||||||||
Berry Plastics Group, Inc.* | 37,370 | 1,532,170 | |||||||||
Graphic Packaging Holding Co. | 60,677 | 827,634 | |||||||||
International Paper Co.2 | 40,939 | 1,875,416 | |||||||||
Sealed Air Corp. | 45,984 | 2,169,525 | |||||||||
Sonoco Products Co.2 | 34,600 | 1,762,178 | |||||||||
WestRock Co. | 71,289 | 3,059,011 | |||||||||
12,718,430 | |||||||||||
Diversified financial services—7.42% | |||||||||||
Bank of America Corp.1 | 1,721,498 | 24,944,506 | |||||||||
Citigroup, Inc.1 | 454,797 | 19,924,657 | |||||||||
CME Group, Inc. | 73,272 | 7,491,329 | |||||||||
Intercontinental Exchange, Inc. | 10,281 | 2,716,240 | |||||||||
JPMorgan Chase & Co.1 | 460,336 | 29,447,694 | |||||||||
Voya Financial, Inc. | 472,673 | 12,114,609 | |||||||||
96,639,035 | |||||||||||
Diversified telecommunication services—2.40% | |||||||||||
AT&T, Inc.1 | 164,424 | 7,117,915 | |||||||||
CenturyLink, Inc.2 | 59,396 | 1,867,410 | |||||||||
Verizon Communications, Inc.1 | 401,496 | 22,246,894 | |||||||||
31,232,219 | |||||||||||
Electric utilities—1.34% | |||||||||||
AES Corp. | 434,441 | 5,365,346 | |||||||||
American Electric Power Co., Inc. | 23,197 | 1,607,552 | |||||||||
Duke Energy Corp. | 12,988 | 1,111,643 | |||||||||
Edison International | 22,315 | 1,726,734 | |||||||||
Entergy Corp. | 11,969 | 974,157 | |||||||||
Exelon Corp. | 39,711 | 1,480,426 | |||||||||
FirstEnergy Corp. | 29,710 | 1,037,473 | |||||||||
NextEra Energy, Inc. | 5,930 | 760,760 | |||||||||
PG&E Corp. | 13,970 | 893,242 | |||||||||
The Southern Co. | 29,980 | 1,603,930 | |||||||||
Xcel Energy, Inc.2 | 20,215 | 889,056 | |||||||||
17,450,319 | |||||||||||
Electrical equipment—0.53% | |||||||||||
Emerson Electric Co.2 | 122,482 | 6,846,744 | |||||||||
Electronic equipment, instruments & components—2.77% | |||||||||||
Arrow Electronics, Inc.* | 18,475 | 1,228,403 | |||||||||
Corning, Inc. | 699,199 | 15,536,202 | |||||||||
Dolby Laboratories, Inc., Class A2 | 12,230 | 615,291 | |||||||||
Flextronics International Ltd.* | 446,761 | 5,660,462 | |||||||||
Jabil Circuit, Inc.2 | 93,888 | 1,910,621 | |||||||||
TE Connectivity Ltd. | 180,716 | 10,893,560 | |||||||||
Trimble Navigation Ltd.*,2 | 9,344 | 247,055 | |||||||||
36,091,594 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Energy equipment & services—1.11% | |||||||||||
Ensco PLC Class A | 77,272 | $ | 708,584 | ||||||||
FMC Technologies, Inc.* | 42,480 | 1,078,143 | |||||||||
Halliburton Co. | 180,200 | 7,867,532 | |||||||||
National Oilwell Varco, Inc.2 | 25,580 | 827,513 | |||||||||
Rowan Cos., PLC, Class A2 | 30,830 | 469,849 | |||||||||
Schlumberger Ltd. | 33,160 | 2,670,043 | |||||||||
Superior Energy Services, Inc.2 | 31,497 | 503,007 | |||||||||
Weatherford International PLC*,2 | 67,590 | 383,911 | |||||||||
14,508,582 | |||||||||||
Food & staples retailing—1.77% | |||||||||||
CVS Health Corp. | 23,680 | 2,195,610 | |||||||||
Wal-Mart Stores, Inc. | 252,762 | 18,444,043 | |||||||||
Walgreens Boots Alliance, Inc. | 30,673 | 2,430,835 | |||||||||
23,070,488 | |||||||||||
Food products—0.62% | |||||||||||
Campbell Soup Co.2 | 13,516 | 841,642 | |||||||||
Kellogg Co. | 13,630 | 1,127,337 | |||||||||
Mondelez International, Inc., Class A | 37,386 | 1,644,236 | |||||||||
The J.M. Smucker Co. | 3,474 | 535,552 | |||||||||
Tyson Foods, Inc., Class A | 52,712 | 3,879,603 | |||||||||
8,028,370 | |||||||||||
Gas utilities—1.24% | |||||||||||
AmeriGas Partners LP | 107,615 | 5,368,912 | |||||||||
Atmos Energy Corp. | 10,432 | 832,369 | |||||||||
National Fuel Gas Co. | 134,701 | 7,611,954 | |||||||||
Questar Corp. | 49,055 | 1,234,714 | |||||||||
UGI Corp. | 24,340 | 1,101,629 | |||||||||
16,149,578 | |||||||||||
Health care equipment & supplies—0.73% | |||||||||||
Baxter International, Inc. | 98,655 | 4,737,413 | |||||||||
Danaher Corp. | 13,440 | 1,094,554 | |||||||||
Medtronic PLC | 9,870 | 864,908 | |||||||||
St. Jude Medical, Inc. | 21,613 | 1,794,744 | |||||||||
Zimmer Holdings, Inc. | 7,810 | 1,024,203 | |||||||||
9,515,822 | |||||||||||
Health care providers & services—4.48% | |||||||||||
Anthem, Inc.2 | 33,956 | 4,459,781 | |||||||||
Cardinal Health, Inc. | 115,197 | 9,630,469 | |||||||||
Cigna Corp. | 52,301 | 6,744,737 | |||||||||
DaVita HealthCare Partners, Inc.* | 6,420 | 497,807 | |||||||||
Express Scripts Holding Co.*,2 | 107,180 | 8,153,183 | |||||||||
HCA Holdings, Inc.* | 24,192 | 1,865,929 | |||||||||
Laboratory Corp. of America Holdings* | 13,767 | 1,921,322 | |||||||||
McKesson Corp.1 | 37,576 | 7,310,787 | |||||||||
MEDNAX, Inc.*,2 | 20,550 | 1,416,100 | |||||||||
Owens & Minor, Inc.2 | 145,589 | 5,198,983 | |||||||||
Quest Diagnostics, Inc. | 73,522 | 6,349,360 | |||||||||
UnitedHealth Group, Inc. | 33,633 | 4,816,246 | |||||||||
58,364,704 |
146
PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Hotels, restaurants & leisure—0.24% | |||||||||||
Choice Hotels International, Inc. | 9,570 | $ | 462,135 | ||||||||
Darden Restaurants, Inc. | 20,261 | 1,247,267 | |||||||||
Six Flags Entertainment Corp. | 23,983 | 1,352,402 | |||||||||
3,061,804 | |||||||||||
Household durables—0.59% | |||||||||||
D.R. Horton, Inc. | 81,033 | 2,664,365 | |||||||||
PulteGroup, Inc. | 235,034 | 4,978,020 | |||||||||
7,642,385 | |||||||||||
Household products—1.23% | |||||||||||
Colgate-Palmolive Co. | 42,900 | 3,193,047 | |||||||||
Kimberly-Clark Corp. | 36,042 | 4,669,241 | |||||||||
The Clorox Co.2 | 12,240 | 1,604,297 | |||||||||
The Procter & Gamble Co.1 | 76,964 | 6,587,349 | |||||||||
16,053,934 | |||||||||||
Industrial conglomerates—0.47% | |||||||||||
General Electric Co.1 | 198,613 | 6,184,809 | |||||||||
Insurance—6.89% | |||||||||||
Allied World Assurance Co. Holdings AG | 149,931 | 6,145,672 | |||||||||
American Financial Group, Inc. | 12,484 | 912,580 | |||||||||
American International Group, Inc. | 140,202 | 7,632,597 | |||||||||
American National Insurance Co. | 3,640 | 416,234 | |||||||||
Aon PLC | 29,190 | 3,125,373 | |||||||||
Arch Capital Group Ltd.* | 11,490 | 834,519 | |||||||||
Arthur J. Gallagher & Co. | 13,580 | 668,000 | |||||||||
Aspen Insurance Holdings Ltd. | 35,180 | 1,616,873 | |||||||||
Axis Capital Holdings Ltd. | 134,881 | 7,496,686 | |||||||||
Berkshire Hathaway, Inc., Class B*,1 | 137,172 | 19,789,804 | |||||||||
Brown & Brown, Inc. | 35,500 | 1,301,430 | |||||||||
Chubb Ltd. | 43,830 | 5,490,146 | |||||||||
Cincinnati Financial Corp.2 | 11,065 | 826,555 | |||||||||
CNA Financial Corp. | 45,092 | 1,435,278 | |||||||||
Everest Re Group Ltd.2 | 3,669 | 693,478 | |||||||||
Loews Corp. | 10,850 | 448,431 | |||||||||
Mercury General Corp.2 | 10,546 | 583,932 | |||||||||
MetLife, Inc. | 330,362 | 14,119,672 | |||||||||
Old Republic International Corp. | 83,980 | 1,627,532 | |||||||||
ProAssurance Corp. | 30,019 | 1,550,782 | |||||||||
RenaissanceRe Holdings Ltd.2 | 12,076 | 1,419,172 | |||||||||
The Allstate Corp. | 65,652 | 4,486,001 | |||||||||
The Hanover Insurance Group, Inc.2 | 19,572 | 1,611,558 | |||||||||
The Hartford Financial Services Group, Inc. | 8,676 | 345,739 | |||||||||
The Travelers Cos., Inc. | 31,108 | 3,615,372 | |||||||||
Validus Holdings Ltd. | 14,707 | 726,967 | |||||||||
W.R. Berkley Corp.2 | 13,490 | 784,983 | |||||||||
89,705,366 | |||||||||||
Internet & catalog retail—0.05% | |||||||||||
Liberty Interactive Corp. QVC Group, Class A* | 26,099 | 699,714 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Internet software & services—1.02% | |||||||||||
Alphabet, Inc., Class A* | 8,502 | $ | 6,727,973 | ||||||||
eBay, Inc.* | 188,324 | 5,868,176 | |||||||||
Twitter, Inc.*,2 | 22,460 | 373,734 | |||||||||
Yelp, Inc.* | 11,350 | 365,129 | |||||||||
13,335,012 | |||||||||||
IT services—2.04% | |||||||||||
Alliance Data Systems Corp.* | 4,299 | 995,734 | |||||||||
Computer Sciences Corp. | 127,887 | 6,116,835 | |||||||||
Fidelity National Information Services, Inc. | 37,540 | 2,985,556 | |||||||||
International Business Machines Corp.2 | 20,170 | 3,239,706 | |||||||||
Leidos Holdings, Inc. | 81,721 | 4,086,867 | |||||||||
The Western Union Co.2 | 381,714 | 7,634,280 | |||||||||
Xerox Corp. | 147,697 | 1,521,279 | |||||||||
26,580,257 | |||||||||||
Leisure products—0.41% | |||||||||||
Mattel, Inc.2 | 28,040 | 935,975 | |||||||||
Polaris Industries, Inc.2 | 44,365 | 4,381,044 | |||||||||
5,317,019 | |||||||||||
Life sciences tools & services—0.07% | |||||||||||
Agilent Technologies, Inc.* | 7,070 | 340,138 | |||||||||
Thermo Fisher Scientific, Inc. | 3,690 | 586,119 | |||||||||
926,257 | |||||||||||
Machinery—3.15% | |||||||||||
Allison Transmission Holdings, Inc. | 44,700 | 1,288,254 | |||||||||
Caterpillar, Inc.2 | 29,140 | 2,411,626 | |||||||||
Colfax Corp.*,2 | 14,310 | 420,142 | |||||||||
Dover Corp. | 153,650 | 10,975,219 | |||||||||
Fortive Corp.* | 6,720 | 323,971 | |||||||||
Kennametal, Inc.2 | 12,250 | 304,535 | |||||||||
Parker-Hannifin Corp. | 141,672 | 16,177,526 | |||||||||
Stanley Black & Decker, Inc. | 71,233 | 8,669,056 | |||||||||
Trinity Industries, Inc.2 | 21,760 | 505,050 | |||||||||
41,075,379 | |||||||||||
Media—6.39% | |||||||||||
CBS Corp., Class B2 | 56,042 | 2,926,513 | |||||||||
Cinemark Holdings, Inc. | 229,804 | 8,640,630 | |||||||||
Comcast Corp., Class A | 96,571 | 6,494,400 | |||||||||
DISH Network Corp., Class A* | 7,360 | 393,171 | |||||||||
Liberty Global PLC LiLAC, Class C* | 68,202 | 2,387,070 | |||||||||
Liberty Global PLC, Series C* | 141,387 | 4,375,928 | |||||||||
Liberty SiriusXM Group, Class C* | 27,890 | 983,122 | |||||||||
News Corp., Class A | 543,561 | 7,049,986 | |||||||||
Omnicom Group, Inc.2 | 252,309 | 20,762,508 | |||||||||
Scripps Networks Interactive, Inc., Class A2 | 10,134 | 669,452 | |||||||||
The Interpublic Group Cos., Inc. | 294,389 | 6,788,610 | |||||||||
Thomson Reuters Corp. | 221,073 | 9,309,384 | |||||||||
Time Warner, Inc. | 156,389 | 11,987,217 | |||||||||
Viacom, Inc., Class B | 11,410 | 518,813 | |||||||||
83,286,804 |
147
PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Metals & mining—1.05% | |||||||||||
Barrick Gold Corp. | 130,176 | $ | 2,845,647 | ||||||||
Compass Minerals International, Inc.2 | 91,033 | 6,334,987 | |||||||||
Nucor Corp. | 43,947 | 2,357,317 | |||||||||
Steel Dynamics, Inc. | 79,454 | 2,130,956 | |||||||||
13,668,907 | |||||||||||
Multi-utilities—1.04% | |||||||||||
Ameren Corp.2 | 23,774 | 1,246,708 | |||||||||
CenterPoint Energy, Inc. | 83,008 | 1,985,551 | |||||||||
Dominion Resources, Inc.2 | 30,635 | 2,390,143 | |||||||||
Vectren Corp. | 152,475 | 7,887,532 | |||||||||
13,509,934 | |||||||||||
Multiline retail—0.98% | |||||||||||
Target Corp.2 | 169,293 | 12,752,842 | |||||||||
Oil, gas & consumable fuels—12.60% | |||||||||||
Anadarko Petroleum Corp. | 59,308 | 3,234,065 | |||||||||
Apache Corp.2 | 15,380 | 807,450 | |||||||||
BP PLC, ADR | 285,900 | 9,834,960 | |||||||||
Canadian Natural Resources Ltd.2 | 132,949 | 4,019,048 | |||||||||
Cenovus Energy, Inc. | 478,600 | 6,843,980 | |||||||||
Chevron Corp.1 | 165,536 | 16,964,129 | |||||||||
ConocoPhillips | 41,738 | 1,703,745 | |||||||||
Devon Energy Corp. | 31,890 | 1,220,749 | |||||||||
Diamondback Energy, Inc.* | 63,617 | 5,584,936 | |||||||||
Energen Corp. | 15,260 | 723,019 | |||||||||
EOG Resources, Inc. | 88,170 | 7,203,489 | |||||||||
EQT Corp. | 40,456 | 2,947,624 | |||||||||
Exxon Mobil Corp.1,2 | 274,506 | 24,417,309 | |||||||||
Gulfport Energy Corp.* | 28,600 | 831,974 | |||||||||
Hess Corp. | 19,770 | 1,060,661 | |||||||||
HollyFrontier Corp.2 | 39,389 | 1,001,268 | |||||||||
Kinder Morgan, Inc. | 51,420 | 1,045,369 | |||||||||
Magellan Midstream Partners LP | 80,754 | 5,883,736 | |||||||||
Marathon Oil Corp. | 74,150 | 1,011,406 | |||||||||
Marathon Petroleum Corp. | 67,973 | 2,677,457 | |||||||||
Murphy Oil Corp.2 | 323,022 | 8,860,494 | |||||||||
Newfield Exploration Co.* | 22,890 | 991,137 | |||||||||
Noble Energy, Inc. | 34,220 | 1,222,338 | |||||||||
Occidental Petroleum Corp.1 | 276,793 | 20,684,741 | |||||||||
Parsley Energy, Inc., Class A*,2 | 58,237 | 1,660,337 | |||||||||
Phillips 661,2 | 132,116 | 10,048,743 | |||||||||
Pioneer Natural Resources Co | 3,390 | 551,112 | |||||||||
QEP Resources, Inc. | 32,398 | 589,644 | |||||||||
Rice Energy, Inc.* | 44,660 | 1,041,471 | |||||||||
Royal Dutch Shell PLC, Class A, ADR | 237,269 | 12,288,162 | |||||||||
Spectra Energy Partners LP | 131,308 | 6,399,952 | |||||||||
Targa Resources Corp. | 9,350 | 348,381 | |||||||||
The Williams Cos., Inc. | 17,990 | 431,220 | |||||||||
164,134,106 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Personal products—0.59% | |||||||||||
Edgewell Personal Care Co.* | 11,250 | $ | 951,863 | ||||||||
Unilever PLC, ADR | 142,593 | 6,674,778 | |||||||||
7,626,641 | |||||||||||
Pharmaceuticals—4.84% | |||||||||||
Abbott Laboratories2 | 159,621 | 7,143,040 | |||||||||
Endo International PLC*,2 | 26,063 | 452,454 | |||||||||
Johnson & Johnson1 | 200,788 | 25,144,681 | |||||||||
Mallinckrodt PLC* | 8,100 | 545,454 | |||||||||
Merck & Co., Inc.1 | 298,172 | 17,490,770 | |||||||||
Perrigo Co. PLC | 7,190 | 657,094 | |||||||||
Pfizer, Inc.1 | 175,616 | 6,478,474 | |||||||||
Sanofi, ADR | 119,421 | 5,090,917 | |||||||||
63,002,884 | |||||||||||
Real estate investment trusts—5.43% | |||||||||||
American Campus Communities, Inc. | 17,570 | 950,010 | |||||||||
American Homes 4 Rent, Class A2 | 29,343 | 636,743 | |||||||||
Annaly Capital Management, Inc. | 152,450 | 1,673,901 | |||||||||
Chimera Investment Corp. | 82,528 | 1,384,820 | |||||||||
Communications Sales & Leasing, Inc. | 158,100 | 4,913,748 | |||||||||
DDR Corp. | 47,200 | 931,728 | |||||||||
Equity Residential | 25,157 | 1,710,424 | |||||||||
General Growth Properties, Inc.2 | 24,470 | 781,817 | |||||||||
Hospitality Properties Trust2 | 25,870 | 825,512 | |||||||||
Iron Mountain, Inc.2 | 367,052 | 15,126,213 | |||||||||
Kimco Realty Corp. | 26,980 | 866,058 | |||||||||
Liberty Property Trust | 35,910 | 1,485,956 | |||||||||
MFA Financial, Inc. | 202,003 | 1,519,063 | |||||||||
National Retail Properties, Inc. | 16,940 | 900,530 | |||||||||
Post Properties, Inc. | 17,190 | 1,093,112 | |||||||||
Prologis, Inc. | 29,045 | 1,582,662 | |||||||||
Regency Centers Corp. | 20,910 | 1,775,886 | |||||||||
Retail Properties of America, Inc., Class A2 | 52,310 | 922,225 | |||||||||
Sabra Health Care REIT, Inc. | 91,275 | 2,182,385 | |||||||||
Sovran Self Storage, Inc. | 6,930 | 709,424 | |||||||||
Starwood Property Trust, Inc. | 66,480 | 1,449,264 | |||||||||
The GEO Group, Inc. | 171,893 | 5,949,217 | |||||||||
Ventas, Inc. | 119,761 | 9,120,998 | |||||||||
VEREIT, Inc.2 | 171,300 | 1,894,578 | |||||||||
Weingarten Realty Investors | 34,920 | 1,508,195 | |||||||||
Weyerhaeuser Co. | 244,969 | 8,015,386 | |||||||||
WP Carey, Inc. | 12,159 | 883,351 | |||||||||
70,793,206 | |||||||||||
Real estate management & development—0.14% | |||||||||||
Jones Lang LaSalle, Inc. | 3,737 | 409,090 | |||||||||
Realogy Holdings Corp.* | 47,270 | 1,464,897 | |||||||||
1,873,987 | |||||||||||
Road & rail—0.60% | |||||||||||
Kansas City Southern | 5,064 | 486,701 | |||||||||
Union Pacific Corp. | 78,959 | 7,347,135 | |||||||||
7,833,836 |
148
PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
Semiconductors & semiconductor equipment—3.26% | |||||||||||
Cree, Inc.*,2 | 30,031 | $ | 858,887 | ||||||||
Intel Corp.1,2 | 736,857 | 25,686,835 | |||||||||
Lam Research Corp. | 10,181 | 913,948 | |||||||||
Micron Technology, Inc.* | 500 | 6,870 | |||||||||
QUALCOMM, Inc. | 145,718 | 9,119,033 | |||||||||
Teradyne, Inc. | 56,240 | 1,110,740 | |||||||||
Texas Instruments, Inc.2 | 68,003 | 4,743,209 | |||||||||
42,439,522 | |||||||||||
Software—3.58% | |||||||||||
ANSYS, Inc.* | 7,530 | 672,881 | |||||||||
Microsoft Corp.1 | 479,544 | 27,180,554 | |||||||||
Nuance Communications, Inc.* | 49,930 | 802,375 | |||||||||
Oracle Corp. | 400,455 | 16,434,673 | |||||||||
Symantec Corp. | 76,976 | 1,572,620 | |||||||||
46,663,103 | |||||||||||
Specialty retail—0.94% | |||||||||||
Best Buy Co., Inc.2 | 48,666 | 1,635,178 | |||||||||
Foot Locker, Inc. | 28,807 | 1,717,473 | |||||||||
Staples, Inc. | 963,385 | 8,949,847 | |||||||||
12,302,498 | |||||||||||
Technology hardware, storage & peripherals—3.20% | |||||||||||
Apple, Inc. | 38,018 | 3,961,856 | |||||||||
Hewlett Packard Enterprise Co.1 | 826,379 | 17,370,486 | |||||||||
HP, Inc. | 549,798 | 7,702,670 | |||||||||
NetApp, Inc.2 | 32,260 | 850,051 | |||||||||
Seagate Technology PLC2 | 367,625 | 11,775,029 | |||||||||
41,660,092 | |||||||||||
Textiles, apparel & luxury goods—0.14% | |||||||||||
Coach, Inc.2 | 24,460 | 1,054,471 | |||||||||
Ralph Lauren Corp.2 | 7,350 | 720,961 | |||||||||
1,775,432 | |||||||||||
Tobacco—0.31% | |||||||||||
Philip Morris International, Inc.1 | 40,500 | 4,060,530 | |||||||||
Trading companies & distributors—1.45% | |||||||||||
Aircastle Ltd. | 166,185 | 3,692,631 | |||||||||
Fastenal Co. | 215,879 | 9,228,827 | |||||||||
MSC Industrial Direct Co., Inc., Class A | 83,533 | 6,000,175 | |||||||||
18,921,633 | |||||||||||
Water utilities—0.04% | |||||||||||
Aqua America, Inc. | 14,010 | 485,305 | |||||||||
Total common stocks (cost—$1,352,164,315) | 1,463,211,253 | ||||||||||
Number of Rights | |||||||||||
Rights—0.00%† | |||||||||||
Safeway Casa Ley CVR*,2,3,4 | 35,500 | 36,029 | �� | ||||||||
Safeway PDC LLC CVR*,2,3,4 | 35,500 | 1,733 | |||||||||
Total rights (cost—$37,630) | 37,762 |
Face Amount | Value | ||||||||||
Repurchase agreement—0.57% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $592,837 US Treasury Bond, 7.875% due 02/15/21 and $6,527,225 US Treasury Notes, 0.750% to 2.250% due 12/31/17 to 07/31/21; (value—$7,496,112); proceeds: $7,349,006 (cost—$7,349,000) | $ | 7,349,000 | $ | 7,349,000 | |||||||
Number of Shares | |||||||||||
Investment of cash collateral from securities loaned—0.39% | |||||||||||
Money market fund—0.39% | |||||||||||
State Street Institutional U.S. Government Money Market Fund (cost—$5,079,560) | 5,079,560 | 5,079,560 | |||||||||
Total investments before investments sold short (cost—$1,364,630,505)—113.29% | 1,475,677,575 | ||||||||||
Investments sold short—(12.97)% | |||||||||||
Common stocks—(12.97)% | |||||||||||
Aerospace & defense—(0.04)% | |||||||||||
Huntington Ingalls Industries, Inc. | (2,830 | ) | (488,401 | ) | |||||||
Airlines—(0.17)% | |||||||||||
Alaska Air Group, Inc. | (273 | ) | (18,351 | ) | |||||||
Delta Air Lines, Inc. | (15,100 | ) | (585,125 | ) | |||||||
JetBlue Airways Corp. | (64,000 | ) | (1,173,120 | ) | |||||||
United Continental Holdings, Inc. | (9,570 | ) | (448,737 | ) | |||||||
(2,225,333 | ) | ||||||||||
Auto components—(0.04)% | |||||||||||
Dorman Products, Inc. | (9,010 | ) | (573,937 | ) | |||||||
The Goodyear Tire & Rubber Co. | (195 | ) | (5,591 | ) | |||||||
(579,528 | ) | ||||||||||
Banks—(1.03)% | |||||||||||
Bank of Hawaii Corp. | (6,762 | ) | (466,037 | ) | |||||||
CIT Group, Inc. | (29,120 | ) | (1,006,387 | ) | |||||||
Comerica, Inc. | (20,860 | ) | (943,706 | ) | |||||||
Community Bank System, Inc. | (24,297 | ) | (1,072,227 | ) | |||||||
Cullen/Frost Bankers, Inc. | (12,794 | ) | (868,585 | ) | |||||||
CVB Financial Corp. | (47,964 | ) | (789,008 | ) | |||||||
First Financial Bankshares, Inc. | (34,798 | ) | (1,189,048 | ) | |||||||
KeyCorp | (86,750 | ) | (1,014,975 | ) | |||||||
SVB Financial Group | (6,930 | ) | (695,910 | ) | |||||||
Trustmark Corp. | (24,675 | ) | (644,017 | ) | |||||||
UMB Financial Corp. | (14,200 | ) | (786,822 | ) | |||||||
United Bankshares, Inc. | (37,663 | ) | (1,442,493 | ) | |||||||
Westamerica Bancorp | (23,845 | ) | (1,121,669 | ) | |||||||
Zions Bancorp | (49,100 | ) | (1,368,908 | ) | |||||||
(13,409,792 | ) |
149
PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Beverages—(0.06)% | |||||||||||
Molson Coors Brewing Co., Class B | (7,590 | ) | $ | (775,394 | ) | ||||||
Monster Beverage Corp. | (361 | ) | (57,988 | ) | |||||||
(833,382 | ) | ||||||||||
Biotechnology—(0.06)% | |||||||||||
United Therapeutics Corp. | (6,030 | ) | (729,690 | ) | |||||||
Building products—(0.09)% | |||||||||||
Fortune Brands Home & Security, Inc. | (17,727 | ) | (1,121,587 | ) | |||||||
Capital markets—(0.17)% | |||||||||||
E*TRADE Financial Corp. | (64,210 | ) | (1,610,387 | ) | |||||||
TD Ameritrade Holding Corp. | (19,063 | ) | (578,753 | ) | |||||||
(2,189,140 | ) | ||||||||||
Chemicals—(0.54)% | |||||||||||
Air Products & Chemicals, Inc. | (4,275 | ) | (638,771 | ) | |||||||
Albemarle Corp. | (8,310 | ) | (699,453 | ) | |||||||
Axalta Coating Systems Ltd. | (52,201 | ) | (1,490,339 | ) | |||||||
Balchem Corp. | (12,535 | ) | (800,610 | ) | |||||||
FMC Corp. | (30,710 | ) | (1,459,953 | ) | |||||||
International Flavors & Fragrances, Inc. | (6,145 | ) | (818,821 | ) | |||||||
NewMarket Corp. | (2,486 | ) | (1,063,859 | ) | |||||||
(6,971,806 | ) | ||||||||||
Commercial services & supplies—(0.16)% | |||||||||||
Mobile Mini, Inc. | (27,371 | ) | (889,831 | ) | |||||||
Rollins, Inc. | (40,881 | ) | (1,152,027 | ) | |||||||
(2,041,858 | ) | ||||||||||
Communications equipment—(0.14)% | |||||||||||
Arista Networks, Inc. | (11,386 | ) | (811,480 | ) | |||||||
ViaSat, Inc. | (14,258 | ) | (1,052,668 | ) | |||||||
(1,864,148 | ) | ||||||||||
Construction & engineering—(0.17)% | |||||||||||
Jacobs Engineering Group, Inc. | (10,584 | ) | (566,456 | ) | |||||||
Valmont Industries, Inc. | (12,530 | ) | (1,640,803 | ) | |||||||
(2,207,259 | ) | ||||||||||
Construction materials—(0.04)% | |||||||||||
Vulcan Materials Co. | (4,523 | ) | (560,762 | ) | |||||||
Consumer finance—(0.32)% | |||||||||||
Ally Financial, Inc. | (46,930 | ) | (846,617 | ) | |||||||
Navient Corp. | (150,469 | ) | (2,136,660 | ) | |||||||
Synchrony Financial | (43,440 | ) | (1,211,107 | ) | |||||||
(4,194,384 | ) | ||||||||||
Containers & packaging—(0.17)% | |||||||||||
AptarGroup, Inc. | (8,392 | ) | (656,087 | ) | |||||||
Ball Corp. | (22,323 | ) | (1,577,566 | ) | |||||||
(2,233,653 | ) | ||||||||||
Diversified financial services—(0.05)% | |||||||||||
Interactive Brokers Group, Inc., Class A | (19,010 | ) | (662,308 | ) |
Number of Shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Diversified telecommunication services—(0.22)% | |||||||||||
Level 3 Communications, Inc. | (56,840 | ) | $ | (2,876,104 | ) | ||||||
Electric utilities—(0.07)% | |||||||||||
Avangrid, Inc. | (19,950 | ) | (900,543 | ) | |||||||
Electrical equipment—(0.09)% | |||||||||||
Rockwell Automation, Inc. | (9,936 | ) | (1,136,678 | ) | |||||||
Electronic equipment, instruments & components—(0.21)% | |||||||||||
Itron, Inc. | (25,383 | ) | (1,083,600 | ) | |||||||
National Instruments Corp. | (29,481 | ) | (845,515 | ) | |||||||
Trimble Navigation Ltd. | (30,157 | ) | (797,351 | ) | |||||||
(2,726,466 | ) | ||||||||||
Energy equipment & services—(0.24)% | |||||||||||
Helmerich & Payne, Inc. | (15,440 | ) | (956,817 | ) | |||||||
National Oilwell Varco, Inc. | (40,130 | ) | (1,298,205 | ) | |||||||
Transocean Ltd. | (27,028 | ) | (297,038 | ) | |||||||
Weatherford International PLC | (96,876 | ) | (550,256 | ) | |||||||
(3,102,316 | ) | ||||||||||
Food & staples retailing—(0.12)% | |||||||||||
PriceSmart, Inc. | (11,700 | ) | (911,196 | ) | |||||||
Walgreens Boots Alliance, Inc. | (8,510 | ) | (674,418 | ) | |||||||
(1,585,614 | ) | ||||||||||
Food products—(0.41)% | |||||||||||
The Hain Celestial Group, Inc. | (12,705 | ) | (670,697 | ) | |||||||
TreeHouse Foods, Inc. | (13,798 | ) | (1,423,815 | ) | |||||||
Tyson Foods, Inc., Class A | (44,858 | ) | (3,301,549 | ) | |||||||
(5,396,061 | ) | ||||||||||
Health care equipment & supplies—(0.25)% | |||||||||||
Intuitive Surgical, Inc. | (828 | ) | (576,089 | ) | |||||||
The Cooper Cos., Inc. | (11,877 | ) | (2,167,196 | ) | |||||||
West Pharmaceutical Services, Inc. | (6,930 | ) | (556,341 | ) | |||||||
(3,299,626 | ) | ||||||||||
Health care providers & services—(0.15)% | |||||||||||
Aetna, Inc. | (3,330 | ) | (383,649 | ) | |||||||
Brookdale Senior Living, Inc. | (35,597 | ) | (657,477 | ) | |||||||
Henry Schein, Inc. | (5,082 | ) | (919,740 | ) | |||||||
(1,960,866 | ) | ||||||||||
Health care technology—(0.22)% | |||||||||||
athenahealth, Inc. | (4,900 | ) | (626,171 | ) | |||||||
Medidata Solutions, Inc. | (21,802 | ) | (1,158,776 | ) | |||||||
Veeva Systems, Inc., Class A | (27,908 | ) | (1,060,225 | ) | |||||||
(2,845,172 | ) | ||||||||||
Hotels, restaurants & leisure—(0.97)% | |||||||||||
Aramark | (24,500 | ) | (878,325 | ) | |||||||
Bob Evans Farms, Inc. | (12,995 | ) | (477,956 | ) | |||||||
Buffalo Wild Wings, Inc. | (3,753 | ) | (630,354 | ) | |||||||
Carnival Corp. | (17,550 | ) | (819,936 | ) | |||||||
Chipotle Mexican Grill, Inc. | (871 | ) | (369,295 | ) |
150
PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Hotels, restaurants & leisure—(concluded) | |||||||||||
Hyatt Hotels Corp., Class A | (16,270 | ) | $ | (820,659 | ) | ||||||
MGM Resorts International | (135,080 | ) | (3,239,218 | ) | |||||||
Norwegian Cruise Line Holdings Ltd. | (18,853 | ) | (803,138 | ) | |||||||
Panera Bread Co., Class A | (4,407 | ) | (966,543 | ) | |||||||
Royal Caribbean Cruises Ltd. | (9,900 | ) | (717,156 | ) | |||||||
SeaWorld Entertainment, Inc. | (44,109 | ) | (679,279 | ) | |||||||
Texas Roadhouse, Inc. | (22,855 | ) | (1,079,213 | ) | |||||||
The Cheesecake Factory, Inc. | (16,865 | ) | (872,427 | ) | |||||||
Wynn Resorts Ltd. | (3,217 | ) | (315,105 | ) | |||||||
(12,668,604 | ) | ||||||||||
Household durables—(0.16)% | |||||||||||
D.R. Horton, Inc. | (63,400 | ) | (2,084,592 | ) | |||||||
Household products—(0.07)% | |||||||||||
Colgate-Palmolive Co. | (12,329 | ) | (917,647 | ) | |||||||
Independent power and renewable electricity producers—(0.05)% | |||||||||||
Ormat Technologies, Inc. | (13,878 | ) | (633,392 | ) | |||||||
Insurance—(0.58)% | |||||||||||
Arch Capital Group Ltd. | (9,025 | ) | (655,486 | ) | |||||||
Assurant, Inc. | (35,800 | ) | (2,971,758 | ) | |||||||
FNF Group | (20,150 | ) | (759,050 | ) | |||||||
Lincoln National Corp. | (6,890 | ) | (300,886 | ) | |||||||
Mercury General Corp. | (19,441 | ) | (1,076,448 | ) | |||||||
RLI Corp. | (9,466 | ) | (645,297 | ) | |||||||
XL Group Ltd. | (33,050 | ) | (1,143,861 | ) | |||||||
(7,552,786 | ) | ||||||||||
Internet & catalog retail—(0.09)% | |||||||||||
Expedia, Inc. | (3,070 | ) | (358,115 | ) | |||||||
Liberty Ventures, Series A | (19,860 | ) | (748,921 | ) | |||||||
(1,107,036 | ) | ||||||||||
Internet software & services—(0.05)% | |||||||||||
CommerceHub, Inc. Series A | (1,986 | ) | (28,003 | ) | |||||||
CommerceHub, Inc. Series C | (3,972 | ) | (55,608 | ) | |||||||
Yahoo!, Inc. | (14,310 | ) | (546,499 | ) | |||||||
(630,110 | ) | ||||||||||
IT services—(0.06)% | |||||||||||
Wipro Ltd., ADR | (68,125 | ) | (772,538 | ) | |||||||
Machinery—(0.64)% | |||||||||||
AGCO Corp. | (14,340 | ) | (690,614 | ) | |||||||
CNH Industrial NV | (194,917 | ) | (1,389,758 | ) | |||||||
Deere & Co. | (19,386 | ) | (1,506,486 | ) | |||||||
Flowserve Corp. | (14,386 | ) | (688,370 | ) | |||||||
Lincoln Electric Holdings, Inc. | (8,200 | ) | (508,892 | ) | |||||||
Middleby Corp. | (9,212 | ) | (1,108,941 | ) | |||||||
Oshkosh Corp. | (6,791 | ) | (374,116 | ) | |||||||
Pentair PLC | (5,107 | ) | (325,929 | ) | |||||||
The Timken Co. | (11,260 | ) | (376,647 | ) | |||||||
Wabtec Corp. | (19,531 | ) | (1,337,874 | ) | |||||||
(8,307,627 | ) |
Number of Shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Media—(0.09)% | |||||||||||
Discovery Communications, Inc., Class C | (12,390 | ) | $ | (304,051 | ) | ||||||
Twenty-First Century Fox, Inc., Class A | (33,192 | ) | (884,235 | ) | |||||||
(1,188,286 | ) | ||||||||||
Metals & mining—(0.04)% | |||||||||||
Royal Gold, Inc. | (5,461 | ) | (461,673 | ) | |||||||
Multi-utilities—(0.04)% | |||||||||||
NiSource, Inc. | (21,870 | ) | (561,184 | ) | |||||||
Multiline retail—(0.17)% | |||||||||||
Dollar Tree, Inc. | (17,803 | ) | (1,714,251 | ) | |||||||
Kohl's Corp. | (11,060 | ) | (459,985 | ) | |||||||
(2,174,236 | ) | ||||||||||
Oil, gas & consumable fuels—(1.12)% | |||||||||||
Apache Corp. | (25,701 | ) | (1,349,302 | ) | |||||||
Cabot Oil & Gas Corp. | (42,122 | ) | (1,039,150 | ) | |||||||
ConocoPhillips | (50,326 | ) | (2,054,307 | ) | |||||||
Continental Resources, Inc. | (34,356 | ) | (1,513,382 | ) | |||||||
Diamondback Energy, Inc. | (13,810 | ) | (1,212,380 | ) | |||||||
Matador Resources Co. | (61,805 | ) | (1,303,467 | ) | |||||||
Murphy Oil Corp. | (47,848 | ) | (1,312,471 | ) | |||||||
Newfield Exploration Co. | (13,413 | ) | (580,783 | ) | |||||||
Southwestern Energy Co. | (34,312 | ) | (500,269 | ) | |||||||
Spectra Energy Corp. | (36,418 | ) | (1,309,955 | ) | |||||||
Tesoro Corp. | (18,850 | ) | (1,435,428 | ) | |||||||
World Fuel Services Corp. | (19,390 | ) | (922,964 | ) | |||||||
(14,533,858 | ) | ||||||||||
Personal products—(0.08)% | |||||||||||
Coty, Inc., Class A | (36,481 | ) | (980,244 | ) | |||||||
Pharmaceuticals—(0.21)% | |||||||||||
Allergan PLC | (3,460 | ) | (875,207 | ) | |||||||
Bristol-Myers Squibb Co. | (18,069 | ) | (1,351,742 | ) | |||||||
Mylan NV | (11,440 | ) | (535,278 | ) | |||||||
(2,762,227 | ) | ||||||||||
Professional services—(0.16)% | |||||||||||
Manpowergroup, Inc. | (12,520 | ) | (868,888 | ) | |||||||
Verisk Analytics, Inc. | (14,651 | ) | (1,249,437 | ) | |||||||
(2,118,325 | ) | ||||||||||
Real estate investment trusts—(0.59)% | |||||||||||
HCP, Inc. | (46,590 | ) | (1,827,726 | ) | |||||||
Omega Healthcare Investors, Inc. | (24,540 | ) | (846,630 | ) | |||||||
Realty Income Corp. | (11,071 | ) | (791,244 | ) | |||||||
SL Green Realty Corp. | (7,784 | ) | (917,111 | ) | |||||||
Ventas, Inc. | (10,030 | ) | (763,885 | ) | |||||||
Welltower, Inc. | (31,950 | ) | (2,534,593 | ) | |||||||
(7,681,189 | ) |
151
PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Real estate management & development—(0.05)% | |||||||||||
The Howard Hughes Corp. | (5,560 | ) | $ | (664,198 | ) | ||||||
Road & rail—(0.18)% | |||||||||||
Heartland Express, Inc. | (28,434 | ) | (526,598 | ) | |||||||
J.B. Hunt Transport Services, Inc. | (5,673 | ) | (471,597 | ) | |||||||
Old Dominion Freight Line, Inc. | (12,931 | ) | (900,773 | ) | |||||||
Ryder System, Inc. | (7,140 | ) | (470,526 | ) | |||||||
(2,369,494 | ) | ||||||||||
Semiconductors & semiconductor equipment—(0.48)% | |||||||||||
Broadcom Ltd. | (5,330 | ) | (863,353 | ) | |||||||
Cavium, Inc. | (11,638 | ) | (543,146 | ) | |||||||
Cypress Semiconductor Corp. | (89,460 | ) | (1,041,314 | ) | |||||||
First Solar, Inc. | (7,150 | ) | (333,762 | ) | |||||||
Marvell Technology Group Ltd. | (59,470 | ) | (698,773 | ) | |||||||
NVIDIA Corp. | (22,220 | ) | (1,268,762 | ) | |||||||
Skyworks Solutions, Inc. | (23,490 | ) | (1,550,810 | ) | |||||||
(6,299,920 | ) | ||||||||||
Software—(0.69)% | |||||||||||
ACI Worldwide, Inc. | (55,538 | ) | (1,100,208 | ) | |||||||
Activision Blizzard, Inc. | (21,160 | ) | (849,786 | ) | |||||||
Blackbaud, Inc. | (16,176 | ) | (1,081,366 | ) | |||||||
Guidewire Software, Inc. | (20,929 | ) | (1,286,506 | ) | |||||||
NetSuite, Inc. | (21,787 | ) | (2,371,515 | ) | |||||||
Proofpoint, Inc. | (15,411 | ) | (1,169,232 | ) | |||||||
Synchronoss Technologies, Inc. | (17,547 | ) | (655,205 | ) | |||||||
The Ultimate Software Group, Inc. | (2,475 | ) | (517,522 | ) | |||||||
(9,031,340 | ) | ||||||||||
Specialty retail—(0.21)% | |||||||||||
CST Brands, Inc. | (6,820 | ) | (304,990 | ) | |||||||
L Brands, Inc. | (8,430 | ) | (622,977 | ) |
Number of Shares | Value | ||||||||||
Investments sold short—(concluded) | |||||||||||
Common stocks—(concluded) | |||||||||||
Specialty retail—(concluded) | |||||||||||
Monro Muffler Brake, Inc. | (20,469 | ) | $ | (1,281,769 | ) | ||||||
Tractor Supply Co. | (5,543 | ) | (508,016 | ) | |||||||
(2,717,752 | ) | ||||||||||
Technology hardware, storage & peripherals—(0.16)% | |||||||||||
Apple, Inc. | (16,275 | ) | (1,696,018 | ) | |||||||
Western Digital Corp. | (9,110 | ) | (432,816 | ) | |||||||
(2,128,834 | ) | ||||||||||
Textiles, apparel & luxury goods—(0.23)% | |||||||||||
Coach, Inc. | (16,094 | ) | (693,812 | ) | |||||||
Gildan Activewear, Inc. | (21,340 | ) | (625,476 | ) | |||||||
Lululemon Athletica, Inc. | (14,060 | ) | (1,091,759 | ) | |||||||
Under Armour, Inc., Class A | (15,198 | ) | (599,713 | ) | |||||||
(3,010,760 | ) | ||||||||||
Thrifts & mortgage finance—(0.07)% | |||||||||||
New York Community Bancorp, Inc. | (67,080 | ) | (969,306 | ) | |||||||
Tobacco—(0.09)% | |||||||||||
Reynolds American, Inc. | (24,439 | ) | (1,223,416 | ) | |||||||
Transportation infrastructure—(0.03)% | |||||||||||
Macquarie Infrastructure Corp. | (4,875 | ) | (373,669 | ) | |||||||
Wireless telecommunication services—(0.38)% | |||||||||||
Sprint Corp. | (389,893 | ) | (2,393,943 | ) | |||||||
T-Mobile US, Inc. | (54,500 | ) | (2,525,530 | ) | |||||||
(4,919,473 | ) | ||||||||||
Total investments sold short (proceeds—$153,770,032) | (168,986,193 | ) | |||||||||
Liabilities in excess of other assets—(0.32)% | (4,128,101 | ) | |||||||||
Net assets—100.00% | $ | 1,302,563,281 |
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 262.
Aggregate cost for federal income tax purposes before investments sold short was $1,375,736,948; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 140,453,481 | |||||
Gross unrealized depreciation | (40,512,854 | ) | |||||
Net unrealized appreciation | $ | 99,940,627 |
152
PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2016
Affiliated issuer activity
The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2016. 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 07/31/15 | Purchases during the year ended 07/31/16 | Sales during the year ended 07/31/16 | Value at 07/31/16 | Net income earned from affiliate for the year ended 07/31/16 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 6,993,833 | $ | 131,524,786 | $ | 138,518,619 | $ | — | $ | 10,409 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | 1,463,211,253 | $ | — | $ | — | $ | 1,463,211,253 | |||||||||||
Rights | — | — | 37,762 | 37,762 | |||||||||||||||
Repurchase agreement | — | 7,349,000 | — | 7,349,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 5,079,560 | — | 5,079,560 | |||||||||||||||
Total | $ | 1,463,211,253 | $ | 12,428,560 | $ | 37,762 | $ | 1,475,677,575 | |||||||||||
Liabilities | |||||||||||||||||||
Investments sold short | $ | (168,986,193 | ) | $ | — | $ | — | $ | (168,986,193 | ) |
At July 31, 2016, there were no transfers between Level 1 and Level 2.
The following is a rollforward of the Portfolio's investments that was valued using unobservable inputs (Level 3) for the year ended July 31, 2016:
Rights | |||||||
Beginning balance | $ | 37,762 | |||||
Purchases | — | ||||||
Issuances | — | ||||||
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 | $ | 37,762 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investments held at July 31, 2016, was $0.
153
PACE Large Co Value Equity Investments
Portfolio of investments—July 31, 2016
Issuer breakdown by country or territory of origin (unaudited)
Investments before investments sold short | Percentage of total investments before investments sold short | ||||||
United States | 90.5 | % | |||||
United Kingdom | 2.7 | ||||||
Canada | 1.7 | ||||||
Switzerland | 1.5 | ||||||
Ireland | 1.2 | ||||||
Bermuda | 1.2 | ||||||
Singapore | 0.4 | ||||||
France | 0.3 | ||||||
Netherlands | 0.2 | ||||||
Curacao | 0.2 | ||||||
Puerto Rico | 0.1 | ||||||
Total | 100.0 | % | |||||
Investments sold short | Percentage of total Investments sold short | ||||||
United States | (92.6 | )% | |||||
Bermuda | (2.8 | ) | |||||
Netherlands | (1.1 | ) | |||||
Ireland | (1.0 | ) | |||||
India | (0.5 | ) | |||||
Panama | (0.5 | ) | |||||
Singapore | (0.5 | ) | |||||
Canada | (0.4 | ) | |||||
Liberia | (0.4 | ) | |||||
Switzerland | (0.2 | ) | |||||
Total | (100.0 | )% |
Portfolio footnotes
* Non-income producing security.
† Amount represents less than 0.005%.
1 Security, or portion thereof, pledged as collateral for investments sold short.
2 Security, or portion thereof, was on loan at July 31, 2016.
3 Illiquid investment as of July 31, 2016.
4 Security is being fair valued by a valuation committee under the direction of the board of trustees.
See accompanying notes to financial statements
154
PACE Large Co Growth Equity Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares returned 1.01% before the deduction of the maximum PACE Select program fee.1 In comparison, the Russell 1000 Growth Index (the "benchmark") gained 4.35%, and the Lipper Large-Cap Growth Funds category posted a median return of 0.04%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 158. 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 3.
Subadvisors' comments (Unaudited)2
Jackson Square
Our portion of the Portfolio underperformed the benchmark during the reporting period. Strong performance in the information technology and financials sectors was unable to overcome weak results in the health care and consumer discretionary sectors. In terms of individual holdings, the largest detractors from performance were Valeant Pharmaceuticals International, Allergan PLC and Walgreens Boots Alliance, Inc. Valeant Pharmaceuticals International was weak due to multiple factors, mainly due to questions over its ability to file its Form 10-K on time to avoid a technical default on its debt obligations. (Form 10-K is an annual report required by the U.S. Securities and Exchange Commission that gives a comprehensive summary of a company's financial performance.) While the company did avoid a technical default, we sold out of the position given the negative change in the company's long-term fundamentals.
Our top contributors to performance included Equinix, Inc., Crown Castle International Corp. and Nike, Inc. Nike was sold in the beginning of 2016, as the investment team believed that the stock had reached full valuation after an extended rally in price. Equinix announced further expansion plans that include additional data centers, the divestiture of certain data centers to Digital Realty and a strategic partnership with Datang Telecom Group in China. Increased globalization, combined with the need for a secure and accessible network to meet the needs of its clients' geographically dispersed workforce, continue to create significant demand. We believe Equinix's innovative product offerings allow it to be well-positioned in the technology spending environment, which is focused on addressing the needs of enterprises that are struggling to maintain the highest level of network performance and quality of service for global users.
Derivatives were not used during the reporting period.
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 subadvisors 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.
(continued on next page)
PACE Select Advisors Trust – PACE Large Co Growth Equity Investments
Investment Manager:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisors:
Jackson Square Partners, LLC ("Jackson Square");
Mar Vista Investment Partners ("Mar Vista");
J.P. Morgan Investment Management Inc. ("J.P. Morgan")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Fred Lee, CFA, Vincent Russo, Mayoor Joshi and Diana To
Jackson Square: Jeffrey Van Harte, Christopher Bonavico, Daniel Prislin and Christopher Ericksen;
Mar Vista: 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
155
PACE Large Co Growth Equity Investments
Subadvisors' comments (Unaudited) – continued
Mar Vista Investment Partners
Our portion of the Portfolio outperformed the benchmark during the reporting period. Strong stock selection drove our outperformance, while sector allocation negatively impacted results.
Sectors that contributed to our results included financials, industrials and health care. Within the financial sector, our significant investment in American Tower and specialty insurance companies positively affected results. Additionally, a lack of exposure to traditional banks was beneficial for results. Within industrials, strong stock selection and sector positioning added value during the period. Our underweight in health care, as well as an avoidance of excessive valuations in biotechnology, also added value relative to the benchmark. Investments within consumer staples, information technology and consumer discretionary detracted from results. The chase for income and yield pushed many investments in the consumer staples sector to excessive valuations. When business valuations disconnect with fundamentals, our portion of the Portfolio will typically be negatively impacted. Finally, a lack of exposure to the telecommunication services sector detracted from results.
The recent market appreciation reduced our average discount to intrinsic value to 10%, which is well below the 20% to 35% historical average. As a result, the investment team expects future returns to be primarily influenced by the compounding growth rates of the portfolio companies and less from stock price convergence to intrinsic value. Given the team's emphasis on capital protection and the elevated valuations for the overall market, the investment team will remain prudent in allocating our portion of the Portfolio's capital.
Derivatives were not used during the reporting period.
J.P. Morgan
Our portion of the Portfolio underperformed the benchmark during the reporting period. Much of the underperformance came during the first quarter of 2016, as investor sentiment abruptly shifted toward defensive sectors and stocks that had previously been out of favor. Underperformance was driven most notably by weak stock selection in the health care sector.
Stock selection in the health care and financial services sectors were the largest detractors from performance over the period. Stock selection within technology was the largest contributor, followed by our holdings within the energy sector. In terms of individual holdings, overweight positions in biopharmaceutical company Gilead Sciences, and biopharmaceutical company Regeneron Pharmaceuticals were our largest detractors from performance. On the upside, overweight positions in semiconductor company ARM and online retailer Amazon.com were our largest contributors to performance.
Investment process
(continued)
of the securities. Jackson Square also considers a company's operational efficiencies, management's plans for capital allocation and the company's shareholder orientation.
Mar Vista employs a bottom-up approach to stock selection, seeking high quality growth companies whose stocks are trading at discounts to fair value. Mar Vista looks for companies with sustainable competitive advantages and opportunities to grow and reinvest capital at higher rates than their cost of capital. Mar Vista also seeks to invest in companies with management teams with a proven ability to allocate capital in ways that maximize shareholder value. Mar Vista'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
(continued on next page)
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PACE Large Co Growth Equity Investments
Subadvisor's comments (Unaudited) – concluded
We continue to focus on identifying companies that possess three key characteristics: 1) a large addressable market undergoing meaningful change, 2) a sustainable competitive advantage which is being well-executed, and 3) positive earnings revisions. We continue to find attractive opportunities in the financial services sector, which is our largest overweight exposure. We are also overweight the consumer discretionary and technology sectors. Our greatest underweights are in consumer staples and producer durables, where we are finding limited growth opportunities.
Derivatives were not used during the reporting period.
Investment process
(concluded)
which are higher than those of the fund's benchmark while attempting to maintain a moderate risk profile.
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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PACE Large Co Growth Equity Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 0.73 | % | 11.80 | % | 7.88 | % | |||||||||
Class C2 | (0.08 | ) | 10.89 | 6.99 | |||||||||||
Class Y3 | 1.04 | 12.10 | 8.21 | ||||||||||||
Class P4 | 1.01 | 12.10 | 8.17 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (4.82 | ) | 10.55 | 7.27 | |||||||||||
Class C2 | (0.90 | ) | 10.89 | 6.99 | |||||||||||
Russell 1000 Growth Index5 | 4.35 | 13.62 | 9.50 | ||||||||||||
Lipper Large-Cap Growth Funds median | 0.04 | 11.71 | 8.21 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | (1.04 | )% | 10.45 | % | 7.13 | % | |||||||||
Class C2 | (1.86 | ) | 9.54 | 6.25 | |||||||||||
Class Y3 | (0.79 | ) | 10.73 | 7.46 | |||||||||||
Class P4 | (0.80 | ) | 10.73 | 7.42 | |||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (6.48 | ) | 9.21 | 6.52 | |||||||||||
Class C2 | (2.66 | ) | 9.54 | 6.25 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, were as follows: Class A—1.18% and 1.18%; Class C—1.99% and 1.99%; Class Y—0.92% and 0.92%; and Class P—0.92% and 0.92%. 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS 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, 2016 (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 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 AM. Upon termination of the agreement, however, UBS 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 of 0.25% annually.
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 of 0.25% and 0.75% annually, respectively.
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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualfundperformance.
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.
158
PACE Large Co Growth Equity 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 Large Co Growth Equity Investments Class P shares versus the Russell 1000 Growth Index over the 10 years ended July 31, 2016. 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.
PACE Large Co Growth Equity Investments
159
PACE Large Co Growth Equity Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Net assets (mm) | $ | 1,274.5 | |||||
Number of holdings | 68 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Common stocks and ADRs | 97.0 | % | |||||
Cash equivalents and other assets less liabilities | 3.0 | ||||||
Total | 100.0 | % | |||||
Top five sectors1 | 07/31/16 | ||||||
Information Technology | 28.4 | % | |||||
Financials | 17.1 | ||||||
Health Care | 15.4 | ||||||
Consumer Discretionary | 14.2 | ||||||
Industrials | 10.4 | ||||||
Total | 85.5 | % | |||||
Top ten equity holdings1 | 07/31/16 | ||||||
Allergan PLC | 5.1 | % | |||||
Berkshire Hathaway, Inc., Class B | 4.4 | ||||||
American Tower Corp. | 4.3 | ||||||
TransDigm Group, Inc. | 3.9 | ||||||
Markel Corp. | 3.4 | ||||||
Alphabet, Inc. Class C | 3.2 | ||||||
Honeywell International, Inc. | 3.0 | ||||||
Schlumberger Ltd. | 2.7 | ||||||
Facebook, Inc., Class A | 2.7 | ||||||
Intuit, Inc. | 2.6 | ||||||
Total | 35.3 | % |
For a listing of defined portfolio acronyms that are used throughout the Portfolio statistics, please refer to page 262.
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
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PACE Large Co Growth Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—96.98% | |||||||||||
Aerospace & defense—6.90% | |||||||||||
Honeywell International, Inc. | 328,459 | $ | 38,209,636 | ||||||||
TransDigm Group, Inc.*,1 | 177,766 | 49,689,152 | |||||||||
87,898,788 | |||||||||||
Biotechnology—5.07% | |||||||||||
Biogen, Inc.* | 52,613 | 15,254,087 | |||||||||
BioMarin Pharmaceutical, Inc.* | 43,540 | 4,328,747 | |||||||||
Celgene Corp.* | 185,038 | 20,759,413 | |||||||||
Gilead Sciences, Inc. | 110,892 | 8,812,587 | |||||||||
Regeneron Pharmaceuticals, Inc.* | 21,309 | 9,058,882 | |||||||||
Vertex Pharmaceuticals, Inc.* | 65,999 | 6,401,903 | |||||||||
64,615,619 | |||||||||||
Capital markets—0.71% | |||||||||||
The Charles Schwab Corp. | 316,590 | 8,997,488 | |||||||||
Chemicals—2.83% | |||||||||||
Air Products & Chemicals, Inc. | 51,731 | 7,729,646 | |||||||||
Ecolab, Inc. | 239,821 | 28,390,010 | |||||||||
36,119,656 | |||||||||||
Diversified financial services—5.93% | |||||||||||
Berkshire Hathaway, Inc., Class B* | 387,730 | 55,937,807 | |||||||||
Intercontinental Exchange Group, Inc. | 74,165 | 19,594,393 | |||||||||
75,532,200 | |||||||||||
Electrical equipment—0.47% | |||||||||||
Acuity Brands, Inc.1 | 22,700 | 5,957,161 | |||||||||
Energy equipment & services—2.73% | |||||||||||
Schlumberger Ltd. | 432,733 | 34,843,661 | |||||||||
Food & staples retailing—1.40% | |||||||||||
CVS Health Corp. | 30,557 | 2,833,245 | |||||||||
Walgreens Boots Alliance, Inc. | 189,384 | 15,008,682 | |||||||||
17,841,927 | |||||||||||
Food products—2.24% | |||||||||||
Mondelez International, Inc., Class A | 648,825 | 28,535,324 | |||||||||
Health care equipment & supplies—0.97% | |||||||||||
DENTSPLY SIRONA, Inc.1 | 143,797 | 9,208,760 | |||||||||
Intuitive Surgical, Inc.* | 4,500 | 3,130,920 | |||||||||
12,339,680 | |||||||||||
Health care technology—0.24% | |||||||||||
IMS Health Holdings, Inc.* | 101,599 | 3,050,002 | |||||||||
Hotels, restaurants & leisure—3.00% | |||||||||||
Las Vegas Sands Corp. | 115,700 | 5,860,205 | |||||||||
Starbucks Corp. | 556,719 | 32,317,538 | |||||||||
38,177,743 | |||||||||||
Insurance—3.36% | |||||||||||
Markel Corp.* | 45,131 | 42,818,036 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Internet & catalog retail—5.19% | |||||||||||
Amazon.com, Inc.* | 39,724 | $ | 30,142,968 | ||||||||
Liberty Interactive Corp. QVC Group, Class A* | 639,464 | 17,144,030 | |||||||||
priceline.com, Inc.* | 5,227 | 7,060,684 | |||||||||
TripAdvisor, Inc.*,1 | 169,035 | 11,827,379 | |||||||||
66,175,061 | |||||||||||
Internet software & services—9.52% | |||||||||||
Alphabet, Inc. Class A* | 38,678 | 30,607,448 | |||||||||
Alphabet, Inc. Class C* | 53,732 | 41,308,624 | |||||||||
eBay, Inc.* | 480,824 | 14,982,476 | |||||||||
Facebook, Inc., Class A* | 278,020 | 34,457,799 | |||||||||
121,356,347 | |||||||||||
IT services—6.02% | |||||||||||
MasterCard, Inc., Class A | 311,461 | 29,663,546 | |||||||||
PayPal Holdings, Inc.* | 686,335 | 25,559,115 | |||||||||
Visa, Inc., Class A1 | 275,752 | 21,522,444 | |||||||||
76,745,105 | |||||||||||
Life sciences tools & services—3.27% | |||||||||||
Illumina, Inc.*,1 | 47,200 | 7,851,720 | |||||||||
Mettler-Toledo International, Inc.* | 67,403 | 27,716,788 | |||||||||
Quintiles Transnational Holdings, Inc.*,1 | 78,588 | 6,101,572 | |||||||||
41,670,080 | |||||||||||
Machinery—0.41% | |||||||||||
Caterpillar, Inc.1 | 62,600 | 5,180,776 | |||||||||
Media—1.25% | |||||||||||
Liberty Global PLC LiLAC, Class C* | 200,718 | 7,025,130 | |||||||||
Liberty Global PLC, Class A* | 58,814 | 1,864,992 | |||||||||
Liberty Global PLC, Series C* | 225,843 | 6,989,841 | |||||||||
15,879,963 | |||||||||||
Oil, gas & consumable fuels—0.37% | |||||||||||
Pioneer Natural Resources Co. | 29,420 | 4,782,809 | |||||||||
Personal products—1.94% | |||||||||||
Unilever N.V. | 536,301 | 24,734,202 | |||||||||
Pharmaceuticals—5.83% | |||||||||||
Allergan PLC* | 255,514 | 64,632,266 | |||||||||
Novo Nordisk A/S, ADR | 170,378 | 9,706,435 | |||||||||
74,338,701 | |||||||||||
Professional services—0.77% | |||||||||||
Nielsen Holdings PLC | 183,082 | 9,860,797 | |||||||||
Real estate investment trusts—7.10% | |||||||||||
American Tower Corp. | 471,330 | 54,565,874 | |||||||||
Crown Castle International Corp. | 195,301 | 18,950,056 | |||||||||
Equinix, Inc.1 | 45,558 | 16,987,212 | |||||||||
90,503,142 | |||||||||||
Road & rail—1.83% | |||||||||||
Kansas City Southern | 242,525 | 23,309,078 |
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PACE Large Co Growth Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
Semiconductors & semiconductor equipment—2.75% | |||||||||||
ARM Holdings PLC, ADR1 | 77,912 | $ | 5,170,240 | ||||||||
Broadcom Ltd. | 56,102 | 9,087,402 | |||||||||
QUALCOMM, Inc. | 331,940 | 20,772,805 | |||||||||
35,030,447 | |||||||||||
Software—10.13% | |||||||||||
Adobe Systems, Inc.* | 294,593 | 28,828,871 | |||||||||
Electronic Arts, Inc.* | 229,190 | 17,491,781 | |||||||||
Intuit, Inc. | 292,763 | 32,493,765 | |||||||||
Microsoft Corp. | 324,395 | 18,386,709 | |||||||||
Oracle Corp. | 506,915 | 20,803,792 | |||||||||
Salesforce.com, Inc.* | �� | 72,339 | 5,917,330 | ||||||||
ServiceNow, Inc.* | 70,100 | 5,251,892 | |||||||||
129,174,140 | |||||||||||
Specialty retail—4.75% | |||||||||||
L Brands, Inc.1 | 160,769 | 11,880,829 | |||||||||
Ross Stores, Inc.1 | 68,000 | 4,204,440 | |||||||||
The Home Depot, Inc. | 87,416 | 12,084,388 | |||||||||
The TJX Cos., Inc. | 268,366 | 21,930,869 | |||||||||
Ulta Salon, Cosmetics & Fragrance, Inc.* | 39,900 | 10,422,279 | |||||||||
60,522,805 | |||||||||||
Total common stocks (cost—$962,689,832) | 1,235,990,738 |
Face Amount | Value | ||||||||||
Repurchase agreement—2.81% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $2,887,147 US Treasury Bond, 7.875% due 02/15/21 and $31,787,914 US Treasury Notes, 0.750% to 2.250% due 12/31/17 to 07/31/21; (value—$36,506,445); proceeds: $35,790,030 (cost—$35,790,000) | $ | 35,790,000 | $ | 35,790,000 | |||||||
Number of Shares | |||||||||||
Investment of cash collateral from securities loaned—0.20% | |||||||||||
Money market funds—0.20% | |||||||||||
State Street Institutional U.S. Government Money Market Fund (cost—$2,515,957) | 2,515,957 | 2,515,957 | |||||||||
Total investments (cost—$1,000,995,789)—99.99% | 1,274,296,695 | ||||||||||
Other assets in excess of liabilities—0.01% | 188,262 | ||||||||||
Net assets—100.00% | $ | 1,274,484,957 |
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 262.
Aggregate cost for federal income tax purposes was $1,001,886,083; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 293,828,310 | |||||
Gross unrealized depreciation | (21,417,698 | ) | |||||
Net unrealized appreciation | $ | 272,410,612 |
Affiliated issuer activity
The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2016. 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 07/31/15 | Purchases during the year ended 07/31/16 | Sales during the year ended 07/31/16 | Value at 07/31/16 | Net income earned from affiliate for the year ended 07/31/16 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 3,716,848 | $ | 188,845,372 | $ | 192,562,220 | $ | — | $ | 9,375 |
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PACE Large Co Growth Equity Investments
Portfolio of investments—July 31, 2016
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | 1,235,990,738 | $ | — | $ | — | $ | 1,235,990,738 | |||||||||||
Repurchase agreement | — | 35,790,000 | — | 35,790,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 2,515,957 | — | 2,515,957 | |||||||||||||||
Total | $ | 1,235,990,738 | $ | 38,305,957 | $ | — | $ | 1,274,296,695 |
At July 31, 2016, 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 | 86.4 | % | |||||
Ireland | 5.1 | ||||||
Curacao | 2.7 | ||||||
United Kingdom | 2.4 | ||||||
Netherlands | 1.9 | ||||||
Denmark | 0.8 | ||||||
Singapore | 0.7 | ||||||
Total | 100.0 | % |
Portfolio footnotes
* Non-income producing security.
1 Security, or portion thereof, was on loan at July 31, 2016.
See accompanying notes to financial statements.
163
PACE Small/Medium Co Value Equity Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares gained 1.77% before the deduction of the maximum PACE Select program fee.1 In comparison, the Russell 2500 Value Index (the "benchmark") rose 6.36%, and the Lipper Small-Cap Core Funds category posted a median return of 0.48%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 167. 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 3.
Subadvisors' comments (Unaudited)2
Wells Capital Management (Previously MetWest Capital)
Our portion of the Portfolio underperformed the benchmark during the reporting period. Sector weightings, a by-product of our bottom-up security allocation decisions, were the primary driver of our underperformance. Stock selection in the financials and information technology sectors also detracted from performance. In financials, Ocwen Financial Corp. was the worst performer. Our contention at the time of the initial investment was that the company would benefit from the secular trend towards non-banking servicing, as well as the resolution of its investigation by the New York Department of Financial Services. During the first quarter of 2016, Ocwen Financial reported a larger-than-expected operating loss, which contradicted the message management conveyed during our discussions with the team. With the credibility of Ocwen Financial's management team in question, we ultimately elected to divest our position in the company. Longer term, Ocwen Financial may benefit from the secular shift to non-banking servicing. However, our visibility into the future of the business has been significantly reduced by the overhang and costs associated with ongoing regulatory issues and lack of management's credibility. Within information technology, Endurance International Group, Inc. detracted the most from returns. During the period, the company announced a debt-financed acquisition of email marketing platform provider Constant Contact. While on the surface this acquisition appears expensive, the valuation becomes more attractive after incorporating the potential cost synergies that should result from the deal.
On the upside, security selection in the energy sector contributed to results, with Encana Corp. being the top performer. Encana's stock price rebounded shortly after our initial investment when Chief Executive Officer Doug Suttles quelled investors' fears during the company's quarterly earnings call. Mr. Suttles reiterated to investors that Encana would not issue equity and the company possessed assets that could be monetized. He also explained that
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 subadvisors 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 Manager:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisors:
Wells Capital Management, Inc. (f/k/a Metropolitan West Capital Management, LLC) ("Wells Capital");
Systematic Financial Management, L.P. ("Systematic");
Kayne Anderson Rudnick, LLC ("Kayne Anderson Rudnick")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Fred Lee, CFA, Vincent Russo, Mayoor Joshi and Diana To
Wells Capital: Samir Sikka;
Systematic: Ronald M. Mushock and D. Kevin McCreesh;
Kayne Anderson Rudnick: Julie Kutasov and Craig Stone
Objective:
Capital appreciation
Investment process:
Wells 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
(continued on next page)
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PACE Small/Medium Co Value Equity Investments
Subadvisors' comments (Unaudited) – continued
almost all of the company's outstanding debt is long dated. Additionally, management initiated cost cuts that generated significant savings, which permits Encana to live within its cash flows. During our investment horizon, we believe Encana will benefit from a continued focus on its core assets and monetization of non-core assets.
Derivatives were not used during the reporting period.
Systematic
Our portion of the Portfolio underperformed the benchmark during the reporting period, as both stock selection and sector allocation detracted from results. Stock selection within the industrials, financials and utilities sectors provided the largest headwinds for our strategy, whereas stock selection was the most favorable in the energy, materials and consumer discretionary sectors. In terms of sector allocation, an underweighting to utilities had a negative impact on our overall relative results, while our overweight to materials proved positive for performance.
An example of a stock that underperformed during the period was Dynegy, an independent electricity generator. We purchased Dynegy after uncovering a positive earnings catalyst in some new electricity market-capacity rules. Beginning in the summer of 2015, however, abnormal weather conditions caused forward power prices to deteriorate, offsetting these catalysts. Negative weather trends continued into the fourth quarter of 2015, and we sold the position after an unexpected rule change further impaired the company's outlook.
A stock that outperformed during the period was DuPont Fabros. Its shares were particularly strong during the first quarter of 2016, solidly outperforming both the benchmark and the average real estate investment trust ("REIT"). The company, which leases data center space primarily to large Internet and cloud-computing companies, has benefited from strong demand. Leasing was very robust in the March 2016 quarter, similar to the final quarter of 2015. The two successive quarters of strong leasing have resulted in positive revisions to profit expectations. In addition, the company is expected to accelerate plans to extend its business into three new geographic markets over the next several years. DuPont Fabros has seen its stock's valuation multiples widen as its operational execution has strengthened, and we have trimmed our exposure to lock in some profits as a result. We still believe its shares have upside potential and, therefore, we continue to hold a position in the REIT.
Please note that no derivatives were used during the reporting period.
Kayne Anderson Rudnick
Our portion of the Portfolio outperformed the benchmark during the reporting period. Stock selection in the health care sector and stock selection and an underweight in the financial services sector contributed the most to relative performance during the period. Conversely, an underweight in utilities and stock selection and an overweight in materials and processing detracted the most from performance.
Investment process
(concluded)
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 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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PACE Small/Medium Co Value Equity Investments
Subadvisor's comments (Unaudited) – concluded
The stocks that were the highest contributors during the period were Jack Henry & Associates and Anika Therapeutics. Shares of Jack Henry & Associates performed strongly, supported by the company's consistently strong operating results that were driven by solid top-line growth and positive operating leverage. Importantly, technology spending by community banks and credit unions remained strong and Jack Henry & Associates continued to benefit from solid growth in complementary products and services. We reduced our position in the company during the first quarter of 2016. Anika Therapeutics saw its shares move higher over the period as solid revenue growth from its MONOVISC and ORTHOVISC product lines allowed the company to continue to gain market share. Anika Therapeutics has a solid balance sheet and is projecting double-digit growth in 2016.
The stocks that detracted the most from performance were Artisan Partners Asset Management and CEB, Inc. Shares of Artisan Partners Asset Management were hurt by net outflows within one of the firm's investment teams due to poor relative performance. We view these issues to be temporary in nature and believe that over time the company's business model will continue to attract skilled professionals from a variety of asset classes. Shares of CEB, Inc. lagged due to investor concerns over increased earnings volatility and slowing revenue growth. Despite near-term challenges, we remain confident that the value of the company's offering will be realized, resulting in strong product and customer growth over the longer term.
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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PACE Small/Medium Co Value Equity Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | 1.60 | % | 9.96 | % | 6.69 | % | |||||||||
Class C2 | 0.83 | 9.13 | 5.88 | ||||||||||||
Class Y3 | 1.81 | 10.11 | 6.94 | ||||||||||||
Class P4 | 1.77 | 10.10 | 6.84 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (3.99 | ) | 8.73 | 6.09 | |||||||||||
Class C2 | (0.06 | ) | 9.13 | 5.88 | |||||||||||
Russell 2500 Value Index5 | 6.36 | 11.41 | 7.15 | ||||||||||||
Lipper Small-Cap Core Funds median | 0.48 | 9.83 | 6.91 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | (3.81 | )% | 8.05 | % | 5.98 | % | |||||||||
Class C2 | (4.56 | ) | 7.25 | 5.18 | |||||||||||
Class Y3 | (3.68 | ) | 8.20 | 6.23 | |||||||||||
Class P4 | (3.67 | ) | 8.19 | 6.14 | |||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (9.09 | ) | 6.84 | 5.39 | |||||||||||
Class C2 | (5.40 | ) | 7.25 | 5.18 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, were as follows: Class A—1.27% and 1.27%; Class C—2.01% and 2.01%; Class Y—1.13% and 1.13%; and Class P—1.12% and 1.12%. 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS 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, 2016 (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 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 AM. Upon termination of the agreement, however, UBS AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 5.50%. Class A shares bear ongoing 12b-1 service fees of 0.25% annually.
2 Maximum contingent deferred sales charge for Class C shares is 1.00% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees of 0.25% and 0.75% annually, respectively.
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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualfundperformance.
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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PACE Small/Medium Co Value Equity 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 Small/Medium Co Value Equity Investments Class P shares versus the Russell 2500 Value Index over the 10 years ended July 31, 2016. 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.
PACE Small/Medium Co Value Equity Investments
168
PACE Small/Medium Co Value Equity Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Net assets (mm) | $ | 512.5 | |||||
Number of holdings | 167 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Common stocks and ADRs | 96.8 | % | |||||
Cash equivalents and other assets less liabilities | 3.2 | ||||||
Total | 100.0 | % | |||||
Top five sectors1 | 07/31/16 | ||||||
Financials | 25.8 | % | |||||
Industrials | 16.0 | ||||||
Information Technology | 16.0 | ||||||
Consumer Discretionary | 11.6 | ||||||
Health Care | 8.0 | ||||||
Total | 77.4 | % | |||||
Top ten equity holdings1 | 07/31/16 | ||||||
Endurance Specialty Holdings Ltd. | 1.5 | % | |||||
Artisan Partners Asset Management, Inc., Class A | 1.4 | ||||||
Webster Financial Corp. | 1.4 | ||||||
Landstar System, Inc. | 1.3 | ||||||
Dril-Quip, Inc. | 1.3 | ||||||
Albemarle Corp. | 1.3 | ||||||
Amsurg Corp. | 1.3 | ||||||
The Cheesecake Factory, Inc. | 1.2 | ||||||
E*TRADE Financial Corp. | 1.2 | ||||||
Jack Henry & Associates, Inc. | 1.1 | ||||||
Total | 13.0 | % |
For a listing of defined portfolio acronyms that are used throughout the Portfolio statistics, please refer to page 262.
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
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PACE Small/Medium Co Value Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—96.79% | |||||||||||
Air freight & logistics—1.26% | |||||||||||
Atlas Air Worldwide Holdings, Inc.* | 46,400 | $ | 2,005,872 | ||||||||
Expeditors International of Washington, Inc. | 89,800 | 4,438,814 | |||||||||
6,444,686 | |||||||||||
Airlines—0.57% | |||||||||||
Alaska Air Group, Inc. | 43,800 | 2,944,236 | |||||||||
Banks—8.52% | |||||||||||
Banc of California, Inc.1 | 128,290 | 2,845,472 | |||||||||
Bank of Hawaii Corp.1 | 64,200 | 4,424,664 | |||||||||
Cathay General Bancorp | 92,450 | 2,771,651 | |||||||||
Glacier Bancorp, Inc.1 | 67,500 | 1,861,650 | |||||||||
Great Western Bancorp, Inc. | 23,340 | 774,188 | |||||||||
Hancock Holding Co.1 | 155,160 | 4,498,088 | |||||||||
KeyCorp | 347,445 | 4,065,107 | |||||||||
Regions Financial Corp. | 179,070 | 1,642,072 | |||||||||
Sterling Bancorp1 | 395,950 | 6,687,595 | |||||||||
United Community Banks, Inc. | 176,790 | 3,401,440 | |||||||||
Webster Financial Corp.1 | 92,350 | 3,320,906 | |||||||||
Zions Bancorporation1 | 264,430 | 7,372,308 | |||||||||
43,665,141 | |||||||||||
Building products—0.59% | |||||||||||
Armstrong World Industries, Inc.* | 42,000 | 1,783,740 | |||||||||
Owens Corning | 23,000 | 1,216,930 | |||||||||
3,000,670 | |||||||||||
Capital markets—3.84% | |||||||||||
Artisan Partners Asset Management, Inc., Class A1 | 219,940 | 6,149,522 | |||||||||
E*TRADE Financial Corp.* | 242,715 | 6,087,292 | |||||||||
Invesco Ltd. | 64,550 | 1,883,569 | |||||||||
Lazard Ltd., Class A | 79,340 | 2,835,612 | |||||||||
Stifel Financial Corp.*,1 | 76,880 | 2,717,708 | |||||||||
19,673,703 | |||||||||||
Chemicals—1.82% | |||||||||||
Albemarle Corp.1 | 10,700 | 900,619 | |||||||||
Celanese Corp., Series A | 18,235 | 1,156,464 | |||||||||
Ferro Corp.* | 61,035 | 791,014 | |||||||||
Ingevity Corp.* | 49,319 | 1,887,438 | |||||||||
The Scotts Miracle-Gro Co., Class A | 62,000 | 4,572,500 | |||||||||
9,308,035 | |||||||||||
Commercial services & supplies—1.49% | |||||||||||
KAR Auction Services, Inc. | 119,000 | 5,089,630 | |||||||||
Steelcase, Inc., Class A | 47,548 | 689,446 | |||||||||
Tetra Tech, Inc. | 56,500 | 1,860,545 | |||||||||
7,639,621 | |||||||||||
Construction & engineering—1.02% | |||||||||||
KBR, Inc. | 330,925 | 4,639,569 | |||||||||
Tutor Perini Corp.*,1 | 23,585 | 592,455 | |||||||||
5,232,024 | |||||||||||
Consumer finance—0.38% | |||||||||||
Encore Capital Group, Inc.*,1 | 80,500 | 1,965,005 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Containers & packaging—2.31% | |||||||||||
Berry Plastics Group, Inc.* | 159,495 | $ | 6,539,295 | ||||||||
Silgan Holdings, Inc.1 | 46,950 | 2,327,781 | |||||||||
WestRock Co.1 | 69,530 | 2,983,532 | |||||||||
11,850,608 | |||||||||||
Diversified financial services—2.12% | |||||||||||
FactSet Research Systems, Inc.1 | 14,300 | 2,459,028 | |||||||||
MSCI, Inc., | 57,650 | 4,960,206 | |||||||||
Voya Financial, Inc. | 135,160 | 3,464,151 | |||||||||
10,883,385 | |||||||||||
Diversified telecommunication services—1.08% | |||||||||||
Level 3 Communications, Inc.* | 109,800 | 5,555,880 | |||||||||
Electrical equipment—0.73% | |||||||||||
Belden, Inc. | 23,130 | 1,693,347 | |||||||||
General Cable Corp.1 | 139,760 | 2,058,665 | |||||||||
3,752,012 | |||||||||||
Electronic equipment, instruments & components—3.68% | |||||||||||
CDW Corp.1 | 89,000 | 3,820,770 | |||||||||
Coherent, Inc.* | 32,105 | 3,404,735 | |||||||||
Jabil Circuit, Inc. | 138,500 | 2,818,475 | |||||||||
Orbotech Ltd.* | 111,020 | 3,167,401 | |||||||||
VeriFone Systems, Inc.* | 97,550 | 1,869,058 | |||||||||
Zebra Technologies Corp., Class A* | 71,250 | 3,776,962 | |||||||||
18,857,401 | |||||||||||
Energy equipment & services—3.41% | |||||||||||
Core Laboratories N.V.1 | 33,750 | 3,942,337 | |||||||||
Dril-Quip, Inc.* | 52,200 | 2,841,246 | |||||||||
Forum Energy Technologies, Inc.*,1 | 104,080 | 1,699,626 | |||||||||
Nabors Industries Ltd. | 248,025 | 2,232,225 | |||||||||
Precision Drilling Corp.1 | 477,610 | 2,039,395 | |||||||||
Superior Energy Services, Inc. | 188,945 | 3,017,452 | |||||||||
US Silica Holdings, Inc. | 49,940 | 1,721,432 | |||||||||
17,493,713 | |||||||||||
Food & staples retailing—0.36% | |||||||||||
Village Super Market, Inc., Class A | 57,999 | 1,835,088 | |||||||||
Food products—3.41% | |||||||||||
J&J Snack Foods Corp.1 | 16,200 | 1,970,082 | |||||||||
Pinnacle Foods, Inc. | 134,895 | 6,773,078 | |||||||||
Post Holdings, Inc.* | 22,200 | 1,924,074 | |||||||||
Snyder's-Lance, Inc.1 | 110,976 | 3,802,038 | |||||||||
TreeHouse Foods, Inc.*,1 | 29,250 | 3,018,307 | |||||||||
17,487,579 | |||||||||||
Health care equipment & supplies—3.07% | |||||||||||
Anika Therapeutics, Inc.* | 97,200 | 4,852,224 | |||||||||
DENTSPLY SIRONA, Inc.1 | 29,065 | 1,861,323 | |||||||||
Haemonetics Corp.*,1 | 76,650 | 2,324,028 | |||||||||
Integra LifeSciences Holdings*,1 | 29,800 | 2,511,246 | |||||||||
STERIS PLC1 | 59,000 | 4,186,050 | |||||||||
15,734,871 |
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PACE Small/Medium Co Value Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Health care providers & services—4.10% | |||||||||||
Amedisys, Inc.* | 17,435 | $ | 933,644 | ||||||||
AMN Healthcare Services, Inc.*,1 | 41,200 | 1,742,760 | |||||||||
Amsurg Corp.*,1 | 103,460 | 7,760,535 | |||||||||
Centene Corp.* | 34,215 | 2,413,868 | |||||||||
HealthSouth Corp.1 | 68,700 | 2,957,535 | |||||||||
Patterson Cos., Inc.1 | 105,900 | 5,227,224 | |||||||||
21,035,566 | |||||||||||
Hotels, restaurants & leisure—2.27% | |||||||||||
MGM Resorts International* | 136,035 | 3,262,119 | |||||||||
SeaWorld Entertainment, Inc.1 | 220,000 | 3,388,000 | |||||||||
The Cheesecake Factory, Inc.1 | 96,250 | 4,979,013 | |||||||||
11,629,132 | |||||||||||
Household durables—2.51% | |||||||||||
Ethan Allen Interiors, Inc.1 | 44,260 | 1,537,150 | |||||||||
KB Home1 | 166,420 | 2,612,794 | |||||||||
Newell Brands, Inc. | 89,275 | 4,683,366 | |||||||||
Whirlpool Corp. | 21,000 | 4,039,560 | |||||||||
12,872,870 | |||||||||||
Household products—0.49% | |||||||||||
WD-40 Co.1 | 22,000 | 2,529,560 | |||||||||
Insurance—3.30% | |||||||||||
Crawford & Co., Class B | 14,335 | 157,398 | |||||||||
Endurance Specialty Holdings Ltd. | 108,935 | 7,367,274 | |||||||||
RLI Corp.1 | 59,500 | 4,056,115 | |||||||||
Selective Insurance Group, Inc. | 71,075 | 2,783,297 | |||||||||
XL Group Ltd. | 72,880 | 2,522,377 | |||||||||
16,886,461 | |||||||||||
IT services—7.04% | |||||||||||
Broadridge Financial Solutions, Inc. | 71,200 | 4,818,816 | |||||||||
Cass Information Systems, Inc. | 80,550 | 4,186,184 | |||||||||
CoreLogic, Inc.* | 112,640 | 4,537,139 | |||||||||
Endurance International Group Holdings, Inc.* | 339,652 | 3,050,075 | |||||||||
EVERTEC, Inc. | 260,500 | 4,480,600 | |||||||||
Jack Henry & Associates, Inc. | 54,450 | 4,859,662 | |||||||||
Leidos Holdings, Inc.1 | 63,175 | 3,159,382 | |||||||||
Syntel, Inc.*,1 | 95,000 | 4,304,450 | |||||||||
WEX, Inc.*,1 | 28,464 | 2,666,508 | |||||||||
36,062,816 | |||||||||||
Leisure products—0.52% | |||||||||||
Polaris Industries, Inc.1 | 27,000 | 2,666,250 | |||||||||
Life sciences tools & services—0.83% | |||||||||||
Bio-Rad Laboratories, Inc., Class A*,1 | 11,200 | 1,625,008 | |||||||||
Charles River Laboratories International, Inc.* | 22,320 | 1,962,598 | |||||||||
PerkinElmer, Inc. | 11,270 | 641,488 | |||||||||
4,229,094 | |||||||||||
Machinery—5.42% | |||||||||||
Actuant Corp., Class A1 | 72,200 | 1,714,750 | |||||||||
Allison Transmission Holdings, Inc. | 30,840 | 888,809 | |||||||||
Donaldson Co., Inc.1 | 78,000 | 2,818,140 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Machinery—(concluded) | |||||||||||
Graco, Inc.1 | 59,800 | $ | 4,425,798 | ||||||||
Harsco Corp. | 161,770 | 1,583,728 | |||||||||
IDEX Corp. | 29,100 | 2,612,889 | |||||||||
ITT, Inc. | 155,645 | 4,935,503 | |||||||||
RBC Bearings, Inc.*,1 | 62,700 | 4,767,081 | |||||||||
Snap-on, Inc. | 25,700 | 4,039,269 | |||||||||
27,785,967 | |||||||||||
Marine—0.62% | |||||||||||
Kirby Corp.*,1 | 58,010 | 3,160,965 | |||||||||
Media—1.91% | |||||||||||
Cinemark Holdings, Inc., Class A | 142,000 | 5,339,200 | |||||||||
Gray Television, Inc.*,1 | 115,020 | 1,138,698 | |||||||||
TEGNA, Inc.1 | 151,915 | 3,326,939 | |||||||||
9,804,837 | |||||||||||
Metals & mining—0.69% | |||||||||||
Alcoa, Inc.1 | 241,320 | 2,562,818 | |||||||||
TimkenSteel Corp. | 95,325 | 955,157 | |||||||||
3,517,975 | |||||||||||
Multi-utilities—1.09% | |||||||||||
Ameren Corp. | 26,700 | 1,400,148 | |||||||||
Black Hills Corp. | 66,465 | 4,190,618 | |||||||||
5,590,766 | |||||||||||
Oil, gas & consumable fuels—4.61% | |||||||||||
Devon Energy Corp. | 25,905 | 991,643 | |||||||||
Diamondback Energy, Inc.* | 29,200 | 2,563,468 | |||||||||
Encana Corp. | 358,810 | 2,888,421 | |||||||||
Energen Corp. | 65,280 | 3,092,967 | |||||||||
Newfield Exploration Co.*,1 | 32,590 | 1,411,147 | |||||||||
Oasis Petroleum, Inc.* | 180,510 | 1,371,876 | |||||||||
RSP Permian, Inc.*,1 | 53,060 | 1,907,507 | |||||||||
Targa Resources Corp. | 93,505 | 3,483,996 | |||||||||
Tesoro Corp. | 11,255 | 857,068 | |||||||||
Whiting Petroleum Corp.*,1 | 255,790 | 1,885,172 | |||||||||
WPX Energy, Inc.*,1 | 316,810 | 3,164,932 | |||||||||
23,618,197 | |||||||||||
Professional services—2.21% | |||||||||||
CEB, Inc.1 | 56,450 | 3,389,258 | |||||||||
Equifax, Inc. | 22,400 | 2,967,104 | |||||||||
Korn/Ferry International | 117,110 | 2,694,701 | |||||||||
Resources Connection, Inc. | 151,238 | 2,253,446 | |||||||||
11,304,509 | |||||||||||
Real estate investment trusts—6.13% | |||||||||||
Alexandria Real Estate Equities, Inc.1 | 28,940 | 3,249,962 | |||||||||
CBL & Associates Properties, Inc. | 74,545 | 916,158 | |||||||||
Cousins Properties, Inc. | 415,300 | 4,418,792 | |||||||||
DuPont Fabros Technology, Inc. | 36,840 | 1,762,057 | |||||||||
Hudson Pacific Properties, Inc. | 88,000 | 2,975,280 | |||||||||
Ladder Capital Corp., Class A | 112,000 | 1,462,720 | |||||||||
Liberty Property Trust | 30,145 | 1,247,400 | |||||||||
Parkway Properties, Inc. | 204,500 | 3,552,165 |
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PACE Small/Medium Co Value Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Real estate investment trusts—(concluded) | |||||||||||
PennyMac Mortgage Investment Trust | 186,201 | $ | 3,022,042 | ||||||||
Physicians Realty Trust1 | 156,075 | 3,389,949 | |||||||||
Ryman Hospitality Properties, Inc. | 17,235 | 969,297 | |||||||||
Sunstone Hotel Investors, Inc. | 179,530 | 2,387,749 | |||||||||
Tanger Factory Outlet Centers, Inc. | 49,475 | 2,065,087 | |||||||||
31,418,658 | |||||||||||
Real estate management & development—0.85% | |||||||||||
CBRE Group, Inc., Class A* | 152,905 | 4,350,147 | |||||||||
Road & rail—1.78% | |||||||||||
Knight Transportation, Inc.1 | 84,500 | 2,520,635 | |||||||||
Landstar System, Inc.1 | 93,400 | 6,583,766 | |||||||||
9,104,401 | |||||||||||
Semiconductors & semiconductor equipment—2.58% | |||||||||||
Inphi Corp.*,1 | 48,630 | 1,710,803 | |||||||||
Lam Research Corp. | 22,860 | 2,052,142 | |||||||||
Microsemi Corp.*,1 | 91,545 | 3,570,255 | |||||||||
Qorvo, Inc.* | 34,350 | 2,171,951 | |||||||||
Skyworks Solutions, Inc.1 | 56,000 | 3,697,120 | |||||||||
13,202,271 | |||||||||||
Software—1.18% | |||||||||||
American Software, Inc., Class A | 358,700 | 3,956,461 | |||||||||
Nuance Communications, Inc.* | 130,000 | 2,089,100 | |||||||||
6,045,561 | |||||||||||
Specialty retail—2.55% | |||||||||||
Ascena Retail Group, Inc.*,1 | 505,855 | 4,112,601 | |||||||||
Party City Holdco, Inc.*,1 | 213,850 | 3,425,877 | |||||||||
Pier 1 Imports, Inc.1 | 502,800 | 2,574,336 | |||||||||
Ross Stores, Inc.1 | 48,100 | 2,974,023 | |||||||||
13,086,837 | |||||||||||
Technology hardware, storage & peripherals—1.00% | |||||||||||
Diebold, Inc.1 | 71,378 | 2,015,715 | |||||||||
Wincor Nixdorf AG, ADR* | 252,500 | 3,098,175 | |||||||||
5,113,890 |
Number of Shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
Textiles, apparel & luxury goods—1.11% | |||||||||||
PVH Corp. | 56,500 | $ | 5,709,890 | ||||||||
Thrifts & mortgage finance—1.80% | |||||||||||
Essent Group Ltd.*,1 | 130,000 | 3,114,800 | |||||||||
EverBank Financial Corp. | 158,600 | 2,848,456 | |||||||||
Washington Federal, Inc. | 130,600 | 3,265,000 | |||||||||
9,228,256 | |||||||||||
Trading companies & distributors—0.54% | |||||||||||
AerCap Holdings N.V.* | 23,670 | 864,192 | |||||||||
Air Lease Corp.1 | 65,850 | 1,897,138 | |||||||||
2,761,330 | |||||||||||
Total common stocks (cost—$456,593,333) | 496,039,864 | ||||||||||
Face Amount | |||||||||||
Repurchase agreement—4.65% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $1,921,538 US Treasury Bond, 7.875% due 02/15/21 and $21,156,416 US Treasury Notes, 0.750% to 2.250% due 12/31/17 to 07/31/21; (value—$24,296,829); proceeds: $23,820,020 (cost—$23,820,000) | $ | 23,820,000 | 23,820,000 | ||||||||
Number of Shares | |||||||||||
Investment of cash collateral from securities loaned—3.33% | |||||||||||
Money market fund—3.33% | |||||||||||
State Street Institutional U.S. Government Money Market Fund (cost—$17,050,926) | 17,050,926 | 17,050,926 | |||||||||
Total investments (cost—$497,464,259)—104.77% | 536,910,790 | ||||||||||
Liabilities in excess of other assets—(4.77)% | (24,457,861 | ) | |||||||||
Net assets—100.00% | $ | 512,452,929 |
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 262.
Aggregate cost for federal income tax purposes was $500,821,940; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 62,926,820 | |||||
Gross unrealized depreciation | (26,837,970 | ) | |||||
Net unrealized appreciation | $ | 36,088,850 |
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PACE Small/Medium Co Value Equity Investments
Portfolio of investments—July 31, 2016
Affiliated issuer activity
The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2016. 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 07/31/15 | Purchases during the year ended 07/31/16 | Sales during the year ended 07/31/16 | Value at 07/31/16 | Net income earned from affiliate for the year ended 07/31/16 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 30,655,405 | $ | 202,604,354 | $ | 233,259,759 | $ | — | $ | 33,804 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | 496,039,864 | $ | — | $ | — | $ | 496,039,864 | |||||||||||
Repurchase agreement | — | 23,820,000 | — | 23,820,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 17,050,926 | — | 17,050,926 | |||||||||||||||
Total | $ | 496,039,864 | $ | 40,870,926 | $ | — | $ | 536,910,790 |
At July 31, 2016, 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 | 91.7 | % | |||||
Bermuda | 3.7 | ||||||
Canada | 0.9 | ||||||
Netherlands | 0.9 | ||||||
Puerto Rico | 0.8 | ||||||
Venezuela | 0.8 | ||||||
Israel | 0.6 | ||||||
Denmark | 0.6 | ||||||
Total | 100.0 | % |
Portfolio footnotes
* Non-income producing security.
1 Security, or portion thereof, was on loan at July 31, 2016.
See accompanying notes to financial statements.
173
PACE Small/Medium Co Growth Equity Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares returned -11.07% before the deduction of the maximum PACE Select program fee.1 In comparison, the Russell 2500 Growth Index (the "benchmark") returned -3.35%, and the Lipper Small-Cap Growth Funds category posted a median return of -5.61%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 177. 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 3.
Subadvisors' comments (Unaudited)2
Riverbridge Partners
Our portion of the Portfolio outperformed the benchmark during the reporting period. Over the period, global shocks to the market, such as slowing growth in China, turmoil in Greece and other European economies, declining oil prices, and Brexit led to a sentiment shift away from cyclical businesses—defined as those more sensitive to economic growth—towards a preference for high-quality companies with higher return on invested capital in which we invest. Volatility was also significant at times during the period.
Stock selection was the primary driver of our outperformance. The top performing sector was health care. In addition to solid returns of individual positions, our lack of exposure to biotechnology stocks contributed to results. Our consumer discretionary and information technology holdings were also beneficial for returns. The primary detractor from performance was stock selection within the financials sector.
We believe the market events of the past 12 months demonstrate the strength of our investment philosophy. We invest in companies and management teams that are making decisions to position themselves for the next decade, not the next quarter. Therefore, our companies do not tend to get whipsawed by short-term economic fears. Our investment team keeps its focus on our companies' long-term earnings power as opposed to next quarter's earnings. While it can be difficult to maintain a longer-term focus in the face of ominous news and fear of the unknown, investors are well-served in avoiding emotionally based investment decisions.
Derivatives were not used during the reporting period.
LMCG Investments, LLC (formerly Lee Munder Capital Group)
Our portion of the Portfolio underperformed the benchmark during the reporting period. The past 12 months have been a challenging market environment for our investment strategy. As persistent concerns over global growth have given way to increased volatility, our strategy has struggled to
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 subadvisors 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 Growth Equity Investments
Investment Manager:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisors:
Riverbridge Partners, LLC ("Riverbridge"); LMCG Investments, LLC, formerly Lee Munder Capital Group ("LMCG");
Timpani Capital Management LLC ("Timpani")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Fred Lee, CFA, Vincent Russo, Mayoor Joshi and Diana To
Riverbridge: Mark Thompson;
LMCG: Andrew Morey;
Timpani: Brandon Nelson
Objective:
Capital appreciation
Investment process:
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.
LMCG seeks to achieve competitive returns in small/medium capitalization companies by identifying unrecognized growth potential, wherever it
(continued on next page)
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PACE Small/Medium Co Growth Equity Investments
Subadvisors' comments (Unaudited) – continued
add value versus the benchmark. In this environment, investors have shunned companies with complicated or unrecognized qualities, which are hallmarks of our growth strategy. We seek to identify unrecognized growth potential, wherever it exists, across all sectors and industries. Conversely, investors bid up stocks with the most recognized or obvious growth, regardless of valuation, which is an important factor in our process as well. Our response as a team during these difficult periods is to review the investment theses for each stock in our portfolio, evaluate new opportunities created by market volatility and stay loyal to the discipline of our process that has resulted in strong long-term results for our clients.
Our underperformance during the reporting period was spread across several sectors. In particular, our industrials, health care and financials holdings all struggled. In industrials, companies in the professional services and building products industries fared poorly, while our overweight to health care, combined with poor stock selection, weighed on performance comparisons in that sector. Real estate investment trusts ("REITs") were our largest detractor in financials. On the positive side, our underweight to energy and overweight to telecommunication services, combined with good stock selection in both sectors, helped offset some of the relative underperformance in our portion of the Portfolio.
Derivatives were not used during the reporting period.
Timpani Capital Management
Our portion of the Portfolio underperformed the benchmark during the reporting period. For almost the entire period, our earnings momentum investment approach was not embraced by the market. On numerous occasions, we saw our higher growth investments meet and exceed our expectations, but they failed to be rewarded by investors. In other words, valuation multiples compressed for many high-quality, secular-growth stocks. Meanwhile, as long-term interest rates continued to trend lower, investors drove valuations higher for many dividend-paying and lower-growth stocks, such as utilities, real estate investment trusts ("REITs") and consumer staples. As we tend to be "growthier" than the benchmark, these rotations worked against us, making it one of the most challenging 12-month periods in the firm's history.
Both sector allocation and stock selection detracted from results, with the latter producing the majority of the negative impact, typical of stylistic headwind periods. An underweight in consumer staples was the most notable negative contributor from an allocation standpoint. Stock selection was the most negative in health care and consumer discretionary, while it was moderately positive within energy. There were several bright spots with some individual holdings. Stand-out individual contributors included technology companies Fabrinet and Gigamon, along with health care company Ligand Pharmaceuticals. Detractors from results included two of our biggest winners from
Investment process
(concluded)
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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PACE Small/Medium Co Growth Equity Investments
Subadvisors' comments (Unaudited) – concluded
the previous PACE annual report: Adeptus Health and Horizon Pharma. Both stocks were sold as their fundamentals deteriorated. However, Horizon Pharma was recently purchased again given an improving outlook.
Despite this difficult 12 month period, we like the set-up for our prospects going forward. The sluggish global economy is creating a favorable backdrop for our high-quality, secular-growth stock investments. In addition, valuations for many of our growth stocks have compressed to more favorable levels in recent months. Finally, we believe the length and magnitude of the recent stylistic headwinds for us have been particularly severe. Careful analysis suggests these headwinds will inevitably reverse course over time.
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.
176
PACE Small/Medium Co Growth Equity Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | (11.20 | )% | 8.04 | % | 7.43 | % | |||||||||
Class C2 | (11.93 | ) | 7.22 | 6.61 | |||||||||||
Class Y3 | (11.11 | ) | 8.17 | 7.65 | |||||||||||
Class P4 | (11.07 | ) | 8.20 | 7.61 | |||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (16.09 | ) | 6.82 | 6.82 | |||||||||||
Class C2 | (12.59 | ) | 7.22 | 6.61 | |||||||||||
Russell 2500 Growth Index5 | (3.35 | ) | 11.42 | 9.13 | |||||||||||
Lipper Small-Cap Growth Funds median | (5.61 | ) | 9.49 | 7.79 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | (13.73 | )% | 6.25 | % | 6.47 | % | |||||||||
Class C2 | (14.36 | ) | 5.44 | 5.66 | |||||||||||
Class Y3 | (13.61 | ) | 6.39 | 6.70 | |||||||||||
Class P4 | (13.58 | ) | 6.39 | 6.65 | |||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (18.48 | ) | 5.05 | 5.87 | |||||||||||
Class C2 | (15.00 | ) | 5.44 | 5.66 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, were as follows: Class A—1.24% and 1.24%; Class C—1.99% and 1.99%; Class Y—1.13% and 1.13%; and Class P—1.10% and 1.10%. 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS 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, 2016 (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 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 AM. Upon termination of the agreement, however, UBS AM's three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 5.50%. Class A shares bear ongoing 12b-1 service fees of 0.25% annually.
2 Maximum contingent deferred sales charge for Class C shares is 1.00% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees of 0.25% and 0.75% annually, respectively.
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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualfundperformance.
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.
177
PACE Small/Medium Co Growth Equity 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 Small/Medium Co Growth Equity Investments Class P shares versus the Russell 2500 Growth Index over the 10 years ended July 31, 2016. 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.
PACE Small/Medium Co Growth Equity Investments
178
PACE Small/Medium Co Growth Equity Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Net assets (mm) | $ | 469.5 | |||||
Number of holdings | 199 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Common stocks, ADRs and rights | 98.0 | % | |||||
Cash equivalents and other assets less liabilities | 2.0 | ||||||
Total | 100.0 | % | |||||
Top five sectors1 | 07/31/16 | ||||||
Information technology | 31.9 | % | |||||
Health care | 23.0 | ||||||
Industrials | 14.9 | ||||||
Consumer discretionary | 15.0 | ||||||
Financials | 5.4 | ||||||
Total | 90.2 | % | |||||
Top ten equity holdings1 | 07/31/16 | ||||||
Synchronoss Technologies, Inc. | 2.3 | % | |||||
athenahealth, Inc. | 2.3 | ||||||
Nexstar Broadcasting Group, Inc., Class A | 2.2 | ||||||
MAXIMUS, Inc. | 1.8 | ||||||
Ultimate Software Group, Inc. | 1.7 | ||||||
Casey's General Stores, Inc. | 1.7 | ||||||
CoStar Group, Inc. | 1.6 | ||||||
FleetMatics Group PLC | 1.6 | ||||||
SS&C Technologies Holdings, Inc. | 1.6 | ||||||
National Instruments Corp. | 1.5 | ||||||
Total | 18.3 | % |
For a listing of defined portfolio acronyms that are used throughout the Portfolio statistics, please refer to page 262.
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
179
PACE Small/Medium Co Growth Equity Investments
Portfolio of Investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—98.01% | |||||||||||
Aerospace & defense—1.25% | |||||||||||
HEICO Corp.1 | 72,433 | $ | 5,034,818 | ||||||||
KEYW Holding Corp/The*,1 | 17,584 | 180,060 | |||||||||
TransDigm Group, Inc.* | 2,356 | 658,549 | |||||||||
5,873,427 | |||||||||||
Air freight & logistics—0.76% | |||||||||||
Air Transport Services Group, Inc.* | 26,725 | 386,978 | |||||||||
Forward Air Corp. | 45,570 | 2,108,979 | |||||||||
XPO Logistics, Inc.*,1 | 36,387 | 1,077,783 | |||||||||
3,573,740 | |||||||||||
Auto components—2.32% | |||||||||||
Dorman Products, Inc.*,1 | 86,710 | 5,523,427 | |||||||||
Gentex Corp.1 | 286,099 | 5,055,370 | |||||||||
Motorcar Parts of America, Inc.* | 10,608 | 297,342 | |||||||||
10,876,139 | |||||||||||
Banks—0.50% | |||||||||||
SVB Financial Group* | 10,290 | 1,033,322 | |||||||||
Western Alliance Bancorp* | 38,768 | 1,319,275 | |||||||||
2,352,597 | |||||||||||
Beverages—0.35% | |||||||||||
National Beverage Corp.* | 26,235 | 1,504,839 | |||||||||
Primo Water Corp.* | 9,857 | 118,087 | |||||||||
1,622,926 | |||||||||||
Biotechnology—4.47% | |||||||||||
ACADIA Pharmaceuticals, Inc.*,1 | 102,573 | 3,799,304 | |||||||||
Alder Biopharmaceuticals, Inc.*,1 | 30,700 | 985,470 | |||||||||
Alnylam Pharmaceuticals, Inc.* | 21,466 | 1,461,405 | |||||||||
Cepheid, Inc.*,1 | 152,532 | 5,388,956 | |||||||||
Ligand Pharmaceuticals, Inc.*,1 | 12,465 | 1,681,279 | |||||||||
Neurocrine Biosciences, Inc.* | 70,878 | 3,560,202 | |||||||||
Radius Health, Inc.*,1 | 51,201 | 2,412,591 | |||||||||
Ultragenyx Pharmaceutical, Inc.*,1 | 26,632 | 1,685,273 | |||||||||
20,974,480 | |||||||||||
Building products—1.15% | |||||||||||
American Woodmark Corp.* | 3,483 | 258,543 | |||||||||
Apogee Enterprises, Inc. | 51,261 | 2,396,452 | |||||||||
Masonite International Corp.* | 35,713 | 2,493,839 | |||||||||
Quanex Building Products Corp. | 13,179 | 263,448 | |||||||||
5,412,282 | |||||||||||
Capital markets—0.66% | |||||||||||
Financial Engines, Inc.1 | 117,075 | 3,089,609 | |||||||||
Commercial services & supplies—4.28% | |||||||||||
Healthcare Services Group, Inc.1 | 161,165 | 6,254,814 | |||||||||
HNI Corp. | 52,228 | 2,722,646 | |||||||||
Innerworkings, Inc.* | 179,352 | 1,526,285 | |||||||||
Mobile Mini, Inc.1 | 102,277 | 3,325,025 | |||||||||
Ritchie Brothers Auctioneers, Inc.1 | 189,223 | 6,282,204 | |||||||||
20,110,974 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Communications equipment—0.55% | |||||||||||
Digi International, Inc.* | 184,847 | $ | 2,053,650 | ||||||||
Lumentum Holdings, Inc.* | 18,077 | 546,829 | |||||||||
2,600,479 | |||||||||||
Construction & engineering—1.65% | |||||||||||
Dycom Industries, Inc.* | 65,598 | 6,169,492 | |||||||||
Granite Construction, Inc. | 11,327 | 563,858 | |||||||||
MasTec, Inc.* | 22,956 | 561,274 | |||||||||
NV5 Global, Inc.* | 13,950 | 448,772 | |||||||||
7,743,396 | |||||||||||
Construction materials—1.64% | |||||||||||
Headwaters, Inc.* | 27,904 | 555,011 | |||||||||
Summit Materials, Inc., Class A* | 263,104 | 5,825,123 | |||||||||
US Concrete, Inc.* | 20,177 | 1,301,416 | |||||||||
7,681,550 | |||||||||||
Consumer finance—0.83% | |||||||||||
PRA Group, Inc.*,1 | 140,276 | 3,908,089 | |||||||||
Containers & packaging—0.32% | |||||||||||
Berry Plastics Group, Inc.* | 37,116 | 1,521,756 | |||||||||
Distributors—0.06% | |||||||||||
Pool Corp. | 2,548 | 260,609 | |||||||||
Diversified consumer services—1.49% | |||||||||||
Grand Canyon Education, Inc.* | 166,797 | 7,015,482 | |||||||||
Diversified financial services—0.13% | |||||||||||
MarketAxess Holdings, Inc. | 3,629 | 586,664 | |||||||||
Diversified telecommunication services—0.98% | |||||||||||
Zayo Group Holdings, Inc.* | 162,361 | 4,594,816 | |||||||||
Electrical equipment—0.50% | |||||||||||
Acuity Brands, Inc. | 8,947 | 2,347,961 | |||||||||
Electronic equipment, instruments & components—3.63% | |||||||||||
Belden, Inc. | 38,772 | 2,838,498 | |||||||||
Cognex Corp. | 97,110 | 4,386,459 | |||||||||
Coherent, Inc.* | 7,250 | 768,863 | |||||||||
CUI Global, Inc.*,1 | 10,836 | 53,638 | |||||||||
Fabrinet* | 20,873 | 788,164 | |||||||||
National Instruments Corp. | 247,332 | 7,093,482 | |||||||||
NeoPhotonics Corp.* | 43,523 | 546,214 | |||||||||
Orbotech Ltd.* | 19,189 | 547,462 | |||||||||
17,022,780 | |||||||||||
Food & staples retailing—2.91% | |||||||||||
Casey's General Stores, Inc. | 57,973 | 7,741,715 | |||||||||
Rite Aid Corp.* | 265,266 | 1,856,862 | |||||||||
United Natural Foods, Inc.* | 81,238 | 4,060,275 | |||||||||
13,658,852 |
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PACE Small/Medium Co Growth Equity Investments
Portfolio of Investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Food products—1.53% | |||||||||||
Calavo Growers, Inc.1 | 59,347 | $ | 3,903,846 | ||||||||
Darling International, Inc.* | 23,067 | 363,997 | |||||||||
Freshpet, Inc.*,1 | 264,829 | 2,314,605 | |||||||||
TreeHouse Foods, Inc.* | 5,840 | 602,630 | |||||||||
7,185,078 | |||||||||||
Health care equipment & supplies—4.26% | |||||||||||
ABIOMED, Inc.* | 5,411 | 638,336 | |||||||||
AxoGen, Inc.* | 17,728 | 119,132 | |||||||||
Chembio Diagnostics, Inc.* | 9,114 | 63,160 | |||||||||
Cynosure, Inc., Class A* | 13,331 | 732,672 | |||||||||
ICU Medical, Inc.* | 4,218 | 492,494 | |||||||||
Inogen, Inc.* | 3,592 | 193,034 | |||||||||
iRadimed Corp.*,1 | 13,870 | 268,523 | |||||||||
Neogen Corp.*,1 | 52,422 | 2,891,073 | |||||||||
Nevro Corp.*,1 | 47,529 | 3,930,648 | |||||||||
Novadaq Technologies, Inc.*,1 | 245,465 | 2,616,657 | |||||||||
NuVasive, Inc.* | 12,652 | 786,954 | |||||||||
Penumbra, Inc.* | 7,291 | 498,048 | |||||||||
STERIS PLC | 47,724 | 3,386,018 | |||||||||
Zeltiq Aesthetics, Inc.*,1 | 99,426 | 3,375,513 | |||||||||
19,992,262 | |||||||||||
Health care providers & services—7.64% | |||||||||||
Adeptus Health, Inc., Class A*,1 | 16,054 | 715,527 | |||||||||
Amedisys, Inc.* | 13,763 | 737,009 | |||||||||
AMN Healthcare Services, Inc.* | 12,282 | 519,528 | |||||||||
Amsurg Corp.* | 63,171 | 4,738,457 | |||||||||
BioTelemetry, Inc.* | 13,330 | 253,536 | |||||||||
Centene Corp.* | 45,133 | 3,184,133 | |||||||||
Chemed Corp.1 | 38,155 | 5,614,127 | |||||||||
Cross Country Healthcare, Inc.* | 39,501 | 577,505 | |||||||||
Diplomat Pharmacy, Inc.*,1 | 89,180 | 3,204,237 | |||||||||
Envision Healthcare Holdings, Inc.* | 34,591 | 850,593 | |||||||||
HealthSouth Corp. | 146,835 | 6,321,247 | |||||||||
Premier, Inc., Class A* | 92,215 | 3,015,430 | |||||||||
Tenet Healthcare Corp.* | 196,057 | 6,001,305 | |||||||||
The Ensign Group, Inc. | 6,923 | 148,844 | |||||||||
35,881,478 | |||||||||||
Health care technology—4.45% | |||||||||||
athenahealth, Inc.*,1 | 83,223 | 10,635,067 | |||||||||
HealthStream, Inc.* | 127,170 | 3,081,329 | |||||||||
Inovalon Holdings, Inc., Class A*,1 | 150,295 | 2,798,493 | |||||||||
Veeva Systems, Inc., Class A*,1 | 115,225 | 4,377,398 | |||||||||
20,892,287 | |||||||||||
Hotels, restaurants & leisure—4.28% | |||||||||||
Chuy's Holdings, Inc.* | 14,191 | 478,520 | |||||||||
Dave & Buster's Entertainment, Inc.* | 38,434 | 1,710,313 | |||||||||
Noodles & Co.*,1 | 109,777 | 811,252 | |||||||||
Papa John's International, Inc. | 28,387 | 2,099,219 | |||||||||
Red Lion Hotels Corp.* | 20,284 | 161,055 | |||||||||
Sonic Corp. | 199,014 | 5,355,467 | |||||||||
The Cheesecake Factory, Inc.1 | 61,735 | 3,193,552 | |||||||||
Vail Resorts, Inc. | 42,803 | 6,123,825 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Hotels, restaurants & leisure—(concluded) | |||||||||||
Zoe's Kitchen, Inc.* | 4,826 | $ | 171,516 | ||||||||
20,104,719 | |||||||||||
Household durables—1.03% | |||||||||||
CalAtlantic Group, Inc. | 99,462 | 3,601,519 | |||||||||
Century Communities, Inc.* | 17,305 | 306,298 | |||||||||
Installed Building Products, Inc.* | 9,312 | 333,649 | |||||||||
LGI Homes, Inc.*,1 | 17,551 | 602,526 | |||||||||
4,843,992 | |||||||||||
Insurance—0.25% | |||||||||||
Primerica, Inc.1 | 22,777 | 1,173,243 | |||||||||
Internet & catalog retail—0.24% | |||||||||||
Wayfair, Inc., Class A*,1 | 25,619 | 1,114,426 | |||||||||
Internet software & services—3.88% | |||||||||||
2U, Inc.*,1 | 102,510 | 3,585,800 | |||||||||
Alarm.com Holdings, Inc.* | 8,400 | 241,332 | |||||||||
Apigee Corp.* | 15,229 | 189,449 | |||||||||
Autobytel, Inc.* | 16,804 | 249,707 | |||||||||
Benefitfocus, Inc.*,1 | 7,601 | 326,843 | |||||||||
Carbonite, Inc.* | 10,227 | 112,599 | |||||||||
ChannelAdvisor Corp.* | 114,644 | 1,806,789 | |||||||||
Five9, Inc.* | 51,357 | 647,612 | |||||||||
GTT Communications, Inc.* | 27,193 | 558,272 | |||||||||
Internap Corp.* | 736,865 | 1,635,840 | |||||||||
LogMeIn, Inc.* | 10,236 | 879,375 | |||||||||
Perficient, Inc.* | 7,780 | 172,872 | |||||||||
Q2 Holdings, Inc.* | 14,265 | 423,385 | |||||||||
Shopify, Inc.* | 25,777 | 883,378 | |||||||||
SPS Commerce, Inc.*,1 | 96,655 | 6,120,195 | |||||||||
Stamps.com, Inc.*,1 | 4,733 | 358,785 | |||||||||
18,192,233 | |||||||||||
IT services—5.44% | |||||||||||
Cass Information Systems, Inc.1 | 52,363 | 2,721,305 | |||||||||
Echo Global Logistics, Inc.* | 109,151 | 2,702,579 | |||||||||
Euronet Worldwide, Inc.* | 58,018 | 4,424,453 | |||||||||
InterXion Holding NV* | 108,137 | 4,096,230 | |||||||||
MAXIMUS, Inc.1 | 143,686 | 8,465,979 | |||||||||
PFSweb, Inc.* | 27,666 | 274,170 | |||||||||
Planet Payment, Inc.* | 19,242 | 90,245 | |||||||||
Vantiv, Inc., Class A* | 50,616 | 2,772,238 | |||||||||
25,547,199 | |||||||||||
Leisure products—0.15% | |||||||||||
MCBC Holdings, Inc. | 10,749 | 123,399 | |||||||||
Nautilus, Inc.* | 31,554 | 594,477 | |||||||||
717,876 | |||||||||||
Life sciences tools & services—1.66% | |||||||||||
Bio-Techne Corp. | 42,390 | 4,765,484 | |||||||||
Cambrex Corp.* | 7,776 | 407,540 | |||||||||
NeoGenomics, Inc.* | 46,076 | 401,783 | |||||||||
PAREXEL International Corp.* | 33,067 | 2,210,529 | |||||||||
7,785,336 |
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PACE Small/Medium Co Growth Equity Investments
Portfolio of Investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Machinery—1.05% | |||||||||||
John Bean Technologies Corp. | 6,998 | $ | 468,306 | ||||||||
Manitowoc Foodservice, Inc.* | 5,828 | 106,886 | |||||||||
Proto Labs, Inc.*,1 | 79,005 | 4,348,435 | |||||||||
4,923,627 | |||||||||||
Media—2.16% | |||||||||||
Nexstar Broadcasting Group, Inc., Class A1 | 200,196 | 10,119,908 | |||||||||
Multiline retail—0.16% | |||||||||||
Burlington Stores, Inc.* | 9,867 | 754,924 | |||||||||
Pharmaceuticals—0.51% | |||||||||||
Dipexium Pharmaceuticals, Inc.*,1 | 12,056 | 125,865 | |||||||||
Heska Corp.* | 17,240 | 733,562 | |||||||||
Horizon Pharma PLC* | 17,152 | 330,862 | |||||||||
Pacira Pharmaceuticals Inc/DE*,1 | 26,354 | 955,332 | |||||||||
Supernus Pharmaceuticals, Inc.* | 10,662 | 236,910 | |||||||||
2,382,531 | |||||||||||
Professional services—2.65% | |||||||||||
CoStar Group, Inc.* | 36,021 | 7,488,766 | |||||||||
Mistras Group, Inc.* | 8,943 | 224,111 | |||||||||
The Advisory Board Co.*,1 | 113,300 | 4,731,408 | |||||||||
12,444,285 | |||||||||||
Real estate investment trusts—2.38% | |||||||||||
DuPont Fabros Technology, Inc. | 17,912 | 856,731 | |||||||||
National Storage Affiliates Trust | 160,289 | 3,425,376 | |||||||||
QTS Realty Trust, Inc. | 35,475 | 2,030,943 | |||||||||
Sovran Self Storage, Inc. | 47,586 | 4,871,379 | |||||||||
11,184,429 | |||||||||||
Road & rail—0.04% | |||||||||||
Knight Transportation, Inc. | 6,432 | 191,867 | |||||||||
Semiconductors & semiconductor equipment—4.75% | |||||||||||
Cabot Microelectronics Corp. | 83,471 | 4,392,244 | |||||||||
Cavium, Inc.*,1 | 97,885 | 4,568,293 | |||||||||
CEVA, Inc.* | 31,099 | 934,836 | |||||||||
M/A-COM Technology Solutions Holdings, Inc.* | 81,806 | 3,232,155 | |||||||||
Microsemi Corp.* | 140,820 | 5,491,980 | |||||||||
Power Integrations, Inc. | 64,740 | 3,694,712 | |||||||||
22,314,220 | |||||||||||
Software—13.57% | |||||||||||
A10 Networks, Inc.* | 6,177 | 48,304 | |||||||||
BroadSoft, Inc.* | 15,872 | 711,542 | |||||||||
CommVault Systems, Inc.* | 16,227 | 839,585 | |||||||||
CyberArk Software Ltd.* | 5,353 | 301,856 | |||||||||
Ellie Mae, Inc.*,1 | 54,543 | 5,023,956 | |||||||||
FleetMatics Group PLC*,1 | 173,855 | 7,468,811 | |||||||||
Gigamon, Inc.* | 24,768 | 1,157,161 | |||||||||
Manhattan Associates, Inc.* | 48,627 | 2,822,797 | |||||||||
Paycom Software, Inc.*,1 | 9,624 | 454,349 | |||||||||
Paylocity Holding Corp.*,1 | 56,645 | 2,528,633 | |||||||||
Pegasystems, Inc. | 153,229 | 4,275,089 | |||||||||
Proofpoint, Inc.*,1 | 2,858 | 216,836 |
Number of Shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
Software—(concluded) | |||||||||||
PROS Holdings, Inc.*,1 | 154,050 | $ | 2,862,249 | ||||||||
SS&C Technologies Holdings, Inc. | 230,110 | 7,414,144 | |||||||||
Synchronoss Technologies, Inc.* | 285,145 | 10,647,314 | |||||||||
The Rubicon Project, Inc.* | 17,136 | 241,960 | |||||||||
TubeMogul, Inc.*,1 | 31,767 | 356,108 | |||||||||
Tyler Technologies, Inc.* | 22,040 | 3,592,961 | |||||||||
Ultimate Software Group, Inc.*,1 | 37,826 | 7,909,417 | |||||||||
Varonis Systems, Inc.* | 8,255 | 212,071 | |||||||||
Verint Systems, Inc.* | 87,095 | 3,071,841 | |||||||||
Zendesk, Inc.*,1 | 51,029 | 1,543,117 | |||||||||
63,700,101 | |||||||||||
Specialty retail—3.14% | |||||||||||
Five Below, Inc.*,1 | 109,536 | 5,587,431 | |||||||||
Lithia Motors, Inc., Class A | 1,884 | 162,570 | |||||||||
Monro Muffler Brake, Inc. | 71,864 | 4,500,124 | |||||||||
The Children's Place, Inc. | 8,649 | 722,884 | |||||||||
Tile Shop Holdings, Inc.* | 221,900 | 3,783,395 | |||||||||
14,756,404 | |||||||||||
Technology hardware, storage & peripherals—0.66% | |||||||||||
Stratasys Ltd.*,1 | 129,180 | 2,705,029 | |||||||||
USA Technologies, Inc.*,1 | 79,904 | 377,147 | |||||||||
3,082,176 | |||||||||||
Thrifts & mortgage finance—0.64% | |||||||||||
BofI Holding, Inc.*,1 | 108,159 | 1,819,234 | |||||||||
LendingTree, Inc.*,1 | 11,566 | 1,167,935 | |||||||||
2,987,169 | |||||||||||
Trading companies & distributors—0.98% | |||||||||||
Aceto Corp. | 8,050 | 206,965 | |||||||||
Beacon Roofing Supply, Inc.* | 93,897 | 4,415,037 | |||||||||
4,622,002 | |||||||||||
Wireless telecommunication services—0.08% | |||||||||||
Boingo Wireless, Inc.* | 41,941 | 384,180 | |||||||||
Total common stocks (cost—$430,148,420) | 460,106,560 | ||||||||||
Number of Rights | |||||||||||
Right—0.02% | |||||||||||
Dyax Corp.*,2,3 (cost—$80,090) | 72,153 | 85,141 |
182
PACE Small/Medium Co Growth Equity Investments
Portfolio of Investments—July 31, 2016
Face Amount | Value | ||||||||||
Repurchase agreement—2.65% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $1,004,572 US Treasury Bond, 7.875% due 02/15/21 and $11,060,489 US Treasury Notes, 0.750% to 2.250% due 12/31/17 to 07/31/21; (value—$12,702,284); proceeds: $12,453,010 (cost—$12,453,000) | $ | 12,453,000 | $ | 12,453,000 |
Number of Shares | Value | ||||||||||
Investment of cash collateral from securities loaned—14.89% | |||||||||||
Money market fund—14.89% | |||||||||||
State Street Institutional U.S. Government Money Market Fund (cost—$69,914,089) | 69,914,089 | $ | 69,914,089 | ||||||||
Total investments (cost—$512,595,599)—115.57% | 542,558,790 | ||||||||||
Liabilities in excess of other assets—(15.57)% | (73,105,631 | ) | |||||||||
Net assets—100.00% | $ | 469,453,159 |
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 262.
Aggregate cost for federal income tax purposes was $514,591,203; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 55,350,048 | |||||
Gross unrealized depreciation | (27,382,461 | ) | |||||
Net unrealized appreciation | $ | 27,967,587 |
Affiliated issuer activity
The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2016. 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 07/31/15 | Purchases during the year ended 07/31/16 | Sales during the year ended 07/31/16 | Value at 07/31/16 | Net income earned from affiliate for the year ended 07/31/16 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 93,660,105 | $ | 340,846,975 | $ | 434,507,080 | $ | — | $ | 74,421 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | 460,106,560 | $ | — | $ | — | $ | 460,106,560 | |||||||||||
Right | — | — | 85,141 | 85,141 | |||||||||||||||
Repurchase agreement | — | 12,453,000 | — | 12,453,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 69,914,089 | — | 69,914,089 | |||||||||||||||
Total | $ | 460,106,560 | $ | 82,367,089 | $ | 85,141 | $ | 542,558,790 |
At July 31, 2016, there were no transfers between Level 1 and Level 2.
183
PACE Small/Medium Co Growth Equity Investments
Portfolio of Investments—July 31, 2016
The following is a rollforward of the Portfolio's investment that was valued using unobservable inputs (Level 3) for the year ended July 31, 2016:
Warrants | Right | Total | |||||||||||||
Beginning balance | $ | 0 | $ | — | $ | — | |||||||||
Purchases | — | 80,090 | 80,090 | ||||||||||||
Issuance | — | — | — | ||||||||||||
Sales | — | — | — | ||||||||||||
Accrued discounts/(premiums) | — | — | — | ||||||||||||
Total realized gain/(loss) | 0 | — | — | ||||||||||||
Net change in unrealized appreciation/depreciation | — | 5,051 | 5,051 | ||||||||||||
Transfers into Level 3 | — | — | — | ||||||||||||
Transfers out of Level 3 | — | — | — | ||||||||||||
Ending balance | $ | — | $ | 85,141 | $ | 85,141 |
The change in net unrealized appreciation/depreciation relating to the Level 3 investment held at July 31, 2016 was $5,051.
Issuer breakdown by country or territory of origin (unaudited)
Percentage of total investments | |||||||
United States | 94.1 | % | |||||
Canada | 2.3 | ||||||
Ireland | 1.4 | ||||||
Netherlands | 0.8 | ||||||
Israel | 0.7 | ||||||
United Kingdom | 0.6 | ||||||
Cayman Islands | 0.1 | ||||||
Total | 100.0 | % |
Portfolio footnotes
* Non-income producing security.
1 Security, or portion thereof, was on loan at July 31, 2016.
2 Illiquid investment as of July 31, 2016.
3 Security is being fair valued by a valuation committee under the direction of the board of trustees.
See accompanying notes to financial statements.
184
PACE International Equity Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares returned -4.09% before the deduction of the maximum PACE Select program fee.1 In comparison, the MSCI EAFE Index (net) (the "benchmark") returned -7.53%, the Lipper International Multi-Cap Growth Funds category had a median return of -4.46%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 188. 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 3.
Special Note: As a result of a transaction resulting in Robert W. Baird & Co. Incorporated owning a controlling interest in Chautauqua Capital Management, LLC, Robert W. Baird & Co. Incorporated became responsible for Chautauqua Capital Management, LLC's portion of the Portfolio effective January 15, 2016.
Subadvisors' comments (Unaudited)2
Mondrian
Our portion of the Portfolio modestly outperformed the benchmark during the reporting period. Stock selection within markets added to our returns. In particular, strong stock selection in Japan and Switzerland was only partially offset by stock selection in France and the UK. Strong performing individual holdings included Ahold, National Grid and Tokyo Electron. Weak performing holdings included Tesco and Amec Foster Wheeler. At the sector level, allocation between sectors was positive for performance. Our portion of the Portfolio benefited relative to the benchmark from underweight positions in the financials and consumer discretionary sectors, along with our overweight positions in the energy and consumer staples sectors. However, stock selection within sectors was negative overall, driven by our holdings in the health care and telecommunication services sectors.
Country allocation added to relative performance, driven by an underweight position in the weak Japanese equity market and an overweight position in the strong UK equity market. Currency allocation, however, held back returns, due to an underweight position in the strong Japanese yen and an overweight position in the weak British pound.
The main highlights of the strategy being adopted for our portion of the Portfolio are an overweight position in select European markets, overweight positions in the telecommunications services, energy and utilities sectors, and
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 subadvisors 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 Manager:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisors:
Mondrian Investment Partners Limited ("Mondrian");
Chautauqua Capital Management, a division of Robert W. Baird & Co. Incorporated ("Chautauqua");
Los Angeles Capital Management and Equity Research, Inc. ("Los Angeles Capital")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Fred Lee, CFA, Vincent Russo, Mayoor Joshi and Diana To
Mondrian: Elizabeth A. Desmond, Nigel Bliss, Andrew Porter and Steve Dutaut;
Chautauqua: Brian M. Beitner, CFA Dan Boston, Jesse Flores and Michael Mow, CFA;
Los Angeles Capital: Thomas D. Stevens, CFA, Hal W. Reynolds, CFA and Daniel E. Allen, CFA
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
(continued on next page)
185
PACE International Equity Investments
Subadvisors' comments (Unaudited) – continued
underweight positions in the materials, consumer discretionary and financials sectors.
Derivatives were not used during the review period.
Chautauqua Capital Management
Our portion of the Portfolio significantly outperformed the benchmark during the reporting period, due to our security selection. Stock selection and overweights in the information technology and health care sectors, along with underweights to the consumer discretionary and financials sectors, combined with strong stock selection in those sectors, were the strongest contributors to performance. Stock selection and an overweight to energy were also beneficial for results. Despite positive stock selection in materials, industrials and utilities, underweights in these sectors modestly detracted from performance, as did our substantial underweight to the consumer staples sector.
Regionally, superior stock selection and underweights in Europe, Asia/Pacific Basin and Africa/Middle East contributed to relative results. An overweight, along with strong stock selection, benefited performance in North America. While an overweight to Latin America aided performance, this was partially offset by weak stock selection in the region.
Derivatives were not used during the review period.
Los Angeles Capital
Our portion of the Portfolio outperformed the benchmark during the reporting period, with fundamental factor exposures contributing to performance, whereas country and sector tilts detracted from results.
Looking at fundamental factors, our tilt toward smaller cap stocks was the largest contributor to performance in each of the Europe, Japan, and Pacific ex-Japan regions as larger cap companies were penalized. Stocks with strong three-year momentum fell out of favor globally, causing our tilt toward this factor in the European and Pacific regions to detract from results. However, stocks with strong one-year momentum performed well across all three regions and an overweight to this factor helped performance in Europe and the Pacific ex-Japan region, whereas an underweight hurt in Japan. Volatile companies ended the reporting period with negative factor returns in all regions and an underweight to such companies in Japan and the Pacific ex-Japan region positively impacted performance.
Throughout the fiscal year, our portion of the Portfolio was tilted toward stocks with stronger earnings quality, which contributed to performance in Europe and the Pacific ex-Japan regions. In addition, a high quality posture proved beneficial in Europe with tilts toward companies with strong analyst insight and higher profitability contributing to returns. Investors were mixed on value metrics during the period, rewarding stocks with attractive dividend payouts in lieu of low interest rates, while penalizing stocks with higher
Investment process
(continued)
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 selecting investments, Chautauqua has a long-term horizon.
(continued on next page)
186
PACE International Equity Investments
Subadvisor's comments (Unaudited) – concluded
earnings yields. Consequently, our tilt toward stocks with larger dividend yields helped performance in Japan, whereas a tilt away hurt in Europe. An underweight to securities with higher earnings yields modestly added value relative to the benchmark in the Pacific ex-Japan region, but an overweight held performance back in Europe.
Within sectors, an underweight to consumer discretionary, which generally plummeted globally, was a significant contributor to relative returns, particularly in Japan. Energy and utilities rallied in Europe and, consequently, a greater exposure to European utilities benefited our results, while a tilt away from energy detracted from performance. Examining countries, overweights to Denmark and New Zealand added value, but overweights to Italy and Switzerland were headwinds for performance.
At the end of the reporting period, our portion of the Portfolio exhibited tilts toward materials, utilities and health care, and away from consumer discretionary, financials and telecommunications, relative to the benchmark. We exhibited higher price-to-earnings and price-to-book ratios, as well as a higher yield, relative to the MSCI EAFE Index. We also exhibited a lower beta and a smaller weighted average market capitalization (Beta is a measure of volatility or risk relative to the market as a whole).
Derivatives were not used during the reporting period.
Investment process
(concluded)
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.
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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PACE International Equity Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | (4.30 | )% | 3.32 | % | 1.30 | % | |||||||||
Class C2 | (5.10 | ) | 2.47 | 0.47 | |||||||||||
Class Y3 | (4.09 | ) | 3.59 | 1.61 | |||||||||||
Class P4 | (4.09 | ) | 3.58 | 1.56 | |||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (9.59 | ) | 2.16 | 0.73 | |||||||||||
Class C2 | (6.05 | ) | 2.47 | 0.47 | |||||||||||
MSCI EAFE Index (net)5 | (7.53 | ) | 3.02 | 1.98 | |||||||||||
Lipper International Multi-Cap Growth Funds median | (4.46 | ) | 3.25 | 2.50 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | (6.41 | )% | 2.20 | % | 1.05 | % | |||||||||
Class C2 | (7.17 | ) | 1.37 | 0.22 | |||||||||||
Class Y3 | (6.15 | ) | 2.47 | 1.36 | |||||||||||
Class P4 | (6.16 | ) | 2.47 | 1.31 | |||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (11.59 | ) | 1.05 | 0.48 | |||||||||||
Class C2 | (8.09 | ) | 1.37 | 0.22 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, were as follows: Class A—1.78% and 1.78%; Class C—2.58% and 2.58%; Class Y—1.51% and 1.51%; and Class P—1.52% and 1.52%. 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS 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, 2016 (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 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 AM. Upon termination of the agreement, however, UBS 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 of 0.25% annually.
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 of 0.25% and 0.75% annually, respectively.
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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualfundperformance.
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.
188
PACE International Equity 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 International Equity Investments Class P shares versus the MSCI EAFE Index (net) over the 10 years ended July 31, 2016. 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.
PACE International Equity Investments
189
PACE International Equity Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Net assets (mm) | $ | 972.8 | |||||
Number of holdings | 587 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Common stocks, ADRs, and preferred stocks | 111.5 | % | |||||
Investments sold short | (12.7 | ) | |||||
Cash equivalents and other assets less liabilities | 1.2 | ||||||
Total | 100.0 | % | |||||
Regional allocation (equity investments)1 | 07/31/16 | ||||||
Europe and European territories | 74.0 | % | |||||
Asia | 30.8 | ||||||
Oceania | 5.6 | ||||||
The Americas | 0.9 | ||||||
Curacao | 0.2 | ||||||
Total | 111.5 | % | |||||
Top five countries (equity investments-long holdings)1 | 07/31/16 | ||||||
Japan | 22.3 | % | |||||
United Kingdom | 18.5 | ||||||
Switzerland | 12.3 | ||||||
Germany | 9.8 | ||||||
France | 6.8 | ||||||
Total | 69.7 | % | |||||
Top five sectors (long holdings)1 | 07/31/16 | ||||||
Financials | 21.2 | % | |||||
Health Care | 14.9 | ||||||
Industrials | 13.5 | ||||||
Information Technology | 12.2 | ||||||
Consumer Staples | 11.5 | ||||||
Total | 73.3 | % | |||||
Top ten equity holdings (long holdings)1 | 07/31/16 | ||||||
Nestle SA | 2.1 | % | |||||
Takeda Pharmaceutical Co. Ltd. | 1.9 | ||||||
GlaxoSmithKline PLC | 1.9 | ||||||
Sanofi SA | 1.9 | ||||||
SAP SE | 1.6 | ||||||
Kirin Holdings Co. Ltd. | 1.6 | ||||||
ABB Ltd. | 1.5 | ||||||
Canon, Inc. | 1.5 | ||||||
Royal Dutch Shell PLC, B Shares | 1.5 | ||||||
ENI SpA | 1.5 | ||||||
Total | 17.0 | % | |||||
Top five countries (equity investments-short holdings)1 | 07/31/16 | ||||||
Japan | (5.0 | )% | |||||
Switzerland | (1.3 | ) | |||||
France | (1.1 | ) | |||||
Netherlands | (0.9 | ) | |||||
United Kingdom | (0.7 | ) | |||||
Total | (9.0 | )% | |||||
Top five sectors (short holdings)1 | 07/31/16 | ||||||
Financials | (4.0 | )% | |||||
Industrials | (2.5 | ) | |||||
Consumer Discretionary | (2.2 | ) | |||||
Information Technology | (1.3 | ) | |||||
Materials | (0.8 | ) | |||||
Total | (10.8 | )% | |||||
Top ten equity holdings (short holdings)1 | 07/31/16 | ||||||
CNH Industrial N.V. | (0.5 | )% | |||||
Swiss Life Holding AG | (0.5 | ) | |||||
Central Japan Railway Co. | (0.4 | ) | |||||
Dufry AG | (0.4 | ) | |||||
Fresnillo PLC | (0.3 | ) | |||||
NIDEC Corp. | (0.3 | ) | |||||
Klepierre | (0.3 | ) | |||||
Zurich Insurance Group AG | (0.3 | ) | |||||
MTR Corp. Ltd. | (0.3 | ) | |||||
Keyence Corp. | (0.2 | ) | |||||
Total | (3.5 | )% |
For a listing of defined portfolio acronyms that are used throughout the Portfolio statistics, please refer to page 262.
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
190
PACE International Equity Investments
Industry diversification—(unaudited)
As a percentage of net assets as of July 31, 2016
Common stocks | |||||||
Aerospace & defense | 0.44 | % | |||||
Airlines | 0.37 | ||||||
Auto components | 1.76 | ||||||
Automobiles | 2.19 | ||||||
Banks | 6.32 | ||||||
Beverages | 1.99 | ||||||
Biotechnology | 0.95 | ||||||
Building products | 1.73 | ||||||
Capital markets | 3.26 | ||||||
Chemicals | 4.60 | ||||||
Commercial services & supplies | 1.46 | ||||||
Communications equipment | 0.80 | ||||||
Construction & engineering | 0.30 | ||||||
Construction materials | 0.43 | ||||||
Consumer finance | 0.33 | ||||||
Containers & packaging | 0.05 | ||||||
Diversified consumer services | 0.10 | ||||||
Diversified financial services | 1.14 | ||||||
Diversified telecommunication services | 5.61 | ||||||
Electric utilities | 2.53 | ||||||
Electrical equipment | 4.25 | ||||||
Electronic equipment, instruments & components | 0.77 | ||||||
Energy equipment & services | 1.30 | ||||||
Food & staples retailing | 3.38 | ||||||
Food products | 3.85 | ||||||
Gas utilities | 0.92 | ||||||
Health care equipment & supplies | 1.20 | ||||||
Health care providers & services | 1.44 | ||||||
Hotels, restaurants & leisure | 1.19 | ||||||
Household durables | 0.64 | ||||||
Household products | 0.74 | ||||||
Independent power and renewable electricity producers | 0.20 | ||||||
Industrial conglomerates | 1.31 | ||||||
Insurance | 6.51 | ||||||
Internet software & services | 1.53 | ||||||
IT services | 1.44 | ||||||
Leisure products | 0.48 | ||||||
Machinery | 1.29 | ||||||
Marine | 0.17 | ||||||
Media | 1.61 | ||||||
Metals & mining | 0.88 | ||||||
Multi-utilities | 2.37 | ||||||
Multiline retail | 0.31 |
Common stocks—(concluded) | |||||||
Oil, gas & consumable fuels | 5.88 | % | |||||
Paper & forest products | 0.80 | ||||||
Personal products | 0.48 | ||||||
Pharmaceuticals | 11.32 | ||||||
Professional services | 0.90 | ||||||
Real estate investment trusts | 2.00 | ||||||
Real estate management & development | 1.66 | ||||||
Road & rail | 0.14 | ||||||
Semiconductors & semiconductor equipment | 3.15 | ||||||
Software | 2.33 | ||||||
Specialty retail | 1.18 | ||||||
Technology hardware, storage & peripherals | 0.50 | ||||||
Textiles, apparel & luxury goods | 1.54 | ||||||
Tobacco | 0.99 | ||||||
Trading companies & distributors | 1.40 | ||||||
Transportation infrastructure | 1.42 | ||||||
Wireless telecommunication services | 1.54 | ||||||
Total common stocks | 111.37 | ||||||
Preferred stocks | |||||||
Chemicals | 0.04 | ||||||
Household products | 0.07 | ||||||
Total preferred stocks | 0.11 | ||||||
Repurchase agreement | 0.39 | ||||||
Investment of cash collateral from securities loaned | 3.05 | ||||||
Investments sold short Common stocks | |||||||
Aerospace & defense | (0.15 | ) | |||||
Airlines | (0.23 | ) | |||||
Auto components | (0.07 | ) | |||||
Automobiles | (0.53 | ) | |||||
Banks | (1.06 | ) | |||||
Beverages | (0.08 | ) | |||||
Biotechnology | (0.17 | ) | |||||
Building products | (0.29 | ) | |||||
Capital markets | (0.02 | ) | |||||
Chemicals | (0.13 | ) | |||||
Commercial services & supplies | (0.02 | ) | |||||
Construction materials | (0.09 | ) | |||||
Distributors | (0.23 | ) | |||||
Diversified financial services | (0.36 | ) | |||||
Diversified telecommunication services | (0.49 | ) |
191
PACE International Equity Investments
Industry diversification—(unaudited) (concluded)
As a percentage of net assets as of July 31, 2016
Investments sold short—(continued) Common stocks—(continued) | |||||||
Electric utilities | (0.32 | )% | |||||
Electronic equipment, instruments & components | (0.63 | ) | |||||
Food products | (0.25 | ) | |||||
Gas utilities | (0.23 | ) | |||||
Health care technology | (0.05 | ) | |||||
Hotels, restaurants & leisure | (0.31 | ) | |||||
Household durables | (0.10 | ) | |||||
Insurance | (1.10 | ) | |||||
Internet & catalog retail | (0.04 | ) | |||||
Internet software & services | (0.36 | ) | |||||
IT services | (0.10 | ) | |||||
Leisure products | (0.09 | ) | |||||
Machinery | (0.77 | ) | |||||
Marine | (0.24 | ) | |||||
Media | (0.16 | ) | |||||
Metals & mining | (0.56 | ) |
Investments sold short—(concluded) Common stocks—(concluded) | |||||||
Multiline retail | (0.04 | )% | |||||
Oil, gas & consumable fuels | (0.16 | ) | |||||
Pharmaceuticals | (0.17 | ) | |||||
Real estate investment trusts | (0.93 | ) | |||||
Real estate management & development | (0.25 | ) | |||||
Road & rail | (0.92 | ) | |||||
Software | (0.10 | ) | |||||
Specialty retail | (0.58 | ) | |||||
Technology hardware, storage & peripherals | (0.06 | ) | |||||
Textiles, apparel & luxury goods | (0.08 | ) | |||||
Transportation infrastructure | (0.14 | ) | |||||
Wireless telecommunication services | (0.05 | ) | |||||
Total investments sold short | (12.71 | ) | |||||
Liabilities in excess of other assets | (2.21 | ) | |||||
Net assets | 100.00 | % |
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PACE International Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—111.37% | |||||||||||
Australia—4.62% | |||||||||||
Alumina Ltd.1 | 1,696,957 | $ | 1,708,723 | ||||||||
ASX Ltd. | 44,188 | 1,668,959 | |||||||||
Boral Ltd. | 106,627 | 556,684 | |||||||||
Caltex Australia Ltd. | 28,135 | 709,000 | |||||||||
Coca-Cola Amatil Ltd. | 190,547 | 1,335,113 | |||||||||
Cochlear Ltd. | 17,173 | 1,732,209 | |||||||||
Computershare Ltd. | 277,826 | 1,874,869 | |||||||||
Flight Centre Travel Group Ltd.1 | 12,483 | 305,369 | |||||||||
Fortescue Metals Group Ltd. | 368,149 | 1,239,403 | |||||||||
GPT Group | 636,470 | 2,713,475 | |||||||||
Harvey Norman Holdings Ltd. | 293,249 | 1,078,616 | |||||||||
Healthscope Ltd. | 271,888 | 611,599 | |||||||||
Incitec Pivot Ltd. | 854,231 | 1,863,126 | |||||||||
Medibank Pvt Ltd. | 714,059 | 1,665,933 | |||||||||
Mirvac Group | 241,683 | 404,067 | |||||||||
Platinum Asset Management Ltd.1 | 155,212 | 714,797 | |||||||||
Qantas Airways Ltd. | 343,007 | 823,711 | |||||||||
QBE Insurance Group Ltd. | 675,605 | 5,632,284 | |||||||||
REA Group Ltd.1 | 8,691 | 431,090 | |||||||||
Santos Ltd. | 138,915 | 463,446 | |||||||||
Scentre Group | 917,484 | 3,695,383 | |||||||||
Seek Ltd.1 | 19,934 | 252,986 | |||||||||
South32 Ltd.* | 394,289 | 549,839 | |||||||||
Stockland | 1,154,097 | 4,420,363 | |||||||||
Suncorp Group Ltd. | 134,084 | 1,368,479 | |||||||||
Sydney Airport | 243,431 | 1,398,565 | |||||||||
Tatts Group Ltd. | 355,672 | 1,116,310 | |||||||||
Telstra Corp.Ltd. | 35,300 | 154,787 | |||||||||
TPG Telecom Ltd. | 104,491 | 1,018,804 | |||||||||
Transurban Group | 326,315 | 3,114,668 | |||||||||
Vicinity Centres | 126,702 | 333,154 | |||||||||
Total Australia common stocks | 44,955,811 | ||||||||||
Austria—0.11% | |||||||||||
Andritz AG | 4,715 | 240,374 | |||||||||
Erste Group Bank AG* | 22,745 | 602,793 | |||||||||
OMV AG | 8,498 | 225,786 | |||||||||
Total Austria common stocks | 1,068,953 | ||||||||||
Belgium—0.78% | |||||||||||
Colruyt SA | 29,248 | 1,631,367 | |||||||||
Groupe Bruxelles Lambert SA | 2,846 | 240,069 | |||||||||
KBC Group N.V.*,2 | 86,443 | 4,492,465 | |||||||||
Solvay SA | 4,509 | 467,861 | |||||||||
Telenet Group Holding N.V.* | 11,378 | 539,672 | |||||||||
UCB SA | 2,183 | 170,768 | |||||||||
Total Belgium common stocks | 7,542,202 | ||||||||||
Bermuda—1.49% | |||||||||||
Cheung Kong Infrastructure Holdings Ltd. | 195,000 | 1,724,196 | |||||||||
First Pacific Co.Ltd. | 520,000 | 403,485 | |||||||||
Hongkong Land Holdings Ltd. | 781,500 | 5,001,600 | |||||||||
Jardine Matheson Holdings Ltd. | 68,700 | 4,073,910 | |||||||||
Kerry Properties Ltd. | 92,000 | 251,392 | |||||||||
Kunlun Energy Co.Ltd.1 | 3,981,181 | 3,007,027 | |||||||||
Total Bermuda common stocks | 14,461,610 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Brazil—0.09% | |||||||||||
BB Seguridade Participacoes SA | 92,665 | $ | 861,375 | ||||||||
Cayman Islands—2.26% | |||||||||||
Alibaba Group Holding Ltd., ADR* | 85,453 | 7,048,163 | |||||||||
Cheung Kong Property Holdings Ltd. | 305,500 | 2,181,468 | |||||||||
Ctrip.com International Ltd., ADR* | 151,487 | 6,615,437 | |||||||||
MGM China Holdings Ltd. | 618,800 | 896,488 | |||||||||
Tencent Holdings Ltd. | 216,254 | 5,198,414 | |||||||||
Total Cayman Islands common stocks | 21,939,970 | ||||||||||
China—0.77% | |||||||||||
Sinopharm Group Co., Class H | 1,554,904 | 7,525,604 | |||||||||
Denmark—2.41% | |||||||||||
Chr. Hansen Holding A/S | 21,986 | 1,383,222 | |||||||||
ISS A/S | 111,807 | 4,311,935 | |||||||||
Novo Nordisk A/S, ADR | 147,652 | 8,411,734 | |||||||||
Novo Nordisk A/S, Class B | 66,354 | 3,780,659 | |||||||||
Novozymes A/S, B Shares | 53,344 | 2,617,673 | |||||||||
TDC A/S | 273,963 | 1,441,965 | |||||||||
William Demant Holding A/S*,1 | 72,348 | 1,476,634 | |||||||||
Total Denmark common stocks | 23,423,822 | ||||||||||
Finland—1.42% | |||||||||||
Fortum Oyj | 25,942 | 430,697 | |||||||||
Kone Oyj, Class B | 16,958 | 858,655 | |||||||||
Neste Oyj1 | 57,200 | 2,165,974 | |||||||||
Nokian Renkaat Oyj1 | 28,141 | 1,045,471 | |||||||||
Orion Oyj, Class B | 28,917 | 1,184,219 | |||||||||
Sampo Oyj, A Shares | 46,391 | 1,922,642 | |||||||||
Stora Enso Oyj, R Shares | 68,732 | 623,960 | |||||||||
UPM-Kymmene Oyj2 | 268,885 | 5,540,308 | |||||||||
Total Finland common stocks | 13,771,926 | ||||||||||
France—6.78% | |||||||||||
Arkema SA | 1,995 | 170,336 | |||||||||
Atos SE | 11,656 | 1,142,464 | |||||||||
AXA SA | 18,417 | 375,360 | |||||||||
Bureau Veritas SA | 58,189 | 1,264,025 | |||||||||
Capgemini SA | 2,795 | 268,578 | |||||||||
Carrefour SA | 64,948 | 1,626,869 | |||||||||
Christian Dior SA | 11,383 | 2,058,463 | |||||||||
Cie de Saint-Gobain | 204,152 | 8,650,373 | |||||||||
Cie Generale des Etablissements Michelin | 5,522 | 564,514 | |||||||||
Dassault Systemes | 13,770 | 1,137,219 | |||||||||
Essilor International SA | 7,618 | 975,615 | |||||||||
Eurazeo SA | 24,147 | 1,543,382 | |||||||||
France Telecom SA | 169,178 | 2,589,341 | |||||||||
Gecina SA | 4,255 | 643,635 | |||||||||
Hermes International | 762 | 327,817 | |||||||||
Iliad SA | 30,222 | 5,874,080 | |||||||||
L'Oreal SA | 2,418 | 460,241 | |||||||||
Lagardere SCA | 21,926 | 560,006 | |||||||||
LVMH Moet Hennessy Louis Vuitton SE | 2,315 | 397,025 | |||||||||
Natixis SA | 54,563 | 224,790 | |||||||||
Pernod Ricard SA | 2,251 | 257,198 | |||||||||
Publicis Groupe SA | 13,199 | 982,782 |
193
PACE International Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
France—(concluded) | |||||||||||
Safran SA | 17,496 | $ | 1,189,281 | ||||||||
Sanofi SA2 | 212,232 | 18,068,528 | |||||||||
SCOR SE | 33,223 | 970,741 | |||||||||
Societe BIC SA | 2,118 | 313,040 | |||||||||
Societe Generale SA | 126,511 | 4,321,680 | |||||||||
Technip SA | 63,059 | 3,519,712 | |||||||||
Unibail-Rodamco SE | 7,491 | 2,061,492 | |||||||||
Veolia Environnement SA | 60,397 | 1,341,024 | |||||||||
Wendel SA | 19,022 | 2,030,323 | |||||||||
Total France common stocks | 65,909,934 | ||||||||||
Germany—9.69% | |||||||||||
Allianz SE2 | 81,335 | 11,666,649 | |||||||||
BASF SE | 2,010 | 157,887 | |||||||||
Bayer AG | 23,568 | 2,535,304 | |||||||||
Beiersdorf AG | 17,770 | 1,668,618 | |||||||||
Continental AG | 5,315 | 1,114,157 | |||||||||
Daimler AG | 104,242 | 7,088,121 | |||||||||
Deutsche Bank AG* | 231,085 | 3,106,696 | |||||||||
Deutsche Lufthansa AG | 134,676 | 1,600,536 | |||||||||
Deutsche Telekom AG1 | 566,475 | 9,642,287 | |||||||||
E.ON SE | 228,431 | 2,449,662 | |||||||||
Evonik Industries AG | 89,655 | 2,794,533 | |||||||||
Fresenius Medical Care AG & Co. KGaA | 14,056 | 1,284,827 | |||||||||
Hannover Rueck SE | 3,344 | 342,156 | |||||||||
Hugo Boss AG1 | 22,629 | 1,342,124 | |||||||||
K+S AG1 | 64,345 | 1,344,157 | |||||||||
Linde AG | 3,542 | 509,647 | |||||||||
Metro AG | 53,413 | 1,718,620 | |||||||||
Muenchener Rueckversicherungs-Gesellschaft AG | 18,956 | 3,161,968 | |||||||||
Osram Licht AG2 | 57,293 | 2,977,852 | |||||||||
ProSiebenSat.1 Media SE1 | 16,493 | 753,978 | |||||||||
RWE AG*,2 | 552,580 | 9,825,866 | |||||||||
SAP SE2 | 180,368 | 15,811,495 | |||||||||
Siemens AG2 | 30,922 | 3,357,517 | |||||||||
ThyssenKrupp AG | 18,139 | 415,728 | |||||||||
United Internet AG | 18,575 | 821,122 | |||||||||
Wirecard AG1 | 145,640 | 6,771,916 | |||||||||
Total Germany common stocks | 94,263,423 | ||||||||||
Hong Kong—2.33% | |||||||||||
AIA Group Ltd. | 772,626 | 4,785,095 | |||||||||
BOC Hong Kong Holdings Ltd. | 90,000 | 295,228 | |||||||||
China Mobile Ltd. | 543,500 | 6,700,579 | |||||||||
Galaxy Entertainment Group Ltd. | 268,000 | 891,215 | |||||||||
Hang Seng Bank Ltd. | 141,423 | 2,524,629 | |||||||||
HKT Trust/HKT Ltd. | 615,000 | 971,837 | |||||||||
Hong Kong & China Gas Co. Ltd. | 343,332 | 637,242 | |||||||||
Hong Kong Exchanges & Clearing Ltd. | 79,300 | 1,957,356 | |||||||||
Hysan Development Co. Ltd. | 139,000 | 639,604 | |||||||||
Power Assets Holdings Ltd. | 125,500 | 1,228,568 | |||||||||
Sino Land Co. Ltd. | 294,000 | 524,459 | |||||||||
Sun Hung Kai Properties Ltd. | 38,000 | 543,669 | |||||||||
Swire Properties Ltd. | 353,000 | 982,780 | |||||||||
Total Hong Kong common stocks | 22,682,261 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Ireland—0.37% | |||||||||||
Allergan PLC* | 13,634 | $ | 3,448,721 | ||||||||
James Hardie Industries PLC | 12,110 | 200,625 | |||||||||
Total Ireland common stocks | 3,649,346 | ||||||||||
Israel—0.52% | |||||||||||
Bezeq The Israeli Telecommunication Corp. Ltd. | 433,243 | 856,670 | |||||||||
Check Point Software Technologies Ltd.*,1,2 | 22,500 | 1,729,800 | |||||||||
Israel Chemicals Ltd. | 212,024 | 860,173 | |||||||||
Nice Ltd. | 23,936 | 1,647,122 | |||||||||
Total Israel common stocks | 5,093,765 | ||||||||||
Italy—2.63% | |||||||||||
Atlantia SpA | 40,797 | 1,019,407 | |||||||||
ENI SpA | 928,702 | 14,203,797 | |||||||||
Prysmian SpA | 50,781 | 1,187,695 | |||||||||
Saipem SpA* | 3,020,142 | 1,319,882 | |||||||||
Snam SpA | 659,528 | 3,815,800 | |||||||||
Terna Rete Elettrica Nazionale SpA | 742,097 | 4,040,468 | |||||||||
Total Italy common stocks | 25,587,049 | ||||||||||
Japan—22.32% | |||||||||||
ABC-Mart, Inc. | 14,100 | 912,040 | |||||||||
ACOM Co. Ltd.*,1 | 245,800 | 1,180,399 | |||||||||
Aeon Financial Service Co. Ltd. | 31,700 | 740,656 | |||||||||
AEON Mall Co. Ltd. | 35,000 | 476,797 | |||||||||
Air Water, Inc. | 18,000 | 310,835 | |||||||||
Alfresa Holdings Corp. | 9,800 | 217,831 | |||||||||
Amada Holdings Co. Ltd. | 111,300 | 1,229,334 | |||||||||
Astellas Pharma, Inc. | 33,900 | 571,949 | |||||||||
Benesse Holdings, Inc.1 | 39,900 | 971,349 | |||||||||
Bridgestone Corp.2 | 76,600 | 2,703,353 | |||||||||
Calbee, Inc. | 21,100 | 932,631 | |||||||||
Canon, Inc.2 | 513,800 | 14,779,272 | |||||||||
Credit Saison Co. Ltd.1 | 79,100 | 1,334,936 | |||||||||
Daiichi Sankyo Co. Ltd. | 68,800 | 1,659,399 | |||||||||
Dainippon Pharmaceutical Co. Ltd.1 | 16,300 | 307,677 | |||||||||
Daiwa House Industry Co. Ltd. | 12,700 | 360,830 | |||||||||
Daiwa Securities Group, Inc.2 | 509,000 | 2,919,760 | |||||||||
Denso Corp. | 25,500 | 1,011,153 | |||||||||
Dentsu, Inc. | 10,500 | 509,384 | |||||||||
Eisai Co. Ltd.1 | 10,500 | 621,963 | |||||||||
Electric Power Development Co. Ltd. | 29,000 | 673,877 | |||||||||
FamilyMart Co. Ltd. | 11,600 | 688,940 | |||||||||
Fast Retailing Co. Ltd. | 4,500 | 1,474,347 | |||||||||
Fuji Electric Holdings Co. Ltd.2 | 67,000 | 300,083 | |||||||||
Hamamatsu Photonics KK1 | 15,400 | 460,332 | |||||||||
Hirose Electric Co. Ltd. | 2,500 | 314,353 | |||||||||
Hisamitsu Pharmaceutical Co., Inc. | 12,100 | 690,175 | |||||||||
Hitachi Construction Machinery Co. Ltd.1 | 36,500 | 602,759 | |||||||||
Honda Motor Co. Ltd. | 432,100 | 12,033,245 | |||||||||
Hoshizaki Corp. | 3,000 | 274,906 | |||||||||
Hoya Corp. | 98,400 | 3,544,078 | |||||||||
Idemitsu Kosan Co. Ltd.1 | 15,800 | 310,627 | |||||||||
IHI Corp. | 462,000 | 1,317,607 | |||||||||
Iida Group Holdings Co. Ltd. | 65,900 | 1,326,590 | |||||||||
Isuzu Motors Ltd. | 15,100 | 199,636 |
194
PACE International Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Japan—(continued) | |||||||||||
Japan Airlines Co. Ltd. | 6,000 | $ | 187,936 | ||||||||
Japan Post Holdings Co. Ltd. | 52,300 | 698,632 | |||||||||
Japan Tobacco, Inc. | 25,000 | 986,181 | |||||||||
JGC Corp.1 | 30,700 | 455,829 | |||||||||
JSR Corp. | 53,100 | 736,380 | |||||||||
JX Holdings, Inc. | 267,800 | 1,018,078 | |||||||||
Kajima Corp. | 65,000 | 485,422 | |||||||||
Kamigumi Co. Ltd. | 20,000 | 182,290 | |||||||||
Kaneka Corp. | 71,000 | 544,842 | |||||||||
Kao Corp. | 9,000 | 489,803 | |||||||||
Keikyu Corp. | 83,000 | 849,238 | |||||||||
Keyence Corp. | 3,981 | 2,845,048 | |||||||||
Kintetsu Group Holdings Co. Ltd. | 107,000 | 466,654 | |||||||||
Kirin Holdings Co. Ltd.1 | 883,800 | 15,305,283 | |||||||||
Kobe Steel Ltd.1 | 787,000 | 694,174 | |||||||||
Koito Manufacturing Co. Ltd. | 6,300 | 316,127 | |||||||||
Konami Holdings Corp.1 | 22,100 | 864,203 | |||||||||
Konica Minolta, Inc. | 220,700 | 1,808,254 | |||||||||
Kose Corp. | 14,500 | 1,361,396 | |||||||||
Kuraray Co. Ltd. | 141,300 | 1,811,343 | |||||||||
Kurita Water Industries Ltd. | 70,500 | 1,580,178 | |||||||||
Kyushu Electric Power Co., Inc. | 32,200 | 304,848 | |||||||||
Lawson, Inc. | 15,700 | 1,217,102 | |||||||||
LIXIL Group Corp.1 | 79,500 | 1,499,853 | |||||||||
Makita Corp. | 4,700 | 333,954 | |||||||||
Marubeni Corp.2 | 1,086,000 | 5,121,607 | |||||||||
Maruichi Steel Tube Ltd. | 24,000 | 896,163 | |||||||||
Mazda Motor Corp | 59,500 | 902,399 | |||||||||
Medipal Holdings Corp. | 57,900 | 960,129 | |||||||||
Miraca Holdings, Inc. | 36,900 | 1,710,560 | |||||||||
Mitsubishi Chemical Holdings Corp. | 63,100 | 347,797 | |||||||||
Mitsubishi Corp. | 62,800 | 1,094,622 | |||||||||
Mitsubishi Electric Corp. | 458,000 | 5,464,939 | |||||||||
Mitsubishi Logistics Corp.1 | 48,000 | 677,415 | |||||||||
Mitsubishi Tanabe Pharma Corp. | 61,000 | 1,150,233 | |||||||||
Mitsubishi UFJ Financial Group, Inc. | 536,900 | 2,746,722 | |||||||||
Mitsubishi UFJ Lease & Finance Co. Ltd. | 146,500 | 601,593 | |||||||||
Mitsui O.S.K. Lines Ltd.1 | 754,000 | 1,633,106 | |||||||||
Mizuho Financial Group, Inc. | 486,600 | 796,892 | |||||||||
MS&AD Insurance Group Holdings, Inc. | 13,300 | 391,824 | |||||||||
Nabtesco Corp. | 72,700 | 1,972,914 | |||||||||
Namco Bandai Holdings, Inc. | 47,700 | 1,279,511 | |||||||||
NEC Corp. | 329,000 | 915,725 | |||||||||
NGK Spark Plug Co. Ltd.1 | 39,600 | 662,102 | |||||||||
NHK Spring Co. Ltd. | 28,500 | 253,619 | |||||||||
Nippon Electric Glass Co. Ltd. | 64,000 | 294,801 | |||||||||
Nissin Foods Holdings Co. Ltd. | 30,800 | 1,762,846 | |||||||||
Nitto Denko Corp. | 2,600 | 176,102 | |||||||||
Nomura Real Estate Holdings, Inc. | 47,500 | 830,499 | |||||||||
Nomura Research Institute Ltd. | 25,500 | 909,688 | |||||||||
NTT DoCoMo, Inc. | 177,500 | 4,783,028 | |||||||||
NTT Urban Development Corp. | 15,600 | 168,636 | |||||||||
OJI Paper Corp. | 138,000 | 581,565 | |||||||||
Olympus Corp. | 143,544 | 5,036,385 | |||||||||
Ono Pharmaceutical Co. Ltd. | 36,500 | 1,324,639 | |||||||||
Otsuka Corp. | 7,200 | 373,284 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Japan—(concluded) | |||||||||||
Park24 Co. Ltd. | 39,600 | $ | 1,354,476 | ||||||||
Rinnai Corp. | 15,100 | 1,499,123 | |||||||||
Sankyo Co. Ltd. | 32,100 | 1,181,315 | |||||||||
SBI Holdings, Inc.1 | 134,000 | 1,482,687 | |||||||||
Secom Co. Ltd. | 10,400 | 790,842 | |||||||||
Sega Sammy Holdings, Inc. | 121,300 | 1,346,919 | |||||||||
Sekisui Chemical Co. Ltd. | 51,200 | 757,199 | |||||||||
Sekisui House Ltd.1 | 18,700 | 316,783 | |||||||||
Seven & I Holdings Co. Ltd. | 16,500 | 695,835 | |||||||||
Shikoku Electric Power Co., Inc.1 | 54,100 | 571,036 | |||||||||
Shin-Etsu Chemical Co. Ltd. | 29,400 | 2,035,396 | |||||||||
Shiseido Co. Ltd. | 25,200 | 716,472 | |||||||||
Showa Shell Sekiyu K.K. | 60,900 | 548,509 | |||||||||
SoftBank Group Corp. | 51,200 | 2,861,700 | |||||||||
Sohgo Security Services Co. Ltd. | 7,300 | 364,875 | |||||||||
Sompo Japan Nipponkoa Holdings, Inc. | 28,400 | 936,322 | |||||||||
Sumitomo Corp.2 | 510,400 | 5,422,390 | |||||||||
Sumitomo Mitsui Financial Group, Inc. | 57,900 | 1,877,132 | |||||||||
Sumitomo Mitsui Trust Holdings, Inc. | 371,000 | 1,261,695 | |||||||||
Suntory Beverage & Food Ltd. | 10,400 | 456,118 | |||||||||
Suzuken Co. Ltd. | 19,100 | 617,729 | |||||||||
Taiheiyo Cement Corp.2 | 363,000 | 1,056,608 | |||||||||
Taiyo Nippon Sanso Corp. | 35,200 | 343,945 | |||||||||
Takashimaya Co. Ltd. | 60,000 | 460,430 | |||||||||
Takeda Pharmaceutical Co. Ltd.1,2 | 411,000 | 18,480,600 | |||||||||
Teijin Ltd. | 256,000 | 975,979 | |||||||||
The Hiroshima Bank Ltd. | 68,000 | 250,581 | |||||||||
The Kansai Electric Power Co., Inc.* | 48,100 | 450,854 | |||||||||
THK Co. Ltd. | 23,200 | 466,569 | |||||||||
Tokio Marine Holdings, Inc. | 225,400 | 8,924,545 | |||||||||
Tokyo Electron Ltd. | 61,700 | 5,459,786 | |||||||||
Tokyo Tatemono Co. Ltd. | 17,700 | 223,603 | |||||||||
Toshiba Corp.*,1 | 1,513,000 | 3,991,764 | |||||||||
TOTO Ltd. | 8,300 | 360,763 | |||||||||
Toyo Seikan Group Holdings, Ltd. | 26,700 | 527,013 | |||||||||
Toyo Suisan Kaisha Ltd. | 39,500 | 1,773,019 | |||||||||
Toyoda Gosei Co. Ltd. | 42,700 | 944,518 | |||||||||
Trend Micro, Inc.1 | 22,400 | 821,052 | |||||||||
Uni-Charm Corp. | 82,000 | 1,706,944 | |||||||||
Yamaha Corp. | 32,400 | 909,429 | |||||||||
Yamaha Motor Co. Ltd.1 | 61,000 | 1,050,992 | |||||||||
Total Japan common stocks | 217,101,043 | ||||||||||
Jersey—1.04% | |||||||||||
Delphi Automotive PLC | 75,842 | 5,143,605 | |||||||||
Experian PLC | 31,110 | 608,118 | |||||||||
Glencore PLC | 229,354 | 566,858 | |||||||||
Shire PLC2 | 58,253 | 3,755,294 | |||||||||
Total Jersey common stocks | 10,073,875 | ||||||||||
Luxembourg—0.10% | |||||||||||
ArcelorMittal* | 154,026 | 989,984 | |||||||||
Netherlands—3.35% | |||||||||||
Airbus Group SE | 10,428 | 613,587 | |||||||||
Akzo Nobel N.V. | 19,489 | 1,262,874 |
195
PACE International Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Netherlands—(concluded) | |||||||||||
ASML Holding N.V., NY Registered Shares | 45,023 | $ | 4,935,421 | ||||||||
Boskalis Westminster | 11,572 | 425,126 | |||||||||
Core Laboratories N.V.1 | 36,677 | 4,284,240 | |||||||||
Koninklijke Ahold Delhaize NV | 556,733 | 13,295,057 | |||||||||
Koninklijke Vopak N.V.1 | 46,774 | 2,404,971 | |||||||||
OCI NV*,1 | 55,308 | 844,658 | |||||||||
Randstad Holding N.V. | 15,368 | 661,142 | |||||||||
STMicroelectronics N.V. | 162,602 | 1,186,538 | |||||||||
Unilever N.V. | 58,526 | 2,711,179 | |||||||||
Total Netherlands common stocks | 32,624,793 | ||||||||||
New Zealand—0.79% | |||||||||||
Auckland International Airport Ltd. | 465,302 | 2,479,983 | |||||||||
Fletcher Building Ltd. | 339,630 | 2,376,771 | |||||||||
Meridian Energy Ltd. | 605,835 | 1,225,095 | |||||||||
Ryman Healthcare Ltd. | 159,725 | 1,099,318 | |||||||||
Spark New Zealand Ltd. | 190,318 | 542,231 | |||||||||
Total New Zealand common stocks | 7,723,398 | ||||||||||
Norway—0.82% | |||||||||||
DnB NOR ASA | 118,890 | 1,308,373 | |||||||||
Norsk Hydro ASA | 271,548 | 1,159,619 | |||||||||
Orkla ASA | 237,892 | 2,207,729 | |||||||||
Statoil ASA | 45,358 | 713,931 | |||||||||
Yara International ASA | 80,301 | 2,610,664 | |||||||||
Total Norway common stocks | 8,000,316 | ||||||||||
Papua New Guinea—0.12% | |||||||||||
Oil Search Ltd. | 212,127 | 1,142,950 | |||||||||
Portugal—0.31% | |||||||||||
Galp Energia, SGPS SA | 17,943 | 244,936 | |||||||||
Jeronimo Martins, SGPS SA | 166,486 | 2,787,318 | |||||||||
Total Portugal common stocks | 3,032,254 | ||||||||||
Singapore—3.08% | |||||||||||
Ascendas Real Estate Investment Trust | 1,220,700 | 2,230,712 | |||||||||
CapitaLand Commercial Trust | 770,500 | 864,923 | |||||||||
CapitaLand Mall Trust | 152,800 | 243,896 | |||||||||
City Developments Ltd. | 101,500 | 644,264 | |||||||||
DBS Group Holdings Ltd. | 80,000 | 919,520 | |||||||||
Hutchison Port Holdings Trust | 1,557,000 | 739,575 | |||||||||
SembCorp Industries Ltd.1 | 1,290,900 | 2,667,109 | |||||||||
Singapore Exchange Ltd. | 245,300 | 1,377,720 | |||||||||
Singapore Press Holdings Ltd.1 | 387,600 | 1,092,808 | |||||||||
Singapore Telecommunications Ltd. | 2,707,400 | 8,441,062 | |||||||||
StarHub Ltd. | 231,400 | 676,578 | |||||||||
Suntec Real Estate Investment Trust | 251,600 | 313,397 | |||||||||
United Overseas Bank Ltd. | 699,032 | 9,489,358 | |||||||||
UOL Group Ltd. | 69,500 | 299,109 | |||||||||
Total Singapore common stocks | 30,000,031 | ||||||||||
South Africa—0.19% | |||||||||||
Naspers Ltd., N Shares | 12,014 | 1,886,565 | |||||||||
South Korea—0.18% | |||||||||||
NAVER Corp. | 2,819 | 1,786,805 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Spain—5.42% | |||||||||||
Abertis Infraestructuras SA | 269,238 | $ | 4,235,186 | ||||||||
Amadeus IT Holding SA1 | 57,051 | 2,678,569 | |||||||||
Banco Popular Espanol SA | 435,464 | 609,535 | |||||||||
Banco Santander SA1 | 2,340,421 | 9,927,349 | |||||||||
Enagas SA2 | 137,998 | 4,207,265 | |||||||||
Ferrovial SA | 73,702 | 1,525,615 | |||||||||
Gas Natural SDG, SA | 13,784 | 285,172 | |||||||||
Grifols SA, ADR | 391,320 | 6,628,961 | |||||||||
Iberdrola SA | 1,947,280 | 13,378,033 | |||||||||
Industria de Diseno Textil SA | 6,995 | 241,964 | |||||||||
Mapfre SA | 122,765 | 300,855 | |||||||||
Repsol SA | 12,571 | 158,463 | |||||||||
Telefonica SA | 846,793 | 8,300,797 | |||||||||
Zardoya Otis SA1 | 28,927 | 283,949 | |||||||||
Total Spain common stocks | 52,761,713 | ||||||||||
Sweden—3.79% | |||||||||||
Alfa Laval AB1 | 67,609 | 1,065,847 | |||||||||
Getinge AB, B Shares | 39,034 | 791,446 | |||||||||
Hexagon AB, B Shares | 4,606 | 181,667 | |||||||||
Husqvarna AB, B Shares | 85,710 | 735,702 | |||||||||
Kinnevik AB | 30,575 | 779,650 | |||||||||
Securitas AB, B Shares | 37,835 | 622,551 | |||||||||
SKF AB, B Shares | 50,624 | 802,222 | |||||||||
Svenska Handelsbanken AB2 | 306,529 | 3,689,668 | |||||||||
Swedbank AB, A Shares | 170,934 | 3,591,672 | |||||||||
Swedish Match AB | 113,250 | 4,130,574 | |||||||||
Telefonaktiebolaget LM Ericsson, B Shares | 1,043,490 | 7,780,140 | |||||||||
Telia Co. AB | 2,779,897 | 12,686,102 | |||||||||
Total Sweden common stocks | 36,857,241 | ||||||||||
Switzerland—12.30% | |||||||||||
ABB Ltd.* | 696,822 | 14,810,703 | |||||||||
Adecco Group SA | 48,399 | 2,656,652 | |||||||||
Aryzta AG*,1 | 12,422 | 467,171 | |||||||||
Cie Financiere Richemont SA | 26,595 | 1,617,597 | |||||||||
Coca-Cola HBC AG* | 85,362 | 1,763,498 | |||||||||
Credit Suisse Group AG* | 48,101 | 553,370 | |||||||||
EMS-Chemie Holding AG1 | 2,201 | 1,204,736 | |||||||||
Geberit AG2 | 16,294 | 6,287,615 | |||||||||
Julius Baer Group Ltd.* | 184,843 | 7,586,726 | |||||||||
Nestle SA2 | 258,710 | 20,740,577 | |||||||||
Novartis AG2 | 153,188 | 12,691,907 | |||||||||
Pargesa Holding SA | 7,530 | 524,427 | |||||||||
Partners Group Holding AG | 1,425 | 652,071 | |||||||||
Roche Holding AG2 | 45,330 | 11,575,707 | |||||||||
Sika AG | 511 | 2,396,828 | |||||||||
Sonova Holding AG | 9,124 | 1,250,173 | |||||||||
Swiss Prime Site AG*,2 | 32,685 | 3,003,095 | |||||||||
Swiss Re AG2 | 72,731 | 6,104,691 | |||||||||
Swisscom AG | 2,224 | 1,094,790 | |||||||||
Syngenta AG | 32,989 | 12,971,634 | |||||||||
Zurich Insurance Group AG* | 40,323 | 9,689,668 | |||||||||
Total Switzerland common stocks | 119,643,636 |
196
PACE International Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Taiwan—0.98% | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 1,207,000 | $ | 6,522,178 | ||||||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 108,155 | 3,004,546 | |||||||||
Total Taiwan common stocks | 9,526,724 | ||||||||||
United Kingdom—18.52% | |||||||||||
3 | i Group PLC | 366,508 | 2,992,789 | ||||||||
Aberdeen Asset Management PLC | 129,797 | 547,119 | |||||||||
Admiral Group PLC | 61,165 | 1,751,732 | |||||||||
AMEC PLC | 592,969 | 3,499,266 | |||||||||
ARM Holdings PLC2 | 431,761 | 9,554,042 | |||||||||
Associated British Foods PLC1 | 10,692 | 380,785 | |||||||||
AstraZeneca PLC | 24,429 | 1,632,046 | |||||||||
BAE Systems PLC | 29,680 | 209,755 | |||||||||
Barclays PLC | 356,815 | 729,826 | |||||||||
Barratt Developments PLC | 107,699 | 623,587 | |||||||||
BP PLC | 1,972,795 | 11,144,606 | |||||||||
British American Tobacco PLC2 | 70,572 | 4,506,011 | |||||||||
BT Group PLC | 146,686 | 802,443 | |||||||||
Bunzl PLC | 63,027 | 1,972,719 | |||||||||
Burberry Group PLC | 60,347 | 1,054,234 | |||||||||
Centrica PLC | 512,410 | 1,635,017 | |||||||||
Cobham PLC | 230,181 | 521,227 | |||||||||
Compass Group PLC | 54,413 | 1,034,105 | |||||||||
Diageo PLC | 9,513 | 272,069 | |||||||||
Direct Line Insurance Group PLC | 247,022 | 1,144,878 | |||||||||
easyJet PLC | 87,868 | 1,210,567 | |||||||||
G4S PLC | 2,612,363 | 6,441,008 | |||||||||
GKN PLC | 887,753 | 3,400,151 | |||||||||
GlaxoSmithKline PLC2 | 810,035 | 18,096,047 | |||||||||
Hammerson PLC | 122,205 | 901,657 | |||||||||
Hargreaves Lansdown PLC1 | 564,407 | 9,703,067 | |||||||||
HSBC Holdings PLC | 386,742 | 2,534,088 | |||||||||
ICAP PLC | 216,522 | 1,275,174 | |||||||||
IMI PLC | 96,092 | 1,363,294 | |||||||||
Inmarsat PLC | 16,089 | 166,511 | |||||||||
Intertek Group PLC | 14,427 | 692,136 | |||||||||
Investec PLC | 34,612 | 205,904 | |||||||||
Kingfisher PLC | 1,981,030 | 8,817,093 | |||||||||
Land Securities Group PLC | 11,667 | 168,921 | |||||||||
Lloyds Banking Group PLC | 13,173,056 | 9,266,106 | |||||||||
Mondi PLC | 52,257 | 1,058,141 | |||||||||
National Grid PLC | 716,470 | 10,269,137 | |||||||||
Next PLC | 22,324 | 1,484,621 | |||||||||
Pearson PLC | 442,683 | 5,167,362 | |||||||||
Prudential PLC | 13,410 | 236,929 | |||||||||
Reckitt Benckiser Group PLC2 | 56,287 | 5,454,379 | |||||||||
Rolls-Royce Holdings PLC* | 145,277 | 1,520,831 | |||||||||
Royal Dutch Shell PLC, A Shares2,3 | 169,483 | 4,360,436 | |||||||||
Royal Dutch Shell PLC, B Shares4 | 542,484 | 14,373,366 | |||||||||
RSA Insurance Group PLC | 53,309 | 351,136 | |||||||||
Segro PLC | 76,711 | 449,748 | |||||||||
Sky PLC2 | 303,144 | 3,693,008 | |||||||||
Smith & Nephew PLC | 25,107 | 413,022 | |||||||||
Smiths Group PLC | 25,721 | 429,931 | |||||||||
Taylor Wimpey PLC | 492,033 | 1,007,377 | |||||||||
Tesco PLC* | 4,442,997 | 9,172,930 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
United Kingdom—(concluded) | |||||||||||
The Sage Group PLC | 66,093 | $ | 623,229 | ||||||||
Unilever PLC | 193,229 | 9,036,180 | |||||||||
William Hill PLC | 181,107 | 766,756 | |||||||||
Total United Kingdom common stocks | 180,118,499 | ||||||||||
United States—0.84% | |||||||||||
Lululemon Athletica, Inc.*,1 | 105,143 | 8,164,354 | |||||||||
Venezuela—0.95% | |||||||||||
Croda International PLC | 150,246 | 6,611,531 | |||||||||
Nielsen Holdings PLC | 48,179 | 2,594,921 | |||||||||
Total Venezuela common stocks | 9,206,452 | ||||||||||
Total common stocks (cost—$1,076,181,159) | 1,083,377,684 | ||||||||||
Preferred stocks—0.11% | |||||||||||
Germany—0.11% | |||||||||||
Fuchs Petrolub SE | 10,282 | 433,889 | |||||||||
Henkel AG & Co. KGaA Vorzug | 5,155 | 642,031 | |||||||||
Total preferred stocks (cost—$1,005,301) | 1,075,920 | ||||||||||
Face Amount | |||||||||||
Repurchase agreement—0.39% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $310,092 US Treasury Bond, 7.875% due 02/15/21 and $3,414,159 US Treasury Notes, 0.750% to 2.250% due 12/31/17 to 07/31/21; (value—$3,920,949); proceeds: $3,844,003 (cost—$3,844,000) | $ | 3,844,000 | 3,844,000 | ||||||||
Number of Shares | |||||||||||
Investment of cash collateral from securities loaned—3.05% | |||||||||||
Money market fund—3.05% | |||||||||||
State Street Institutional U.S. Government Money Market Fund (cost—$29,635,188) | 29,635,188 | 29,635,188 | |||||||||
Total investments before investments sold short (cost—$1,110,665,648)—114.92% | 1,117,932,792 | ||||||||||
Investments sold short—(12.71)% | |||||||||||
Common stocks—(12.71)% | |||||||||||
Australia—(0.43)% | |||||||||||
Challenger Financial Services Group Ltd. | (95,049 | ) | (686,209 | ) | |||||||
Insurance Australia Group Ltd. | (203,288 | ) | (933,112 | ) | |||||||
National Australia Bank Ltd. | (72,989 | ) | (1,472,120 | ) | |||||||
Orica Ltd. | (17,045 | ) | (183,290 | ) | |||||||
Treasury Wine Estates Ltd. | (33,397 | ) | (244,917 | ) | |||||||
Vocus Communications Ltd. | (90,959 | ) | (617,280 | ) | |||||||
(4,136,928 | ) |
197
PACE International Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Belgium—(0.06)% | |||||||||||
Ageas | (17,379 | ) | $ | (584,738 | ) | ||||||
Denmark—(0.38)% | |||||||||||
AP Moller—Maersk A/S, Class B | (1,546 | ) | (2,098,185 | ) | |||||||
Genmab A/S | (8,998 | ) | (1,630,947 | ) | |||||||
(3,729,132 | ) | ||||||||||
Finland—(0.02)% | |||||||||||
Metso Oyj | (8,112 | ) | (225,007 | ) | |||||||
France—(1.08)% | |||||||||||
CNP Assurances | (107,375 | ) | (1,640,419 | ) | |||||||
Electricite de France (EDF) | (124,610 | ) | (1,630,671 | ) | |||||||
Groupe Eurotunnel SA | (88,140 | ) | (915,836 | ) | |||||||
Klepierre | (60,428 | ) | (2,893,194 | ) | |||||||
Peugeot SA | (99,225 | ) | (1,498,713 | ) | |||||||
Vivendi SA | (25,020 | ) | (491,894 | ) | |||||||
Zodiac SA | (64,671 | ) | (1,456,890 | ) | |||||||
(10,527,617 | ) | ||||||||||
Germany—(0.33)% | |||||||||||
Daimler AG | (18,650 | ) | (1,268,140 | ) | |||||||
Deutsche Telekom AG | (35,658 | ) | (606,955 | ) | |||||||
MAN SE | (3,422 | ) | (358,783 | ) | |||||||
Merck KGaA | (4,112 | ) | (454,021 | ) | |||||||
Volkswagen AG | (3,429 | ) | (482,270 | ) | |||||||
(3,170,169 | ) | ||||||||||
Hong Kong—(0.62)% | |||||||||||
Cathay Pacific Airways Ltd. | (441,000 | ) | (716,205 | ) | |||||||
MTR Corp. Ltd. | (447,415 | ) | (2,531,646 | ) | |||||||
PCCW Ltd. | (875,830 | ) | (637,817 | ) | |||||||
SJM Holdings Ltd. | (1,143,000 | ) | (713,049 | ) | |||||||
Swire Pacific Ltd. | (12,500 | ) | (149,354 | ) | |||||||
The Bank of East Asia Ltd. | (308,827 | ) | (1,275,766 | ) | |||||||
(6,023,837 | ) | ||||||||||
Ireland—(0.06)% | |||||||||||
Kerry Group PLC | (6,304 | ) | (539,515 | ) | |||||||
Isle Of Man—(0.08)% | |||||||||||
Genting Singapore PLC | (1,334,500 | ) | (781,370 | ) | |||||||
Italy—(0.47)% | |||||||||||
EXOR SpA | (27,262 | ) | (1,061,581 | ) | |||||||
Intesa Sanpaolo SpA | (256,715 | ) | (565,405 | ) | |||||||
Luxottica Group SpA | (16,046 | ) | (778,751 | ) | |||||||
Mediobanca SpA | (310,588 | ) | (2,175,443 | ) | |||||||
(4,581,180 | ) | ||||||||||
Japan—(5.02)% | |||||||||||
ANA Holdings, Inc. | (372,000 | ) | (1,072,961 | ) | |||||||
Aozora Bank Ltd. | (373,000 | ) | (1,385,476 | ) | |||||||
Asahi Glass Co. Ltd. | (107,000 | ) | (626,050 | ) | |||||||
Central Japan Railway Co. | (20,300 | ) | (3,823,845 | ) | |||||||
Chubu Electric Power Co., Inc. | (98,900 | ) | (1,463,121 | ) | |||||||
Don Quijote Holdings Co. Ltd. | (10,100 | ) | (401,387 | ) |
Number of Shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Japan—(concluded) | |||||||||||
East Japan Railway Co. | (9,300 | ) | $ | (864,512 | ) | ||||||
Fujitsu Ltd. | (144,000 | ) | (611,084 | ) | |||||||
GungHo Online Entertainment, Inc. | (251,300 | ) | (573,851 | ) | |||||||
Hitachi Metals Ltd. | (57,500 | ) | (649,753 | ) | |||||||
Inpex Corp. | (24,600 | ) | (196,877 | ) | |||||||
Japan Airport Terminal Co. Ltd. | (10,100 | ) | (453,354 | ) | |||||||
Japan Prime Realty Investment Corp. | (152 | ) | (671,103 | ) | |||||||
Japan Real Estate Investment Corp. | (219 | ) | (1,328,574 | ) | |||||||
Japan Retail Fund Investment Corp. | (535 | ) | (1,321,311 | ) | |||||||
Kakaku.com, Inc. | (50,300 | ) | (1,055,938 | ) | |||||||
Keyence Corp. | (3,300 | ) | (2,358,367 | ) | |||||||
M3, Inc. | (13,900 | ) | (450,914 | ) | |||||||
Minebea Co. Ltd. | (94,600 | ) | (766,739 | ) | |||||||
Mixi, Inc. | (16,800 | ) | (607,556 | ) | |||||||
Nexon Co. Ltd. | (29,000 | ) | (437,693 | ) | |||||||
NH Foods Ltd. | (45,000 | ) | (1,103,886 | ) | |||||||
NIDEC Corp. | (34,900 | ) | (3,227,143 | ) | |||||||
Nippon Paint Co. Ltd. | (37,200 | ) | (1,037,232 | ) | |||||||
Nippon Prologis REIT, Inc. | (446 | ) | (1,113,306 | ) | |||||||
Nippon Yusen Kabushiki Kaisha | (156,000 | ) | (281,315 | ) | |||||||
Nitori Holdings Co. Ltd. | (8,400 | ) | (1,048,817 | ) | |||||||
NOK Corp. | (16,700 | ) | (324,229 | ) | |||||||
Nomura Real Estate Master Fund, Inc. | (218 | ) | (362,568 | ) | |||||||
Obic Co. Ltd. | (5,500 | ) | (325,036 | ) | |||||||
Oriental Land Co. Ltd. | (13,300 | ) | (848,562 | ) | |||||||
Osaka Gas Co. Ltd. | (157,000 | ) | (640,402 | ) | |||||||
Panasonic Corp. | (37,600 | ) | (372,554 | ) | |||||||
Seiko Epson Corp. | (32,100 | ) | (576,973 | ) | |||||||
Shimano, Inc. | (5,500 | ) | (875,925 | ) | |||||||
SMC Corp. | (3,600 | ) | (959,141 | ) | |||||||
Start Today Co. Ltd. | (8,200 | ) | (393,786 | ) | |||||||
Sumitomo Realty & Development Co. Ltd. | (65,000 | ) | (1,710,761 | ) | |||||||
Suruga Bank Ltd. | (80,200 | ) | (1,859,687 | ) | |||||||
Taisho Pharmaceutical Holdings Co. Ltd. | (3,600 | ) | (397,628 | ) | |||||||
TDK Corp. | (9,100 | ) | (569,893 | ) | |||||||
The Bank of Kyoto Ltd. | (48,000 | ) | (328,828 | ) | |||||||
Tokyo Gas Co. Ltd. | (371,000 | ) | (1,596,207 | ) | |||||||
Tokyu Corp. | (160,000 | ) | (1,328,172 | ) | |||||||
Tokyu Fudosan Holdings Corp. | (89,700 | ) | (541,532 | ) | |||||||
TonenGeneral Sekiyu KK | (49,000 | ) | (446,131 | ) | |||||||
Toyota Industries Corp. | (7,200 | ) | (329,887 | ) | |||||||
United Urban Investment Corp. | (709 | ) | (1,329,266 | ) | |||||||
West Japan Railway Co. | (6,200 | ) | (389,190 | ) | |||||||
Yahoo Japan Corp. | (421,100 | ) | (1,877,792 | ) | |||||||
Yamada Denki Co. Ltd. | (48,900 | ) | (259,752 | ) | |||||||
Yamaguchi Financial Group, Inc. | (130,000 | ) | (1,299,554 | ) | |||||||
(48,875,621 | ) | ||||||||||
Luxembourg—(0.05)% | |||||||||||
Millicom International Cellular SA, SDR | (9,279 | ) | (495,560 | ) | |||||||
Mauritius—(0.08)% | |||||||||||
Golden Agri-Resources Ltd. | (2,799,400 | ) | (751,685 | ) | |||||||
Netherlands—(0.92)% | |||||||||||
Altice N.V., Class A | (33,353 | ) | (495,007 | ) |
198
PACE International Equity Investments
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Investments sold short—(continued) | |||||||||||
Common stocks—(continued) | |||||||||||
Netherlands—(concluded) | |||||||||||
CNH Industrial N.V. | (659,154 | ) | $ | (4,701,642 | ) | ||||||
Ferrari NV | (21,413 | ) | (968,123 | ) | |||||||
Fiat Chrysler Automobiles N.V. | (149,545 | ) | (963,022 | ) | |||||||
Koninklijke KPN N.V. | (553,063 | ) | (1,819,730 | ) | |||||||
(8,947,524 | ) | ||||||||||
Singapore—(0.32)% | |||||||||||
Jardine Cycle & Carriage Ltd. | (77,200 | ) | (2,258,936 | ) | |||||||
Singapore Airlines Ltd. | (49,700 | ) | (407,031 | ) | |||||||
Yangzijiang Shipbuilding Holdings Ltd. | (752,700 | ) | (488,438 | ) | |||||||
(3,154,405 | ) | ||||||||||
Spain—(0.45)% | |||||||||||
Bankinter SA | (309,117 | ) | (2,156,500 | ) | |||||||
CaixaBank SA | (894,375 | ) | (2,246,802 | ) | |||||||
(4,403,302 | ) | ||||||||||
Sweden—(0.24)% | |||||||||||
Hennes & Mauritz AB, B Shares | (29,301 | ) | (885,159 | ) | |||||||
Industrivarden AB, C Shares | (31,205 | ) | (525,128 | ) | |||||||
Lundin Petroleum AB | (52,851 | ) | (874,571 | ) | |||||||
(2,284,858 | ) | ||||||||||
Switzerland—(1.30)% | |||||||||||
Dufry AG | (30,120 | ) | (3,468,213 | ) | |||||||
Galenica AG | (593 | ) | (764,806 | ) |
Number of Shares | Value | ||||||||||
Investments sold short—(concluded) | |||||||||||
Common stocks—(concluded) | |||||||||||
Switzerland—(concluded) | |||||||||||
Julius Baer Group Ltd. | (5,500 | ) | $ | (225,743 | ) | ||||||
LafargeHolcim Ltd. | (19,208 | ) | (914,025 | ) | |||||||
Swiss Life Holding AG | (20,119 | ) | (4,597,976 | ) | |||||||
Zurich Insurance Group AG | (11,074 | ) | (2,661,096 | ) | |||||||
(12,631,859 | ) | ||||||||||
United Kingdom—(0.68)% | |||||||||||
Aggreko PLC | (13,588 | ) | (231,262 | ) | |||||||
Antofagasta PLC | (239,804 | ) | (1,588,430 | ) | |||||||
Aviva PLC | (46,995 | ) | (243,247 | ) | |||||||
Fresnillo PLC | (127,595 | ) | (3,260,794 | ) | |||||||
RELX PLC | (31,333 | ) | (595,061 | ) | |||||||
Whitbread PLC | (13,615 | ) | (695,344 | ) | |||||||
(6,614,138 | ) | ||||||||||
Venezuela—(0.12)% | |||||||||||
Coca-Cola European Partners PLC | (14,773 | ) | (557,340 | ) | |||||||
Berkeley Group Holdings PLC | (17,462 | ) | (620,043 | ) | |||||||
(1,177,383 | ) | ||||||||||
Total investments sold short (proceeds—$120,853,331) | (123,635,828 | ) | |||||||||
Liabilities in excess of other assets—(2.21)% | (21,546,365 | ) | |||||||||
Net assets—100.00% | $ | 972,750,599 |
For a listing of defined portfolio acronyms and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 262.
Aggregate cost for federal income tax purposes before investments sold short was $1,127,789,998; and net unrealized depreciation consisted of:
Gross unrealized appreciation | $ | 82,845,746 | |||||
Gross unrealized depreciation | (92,702,952 | ) | |||||
Net unrealized depreciation | $ | (9,857,206 | ) |
Affiliated issuer activity
The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2016. 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 07/31/15 | Purchases during the year ended 07/31/16 | Sales during the year ended 07/31/16 | Value at 07/31/16 | Net income earned from affiliate for the year ended 07/31/16 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 29,746,054 | $ | 476,504,722 | $ | 506,250,776 | $ | — | $ | 56,194 |
199
PACE International Equity Investments
Portfolio of investments—July 31, 2016
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | 1,083,377,684 | $ | — | $ | — | $ | 1,083,377,684 | |||||||||||
Preferred stocks | 1,075,920 | — | — | 1,075,920 | |||||||||||||||
Repurchase agreement | — | 3,844,000 | — | 3,844,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 29,635,188 | — | 29,635,188 | |||||||||||||||
Total | $ | 1,084,453,604 | $ | 33,479,188 | $ | — | $ | 1,117,932,792 | |||||||||||
Liabilities | |||||||||||||||||||
Investments sold short | $ | (123,635,828 | ) | $ | — | $ | — | $ | (123,635,828 | ) |
At July 31, 2016, there were no transfers between Level 1 and Level 2.
Portfolio footnotes
* Non-income producing security.
1 Security, or portion thereof, was on loan at July 31, 2016.
2 Security, or portion thereof, pledged as collateral for investments sold short.
3 Security is traded on the Amsterdam Exchange.
4 Security is traded on the London Exchange.
See accompanying notes to financial statements
200
PACE International Emerging Markets Equity Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares returned -2.82% before the deduction of the maximum PACE Select program fee.1 In comparison, the MSCI Emerging Markets Index (net) (the "benchmark") returned -0.75%, and the Lipper Emerging Markets Funds category posted a median return of -1.17%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 204. 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 3.
Subadvisors' comments2 (Unaudited)
Mondrian
Our portion of the Portfolio outperformed the benchmark during the reporting period. Country allocation was positive, although this was offset by the impact of currency movements. In Asia, our underweight exposure to the weak Chinese market strongly contributed to returns. However, this was offset by stock selection in the country, as the impact of a zero weighting to strong performing Internet company Tencent Holdings and positions in footwear company Belle International and power producer China Resources Power weighed on returns. Elsewhere, we benefited from an overweight exposure and good stock selection in India, particularly from holdings in technology consultancy firm Infosys and motorcycle manufacturer Bajaj Auto. In other Asian countries, we were negatively impacted by weak performance from Philippine telecom operator PLDT, which underperformed due to concerns over the impact of greater competition. In Latin America, we benefited from an overweight exposure and stock selection in Mexico, particularly from airport operator GAP, as it continued to experience strong growth in air traffic. Peruvian financial stock Credicorp also performed well. In Brazil, the prospect of an improving economic environment under the new government caused the market to outperform. As such, our underweight position dragged on relative returns, although holdings in toll-road operator CCR and payment processor Cielo performed well. Exposure to consumer stocks added value across several countries, particularly in Europe, the Middle East and Africa (EMEA) where an out-of-benchmark exposure to Unilever was additive to results. In addition, South African brewing company SAB Miller gained on a takeover bid from AB Inbev. SAB Miller was subsequently sold from our portion of the Portfolio. Elsewhere in EMEA, our portion of the Portfolio benefited relative to the benchmark from having no exposure to the underperforming markets of Greece and Poland. However, this was offset by the impact of underweight exposure to Russia.
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 subadvisors 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 Manager:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisors:
Mondrian Investment Partners Limited ("Mondrian"); William Blair & Company L.L.C. ("William Blair");
LMCG Investments, LLC, formerly Lee Munder Capital Group ("LMCG")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Fred Lee, CFA, Vincent Russo, Mayoor Joshi and Diana To
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
(continued on next page)
201
PACE International Emerging Markets Equity Investments
Subadvisors' comments (Unaudited) – continued
Derivatives were not used during the review period.
William Blair
Our portion of the Portfolio underperformed the benchmark during the reporting period. Style headwinds during the first quarter of 2016 significantly detracted from performance, as lower valuation companies with weaker earnings trends strongly outperformed higher growth, higher valuation companies with stronger earnings trends. From a sector perspective, positioning was the biggest detractor from relative performance in this environment, primarily underweighting cyclical sectors such as energy and materials, while overweighting non-cyclical sectors, such as consumer staples and health care.
Information technology stock selection was bolstered by relative strength across industries. Our overweight and stock selection in Internet services was positive. For example, Chinese gaming company Netease reported that revenue of online games grew 105% year over year, mainly driven by strong mobile segment performance. Within energy, India's Bharat Petroleum benefited from quarterly earnings that beat consensus estimates, along with a positive outlook for refining margins and fuel demand. These effects were partially offset by negative stock selection in the materials and utilities sectors.
Within the materials sector, our exclusion of metals & mining stocks was detrimental amid the commodity price rally. Our position in LG Chem (South Korea) also weighed on performance, as the stock price languished on concerns about decelerating trends in its LCD/smartphone business. These negative effects were mitigated by positive stock selection in industrials and telecommunication services. Within industrials, South Africa-based Bidvest Corp. was a leading contributor, as the share price rallied after the spinoff of its food service businesses.
From a geographic perspective, poor stock selection in Russia, South Africa and Brazil were mitigated by outperformance in China due to selection and the favorable impact of an underweight position.
From a positioning perspective, we added to emerging market exposure in Asia, while reducing our allocation to Europe, the Middle East and Africa (EMEA) over the reporting period. In terms of sectors, we added to our energy and telecommunication services allocations, while reducing our exposures to financials and industrials.
Derivatives were not used during the reporting period.
LMCG Investments, LLC (formerly Lee Munder Capital Group)
Our portion of the Portfolio modestly underperformed the benchmark during the reporting period. The last 12 months continued to be volatile for global markets. However, in contrast to the last few years, when volatility centered on macro uncertainty for emerging market countries, recent concerns have
Investment process
(continued)
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.
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 perform-
(continued on next page)
202
PACE International Emerging Markets Equity Investments
Subadvisors' comments (Unaudited) – concluded
been centered on developed markets. Investors have been focused on the UK's decision to leave the European Union and how that decision will impact global trade. As a result, emerging markets fared better than developed international markets during the reporting period.
Our overall stock selection model worked modestly well on average, but the effectiveness of its three major components (Market Dynamics, Earnings Quality and Valuation) varied widely. Investors focused less on company fundamentals and more on macroeconomic drivers and concerns. We attribute this to a pivoting between "risk-on" and "risk-off" trades, an environment that is not conducive to our stock selection model generating excess returns. Our goal is to add value by emphasizing three main categories of quantitative stock selection factors that we expect will pay off positively over time. Our research indicates that many stock selection factors work well in one environment, but not the other. Predicting whether the market will be risk-on or risk-off, and emphasizing the appropriate factors for that environment, is difficult when the market is switching back and forth.
Stock selection detracted modestly from performance during the reporting period. Positive stock selection, particularly in China and Greece, was offset by negative stock selection in Brazil and Korea. Country allocation also detracted from performance, largely due to an overweight position in Turkey. In terms of sectors, positive stock selection in energy, information technology and telecommunication services was offset by negative stock selection in financials. Sector allocation was a slight tailwind to relative performance for the period, led by an underweight in financials and overweight positions in information technology and materials.
Derivatives were not used during the reporting period.
Investment process
(concluded)
ance 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.
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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PACE International Emerging Markets Equity Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | (3.08 | )% | (2.95 | )% | 2.73 | % | |||||||||
Class C2 | (3.75 | ) | (3.66 | ) | 1.98 | ||||||||||
Class Y3 | (2.80 | ) | (2.71 | ) | 3.04 | ||||||||||
Class P4 | (2.82 | ) | (2.82 | ) | 2.82 | ||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (8.43 | ) | (4.04 | ) | 2.15 | ||||||||||
Class C2 | (4.71 | ) | (3.66 | ) | 1.98 | ||||||||||
MSCI Emerging Markets Index (net)5 | (0.75 | ) | (2.75 | ) | 3.90 | ||||||||||
Lipper Emerging Markets Funds median | (1.17 | ) | (2.50 | ) | 3.47 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A1 | (12.37 | )% | (3.96 | )% | 2.49 | % | |||||||||
Class C2 | (13.06 | ) | (4.68 | ) | 1.72 | ||||||||||
Class Y3 | (12.16 | ) | (3.73 | ) | 2.79 | ||||||||||
Class P4 | (12.16 | ) | (3.84 | ) | 2.57 | ||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A1 | (17.18 | ) | (5.03 | ) | 1.91 | ||||||||||
Class C2 | (13.93 | ) | (4.68 | ) | 1.72 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, supplemented from time to time, were as follows: Class A—1.78% and 1.75%; Class C—2.51% and 2.50%; Class Y—1.54% and 1.50%; and Class P—1.57% and 1.50%. 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS AM is contractually obligated to: (1) waive its management fees and/or reimburse expenses so that the Portfolio's ordinary total operating expenses of each class through November 30, 2016 (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, prior to August 1, 2016, 1.95% for Class A, 2.70% for Class C, 1.70% for Class Y and 1.70% for Class P. Effective August 1, 2016, the expense caps were changed to: Class A—1.75%; Class C—2.50%; Class Y—1.50%; and Class P—1.50%. The Portfolio has agreed to repay UBS AM for any waived fees/reimbursed expenses (pursuant to item (1)) 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 AM. Upon termination of the agreement, however, UBS 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 of 0.25% annually.
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 of 0.25% and 0.75% annually, respectively.
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 (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 nonresident 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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amountsold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualfundperformance.
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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PACE International Emerging Markets Equity 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 International Emerging Markets Equity Investments Class P shares versus the MSCI Emerging Markets Index (net) over the 10 years ended July 31, 2016. 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 are unmanaged. The comparison is shown for illustration purposes only.
PACE International Emerging Markets Equity Investments
205
PACE International Emerging Markets Equity Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Net assets (mm) | $ | 407.5 | |||||
Number of holdings | 230 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Common stocks, ADRs, GDRs, and preferred stocks | 98.2 | % | |||||
Investment companies | 0.9 | ||||||
Cash equivalents and other assets less liabilities | 0.9 | ||||||
Total | 100.0 | % | |||||
Regional allocation (equity investments)1 | 07/31/16 | ||||||
Asia | 63.6 | % | |||||
The Americas | 13.6 | ||||||
Europe and European territories | 12.5 | ||||||
Africa | 6.4 | ||||||
Russia | 2.1 | ||||||
Total | 98.2 | % | |||||
Top five countries (equity investments)1,2 | 07/31/16 | ||||||
South Korea | 14.9 | % | |||||
Taiwan | 13.9 | ||||||
India | 11.0 | ||||||
Cayman Islands | 8.0 | ||||||
Brazil | 7.9 | ||||||
Total | 55.7 | % | |||||
Top five sectors1,2 | 07/31/16 | ||||||
Financials | 22.4 | % | |||||
Information Technology | 21.3 | ||||||
Consumer Discretionary | 12.3 | ||||||
Consumer Staples | 12.0 | ||||||
Telecommunication Services | 7.7 | ||||||
Total | 75.7 | % | |||||
Top ten equity holdings1,2 | 07/31/16 | ||||||
Samsung Electronics Co. Ltd. | 4.2 | % | |||||
Tencent Holdings Ltd. | 2.9 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 2.9 | ||||||
China Mobile Ltd. | 2.5 | ||||||
Itau Unibanco Holding SA | 1.3 | ||||||
Uni-President Enterprises Corp. | 1.1 | ||||||
Credicorp Ltd. | 1.1 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 1.0 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 1.0 | ||||||
Housing Development Finance Corp. | 1.0 | ||||||
Total | 19.0 | % |
For a listing of defined portfolio acronyms that are used throughout the Portfolio statistics, please refer to page 262.
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. 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 companies was included.
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PACE International Emerging Markets Equity Investments
Industry diversification—(unaudited)
As a percentage of net assets as of July 31, 2016
Common stocks | |||||||
Airlines | 0.57 | % | |||||
Auto components | 1.22 | ||||||
Automobiles | 3.51 | ||||||
Banks | 12.62 | ||||||
Beverages | 2.04 | ||||||
Capital markets | 0.28 | ||||||
Chemicals | 1.77 | ||||||
Construction & engineering | 0.70 | ||||||
Construction materials | 0.30 | ||||||
Consumer finance | 0.21 | ||||||
Diversified consumer services | 0.75 | ||||||
Diversified financial services | 1.14 | ||||||
Diversified telecommunication services | 2.21 | ||||||
Electric utilities | 1.26 | ||||||
Electrical equipment | 0.49 | ||||||
Electronic equipment, instruments & components | 1.81 | ||||||
Food & staples retailing | 2.43 | ||||||
Food products | 4.53 | ||||||
Health care providers & services | 1.06 | ||||||
Hotels, restaurants & leisure | 1.70 | ||||||
Household durables | 1.21 | ||||||
Household products | 1.47 | ||||||
Independent power and renewable electricity producers | 0.67 | ||||||
Industrial conglomerates | 1.49 | ||||||
Insurance | 2.11 | ||||||
Internet software & services | 5.36 | ||||||
IT services | 2.54 | ||||||
Machinery | 0.86 | ||||||
Media | 1.20 | ||||||
Metals & mining | 1.27 | ||||||
Multi-utilities | 0.55 | ||||||
Multiline retail | 1.36 |
Common stocks—(concluded) | |||||||
Oil, gas & consumable fuels | 5.66 | % | |||||
Paper & forest products | 0.29 | ||||||
Personal products | 0.76 | ||||||
Pharmaceuticals | 1.49 | ||||||
Real estate investment trusts | 1.51 | ||||||
Real estate management & development | 1.95 | ||||||
Road & rail | 0.26 | ||||||
Semiconductors & semiconductor equipment | 9.52 | ||||||
Specialty retail | 0.96 | ||||||
Technology hardware, storage & peripherals | 2.03 | ||||||
Textiles, apparel & luxury goods | 0.62 | ||||||
Thrifts & mortgage finance | 1.29 | ||||||
Tobacco | 0.81 | ||||||
Trading companies & distributors | 0.32 | ||||||
Transportation infrastructure | 1.74 | ||||||
Wireless telecommunication services | 5.54 | ||||||
Total common stocks | 95.44 | ||||||
Preferred stocks | |||||||
Automobiles | 0.16 | ||||||
Banks | 1.32 | ||||||
Metals & mining | 0.36 | ||||||
Oil, gas & consumable fuels | 0.51 | ||||||
Paper & forest products | 0.44 | ||||||
Total preferred stocks | 2.79 | ||||||
Investment company | 0.94 | ||||||
Repurchase agreement | 0.94 | ||||||
Investment of cash collateral from securities loaned | 1.59 | ||||||
Liabilities in excess of other assets | (1.70 | ) | |||||
Net assets | 100.00 | % |
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PACE International Emerging Markets Equity Investments
Portfolio of Investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—95.44% | |||||||||||
Bermuda—1.17% | |||||||||||
Credicorp Ltd. | 27,894 | $ | 4,472,245 | ||||||||
Huabao International Holdings Ltd.* | 833,000 | 298,482 | |||||||||
Total Bermuda common stocks | 4,770,727 | ||||||||||
Brazil—5.28% | |||||||||||
AMBEV SA | 321,900 | 1,866,432 | |||||||||
AMBEV SA, ADR | 578,810 | 3,345,522 | |||||||||
Banco Bradesco SA | 139,100 | 1,253,118 | |||||||||
BB Seguridade Participacoes SA | 271,000 | 2,519,103 | |||||||||
BM&FBovespa SA—Bolsa de Valores Mercadorias e Futuros | 173,700 | 1,022,679 | |||||||||
Cielo SA | 265,864 | 3,013,355 | |||||||||
Companhia de Concessoes Rodoviarias (CCR) | 446,000 | 2,576,357 | |||||||||
Equatorial Energia SA | 74,700 | 1,279,327 | |||||||||
Kroton Educacional SA | 376,000 | 1,674,513 | |||||||||
Lojas Renner SA | 249,195 | 2,095,070 | |||||||||
Ultrapar Participacoes SA | 37,900 | 865,444 | |||||||||
Total Brazil common stocks | 21,510,920 | ||||||||||
British Virgin Islands—0.22% | |||||||||||
Mail.ru Group Ltd., GDR* | 46,771 | 902,680 | |||||||||
Cayman Islands—7.96% | |||||||||||
Alibaba Group Holding Ltd., ADR* | 48,231 | 3,978,093 | |||||||||
Belle International Holdings Ltd. | 2,170,976 | 1,435,490 | |||||||||
China Resources Land Ltd. | 522,000 | 1,297,195 | |||||||||
Dali Foods Group Co. Ltd.1,2 | 1,845,000 | 1,074,887 | |||||||||
Geely Automobile Holdings Ltd. | 2,755,000 | 1,811,005 | |||||||||
Golden Eagle Retail Group Ltd.2 | 859,000 | 964,360 | |||||||||
Hengan International Group Co. Ltd. | 233,000 | 1,958,084 | |||||||||
NetEase, Inc., ADR | 9,800 | 2,001,846 | |||||||||
Sands China Ltd. | 393,200 | 1,500,144 | |||||||||
TAL Education Group, ADR* | 14,660 | 882,679 | |||||||||
Tencent Holdings Ltd. | 498,100 | 11,973,558 | |||||||||
Want Want China Holdings Ltd.2 | 2,068,000 | 1,266,111 | |||||||||
WH Group Ltd. | 2,898,500 | 2,282,666 | |||||||||
Total Cayman Islands common stocks | 32,426,118 | ||||||||||
Chile—0.42% | |||||||||||
Banco Santander Chile, ADR2 | 32,772 | 674,120 | |||||||||
Cia Cervecerias Unidas SA | 89,563 | 1,022,111 | |||||||||
Total Chile common stocks | 1,696,231 | ||||||||||
China—7.14% | |||||||||||
Air China Ltd., Class H | 1,520,000 | 1,161,786 | |||||||||
Bank of Communications Co. Ltd., Class H | 2,396,000 | 1,615,163 | |||||||||
China Bluechemical Ltd., Class H | 2,142,000 | 427,936 | |||||||||
China CITIC Bank, Class H | 2,812,000 | 1,775,985 | |||||||||
China Construction Bank Corp., Class H | 2,865,000 | 1,920,241 | |||||||||
China Everbright Bank Co. Ltd. | 1,747,000 | 758,841 | |||||||||
China Evergrande Group2 | 1,477,000 | 930,930 | |||||||||
China Galaxy Securities Co. Ltd. | 1,342,500 | 1,161,087 | |||||||||
China Minsheng Banking Corp. Ltd., Class H | 1,359,500 | 1,417,606 | |||||||||
China Pacific Insurance (Group) Co. Ltd., Class H | 349,800 | 1,235,373 | |||||||||
China Vanke Co. Ltd., Class H | 547,300 | 1,237,322 | |||||||||
Chongqing Rural Commercial Bank, Class H2 | 2,338,000 | 1,226,498 | |||||||||
Guangzhou Automobile Group Co. Ltd., Class H | 1,204,000 | 1,545,659 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
China—(concluded) | |||||||||||
Guangzhou R&F Properties Co. Ltd., Class H | 802,800 | $ | 1,214,796 | ||||||||
Industrial & Commercial Bank of China Ltd., Class H | 3,581,000 | 2,026,267 | |||||||||
Jiangsu Expressway Co. Ltd., Class H | 1,342,000 | 1,895,793 | |||||||||
New Oriental Education & Technology Group, Inc., ADR | 11,129 | 490,344 | |||||||||
PICC Property & Casualty Co. Ltd., Class H | 1,450,000 | 2,246,468 | |||||||||
Shanghai Pharmaceuticals Holding Co. Ltd. | 474,700 | 1,125,809 | |||||||||
Sinopharm Group Co., Class H | 245,600 | 1,188,683 | |||||||||
The People's Insurance Co. Group of China Ltd. | 2,162,000 | 830,424 | |||||||||
Weichai Power Co. Ltd., Class H | 874,000 | 1,047,665 | |||||||||
Zhuzhou CSR Times Electric Co. Ltd., Class H | 110,500 | 609,584 | |||||||||
Total China common stocks | 29,090,260 | ||||||||||
Czech Republic—0.15% | |||||||||||
Komercni Banka A.S. | 15,587 | 613,168 | |||||||||
Hong Kong—5.65% | |||||||||||
Beijing Enterprises Holdings Ltd. | 323,500 | 1,822,148 | |||||||||
China Everbright Ltd. | 412,000 | 785,935 | |||||||||
China Mobile Ltd. | 810,000 | 9,986,144 | |||||||||
China Overseas Land & Investment Ltd. | 802,000 | 2,635,982 | |||||||||
China Resources Power Holdings Co. Ltd. | 1,716,911 | 2,735,231 | |||||||||
China Taiping Insurance Holdings Co. Ltd.* | 362,800 | 710,786 | |||||||||
CITIC Ltd. | 1,029,000 | 1,554,429 | |||||||||
CNOOC Ltd. | 2,328,000 | 2,784,574 | |||||||||
Total Hong Kong common stocks | 23,015,229 | ||||||||||
Hungary—0.67% | |||||||||||
OTP Bank PLC | 71,274 | 1,735,782 | |||||||||
Richter Gedeon Nyrt | 45,998 | 972,091 | |||||||||
Total Hungary common stocks | 2,707,873 | ||||||||||
India—10.96% | |||||||||||
Asian Paints Ltd. | 94,518 | 1,572,102 | |||||||||
Axis Bank Ltd. | 211,830 | 1,727,117 | |||||||||
Bajaj Auto Ltd. | 92,987 | 3,749,187 | |||||||||
Bharat Petroleum Corp. Ltd. | 192,166 | 1,700,189 | |||||||||
Cairn India Ltd. | 650,002 | 1,853,891 | |||||||||
Dr Reddy's Laboratories Ltd., ADR2 | 18,383 | 802,418 | |||||||||
HCL Technologies Ltd. | 167,049 | 1,877,727 | |||||||||
HDFC Bank Ltd. | 127,109 | 2,364,757 | |||||||||
HDFC Bank Ltd., ADR | 8,258 | 572,032 | |||||||||
Hero Honda Motors Ltd. | 40,510 | 1,937,144 | |||||||||
Hindustan Petroleum Corp. Ltd. | 106,457 | 2,005,177 | |||||||||
Hindustan Unilever Ltd. | 107,470 | 1,480,129 | |||||||||
Housing Development Finance Corp. | 194,322 | 3,987,394 | |||||||||
Indiabulls Housing Finance Ltd. | 111,796 | 1,275,845 | |||||||||
Infosys Ltd. | 89,990 | 1,442,648 | |||||||||
Infosys Ltd., ADR2 | 146,727 | 2,410,725 | |||||||||
ITC Ltd. | 120,913 | 455,691 | |||||||||
Larsen & Toubro Ltd. | 76,739 | 1,785,841 | |||||||||
Maruti Suzuki India Ltd. | 18,877 | 1,340,736 | |||||||||
Reliance Industries Ltd., GDR1 | 60,765 | 1,832,065 | |||||||||
Sesa Goa Ltd. | 586,834 | 1,442,446 | |||||||||
Tata Motors Ltd. | 285,869 | 2,147,485 | |||||||||
Tata Motors Ltd., ADR | 46,480 | 1,758,338 |
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PACE International Emerging Markets Equity Investments
Portfolio of Investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
India—(concluded) | |||||||||||
Wipro Ltd., ADR2 | 140,718 | $ | 1,595,742 | ||||||||
Zee Entertainment Enterprises Ltd. | 210,789 | 1,564,908 | |||||||||
Total India common stocks | 44,681,734 | ||||||||||
Indonesia—2.60% | |||||||||||
PT Bank Central Asia Tbk | 1,297,100 | 1,430,935 | |||||||||
PT Bank Mandiri (Persero) Tbk | 1,910,300 | 1,472,995 | |||||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 4,706,600 | 4,141,204 | |||||||||
PT Kalbe Farma Tbk | 5,638,100 | 720,985 | |||||||||
Telekomunikasi Indonesia Persero Tbk PT | 5,600,200 | 1,808,516 | |||||||||
Unilever Indonesia Tbk PT | 299,000 | 1,028,358 | |||||||||
Total Indonesia common stocks | 10,602,993 | ||||||||||
Kazakhstan—0.11% | |||||||||||
KazMunaiGas Exploration Production, GDR*,3 | 30,021 | 231,762 | |||||||||
KazMunaiGas Exploration Production, GDR*,4 | 28,996 | 223,849 | |||||||||
Total Kazakhstan common stocks | 455,611 | ||||||||||
Malaysia—3.41% | |||||||||||
AirAsia Bhd | 1,600,100 | 1,151,773 | |||||||||
AMMB Holdings Berhad | 1,263,700 | 1,334,949 | |||||||||
Genting Berhad | 465,600 | 940,236 | |||||||||
Genting Malaysia Berhad | 1,315,900 | 1,386,860 | |||||||||
IHH Healthcare Berhad | 839,100 | 1,348,167 | |||||||||
Malayan Banking Berhad | 855,469 | 1,685,508 | |||||||||
Public Bank Berhad | 610,700 | 2,925,599 | |||||||||
Telekom Malaysia Berhad | 661,500 | 1,109,949 | |||||||||
Tenaga Nasional Berhad | 570,700 | 2,016,132 | |||||||||
Total Malaysia common stocks | 13,899,173 | ||||||||||
Mexico—4.30% | |||||||||||
Arca Continental SAB de C.V. | 112,248 | 721,440 | |||||||||
Compartamos SAB de C.V | 471,100 | 874,864 | |||||||||
Fibra Uno Administracion SA de C.V. | 1,342,700 | 2,731,947 | |||||||||
Fomento Economico Mexicano SAB de C.V., ADR | 10,692 | 956,934 | |||||||||
Gruma SAB de C.V., Series B | 62,611 | 901,398 | |||||||||
Grupo Aeroportuario del Pacifico SAB de C.V. | 117,191 | 1,152,097 | |||||||||
Grupo Aeroportuario del Pacifico SAB de C.V., ADR | 5,800 | 569,966 | |||||||||
Grupo Financiero Banorte SAB de C.V., Series O | 605,977 | 3,319,138 | |||||||||
Grupo Financiero Santander Mexico SAB de C.V., Class B, ADR2 | 142,400 | 1,300,112 | |||||||||
Kimberly-Clark de Mexico SAB de C.V., Series A | 757,500 | 1,712,152 | |||||||||
Wal-Mart de Mexico SAB de C.V. | 1,429,203 | 3,262,394 | |||||||||
Total Mexico common stocks | 17,502,442 | ||||||||||
Netherlands—0.71% | |||||||||||
Steinhoff International Holdings NV | 291,893 | 1,845,615 | |||||||||
Yandex N.V.* | 47,733 | 1,033,420 | |||||||||
Total Netherlands common stocks | 2,879,035 | ||||||||||
Philippines—0.88% | |||||||||||
Philippine Long Distance Telephone Co., ADR | 56,050 | 2,526,174 | |||||||||
SM Prime Holdings, Inc. | 998,500 | 618,896 | |||||||||
Universal Robina Corp. | 106,510 | 453,080 | |||||||||
Total Philippines common stocks | 3,598,150 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Poland—0.32% | |||||||||||
Polski Koncern Naftowy Orlen SA | 82,215 | $ | 1,317,541 | ||||||||
Qatar—0.87% | |||||||||||
Qatar Electricity & Water Co. | 36,078 | 2,227,227 | |||||||||
Qatar National Bank | 31,247 | 1,312,881 | |||||||||
Total Qatar common stocks | 3,540,108 | ||||||||||
Romania—0.10% | |||||||||||
Societatea Nationala de Gaze Naturale ROMGAZ SA, GDR5 | 71,870 | 408,222 | |||||||||
Russia—2.07% | |||||||||||
Gazprom PAO, ADR4 | 427,028 | 1,738,004 | |||||||||
Gazprom PAO, ADR3 | 511,359 | 2,101,685 | |||||||||
Lukoil PJSC, ADR4 | 27,722 | 1,204,743 | |||||||||
Lukoil PJSC, ADR3 | 5,378 | 229,910 | |||||||||
Magnit PJSC, GDR | 26,844 | 1,030,004 | |||||||||
MMC Norilsk Nickel PJSC, ADR | 49,766 | 727,579 | |||||||||
Tatneft PAO, ADR | 49,250 | 1,391,312 | |||||||||
Total Russia common stocks | 8,423,237 | ||||||||||
South Africa—6.43% | |||||||||||
Bid Corp. Ltd.* | 41,535 | 775,031 | |||||||||
FirstRand Ltd. | 432,048 | 1,512,343 | |||||||||
Gold Fields Ltd. | 202,948 | 1,253,398 | |||||||||
Growthpoint Properties Ltd. | 612,501 | 1,162,676 | |||||||||
Mr Price Group Ltd. | 84,473 | 1,392,949 | |||||||||
MTN Group Ltd.2 | 151,063 | 1,526,600 | |||||||||
Naspers Ltd., N Shares | 21,083 | 3,310,675 | |||||||||
Redefine Properties Ltd. | 2,610,677 | 2,254,985 | |||||||||
Sappi Ltd.* | 234,854 | 1,194,805 | |||||||||
Sasol Ltd. | 18,660 | 495,682 | |||||||||
Shoprite Holdings Ltd. | 85,025 | 1,245,247 | |||||||||
The Bidvest Group Ltd. | 156,124 | 1,793,915 | |||||||||
The Foschini Group Ltd. | 101,581 | 1,090,361 | |||||||||
The SPAR Group Ltd. | 80,087 | 1,194,735 | |||||||||
Tiger Brands Ltd. | 41,744 | 1,172,396 | |||||||||
Vodacom Group Ltd. | 201,920 | 2,340,926 | |||||||||
Woolworths Holdings Ltd. | 387,575 | 2,496,953 | |||||||||
Total South Africa common stocks | 26,213,677 | ||||||||||
South Korea—14.75% | |||||||||||
Amorepacific Corp. | 3,254 | 1,127,128 | |||||||||
CJ CheilJedang Corp. | 4,573 | 1,606,459 | |||||||||
Coway Co. Ltd. | 10,031 | 767,448 | |||||||||
Dongbu Insurance Co. Ltd. | 18,414 | 1,043,868 | |||||||||
Doosan Infracore Co. Ltd.* | 154,014 | 1,095,828 | |||||||||
GS Engineering & Construction Corp.*,2 | 41,740 | 1,069,444 | |||||||||
Hana Financial Group, Inc. | 47,812 | 1,175,932 | |||||||||
Hankook Tire Co. Ltd. | 20,596 | 996,566 | |||||||||
Hyosung Corp. | 11,701 | 1,451,983 | |||||||||
Hyundai Heavy Industries Co. Ltd.* | 12,218 | 1,368,887 | |||||||||
Hyundai Mobis | 13,088 | 2,979,458 | |||||||||
Industrial Bank of Korea | 139,507 | 1,475,836 | |||||||||
Kangwon Land, Inc. | 47,380 | 1,734,214 | |||||||||
Korea Electric Power Corp. (KEPCO) | 33,924 | 1,856,485 | |||||||||
KT&G Corp. | 26,495 | 2,862,023 |
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Portfolio of Investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
South Korea—(concluded) | |||||||||||
LG Display Co. Ltd. | 56,208 | $ | 1,555,549 | ||||||||
LG Electronics, Inc. | 26,583 | 1,269,643 | |||||||||
LG Household & Health Care Ltd. | 1,969 | 1,771,863 | |||||||||
LG International Corp. | 39,819 | 1,295,722 | |||||||||
LG Uplus Corp. | 99,740 | 975,006 | |||||||||
Lotte Chemical Corp. | 3,953 | 1,071,049 | |||||||||
NAVER Corp. | 3,100 | 1,964,915 | |||||||||
POSCO | 8,587 | 1,736,335 | |||||||||
Samsung Electronics Co. Ltd. | 12,531 | 17,216,631 | |||||||||
Shinhan Financial Group Co. Ltd. | 41,973 | 1,496,962 | |||||||||
SK Energy Co. Ltd. | 13,811 | 1,800,121 | |||||||||
SK Telecom Co. Ltd. | 16,240 | 3,334,553 | |||||||||
Woori Bank | 125,867 | 1,134,899 | |||||||||
Yuhan Corp. | 3,220 | 879,632 | |||||||||
Total South Korea common stocks | 60,114,439 | ||||||||||
Switzerland—0.35% | |||||||||||
Cie Financiere Richemont SA | 233,113 | 1,423,910 | |||||||||
Taiwan—13.88% | |||||||||||
Asustek Computer, Inc. | 184,000 | 1,599,474 | |||||||||
Cheng Shin Rubber Industry Co. Ltd. | 476,000 | 993,065 | |||||||||
Cheng Uei Precision Industry Co. Ltd. | 507,058 | 687,768 | |||||||||
Chinatrust Financial Holding Co. Ltd. | 2,036,050 | 1,122,529 | |||||||||
Chunghwa Telecom Co. Ltd. | 1,038,000 | 3,690,537 | |||||||||
Compal Electronics, Inc. | 1,643,000 | 1,031,925 | |||||||||
Formosa Chemicals & Fibre Corp. | 457,000 | 1,189,634 | |||||||||
Formosa Plastics Corp. | 491,000 | 1,196,623 | |||||||||
Foxconn Technology Co. Ltd. | 462,000 | 1,118,711 | |||||||||
HON Hai Precision Industry Co. Ltd. | 1,325,688 | 3,650,283 | |||||||||
King Yuan Electronics Co. Ltd. | 1,598,000 | 1,529,270 | |||||||||
Largan Precision Co. Ltd. | 14,000 | 1,499,859 | |||||||||
MediaTek, Inc. | 246,000 | 1,876,421 | |||||||||
Mega Financial Holding Co. Ltd. | 2,142,118 | 1,677,566 | |||||||||
Novatek Microelectronics Corp. | 318,000 | 1,115,685 | |||||||||
Pegatron Corp. | 391,000 | 959,036 | |||||||||
POU Chen Corp. | 822,000 | 1,120,102 | |||||||||
Powertech Technology, Inc. | 526,000 | 1,337,944 | |||||||||
President Chain Store Corp. | 131,000 | 1,062,839 | |||||||||
Quanta Computer, Inc. | 1,168,000 | 2,374,564 | |||||||||
Taiwan Mobile Co. Ltd. | 829,000 | 2,856,561 | |||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 2,171,156 | 11,732,118 | |||||||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR | 144,035 | 4,001,292 | |||||||||
Teco Electric and Machinery Co. Ltd. | 1,576,000 | 1,394,668 | |||||||||
Uni-President Enterprises Corp. | 2,242,986 | 4,581,107 | |||||||||
Wistron Corp. | 1,490,000 | 1,183,206 | |||||||||
Total Taiwan common stocks | 56,582,787 | ||||||||||
Thailand—1.88% | |||||||||||
Airports of Thailand PCL | 77,400 | 877,778 | |||||||||
Bangkok Dusit Medical Services PCL | 1,035,900 | 669,186 | |||||||||
BTS Group Holdings PCL | 3,972,900 | 1,072,215 | |||||||||
Charoen Pokphand Foods PCL | 1,514,100 | 1,217,192 | |||||||||
CP ALL PCL | 338,600 | 503,088 | |||||||||
Thai Beverage PCL | 494,000 | 381,361 |
Number of Shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
Thailand—(concluded) | |||||||||||
Thai Union Group PCL | 2,766,300 | $ | 1,731,419 | ||||||||
The Siam Cement PCL | 83,300 | 1,224,508 | |||||||||
Total Thailand common stocks | 7,676,747 | ||||||||||
Turkey—1.25% | |||||||||||
Arcelik AS | 150,483 | 1,028,590 | |||||||||
BIM Birlesik Magazalar A.S. | 45,877 | 847,683 | |||||||||
Koc Holding A.S. | 213,845 | 916,238 | |||||||||
Tupras-Turkiye Petrol Rafinerileri A.S. | 41,317 | 883,058 | |||||||||
Turk Telekomunikasyon A.S. | 705,458 | 1,426,289 | |||||||||
Total Turkey common stocks | 5,101,858 | ||||||||||
United Arab Emirates—0.39% | |||||||||||
First Gulf Bank PJSC | 482,835 | 1,590,651 | |||||||||
United Kingdom—0.53% | |||||||||||
Unilever PLC | 46,157 | 2,158,491 | |||||||||
United States—0.99% | |||||||||||
Abbott Laboratories2 | 60,100 | 2,689,475 | |||||||||
Yum! Brands, Inc. | 15,125 | 1,352,478 | |||||||||
Total United States common stocks | 4,041,953 | ||||||||||
Total common stocks (cost—$381,199,081) | 388,945,965 | ||||||||||
Preferred stocks—2.79% | |||||||||||
Brazil—2.63% | |||||||||||
Gerdau SA | 604,200 | 1,444,162 | |||||||||
Itau Unibanco Holding SA | 517,130 | 5,389,163 | |||||||||
Petroleo Brasileiro SA, ADR* | 572,500 | 2,095,847 | |||||||||
Suzano Papel e Celulose SA | 587,400 | 1,797,128 | |||||||||
Total Brazil preferred stocks | 10,726,300 | ||||||||||
South Korea—0.16% | |||||||||||
Hyundai Motor Co. | 7,347 | 659,174 | |||||||||
Total preferred stocks (cost—$10,329,201) | 11,385,474 | ||||||||||
Investment company—0.94% | |||||||||||
iShares MSCI Emerging Markets Index Fund (cost—$3,609,786) | 105,196 | 3,811,251 | |||||||||
Face Amount | |||||||||||
Repurchase agreement—0.94% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $308,156 US Treasury Bond, 7.875% due 02/15/21 and $3,392,842 US Treasury Notes, 0.750% to 2.250% due 12/31/17 to 07/31/21; (value—$3,896,469); proceeds: $3,820,003 (cost—$3,820,000) | $ | 3,820,000 | 3,820,000 |
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PACE International Emerging Markets Equity Investments
Portfolio of Investments—July 31, 2016
Number of Shares | Value | ||||||||||
Investment of cash collateral from securities loaned—1.59% | |||||||||||
Money market fund—1.59% | |||||||||||
State Street Institutional U.S. Government Money Market Fund (cost—$6,491,485) | 6,491,485 | $ | 6,491,485 | ||||||||
Total investments (cost—$405,449,553)—101.70% | 414,454,175 | ||||||||||
Liabilities in excess of other assets—(1.70)% | (6,916,390 | ) | |||||||||
Net assets—100.00% | $ | 407,537,785 |
|
For a listing of defined portfolio acronyms and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 262.
Aggregate cost for federal income tax purposes was $409,021,062; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 35,498,288 | |||||
Gross unrealized depreciation | (30,065,175 | ) | |||||
Net unrealized appreciation | $ | 5,433,113 |
Affiliated issuer activity
The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2016. 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 07/31/15 | Purchases during the year ended 07/31/16 | Sales during the year ended 07/31/16 | Value at 07/31/16 | Net income earned from affiliate for the year ended 07/31/16 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 24,172,620 | $ | 95,054,220 | $ | 119,226,840 | $ | — | $ | 16,315 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | 388,537,743 | $ | 408,222 | $ | — | $ | 388,945,965 | |||||||||||
Preferred stocks | 11,385,474 | — | — | 11,385,474 | |||||||||||||||
Investment company | 3,811,251 | — | — | 3,811,251 | |||||||||||||||
Repurchase agreement | — | 3,820,000 | — | 3,820,000 | |||||||||||||||
Investment of cash collateral from securities loaned | — | 6,491,485 | — | 6,491,485 | |||||||||||||||
Total | $ | 403,734,468 | $ | 10,719,707 | $ | — | $ | 414,454,175 |
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PACE International Emerging Markets Equity Investments
Portfolio of Investments—July 31, 2016
Portfolio footnotes
* Non-income producing security.
1 Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities, which represent 0.71% of net assets as of July 31, 2016, are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers.
2 Security, or portion thereof, was on loan at July 31, 2016.
3 Security is traded on the Turquoise Exchange.
4 Security is traded on the over-the-counter ("OTC") market.
5 Illiquid investment as of July 31, 2016.
See accompanying notes to financial statements
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PACE Global Real Estate Securities Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares returned 10.13% before the deduction of the maximum PACE Select program fee.1 In comparison, the FTSE EPRA/NAREIT Developed Index (the "benchmark") returned 14.30%, while the Lipper Global Real Estate Funds category posted a median return of 10.51%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 215. 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 3.
Subadvisors' comments2 (Unaudited)
The Portfolio underperformed the benchmark during the reporting period. From a sector perspective, retail and industrial were the largest detractors from performance, both driven by negative stock selection. An overweight to the office sector also detracted from results. Conversely, an underweight allocation to the diversified sector was the largest contributor to relative performance. Stock selection within the residential sector was also beneficial for results.
By region, the US, Continental Europe and Singapore were the three leading detractors, all driven by stock selection. On the other hand, Australia/New Zealand was the biggest contributor, driven by positive stock selection and an overweight allocation. An underweight position and stock selection in the UK was also additive for relative results, as was an underweight exposure to Japan.
By security, the leading detractor was an overweight position to Hongkong Land Holdings Limited (office, Hong Kong). The stock underperformed on fears of a slowdown in the Chinese economy, as well as concerns about weakening demand from the banking sector, due to negative or near zero interest rate policy globally. An overweight position in Mitsubishi Estate Company, Limited (office, Japan) also detracted from results due to the market sell-off with other Japanese real estate investment trusts ("REITs"). A non-benchmark position in NorthStar Realty Finance Corp. (diversified, US) continued to underperform following a spin-off of its European assets in November 2015. We sold NorthStar Realty Finance Corp. in March 2016.
PACE Select Advisors Trust –
PACE Global Real Estate Securities Investments
Investment Manager:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisor:
Brookfield Investment Management Inc. ("Brookfield")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Gina Toth, CFA, Fred Lee, CFA and Diana To
Brookfield: Jason Baine and Bernhard Krieg
Objective:
Total Return
Investment process:
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.
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 subadvisors 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 Global Real Estate Securities Investments
Subadvisors' comments (Unaudited) – concluded
On the upside, a zero allocation to Sumitomo Realty & Development Co., Ltd. (office, Japan) was the biggest contributor over the period. A non-benchmark position in CyrusOne, Inc. (other, US) also contributed to performance as its shares rallied sharply during the period. An overweight allocation to Dexus Property Group (diversified, Australia) contributed as well during the period.
The Portfolio did not hold derivatives 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.
214
PACE Global Real Estate Securities Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | Since inception1 | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A2 | 9.86 | % | 8.37 | % | 1.28 | % | |||||||||
Class C3 | 9.11 | 7.57 | 0.51 | ||||||||||||
Class Y4 | 9.94 | 8.58 | 12.66 | ||||||||||||
Class P5 | 10.13 | 8.64 | 1.06 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A2 | 3.78 | 7.15 | 0.69 | ||||||||||||
Class C3 | 8.11 | 7.57 | 0.51 | ||||||||||||
FTSE EPRA/NAREIT Developed Index6 | 14.30 | 9.54 | 3.30 | ||||||||||||
Lipper Global Real Estate Funds median | 10.51 | 8.12 | 2.31 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | Since inception1 | ||||||||||||
Before deducting maximum sales charge | |||||||||||||||
Class A2 | 7.25 | % | 7.32 | % | 0.73 | % | |||||||||
Class C3 | 6.53 | 6.50 | (0.05 | ) | |||||||||||
Class Y4 | 7.52 | 7.54 | 12.02 | ||||||||||||
Class P5 | 7.71 | 7.60 | 0.51 | ||||||||||||
After deducting maximum sales charge | |||||||||||||||
Class A2 | 1.41 | 6.11 | 0.13 | ||||||||||||
Class C3 | 5.53 | 6.50 | (0.05 | ) |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, were as follows: Class A—1.59% and 1.45%; Class C—2.24% and 2.20%; Class Y—1.27% and 1.20%; and Class P—1.56% 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS 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, 2016 (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 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 and that UBS AM has not waived the right to do so. 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 AM. Upon termination of the agreement, however, UBS 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 of 0.25% annually.
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 of 0.25% and 0.75% annually, respectively.
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 measure the stock performance of companies engaged in special real estate activities of the North American, European and Asian real estate markets. Relevant real estate activities are defined as the ownership, trading and development of income-producing real estate. Investors should note that indices do not reflect the deduction of fees and expenses.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualfundperformance.
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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PACE Global Real Estate Securities Investments
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, 2016. 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.
PACE Global Real Estate Securities Investments
216
PACE Global Real Estate Securities Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Net assets (mm) | $ | 152.3 | |||||
Number of holdings | 62 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Common stocks | 98.9 | % | |||||
Cash equivalents and other assets less liabilities | 1.1 | ||||||
100.0 | % | ||||||
Top five countries (equity investments)1 | 07/31/16 | ||||||
United States | 49.8 | % | |||||
Japan | 7.8 | ||||||
United Kingdom | 7.4 | ||||||
Germany | 7.1 | ||||||
Hong Kong | 5.7 | ||||||
Total | 77.8 | % | |||||
Top ten equity holdings1 | 07/31/16 | ||||||
Simon Property Group, Inc. | 6.0 | % | |||||
Vornado Realty Trust | 4.0 | ||||||
Wharf (Holdings) Ltd. | 3.7 | ||||||
Mitsubishi Estate Co. Ltd. | 3.1 | ||||||
Land Securities Group PLC | 3.1 | ||||||
AvalonBay Communities, Inc. | 2.8 | ||||||
Hongkong Land Holdings Ltd. | 2.8 | ||||||
Hammerson PLC | 2.8 | ||||||
Global Logistic Properties Ltd. | 2.7 | ||||||
Alstria Office REIT-AG | 2.7 | ||||||
Total | 33.7 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
217
PACE Global Real Estate Securities Investments
Industry diversification—(unaudited)
As a percentage of net assets as of July 31, 2016
Common stocks | |||||||
Apartments | 5.61 | % | |||||
Diversified | 15.66 | ||||||
Diversified operations | 3.65 | ||||||
Health care | 6.85 | ||||||
Hotels | 4.25 | ||||||
Hotels & motels | 2.46 | ||||||
Office property | 13.95 | ||||||
Real estate management/service | 11.03 | ||||||
Real estate operations/development | 15.32 | ||||||
Regional malls | 7.88 | ||||||
Retirement/aged care | 0.65 | ||||||
Shopping centers | 5.06 | ||||||
Single Tenant | 1.29 | ||||||
Warehouse/industrial | 5.23 | ||||||
Total common stocks | 98.89 | ||||||
Repurchase agreement | 1.28 | ||||||
Total investments | 100.17 | ||||||
Liabilities in excess of other assets | (0.17 | ) | |||||
Net assets | 100.00 | % |
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Portfolio of Investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—98.89% | |||||||||||
Australia—5.52% | |||||||||||
Dexus Property Group | 313,196 | $ | 2,325,390 | ||||||||
Scentre Group | 373,755 | 1,505,386 | |||||||||
Vicinity Centres | 593,100 | 1,559,513 | |||||||||
Westfield Corp. | 371,100 | 3,011,947 | |||||||||
Total Australia common stocks | 8,402,236 | ||||||||||
Austria—1.81% | |||||||||||
BUWOG AG* | 52,900 | 1,282,795 | |||||||||
CA Immobilien Anlagen AG* | 78,900 | 1,481,932 | |||||||||
Total Austria common stocks | 2,764,727 | ||||||||||
Bermuda—2.80% | |||||||||||
Hongkong Land Holdings Ltd. | 665,300 | 4,257,920 | |||||||||
Cayman Islands—2.94% | |||||||||||
Cheung Kong Property Holdings Ltd. | 431,928 | 3,084,246 | |||||||||
Soho China Ltd. | 3,030,200 | 1,398,241 | |||||||||
Total Cayman Islands common stocks | 4,482,487 | ||||||||||
France—1.82% | |||||||||||
Unibail Rodamco | 10,052 | 2,766,268 | |||||||||
Germany—7.07% | |||||||||||
Alstria Office REIT-AG* | 291,092 | 4,051,741 | |||||||||
Deutsche EuroShop AG | 75,100 | 3,561,241 | |||||||||
Vonovia SE | 79,448 | 3,148,772 | |||||||||
Total Germany common stocks | 10,761,754 | ||||||||||
Hong Kong—5.67% | |||||||||||
Sun Hung Kai Properties Ltd. | 111,500 | 1,595,239 | |||||||||
Swire Properties Ltd. | 531,400 | 1,479,460 | |||||||||
Wharf (Holdings) Ltd. | 806,056 | 5,553,167 | |||||||||
Total Hong Kong common stocks | 8,627,866 | ||||||||||
Japan—7.78% | |||||||||||
GLP J-REIT | 1,125 | 1,435,537 | |||||||||
Mitsubishi Estate Co. Ltd. | 250,289 | 4,731,783 | |||||||||
Mitsui Fudosan Co. Ltd. | 121,100 | 2,674,561 | |||||||||
Nippon Accommodations Fund, Inc. | 326 | 1,495,252 | |||||||||
Nippon Building Fund, Inc. | 246 | 1,518,890 | |||||||||
Total Japan common stocks | 11,856,023 | ||||||||||
Jersey—1.27% | |||||||||||
Atrium European Real Estate Ltd.* | 440,211 | 1,937,619 | |||||||||
New Zealand—0.72% | |||||||||||
Precinct Properties New Zealand Ltd. | 1,202,957 | 1,090,313 | |||||||||
Singapore—4.28% | |||||||||||
CapitaLand Ltd. | 385,100 | 910,544 | |||||||||
City Developments Ltd. | 245,200 | 1,556,390 | |||||||||
Global Logistic Properties Ltd. | 2,839,900 | 4,056,395 | |||||||||
Total Singapore common stocks | 6,523,329 | ||||||||||
United Kingdom—7.42% | |||||||||||
Great Portland Estates PLC | 115,900 | 1,048,406 | |||||||||
Hammerson PLC | 573,785 | 4,233,519 | |||||||||
Intu Properties PLC | 9,100 | 36,299 |
Number of Shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
United Kingdom—(concluded) | |||||||||||
Land Securities Group PLC | 322,400 | $ | 4,667,881 | ||||||||
Segro PLC | 225,100 | 1,319,735 | |||||||||
Total United Kingdom common stocks | 11,305,840 | ||||||||||
United States—49.79% | |||||||||||
American Homes 4 Rent, Class A | 89,100 | 1,933,470 | |||||||||
AvalonBay Communities, Inc. | 23,210 | 4,308,936 | |||||||||
Brandywine Realty Trust | 111,900 | 1,887,753 | |||||||||
Brixmor Property Group, Inc. | 55,400 | 1,573,360 | |||||||||
Brookdale Senior Living, Inc.* | 53,800 | 993,686 | |||||||||
Camden Property Trust1 | 30,500 | 2,732,495 | |||||||||
Care Capital Properties, Inc. | 83,675 | 2,475,106 | |||||||||
CBL & Associates Properties, Inc. | 238,188 | 2,927,330 | |||||||||
CyrusOne, Inc. | 54,400 | 2,982,208 | |||||||||
DiamondRock Hospitality Co.1 | 116,300 | 1,142,066 | |||||||||
Equity Commonwealth* | 48,700 | 1,461,974 | |||||||||
Gramercy Property Trust | 374,800 | 3,744,252 | |||||||||
Hersha Hospitality Trust1 | 60,600 | 1,145,340 | |||||||||
Highwoods Properties, Inc.1 | 48,500 | 2,702,420 | |||||||||
Hilton Worldwide Holdings, Inc. | 94,204 | 2,184,591 | |||||||||
Hudson Pacific Properties, Inc. | 48,200 | 1,629,642 | |||||||||
LaSalle Hotel Properties1 | 80,900 | 2,228,795 | |||||||||
MGM Growth Properties LLC REIT, Class A | 72,400 | 1,962,764 | |||||||||
OMEGA Healthcare Investors, Inc. | 43,498 | 1,500,681 | |||||||||
Outfront Media, Inc.1 | 106,773 | 2,484,608 | |||||||||
Physicians Realty Trust | 70,115 | 1,522,898 | |||||||||
ProLogis, Inc. | 64,961 | 3,539,725 | |||||||||
Sabra Health Care REIT, Inc. | 45,700 | 1,092,687 | |||||||||
Simon Property Group, Inc. | 39,991 | 9,079,557 | |||||||||
SL Green Realty Corp. | 27,200 | 3,204,704 | |||||||||
Spirit Realty Capital, Inc. | 143,300 | 1,958,911 | |||||||||
Urban Edge Properties1 | 13,700 | 409,767 | |||||||||
Vornado Realty Trust | 55,991 | 6,013,433 | |||||||||
Welltower, Inc. | 48,500 | 3,847,505 | |||||||||
WP GLIMCHER, Inc. | 90,420 | 1,146,526 | |||||||||
Total United States common stocks | 75,817,190 | ||||||||||
Total common stocks (cost—$141,041,383) | 150,593,572 | ||||||||||
Face Amount | |||||||||||
Repurchase agreement—1.28% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $157,305 US Treasury Bond, 7.875% due 02/15/21 and $1,731,948 US Treasury Notes, 0.750% to 2.250% due 12/31/17 to 07/31/21; (value—$1,989,035); proceeds:$1,950,002 (cost—$1,950,000) | $ | 1,950,000 | 1,950,000 | ||||||||
Total investments (cost—$142,991,383)—100.17% | 152,543,572 | ||||||||||
Liabilities in excess of other assets—(0.17)% | (261,734 | ) | |||||||||
Net assets—100.00% | $ | 152,281,838 |
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Portfolio of Investments—July 31, 2016
For a listing of defined portfolio acronyms and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 262.
Aggregate cost for federal income tax purposes was $147,434,909; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 10,607,638 | |||||
Gross unrealized depreciation | (5,498,975 | ) | |||||
Net unrealized appreciation | $ | 5,108,663 |
Affiliated issuer activity
The table below details the Portfolio's transaction activity in an affiliated issuer during the year ended July 31, 2016. 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 07/31/15 | Purchases during the year ended 07/31/16 | Sales during the year ended 07/31/16 | Value at 07/31/16 | Net income earned from affiliate for the year ended 07/31/16 | ||||||||||||||||||
UBS Private Money Market Fund LLC | $ | 1,874,653 | $ | 21,365,075 | $ | 23,239,728 | $ | — | $ | 2,704 |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | 150,593,572 | $ | — | $ | — | $ | 150,593,572 | |||||||||||
Repurchase agreement | — | 1,950,000 | — | 1,950,000 | |||||||||||||||
Total | $ | 150,593,572 | $ | 1,950,000 | $ | — | $ | 152,543,572 |
At July 31, 2016, there were no transfers between Level 1 and Level 2.
Portfolio footnotes
* Non-income producing security.
1 Security, or portion thereof, was on loan as of July 31, 2016.
See accompanying notes to financial statements
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PACE Alternative Strategies Investments
Performance (Unaudited)
For the 12 months ended July 31, 2016, the Portfolio's Class P shares returned -3.13% before the deduction of the maximum PACE Select program fee.1 In comparison, the Citigroup Three-Month US Treasury Bill Index (the "benchmark") returned 0.16%, the Barclays Global Aggregate Index gained 9.45%, the MSCI World Free Index (net) returned -0.46%, the HFRI Fund of Funds Composite Index (net) returned -4.11%, and the Lipper Alternative Multi-Strategy Funds category posted a median return of -0.93%. (Returns for all share classes over various time periods are shown in the "Performance at a glance" table on page 228. 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 3.
Special note: On May 9, 2016, Aviva Investors began serving as a subadvisor for this Portfolio. On July 8, 2016, PCJ Investment Counsel Ltd. began serving as a subadvisor for this Portfolio. On July 8, 2016, First Quadrant Global Macro Strategy transitioned to First Quadrant Currency Strategy.
Subadvisors' comments2 (Unaudited)
Analytic Investors
Our portion of the Portfolio, consisting of long/short equity positions, produced a positive return for the period.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 in all categories except within Valuation and Technical. For instance, stocks with strong earnings relative to price (a valuation characteristic) and strong price momentum (a technical characteristic) negatively impacted performance as these characteristics were not rewarded by investors. Specifically, our overweight positioning to Quality (profit margin and return on assets) and Revisions (earning estimate revisions), and an underweight to Risk (dispersion of analyst earnings estimates) all added value. This was slightly offset by an emphasis to Valuation (earnings to price and sales to price) and Technical (momentum) which were not rewarded by investors during the reporting
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 subadvisors 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 Investments
Investment Manager and Subadvisor:
UBS Asset Management (Americas) Inc. ("UBS AM")
Investment Subadvisors:
Analytic Investors, LLC ("Analytic Investors"); First Quadrant L.P. ("First Quadrant");
Standard Life Investments (Corporate Funds) Limited ("Standard Life Investments");
AQR Capital Management, LLC ("AQR");
Sirios Capital Management, L.P. ("Sirios")
Aviva Investors Americas LLC ("Aviva Investors");
PCJ Investment Counsel Ltd. ("PCJ")
Portfolio Management Team:
UBS AM: Mabel Lung, CFA, Gina Toth, CFA, Fred Lee, CFA, Diana To and Anthony Karaminas
Analytic Investors: Dennis Bein, David Krider and Harindra de Silva;
First Quadrant: Dori Levanoni and Ed Peters
Standard Life Investments: Guy Stern and Roger Sadewsky;
AQR: Clifford Asness, John Liew, Brian Hurst, Yao Hua Ooi and Ari Levine;
UBS AM: Mabel Lung, Gina Toth and Fred Lee;
Sirios: John F. Brennan, Jr.
Aviva Investors: Peter Fitzgerald, Dan James, Ian Pizer and Brendan Walsh;
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Subadvisors' comments (Unaudited) – continued
period. An emphasis on low beta stocks also helped performance, as low beta securities significantly outperformed high beta securities. (Beta is a measure of volatility or risk relative to the market as a whole.)
During the period, the strategy experienced positive results in North America, as modest overweight positions to both the US and Canada helped results. In addition, stock selection within the US was particularly strong. While an underweight position to the United Kingdom also helped performance, stock selection within the country produced negative results. Sector positioning was also relatively positive, led by underweight positions to energy and financials. While an overweight to industrials also helped, stock selection within this sector negatively impacted results.
The top performing equities were a short position in US-based SunEdison and a long position in Japan-based NTT DoCoMo, Inc. We closed our short position in SunEdison in November 2015, as our view on the company improved. The worst performing positions during the reporting period were both materials companies: short positions in Fresnillo and Yamana Gold.
Derivatives were not used during the reporting period.
First Quadrant: Global Macro Strategy
From August 1, 2015 to July 8, 2016, strong performance from currency selection contributed to a positive total return. However, losses primarily in global asset class selection and, to lesser extents, within tactical options selection and bond country selection, held us from outperforming our benchmark.
Currency selection delivered the strongest performance during the period. The broad sell-off in equity markets beginning in August 2015 resulted in large flows into the yen and euro, which favored our long positions in the two currencies. Heightened volatility in equities continued to fuel risk-off flows into the yen, which appreciated against the US dollar at a pace unseen since October 2008. Global asset class selection proved to be the weakest link in our portion of the Portfolio during the period. The equity downturn beginning in August 2015 caused our long equity bias to suffer. Repositioning throughout the period created a buffer but was unable to offset losses. Long positions in equities and bonds that were held from April through the remainder of the period placed asset class selection in a well-hedged position against shifts in risk appetite. Our bullish stance on equities detracted following the UK referendum to leave the European Union but recouped these losses as it became increasingly murky how an actual exit would occur. A corresponding long view on bonds tempered both positive and negative performance throughout the remaining months, as fixed income markets moved in contrast with equity markets.
As a general rule, derivatives are the primary instrument used to implement our portion of the Portfolio. Specifically, we used futures in order to implement stock and bond country selection, and global asset class selection
Investment process
(continued)
PCJ: Nereo Piticco, Adam Posman, Aly Alladina, Heiki Altosaar and Bryan Rock
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 capture inefficiencies in those markets. First Quadrant's strategy is primarily implemented through the use of derivatives.
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Subadvisors' comments (Unaudited) – continued
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 volatility alpha sleeve 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.
First Quadrant: Currency Strategy
From July 8, 2016 to July 31, 2016, this portion of the Portfolio produced a positive return. Overall, currency positioning in the wake of Brexit benefited from our shorter-term behavioral biases class of models, as markets adapted to the shifting risk environment. The investment flows set of models also contributed net gains on the gradual return of profit-seeking investors to global markets amid a general risk-on trend.
From a currency perspective, our New Zealand dollar and euro positions were the largest contributors to results, while our Australian and US dollar positions modestly detracted from performance. An Australian dollar short position, based on views from the risk dynamics and investment flows models, was the largest detractor. Amid broader risk-on sentiment in the aftermath of the initial post-Brexit shock, the Australian dollar rallied.
The strategy was short the New Zealand dollar for the first weeks of August before rotating to a long position. This adjustment was primarily due to our behavioral biases set of models, but also supported by views from our investment flows and macroeconomic models. Inflation and investment flows models became increasingly optimistic as well, leading to a long position that was well-timed to benefit from the shifting trajectory of the currency in the latter part of the month. In terms of the euro, the strategy maintained a long position on fair value and trade and price dynamics signals. We benefited from the currency's modest but steady appreciation relative to developed market currency valuations.
As a general rule, derivatives are the primary instrument used to implement our portion of the Portfolio. Specifically, currency forwards are used to gain economic exposure. Overall, the liquidity and low transaction cost of this instrument offers the investment team the ability to be more nimble and to implement at a lower cost.
The only instruments traded in the Portfolio to achieve market exposure are considered derivative instruments. Overall, derivative instruments contributed to performance during the reporting period.
Standard Life Investments
Our portion of the Portfolio, consisting of a fundamental global macro strategy, produced a negative return for the period. Central bank monetary policy continued to play a significant role in shaping asset returns. Concerns
Investment process
(continued)
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
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PACE Alternative Strategies Investments
Subadvisors' comments (Unaudited) – continued
over the pace of US interest rate hikes materially hurt the US dollar over the 12-month period, with our long US dollar positions versus Asian currencies (South Korean won and Singapore dollar) among our largest detractors from results. Our long Mexican peso versus our short Australian dollar exposure was also a detractor and this strategy was closed in April. Our currency positions were implemented through currency forward contracts.
Global equites fell on worries of a slowdown in global growth and increasing concerns that negative interest rates were a headwind to economic outcomes. This environment was a negative for our European equity and Japanese equity strategies, among others. The European equity and Japanese equity strategies were implemented through physical stocks and equity futures.
Related to this trend of deteriorating global growth and interest rates hikes being pushed out, our relative value equity strategies (European banks versus insurers and US banks versus consumer staples) detracted from performance. This more than offset the positive contribution from our US large cap and US technology versus US small cap investments. These strategies were implemented through equity futures, options and swaps.
Our stock selection strategy for global equity was also negative. Our equity positions included companies that performed poorly as investor fears of a recession increased. Among the largest negative impacts were consumer discretionary and financial firms. This strategy was implemented using physical stocks.
Treasuries and other safe haven assets fared better, benefiting from improving demand amid increased volatility in equity markets and the collapse in commodity prices. This was negative for our short US duration strategy, but additive to our Australian duration and Australian forward interest rates strategies. These strategies were implemented using bond futures and interest rate swaps.
We use derivatives extensively to implement our fundamental strategy, ensuring a wide range of diverse sources of return are accessible at all times. As such, their overall impact on performance is varied and linked to the strategies within which they are implemented.
AQR
Our managed futures strategy is an active trend-following strategy that employs a diverse portfolio of derivative instruments (primarily futures, swaps and forwards) to achieve exposure to various global markets. Our strategy generated a small positive return during the reporting period. Trend following in fixed income and currencies performed well over the period, but losses in equities offset those gains. Signal horizon, long-term trend signals and overextended signals contributed to performance, while short-term signals detracted from results due to reversals.
Investment process
(continued)
derivative investments may include, but are not restricted to, futures, options, swaps, and forward currency contracts.
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.
UBS AM allocates a portion of the fund's assets primarily to unaffiliated actively- and passively-managed pooled investment vehicles, including ETFs, that it believes are suitable for return generation, risk management (e.g., increased portfolio diversification), or both. In addition, UBS AM may invest in index futures primarily for cash management (i.e., to obtain certain market exposures in the fund and reduce cash holdings) and risk management purposes. UBS AM generally invests in other unaffiliated pooled investment vehicles and index futures that have risk and return objectives that are deemed to be complementary
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Subadvisors' comments (Unaudited) – continued
The reporting period can be characterized by many reversals due to risk-on and risk-off dynamics. In the early part of the period, markets globally experienced a risk-off episode due to fears of a global growth slowdown led by China. This caused risky assets to sell off, along with a bid for safe haven currencies like the Japanese yen. Central banks initially responded with accommodative monetary policy and rhetoric which caused a rally in risky assets globally. However, later on in the year, Federal Reserve Board rate hike expectations and disappointing easing measures from the European Central Bank caused choppiness in equity and fixed income markets.
A strong risk-off episode followed in early 2016, which supported long-term bullish trends in safe-haven assets, such as fixed income and the Japanese yen. Further support for the risk-off move was the strong response from central banks to indicators of slowing global growth. This dynamic changed in mid-February, with equities reversing their bearish trends. Broadly, markets were choppy from mid-April through early June. Trend-following strategies tend to perform poorly during periods of large reversals, and elevated equity market volatility severely impacted the effectiveness of our signals.
Gains were driven by June's strong risk-off dynamics, which were fueled by concerns over the European Union referendum in the UK and, ultimately, the outcome itself. Long-term and short-term signals aligned to be long in fixed income and safe-haven currencies before the vote. When the UK voted to leave, global fixed income yields declined in anticipation of future central bank stimulus and the Japanese yen rallied as the currency was viewed as a safe-haven, benefiting our performance. While some of these trends reversed in July, some were sustained, such as in fixed income, which preserved capital.
Most positions in our portion of the Portfolio are implemented through derivative instruments. As a result, performance of the Portfolio is primarily from the performance of derivatives-based positions. Overall, derivatives were instrumental to the performance and operating efficiency of our portion of the Portfolio.
UBS Asset Management
Our portion of the Portfolio consists primarily of third-party funds and it contributed positively to the Portfolio's performance during the reporting period. In particular, positive results from Scout Unconstrained Bond Fund and the Natixis ASG Managed Futures Strategy Fund more than offset the negative performance from Legg Mason BW Absolute Return Opportunities Fund and AQR Style Premia Alternative Fund. We purchased AQR Style Premia Alternative Fund in early 2016, concurrently reducing our exposure to Legg Mason BW Absolute Return Opportunities Fund. Scout Unconstrained Bond Fund produced a positive return, primarily due to its exposure to the higher-quality portions of the high yield and investment grade corporate bond markets. It also benefited from having a well-timed underexposure to German bunds. Natixis ASG Managed Futures Strategy Fund, a position we
Investment process
(continued)
to the other investments and strategies within the fund overall.
Sirios Capital Management employs a fundamental, bottom-up, long/short strategy that is focused primarily on U.S. equities. For long positions, the investment team concentrates on mid/large cap companies where we see unrecognized growth over a 3-5 year period and a favorable valuation. The short positions generally include a selection of liquid large cap companies, sector hedges and index put options.
Aviva Investors employs a "global unconstrained multi-strategy" approach and seeks to deliver positive returns over rolling three year periods by identifying investment ideas and opportunities across and within asset classes. After evaluating these ideas, Aviva Investors decides how to implement a select number of them in investment strategies within the portfolio in light of the fund's objectives. Aviva Investors believes multi-strategy investing provides many ways to reflect ideas more precisely than is possible in traditional funds.
PCJ follows a bottom-up fundamental, independent research process that focuses on high conviction ideas and seeks to extract alpha from long and short positions. The fund invests in Canadian and
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Subadvisors' comments (Unaudited) – continued
initiated in mid-July 2016, also produced a positive return over our holding period.
Legg Mason BW Absolute Return Opportunities Fund was the key detractor from performance. This was primarily due to exposure to emerging market currencies, particularly in the latter part of 2015. Its performance has improved in 2016, but not enough to produce a positive return for the reporting period as a whole. AQR Style Premia Alternative Fund generated a negative return over our holding period. This was mostly driven by exposures to momentum factors during the early part of 2016. Returns to momentum and defensive factors have since rebounded, but not enough to offset the negative returns produced earlier in the period.
We did not use derivatives during the reporting period.
Sirios Capital Management
Our portion of the Portfolio, consisting of a fundamental long/short equity strategy, underperformed the HFRX Equity Hedge Index (the "benchmark") and produced a negative total return during the reporting period. We outperformed the benchmark in seven of the 12 months during the period (October and November 2015, and January, March, April, May and July 2016) and underperformed the remaining five months (August, September and December 2015, and February and June 2016). Long positions were the largest detractors from absolute performance. Short positions detracted modestly from absolute performance during the period. The health care, financial and energy/industrials sectors had the most significant negative contribution to gross performance. The technology/telecom sector detracted modestly from performance, while the consumer sector contributed to results during the period.
The most significant individual long contributors to performance were Constellation Brands, J.M. Smucker, Sherwin-Williams, Alphabet and Computer Sciences. The largest long detractors were Valeant Pharmaceuticals, Allergan, NorthStar Realty, Realogy and Bank of America. Our long position in Valeant Pharmaceuticals was sold during the fourth quarter of 2015 based on a change in our fundamental outlook. Our long position in NorthStar Realty was sold during the first quarter of 2016 after an expected catalyst occurred, but its valuation responded less than anticipated. Our long position in Realogy was sold during the second quarter of 2016 due to a slowdown in the luxury home market. Bank of America and Allergan remained significant positions in our portion of the Portfolio as of the end of the reporting period.
We had a net exposure of 44% as of July 31, 2016, with a focus on US domestically driven companies. Net exposure was balanced across the consumer (18%), technology/telecom (14%), health care (13%) and financial (11%) sectors. Net exposure to the energy/industrials sector ended the month at -2%. The 10 largest long positions were Allergan, Bank of America, Constellation Brands, Time Warner Inc., Sherwin-Williams, FedEx, JCDecaux, Universal Health Services, Bristol Myers Squibb and Nestlé.
We use forward currency contracts to hedge the currency exposure on non-US positions. The currency hedges did not contribute meaningfully to our performance during this period.
Aviva Investors
We began managing a portion of the Portfolio on May 9, 2016, providing a fundamental global macro strategy. From that day through July 31, 2016, the largest contributors to performance included one market return and one opportunistic return strategy. These were long North American high yield bonds, implemented via credit default swaps, and long US commercial mortgage-backed securities, implemented via Ginnie Mae bonds. These strategies
Investment process
(concluded)
US listed securities diversified across sectors and market capitalizations to seek to construct a market neutral, absolute return strategy with low volatility and correlation to broader markets within a disciplined risk management framework
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Subadvisors' comments (Unaudited) – concluded
benefited from tighter spreads in the US high yield bond and asset-backed securities markets over the reporting period.
The largest detractors from our performance included one market return strategy and one opportunistic return strategy. These were long European stocks and short German 10-year government bonds, both implemented via futures. The market reaction to the UK's decision to leave the European Union resulted in significant stock prices declines in European markets. This, in conjunction with the strengthening of developed market government debt, adversely impacted the two strategies.
Global financial markets have generally improved from the initial post-Brexit fallout and the subsequent shift of global risks to the downside as a result of the June 23, 2016 European Union referendum. The efficacy of global central bank intervention is being observed closely as global growth continues to be challenged. In addition to geopolitical risks, the increase in debt globally and the impact of new regulatory requirements since the global financial crisis are of particular concern.
There is significant use of derivatives in our portion of the Portfolio. Derivative use is relied upon for risk management and efficient implementation purposes in our portion of the Portfolio. Overall, derivatives detracted from performance during the reporting period.
PCJ Investment Counsel Ltd.
We began managing a portion of the Portfolio on July 8, 2016, providing an equity market neutral strategy. From that day through July 31, 2016 we generated a positive absolute return. Holdings in the materials and industrials sectors were the primary contributors to performance. Specifically, shares of Interfor Corp. rose sharply as the company posted record quarterly earnings, underpinned by robust US housing data, firm lumber prices and strong execution. Similarly, shares of Norbord, Inc. rallied sharply. Within the industrials sector, Canadian Pacific Railway, Inc. and Hardwood Distribution both posted strong quarterly earnings on better underlying economic strength.
On a negative front, within our consumer discretionary basket, several home retailer short positions advanced during the reporting period. Also, within the health care sector, shares of Concordia Healthcare declined and, despite being an inexpensive stock, the company is facing headwinds surrounding regulatory and pricing uncertainty.
Our strategy is to maintain a neutral directional bias, and derivatives were not used as part of our investment process during the reporting period.
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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Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | Since inception1 | |||||||||||||||
Before deducting maximum sales charge | |||||||||||||||||||
Class A2 | (3.47 | )% | 3.30 | % | 1.52 | % | 1.40 | % | |||||||||||
Class C3 | (4.08 | ) | 2.60 | 0.80 | 0.72 | ||||||||||||||
Class Y4 | (2.99 | ) | 3.61 | N/A | 1.14 | ||||||||||||||
Class P5 | (3.13 | ) | 3.60 | 1.80 | 1.67 | ||||||||||||||
After deducting maximum sales charge | |||||||||||||||||||
Class A2 | (8.81 | ) | 2.14 | 0.95 | 0.85 | ||||||||||||||
Class C3 | (5.01 | ) | 2.60 | 0.80 | 0.72 | ||||||||||||||
Citigroup Three-Month US Treasury Bill Index6 | 0.16 | 0.07 | 0.92 | 1.02 | |||||||||||||||
Barclays Global Aggregate Index7 | 9.45 | 1.50 | 4.37 | 4.41 | |||||||||||||||
MSCI World Free Index (net)8 | (0.46 | ) | 7.91 | 4.80 | 4.39 | ||||||||||||||
HFRI Fund of Funds Composite Index (net)9 | (4.11 | ) | 1.87 | 1.76 | 1.45 | ||||||||||||||
Lipper Alternative Multi-Strategy Funds median | (0.93 | ) | 2.38 | 1.80 | 1.52 |
Most recent calendar quarter-end returns (unaudited)
Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | Since inception1 | |||||||||||||||
Before deducting maximum sales charge | |||||||||||||||||||
Class A2 | (2.82 | )% | 2.84 | % | 1.48 | % | 1.32 | % | |||||||||||
Class C3 | (3.50 | ) | 2.14 | 0.76 | 0.64 | ||||||||||||||
Class Y4 | (2.43 | ) | 3.15 | N/A | 1.02 | ||||||||||||||
Class P5 | (2.58 | ) | 3.12 | 1.74 | 1.58 | ||||||||||||||
After deducting maximum sales charge | |||||||||||||||||||
Class A2 | (8.20 | ) | 1.68 | 0.90 | 0.76 | ||||||||||||||
Class C3 | (4.44 | ) | 2.14 | 0.76 | 0.64 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2015 prospectuses, were as follows: Class A—1.99% and 1.93%; Class C—2.73% and 2.67%; Class Y—1.78% and 1.72%; and Class P—1.75% and 1.69%. 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 Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS 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, 2016 (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 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 AM. Upon termination of the agreement, however, UBS 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 of 0.25% annually.
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 of 0.25% and 0.75% annually, respectively.
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.
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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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the portfolios made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
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 www.ubs.com/us-mutualfundperformance.
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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PACE Alternative Strategies 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 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) over the 10 years ended July 31, 2016. 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.
PACE Alternative Strategies Investments
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Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Net assets (mm) | $ | 736.8 | |||||
Number of holdings | 540 | ||||||
Portfolio composition1 | 07/31/16 | ||||||
Common stocks, preferred stocks and warrants | 37.9 | % | |||||
Investment companies | 13.7 | ||||||
Bonds and notes | 13.4 | ||||||
Options, futures, swaps, and forward foreign currency contracts | 1.4 | ||||||
Investments sold short | (13.6 | ) | |||||
Cash equivalents and other assets less liabilities | 47.2 | ||||||
Total | 100.0 | % | |||||
Top five countries (long holdings)1 | 07/31/16 | ||||||
United States | 43.0 | % | |||||
Canada | 6.0 | ||||||
Japan | 2.5 | ||||||
United Kingdom | 1.5 | ||||||
Poland | 1.3 | ||||||
Total | 54.3 | % | |||||
Top five equity sectors (long holdings)1 | 07/31/16 | ||||||
Financials | 6.7 | % | |||||
Information Technology | 6.6 | ||||||
Consumer Discretionary | 5.8 | ||||||
Health Care | 4.5 | ||||||
Industrials | 4.1 | ||||||
Total | 27.7 | % | |||||
Top five countries (short holdings)1 | 07/31/16 | ||||||
United States | (8.4 | )% | |||||
Canada | (3.1 | ) | |||||
United Kingdom | (0.8 | ) | |||||
Japan | (0.4 | ) | |||||
Liberia | (0.2 | ) | |||||
Total | (12.9 | )% | |||||
Top five equity sectors (short holdings)1 | 07/31/16 | ||||||
Financials | (6.1 | )% | |||||
Consumer Discretionary | (1.5 | ) | |||||
Energy | (1.5 | ) | |||||
Industrials | (1.3 | ) | |||||
Materials | (1.0 | ) | |||||
Total | (11.4 | )% |
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Portfolio statistics (unaudited) (concluded)
Top ten equity holdings (long holdings)1,2 | 07/31/16 | ||||||
Bank of America Corp. | 0.7 | % | |||||
McDonald's Corp. | 0.6 | ||||||
Amgen, Inc. | 0.6 | ||||||
Allergan PLC | 0.5 | ||||||
DISH Network Corp., Class A | 0.5 | ||||||
Constellation Brands, Inc., Class A | 0.5 | ||||||
Interfor Corp. | 0.4 | ||||||
Time Warner, Inc. | 0.4 | ||||||
Alphabet, Inc., Class A | 0.4 | ||||||
The Sherwin-Williams Co. | 0.4 | ||||||
Total | 5.0 | % | |||||
Top ten equity holdings (short holdings)1,2 | 07/31/16 | ||||||
Level 3 Communications, Inc. | (0.3 | )% | |||||
Vertex Pharmaceuticals, Inc. | (0.2 | ) | |||||
Royal Caribbean Cruises Ltd. | (0.2 | ) | |||||
Qorvo, Inc. | (0.2 | ) | |||||
Cheniere Energy, Inc. | (0.2 | ) | |||||
Autodesk, Inc. | (0.2 | ) | |||||
Standard Chartered PLC | (0.2 | ) | |||||
Alnylam Pharmaceuticals, Inc. | (0.2 | ) | |||||
Fresnillo PLC | (0.2 | ) | |||||
Royal Bank of Scotland Group PLC | (0.2 | ) | |||||
Total | (2.1 | )% | |||||
Top ten long-term fixed income holdings (long holdings)1,2 | 07/31/16 | ||||||
US Treasury Inflation Index Notes (TIPS), 0.625%, due 01/15/26 | 2.7 | % | |||||
Poland Government Bond, 2.500%, due 07/25/26 | 1.3 | ||||||
Indonesia Treasury Bond, 8.250%, due 07/15/21 | 1.1 | ||||||
GNMA REMIC, Trust 2016-73, Class Z, 3.500%, due 10/16/55 | 0.7 | ||||||
US Treasury Inflation Index Bonds (TIPS), 2.125%, due 02/15/40 | 0.6 | ||||||
South Africa Government Bond, 10.500%, due 12/21/26 | 0.5 | ||||||
US Treasury Inflation Index Notes (TIPS), 0.125%, due 07/15/22 | 0.5 | ||||||
US Treasury Inflation Index Notes (TIPS), 0.375%, due 07/15/23 | 0.4 | ||||||
US Treasury Inflation Index Notes (TIPS), 0.625%, due 01/15/24 | 0.4 | ||||||
US Treasury Inflation Index Bonds (TIPS), 2.375%, due 01/15/25 | 0.4 | ||||||
Total | 8.6 | % |
For a listing of defined portfolio acronyms that are used throughout the Portfolio statistics, please refer to page 262.
1 Weightings represent percentages of the Portfolio's net assets as of July 31,2016. 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, 2016
Common stocks | |||||||
Aerospace & defense | 0.07 | % | |||||
Air freight & logistics | 0.35 | ||||||
Airlines | 0.36 | ||||||
Auto components | 0.21 | ||||||
Banks | 1.82 | ||||||
Beverages | 0.96 | ||||||
Biotechnology | 1.55 | ||||||
Building products | 1.08 | ||||||
Capital markets | 0.78 | ||||||
Chemicals | 0.52 | ||||||
Commercial services & supplies | 0.50 | ||||||
Communications equipment | 0.26 | ||||||
Construction & engineering | 0.16 | ||||||
Construction materials | 0.11 | ||||||
Containers & packaging | 0.25 | ||||||
Distributors | 0.04 | ||||||
Diversified consumer services | 0.14 | ||||||
Diversified financial services | 1.37 | ||||||
Diversified telecommunication services | 0.52 | ||||||
Electric utilities | 0.41 | ||||||
Electrical equipment | 0.11 | ||||||
Electronic equipment, instruments & components | 0.07 | ||||||
Energy equipment & services | 0.13 | ||||||
Food & staples retailing | 0.42 | ||||||
Food products | 1.60 | ||||||
Gas utilities | 0.08 | ||||||
Health care equipment & supplies | 0.70 | ||||||
Health care providers & services | 0.75 | ||||||
Hotels, restaurants & leisure | 1.47 | ||||||
Household durables | 0.64 | ||||||
Household products | 0.22 | ||||||
Independent power and renewable electricity producers | 0.14 | ||||||
Industrial conglomerates | 0.18 | ||||||
Insurance | 1.05 | ||||||
Internet & catalog retail | 0.47 | ||||||
Internet software & services | 1.49 | ||||||
IT services | 0.45 | ||||||
Leisure products | 0.18 | ||||||
Life sciences tools & services | 0.06 | ||||||
Machinery | 0.14 | ||||||
Marine | 0.09 | ||||||
Media | 1.43 |
Common stocks—(concluded) | |||||||
Metals & mining | 1.51 | % | |||||
Multi-utilities | 0.07 | ||||||
Multiline retail | 0.08 | ||||||
Oil, gas & consumable fuels | 1.94 | ||||||
Paper & forest products | 0.53 | ||||||
Personal products | 0.18 | ||||||
Pharmaceuticals | 1.46 | ||||||
Professional services | 0.24 | ||||||
Real estate investment trusts | 1.32 | ||||||
Real estate management & development | 0.35 | ||||||
Road & rail | 0.32 | ||||||
Semiconductors & semiconductor equipment | 1.44 | ||||||
Software | 2.23 | ||||||
Specialty retail | 0.59 | ||||||
Technology hardware, storage & peripherals | 0.61 | ||||||
Textiles, apparel & luxury goods | 0.53 | ||||||
Tobacco | 0.27 | ||||||
Trading companies & distributors | 0.49 | ||||||
Transportation infrastructure | 0.01 | ||||||
Wireless telecommunication services | 0.35 | ||||||
Total common stocks | 37.85 | ||||||
Preferred stock | |||||||
Household products | 0.04 | ||||||
Warrants | 0.00 | ||||||
Investment companies | 13.65 | ||||||
US government obligations | 6.30 | ||||||
Collateralized mortgage obligations | 0.72 | ||||||
Corporate notes | |||||||
Agriculture | 0.05 | ||||||
Auto manufacturers | 0.18 | ||||||
Banks | 0.82 | ||||||
Beverages | 0.11 | ||||||
Commercial services | 0.16 | ||||||
Diversified financial services | 0.55 | ||||||
Electric | 0.10 | ||||||
Electric utilities | 0.09 | ||||||
Engineering & construction | 0.04 | ||||||
Financial services | 0.05 | ||||||
Food | 0.02 | ||||||
Gas | 0.03 |
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Industry diversification—(unaudited)
As a percentage of net assets as of July 31, 2016
Corporate notes—(concluded) | |||||||
Holding companies-divers | 0.05 | % | |||||
Insurance | 0.13 | ||||||
International government obligations | 0.03 | ||||||
Investment company | 0.02 | ||||||
Media | 0.02 | ||||||
Mining | 0.03 | ||||||
Oil & gas | 0.12 | ||||||
Pharmaceuticals | 0.02 | ||||||
Pipelines | 0.10 | ||||||
Real estate | 0.06 | ||||||
REITS | 0.05 | ||||||
Savings & loans | 0.09 | ||||||
Sovereign | 0.02 | ||||||
Telecommunications | 0.11 | ||||||
Transportation | 0.01 | ||||||
Water | 0.08 | ||||||
Total corporate notes | 3.14 | ||||||
Non-US government obligations | 3.24 | ||||||
Time deposits | 10.31 | ||||||
Short-term US government obligations | 11.33 | ||||||
Repurchase agreement | 18.20 | ||||||
Options purchased | |||||||
Call options & swaptions purchased | 1.01 | ||||||
Put options & swaptions purchased | 0.50 | ||||||
Total options purchased | 1.51 | ||||||
Investments sold short Common stocks | |||||||
Aerospace & defense | (0.17 | ) | |||||
Air freight & logistics | (0.03 | ) | |||||
Airlines | (0.07 | ) | |||||
Auto components | (0.05 | ) | |||||
Banks | (0.64 | ) | |||||
Biotechnology | (0.62 | ) | |||||
Capital markets | (0.49 | ) | |||||
Chemicals | (0.16 | ) | |||||
Commercial services & supplies | (0.05 | ) | |||||
Construction & engineering | (0.14 | ) | |||||
Construction materials | (0.04 | ) | |||||
Containers & packaging | (0.03 | ) | |||||
Diversified financial services | (0.13 | ) |
Investments sold short—(concluded) Common stocks—(concluded) | |||||||
Diversified telecommunication services | (0.30 | )% | |||||
Electric utilities | (0.06 | ) | |||||
Electrical equipment | (0.03 | ) | |||||
Electronic equipment, instruments & components | (0.04 | ) | |||||
Energy equipment & services | (0.34 | ) | |||||
Financial services | (0.07 | ) | |||||
Food & staples retailing | (0.17 | ) | |||||
Food products | (0.08 | ) | |||||
Hotels, restaurants & leisure | (0.32 | ) | |||||
Household durables | (0.20 | ) | |||||
Independent power and renewable electricity producers | (0.14 | ) | |||||
Insurance | (0.39 | ) | |||||
Internet & catalog retail | (0.08 | ) | |||||
IT services | (0.07 | ) | |||||
Leisure products | (0.05 | ) | |||||
Machinery | (0.20 | ) | |||||
Media | (0.12 | ) | |||||
Metals & mining | (0.52 | ) | |||||
Multi-utilities | (0.08 | ) | |||||
Multiline retail | (0.24 | ) | |||||
Oil, gas & consumable fuels | (1.15 | ) | |||||
Paper & forest products | (0.22 | ) | |||||
Pharmaceuticals | (0.07 | ) | |||||
Professional services | (0.15 | ) | |||||
Real estate investment trusts | (0.11 | ) | |||||
Real estate management & development | (0.17 | ) | |||||
Semiconductors & semiconductor equipment | (0.20 | ) | |||||
Software | (0.21 | ) | |||||
Specialty retail | (0.34 | ) | |||||
Technology hardware, storage & peripherals | (0.07 | ) | |||||
Textiles, apparel & luxury goods | (0.09 | ) | |||||
Trading companies & distributors | (0.42 | ) | |||||
Wireless telecommunication services | (0.07 | ) | |||||
Total common stocks | (9.39 | ) | |||||
Investment companies | (4.17 | ) | |||||
Total investments sold short | (13.56 | ) | |||||
Other assets in excess of liabilities | 7.27 | ||||||
Net assets | 100.00 | % |
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Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—37.85% | |||||||||||
Australia—0.72% | |||||||||||
Coca-Cola Amatil Ltd. | 33,372 | $ | 233,829 | ||||||||
Flight Centre Travel Group Ltd. | 13,218 | 323,349 | |||||||||
Newcrest Mining Ltd.* | 82,946 | 1,575,871 | |||||||||
Qantas Airways Ltd.* | 193,373 | 464,374 | |||||||||
Rio Tinto Ltd. | 25,196 | 948,960 | |||||||||
TABCORP Holdings Ltd. | 219,150 | 814,395 | |||||||||
Treasury Wine Estates Ltd. | 133,871 | 981,745 | |||||||||
Total Australia common stocks | 5,342,523 | ||||||||||
Austria—0.01% | |||||||||||
Raiffeisen Bank International AG* | 7,697 | 101,542 | |||||||||
Bermuda—0.22% | |||||||||||
Invesco Ltd. | 13,115 | 382,696 | |||||||||
Kerry Properties Ltd. | 127,000 | 347,030 | |||||||||
Lazard Ltd., Class A | 7,001 | 250,216 | |||||||||
NWS Holdings Ltd. | 37,000 | 60,471 | |||||||||
Yue Yuen Industrial Holdings Ltd. | �� | 137,000 | 556,236 | ||||||||
Total Bermuda common stocks | 1,596,649 | ||||||||||
British Virgin Islands—0.14% | |||||||||||
Michael Kors Holdings Ltd.*,1 | 19,892 | 1,028,814 | |||||||||
Canada—5.38% | |||||||||||
Africa Oil Corp.* | 33,737 | 45,892 | |||||||||
Air Canada*,1 | 63,660 | 438,328 | |||||||||
Algonquin Power & Utilities Corp.1 | 40,460 | 378,368 | |||||||||
Alimentation Couche Tard, Inc., Class B1 | 29,719 | 1,343,632 | |||||||||
ARC Resources Ltd.1 | 29,730 | 523,033 | |||||||||
Artis Real Estate Investment Trust1 | 40,720 | 425,710 | |||||||||
Badger Daylighting Ltd.1 | 37,966 | 596,685 | |||||||||
Birchcliff Energy Ltd.*,1 | 81,370 | 588,315 | |||||||||
Bonterra Energy Corp.1 | 7,490 | 141,981 | |||||||||
Canadian Pacific Railway Ltd.1 | 5,100 | 764,072 | |||||||||
CanWel Building Materials Group Ltd.1 | 121,060 | 572,083 | |||||||||
Cara Operations Ltd.1 | 7,340 | 172,250 | |||||||||
Cargojet, Inc.1 | 7,460 | 191,464 | |||||||||
CCL Industries, Inc., Class B1 | 6,460 | 1,156,284 | |||||||||
CGI Group, Inc., Class A*,1 | 8,050 | 390,832 | |||||||||
Chorus Aviation, Inc.1 | 40,130 | 187,488 | |||||||||
Concordia International Corp.1 | 23,307 | 407,000 | |||||||||
Constellation Software, Inc. | 2,900 | 1,180,545 | |||||||||
Cott Corp.1 | 173,000 | 2,578,471 | |||||||||
Crescent Point Energy Corp.1 | 33,790 | 494,046 | |||||||||
Crew Energy, Inc.*,1 | 59,990 | 254,084 | |||||||||
Detour Gold Corp.*,1 | 8,130 | 212,582 | |||||||||
Dollarama, Inc. | 1,700 | 125,698 | |||||||||
Dream Global Real Estate Investment Trust1 | 34,510 | 240,260 | |||||||||
Element Financial Corp. | 54,270 | 582,748 | |||||||||
Empire Co. Ltd., Class A | 13,800 | 219,845 | |||||||||
Encana Corp.1 | 30,480 | 245,119 | |||||||||
Enercare, Inc.1 | 44,490 | 599,379 | |||||||||
First Quantum Minerals Ltd.1 | 8,140 | 70,387 | |||||||||
Gildan Activewear, Inc.1 | 18,977 | 556,818 | |||||||||
Goldcorp, Inc.1 | 18,520 | 330,925 | |||||||||
Great Canadian Gaming Corp.*,1 | 6,070 | 86,565 | |||||||||
H&R Real Estate Investment Trust1 | 59,040 | 1,051,338 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Canada—(concluded) | |||||||||||
Hardwoods Distribution, Inc.1 | 39,619 | $ | 575,934 | ||||||||
Hudson's Bay Co.1 | 39,330 | 494,317 | |||||||||
Interfor Corp.*,1 | 280,257 | 3,101,684 | |||||||||
Keyera Corp.1 | 26,220 | 752,672 | |||||||||
Kinross Gold Corp.* | 115,900 | 599,184 | |||||||||
Knight Therapeutics, Inc.*,1 | 40,510 | 263,417 | |||||||||
Labrador Iron Ore Royalty Corp.1 | 12,150 | 139,213 | |||||||||
Lundin Mining Corp.*,1 | 46,281 | 193,539 | |||||||||
Magna International, Inc.1 | 4,450 | 171,436 | |||||||||
Maple Leaf Foods, Inc.1 | 58,383 | 1,328,949 | |||||||||
Masonite International Corp.*,1 | 4,080 | 284,906 | |||||||||
Nanotech Security Corp.*,1 | 75,090 | 65,563 | |||||||||
New Flyer Industries, Inc.1 | 10,040 | 318,736 | |||||||||
Norbord, Inc.1 | 32,801 | 826,525 | |||||||||
Northland Power, Inc.1 | 32,780 | 615,857 | |||||||||
OceanaGold Corp.1 | 50,463 | 182,427 | |||||||||
Open Text Corp.1 | 6,080 | 370,454 | |||||||||
Osisko Gold Royalties Ltd.1 | 11,560 | 153,525 | |||||||||
Parkland Fuel Corp.1 | 36,916 | 655,110 | |||||||||
Pembina Pipeline Corp.1 | 24,190 | 705,515 | |||||||||
PrairieSky Royalty Ltd. | 8,500 | 165,423 | |||||||||
Precision Drilling Corp.1 | 28,862 | 123,127 | |||||||||
Pure Industrial Real Estate Trust1 | 123,570 | 516,748 | |||||||||
Raging River Exploration, Inc.*,1 | 9,690 | 76,814 | |||||||||
Restaurant Brands International, Inc.1 | 2,938 | 131,458 | |||||||||
Richelieu Hardware Ltd.1 | 20,170 | 420,810 | |||||||||
RioCan Real Estate Investment Trust | 37,800 | 839,003 | |||||||||
Rogers Communications, Inc., Class B | 2,600 | 114,841 | |||||||||
Seven Generations Energy Ltd., Class A*,1 | 24,134 | 506,469 | |||||||||
Sienna Senior Living, Inc.1 | 22,340 | 299,258 | |||||||||
Spartan Energy Corp.*,1 | 86,920 | 218,357 | |||||||||
Stingray Digital Group, Inc.1 | 34,860 | 185,827 | |||||||||
Storm Resources Ltd.*,1 | 32,860 | 106,962 | |||||||||
Superior Plus Corp.1 | 66,710 | 582,975 | |||||||||
Tahoe Resources, Inc.1 | 9,170 | 142,363 | |||||||||
Teck Resources Ltd., Class B | 50,800 | 809,672 | |||||||||
The Bank of Nova Scotia1 | 17,250 | 876,075 | |||||||||
TransForce, Inc.1 | 30,502 | 597,822 | |||||||||
Tree Island Steel Ltd.1 | 76,800 | 285,283 | |||||||||
Trinidad Drilling Ltd.1 | 48,830 | 86,392 | |||||||||
Uni-Select, Inc.1 | 13,040 | 318,098 | |||||||||
Valeant Pharmaceuticals International, Inc.*,1 | 4,020 | 89,535 | |||||||||
Vermilion Energy, Inc.1 | 9,020 | 300,517 | |||||||||
Waste Connections, Inc.1 | 12,410 | 924,631 | |||||||||
Waste Connections, Inc.*,1 | 18,300 | 1,362,984 | |||||||||
Whitecap Resources, Inc.1 | 37,700 | 279,794 | |||||||||
Yamana Gold, Inc.1 | 62,720 | 358,839 | |||||||||
Total Canada common stocks | 39,671,267 | ||||||||||
Cayman Islands—0.16% | |||||||||||
Baidu, Inc., ADR* | 3,616 | 577,114 | |||||||||
Himax Technologies, Inc., ADR | 31,307 | 280,198 | |||||||||
JD.com, Inc., ADR* | 14,970 | 324,100 | |||||||||
Total Cayman Islands common stocks | 1,181,412 |
235
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Denmark—0.29% | |||||||||||
Danske Bank A/S | 32,600 | $ | 885,855 | ||||||||
Genmab A/S* | 2,105 | 381,545 | |||||||||
Novo Nordisk A/S, Class B | 14,685 | 836,709 | |||||||||
Total Denmark common stocks | 2,104,109 | ||||||||||
Finland—0.06% | |||||||||||
Kone Oyj, Class B | 8,600 | 435,455 | |||||||||
France—0.49% | |||||||||||
JCDecaux SA | 67,762 | 2,319,330 | |||||||||
L'Oreal SA | 2,300 | 437,781 | |||||||||
Orpea | 9,470 | 836,939 | |||||||||
Total France common stocks | 3,594,050 | ||||||||||
Germany—0.37% | |||||||||||
Covestro AG | 17,285 | 807,383 | |||||||||
Deutsche Telekom AG | 56,969 | 969,701 | |||||||||
Henkel AG & Co. KGaA | 1,500 | 162,837 | |||||||||
Infineon Technologies AG | 47,831 | 791,431 | |||||||||
Total Germany common stocks | 2,731,352 | ||||||||||
Hong Kong—0.59% | |||||||||||
CLP Holdings Ltd. | 27,000 | 281,192 | |||||||||
Hang Lung Properties Ltd. | 78,000 | 168,901 | |||||||||
Hysan Development Co. Ltd. | 30,000 | 138,044 | |||||||||
Link REIT | 195,500 | 1,458,993 | |||||||||
Power Assets Holdings Ltd. | 144,000 | 1,409,672 | |||||||||
Sino Land Co. Ltd. | 58,000 | 103,464 | |||||||||
The Wharf Holdings Ltd. | 76,000 | 523,587 | |||||||||
Wheelock & Co. Ltd. | 49,000 | 262,419 | |||||||||
Total Hong Kong common stocks | 4,346,272 | ||||||||||
Ireland—0.97% | |||||||||||
Allegion PLC1 | 14,815 | 1,072,458 | |||||||||
Allergan PLC* | 14,933 | 3,777,302 | |||||||||
DCC PLC | 9,407 | 839,732 | |||||||||
Glanbia PLC | 34,198 | 658,570 | |||||||||
Ryanair Holdings PLC, ADR | 10,925 | 773,162 | |||||||||
Total Ireland common stocks | 7,121,224 | ||||||||||
Israel—0.08% | |||||||||||
Caesarstone Ltd.*,1 | 5,990 | 224,565 | |||||||||
Radware Ltd.* | 32,392 | 398,746 | |||||||||
Total Israel common stocks | 623,311 | ||||||||||
Italy—0.30% | |||||||||||
Banca Popolare di Milano Scarl | 510,050 | 247,482 | |||||||||
Intesa Sanpaolo SpA | 669,978 | 1,414,739 | |||||||||
Mediobanca SpA | 75,812 | 531,008 | |||||||||
Total Italy common stocks | 2,193,229 | ||||||||||
Japan—2.43% | |||||||||||
Asahi Glass Co. Ltd. | 28,000 | 163,826 | |||||||||
Bandai Namco Holdings, Inc. | 3,800 | 101,932 | |||||||||
Hokuhoku Financial Group, Inc. | 269,000 | 350,635 | |||||||||
Inpex Corp. | 195,200 | 1,562,212 | |||||||||
KDDI Corp. | 1,800 | 55,481 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
Japan—(concluded) | |||||||||||
Konami Holdings Corp. | 8,700 | $ | 340,207 | ||||||||
Kumagai Gumi Co. Ltd. | 62,043 | 209,171 | |||||||||
Medipal Holdings Corp. | 4,100 | 67,988 | |||||||||
MISUMI Group, Inc. | 29,675 | 553,162 | |||||||||
Mitsubishi Chemical Holdings Corp. | 52,300 | 288,269 | |||||||||
Mitsubishi UFJ Financial Group, Inc. | 89,479 | 457,765 | |||||||||
Mitsui Fudosan Co. Ltd. | 27,321 | 603,400 | |||||||||
Mixi, Inc. | 33,300 | 1,204,263 | |||||||||
Nippon Express Co. Ltd. | 146,000 | 748,351 | |||||||||
NTT DOCOMO, Inc. | 77,500 | 2,088,364 | |||||||||
Ono Pharmaceutical Co. Ltd. | 9,100 | 330,252 | |||||||||
Oracle Corp. Japan | 7,500 | 460,136 | |||||||||
Pola Orbis Holdings, Inc. | 9,100 | 906,121 | |||||||||
Resorttrust, Inc. | 22,312 | 512,781 | |||||||||
Sankyo Co. Ltd. | 5,600 | 206,086 | |||||||||
Sega Sammy Holdings, Inc. | 27,200 | 302,030 | |||||||||
Seven & I Holdings Co. Ltd. | 12,522 | 528,075 | |||||||||
Start Today Co. Ltd. | 15,400 | 739,550 | |||||||||
T&D Holdings, Inc. | 45,400 | 474,534 | |||||||||
The Dai-ichi Life Insurance Co. Ltd. | 86,500 | 1,149,547 | |||||||||
TonenGeneral Sekiyu KK | 235,000 | 2,139,609 | |||||||||
Toyo Seikan Kaisha Ltd. | 34,800 | 686,894 | |||||||||
Trend Micro, Inc. | 19,200 | 703,759 | |||||||||
Total Japan common stocks | 17,934,400 | ||||||||||
Jersey—0.17% | |||||||||||
Glencore PLC | 209,319 | 517,341 | |||||||||
Shire PLC | 11,627 | 749,537 | |||||||||
Total Jersey common stocks | 1,266,878 | ||||||||||
Netherlands—0.24% | |||||||||||
Airbus Group SE | 3,166 | 186,289 | |||||||||
NN Group N.V. | 20,456 | 551,734 | |||||||||
RELX N.V. | 22,400 | 405,074 | |||||||||
Unilever N.V. | 13,769 | 637,840 | |||||||||
Total Netherlands common stocks | 1,780,937 | ||||||||||
Norway—0.23% | |||||||||||
Marine Harvest ASA* | 59,390 | 1,010,816 | |||||||||
Statoil ASA | 43,910 | 691,139 | |||||||||
Total Norway common stocks | 1,701,955 | ||||||||||
Panama—0.15% | |||||||||||
Carnival Corp.1 | 24,242 | 1,132,586 | |||||||||
Papua New Guinea—0.05% | |||||||||||
Oil Search Ltd. | 61,842 | 333,208 | |||||||||
Portugal—0.17% | |||||||||||
Galp Energia, SGPS SA | 91,681 | 1,251,518 | |||||||||
Singapore—0.18% | |||||||||||
Broadcom Ltd. | 6,017 | 974,634 | |||||||||
Hutchison Port Holdings Trust | 128,000 | 60,800 | |||||||||
Yangzijiang Shipbuilding Holdings Ltd. | 447,400 | 290,324 | |||||||||
Total Singapore common stocks | 1,325,758 |
236
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
South Korea—0.08% | |||||||||||
Samsung Electronics Co. Ltd. | 430 | $ | 590,787 | ||||||||
Spain—0.31% | |||||||||||
Cellnex Telecom SAU | 33,881 | 599,624 | |||||||||
International Consolidated Airlines Group SA | 54,584 | 294,567 | |||||||||
Red Electrica Corp. SA | 59,396 | 1,360,634 | |||||||||
Repsol SA | 5,376 | 67,767 | |||||||||
Total Spain common stocks | 2,322,592 | ||||||||||
Sweden—0.20% | |||||||||||
Assa Abloy AB, Class B | 19,500 | 427,965 | |||||||||
Lundin Petroleum AB* | 16,526 | 273,470 | |||||||||
Securitas AB, Class B | 44,966 | 739,887 | |||||||||
Total Sweden common stocks | 1,441,322 | ||||||||||
Switzerland—0.82% | |||||||||||
Actelion Ltd.* | 7,063 | 1,252,713 | |||||||||
Kuehne & Nagel International AG | 4,753 | 666,950 | |||||||||
Nestle SA | 29,466 | 2,362,266 | |||||||||
Roche Holding AG | 3,658 | 934,126 | |||||||||
Sunrise Communications Group AG* | 12,659 | 818,290 | |||||||||
Total Switzerland common stocks | 6,034,345 | ||||||||||
United Kingdom—1.16% | |||||||||||
Associated British Foods PLC | 1,351 | 48,114 | |||||||||
Auto Trader Group PLC | 25,810 | 126,625 | |||||||||
Babcock International Group PLC | 38,837 | 498,568 | |||||||||
Barclays PLC | 164,245 | 335,945 | |||||||||
Bellway PLC | 11,759 | 326,189 | |||||||||
Berkeley Group Holdings PLC | 22,516 | 799,502 | |||||||||
British American Tobacco PLC | 6,800 | 434,179 | |||||||||
BT Group PLC | 125,374 | 685,856 | |||||||||
Bunzl PLC | 5,420 | 169,644 | |||||||||
Compass Group PLC | 33,522 | 637,077 | |||||||||
Halma PLC | 9,400 | 130,500 | |||||||||
Hammerson PLC | 12,781 | 94,301 | |||||||||
Mccarthy & Stone PLC | 68,587 | 155,038 | |||||||||
OM Asset Management PLC | 34,104 | 477,456 | |||||||||
Persimmon PLC | 49,455 | 1,104,162 | |||||||||
Reckitt Benckiser Group PLC | 5,000 | 484,515 | |||||||||
Segro PLC | 22,084 | 129,476 | |||||||||
The British Land Co. PLC | 99,280 | 881,641 | |||||||||
Unilever PLC | 10,300 | 481,670 | |||||||||
Vodafone Group PLC | 103,504 | 314,443 | |||||||||
Wm Morrison Supermarkets PLC | 82,636 | 203,199 | |||||||||
Total United Kingdom common stocks | 8,518,100 | ||||||||||
United States—21.88% | |||||||||||
3M Co. | 2,200 | 392,392 | |||||||||
Acadia Healthcare Co., Inc.* | 13,916 | 786,254 | |||||||||
Activision Blizzard, Inc.1 | 58,124 | 2,334,260 | |||||||||
Acuity Brands, Inc. | 3,084 | 809,334 | |||||||||
Adobe Systems, Inc.* | 4,285 | 419,330 | |||||||||
Advance Auto Parts, Inc. | 3,340 | 567,332 | |||||||||
Affiliated Managers Group, Inc.*,1 | 11,393 | 1,672,265 | |||||||||
Alphabet, Inc., Class A*,1 | 3,498 | 2,768,107 | |||||||||
Alphabet, Inc., Class C* | 1,185 | 911,016 |
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
United States—(continued) | |||||||||||
Altria Group, Inc.1 | 16,630 | $ | 1,125,851 | ||||||||
Amazon.com, Inc.*,1 | 3,169 | 2,404,669 | |||||||||
American Capital Agency Corp. | 3,630 | 71,112 | |||||||||
American Tower Corp. | 9,683 | 1,121,001 | |||||||||
American Woodmark Corp.*,1 | 5,300 | 393,419 | |||||||||
Amgen, Inc.1 | 24,177 | 4,159,169 | |||||||||
Amphenol Corp., Class A | 6,900 | 410,688 | |||||||||
Assurant, Inc. | 6,015 | 499,305 | |||||||||
Avis Budget Group, Inc.* | 7,304 | 268,276 | |||||||||
Bank of America Corp.1 | 330,898 | 4,794,712 | |||||||||
Bank of the Ozarks, Inc.1 | 27,849 | 1,002,285 | |||||||||
Baxter International, Inc.1 | 33,544 | 1,610,783 | |||||||||
BB&T Corp. | 8,688 | 320,327 | |||||||||
Beacon Roofing Supply, Inc.*,1 | 12,270 | 576,935 | |||||||||
Becton, Dickinson and Co.1 | 5,138 | 904,288 | |||||||||
Berkshire Hathaway, Inc., Class B* | 2,800 | 403,956 | |||||||||
Blackhawk Network Holdings, Inc.* | 21,412 | 744,923 | |||||||||
Boston Scientific Corp.* | 35,196 | 854,559 | |||||||||
Bristol-Myers Squibb Co.1 | 27,030 | 2,022,114 | |||||||||
C.R. Bard, Inc. | 4,998 | 1,118,203 | |||||||||
CA, Inc.1 | 71,337 | 2,471,827 | |||||||||
CalAtlantic Group, Inc.1 | 7,070 | 256,005 | |||||||||
Carrols Restaurant Group, Inc.*,1 | 34,850 | 422,033 | |||||||||
Cavium, Inc.* | 10,099 | 471,320 | |||||||||
CBRE Group, Inc., Class A* | 15,462 | 439,894 | |||||||||
Celgene Corp.* | 9,697 | 1,087,906 | |||||||||
CenturyLink, Inc. | 24,192 | 760,596 | |||||||||
Church & Dwight Co., Inc. | 4,800 | 471,552 | |||||||||
Cimarex Energy Co.1 | 5,090 | 610,902 | |||||||||
Cincinnati Financial Corp.1 | 27,132 | 2,026,760 | |||||||||
Cisco Systems, Inc.1 | 19,371 | 591,397 | |||||||||
Citigroup, Inc.1 | 52,249 | 2,289,029 | |||||||||
CME Group, Inc.1 | 7,862 | 803,811 | |||||||||
CMS Energy Corp. | 10,966 | 495,444 | |||||||||
Coach, Inc. | 22,072 | 951,524 | |||||||||
Colgate-Palmolive Co. | 6,600 | 491,238 | |||||||||
Comerica, Inc. | 3,312 | 149,835 | |||||||||
CommVault Systems, Inc.* | 7,363 | 380,962 | |||||||||
Concho Resources, Inc.* | 2,207 | 274,109 | |||||||||
Constellation Brands, Inc., Class A | 20,105 | 3,309,886 | |||||||||
CSRA, Inc. | 23,287 | 626,886 | |||||||||
CVS Health Corp. | 8,615 | 798,783 | |||||||||
Darden Restaurants, Inc.1 | 30,889 | 1,901,527 | |||||||||
Delta Air Lines, Inc. | 9,539 | 369,636 | |||||||||
Devon Energy Corp. | 7,159 | 274,047 | |||||||||
Discovery Communications, Inc., Class A*,1 | 33,360 | 837,002 | |||||||||
DISH Network Corp., Class A*,1 | 65,966 | 3,523,904 | |||||||||
Domino's Pizza, Inc. | 1,135 | 167,185 | |||||||||
E*TRADE Financial Corp.*,1 | 57,171 | 1,433,849 | |||||||||
eBay, Inc.*,1 | 69,906 | 2,178,271 | |||||||||
Electronic Arts, Inc.* | 7,659 | 584,535 | |||||||||
Equinix, Inc. | 926 | 345,278 | |||||||||
Equity Residential1 | 37,039 | 2,518,282 | |||||||||
Evercore Partners, Inc., Class A | 4,905 | 248,536 | |||||||||
F5 Networks, Inc.* | 7,702 | 950,581 | |||||||||
Facebook, Inc., Class A* | 9,087 | 1,126,243 |
237
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Common stocks—(continued) | |||||||||||
United States—(continued) | |||||||||||
Fastenal Co. | 16,992 | $ | 726,408 | ||||||||
FedEx Corp.1 | 14,744 | 2,387,054 | |||||||||
Fifth Third Bancorp | 11,602 | 220,206 | |||||||||
First Republic Bank | 17,168 | 1,230,431 | |||||||||
Fiserv, Inc.* | 1,800 | 198,648 | |||||||||
FleetCor Technologies, Inc.* | 3,421 | 518,897 | |||||||||
Fortune Brands Home & Security, Inc. | 17,778 | 1,124,814 | |||||||||
GameStop Corp., Class A1 | 46,043 | 1,425,031 | |||||||||
General Dynamics Corp.1 | 1,998 | 293,486 | |||||||||
Gilead Sciences, Inc.1 | 20,333 | 1,615,863 | |||||||||
Granite Construction, Inc.1 | 7,170 | 356,923 | |||||||||
Halliburton Co. | 16,980 | 741,347 | |||||||||
Hanesbrands, Inc. | 31,289 | 834,165 | |||||||||
Hasbro, Inc.1 | 9,141 | 742,523 | |||||||||
HCA Holdings, Inc.*,1 | 12,138 | 936,204 | |||||||||
Henry Schein, Inc.* | 2,200 | 398,156 | |||||||||
Hewlett Packard Enterprise Co. | 30,618 | 643,590 | |||||||||
HollyFrontier Corp. | 15,156 | 385,266 | |||||||||
Hormel Foods Corp.1 | 59,118 | 2,208,057 | |||||||||
Huntington Bancshares, Inc. | 11,451 | 108,784 | |||||||||
Intercontinental Exchange, Inc. | 2,159 | 570,408 | |||||||||
Intuitive Surgical, Inc.* | 947 | 658,885 | |||||||||
Jack Henry & Associates, Inc. | 1,920 | 171,360 | |||||||||
Johnson & Johnson1 | 9,627 | 1,205,589 | |||||||||
JPMorgan Chase & Co. | 16,505 | 1,055,825 | |||||||||
KeyCorp | 18,451 | 215,877 | |||||||||
Lear Corp.1 | 7,176 | 814,117 | |||||||||
Lennar Corp., Class A1 | 5,084 | 237,931 | |||||||||
Liberty Property Trust | 4,840 | 200,279 | |||||||||
Linear Technology Corp.1 | 29,342 | 1,760,227 | |||||||||
M&T Bank Corp. | 1,440 | 164,966 | |||||||||
Manpowergroup, Inc.1 | 10,649 | 739,041 | |||||||||
Martin Marietta Materials, Inc. | 3,846 | 779,392 | |||||||||
Masco Corp.1 | 73,962 | 2,698,134 | |||||||||
Maxim Integrated Products, Inc.1 | 38,020 | 1,550,456 | |||||||||
McDonald's Corp.1 | 38,703 | 4,553,408 | |||||||||
Mettler-Toledo International, Inc.* | 1,100 | 452,331 | |||||||||
Mohawk Industries, Inc.*,1 | 2,040 | 426,238 | |||||||||
Murphy Oil Corp. | 12,663 | 347,346 | |||||||||
NetApp, Inc.1 | 79,605 | 2,097,592 | |||||||||
Newell Brands, Inc. | 21,919 | 1,149,871 | |||||||||
Newmont Mining Corp.1 | 32,850 | 1,445,400 | |||||||||
Nuance Communications, Inc.*,1 | 73,903 | 1,187,621 | |||||||||
Nucor Corp.1 | 45,656 | 2,448,988 | |||||||||
NVIDIA Corp.1 | 33,098 | 1,889,896 | |||||||||
Oracle Corp.1 | 40,359 | 1,656,333 | |||||||||
Owens Corning1 | 11,735 | 620,899 | |||||||||
People's United Financial, Inc. | 26,685 | 404,545 | |||||||||
PGT, Inc.*,1 | 59,394 | 712,728 | |||||||||
Philip Morris International, Inc. | 4,400 | 441,144 | |||||||||
Prudential Financial, Inc.1 | 24,755 | 1,863,804 | |||||||||
PTC, Inc.*,1 | 33,528 | 1,332,067 | |||||||||
Rackspace Hosting, Inc.* | 22,265 | 521,669 | |||||||||
Regeneron Pharmaceuticals, Inc.*,1 | 2,687 | 1,142,297 | |||||||||
Regions Financial Corp. | 24,190 | 221,822 | |||||||||
Robert Half International, Inc.1 | 28,555 | 1,043,400 |
Number of Shares | Value | ||||||||||
Common stocks—(concluded) | |||||||||||
United States—(concluded) | |||||||||||
Rollins, Inc. | 5,200 | $ | 146,536 | ||||||||
Ross Stores, Inc.1 | 5,100 | 315,333 | |||||||||
SEI Investments Co. | 1,610 | 72,450 | |||||||||
Service Corp. International | 14,600 | 404,712 | |||||||||
Signature Bank* | 2,011 | 241,803 | |||||||||
SL Green Realty Corp. | 1,358 | 160,000 | |||||||||
Southwest Airlines Co. | 2,423 | 89,675 | |||||||||
Stillwater Mining Co.* | 45,235 | 692,095 | |||||||||
SunTrust Banks, Inc. | 5,795 | 245,071 | |||||||||
Synaptics, Inc.* | 7,148 | 371,339 | |||||||||
Synopsys, Inc.*,1 | 13,112 | 710,146 | |||||||||
TEGNA, Inc. | 12,503 | 273,816 | |||||||||
The Charles Schwab Corp. | 23,125 | 657,212 | |||||||||
The Hartford Financial Services Group, Inc. | 16,230 | 646,765 | |||||||||
The Home Depot, Inc.1 | 5,070 | 700,877 | |||||||||
The J.M. Smucker Co. | 795 | 122,557 | |||||||||
The Kraft Heinz Co. | 10,909 | 942,428 | |||||||||
The PNC Financial Services Group, Inc. | 5,414 | 447,467 | |||||||||
The Sherwin-Williams Co. | 9,085 | 2,723,047 | |||||||||
Time Warner, Inc.1 | 38,497 | 2,950,795 | |||||||||
TJX Cos., Inc.1 | 16,635 | 1,359,412 | |||||||||
TRI Pointe Group, Inc.*,1 | 29,295 | 394,018 | |||||||||
Tyson Foods, Inc., Class A1 | 27,342 | 2,012,371 | |||||||||
United Therapeutics Corp.*,1 | 12,338 | 1,493,021 | |||||||||
Universal Health Services, Inc., Class B1 | 15,786 | 2,044,761 | |||||||||
Unum Group | 4,528 | 151,280 | |||||||||
US Bancorp1 | 22,869 | 964,386 | |||||||||
USG Corp.*,1 | 8,140 | 229,222 | |||||||||
Verint Systems, Inc.*,1 | 24,498 | 864,044 | |||||||||
VeriSign, Inc.*,1 | 14,414 | 1,248,397 | |||||||||
Visa, Inc., Class A1 | 8,320 | 649,376 | |||||||||
Visteon Corp. | 7,971 | 558,687 | |||||||||
VMware, Inc., Class A*,1 | 20,041 | 1,462,592 | |||||||||
Wells Fargo & Co.1 | 27,540 | 1,321,094 | |||||||||
Western Alliance Bancorp*,1 | 38,721 | 1,317,676 | |||||||||
Western Digital Corp.1 | 29,190 | 1,386,817 | |||||||||
Xilinx, Inc.1 | 44,954 | 2,296,250 | |||||||||
Zions Bancorp. | 5,410 | 150,831 | |||||||||
Zoetis, Inc. | 8,000 | 403,760 | |||||||||
Total United States common stocks | 161,207,298 | ||||||||||
Total common stocks (cost—$265,336,549) | 278,912,893 | ||||||||||
Preferred stock—0.04% | |||||||||||
Germany—0.04% | |||||||||||
Henkel AG & Co. KGaA (cost—$264,425) | 2,270 | 282,718 | |||||||||
Number of warrants | Value | ||||||||||
Warrants—0.00%† | |||||||||||
Canada—0.00%† | |||||||||||
Delphi Energy Corp. expiring 07/15/21*,1 (cost—$3,819) | 9,900 | 2,692 |
238
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Investment companies—13.65% | |||||||||||
AQR Style Premia Alternative Fund | 3,086,310 | $ | 31,079,144 | ||||||||
ASG Managed Futures Strategy Fund | 2,704,692 | 30,130,267 | |||||||||
Boyd Group Income Fund1 | 3,040 | 179,259 | |||||||||
iShares MSCI Emerging Markets Small-Cap ETF | 39,638 | 1,703,241 | |||||||||
Scout Unconstrained Bond Fund | 2,654,425 | 31,136,407 | |||||||||
SPDR S&P Emerging Markets SmallCap ETF | 125,066 | 5,185,236 | |||||||||
SPDR S&P500 ETF Trust1 | 734 | 159,388 | |||||||||
VanEck Vectors Gold Miners ETF1 | 18,882 | 577,600 | |||||||||
VanEck Vectors Junior Gold Miners ETF1 | 8,170 | 409,154 | |||||||||
Total investment companies (cost—$98,777,928) | 100,559,696 | ||||||||||
Face amount | |||||||||||
US government obligations—6.30% | |||||||||||
US Treasury Inflation Index Bonds (TIPS) 2.000%, due 01/15/26 | USD | 2,044,579 | 2,408,212 | ||||||||
2.125%, due 02/15/40 | USD | 3,167,319 | 4,248,784 | ||||||||
2.375%, due 01/15/251 | USD | 2,264,212 | 2,704,848 | ||||||||
US Treasury Inflation Index Notes (TIPS) 0.125%, due 07/15/22 | USD | 3,474,453 | 3,543,129 | ||||||||
0.125%, due 07/15/24 | USD | 2,626,975 | 2,659,095 | ||||||||
0.250%, due 01/15/25 | USD | 2,472,599 | 2,518,864 | ||||||||
0.375%, due 07/15/23 | USD | 2,967,282 | 3,065,265 | ||||||||
0.375%, due 07/15/25 | USD | 2,315,107 | 2,392,700 | ||||||||
0.625%, due 01/15/24 | USD | 2,755,967 | 2,886,912 | ||||||||
0.625%, due 01/15/26 | USD | 18,950,317 | 19,985,914 | ||||||||
Total US government obligations (cost—$45,734,099) | 46,413,723 | ||||||||||
Collateralized mortgage obligation—0.72% | |||||||||||
GNMA REMIC, Trust 2016-73, Class Z 3.500%, due 10/16/552 (cost—$5,024,354) | USD | 5,029,226 | 5,319,667 | ||||||||
Corporate notes—3.14% | |||||||||||
Australia—0.07% | |||||||||||
APT Pipelines Ltd. 2.000%, due 03/22/273 | EUR | 100,000 | 115,399 | ||||||||
National Australia Bank Ltd. 2.000%, due 11/12/242,3 | EUR | 100,000 | 113,271 | ||||||||
Santos Finance Ltd. 8.250%, due 09/22/702 | EUR | 50,000 | 55,811 | ||||||||
Scentre Group Trust 2 3.250%, due 09/11/233 | EUR | 200,000 | 267,703 | ||||||||
Total Australia corporate notes | 552,184 | ||||||||||
Austria—0.03% | |||||||||||
UniCredit Bank Austria AG 2.625%, due 01/30/183 | EUR | 100,000 | 115,531 | ||||||||
2.500%, due 05/27/193 | EUR | 100,000 | 117,655 | ||||||||
Total Austria corporate notes | 233,186 | ||||||||||
Belgium—0.11% | |||||||||||
Anheuser-Busch InBev SA 1.500%, due 03/17/253 | EUR | 100,000 | 119,063 | ||||||||
2.000%, due 03/17/283 | EUR | 545,000 | 684,086 | ||||||||
Total Belgium corporate notes | 803,149 |
Face amount | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Canada—0.64% | |||||||||||
Delphi Energy Corp.1 10.000%, due 07/15/213 | CAD | 400,000 | $ | 306,361 | |||||||
Element Financial Corp. 5.125%, due 06/30/19 | CAD | 2,928,800 | 2,467,491 | ||||||||
4.250%, due 06/30/20 | CAD | 1,520,000 | 1,175,813 | ||||||||
Great-West Lifeco, Inc. 2.500%, due 04/18/233 | EUR | 250,000 | 311,652 | ||||||||
Northland Power, Inc.1 4.750%, due 06/30/20 | CAD | 520,000 | 431,286 | ||||||||
Total Canada corporate notes | 4,692,603 | ||||||||||
Cayman Islands—0.05% | |||||||||||
Hutchison Whampoa Finance 14 Ltd. 1.375%, due 10/31/213 | EUR | 200,000 | 231,954 | ||||||||
IPIC GMTN Ltd. 5.875%, due 03/14/213 | EUR | 100,000 | 138,213 | ||||||||
Total Cayman Islands corporate notes | 370,167 | ||||||||||
Denmark—0.01% | |||||||||||
DONG Energy A/S 6.250%, VRD2,3 | EUR | 54,000 | 68,522 | ||||||||
France—0.51% | |||||||||||
Aeroports de Paris 1.500%, due 07/24/233 | EUR | 100,000 | 122,417 | ||||||||
BNP Paribas SA 2.875%, due 09/26/23 | EUR | 42,000 | 55,324 | ||||||||
BPCE SA 1.125%, due 12/14/223 | EUR | 200,000 | 234,385 | ||||||||
Casino Guichard-Perrachon SA 3.311%, due 01/25/233,4 | EUR | 100,000 | 124,807 | ||||||||
Credit Logement SA 0.888%, due 09/16/162,3,5 | EUR | 100,000 | 83,850 | ||||||||
Electricite de France SA 4.125%, due 01/22/222,3,5 | EUR | 100,000 | 106,501 | ||||||||
5.625%, due 02/21/33 | EUR | 60,000 | 111,160 | ||||||||
Engie 3.875%, due 06/02/242,3,5 | EUR | 100,000 | 123,433 | ||||||||
Holding d'Infrastructures de Transport SAS 2.250%, due 03/24/253 | EUR | 200,000 | 256,021 | ||||||||
Infra Foch SAS 1.250%, due 10/16/203 | EUR | 200,000 | 234,107 | ||||||||
Lagardere SCA 4.125%, due 10/31/173 | EUR | 100,000 | 116,815 | ||||||||
Orange SA 5.250%, due 02/07/242,3,5 | EUR | 200,000 | 249,314 | ||||||||
8.125%, due 01/28/33 | EUR | 49,000 | 111,404 | ||||||||
RCI Banque SA 0.625%, due 03/04/203 | EUR | 170,000 | 193,487 | ||||||||
SANEF SA 1.875%, due 03/16/263 | EUR | 100,000 | 126,012 | ||||||||
Societe Des Autoroutes Paris-Rhin-Rhone 1.125%, due 01/15/213 | EUR | 200,000 | 233,077 | ||||||||
Societe Fonciere Lyonnaise SA 1.875%, due 11/26/213 | EUR | 100,000 | 120,346 |
239
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Face amount | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
France—(concluded) | |||||||||||
Societe Generale SA 9.375%, due 09/04/192,3,5 | EUR | 50,000 | $ | 67,616 | |||||||
Suez 1.750%, due 09/10/253 | EUR | 100,000 | 125,905 | ||||||||
Transport et Infrastructures Gaz France SA 4.339%, due 07/07/213 | EUR | 100,000 | 134,185 | ||||||||
2.200%, due 08/05/253 | EUR | 300,000 | 379,414 | ||||||||
Veolia Environnement SA 4.625%, due 03/30/273 | EUR | 200,000 | 314,716 | ||||||||
1.590%, due 01/10/283 | EUR | 100,000 | 122,826 | ||||||||
Total France corporate notes | 3,747,122 | ||||||||||
Germany—0.03% | |||||||||||
Aareal Bank AG 4.250%, due 03/18/262 | EUR | 35,000 | 40,667 | ||||||||
Commerzbank AG 7.750%, due 03/16/21 | EUR | 100,000 | 135,781 | ||||||||
Muenchener Rueckversicherungs AG 5.767%, due 06/12/172,3,5 | EUR | 50,000 | 58,137 | ||||||||
Total Germany corporate notes | 234,585 | ||||||||||
Guernsey—0.03% | |||||||||||
Credit Suisse Group Guernsey I Ltd. 7.875%, due 02/24/412,3 | USD | 200,000 | 200,780 | ||||||||
Ireland—0.15% | |||||||||||
Bank of Ireland 2.000%, due 05/08/173 | EUR | 200,000 | 226,702 | ||||||||
ESB Finance Ltd. 3.494%, due 01/12/243 | EUR | 250,000 | 342,985 | ||||||||
FCA Capital Ireland PLC 2.000%, due 10/23/193 | EUR | 100,000 | 117,166 | ||||||||
FGA Capital Ireland PLC 4.000%, due 10/17/183 | EUR | 100,000 | 120,854 | ||||||||
GE Capital European Funding Unlimited Co. 2.625%, due 03/15/233 | EUR | 140,000 | 180,744 | ||||||||
Willow No.2 Ireland PLC for Zurich Insurance Co. Ltd. 3.375%, due 06/27/223 | EUR | 100,000 | 131,137 | ||||||||
Total Ireland corporate notes | 1,119,588 | ||||||||||
Italy—0.15% | |||||||||||
2i Rete Gas SpA 1.125%, due 01/02/203 | EUR | 200,000 | 232,309 | ||||||||
Assicurazioni Generali SpA 7.750%, due 12/12/422,3 | EUR | 100,000 | 132,511 | ||||||||
Intesa Sanpaolo SpA 4.375%, due 10/15/193 | EUR | 200,000 | 250,329 | ||||||||
1.125%, due 03/04/223 | EUR | 230,000 | 260,155 | ||||||||
UniCredit SpA 5.650%, due 08/24/18 | EUR | 70,000 | 85,431 | ||||||||
3.625%, due 01/24/193 | EUR | 100,000 | 119,932 | ||||||||
Total Italy corporate notes | 1,080,667 |
Face amount | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Japan—0.04% | |||||||||||
Sumitomo Mitsui Banking Corp. 1.000%, due 01/19/223 | EUR | 250,000 | $ | 289,613 | |||||||
Jersey—0.02% | |||||||||||
AA Bond Co. Ltd. 4.720%, due 07/31/183 | GBP | 100,000 | 138,737 | ||||||||
Luxembourg—0.03% | |||||||||||
Glencore Finance Europe SA 4.625%, due 04/03/183,4 | EUR | 100,000 | 119,095 | ||||||||
3.375%, due 09/30/203 | EUR | 100,000 | 119,333 | ||||||||
Total Luxembourg corporate notes | 238,428 | ||||||||||
Mexico—0.05% | |||||||||||
America Movil SAB de CV 4.750%, due 06/28/22 | EUR | 100,000 | 138,052 | ||||||||
Petroleos Mexicanos 3.125%, due 11/27/203 | EUR | 200,000 | 234,221 | ||||||||
Total Mexico corporate notes | 372,273 | ||||||||||
Netherlands—0.23% | |||||||||||
BMW Finance N.V. 2.625%, due 01/17/243 | EUR | 170,000 | 224,037 | ||||||||
Cooperatieve Centrale Raiffeisen- Boerenleenbank BA 2.500%, due 05/26/262,3 | EUR | 300,000 | 347,902 | ||||||||
Deutsche Annington Finance BV 4.000%, due 12/17/212,3,5 | EUR | 200,000 | 233,662 | ||||||||
Deutsche Bahn Finance BV 3.000%, due 03/08/24 | EUR | 42,000 | 57,263 | ||||||||
EDP Finance BV 4.125%, due 01/20/213 | EUR | 100,000 | 127,850 | ||||||||
General Motors Financial International BV 1.875%, due 10/15/193 | EUR | 100,000 | 116,989 | ||||||||
JAB Holdings BV 1.500%, due 11/24/213 | EUR | 100,000 | 117,530 | ||||||||
2.125%, due 09/16/223 | EUR | 100,000 | 121,667 | ||||||||
Telefonica Europe BV 5.875%, due 02/14/333 | EUR | 35,000 | 65,123 | ||||||||
Volkswagen International Finance N.V. 3.250%, due 01/21/193 | EUR | 35,000 | 42,296 | ||||||||
0.875%, due 01/16/233 | EUR | 50,000 | 57,379 | ||||||||
3.500%, due 03/20/302,3,5 | EUR | 205,000 | 210,640 | ||||||||
Total Netherlands corporate notes | 1,722,338 | ||||||||||
Norway—0.05% | |||||||||||
DNB Bank ASA 3.000%, due 09/26/232,3 | EUR | 200,000 | 232,854 | ||||||||
Statkraft AS 2.500%, due 11/28/223 | EUR | 100,000 | 127,815 | ||||||||
Total Norway corporate notes | 360,669 | ||||||||||
Spain—0.05% | |||||||||||
Ferrovial Emisiones SA 3.375%, due 01/30/183 | EUR | 100,000 | 117,416 |
240
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Face amount | Value | ||||||||||
Corporate notes—(continued) | |||||||||||
Spain—(concluded) | |||||||||||
Inmobiliaria Colonial SA 1.863%, due 06/05/193 | EUR | 200,000 | $ | 234,138 | |||||||
Total Spain corporate notes | 351,554 | ||||||||||
Sweden—0.04% | |||||||||||
Nordea Bank AB 1.000%, due 02/22/233 | EUR | 250,000 | 292,956 | ||||||||
Switzerland—0.05% | |||||||||||
Credit Suisse AG 1.125%, due 09/15/203 | EUR | 300,000 | 346,981 | ||||||||
United Kingdom—0.37% | |||||||||||
Aviva PLC 3.375%, due 12/04/452,3 | EUR | 200,000 | 214,963 | ||||||||
Babcock International Group PLC 1.750%, due 10/06/223 | EUR | 100,000 | 116,607 | ||||||||
Barclays Bank PLC 6.000%, due 01/14/213 | EUR | 50,000 | 65,223 | ||||||||
BP Capital Markets PLC 1.573%, due 02/16/273 | EUR | 200,000 | 239,571 | ||||||||
Brambles Finance PLC 4.625%, due 04/20/183 | EUR | 100,000 | 120,445 | ||||||||
Coventry Building Society 2.500%, due 11/18/203 | EUR | 200,000 | 237,334 | ||||||||
FCE Bank PLC 1.875%, due 06/24/213 | EUR | 200,000 | 237,961 | ||||||||
G4S International Finance PLC 2.625%, due 12/06/183 | EUR | 100,000 | 116,942 | ||||||||
Heathrow Finance PLC 7.125%, due 03/01/173 | GBP | 50,000 | 68,323 | ||||||||
HSBC Holdings PLC 1.500%, due 03/15/223 | EUR | 200,000 | 232,306 | ||||||||
Imperial Brands Finance PLC 5.000%, due 12/02/193 | EUR | 200,000 | 259,198 | ||||||||
Leeds Building Society 2.625%, due 04/01/213 | EUR | 200,000 | 233,742 | ||||||||
Lloyds Bank PLC 7.625%, due 04/22/253 | GBP | 35,000 | 60,700 | ||||||||
Lloyds TSB Bank PLC 10.375%, due 02/12/242,3 | EUR | 35,000 | 47,353 | ||||||||
Royal Bank of Scotland PLC 4.625%, due 09/22/212 | EUR | 45,000 | 49,681 | ||||||||
Santander UK PLC 0.875%, due 01/13/203 | EUR | 100,000 | 112,813 | ||||||||
2.625%, due 07/16/203 | EUR | 100,000 | 120,459 | ||||||||
Yorkshire Building Society 2.125%, due 03/18/193 | EUR | 200,000 | 231,180 | ||||||||
Total United Kingdom corporate notes | 2,764,801 | ||||||||||
United States—0.43% | |||||||||||
AT&T, Inc. 2.500%, due 03/15/23 | EUR | 100,000 | 125,731 | ||||||||
2.750%, due 05/19/23 | EUR | 100,000 | 127,766 | ||||||||
Bank of America Corp. 1.375%, due 09/10/213 | EUR | 100,000 | 117,279 | ||||||||
1.625%, due 09/14/223 | EUR | 100,000 | 118,693 |
Face amount | Value | ||||||||||
Corporate notes—(concluded) | |||||||||||
United States—(concluded) | |||||||||||
Citigroup, Inc. 0.369%, due 05/31/172 | EUR | 200,000 | $ | 223,590 | |||||||
1.375%, due 10/27/213 | EUR | 220,000 | 258,553 | ||||||||
JPMorgan Chase & Co. 1.375%, due 09/16/213 | EUR | 300,000 | 354,497 | ||||||||
1.500%, due 10/26/223 | EUR | 300,000 | 357,422 | ||||||||
Kinder Morgan, Inc. 1.500%, due 03/16/22 | EUR | 100,000 | 110,730 | ||||||||
Merck & Co., Inc. 1.875%, due 10/15/26 | EUR | 100,000 | 125,980 | ||||||||
Metropolitan Life Global Funding I 0.875%, due 01/20/223 | EUR | 200,000 | 229,488 | ||||||||
Morgan Stanley 1.875%, due 03/30/23 | EUR | 200,000 | 238,956 | ||||||||
Pemex Project Funding Master Trust 6.375%, due 08/05/163 | EUR | 50,000 | 55,900 | ||||||||
Philip Morris International, Inc. 1.875%, due 03/03/21 | EUR | 100,000 | 120,993 | ||||||||
Wells Fargo & Co. 1.500%, due 09/12/223 | EUR | 300,000 | 357,741 | ||||||||
2.250%, due 05/02/233 | EUR | 200,000 | 250,043 | ||||||||
Total United States corporate notes | 3,173,362 | ||||||||||
Total corporate notes (cost—$23,354,662) | 23,154,265 | ||||||||||
Non-US government obligations—3.24% | |||||||||||
Germany—0.15% | |||||||||||
Bundesrepublik Deutschland 0.500%, due 02/15/261,3 | EUR | 812,000 | 966,899 | ||||||||
4.750%, due 07/04/343 | EUR | 67,000 | 137,126 | ||||||||
Total Germany | 1,104,025 | ||||||||||
Indonesia—1.12% | |||||||||||
Indonesia Treasury Bond 8.250%, due 07/15/21 | IDR | 102,000,000,000 | 8,244,257 | ||||||||
Poland—1.27% | |||||||||||
Poland Government Bond 2.500%, due 07/25/26 | PLN | 37,800,000 | 9,384,864 | ||||||||
South Africa—0.70% | |||||||||||
South Africa Government Bond 10.500%, due 12/21/26 | ZAR | 47,825,000 | 3,878,438 | ||||||||
8.750%, due 02/28/48 | ZAR | 18,780,000 | 1,273,069 | ||||||||
Total South Africa | 5,151,507 | ||||||||||
Total non-US government obligations (cost—$23,007,992) | 23,884,653 | ||||||||||
Time deposits—10.31% | |||||||||||
Abbey National Treasury Services PLC 0.010%, due 10/17/16 | USD | 5,000,000 | 5,000,000 | ||||||||
ABN Amro Bank N.V. 0.010%, due 09/20/16 | USD | 5,000,000 | 4,995,493 | ||||||||
Agence Centrale Organismes 0.873%, due 09/29/16 | USD | 5,000,000 | 4,992,861 | ||||||||
Banque Nationale De Paris 0.400%, due 08/01/16 | USD | 4,815,831 | 4,815,831 |
241
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Face amount | Value | ||||||||||
Time deposits—(concluded) | |||||||||||
DGZ Dekabank 0.670%, due 09/15/16 | USD | 5,000,000 | $ | 4,995,820 | |||||||
DZ Bank AG 0.300%, due 08/01/16 | USD | 4,909,164 | 4,909,164 | ||||||||
Goldman Sachs Group, Inc. 0.780%, due 09/08/16 | USD | 6,000,000 | 6,000,000 | ||||||||
ING Bank N.V. 0.680%, due 09/01/16 | USD | 5,000,000 | 5,000,000 | ||||||||
KBC Bank N.V. 0.400%, due 08/01/16 | USD | 5,161,175 | 5,161,175 | ||||||||
Mizuho Corporate Bank 0.010%, due 10/28/16 | USD | 5,000,000 | 4,989,877 | ||||||||
Nationwide Building Society 0.700%, due 10/21/16 | USD | 5,000,000 | 5,000,000 | ||||||||
Natixis SA 0.960%, due 12/01/16 | USD | 5,000,000 | 5,000,000 | ||||||||
OP Corporate Bank PLC 0.820%, due 10/25/16 | USD | 5,000,000 | 4,990,340 | ||||||||
Societe Generale 0.800%, due 11/23/16 | USD | 5,000,000 | 5,000,000 | ||||||||
Sumitomo Mitsui Banking Corp. 0.380%, due 08/01/16 | USD | 100,412 | 100,412 | ||||||||
Toronto-Dominion Bank 0.750%, due 11/15/16 | USD | 5,000,000 | 5,000,000 | ||||||||
Total time deposits (cost—$75,950,973) | 75,950,973 | ||||||||||
Short-term US government obligations6—11.33% | |||||||||||
US Treasury Bills 0.420%, due 08/11/16 | USD | 2,676,000 | 2,675,888 | ||||||||
0.406%, due 08/18/16 | USD | 7,500,000 | 7,499,347 | ||||||||
0.408%, due 08/18/16 | USD | 3,880,000 | 3,879,662 | ||||||||
0.264%, due 09/01/161 | USD | 5,500,000 | 5,498,994 | ||||||||
0.386%, due 09/15/161 | USD | 4,099,000 | 4,097,885 | ||||||||
0.475%, due 09/29/16 | USD | 22,504,000 | 22,495,178 | ||||||||
0.385%, due 10/06/16 | USD | 23,710,000 | 23,699,307 | ||||||||
0.367%, due 10/13/161 | USD | 8,369,000 | 8,364,933 | ||||||||
0.488%, due 11/10/161 | USD | 5,256,000 | 5,252,252 | ||||||||
Total short-term US government obligations (cost—$83,441,435) | 83,463,446 | ||||||||||
Repurchase agreement—18.20% | |||||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $10,820,549 US Treasury Bond, 7.875% due 02/15/21 and $119,135,844 US Treasury Notes, 0.750% to 2.250% due 12/31/17 to 07/31/21; (value—$136,820,117); proceeds: $134,135,112 (cost—$134,135,000) | USD | 134,135,000 | 134,135,000 |
Number of contracts/ Notional amount | Value | ||||||||||
Options purchased—1.51% | |||||||||||
Call options & swaptions purchased—1.01% | |||||||||||
3 Month USD LIBOR Interest Rate Swap, strike @ 1.000%, expires 05/09/31 (counterparty: CITI; receive fixed rate); underlying swap terminates 05/09/467 | USD | 28,600,000 | $ | 1,589,720 | |||||||
Euro STOXX 50 Index, strike @ 3,800, expires 12/20/19 | 1,386 | 1,341,909 | |||||||||
NIKKEI 225 Index, Strike @ 20,000, expires 12/11/20 | 145 | 1,918,459 | |||||||||
USD Call/CNH Put, strike @ 6.8, expires 05/08/17 | USD | 40,875,000 | 804,093 | ||||||||
USD Call/JPY Put, strike @ 96.90, expires 05/06/21 | USD | 16,350,000 | 1,169,663 | ||||||||
USD Call/SAR Put, strike @ 3.83, expires 05/08/18 | USD | 16,350,000 | 601,549 | ||||||||
Total Call options & swaptions purchased | 7,425,393 | ||||||||||
Put options & swaptions purchased—0.50% | |||||||||||
3 Month USD LIBOR Interest Rate Swap, strike @ 3.850%, expires 05/09/31 (counterparty: CITI; receive fixed rate); underlying swap terminates 05/09/467 | USD | 32,700,000 | 1,112,395 | ||||||||
6 Month EURIBOR Interest Rate Swap, strike @ 3.600%, expires 05/09/31 (counterparty: CITI; receive floating rate); underlying swap terminates 05/09/467 | GBP | 11,200,000 | 385,111 | ||||||||
Apple Inc., Flex, strike @ 100, expires 06/16/17 | 71 | 56,267 | |||||||||
Euro STOXX 50 Index, strike @ 3,000, expires 12/21/18 | 150 | 831,960 | |||||||||
Euro STOXX 50 Index, strike @ 3,400, expires 12/15/17 | 181 | 1,270,809 | |||||||||
Swiss Market Index, strike @ 8,037.25, expires 09/16/16 | 205 | 27,540 | |||||||||
Total put options & swaptions purchased | 3,684,082 | ||||||||||
Total options purchased (cost—$12,289,317) | 11,109,475 | ||||||||||
Total investments before investments sold short (cost—$767,320,553) — 106.29% | 783,189,201 | ||||||||||
Number of shares | |||||||||||
Investments sold short—(13.56)% Common stocks—(9.39)% | |||||||||||
Australia—(0.11)% | |||||||||||
Insurance Australia Group Ltd. | (101,101 | ) | (464,064 | ) | |||||||
BHP Billiton Ltd., ADR | (11,280 | ) | (334,903 | ) | |||||||
Total Australia common stocks | (798,967 | ) | |||||||||
Bermuda—(0.07)% | |||||||||||
Axalta Coating Systems Ltd. | (18,288 | ) | (522,122 | ) | |||||||
Canada—(2.46)% | |||||||||||
Aecon Group, Inc. | (31,474 | ) | (419,203 | ) | |||||||
Agrium, Inc. | (5,020 | ) | (455,612 | ) | |||||||
Aimia, Inc. | (18,160 | ) | (119,476 | ) |
242
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Investments sold short—(continued) Common stocks—(continued) | |||||||||||
Canada—(concluded) | |||||||||||
Bank of Montreal | (4,040 | ) | $ | (258,988 | ) | ||||||
Barrick Gold Corp. | (12,090 | ) | (263,996 | ) | |||||||
Bird Construction, Inc. | (56,770 | ) | (585,679 | ) | |||||||
Bonavista Energy Corp. | (69,710 | ) | (187,936 | ) | |||||||
Boralex, Inc., Class A | (16,210 | ) | (247,685 | ) | |||||||
BRP, Inc. | (7,090 | ) | (115,121 | ) | |||||||
CAE, Inc. | (32,210 | ) | (429,746 | ) | |||||||
Cameco Corp. | (24,230 | ) | (231,601 | ) | |||||||
Canadian Tire Corp. Ltd., Class A | (7,112 | ) | (747,287 | ) | |||||||
Canadian Utilities Ltd., Class A | (19,860 | ) | (611,323 | ) | |||||||
Canadian Western Bank | (12,210 | ) | (235,849 | ) | |||||||
Canexus Corp. | (40,520 | ) | (39,724 | ) | |||||||
Canfor Corp. | (50,099 | ) | (594,749 | ) | |||||||
Capital Power Corp. | (11,700 | ) | (188,182 | ) | |||||||
CI Financial Corp. | (34,220 | ) | (699,523 | ) | |||||||
Cineplex, Inc. | (4,403 | ) | (171,581 | ) | |||||||
Conifex Timber, Inc. | (43,280 | ) | (110,384 | ) | |||||||
DH Corp. | (20,550 | ) | (507,592 | ) | |||||||
Dorel Industries, Inc., Class B | (32,220 | ) | (929,103 | ) | |||||||
Emera, Inc. | (11,330 | ) | (422,429 | ) | |||||||
Empire Co. Ltd., Class A | (30,820 | ) | (490,986 | ) | |||||||
Finning International, Inc. | (17,330 | ) | (280,858 | ) | |||||||
Great-West Lifeco, Inc. | (14,210 | ) | (369,058 | ) | |||||||
IGM Financial, Inc. | (24,190 | ) | (673,092 | ) | |||||||
INFOR Acquisition Corp., Class A | (64,527 | ) | (489,272 | ) | |||||||
Inter Pipeline Ltd. | (11,970 | ) | (250,099 | ) | |||||||
Leon's Furniture Ltd. | (14,460 | ) | (171,662 | ) | |||||||
Linamar Corp. | (10,030 | ) | (398,158 | ) | |||||||
Methanex Corp. | (5,950 | ) | (166,882 | ) | |||||||
National Bank of Canada | (14,110 | ) | (483,176 | ) | |||||||
Northview Apartment Real Estate Investment Trust | (10,020 | ) | (173,287 | ) | |||||||
Novagold Resources, Inc. | (130,760 | ) | (909,356 | ) | |||||||
Painted Pony Petroleum Ltd. | (20,220 | ) | (133,649 | ) | |||||||
Pengrowth Energy Corp. | (100,145 | ) | (149,567 | ) | |||||||
Power Corp. of Canada | (24,090 | ) | (524,735 | ) | |||||||
PrairieSky Royalty Ltd. | (16,190 | ) | (315,083 | ) | |||||||
Rogers Sugar, Inc. | (20,670 | ) | (98,312 | ) | |||||||
Russel Metals, Inc. | (13,110 | ) | (236,967 | ) | |||||||
Saputo, Inc. | (16,220 | ) | (487,352 | ) | |||||||
Sleep Country Canada Holdings, Inc. | (15,851 | ) | (366,637 | ) | |||||||
Surge Energy, Inc. | (147,740 | ) | (262,518 | ) | |||||||
Teck Resources Ltd., Class B | (17,356 | ) | (276,627 | ) | |||||||
The Jean Coutu Group PJC, Inc., Class A | (15,120 | ) | (218,986 | ) | |||||||
Thomson Reuters Corp. | (6,070 | ) | (255,743 | ) | |||||||
Toromont Industries Ltd. | (5,070 | ) | (152,218 | ) | |||||||
Wajax Corp. | (28,570 | ) | (308,753 | ) | |||||||
Western Forest Products, Inc. | (142,180 | ) | (233,037 | ) | |||||||
WestJet Airlines Ltd. | (28,310 | ) | (498,702 | ) | |||||||
Winpak Ltd. | (6,120 | ) | (208,820 | ) | |||||||
Total Canada common stocks | (18,156,361 | ) | |||||||||
Ireland—(0.19)% | |||||||||||
Alkermes PLC | (9,043 | ) | (451,246 | ) | |||||||
Willis Towers Watson PLC | (7,457 | ) | (921,834 | ) | |||||||
Total Ireland common stocks | (1,373,080 | ) |
Number of Shares | Value | ||||||||||
Investments sold short—(continued) Common stocks—(continued) | |||||||||||
Italy—(0.11)% | |||||||||||
Saipem SpA | (1,826,176 | ) | $ | (798,087 | ) | ||||||
Japan—(0.36)% | |||||||||||
Alps Electric Co. Ltd. | (12,700 | ) | (291,253 | ) | |||||||
Dentsu, Inc. | (5,100 | ) | (247,415 | ) | |||||||
Hulic Co. Ltd. | (105,200 | ) | (1,107,314 | ) | |||||||
NTT Urban Development Corp. | (16,800 | ) | (181,608 | ) | |||||||
Rakuten, Inc. | (53,700 | ) | (618,654 | ) | |||||||
Sony Corp. | (6,700 | ) | (215,509 | ) | |||||||
Total Japan common stocks | (2,661,753 | ) | |||||||||
Liberia—(0.21)% | |||||||||||
Royal Caribbean Cruises Ltd. | (21,351 | ) | (1,546,666 | ) | |||||||
Netherlands—(0.08)% | |||||||||||
AerCap Holdings NV | (8,617 | ) | (314,607 | ) | |||||||
Mylan NV | (6,150 | ) | (287,758 | ) | |||||||
Total Netherlands common stocks | (602,365 | ) | |||||||||
Sweden—(0.05)% | |||||||||||
Investor AB, Class B | (11,053 | ) | (380,791 | ) | |||||||
Switzerland—(0.14)% | |||||||||||
Credit Suisse Group AG | (27,605 | ) | (317,577 | ) | |||||||
Dufry AG | (2,441 | ) | (281,073 | ) | |||||||
Julius Baer Group Ltd. | (1,483 | ) | (60,868 | ) | |||||||
LafargeHolcim Ltd. | (6,919 | ) | (329,245 | ) | |||||||
Total Switzerland common stocks | (988,763 | ) | |||||||||
United Kingdom—(0.77)% | |||||||||||
Ashtead Group PLC | (28,238 | ) | (446,964 | ) | |||||||
Fresnillo PLC | (52,019 | ) | (1,329,388 | ) | |||||||
Legal & General Group PLC | (65,074 | ) | (177,153 | ) | |||||||
Lloyds Banking Group PLC | (387,667 | ) | (272,690 | ) | |||||||
Royal Bank of Scotland Group PLC | (505,072 | ) | (1,286,074 | ) | |||||||
St James's Place PLC | (36,481 | ) | (447,080 | ) | |||||||
Standard Chartered PLC | (168,767 | ) | (1,350,402 | ) | |||||||
Rio Tinto PLC, ADR | (11,280 | ) | (370,210 | ) | |||||||
Total United Kingdom common stocks | (5,679,961 | ) | |||||||||
United States—(4.84)% | |||||||||||
Abercrombie & Fitch Co., Class A | (10,190 | ) | (211,035 | ) | |||||||
Alnylam Pharmaceuticals, Inc. | (19,690 | ) | (1,340,495 | ) | |||||||
AT&T, Inc. | (5,436 | ) | (235,324 | ) | |||||||
Autodesk, Inc. | (23,259 | ) | (1,382,748 | ) | |||||||
Baker Hughes, Inc. | (1,275 | ) | (60,983 | ) | |||||||
BioMarin Pharmaceutical, Inc. | (12,190 | ) | (1,211,930 | ) | |||||||
Boise Cascade Co. | (2,851 | ) | (77,462 | ) | |||||||
Cabot Oil & Gas Corp. | (3,388 | ) | (83,582 | ) | |||||||
Calpine Corp. | (45,771 | ) | (628,894 | ) | |||||||
Caterpillar, Inc. | (13,229 | ) | (1,094,832 | ) | |||||||
Charter Communications, Inc., Class A | (296 | ) | (69,522 | ) | |||||||
Cheniere Energy, Inc. | (33,502 | ) | (1,401,389 | ) | |||||||
Chico's FAS, Inc. | (16,270 | ) | (195,403 | ) | |||||||
CIT Group, Inc. | (10,200 | ) | (352,512 | ) | |||||||
Concho Resources, Inc. | (9,693 | ) | (1,203,871 | ) | |||||||
Continental Resources, Inc. | (6,177 | ) | (272,097 | ) |
243
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Number of Shares | Value | ||||||||||
Investments sold short—(continued) Common stocks—(continued) | |||||||||||
United States—(continued) | |||||||||||
D.R. Horton, Inc. | (10,240 | ) | $ | (336,691 | ) | ||||||
Deere & Co. | (4,428 | ) | (344,100 | ) | |||||||
Emerson Electric Co. | (4,590 | ) | (256,581 | ) | |||||||
EOG Resources, Inc. | (14,966 | ) | (1,222,722 | ) | |||||||
Express, Inc. | (16,110 | ) | (241,006 | ) | |||||||
Fastenal Co. | (6,120 | ) | (261,630 | ) | |||||||
First Financial Bankshares, Inc. | (14,940 | ) | (510,500 | ) | |||||||
Foot Locker, Inc. | (4,080 | ) | (243,250 | ) | |||||||
Halliburton Co. | (23,049 | ) | (1,006,319 | ) | |||||||
Hewlett Packard Enterprise Co. | (23,770 | ) | (499,645 | ) | |||||||
Kinder Morgan, Inc. | (52,928 | ) | (1,076,026 | ) | |||||||
Leucadia National Corp. | (17,778 | ) | (324,626 | ) | |||||||
Level 3 Communications, Inc. | (39,232 | ) | (1,985,139 | ) | |||||||
Louisiana-Pacific Corp. | (9,980 | ) | (201,596 | ) | |||||||
Lululemon Athletica, Inc. | (8,150 | ) | (632,848 | ) | |||||||
Macy's, Inc. | (10,170 | ) | (364,391 | ) | |||||||
Mattel, Inc. | (8,340 | ) | (278,389 | ) | |||||||
Mercer International, Inc. | (24,869 | ) | (196,216 | ) | |||||||
Merck & Co., Inc. | (3,410 | ) | (200,031 | ) | |||||||
Morgan Stanley | (8,690 | ) | (249,664 | ) | |||||||
Nasdaq, Inc. | (3,200 | ) | (226,432 | ) | |||||||
National Oilwell Varco, Inc. | (19,364 | ) | (626,425 | ) | |||||||
Noble Energy, Inc. | (33,325 | ) | (1,190,369 | ) | |||||||
Nordstrom, Inc. | (7,120 | ) | (314,918 | ) | |||||||
Pioneer Natural Resources Co. | (830 | ) | (134,933 | ) | |||||||
Qorvo, Inc. | (23,620 | ) | (1,493,493 | ) | |||||||
Rayonier, Inc. | (10,050 | ) | (273,561 | ) | |||||||
Resolute Forest Products, Inc. | (41,080 | ) | (226,762 | ) | |||||||
SBA Communications Corp., Class A | (4,683 | ) | (538,545 | ) | |||||||
ServiceNow, Inc. | (1,290 | ) | (96,647 | ) | |||||||
Southern Copper Corp. | (12,850 | ) | (333,971 | ) | |||||||
Target Corp. | (4,450 | ) | (335,218 | ) | |||||||
TD Ameritrade Holding Corp. | (35,170 | ) | (1,067,761 | ) | |||||||
The Boeing Co. | (6,180 | ) | (826,019 | ) | |||||||
The Cheesecake Factory, Inc. | (10,130 | ) | (524,025 | ) | |||||||
The Gap, Inc. | (3,820 | ) | (98,518 | ) | |||||||
The Goldman Sachs Group, Inc. | (3,250 | ) | (516,132 | ) | |||||||
The Wendy's Co. | (28,340 | ) | (273,764 | ) | |||||||
The Williams Cos., Inc. | (14,326 | ) | (343,394 | ) |
Number of Shares | Value | ||||||||||
Investments sold short—(concluded) Common stocks—(concluded) | |||||||||||
United States—(concluded) | |||||||||||
Tiffany & Co. | (7,860 | ) | $ | (507,127 | ) | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. | (600 | ) | (156,726 | ) | |||||||
United Parcel Service, Inc., Class B | (2,159 | ) | (233,388 | ) | |||||||
United Rentals, Inc. | (13,315 | ) | (1,060,806 | ) | |||||||
Verisk Analytics, Inc. | (12,576 | ) | (1,072,481 | ) | |||||||
Vertex Pharmaceuticals, Inc. | (15,980 | ) | (1,550,060 | ) | |||||||
Wal-Mart Stores, Inc. | (7,000 | ) | (510,790 | ) | |||||||
Waste Management, Inc. | (6,070 | ) | (401,348 | ) | |||||||
Weyerhaeuser Co. | (12,140 | ) | (397,221 | ) | |||||||
Workday, Inc., Class A | (925 | ) | (77,089 | ) | |||||||
Total United States common stocks | (35,661,372 | ) | |||||||||
Total common stocks (proceeds—$65,677,676) | (69,170,288 | ) | |||||||||
Investment companies—(4.17)% | |||||||||||
Consumer Discretionary Select Sector SPDR Fund | (16,903 | ) | (1,379,792 | ) | |||||||
Financial Select Sector SPDR Fund | (12,130 | ) | (286,753 | ) | |||||||
Health Care Select Sector SPDR Fund | (8,489 | ) | (638,797 | ) | |||||||
Industrial Select Sector SPDR Fund | (26,807 | ) | (1,555,878 | ) | |||||||
iShares Core S&P/TSX Capped Composite Index ETF | (96,540 | ) | (1,709,497 | ) | |||||||
iShares iBoxx $ Investment Grade Corporate Bond ETF | (9,146 | ) | (1,134,012 | ) | |||||||
iShares Russell 2000 Index Fund | (22,660 | ) | (2,743,900 | ) | |||||||
iShares S&P/TSX 60 Index ETF | (144,630 | ) | (2,364,991 | ) | |||||||
iShares S&P/TSX Capped Energy Index ETF | (28,500 | ) | (260,629 | ) | |||||||
Materials Select Sector SPDR Fund | (16,382 | ) | (798,131 | ) | |||||||
Powershares QQQ Trust, Series1 | (6,120 | ) | (705,208 | ) | |||||||
SPDR Barclays High Yield Bond ETF | (31,351 | ) | (1,130,517 | ) | |||||||
SPDR S&P Oil & Gas Exploration & Production ETF | (16,180 | ) | (554,165 | ) | |||||||
SPDR S&P Regional Banking ETF | (27,998 | ) | (1,122,720 | ) | |||||||
SPDR S&P500 ETF Trust | (53,521 | ) | (11,622,085 | ) | |||||||
Technology Select Sector SPDR Fund | (59,049 | ) | (2,743,417 | ) | |||||||
Total Investment companies (proceeds—$29,932,750) | (30,750,492 | ) | |||||||||
Total investments sold short (proceeds—$95,610,426) | (99,920,780 | ) | |||||||||
Other assets in excess of liabilities—7.27% | 53,531,445 | ||||||||||
Net assets—100.00% | $ | 736,799,866 |
For a listing of defined portfolio acronyms and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 262.
Aggregate cost for federal income tax purposes before investments sold short was $772,480,817; and net unrealized appreciation consisted of:
Gross unrealized appreciation | $ | 22,771,932 | |||||
Gross unrealized depreciation | (12,063,548 | ) | |||||
Net unrealized appreciation | $ | 10,708,384 |
244
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Written options
Number of contracts | Call options written | Expiration date | Premiums received | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||
71 | Apple Inc., Flex, strike @ 100 | 06/16/17 | $ | 60,261 | $ | (76,857 | ) | $ | (16,596 | ) | |||||||||||||
91 | S&P 500 Index, strike @ 2,200 | 06/16/17 | 561,136 | (889,434 | ) | (328,298 | ) | ||||||||||||||||
205 | Swiss Market Index, strike @ 8,037.25 | 09/16/16 | 61,667 | (44,597 | ) | 17,070 | |||||||||||||||||
$ | 683,064 | $ | (1,010,888 | ) | $ | (327,824 | ) |
Written options activity for the year ended July 31, 2016 was as follows:
Number of Contracts | Premiums received | ||||||||||
Options outstanding at July 31, 2015 | 2,422 | $ | 953,547 | ||||||||
Options written | 5,088 | 4,325,745 | |||||||||
Options exercised | (144 | ) | (28,812 | ) | |||||||
Options terminated in closing purchase transactions | (4,520 | ) | (3,609,106 | ) | |||||||
Options expired prior to exercise | (2,479 | ) | (958,310 | ) | |||||||
Options outstanding at July 31, 2016 | 367 | $ | 683,064 |
Foreign exchange written options
Notional amount (000) | Calls written | Counterparty | Expiration date | Premiums received | Current value | Unrealized appreciation | |||||||||||||||||||||
USD | 40,875 | USD Call/CNH Put, strike @ JPY 7.34 | BNP | 05/08/17 | $ | 478,851 | $ | (222,319 | ) | $ | 256,532 |
Foreign exchange written options activity for the year ended July 31, 2016 was as follows:
Premiums received | |||||||
Foreign exchange options outstanding at July 31, 2015 | $ | 668,268 | |||||
Foreign exchange options written | 1,247,541 | ||||||
Foreign exchange options terminated in closing purchase transactions | (1,436,958 | ) | |||||
Foreign exchange options expired prior to exercise | — | ||||||
Foreign exchange options outstanding at July 31, 2016 | $ | 478,851 |
Futures contracts
Number of contracts | Currency | Expiration date | Cost | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||
US Treasury futures buy contracts: | |||||||||||||||||||||||||||
13 | USD | Ultra Long US Treasury Bond Futures | September 16 | $ | 2,351,278 | $ | 2,476,906 | $ | 125,628 | ||||||||||||||||||
6 | USD | Ultra Long US Treasury Bond Futures* | September 16 | 1,050,653 | 1,143,188 | 92,535 | |||||||||||||||||||||
95 | USD | US Long Bond Futures | September 16 | 16,316,402 | 16,571,562 | 255,160 | |||||||||||||||||||||
90 | USD | US Treasury Note 2 Year Futures* | September 16 | 19,677,652 | 19,710,000 | 32,348 | |||||||||||||||||||||
56 | USD | US Treasury Note 10 Year Futures | September 16 | 7,312,705 | 7,450,625 | 137,920 |
245
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Futures contracts—(continued)
Number of contracts | Currency | Expiration date | Cost | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||
US Treasury futures buy contracts—(concluded) | |||||||||||||||||||||||||||
56 | USD | US Treasury Note 5 Year Futures | September 16 | $ | 6,784,439 | $ | 6,832,875 | $ | 48,436 | ||||||||||||||||||
52 | USD | US Treasury Note 5 Year Futures* | September 16 | 6,243,692 | 6,344,813 | 101,121 | |||||||||||||||||||||
Index futures buy contracts: | |||||||||||||||||||||||||||
31 | AUD | ASX SPI 200 Index Futures | September 16 | 3,161,001 | 3,250,477 | 89,476 | |||||||||||||||||||||
45 | BRL | Bovespa Index Futures* | August 16 | 794,250 | 802,184 | 7,934 | |||||||||||||||||||||
21 | CAD | S&P TSX 60 Index Futures | September 16 | 2,675,171 | 2,720,116 | 44,945 | |||||||||||||||||||||
3 | EUR | Amsterdam Index Futures | August 16 | 301,959 | 299,512 | (2,447 | ) | ||||||||||||||||||||
172 | EUR | CAC 40 Index Futures | August 16 | 8,345,024 | 8,536,985 | 191,961 | |||||||||||||||||||||
534 | EUR | EURO STOXX 50 Index Futures | September 16 | 17,045,227 | 17,808,876 | 763,649 | |||||||||||||||||||||
35 | GBP | FTSE 100 Index Futures | September 16 | 3,034,069 | 3,092,604 | 58,535 | |||||||||||||||||||||
4 | HKD | Hang Seng Index Futures | August 16 | 564,789 | 561,301 | (3,488 | ) | ||||||||||||||||||||
11 | HKD | Hang Seng Index Futures* | August 16 | 1,565,276 | 1,543,579 | (21,697 | ) | ||||||||||||||||||||
4 | KRW | Hang Seng Index Futures* | September 16 | 441,818 | 450,654 | 8,836 | |||||||||||||||||||||
25 | SGD | MSCI Singapore Index Future | August 16 | 595,724 | 582,625 | (13,099 | ) | ||||||||||||||||||||
34 | TWD | Taiex Futures Index Futures* | August 16 | 1,890,209 | 1,894,534 | 4,325 | |||||||||||||||||||||
50 | USD | Dow Jones E-Mini Index Futures | September 16 | 4,573,780 | 4,590,500 | 16,720 | |||||||||||||||||||||
33 | USD | Mini MSCI Emerging Markets (EM) Index Futures | September 16 | 1,435,428 | 1,454,475 | 19,047 | |||||||||||||||||||||
1 | USD | MSCI EAFE Mini Index Futures | September 16 | 82,930 | 84,010 | 1,080 | |||||||||||||||||||||
7 | USD | MSCI Taiwan Index Futures | August 16 | 233,445 | 233,030 | (415 | ) | ||||||||||||||||||||
25 | USD | MSCI Taiwan Index Futures* | August 16 | 827,370 | 832,250 | 4,880 | |||||||||||||||||||||
165 | USD | NASDAQ 100 E-Mini Index Futures | September 16 | 14,852,985 | 15,598,275 | 745,290 | |||||||||||||||||||||
14 | USD | Russell 2000 Mini Index Futures | September 16 | 1,684,561 | 1,703,800 | 19,239 | |||||||||||||||||||||
10 | USD | S&P 400 E-Mini Index Futures | September 16 | 1,515,474 | 1,556,900 | 41,426 | |||||||||||||||||||||
126 | USD | S&P 500 E-Mini Index Futures | September 16 | 13,339,269 | 13,659,660 | 320,391 | |||||||||||||||||||||
32 | USD | SGX 50 NIFTY Index Futures | August 16 | 553,933 | 556,000 | 2,067 | |||||||||||||||||||||
15 | USD | SGX 50 NIFTY Index Futures* | August 16 | 258,359 | 260,625 | 2,266 | |||||||||||||||||||||
37 | USD | SGX FTSE China A50 Index Future | August 16 | 351,282 | 349,372 | (1,910 | ) | ||||||||||||||||||||
10 | ZAR | FTSE/JSE Africa Top 40 Tradeable Index Futures | September 16 | 335,231 | 332,340 | (2,891 | ) | ||||||||||||||||||||
Interest rate futures buy contracts: | |||||||||||||||||||||||||||
356 | AUD | Australian Bond 10 Year Futures | September 16 | 36,485,486 | 37,157,503 | 672,017 | |||||||||||||||||||||
270 | AUD | Australian Bond 3 Year Futures | September 16 | 23,197,419 | 23,275,643 | 78,224 | |||||||||||||||||||||
29 | CAD | Canada Government Bond 10 Year Futures | September 16 | 3,232,915 | 3,297,913 | 64,998 | |||||||||||||||||||||
1 | CHF | 3 month Euroswiss Interest Rate Futures | June 17 | 260,338 | 260,240 | (98 | ) | ||||||||||||||||||||
41 | EUR | 3 Month EURIBOR Futures | December 16 | 11,500,240 | 11,496,748 | (3,492 | ) | ||||||||||||||||||||
40 | EUR | 3 Month EURIBOR Futures | March 17 | 11,221,094 | 11,217,458 | (3,636 | ) | ||||||||||||||||||||
51 | EUR | 3 Month EURIBOR Futures | June 17 | 14,303,340 | 14,304,397 | 1,057 | |||||||||||||||||||||
70 | EUR | 3 Month EURIBOR Futures | September 17 | 19,632,303 | 19,636,421 | 4,118 | |||||||||||||||||||||
80 | EUR | 3 Month EURIBOR Futures | December 17 | 22,431,294 | 22,443,860 | 12,566 | |||||||||||||||||||||
82 | EUR | 3 Month EURIBOR Futures | March 18 | 22,987,850 | 23,006,102 | 18,252 | |||||||||||||||||||||
57 | EUR | 3 Month EURIBOR Futures | June 18 | 15,981,245 | 15,992,047 | 10,802 | |||||||||||||||||||||
59 | EUR | German Euro BOBL Futures | September 16 | 8,775,396 | 8,817,144 | 41,748 | |||||||||||||||||||||
77 | EUR | German Euro BOBL Futures* | September 16 | 11,380,626 | 11,507,121 | 126,495 | |||||||||||||||||||||
39 | EUR | German Euro Bund Futures | September 16 | 7,155,920 | 7,316,855 | 160,935 | |||||||||||||||||||||
3 | EUR | German Euro Buxl 30 Year Futures | September 16 | 616,894 | 660,872 | 43,978 |
246
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Futures contracts—(continued)
Number of contracts | Currency | Expiration date | Cost | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||
Interest rate futures buy contracts—(concluded): | |||||||||||||||||||||||||||
46 | EUR | German Euro Schatz Futures | September 16 | $ | 5,763,232 | $ | 5,760,967 | $ | (2,265 | ) | |||||||||||||||||
135 | EUR | German Euro Schatz Futures* | September 16 | 16,881,090 | 16,907,186 | 26,096 | |||||||||||||||||||||
35 | EUR | Italian Government Bond Futures | September 16 | 5,613,087 | 5,668,374 | 55,287 | |||||||||||||||||||||
7 | EUR | Italian Government Bond Futures* | September 16 | 1,104,015 | 1,133,675 | 29,660 | |||||||||||||||||||||
4 | EUR | Mid-Term Euro-OAT Futures | September 16 | 718,628 | 725,135 | 6,507 | |||||||||||||||||||||
24 | EUR | Mid-Term Euro-OAT Futures* | September 16 | 4,193,852 | 4,350,811 | 156,959 | |||||||||||||||||||||
99 | GBP | 90-Day Sterling Pound Futures | December 16 | 16,314,279 | 16,330,196 | 15,917 | |||||||||||||||||||||
83 | GBP | 90-Day Sterling Pound Futures | March 17 | 13,666,378 | 13,690,973 | 24,595 | |||||||||||||||||||||
69 | GBP | 90-Day Sterling Pound Futures | June 17 | 11,348,521 | 11,381,652 | 33,131 | |||||||||||||||||||||
63 | GBP | 90-Day Sterling Pound Futures | September 17 | 10,364,514 | 10,391,943 | 27,429 | |||||||||||||||||||||
57 | GBP | 90-Day Sterling Pound Futures | December 17 | 9,374,239 | 9,401,291 | 27,052 | |||||||||||||||||||||
52 | GBP | 90-Day Sterling Pound Futures | March 18 | 8,549,497 | 8,575,756 | 26,259 | |||||||||||||||||||||
49 | GBP | 90-Day Sterling Pound Futures | June 18 | 8,057,013 | 8,080,190 | 23,177 | |||||||||||||||||||||
359 | GBP | United Kingdom Long Gilt Bond Futures | September 16 | 61,320,019 | 62,216,765 | 896,746 | |||||||||||||||||||||
1 | JPY | Japan Government Bond 10 Year Futures | September 16 | 1,501,977 | 1,495,565 | (6,412 | ) | ||||||||||||||||||||
42 | JPY | JGB MINI 10 Year Futures | September 16 | 6,266,711 | 6,288,783 | 22,072 | |||||||||||||||||||||
17 | USD | 90-Day Eurodollar Futures | June 17 | 4,214,501 | 4,212,175 | (2,326 | ) | ||||||||||||||||||||
21 | USD | 90-Day Eurodollar Futures | September 17 | 5,202,071 | 5,201,963 | (108 | ) | ||||||||||||||||||||
22 | USD | 90-Day Eurodollar Futures | December 17 | 5,446,082 | 5,447,475 | 1,393 | |||||||||||||||||||||
24 | USD | 90-Day Eurodollar Futures | March 18 | 5,937,847 | 5,941,200 | 3,353 | |||||||||||||||||||||
25 | USD | 90-Day Eurodollar Futures | June 18 | 6,180,751 | 6,186,875 | 6,124 | |||||||||||||||||||||
$ | 557,376,049 | $ | 563,063,927 | $ | 5,687,878 | ||||||||||||||||||||||
Proceeds | |||||||||||||||||||||||||||
US Treasury futures sell contracts: | |||||||||||||||||||||||||||
32 | USD | US Long Bond Futures | September 16 | $ | 5,546,935 | $ | 5,582,000 | $ | (35,065 | ) | |||||||||||||||||
28 | USD | US Treasury Note 10 Year Futures | September 16 | 3,740,999 | 3,725,313 | 15,686 | |||||||||||||||||||||
128 | USD | US Ultra Treasury Note 10 Year Futures | September 16 | 17,982,896 | 18,714,000 | (731,104 | ) | ||||||||||||||||||||
Index futures sell contracts: | |||||||||||||||||||||||||||
15 | AUD | ASX SPI 200 Index Futures | September 16 | 1,500,672 | 1,572,811 | (72,139 | ) | ||||||||||||||||||||
3 | CHF | Swiss Market Index Futures* | September 16 | 253,342 | 251,744 | 1,598 | |||||||||||||||||||||
6 | EUR | CAC 40 Index Futures | August 16 | 293,247 | 297,802 | (4,555 | ) | ||||||||||||||||||||
32 | EUR | DAX Index Futures | September 16 | 8,794,513 | 9,235,578 | (441,065 | ) | ||||||||||||||||||||
30 | EUR | EURO STOXX 50 Index Futures | September 16 | 986,681 | 1,000,499 | (13,818 | ) | ||||||||||||||||||||
4 | EUR | FTSE MIB Index Futures | September 16 | 361,445 | 376,095 | (14,650 | ) | ||||||||||||||||||||
12 | EUR | IBEX 35 Index Futures | August 16 | 1,143,019 | 1,149,886 | (6,867 | ) | ||||||||||||||||||||
2 | HKD | H-Shares Index Futures* | August 16 | 117,472 | 115,655 | 1,817 | |||||||||||||||||||||
5 | HKD | Hang Seng Index Futures | August 16 | 711,270 | 701,627 | 9,643 | |||||||||||||||||||||
12 | JPY | NIKKEI 225 Index Futures | September 16 | 1,930,449 | 1,953,447 | (22,998 | ) | ||||||||||||||||||||
49 | JPY | TOPIX Index Futures | September 16 | 6,320,862 | 6,379,821 | (58,959 | ) | ||||||||||||||||||||
73 | SEK | OMX 30 Index Futures | August 16 | 1,152,974 | 1,181,974 | (29,000 | ) | ||||||||||||||||||||
274 | USD | Russell 2000 Mini Index Futures | September 16 | 31,681,230 | 33,345,800 | (1,664,570 | ) | ||||||||||||||||||||
41 | USD | S&P 500 E-Mini Index Futures | September 16 | 4,390,360 | 4,444,810 | (54,450 | ) |
247
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Futures contracts—(concluded)
Number of contracts | Currency | Expiration date | Proceeds | Current value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||
Interest rate futures sell contracts—(concluded): | |||||||||||||||||||||||||||
39 | CAD | Canadian Bankers Acceptance Futures | December 16 | $ | 7,397,327 | $ | 7,398,470 | $ | (1,143 | ) | |||||||||||||||||
21 | CAD | Canadian Bankers Acceptance Futures | March 17 | 3,983,210 | 3,983,792 | (582 | ) | ||||||||||||||||||||
3 | CHF | 3 month Euroswiss Interest Rate Futures | December 16 | 780,481 | 780,566 | (85 | ) | ||||||||||||||||||||
1 | CHF | 3 month Euroswiss Interest Rate Futures | March 17 | 260,174 | 260,215 | (41 | ) | ||||||||||||||||||||
397 | EUR | German Euro Bund Futures | September 16 | 73,563,048 | 74,481,829 | (918,781 | ) | ||||||||||||||||||||
15 | USD | 90-Day Eurodollar Futures | December 16 | 3,716,636 | 3,718,687 | (2,051 | ) | ||||||||||||||||||||
1 | USD | 90-Day Eurodollar Futures | March 17 | 247,811 | 247,850 | (39 | ) | ||||||||||||||||||||
$ | 176,857,053 | $ | 180,900,271 | $ | (4,043,218 | ) | |||||||||||||||||||||
$ | 1,644,660 |
* Exposure to Futures Contracts is achieved through the use of a swap contract with Bank of America N.A.
Forward foreign currency contracts
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
BB | AUD | 28,609,045 | USD | 20,921,024 | 09/21/16 | $ | (786,535 | ) | |||||||||||
BB | CAD | 480,000 | USD | 375,420 | 09/20/16 | 7,690 | |||||||||||||
BB | CAD | 6,038,755 | USD | 4,674,983 | 09/21/16 | 48,649 | |||||||||||||
BB | CAD | 4,195,439 | USD | 3,181,033 | 09/21/16 | (33,123 | ) | ||||||||||||
BB | DKK | 2,700,000 | USD | 414,117 | 09/20/16 | 7,480 | |||||||||||||
BB | EUR | 666,227 | SEK | 6,167,000 | 08/01/16 | (24,146 | ) | ||||||||||||
BB | EUR | 666,384 | SEK | 6,167,000 | 08/04/16 | (24,308 | ) | ||||||||||||
BB | EUR | 8,756,354 | USD | 9,689,256 | 09/21/16 | (120,600 | ) | ||||||||||||
BB | GBP | 410,000 | USD | 538,423 | 08/12/16 | (4,263 | ) | ||||||||||||
BB | GBP | 1,572,330 | USD | 2,064,565 | 09/21/16 | (18,102 | ) | ||||||||||||
BB | GBP | 13,934,962 | USD | 20,182,535 | 09/21/16 | 1,724,649 | |||||||||||||
BB | JPY | 355,000,000 | USD | 3,330,389 | 08/12/16 | (149,857 | ) | ||||||||||||
BB | JPY | 1,154,185,794 | USD | 10,949,209 | 09/21/16 | (383,607 | ) | ||||||||||||
BB | KRW | 5,000,000,000 | USD | 4,265,848 | 08/26/16 | (197,053 | ) | ||||||||||||
BB | KRW | 5,175,000,000 | USD | 4,507,761 | 10/14/16 | (110,848 | ) | ||||||||||||
BB | NOK | 1,000,000 | USD | 122,780 | 09/20/16 | 4,246 | |||||||||||||
BB | NZD | 76,377,105 | USD | 51,977,556 | 09/21/16 | (3,057,594 | ) | ||||||||||||
BB | SEK | 320,343,992 | USD | 38,626,914 | 09/21/16 | 1,097,414 | |||||||||||||
BB | SEK | 22,897,360 | USD | 2,665,490 | 09/21/16 | (17,022 | ) | ||||||||||||
BB | SGD | 10,896,360 | USD | 7,897,671 | 09/21/16 | (226,581 | ) | ||||||||||||
BB | USD | 12,773,163 | AUD | 17,744,811 | 09/21/16 | 690,989 | |||||||||||||
BB | USD | 7,340,080 | CAD | 9,586,429 | 09/21/16 | 4,153 | |||||||||||||
BB | USD | 16,761,222 | CAD | 21,639,781 | 09/21/16 | (182,830 | ) | ||||||||||||
BB | USD | 29,990,128 | EUR | 26,738,446 | 09/21/16 | (34,704 | ) | ||||||||||||
BB | USD | 16,079,268 | EUR | 14,458,246 | 09/21/16 | 118,490 | |||||||||||||
BB | USD | 9,130,368 | GBP | 6,812,095 | 09/21/16 | (107,245 | ) |
248
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Forward foreign currency contracts—(continued)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
BB | USD | 567,935 | JPY | 58,000,000 | 08/12/16 | $ | 669 | ||||||||||||
BB | USD | 29,056,787 | JPY | 3,147,333,513 | 09/21/16 | 1,846,515 | |||||||||||||
BB | USD | 4,249,713 | KRW | 5,000,000,000 | 08/26/16 | 213,188 | |||||||||||||
BB | USD | 1,419,342 | NOK | 12,114,611 | 09/21/16 | 16,649 | |||||||||||||
BB | USD | 58,250,899 | NOK | 483,178,744 | 09/21/16 | (977,863 | ) | ||||||||||||
BB | USD | 9,604,118 | NZD | 13,640,558 | 09/21/16 | 224,877 | |||||||||||||
BB | USD | 1,582,366 | NZD | 2,191,081 | 09/21/16 | (3,536 | ) | ||||||||||||
BB | USD | 431,640 | SEK | 3,734,060 | 09/21/16 | 5,819 | |||||||||||||
BB | USD | 5,945,202 | SEK | 48,948,511 | 09/21/16 | (210,700 | ) | ||||||||||||
BB | USD | 5,528,196 | SGD | 7,438,776 | 09/21/16 | 18,105 | |||||||||||||
BNP | CHF | 800,000 | USD | 829,856 | 09/20/16 | 2,252 | |||||||||||||
BNP | EUR | 2,501,779 | SEK | 23,700,000 | 10/18/16 | (25,793 | ) | ||||||||||||
BNP | EUR | 5,071,000 | USD | 5,848,577 | 08/12/16 | 177,074 | |||||||||||||
BNP | EUR | 5,802,219 | USD | 6,407,593 | 10/17/16 | (100,191 | ) | ||||||||||||
BNP | EUR | 9,747,221 | USD | 10,770,026 | 10/19/16 | (163,406 | ) | ||||||||||||
BNP | GBP | 3,082,681 | USD | 4,468,435 | 08/12/16 | 388,118 | |||||||||||||
BNP | KRW | 3,415,000,000 | USD | 2,896,522 | 08/23/16 | (151,700 | ) | ||||||||||||
BNP | KRW | 3,415,000,000 | USD | 2,885,509 | 08/30/16 | (162,571 | ) | ||||||||||||
BNP | SGD | 2,928,000 | USD | 2,159,333 | 10/05/16 | (23,540 | ) | ||||||||||||
BNP | USD | 1,272,809 | EUR | 1,150,000 | 08/12/16 | 13,373 | |||||||||||||
BNP | USD | 120,672 | EUR | 109,041 | 10/17/16 | 1,629 | |||||||||||||
BNP | USD | 1,643,592 | INR | 111,000,000 | 08/11/16 | 10,963 | |||||||||||||
BNP | USD | 2,860,967 | INR | 194,500,000 | 08/24/16 | 31,925 | |||||||||||||
BNP | USD | 8,166,519 | INR | 553,200,000 | 08/26/16 | 58,739 | |||||||||||||
BNP | USD | 2,864,275 | INR | 194,500,000 | 08/31/16 | 25,233 | |||||||||||||
BNP | USD | 1,159,633 | INR | 79,000,000 | 10/18/16 | 4,571 | |||||||||||||
BOA | EUR | 2,509,072 | SEK | 23,700,000 | 10/21/16 | (33,933 | ) | ||||||||||||
BOA | EUR | 2,508,028 | SEK | 23,700,000 | 10/24/16 | (32,721 | ) | ||||||||||||
BOA | EUR | 647,304 | SEK | 6,167,000 | 11/14/16 | (2,480 | ) | ||||||||||||
BOA | KRW | 2,825,000,000 | USD | 2,473,059 | 08/10/16 | (48,750 | ) | ||||||||||||
BOA | KRW | 2,825,000,000 | USD | 2,455,753 | 10/12/16 | (65,524 | ) | ||||||||||||
BOA | KRW | 2,825,000,000 | USD | 2,480,573 | 10/24/16 | (40,658 | ) | ||||||||||||
BOA | KRW | 2,825,000,000 | USD | 2,519,487 | 11/07/16 | (1,715 | ) | ||||||||||||
BOA | SEK | 6,167,000 | EUR | 646,775 | 08/04/16 | 2,383 | |||||||||||||
BOA | SGD | 3,576,000 | USD | 2,646,027 | 10/07/16 | (19,899 | ) | ||||||||||||
BOA | USD | 299,557 | CAD | 390,000 | 08/12/16 | (832 | ) | ||||||||||||
BOA | USD | 1,308,207 | GBP | 980,000 | 08/12/16 | (11,053 | ) | ||||||||||||
BOA | USD | 2,522,321 | KRW | 2,825,000,000 | 08/10/16 | (512 | ) | ||||||||||||
CITI | AUD | 860,000 | USD | 641,672 | 08/12/16 | (11,698 | ) | ||||||||||||
CITI | AUD | 25,162,000 | USD | 18,139,291 | 09/21/16 | (952,768 | ) | ||||||||||||
CITI | BRL | 427,000 | USD | 119,239 | 09/21/16 | (10,330 | ) | ||||||||||||
CITI | CAD | 2,150,000 | USD | 1,691,618 | 08/12/16 | 44,798 | |||||||||||||
CITI | CAD | 9,902,613 | USD | 7,629,308 | 09/21/16 | 42,845 | |||||||||||||
CITI | CAD | 9,622,387 | USD | 7,330,272 | 09/21/16 | (41,508 | ) | ||||||||||||
CITI | CHF | 444,735 | USD | 450,754 | 09/02/16 | (8,841 | ) |
249
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Forward foreign currency contracts—(continued)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
CITI | CHF | 82,000 | USD | 83,703 | 09/21/16 | $ | (1,132 | ) | |||||||||||
CITI | CHF | 6,000 | USD | 6,229 | 09/21/16 | 22 | |||||||||||||
CITI | CHF | 2,215,000 | USD | 2,296,022 | 10/12/16 | 1,662 | |||||||||||||
CITI | CHF | 4,312,500 | USD | 4,421,254 | 10/20/16 | (47,727 | ) | ||||||||||||
CITI | CLP | 305,284,000 | USD | 436,822 | 09/21/16 | (27,274 | ) | ||||||||||||
CITI | COP | 426,430,000 | USD | 138,210 | 09/21/16 | 749 | |||||||||||||
CITI | COP | 294,592,000 | USD | 94,096 | 09/21/16 | (867 | ) | ||||||||||||
CITI | EUR | 8,812,000 | USD | 9,778,944 | 09/21/16 | (93,252 | ) | ||||||||||||
CITI | EUR | 15,943,000 | USD | 18,090,388 | 09/21/16 | 229,240 | |||||||||||||
CITI | GBP | 520,000 | USD | 683,885 | 08/12/16 | (4,400 | ) | ||||||||||||
CITI | GBP | 1,366,460 | USD | 1,971,269 | 09/02/16 | 161,954 | |||||||||||||
CITI | GBP | 1,600,000 | USD | 2,102,251 | 09/21/16 | (17,067 | ) | ||||||||||||
CITI | GBP | 9,476,000 | USD | 13,487,108 | 09/21/16 | 935,446 | |||||||||||||
CITI | GBP | 1,078,578 | USD | 1,400,000 | 10/11/16 | (29,182 | ) | ||||||||||||
CITI | GBP | 201,455 | USD | 260,772 | 10/17/16 | (6,196 | ) | ||||||||||||
CITI | GBP | 1,079,094 | USD | 1,400,000 | 10/18/16 | (30,036 | ) | ||||||||||||
CITI | GBP | 1,083,415 | USD | 1,400,000 | 10/25/16 | (35,935 | ) | ||||||||||||
CITI | GBP | 1,078,724 | USD | 1,400,000 | 10/31/16 | (29,864 | ) | ||||||||||||
CITI | HKD | 287,000 | USD | 37,020 | 09/21/16 | 5 | |||||||||||||
CITI | HKD | 1,019,000 | USD | 131,382 | 09/21/16 | (40 | ) | ||||||||||||
CITI | HUF | 480,580,000 | USD | 1,701,838 | 09/21/16 | (25,781 | ) | ||||||||||||
CITI | IDR | 5,466,350,000 | USD | 397,179 | 09/21/16 | (17,015 | ) | ||||||||||||
CITI | IDR | 609,101,000 | USD | 46,426 | 09/21/16 | 273 | |||||||||||||
CITI | ILS | 3,932,000 | USD | 1,019,025 | 09/21/16 | (13,026 | ) | ||||||||||||
CITI | INR | 56,639,000 | USD | 825,318 | 09/21/16 | (13,125 | ) | ||||||||||||
CITI | JPY | 1,932,913,000 | USD | 18,535,557 | 09/21/16 | (443,491 | ) | ||||||||||||
CITI | JPY | 273,042,000 | USD | 2,706,080 | 09/21/16 | 25,113 | |||||||||||||
CITI | KRW | 7,294,903,000 | USD | 6,172,627 | 09/21/16 | (338,181 | ) | ||||||||||||
CITI | MXN | 13,821,000 | USD | 728,801 | 09/21/16 | (4,470 | ) | ||||||||||||
CITI | MXN | 84,144,000 | USD | 4,491,189 | 09/21/16 | 26,947 | |||||||||||||
CITI | MYR | 3,221,000 | USD | 781,197 | 09/21/16 | (7,770 | ) | ||||||||||||
CITI | MYR | 513,000 | USD | 126,268 | 09/21/16 | 611 | |||||||||||||
CITI | NOK | 26,128,000 | USD | 3,133,292 | 09/21/16 | 36,239 | |||||||||||||
CITI | NOK | 29,527,000 | USD | 3,470,043 | 09/21/16 | (29,906 | ) | ||||||||||||
CITI | NZD | 45,000 | USD | 32,755 | 09/21/16 | 329 | |||||||||||||
CITI | NZD | 10,601,000 | USD | 7,220,675 | 09/21/16 | (418,101 | ) | ||||||||||||
CITI | PHP | 24,038,000 | USD | 507,245 | 09/21/16 | (1,658 | ) | ||||||||||||
CITI | PHP | 30,248,000 | USD | 645,074 | 09/21/16 | 4,701 | |||||||||||||
CITI | PLN | 19,161,000 | USD | 4,835,345 | 09/21/16 | (75,712 | ) | ||||||||||||
CITI | PLN | 1,058,000 | USD | 272,644 | 09/21/16 | 1,474 | |||||||||||||
CITI | SEK | 55,063,000 | USD | 6,596,072 | 09/21/16 | 145,235 | |||||||||||||
CITI | SEK | 12,936,000 | USD | 1,506,241 | 09/21/16 | (9,260 | ) | ||||||||||||
CITI | SGD | 1,768,000 | USD | 1,293,210 | 09/21/16 | (24,999 | ) | ||||||||||||
CITI | SGD | 3,575,000 | USD | 2,655,458 | 10/11/16 | (9,638 | ) | ||||||||||||
CITI | SGD | 3,005,000 | USD | 2,226,000 | 10/14/16 | (14,118 | ) |
250
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Forward foreign currency contracts—(continued)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
CITI | TRY | 10,052,000 | USD | 3,267,377 | 09/21/16 | $ | (58,033 | ) | |||||||||||
CITI | TWD | 39,150,000 | USD | 1,204,958 | 09/21/16 | (22,543 | ) | ||||||||||||
CITI | USD | 12,869,966 | AUD | 17,381,000 | 09/21/16 | 318,138 | |||||||||||||
CITI | USD | 4,877,288 | AUD | 6,400,110 | 09/21/16 | (21,105 | ) | ||||||||||||
CITI | USD | 1,833,495 | BRL | 6,574,000 | 09/21/16 | 161,311 | |||||||||||||
CITI | USD | 1,399,618 | CAD | 1,829,000 | 09/21/16 | 1,592 | |||||||||||||
CITI | USD | 8,514,270 | CAD | 10,912,192 | 09/21/16 | (154,361 | ) | ||||||||||||
CITI | USD | 53,065 | CHF | 51,000 | 09/21/16 | (303 | ) | ||||||||||||
CITI | USD | 794,341 | CLP | 534,608,000 | 09/21/16 | 18,376 | |||||||||||||
CITI | USD | 460,463 | CLP | 301,423,000 | 09/21/16 | (2,237 | ) | ||||||||||||
CITI | USD | 244,662 | COP | 733,134,000 | 09/21/16 | (8,334 | ) | ||||||||||||
CITI | USD | 21,745 | EUR | 19,609 | 08/04/16 | 180 | |||||||||||||
CITI | USD | 551,930 | EUR | 500,000 | 08/12/16 | 7,279 | |||||||||||||
CITI | USD | 640,941 | EUR | 570,000 | 08/12/16 | (3,442 | ) | ||||||||||||
CITI | USD | 6,561,601 | EUR | 5,913,000 | 09/21/16 | 62,808 | |||||||||||||
CITI | USD | 15,700,558 | EUR | 13,992,000 | 09/21/16 | (25,141 | ) | ||||||||||||
CITI | USD | 2,743,911 | GBP | 1,900,000 | 08/12/16 | (229,022 | ) | ||||||||||||
CITI | USD | 1,877,240 | GBP | 1,441,000 | 09/21/16 | 31,471 | |||||||||||||
CITI | USD | 4,945,991 | GBP | 3,365,000 | 09/21/16 | (488,800 | ) | ||||||||||||
CITI | USD | 296,636 | HKD | 2,300,000 | 08/12/16 | (150 | ) | ||||||||||||
CITI | USD | 166,648 | HKD | 1,292,000 | 09/21/16 | (16 | ) | ||||||||||||
CITI | USD | 1,187,305 | HUF | 336,105,000 | 09/21/16 | 20,946 | |||||||||||||
CITI | USD | 1,100,210 | HUF | 301,954,000 | 09/21/16 | (14,727 | ) | ||||||||||||
CITI | USD | 1,436,565 | IDR | 19,832,568,000 | 09/21/16 | 66,180 | |||||||||||||
CITI | USD | 565,458 | ILS | 2,165,000 | 09/21/16 | 2,800 | |||||||||||||
CITI | USD | 51,777 | ILS | 197,000 | 09/21/16 | (70 | ) | ||||||||||||
CITI | USD | 1,384,445 | INR | 94,705,028 | 09/21/16 | 17,501 | |||||||||||||
CITI | USD | 130,385 | INR | 8,802,000 | 09/21/16 | (87 | ) | ||||||||||||
CITI | USD | 44,769,326 | JPY | 4,844,125,000 | 09/21/16 | 2,794,574 | |||||||||||||
CITI | USD | 7,845,709 | KRW | 9,012,501,000 | 09/21/16 | 198,081 | |||||||||||||
CITI | USD | 1,781,597 | MXN | 33,040,000 | 09/21/16 | (28,667 | ) | ||||||||||||
CITI | USD | 727,811 | MXN | 13,951,000 | 09/21/16 | 12,356 | |||||||||||||
CITI | USD | 89,257 | MYR | 369,000 | 09/21/16 | 1,128 | |||||||||||||
CITI | USD | 528,985 | MYR | 2,121,000 | 09/21/16 | (9,457 | ) | ||||||||||||
CITI | USD | 1,123,140 | NOK | 9,174,000 | 09/21/16 | (35,711 | ) | ||||||||||||
CITI | USD | 441,976 | NOK | 3,767,000 | 09/21/16 | 4,541 | |||||||||||||
CITI | USD | 20,495,574 | NZD | 29,640,000 | 09/21/16 | 862,160 | |||||||||||||
CITI | USD | 24,381 | PHP | 1,153,000 | 09/21/16 | 29 | |||||||||||||
CITI | USD | 1,214,301 | PHP | 57,042,000 | 09/21/16 | (6,678 | ) | ||||||||||||
CITI | USD | 1,638,819 | PLN | 6,305,000 | 09/21/16 | (22,817 | ) | ||||||||||||
CITI | USD | 2,968,435 | PLN | 11,785,000 | 09/21/16 | 52,118 | |||||||||||||
CITI | USD | 1,699,764 | SEK | 13,763,000 | 09/21/16 | (87,377 | ) | ||||||||||||
CITI | USD | 1,367,338 | SGD | 1,851,000 | 09/21/16 | 12,755 | |||||||||||||
CITI | USD | 3,185,619 | SGD | 4,300,000 | 09/30/16 | 20,223 | |||||||||||||
CITI | USD | 2,396,381 | TRY | 7,090,500 | 09/21/16 | (50,697 | ) |
251
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Forward foreign currency contracts—(continued)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
CITI | USD | 2,152,479 | TRY | 6,522,500 | 09/21/16 | $ | 5,299 | ||||||||||||
CITI | USD | 188,224 | TWD | 5,987,000 | 09/21/16 | (509 | ) | ||||||||||||
CITI | USD | 811,858 | TWD | 26,158,000 | 09/21/16 | 8,295 | |||||||||||||
CITI | USD | 3,384,776 | ZAR | 51,189,000 | 09/21/16 | 266,740 | |||||||||||||
CITI | ZAR | 38,309,000 | USD | 2,401,643 | 09/21/16 | (331,091 | ) | ||||||||||||
DB | CHF | 1,030,000 | USD | 1,083,210 | 08/12/16 | 19,971 | |||||||||||||
DB | CHF | 809,000 | USD | 825,258 | 11/17/16 | (14,516 | ) | ||||||||||||
DB | EUR | 649,257 | SEK | 6,167,000 | 11/01/16 | (4,715 | ) | ||||||||||||
DB | EUR | 350,000 | USD | 389,672 | 09/20/16 | (2,419 | ) | ||||||||||||
DB | EUR | 11,957,784 | USD | 13,289,272 | 10/17/16 | (122,611 | ) | ||||||||||||
DB | EUR | 3,084,000 | USD | 3,429,408 | 11/17/16 | (31,093 | ) | ||||||||||||
DB | GBP | 630,000 | USD | 830,532 | 08/12/16 | (3,352 | ) | ||||||||||||
DB | GBP | 430,000 | USD | 630,756 | 08/12/16 | 61,597 | |||||||||||||
DB | HKD | 12,000,000 | USD | 1,547,428 | 08/12/16 | 542 | |||||||||||||
DB | JPY | 3,611,731 | USD | 36,050 | 09/20/16 | 589 | |||||||||||||
DB | SEK | 6,167,000 | EUR | 648,876 | 08/01/16 | 4,747 | |||||||||||||
DB | SEK | 2,400,000 | USD | 299,416 | 08/12/16 | 18,811 | |||||||||||||
DB | SEK | 2,400,000 | USD | 296,896 | 09/20/16 | 15,742 | |||||||||||||
DB | USD | 74,314 | DKK | 500,000 | 09/20/16 | 989 | |||||||||||||
DB | USD | 19,103 | EUR | 17,351 | 08/01/16 | 295 | |||||||||||||
DB | USD | 345,629 | EUR | 311,000 | 11/17/16 | 3,339 | |||||||||||||
DB | USD | 979,893 | HKD | 7,600,000 | 08/12/16 | (198 | ) | ||||||||||||
DB | USD | 478,104 | KRW | 571,000,000 | 09/09/16 | 31,530 | |||||||||||||
GSB | EUR | 1,369,910 | USD | 1,531,920 | 09/02/16 | (1,448 | ) | ||||||||||||
GSB | EUR | 750,000 | USD | 830,256 | 09/21/16 | (9,979 | ) | ||||||||||||
GSB | GBP | 5,835,582 | USD | 8,000,000 | 09/21/16 | 270,340 | |||||||||||||
GSB | USD | 1,439,190 | EUR | 1,296,230 | 09/21/16 | 12,994 | |||||||||||||
GSB | USD | 163,619 | GBP | 112,281 | 09/02/16 | (14,949 | ) | ||||||||||||
GSB | USD | 790,313 | JPY | 82,000,000 | 09/21/16 | 14,836 | |||||||||||||
MSCI | AUD | 3,093,003 | USD | 2,351,898 | 09/21/16 | 5,034 | |||||||||||||
MSCI | AUD | 49,182,240 | USD | 36,214,932 | 09/21/16 | (1,102,859 | ) | ||||||||||||
MSCI | CAD | 29,782,710 | USD | 23,054,463 | 09/21/16 | 237,714 | |||||||||||||
MSCI | CAD | 10,052,648 | USD | 7,694,597 | 09/21/16 | (6,809 | ) | ||||||||||||
MSCI | EUR | 19,589,699 | USD | 21,728,906 | 09/21/16 | (217,685 | ) | ||||||||||||
MSCI | EUR | 21,461,621 | USD | 24,315,716 | 09/21/16 | 271,987 | |||||||||||||
MSCI | GBP | 16,408,067 | USD | 21,375,763 | 09/21/16 | (357,934 | ) | ||||||||||||
MSCI | JPY | 886,751,883 | USD | 8,761,783 | 09/21/16 | 54,869 | |||||||||||||
MSCI | JPY | 2,325,868,137 | USD | 21,779,235 | 09/21/16 | (1,058,194 | ) | ||||||||||||
MSCI | NOK | 575,399,645 | USD | 69,006,804 | 09/21/16 | 802,469 | |||||||||||||
MSCI | NOK | 83,054,767 | USD | 9,790,745 | 09/21/16 | (54,056 | ) | ||||||||||||
MSCI | NZD | 9,929,721 | USD | 7,176,359 | 09/21/16 | 21,287 | |||||||||||||
MSCI | NZD | 19,570,981 | USD | 13,669,612 | 09/21/16 | (432,676 | ) | ||||||||||||
MSCI | SEK | 191,597,316 | USD | 22,822,664 | 09/21/16 | 376,320 | |||||||||||||
MSCI | SEK | 32,374,549 | USD | 3,750,249 | 09/21/16 | (42,551 | ) | ||||||||||||
MSCI | SGD | 53,377,284 | USD | 39,146,621 | 09/21/16 | (651,121 | ) |
252
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Forward foreign currency contracts—(concluded)
Counterparty | Contracts to deliver | In exchange for | Maturity date | Unrealized appreciation (depreciation) | |||||||||||||||
MSCI | USD | 35,479,431 | AUD | 48,110,928 | 09/21/16 | $ | 1,025,485 | ||||||||||||
MSCI | USD | 927,303 | AUD | 1,217,911 | 09/21/16 | (3,194 | ) | ||||||||||||
MSCI | USD | 1,855,973 | CAD | 2,428,416 | 09/21/16 | 4,454 | |||||||||||||
MSCI | USD | 25,888,279 | CAD | 33,508,738 | 09/21/16 | (216,993 | ) | ||||||||||||
MSCI | USD | 12,436,024 | EUR | 11,189,136 | 09/21/16 | 99,308 | |||||||||||||
MSCI | USD | 12,609,434 | EUR | 11,168,385 | 09/21/16 | (97,349 | ) | ||||||||||||
MSCI | USD | 29,354,921 | GBP | 20,824,577 | 09/21/16 | (1,771,230 | ) | ||||||||||||
MSCI | USD | 17,506,634 | JPY | 1,854,912,281 | 09/21/16 | 706,534 | |||||||||||||
MSCI | USD | 1,066,030 | JPY | 107,169,230 | 09/21/16 | (13,747 | ) | ||||||||||||
MSCI | USD | 7,033,393 | NOK | 58,454,427 | 09/21/16 | (104,565 | ) | ||||||||||||
MSCI | USD | 9,835,677 | NOK | 83,387,828 | 09/21/16 | 48,603 | |||||||||||||
MSCI | USD | 77,803,413 | NZD | 113,410,162 | 09/21/16 | 3,916,695 | |||||||||||||
MSCI | USD | 705,448 | NZD | 971,701 | 09/21/16 | (5,268 | ) | ||||||||||||
MSCI | USD | 30,535,684 | SEK | 254,120,159 | 09/21/16 | (764,554 | ) | ||||||||||||
MSCI | USD | 11,783,660 | SEK | 100,654,993 | 09/21/16 | 8,450 | |||||||||||||
MSCI | USD | 18,612,197 | SGD | 25,170,380 | 09/21/16 | 154,668 | |||||||||||||
RBS | AUD | 2,410,000 | USD | 1,785,389 | 09/20/16 | (43,294 | ) | ||||||||||||
RBS | CHF | 4,312,500 | USD | 4,405,834 | 10/26/16 | (64,626 | ) | ||||||||||||
RBS | EUR | 651,867 | SEK | 6,167,000 | 10/27/16 | (7,663 | ) | ||||||||||||
RBS | EUR | 1,637,531 | USD | 1,867,228 | 09/20/16 | 32,767 | |||||||||||||
RBS | JPY | 170,000,000 | USD | 1,582,346 | 09/20/16 | (86,792 | ) | ||||||||||||
RBS | SGD | 3,576,000 | USD | 2,640,028 | 09/19/16 | (26,252 | ) | ||||||||||||
RBS | SGD | 450,000 | USD | 331,526 | 09/20/16 | (3,993 | ) | ||||||||||||
RBS | SGD | 6,504,000 | USD | 4,791,198 | 09/30/16 | (57,825 | ) | ||||||||||||
RBS | SGD | 7,150,000 | USD | 5,303,269 | 10/13/16 | (26,837 | ) | ||||||||||||
RBS | USD | 264,260 | CHF | 260,000 | 08/12/16 | 4,131 | |||||||||||||
RBS | USD | 69,899 | SEK | 600,000 | 08/12/16 | 252 | |||||||||||||
SG | AUD | 11,167,194 | USD | 8,175,000 | 09/21/16 | (298,282 | ) | ||||||||||||
SG | CAD | 10,540,009 | USD | 8,200,000 | 09/21/16 | 125,223 | |||||||||||||
SG | EUR | 3,400,000 | USD | 3,830,865 | 09/21/16 | 21,801 | |||||||||||||
SG | SGD | 11,120,672 | USD | 8,187,500 | 09/21/16 | (103,998 | ) | ||||||||||||
SG | USD | 163,863 | EUR | 143,610 | 09/02/16 | (3,117 | ) | ||||||||||||
SG | USD | 8,187,500 | SGD | 10,985,251 | 09/21/16 | 3,029 | |||||||||||||
$ | 1,947,486 |
Variance swap agreements 7,8
Counterparty | Notional amount (000) | Termination date | Pay/ receive variance | Reference entity | Volatility strike price | Upfront payments received (made) | Value | Unrealized appreciation (depreciation) | |||||||||||||||||||||||||||
BNP | GBP | 14 | 12/16/16 | Pay | FTSE 100 Index | 18.60 | % | $ | — | $ | 15,774 | $ | 15,774 | ||||||||||||||||||||||
BNP | GBP | 19 | 12/16/16 | Pay | FTSE 100 Index | 19.20 | — | 24,749 | 24,749 | ||||||||||||||||||||||||||
BNP | GBP | 18 | 12/16/16 | Pay | FTSE 100 Index | 19.60 | — | 22,350 | 22,350 | ||||||||||||||||||||||||||
BNP | HKD | 75 | 12/29/16 | Receive | China Enterprises Index (Hang Seng) | 27.40 | — | (8,846 | ) | (8,846 | ) |
253
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Variance swap agreements7,8—(concluded)
Counterparty | Notional amount (000) | Termination date | Pay/ receive variance | Reference entity | Volatility strike price | Upfront payments received (made) | Value | Unrealized appreciation (depreciation) | |||||||||||||||||||||||||||
BNP | HKD | 100 | 12/29/16 | Receive | China Enterprises Index (Hang Seng) | 27.50 | % | $ | — | $ | (13,881 | ) | $ | (13,881 | ) | ||||||||||||||||||||
BNP | HKD | 225 | 12/29/16 | Receive | China Enterprises Index (Hang Seng) | 28.20 | — | (28,580 | ) | (28,580 | ) | ||||||||||||||||||||||||
BNP | HKD | 160 | 12/29/16 | Receive | China Enterprises Index (Hang Seng) | 28.35 | — | (16,207 | ) | (16,207 | ) | ||||||||||||||||||||||||
BNP | HKD | 500 | 12/29/16 | Receive | Hang Seng Index | 25.20 | — | (256,031 | ) | (256,031 | ) | ||||||||||||||||||||||||
BNP | KRW | 20,000 | 12/08/16 | Receive | Kospi 200 Index | 19.80 | — | (76,198 | ) | (76,198 | ) | ||||||||||||||||||||||||
BNP | KRW | 20,000 | 12/08/16 | Receive | Kospi 200 Index | 19.90 | — | (78,312 | ) | (78,312 | ) | ||||||||||||||||||||||||
BNP | KRW | 40,000 | 12/08/16 | Receive | Kospi 200 Index | 21.00 | — | (220,289 | ) | (220,289 | ) | ||||||||||||||||||||||||
BNP | KRW | 30,000 | 12/08/16 | Receive | Kospi 200 Index | 21.40 | — | (166,225 | ) | (166,225 | ) | ||||||||||||||||||||||||
BNP | USD | 26 | 12/16/16 | Pay | S&P 500 Index | 19.20 | — | 94,960 | 94,960 | ||||||||||||||||||||||||||
BNP | USD | 18 | 12/16/16 | Pay | S&P 500 Index | 19.95 | — | 51,815 | 51,815 | ||||||||||||||||||||||||||
BNP | USD | 18 | 12/16/16 | Pay | S&P 500 Index | 20.25 | — | 56,900 | 56,900 | ||||||||||||||||||||||||||
BNP | USD | 28 | 12/16/16 | Pay | S&P 500 Index | 21.10 | — | 133,090 | 133,090 | ||||||||||||||||||||||||||
BNP | USD | 50 | 12/16/16 | Pay | S&P 500 Index | 22.55 | — | 295,655 | 295,655 | ||||||||||||||||||||||||||
GS | EUR | 5 | 12/16/16 | Pay | DJ Euro Stoxx 50SX5E | 27.78 | — | (274,240 | ) | (274,240 | ) | ||||||||||||||||||||||||
GS | EUR | 2 | 12/15/17 | Receive | DJ Euro Stoxx 50SX5E | 27.35 | — | 211,844 | 211,844 | ||||||||||||||||||||||||||
$ | — | $ | (231,672 | ) | $ | (231,672 | ) |
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 | 130,000 | 05/10/18 | 6 Month AUD Bank Bill Rate | 1.771 | % | $ | 73,194 | $ | 73,194 | ||||||||||||||
AUD | 15,000 | 11/21/18 | 6 Month AUD Bank Bill Rate | 3.235 | 311,465 | 311,465 | |||||||||||||||||
AUD | 5,931 | 05/08/19 | 6 Month AUD Bank Bill Rate | 2.890 | 96,137 | 96,137 | |||||||||||||||||
AUD | 5,931 | 05/08/19 | 6 Month AUD Bank Bill Rate | 2.908 | 97,669 | 97,669 | |||||||||||||||||
AUD | 3,954 | 05/08/19 | 6 Month AUD Bank Bill Rate | 2.775 | 57,379 | 57,379 | |||||||||||||||||
AUD | 3,954 | 05/11/19 | 6 Month AUD Bank Bill Rate | 2.833 | 60,938 | 60,938 | |||||||||||||||||
AUD | 1,977 | 05/11/19 | 6 Month AUD Bank Bill Rate | 2.835 | 30,542 | 30,542 | |||||||||||||||||
AUD | 1,977 | 05/12/19 | 6 Month AUD Bank Bill Rate | 2.823 | 30,140 | 30,140 | |||||||||||||||||
AUD | 3,276 | 05/15/19 | 6 Month AUD Bank Bill Rate | 2.961 | 56,599 | 56,599 | |||||||||||||||||
AUD | 16,600 | 12/04/19 | 6 Month AUD Bank Bill Rate | 2.650 | 210,594 | 210,594 | |||||||||||||||||
AUD | 4,056 | 12/14/19 | 6 Month AUD Bank Bill Rate | 2.652 | 51,609 | 51,609 | |||||||||||||||||
AUD | 1,352 | 12/18/19 | 6 Month AUD Bank Bill Rate | 2.650 | 17,120 | 17,120 | |||||||||||||||||
AUD | 2,704 | 12/18/19 | 6 Month AUD Bank Bill Rate | 2.650 | 34,131 | 34,131 | |||||||||||||||||
AUD | 4,056 | 12/18/19 | 6 Month AUD Bank Bill Rate | 2.650 | 51,360 | 51,360 | |||||||||||||||||
EUR | 1,130 | 01/18/26 | 1.499 | % | 6 Month EURIBOR | (59,734 | ) | (12,061 | ) | ||||||||||||||
EUR | 1,129 | 01/15/26 | 1.520 | 6 Month EURIBOR | (61,110 | ) | (14,423 | ) | |||||||||||||||
EUR | 1,046 | 12/22/25 | 1.552 | 6 Month EURIBOR | (59,344 | ) | (9,354 | ) | |||||||||||||||
EUR | 1,046 | 12/15/25 | 1.559 | 6 Month EURIBOR | (59,996 | ) | (8,251 | ) | |||||||||||||||
EUR | 1,046 | 12/16/25 | 1.572 | 6 Month EURIBOR | (60,734 | ) | (9,521 | ) | |||||||||||||||
EUR | 753 | 01/11/26 | 1.574 | 6 Month EURIBOR | (43,152 | ) | (8,093 | ) | |||||||||||||||
EUR | 1,046 | 12/10/25 | 1.576 | 6 Month EURIBOR | (61,173 | ) | (8,110 | ) | |||||||||||||||
EUR | 1,394 | 12/11/25 | 1.579 | 6 Month EURIBOR | (81,732 | ) | (11,738 | ) |
254
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Centrally cleared interest rate swap agreements—(continued)
Notional amount (000) | Termination date | Payments made by the Portfolio10 | Payments received by the Portfolio10 | Value | Unrealized appreciation (depreciation) | ||||||||||||||||||
EUR | 1,394 | 01/06/26 | 1.611 | % | 6 Month EURIBOR | $ | (83,082 | ) | $ | (12,157 | ) | ||||||||||||
EUR | 1,046 | 12/21/25 | 1.620 | 6 Month EURIBOR | (63,437 | ) | (8,582 | ) | |||||||||||||||
EUR | 1,046 | 12/17/25 | 1.674 | 6 Month EURIBOR | (66,758 | ) | (9,589 | ) | |||||||||||||||
EUR | 1,046 | 12/18/25 | 1.679 | 6 Month EURIBOR | (66,984 | ) | (9,656 | ) | |||||||||||||||
EUR | 1,046 | 12/10/25 | 6 Month EURIBOR | 1.576 | % | 61,173 | 61,173 | ||||||||||||||||
EUR | 1,394 | 12/11/25 | 6 Month EURIBOR | 1.579 | 81,732 | 81,732 | |||||||||||||||||
EUR | 1,046 | 12/15/25 | 6 Month EURIBOR | 1.559 | 59,996 | 59,996 | |||||||||||||||||
EUR | 1,046 | 12/16/25 | 6 Month EURIBOR | 1.572 | 60,734 | 60,734 | |||||||||||||||||
EUR | 1,046 | 12/17/25 | 6 Month EURIBOR | 1.674 | 66,757 | 66,757 | |||||||||||||||||
EUR | 1,046 | 12/18/25 | 6 Month EURIBOR | 1.679 | 66,984 | 66,984 | |||||||||||||||||
EUR | 1,046 | 12/21/25 | 6 Month EURIBOR | 1.620 | 63,437 | 63,437 | |||||||||||||||||
EUR | 1,046 | 12/22/25 | 6 Month EURIBOR | 1.552 | 59,344 | 59,344 | |||||||||||||||||
EUR | 1,394 | 01/06/26 | 6 Month EURIBOR | 1.611 | 83,082 | 83,082 | |||||||||||||||||
EUR | 753 | 01/11/26 | 6 Month EURIBOR | 1.574 | 43,153 | 43,153 | |||||||||||||||||
EUR | 1,129 | 01/15/26 | 6 Month EURIBOR | 1.520 | 61,110 | 61,110 | |||||||||||||||||
EUR | 1,130 | 01/18/26 | 6 Month EURIBOR | 1.499 | 59,734 | 59,734 | |||||||||||||||||
GBP | 1,661 | 01/14/26 | 2.239 | 6 Month GBP LIBOR | (133,258 | ) | (133,258 | ) | |||||||||||||||
GBP | 2,138 | 11/27/25 | 2.275 | 6 Month GBP LIBOR | (178,944 | ) | (178,944 | ) | |||||||||||||||
GBP | 1,661 | 01/13/26 | 2.288 | 6 Month GBP LIBOR | (138,571 | ) | (138,571 | ) | |||||||||||||||
GBP | 1,604 | 11/25/25 | 2.292 | 6 Month GBP LIBOR | (136,058 | ) | (136,058 | ) | |||||||||||||||
GBP | 2,215 | 01/08/26 | 2.298 | 6 Month GBP LIBOR | (186,338 | ) | (186,338 | ) | |||||||||||||||
GBP | 1,604 | 11/30/25 | 2.309 | 6 Month GBP LIBOR | (137,509 | ) | (137,509 | ) | |||||||||||||||
GBP | 535 | 11/30/25 | 2.316 | 6 Month GBP LIBOR | (46,078 | ) | (46,078 | ) | |||||||||||||||
GBP | 2,215 | 01/11/26 | 2.316 | 6 Month GBP LIBOR | (188,850 | ) | (188,850 | ) | |||||||||||||||
GBP | 1,069 | 11/25/25 | 2.320 | 6 Month GBP LIBOR | (92,641 | ) | (92,641 | ) | |||||||||||||||
GBP | 1,604 | 12/03/25 | 2.322 | 6 Month GBP LIBOR | (138,893 | ) | (138,893 | ) | |||||||||||||||
GBP | 2,215 | 01/12/26 | 2.329 | 6 Month GBP LIBOR | (190,699 | ) | (190,699 | ) | |||||||||||||||
GBP | 1,107 | 01/07/26 | 2.337 | 6 Month GBP LIBOR | (96,012 | ) | (96,012 | ) | |||||||||||||||
GBP | 2,138 | 12/01/25 | 2.339 | 6 Month GBP LIBOR | (187,660 | ) | (187,660 | ) | |||||||||||||||
GBP | 1,539 | 12/08/25 | 2.349 | 6 Month GBP LIBOR | (135,756 | ) | (135,756 | ) | |||||||||||||||
GBP | 1,539 | 12/18/25 | 2.358 | 6 Month GBP LIBOR | (136,246 | ) | (136,246 | ) | |||||||||||||||
GBP | 1,539 | 12/11/25 | 2.367 | 6 Month GBP LIBOR | (137,484 | ) | (137,484 | ) | |||||||||||||||
GBP | 2,052 | 12/09/25 | 2.373 | 6 Month GBP LIBOR | (184,210 | ) | (184,210 | ) | |||||||||||||||
GBP | 1,539 | 12/14/25 | 2.391 | 6 Month GBP LIBOR | (139,759 | ) | (139,759 | ) | |||||||||||||||
GBP | 1,539 | 12/17/25 | 2.396 | 6 Month GBP LIBOR | (140,115 | ) | (140,115 | ) | |||||||||||||||
GBP | 2,138 | 12/07/25 | 2.399 | 6 Month GBP LIBOR | (195,670 | ) | (195,670 | ) | |||||||||||||||
GBP | 2,052 | 01/04/26 | 2.410 | 6 Month GBP LIBOR | (187,779 | ) | (187,779 | ) | |||||||||||||||
GBP | 1,539 | 12/16/25 | 2.458 | 6 Month GBP LIBOR | (146,302 | ) | (146,302 | ) | |||||||||||||||
GBP | 1,539 | 12/15/25 | 2.467 | 6 Month GBP LIBOR | (147,235 | ) | (147,235 | ) | |||||||||||||||
GBP | 1,604 | 11/25/25 | 6 Month GBP LIBOR | 2.292 | 136,058 | 21,592 | |||||||||||||||||
GBP | 1,069 | 11/25/25 | 6 Month GBP LIBOR | 2.320 | 92,641 | 8,364 | |||||||||||||||||
GBP | 2,138 | 11/27/25 | 6 Month GBP LIBOR | 2.275 | 178,944 | 14,005 | |||||||||||||||||
GBP | 535 | 11/30/25 | 6 Month GBP LIBOR | 2.316 | 46,078 | 6,875 | |||||||||||||||||
GBP | 1,604 | 11/30/25 | 6 Month GBP LIBOR | 2.309 | 137,509 | 10,105 | |||||||||||||||||
GBP | 2,138 | 12/01/25 | 6 Month GBP LIBOR | 2.339 | 187,660 | 18,952 |
255
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Centrally cleared interest rate swap agreements—(continued)
Notional amount (000) | Termination date | Payments made by the Portfolio10 | Payments received by the Portfolio10 | Value | Unrealized appreciation (depreciation) | ||||||||||||||||||
GBP | 1,604 | 12/03/25 | 6 Month GBP LIBOR | 2.322 | % | $ | 138,893 | $ | 9,818 | ||||||||||||||
GBP | 2,138 | 12/07/25 | 6 Month GBP LIBOR | 2.399 | 195,670 | 14,758 | |||||||||||||||||
GBP | 1,539 | 12/08/25 | 6 Month GBP LIBOR | 2.349 | 135,756 | 17,382 | |||||||||||||||||
GBP | 2,052 | 12/09/25 | 6 Month GBP LIBOR | 2.373 | 184,210 | 20,745 | |||||||||||||||||
GBP | 1,539 | 12/11/25 | 6 Month GBP LIBOR | 2.367 | 137,483 | 16,857 | |||||||||||||||||
GBP | 1,539 | 12/14/25 | 6 Month GBP LIBOR | 2.391 | 139,760 | 16,330 | |||||||||||||||||
GBP | 1,539 | 12/15/25 | 6 Month GBP LIBOR | 2.467 | 147,235 | 17,096 | |||||||||||||||||
GBP | 1,539 | 12/16/25 | 6 Month GBP LIBOR | 2.458 | 146,302 | 16,799 | |||||||||||||||||
GBP | 1,539 | 12/17/25 | 6 Month GBP LIBOR | 2.396 | 140,115 | 14,524 | |||||||||||||||||
GBP | 1,539 | 12/18/25 | 6 Month GBP LIBOR | 2.358 | 136,246 | 14,377 | |||||||||||||||||
GBP | 2,052 | 01/04/26 | 6 Month GBP LIBOR | 2.410 | 187,778 | 20,007 | |||||||||||||||||
MXN | 610,900 | 05/04/22 | Mexico Interbank TIIE 28 Days | 6.220 | (36,735 | ) | (36,735 | ) | |||||||||||||||
MXN | 72,000 | 05/06/22 | Mexico Interbank TIIE 28 Days | 6.215 | (4,865 | ) | (4,865 | ) | |||||||||||||||
USD | 23,130 | 05/10/18 | 0.985 | % | 3 Month USD LIBOR | (13,357 | ) | (13,357 | ) | ||||||||||||||
USD | 7,235 | 05/09/18 | 1.006 | 3 Month USD LIBOR | (5,713 | ) | (5,713 | ) | |||||||||||||||
USD | 9,417 | 05/17/18 | 1.021 | 3 Month USD LIBOR | (8,624 | ) | (8,624 | ) | |||||||||||||||
USD | 15,567 | 05/05/18 | 1.026 | 3 Month USD LIBOR | (15,665 | ) | (15,665 | ) | |||||||||||||||
USD | 13,644 | 05/08/18 | 1.028 | 3 Month USD LIBOR | (13,744 | ) | (13,744 | ) | |||||||||||||||
USD | 3,348 | 05/18/18 | 1.037 | 3 Month USD LIBOR | (3,584 | ) | (3,584 | ) | |||||||||||||||
USD | 6,702 | 05/18/18 | 1.039 | 3 Month USD LIBOR | (7,307 | ) | (7,307 | ) | |||||||||||||||
USD | 16,596 | 05/19/18 | 1.069 | 3 Month USD LIBOR | (23,050 | ) | (23,050 | ) | |||||||||||||||
USD | 1,294 | 05/03/18 | 1.079 | 3 Month USD LIBOR | (1,981 | ) | (1,981 | ) | |||||||||||||||
USD | 26,450 | 04/28/18 | 1.128 | 3 Month USD LIBOR | (54,057 | ) | (54,057 | ) | |||||||||||||||
USD | 26,450 | 04/28/18 | 1.137 | 3 Month USD LIBOR | (56,333 | ) | (56,333 | ) | |||||||||||||||
USD | 3,521 | 05/22/18 | 1.138 | 3 Month USD LIBOR | (7,242 | ) | (7,242 | ) | |||||||||||||||
USD | 2,058 | 05/23/18 | 1.168 | 3 Month USD LIBOR | (4,854 | ) | (4,854 | ) | |||||||||||||||
USD | 3,100 | 05/12/22 | 1.375 | 3 Month USD LIBOR | (33,899 | ) | (33,899 | ) | |||||||||||||||
USD | 47,900 | 05/11/22 | 1.383 | 3 Month USD LIBOR | (542,127 | ) | (542,127 | ) | |||||||||||||||
USD | 4,256 | 04/22/46 | 2.414 | 3 Month USD LIBOR | (142,919 | ) | (142,919 | ) | |||||||||||||||
USD | 3,405 | 04/21/46 | 2.434 | 3 Month USD LIBOR | (119,389 | ) | (119,389 | ) | |||||||||||||||
USD | 3,405 | 04/28/46 | 2.524 | 3 Month USD LIBOR | (141,205 | ) | (141,205 | ) | |||||||||||||||
USD | 216 | 02/06/45 | 2.527 | 3 Month USD LIBOR | (13,366 | ) | (13,366 | ) | |||||||||||||||
USD | 3,405 | 04/25/46 | 2.527 | 3 Month USD LIBOR | (141,863 | ) | (141,863 | ) | |||||||||||||||
USD | 2,554 | 04/28/46 | 2.538 | 3 Month USD LIBOR | (108,583 | ) | (108,583 | ) | |||||||||||||||
USD | 3,800 | 05/06/46 | 2.546 | 3 Month USD LIBOR | (163,580 | ) | (163,580 | ) | |||||||||||||||
USD | 3,405 | 04/28/46 | 2.565 | 3 Month USD LIBOR | (151,179 | ) | (151,179 | ) | |||||||||||||||
USD | 2,270 | 04/29/46 | 2.568 | 3 Month USD LIBOR | (101,463 | ) | (101,463 | ) | |||||||||||||||
USD | 344 | 01/25/45 | 2.575 | 3 Month USD LIBOR | (23,174 | ) | (23,174 | ) | |||||||||||||||
USD | 414 | 12/02/25 | 2.614 | 3 Month USD LIBOR | (19,981 | ) | 592 | ||||||||||||||||
USD | 1,655 | 12/01/25 | 2.630 | 3 Month USD LIBOR | (81,241 | ) | 1,081 | ||||||||||||||||
USD | 1,655 | 12/03/25 | 2.642 | 3 Month USD LIBOR | (82,099 | ) | 4,993 | ||||||||||||||||
USD | 1,192 | 12/10/25 | 2.644 | 3 Month USD LIBOR | (59,103 | ) | (6,490 | ) | |||||||||||||||
USD | 1,241 | 12/02/25 | 2.645 | 3 Month USD LIBOR | (61,788 | ) | (38 | ) | |||||||||||||||
USD | 1,192 | 12/22/25 | 2.646 | 3 Month USD LIBOR | (58,950 | ) | (5,041 | ) | |||||||||||||||
USD | 1,241 | 11/27/25 | 2.648 | 3 Month USD LIBOR | (62,093 | ) | (1,357 | ) |
256
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Centrally cleared interest rate swap agreements—(continued)
Notional amount (000) | Termination date | Payments made by the Portfolio10 | Payments received by the Portfolio10 | Value | Unrealized appreciation (depreciation) | ||||||||||||||||||
USD | 1,589 | 01/06/26 | 2.648 | % | 3 Month USD LIBOR | $ | (74,537 | ) | $ | — | |||||||||||||
USD | 647 | 01/16/45 | 2.648 | 3 Month USD LIBOR | (49,004 | ) | (49,004 | ) | |||||||||||||||
USD | 516 | 01/21/45 | 2.655 | 3 Month USD LIBOR | (39,492 | ) | (39,492 | ) | |||||||||||||||
USD | 1,241 | 12/07/25 | 2.658 | 3 Month USD LIBOR | (62,441 | ) | 2,539 | ||||||||||||||||
USD | 828 | 11/27/25 | 2.662 | 3 Month USD LIBOR | (41,942 | ) | 398 | ||||||||||||||||
USD | 1,192 | 12/15/25 | 2.667 | 3 Month USD LIBOR | (60,258 | ) | (6,109 | ) | |||||||||||||||
USD | 1,192 | 12/16/25 | 2.676 | 3 Month USD LIBOR | (60,761 | ) | (6,071 | ) | |||||||||||||||
USD | 1,589 | 12/11/25 | 2.681 | 3 Month USD LIBOR | (74,849 | ) | — | ||||||||||||||||
USD | 344 | 01/28/45 | 2.703 | 3 Month USD LIBOR | (28,208 | ) | (28,208 | ) | |||||||||||||||
USD | 1,192 | 12/21/25 | 2.704 | 3 Month USD LIBOR | (62,254 | ) | (4,190 | ) | |||||||||||||||
USD | 353 | 01/15/45 | 2.717 | 3 Month USD LIBOR | (29,518 | ) | (29,518 | ) | |||||||||||||||
USD | 1,192 | 12/17/25 | 2.723 | 3 Month USD LIBOR | (63,350 | ) | (4,638 | ) | |||||||||||||||
USD | 1,655 | 12/09/25 | 2.726 | 3 Month USD LIBOR | (88,505 | ) | 5,301 | ||||||||||||||||
USD | 666 | 03/04/45 | 2.764 | 3 Month USD LIBOR | (59,191 | ) | (59,191 | ) | |||||||||||||||
USD | 793 | 03/18/45 | 2.766 | 3 Month USD LIBOR | (70,594 | ) | (70,594 | ) | |||||||||||||||
USD | 999 | 03/04/45 | 2.776 | 3 Month USD LIBOR | (90,164 | ) | (90,164 | ) | |||||||||||||||
USD | 572 | 01/14/45 | 2.800 | 3 Month USD LIBOR | (53,263 | ) | (53,263 | ) | |||||||||||||||
USD | 572 | 01/14/45 | 2.815 | 3 Month USD LIBOR | (54,244 | ) | (54,244 | ) | |||||||||||||||
USD | 215 | 02/20/45 | 2.820 | 3 Month USD LIBOR | (20,487 | ) | (20,487 | ) | |||||||||||||||
USD | 666 | 02/26/45 | 2.820 | 3 Month USD LIBOR | (63,452 | ) | (63,452 | ) | |||||||||||||||
USD | 333 | 02/25/45 | 2.827 | 3 Month USD LIBOR | (31,998 | ) | (31,998 | ) | |||||||||||||||
USD | 666 | 03/13/45 | 2.830 | 3 Month USD LIBOR | (64,126 | ) | (64,126 | ) | |||||||||||||||
USD | 1,332 | 03/05/45 | 2.836 | 3 Month USD LIBOR | (129,323 | ) | (129,323 | ) | |||||||||||||||
USD | 213 | 02/25/45 | 2.850 | 3 Month USD LIBOR | (21,026 | ) | (21,026 | ) | |||||||||||||||
USD | 666 | 03/11/45 | 2.863 | 3 Month USD LIBOR | (66,713 | ) | (66,713 | ) | |||||||||||||||
USD | 7,928 | 09/01/25 | 2.941 | 3 Month USD LIBOR | (518,589 | ) | (68,582 | ) | |||||||||||||||
USD | 666 | 03/11/45 | 2.956 | 3 Month USD LIBOR | (73,751 | ) | (73,751 | ) | |||||||||||||||
USD | 1,192 | 12/18/25 | 2.735 | 3 Month USD LIBOR | (64,047 | ) | (4,159 | ) | |||||||||||||||
USD | 13,225 | 04/28/18 | 3 Month USD LIBOR | 1.137 | % | 28,167 | (12,276 | ) | |||||||||||||||
USD | 13,225 | 04/28/18 | 3 Month USD LIBOR | 1.137 | 28,167 | (10,257 | ) | ||||||||||||||||
USD | 26,450 | 04/28/18 | 3 Month USD LIBOR | 1.128 | 54,057 | (7,565 | ) | ||||||||||||||||
USD | 1,294 | 05/03/18 | 3 Month USD LIBOR | 1.079 | 1,981 | (452 | ) | ||||||||||||||||
USD | 15,567 | 05/05/18 | 3 Month USD LIBOR | 1.026 | 15,665 | (6,267 | ) | ||||||||||||||||
USD | 13,644 | 05/08/18 | 3 Month USD LIBOR | 1.028 | 13,744 | (5,024 | ) | ||||||||||||||||
USD | 7,235 | 05/09/18 | 3 Month USD LIBOR | 1.006 | 5,713 | (2,348 | ) | ||||||||||||||||
USD | 23,130 | 05/10/18 | 3 Month USD LIBOR | 0.985 | 13,358 | (11,938 | ) | ||||||||||||||||
USD | 9,417 | 05/17/18 | 3 Month USD LIBOR | 1.021 | 8,624 | (17,314 | ) | ||||||||||||||||
USD | 6,702 | 05/18/18 | 3 Month USD LIBOR | 1.039 | 7,307 | (8,617 | ) | ||||||||||||||||
USD | 3,348 | 05/18/18 | 3 Month USD LIBOR | 1.037 | 3,584 | (3,841 | ) | ||||||||||||||||
USD | 16,596 | 05/19/18 | 3 Month USD LIBOR | 1.069 | 23,050 | (25,079 | ) | ||||||||||||||||
USD | 3,521 | 05/22/18 | 3 Month USD LIBOR | 1.138 | 7,241 | (5,132 | ) | ||||||||||||||||
USD | 2,058 | 05/23/18 | 3 Month USD LIBOR | 1.168 | 4,854 | (2,579 | ) | ||||||||||||||||
USD | 109,100 | 05/11/19 | 3 Month USD LIBOR | 1.076 | 228,412 | 228,412 | |||||||||||||||||
USD | 15,200 | 05/12/19 | 3 Month USD LIBOR | 1.067 | 29,023 | 29,023 | |||||||||||||||||
USD | 3,247 | 07/14/25 | 3 Month USD LIBOR | 3.284 | 267,731 | 267,731 |
257
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
Centrally cleared interest rate swap agreements—(continued)
Notional amount (000) | Termination date | Payments made by the Portfolio10 | Payments received by the Portfolio10 | Value | Unrealized appreciation (depreciation) | ||||||||||||||||||
USD | 4,342 | 07/15/25 | 3 Month USD LIBOR | 3.314 | % | $ | 364,020 | $ | 364,020 | ||||||||||||||
USD | 6,512 | 07/16/25 | 3 Month USD LIBOR | 3.291 | 538,757 | 538,757 | |||||||||||||||||
USD | 5,427 | 07/17/25 | 3 Month USD LIBOR | 3.256 | 439,949 | 439,949 | |||||||||||||||||
USD | 2,202 | 07/20/25 | 3 Month USD LIBOR | 3.206 | 173,284 | 173,284 | |||||||||||||||||
USD | 3,442 | 08/10/25 | 3 Month USD LIBOR | 3.006 | 236,932 | 236,932 | |||||||||||||||||
USD | 7,928 | 09/01/25 | 3 Month USD LIBOR | 2.941 | 518,589 | 518,589 | |||||||||||||||||
USD | 1,241 | 11/27/25 | 3 Month USD LIBOR | 2.648 | 62,093 | 62,093 | |||||||||||||||||
USD | 828 | 11/27/25 | 3 Month USD LIBOR | 2.662 | 41,942 | 41,942 | |||||||||||||||||
USD | 1,655 | 12/01/25 | 3 Month USD LIBOR | 2.630 | 81,241 | 81,241 | |||||||||||||||||
USD | 414 | 12/02/25 | 3 Month USD LIBOR | 2.614 | 19,981 | 19,981 | |||||||||||||||||
USD | 1,241 | 12/02/25 | 3 Month USD LIBOR | 2.645 | 61,788 | 61,788 | |||||||||||||||||
USD | 1,655 | 12/03/25 | 3 Month USD LIBOR | 2.642 | 82,099 | 82,099 | |||||||||||||||||
USD | 1,241 | 12/07/25 | 3 Month USD LIBOR | 2.658 | 62,441 | 62,441 | |||||||||||||||||
USD | 1,655 | 12/09/25 | 3 Month USD LIBOR | 2.726 | 88,505 | 88,505 | |||||||||||||||||
USD | 1,192 | 12/10/25 | 3 Month USD LIBOR | 2.644 | 59,103 | 59,103 | |||||||||||||||||
USD | 1,589 | 12/11/25 | 3 Month USD LIBOR | 2.681 | 81,494 | 81,494 | |||||||||||||||||
USD | 1,192 | 12/15/25 | 3 Month USD LIBOR | 2.667 | 60,258 | 60,258 | |||||||||||||||||
USD | 1,192 | 12/16/25 | 3 Month USD LIBOR | 2.676 | 60,761 | 60,761 | |||||||||||||||||
USD | 1,192 | 12/17/25 | 3 Month USD LIBOR | 2.723 | 63,351 | 63,351 | |||||||||||||||||
USD | 1,192 | 12/18/25 | 3 Month USD LIBOR | 2.735 | 64,048 | 64,048 | |||||||||||||||||
USD | 1,192 | 12/21/25 | 3 Month USD LIBOR | 2.704 | 62,254 | 62,254 | |||||||||||||||||
USD | 1,192 | 12/22/25 | 3 Month USD LIBOR | 2.646 | 58,951 | 58,951 | |||||||||||||||||
USD | 1,589 | 01/06/26 | 3 Month USD LIBOR | 2.648 | 78,342 | 78,342 | |||||||||||||||||
USD | 857 | 01/11/26 | 3 Month USD LIBOR | 2.606 | 40,485 | 40,485 | |||||||||||||||||
USD | 1,713 | 01/12/26 | 3 Month USD LIBOR | 2.581 | 78,893 | 78,893 | |||||||||||||||||
USD | 1,285 | 01/15/26 | 3 Month USD LIBOR | 2.512 | 54,909 | 54,909 | |||||||||||||||||
USD | 1,285 | 01/19/26 | 3 Month USD LIBOR | 2.445 | 50,807 | 50,807 | |||||||||||||||||
USD | 3,290 | 09/18/44 | 3 Month USD LIBOR | 3.715 | 422,340 | (5,698 | ) | ||||||||||||||||
USD | 3,290 | 09/18/44 | 3 Month USD LIBOR | 3.698 | 418,111 | 4,850 | |||||||||||||||||
USD | 4,935 | 09/29/44 | 3 Month USD LIBOR | 3.612 | 603,739 | 70,258 | |||||||||||||||||
USD | 4,144 | 06/11/45 | 3 Month USD LIBOR | 3.138 | 355,287 | 30,626 | |||||||||||||||||
USD | 1,100 | 04/21/46 | 3 Month USD LIBOR | 2.434 | 38,569 | 12,093 | |||||||||||||||||
USD | 4,256 | 04/22/46 | 3 Month USD LIBOR | 2.414 | 142,919 | 117,043 | |||||||||||||||||
USD | 3,442 | 08/10/25 | 3.006 | % | 3 Month USD LIBOR | (236,932 | ) | (34,132 | ) | ||||||||||||||
USD | 2,763 | 06/08/45 | 3.093 | 3 Month USD LIBOR | (227,711 | ) | (227,711 | ) | |||||||||||||||
USD | 714 | 12/24/44 | 3.095 | 3 Month USD LIBOR | (90,610 | ) | (90,610 | ) | |||||||||||||||
USD | 4,144 | 06/11/45 | 3.138 | 3 Month USD LIBOR | (355,287 | ) | (355,287 | ) | |||||||||||||||
USD | 1,400 | 07/09/45 | 3.170 | 3 Month USD LIBOR | (123,263 | ) | (123,263 | ) | |||||||||||||||
USD | 1,500 | 06/15/45 | 3.180 | 3 Month USD LIBOR | (133,163 | ) | (133,163 | ) | |||||||||||||||
USD | 786 | 12/12/44 | 3.200 | 3 Month USD LIBOR | (109,145 | ) | (109,145 | ) | |||||||||||||||
USD | 786 | 12/12/44 | 3.200 | 3 Month USD LIBOR | (109,145 | ) | (109,145 | ) | |||||||||||||||
USD | 302 | 12/11/44 | 3.205 | 3 Month USD LIBOR | (42,118 | ) | (42,118 | ) | |||||||||||||||
USD | 2,202 | 07/20/25 | 3.206 | 3 Month USD LIBOR | (173,284 | ) | (15,715 | ) | |||||||||||||||
USD | 2,300 | 07/02/45 | 3.223 | 3 Month USD LIBOR | (211,297 | ) | (211,297 | ) | |||||||||||||||
USD | 3,700 | 06/25/45 | 3.236 | 3 Month USD LIBOR | (343,418 | ) | (343,418 | ) |
258
PACE Alternative Strategies Investments Fund
Portfolio of investments—July 31, 2016
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) | ||||||||||||||||||
USD | 1,900 | 06/29/45 | 3.245 | % | 3 Month USD LIBOR | $ | (177,605 | ) | $ | (177,605 | ) | ||||||||||||
USD | 5,427 | 07/17/25 | 3.256 | 3 Month USD LIBOR | (439,949 | ) | (32,752 | ) | |||||||||||||||
USD | 3,247 | 07/14/25 | 3.284 | 3 Month USD LIBOR | (267,731 | ) | (12,518 | ) | |||||||||||||||
USD | 3,256 | 07/16/25 | 3.291 | 3 Month USD LIBOR | (269,379 | ) | (21,117 | ) | |||||||||||||||
USD | 3,256 | 07/16/25 | 3.291 | 3 Month USD LIBOR | (269,379 | ) | (16,679 | ) | |||||||||||||||
USD | 4,342 | 07/15/25 | 3.314 | 3 Month USD LIBOR | (364,020 | ) | (23,949 | ) | |||||||||||||||
USD | 1,500 | 10/06/44 | 3.508 | 3 Month USD LIBOR | (169,588 | ) | (169,588 | ) | |||||||||||||||
USD | 4,935 | 09/29/44 | 3.632 | 3 Month USD LIBOR | (603,739 | ) | (603,739 | ) | |||||||||||||||
USD | 3,290 | 09/25/44 | 3.645 | 3 Month USD LIBOR | (405,364 | ) | (405,364 | ) | |||||||||||||||
USD | 1,645 | 09/25/44 | 3.645 | 3 Month USD LIBOR | (202,682 | ) | (202,682 | ) | |||||||||||||||
USD | 3,290 | 09/18/44 | 3.698 | 3 Month USD LIBOR | (418,111 | ) | (418,111 | ) | |||||||||||||||
USD | 3,290 | 09/18/44 | 3.715 | 3 Month USD LIBOR | (422,340 | ) | (422,340 | ) | |||||||||||||||
USD | 3,290 | 09/19/44 | 3.745 | 3 Month USD LIBOR | (429,343 | ) | (429,343 | ) | |||||||||||||||
USD | 1,645 | 09/19/44 | 3.755 | 3 Month USD LIBOR | (215,940 | ) | (215,940 | ) | |||||||||||||||
$ | (4,739,675 | ) | $ | (5,020,891 | ) |
Centrally cleared credit default swap agreements on credit indices—buy protection11
Referenced obligations9 | Notional amount (000) | Termination date | Payments made by the Portfolio10 | Upfront payments received (made) | Value | Unrealized depreciation | |||||||||||||||||||||
CDX Investment Grade Series 26 Index | USD | 8,710 | 06/20/21 | 1.000 | % | $ | 115,374 | $ | (124,175 | ) | $ | (8,801 | ) | ||||||||||||||
CDX Investment Grade Series 26 Index | USD | 24,400 | 06/20/21 | 1.000 | 180,126 | (347,862 | ) | (167,736 | ) | ||||||||||||||||||
CDX North America High Yield 26 Index | USD | 4,060 | 06/20/21 | 5.000 | 65,951 | (202,323 | ) | (136,372 | ) | ||||||||||||||||||
iTraxx Europe Senior Financials Series 25 Index | EUR | 29,500 | 06/20/21 | 1.000 | (319,473 | ) | (176,904 | ) | (496,377 | ) | |||||||||||||||||
$ | 41,978 | $ | (851,264 | ) | $ | (809,286 | ) |
Centrally cleared credit default swap agreements on credit indices—sell protection12
Referenced obligations9 | Notional amount (000) | Termination date | Payments received by the Portfolio10 | Upfront payments made | Value | Unrealized appreciation | Credit spread13 | ||||||||||||||||||||||||
CDX Investment Grade Series 26 Index | USD | 6,630 | 06/20/21 | 1.000 | % | $ | (53,815 | ) | $ | 94,521 | $ | 40,706 | 0.73 | % | |||||||||||||||||
CDX Investment Grade Series 26 Index | USD | 16,000 | 06/20/21 | 1.000 | (184,647 | ) | 228,106 | 43,459 | 0.73 | ||||||||||||||||||||||
CDX North America High Yield 26 Index | USD | 20,350 | 06/20/21 | 5.000 | (346,545 | ) | 1,001,353 | 654,808 | 3.97 | ||||||||||||||||||||||
CDX Investment Grade Series 26 Index | USD | 3,810 | 06/20/21 | 1.000 | (32,857 | ) | 54,318 | 21,461 | 0.73 | ||||||||||||||||||||||
CDX Investment Grade Series 26 Index | USD | 44,500 | 06/20/21 | 1.000 | (375,982 | ) | 634,420 | 258,438 | 0.73 | ||||||||||||||||||||||
CDX Investment Grade Series 26 Index | USD | 4,030 | 06/20/21 | 1.000 | (30,553 | ) | 57,454 | 26,901 | 0.73 | ||||||||||||||||||||||
CDX Investment Grade Series 26 Index | USD | 10,200 | 06/20/21 | 1.000 | (89,561 | ) | 145,418 | 55,857 | 0.73 | ||||||||||||||||||||||
CDX North America High Yield 26 Index | USD | 13,009 | 06/20/21 | 5.000 | (170,285 | ) | 648,262 | 477,977 | 4.02 | ||||||||||||||||||||||
CDX North America High Yield 26 Index | USD | 2,300 | 06/20/21 | 5.000 | (77,162 | ) | 114,617 | 37,455 | 4.02 | ||||||||||||||||||||||
iTraxx Europe Senior Financials Series 25 Index | EUR | 29,500 | 06/20/21 | 1.000 | (176,505 | ) | 562,379 | 385,874 | 0.67 | ||||||||||||||||||||||
$ | (1,537,912 | ) | $ | 3,540,848 | $ | 2,002,936 |
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Portfolio of investments—July 31, 2016
Total return swap agreements7
Counterparty | Notional amount (000) | Termination date | Payments made by the Portfolio10 | Payments received by the Portfolio10 | Upfront payments received (made) | Value | Unrealized appreciation (depreciation) | ||||||||||||||||||||||||
BNP | USD | 5,035 | 07/25/17 | 1 Month USD LIBOR plus 52 bps | RUGL | $ | — | $ | 67,381 | $ | 67,381 | ||||||||||||||||||||
BNP | USD | 2,879 | 08/12/16 | SPDR S&P ETF | 3 Month USD LIBOR | (1,064 | ) | (607,862 | ) | (608,926 | ) | ||||||||||||||||||||
BNP | USD | 4,550 | 12/15/17 | RU20INTR | 3 Month USD LIBOR minus 69 bps | — | (287,916 | ) | (287,916 | ) | |||||||||||||||||||||
CITI | USD | 2,264 | 09/06/16 | IXRTR | 1 Month USD LIBOR plus 31 bps | — | 23,657 | 23,657 | |||||||||||||||||||||||
CITI | USD | 1,829 | 09/06/16 | IXRTR | 1 Month USD LIBOR plus 31 bps | — | 19,116 | 19,116 | |||||||||||||||||||||||
CITI | USD | 2,606 | 09/06/16 | IXRTR | 1 Month USD LIBOR plus 31 bps | — | 27,240 | 27,240 | |||||||||||||||||||||||
SG | USD | 1,490 | 06/09/17 | 3 Month USD LIBOR minus 37 bps | SGAVIVA1 Index | — | (141,629 | ) | (141,629 | ) | |||||||||||||||||||||
SG | USD | 1,798 | 06/09/17 | 3 Month USD LIBOR minus 37 bps | SGAVIVA1 Index | — | (77,022 | ) | (77,022 | ) | |||||||||||||||||||||
$ | (1,064 | ) | $ | (977,035 | ) | $ | (978,099 | ) |
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | 278,912,893 | $ | — | $ | — | $ | 278,912,893 | |||||||||||
Preferred stock | 282,718 | — | — | 282,718 | |||||||||||||||
Warrants | 2,692 | — | — | 2,692 | |||||||||||||||
Investment companies | 69,423,289 | 31,136,407 | — | 100,559,696 | |||||||||||||||
US government obligations | — | 46,413,723 | — | 46,413,723 | |||||||||||||||
Collateralized mortgage obligation | — | 5,319,667 | — | 5,319,667 | |||||||||||||||
Corporate notes | — | 23,154,265 | — | 23,154,265 | |||||||||||||||
Non-US government obligations | — | 23,884,653 | — | 23,884,653 | |||||||||||||||
Time deposits | — | 75,950,973 | — | 75,950,973 | |||||||||||||||
Short-term US government obligations | — | 83,463,446 | — | 83,463,446 | |||||||||||||||
Repurchase agreement | — | 134,135,000 | — | 134,135,000 | |||||||||||||||
Options purchased | 5,363,137 | 5,746,338 | — | 11,109,475 | |||||||||||||||
Futures contracts | 5,780,906 | — | — | 5,780,906 | |||||||||||||||
Forward foreign currency contracts | — | 21,727,768 | — | 21,727,768 | |||||||||||||||
Swap agreements | — | 15,306,750 | — | 15,306,750 | |||||||||||||||
Total | $ | 359,765,635 | $ | 466,238,990 | $ | — | $ | 826,004,625 |
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Portfolio of investments—July 31, 2016
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 | |||||||||||||||
Investments sold short | $ | (99,920,780 | ) | $ | — | $ | — | $ | (99,920,780 | ) | |||||||||
Written options | (889,434 | ) | (121,454 | ) | — | (1,010,888 | ) | ||||||||||||
Written swaptions | — | (222,319 | ) | — | (222,319 | ) | |||||||||||||
Futures contracts | (4,136,246 | ) | — | — | (4,136,246 | ) | |||||||||||||
Forward foreign currency contracts | — | (19,780,282 | ) | — | (19,780,282 | ) | |||||||||||||
Swap agreements | — | (18,565,548 | ) | — | (18,565,548 | ) | |||||||||||||
Total | $ | (104,946,460 | ) | $ | (38,689,603 | ) | $ | — | $ | (143,636,063 | ) |
At July 31, 2016, there were no transfers between Level 1 and Level 2.
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 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2016 and changes periodically.
3 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, 2016, the value of these securities amounted to 2.48% of net assets.
4 Step bond that converts to the noted fixed rate at a designated future date.
5 Perpetual investment. The maturity date reflects the next call date.
6 Rates shown is the discount rate at date of purchase.
7 Illiquid investments as of July 31, 2016.
8 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.
9 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.
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 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
12 If the Portfolio is a seller of protection and a credit event occurs, as defined under the terms of the 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.
13 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.
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Portfolio acronyms:
ABS Asset-backed Security
ADR American Depositary Receipt
ALM Application Lifecycle Management
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, 2016.
ASX Australian Securities Exchange
BHAC Berkshire Hathaway Assurance Corporation
BOBL Bundesobligationen
CAC 40 French Stock Market Index
CDX Compound Index
CLO Collateralized Loan Obligation
CMBX A series of indices designed to reflect the creditworthiness of commercial mortgage-backed securities
COFI Cost of Funds Index
CVR Contingent Value Right
DAX German Stock Index
ETF Exchange Traded Fund
EURIBOR Euro Interbank Offered Rate
FHA Federal Housing Administration
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FREMF Finnish Real Estate Management Federation
FTSE London Stock Exchange Index
FTSE MIB Italian National Stock Exchange Index
FTSE/JSE South Africa Stock Market Index
GDR Global Depositary Receipt
GMAC General Motors Acceptance Corporation
GMTN Global Medium Term Note
GNMA Government National Mortgage Association
GSAMP Goldman Sachs Asset Mortgage Passthrough
GTD Guaranteed
IBEX 35 Spanish Exchange Index
iTraxx Credit default swap index products covering regions of Europe, Australia, Japan, and non-Japan Asia
JGB Japan Government Bond
KOSPI Korea Composite Stock Price Index
LIBOR London Interbank Offered Rate
MTN Medium Term Note
NIKKEI Tokyo Stock Exchange Index
OAT Obligation Assimilables du Trésor
OJSC Open Joint Stock Company
OMX Stockholm Stock Exchange
OMX 30 Stockholm Stock Exchange
PSF Permanent School Fund
RASC Retirement Administration Service Center
REIT Real Estate Investment Trust
REMIC Real Estate Mortgage Investment Conduit
RU20INTR Russell 2000 Total Return Index
SBA Small Business Administration
SDR Special Drawing Rights
S&P Standard and Poor's
S&P TSX S&P/Toronto Stock Exchange Index
SGX Singapore Stock eXchange
SPDR Standard and Poor's Depository Receipts
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.
TIAA Teachers Insurance and Annuity Association
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 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
VRD Variable rate demand notes are payable on demand. The interest rates shown are the current rates as of July 31, 2016 and reset periodically.
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Currency type abbreviations:
AUD Australian Dollar
BRL Brazilian Real
CAD Canadian Dollar
CHF Swiss Franc
CLP Chilean Peso
CNH Chinese Yuan Renminbi
CNY Chinese Yuan Renminbi
COP Colombian Peso
CZK Czech Koruna
DKK Danish Krone
EUR Euro
GBP Great Britain Pound
HKD Hong Kong Dollar
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:
ANZ Australia and New Zealand Banking Group
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
GSI Goldman Sachs International
HSBC HSBC Bank PLC
JPMCB JPMorgan Chase Bank
MSCI Morgan Stanley & Co. International PLC
RBC Royal Bank of Canada
RBS Royal Bank of Scotland PLC
SG Societe Generale
SSC State Street Bank and Trust Co.
WBC Westpac Banking Corp.
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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, 2016 to July 31, 2016.
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, 2016 | Ending account value July 31, 2016 | Expenses paid during period1 02/01/16 to 07/31/16 | Expense ratio during the period | ||||||||||||||||||||
PACE Government Money Market Investments | |||||||||||||||||||||||
Class P | Actual | $ | 1,000.00 | $ | 1,000.00 | $ | 1.69 | 0.34 | % | ||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,023.17 | 1.71 | 0.34 | |||||||||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,024.10 | 4.88 | 0.97 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.04 | 4.87 | 0.97 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,021.50 | 7.39 | 1.47 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.55 | 7.37 | 1.47 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,024.60 | 3.62 | 0.72 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,021.28 | 3.62 | 0.72 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,025.40 | 3.63 | 0.72 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,021.28 | 3.62 | 0.72 | |||||||||||||||||||
PACE Intermediate Fixed Income Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,026.30 | 4.69 | 0.93 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.24 | 4.67 | 0.93 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,023.70 | 7.20 | 1.43 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.75 | 7.17 | 1.43 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,027.60 | 3.43 | 0.68 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,021.48 | 3.42 | 0.68 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,027.60 | 3.43 | 0.68 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,021.48 | 3.42 | 0.68 | |||||||||||||||||||
PACE Strategic Fixed Income Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,062.00 | 5.02 | 0.98 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.99 | 4.92 | 0.98 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,059.90 | 7.78 | 1.52 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.30 | 7.62 | 1.52 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,062.70 | 4.56 | 0.89 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.44 | 4.47 | 0.89 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,063.00 | 4.10 | 0.80 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.88 | 4.02 | 0.80 | |||||||||||||||||||
PACE Municipal Fixed Income Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,022.80 | 4.27 | 0.85 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.64 | 4.27 | 0.85 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,019.50 | 6.78 | 1.35 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.15 | 6.77 | 1.35 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,023.90 | 3.42 | 0.68 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,021.48 | 3.42 | 0.68 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,024.10 | 3.02 | 0.60 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,021.88 | 3.02 | 0.60 |
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Beginning account value February 1, 2016 | Ending account value July 31, 2016 | Expenses paid during period1 02/01/16 to 07/31/16 | Expense ratio during the period | ||||||||||||||||||||
PACE International Fixed Income Investments | |||||||||||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,120.00 | $ | 5.48 | 1.04 | % | ||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.69 | 5.22 | 1.04 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,116.20 | 7.95 | 1.51 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.36 | 7.57 | 1.51 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,120.70 | 4.11 | 0.78 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.99 | 3.92 | 0.78 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,121.10 | 4.43 | 0.84 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.69 | 4.22 | 0.84 | |||||||||||||||||||
PACE High Yield Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,123.00 | 5.65 | 1.07 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.54 | 5.37 | 1.07 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,120.30 | 8.33 | 1.58 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.01 | 7.92 | 1.58 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,123.80 | 4.49 | 0.85 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.64 | 4.27 | 0.85 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,123.40 | 5.02 | 0.95 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.14 | 4.77 | 0.95 | |||||||||||||||||||
PACE Large Co Value Equity Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,129.60 | 7.73 | 1.46 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.60 | 7.32 | 1.46 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,126.00 | 11.84 | 2.24 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,013.72 | 11.22 | 2.24 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,131.60 | 6.36 | 1.20 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.90 | 6.02 | 1.20 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,131.70 | 6.47 | 1.22 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.80 | 6.12 | 1.22 | |||||||||||||||||||
PACE Large Co Growth Equity Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,093.90 | 6.14 | 1.18 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.00 | 5.92 | 1.18 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,089.60 | 10.39 | 2.00 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,014.92 | 10.02 | 2.00 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,095.90 | 4.74 | 0.91 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.34 | 4.57 | 0.91 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,095.60 | 4.85 | 0.93 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,020.24 | 4.67 | 0.93 | |||||||||||||||||||
PACE Small/Medium Co Value Equity Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,157.10 | 6.65 | 1.24 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.70 | 6.22 | 1.24 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,152.80 | 10.76 | 2.01 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,014.87 | 10.07 | 2.01 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,158.20 | 5.63 | 1.05 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.64 | 5.27 | 1.05 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,158.00 | 5.96 | 1.11 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.34 | 5.57 | 1.11 |
266
PACE Select Advisors Trust
Beginning account value February 1, 2016 | Ending account value July 31, 2016 | Expenses paid during period1 02/01/16 to 07/31/16 | Expense ratio during the period | ||||||||||||||||||||
PACE Small/Medium Co Growth Equity Investments | |||||||||||||||||||||||
Class A | Actual | $ | 1,000.00 | $ | 1,137.20 | $ | 6.48 | 1.22 | % | ||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.80 | 6.12 | 1.22 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,132.70 | 10.61 | 2.00 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,014.92 | 10.02 | 2.00 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,137.80 | 5.90 | 1.11 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.34 | 5.57 | 1.11 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,137.60 | 5.90 | 1.11 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,019.34 | 5.57 | 1.11 | |||||||||||||||||||
PACE International Equity Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,070.10 | 10.19 | 1.98 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,015.02 | 9.92 | 1.98 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,066.10 | 14.33 | 2.79 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,010.99 | 13.95 | 2.79 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,071.20 | 8.65 | 1.68 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,016.51 | 8.42 | 1.68 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,071.40 | 8.81 | 1.71 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,016.36 | 8.57 | 1.71 | |||||||||||||||||||
PACE International Emerging Markets Equity Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,156.00 | 9.86 | 1.84 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,015.71 | 9.22 | 1.84 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,151.00 | 14.01 | 2.62 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,011.83 | 13.11 | 2.62 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,156.80 | 8.31 | 1.55 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.16 | 7.77 | 1.55 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,156.60 | 8.85 | 1.65 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,016.66 | 8.27 | 1.65 | |||||||||||||||||||
PACE Global Real Estate Securities Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 1,207.50 | 7.96 | 1.45 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,017.65 | 7.27 | 1.45 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 1,203.40 | 12.05 | 2.20 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,013.92 | 11.02 | 2.20 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,206.50 | 6.58 | 1.20 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.90 | 6.02 | 1.20 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,208.70 | 6.59 | 1.20 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,018.90 | 6.02 | 1.20 | |||||||||||||||||||
PACE Alternative Strategies Investments | |||||||||||||||||||||||
Class A | Actual | 1,000.00 | 999.00 | 9.59 | 1.93 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,015.27 | 9.67 | 1.93 | |||||||||||||||||||
Class C | Actual | 1,000.00 | 996.00 | 13.40 | 2.70 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,011.44 | 13.50 | 2.70 | |||||||||||||||||||
Class Y | Actual | 1,000.00 | 1,002.90 | 8.07 | 1.62 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,016.81 | 8.12 | 1.62 | |||||||||||||||||||
Class P | Actual | 1,000.00 | 1,001.00 | 8.51 | 1.71 | ||||||||||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,016.36 | 8.57 | 1.71 |
1 Expenses are equal to the Portfolios' annualized net expense ratios, multiplied by the average account value over the period, multiplied by 182 divided by 366 (to reflect the one-half year period).
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PACE Select Advisors Trust
Statement of assets and liabilities
July 31, 2016
PACE Government Money Market Investments | PACE Mortgage-Backed Securities Fixed Income Investments | PACE Intermediate Fixed Income Investments | PACE Strategic Fixed Income Investments | ||||||||||||||||
Assets: | |||||||||||||||||||
Investments in securities, at value (cost—$137,511,398; $809,185,325; $433,449,776; $1,039,692,453; $381,458,281; $531,080,054 and $467,440,718, respectively)1 | $ | 137,511,398 | $ | 817,888,818 | $ | 439,175,910 | $ | 1,077,339,782 | |||||||||||
Repurchase agreements, at value (cost—$45,925,000; $1,248,000; $15,894,000; $5,382,000; $518,000; $1,866,000 and $6,955,000, respectively) | 45,925,000 | 1,248,000 | 15,894,000 | 5,382,000 | |||||||||||||||
Total investments in securities, at value (cost—$183,436,398; $810,433,325; $449,343,776; $1,045,074,453; $381,976,281; $532,946,054 and $474,395,718, respectively) | $ | 183,436,398 | $ | 819,136,818 | $ | 455,069,910 | $ | 1,082,721,782 | |||||||||||
Cash | 632 | 2,500,455 | 182,001 | 4,921,470 | |||||||||||||||
Cash collateral on futures | — | — | 227,597 | 2,875,455 | |||||||||||||||
Cash collateral on swap agreements | — | 1,294,000 | 356,120 | 6,433,000 | |||||||||||||||
Foreign currency, at value (cost—$0; $0; $3,350,557; $2,497,927; $0; $2,236,585 and $1,413,779, respectively) | — | — | 3,439,253 | 2,547,551 | |||||||||||||||
Receivable for investments sold | — | 6,429,270 | 2,631,130 | 1,803,747 | |||||||||||||||
Receivable for investments sold short | — | 92,047,266 | — | — | |||||||||||||||
Receivable for shares of beneficial interest sold | 295,601 | 1,455,604 | 1,066,329 | 1,972,946 | |||||||||||||||
Receivable for interest | 138,026 | 2,012,906 | 1,966,016 | 6,651,912 | |||||||||||||||
Receivable from affiliate | 42,504 | — | — | — | |||||||||||||||
Receivable for when issued TBA securities | — | 278,577,655 | — | 30,830,781 | |||||||||||||||
Swap agreements, at value2 | — | 2,392 | 12,872 | 87,275 | |||||||||||||||
Due from broker | — | — | 467,356 | — | |||||||||||||||
Unrealized appreciation on forward foreign currency contracts | — | — | 20,511 | 3,315,758 | |||||||||||||||
Receivable for variation margin on futures contract | — | — | — | 2,381,419 | |||||||||||||||
Receivable for foreign tax reclaims | — | — | — | — | |||||||||||||||
Other assets | 17,163 | 23,095 | 20,727 | 28,305 | |||||||||||||||
Total assets | 183,930,324 | 1,203,479,461 | 465,459,822 | 1,146,571,401 | |||||||||||||||
Liabilities: | |||||||||||||||||||
Payable for shares of beneficial interest repurchased | 651,635 | 1,256,830 | 783,405 | 994,404 | |||||||||||||||
Payable to custodian | 3,268 | 37,058 | 35,577 | 83,613 | |||||||||||||||
Dividends payable to shareholders | 677 | — | — | — | |||||||||||||||
Payable for when issued TBA securities | — | 590,857,262 | 525,176 | 77,432,615 | |||||||||||||||
Investments sold short, at value (proceeds—$0; $92,047,266; $0; $0; $0; $0 and $0, respectively) | — | 92,171,366 | — | — | |||||||||||||||
Payable for investments purchased | — | 6,782,197 | 19,561,033 | 13,893,391 | |||||||||||||||
Due to broker | — | 820,643 | — | 2,217,750 | |||||||||||||||
Payable to affiliate | — | 190,014 | 165,151 | 388,512 | |||||||||||||||
Options and swaptions written, at value (premiums received $0; $159,980; $746,778; $1,436,233; $0; $0 and $0, respectively) | — | 150,907 | 533,347 | 960,225 | |||||||||||||||
Payable for variation margin on centrally cleared swap agreements | — | 136,207 | 54,230 | 985,540 | |||||||||||||||
Payable for cash collateral from securities loaned | — | — | 10,884,573 | 17,724,928 | |||||||||||||||
Payable for variation margin on futures contracts | — | — | 534,189 | — | |||||||||||||||
Unrealized depreciation on forward foreign currency contracts | — | — | 86,634 | 4,827,343 | |||||||||||||||
Swap agreements, at value2 | — | — | 26,804 | 2,102,577 | |||||||||||||||
Payable for dollar roll transactions | — | — | — | 141,926,924 | |||||||||||||||
Deferred payable for dollar roll transactions | — | — | — | 56,001 | |||||||||||||||
Payable for foreign withholding taxes and foreign capital gains taxes | — | — | — | — | |||||||||||||||
Accrued expenses and other liabilities | 298,199 | 441,574 | 395,294 | 495,459 | |||||||||||||||
Total liabilities | 953,779 | 692,844,058 | 33,585,413 | 264,089,282 |
1 Includes $0; $0; $10,678,241; $17,390,831; $0; $1,196,333 and $57,622,947, 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, PACE Intermediate Fixed Income Investments and PACE Strategic Fixed Income Investments were $16,879, $1,748 and $3,058,918, respectively.
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PACE Select Advisors Trust
PACE Municipal Fixed Income Investments | PACE International Fixed Income Investments | PACE High Yield Investments | |||||||||||||
Assets: | |||||||||||||||
Investments in securities, at value (cost—$137,511,398; $809,185,325; $433,449,776; $1,039,692,453; $381,458,281; $531,080,054 and $467,440,718, respectively)1 | $ | 407,380,526 | $ | 551,179,879 | $ | 468,214,666 | |||||||||
Repurchase agreements, at value (cost—$45,925,000; $1,248,000; $15,894,000; $5,382,000; $518,000; $1,866,000 and $6,955,000, respectively) | 518,000 | 1,866,000 | 6,955,000 | ||||||||||||
Total investments in securities, at value (cost—$183,436,398; $810,433,325; $449,343,776; $1,045,074,453; $381,976,281; $532,946,054 and $474,395,718, respectively) | $ | 407,898,526 | $ | 553,045,879 | $ | 475,169,666 | |||||||||
Cash | 407 | 331 | 669,984 | ||||||||||||
Cash collateral on futures | — | 2,966,706 | — | ||||||||||||
Cash collateral on swap agreements | — | — | — | ||||||||||||
Foreign currency, at value (cost—$0; $0; $3,350,557; $2,497,927; $0; $2,236,585 and $1,413,779, respectively) | — | 2,295,684 | 1,423,527 | ||||||||||||
Receivable for investments sold | 2,262,151 | — | 6,463,579 | ||||||||||||
Receivable for investments sold short | — | — | — | ||||||||||||
Receivable for shares of beneficial interest sold | 166,968 | 1,010,661 | 605,393 | ||||||||||||
Receivable for interest | 4,608,285 | 5,177,862 | 7,756,259 | ||||||||||||
Receivable from affiliate | — | — | — | ||||||||||||
Receivable for when issued TBA securities | — | — | — | ||||||||||||
Swap agreements, at value2 | — | — | — | ||||||||||||
Due from broker | — | — | — | ||||||||||||
Unrealized appreciation on forward foreign currency contracts | — | 6,679,179 | 229,228 | ||||||||||||
Receivable for variation margin on futures contract | — | 2,378,669 | — | ||||||||||||
Receivable for foreign tax reclaims | — | — | 4,127 | ||||||||||||
Other assets | 20,410 | 22,459 | 22,961 | ||||||||||||
Total assets | 414,956,747 | 573,577,430 | 492,344,724 | ||||||||||||
Liabilities: | |||||||||||||||
Payable for shares of beneficial interest repurchased | 573,488 | 634,095 | 483,280 | ||||||||||||
Payable to custodian | 23,486 | 85,376 | — | ||||||||||||
Dividends payable to shareholders | — | — | — | ||||||||||||
Payable for when issued TBA securities | — | — | — | ||||||||||||
Investments sold short, at value (proceeds—$0; $92,047,266; $0; $0; $0; $0 and $0, respectively) | — | — | — | ||||||||||||
Payable for investments purchased | 1,880,580 | — | 9,535,234 | ||||||||||||
Due to broker | — | 172,310 | — | ||||||||||||
Payable to affiliate | 179,021 | 254,288 | 224,242 | ||||||||||||
Options and swaptions written, at value (premiums received $0; $159,980; $746,778; $1,436,233; $0; $0 and $0, respectively) | — | — | — | ||||||||||||
Payable for variation margin on centrally cleared swap agreements | — | — | — | ||||||||||||
Payable for cash collateral from securities loaned | — | 1,220,380 | 58,971,210 | ||||||||||||
Payable for variation margin on futures contracts | — | — | — | ||||||||||||
Unrealized depreciation on forward foreign currency contracts | — | 5,289,627 | 2,004,545 | ||||||||||||
Swap agreements, at value2 | — | — | — | ||||||||||||
Payable for dollar roll transactions | — | — | — | ||||||||||||
Deferred payable for dollar roll transactions | — | — | — | ||||||||||||
Payable for foreign withholding taxes and foreign capital gains taxes | — | 6,324 | — | ||||||||||||
Accrued expenses and other liabilities | 158,092 | 460,304 | 352,306 | ||||||||||||
Total liabilities | 2,814,667 | 8,122,704 | 71,570,817 |
See accompanying notes to financial statements.
269
PACE Select Advisors Trust
Statement of assets and liabilities (continued)
July 31, 2016
PACE Government 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) | $ | 182,977,137 | $ | 511,436,299 | $ | 424,421,849 | $ | 863,571,088 | |||||||||||
Accumulated undistributed (distributions in excess of) net investment income | — | 591,116 | 1,920,184 | 11,568,318 | |||||||||||||||
Accumulated net realized gain (loss) | (592 | ) | (8,282,921 | ) | 424,532 | (9,024,982 | ) | ||||||||||||
Net unrealized appreciation | — | 6,890,909 | 5,107,844 | 16,367,695 | |||||||||||||||
Net assets | $ | 182,976,545 | $ | 510,635,403 | $ | 431,874,409 | $ | 882,482,119 | |||||||||||
Class A | |||||||||||||||||||
Net assets | $ | — | $ | 41,260,449 | $ | 18,680,847 | $ | 13,480,231 | |||||||||||
Shares outstanding | — | 3,136,604 | 1,500,559 | 948,492 | |||||||||||||||
Net asset value per share | $ | — | $ | 13.15 | $ | 12.45 | $ | 14.21 | |||||||||||
Maximum offering price per share | $ | — | $ | 13.66 | $ | 12.94 | $ | 14.76 | |||||||||||
Class C | |||||||||||||||||||
Net assets | $ | — | $ | 12,299,115 | $ | 1,644,435 | $ | 10,417,606 | |||||||||||
Shares outstanding | — | 933,794 | 131,891 | 732,829 | |||||||||||||||
Net asset value and offering price per share | $ | — | $ | 13.17 | $ | 12.47 | $ | 14.22 | |||||||||||
Class Y | |||||||||||||||||||
Net assets | $ | — | $ | 51,822,902 | $ | 400,952 | $ | 2,283,143 | |||||||||||
Shares outstanding | — | 3,939,004 | 32,210 | 160,928 | |||||||||||||||
Net asset value, offering price and redemption value per share4 | $ | — | $ | 13.16 | $ | 12.45 | $ | 14.19 | |||||||||||
Class P | |||||||||||||||||||
Net assets | $ | 182,976,545 | $ | 405,252,937 | $ | 411,148,175 | $ | 856,301,139 | |||||||||||
Shares outstanding | 182,975,935 | 30,792,132 | 33,022,257 | 60,284,098 | |||||||||||||||
Net asset value, offering price and redemption value per share4 | $ | 1.00 | $ | 13.16 | $ | 12.45 | $ | 14.20 |
4 Assumes shares were held a sufficient period or are otherwise not subject to a redemption fee.
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PACE Select Advisors Trust
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) | $ | 383,636,962 | $ | 576,552,007 | $ | 439,485,681 | |||||||||
Accumulated undistributed (distributions in excess of) net investment income | — | (12,797,911 | ) | (1,221,874 | ) | ||||||||||
Accumulated net realized gain (loss) | 2,582,873 | (22,229,471 | ) | (17,690,494 | ) | ||||||||||
Net unrealized appreciation | 25,922,245 | 23,930,101 | 200,594 | ||||||||||||
Net assets | $ | 412,142,080 | $ | 565,454,726 | $ | 420,773,907 | |||||||||
Class A | |||||||||||||||
Net assets | $ | 51,397,369 | $ | 45,624,231 | $ | 3,764,165 | |||||||||
Shares outstanding | 3,792,534 | 4,229,546 | 392,511 | ||||||||||||
Net asset value per share | $ | 13.55 | $ | 10.79 | $ | 9.59 | |||||||||
Maximum offering price per share | $ | 13.86 | $ | 11.21 | $ | 9.96 | |||||||||
Class C | |||||||||||||||
Net assets | $ | 10,537,290 | $ | 3,159,579 | $ | 3,346,612 | |||||||||
Shares outstanding | 777,388 | 292,698 | 349,350 | ||||||||||||
Net asset value and offering price per share | $ | 13.55 | $ | 10.79 | $ | 9.58 | |||||||||
Class Y | |||||||||||||||
Net assets | $ | 69,998 | $ | 4,040,098 | $ | 874,368 | |||||||||
Shares outstanding | 5,164 | 375,718 | 90,855 | ||||||||||||
Net asset value, offering price and redemption value per share4 | $ | 13.56 | $ | 10.75 | $ | 9.62 | |||||||||
Class P | |||||||||||||||
Net assets | $ | 350,137,423 | $ | 512,630,818 | $ | 412,788,762 | |||||||||
Shares outstanding | 25,827,157 | 47,530,692 | 42,951,581 | ||||||||||||
Net asset value, offering price and redemption value per share4 | $ | 13.56 | $ | 10.79 | $ | 9.61 |
See accompanying notes to financial statements.
271
PACE Select Advisors Trust
Statement of assets and liabilities (continued)
July 31, 2016
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, at value (cost—$1,357,281,505; $965,205,789; $473,644,259; $500,142,599; $1,106,821,648; $401,629,553; $141,041,383 and $633,185,553, respectively)1 | $ | 1,468,328,575 | $ | 1,238,506,695 | $ | 513,090,790 | $ | 530,105,790 | |||||||||||
Repurchase agreements, at value (cost—$7,349,000; $35,790,000; $23,820,000; $12,453,000; $3,844,000; $3,820,000; $1,950,000 and $134,135,000, respectively) | 7,349,000 | 35,790,000 | 23,820,000 | 12,453,000 | |||||||||||||||
Total investments in securities, at value (cost—$1,364,630,505; $1,000,995,789; $497,464,259; $512,595,599; $1,110,665,648; $405,449,553; $142,991,383 and $767,320,553, respectively) | $ | 1,475,677,575 | $ | 1,274,296,695 | $ | 536,910,790 | $ | 542,558,790 | |||||||||||
Cash | 862 | 1,315 | 242,825 | 1,061 | |||||||||||||||
Cash collateral on futures | — | — | — | — | |||||||||||||||
Cash collateral for forward foreign currency contracts | — | — | — | — | |||||||||||||||
Cash collateral on swap agreements | — | — | — | — | |||||||||||||||
Cash collateral on investments sold short | 18,699,486 | — | — | — | |||||||||||||||
Cash collateral on options | — | — | — | — | |||||||||||||||
Foreign currency, at value (cost—$0; $0; $0; $0; $6,323,871; $2,031,319; $78,113 and $0, respectively) | — | — | — | — | |||||||||||||||
Receivable for investments sold | 2,424,258 | 6,751,024 | 6,656,795 | 4,917,526 | |||||||||||||||
Receivable for investments sold short | 2,435,634 | — | — | — | |||||||||||||||
Receivable for shares of beneficial interest sold | 1,234,170 | 1,258,242 | 512,244 | 452,512 | |||||||||||||||
Receivable for dividends and interest | 1,610,898 | 127,963 | 251,391 | 64,888 | |||||||||||||||
Receivable for variation margin on futures contract | — | — | — | — | |||||||||||||||
Receivable for variation margin on centrally cleared swap agreements | — | — | — | — | |||||||||||||||
Swap agreements, at value | — | — | — | — | |||||||||||||||
Due from broker | — | — | — | — | |||||||||||||||
Unrealized appreciation on forward foreign currency contracts | — | — | — | — | |||||||||||||||
Receivable for cash collateral | — | — | — | — | |||||||||||||||
Receivable for foreign tax reclaims | — | 56,224 | — | — | |||||||||||||||
Other assets | 33,340 | 33,377 | 22,260 | 21,318 | |||||||||||||||
Total assets | 1,502,116,223 | 1,282,524,840 | 544,596,305 | 548,016,095 | |||||||||||||||
Liabilities: | |||||||||||||||||||
Investments sold short, at value (proceeds—$153,770,032; $0; $0; $0; $120,853,331; $0; $0 and $95,610,426, respectively) | 168,986,193 | — | — | — | |||||||||||||||
Payable for cash collateral from securities loaned | 23,779,046 | 2,515,957 | 17,050,926 | 69,914,089 | |||||||||||||||
Payable for investments purchased | 3,667,974 | 2,732,830 | 13,710,793 | 7,348,890 | |||||||||||||||
Payable for shares of beneficial interest repurchased | 1,481,904 | 1,396,236 | 544,558 | 506,343 | |||||||||||||||
Payable to affiliate | 834,461 | 828,196 | 350,379 | 303,209 | |||||||||||||||
Payable for dividend and interest expense on investments sold short | 85,854 | — | — | — | |||||||||||||||
Payable to custodian | 83,373 | 80,671 | 32,891 | 29,812 | |||||||||||||||
Payable for foreign withholding taxes and foreign capital gains taxes | 18 | — | 2,784 | — | |||||||||||||||
Payable for bank loan | — | — | — | — | |||||||||||||||
Deferred foreign capital gain taxes payable | — | — | — | — | |||||||||||||||
Unrealized depreciation on forward foreign currency contracts | — | — | — | — | |||||||||||||||
Due to broker | — | — | — | — | |||||||||||||||
Swap agreements, at value2 | — | — | — | — | |||||||||||||||
Options and swaptions written, at value (premiums received $0; $0; $0; $0; $0; $0; $0 and $1,161,915, respectively) | — | — | — | — | |||||||||||||||
Payable for variation margin on futures contracts | — | — | — | — | |||||||||||||||
Payable for variation margin on centrally cleared swap agreements | — | — | — | — | |||||||||||||||
Accrued expenses and other liabilities | 634,119 | 485,993 | 451,045 | 460,593 | |||||||||||||||
Total liabilities | 199,552,942 | 8,039,883 | 32,143,376 | 78,562,936 |
1 Includes $35,162,957; $119,122,824; $120,493,974; $121,805,358; $56,894,235; $13,433,019; $6,476,400 and $0, respectively, of investments in securities on loan, at value plus accrued interest and dividends, if any.
2 Net upfront payments received by PACE Alternative Strategies Investments was $1,604.
272
PACE Select Advisors Trust
PACE International Equity Investments | PACE International Emerging Markets Equity Investments | PACE Global Real Estate Securities Investments | PACE Alternative Strategies Investments | ||||||||||||||||
Assets: | |||||||||||||||||||
Investments, at value (cost—$1,357,281,505; $965,205,789; $473,644,259; $500,142,599; $1,106,821,648; $401,629,553; $141,041,383 and $633,185,553, respectively)1 | $ | 1,114,088,792 | $ | 410,634,175 | $ | 150,593,572 | $ | 649,054,201 | |||||||||||
Repurchase agreements, at value (cost—$7,349,000; $35,790,000; $23,820,000; $12,453,000; $3,844,000; $3,820,000; $1,950,000 and $134,135,000, respectively) | 3,844,000 | 3,820,000 | 1,950,000 | 134,135,000 | |||||||||||||||
Total investments in securities, at value (cost—$1,364,630,505; $1,000,995,789; $497,464,259; $512,595,599; $1,110,665,648; $405,449,553; $142,991,383 and $767,320,553, respectively) | $ | 1,117,932,792 | $ | 414,454,175 | $ | 152,543,572 | $ | 783,189,201 | |||||||||||
Cash | 1,457 | 552 | 109 | — | |||||||||||||||
Cash collateral on futures | — | — | — | 13,271,403 | |||||||||||||||
Cash collateral for forward foreign currency contracts | — | — | — | 400,000 | |||||||||||||||
Cash collateral on swap agreements | — | — | — | 2,724,548 | |||||||||||||||
Cash collateral on investments sold short | 26,164,501 | — | — | 48,681,479 | |||||||||||||||
Cash collateral on options | — | — | — | 3,853,522 | |||||||||||||||
Foreign currency, at value (cost—$0; $0; $0; $0; $6,323,871; $2,031,319; $78,113 and $0, respectively) | 6,339,818 | 2,054,282 | 84,831 | — | |||||||||||||||
Receivable for investments sold | 1,167,987 | 7,743,632 | 1,244,947 | 12,332,447 | |||||||||||||||
Receivable for investments sold short | — | — | — | — | |||||||||||||||
Receivable for shares of beneficial interest sold | 1,619,859 | 747,543 | 198,207 | 605,956 | |||||||||||||||
Receivable for dividends and interest | 1,803,556 | 1,619,386 | 159,873 | 756,567 | |||||||||||||||
Receivable for variation margin on futures contract | — | — | — | 2,027,073 | |||||||||||||||
Receivable for variation margin on centrally cleared swap agreements | — | — | — | 138,769 | |||||||||||||||
Swap agreements, at value | — | — | — | 1,044,531 | |||||||||||||||
Due from broker | — | — | — | 689,986 | |||||||||||||||
Unrealized appreciation on forward foreign currency contracts | — | — | — | 21,727,768 | |||||||||||||||
Receivable for cash collateral | — | — | — | 820,000 | |||||||||||||||
Receivable for foreign tax reclaims | 1,850,911 | — | 12,558 | 76,179 | |||||||||||||||
Other assets | 28,989 | 20,424 | 9,771 | 30,258 | |||||||||||||||
Total assets | 1,156,909,870 | 426,639,994 | 154,253,868 | 892,369,687 | |||||||||||||||
Liabilities: | |||||||||||||||||||
Investments sold short, at value (proceeds—$153,770,032; $0; $0; $0; $120,853,331; $0; $0 and $95,610,426, respectively) | 123,635,828 | — | — | 99,920,780 | |||||||||||||||
Payable for cash collateral from securities loaned | 55,799,689 | 6,491,485 | — | — | |||||||||||||||
Payable for investments purchased | 1,284,251 | 10,163,208 | 1,228,903 | 11,269,271 | |||||||||||||||
Payable for shares of beneficial interest repurchased | 1,044,075 | 472,227 | 259,966 | 1,939,238 | |||||||||||||||
Payable to affiliate | 699,844 | 342,492 | 59,143 | 821,535 | |||||||||||||||
Payable for dividend and interest expense on investments sold short | 48,260 | — | — | 49,624 | |||||||||||||||
Payable to custodian | 151,167 | 121,096 | 21,474 | 14,071,370 | |||||||||||||||
Payable for foreign withholding taxes and foreign capital gains taxes | 256,354 | 623,270 | 52,492 | 21,851 | |||||||||||||||
Payable for bank loan | 590,108 | — | — | — | |||||||||||||||
Deferred foreign capital gain taxes payable | — | 403,196 | — | — | |||||||||||||||
Unrealized depreciation on forward foreign currency contracts | — | — | — | 19,780,282 | |||||||||||||||
Due to broker | — | — | — | 3,173,699 | |||||||||||||||
Swap agreements, at value2 | — | — | — | 2,294,838 | |||||||||||||||
Options and swaptions written, at value (premiums received $0; $0; $0; $0; $0; $0; $0 and $1,161,915, respectively) | — | — | — | 1,233,207 | |||||||||||||||
Payable for variation margin on futures contracts | — | — | — | 376,889 | |||||||||||||||
Payable for variation margin on centrally cleared swap agreements | — | — | — | 171,603 | |||||||||||||||
Accrued expenses and other liabilities | 649,695 | 485,235 | 350,052 | 445,634 | |||||||||||||||
Total liabilities | 184,159,271 | 19,102,209 | 1,972,030 | 155,569,821 |
See accompanying notes to financial statements.
273
PACE Select Advisors Trust
Statement of assets and liabilities (concluded)
July 31, 2016
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) | $ | 1,182,176,166 | $ | 975,735,346 | $ | 470,333,879 | $ | 459,706,764 | |||||||||||
Accumulated undistributed (distributions in excess of) net investment income | 11,580,610 | 1,024,277 | 890,309 | (1,450,466 | ) | ||||||||||||||
Accumulated net realized gain (loss) | 12,975,595 | 24,424,428 | 1,782,210 | (18,766,330 | ) | ||||||||||||||
Net unrealized appreciation | 95,830,910 | 273,300,906 | 39,446,531 | 29,963,191 | |||||||||||||||
Net assets | $ | 1,302,563,281 | $ | 1,274,484,957 | $ | 512,452,929 | $ | 469,453,159 | |||||||||||
Class A | |||||||||||||||||||
Net assets | $ | 111,715,953 | $ | 42,861,646 | $ | 16,670,051 | $ | 21,911,509 | |||||||||||
Shares outstanding | 5,231,716 | 1,915,665 | 883,665 | 1,528,025 | |||||||||||||||
Net asset value per share | $ | 21.35 | $ | 22.37 | $ | 18.86 | $ | 14.34 | |||||||||||
Maximum offering price per share | $ | 22.59 | $ | 23.67 | $ | 19.96 | $ | 15.17 | |||||||||||
Class C | |||||||||||||||||||
Net assets | $ | 12,689,930 | $ | 3,565,118 | $ | 4,323,842 | $ | 2,753,144 | |||||||||||
Shares outstanding | 594,215 | 190,309 | 270,414 | 244,243 | |||||||||||||||
Net asset value and offering price per share | $ | 21.36 | $ | 18.73 | $ | 15.99 | $ | 11.27 | |||||||||||
Class Y | |||||||||||||||||||
Net assets | $ | 17,870,063 | $ | 13,989,371 | $ | 696,833 | $ | 488,339 | |||||||||||
Shares outstanding | 834,723 | 603,359 | 35,646 | 31,632 | |||||||||||||||
Net asset value, offering price and redemption value per share3 | $ | 21.41 | $ | 23.19 | $ | 19.55 | $ | 15.44 | |||||||||||
Class P | |||||||||||||||||||
Net assets | $ | 1,160,287,335 | $ | 1,214,068,822 | $ | 490,762,203 | $ | 444,300,167 | |||||||||||
Shares outstanding | 54,449,478 | 52,721,310 | 25,358,256 | 29,220,295 | |||||||||||||||
Net asset value, offering price and redemption value per share3 | $ | 21.31 | $ | 23.03 | $ | 19.35 | $ | 15.21 |
3 Assumes shares were held a sufficient period or are otherwise not subject to a redemption fee.
274
PACE Select Advisors Trust
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) | $ | 1,126,940,444 | $ | 475,305,844 | $ | 145,875,654 | $ | 787,595,569 | |||||||||||
Accumulated undistributed (distributions in excess of) net investment income | 13,829,414 | 4,034,632 | 1,421,533 | (6,915,212 | ) | ||||||||||||||
Accumulated net realized gain (loss) | (172,470,206 | ) | (80,442,883 | ) | (4,574,995 | ) | (53,931,798 | ) | |||||||||||
Net unrealized appreciation | 4,450,947 | 8,640,192 | 9,559,646 | 10,051,307 | |||||||||||||||
Net assets | $ | 972,750,599 | $ | 407,537,785 | $ | 152,281,838 | $ | 736,799,866 | |||||||||||
Class A | |||||||||||||||||||
Net assets | $ | 29,788,075 | $ | 3,931,259 | $ | 372,673 | $ | 9,800,113 | |||||||||||
Shares outstanding | 2,099,864 | 344,537 | 46,411 | 933,892 | |||||||||||||||
Net asset value per share | $ | 14.19 | $ | 11.41 | $ | 8.03 | $ | 10.49 | |||||||||||
Maximum offering price per share | $ | 15.02 | $ | 12.07 | $ | 8.50 | $ | 11.10 | |||||||||||
Class C | |||||||||||||||||||
Net assets | $ | 2,230,140 | $ | 1,337,241 | $ | 319,126 | $ | 12,397,709 | |||||||||||
Shares outstanding | 160,684 | 127,136 | 41,522 | 1,248,597 | |||||||||||||||
Net asset value and offering price per share | $ | 13.88 | $ | 10.52 | $ | 7.69 | $ | 9.93 | |||||||||||
Class Y | |||||||||||||||||||
Net assets | $ | 15,899,586 | $ | 7,922,829 | $ | 25,387 | $ | 1,925,917 | |||||||||||
Shares outstanding | 1,124,350 | 688,355 | 3,267 | 184,788 | |||||||||||||||
Net asset value, offering price and redemption value per share3 | $ | 14.14 | $ | 11.51 | $ | 7.77 | $ | 10.42 | |||||||||||
Class P | |||||||||||||||||||
Net assets | $ | 924,832,798 | $ | 394,346,456 | $ | 151,564,652 | $ | 712,676,127 | |||||||||||
Shares outstanding | 65,549,996 | 34,448,331 | 19,528,888 | 68,674,436 | |||||||||||||||
Net asset value, offering price and redemption value per share3 | $ | 14.11 | $ | 11.45 | $ | 7.76 | $ | 10.38 |
See accompanying notes to financial statements.
275
PACE Select Advisors Trust
Statement of operations
For the year ended July 31, 2016
PACE Government Money Market Investments | PACE Mortgage-Backed Securities Fixed Income Investments | PACE Intermediate Fixed Income Investments | PACE Strategic Fixed Income Investments | ||||||||||||||||
Investment income: | |||||||||||||||||||
Dividends | $ | — | $ | — | $ | 12,971 | $ | 509,962 | |||||||||||
Interest (net of foreign withholding taxes of $0; $3,723; $0; $0; $0; $15,963 and $0, respectively) | 542,855 | 12,694,696 | 9,507,932 | 32,338,797 | |||||||||||||||
Securities lending income (includes $0; $0; $25,211; $28,664; $0; $2,370 and $83,191, respectively earned from an affiliated entity) | — | — | 37,331 | 17,531 | |||||||||||||||
542,855 | 12,694,696 | 9,558,234 | 32,866,290 | ||||||||||||||||
Expenses: | |||||||||||||||||||
Investment management and administration fees | 692,313 | 3,234,844 | 2,259,268 | 5,323,049 | |||||||||||||||
Service fees–Class A | — | 113,532 | 47,485 | 32,991 | |||||||||||||||
Service and distribution fees–Class C | — | 93,305 | 13,494 | 81,485 | |||||||||||||||
Transfer agency and related services fees | 828,698 | 853,994 | 668,109 | 926,876 | |||||||||||||||
Custody and accounting fees | 19,341 | 220,988 | 210,907 | 506,245 | |||||||||||||||
Professional fees | 124,999 | 166,469 | 208,160 | 226,786 | |||||||||||||||
Reports and notices to shareholders | 134,584 | 53,923 | 48,113 | 81,639 | |||||||||||||||
State registration fees | 30,064 | 54,936 | 52,990 | 58,495 | |||||||||||||||
Trustees' fees | 25,457 | 31,165 | 29,348 | 38,095 | |||||||||||||||
Insurance expense | 5,375 | 14,667 | 11,894 | �� | 25,315 | ||||||||||||||
Interest expense | — | 5,093 | 1,728 | 544,930 | |||||||||||||||
Other expenses | 32,874 | 45,405 | 35,025 | 46,995 | |||||||||||||||
1,893,705 | 4,888,321 | 3,586,521 | 7,892,901 | ||||||||||||||||
Fee waivers and/or expense reimbursements by investment manager and administrator | (1,370,692 | ) | (938,847 | ) | (621,421 | ) | (809,457 | ) | |||||||||||
Net expenses | 523,013 | 3,949,474 | 2,965,100 | 7,083,444 | |||||||||||||||
Net investment income | 19,842 | 8,745,222 | 6,593,134 | 25,782,846 | |||||||||||||||
Net realized and unrealized gains (losses) from investment activities: | |||||||||||||||||||
Net realized gains (losses) from: | |||||||||||||||||||
Investments | 3,848 | 14,848,106 | 1,972,453 | 1,645,324 | |||||||||||||||
Futures | — | 32,753 | 190,528 | (221,124 | ) | ||||||||||||||
Options and swaptions written | — | 1,292,171 | 418,794 | 3,017,365 | |||||||||||||||
Investments sold short | — | (322,113 | ) | — | — | ||||||||||||||
Swap agreements | — | (5,226,436 | ) | (604,504 | ) | (3,114,511 | ) | ||||||||||||
Forward foreign currency contracts | — | — | 125,946 | 1,586,627 | |||||||||||||||
Foreign currency transactions | — | — | (76,357 | ) | (942,397 | ) | |||||||||||||
Net realized gain (loss) | 3,848 | 10,624,481 | 2,026,860 | 1,971,284 | |||||||||||||||
Net change in unrealized appreciation/depreciation of: | |||||||||||||||||||
Investments | — | 1,456,715 | 5,538,085 | 38,361,697 | |||||||||||||||
Futures | — | — | (623,927 | ) | 2,876,960 | ||||||||||||||
Options and swaptions written | — | (424,896 | ) | (34,217 | ) | 85,940 | |||||||||||||
Investments sold short | — | 1,561,240 | 22,750 | — | |||||||||||||||
Swap agreements | — | (1,549,237 | ) | (394,232 | ) | (17,987,352 | ) | ||||||||||||
Forward foreign currency contracts | — | — | (123,539 | ) | (2,732,657 | ) | |||||||||||||
Other assets and liabilities denominated in foreign currency | — | — | 152,167 | 135,194 | |||||||||||||||
Net change in unrealized appreciation/depreciation | — | 1,043,822 | 4,537,087 | 20,739,782 | |||||||||||||||
Net realized and unrealized gain (loss) from investment activities | 3,848 | 11,668,303 | 6,563,947 | 22,711,066 | |||||||||||||||
Net increase in net assets resulting from operations | $ | 23,690 | $ | 20,413,525 | $ | 13,157,081 | $ | 48,493,912 |
276
PACE Select Advisors Trust
PACE Municipal Fixed Income Investments | PACE International Fixed Income Investments | PACE High Yield Investments | |||||||||||||
Investment income: | |||||||||||||||
Dividends | $ | — | $ | — | $ | 13,539 | |||||||||
Interest (net of foreign withholding taxes of $0; $3,723; $0; $0; $0; $15,963 and $0, respectively) | 13,709,010 | 13,066,026 | 28,143,916 | ||||||||||||
Securities lending income (includes $0; $0; $25,211; $28,664; $0; $2,370 and $83,191, respectively earned from an affiliated entity) | — | 3,041 | 183,252 | ||||||||||||
13,709,010 | 13,069,067 | 28,340,707 | |||||||||||||
Expenses: | |||||||||||||||
Investment management and administration fees | 2,180,686 | 4,116,206 | 3,268,258 | ||||||||||||
Service fees–Class A | 130,174 | 110,127 | 10,910 | ||||||||||||
Service and distribution fees–Class C | 78,198 | 22,448 | 26,063 | ||||||||||||
Transfer agency and related services fees | 153,259 | 915,854 | 712,984 | ||||||||||||
Custody and accounting fees | 139,765 | 504,741 | 173,584 | ||||||||||||
Professional fees | 139,946 | 181,002 | 190,424 | ||||||||||||
Reports and notices to shareholders | 18,700 | 65,910 | 59,788 | ||||||||||||
State registration fees | 55,381 | 56,228 | 51,994 | ||||||||||||
Trustees' fees | 29,131 | 31,721 | 28,956 | ||||||||||||
Insurance expense | 11,154 | 15,350 | 11,793 | ||||||||||||
Interest expense | — | 14,366 | — | ||||||||||||
Other expenses | 31,813 | 39,429 | 32,248 | ||||||||||||
2,968,207 | 6,073,382 | 4,567,002 | |||||||||||||
Fee waivers and/or expense reimbursements by investment manager and administrator | (291,138 | ) | (1,272,295 | ) | (716,802 | ) | |||||||||
Net expenses | 2,677,069 | 4,801,087 | 3,850,200 | ||||||||||||
Net investment income | 11,031,941 | 8,267,980 | 24,490,507 | ||||||||||||
Net realized and unrealized gains (losses) from investment activities: | |||||||||||||||
Net realized gains (losses) from: | |||||||||||||||
Investments | 2,852,505 | (14,907,835 | ) | (13,136,555 | ) | ||||||||||
Futures | — | (817,298 | ) | — | |||||||||||
Options and swaptions written | — | — | — | ||||||||||||
Investments sold short | — | — | — | ||||||||||||
Swap agreements | — | — | — | ||||||||||||
Forward foreign currency contracts | — | 16,245,903 | 4,106,711 | ||||||||||||
Foreign currency transactions | — | (593,522 | ) | (1,285,480 | ) | ||||||||||
Net realized gain (loss) | 2,852,505 | (72,752 | ) | (10,315,324 | ) | ||||||||||
Net change in unrealized appreciation/depreciation of: | |||||||||||||||
Investments | 11,910,940 | 49,150,268 | 6,114,333 | ||||||||||||
Futures | — | 2,780,452 | — | ||||||||||||
Options and swaptions written | — | — | — | ||||||||||||
Investments sold short | — | — | — | ||||||||||||
Swap agreements | — | — | — | ||||||||||||
Forward foreign currency contracts | — | 1,309,834 | (2,389,290 | ) | |||||||||||
Other assets and liabilities denominated in foreign currency | — | 179,129 | 1,172,658 | ||||||||||||
Net change in unrealized appreciation/depreciation | 11,910,940 | 53,419,683 | 4,897,701 | ||||||||||||
Net realized and unrealized gain (loss) from investment activities | 14,763,445 | 53,346,931 | (5,417,623 | ) | |||||||||||
Net increase in net assets resulting from operations | $ | 25,795,386 | $ | 61,614,911 | $ | 19,072,884 |
See accompanying notes to financial statements.
277
PACE Select Advisors Trust
Statement of operations (concluded)
For the year ended July 31, 2016
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 $108,168; $116,556; $30,216; $20,699; $2,816,785; $1,306,045; $118,603 and $192,912, respectively) | $ | 39,871,705 | $ | 11,842,302 | $ | 7,946,271 | $ | 2,240,445 | |||||||||||
Interest (net of foreign withholding taxes of $0; $0; $0; $0; $0; $0; $36 and $28,500, respectively) | 1,687 | 2,894 | 1,098 | 1,309 | |||||||||||||||
Securities lending income (includes $10,409; $9,375; $33,804; $74,421; $56,194; $16,315; $2,704 and $0, respectively earned from an affiliated entity) | 54,247 | 191,805 | 305,269 | 465,474 | |||||||||||||||
39,927,639 | 12,037,001 | 8,252,638 | 2,707,228 | ||||||||||||||||
Expenses: | |||||||||||||||||||
Investment management and administration fees | 9,596,332 | 10,006,458 | 4,018,604 | 3,796,596 | |||||||||||||||
Service fees–Class A | 277,764 | 105,760 | 41,366 | 56,522 | |||||||||||||||
Service and distribution fees–Class C | 128,622 | 36,602 | 42,929 | 30,895 | |||||||||||||||
Transfer agency and related services fees | 1,098,318 | 1,046,728 | 993,318 | 997,517 | |||||||||||||||
Dividend expense, interest expense and other borrowing costs for investments sold short | 4,321,583 | — | — | — | |||||||||||||||
Custody and accounting fees | 502,444 | 500,652 | 195,977 | 185,117 | |||||||||||||||
Professional fees | 162,419 | 144,338 | 140,620 | 144,429 | |||||||||||||||
Reports and notices to shareholders | 110,942 | 76,037 | 64,658 | 82,981 | |||||||||||||||
State registration fees | 61,013 | 60,454 | 52,996 | 52,905 | |||||||||||||||
Trustees' fees | 45,191 | 45,126 | 30,511 | 29,988 | |||||||||||||||
Insurance expense | 38,657 | 38,377 | 15,011 | 14,611 | |||||||||||||||
Interest expense | 1,576 | 623 | — | 22 | |||||||||||||||
Other expenses | 52,984 | 54,657 | 35,541 | 34,369 | |||||||||||||||
16,397,845 | 12,115,812 | 5,631,531 | 5,425,952 | ||||||||||||||||
Fee waivers and/or expense reimbursements by investment manager and administrator | (161,095 | ) | (96,315 | ) | — | (208,959 | ) | ||||||||||||
Recoupment of fees waived or expenses previously reimbursed | — | — | — | 441 | |||||||||||||||
Net expenses | 16,236,750 | 12,019,497 | 5,631,531 | 5,217,434 | |||||||||||||||
Net investment income | 23,690,889 | 17,504 | 2,621,107 | (2,510,206 | ) | ||||||||||||||
Net realized and unrealized gains (losses) from investment activities: | |||||||||||||||||||
Net realized gains from: | |||||||||||||||||||
Investments (net of foreign tax expense of $0; $0; $0; $0; $0; $73,155; $0 and $0, respectively) | 19,152,114 | 51,721,018 | 9,611,148 | 8,739,120 | |||||||||||||||
Futures | — | — | — | — | |||||||||||||||
Options and swaptions written | — | — | — | — | |||||||||||||||
Investments sold short | 12,356,779 | — | — | — | |||||||||||||||
Swap agreements | — | — | — | — | |||||||||||||||
Forward foreign currency contracts | — | — | — | — | |||||||||||||||
Foreign currency transactions | (1,549 | ) | — | (415 | ) | — | |||||||||||||
Net realized gain (loss) | 31,507,344 | 51,721,018 | 9,610,733 | 8,739,120 | |||||||||||||||
Net change in unrealized appreciation/depreciation of: | |||||||||||||||||||
Investments (net of change in deferred foreign capital gains taxes of $0; $0; $0; $0; $0; $167,025; $0; $0, respectively) | (10,767,650 | ) | (46,533,169 | ) | (5,331,431 | ) | (70,434,920 | ) | |||||||||||
Futures | — | — | — | — | |||||||||||||||
Options and swaptions written | — | — | — | — | |||||||||||||||
Investments sold short | (9,849,528 | ) | — | — | — | ||||||||||||||
Swap agreements | — | — | — | — | |||||||||||||||
Forward foreign currency contracts | — | — | — | — | |||||||||||||||
Other assets and liabilities denominated in foreign currency | 1 | — | — | — | |||||||||||||||
Net change in unrealized appreciation/depreciation | (20,617,177 | ) | (46,533,169 | ) | (5,331,431 | ) | (70,434,920 | ) | |||||||||||
Net realized and unrealized gain (loss) from investment activities | 10,890,167 | 5,187,849 | 4,279,302 | (61,695,800 | ) | ||||||||||||||
Net increase in net assets resulting from operations | $ | 34,581,056 | $ | 5,205,353 | $ | 6,900,409 | $ | (64,206,006 | ) |
278
PACE Select Advisors Trust
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 $108,168; $116,556; $30,216; $20,699; $2,816,785; $1,306,045; $118,603 and $192,912, respectively) | $ | 32,862,247 | $ | 10,196,132 | $ | 4,604,468 | $ | 7,351,446 | |||||||||||
Interest (net of foreign withholding taxes of $0; $0; $0; $0; $0; $0; $36 and $28,500, respectively) | 494 | — | 2 | 3,489,230 | |||||||||||||||
Securities lending income (includes $10,409; $9,375; $33,804; $74,421; $56,194; $16,315; $2,704 and $0, respectively earned from an affiliated entity) | 635,545 | 170,949 | 15,178 | — | |||||||||||||||
33,498,286 | 10,367,081 | 4,619,648 | 10,840,676 | ||||||||||||||||
Expenses: | |||||||||||||||||||
Investment management and administration fees | 8,637,594 | 4,226,549 | 1,131,011 | 10,720,564 | |||||||||||||||
Service fees–Class A | 74,995 | 9,747 | 843 | 21,395 | |||||||||||||||
Service and distribution fees–Class C | 24,298 | 13,359 | 3,136 | 112,402 | |||||||||||||||
Transfer agency and related services fees | 1,011,103 | 922,280 | 689,410 | 571,089 | |||||||||||||||
Dividend expense, interest expense and other borrowing costs for investments sold short | 4,326,190 | — | 1,227 | 1,127,616 | |||||||||||||||
Custody and accounting fees | 926,811 | 711,831 | 102,662 | 544,236 | |||||||||||||||
Professional fees | 193,904 | 188,392 | 142,761 | 349,728 | |||||||||||||||
Reports and notices to shareholders | 65,105 | 63,226 | 62,167 | 64,232 | |||||||||||||||
State registration fees | 59,021 | 55,044 | 48,435 | 68,604 | |||||||||||||||
Trustees' fees | 39,405 | 28,327 | 23,705 | 35,946 | |||||||||||||||
Insurance expense | 28,457 | 11,775 | 4,034 | 20,930 | |||||||||||||||
Interest expense | 356 | 1,407 | 132 | 111,846 | |||||||||||||||
Other expenses | 67,785 | 53,167 | 39,712 | 75,912 | |||||||||||||||
15,455,024 | 6,285,104 | 2,249,235 | 13,824,500 | ||||||||||||||||
Fee waivers and/or expense reimbursements by investment manager and administrator | (323,033 | ) | (365,020 | ) | (547,380 | ) | (559,058 | ) | |||||||||||
Recoupment of fees waived or expenses previously reimbursed | — | — | — | — | |||||||||||||||
Net expenses | 15,131,991 | 5,920,084 | 1,701,855 | 13,265,442 | |||||||||||||||
Net investment income | 18,366,295 | 4,446,997 | 2,917,793 | (2,424,766 | ) | ||||||||||||||
Net realized and unrealized gains (losses) from investment activities: | |||||||||||||||||||
Net realized gains from: | |||||||||||||||||||
Investments (net of foreign tax expense of $0; $0; $0; $0; $0; $73,155; $0 and $0, respectively) | (21,367,854 | ) | (52,871,492 | ) | 3,176,505 | (30,673,943 | ) | ||||||||||||
Futures | — | — | — | (5,679,069 | ) | ||||||||||||||
Options and swaptions written | — | — | — | (79,941 | ) | ||||||||||||||
Investments sold short | 6,309,055 | — | — | 16,879,118 | |||||||||||||||
Swap agreements | — | — | — | (919,693 | ) | ||||||||||||||
Forward foreign currency contracts | (179,527 | ) | 24,550 | — | 3,345,468 | ||||||||||||||
Foreign currency transactions | (131,075 | ) | (430,397 | ) | (48,811 | ) | 1,001,891 | ||||||||||||
Net realized gain (loss) | (15,369,401 | ) | (53,277,339 | ) | 3,127,694 | (16,126,169 | ) | ||||||||||||
Net change in unrealized appreciation/depreciation of: | |||||||||||||||||||
Investments (net of change in deferred foreign capital gains taxes of $0; $0; $0; $0; $0; $167,025; $0; $0, respectively) | (50,740,473 | ) | 35,371,387 | 7,765,326 | 16,679,596 | ||||||||||||||
Futures | — | — | — | (904,081 | ) | ||||||||||||||
Options and swaptions written | — | — | — | (980,778 | ) | ||||||||||||||
Investments sold short | 1,553,123 | — | — | (13,424,666 | ) | ||||||||||||||
Swap agreements | — | — | — | (4,686,436 | ) | ||||||||||||||
Forward foreign currency contracts | — | — | — | (3,730,074 | ) | ||||||||||||||
Other assets and liabilities denominated in foreign currency | 30,557 | 230,094 | 11,884 | 85,680 | |||||||||||||||
Net change in unrealized appreciation/depreciation | (49,156,793 | ) | 35,601,481 | 7,777,210 | (6,960,759 | ) | |||||||||||||
Net realized and unrealized gain (loss) from investment activities | (64,526,194 | ) | (17,675,858 | ) | 10,904,904 | (23,086,928 | ) | ||||||||||||
Net increase in net assets resulting from operations | $ | (46,159,899 | ) | $ | (13,228,861 | ) | $ | 13,822,697 | $ | (25,511,694 | ) |
See accompanying notes to financial statements.
279
PACE Select Advisors Trust
Statement of changes in net assets
PACE Government 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, | |||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||
From operations: | |||||||||||||||||||||||||||
Net investment income | $ | 19,842 | $ | 21,010 | $ | 8,745,222 | $ | 5,992,694 | $ | 6,593,134 | $ | 6,624,471 | |||||||||||||||
Net realized gain | 3,848 | 1,868 | 10,624,481 | 8,741,969 | 2,026,860 | 2,913,021 | |||||||||||||||||||||
Net change in unrealized appreciation/depreciation | — | — | 1,043,822 | 2,058,413 | 4,537,087 | (1,438,203 | ) | ||||||||||||||||||||
Net increase in net assets resulting from operations | 23,690 | 22,878 | 20,413,525 | 16,793,076 | 13,157,081 | 8,099,289 | |||||||||||||||||||||
Dividends and distributions to shareholders from: | |||||||||||||||||||||||||||
Net investment income–Class A | — | — | (1,006,916 | ) | (917,339 | ) | (263,010 | ) | (300,471 | ) | |||||||||||||||||
Net investment income–Class C | — | — | (215,766 | ) | (164,106 | ) | (15,891 | ) | (16,086 | ) | |||||||||||||||||
Net investment income–Class Y | — | — | (1,146,926 | ) | (959,832 | ) | (6,942 | ) | (8,135 | ) | |||||||||||||||||
Net investment income–Class P | (19,842 | ) | (21,010 | ) | (10,342,027 | ) | (8,706,791 | ) | (6,640,312 | ) | (6,417,370 | ) | |||||||||||||||
Net realized gains–Class A | — | — | — | — | (131,084 | ) | (20,543 | ) | |||||||||||||||||||
Net realized gains–Class C | — | — | — | — | (12,463 | ) | (1,929 | ) | |||||||||||||||||||
Net realized gains–Class Y | — | — | — | — | (3,103 | ) | (533 | ) | |||||||||||||||||||
Net realized gains–Class P | (5,106 | ) | — | — | — | (2,790,103 | ) | (393,490 | ) | ||||||||||||||||||
(24,948 | ) | (21,010 | ) | (12,711,635 | ) | (10,748,068 | ) | (9,862,908 | ) | (7,158,557 | ) | ||||||||||||||||
From beneficial interest transactions: | |||||||||||||||||||||||||||
Net proceeds from shares sold | 256,831,799 | 183,206,846 | 108,709,216 | 101,122,463 | 83,092,551 | 73,336,307 | |||||||||||||||||||||
Cost of shares repurchased | (242,373,374 | ) | (226,742,570 | ) | (146,802,261 | ) | (144,471,645 | ) | (89,117,955 | ) | (103,080,896 | ) | |||||||||||||||
Proceeds from dividends reinvested | 16,261 | 11,852 | 11,603,725 | 9,890,764 | 8,939,336 | 6,563,326 | |||||||||||||||||||||
Net increase (decrease) in net assets from beneficial interest transactions | 14,474,686 | (43,523,872 | ) | (26,489,320 | ) | (33,458,418 | ) | 2,913,932 | (23,181,263 | ) | |||||||||||||||||
Redemption fees | — | — | 508 | 22,140 | 379 | 11,937 | |||||||||||||||||||||
Net increase (decrease) in net assets | 14,473,428 | (43,522,004 | ) | (18,786,922 | ) | (27,391,270 | ) | 6,208,484 | (22,228,594 | ) | |||||||||||||||||
Net assets: | |||||||||||||||||||||||||||
Beginning of year | 168,503,117 | 212,025,121 | 529,422,325 | 556,813,595 | 425,665,925 | 447,894,519 | |||||||||||||||||||||
End of year | $ | 182,976,545 | $ | 168,503,117 | $ | 510,635,403 | $ | 529,422,325 | $ | 431,874,409 | $ | 425,665,925 | |||||||||||||||
Accumulated undistributed net investment income | $ | — | $ | — | $ | 591,116 | $ | 395,813 | $ | 1,920,184 | $ | 1,930,867 |
280
PACE Select Advisors Trust
PACE Strategic Fixed Income Investments | PACE Municipal Fixed Income Investments | ||||||||||||||||||
For the years ended July 31, | For the years ended July 31, | ||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||
From operations: | |||||||||||||||||||
Net investment income | $ | 25,782,846 | $ | 25,326,554 | $ | 11,031,941 | $ | 10,736,582 | |||||||||||
Net realized gain | 1,971,284 | 37,741,831 | 2,852,505 | 2,565,096 | |||||||||||||||
Net change in unrealized appreciation/depreciation | 20,739,782 | (36,203,343 | ) | 11,910,940 | (3,970,786 | ) | |||||||||||||
Net increase in net assets resulting from operations | 48,493,912 | 26,865,042 | 25,795,386 | 9,330,892 | |||||||||||||||
Dividends and distributions to shareholders from: | |||||||||||||||||||
Net investment income–Class A | (352,102 | ) | (583,597 | ) | (1,292,121 | ) | (1,412,028 | ) | |||||||||||
Net investment income–Class C | (234,401 | ) | (261,237 | ) | (207,063 | ) | (208,822 | ) | |||||||||||
Net investment income–Class Y | (71,126 | ) | (76,482 | ) | (2,267 | ) | (2,202 | ) | |||||||||||
Net investment income–Class P | (24,915,797 | ) | (23,904,856 | ) | (9,532,273 | ) | (9,111,979 | ) | |||||||||||
Net realized gains–Class A | (91,459 | ) | — | (255,997 | ) | — | |||||||||||||
Net realized gains–Class C | (76,636 | ) | — | (52,887 | ) | — | |||||||||||||
Net realized gains–Class Y | (17,865 | ) | — | (411 | ) | — | |||||||||||||
Net realized gains–Class P | (6,082,217 | ) | — | (1,721,048 | ) | — | |||||||||||||
(31,841,603 | ) | (24,826,172 | ) | (13,064,067 | ) | (10,735,031 | ) | ||||||||||||
From beneficial interest transactions: | |||||||||||||||||||
Net proceeds from shares sold | 130,723,266 | 154,923,974 | 64,243,911 | 85,015,800 | |||||||||||||||
Cost of shares repurchased | (215,705,066 | ) | (210,830,699 | ) | (85,572,394 | ) | (92,511,215 | ) | |||||||||||
Proceeds from dividends reinvested | 29,443,249 | 23,047,188 | 11,190,519 | 9,095,650 | |||||||||||||||
Net increase (decrease) in net assets from beneficial interest transactions | (55,538,551 | ) | (32,859,537 | ) | (10,137,964 | ) | 1,600,235 | ||||||||||||
Redemption fees | 872 | 20,193 | 106 | 13,231 | |||||||||||||||
Net increase (decrease) in net assets | (38,885,370 | ) | (30,800,474 | ) | 2,593,461 | 209,327 | |||||||||||||
Net assets: | |||||||||||||||||||
Beginning of year | 921,367,489 | 952,167,963 | 409,548,619 | 409,339,292 | |||||||||||||||
End of year | $ | 882,482,119 | $ | 921,367,489 | $ | 412,142,080 | $ | 409,548,619 | |||||||||||
Accumulated undistributed net investment income | $ | 11,568,318 | $ | 10,481,898 | $ | — | $ | 1,551 |
See accompanying notes to financial statements.
281
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, | |||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||
From operations: | |||||||||||||||||||||||||||
Net investment income (loss) | $ | 8,267,980 | $ | 9,801,696 | $ | 24,490,507 | $ | 24,212,951 | $ | 23,690,889 | $ | 16,775,073 | |||||||||||||||
Net realized gain (loss) | (72,752 | ) | 10,782,783 | (10,315,324 | ) | (2,618,545 | ) | 31,507,344 | 164,991,691 | ||||||||||||||||||
Net change in unrealized appreciation/depreciation | 53,419,683 | (50,024,939 | ) | 4,897,701 | (31,613,085 | ) | (20,617,177 | ) | (89,288,676 | ) | |||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 61,614,911 | (29,440,460 | ) | 19,072,884 | (10,018,679 | ) | 34,581,056 | 92,478,088 | |||||||||||||||||||
Dividends and distributions to shareholders from: | |||||||||||||||||||||||||||
Net investment income–Class A | (1,270,967 | ) | (1,135,389 | ) | (224,536 | ) | (597,629 | ) | (1,600,974 | ) | (1,525,090 | ) | |||||||||||||||
Net investment income–Class C | (71,865 | ) | (78,518 | ) | (163,374 | ) | (220,431 | ) | (76,124 | ) | (66,854 | ) | |||||||||||||||
Net investment income–Class Y | (125,618 | ) | (115,532 | ) | (53,220 | ) | (65,184 | ) | (296,865 | ) | (293,672 | ) | |||||||||||||||
Net investment income–Class P | (15,380,077 | ) | (11,525,447 | ) | (20,953,766 | ) | (23,460,551 | ) | (19,469,455 | ) | (18,788,240 | ) | |||||||||||||||
Net realized gains–Class A | — | — | — | (95,677 | ) | (12,437,876 | ) | (14,137,477 | ) | ||||||||||||||||||
Net realized gains–Class C | — | — | — | (69,906 | ) | (1,467,118 | ) | (1,652,069 | ) | ||||||||||||||||||
Net realized gains–Class Y | — | — | — | (17,723 | ) | (1,945,097 | ) | (2,152,081 | ) | ||||||||||||||||||
Net realized gains–Class P | — | — | — | (6,529,594 | ) | (127,599,656 | ) | (138,591,954 | ) | ||||||||||||||||||
Return of capital–Class A | — | (495,088 | ) | (30,687 | ) | — | — | — | |||||||||||||||||||
Return of capital–Class C | — | (28,081 | ) | (23,690 | ) | — | — | — | |||||||||||||||||||
Return of capital–Class Y | — | (54,520 | ) | (7,822 | ) | — | — | — | |||||||||||||||||||
Return of capital–Class P | — | (5,859,791 | ) | (3,115,953 | ) | — | — | — | |||||||||||||||||||
(16,848,527 | ) | (19,292,366 | ) | (24,573,048 | ) | (31,056,695 | ) | (164,893,165 | ) | (177,207,437 | ) | ||||||||||||||||
From beneficial interest transactions: | |||||||||||||||||||||||||||
Net proceeds from shares sold | 70,938,828 | 95,553,557 | 68,242,265 | 90,672,586 | 114,721,376 | 136,265,977 | |||||||||||||||||||||
Cost of shares repurchased | (120,107,244 | ) | (109,511,562 | ) | (103,053,687 | ) | (102,686,648 | ) | (244,023,149 | ) | (267,096,055 | ) | |||||||||||||||
Proceeds from dividends reinvested | 15,504,917 | 17,870,563 | 22,662,079 | 28,870,493 | 155,548,126 | 168,243,107 | |||||||||||||||||||||
Net increase (decrease) in net assets from beneficial interest transactions | (33,663,499 | ) | 3,912,558 | (12,149,343 | ) | 16,856,431 | 26,246,353 | 37,413,029 | |||||||||||||||||||
Redemption fees | 94 | 13,889 | 110 | 16,853 | 230 | 23,523 | |||||||||||||||||||||
Net increase (decrease) in net assets | 11,102,979 | (44,806,379 | ) | (17,649,397 | ) | (24,202,090 | ) | (104,065,526 | ) | (47,292,797 | ) | ||||||||||||||||
Net assets: | |||||||||||||||||||||||||||
Beginning of year | 554,351,747 | 599,158,126 | 438,423,304 | 462,625,394 | 1,406,628,807 | 1,453,921,604 | |||||||||||||||||||||
End of year | $ | 565,454,726 | $ | 554,351,747 | $ | 420,773,907 | $ | 438,423,304 | $ | 1,302,563,281 | $ | 1,406,628,807 | |||||||||||||||
Accumulated undistributed (distributions in excess of) net investment income | $ | (12,797,911 | ) | $ | (10,592,878 | ) | $ | (1,221,874 | ) | $ | (2,903,233 | ) | $ | 11,580,610 | $ | 10,191,229 |
282
PACE Select Advisors Trust
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, | ||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||
From operations: | |||||||||||||||||||
Net investment income (loss) | $ | 17,504 | $ | (4,719,801 | ) | $ | 2,621,107 | $ | 3,541,731 | ||||||||||
Net realized gain (loss) | 51,721,018 | 235,265,227 | 9,610,733 | 48,483,218 | |||||||||||||||
Net change in unrealized appreciation/depreciation | (46,533,169 | ) | (35,032,795 | ) | (5,331,431 | ) | (11,509,145 | ) | |||||||||||
Net increase (decrease) in net assets resulting from operations | 5,205,353 | 195,512,631 | 6,900,409 | 40,515,804 | |||||||||||||||
Dividends and distributions to shareholders from: | |||||||||||||||||||
Net investment income–Class A | — | — | (98,376 | ) | (24,600 | ) | |||||||||||||
Net investment income–Class C | — | — | — | — | |||||||||||||||
Net investment income–Class Y | — | (35,724 | ) | (6,601 | ) | (4,681 | ) | ||||||||||||
Net investment income–Class P | — | (2,888,553 | ) | (3,438,922 | ) | (2,389,968 | ) | ||||||||||||
Net realized gains–Class A | (6,743,462 | ) | (5,095,957 | ) | (1,705,018 | ) | (2,280,425 | ) | |||||||||||
Net realized gains–Class C | (683,839 | ) | (525,244 | ) | (511,308 | ) | (685,859 | ) | |||||||||||
Net realized gains–Class Y | (2,275,236 | ) | (1,776,075 | ) | (90,053 | ) | (113,176 | ) | |||||||||||
Net realized gains–Class P | (190,560,995 | ) | (147,942,352 | ) | (47,631,702 | ) | (62,244,809 | ) | |||||||||||
Return of capital–Class A | — | — | — | — | |||||||||||||||
Return of capital–Class C | — | — | — | — | |||||||||||||||
Return of capital–Class Y | — | — | — | — | |||||||||||||||
Return of capital–Class P | — | — | — | — | |||||||||||||||
(200,263,532 | ) | (158,263,905 | ) | (53,481,980 | ) | (67,743,518 | ) | ||||||||||||
From beneficial interest transactions: | |||||||||||||||||||
Net proceeds from shares sold | 107,834,177 | 132,259,675 | 57,217,306 | 68,158,767 | |||||||||||||||
Cost of shares repurchased | (255,468,632 | ) | (272,549,191 | ) | (99,345,849 | ) | (104,177,834 | ) | |||||||||||
Proceeds from dividends reinvested | 190,898,503 | 151,450,541 | 51,029,897 | 64,935,600 | |||||||||||||||
Net increase (decrease) in net assets from beneficial interest transactions | 43,264,048 | 11,161,025 | 8,901,354 | 28,916,533 | |||||||||||||||
Redemption fees | 169 | 23,600 | 202 | 9,886 | |||||||||||||||
Net increase (decrease) in net assets | (151,793,962 | ) | 48,433,351 | (37,680,015 | ) | 1,698,705 | |||||||||||||
Net assets: | |||||||||||||||||||
Beginning of year | 1,426,278,919 | 1,377,845,568 | 550,132,944 | 548,434,239 | |||||||||||||||
End of year | $ | 1,274,484,957 | $ | 1,426,278,919 | $ | 512,452,929 | $ | 550,132,944 | |||||||||||
Accumulated undistributed (distributions in excess of) net investment income | $ | 1,024,277 | $ | 1,878,487 | $ | 890,309 | $ | 1,948,504 |
See accompanying notes to financial statements.
283
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, | |||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||
From operations: | |||||||||||||||||||||||||||
Net investment income (loss) | $ | (2,510,206 | ) | $ | (3,413,348 | ) | $ | 18,366,295 | $ | 17,906,329 | $ | 4,446,997 | $ | 5,475,929 | |||||||||||||
Net realized gain (loss) | 8,739,120 | 79,663,106 | (15,369,401 | ) | 143,550 | (53,277,339 | ) | (6,360,744 | ) | ||||||||||||||||||
Net change in unrealized appreciation/depreciation | (70,434,920 | ) | 28,257,828 | (49,156,793 | ) | (30,875,378 | ) | 35,601,481 | (59,652,368 | ) | |||||||||||||||||
Net increase (decrease) in net assets resulting from operations | (64,206,006 | ) | 104,507,586 | (46,159,899 | ) | (12,825,499 | ) | (13,228,861 | ) | (60,537,183 | ) | ||||||||||||||||
Dividends and distributions to shareholders from: | |||||||||||||||||||||||||||
Net investment income–Class A | — | — | (432,357 | ) | (775,097 | ) | (12,585 | ) | (31,788 | ) | |||||||||||||||||
Net investment income–Class C | — | — | (15,942 | ) | (43,304 | ) | — | (4,650 | ) | ||||||||||||||||||
Net investment income–Class Y | — | — | (296,907 | ) | (574,833 | ) | (80,288 | ) | (130,682 | ) | |||||||||||||||||
Net investment income–Class P | — | — | (16,216,509 | ) | (26,674,739 | ) | (3,935,905 | ) | (5,205,232 | ) | |||||||||||||||||
Net realized gains–Class A | (5,003,773 | ) | (3,951,907 | ) | — | — | — | — | |||||||||||||||||||
Net realized gains–Class C | (822,961 | ) | (684,644 | ) | — | — | — | — | |||||||||||||||||||
Net realized gains–Class Y | (139,471 | ) | (102,429 | ) | — | — | — | — | |||||||||||||||||||
Net realized gains–Class P | (93,077,502 | ) | (70,594,409 | ) | — | — | — | — | |||||||||||||||||||
(99,043,707 | ) | (75,333,389 | ) | (16,961,715 | ) | (28,067,973 | ) | (4,028,778 | ) | (5,372,352 | ) | ||||||||||||||||
From beneficial interest transactions: | |||||||||||||||||||||||||||
Net proceeds from shares sold | 58,421,325 | 64,464,065 | 125,619,598 | 155,528,359 | 87,114,243 | 97,397,616 | |||||||||||||||||||||
Cost of shares repurchased | (98,839,401 | ) | (106,447,993 | ) | (177,781,640 | ) | (178,023,630 | ) | (99,001,183 | ) | (85,432,969 | ) | |||||||||||||||
Proceeds from dividends reinvested | 94,257,227 | 72,340,950 | 15,838,350 | 26,584,568 | 3,797,286 | 5,120,906 | |||||||||||||||||||||
Net increase (decrease) in net assets from beneficial interest transactions | 53,839,151 | 30,357,022 | (36,323,692 | ) | 4,089,297 | (8,089,654 | ) | 17,085,553 | |||||||||||||||||||
Redemption fees | 202 | 10,275 | 154 | 20,422 | 66 | 13,777 | |||||||||||||||||||||
Net increase (decrease) in net assets | (109,410,360 | ) | 59,541,494 | (99,445,152 | ) | (36,783,753 | ) | (25,347,227 | ) | (48,810,205 | ) | ||||||||||||||||
Net assets: | |||||||||||||||||||||||||||
Beginning of year | 578,863,519 | 519,322,025 | 1,072,195,751 | 1,108,979,504 | 432,885,012 | 481,695,217 | |||||||||||||||||||||
End of year | $ | 469,453,159 | $ | 578,863,519 | $ | 972,750,599 | $ | 1,072,195,751 | $ | 407,537,785 | $ | 432,885,012 | |||||||||||||||
Accumulated undistributed (distributions in excess of) net investment income | $ | (1,450,466 | ) | $ | 158,706 | $ | 13,829,414 | $ | 11,988,150 | $ | 4,034,632 | $ | 4,022,237 |
284
PACE Select Advisors Trust
PACE Global Real Estate Securities Investments | PACE Alternative Strategies Investments | ||||||||||||||||||
For the years ended July 31, | For the years ended July 31, | ||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||
From operations: | |||||||||||||||||||
Net investment income (loss) | $ | 2,917,793 | $ | 2,791,214 | $ | (2,424,766 | ) | $ | (2,996,642 | ) | |||||||||
Net realized gain (loss) | 3,127,694 | 19,080,873 | (16,126,169 | ) | 45,960,291 | ||||||||||||||
Net change in unrealized appreciation/depreciation | 7,777,210 | (17,829,865 | ) | (6,960,759 | ) | (8,120,779 | ) | ||||||||||||
Net increase (decrease) in net assets resulting from operations | 13,822,697 | 4,042,222 | (25,511,694 | ) | 34,842,870 | ||||||||||||||
Dividends and distributions to shareholders from: | |||||||||||||||||||
Net investment income–Class A | (8,823 | ) | — | (176,054 | ) | — | |||||||||||||
Net investment income–Class C | (7,358 | ) | (7,950 | ) | (310,096 | ) | (13,698 | ) | |||||||||||
Net investment income–Class Y | (7,174 | ) | (9,820 | ) | (553,606 | ) | (37,288 | ) | |||||||||||
Net investment income–Class P | (4,510,322 | ) | (5,232,448 | ) | (25,341,043 | ) | (7,024,459 | ) | |||||||||||
Net realized gains–Class A | — | — | — | — | |||||||||||||||
Net realized gains–Class C | — | — | — | — | |||||||||||||||
Net realized gains–Class Y | — | — | — | — | |||||||||||||||
Net realized gains–Class P | — | — | — | — | |||||||||||||||
(4,533,677 | ) | (5,250,218 | ) | (26,380,799 | ) | (7,075,445 | ) | ||||||||||||
From beneficial interest transactions: | |||||||||||||||||||
Net proceeds from shares sold | 17,256,164 | 26,400,418 | 224,976,743 | 280,363,346 | |||||||||||||||
Cost of shares repurchased | (27,584,055 | ) | (32,397,785 | ) | (262,735,339 | ) | (212,517,090 | ) | |||||||||||
Proceeds from dividends reinvested | 4,240,406 | 4,972,531 | 24,526,498 | 6,583,602 | |||||||||||||||
Net increase (decrease) in net assets from beneficial interest transactions | (6,087,485 | ) | (1,024,836 | ) | (13,232,098 | ) | 74,429,858 | ||||||||||||
Redemption fees | 126 | 2,727 | 179 | 21,748 | |||||||||||||||
Net increase (decrease) in net assets | 3,201,661 | (2,230,105 | ) | (65,124,412 | ) | 102,219,031 | |||||||||||||
Net assets: | |||||||||||||||||||
Beginning of year | 149,080,177 | 151,310,282 | 801,924,278 | 699,705,247 | |||||||||||||||
End of year | $ | 152,281,838 | $ | 149,080,177 | $ | 736,799,866 | $ | 801,924,278 | |||||||||||
Accumulated undistributed (distributions in excess of) net investment income | $ | 1,421,533 | $ | 1,526,729 | $ | (6,915,212 | ) | $ | 20,453,216 |
See accompanying notes to financial statements.
285
PACE Select Advisors Trust
Statement of cash flows
For the year ended July 31, 2016
PACE Large Co Value Equity Investments | |||||||
Cash flows from operating activities | |||||||
Net increase in net assets resulting from operations | $ | 34,581,056 | |||||
Adjustments to reconcile net increase in net assets resulting from operations to net cash used for operating activities: | |||||||
Purchases of long-term investments | (651,089,264 | ) | |||||
Purchases to cover investments sold short | (186,735,018 | ) | |||||
Proceeds from disposition of long-term investments | 758,799,798 | ||||||
Sales of investments sold short | 171,829,367 | ||||||
Net purchases from short-term investments | 24,578,273 | ||||||
Net realized (gains) from investments in securities | (19,152,114 | ) | |||||
Net realized losses from investments sold short | (12,356,779 | ) | |||||
Net change in unrealized appreciation/depreciation of investments in securities | 10,767,650 | ||||||
Net change in unrealized appreciation/depreciation of investments sold short | 9,849,528 | ||||||
Changes in assets and liabilities: | |||||||
(Increase) decrease in assets: | |||||||
Cash collateral on deposit at custodian for securities loaned | (558,807 | ) | |||||
Receivable for interest | (319,116 | ) | |||||
Receivable for foreign tax reclaims | 2,282 | ||||||
Other assets | 11,432 | ||||||
Increase (decrease) in liabilities: | |||||||
Payable for cash collateral from securities loaned | (1,355,466 | ) | |||||
Payable to affiliate | (75,422 | ) | |||||
Payable for foreign withholding taxes and foreign capital gains taxes | 18 | ||||||
Payable for dividends and interest on investments sold short | (68,775 | ) | |||||
Payable to custodian | 33,942 | ||||||
Accrued expenses and other liabilities | 107,062 | ||||||
Net cash provided from operating activities | 138,849,647 | ||||||
Cash flows from financing activities | |||||||
Proceeds from shares sold | 114,160,250 | ||||||
Cost of shares repurchased | (243,664,226 | ) | |||||
Dividends paid to shareholders | (9,345,039 | ) | |||||
Redemption fees | 230 | ||||||
Net cash used in financing activities | (138,848,785 | ) | |||||
Net increase in cash and foreign currency | 862 | ||||||
Cash and foreign currency, beginning of year | — | ||||||
Cash and foreign currency, end of year | $ | 862 | |||||
Supplemental disclosure of cash flow information: | |||||||
Reinvestment of dividends | $ | (155,548,126 | ) | ||||
Cash paid during the year for interest | $ | 1,576 |
See accompanying notes to financial statements.
286
PACE Select Advisors Trust
Statement of cash flows (concluded)
For the year ended July 31, 2016
PACE International Equity Investments | |||||||
Cash flows from operating activities | |||||||
Net decrease in net assets resulting from operations | $ | (46,159,899 | ) | ||||
Adjustments to reconcile net decrease in net assets resulting from operations to net cash provided from operating activities: | |||||||
Purchases of long-term investments | (604,418,331 | ) | |||||
Purchases to cover investments sold short | (179,834,268 | ) | |||||
Proceeds from disposition of long-term investments | 635,978,144 | ||||||
Sales of investments sold short | 182,906,608 | ||||||
Net purchases from short-term investments | 7,528,866 | ||||||
Net realized losses from investments in securities | 21,367,854 | ||||||
Net realized (gains) from investments sold short | (6,309,055 | ) | |||||
Net change in unrealized appreciation/depreciation of investments in securities | 50,740,473 | ||||||
Net change in unrealized appreciation/depreciation of investments sold short | (1,553,123 | ) | |||||
Changes in assets and liabilities: | |||||||
(Increase) decrease in assets: | |||||||
Cash collateral on investments sold short | 16,370,263 | ||||||
Receivable for interest and dividends | (30,143 | ) | |||||
Receivable for foreign tax reclaims | (490,289 | ) | |||||
Other assets | 10,748 | ||||||
Increase (decrease) in liabilities: | |||||||
Payable for cash collateral from securities loaned | (16,481,129 | ) | |||||
Payable for foreign withholding taxes and foreign capital gains taxes | 25,010 | ||||||
Payable for bank loan | 590,108 | ||||||
Payable to affiliate | (83,049 | ) | |||||
Payable for dividends and interest on investments sold short | (107,242 | ) | |||||
Payable to custodian | 66,252 | ||||||
Accrued expenses and other liabilities | 75,759 | ||||||
Net cash provided from operating activities | 60,193,557 | ||||||
Cash flows from financing activities | |||||||
Proceeds from shares sold | 124,848,263 | ||||||
Cost of shares repurchased | (177,702,565 | ) | |||||
Dividends paid to shareholders | (1,123,365 | ) | |||||
Redemption fees | 154 | ||||||
Net cash used in financing activities | (53,977,513 | ) | |||||
Net increase in cash and foreign currency | 6,216,044 | ||||||
Cash and foreign currency, beginning of year | 125,231 | ||||||
Cash and foreign currency, end of year | $ | 6,341,275 | |||||
Supplemental disclosure of cash flow information: | |||||||
Reinvestment of dividends | $ | (15,838,350 | ) | ||||
Cash paid during the year for interest | $ | 356 |
See accompanying notes to financial statements.
287
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288
PACE Government Money Market Investments
Financial highlights
Selected financial data throughout each year is presented below:
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
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 | ||||||||||||||||||
Net realized gain | 0.0001 | — | 0.0001 | — | — | ||||||||||||||||||
Net increase from operations | 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 | — | — | ||||||||||||||||
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 | % | 0.01 | % | 0.01 | %3 | 0.01 | % | 0.01 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.96 | % | 0.93 | % | 0.91 | % | 0.88 | % | 0.89 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.26 | % | 0.14 | % | 0.14 | % | 0.19 | % | 0.19 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 182,977 | $ | 168,503 | $ | 212,025 | $ | 309,842 | $ | 337,091 |
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 fees were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions.
3 In August 2013, UBS AM made a voluntary cash payment of $2,340 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 credit crisis of 2008. Payment from investment advisor had no impact on the Portfolio's total investment return and represents less than $0.0005 per share.
See accompanying notes to financial statements
289
PACE Mortgage-Backed Securities Fixed Income Investments
Financial highlights
Selected data for a share of beneficial interest outstanding throughout each year is presented below:
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%.
Class A
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.96 | $ | 12.82 | $ | 12.62 | $ | 13.46 | $ | 13.31 | |||||||||||||
Net investment income1 | 0.19 | 0.11 | 0.15 | 0.11 | 0.22 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.29 | 0.26 | 0.32 | (0.39 | ) | 0.34 | |||||||||||||||||
Net increase (decrease) from operations | 0.48 | 0.37 | 0.47 | (0.28 | ) | 0.56 | |||||||||||||||||
Dividends from net investment income | (0.29 | ) | (0.23 | ) | (0.27 | ) | (0.31 | ) | (0.34 | ) | |||||||||||||
Distributions from net realized gains | — | — | — | (0.25 | ) | (0.07 | ) | ||||||||||||||||
Total dividends and distributions | (0.29 | ) | (0.23 | ) | (0.27 | ) | (0.56 | ) | (0.41 | ) | |||||||||||||
Net asset value, end of year | $ | 13.15 | $ | 12.96 | $ | 12.82 | $ | 12.62 | $ | 13.46 | |||||||||||||
Total investment return2 | 3.76 | % | 2.86 | % | 3.74 | % | (2.29 | )% | 4.34 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.07 | %3 | 1.07 | % | 1.07 | % | 1.05 | % | 1.05 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.97 | %3 | 0.97 | % | 0.97 | % | 0.99 | % | 1.02 | % | |||||||||||||
Net investment income | 1.47 | % | 0.87 | % | 1.17 | % | 0.83 | % | 1.68 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 41,260 | $ | 47,860 | $ | 59,834 | $ | 66,554 | $ | 78,764 | |||||||||||||
Portfolio turnover | 1,383 | % | 1,360 | % | 1,117 | % | 1,336 | % | 1,046 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.96 | $ | 12.82 | $ | 12.62 | $ | 13.47 | $ | 13.31 | |||||||||||||
Net investment income1 | 0.23 | 0.15 | 0.18 | 0.14 | 0.26 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.29 | 0.25 | 0.32 | (0.40 | ) | 0.35 | |||||||||||||||||
Net increase (decrease) from operations | 0.52 | 0.40 | 0.50 | (0.26 | ) | 0.61 | |||||||||||||||||
Dividends from net investment income | (0.32 | ) | (0.26 | ) | (0.30 | ) | (0.34 | ) | (0.38 | ) | |||||||||||||
Distributions from net realized gains | — | — | — | (0.25 | ) | (0.07 | ) | ||||||||||||||||
Total dividends and distributions | (0.32 | ) | (0.26 | ) | (0.30 | ) | (0.59 | ) | (0.45 | ) | |||||||||||||
Net asset value, end of year | $ | 13.16 | $ | 12.96 | $ | 12.82 | $ | 12.62 | $ | 13.47 | |||||||||||||
Total investment return2 | 4.03 | % | 3.12 | % | 4.00 | % | (2.05 | )% | 4.60 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.89 | %3 | 0.86 | % | 0.87 | % | 0.85 | % | 0.86 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.72 | %3 | 0.72 | % | 0.72 | % | 0.74 | % | 0.77 | % | |||||||||||||
Net investment income | 1.73 | % | 1.13 | % | 1.42 | % | 1.08 | % | 1.92 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 51,823 | $ | 46,071 | $ | 47,959 | $ | 57,567 | $ | 61,428 | |||||||||||||
Portfolio turnover | 1,383 | % | 1,360 | % | 1,117 | % | 1,336 | % | 1,046 | % |
290
PACE Mortgage-Backed Securities Fixed Income Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.97 | $ | 12.84 | $ | 12.63 | $ | 13.48 | $ | 13.32 | |||||||||||||
Net investment income1 | 0.13 | 0.05 | 0.09 | 0.04 | 0.16 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.30 | 0.24 | 0.32 | (0.40 | ) | 0.34 | |||||||||||||||||
Net increase (decrease) from operations | 0.43 | 0.29 | 0.41 | (0.36 | ) | 0.50 | |||||||||||||||||
Dividends from net investment income | (0.23 | ) | (0.16 | ) | (0.20 | ) | (0.24 | ) | (0.27 | ) | |||||||||||||
Distributions from net realized gains | — | — | — | (0.25 | ) | (0.07 | ) | ||||||||||||||||
Total dividends and distributions | (0.23 | ) | (0.16 | ) | (0.20 | ) | (0.49 | ) | (0.34 | ) | |||||||||||||
Net asset value, end of year | $ | 13.17 | $ | 12.97 | $ | 12.84 | $ | 12.63 | $ | 13.48 | |||||||||||||
Total investment return2 | 3.32 | % | 2.27 | % | 3.29 | % | (2.78 | )% | 3.81 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.60 | %3 | 1.59 | % | 1.59 | % | 1.56 | % | 1.56 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.47 | %3 | 1.47 | % | 1.47 | % | 1.49 | % | 1.52 | % | |||||||||||||
Net investment income | 0.97 | % | 0.37 | % | 0.67 | % | 0.33 | % | 1.19 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 12,299 | $ | 12,887 | $ | 13,958 | $ | 16,907 | $ | 20,710 | |||||||||||||
Portfolio turnover | 1,383 | % | 1,360 | % | 1,117 | % | 1,336 | % | 1,046 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.96 | $ | 12.83 | $ | 12.63 | $ | 13.47 | $ | 13.32 | |||||||||||||
Net investment income1 | 0.22 | 0.15 | 0.18 | 0.14 | 0.26 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.30 | 0.24 | 0.32 | (0.39 | ) | 0.34 | |||||||||||||||||
Net increase (decrease) from operations | 0.52 | 0.39 | 0.50 | (0.25 | ) | 0.60 | |||||||||||||||||
Dividends from net investment income | (0.32 | ) | (0.26 | ) | (0.30 | ) | (0.34 | ) | (0.38 | ) | |||||||||||||
Distributions from net realized gains | — | — | — | (0.25 | ) | (0.07 | ) | ||||||||||||||||
Total dividends and distributions | (0.32 | ) | (0.26 | ) | (0.30 | ) | (0.59 | ) | (0.45 | ) | |||||||||||||
Net asset value, end of year | $ | 13.16 | $ | 12.96 | $ | 12.83 | $ | 12.63 | $ | 13.47 | |||||||||||||
Total investment return2 | 4.10 | % | 3.04 | % | 4.00 | % | (1.97 | )% | 4.52 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.91 | %3 | 0.91 | % | 0.90 | % | 0.86 | % | 0.85 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.72 | %3 | 0.72 | % | 0.72 | % | 0.74 | % | 0.77 | % | |||||||||||||
Net investment income | 1.72 | % | 1.13 | % | 1.41 | % | 1.08 | % | 1.93 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 405,253 | $ | 422,604 | $ | 435,063 | $ | 447,362 | $ | 453,841 | |||||||||||||
Portfolio turnover | 1,383 | % | 1,360 | % | 1,117 | % | 1,336 | % | 1,046 | % |
See accompanying notes to financial statements.
291
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, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.36 | $ | 12.33 | $ | 12.20 | $ | 12.42 | $ | 12.15 | |||||||||||||
Net investment income1 | 0.16 | 0.16 | 0.14 | 0.12 | 0.21 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.18 | 0.04 | 0.14 | (0.22 | ) | 0.28 | |||||||||||||||||
Net increase (decrease) from operations | 0.34 | 0.20 | 0.28 | (0.10 | ) | 0.49 | |||||||||||||||||
Dividends from net investment income | (0.17 | ) | (0.16 | ) | (0.15 | ) | (0.12 | ) | (0.22 | ) | |||||||||||||
Distributions from net realized gains | (0.08 | ) | (0.01 | ) | — | — | — | ||||||||||||||||
Total dividends and distributions | (0.25 | ) | (0.17 | ) | (0.15 | ) | (0.12 | ) | (0.22 | ) | |||||||||||||
Net asset value, end of year | $ | 12.45 | $ | 12.36 | $ | 12.33 | $ | 12.20 | $ | 12.42 | |||||||||||||
Total investment return2 | 2.85 | % | 1.64 | % | 2.30 | % | (0.93 | )% | 4.16 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.03 | %3 | 1.03 | %3 | 1.03 | % | 0.99 | %3 | 1.00 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.93 | %3 | 0.93 | %3 | 0.93 | % | 0.93 | %3 | 0.93 | % | |||||||||||||
Net investment income | 1.31 | % | 1.26 | % | 1.18 | % | 0.98 | % | 1.73 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 18,681 | $ | 19,932 | $ | 28,080 | $ | 31,355 | $ | 36,665 | |||||||||||||
Portfolio turnover | 284 | % | 476 | % | 827 | % | 818 | % | 398 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.36 | $ | 12.33 | $ | 12.20 | $ | 12.43 | $ | 12.15 | |||||||||||||
Net investment income1 | 0.19 | 0.19 | 0.18 | 0.15 | 0.24 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.18 | 0.04 | 0.13 | (0.23 | ) | 0.29 | |||||||||||||||||
Net increase (decrease) from operations | 0.37 | 0.23 | 0.31 | (0.08 | ) | 0.53 | |||||||||||||||||
Dividends from net investment income | (0.20 | ) | (0.19 | ) | (0.18 | ) | (0.15 | ) | (0.25 | ) | |||||||||||||
Distributions from net realized gains | (0.08 | ) | (0.01 | ) | — | — | — | ||||||||||||||||
Total dividends and distributions | (0.28 | ) | (0.20 | ) | (0.18 | ) | (0.15 | ) | (0.25 | ) | |||||||||||||
Net asset value, end of year | $ | 12.45 | $ | 12.36 | $ | 12.33 | $ | 12.20 | $ | 12.43 | |||||||||||||
Total investment return2 | 3.11 | % | 1.90 | % | 2.56 | % | (0.68 | )% | 4.42 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.94 | %3 | 0.86 | %3 | 1.05 | % | 0.89 | %3 | 0.88 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.68 | %3 | 0.68 | %3 | 0.68 | % | 0.68 | %3 | 0.68 | % | |||||||||||||
Net investment income | 1.56 | % | 1.51 | % | 1.43 | % | 1.24 | % | 1.99 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 401 | $ | 444 | $ | 543 | $ | 674 | $ | 990 | |||||||||||||
Portfolio turnover | 284 | % | 476 | % | 827 | % | 818 | % | 398 | % |
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%.
292
PACE Intermediate Fixed Income Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.37 | $ | 12.35 | $ | 12.22 | $ | 12.44 | $ | 12.17 | |||||||||||||
Net investment income1 | 0.10 | 0.09 | 0.08 | 0.06 | 0.15 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.19 | 0.04 | 0.14 | (0.23 | ) | 0.28 | |||||||||||||||||
Net increase (decrease) from operations | 0.29 | 0.13 | 0.22 | (0.17 | ) | 0.43 | |||||||||||||||||
Dividends from net investment income | (0.11 | ) | (0.10 | ) | (0.09 | ) | (0.05 | ) | (0.16 | ) | |||||||||||||
Distributions from net realized gains | (0.08 | ) | (0.01 | ) | — | — | — | ||||||||||||||||
Total dividends and distributions | (0.19 | ) | (0.11 | ) | (0.09 | ) | (0.05 | ) | (0.16 | ) | |||||||||||||
Net asset value, end of year | $ | 12.47 | $ | 12.37 | $ | 12.35 | $ | 12.22 | $ | 12.44 | |||||||||||||
Total investment return2 | 2.41 | % | 1.05 | % | 1.78 | % | (1.34 | )% | 3.55 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.53 | %3 | 1.53 | %3 | 1.52 | % | 1.49 | %3 | 1.51 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.43 | %3 | 1.43 | %3 | 1.43 | % | 1.43 | %3 | 1.43 | % | |||||||||||||
Net investment income | 0.81 | % | 0.76 | % | 0.68 | % | 0.48 | % | 1.23 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 1,644 | $ | 1,931 | $ | 2,260 | $ | 2,685 | $ | 3,270 | |||||||||||||
Portfolio turnover | 284 | % | 476 | % | 827 | % | 818 | % | 398 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 12.36 | $ | 12.33 | $ | 12.20 | $ | 12.43 | $ | 12.16 | |||||||||||||
Net investment income1 | 0.19 | 0.19 | 0.18 | 0.15 | 0.24 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.18 | 0.04 | 0.13 | (0.23 | ) | 0.28 | |||||||||||||||||
Net increase (decrease) from operations | 0.37 | 0.23 | 0.31 | (0.08 | ) | 0.52 | |||||||||||||||||
Dividends from net investment income | (0.20 | ) | (0.19 | ) | (0.18 | ) | (0.15 | ) | (0.25 | ) | |||||||||||||
Distributions from net realized gains | (0.08 | ) | (0.01 | ) | — | — | — | ||||||||||||||||
Total dividends and distributions | (0.28 | ) | (0.20 | ) | (0.18 | ) | (0.15 | ) | (0.25 | ) | |||||||||||||
Net asset value, end of year | $ | 12.45 | $ | 12.36 | $ | 12.33 | $ | 12.20 | $ | 12.43 | |||||||||||||
Total investment return2 | 3.11 | % | 1.90 | % | 2.56 | % | (0.68 | )% | 4.33 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.83 | %3 | 0.83 | %3 | 0.82 | % | 0.74 | %3 | 0.74 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.68 | %3 | 0.68 | %3 | 0.68 | % | 0.68 | %3 | 0.68 | % | |||||||||||||
Net investment income | 1.56 | % | 1.51 | % | 1.43 | % | 1.22 | % | 1.97 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 411,148 | $ | 403,358 | $ | 417,011 | $ | 415,894 | $ | 421,822 | |||||||||||||
Portfolio turnover | 284 | % | 476 | % | 827 | % | 818 | % | 398 | % |
See accompanying notes to financial statements.
293
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, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 13.93 | $ | 13.90 | $ | 14.16 | $ | 15.29 | $ | 14.55 | |||||||||||||
Net investment income1 | 0.37 | 0.35 | 0.37 | 0.41 | 0.42 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.38 | 0.01 | 0.11 | (0.78 | ) | 1.11 | |||||||||||||||||
Net increase (decrease) from operations | 0.75 | 0.36 | 0.48 | (0.37 | ) | 1.53 | |||||||||||||||||
Dividends from net investment income | (0.37 | ) | (0.33 | ) | (0.28 | ) | (0.43 | ) | (0.52 | ) | |||||||||||||
Distributions from net realized gains | (0.10 | ) | — | (0.37 | ) | (0.33 | ) | (0.27 | ) | ||||||||||||||
Return of capital | — | — | (0.09 | ) | — | — | |||||||||||||||||
Total dividends, distributions, and return of capital | (0.47 | ) | (0.33 | ) | (0.74 | ) | (0.76 | ) | (0.79 | ) | |||||||||||||
Net asset value, end of year | $ | 14.21 | $ | 13.93 | $ | 13.90 | $ | 14.16 | $ | 15.29 | |||||||||||||
Total investment return2 | 5.43 | % | 2.69 | % | 3.51 | % | (2.60 | )% | 10.86 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments, including interest expense | 1.10 | %3 | 1.07 | % | 1.06 | %3 | 1.03 | %3 | 1.04 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including interest expense | 1.01 | %3 | 1.05 | % | 1.06 | %3 | 1.06 | %3,4 | 1.06 | %3,4 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding interest expense | 0.95 | % | 1.03 | % | 1.05 | % | 1.05 | %4 | 1.06 | %4 | |||||||||||||
Net investment income | 2.69 | % | 2.52 | % | 2.63 | % | 2.72 | % | 2.85 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 13,480 | $ | 13,699 | $ | 44,465 | $ | 67,417 | $ | 85,571 | |||||||||||||
Portfolio turnover | 133 | % | 154 | % | 154 | % | 186 | % | 162 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 13.91 | $ | 13.89 | $ | 14.15 | $ | 15.28 | $ | 14.54 | |||||||||||||
Net investment income1 | 0.39 | 0.37 | 0.40 | 0.42 | 0.46 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.38 | 0.02 | 0.12 | (0.76 | ) | 1.10 | |||||||||||||||||
Net increase (decrease) from operations | 0.77 | 0.39 | 0.52 | (0.34 | ) | 1.56 | |||||||||||||||||
Dividends from net investment income | (0.39 | ) | (0.37 | ) | (0.31 | ) | (0.46 | ) | (0.55 | ) | |||||||||||||
Distributions from net realized gains | (0.10 | ) | — | (0.37 | ) | (0.33 | ) | (0.27 | ) | ||||||||||||||
Return of capital | — | — | (0.10 | ) | — | — | |||||||||||||||||
Total dividends, distributions, and return of capital | (0.49 | ) | (0.37 | ) | (0.78 | ) | (0.79 | ) | (0.82 | ) | |||||||||||||
Net asset value, end of year | $ | 14.19 | $ | 13.91 | $ | 13.89 | $ | 14.15 | $ | 15.28 | |||||||||||||
Total investment return2 | 5.68 | % | 2.81 | % | 3.82 | % | (2.38 | )% | 11.10 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments, including interest expense | 0.97 | %3 | 0.93 | % | 0.93 | %3 | 0.90 | %3 | 0.89 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including interest expense | 0.87 | %3 | 0.83 | % | 0.81 | %3 | 0.81 | %3 | 0.81 | %3 | |||||||||||||
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 | 2.82 | % | 2.66 | % | 2.90 | % | 2.80 | % | 3.09 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 2,283 | $ | 2,543 | $ | 3,158 | $ | 3,638 | $ | 5,907 | |||||||||||||
Portfolio turnover | 133 | % | 154 | % | 154 | % | 186 | % | 162 | % |
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.
294
PACE Strategic Fixed Income Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 13.93 | $ | 13.91 | $ | 14.17 | $ | 15.29 | $ | 14.56 | |||||||||||||
Net investment income1 | 0.30 | 0.28 | 0.30 | 0.34 | 0.35 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.39 | 0.01 | 0.11 | (0.78 | ) | 1.10 | |||||||||||||||||
Net increase (decrease) from operations | 0.69 | 0.29 | 0.41 | (0.44 | ) | 1.45 | |||||||||||||||||
Dividends from net investment income | (0.30 | ) | (0.27 | ) | (0.23 | ) | (0.35 | ) | (0.45 | ) | |||||||||||||
Distributions from net realized gains | (0.10 | ) | — | (0.37 | ) | (0.33 | ) | (0.27 | ) | ||||||||||||||
Return of capital | — | — | (0.07 | ) | — | — | |||||||||||||||||
Total dividends, distributions, and return of capital | (0.40 | ) | (0.27 | ) | (0.67 | ) | (0.68 | ) | (0.72 | ) | |||||||||||||
Net asset value, end of year | $ | 14.22 | $ | 13.93 | $ | 13.91 | $ | 14.17 | $ | 15.29 | |||||||||||||
Total investment return2 | 4.98 | % | 2.16 | % | 3.03 | % | (2.99 | )% | 10.25 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments, including interest expense | 1.60 | %3 | 1.54 | % | 1.53 | %3 | 1.51 | %3 | 1.52 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including interest expense | 1.51 | %3 | 1.52 | % | 1.53 | %3 | 1.51 | %3 | 1.52 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding interest expense | 1.45 | % | 1.50 | % | 1.52 | % | 1.51 | % | 1.52 | % | |||||||||||||
Net investment income | 2.19 | % | 1.98 | % | 2.17 | % | 2.26 | % | 2.38 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 10,418 | $ | 11,752 | $ | 15,143 | $ | 20,992 | $ | 21,193 | |||||||||||||
Portfolio turnover | 133 | % | 154 | % | 154 | % | 186 | % | 162 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 13.92 | $ | 13.90 | $ | 14.16 | $ | 15.29 | $ | 14.55 | |||||||||||||
Net investment income1 | 0.40 | 0.38 | 0.40 | 0.44 | 0.46 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.38 | 0.01 | 0.11 | (0.78 | ) | 1.10 | |||||||||||||||||
Net increase (decrease) from operations | 0.78 | 0.39 | 0.51 | (0.34 | ) | 1.56 | |||||||||||||||||
Dividends from net investment income | (0.40 | ) | (0.37 | ) | (0.30 | ) | (0.46 | ) | (0.55 | ) | |||||||||||||
Distributions from net realized gains | (0.10 | ) | — | (0.37 | ) | (0.33 | ) | (0.27 | ) | ||||||||||||||
Return of capital | — | — | (0.10 | ) | — | — | |||||||||||||||||
Total dividends, distributions, and return of capital | (0.50 | ) | (0.37 | ) | (0.77 | ) | (0.79 | ) | (0.82 | ) | |||||||||||||
Net asset value, end of year | $ | 14.20 | $ | 13.92 | $ | 13.90 | $ | 14.16 | $ | 15.29 | |||||||||||||
Total investment return2 | 5.68 | % | 2.91 | % | 3.77 | % | (2.37 | )% | 11.09 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments, including interest expense | 0.88 | %3 | 0.82 | % | 0.81 | %3 | 0.81 | %3 | 0.82 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including interest expense | 0.79 | %3 | 0.80 | % | 0.81 | %3,4 | 0.81 | %3 | 0.81 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding interest expense | 0.72 | % | 0.78 | % | 0.81 | %4 | 0.81 | % | 0.81 | % | |||||||||||||
Net investment income | 2.92 | % | 2.69 | % | 2.90 | % | 2.96 | % | 3.10 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 856,301 | $ | 893,373 | $ | 889,402 | $ | 833,352 | $ | 795,829 | |||||||||||||
Portfolio turnover | 133 | % | 154 | % | 154 | % | 186 | % | 162 | % |
See accompanying notes to financial statements.
295
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, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 13.14 | $ | 13.19 | $ | 12.91 | $ | 13.56 | $ | 13.00 | |||||||||||||
Net investment income1 | 0.33 | 0.32 | 0.34 | 0.33 | 0.37 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.48 | (0.05 | ) | 0.38 | (0.59 | ) | 0.56 | ||||||||||||||||
Net increase (decrease) from operations | 0.81 | 0.27 | 0.72 | (0.26 | ) | 0.93 | |||||||||||||||||
Dividends from net investment income | (0.33 | ) | (0.32 | ) | (0.34 | ) | (0.33 | ) | (0.37 | ) | |||||||||||||
Distributions from net realized gains | (0.07 | ) | — | (0.10 | ) | (0.06 | ) | — | |||||||||||||||
Total dividends and distributions | (0.40 | ) | (0.32 | ) | (0.44 | ) | (0.39 | ) | (0.37 | ) | |||||||||||||
Net asset value, end of year | $ | 13.55 | $ | 13.14 | $ | 13.19 | $ | 12.91 | $ | 13.56 | |||||||||||||
Total investment return2 | 6.26 | % | 2.07 | % | 5.64 | % | (1.99 | )% | 7.21 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.92 | % | 0.92 | % | 0.92 | % | 0.93 | % | 0.95 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.85 | % | 0.90 | %3 | 0.90 | % | 0.91 | % | 0.93 | % | |||||||||||||
Net investment income | 2.49 | % | 2.42 | % | 2.59 | % | 2.47 | % | 2.75 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 51,397 | $ | 53,923 | $ | 63,225 | $ | 63,540 | $ | 71,639 | |||||||||||||
Portfolio turnover | 15 | % | 21 | % | 30 | % | 69 | % | 32 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 13.15 | $ | 13.20 | $ | 12.92 | $ | 13.57 | $ | 13.00 | |||||||||||||
Net investment income1 | 0.36 | 0.35 | 0.37 | 0.37 | 0.40 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.48 | (0.05 | ) | 0.38 | (0.60 | ) | 0.57 | ||||||||||||||||
Net increase (decrease) from operations | 0.84 | 0.30 | 0.75 | (0.23 | ) | 0.97 | |||||||||||||||||
Dividends from net investment income | (0.36 | ) | (0.35 | ) | (0.37 | ) | (0.36 | ) | (0.40 | ) | |||||||||||||
Distributions from net realized gains | (0.07 | ) | — | (0.10 | ) | (0.06 | ) | — | |||||||||||||||
Total dividends and distributions | (0.43 | ) | (0.35 | ) | (0.47 | ) | (0.42 | ) | (0.40 | ) | |||||||||||||
Net asset value, end of year | $ | 13.56 | $ | 13.15 | $ | 13.20 | $ | 12.92 | $ | 13.57 | |||||||||||||
Total investment return2 | 6.49 | % | 2.32 | % | 5.89 | % | (1.74 | )% | 7.56 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.72 | % | 0.70 | % | 0.72 | % | 0.72 | % | 0.73 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.65 | % | 0.65 | % | 0.65 | % | 0.66 | % | 0.68 | % | |||||||||||||
Net investment income | 2.69 | % | 2.67 | % | 2.84 | % | 2.72 | % | 3.00 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 70 | $ | 81 | $ | 83 | $ | 82 | $ | 121 | |||||||||||||
Portfolio turnover | 15 | % | 21 | % | 30 | % | 69 | % | 32 | % |
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.
3 The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Portfolio, not to exceed the expense cap.
296
PACE Municipal Fixed Income Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 13.14 | $ | 13.19 | $ | 12.91 | $ | 13.57 | $ | 13.00 | |||||||||||||
Net investment income1 | 0.26 | 0.25 | 0.27 | 0.26 | 0.30 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.49 | (0.05 | ) | 0.38 | (0.60 | ) | 0.57 | ||||||||||||||||
Net increase (decrease) from operations | 0.75 | 0.20 | 0.65 | (0.34 | ) | 0.87 | |||||||||||||||||
Dividends from net investment income | (0.27 | ) | (0.25 | ) | (0.27 | ) | (0.26 | ) | (0.30 | ) | |||||||||||||
Distributions from net realized gains | (0.07 | ) | — | (0.10 | ) | (0.06 | ) | — | |||||||||||||||
Total dividends and distributions | (0.34 | ) | (0.25 | ) | (0.37 | ) | (0.32 | ) | (0.30 | ) | |||||||||||||
Net asset value, end of year | $ | 13.55 | $ | 13.14 | $ | 13.19 | $ | 12.91 | $ | 13.57 | |||||||||||||
Total investment return2 | 5.72 | % | 1.55 | % | 5.10 | % | (2.56 | )% | 6.76 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.42 | % | 1.42 | % | 1.43 | % | 1.44 | % | 1.45 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.35 | % | 1.40 | % | 1.40 | % | 1.41 | % | 1.43 | % | |||||||||||||
Net investment income | 1.98 | % | 1.92 | % | 2.09 | % | 1.97 | % | 2.25 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 10,537 | $ | 10,388 | $ | 11,033 | $ | 12,336 | $ | 13,684 | |||||||||||||
Portfolio turnover | 15 | % | 21 | % | 30 | % | 69 | % | 32 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 13.15 | $ | 13.19 | $ | 12.91 | $ | 13.57 | $ | 13.00 | |||||||||||||
Net investment income1 | 0.36 | 0.35 | 0.37 | 0.36 | 0.40 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.49 | (0.04 | ) | 0.38 | (0.60 | ) | 0.57 | ||||||||||||||||
Net increase (decrease) from operations | 0.85 | 0.31 | 0.75 | (0.24 | ) | 0.97 | |||||||||||||||||
Dividends from net investment income | (0.37 | ) | (0.35 | ) | (0.37 | ) | (0.36 | ) | (0.40 | ) | |||||||||||||
Distributions from net realized gains | (0.07 | ) | — | (0.10 | ) | (0.06 | ) | — | |||||||||||||||
Total dividends and distributions | (0.44 | ) | (0.35 | ) | (0.47 | ) | (0.42 | ) | (0.40 | ) | |||||||||||||
Net asset value, end of year | $ | 13.56 | $ | 13.15 | $ | 13.19 | $ | 12.91 | $ | 13.57 | |||||||||||||
Total investment return2 | 6.51 | % | 2.39 | % | 5.90 | % | (1.82 | )% | 7.56 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.67 | % | 0.67 | % | 0.68 | % | 0.70 | % | 0.72 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.60 | % | 0.65 | % | 0.65 | % | 0.66 | % | 0.68 | % | |||||||||||||
Net investment income | 2.73 | % | 2.67 | % | 2.84 | % | 2.70 | % | 3.00 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 350,137 | $ | 345,157 | $ | 334,999 | $ | 300,838 | $ | 231,010 | |||||||||||||
Portfolio turnover | 15 | % | 21 | % | 30 | % | 69 | % | 32 | % |
See accompanying notes to financial statements.
297
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, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 9.94 | $ | 10.82 | $ | 10.56 | $ | 11.40 | $ | 12.52 | |||||||||||||
Net investment income1 | 0.14 | 0.16 | 0.19 | 0.19 | 0.25 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 1.00 | (0.71 | ) | 0.34 | (0.72 | ) | (0.56 | ) | |||||||||||||||
Net increase (decrease) from operations | 1.14 | (0.55 | ) | 0.53 | (0.53 | ) | (0.31 | ) | |||||||||||||||
Dividends from net investment income | (0.29 | ) | (0.23 | ) | (0.14 | ) | (0.16 | ) | (0.81 | ) | |||||||||||||
Return of capital | — | (0.10 | ) | (0.13 | ) | (0.15 | ) | — | |||||||||||||||
Total dividends and return of capital | (0.29 | ) | (0.33 | ) | (0.27 | ) | (0.31 | ) | (0.81 | ) | |||||||||||||
Net asset value, end of year | $ | 10.79 | $ | 9.94 | $ | 10.82 | $ | 10.56 | $ | 11.40 | |||||||||||||
Total investment return2 | 11.77 | % | (5.17 | )% | 5.08 | % | (4.80 | )% | (2.33 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.28 | %3 | 1.27 | %3 | 1.28 | %3 | 1.27 | %3 | 1.27 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.04 | %3 | 1.17 | %3 | 1.22 | %3 | 1.22 | %3 | 1.21 | %4 | |||||||||||||
Net investment income | 1.33 | % | 1.56 | % | 1.79 | % | 1.65 | % | 2.16 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 45,624 | $ | 44,725 | $ | 62,808 | $ | 70,052 | $ | 84,661 | |||||||||||||
Portfolio turnover | 38 | % | 40 | % | 46 | % | 63 | % | 40 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 9.91 | $ | 10.79 | $ | 10.54 | $ | 11.37 | $ | 12.49 | |||||||||||||
Net investment income1 | 0.16 | 0.18 | 0.21 | 0.21 | 0.28 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.99 | (0.71 | ) | 0.33 | (0.71 | ) | (0.57 | ) | |||||||||||||||
Net increase (decrease) from operations | 1.15 | (0.53 | ) | 0.54 | (0.50 | ) | (0.29 | ) | |||||||||||||||
Dividends from net investment income | (0.31 | ) | (0.24 | ) | (0.14 | ) | (0.17 | ) | (0.83 | ) | |||||||||||||
Return of capital | — | (0.11 | ) | (0.15 | ) | (0.16 | ) | — | |||||||||||||||
Total dividends and return of capital | (0.31 | ) | (0.35 | ) | (0.29 | ) | (0.33 | ) | (0.83 | ) | |||||||||||||
Net asset value, end of year | $ | 10.75 | $ | 9.91 | $ | 10.79 | $ | 10.54 | $ | 11.37 | |||||||||||||
Total investment return2 | 11.93 | % | (5.00 | )% | 5.23 | % | (4.60 | )% | (2.04 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.07 | %3 | 1.09 | %3 | 1.07 | %3 | 1.09 | %3 | 1.11 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.84 | %3 | 1.00 | %3,4 | 1.00 | %3 | 1.00 | %3 | 1.00 | % | |||||||||||||
Net investment income | 1.54 | % | 1.72 | % | 2.01 | % | 1.88 | % | 2.37 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 4,040 | $ | 4,510 | $ | 5,479 | $ | 5,171 | $ | 4,720 | |||||||||||||
Portfolio turnover | 38 | % | 40 | % | 46 | % | 63 | % | 40 | % |
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.
298
PACE International Fixed Income Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 9.95 | $ | 10.82 | $ | 10.57 | $ | 11.41 | $ | 12.52 | |||||||||||||
Net investment income1 | 0.09 | 0.11 | 0.14 | 0.13 | 0.20 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.99 | (0.70 | ) | 0.33 | (0.72 | ) | (0.56 | ) | |||||||||||||||
Net increase (decrease) from operations | 1.08 | (0.59 | ) | 0.47 | (0.59 | ) | (0.36 | ) | |||||||||||||||
Dividends from net investment income | (0.24 | ) | (0.22 | ) | (0.12 | ) | (0.13 | ) | (0.75 | ) | |||||||||||||
Return of capital | — | (0.06 | ) | (0.10 | ) | (0.12 | ) | — | |||||||||||||||
Total dividends and return of capital | (0.24 | ) | (0.28 | ) | (0.22 | ) | (0.25 | ) | (0.75 | ) | |||||||||||||
Net asset value, end of year | $ | 10.79 | $ | 9.95 | $ | 10.82 | $ | 10.57 | $ | 11.41 | |||||||||||||
Total investment return2 | 11.12 | % | (5.55 | )% | 4.47 | % | (5.26 | )% | (2.72 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.76 | %3 | 1.76 | %3 | 1.76 | %3 | 1.75 | %3 | 1.75 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.52 | %3 | 1.65 | %3 | 1.70 | %3 | 1.69 | %3 | 1.69 | % | |||||||||||||
Net investment income | 0.85 | % | 1.07 | % | 1.31 | % | 1.17 | % | 1.68 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 3,160 | $ | 2,994 | $ | 4,559 | $ | 5,862 | $ | 6,949 | |||||||||||||
Portfolio turnover | 38 | % | 40 | % | 46 | % | 63 | % | 40 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 9.94 | $ | 10.82 | $ | 10.56 | $ | 11.40 | $ | 12.52 | |||||||||||||
Net investment income1 | 0.15 | 0.18 | 0.21 | 0.21 | 0.28 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 1.01 | (0.71 | ) | 0.34 | (0.72 | ) | (0.57 | ) | |||||||||||||||
Net increase (decrease) from operations | 1.16 | (0.53 | ) | 0.55 | (0.51 | ) | (0.29 | ) | |||||||||||||||
Dividends from net investment income | (0.31 | ) | (0.23 | ) | (0.14 | ) | (0.17 | ) | (0.83 | ) | |||||||||||||
Return of capital | — | (0.12 | ) | (0.15 | ) | (0.16 | ) | — | |||||||||||||||
Total dividends and return of capital | (0.31 | ) | (0.35 | ) | (0.29 | ) | (0.33 | ) | (0.83 | ) | |||||||||||||
Net asset value, end of year | $ | 10.79 | $ | 9.94 | $ | 10.82 | $ | 10.56 | $ | 11.40 | |||||||||||||
Total investment return2 | 11.99 | % | (4.99 | )% | 5.31 | % | (4.59 | )% | (2.12 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.08 | %3 | 1.08 | %3 | 1.10 | %3 | 1.10 | %3 | 1.11 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.85 | %3 | 1.00 | %3,4 | 1.00 | %3 | 1.00 | %3 | 1.00 | % | |||||||||||||
Net investment income | 1.52 | % | 1.71 | % | 2.01 | % | 1.88 | % | 2.37 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 512,631 | $ | 502,122 | $ | 526,312 | $ | 467,121 | $ | 430,268 | |||||||||||||
Portfolio turnover | 38 | % | 40 | % | 46 | % | 63 | % | 40 | % |
See accompanying notes to financial statements.
299
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, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 9.70 | $ | 10.62 | $ | 10.41 | $ | 10.15 | $ | 10.39 | |||||||||||||
Net investment income1 | 0.54 | 0.54 | 0.56 | 0.64 | 0.69 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.11 | ) | (0.78 | ) | 0.21 | 0.41 | (0.12 | ) | |||||||||||||||
Net increase (decrease) from operations | 0.43 | (0.24 | ) | 0.77 | 1.05 | 0.57 | |||||||||||||||||
Dividends from net investment income | (0.47 | ) | (0.53 | ) | (0.56 | ) | (0.63 | ) | (0.70 | ) | |||||||||||||
Distributions from net realized gains | — | (0.15 | ) | — | (0.15 | ) | (0.11 | ) | |||||||||||||||
Return of capital | (0.07 | ) | — | — | (0.01 | ) | — | ||||||||||||||||
Total dividends, distributions and return of capital | (0.54 | ) | (0.68 | ) | (0.56 | ) | (0.79 | ) | (0.81 | ) | |||||||||||||
Net asset value, end of year | $ | 9.59 | $ | 9.70 | $ | 10.62 | $ | 10.41 | $ | 10.15 | |||||||||||||
Total investment return2 | 4.88 | % | (2.29 | )% | 7.59 | % | 10.48 | % | 5.97 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.26 | % | 1.26 | % | 1.26 | % | 1.27 | % | 1.32 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.08 | % | 1.25 | % | 1.26 | % | 1.27 | % | 1.33 | %3 | |||||||||||||
Net investment income | 5.84 | % | 5.20 | % | 5.28 | % | 6.07 | % | 7.01 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 3,764 | $ | 5,330 | $ | 23,516 | $ | 23,400 | $ | 22,405 | |||||||||||||
Portfolio turnover | 103 | % | 57 | % | 20 | % | 26 | % | 20 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 9.73 | $ | 10.66 | $ | 10.44 | $ | 10.18 | $ | 10.42 | |||||||||||||
Net investment income1 | 0.56 | 0.55 | 0.59 | 0.66 | 0.72 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.10 | ) | (0.78 | ) | 0.22 | 0.41 | (0.12 | ) | |||||||||||||||
Net increase (decrease) from operations | 0.46 | (0.23 | ) | 0.81 | 1.07 | 0.60 | |||||||||||||||||
Dividends from net investment income | (0.49 | ) | (0.55 | ) | (0.59 | ) | (0.65 | ) | (0.73 | ) | |||||||||||||
Distributions from net realized gains | — | (0.15 | ) | — | (0.15 | ) | (0.11 | ) | |||||||||||||||
Return of capital | (0.08 | ) | — | — | (0.01 | ) | — | ||||||||||||||||
Total dividends, distributions and return of capital | (0.57 | ) | (0.70 | ) | (0.59 | ) | (0.81 | ) | (0.84 | ) | |||||||||||||
Net asset value, end of year | $ | 9.62 | $ | 9.73 | $ | 10.66 | $ | 10.44 | $ | 10.18 | |||||||||||||
Total investment return2 | 5.11 | % | (2.13 | )% | 7.94 | % | 10.74 | % | 6.29 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.03 | % | 1.03 | % | 1.00 | % | 1.02 | % | 1.03 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 0.86 | % | 1.02 | % | 1.00 | % | 1.02 | % | 1.03 | % | |||||||||||||
Net investment income | 6.09 | % | 5.40 | % | 5.54 | % | 6.26 | % | 7.25 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 874 | $ | 1,119 | $ | 1,692 | $ | 1,552 | $ | 572 | |||||||||||||
Portfolio turnover | 103 | % | 57 | % | 20 | % | 26 | % | 20 | % |
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.
300
PACE High Yield Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 9.69 | $ | 10.62 | $ | 10.40 | $ | 10.14 | $ | 10.38 | |||||||||||||
Net investment income1 | 0.49 | 0.48 | 0.51 | 0.59 | 0.64 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.10 | ) | (0.78 | ) | 0.22 | 0.41 | (0.12 | ) | |||||||||||||||
Net increase (decrease) from operations | 0.39 | (0.30 | ) | 0.73 | 1.00 | 0.52 | |||||||||||||||||
Dividends from net investment income | (0.43 | ) | (0.48 | ) | (0.51 | ) | (0.58 | ) | (0.65 | ) | |||||||||||||
Distributions from net realized gains | — | (0.15 | ) | — | (0.15 | ) | (0.11 | ) | |||||||||||||||
Return of capital | (0.07 | ) | — | — | (0.01 | ) | — | ||||||||||||||||
Total dividends, distributions and return of capital | (0.50 | ) | (0.63 | ) | (0.51 | ) | (0.74 | ) | (0.76 | ) | |||||||||||||
Net asset value, end of year | $ | 9.58 | $ | 9.69 | $ | 10.62 | $ | 10.40 | $ | 10.14 | |||||||||||||
Total investment return2 | 4.38 | % | (2.83 | )% | 7.20 | % | 9.98 | % | 5.51 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.75 | % | 1.73 | % | 1.72 | % | 1.73 | % | 1.77 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.57 | % | 1.72 | % | 1.72 | % | 1.73 | % | 1.77 | % | |||||||||||||
Net investment income | 5.36 | % | 4.71 | % | 4.82 | % | 5.61 | % | 6.49 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 3,347 | $ | 3,913 | $ | 5,607 | $ | 5,607 | $ | 5,832 | |||||||||||||
Portfolio turnover | 103 | % | 57 | % | 20 | % | 26 | % | 20 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 9.72 | $ | 10.65 | $ | 10.43 | $ | 10.17 | $ | 10.41 | |||||||||||||
Net investment income1 | 0.56 | 0.55 | 0.58 | 0.66 | 0.72 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.11 | ) | (0.78 | ) | 0.23 | 0.41 | (0.14 | ) | |||||||||||||||
Net increase (decrease) from operations | 0.45 | (0.23 | ) | 0.81 | 1.07 | 0.58 | |||||||||||||||||
Dividends from net investment income | (0.49 | ) | (0.55 | ) | (0.59 | ) | (0.65 | ) | (0.71 | ) | |||||||||||||
Distributions from net realized gains | — | (0.15 | ) | — | (0.15 | ) | (0.11 | ) | |||||||||||||||
Return of capital | (0.07 | ) | — | — | (0.01 | ) | — | ||||||||||||||||
Total dividends, distributions and return of capital | (0.56 | ) | (0.70 | ) | (0.59 | ) | (0.81 | ) | (0.82 | ) | |||||||||||||
Net asset value, end of year | $ | 9.61 | $ | 9.72 | $ | 10.65 | $ | 10.43 | $ | 10.17 | |||||||||||||
Total investment return2 | 5.03 | % | (2.14 | )% | 7.92 | % | 10.70 | % | 6.19 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.11 | % | 1.09 | % | 1.10 | % | 1.11 | % | 1.15 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 0.94 | % | 1.03 | % | 1.03 | % | 1.05 | % | 1.10 | % | |||||||||||||
Net investment income | 6.00 | % | 5.39 | % | 5.50 | % | 6.28 | % | 7.21 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 412,789 | $ | 428,061 | $ | 431,812 | $ | 357,726 | $ | 271,352 | |||||||||||||
Portfolio turnover | 103 | % | 57 | % | 20 | % | 26 | % | 20 | % |
See accompanying notes to financial statements.
301
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, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 23.72 | $ | 25.25 | $ | 22.53 | $ | 17.27 | $ | 17.10 | |||||||||||||
Net investment income1 | 0.34 | 0.23 | 0.30 | 0.23 | 0.24 | ||||||||||||||||||
Net realized and unrealized gains | 0.11 | 1.34 | 2.92 | 5.27 | 0.15 | ||||||||||||||||||
Net increase from operations | 0.45 | 1.57 | 3.22 | 5.50 | 0.39 | ||||||||||||||||||
Dividends from net investment income | (0.32 | ) | (0.30 | ) | (0.21 | ) | (0.24 | ) | (0.22 | ) | |||||||||||||
Distributions from net realized gains | (2.50 | ) | (2.80 | ) | (0.29 | ) | — | — | |||||||||||||||
Total dividends and distributions | (2.82 | ) | (3.10 | ) | (0.50 | ) | (0.24 | ) | (0.22 | ) | |||||||||||||
Net asset value, end of year | $ | 21.35 | $ | 23.72 | $ | 25.25 | $ | 22.53 | $ | 17.27 | |||||||||||||
Total investment return2 | 2.87 | % | 6.23 | % | 14.39 | % | 32.12 | % | 2.41 | % | |||||||||||||
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 | 1.48 | % | 1.48 | % | 1.32 | % | 1.16 | % | 1.18 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.47 | % | 1.47 | % | 1.31 | % | 1.15 | % | 1.18 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.13 | % | 1.13 | % | 1.13 | % | 1.15 | % | 1.18 | % | |||||||||||||
Net investment income | 1.63 | % | 0.94 | % | 1.25 | % | 1.16 | % | 1.43 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 111,716 | $ | 124,198 | $ | 155,480 | $ | 151,583 | $ | 132,417 | |||||||||||||
Portfolio turnover | 65 | % | 97 | % | 71 | % | 71 | % | 62 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 23.78 | $ | 25.32 | $ | 22.60 | $ | 17.32 | $ | 17.15 | |||||||||||||
Net investment income1 | 0.40 | 0.29 | 0.36 | 0.27 | 0.28 | ||||||||||||||||||
Net realized and unrealized gains | 0.11 | 1.35 | 2.91 | 5.29 | 0.15 | ||||||||||||||||||
Net increase from operations | 0.51 | 1.64 | 3.27 | 5.56 | 0.43 | ||||||||||||||||||
Dividends from net investment income | (0.38 | ) | (0.38 | ) | (0.26 | ) | (0.28 | ) | (0.26 | ) | |||||||||||||
Distributions from net realized gains | (2.50 | ) | (2.80 | ) | (0.29 | ) | — | — | |||||||||||||||
Total dividends and distributions | (2.88 | ) | (3.18 | ) | (0.55 | ) | (0.28 | ) | (0.26 | ) | |||||||||||||
Net asset value, end of year | $ | 21.41 | $ | 23.78 | $ | 25.32 | $ | 22.60 | $ | 17.32 | |||||||||||||
Total investment return2 | 3.16 | % | 6.51 | % | 14.62 | % | 32.46 | % | 2.68 | % | |||||||||||||
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 | 1.23 | % | 1.23 | % | 1.07 | % | 0.92 | % | 0.94 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.21 | % | 1.23 | % | 1.06 | % | 0.91 | % | 0.94 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 0.88 | % | 0.88 | % | 0.89 | % | 0.91 | % | 0.94 | % | |||||||||||||
Net investment income | 1.89 | % | 1.19 | % | 1.50 | % | 1.40 | % | 1.66 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 17,870 | $ | 19,593 | $ | 19,765 | $ | 18,536 | $ | 15,642 | |||||||||||||
Portfolio turnover | 65 | % | 97 | % | 71 | % | 71 | % | 62 | % |
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.
302
PACE Large Co Value Equity Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 23.69 | $ | 25.23 | $ | 22.53 | $ | 17.26 | $ | 17.07 | |||||||||||||
Net investment income1 | 0.18 | 0.04 | 0.11 | 0.07 | 0.10 | ||||||||||||||||||
Net realized and unrealized gains | 0.12 | 1.33 | 2.91 | 5.29 | 0.16 | ||||||||||||||||||
Net increase from operations | 0.30 | 1.37 | 3.02 | 5.36 | 0.26 | ||||||||||||||||||
Dividends from net investment income | (0.13 | ) | (0.11 | ) | (0.03 | ) | (0.09 | ) | (0.07 | ) | |||||||||||||
Distributions from net realized gains | (2.50 | ) | (2.80 | ) | (0.29 | ) | — | — | |||||||||||||||
Total dividends and distributions | (2.63 | ) | (2.91 | ) | (0.32 | ) | (0.09 | ) | (0.07 | ) | |||||||||||||
Net asset value, end of year | $ | 21.36 | $ | 23.69 | $ | 25.23 | $ | 22.53 | $ | 17.26 | |||||||||||||
Total investment return2 | 2.11 | % | 5.44 | % | 13.43 | % | 31.13 | % | 1.55 | % | |||||||||||||
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 | 2.26 | % | 2.25 | % | 2.10 | % | 1.95 | % | 1.98 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 2.25 | % | 2.25 | % | 2.09 | % | 1.95 | % | 1.98 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.91 | % | 1.90 | % | 1.92 | % | 1.95 | % | 1.98 | % | |||||||||||||
Net investment income | 0.85 | % | 0.17 | % | 0.47 | % | 0.36 | % | 0.63 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 12,690 | $ | 14,500 | $ | 15,380 | $ | 14,437 | $ | 12,439 | |||||||||||||
Portfolio turnover | 65 | % | 97 | % | 71 | % | 71 | % | 62 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 23.68 | $ | 25.24 | $ | 22.52 | $ | 17.26 | $ | 17.10 | |||||||||||||
Net investment income1 | 0.39 | 0.29 | 0.36 | 0.27 | 0.28 | ||||||||||||||||||
Net realized and unrealized gains | 0.12 | 1.33 | 2.91 | 5.27 | 0.14 | ||||||||||||||||||
Net increase from operations | 0.51 | 1.62 | 3.27 | 5.54 | 0.42 | ||||||||||||||||||
Dividends from net investment income | (0.38 | ) | (0.38 | ) | (0.26 | ) | (0.28 | ) | (0.26 | ) | |||||||||||||
Distributions from net realized gains | (2.50 | ) | (2.80 | ) | (0.29 | ) | — | — | |||||||||||||||
Total dividends and distributions | (2.88 | ) | (3.18 | ) | (0.55 | ) | (0.28 | ) | (0.26 | ) | |||||||||||||
Net asset value, end of year | $ | 21.31 | $ | 23.68 | $ | 25.24 | $ | 22.52 | $ | 17.26 | |||||||||||||
Total investment return2 | 3.17 | % | 6.48 | % | 14.62 | % | 32.47 | % | 2.64 | % | |||||||||||||
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 | 1.24 | % | 1.24 | % | 1.08 | % | 0.91 | % | 0.93 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.23 | % | 1.23 | % | 1.07 | % | 0.91 | % | 0.93 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 0.89 | % | 0.88 | % | 0.90 | % | 0.91 | % | 0.93 | % | |||||||||||||
Net investment income | 1.87 | % | 1.19 | % | 1.49 | % | 1.40 | % | 1.66 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 1,160,287 | $ | 1,248,338 | $ | 1,263,296 | $ | 1,135,014 | $ | 991,824 | |||||||||||||
Portfolio turnover | 65 | % | 97 | % | 71 | % | 71 | % | 62 | % |
See accompanying notes to financial statements.
303
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, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 26.24 | $ | 25.75 | $ | 23.52 | $ | 19.40 | $ | 18.62 | |||||||||||||
Net investment income (loss)1 | (0.05 | ) | (0.15 | ) | 0.07 | 0.08 | (0.00 | )2 | |||||||||||||||
Net realized and unrealized gains | 0.10 | 3.70 | 4.39 | 4.08 | 0.78 | ||||||||||||||||||
Net increase from operations | 0.05 | 3.55 | 4.46 | 4.16 | 0.78 | ||||||||||||||||||
Dividends from net investment income | — | — | (0.04 | ) | (0.04 | ) | — | ||||||||||||||||
Distributions from net realized gains | (3.92 | ) | (3.06 | ) | (2.19 | ) | — | — | |||||||||||||||
Total dividends and distributions | (3.92 | ) | (3.06 | ) | (2.23 | ) | (0.04 | ) | — | ||||||||||||||
Net asset value, end of year | $ | 22.37 | $ | 26.24 | $ | 25.75 | $ | 23.52 | $ | 19.40 | |||||||||||||
Total investment return3 | 0.73 | % | 14.60 | % | 19.60 | % | 21.45 | % | 4.19 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.19 | %4 | 1.18 | %4 | 1.18 | % | 1.21 | % | 1.23 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.18 | %4 | 1.18 | %4 | 1.18 | % | 1.21 | % | 1.23 | % | |||||||||||||
Net investment income (loss) | (0.24 | )% | (0.57 | )% | 0.28 | % | 0.40 | % | (0.02 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 42,862 | $ | 46,777 | $ | 68,207 | $ | 63,108 | $ | 59,435 | |||||||||||||
Portfolio turnover | 33 | % | 48 | % | 40 | % | 76 | % | 54 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 26.98 | $ | 26.39 | $ | 24.06 | $ | 19.86 | $ | 19.05 | |||||||||||||
Net investment income (loss)1 | 0.01 | (0.09 | ) | 0.14 | 0.14 | 0.04 | |||||||||||||||||
Net realized and unrealized gains | 0.12 | 3.80 | 4.48 | 4.17 | 0.81 | ||||||||||||||||||
Net increase from operations | 0.13 | 3.71 | 4.62 | 4.31 | 0.85 | ||||||||||||||||||
Dividends from net investment income | — | (0.06 | ) | (0.10 | ) | (0.11 | ) | (0.04 | ) | ||||||||||||||
Distributions from net realized gains | (3.92 | ) | (3.06 | ) | (2.19 | ) | — | — | |||||||||||||||
Total dividends and distributions | (3.92 | ) | (3.12 | ) | (2.29 | ) | (0.11 | ) | (0.04 | ) | |||||||||||||
Net asset value, end of year | $ | 23.19 | $ | 26.98 | $ | 26.39 | $ | 24.06 | $ | 19.86 | |||||||||||||
Total investment return3 | 1.04 | % | 14.89 | % | 19.86 | % | 21.77 | % | 4.49 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.92 | %4 | 0.92 | %4 | 0.93 | % | 0.96 | % | 0.97 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.91 | %4 | 0.92 | %4 | 0.93 | % | 0.96 | % | 0.97 | % | |||||||||||||
Net investment income (loss) | 0.02 | % | (0.32 | )% | 0.53 | % | 0.66 | % | 0.23 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 13,989 | $ | 16,174 | $ | 15,858 | $ | 14,814 | $ | 13,258 | |||||||||||||
Portfolio turnover | 33 | % | 48 | % | 40 | % | 76 | % | 54 | % |
1 Calculated using the average shares method.
2 Amount represents less than $0.005 per share.
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%.
5 The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Portfolio, not to exceed the expense cap.
304
PACE Large Co Growth Equity Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 22.79 | $ | 22.91 | $ | 21.29 | $ | 17.67 | $ | 17.10 | |||||||||||||
Net investment income (loss)1 | (0.20 | ) | (0.31 | ) | (0.13 | ) | (0.08 | ) | (0.14 | ) | |||||||||||||
Net realized and unrealized gains | 0.06 | 3.25 | 3.94 | 3.70 | 0.71 | ||||||||||||||||||
Net increase from operations | (0.14 | ) | 2.94 | 3.81 | 3.62 | 0.57 | |||||||||||||||||
Dividends from net investment income | — | — | — | — | — | ||||||||||||||||||
Distributions from net realized gains | (3.92 | ) | (3.06 | ) | (2.19 | ) | — | — | |||||||||||||||
Total dividends and distributions | (3.92 | ) | (3.06 | ) | (2.19 | ) | — | — | |||||||||||||||
Net asset value, end of year | $ | 18.73 | $ | 22.79 | $ | 22.91 | $ | 21.29 | $ | 17.67 | |||||||||||||
Total investment return3 | (0.08 | )% | 13.67 | % | 18.54 | % | 20.49 | % | 3.33 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 2.00 | %4 | 1.99 | %4 | 2.00 | % | 2.04 | % | 2.07 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.99 | %4 | 1.99 | %4 | 2.03 | %5 | 2.05 | %5 | 2.05 | % | |||||||||||||
Net investment income (loss) | (1.06 | )% | (1.39 | )% | (0.57 | )% | (0.43 | )% | (0.84 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 3,565 | $ | 4,104 | $ | 4,204 | $ | 4,033 | $ | 3,720 | |||||||||||||
Portfolio turnover | 33 | % | 48 | % | 40 | % | 76 | % | 54 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 26.83 | $ | 26.26 | $ | 23.95 | $ | 19.77 | $ | 18.97 | |||||||||||||
Net investment income (loss)1 | 0.002 | (0.08 | ) | 0.14 | 0.14 | 0.05 | |||||||||||||||||
Net realized and unrealized gains | 0.12 | 3.77 | 4.46 | 4.15 | 0.79 | ||||||||||||||||||
Net increase from operations | 0.12 | 3.69 | 4.60 | 4.29 | 0.84 | ||||||||||||||||||
Dividends from net investment income | — | (0.06 | ) | (0.10 | ) | (0.11 | ) | (0.04 | ) | ||||||||||||||
Distributions from net realized gains | (3.92 | ) | (3.06 | ) | (2.19 | ) | — | — | |||||||||||||||
Total dividends and distributions | (3.92 | ) | (3.12 | ) | (2.29 | ) | (0.11 | ) | (0.04 | ) | |||||||||||||
Net asset value, end of year | $ | 23.03 | $ | 26.83 | $ | 26.26 | $ | 23.95 | $ | 19.77 | |||||||||||||
Total investment return3 | 1.01 | % | 14.88 | % | 19.87 | % | 21.79 | % | 4.48 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.93 | %4 | 0.92 | %4 | 0.93 | % | 0.95 | % | 0.96 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.92 | %4 | 0.92 | %4 | 0.93 | % | 0.95 | % | 0.96 | % | |||||||||||||
Net investment income (loss) | 0.01 | % | (0.32 | )% | 0.53 | % | 0.65 | % | 0.24 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 1,214,069 | $ | 1,359,224 | $ | 1,289,577 | $ | 1,113,514 | $ | 1,036,636 | |||||||||||||
Portfolio turnover | 33 | % | 48 | % | 40 | % | 76 | % | 54 | % |
See accompanying notes to financial statements.
305
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, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 20.81 | $ | 22.05 | $ | 22.19 | $ | 16.61 | $ | 17.05 | |||||||||||||
Net investment income (loss)1 | 0.07 | 0.11 | 0.05 | 0.13 | 0.03 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.08 | 1.41 | 2.67 | 5.55 | (0.47 | ) | |||||||||||||||||
Net increase (decrease) from operations | 0.15 | 1.52 | 2.72 | 5.68 | (0.44 | ) | |||||||||||||||||
Dividends from net investment income | (0.11 | ) | (0.03 | ) | (0.09 | ) | (0.10 | ) | — | ||||||||||||||
Distributions from net realized gains | (1.99 | ) | (2.73 | ) | (2.77 | ) | — | — | |||||||||||||||
Total dividends and distributions | (2.10 | ) | (2.76 | ) | (2.86 | ) | (0.10 | ) | — | ||||||||||||||
Net asset value, end of year | $ | 18.86 | $ | 20.81 | $ | 22.05 | $ | 22.19 | $ | 16.61 | |||||||||||||
Total investment return2 | 1.60 | % | 7.35 | % | 12.74 | % | 34.23 | % | (2.58 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.24 | % | 1.24 | % | 1.24 | % | 1.28 | % | 1.32 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.24 | % | 1.24 | % | 1.24 | % | 1.28 | % | 1.32 | % | |||||||||||||
Net investment income (loss) | 0.41 | % | 0.53 | % | 0.24 | % | 0.68 | % | 0.21 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 16,670 | $ | 18,334 | $ | 32,039 | $ | 31,930 | $ | 27,101 | |||||||||||||
Portfolio turnover | 74 | % | 66 | % | 86 | % | 97 | % | 72 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 21.48 | $ | 22.73 | $ | 22.79 | $ | 17.06 | $ | 17.51 | |||||||||||||
Net investment income1 | 0.12 | 0.14 | 0.08 | 0.16 | 0.06 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.09 | 1.45 | 2.75 | 5.70 | (0.50 | ) | |||||||||||||||||
Net increase (decrease) from operations | 0.21 | 1.59 | 2.83 | 5.86 | (0.44 | ) | |||||||||||||||||
Dividends from net investment income | (0.15 | ) | (0.11 | ) | (0.12 | ) | (0.13 | ) | (0.01 | ) | |||||||||||||
Distributions from net realized gains | (1.99 | ) | (2.73 | ) | (2.77 | ) | — | — | |||||||||||||||
Total dividends and distributions | (2.14 | ) | (2.84 | ) | (2.89 | ) | (0.13 | ) | (0.01 | ) | |||||||||||||
Net asset value, end of year | $ | 19.55 | $ | 21.48 | $ | 22.73 | $ | 22.79 | $ | 17.06 | |||||||||||||
Total investment return2 | 1.81 | % | 7.47 | % | 12.84 | % | 34.41 | % | (2.45 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.07 | % | 1.10 | % | 1.11 | % | 1.19 | % | 1.16 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.07 | % | 1.10 | % | 1.13 | %4 | 1.16 | % | 1.16 | % | |||||||||||||
Net investment income | 0.63 | % | 0.63 | % | 0.35 | % | 0.80 | % | 0.36 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 697 | $ | 998 | $ | 912 | $ | 768 | $ | 443 | |||||||||||||
Portfolio turnover | 74 | % | 66 | % | 86 | % | 97 | % | 72 | % |
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 Amount represents less than $0.005 per share.
4 The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Portfolio, not to exceed the expense cap.
306
PACE Small/Medium Co Value Equity Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 17.99 | $ | 19.52 | $ | 20.00 | $ | 15.00 | $ | 15.53 | |||||||||||||
Net investment income (loss)1 | (0.06 | ) | (0.05 | ) | (0.10 | ) | (0.01 | ) | (0.08 | ) | |||||||||||||
Net realized and unrealized gains (losses) | 0.05 | 1.25 | 2.39 | 5.01 | (0.45 | ) | |||||||||||||||||
Net increase (decrease) from operations | (0.01 | ) | 1.20 | 2.29 | 5.00 | (0.53 | ) | ||||||||||||||||
Dividends from net investment income | — | — | — | — | — | ||||||||||||||||||
Distributions from net realized gains | (1.99 | ) | (2.73 | ) | (2.77 | ) | — | — | |||||||||||||||
Total dividends and distributions | (1.99 | ) | (2.73 | ) | (2.77 | ) | — | — | |||||||||||||||
Net asset value, end of year | $ | 15.99 | $ | 17.99 | $ | 19.52 | $ | 20.00 | $ | 15.00 | |||||||||||||
Total investment return2 | 0.83 | % | 6.59 | % | 11.84 | % | 33.24 | % | (3.35 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 2.01 | % | 1.98 | % | 2.00 | % | 2.03 | % | 2.07 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 2.01 | % | 1.98 | % | 2.00 | % | 2.03 | % | 2.07 | % | |||||||||||||
Net investment income (loss) | (0.36 | )% | (0.24 | )% | (0.51 | )% | (0.08 | )% | (0.54 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 4,324 | $ | 4,843 | $ | 5,106 | $ | 4,983 | $ | 4,325 | |||||||||||||
Portfolio turnover | 74 | % | 66 | % | 86 | % | 97 | % | 72 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 21.30 | $ | 22.54 | $ | 22.63 | $ | 16.94 | $ | 17.38 | |||||||||||||
Net investment income1 | 0.10 | 0.14 | 0.07 | 0.15 | 0.06 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.08 | 1.46 | 2.72 | 5.67 | (0.50 | ) | |||||||||||||||||
Net increase (decrease) from operations | 0.18 | 1.60 | 2.79 | 5.82 | (0.44 | ) | |||||||||||||||||
Dividends from net investment income | (0.14 | ) | (0.11 | ) | (0.11 | ) | (0.13 | ) | (0.00 | )3 | |||||||||||||
Distributions from net realized gains | (1.99 | ) | (2.73 | ) | (2.77 | ) | — | — | |||||||||||||||
Total dividends and distributions | (2.13 | ) | (2.84 | ) | (2.88 | ) | (0.13 | ) | (0.00 | )3 | |||||||||||||
Net asset value, end of year | $ | 19.35 | $ | 21.30 | $ | 22.54 | $ | 22.63 | $ | 16.94 | |||||||||||||
Total investment return2 | 1.77 | % | 7.49 | % | 12.77 | % | 34.51 | % | (2.51 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.11 | % | 1.09 | % | 1.11 | % | 1.15 | % | 1.22 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.11 | % | 1.09 | % | 1.16 | %4 | 1.16 | %4 | 1.16 | % | |||||||||||||
Net investment income | 0.53 | % | 0.65 | % | 0.32 | % | 0.79 | % | 0.37 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 490,762 | $ | 525,959 | $ | 510,377 | $ | 448,879 | $ | 354,936 | |||||||||||||
Portfolio turnover | 74 | % | 66 | % | 86 | % | 97 | % | 72 | % |
See accompanying notes to financial statements.
307
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, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 20.45 | $ | 19.72 | $ | 21.42 | $ | 16.45 | $ | 16.66 | |||||||||||||
Net investment loss1 | (0.10 | ) | (0.14 | ) | (0.16 | ) | (0.08 | ) | (0.12 | ) | |||||||||||||
Net realized and unrealized gains (losses) | (2.23 | ) | 3.90 | 1.34 | 5.35 | (0.09 | ) | ||||||||||||||||
Net increase (decrease) from operations | (2.33 | ) | 3.76 | 1.18 | 5.27 | (0.21 | ) | ||||||||||||||||
Distributions from net realized gains | (3.78 | ) | (3.03 | ) | (2.88 | ) | (0.30 | ) | — | ||||||||||||||
Net asset value, end of year | $ | 14.34 | $ | 20.45 | $ | 19.72 | $ | 21.42 | $ | 16.45 | |||||||||||||
Total investment return2 | (11.20 | )% | 20.82 | % | 4.92 | % | 32.44 | % | (1.26 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.25 | %3 | 1.24 | % | 1.25 | % | 1.26 | % | 1.30 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.21 | %3 | 1.21 | % | 1.25 | % | 1.26 | % | 1.30 | % | |||||||||||||
Net investment loss | (0.64 | )% | (0.70 | )% | (0.77 | )% | (0.43 | )% | (0.73 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 21,912 | $ | 28,386 | $ | 40,210 | $ | 41,721 | $ | 36,620 | |||||||||||||
Portfolio turnover | 98 | % | 88 | % | 94 | % | 60 | % | 94 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 21.67 | $ | 20.72 | $ | 22.34 | $ | 17.13 | $ | 17.31 | |||||||||||||
Net investment loss1 | (0.09 | ) | (0.13 | ) | (0.15 | ) | (0.07 | ) | (0.10 | ) | |||||||||||||
Net realized and unrealized gains (losses) | (2.36 | ) | 4.11 | 1.41 | 5.58 | (0.08 | ) | ||||||||||||||||
Net increase (decrease) from operations | (2.45 | ) | 3.98 | 1.26 | 5.51 | (0.18 | ) | ||||||||||||||||
Distributions from net realized gains | (3.78 | ) | (3.03 | ) | (2.88 | ) | (0.30 | ) | — | ||||||||||||||
Net asset value, end of year | $ | 15.44 | $ | 21.67 | $ | 20.72 | $ | 22.34 | $ | 17.13 | |||||||||||||
Total investment return2 | (11.11 | )% | 20.89 | % | 5.09 | % | 32.55 | % | (1.04 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.09 | %3,4 | 1.13 | % | 1.14 | % | 1.25 | % | 1.25 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.12 | %3,4 | 1.11 | %3 | 1.13 | % | 1.13 | % | 1.13 | % | |||||||||||||
Net investment loss | (0.55 | )% | (0.62 | )% | (0.65 | )% | (0.33 | )% | (0.59 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 488 | $ | 844 | $ | 667 | $ | 588 | $ | 224 | |||||||||||||
Portfolio turnover | 98 | % | 88 | % | 94 | % | 60 | % | 94 | % |
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.
4 Includes interest expense representing less than 0.005%.
308
PACE Small/Medium Co Growth Equity Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 17.11 | $ | 17.07 | $ | 19.02 | $ | 14.75 | $ | 15.05 | |||||||||||||
Net investment loss1 | (0.17 | ) | (0.24 | ) | (0.28 | ) | (0.20 | ) | (0.21 | ) | |||||||||||||
Net realized and unrealized gains (losses) | (1.89 | ) | 3.31 | 1.21 | 4.77 | (0.09 | ) | ||||||||||||||||
Net increase (decrease) from operations | (2.06 | ) | 3.07 | 0.93 | 4.57 | (0.30 | ) | ||||||||||||||||
Distributions from net realized gains | (3.78 | ) | (3.03 | ) | (2.88 | ) | (0.30 | ) | — | ||||||||||||||
Net asset value, end of year | $ | 11.27 | $ | 17.11 | $ | 17.07 | $ | 19.02 | $ | 14.75 | |||||||||||||
Total investment return2 | (11.93 | )% | 19.93 | % | 4.16 | % | 31.42 | % | (1.99 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 2.02 | %3 | 1.99 | % | 2.01 | % | 2.02 | % | 2.05 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.98 | %3 | 1.96 | % | 2.00 | % | 2.02 | % | 2.05 | % | |||||||||||||
Net investment loss | (1.41 | )% | (1.46 | )% | (1.52 | )% | (1.19 | )% | (1.49 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 2,753 | $ | 4,116 | $ | 3,977 | $ | 4,038 | $ | 3,529 | |||||||||||||
Portfolio turnover | 98 | % | 88 | % | 94 | % | 60 | % | 94 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 21.40 | $ | 20.49 | $ | 22.13 | $ | 16.97 | $ | 17.14 | |||||||||||||
Net investment loss1 | (0.08 | ) | (0.13 | ) | (0.14 | ) | (0.06 | ) | (0.09 | ) | |||||||||||||
Net realized and unrealized gains (losses) | (2.33 | ) | 4.07 | 1.38 | 5.52 | (0.08 | ) | ||||||||||||||||
Net increase (decrease) from operations | (2.41 | ) | 3.94 | 1.24 | 5.46 | (0.17 | ) | ||||||||||||||||
Distributions from net realized gains | (3.78 | ) | (3.03 | ) | (2.88 | ) | (0.30 | ) | — | ||||||||||||||
Net asset value, end of year | $ | 15.21 | $ | 21.40 | $ | 20.49 | $ | 22.13 | $ | 16.97 | |||||||||||||
Total investment return2 | (11.07 | )% | 20.93 | % | 5.04 | % | 32.57 | % | (0.99 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements/recoupments | 1.13 | %3 | 1.10 | % | 1.12 | % | 1.14 | % | 1.18 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments | 1.09 | %3 | 1.11 | %3 | 1.13 | %3 | 1.13 | % | 1.13 | % | |||||||||||||
Net investment loss | (0.52 | )% | (0.61 | )% | (0.65 | )% | (0.30 | )% | (0.56 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 444,300 | $ | 545,517 | $ | 474,468 | $ | 457,011 | $ | 383,330 | |||||||||||||
Portfolio turnover | 98 | % | 88 | % | 94 | % | 60 | % | 94 | % |
See accompanying notes to financial statements.
309
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, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 15.04 | $ | 15.60 | $ | 13.96 | $ | 11.63 | $ | 13.41 | |||||||||||||
Net investment income1 | 0.22 | 0.20 | 0.35 | 0.24 | 0.26 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.87 | ) | (0.43 | ) | 1.56 | 2.36 | (1.71 | ) | |||||||||||||||
Net increase (decrease) from operations | (0.65 | ) | (0.23 | ) | 1.91 | 2.60 | (1.45 | ) | |||||||||||||||
Dividends from net investment income | (0.20 | ) | (0.33 | ) | (0.27 | ) | (0.27 | ) | (0.33 | ) | |||||||||||||
Net asset value, end of year | $ | 14.19 | $ | 15.04 | $ | 15.60 | $ | 13.96 | $ | 11.63 | |||||||||||||
Total investment return2 | (4.30 | )% | (1.38 | )% | 13.78 | % | 22.63 | % | (10.58 | )% | |||||||||||||
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 | 1.86 | %3 | 1.78 | %3 | 1.70 | % | 1.42 | % | 1.43 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.82 | %3 | 1.75 | %3 | 1.68 | % | 1.42 | %4 | 1.43 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.38 | % | 1.37 | % | 1.37 | % | 1.42 | %4 | 1.43 | % | |||||||||||||
Net investment income | 1.61 | % | 1.31 | % | 2.33 | % | 1.84 | % | 2.27 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 29,788 | $ | 33,882 | $ | 57,389 | $ | 55,533 | $ | 51,294 | |||||||||||||
Portfolio turnover | 80 | % | 79 | % | 86 | % | 36 | % | 44 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 15.00 | $ | 15.59 | $ | 13.95 | $ | 11.63 | $ | 13.41 | |||||||||||||
Net investment income1 | 0.26 | 0.25 | 0.40 | 0.28 | 0.29 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.88 | ) | (0.44 | ) | 1.55 | 2.35 | (1.70 | ) | |||||||||||||||
Net increase (decrease) from operations | (0.62 | ) | (0.19 | ) | 1.95 | 2.63 | (1.41 | ) | |||||||||||||||
Dividends from net investment income | (0.24 | ) | (0.40 | ) | (0.31 | ) | (0.31 | ) | (0.37 | ) | |||||||||||||
Net asset value, end of year | $ | 14.14 | $ | 15.00 | $ | 15.59 | $ | 13.95 | $ | 11.63 | |||||||||||||
Total investment return2 | (4.09 | )% | (1.09 | )% | 14.10 | % | 22.97 | % | (10.37 | )% | |||||||||||||
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 | 1.56 | %3 | 1.51 | %3 | 1.42 | % | 1.16 | % | 1.18 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.53 | %3 | 1.48 | %3 | 1.40 | % | 1.16 | %4 | 1.18 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.09 | % | 1.10 | % | 1.09 | % | 1.16 | %4 | 1.18 | % | |||||||||||||
Net investment income | 1.86 | % | 1.64 | % | 2.63 | % | 2.13 | % | 2.51 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 15,900 | $ | 19,150 | $ | 22,915 | $ | 20,865 | $ | 18,004 | |||||||||||||
Portfolio turnover | 80 | % | 79 | % | 86 | % | 36 | % | 44 | % |
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 ratios after and before fee waivers and/or expense reimbursements are the same since the fee waiver/reimbursement represents less than 0.01%.
310
PACE International Equity Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 14.72 | $ | 15.29 | $ | 13.68 | $ | 11.41 | $ | 13.14 | |||||||||||||
Net investment income1 | 0.11 | 0.09 | 0.23 | 0.13 | 0.16 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.86 | ) | (0.43 | ) | 1.53 | 2.31 | (1.67 | ) | |||||||||||||||
Net increase (decrease) from operations | (0.75 | ) | (0.34 | ) | 1.76 | 2.44 | (1.51 | ) | |||||||||||||||
Dividends from net investment income | (0.09 | ) | (0.23 | ) | (0.15 | ) | (0.17 | ) | (0.22 | ) | |||||||||||||
Net asset value, end of year | $ | 13.88 | $ | 14.72 | $ | 15.29 | $ | 13.68 | $ | 11.41 | |||||||||||||
Total investment return2 | (5.10 | )% | (2.14 | )% | 12.93 | % | 21.50 | % | (11.35 | )% | |||||||||||||
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 | 2.65 | %3 | 2.58 | %3 | 2.51 | % | 2.26 | % | 2.27 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 2.62 | %3 | 2.55 | %3 | 2.49 | % | 2.25 | % | 2.27 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 2.17 | % | 2.16 | % | 2.18 | % | 2.25 | % | 2.27 | % | |||||||||||||
Net investment income | 0.83 | % | 0.62 | % | 1.52 | % | 1.01 | % | 1.41 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 2,230 | $ | 2,744 | $ | 2,919 | $ | 2,746 | $ | 2,573 | |||||||||||||
Portfolio turnover | 80 | % | 79 | % | 86 | % | 36 | % | 44 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 14.97 | $ | 15.56 | $ | 13.92 | $ | 11.60 | $ | 13.39 | |||||||||||||
Net investment income1 | 0.26 | 0.25 | 0.40 | 0.28 | 0.29 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.88 | ) | (0.44 | ) | 1.54 | 2.35 | (1.71 | ) | |||||||||||||||
Net increase (decrease) from operations | (0.62 | ) | (0.19 | ) | 1.94 | 2.63 | (1.42 | ) | |||||||||||||||
Dividends from net investment income | (0.24 | ) | (0.40 | ) | (0.30 | ) | (0.31 | ) | (0.37 | ) | |||||||||||||
Net asset value, end of year | $ | 14.11 | $ | 14.97 | $ | 15.56 | $ | 13.92 | $ | 11.60 | |||||||||||||
Total investment return2 | (4.09 | )% | (1.11 | )% | 14.12 | % | 22.92 | % | (10.39 | )% | |||||||||||||
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 | 1.58 | %3 | 1.52 | %3 | 1.45 | % | 1.17 | % | 1.18 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.54 | %3 | 1.49 | %3 | 1.43 | % | 1.17 | %4 | 1.18 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.10 | % | 1.10 | % | 1.11 | % | 1.17 | %4 | 1.18 | % | |||||||||||||
Net investment income | 1.90 | % | 1.69 | % | 2.63 | % | 2.12 | % | 2.54 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 924,833 | $ | 1,016,420 | $ | 1,025,757 | $ | 863,063 | $ | 698,255 | |||||||||||||
Portfolio turnover | 80 | % | 79 | % | 86 | % | 36 | % | 44 | % |
See accompanying notes to financial statements.
311
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, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 11.81 | $ | 13.56 | $ | 12.29 | $ | 11.81 | $ | 13.80 | |||||||||||||
Net investment income1 | 0.09 | 0.09 | 0.14 | 0.09 | 0.11 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.46 | ) | (1.78 | ) | 1.17 | 0.49 | (1.86 | ) | |||||||||||||||
Net increase (decrease) from operations | (0.37 | ) | (1.69 | ) | 1.31 | 0.58 | (1.75 | ) | |||||||||||||||
Dividends from net investment income | (0.03 | ) | (0.06 | ) | (0.04 | ) | (0.10 | ) | (0.11 | ) | |||||||||||||
Distributions from net realized gains | — | — | — | — | (0.13 | ) | |||||||||||||||||
Total dividends and distributions | (0.03 | ) | (0.06 | ) | (0.04 | ) | (0.10 | ) | (0.24 | ) | |||||||||||||
Net asset value, end of year | $ | 11.41 | $ | 11.81 | $ | 13.56 | $ | 12.29 | $ | 11.81 | |||||||||||||
Total investment return3 | (3.08 | )% | (12.50 | )% | 10.71 | % | 4.81 | % | (12.52 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.90 | %4 | 1.77 | %4 | 1.80 | % | 1.82 | % | 1.90 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.80 | %4 | 1.67 | %4 | 1.69 | % | 1.75 | % | 1.90 | % | |||||||||||||
Net investment income | 0.86 | % | 0.67 | % | 1.14 | % | 0.72 | % | 0.93 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 3,931 | $ | 4,707 | $ | 17,200 | $ | 16,810 | $ | 17,559 | |||||||||||||
Portfolio turnover | 65 | % | 63 | % | 74 | % | 158 | % | 30 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 11.97 | $ | 13.82 | $ | 12.53 | $ | 12.03 | $ | 14.06 | |||||||||||||
Net investment income1 | 0.12 | 0.15 | 0.18 | 0.12 | 0.14 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.47 | ) | (1.84 | ) | 1.18 | 0.51 | (1.90 | ) | |||||||||||||||
Net increase (decrease) from operations | (0.35 | ) | (1.69 | ) | 1.36 | 0.63 | (1.76 | ) | |||||||||||||||
Dividends from net investment income | (0.11 | ) | (0.16 | ) | (0.07 | ) | (0.13 | ) | (0.14 | ) | |||||||||||||
Distributions from net realized gains | — | — | — | — | (0.13 | ) | |||||||||||||||||
Total dividends and distributions | (0.11 | ) | (0.16 | ) | (0.07 | ) | (0.13 | ) | (0.27 | ) | |||||||||||||
Net asset value, end of year | $ | 11.51 | $ | 11.97 | $ | 13.82 | $ | 12.53 | $ | 12.03 | |||||||||||||
Total investment return3 | (2.80 | )% | (12.30 | )% | 10.94 | % | 5.13 | % | (12.35 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.63 | %4 | 1.53 | %4 | 1.55 | % | 1.58 | % | 1.67 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.54 | %4 | 1.44 | %4 | 1.44 | % | 1.51 | % | 1.67 | % | |||||||||||||
Net investment income | 1.14 | % | 1.15 | % | 1.37 | % | 0.94 | % | 1.17 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 7,923 | $ | 8,767 | $ | 11,978 | $ | 12,835 | $ | 13,835 | |||||||||||||
Portfolio turnover | 65 | % | 63 | % | 74 | % | 158 | % | 30 | % |
1 Calculated using the average shares method.
2 Amount represents less than $0.005 per share.
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%.
312
PACE International Emerging Markets Equity Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 10.93 | $ | 12.61 | $ | 11.48 | $ | 11.04 | $ | 12.87 | |||||||||||||
Net investment income1 | 0.01 | 0.03 | 0.04 | (0.00 | )2 | 0.02 | |||||||||||||||||
Net realized and unrealized gains (losses) | (0.42 | ) | (1.68 | ) | 1.09 | 0.44 | (1.72 | ) | |||||||||||||||
Net increase (decrease) from operations | (0.41 | ) | (1.65 | ) | 1.13 | 0.44 | (1.70 | ) | |||||||||||||||
Dividends from net investment income | — | (0.03 | ) | — | — | — | |||||||||||||||||
Distributions from net realized gains | — | — | — | — | (0.13 | ) | |||||||||||||||||
Total dividends and distributions | — | (0.03 | ) | — | — | (0.13 | ) | ||||||||||||||||
Net asset value, end of year | $ | 10.52 | $ | 10.93 | $ | 12.61 | $ | 11.48 | $ | 11.04 | |||||||||||||
Total investment return3 | (3.75 | )% | (13.17 | )% | 9.93 | % | 3.99 | % | (13.13 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 2.65 | %4 | 2.50 | %4 | 2.55 | % | 2.57 | % | 2.65 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 2.55 | %4 | 2.41 | %4 | 2.44 | % | 2.49 | % | 2.65 | % | |||||||||||||
Net investment income | 0.12 | % | 0.21 | % | 0.37 | % | (0.04 | )% | 0.16 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 1,337 | $ | 1,661 | $ | 2,079 | $ | 2,201 | $ | 2,396 | |||||||||||||
Portfolio turnover | 65 | % | 63 | % | 74 | % | 158 | % | 30 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 11.91 | $ | 13.75 | $ | 12.47 | $ | 11.98 | $ | 14.00 | |||||||||||||
Net investment income1 | 0.12 | 0.16 | 0.18 | 0.12 | 0.12 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.47 | ) | (1.85 | ) | 1.17 | 0.47 | (1.89 | ) | |||||||||||||||
Net increase (decrease) from operations | (0.35 | ) | (1.69 | ) | 1.35 | 0.59 | (1.77 | ) | |||||||||||||||
Dividends from net investment income | (0.11 | ) | (0.15 | ) | (0.07 | ) | (0.10 | ) | (0.12 | ) | |||||||||||||
Distributions from net realized gains | — | — | — | — | (0.13 | ) | |||||||||||||||||
Total dividends and distributions | (0.11 | ) | (0.15 | ) | (0.07 | ) | (0.10 | ) | (0.25 | ) | |||||||||||||
Net asset value, end of year | $ | 11.45 | $ | 11.91 | $ | 13.75 | $ | 12.47 | $ | 11.98 | |||||||||||||
Total investment return3 | (2.82 | )% | (12.33 | )% | 10.86 | % | 4.87 | % | (12.49 | )% | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.69 | %4 | 1.56 | %4 | 1.64 | % | 1.75 | % | 1.88 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.60 | %4 | 1.47 | %4 | 1.53 | % | 1.67 | % | 1.88 | % | |||||||||||||
Net investment income | 1.10 | % | 1.18 | % | 1.37 | % | 0.92 | % | 0.97 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 394,346 | $ | 417,751 | $ | 450,438 | $ | 334,525 | $ | 218,196 | |||||||||||||
Portfolio turnover | 65 | % | 63 | % | 74 | % | 158 | % | 30 | % |
See accompanying notes to financial statements.
313
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, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 7.51 | $ | 7.33 | $ | 6.52 | $ | 6.05 | $ | 6.02 | |||||||||||||
Net investment income1 | 0.13 | 0.16 | 0.10 | 0.08 | 0.09 | ||||||||||||||||||
Net realized and unrealized gains | 0.58 | 0.02 | 0.83 | 0.65 | 0.08 | ||||||||||||||||||
Net increase from operations | 0.71 | 0.18 | 0.93 | 0.73 | 0.17 | ||||||||||||||||||
Dividends from net investment income | (0.19 | ) | — | (0.12 | ) | (0.26 | ) | (0.14 | ) | ||||||||||||||
Net asset value, end of year | $ | 8.03 | $ | 7.51 | $ | 7.33 | $ | 6.52 | $ | 6.05 | |||||||||||||
Total investment return2 | 9.86 | % | 2.46 | % | 14.56 | % | 12.24 | % | 3.28 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.65 | % | 1.59 | % | 1.59 | % | 1.56 | % | 1.69 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.45 | % | 1.45 | % | 1.45 | % | 1.45 | % | 1.45 | % | |||||||||||||
Net investment income | 1.79 | % | 2.21 | % | 1.55 | % | 1.19 | % | 1.61 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 373 | $ | 363 | $ | 5,692 | $ | 5,233 | $ | 4,838 | |||||||||||||
Portfolio turnover | 75 | % | 102 | % | 53 | % | 92 | % | 66 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 7.30 | $ | 7.37 | $ | 6.55 | $ | 6.08 | $ | 6.05 | |||||||||||||
Net investment income1 | 0.19 | 0.14 | 0.12 | 0.09 | 0.11 | ||||||||||||||||||
Net realized and unrealized gains | 0.50 | 0.05 | 0.84 | 0.66 | 0.07 | ||||||||||||||||||
Net increase from operations | 0.69 | 0.19 | 0.96 | 0.75 | 0.18 | ||||||||||||||||||
Dividends from net investment income | (0.22 | ) | (0.26 | ) | (0.14 | ) | (0.28 | ) | (0.15 | ) | |||||||||||||
Net asset value, end of year | $ | 7.77 | $ | 7.30 | $ | 7.37 | $ | 6.55 | $ | 6.08 | |||||||||||||
Total investment return2 | 9.94 | % | 2.58 | % | 14.94 | % | 12.53 | % | 3.46 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.50 | % | 1.27 | % | 1.38 | % | 1.39 | % | 1.39 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.20 | % | 1.20 | % | 1.20 | % | 1.20 | % | 1.20 | % | |||||||||||||
Net investment income | 2.80 | % | 1.84 | % | 1.81 | % | 1.43 | % | 1.90 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 25 | $ | 281 | $ | 280 | $ | 294 | $ | 210 | |||||||||||||
Portfolio turnover | 75 | % | 102 | % | 53 | % | 92 | % | 66 | % |
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.
314
PACE Global Real Estate Securities Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 7.21 | $ | 7.29 | $ | 6.48 | $ | 6.00 | $ | 5.99 | |||||||||||||
Net investment income1 | 0.08 | 0.06 | 0.05 | 0.03 | 0.05 | ||||||||||||||||||
Net realized and unrealized gains | 0.56 | 0.06 | 0.83 | 0.65 | 0.07 | ||||||||||||||||||
Net increase from operations | 0.64 | 0.12 | 0.88 | 0.68 | 0.12 | ||||||||||||||||||
Dividends from net investment income | (0.16 | ) | (0.20 | ) | (0.07 | ) | (0.20 | ) | (0.11 | ) | |||||||||||||
Net asset value, end of year | $ | 7.69 | $ | 7.21 | $ | 7.29 | $ | 6.48 | $ | 6.00 | |||||||||||||
Total investment return2 | 9.11 | % | 1.58 | % | 13.77 | % | 11.52 | % | 2.42 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 2.26 | % | 2.24 | % | 2.30 | % | 2.27 | % | 2.44 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 2.20 | % | 2.20 | % | 2.20 | % | 2.20 | % | 2.20 | % | |||||||||||||
Net investment income | 1.11 | % | 0.79 | % | 0.78 | % | 0.40 | % | 0.92 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 319 | $ | 340 | $ | 272 | $ | 222 | $ | 172 | |||||||||||||
Portfolio turnover | 75 | % | 102 | % | 53 | % | 92 | % | 66 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 7.28 | $ | 7.35 | $ | 6.53 | $ | 6.06 | $ | 6.03 | |||||||||||||
Net investment income1 | 0.14 | 0.14 | 0.12 | 0.10 | 0.10 | ||||||||||||||||||
Net realized and unrealized gains | 0.56 | 0.05 | 0.84 | 0.65 | 0.08 | ||||||||||||||||||
Net increase from operations | 0.70 | 0.19 | 0.96 | 0.75 | 0.18 | ||||||||||||||||||
Dividends from net investment income | (0.22 | ) | (0.26 | ) | (0.14 | ) | (0.28 | ) | (0.15 | ) | |||||||||||||
Net asset value, end of year | $ | 7.76 | $ | 7.28 | $ | 7.35 | $ | 6.53 | $ | 6.06 | |||||||||||||
Total investment return2 | 10.13 | % | 2.59 | % | 15.00 | % | 12.57 | % | 3.47 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 1.59 | % | 1.56 | % | 1.63 | % | 1.52 | % | 1.65 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 1.20 | % | 1.20 | % | 1.20 | % | 1.20 | % | 1.20 | % | |||||||||||||
Net investment income | 2.07 | % | 1.83 | % | 1.79 | % | 1.47 | % | 1.88 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 151,565 | $ | 148,096 | $ | 145,067 | $ | 116,509 | $ | 108,101 | |||||||||||||
Portfolio turnover | 75 | % | 102 | % | 53 | % | 92 | % | 66 | % |
See accompanying notes to financial statements.
315
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, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 11.10 | $ | 10.62 | $ | 10.21 | $ | 9.35 | $ | 9.32 | |||||||||||||
Net investment loss1 | (0.06 | ) | (0.08 | ) | (0.09 | ) | (0.05 | ) | (0.02 | ) | |||||||||||||
Net realized and unrealized gains (losses) | (0.32 | ) | 0.56 | 0.70 | 0.95 | 0.05 | |||||||||||||||||
Net increase (decrease) from operations | (0.38 | ) | 0.48 | 0.61 | 0.90 | 0.03 | |||||||||||||||||
Dividends from net investment income | (0.23 | ) | — | (0.20 | ) | (0.04 | ) | — | |||||||||||||||
Net asset value, end of year | $ | 10.49 | $ | 11.10 | $ | 10.62 | $ | 10.21 | $ | 9.35 | |||||||||||||
Total investment return2 | (3.47 | )% | 4.52 | % | 5.99 | % | 9.54 | % | 0.43 | % | |||||||||||||
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 | 2.02 | % | 1.93 | % | 1.97 | % | 2.01 | % | 2.12 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.95 | % | 1.88 | % | 1.99 | %3 | 1.98 | %3 | 2.10 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.79 | % | 1.81 | % | 1.88 | %3 | 1.90 | %3 | 1.95 | %3 | |||||||||||||
Net investment loss | (0.53 | )% | (0.74 | )% | (0.89 | )% | (0.49 | )% | (0.23 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 9,800 | $ | 7,408 | $ | 77,331 | $ | 53,728 | $ | 43,644 | |||||||||||||
Portfolio turnover | 221 | % | 165 | % | 114 | % | 140 | % | 242 | % |
Class Y
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 11.12 | $ | 10.71 | $ | 10.30 | $ | 9.43 | $ | 9.38 | |||||||||||||
Net investment income (loss)1 | (0.02 | ) | (0.05 | ) | (0.07 | ) | (0.03 | ) | 0.004 | ||||||||||||||
Net realized and unrealized gains (losses) | (0.31 | ) | 0.56 | 0.70 | 0.97 | 0.05 | |||||||||||||||||
Net increase (decrease) from operations | (0.33 | ) | 0.51 | 0.63 | 0.94 | 0.05 | |||||||||||||||||
Dividends from net investment income | (0.37 | ) | (0.10 | ) | (0.22 | ) | (0.07 | ) | — | ||||||||||||||
Net asset value, end of year | $ | 10.42 | $ | 11.12 | $ | 10.71 | $ | 10.30 | $ | 9.43 | |||||||||||||
Total investment return2 | (2.99 | )% | 4.82 | % | 6.18 | % | 9.89 | % | 0.64 | % | |||||||||||||
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 | 1.69 | % | 1.72 | % | 1.74 | % | 1.77 | % | 1.91 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.62 | % | 1.68 | %3 | 1.75 | %3 | 1.73 | %3 | 1.86 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.48 | % | 1.60 | % | 1.63 | %3 | 1.65 | %3 | 1.70 | %3 | |||||||||||||
Net investment income (loss) | (0.17 | )% | (0.43 | )% | (0.65 | )% | (0.25 | )% | 0.00 | %6 | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 1,926 | $ | 2,449 | $ | 4,629 | $ | 2,732 | $ | 1,668 | |||||||||||||
Portfolio turnover | 221 | % | 165 | % | 114 | % | 140 | % | 242 | % |
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.
316
PACE Alternative Strategies Investments
Financial highlights (continued)
Class C
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 10.66 | $ | 10.29 | $ | 9.90 | $ | 9.09 | $ | 9.13 | |||||||||||||
Net investment loss1 | (0.13 | ) | (0.14 | ) | (0.16 | ) | (0.11 | ) | (0.08 | ) | |||||||||||||
Net realized and unrealized gains (losses) | (0.30 | ) | 0.53 | 0.67 | 0.92 | 0.04 | |||||||||||||||||
Net increase (decrease) from operations | (0.43 | ) | 0.39 | 0.51 | 0.81 | (0.04 | ) | ||||||||||||||||
Dividends from net investment income | (0.30 | ) | (0.02 | ) | (0.12 | ) | — | — | |||||||||||||||
Net asset value, end of year | $ | 9.93 | $ | 10.66 | $ | 10.29 | $ | 9.90 | $ | 9.09 | |||||||||||||
Total investment return2 | (4.08 | )% | 3.81 | % | 5.18 | % | 8.79 | % | (0.22 | )% | |||||||||||||
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 | 2.75 | % | 2.67 | % | 2.71 | % | 2.72 | % | 2.82 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 2.68 | % | 2.60 | % | 2.70 | % | 2.70 | % | 2.78 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 2.52 | % | 2.52 | % | 2.58 | % | 2.62 | % | 2.63 | % | |||||||||||||
Net investment loss | (1.27 | )% | (1.37 | )% | (1.60 | )% | (1.20 | )% | (0.91 | )% | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 12,398 | $ | 9,385 | $ | 6,346 | $ | 4,827 | $ | 4,989 | |||||||||||||
Portfolio turnover | 221 | % | 165 | % | 114 | % | 140 | % | 242 | % |
Class P
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Net asset value, beginning of year | $ | 11.09 | $ | 10.69 | $ | 10.27 | $ | 9.41 | $ | 9.36 | |||||||||||||
Net investment income (loss)1 | (0.03 | ) | (0.04 | ) | (0.07 | ) | (0.02 | ) | 0.004 | ||||||||||||||
Net realized and unrealized gains (losses) | (0.31 | ) | 0.55 | 0.71 | 0.95 | 0.05 | |||||||||||||||||
Net increase (decrease) from operations | (0.34 | ) | 0.51 | 0.64 | 0.93 | 0.05 | |||||||||||||||||
Dividends from net investment income | (0.37 | ) | (0.11 | ) | (0.22 | ) | (0.07 | ) | — | ||||||||||||||
Net asset value, end of year | $ | 10.38 | $ | 11.09 | $ | 10.69 | $ | 10.27 | $ | 9.41 | |||||||||||||
Total investment return2 | (3.13 | )% | 4.79 | % | 6.27 | % | 9.93 | % | 0.64 | % | |||||||||||||
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 | 1.77 | % | 1.69 | % | 1.74 | %5 | 1.74 | % | 1.85 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, including dividend expense, interest expense and other borrowing costs for investments sold short | 1.69 | % | 1.62 | % | 1.74 | %3, 5 | 1.71 | % | 1.85 | %3 | |||||||||||||
Expenses after fee waivers and/or expense reimbursements/recoupments, excluding dividend expense, interest expense and other borrowing costs for investments sold short | 1.53 | % | 1.54 | % | 1.62 | %3 | 1.63 | % | 1.69 | %3 | |||||||||||||
Net investment income (loss) | (0.30 | )% | (0.38 | )% | (0.64 | )% | (0.21 | )% | 0.02 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 712,676 | $ | 782,683 | $ | 611,399 | $ | 493,524 | $ | 449,925 | |||||||||||||
Portfolio turnover | 221 | % | 165 | % | 114 | % | 140 | % | 242 | % |
4 Amount represents less than $0.005 per share.
5 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%.
6 Amount represents less than 0.005%.
See accompanying notes to financial statements.
317
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 Government Money Market Investments (formerly, PACE Money Market Investments), 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, 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").
UBS Asset Management (Americas) Inc. ("UBS AM") is the investment manager of the Portfolios. UBS AM is an indirect asset management subsidiary of UBS Group AG. UBS Group AG is an internationally diversified organization with headquarters in Zurich, Switzerland. UBS Group AG operates in many areas of the financial services industry.
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 Government 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 Government 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, 2016 pursuant to these contracts and expect the risk of loss to be remote.
PACE Government Money Market Investments seeks to maintain a stable price of $1.00 per share. The Portfolio's Board of Trustees (the "Board") has determined that the Portfolio will operate as a "government money market fund" under Rule 2a-7 of the 1940 Act. The Portfolio has adopted certain investment, portfolio valuation and dividend/distribution policies in an attempt to enable it to do so. As a "government money market fund" under Rule 2a-7, the Portfolio will be permitted to use the amortized cost method of valuation to seek to maintain a $1.00 share price and will not be subject to a liquidity fee and/or a redemption gate on portfolio redemptions.
318
PACE Select Advisors Trust
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 Portfolios' financial statements are prepared in accordance with US GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
In August 2014, the FASB issued Accounting Standard Update No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): "Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern" ("ASU 2014-15"). The update provides guidance about management's responsibility to evaluate whether there is substantial doubt about the entity's ability to continue as a going concern and to provide related footnote disclosure. ASU 2014-15 is effective for annual reporting periods ending after December 15, 2016, and for annual and interim periods thereafter. Management is currently evaluating the impact of the guidance on the disclosures in the financial statements.
The following is a summary of significant accounting policies:
Valuation of investments
Each Portfolio generally 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). The NYSE normally is not open, and the Portfolios do not price their shares, on most national holidays and Good Friday. To the extent that a Portfolio's assets are traded in other markets on days when the NYSE is not open, the value of a Portfolio's assets may be affected on those days. 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 generally will still be calculated as of the close of regular trading on the NYSE. The time at which a Portfolio calculates its net asset value and until which purchase, sale or exchange orders are accepted may be changed as permitted by the SEC.
PACE Government Money Market Investments' net asset value per share is expected to be $1.00 per share, although this value is not guaranteed. PACE Government Money Market Investments values its securities at amortized cost unless the Portfolio's Board determines that this does not represent fair value. 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. The amortized cost 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 Government 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. Investments also may be valued based on appraisals derived from information concerning the investment or similar investments received from recognized dealers in those holdings. 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 normally are 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. Investments listed on foreign stock exchanges may be fair valued based on significant events that have occurred subsequent to the close of the foreign markets. 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 AM. If a market value is not readily available from
319
PACE Select Advisors Trust
Notes to financial statements
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. Foreign currency exchange rates are generally determined as of the close of the NYSE.
Certain investments in which the Portfolios invest are traded in markets that close before 4:00 p.m., Eastern time. Normally, developments that occur between the close of the foreign markets and 4:00 p.m., Eastern time, will not be reflected in a Portfolio's net asset value. However, if any of the Portfolios determine that such developments are so significant that they will materially affect the value of the Portfolio's investments, the Portfolio may adjust the previous closing prices to reflect what is believed to be the fair value of these investments as of 4:00 p.m., Eastern time.
Certain Portfolios 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. The systematic fair valuation model may use calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and futures contracts. If an investment is valued at "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 securities being transferred between Level 1 and Level 2 of the fair valuation hierarchy at the end of the reporting period. Transfers between Level 1 and Level 2, if any, are disclosed near the end of each Portfolio's Portfolio of investments.
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 investment companies without publicly published prices are also valued at the daily net asset value.
All investments quoted in foreign currencies are 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.
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.
OTC swaps 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. Centrally cleared swaps are valued using prices from the counterparty clearing houses.
The Board has delegated to the Equities, Fixed Income, and Multi-Asset Valuation Committee ("VC") (formerly UBS AM Global Valuation Committee or GVC) the responsibility for making fair value determinations with respect to the Portfolios' portfolio holdings. The VC is comprised of representatives of management. The VC 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 VC, 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 VC 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.
320
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, 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. The need to fair value a Portfolio's portfolio investments may also result from low trading volume in foreign markets or thinly traded domestic investments, and when a security that is subject to a trading limit or collar on the exchange or market on which it is primarily traded reaches the "limit up" or "limit down" price and no trading has taken place at that price. 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 investment; and the evaluation of forces which influence the market in which the investment is 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 a fair value pricing service.
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.
In May 2015, the FASB issued Accounting Standards Update No. 2015-07, Fair Value Measurement (Topic 820): "Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)" ("ASU 2015-07"). The modification removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share practical expedient. Early application is permitted and the Trust has elected to adopt ASU 2015-07 early. In the event a Portfolio holds investments for which fair value is measured using the NAV per share practical expedient, a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments.
A fair value hierarchy table 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, 2016 is reflected in
321
PACE Select Advisors Trust
Notes to financial statements
the Statement of assets and liabilities. 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, 2016.
At July 31, 2016, 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 | |||||||||||||||||||||||
Swap agreements | $ | 2,392 | $ | — | $ | — | $ | — | $ | 2,392 | |||||||||||||
Total value | $ | 2,392 | $ | — | $ | — | $ | — | $ | 2,392 | |||||||||||||
PACE Intermediate Fixed Income Investments | |||||||||||||||||||||||
Futures contracts | $ | 558,455 | $ | — | $ | — | $ | — | $ | 558,455 | |||||||||||||
Forward foreign currency contracts | — | 20,511 | — | — | 20,511 | ||||||||||||||||||
Options and swaptions purchased | 387,798 | — | — | — | 387,798 | ||||||||||||||||||
Swap agreements | 16,299 | — | 12,872 | — | 29,171 | ||||||||||||||||||
Total value | $ | 962,552 | $ | 20,511 | $ | 12,872 | $ | — | $ | 995,935 | |||||||||||||
PACE Strategic Fixed Income Investments | |||||||||||||||||||||||
Futures contracts | $ | 5,540,913 | $ | — | $ | — | $ | — | $ | 5,540,913 | |||||||||||||
Options and swaptions purchased | 423,604 | — | — | — | 423,604 | ||||||||||||||||||
Forward foreign currency contracts | — | 3,315,758 | — | — | 3,315,758 | ||||||||||||||||||
Swap agreements | — | — | 2,059,888 | — | 2,059,888 | ||||||||||||||||||
Total value | $ | 5,964,517 | $ | 3,315,758 | $ | 2,059,888 | $ | — | $ | 11,340,163 | |||||||||||||
PACE International Fixed Income Investments | |||||||||||||||||||||||
Futures contracts | $ | 3,677,706 | $ | — | $ | — | $ | — | $ | 3,677,706 | |||||||||||||
Forward foreign currency contracts | — | 6,679,179 | — | — | 6,679,179 | ||||||||||||||||||
Total value | $ | 3,677,706 | $ | 6,679,179 | $ | — | $ | — | $ | 10,356,885 | |||||||||||||
PACE High Yield Investments | |||||||||||||||||||||||
Forward foreign currency contracts | $ | — | $ | 229,228 | $ | — | $ | — | $ | 229,228 | |||||||||||||
Total value | $ | — | $ | 229,228 | $ | — | $ | — | $ | 229,228 | |||||||||||||
PACE Alternative Strategies Investments | |||||||||||||||||||||||
Futures contracts | $ | 3,425,781 | $ | — | $ | — | $ | 2,355,125 | $ | 5,780,906 | |||||||||||||
Options purchased | 3,087,226 | 2,575,305 | — | 5,446,944 | 11,109,475 | ||||||||||||||||||
Forward foreign currency contracts | — | 21,727,768 | — | — | 21,727,768 | ||||||||||||||||||
Swap agreements | 10,791,384 | — | 3,540,848 | 974,518 | 15,306,750 | ||||||||||||||||||
Total value | $ | 17,304,391 | $ | 24,303,073 | $ | 3,540,848 | $ | 8,776,587 | $ | 53,924,899 |
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PACE Select Advisors Trust
Notes to financial statements
Liability derivatives2
Interest rate risk | Foreign exchange risk | Credit risk | Equity risk | Total | |||||||||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | |||||||||||||||||||||||
Swap agreements | $ | (2,265,930 | ) | $ | — | $ | — | $ | — | $ | (2,265,930 | ) | |||||||||||
Options written | (150,907 | ) | — | — | — | (150,907 | ) | ||||||||||||||||
Total value | $ | (2,416,837 | ) | $ | — | $ | — | $ | — | $ | (2,416,837 | ) | |||||||||||
PACE Intermediate Fixed Income Investments | |||||||||||||||||||||||
Futures contracts | $ | (1,094,450 | ) | $ | — | $ | — | $ | — | $ | (1,094,450 | ) | |||||||||||
Forward foreign currency contracts | — | (86,634 | ) | — | — | (86,634 | ) | ||||||||||||||||
Swap agreements | (282,800 | ) | — | (229,063 | ) | — | (511,863 | ) | |||||||||||||||
Options and swaptions written | (533,347 | ) | — | — | — | (533,347 | ) | ||||||||||||||||
Total value | $ | (1,910,597 | ) | $ | (86,634 | ) | $ | (229,063 | ) | $ | — | $ | (2,226,294 | ) | |||||||||
PACE Strategic Fixed Income Investments | |||||||||||||||||||||||
Futures contracts | $ | (3,262,882 | ) | $ | — | $ | — | $ | — | $ | (3,262,882 | ) | |||||||||||
Options and swaptions written | (486,751 | ) | (473,474 | ) | — | — | (960,225 | ) | |||||||||||||||
Forward foreign currency contracts | — | (4,827,343 | ) | — | — | (4,827,343 | ) | ||||||||||||||||
Swap agreements | (23,450,908 | ) | — | (2,102,577 | ) | — | (25,553,485 | ) | |||||||||||||||
Total value | $ | (27,200,541 | ) | $ | (5,300,817 | ) | $ | (2,102,577 | ) | $ | — | $ | (34,603,935 | ) | |||||||||
PACE International Fixed Income Investments | |||||||||||||||||||||||
Futures contracts | $ | (1,303,923 | ) | $ | — | $ | — | $ | — | $ | (1,303,923 | ) | |||||||||||
Forward foreign currency contracts | — | (5,289,627 | ) | — | — | (5,289,627 | ) | ||||||||||||||||
Total value | $ | (1,303,923 | ) | $ | (5,289,627 | ) | $ | — | $ | — | $ | (6,593,550 | ) | ||||||||||
PACE High Yield Investments | |||||||||||||||||||||||
Forward foreign currency contracts | $ | — | $ | (2,004,545 | ) | $ | — | $ | — | $ | (2,004,545 | ) | |||||||||||
Total value | $ | — | $ | (2,004,545 | ) | $ | — | $ | — | $ | (2,004,545 | ) | |||||||||||
PACE Alternative Strategies Investments | |||||||||||||||||||||||
Futures contracts | $ | (1,707,228 | ) | $ | — | $ | — | $ | (2,429,018 | ) | $ | (4,136,246 | ) | ||||||||||
Written options and foreign exchange options | — | (222,319 | ) | — | (1,010,888 | ) | (1,233,207 | ) | |||||||||||||||
Forward foreign currency contracts | — | (19,780,282 | ) | — | — | (19,780,282 | ) | ||||||||||||||||
Swap agreements | (16,575,475 | ) | — | (851,264 | ) | (1,138,809 | ) | (18,565,548 | ) | ||||||||||||||
Total value | $ | (18,282,703 | ) | $ | (20,002,601 | ) | $ | (851,264 | ) | $ | (4,578,715 | ) | $ | (43,715,283 | ) |
1 In the Statement of assets and liabilities, options and swaptions purchased are shown within Investments, at value, swap agreements (except centrally cleared swaps) are shown within swap agreements at value while forward foreign currency contracts are shown within unrealized appreciation on forward foreign currency contracts. Futures contracts are reported in the table above using cumulative appreciation of futures contracts and centrally cleared swaps are reported at value 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, options and swaptions written are shown within options and swaptions written, at value and swap agreements (except centrally cleared swaps) are shown within swap agreements at value while forward foreign currency contracts are shown within unrealized depreciation on forward foreign currency contracts. Futures contracts are reported in the table above using cumulative depreciation of futures contracts and centrally cleared swaps are reported at value 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 paid, if any, is reported within the Statement of assets and liabilities.
323
PACE Select Advisors Trust
Notes to financial statements
Net realized and change in unrealized gains (losses) from derivatives instruments during the year ended July 31, 2016, 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 | |||||||||||||||||||||||
Futures | $ | 32,753 | $ | — | $ | — | $ | — | $ | 32,753 | |||||||||||||
Options and swaptions purchased4 | (1,061,797 | ) | — | — | — | (1,061,797 | ) | ||||||||||||||||
Swap agreements | (5,226,436 | ) | — | — | — | (5,226,436 | ) | ||||||||||||||||
Options and swaptions written | 1,292,171 | — | — | 1,292,171 | |||||||||||||||||||
Total net realized gain (loss) | $ | (4,963,309 | ) | $ | — | $ | — | $ | — | $ | (4,963,309 | ) | |||||||||||
Net change in unrealized appreciation/depreciation5 | |||||||||||||||||||||||
Futures | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Options and swaptions purchased4 | 289,057 | — | — | — | 289,057 | ||||||||||||||||||
Swap agreements | (1,549,237 | ) | — | — | — | (1,549,237 | ) | ||||||||||||||||
Options and swaptions written | (424,896 | ) | — | — | (424,896 | ) | |||||||||||||||||
Total net change in unrealized appreciation/depreciation | $ | (1,685,076 | ) | $ | — | $ | — | $ | — | $ | (1,685,076 | ) | |||||||||||
PACE Intermediate Fixed Income Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Futures contracts | $ | 190,528 | $ | — | $ | — | $ | — | $ | 190,528 | |||||||||||||
Options and swaptions purchased4 | (232,692 | ) | (16,618 | ) | — | — | (249,310 | ) | |||||||||||||||
Forward foreign currency contracts | — | 125,946 | — | — | 125,946 | ||||||||||||||||||
Swap agreements | (866,006 | ) | — | 261,502 | — | (604,504 | ) | ||||||||||||||||
Options and swaptions written | 328,615 | 90,179 | — | — | 418,794 | ||||||||||||||||||
Total net realized gain (loss) | $ | (579,555 | ) | $ | 199,507 | $ | 261,502 | $ | — | $ | (118,546 | ) | |||||||||||
Net change in unrealized appreciation/depreciation5 | |||||||||||||||||||||||
Futures contracts | $ | (623,927 | ) | $ | — | $ | — | $ | — | $ | (623,927 | ) | |||||||||||
Options and swaptions purchased4 | 206,399 | 2,535 | — | — | 208,934 | ||||||||||||||||||
Forward foreign currency contracts | — | (123,539 | ) | — | — | (123,539 | ) | ||||||||||||||||
Swap agreements | (342,621 | ) | — | (51,611 | ) | — | (394,232 | ) | |||||||||||||||
Options and swaptions written | (23,156 | ) | (11,061 | ) | — | — | (34,217 | ) | |||||||||||||||
Total net change in unrealized appreciation/depreciation | $ | (783,305 | ) | $ | (132,065 | ) | $ | (51,611 | ) | $ | — | $ | (966,981 | ) |
324
PACE Select Advisors Trust
Notes to financial statements
Interest rate risk | Foreign exchange risk | Credit risk | Equity risk | Total | |||||||||||||||||||
PACE Strategic Fixed Income Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Futures contracts | $ | 114,409 | $ | (335,533 | ) | $ | — | $ | — | $ | (221,124 | ) | |||||||||||
Options and swaptions purchased4 | (625,652 | ) | — | — | — | (625,652 | ) | ||||||||||||||||
Options and swaptions written | 1,769,690 | 1,247,675 | — | — | 3,017,365 | ||||||||||||||||||
Forward foreign currency contracts | — | 1,586,627 | — | — | 1,586,627 | ||||||||||||||||||
Swap agreements | (3,514,318 | ) | — | 399,807 | — | (3,114,511 | ) | ||||||||||||||||
Total net realized gain (loss) | $ | (2,255,871 | ) | $ | 2,498,769 | $ | 399,807 | $ | — | $ | 642,705 | ||||||||||||
Net change in unrealized appreciation/depreciation5 | |||||||||||||||||||||||
Options and swaptions purchased4 | $ | (155,686 | ) | $ | — | $ | — | $ | — | $ | (155,686 | ) | |||||||||||
Futures contracts | 2,876,960 | — | — | — | 2,876,960 | ||||||||||||||||||
Options and swaptions written4 | 92,908 | (6,968 | ) | — | — | 85,940 | |||||||||||||||||
Swap agreements | (19,998,860 | ) | — | 2,011,508 | — | (17,987,352 | ) | ||||||||||||||||
Forward foreign currency contracts | — | (2,732,657 | ) | — | — | (2,732,657 | ) | ||||||||||||||||
Total net change in unrealized appreciation/depreciation | $ | (17,184,678 | ) | $ | (2,739,625 | ) | $ | 2,011,508 | $ | — | $ | (17,912,795 | ) | ||||||||||
PACE International Fixed Income Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Futures contracts | $ | (817,298 | ) | $ | — | $ | — | $ | — | $ | (817,298 | ) | |||||||||||
Forward foreign currency contracts | — | 16,245,903 | — | — | 16,245,903 | ||||||||||||||||||
Total net realized gain (loss) | $ | (817,298 | ) | $ | 16,245,903 | $ | — | $ | — | $ | 15,428,605 | ||||||||||||
Net change in unrealized appreciation/depreciation5 | |||||||||||||||||||||||
Futures contracts | $ | 2,780,452 | $ | — | $ | — | $ | — | $ | 2,780,452 | |||||||||||||
Forward foreign currency contracts | — | 1,309,834 | — | — | 1,309,834 | ||||||||||||||||||
Total net change in unrealized appreciation/depreciation | $ | 2,780,452 | $ | 1,309,834 | $ | — | $ | — | $ | 4,090,286 | |||||||||||||
PACE High Yield Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Forward foreign currency contracts | $ | — | $ | 4,106,711 | $ | — | $ | — | $ | 4,106,711 | |||||||||||||
Total net realized gain (loss) | $ | — | $ | 4,106,711 | $ | — | $ | — | $ | 4,106,711 | |||||||||||||
Net change in unrealized appreciation/depreciation5 | |||||||||||||||||||||||
Forward foreign currency contracts | $ | — | $ | (2,389,290 | ) | $ | — | $ | — | $ | (2,389,290 | ) | |||||||||||
Total net change in unrealized appreciation/depreciation | $ | — | $ | (2,389,290 | ) | $ | — | $ | — | $ | (2,389,290 | ) | |||||||||||
PACE International Equity Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Forward foreign currency contracts | — | (179,527 | ) | — | — | (179,527 | ) | ||||||||||||||||
Total net realized gain (loss) | $ | — | $ | (179,527 | ) | $ | — | $ | — | $ | (179,527 | ) | |||||||||||
PACE International Emerging Markets Equity Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Forward foreign currency contracts | $ | — | $ | 24,550 | $ | — | $ | — | $ | 24,550 | |||||||||||||
Total net realized gain (loss) | $ | — | $ | 24,550 | $ | — | $ | — | $ | 24,550 |
325
PACE Select Advisors Trust
Notes to financial statements
Interest rate risk | Foreign exchange risk | Credit risk | Equity risk | Total | |||||||||||||||||||
PACE Alternative Strategies Investments | |||||||||||||||||||||||
Net realized gain (loss)3 | |||||||||||||||||||||||
Futures contracts | $ | 6,036,603 | $ | — | $ | — | $ | (11,715,672 | ) | $ | (5,679,069 | ) | |||||||||||
Options and swaptions purchased4 | (459,705 | ) | (43,303 | ) | — | (33,634 | ) | (536,642 | ) | ||||||||||||||
Options and swaptions written | (54,464 | ) | 492,506 | — | (517,983 | ) | (79,941 | ) | |||||||||||||||
Forward foreign currency contracts | — | 3,345,468 | — | — | 3,345,468 | ||||||||||||||||||
Swap agreements | (2,066,209 | ) | — | 774,127 | 372,389 | (919,693 | ) | ||||||||||||||||
Total net realized gain (loss) | $ | 3,456,225 | $ | 3,794,671 | $ | 774,127 | $ | (11,894,900 | ) | $ | (3,869,877 | ) | |||||||||||
Net change in unrealized appreciation/depreciation5 | |||||||||||||||||||||||
Futures contracts | $ | 1,717,972 | $ | — | $ | — | $ | (2,622,053 | ) | $ | (904,081 | ) | |||||||||||
Options and swaptions purchased4 | (632,114 | ) | (320,920 | ) | — | 1,437,053 | 484,019 | ||||||||||||||||
Options and swaption written | (17,671 | ) | (107,581 | ) | — | (855,526 | ) | (980,778 | ) | ||||||||||||||
Forward foreign currency contracts | — | (3,730,074 | ) | — | — | (3,730,074 | ) | ||||||||||||||||
Swap agreements | (5,398,729 | ) | — | 1,157,930 | (445,637 | ) | (4,686,436 | ) | |||||||||||||||
Total net change in unrealized appreciation/depreciation | $ | (4,330,542 | ) | $ | (4,158,575 | ) | $ | 1,157,930 | $ | (2,486,163 | ) | $ | (9,817,350 | ) |
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, unless otherwise noted.
4 Realized and unrealized gain (loss) is included in net realized gain (loss) from investments and net change in unrealized appreciation/depreciation on investments in the Statement of operations.
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, unless otherwise noted.
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 limits the scope of the new balance sheet offsetting disclosures to derivatives, repurchase and reverse repurchase agreements, and securities lending and securities borrowing transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting agreement ("MNA") 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. The statement of assets and liabilities is presented gross of any netting.
326
PACE Select Advisors Trust
Notes to financial statements
At July 31, 2016, derivative assets and liabilities (by type) on a gross basis were follows:
PACE Mortgage-Backed Securities Fixed Income Investments
Derivative Financial Instruments: | Assets | Liabilities | |||||||||
Options written | $ | — | $ | (150,907 | ) | ||||||
Swap agreements1 | 2,392 | (2,265,930 | ) | ||||||||
Total gross amount of derivative assets and liabilities in the Statement of Assets and Liabilities | 2,392 | (2,416,837 | ) | ||||||||
Derivatives not subject to MNA or similar agreements | — | 2,265,930 | |||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements | 2,392 | (150,907 | ) |
1 Includes cumulative appreciation/depreciation of centrally cleared swaps as reported in centrally cleared swaps tables in the Portfolio of investments but only the unpaid variation margin is reported within the Statement of assets and liabilities within variation margin on centrally cleared swap agreements.
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, 2016.
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 | |||||||||||||||
CSI | $ | 1,146 | $ | (1,146 | ) | $ | — | $ | — | ||||||||||
GS | 1,246 | — | (1,246 | ) | — | ||||||||||||||
Total | 2,392 | (1,146 | ) | (1,246 | ) | — | |||||||||||||
Counterparty | Gross amount of liabilities | Financial instruments and derivatives available for offset | Collateral pledged* | Net amount of liabilities | |||||||||||||||
CSI | $ | (102,370 | ) | $ | 1,146 | $ | 101,224 | $ | — | ||||||||||
JMPCM | (48,537 | ) | — | 48,537 | — | ||||||||||||||
Total | (150,907 | ) | 1,146 | 149,761 | — |
* In some instances, the actual collateral received and/or pledged may be more than the amount shown and may be comprised of cash collateral, non-cash collateral or combination of both.
PACE Intermediate Fixed Income
Derivative Financial Instruments: | Assets | Liabilities | |||||||||
Forward foreign currency contracts | $ | 20,511 | $ | (86,634 | ) | ||||||
Futures contracts 1 | 558,455 | (1,094,450 | ) | ||||||||
Options and swaptions purchased | 387,798 | — | |||||||||
Options and swaptions written | — | (533,347 | ) | ||||||||
Swap agreements1 | 29,171 | (511,863 | ) | ||||||||
Total gross amount of derivative assets and liabilities in the Statement of Assets and Liabilities | 995,935 | (2,226,294 | ) | ||||||||
Derivatives not subject to MNA or similar agreements | (574,754 | ) | 1,579,509 | ||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements | 421,181 | (646,785 | ) |
1 Includes cumulative appreciation/depreciation of futures contracts and centrally cleared swaps as reported in the futures contracts and centrally cleared swaps tables in the Portfolio of investments but only the unpaid variation margin is reported within the Statement of assets and liabilities within variation margin on futures contracts and centrally cleared swap agreements, respectively.
327
PACE Select Advisors Trust
Notes to financial statements
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, 2016.
PACE Intermediate Fixed Income
Counterparty | Gross amount of assets | Financial instruments and derivatives available for offset | Collateral received | Net amount of assets | |||||||||||||||
BB | $ | 8,324 | $ | — | $ | — | $ | 8,324 | |||||||||||
CSI | 16,624 | — | — | 16,624 | |||||||||||||||
GS | 387,798 | (362,958 | ) | — | 24,840 | ||||||||||||||
MSCI | 8,435 | (8,435 | ) | — | — | ||||||||||||||
Total | 421,181 | (371,393 | ) | — | 49,788 | ||||||||||||||
Counterparty | Gross amount of liabilities | Financial instruments and derivatives available for offset | Collateral pledged | Net amount of liabilities | |||||||||||||||
BOA | $ | (164,203 | ) | $ | — | $ | — | $ | (164,203 | ) | |||||||||
GS | (362,958 | ) | 362,958 | — | — | ||||||||||||||
JPMBC | (32,990 | ) | — | — | (32,990 | ) | |||||||||||||
MSCI | (86,568 | ) | 8,435 | — | (78,133 | ) | |||||||||||||
RBS | (66 | ) | — | — | (66 | ) | |||||||||||||
Total | (646,785 | ) | 371,393 | — | (275,392 | ) |
PACE Strategic Fixed Income Investments
Derivative Financial Instruments: | Assets | Liabilities | |||||||||
Forward foreign currency contracts | $ | 3,315,758 | $ | (4,827,343 | ) | ||||||
Futures contracts1 | 5,540,913 | (3,262,882 | ) | ||||||||
Options and swaptions purchased | 423,604 | — | |||||||||
Options and swaptions written | — | (960,225 | ) | ||||||||
Swap agreements1 | 2,059,888 | (25,553,485 | ) | ||||||||
Total gross amount of derivative assets and liabilities in the Statement of Assets and Liabilities | 11,340,163 | (34,603,935 | ) | ||||||||
Derivatives not subject to MNA or similar agreements | (7,513,526 | ) | 26,713,790 | ||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements | 3,826,637 | (7,890,145 | ) |
1 Includes cumulative appreciation/depreciation of futures contracts and centrally cleared swaps as reported in the futures contracts and centrally cleared swaps tables in the Portfolio of investments but only the unpaid variation margin is reported within the Statement of assets and liabilities within variation margin on futures contracts and centrally cleared swap agreements, respectively.
328
PACE Select Advisors Trust
Notes to financial statements
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, 2016.
PACE Strategic Fixed Income Investments
Counterparty | Gross amount of assets | Financial instruments and derivatives available for offset | Collateral received* | Net amount of assets | |||||||||||||||
BB | $ | 20,675 | $ | (20,675 | ) | $ | — | $ | — | ||||||||||
BNP | 190,036 | (190,036 | ) | — | — | ||||||||||||||
BOA | 693,442 | (693,442 | ) | — | — | ||||||||||||||
CITI | 470,621 | (470,621 | ) | — | — | ||||||||||||||
DB | 48,452 | (48,452 | ) | — | — | ||||||||||||||
GSB | 349,413 | (349,413 | ) | — | — | ||||||||||||||
HSBC | 422,899 | (422,899 | ) | — | — | ||||||||||||||
JPMCB | 1,026,349 | (663,043 | ) | (226,000 | ) | 137,306 | |||||||||||||
MSCI | 184,952 | (184,952 | ) | — | — | ||||||||||||||
RBC | 30,549 | (30,549 | ) | — | — | ||||||||||||||
RBS | 27,625 | — | — | 27,625 | |||||||||||||||
SG | 282,122 | (4,292 | ) | — | 277,830 | ||||||||||||||
SSC | 72,957 | (39,508 | ) | — | 33,449 | ||||||||||||||
WBC | 6,545 | (4,766 | ) | — | 1,779 | ||||||||||||||
Total | 3,826,637 | (3,122,648 | ) | (226,000 | ) | 477,989 | |||||||||||||
Counterparty | Gross amount of liabilities | Financial instruments and derivatives available for offset | Collateral pledged* | Net amount of liabilities | |||||||||||||||
BB | $ | (243,430 | ) | $ | 20,675 | $ | — | $ | (222,755 | ) | |||||||||
BNP | (546,242 | ) | 190,036 | 152,484 | (203,722 | ) | |||||||||||||
BOA | (1,236,681 | ) | 693,442 | — | (543,239 | ) | |||||||||||||
CITI | (659,774 | ) | 470,621 | 189,153 | — | ||||||||||||||
CSI | (124,450 | ) | — | 124,450 | — | ||||||||||||||
DB | (247,854 | ) | 48,452 | — | (199,402 | ) | |||||||||||||
GSB | (904,242 | ) | 349,413 | 529,688 | (25,141 | ) | |||||||||||||
GSI | (837,226 | ) | — | 837,226 | — | ||||||||||||||
HSBC | (1,449,061 | ) | 422,899 | 558,091 | (468,071 | ) | |||||||||||||
JPMCB | (663,043 | ) | 663,043 | — | — | ||||||||||||||
MSCI | (358,711 | ) | 184,952 | 173,759 | — | ||||||||||||||
RBC | (570,865 | ) | 30,549 | — | (540,316 | ) | |||||||||||||
SG | (4,292 | ) | 4,292 | — | — | ||||||||||||||
SSC | (39,508 | ) | 39,508 | — | — | ||||||||||||||
WBC | (4,766 | ) | 4,766 | — | — | ||||||||||||||
Total | (7,890,145 | ) | 3,122,648 | 2,564,851 | (2,202,646 | ) |
* In some instances, the actual collateral received and/or pledged may be more than the amount shown and may be comprised of cash collateral, non-cash collateral or combination of both.
329
PACE Select Advisors Trust
Notes to financial statements
PACE International Fixed Income Investments
Derivative Financial Instruments: | Assets | Liabilities | |||||||||
Forward foreign currency contracts | $ | 6,679,179 | $ | (5,289,627 | ) | ||||||
Futures contracts1 | 3,677,706 | (1,303,923 | ) | ||||||||
Total gross amount of derivative assets and liabilities in the Statement of Assets and Liabilities | 10,356,885 | (6,593,550 | ) | ||||||||
Derivatives not subject to MNA or similar agreements | (10,356,885 | ) | 6,593,550 | ||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements | — | — |
PACE High Yield Investments
Derivative Financial Instruments: | Assets | Liabilities | |||||||||
Forward foreign currency contracts | $ | 229,228 | $ | (2,004,545 | ) | ||||||
Total gross amount of derivative assets and liabilities in the Statement of Assets and Liabilities | 229,228 | (2,004,545 | ) | ||||||||
Derivatives not subject to MNA or similar agreements | (229,228 | ) | 2,004,545 | ||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements | — | — |
* In some instances, the actual collateral received and/or pledged may be more than the amount shown and may be comprised of cash collateral, non-cash collateral or combination of both.
PACE Alternative Strategies Investments
Derivative Financial Instruments: | Assets | Liabilities | |||||||||
Forward foreign currency contracts | $ | 21,727,768 | $ | (19,780,282 | ) | ||||||
Futures contracts1 | 5,780,906 | (4,136,246 | ) | ||||||||
Options and swaptions purchased | 11,109,475 | — | |||||||||
Options and swaptions written | — | (1,233,207 | ) | ||||||||
Swap agreements1 | 15,306,750 | (18,565,548 | ) | ||||||||
Total gross amount of derivative assets and liabilities in the Statement of Assets and Liabilities | 53,924,899 | (43,715,283 | ) | ||||||||
Derivatives not subject to MNA or similar agreements | (20,043,125 | ) | 20,448,556 | ||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements | 33,881,774 | (23,266,727 | ) |
1 Includes cumulative appreciation/depreciation of futures contracts and centrally cleared swaps as reported in the futures contracts and centrally cleared swaps tables in the Portfolio of investments but only the unpaid variation margin is reported within the Statement of assets and liabilities within variation margin on futures contracts and centrally cleared swap agreements, respectively.
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, 2016.
PACE Alternative Strategies Investments
Counterparty | Gross amount of assets | Financial instruments and derivatives available for offset | Collateral received* | Net amount of assets | |||||||||||||||
BB | $ | 6,029,582 | $ | (6,029,582 | ) | $ | — | $ | — | ||||||||||
BNP | 3,450,307 | (2,609,867 | ) | — | 840,440 | ||||||||||||||
BOA | 2,383 | (2,383 | ) | — | — | ||||||||||||||
CITI | 9,761,763 | (4,395,743 | ) | (209,605 | ) | 5,156,415 |
330
PACE Select Advisors Trust
Notes to financial statements
Counterparty | Gross amount of assets | Financial instruments and derivatives available for offset | Collateral received* | Net amount of assets | |||||||||||||||
DB | $ | 158,152 | $ | (158,152 | ) | $ | — | $ | — | ||||||||||
GS | 2,314,613 | (274,240 | ) | — | 2,040,373 | ||||||||||||||
GSB | 298,170 | (26,376 | ) | — | 271,794 | ||||||||||||||
HSBC | 1,341,909 | — | — | 1,341,909 | |||||||||||||||
JPMCB | 629,089 | (44,597 | ) | — | 584,492 | ||||||||||||||
MSCI | 7,790,144 | (7,790,144 | ) | — | — | ||||||||||||||
RBS | 37,150 | (37,150 | ) | — | — | ||||||||||||||
SG | 150,053 | (150,053 | ) | — | — | ||||||||||||||
SGST | 1,918,459 | — | — | 1,918,459 | |||||||||||||||
Total | 33,881,774 | (21,518,287 | ) | (209,605 | ) | 12,153,882 | |||||||||||||
Counterparty | Gross amount of liabilities | Financial instruments and derivatives available for offset | Collateral pledged* | Net amount of liabilities | |||||||||||||||
BB | $ | (6,670,517 | ) | $ | 6,029,582 | $ | — | $ | (640,935 | ) | |||||||||
BNP | (2,609,867 | ) | 2,609,867 | — | — | ||||||||||||||
BOA | (258,077 | ) | 2,383 | (255,694 | ) | ||||||||||||||
CITI | (4,395,743 | ) | 4,395,743 | — | — | ||||||||||||||
DB | (178,904 | ) | 158,152 | — | (20,752 | ) | |||||||||||||
GS | (274,240 | ) | 274,240 | — | — | ||||||||||||||
GSB | (26,376 | ) | 26,376 | — | — | ||||||||||||||
JPMCB | (44,597 | ) | 44,597 | — | — | ||||||||||||||
MSCI | (7,867,076 | ) | 7,790,144 | 76,932 | — | ||||||||||||||
RBS | (317,282 | ) | 37,150 | — | (280,132 | ) | |||||||||||||
SG | (624,048 | ) | 150,053 | — | (473,995 | ) | |||||||||||||
Total | (23,266,727 | ) | 21,518,287 | 76,932 | (1,671,508 | ) |
* In some instances, the actual collateral received and/or pledged may be more than the amount shown and may be comprised of cash collateral, non-cash collateral or combination of both.
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
331
PACE Select Advisors Trust
Notes to financial statements
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 may participate in joint repurchase agreement transactions with other funds managed, advised or subadvised by UBS 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 assessed to a fee for uninvested cash held in a business account at a bank.
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.
There were no reverse repurchase agreements outstanding at the year ended July 31, 2016.
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 footnotes.
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 and expense are 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.
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
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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 their investment strategies, 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 subadvisor 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 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.
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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.
In the normal course of trading activities, the Portfolios trade and hold certain fair valued derivative contracts that constitute guarantees. Such contracts include written put options, where the Portfolios would be obligated to purchase securities at specified prices (i.e. the options are exercised by the counterparties). The maximum payout for these contracts is limited to the number of put option contracts written and the related strike prices, respectively. At July 31, 2016, PACE Mortgage-Backed Securities Fixed Income Investments and PACE Strategic Fixed Income Investments had a maximum payout amounts of approximately $26,031,250 and $6,973,898, repectively, relating to written put option contracts. Maximum payout amounts could be offset by the subsequent sale, if any, of assets obtained via the execution of a payout event.
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, 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 that are held through swap 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.
Loan assignments and participations—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 insol-
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vency 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 subadvisor 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 Government 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 subadvisor 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 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
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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, 2016.
Mortgage-backed securities—Certain Portfolios may invest in mortgage-backed securities ("MBS"), representing direct or indirect interests in pools of underlying mortgage loans that are secured by real property. These securities provide investors with payments consisting of both principal and interest as the mortgages in the underlying mortgage pools are paid.
The timely payment of principal and interest (but not the market value) on MBS issued or guaranteed by Ginnie Mae (formally known as the Government National Mortgage Association or GNMA) is backed by Ginnie Mae and the full faith and credit of the US government. Obligations issued by Fannie Mae (formally known as the Federal National Mortgage Association or FNMA) and Freddie Mac (formally known as the Federal Home Loan Mortgage Company or FHLMC) are historically supported only by the credit of the issuer, but currently are guaranteed by the US government in connection with such agencies being placed temporarily into conservatorship by the US government.
Some MBS are sponsored or issued by private entities. Payments of principal and interest (but not the market value) of such private MBS may be supported by pools of mortgage loans or other MBS that are guaranteed, directly or indirectly, by the US government or one of its agencies or instrumentalities, or they may be issued without any government guarantee of the underlying mortgage assets but with some form of non-government credit enhancement.
Collateralized mortgage obligations ("CMO") are a type of MBS. A CMO is a debt security that may be collateralized by whole mortgage loans or mortgage pass-through securities. The mortgage loans or mortgage pass-through securities are divided into classes or tranches with each class having its own characteristics. Investors typically receive payments out of the interest and principal on the underlying mortgages. The portions of these payments that investors receive, as well as the priority of their rights to receive payments, are determined by the specific terms of the CMO class.
The yield characteristics of MBS differ from those of traditional debt securities. Among the major differences are that interest and principal payments are made more frequently, usually monthly, and that principal may be prepaid at any time because the underlying mortgage loans or other obligations generally may be prepaid at any time. Prepayments on a pool of mortgage loans are influenced by a variety of economic, geographic, social and other factors. Generally, prepayments on fixed-rate mortgage loans will increase during a period of falling interest rates and decrease during a period of rising interest rates. Certain classes of CMOs and other MBS are structured in a manner that makes them extremely sensitive to changes in prepayment rates. Such classes include interest-only ("IO") and principal-only ("PO") classes. IOs are entitled to receive all or a portion of the interest, but none (or only a nominal amount) of the principal payments, from the underlying mortgage assets. If the mortgage assets underlying an IO experience greater than anticipated principal prepayments, then the total amount of interest payments allocable to the IO class, and therefore the yield to investors, generally will be reduced. Conversely, PO classes are entitled to receive all or a portion of the principal payments, but none of the interest, from the underlying mortgage assets. PO classes are purchased at substantial discounts from par, and the yield to investors will be reduced if principal payments are slower than expected.
Asset-backed securities—Certain Portfolios may invest in asset-backed securities ("ABS"), representing interests in pools of certain types of underlying installment loans, home equity loans, leases of various types of real and personal property and receivables from revolving lines of credit (credit cards). Such assets are securitized through the use of trusts or special purpose corporations. The yield characteristics of ABS differ from those of traditional debt securities. One such major difference is that principal may be prepaid at any time because the underlying obligations generally may be prepaid at any time. ABS may decrease in value as a result of increases in interest rates and may benefit less than other fixed-income securities from declining interest rates because of the risk of prepayment.
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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, 2016, only PACE Mortgage-Backed Securities Fixed Income Investments, PACE Intermediate Fixed Income Investments and PACE Strategic Fixed Income Investments utilized treasury roll transactions.
Pursuant to Accounting Standards Update ("ASU") No. 2014-11, Transfers & Servicing (Topic 860): "Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures" ("ASU 2014-11"), the table below represents the remaining contractual maturity as of July 31, 2016, of the treasury roll transactions accounted for as secured borrowings.
PACE Strategic Fixed Income Investments
Type of securities being bought back | Overnight and continuous | Up to 30 days | 31-90 days | Greater than 90 days | Total | ||||||||||||||||||
US government obligations | $ | — | $ | 71,452,512 | $ | 70,474,412 | $ | — | $ | 141,926,924 |
Swap agreements—Certain Portfolios may engage in swap agreements, including, but not limited to, interest rate, credit default, total return and variance swap agreements. A Portfolio expects to enter into these transactions to preserve a return or spread on a particular investment or to hedge a portion of the portfolio's duration, to protect against any increase in the price of securities the Portfolio anticipates purchasing at a later date, to gain exposure to certain markets in the most economical way possible or in an attempt to enhance income or gains.
The Portfolios accrue for interim payments on swap agreements on a daily basis, with the net amount recorded within unrealized appreciation or depreciation of swap agreements. Once interim payments are settled in cash, the net amount is recorded as realized gain/loss on swap agreements, in addition to realized gain/loss recorded upon the termination of swap agreements on the Statement of operations. Fluctuations in the value of swap agreements are recorded for financial statement purposes as unrealized appreciation or depreciation on swap agreements.
Certain Portfolios may enter into interest rate swap agreements with another party to receive or pay interest (e.g., an exchange of fixed rate payments for floating rate payments) to protect themselves from interest rate fluctuations. 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. Interest rate swap agreements are subject to general market risk, liquidity risk, counterparty risk and interest rate risk.
Credit default swap agreements involve commitments to make or receive payments in the event of a default of a security or other credit event of the referenced obligation. As a buyer, the Portfolio would make periodic payments to the counterparty, and the Portfolio would receive payments only upon the occurrence of a default or credit event. If no default or credit event occurs, the Portfolio will lose its periodic stream of payments over the term of the contract. However, if a default or a credit event does occur, the Portfolio typically would receive full notional value for the referenced 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 default or a credit event. If no
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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 would pay full notional value for the referenced obligation that may have little or no value. Credit default swap agreements may involve greater risks than if the Portfolio had invested in the referenced 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 swap agreements 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 swap agreements on credit indices are benchmarks for protecting investors owning bonds against default, and traders use them to speculate on changes in credit quality.
Credit default swap agreements on corporate issues or sovereign issues of an emerging market 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 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 swap agreements on corporate issues or sovereign issues of an emerging market 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, 2016 for which a Portfolio is the seller of protection are disclosed under the sections "Credit default swap agreements on credit indices—sell protection" and "Credit default swap agreements 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 agreements involve commitments to pay or receive interest in exchange for a market-linked return 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, respectively. Total return swap agreements are marked-to-market daily, and the change, if any, is recorded as unrealized appreciation or depreciation. Total return swap agreements are subject to general market risk, liquidity risk, counterparty risk, interest risk, credit risk and the risk that there may be unfavorable changes in the underlying investments or instruments.
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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 realized price variance of the underlying asset 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.
The use of swap agreements involves investment techniques and risks different from those associated with ordinary portfolio security transactions. If a Portfolio's subadviser 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. OTC swap agreements do not involve the delivery of securities and are subject to counterparty risk. If the other party to a swap agreement 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.
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. Centrally cleared swaps, if any, are reported on the Statement of assets and liabilities based on variation margin received or paid, if any.
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
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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 AM. In accordance with the Management Contract, each Portfolio paid UBS AM investment management and administration fees, which were accrued daily and paid monthly, in accordance with the following schedule as of July 31, 2016:
Portfolio | Annual rate as a percentage of each Portfolio's average daily net assets | ||||||
PACE Government 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 |
340
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Notes to financial statements
Portfolio | Annual rate as a percentage of each Portfolio's average daily net assets | ||||||
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 | ||||||
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 |
341
PACE Select Advisors Trust
Notes to financial statements
Under separate Subadvisory Agreements, with the exception of PACE Government Money Market Investments, UBS AM (not the Portfolios) pays the following investment subadvisors a fee from the investment management and administration fees which UBS AM receives, which is accrued daily and paid monthly:
Portfolio | Investment subadvisor | ||||||
PACE Mortgage-Backed Securities Fixed Income Investments | Pacific Investment Management Company LLC | ||||||
PACE Intermediate Fixed Income Investments | Babson Capital Management LLC BlackRock Financial Management, Inc. | ||||||
PACE Strategic Fixed Income Investments | Pacific Investment Management Company LLC Neuberger Berman Investment Advisers 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 | Nomura Corporate Research and Asset Management, Inc. | ||||||
PACE Large Co Value Equity Investments | Los Angeles Capital Management and Equity Research, Inc. River Road Asset Management, LLC Pzena Investment Management, LLC Boston Partners | ||||||
PACE Large Co Growth Equity Investments | Jackson Square Partners, LLC J.P. Morgan Investment Management Mar Vista Investment Partners, LLC | ||||||
PACE Small/Medium Co Value Equity Investments | Kayne Anderson Rudnick Investment Management, LLC Wells Capital Management, Inc. Systematic Financial Management, L.P. | ||||||
PACE Small/Medium Co Growth Equity Investments | LMCG Investments, LLC (formerly known as Lee Munder Capital Group, LLC) Riverbridge Partners, LLC Timpani Capital Management LLC | ||||||
PACE International Equity Investments | Robert W. Baird & Co. Incorporated (formerly known as Chautauqua Capital Management, LLC) Los Angeles Capital Management and Equity Research, Inc. Mondrian Investment Partners Ltd. | ||||||
PACE International Emerging Markets Equity Investments | LMCG Investments, LLC (formerly known as 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. | ||||||
PACE Alternative Strategies Investments.1 | Analytic Investors, LLC AQR Capital Management LLC Aviva Investors America LLC First Quadrant L.P. PCJ Investment Counsel Ltd. Sirios Capital Management, L.P. Standard Life investments (Corporate Funds) Limited |
1 UBS Asset Management (Americas) Inc. has the authority to allocate a portion of the Portfolio's assets to unaffiliated actively-and passively-managed pooled investment vehicles and index futures.
342
PACE Select Advisors Trust
Notes to financial statements
At July 31, 2016, certain Portfolios owe or are owed by UBS 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 AM | ||||||
PACE Government Money Market Investments | $ | (42,504 | ) | ||||
PACE Mortgage-Backed Securities Fixed Income Investments | 173,451 | ||||||
PACE Intermediate Fixed Income Investments | 160,142 | ||||||
PACE Strategic Fixed Income Investments | 379,007 | ||||||
PACE Municipal Fixed Income Investments | 161,321 | ||||||
PACE International Fixed Income Investments | 242,803 | ||||||
PACE High Yield Investments | 221,351 | ||||||
PACE Large Co Value Equity Investments | 800,333 | ||||||
PACE Large Co Growth Equity Investments | 816,350 | ||||||
PACE Small/Medium Co Value Equity Investments | 343,238 | ||||||
PACE Small/Medium Co Growth Equity Investments | 296,324 | ||||||
PACE International Equity Investments | 691,781 | ||||||
PACE International Emerging Markets Equity Investments | 340,556 | ||||||
PACE Global Real Estate Securities Investments | 58,797 | ||||||
PACE Alternative Strategies Investments | 809,060 |
UBS 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 AM is contractually obligated to waive its management fees to the extent necessary to reflect the lower subadvisory fees paid by UBS AM to each of these Portfolio's subadvisors: Pacific Investment Management Company LLC and Rogge Global Partners plc.
UBS AM has agreed to lower its management fee so that the annual fee rate for management services (but not the administrative services) for the PACE Strategic Fixed Income Investments and PACE International Fixed Income Investments Portfolios don't exceed the following rate: $0 to $500 million—0.500%; in excess of $500 million up to $1 billion—0.450%; in excess of $1 billion up to $1.25 billion—0.425%; in excess of $1.25 billion up to $1.5 billion—0.400%; and over $1.5 billion—0.375% and $0 to $500 million—0.600%; in excess of $500 million up to $1 billion—0.575%; and over $1 billion—0.550%, respectively. UBS AM has further voluntarily waived its fees in the following amounts for PACE Strategic Fixed Income Fund, PACE Municipal Fixed Income Investments, PACE International Fixed Income Investments and PACE High Yield Investments: 0.070%, 0.050%, 0.100% and 0.100%, respectively, through November 30, 2016. These management fee waivers will not be subject to future recoupment.
For the year ended July 31, 2016, UBS AM was contractually obligated to waive as follows:
Management fees waived | |||||||
PACE Mortgage-Backed Securities Fixed Income Investments | $ | 224,637 | |||||
PACE Strategic Fixed Income Investments | 809,299 | ||||||
PACE Municipal Fixed Income Investments | 205,569 | ||||||
PACE International Fixed Income Investments | 1,272,295 | ||||||
PACE High Yield Investments | 408,532 |
Additionally, PACE Alternative Strategies Investments and UBS AM have entered into a written fee waiver agreement pursuant to which UBS AM is contractually obligated to waive its management fees to the extent necessary to offset the cost savings to UBS AM for allocating a portion of the fund's assets to other unaffiliated pooled investment vehicles and index futures. The fee waiver agreement may be terminated by the Portfolio's Board at any time and also will terminated automatically upon the expiration or termination of the Portfolio's advisory contract with UBS
343
PACE Select Advisors Trust
Notes to financial statements
AM. For the year ended July 31, 2016, UBS AM was contractually obligated to waive $442,718 in investment management and administration fees. This management fee waiver will not be subject to future recoupment.
With respect to the following Portfolios, UBS AM may voluntarily waive its management fees to the extent necessary to reflect lower subadvisory fees paid. This management fee waiver will not be subject to future recoupment. Once started, there is no guarantee that UBS AM would continue to voluntarily waive a portion of its management fees. For the year ended July 31, 2016, UBS AM voluntarily waived fees of:
Management fees waived | |||||||
PACE Intermediate Fixed Income Investments | $ | 46,884 | |||||
PACE Municipal Fixed Income Investments | 85,569 | ||||||
PACE High Yield Investments | 308,270 | ||||||
PACE Large Co Value Equity Investments | 161,095 | ||||||
PACE Large Co Growth Equity Investments | 96,315 | ||||||
PACE Small/Medium Co Growth Equity Investments | 208,959 | ||||||
PACE International Equity Investments | 323,033 | ||||||
PACE International Emerging Markets Equity Investments | 365,020 | ||||||
PACE Alternative Strategies Investments | 116,340 |
Additionally, with respect to PACE Government Money Market Investments, UBS 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 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, 2016, UBS AM voluntarily waived and/or reimbursed expenses of $386,980 for PACE Government Money Market Investments for that purpose.
UBS 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, relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) through November 30, 2016 at a level not to exceed the amounts in the table below.
Each Portfolio will repay UBS AM for any such waived fees/reimbursed expenses during a three-year period following July 31, 2013, 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, 2016, UBS AM had the following fee waivers/expense reimbursements, and recoupments. The fee waivers/expense reimbursements, portions of which are subject to repayment by the Portfolios through July 31, 2019, and recoupments for the year ended July 31, 2016, 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 Government Money Market Investments | N/A | N/A | N/A | 0.60 | % | $ | 706,786 | $ | — | ||||||||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | 0.97 | % | 1.47 | % | 0.72 | % | 0.72 | 714,210 | — | ||||||||||||||||||
PACE Intermediate Fixed Income Investments | 0.93 | 1.43 | 0.68 | 0.68 | 574,537 | — | |||||||||||||||||||||
PACE Strategic Fixed Income Investments | 1.06 | 1.56 | 0.81 | 0.81 | 158 | — | |||||||||||||||||||||
PACE Municipal Fixed Income Investments | 0.90 | 1.40 | 0.65 | 0.65 | — | — | |||||||||||||||||||||
PACE International Fixed Income Investments | 1.25 | 1.75 | 1.00 | 1.00 | — | — | |||||||||||||||||||||
PACE High Yield Investments | 1.28 | 1.78 | 1.03 | 1.03 | — | — |
344
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 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 | — | — | |||||||||||||||||||||
PACE Small/Medium Co Value Equity Investments | 1.41 | 2.16 | 1.16 | 1.16 | — | — | |||||||||||||||||||||
PACE Small/Medium Co Growth Equity Investments | 1.38 | 2.13 | 1.13 | 1.13 | — | 441 | |||||||||||||||||||||
PACE International Equity Investments | 1.55 | 2.30 | 1.30 | 1.30 | — | — | |||||||||||||||||||||
PACE International Emerging Markets Equity Investments | 1.95 | 2.70 | 1.70 | 1.70 | — | — | |||||||||||||||||||||
PACE Global Real Estate Securities Investments | 1.45 | 2.20 | 1.20 | 1.20 | 547,380 | — | |||||||||||||||||||||
PACE Alternative Strategies Investments | 1.88 | 2.63 | 1.63 | 1.63 | — | — |
At July 31, 2016, the following Portfolios had remaining fee waivers/expense reimbursements subject to repayment to UBS AM and respective dates of expiration as follows:
Portfolio | Fee waivers/ expense reimbursements subject to repayment | Expires July 31, 2017 | Expires July 31, 2018 | Expires July 31, 2019 | |||||||||||||||
PACE Government Money Market Investments | $ | 2,248,248 | $ | 855,490 | $ | 685,972 | $ | 706,786 | |||||||||||
PACE Mortgage-Backed Fixed Income Investments—Class A | 117,210 | 49,829 | 40,449 | 26,932 | |||||||||||||||
PACE Mortgage-Backed Fixed Income Investments—Class C | 37,602 | 14,845 | 12,532 | 10,225 | |||||||||||||||
PACE Mortgage-Backed Fixed Income Investments—Class Y | 185,363 | 68,311 | 57,441 | 59,611 | |||||||||||||||
PACE Mortgage-Backed Fixed Income Investments—Class P | 2,006,140 | 686,529 | 702,169 | 617,442 | |||||||||||||||
PACE Intermediate Fixed Income Investments—Class A | 68,391 | 27,819 | 24,173 | 16,399 | |||||||||||||||
PACE Intermediate Fixed Income Investments—Class C | 6,064 | 2,283 | 2,177 | 1,604 | |||||||||||||||
PACE Intermediate Fixed Income Investments—Class Y | 4,354 | 2,292 | 997 | 1,065 | |||||||||||||||
PACE Intermediate Fixed Income Investments—Class P | 1,757,614 | 565,867 | 636,278 | 555,469 | |||||||||||||||
PACE Global Real Estate Securities Investments—Class A | 11,579 | 7,544 | 3,353 | 682 | |||||||||||||||
PACE Global Real Estate Securities Investments—Class C | 553 | 229 | 142 | 182 | |||||||||||||||
PACE Global Real Estate Securities Investments—Class Y | 1,263 | 497 | 210 | 556 | |||||||||||||||
PACE Global Real Estate Securities Investments—Class P | 1,626,658 | 547,189 | 533,509 | 545,960 |
During the year ended July 31, 2016, the Portfolios could invest cash collateral from securities lending activities into an affiliated private money market fund, UBS Private Money Market Fund, LLC ("Private Money Market"), which operated in compliance with most of the substantive provisions of Rule 2a-7 of the 1940 Act. Private Money Market was managed by UBS AM and was offered only to mutual funds and certain other accounts managed by the Portfolios' investment manager. UBS AM acted as managing member of Private Money Market and received 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 AM might have, in its sole discretion, waived all or any portion of the management fee to which it might have been entitled from time to time in order to maintain operating expenses at a certain level.
On May 25, 2016, the Board approved changing the Portfolios' reinvestment option for cash collateral from securities lending activities from Private Money Market to State Street Institutional U.S. Government Money Market Fund; the change went into effect on June 17, 2016. Distributions received from Private Money Market and State Street Institutional U.S. Government Money Market Fund, net of fee rebates paid to borrowers, are included in securities lending income in the Statement of operations. Amounts relating to those investments in Private Money Market for the year ended July 31, 2016 have been included near the end of each Portfolio's Portfolio of investments.
345
PACE Select Advisors Trust
Notes to financial statements
During the year ended July 31, 2016, the Portfolios listed below paid broker commissions to affiliates of the investment manager as follows:
Affiliated broker | PACE Large Co Value Equity Investments | PACE Large Co Growth Equity Investments | PACE International Equity Investments | PACE International Emerging Markets Equity Investments | PACE Alternative Strategies Investments | ||||||||||||||||||
UBS AG | $ | — | $ | 88 | $ | — | $ | 2,385 | $ | 1,665 | |||||||||||||
UBS Limited | — | — | 404 | 1,004 | 20 | ||||||||||||||||||
UBS Securities Asia Ltd. | — | — | 22,948 | 8,007 | — | ||||||||||||||||||
UBS Securities Private Ltd. | — | — | — | 1,800 | — | ||||||||||||||||||
UBS Securities LLC | 25,934 | 1,905 | — | 6,137 | — |
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 execution of the transactions. For the year ended July 31, 2016, the following Portfolios paid brokerage commissions to Morgan Stanley in the amounts as follows:
PACE Strategic Fixed Income Investments | $ | 110 | |||||
PACE Large Co Value Equity Investments | 21,308 | ||||||
PACE Large Co Growth Equity Investments | 23,243 | ||||||
PACE Small/Medium Co Value Equity Investments | 32,557 | ||||||
PACE Small/Medium Co Growth Equity Investments | 4,868 | ||||||
PACE International Equity Investments | 23,936 | ||||||
PACE International Emerging Markets Equity Investments | 24,429 | ||||||
PACE Global Real Estate Securities Investments | 8,812 | ||||||
PACE Alternative Strategies Investments | 34,869 |
During the year ended July 31, 2016, 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 Government Money Market Investments | $ | 41,497,413 | |||||
PACE Mortgage-Backed Securities Fixed Income Investments | 1,925,696,222 | ||||||
PACE Intermediate Fixed Income Investments | 758,975,475 | ||||||
PACE Strategic Fixed Income Investments | 2,762,988,930 | ||||||
PACE Municipal Fixed Income Investments | 19,339,926 | ||||||
PACE International Fixed Income Investments | 26,762,554 | ||||||
PACE High Yield Investments | 56,135,259 | ||||||
PACE Alternative Strategies Investments | 135,225,492 |
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.
346
PACE Select Advisors Trust
Notes to financial statements
Service and distribution plans
UBS Asset Management (US) Inc. ("UBS 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 Government Money Market Investments, which only offers Class P shares), pay UBS 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.
UBS 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, 2016, certain Portfolios owed UBS AM (US) service and distribution fees, and for the year ended July 31, 2016, certain Portfolios were informed by UBS 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 | $ | 8,753 | $ | 2,915 | |||||||
PACE Mortgage-Backed Securities Fixed Income Investments—Class C | 7,810 | 0 | |||||||||
PACE Intermediate Fixed Income Investments—Class A | 3,963 | 611 | |||||||||
PACE Intermediate Fixed Income Investments—Class C | 1,046 | — | |||||||||
PACE Strategic Fixed Income Investments—Class A | 2,846 | 2,678 | |||||||||
PACE Strategic Fixed Income Investments—Class C | 6,659 | — | |||||||||
PACE Municipal Fixed Income Investments—Class A | 10,994 | 9,274 | |||||||||
PACE Municipal Fixed Income Investments—Class C | 6,706 | — | |||||||||
PACE International Fixed Income Investments—Class A | 9,511 | 3,668 | |||||||||
PACE International Fixed Income Investments—Class C | 1,974 | — | |||||||||
PACE High Yield Investments—Class A | 791 | 7,648 | |||||||||
PACE High Yield Investments—Class C | 2,100 | 74 | |||||||||
PACE Large Co Value Equity Investments—Class A | 23,474 | 10,736 | |||||||||
PACE Large Co Value Equity Investments—Class C | 10,654 | — | |||||||||
PACE Large Co Growth Equity Investments—Class A | 8,895 | 11,074 | |||||||||
PACE Large Co Growth Equity Investments—Class C | 2,951 | 103 | |||||||||
PACE Small/Medium Co Value Equity Investments—Class A | 3,521 | 1,926 | |||||||||
PACE Small/Medium Co Value Equity Investments—Class C | 3,620 | — | |||||||||
PACE Small/Medium Co Growth Equity Investments—Class A | 4,586 | 5,626 | |||||||||
PACE Small/Medium Co Growth Equity Investments—Class C | 2,299 | 43 | |||||||||
PACE International Equity Investments—Class A | 6,193 | 4,858 | |||||||||
PACE International Equity Investments—Class C | 1,870 | — |
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Notes to financial statements
Portfolio | Service and distribution fees owed | Sales charges earned by distributor | |||||||||
PACE International Emerging Markets Equity Investments—Class A | $ | 818 | $ | 593 | |||||||
PACE International Emerging Markets Equity Investments—Class C | 1,118 | 0 | |||||||||
PACE Global Real Estate Securities Investments—Class A | 77 | 112 | |||||||||
PACE Global Real Estate Securities Investments—Class C | 269 | 2 | |||||||||
PACE Alternative Strategies Investments—Class A | 2,056 | 63,169 | |||||||||
PACE Alternative Strategies Investments—Class C | 10,419 | 2,183 |
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 Government Money Market Investments so that BNY Mellon would correspondingly reduce the fees it would have charged to that Portfolio. Given that UBS 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 AM would have otherwise voluntarily waived/reimbursed. For the year ended July 31, 2016, the amount of the reduction in transfer agency and related services fees charged by BNY Mellon to the Portfolio was $276,926, 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, 2016, UBS Financial Services Inc. received from BNY Mellon, not the Portfolios, total delegated services fees as follows:
Portfolio | Delegated services fees earned | ||||||
PACE Government Money Market Investments | $ | 136,454 | |||||
PACE Mortgage-Backed Securities Fixed Income Investments | 429,646 | ||||||
PACE Intermediate Fixed Income Investments | 375,114 | ||||||
PACE Strategic Fixed Income Investments | 518,948 | ||||||
PACE Municipal Fixed Income Investments | 81,457 | ||||||
PACE International Fixed Income Investments | 508,208 | ||||||
PACE High Yield Investments | 404,074 | ||||||
PACE Large Co Value Equity Investments | 600,425 | ||||||
PACE Large Co Growth Equity Investments | 579,365 | ||||||
PACE Small/Medium Co Value Equity Investments | 561,259 | ||||||
PACE Small/Medium Co Growth Equity Investments | 563,029 | ||||||
PACE International Equity Investments | 559,416 | ||||||
PACE International Emerging Markets Equity Investments | 516,730 | ||||||
PACE Global Real Estate Securities Investments | 393,774 | ||||||
PACE Alternative Strategies Investments | 323,490 |
348
PACE Select Advisors Trust
Notes to financial statements
For the year ended July 31, 2016, 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 Government Money Market Investments | $ | — | $ | — | $ | — | $ | 828,698 | |||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | 39,167 | 13,573 | 71,907 | 729,347 | |||||||||||||||
PACE Intermediate Fixed Income Investments | 20,529 | 1,990 | 1,157 | 644,433 | |||||||||||||||
PACE Strategic Fixed Income Investments | 10,084 | 8,704 | 5,020 | 903,068 | |||||||||||||||
PACE Municipal Fixed Income Investments | 16,795 | 3,983 | 75 | 132,406 | |||||||||||||||
PACE International Fixed Income Investments | 49,415 | 2,785 | 6,312 | 857,342 | |||||||||||||||
PACE High Yield Investments | 3,309 | 2,141 | 1,003 | 706,531 | |||||||||||||||
PACE Large Co Value Equity Investments | 82,042 | 13,395 | 12,568 | 990,313 | |||||||||||||||
PACE Large Co Growth Equity Investments | 36,129 | 5,513 | 10,163 | 994,923 | |||||||||||||||
PACE Small/Medium Co Value Equity Investments | 13,753 | 4,296 | 1,340 | 973,929 | |||||||||||||||
PACE Small/Medium Co Growth Equity Investments | 19,545 | 3,381 | 1,097 | 973,494 | |||||||||||||||
PACE International Equity Investments | 40,310 | 4,208 | 15,565 | 951,020 | |||||||||||||||
PACE International Emerging Markets Equity Investments | 7,804 | 2,687 | 13,659 | 898,130 | |||||||||||||||
PACE Global Real Estate Securities Investments | 1,020 | 498 | 735 | 687,157 | |||||||||||||||
PACE Alternative Strategies Investments | 6,591 | 6,712 | 1,758 | 556,028 |
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. Effective June 17, 2016, cash collateral received is invested in State Street Institutional U.S. Government Money Market Fund, which is included in each Portfolio's Portfolio of investments. Prior to that, cash collateral received was invested in Private Money Market. State Street Bank and Trust Company serves as the Portfolios' lending agent.
In addition, PACE Large Co Value Equity Investments and PACE International Equity Investments participate in State Street's enhanced custody program. Through this program, State Street is capable of facilitating the Portfolios' short selling activity at a lower cost. A portion of the cash collateral received in connection with the Portfolios' securities lending activity is pledged back to State Street for the financing of short sales. This amount is shown as cash collateral on investments sold short in the Statement of assets and liabilities.
At July 31, 2016, 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 | $ | 10,678,241 | $ | 10,884,573 | $ | — | $ | 10,884,573 | |||||||||||||||
PACE Strategic Fixed Income Investments | 17,390,831 | 17,724,928 | — | 17,724,928 | |||||||||||||||||||
PACE International Fixed Income Investments | 1,196,333 | 1,220,380 | — | 1,220,380 |
349
PACE Select Advisors Trust
Notes to financial statements
Portfolio | Value of securities on loan | Cash collateral | Non-cash collateral* | Total collateral | Security types held as non-cash collateral | ||||||||||||||||||
PACE High Yield Investments | $ | 57,622,947 | $ | 58,971,210 | $ | — | $ | 58,971,210 | |||||||||||||||
PACE Large Co Value Equity Investments ** | 35,162,957 | 23,779,046 | 12,041,685 | 35,820,731 | US Treasury Notes and US Treasury Bills | ||||||||||||||||||
PACE Large Co Growth Equity Investments | 119,122,824 | 2,515,957 | 119,661,045 | 122,177,002 | US Treasury Notes and US Treasury Bills | ||||||||||||||||||
PACE Small/Medium Co Value Equity Investments | 120,493,974 | 17,050,926 | 106,036,726 | 123,087,652 | US Treasury Notes and US Treasury Bills | ||||||||||||||||||
PACE Small/Medium Co Growth Equity Investments | 121,805,358 | 69,914,089 | 54,896,571 | 124,810,660 | US Treasury Notes and US Treasury Bills | ||||||||||||||||||
PACE International Equity Investments** | 56,894,235 | 55,799,689 | 3,551,790 | 59,351,479 | US Treasury Notes and US Treasury Bills | ||||||||||||||||||
PACE International Emerging Markets Investments | 13,433,019 | 6,491,485 | 7,717,890 | 14,209,375 | US Treasury Notes and US Treasury Bills | ||||||||||||||||||
PACE Global Real Estate Securities Investments | 6,476,400 | — | 6,533,112 | 6,533,112 | US Treasury Notes and US Treasury Bills |
* These securities are held for the benefit of 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.
** This Portfolio participates in the enhanced custody program which permits self-borrow transactions that does not require any collateral for the securities on loan under those transactions.
Pursuant to ASU 2014-11, the table below represents the disaggregation at July 31, 2016 of the gross amount of recognized liabilities for securities lending transactions. As the securities loaned are subject to termination by the Portfolios or the borrower at any time, the remaining contractual maturities of the transactions presented below are considered to be overnight and continuous.
Type of securities loaned | Total gross amount of recognized liabilities for | ||||||||||||||
Portfolio | Equity securities | Corporate bonds | securities lending transactions | ||||||||||||
PACE Intermediate Fixed Income Investments | $ | — | $ | 10,884,573 | $ | 10,884,573 | |||||||||
PACE Strategic Fixed Income Investments | — | 17,724,928 | 17,724,928 | ||||||||||||
PACE International Fixed Income Investments | — | 1,220,380 | 1,220,380 | ||||||||||||
PACE High Yield Investments | 107,790 | 58,863,420 | 58,971,210 | �� | |||||||||||
PACE Large Co Value Equity Investments | 35,820,731 | — | 35,820,731 | ||||||||||||
PACE Large Co Growth Equity Investments | 122,177,002 | — | 122,177,002 | ||||||||||||
PACE Small/Medium Co Value Equity Investments | 123,087,652 | — | 123,087,652 | ||||||||||||
PACE Small/Medium Co Growth Equity Investments | 124,810,660 | — | 124,810,660 | ||||||||||||
PACE International Equity Investments | 59,351,479 | — | 59,351,479 | ||||||||||||
PACE International Emerging Markets Investments | 14,209,375 | — | 14,209,375 | ||||||||||||
PACE Global Real Estate Securities Investments | 6,533,112 | — | 6,533,112 |
Bank line of credit
Each Portfolio, other than PACE Government Money Market Investments, participates with other funds managed, advised or subadvised by UBS 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 on the average daily balance of the Committed Credit Facility not utilized. Effective November 18, 2015, commitment fees have been allocated among the Portfolios in the Committed Credit Facility as follows: 50% of the allocation is based on the relative asset size of Funds and the other 50% of the allocation is based on utilization. Prior to November 18, 2015, commitment fees were allocated among the Portfolios in the
350
PACE Select Advisors Trust
Notes to financial statements
Committed Credit Facility pro rata, based on the relative asset size of Portfolios. For the year ended July 31, 2016, the following Portfolios had borrowings as follows:
Portfolio | Average daily amount of borrowing outstanding | Days outstanding | Interest expense | Weighted average annualized interest rate | |||||||||||||||
PACE Intermediate Fixed Income Investments | $ | 504,746 | 3 | $ | 60 | 1.437 | % | ||||||||||||
PACE International Fixed Income Investments | 1,044,623 | 5 | 207 | 1.427 | |||||||||||||||
PACE Large Co Value Equity Investments | 1,083,726 | 39 | 1,576 | 1.286 | |||||||||||||||
PACE Large Co Growth Equity Investments | 1,157,455 | 14 | 623 | 1.386 | |||||||||||||||
PACE Small/Medium Co Growth Equity Investments | 546,534 | 1 | 22 | 1.422 | |||||||||||||||
PACE International Equity Investments | 1,980,328 | 17 | 356 | 1.423 | |||||||||||||||
PACE International Emerging Markets Equity Investments | 1,173,745 | 31 | 1,407 | 1.389 | |||||||||||||||
PACE Global Real Estate Securities Investments | 658,954 | 5 | 132 | 1.443 | |||||||||||||||
PACE Alternative Strategies Investments | 2,856,189 | 25 | 2,338 | 1.279 |
At July 31, 2016, PACE International Equity Investments had an outstanding borrowing of $590,108.
Purchases and sales of securities
For the year ended July 31, 2016, aggregate purchases and sales of portfolio securities, excluding short-term securities and US Government and agency securities, were as follows:
Portfolio | Purchases | Sales | |||||||||
PACE Mortgage-Backed Securities Fixed Income Investments (long transactions) | $ | 90,134,142 | $ | 34,756,426 | |||||||
PACE Intermediate Fixed Income Investments | 130,570,050 | 157,668,461 | |||||||||
PACE Strategic Fixed Income Investments | 262,504,351 | 280,059,686 | |||||||||
PACE Municipal Fixed Income Investments | 62,470,768 | 71,738,278 | |||||||||
PACE International Fixed Income Investments | 203,912,405 | 212,571,651 | |||||||||
PACE High Yield Investments | 407,674,035 | 403,848,900 | |||||||||
PACE Large Co Value Equity Investments (long transactions) | 647,440,187 | 753,499,081 | |||||||||
PACE Large Co Value Equity Investment (short transactions) | 180,799,475 | 165,623,089 | |||||||||
PACE Large Co Growth Equity Investments | 421,591,155 | 607,303,310 | |||||||||
PACE Small/Medium Co Value Equity Investments | 365,818,630 | 407,181,289 | |||||||||
PACE Small/Medium Co Growth Equity Investments | 459,063,510 | 499,422,544 | |||||||||
PACE International Equity Investments (long transactions) | 599,059,071 | 626,524,851 | |||||||||
PACE International Equity Investments (short transactions) | 176,985,795 | 180,631,212 | |||||||||
PACE International Emerging Markets Equity Investments | 248,514,953 | 248,887,666 | |||||||||
PACE Global Real Estate Securities Investments | 105,776,161 | 111,899,320 | |||||||||
PACE Alternative Strategies Investments (long transactions) | 692,971,399 | 590,208,932 | |||||||||
PACE Alternative Strategies Investments (short transactions) | 177,911,817 | 193,589,348 |
For the year ended July 31, 2016, 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) | $ | 11,516,926,835 | $ | 11,554,585,961 | |||||||
PACE Intermediate Fixed Income Investments | 1,066,268,258 | 1,031,671,805 | |||||||||
PACE Strategic Fixed Income Investments | 1,140,344,649 | 1,066,144,017 | |||||||||
PACE International Fixed Income Investments | — | 10,748,293 |
351
PACE Select Advisors Trust
Notes to financial statements
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 brokers or dealers. If a Portfolio's investment subadvisor 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, 2016, 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 | $ | 34,331 | |||||
PACE Large Co Growth Equity Investments | 55,209 | ||||||
PACE Small/Medium Co Value Equity Investments | 130,999 | ||||||
PACE Small/Medium Co Growth Equity Investments | 62,723 | ||||||
PACE International Equity Investments | 30,047 | ||||||
PACE International Emerging Markets Equity Investments | 19,509 | ||||||
PACE Global Real Estate Securities Investments | 9,835 |
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 Government Money Market Investments, which transacts at $1.00 per share, were as follows:
PACE Mortgage-Backed Securities Fixed Income Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 62,676 | $ | 819,419 | 718 | $ | 9,366 | |||||||||||||
Shares repurchased | (678,110 | ) | (8,838,528 | ) | (73,491 | ) | (951,773 | ) | |||||||||||
Dividends reinvested | 58,668 | 761,882 | 13,365 | 173,862 | |||||||||||||||
Net decrease | (556,766 | ) | $ | (7,257,227 | ) | (59,408 | ) | $ | (768,545 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 2,360,226 | $ | 30,698,013 | 5,938,165 | $ | 77,182,418 | |||||||||||||
Shares repurchased | (2,064,149 | ) | (26,827,857 | ) | (8,474,604 | ) | (110,184,103 | ) | |||||||||||
Dividends reinvested | 88,232 | 1,146,869 | 732,706 | 9,521,112 | |||||||||||||||
Net increase (decrease) | 384,309 | $ | 5,017,025 | (1,803,733 | ) | $ | (23,480,573 | ) |
352
PACE Select Advisors Trust
Notes to financial statements
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 137,182 | $ | 1,775,921 | 93 | $ | 1,207 | |||||||||||||
Shares repurchased | (1,164,818 | ) | (15,109,274 | ) | (104,446 | ) | (1,354,903 | ) | |||||||||||
Dividends reinvested | 54,159 | 701,732 | 10,235 | 132,812 | |||||||||||||||
Net decrease | (973,477 | ) | $ | (12,631,621 | ) | (94,118 | ) | $ | (1,220,884 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 1,043,229 | $ | 13,549,103 | 6,610,190 | $ | 85,796,232 | |||||||||||||
Shares repurchased | (1,302,502 | ) | (16,912,832 | ) | (8,554,215 | ) | (111,094,636 | ) | |||||||||||
Dividends reinvested | 74,052 | 959,832 | 624,418 | 8,096,388 | |||||||||||||||
Net decrease | (185,221 | ) | $ | (2,403,897 | ) | (1,319,607 | ) | $ | (17,202,016 | ) |
PACE Intermediate Fixed Income Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 32,525 | $ | 400,870 | 5,222 | $ | 63,654 | |||||||||||||
Shares repurchased | (167,380 | ) | (2,055,363 | ) | (30,989 | ) | (381,832 | ) | |||||||||||
Dividends reinvested | 22,248 | 271,974 | 1,612 | 19,707 | |||||||||||||||
Net decrease | (112,607 | ) | $ | (1,382,519 | ) | (24,155 | ) | $ | (298,471 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 1,513 | $ | 18,520 | 6,722,149 | $ | 82,609,507 | |||||||||||||
Shares repurchased | (6,096 | ) | (74,487 | ) | (7,046,388 | ) | (86,606,273 | ) | |||||||||||
Dividends reinvested | 821 | 10,045 | 706,177 | 8,637,610 | |||||||||||||||
Net increase (decrease) | (3,762 | ) | $ | (45,922 | ) | 381,938 | $ | 4,640,844 |
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 117,921 | $ | 1,461,000 | 7,733 | $ | 95,207 | |||||||||||||
Shares repurchased | (800,462 | ) | (9,875,333 | ) | (35,771 | ) | (443,227 | ) | |||||||||||
Dividends reinvested | 18,251 | 225,391 | 1,032 | 12,760 | |||||||||||||||
Net decrease | (664,290 | ) | $ | (8,188,942 | ) | (27,006 | ) | $ | (335,260 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 9,975 | $ | 123,047 | 5,795,445 | $ | 71,657,053 | |||||||||||||
Shares repurchased | (18,745 | ) | (231,866 | ) | (7,481,396 | ) | (92,530,470 | ) | |||||||||||
Dividends reinvested | 701 | 8,662 | 511,388 | 6,316,513 | |||||||||||||||
Net decrease | (8,069 | ) | $ | (100,157 | ) | (1,174,563 | ) | $ | (14,556,904 | ) |
353
PACE Select Advisors Trust
Notes to financial statements
PACE Strategic Fixed Income Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 58,037 | $ | 804,711 | 27,500 | $ | 381,826 | |||||||||||||
Shares repurchased | (116,713 | ) | (1,607,795 | ) | (153,639 | ) | (2,123,679 | ) | |||||||||||
Dividends reinvested | 23,858 | 327,442 | 15,588 | 213,855 | |||||||||||||||
Net decrease | (34,818 | ) | $ | (475,642 | ) | (110,551 | ) | $ | (1,527,998 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 35,583 | $ | 483,446 | 9,379,592 | $ | 129,053,283 | |||||||||||||
Shares repurchased | (63,965 | ) | (886,160 | ) | (15,353,290 | ) | (211,087,432 | ) | |||||||||||
Dividends reinvested | 6,469 | 88,581 | 2,101,232 | 28,813,371 | |||||||||||||||
Net decrease | (21,913 | ) | $ | (314,133 | ) | (3,872,466 | ) | $ | (53,220,778 | ) |
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 242,517 | $ | 3,404,619 | 33,395 | $ | 473,464 | |||||||||||||
Shares repurchased | (2,490,629 | ) | (34,910,266 | ) | (291,622 | ) | (4,091,148 | ) | |||||||||||
Dividends reinvested | 32,528 | 454,650 | 12,760 | 178,854 | |||||||||||||||
Net decrease | (2,215,584 | ) | $ | (31,050,997 | ) | (245,467 | ) | $ | (3,438,830 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 26,584 | $ | 371,990 | 10,724,618 | $ | 150,673,901 | |||||||||||||
Shares repurchased | (76,471 | ) | (1,073,964 | ) | (12,153,437 | ) | (170,755,321 | ) | |||||||||||
Dividends reinvested | 5,301 | 74,186 | 1,594,516 | 22,339,498 | |||||||||||||||
Net increase (decrease) | (44,586 | ) | $ | (627,788 | ) | 165,697 | $ | 2,258,078 |
PACE Municipal Fixed Income Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 63,428 | $ | 845,058 | 21,083 | $ | 280,720 | |||||||||||||
Shares repurchased | (455,385 | ) | (6,060,444 | ) | (46,866 | ) | (623,776 | ) | |||||||||||
Dividends reinvested | 81,023 | 1,078,481 | 12,790 | 170,255 | |||||||||||||||
Net decrease | (310,934 | ) | $ | (4,136,905 | ) | (12,993 | ) | $ | (172,801 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 2,625 | $ | 34,750 | 4,727,279 | $ | 63,083,383 | |||||||||||||
Shares repurchased | (3,639 | ) | (48,711 | ) | (5,903,217 | ) | (78,839,463 | ) | |||||||||||
Dividends reinvested | 47 | 626 | 746,403 | 9,941,157 | |||||||||||||||
Net decrease | (967 | ) | $ | (13,335 | ) | (429,535 | ) | $ | (5,814,923 | ) |
354
PACE Select Advisors Trust
Notes to financial statements
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 329,924 | $ | 4,402,100 | 12,673 | $ | 168,222 | |||||||||||||
Shares repurchased | (1,093,172 | ) | (14,509,502 | ) | (68,591 | ) | (907,833 | ) | |||||||||||
Dividends reinvested | 72,096 | 954,159 | 9,743 | 128,984 | |||||||||||||||
Net decrease | (691,152 | ) | $ | (9,153,243 | ) | (46,175 | ) | $ | (610,627 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | — | $ | — | 6,067,924 | $ | 80,445,478 | |||||||||||||
Shares repurchased | (176 | ) | (2,341 | ) | (5,813,544 | ) | (77,091,539 | ) | |||||||||||
Dividends reinvested | 38 | 509 | 605,267 | 8,011,998 | |||||||||||||||
Net increase (decrease) | (138 | ) | $ | (1,832 | ) | 859,647 | $ | 11,365,937 |
PACE International Fixed Income Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 32,800 | $ | 347,827 | 4,852 | $ | 51,385 | |||||||||||||
Shares repurchased | (400,840 | ) | (4,048,622 | ) | (18,642 | ) | (186,654 | ) | |||||||||||
Dividends reinvested | 100,115 | 1,001,263 | 5,591 | 55,822 | |||||||||||||||
Net decrease | (267,925 | ) | $ | (2,699,532 | ) | (8,199 | ) | $ | (79,447 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 16,847 | $ | 169,866 | 6,952,643 | $ | 70,369,750 | |||||||||||||
Shares repurchased | (108,584 | ) | (1,089,768 | ) | (11,353,659 | ) | (114,782,200 | ) | |||||||||||
Dividends reinvested | 12,456 | 124,288 | 1,430,992 | 14,323,544 | |||||||||||||||
Net decrease | (79,281 | ) | $ | (795,614 | ) | (2,970,024 | ) | $ | (30,088,906 | ) |
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 99,492 | $ | 1,061,483 | 54 | $ | 561 | |||||||||||||
Shares repurchased | (1,532,678 | ) | (16,077,340 | ) | (127,766 | ) | (1,312,547 | ) | |||||||||||
Dividends reinvested | 124,511 | 1,294,923 | 7,357 | 76,557 | |||||||||||||||
Net decrease | (1,308,675 | ) | $ | (13,720,934 | ) | (120,355 | ) | $ | (1,235,429 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 28,739 | $ | 300,166 | 9,056,130 | $ | 94,191,347 | |||||||||||||
Shares repurchased | (97,885 | ) | (1,017,792 | ) | (8,779,005 | ) | (91,103,883 | ) | |||||||||||
Dividends reinvested | 16,271 | 168,562 | 1,573,276 | 16,330,521 | |||||||||||||||
Net increase (decrease) | (52,875 | ) | $ | (549,064 | ) | 1,850,401 | $ | 19,417,985 |
355
PACE Select Advisors Trust
Notes to financial statements
PACE High Yield Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 40,974 | $ | 381,201 | 31,515 | $ | 291,417 | |||||||||||||
Shares repurchased | (217,253 | ) | (1,983,488 | ) | (95,461 | ) | (876,856 | ) | |||||||||||
Dividends reinvested | 19,117 | 175,667 | 9,313 | 85,559 | |||||||||||||||
Net decrease | (157,162 | ) | $ | (1,426,620 | ) | (54,633 | ) | $ | (499,880 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 14,222 | $ | 129,145 | 7,325,904 | $ | 67,440,502 | |||||||||||||
Shares repurchased | (44,972 | ) | (418,776 | ) | (10,849,112 | ) | (99,774,567 | ) | |||||||||||
Dividends reinvested | 6,630 | �� | 61,042 | 2,424,658 | 22,339,811 | ||||||||||||||
Net decrease | (24,120 | ) | $ | (228,589 | ) | (1,098,550 | ) | $ | (9,994,254 | ) |
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 105,042 | $ | 1,092,150 | 23,927 | $ | 239,283 | |||||||||||||
Shares repurchased | (1,819,626 | ) | (18,433,419 | ) | (163,087 | ) | (1,643,569 | ) | |||||||||||
Dividends reinvested | 50,955 | 520,616 | 14,965 | 150,212 | |||||||||||||||
Net decrease | (1,663,629 | ) | $ | (16,820,653 | ) | (124,195 | ) | $ | (1,254,074 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 4,115 | $ | 41,953 | 8,808,856 | $ | 89,299,200 | |||||||||||||
Shares repurchased | (56,044 | ) | (582,854 | ) | (8,110,133 | ) | (82,026,806 | ) | |||||||||||
Dividends reinvested | 8,222 | 82,907 | 2,796,767 | 28,116,758 | |||||||||||||||
Net increase (decrease) | (43,707 | ) | $ | (457,994 | ) | 3,495,490 | $ | 35,389,152 |
PACE Large Co Value Equity Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 78,794 | $ | 1,606,982 | 8,648 | $ | 176,495 | |||||||||||||
Shares repurchased | (718,201 | ) | (15,146,818 | ) | (97,849 | ) | (2,007,994 | ) | |||||||||||
Dividends reinvested | 634,332 | 12,534,399 | 71,270 | 1,415,420 | |||||||||||||||
Net decrease | (5,075 | ) | $ | (1,005,437 | ) | (17,931 | ) | $ | (416,079 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 21,727 | $ | 428,211 | 5,453,559 | $ | 112,509,688 | |||||||||||||
Shares repurchased | (122,992 | ) | (2,600,559 | ) | (10,790,537 | ) | (224,267,778 | ) | |||||||||||
Dividends reinvested | 111,958 | 2,214,537 | 7,078,912 | 139,383,770 | |||||||||||||||
Net increase | 10,693 | $ | 42,189 | 1,741,934 | $ | 27,625,680 |
356
PACE Select Advisors Trust
Notes to financial statements
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 49,759 | $ | 1,230,771 | 14,977 | $ | 357,072 | |||||||||||||
Shares repurchased | (1,559,905 | ) | (40,248,888 | ) | (77,145 | ) | (1,871,036 | ) | |||||||||||
Dividends reinvested | 588,967 | 13,976,182 | 64,603 | 1,538,181 | |||||||||||||||
Net increase (decrease) | (921,179 | ) | $ | (25,041,935 | ) | 2,435 | $ | 24,217 |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 57,411 | $ | 1,389,489 | 5,374,499 | $ | 133,288,645 | |||||||||||||
Shares repurchased | (112,816 | ) | (2,738,307 | ) | (9,083,798 | ) | (222,237,824 | ) | |||||||||||
Dividends reinvested | 98,943 | 2,349,895 | 6,355,826 | 150,378,849 | |||||||||||||||
Net increase | 43,538 | $ | 1,001,077 | 2,646,527 | $ | 61,429,670 |
PACE Large Co Growth Equity Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 77,193 | $ | 1,673,916 | 5,153 | $ | 101,239 | |||||||||||||
Shares repurchased | (238,792 | ) | (5,344,991 | ) | (28,414 | ) | (532,299 | ) | |||||||||||
Dividends reinvested | 294,538 | 6,356,126 | 33,471 | 607,835 | |||||||||||||||
Net increase | 132,939 | $ | 2,685,051 | 10,210 | $ | 176,775 |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 17,187 | $ | 380,882 | 4,634,745 | $ | 105,678,140 | |||||||||||||
Shares repurchased | (115,244 | ) | (2,582,171 | ) | (10,774,125 | ) | (247,009,171 | ) | |||||||||||
Dividends reinvested | 101,937 | 2,275,236 | 8,193,923 | 181,659,306 | |||||||||||||||
Net increase | 3,880 | $ | 73,947 | 2,054,543 | $ | 40,328,275 |
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 69,175 | $ | 1,781,382 | 3,016 | $ | 67,414 | |||||||||||||
Shares repurchased | (1,126,391 | ) | (30,494,869 | ) | (29,232 | ) | (666,505 | ) | |||||||||||
Dividends reinvested | 191,398 | 4,698,831 | 22,858 | 489,833 | |||||||||||||||
Net decrease | (865,818 | ) | $ | (24,014,656 | ) | (3,358 | ) | $ | (109,258 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 36,339 | $ | 927,224 | 4,888,745 | $ | 129,483,655 | |||||||||||||
Shares repurchased | (109,571 | ) | (2,847,112 | ) | (9,096,942 | ) | (238,540,705 | ) | |||||||||||
Dividends reinvested | 71,897 | 1,811,799 | 5,764,169 | 144,450,078 | |||||||||||||||
Net increase (decrease) | (1,335 | ) | $ | (108,089 | ) | 1,555,972 | $ | 35,393,028 |
357
PACE Select Advisors Trust
Notes to financial statements
PACE Small/Medium Co Value Equity Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 37,781 | $ | 679,799 | 4,275 | $ | 66,392 | |||||||||||||
Shares repurchased | (128,751 | ) | (2,307,091 | ) | (34,608 | ) | (524,594 | ) | |||||||||||
Dividends reinvested | 93,591 | 1,624,745 | 31,509 | 465,710 | |||||||||||||||
Net increase (decrease) | 2,621 | $ | (2,547 | ) | 1,176 | $ | 7,508 |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 2,729 | $ | 51,474 | 3,056,983 | $ | 56,419,641 | |||||||||||||
Shares repurchased | (18,832 | ) | (329,679 | ) | (5,141,981 | ) | (96,184,485 | ) | |||||||||||
Dividends reinvested | 5,314 | 95,497 | 2,745,585 | 48,843,945 | |||||||||||||||
Net increase (decrease) | (10,789 | ) | $ | (182,708 | ) | 660,587 | $ | 9,079,101 |
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 32,700 | $ | 720,456 | 9,720 | $ | 177,405 | |||||||||||||
Shares repurchased | (708,111 | ) | (15,958,419 | ) | (38,169 | ) | (710,298 | ) | |||||||||||
Dividends reinvested | 103,313 | 2,077,634 | 36,147 | 631,485 | |||||||||||||||
Net increase (decrease) | (572,098 | ) | $ | (13,160,329 | ) | 7,698 | $ | 98,592 |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 13,356 | $ | 298,268 | 3,037,901 | $ | 66,962,638 | |||||||||||||
Shares repurchased | (12,677 | ) | (268,980 | ) | (4,001,151 | ) | (87,240,137 | ) | |||||||||||
Dividends reinvested | 5,605 | 116,309 | 3,019,454 | 62,110,172 | |||||||||||||||
Net increase | 6,284 | $ | 145,597 | 2,056,204 | $ | 41,832,673 |
PACE Small/Medium Co Growth Equity Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 85,037 | $ | 1,197,621 | 6,221 | $ | 73,839 | |||||||||||||
Shares repurchased | (263,171 | ) | (3,934,411 | ) | (67,009 | ) | (815,001 | ) | |||||||||||
Dividends reinvested | 318,095 | 4,517,436 | 64,384 | 722,393 | |||||||||||||||
Net increase (decrease) | 139,961 | $ | 1,780,646 | 3,596 | $ | (18,769 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 3,732 | $ | 58,653 | 3,768,892 | $ | 57,091,212 | |||||||||||||
Shares repurchased | (20,164 | ) | (301,010 | ) | (5,943,491 | ) | (93,788,979 | ) | |||||||||||
Dividends reinvested | 9,128 | 139,471 | 5,905,510 | 88,877,927 | |||||||||||||||
Net increase (decrease) | (7,304 | ) | $ | (102,886 | ) | 3,730,911 | $ | 52,180,160 |
358
PACE Select Advisors Trust
Notes to financial statements
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 23,316 | $ | 457,839 | 12,220 | $ | 218,245 | |||||||||||||
Shares repurchased | (871,234 | ) | (17,994,667 | ) | (44,080 | ) | (735,030 | ) | |||||||||||
Dividends reinvested | 197,173 | 3,614,189 | 39,519 | 608,598 | |||||||||||||||
Net increase (decrease) | (650,745 | ) | $ | (13,922,639 | ) | 7,659 | $ | 91,813 |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 14,835 | $ | 313,895 | 3,071,887 | $ | 63,474,086 | |||||||||||||
Shares repurchased | (13,390 | ) | (265,433 | ) | (4,284,782 | ) | (87,452,863 | ) | |||||||||||
Dividends reinvested | 5,277 | 102,429 | 3,548,030 | 68,015,734 | |||||||||||||||
Net increase | 6,722 | $ | 150,891 | 2,335,135 | $ | 44,036,957 |
PACE International Equity Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 51,695 | $ | 711,119 | 4,273 | $ | 58,897 | |||||||||||||
Shares repurchased | (232,451 | ) | (3,207,342 | ) | (31,163 | ) | (419,473 | ) | |||||||||||
Dividends reinvested | 28,179 | 388,873 | 1,124 | 15,259 | |||||||||||||||
Net decrease | (152,577 | ) | $ | (2,107,350 | ) | (25,766 | ) | $ | (345,317 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 72,211 | $ | 962,286 | 9,068,848 | $ | 123,887,296 | |||||||||||||
Shares repurchased | (246,214 | ) | (3,301,859 | ) | (12,539,104 | ) | (170,852,966 | ) | |||||||||||
Dividends reinvested | 21,438 | 294,346 | 1,105,100 | 15,139,872 | |||||||||||||||
Net decrease | (152,565 | ) | $ | (2,045,227 | ) | (2,365,156 | ) | $ | (31,825,798 | ) |
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 49,147 | $ | 742,749 | 10,551 | $ | 155,200 | |||||||||||||
Shares repurchased | (1,522,846 | ) | (22,647,840 | ) | (17,958 | ) | (263,196 | ) | |||||||||||
Dividends reinvested | 48,015 | 690,936 | 2,940 | 41,568 | |||||||||||||||
Net decrease | (1,425,684 | ) | $ | (21,214,155 | ) | (4,467 | ) | $ | (66,428 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 58,254 | $ | 877,495 | 10,321,301 | $ | 153,752,915 | |||||||||||||
Shares repurchased | (290,859 | ) | (4,282,881 | ) | (10,109,594 | ) | (150,829,713 | ) | |||||||||||
Dividends reinvested | 39,843 | 570,555 | 1,769,175 | 25,281,509 | |||||||||||||||
Net increase (decrease) | (192,762 | ) | $ | (2,834,831 | ) | 1,980,882 | $ | 28,204,711 |
359
PACE Select Advisors Trust
Notes to financial statements
PACE International Emerging Markets Equity Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 17,146 | $ | 184,823 | 57 | $ | 1,077 | |||||||||||||
Shares repurchased | (72,405 | ) | (760,386 | ) | (24,921 | ) | (243,564 | ) | |||||||||||
Dividends reinvested | 1,083 | 11,357 | — | — | |||||||||||||||
Net decrease | (54,176 | ) | $ | (564,206 | ) | (24,864 | ) | $ | (242,487 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 60,245 | $ | 658,274 | 8,177,370 | $ | 86,270,069 | |||||||||||||
Shares repurchased | (112,063 | ) | (1,202,099 | ) | (9,161,198 | ) | (96,795,134 | ) | |||||||||||
Dividends reinvested | 7,603 | 80,288 | 352,582 | 3,705,641 | |||||||||||||||
Net decrease | (44,215 | ) | $ | (463,537 | ) | (631,246 | ) | $ | (6,819,424 | ) |
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 48,175 | $ | 638,691 | 11,434 | $ | 135,323 | |||||||||||||
Shares repurchased | (920,629 | ) | (11,827,983 | ) | (24,645 | ) | (292,330 | ) | |||||||||||
Dividends reinvested | 2,316 | 28,948 | 331 | 3,841 | |||||||||||||||
Net decrease | (870,138 | ) | $ | (11,160,344 | ) | (12,880 | ) | $ | (153,166 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 38,127 | $ | 497,223 | 7,342,129 | $ | 96,126,379 | |||||||||||||
Shares repurchased | (182,776 | ) | (2,403,151 | ) | (5,418,163 | ) | (70,909,505 | ) | |||||||||||
Dividends reinvested | 10,330 | 130,670 | 393,761 | 4,957,447 | |||||||||||||||
Net increase (decrease) | (134,319 | ) | $ | (1,775,258 | ) | 2,317,727 | $ | 30,174,321 |
PACE Global Real Estate Securities Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 2,083 | $ | 15,391 | 645 | $ | 4,490 | |||||||||||||
Shares repurchased | (5,046 | ) | (36,866 | ) | (7,297 | ) | (48,962 | ) | |||||||||||
Dividends reinvested | 1,024 | 7,188 | 988 | 6,668 | |||||||||||||||
Net decrease | (1,939 | ) | $ | (14,287 | ) | (5,664 | ) | $ | (37,804 | ) |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 2,493 | $ | 17,052 | 2,487,982 | $ | 17,219,231 | |||||||||||||
Shares repurchased | (38,781 | ) | (273,136 | ) | (3,932,400 | ) | (27,225,091 | ) | |||||||||||
Dividends reinvested | 1,055 | 7,174 | 623,246 | 4,219,376 | |||||||||||||||
Net decrease | (35,233 | ) | $ | (248,910 | ) | (821,172 | ) | $ | (5,786,484 | ) |
360
PACE Select Advisors Trust
Notes to financial statements
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 82,338 | $ | 644,489 | 8,793 | $ | 66,048 | |||||||||||||
Shares repurchased | (810,131 | ) | (6,069,751 | ) | — | — | |||||||||||||
Dividends reinvested | — | — | 1,101 | 7,950 | |||||||||||||||
Net increase (decrease) | (727,793 | ) | $ | (5,425,262 | ) | 9,894 | $ | 73,998 |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 1,076 | $ | 7,783 | 3,458,079 | $ | 25,682,098 | |||||||||||||
Shares repurchased | (1,893 | ) | (14,140 | ) | (3,538,992 | ) | (26,313,892 | ) | |||||||||||
Dividends reinvested | 1,351 | 9,819 | 683,416 | 4,954,762 | |||||||||||||||
Net increase | 534 | $ | 3,462 | 602,503 | $ | 4,322,968 |
PACE Alternative Strategies Investments
For the year ended July 31, 2016:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 413,463 | $ | 4,381,863 | 448,480 | $ | 4,545,102 | |||||||||||||
Shares repurchased | (162,128 | ) | (1,708,287 | ) | (107,636 | ) | (1,074,161 | ) | |||||||||||
Dividends reinvested | 14,938 | 158,942 | 27,571 | 279,019 | |||||||||||||||
Net increase | 266,273 | $ | 2,832,518 | 368,415 | $ | 3,749,960 |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 3,288,642 | $ | 34,814,593 | 17,175,414 | $ | 181,235,185 | |||||||||||||
Shares repurchased | (3,376,675 | ) | (35,026,681 | ) | (21,313,309 | ) | (224,926,210 | ) | |||||||||||
Dividends reinvested | 52,574 | 553,603 | 2,239,290 | 23,534,934 | |||||||||||||||
Net decrease | (35,459 | ) | $ | 341,515 | (1,898,605 | ) | $ | (20,156,091 | ) |
For the year ended July 31, 2015:
Class A | Class C | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 1,737,629 | $ | 18,561,745 | 343,497 | $ | 3,614,059 | |||||||||||||
Shares repurchased | (8,352,327 | ) | (89,919,893 | ) | (81,081 | ) | (847,604 | ) | |||||||||||
Dividends reinvested | — | — | 1,210 | 12,551 | |||||||||||||||
Net increase (decrease) | (6,614,698 | ) | $ | (71,358,148 | ) | 263,626 | $ | 2,779,006 |
Class Y | Class P | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Shares sold | 30,635 | $ | 331,470 | 23,708,618 | $ | 257,856,072 | |||||||||||||
Shares repurchased | (245,039 | ) | (2,641,470 | ) | (10,956,193 | ) | (119,108,123 | ) | |||||||||||
Dividends reinvested | 2,614 | 28,134 | 609,778 | 6,542,917 | |||||||||||||||
Net increase (decrease) | (211,790 | ) | $ | (2,281,866 | ) | 13,362,203 | $ | 145,290,866 |
Redemption fees
Effective August 3, 2015, the redemption fee of 1.00% imposed by each class of each series of the Trust, with the exception of PACE Government Money Market Investments, was eliminated. Prior to August 3, 2015 for purchases of shares on or after February 17, 2015, the redemption fee was calculated as a percentage of the amount redeemed
361
PACE Select Advisors Trust
Notes to financial statements
within 30 days of purchase, if applicable. This amount was 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, 2016, 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 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, 2016 and July 31, 2015 were as follows:
2016 | 2015 | ||||||||||||||||||||||||||||||||||
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 Government Money Market Investments | $ | — | $ | 24,948 | $ | — | $ | — | $ | — | $ | 21,010 | $ | — | $ | — | |||||||||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | — | 12,711,635 | — | — | — | 10,748,068 | — | — | |||||||||||||||||||||||||||
PACE Intermediate Fixed Income Investments | — | 9,142,720 | 720,188 | — | — | 6,742,062 | 416,495 | — | |||||||||||||||||||||||||||
PACE Strategic Fixed Income Investments | — | 26,746,267 | 5,095,336 | — | — | 24,826,172 | — | — | |||||||||||||||||||||||||||
PACE Municipal Fixed Income Investments | 11,033,492 | — | 2,030,575 | — | 10,727,697 | 7,334 | — | — | |||||||||||||||||||||||||||
PACE International Fixed Income Investments | — | 16,848,527 | — | — | — | 12,854,886 | — | 6,437,480 | |||||||||||||||||||||||||||
PACE High Yield Investments | — | 21,394,896 | — | 3,178,152 | — | 24,450,100 | 6,606,595 | — | |||||||||||||||||||||||||||
PACE Large Co Value Equity Investments | — | 45,716,794 | 119,176,371 | — | — | 33,018,522 | 144,188,915 | — | |||||||||||||||||||||||||||
PACE Large Co Growth Equity Investment | — | — | 200,263,532 | — | — | 18,702,626 | 139,561,279 | — | |||||||||||||||||||||||||||
PACE Small/Medium Co Value Equity Investments | — | 6,543,402 | 46,938,578 | — | — | 24,250,226 | 43,493,292 | — | |||||||||||||||||||||||||||
PACE Small/Medium Co Growth Equity Investments | — | 22,271,143 | 76,772,564 | — | — | 10,967,318 | 64,366,071 | — | |||||||||||||||||||||||||||
PACE International Equity Investments | — | 16,961,715 | — | — | — | 28,067,973 | — | — | |||||||||||||||||||||||||||
PACE International Emerging Markets Equity Investments | — | 4,028,778 | — | — | — | 5,372,352 | — | — | |||||||||||||||||||||||||||
PACE Global Real Estate Securities Investments | — | 4,533,677 | — | — | — | 5,250,218 | — | — | |||||||||||||||||||||||||||
PACE Alternative Strategies Investments | — | 26,380,799 | — | — | — | 7,075,445 | — | — |
362
PACE Select Advisors Trust
Notes to financial statements
At July 31, 2016, the components of accumulated earnings (deficit) on a tax basis were as follows:
Portfolio | Undistributed ordinary income | Undistributed long-term capital gains | Accumulated realized capital and other losses | Unrealized appreciation (depreciation) | Total | ||||||||||||||||||
PACE Government Money Market Investments | $ | 84 | $ | — | $ | — | $ | — | $ | 84 | |||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | 550,925 | — | (8,100,867 | ) | 6,749,046 | (800,896 | ) | ||||||||||||||||
PACE Intermediate Fixed Income Investments | 2,227,855 | — | (474,950 | ) | 5,699,655 | 7,452,560 | |||||||||||||||||
PACE Strategic Fixed Income Investments | 12,506,786 | 6,254,022 | (555,656 | ) | 705,879 | 18,911,031 | |||||||||||||||||
PACE Municipal Fixed Income Investments | 92,505 | 2,490,368 | — | 25,922,245 | 28,505,118 | ||||||||||||||||||
PACE International Fixed Income Investments | 9,237,190 | — | (34,881,610 | ) | 14,547,139 | (11,097,281 | ) | ||||||||||||||||
PACE High Yield Investments | — | — | (18,144,759 | ) | (567,015 | ) | (18,711,774 | ) | |||||||||||||||
PACE Large Co Value Equity Investments | 10,458,662 | 25,950,507 | (144,317 | ) | 84,122,263 | 120,387,115 | |||||||||||||||||
PACE Large Co Growth Equity Investments | — | 27,078,988 | (739,997 | ) | 272,410,620 | 298,749,611 | |||||||||||||||||
PACE Small/Medium Co Value Equity Investments | 781,368 | 5,248,834 | — | 36,088,848 | 42,119,050 | ||||||||||||||||||
PACE Small/Medium Co Growth Equity Investments | — | — | (18,221,191 | ) | 27,967,586 | 9,746,395 | |||||||||||||||||
PACE International Equity Investments | 16,743,694 | — | (158,245,028 | ) | (12,688,511 | ) | (154,189,845 | ) | |||||||||||||||
PACE International Emerging Markets Equity Investments | 4,188,429 | — | (76,697,852 | ) | 4,741,364 | (67,768,059 | ) | ||||||||||||||||
PACE Global Real Estate Securities Investments | 5,270,372 | — | (3,980,308 | ) | 5,116,120 | 6,406,184 | |||||||||||||||||
PACE Alternative Strategies Investments | — | — | (51,851,934 | ) | 1,056,231 | (50,795,703 | ) |
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 loss incurred that will be carried forward indefinitely are as following:
Short-term | Long-term | Total | |||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | $ | — | $ | 8,100,867 | $ | 8,100,867 | |||||||||
PACE International Fixed Income Investments | 6,778,859 | 3,891,053 | 10,669,912 | ||||||||||||
PACE High Yield Investments | 3,394,276 | 13,528,609 | 16,922,885 | ||||||||||||
PACE International Equity Investments | 22,295,806 | — | 22,295,806 | ||||||||||||
PACE International Emerging Markets Equity Investments | 45,843,922 | 30,853,930 | 76,697,852 |
At July 31, 2016, 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, 2017 | July 31, 2018 | July 31, 2019 | July 31, 2020 | July 31, 2021 | Total | ||||||||||||||||||||||
PACE International Fixed Income Investments | $ | 765,140 | $ | 7,784,695 | $ | — | $ | — | $ | — | $ | 8,549,835 | |||||||||||||||
PACE International Equity Investments | — | 135,949,222 | — | — | — | 135,949,222 | |||||||||||||||||||||
PACE Global Real Estate Securities Investments | — | 3,980,308 | — | — | — | 3,980,308 | |||||||||||||||||||||
PACE Alternative Strategies Investments | — | 35,556,572 | — | — | — | 35,556,572 |
363
PACE Select Advisors Trust
Notes to financial statements
To the extent that such losses are used to offset future net realized capital gains, it is probable these gains will not be distributed.
During the fiscal year, the following Portfolios utilized capital loss carryforwards to offset current year realized gains:
Capital loss carryforwards utilized | |||||||
PACE Mortgage-Backed Securities Fixed Income Investments | $ | 5,445,466 | |||||
PACE Global Real Estate Securities Investments | 1,530,933 | ||||||
PACE Alternative Strategies Investments | 1,689,486 |
During the fiscal year, the following Portfolio had capital loss carryforwards expired un-utilized:
Capital loss carryforwards expired | |||||||
PACE International Fixed Income Investments | $ | 2,354,563 |
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, 2016, 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 High Yield Investments | $ | 1,221,874 | $ | — | $ | — | |||||||||
PACE Large Co Growth Equity Investments | 739,997 | — | — | ||||||||||||
PACE Small/Medium Co Growth Equity Investments | 1,450,465 | 16,770,726 | — | ||||||||||||
PACE Alternative Strategies Investments | 3,304,401 | 5,209,916 | 7,582,170 |
At July 31, 2016, the effect of permanent "book/tax" reclassifications resulted in increases and decreases to components of the Portfolios' net assets as follows:
Accumulated net investment income/ (distributions in excess of) | Accumulated net realized gain/loss | Beneficial interest | |||||||||||||
PACE Mortgage-Backed Securities Fixed Income Investments | $ | 4,161,716 | $ | (4,161,716 | ) | $ | — | ||||||||
PACE Intermediate Fixed Income Investments | 322,338 | (322,338 | ) | — | |||||||||||
PACE Strategic Fixed Income Investments | 877,000 | (877,000 | ) | — | |||||||||||
PACE Municipal Fixed Income Investments | 232 | (232 | ) | — | |||||||||||
PACE International Fixed Income Investments | 6,375,514 | (4,020,951 | ) | (2,354,563 | ) | ||||||||||
PACE High Yield Investments | (1,414,252 | ) | 1,414,252 | — | |||||||||||
PACE Large Co Value Equity Investments | (858,090 | ) | 858,090 | — | |||||||||||
PACE Large Co Growth Equity Investments | (871,714 | ) | 871,714 | — | |||||||||||
PACE Small/Medium Co Value Equity Investments | (135,403 | ) | 135,403 | — | |||||||||||
PACE Small/Medium Co Growth Equity Investments | 901,034 | 194,697 | (1,095,731 | ) | |||||||||||
PACE International Equity Investments | 436,684 | (436,684 | ) | — | |||||||||||
PACE International Emerging Markets Equity Investments | (405,824 | ) | 405,824 | — | |||||||||||
PACE Global Real Estate Securities Investments | 1,510,688 | (1,510,688 | ) | — | |||||||||||
PACE Alternative Strategies Investments | 1,437,137 | 2,477,974 | (3,915,111 | ) |
364
PACE Select Advisors Trust
Notes to financial statements
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 conducted an analysis and concluded as of July 31, 2016 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. As of July 31, 2016, PACE International Emerging Markets Equity Investments has recognized a liability of $591,774 related to uncertain tax positions of which $398,250 is included in payable foreign withholding taxes and foreign capital gains taxes and $193,524 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, 2016, the Portfolios did not incur any interest or penalties.
Under the applicable foreign tax laws, gains on certain securities held in certain foreign countries may be subject to taxes will be paid by the Portfolios.
Each of the tax years in the four year period ended July 31, 2016, remains subject to examination by the Internal Revenue Service and state taxing authorities.
Subsequent Event
Effective August 1, 2016 through November 30, 2016, PACE Strategic Fixed Income Investments lowered its expense cap so that the fund's ordinary total operating expenses of each class (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 0.96% for Class A, 1.46% for Class C and 0.71% for both Class Y and Class P. Additionally, the waiver of UBS AM's management fees to reflect a lower management fee paid by the fund to UBS AM was terminated. In addition, effective August 1, 2016 through November 30, 2016, PACE International Emerging Markets Equity Investments lowered its expense cap so that the fund's ordinary total operating expenses of each class (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 1.75% for Class A, 2.50% for Class C and 1.50% for both Class Y and Class P.
365
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 Government Money Market Investments (formerly, PACE Money Market Investments), 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, 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, 2016, and the related statements of operations and the statements of cash flows of PACE Large Co Value Equity Investments and PACE International Equity Investments 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, 2016, 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, 2016, the results of their operations and the cash flows of PACE Large Co Value Equity Investments and PACE International Equity Investments 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 U.S. generally accepted accounting principles.
New York, New York
September 29, 2016
366
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 | 90.57 | % | $ | — | |||||||
PACE Small/Medium Co Value Equity Investments | 96.32 | — | |||||||||
PACE Small/Medium Co Growth Equity Investments | 14.26 | — | |||||||||
PACE International Equity Investments | — | 1,552,214 | |||||||||
PACE International Emerging Markets Equity Investments | 0.18 | 1,230,078 | |||||||||
PACE Global Real Estate Securities Investments | 0.73 | — | |||||||||
PACE Alternative Strategies Investments | 4.46 | — |
Also, for the fiscal year ended July 31, 2016, the foreign source income for information reporting purposes for PACE International Equity Investments and PACE International Emerging Markets Equity Investments is $26,746,498 and $10,373,137, respectively.
For the taxable year ended July 31, 2016, the Portfolios designate the amounts below as the maximum amount that may be considered qualified dividend income for individual shareholders.
Portfolio | Maximum amount considered qualified dividend income | ||||||
PACE Large Co Value Equity Investments | $ | 30,238,272 | |||||
PACE Small/Medium Co Value Equity Investments | 6,477,240 | ||||||
PACE Small/Medium Co Growth Equity Investments | 1,450,411 | ||||||
PACE International Equity Investments | 16,961,715 | ||||||
PACE International Emerging Markets Equity Investments | 4,028,778 | ||||||
PACE Global Real Estate Securities Investments | 137,034 | ||||||
PACE Alternative Strategies Investments | 3,975,445 |
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 2016. 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 2017. Shareholders are advised to consult their own tax advisers with respect to the tax consequences of their investment in each of the Portfolios.
367
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 Government 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/usmoneymarketfunds. 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/ubsam-proxy, or on the EDGAR Database on the SEC's Web site (http://www.sec.gov).
368
PACE Select Advisors Trust
Board approvals of investment management and administration agreement and subadvisory agreements (unaudited)
February 2016 Board Meeting
Robert W. Baird & Co. Incorporated
Trustees' considerations
Background—At a meeting of the board of PACE Select Advisors Trust (the "Trust") on February 9-10, 2016 (the "February Meeting"), 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 subadvisory agreement between UBS Asset Management (Americas) Inc. ("UBS AM") and Robert W. Baird & Co. Incorporated ("Baird") (the "Subadvisory Agreement") with respect to PACE International Equity Investments (the "Portfolio"). It was noted that Baird currently serves as a subadvisor to the Portfolio under an interim subadvisory agreement (the "Interim Agreement"), between UBS AM and Baird with respect to the Portfolio, which had been approved by the board at a special telephonic meeting held on December 29, 2015 (the "December Meeting"). Management noted that the board had been asked to approve the Interim Agreement in connection with the sale of all of the outstanding equity interests of Chautauqua Capital Management, LLC ("Chautauqua"), a then-current subadvisor to the Portfolio, to Baird (the "Transaction"), as the change in ownership of Chautauqua would constitute an "assignment" and result in the automatic termination of the then-current subadvisory agreement between UBS AM and Chautauqua with respect to the Portfolio (the "Chautauqua Agreement").
Management stated that the Transaction closed on January 15, 2016 and the Interim Agreement took effect as of the close of business on that date. It was noted that the terms of the Interim Agreement were substantially similar to the terms of the Chautauqua Agreement, except for the duration of the agreement and the fees payable thereunder. Management noted that Baird was not entitled to receive compensation under the terms of the Interim Agreement, which would terminate upon the approval of the Subadvisory Agreement, and that UBS AM had agreed to corresponding waivers of its management fee for the duration of the Interim Agreement. It was noted that such waivers were instituted with respect to the Interim Agreement pending consideration of a superseding agreement at an "in person" board meeting in consideration of regulatory requirements. Management stated that the proposed Subadvisory Agreement also was on substantially similar terms as the Chautauqua Agreement, including the fee rates payable thereunder. It was noted that Chautauqua had served as a subadvisor to the Portfolio since August 2013 and that, following the Transaction, the Portfolio's investment team and strategy continued to operate under the Chautauqua name as an autonomous division of Baird. It was also noted that, following the Transaction, there were no changes to investment personnel or trading functions but all non-investment related services are now primarily supported by Baird.
The board recognized its familiarity with UBS AM and the investment management and subadvisory 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 memoranda from UBS AM discussing UBS AM's reasons for recommending Baird as a subadvisor to the Portfolio and the proposed fee structure in advance of the December Meeting and February Meeting, respectively.
In its consideration of the approval of the Subadvisory Agreement, the board considered the following factors:
Nature, extent and quality of the services under the Subadvisory Agreement—The board's evaluation of the services to be provided by Baird 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. At the December Meeting, the board considered management's reasons for recommending the appointment of Baird as a subadvisor to the Portfolio, including its "due diligence" concerning Baird, that the Portfolio's investment team and strategy continued to operate under the Chautauqua name as an autonomous division of Baird and that there were no expected changes to investment personnel or trading functions as a result of the Transaction. In considering the approval of the Subadvisory Agreement, the board was able to draw on its knowledge of the Trust, its portfolios
369
PACE Select Advisors Trust
Board approvals of investment management and administration agreement and subadvisory agreements (unaudited)
and UBS AM. The board was also able to draw on its knowledge of the current investment team members, including materials it previously received from, and meetings it previously held with, representatives of Chautauqua who discussed with the board the investment philosophy and the backgrounds and qualifications of the investment team. At the February Meeting, UBS AM represented that there had been no material changes in the information previously provided to the board at the December Meeting. 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 SubAdvisory Agreement.
Subadvisory fee—The board reviewed and considered the proposed contractual subadvisory fee to be payable by UBS AM to Baird in light of the nature, extent and quality of the subadvisory services anticipated to be provided by Baird. The board noted that the subadvisory fee rate in the Subadvisory Agreement was the same as that in the Chautauqua Agreement, and that Baird would not receive compensation under the terms of the Subadvisory Agreement for the services provided under the Interim Agreement. The board determined that the proposed subadvisory fee was reasonable in light of the nature, extent and quality of the services proposed to be provided to the Portfolio under the Subadvisory Agreement.
Fund performance—The board received and considered performance information provided by UBS AM, including relative performance information from independent providers of investment company data. The board also noted that UBS AM believes that the Portfolio's investment team would continue to perform at the same level as it did prior to the Transaction. The board concluded that, overall, it was satisfied with the performance of the Portfolio.
Advisor profitability—Profitability of Baird or its affiliates or UBS AM or its affiliates in providing services to the Portfolio was not a significant factor considered by the board, as the subadvisory fee would be paid by UBS 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 subadvisory fee for the Portfolio would be paid by UBS AM, not by the Portfolio, consideration of economies of scale with respect specifically to the subadvisory fee was not relevant.
Other benefits to Baird—The board was informed by management at the December Meeting that Baird's relationship with the Portfolio would be limited to its provision of subadvisory services to the Portfolio and that therefore management believed that Baird 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 Baird could receive intangible benefits from its association with the Portfolio, such as increased name recognition or publicity from being selected as a subadvisor to the Portfolio after an extensive review process. Similarly, the Portfolio could benefit from having a subadvisor with an established or well-regarded reputation.
In light of all of the foregoing, the board, including a majority of the Independent Trustees, approved the proposed Subadvisory 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 Subadvisory Agreement. The Independent Trustees were advised by separate independent legal counsel throughout the process.
370
PACE Select Advisors Trust
Board approvals of investment management and administration agreement and subadvisory agreements (unaudited)
May 2016 Board Meeting
Rogge Global Partners plc
Trustees' considerations
Background—At a meeting of the board of PACE Select Advisors Trust (the "Trust") on May 24-25, 2016 (the "May Meeting"), 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 subadvisory agreement between UBS Asset Management (Americas) Inc. ("UBS AM") and Rogge Global Partners plc ("Rogge") (the "Subadvisory Agreement") with respect to PACE International Fixed Income Investments (the "Portfolio"). It was noted that Rogge has served as a subadvisor to the Portfolio since August 1995. Management explained to the board that Rogge currently was owned by Old Mutual plc and employees of Rogge, who owned 79% and 21% of the equity interests of Rogge, respectively. Management further explained that Rogge had entered into an agreement for the sale of all outstanding equity interests in Rogge to Allianz Global Investors ("Allianz") (the "Transaction"), which was expected to be consummated relatively soon after the May Meeting. Management stated that, following the Transaction, the Rogge investment team and the strategy that Rogge provides for the Portfolio were expected to continue to operate under the Rogge name as an autonomous division of Allianz. Management stated that it did not expect any material changes with respect to the Rogge investment team's management of the Portfolio as a result of the Transaction, and that Allianz was considering integrating its own emerging markets debt team with that of Rogge's as part of the Transaction. Management explained that because the expected change in ownership would constitute an "assignment," the current subadvisory agreement between UBS AM and Rogge with respect to the Portfolio (the "Current Subadvisory Agreement") would terminate automatically upon consummation of the Transaction and, if approved, the proposed SubAdvisory Agreement would become effective. Management stated that the proposed Subadvisory Agreement has substantially the same terms as the Current Subadvisory Agreement, including the fee rates payable thereunder. The board recognized its familiarity with UBS AM and the investment management and subadvisory 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 AM discussing UBS AM's reasons for recommending that Rogge continue serving as a subadvisor to the Portfolio.
In its consideration of the approval of the Subadvisory Agreement, the board considered the following factors:
Nature, extent and quality of the services under the Subadvisory Agreement—The board's evaluation of the services to be provided by Rogge 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 that Rogge continue as a subadvisor to the Portfolio, including that the Portfolio's investment team and strategy were expected to continue to operate under the Rogge name as an autonomous division of Allianz and that there were no expected material changes with respect to the Rogge investment team's management of the Portfolio as a result of the Transaction. In considering the approval of the Subadvisory Agreement, the board was able to draw on its knowledge of the Trust, its portfolios and UBS AM. The board was also able to draw on its knowledge of the current investment team members, including materials it previously received from, and meetings it previously held with, representatives of Rogge who discussed with the board the investment philosophy and the backgrounds and qualifications of the investment team. 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 Subadvisory Agreement.
Subadvisory fee—The board reviewed and considered the proposed contractual subadvisory fee to be payable by UBS AM to Rogge in light of the nature, extent and quality of the subadvisory services anticipated to be provided by Rogge. The board noted that the subadvisory fee rate in the Subadvisory Agreement was the same as that in the Current Subadvisory Agreement. The board determined that the proposed subadvisory fee was reasonable in light
371
PACE Select Advisors Trust
Board approvals of investment management and administration agreement and subadvisory agreements (unaudited)
of the nature, extent and quality of the services proposed to be provided to the Portfolio under the Subadvisory Agreement.
Fund performance—The board received and considered performance information provided by UBS AM, including relative performance information from independent providers of investment company data. The board also noted that UBS AM believes that the Portfolio's investment team would continue to perform at the same level as it did prior to the Transaction. The board concluded that, overall, it was satisfied with the performance of the Portfolio.
Advisor profitability—Profitability of Rogge or its affiliates or UBS AM or its affiliates in providing services to the Portfolio was not a significant factor considered by the board, as the subadvisory fee would be paid by UBS 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 subadvisory fee for the Portfolio would be paid by UBS AM, not by the Portfolio, consideration of economies of scale with respect specifically to the subadvisory fee was not relevant.
Other benefits to Rogge—The board was informed by management that Rogge's relationship with the Portfolio would be limited to its provision of subadvisory services to the Portfolio and that therefore management believed that Rogge 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 Rogge could receive intangible benefits from its association with the Portfolio, such as increased name recognition or publicity from being selected as a subadvisor to the Portfolio after an extensive review process. Similarly, the Portfolio could benefit from having a subadvisor with an established or well-regarded reputation.
In light of all of the foregoing, the board, including a majority of the Independent Trustees, approved the proposed Subadvisory 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 Subadvisory Agreement. The Independent Trustees were advised by separate independent legal counsel throughout the process.
372
PACE Select Advisors Trust
Board approvals of investment management and administration agreement and subadvisory agreements (unaudited)
May 2016 Board Meeting
PCJ Investment Counsel Ltd.
Trustees' considerations
Background—At a meeting of the board of PACE Select Advisors Trust (the "Trust") on May 24-25, 2016, 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 subadvisory agreement between UBS Asset Management (Americas) Inc. ("UBS AM") and PCJ Investment Counsel ("PCJ") (the "Subadvisory Agreement") with respect to PACE Alternative Strategies Investments (the "Portfolio"). Management discussed with the board its proposal to reduce the target allocation of the Portfolio's assets managed by First Quadrant L.P. ("First Quadrant") from 12.0% to 5.5% and to reallocate a portion of the assets managed by First Quadrant (i.e., 6.5%) to PCJ. In considering the approval of the Subadvisory Agreement, the board was able to draw on its knowledge of the Trust, its portfolios and UBS AM. The board recognized its familiarity with UBS AM and the investment management and subadvisory 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 AM discussing UBS AM's reasons for recommending PCJ as a subadvisor to the Portfolio.
In its consideration of the approval of the Subadvisory Agreement, the board considered the following factors:
Nature, extent and quality of the services under the Subadvisory Agreement—The board's evaluation of the services to be provided by PCJ 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 AM's overall plan to meet the Portfolio's stated purposes and objective. The board considered management's reasons for recommending the appointment of PCJ as a subadvisor to the Portfolio, including its "due diligence" concerning PCJ and its belief that PCJ's fundamental equity market neutral strategy would benefit the Portfolio by, among other reasons, improving the Portfolio's ability to generate risk-adjusted returns over full business cycles and complementing the strategies provided by other subadvisors to the Portfolio. The board also received materials from PCJ detailing its investment philosophy and met with representatives of PCJ, who discussed with the board that investment philosophy and process and the backgrounds and qualifications of the portfolio management team. 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 Subadvisory Agreement.
Subadvisory fee—The board reviewed and considered the proposed contractual subadvisory fee to be payable by UBS AM to PCJ in light of the nature, extent and quality of the subadvisory services anticipated to be provided by PCJ. The board noted that although the proposed contractual subadvisory fee would result in a net increase in the subadvisory fees paid by UBS AM with respect to the Portfolio, the net increase in the subadvisory fees would have no impact on the fees paid by the Portfolio's investors as the additional cost would be borne by UBS AM. The board determined that the proposed subadvisory fee was reasonable in light of the nature, extent and quality of the services proposed to be provided to the Portfolio under the Subadvisory Agreement.
Fund performance—The board received and considered composite performance information provided by PCJ. The board also noted that, as PCJ would be a new subadvisor to the Portfolio, the current performance of the Portfolio was not a significant factor in the consideration of the approval of the Subadvisory Agreement.
Advisor profitability—Profitability of PCJ or its affiliates or UBS AM or its affiliates in providing services to the Portfolio was not a significant factor considered by the board, as the subadvisory fee would be paid by UBS AM out of the management fee paid to it by the Portfolio, and not by the Portfolio.
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Economies of scale—The board noted that, as the subadvisory fee for the Portfolio would be paid by UBS AM, not by the Portfolio, consideration of economies of scale with respect specifically to the subadvisory fee was not relevant.
Other benefits to PCJ—The board was informed by management that PCJ's relationship with the Portfolio would be limited to its provision of subadvisory services to the Portfolio and that therefore management believed that PCJ 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 PCJ could receive intangible benefits from its association with the Portfolio, such as increased name recognition or publicity from being selected as a subadvisor to the Portfolio after an extensive review process. Similarly, the Portfolio could benefit from having a subadvisor with an established or well-regarded reputation.
In light of all of the foregoing, the board, including a majority of the Independent Trustees, approved the proposed Subadvisory 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 Subadvisory Agreement. The Independent Trustees were advised by separate independent legal counsel throughout the process.
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July 2016 Board Meeting
Background—At a meeting of the board of PACE Select Advisors Trust (the "Trust") on July 12-13, 2016, 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 Asset Management (Americas) Inc. ("UBS AM") and the Trust, on behalf of each series of the Trust (each a "Portfolio" and together the "Portfolios"), and, for those Portfolios with subadvisors/sub-manager(s), the subadvisory/sub-management agreements for the Portfolios. (Throughout this discussion, each subadvisor/sub-manager to a Portfolio is referred to as a "Subadvisor" and each subadvisory/sub-management agreement is referred to as a "Subadvisory Agreement.") In preparing for the meeting, the Independent Trustees had requested and received extensive information from UBS AM to assist them, including information about UBS AM and the Portfolios' Subadvisors, as well as the management, subadvisory, administrative and distribution arrangements for the Portfolios. The board reviewed and discussed with management the materials initially provided by UBS AM 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, subadvisory/sub-management, administration and distribution agreements.
In its consideration of the approval of the Investment Management and Administration Agreement and the Subadvisory Agreements, the board considered the following factors:
Nature, extent and quality of the services under the Investment Management and Administration Agreement and the Subadvisory Agreements—The board received and considered information regarding the nature, extent and quality of management services provided to the Portfolios by UBS AM and, for those Portfolios with Subadvisor(s), subadvisory services provided by each Subadvisor during the past year. The board also considered the nature, extent and quality of administrative, distribution and shareholder services performed by UBS 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 AM concerning the management of each Portfolio's affairs and UBS 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 AM provided extensive oversight of the Subadvisors for the Portfolios and reported to the board at each regular meeting on the Subadvisors' performance and compliance with applicable requirements and made recommendations with respect to Subadvisor changes (both in terms of the allocation of Portfolio assets to Subadvisors and their hiring and termination) from time to time based on the performance of the Subadvisors and other relevant factors. The board's evaluation of the services provided by UBS AM and the Subadvisors 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 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 AM had expanded over time as a result of regulatory and other developments, including (i) maintaining and monitoring its own and the Portfolios' expanded compliance programs and (ii) hiring and replacing Subadvisors, monitoring current Subadvisors (including adjusting their Portfolio asset allocations) and coordinating strategies among Subadvisors to continue to optimize the 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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The board had available to it the qualifications, backgrounds and responsibilities of the senior personnel at UBS AM responsible for the Portfolios and had previously met with and received information regarding the person(s) or portfolio management team from each Subadvisor primarily responsible for the day-to-day management of each Portfolio. The board recognized that the Portfolios' senior personnel at UBS AM report to the board regularly, and that at each regular meeting the board receives a detailed report from UBS AM on each Portfolio's performance and receives more extensive information periodically from each Subadvisor. The board also considered, based on its knowledge of UBS AM and its affiliates, the financial resources available to UBS AM and its parent organization, UBS Group AG. In that regard, the board received extensive financial information regarding UBS 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 AM had approximately $143 billion in assets under management as of March 31, 2016 and was part of the UBS Asset Management Division, which had approximately $653 billion in assets under management worldwide as of March 31, 2016. The board also was cognizant of, and considered, the regulatory and litigation actions and investigations occurring in the past few years involving UBS Group AG, UBS 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 Subadvisory Agreements.
Management and subadvisory 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 AM in light of the nature, extent and quality of the services provided by UBS 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 AM had entered into one or more fee waiver and/or expense reimbursement agreements with a Portfolio under which UBS AM was contractually obligated to waive its management fees and/or reimburse the Portfolio so that the total ordinary operating expenses of certain or all classes of that Portfolio through November 30, 2016 (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 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 certain fees and/or reimbursing certain expenses as in past years, UBS 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 Broadridge, an independent provider of investment company data (the "Expense Group"). The board also received from Broadridge comparative data on a supplemental expense group of subadvised peers (which may include certain of the subadvised peers contained within the primary Expense Group) (the "Supplemental Expense Group"). A discussion of the board's considerations with respect to each Portfolio's fees is set forth below.
In connection with its consideration of each Portfolio's management fees, the board also received information on UBS 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 AM. The board observed that it had received certain information regarding fees, compensation from other similar funds, and economies of scale from certain
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Subadvisors as part of the summary of each Subadvisor's responses to requests for due diligence materials in connection with the board's annual reconsideration of the Subadvisory Agreements; however, the board also observed that the compensation paid to a Subadvisor is paid by UBS AM, not by the particular Portfolio, and, accordingly, that the retention of a Subadvisor generally does not increase the fees otherwise incurred by a Portfolio's shareholders (unless a management fee waiver level was affected by a subadvisory 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 Broadridge over the one-, three-, five-, ten-year (or shorter for newer Portfolios) and since inception periods ended April 30, 2016, and (b) annualized performance information for each year in the ten-year (or shorter) period ended April 30, 2016. 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 Broadridge 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 May 31, 2016. The board also considered UBS AM's statement that while management believed that the Broadridge 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 Subadvisor'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 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 AM's profitability was considered not excessive in light of the nature, extent and quality of the services provided to the Portfolios. A Subadvisor's profitability in providing services to a Portfolio was not a significant factor considered by the board, as the subadvisory fees are paid by UBS AM, not by the relevant Portfolio.
Economies of scale—The board received and considered information from management regarding whether UBS 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 Government Money Market Investments. The board also noted that as of April 30, 2016, with the exception of PACE Global Real Estate Securities Investments, PACE High Yield Investments, PACE International Emerging Markets Equity Investments and PACE Small/Medium Co Growth Equity 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 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 subadvisory fee and the breakpoints in fees paid by the Portfolios to UBS AM.
Generally, in light of UBS AM's profitability data, the Actual Management Fees, the Contractual Management Fees, the breakpoints currently in place for the Portfolios and the current assets of the Portfolios, the board believed that UBS AM's sharing of potential and current economies of scale with the Portfolios was acceptable.
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Other benefits to UBS AM and the Subadvisors—The board was informed by management that the Subadvisors' relationships with the Portfolios were limited to their provision of subadvisory services to these Portfolios, and that therefore, management believed that the Subadvisors and their affiliates did not receive tangible ancillary benefits as a result of the Subadvisors' 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 Subadvisor, 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 Subadvisors could receive intangible benefits from their association with the Trust, such as increased name recognition or publicity from being selected as Subadvisors to the Trust after an extensive review process. Similarly, a Portfolio could benefit from having a Subadvisor 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 AM's ongoing commitment to the Portfolios, the profits and other ancillary benefits that UBS AM and its affiliates received were considered reasonable.
In the discussions that follow, reference is made to the "median" in the Broadridge Expense Group, Supplemental Expense Group and Broadridge Performance Universe categories. With respect to expenses, below median fees or expenses represent fees or expenses that are lower relative to the median, and above median fees or expenses represent fees or expenses that are higher relative to the median of the funds in the relevant 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 of the funds in the relevant Performance Universe. Broadridge 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 Subadvisory Agreements with each of J.P. Morgan Investment Management Inc., Jackson Square Partners, LLC and Mar Vista Investment Partners, LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Broadridge information showed that the Portfolio's performance was below the Performance Universe median for the one-, three-, five- and ten-year periods and since inception. Management noted that the Portfolio's performance for the one-, three- and five-year periods was within 26 basis points (i.e., 0.26%) of the median.
Management and subadvisory fees and expense ratios—The comparative Broadridge 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 periods utilized in the Broadridge report. Management noted that the Portfolio's total expenses were within a few basis points (that is, hundredths of a percentage point) of the median. Management also noted that, compared to the Supplemental Expense Group, consisting of seven other subadvised funds, the Portfolio's Contractual Management Fee and Actual Management Fee were more closely aligned with its peers, and the Portfolio's total expenses were below the median. Management also noted the downward trend in the Portfolio's total expenses over the last few years.
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PACE Large Co Value Equity Investments
In approving the Investment Management and Administration Agreement and the Subadvisory Agreements with each of Los Angeles Capital Management and Equity Research, Inc. ("Los Angeles Capital"), Pzena Investment Management, LLC, River Road Asset Management, LLC and Boston Partners, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Broadridge information showed that the Portfolio's performance was above the Performance Universe median for the one-, three-, five- and ten-year periods and since inception.
Management and subadvisory fees and expense ratios—The comparative Broadridge information showed that the Portfolio's Contractual Management Fee and Actual Management Fee were above the median and its total expenses were at the median in the Portfolio's Expense Group for the comparison periods utilized in the Broadridge report. Management noted that, compared to the Supplemental Expense Group, consisting of five other subadvised funds, the Portfolio's Contractual Management Fee, Actual Management Fee and total expenses were above the respective medians. Management also noted that the managers of three of the other subadvised funds utilize affiliated subadvisors, which may result in those funds having lower overall expenses.
PACE Small/Medium Co Growth Equity Investments
In approving the Investment Management and Administration Agreement and the Subadvisory Agreements with each of LMCG Investments, LLC ("LMCG"), Riverbridge Partners, LLC and Timpani Capital Management LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Broadridge information showed that the Portfolio's performance was below the Performance Universe median for the one-, three-, five- and ten-year periods and since inception. Management explained that the majority of the Portfolio's underperformance over the one-year period was driven by poor stock selection in certain sectors, compounded by an underweight in certain sectors. Management noted that two of the Portfolio's Subadvisors faced style headwinds that exacerbated the poor stock selection. Management also noted its belief that active equity managers go through alpha cycles and that there is potential for performance reversion as the Subadvisors are still adhering to their investment philosophy and process.
Management and subadvisory fees and expense ratios—The comparative Broadridge 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, as well as the Supplemental Expense Group, for the comparison periods utilized in the Broadridge report.
PACE Small/Medium Co Value Equity Investments
In approving the Investment Management and Administration Agreement and the Subadvisory Agreements with each of Kayne Anderson Rudnick Investment Management, LLC, Systematic Financial Management, L.P. and Wells Capital Management, Inc. (formerly known as Metropolitan West Capital Management, LLC), the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Broadridge information showed that the Portfolio's performance was above the Performance Universe median for the one-, three-, five- and ten-year periods, but that the Portfolio's performance was below the Performance Universe median since inception.
Management and subadvisory fees and expense ratios—The comparative Broadridge information showed that the Portfolio's Contractual Management Fee, Actual Management Fee and total expenses were below the
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median in the Portfolio's Expense Group, as well as the Supplemental Expense Group, for the comparison periods utilized in the Broadridge report.
PACE International Equity Investments
In approving the Investment Management and Administration Agreement and the Subadvisory Agreements with each of Los Angeles Capital, Mondrian Investment Partners Limited ("Mondrian") and R. W. Baird & Co. Incorporated, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—Management noted that Broadridge classified the Portfolio under the International Multi Cap Growth category this year and that last year the Portfolio was classified under the International Large Cap Core category. Management also noted that Broadridge reviews classifications regularly and makes its own determination to classify funds based on its established holdings-based methodology. The comparative Broadridge information showed that the Portfolio's performance was above the Performance Universe median for the one-, three- and five-year periods, but that the Portfolio's performance was below the Performance Universe median for the ten-year period and since inception.
Management and subadvisory fees and expense ratios—The comparative Broadridge 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 periods utilized in the Broadridge report. Management noted that, compared to the Supplemental Expense Group, consisting of fourteen other subadvised funds, the Portfolio's Contractual Management Fee was above the median and the Portfolio's Actual Management Fee and total expenses were below the respective medians. Management also noted that the managers of seven of the other subadvised funds utilize affiliated subadvisors, which may result in those funds having lower overall expenses.
PACE International Emerging Markets Equity Investments
In approving the Investment Management and Administration Agreement and the Subadvisory Agreements with each of LMCG, Mondrian and William Blair & Company L.L.C., the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Broadridge information showed that the Portfolio's performance was below the Performance Universe median for the one-, three-, five- and ten-year periods and since inception. Management stated that the Portfolio underperformed during periods when cheap, low-quality, high-risk companies were rewarded by the market. Management noted that the primary detractor for the one- and three-year periods was the underperformance of one of the Subadvisors, as its quantitative investment approach was challenged when macro concerns created month-to-month volatility in payoffs to value, momentum and quality.
Management and subadvisory fees and expense ratios—The comparative Broadridge 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 (with the Portfolio's total expenses the highest in the Expense Group) for the comparison periods utilized in the Broadridge report. Management noted that the variance in the Portfolio's total expenses relative to the Expense Group median was primarily attributable to non-management fee expenses, including transfer agent fees and custody fees, which are 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 stated that it periodically conducts a review of custody fees for all
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Portfolios to ensure that the fees paid by the Portfolios are competitive and appropriate. Management noted that there are ten funds within the Supplemental Expense Group, consisting of thirteen other subadvised funds, that utilize affiliated subadvisors and that the Portfolio's Actual Management Fee and total expenses are in line with those of the three funds within the Supplemental Expense Group utilizing unaffiliated subadvisors. As a result of discussions with the board prior to the meeting, management proposed to voluntarily lower the Portfolio's expense cap by 20 basis points (i.e., 0.20%) across all share classes from August 1, 2016 to November 30, 2016. Management also proposed to remove the voluntary management fee waiver of 9.5 basis points (i.e., 0.095%), which would create operational efficiency and streamline the Portfolio's waiver calculation.
PACE Alternative Strategies Investments
In approving the Investment Management and Administration Agreement and the Subadvisory Agreements with each of Analytic Investors, LLC, AQR Capital Management, LLC, Aviva Investors Americas LLC, First Quadrant L.P., Sirios Capital Management, L.P., PCJ Investment Counsel Ltd. and Standard Life Investments (Corporate Funds) Limited, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Broadridge information showed that the Portfolio's performance was above the Performance Universe median for the one-, three- and five-year periods, but the Portfolio's performance was below the Performance Universe median for the ten-year period and since inception.
Management and subadvisory fees and expense ratios—The comparative Broadridge 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, as well as the Supplemental Expense Group, for the comparison periods utilized in the Broadridge report.
PACE Global Real Estate Securities Investments
In approving the Investment Management and Administration Agreement and the Subadvisory Agreement with Brookfield Investment Management Inc., the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Broadridge information showed that the Portfolio's performance was below the Performance Universe median for the one- and three-year periods and since inception, but the Portfolio's performance was above the Performance Universe median for the five-year period. Management explained that, for the one-year period, the largest detractor by region was the United States, driven by poor stock selection. Management noted that the Portfolio's performance for the three-year period was within ten basis points (i.e., 0.10%) of the median. Management also noted that, in general, performance has been hurt by the general risk aversion among investors over the past year, which led to discounted valuations relative to net asset values in many sectors. The Subadvisor has been exploiting that by purchasing stocks that it believes have been representing particular value based on the magnitude of the discounts, focusing on sectors where reasonable growth potential is seen. Management stated that this strategy has paid off more recently, with the Portfolio benefitting from a strong change in market sentiment in March 2016 and outperforming its benchmark in April 2016.
Management and subadvisory fees and expense ratios—The comparative Broadridge information showed that the Portfolio's Contractual Management Fee and Actual Management Fee were below the median (with the Portfolio's Actual Management Fee the lowest in the Expense Group) and its total expenses were above the median in the Portfolio's Expense Group for the comparison periods utilized in the Broadridge report. Management noted that the Portfolio's total expenses were within a few basis points (that is, hundredths of a percentage point) of the median of the Supplemental Expense Group, consisting of four other subadvised funds. Management further noted that the Portfolio's Contractual Management Fee and Actual Management Fee were well below the respective
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medians of the Expense Group and Supplemental Expense Group. Management explained that the Portfolio's high transfer agent fees are the main driver of the Portfolio's higher total expenses, which are a result of the large number of shareholder accounts with smaller account sizes within the Portfolio.
PACE Mortgage-Backed Securities Fixed Income Investments
In approving the Investment Management and Administration Agreement and the Subadvisory Agreement with Pacific Investment Management Company LLC ("PIMCO"), the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Broadridge information showed that the Portfolio's performance was above the Performance Universe median for the one-, and ten-year periods and since inception and below the median for the three- and five-year periods.
Management and subadvisory fees and expense ratios—The comparative Broadridge 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 below the median in the Portfolio's Expense Group for the comparison periods utilized in the Broadridge report. Management stated that, while the Portfolio's Contractual Management Fee was above the median, its Actual Management Fee was below the median of the Expense Group. Management explained that the Portfolio's total expenses, although above the median, were reasonably close to the Expense Group median (within three basis points—i.e., 0.03%). Management noted the downward trend in the Portfolio's total expenses over the last few years. Management also noted that, compared to the Supplemental Expense Group, consisting of two other subadvised funds, both of which utilize affiliated subadvisors, the Portfolio's Actual Management Fee was at the median.
PACE High Yield Investments
In approving the Investment Management and Administration Agreement and the Subadvisory Agreements with each of Nomura Corporate Research and Asset Management Inc. ("NCRAM") and Nomura Asset Management Singapore Limited (the latter being a sub-manager to NCRAM for Asia), the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Broadridge information showed that the Portfolio's performance was above the Performance Universe median for the one-year period and since inception but below the median for the three- and five-year periods. Management noted the overall improvement in the Portfolio's performance since the addition of the Subadvisors last year and also noted that the Portfolio's performance for the three- and five-year periods was within 12 basis points (i.e., 0.12%) of the median.
Management and subadvisory fees and expense ratios—The comparative Broadridge 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 (with the Portfolio's Contractual Management Fee the highest in the Expense Group) for the comparison periods utilized in the Broadridge report. Management stated that the Portfolio's total expenses, although above the median, were reasonably close to the Expense Group median (within three basis points—i.e., 0.03%). Management also noted that, compared to the Supplemental Expense Group, consisting of eleven other subadvised funds, eight of which utilize affiliated subadvisors, the Portfolio's Actual Management Fee and total expenses were within one basis point (i.e., 0.01%) of the respective medians.
382
PACE Select Advisors Trust
Board approvals of investment management and administration agreement and subadvisory agreements (unaudited)
PACE Intermediate Fixed Income Investments
In approving the Investment Management and Administration Agreement and the Subadvisory Agreement with BlackRock Financial Management, Inc. and Babson Capital Management LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Broadridge information showed that the Portfolio's performance was below the Performance Universe median for the one-, three-, five- and ten-year periods and since inception. Management noted that the duration of the Portfolio is approximately two years shorter than that of the peer funds in the Performance Universe. Management explained that as yields have fallen and stayed at historic lows, particularly in longer-dated US Treasury securities, the Portfolio has produced lower returns versus longer-duration peers over the one-, three- and five-year periods. Management stated that it would expect the Portfolio's relative performance to improve when Treasury yields start to rise due to the Portfolio's shorter duration (i.e., lower interest rate sensitivity) relative to its peers.
Management and subadvisory fees and expense ratios—The comparative Broadridge information showed that the Portfolio's Contractual Management Fee and total expenses were above the median (with the Portfolio's Contractual Management Fee the highest in the Expense Group) and its Actual Management Fee was at the median in the Portfolio's Expense Group for the comparison periods utilized in the Broadridge report. Management noted that, while the Portfolio's Contractual Management Fee was above the median, its Actual Management Fee was at the median of the Expense Group. Management also noted that, compared to the Supplemental Expense Group, consisting of seven other subadvised funds, five of which utilize affiliated subadvisors, the Portfolio's total expenses, although above the median, were reasonably close to the Expense Group median (within six basis points—i.e., 0.06%).
PACE International Fixed Income Investments
In approving the Investment Management and Administration Agreement and the Subadvisory Agreement with Rogge Global Partners plc, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Broadridge information showed that the Portfolio's performance was above the Performance Universe median for the one-and three-year periods, at the Performance Universe median for the five-year period and below the Performance Universe median for the ten-year period and since inception.
Management and subadvisory fees and expense ratios—The comparative Broadridge 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 periods utilized in the Broadridge report. Management noted that the Portfolio's Actual Management Fee and total expenses were within one basis point (i.e., 0.01%) of the respective medians. Management also noted that, compared to the Supplemental Expense Group, consisting of six other subadvised funds, four of which utilize affiliated subadvisors, the Portfolio's Actual Management Fee was at the median and its total expenses were within two basis points (i.e., 0.02%) of the median.
383
PACE Select Advisors Trust
Board approvals of investment management and administration agreement and subadvisory agreements (unaudited)
PACE Municipal Fixed Income Investments
In approving the Investment Management and Administration Agreement and the Subadvisory Agreement with Standish Mellon Asset Management Company LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Broadridge information showed that the Portfolio's performance was above the Performance Universe median for the one- and three-year periods, at the Performance Universe median for the ten-year period and below the Performance Universe median for the five-year period and since inception.
Management and subadvisory fees and expense ratios—The comparative Broadridge 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 periods utilized in the Broadridge report. Management explained that it appears that other funds in the Expense Group have large fee waivers in place. Management noted that the Portfolio's total expenses, although above the median, were reasonably close to the Expense Group median (within four basis points—i.e., 0.04%) within a tightly-ranged peer group.
PACE Strategic Fixed Income Investments
In approving the Investment Management and Administration Agreement and the Subadvisory Agreement with PIMCO and Neuberger Berman Investment Advisers LLC, the board, including the Independent Trustees, also considered the following factors:
Portfolio performance—The comparative Broadridge information showed that the Portfolio's performance was below the Performance Universe median for the one- and three-year periods and above the Performance Universe median for the five- and ten-year periods and since inception. Management noted that in January 2015 the Portfolio added a new Subadvisor that employs a more dynamic and flexible approach, particularly with respect to sector rotation, which is expected produce alpha over a market cycle.
Management and subadvisory fees and expense ratios—The comparative Broadridge 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 periods utilized in the Broadridge report. Management noted that, compared to the Supplemental Expense Group, consisting of five other subadvised funds, three of which utilize affiliated subadvisors, the Portfolio's Contractual Management Fee, Actual Management Fee and total expenses were above the respective medians. Management also noted that in the Supplemental Expense Group, two of the three peers that utilize affiliated subadvisors pay low subadvisory fees. As a result of discussions with the board prior to the meeting, management proposed to voluntarily lower the Portfolio's expense cap by 10 basis points (i.e., 0.10%) across all share classes, which is two basis points (i.e., 0.02%) lower than its current total expenses from August 1, 2016 to November 30, 2016. Management also proposed to remove the contractual management fee waivers totaling 9 basis points (i.e., 0.09%), which would create operational efficiency and streamline the Portfolio's waiver calculation.
PACE Government 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 Broadridge information showed that the Portfolio's performance was at or above the Performance Universe median for the one-, three-, five- and ten-year periods and since inception. The board noted that the Portfolio's above median performance included periods during which the Portfolio was man-
384
PACE Select Advisors Trust
Board approvals of investment management and administration agreement and subadvisory agreements (unaudited)
aged as prime money market fund, in contrast to the government money market funds in the Portfolio's Performance Universe.
Management fees and expense ratios—The comparative Broadridge information showed that the Portfolio's Contractual Management Fee was below the median, its Actual Management Fee, which was zero, was at the median and its total expenses were above the median in the Portfolio's Expense Group for the comparison periods utilized in the Broadridge report. Management stated that the Portfolio's total expenses were above the median in its Expense Group in part due to higher transfer agency expenses relative to peers, reflective of the smaller average size of Portfolio shareholder accounts Management also noted that the Portfolio was managed as a "prime" money market fund until November 2015, when it converted to a government money market fund in response to regulatory changes. Management noted that the Portfolio's higher gross yields as a prime money market fund resulted in a lower yield floor waiver compared to other government money market funds in the Portfolio's Expense Group.
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 subadvisory fee, as proposed by management after questions and/or suggestions posed 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 Subadvisory Agreement or Subdvisory Agreements, respectively.
In light of all of the foregoing, the board approved the Investment Management and Administration Agreement for each Portfolio and, for those Portfolios with Subadvisors, the Subadvisory 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 subadvised Portfolios, the Subadvisory 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 Subadvisory Agreements in private sessions with their independent legal counsel at which no representatives of UBS AM or the Subadvisors were present.
385
PACE Select Advisors Trust
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 | Number of portfolios in fund complex overseen by Trustee | Other directorships held by Trustee | ||||||||||||||||||
Meyer Feldberg2; 74 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 served 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 promoted interaction with other cities around the world) (2007-2014). 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 18 investment companies (consisting of 59 portfolios) for which UBS Asset Management (Americas) Inc. ("UBS AM") or one of its affiliates serves as investment 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. |
386
PACE Select Advisors Trust
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 | Number of portfolios in fund complex overseen by Trustee | Other directorships held by Trustee | ||||||||||||||||||
Richard Q. Armstrong; 81 c/o Keith Weller Assistant Fund Secretary UBS 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 international packaged goods companies (responsible for such brands as Canada Dry, Dr. Pepper, Adirondack Beverages and Moët Hennessy, among many others) (from 1982 until 1995). | Mr. Armstrong is a director or trustee of 10 investment companies (consisting of 51 portfolios) for which UBS AM serves as investment advisor or manager. | None | ||||||||||||||||||
Alan S. Bernikow; 75 207 Benedict Ave. Staten Island, NY 10314 | Trustee | Since 2005 | Mr. Bernikow is retired. Previously, he was deputy chief executive officer at Deloitte & Touche (international accounting and consulting firm). | Mr. Bernikow is a director or trustee of 10 investment companies (consisting of 51 portfolios) for which UBS 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 the compensation committee), the lead director of Mack-Cali Realty Corporation (real estate investment trust) (and serves as the chair of its audit committee); and a director of the Destination XL Group, Inc. (menswear) (and serves as a member of its nominating and corporate governance committee). He is also a director of Florida Community Bank, N.A. (and serves as the chair of its audit committee). | ||||||||||||||||||
Richard R. Burt; 69 McLarty Associates 900 17th Street Washington, D.C. 20006 | Trustee | Since 2001 | Mr. Burt is a managing director to McLarty Associates (a consulting firm) (since 2007). He was chairman of IEP Advisors (international investments and consulting firm) until 2009. Prior to 2007, he was chairman of Diligence Inc. (international information and risk management firm). | Mr. Burt is a director or trustee of 10 investment companies (consisting of 51 portfolios) for which UBS AM serves as investment advisor or manager. | Mr. Burt is also a director of The Central Europe & Russia Fund, Inc., The 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). |
387
PACE Select Advisors Trust
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 | Number of portfolios in fund complex overseen by Trustee | Other directorships held by Trustee | ||||||||||||||||||
Bernard H. Garil; 76 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 10 investment companies (consisting of 51 portfolios) for which UBS 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; 57 c/o Keith A. Weller Assistant Fund Secretary UBS Asset Management (Americas) Inc. 1285 Avenue of the Americas New York, NY 10019 | Trustee | Since 2005 | Ms. Higgins is the president and director of The Randolph Foundation (charitable foundation) (since 1991). Ms. Higgins also serves (or has 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 10 investment companies (consisting of 51 portfolios) for which UBS AM serves as investment advisor or manager. | None | ||||||||||||||||||
David Malpass; 60 Encima Global, LLC 645 Madison Avenue, 5th Floor, New York, NY 10022 | Trustee | Since 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 10 investment companies (consisting of 51 portfolios) for which UBS AM serves as investment advisor or manager. | Mr. Malpass is also a director of New Mountain Finance Corporation (business development company) (and serves as a member of its audit committee). |
388
PACE Select Advisors Trust
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*; 51 | Chief Compliance Officer | Since 2014 | Mr. Allessie is a managing director (since 2015) (prior to which he was an executive director) at UBS AM and UBS Asset Management (US) Inc. (collectively, "UBS AM—Americas region"). Mr. Allessie is head of compliance and operational risk control for the UBS 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 of USA AM—Americas region (from 2005 to 2014). Mr. Allessie is the chief compliance officer (prior to which he was interim chief compliance officer (from January to July 2014)) and had served as a vice president and assistant secretary (from 2005 to 2016) of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Rose Ann Bubloski*; 48 | Vice President and Assistant Treasurer | Since 2011 | Ms. Bubloski is a director (since 2012) (prior to which she was an associate director (from 2008 to 2012)) and senior manager of registered fund product control of UBS AM—Americas region. She is vice president and assistant treasurer of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Mark E. Carver*; 53 | President | Since 2010 | Mr. Carver is a managing director and head of product development and management for UBS 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). Mr. Carver is president of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Thomas Disbrow*; 50 | 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 (from 2007 to 2011)) and is global head of registered fund product control (since January 2016) (prior to which he was head of the North America fund treasury administration department of UBS AM—Americas region (from 2011-2015)). Mr. Disbrow is a vice president and treasurer and/or principal accounting officer of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Mark F. Kemper**; 58 | Vice President and Secretary | Since 2004 | Mr. Kemper is a managing director (since 2006) and head of the legal department of UBS AM—Americas region (since 2004). He has been secretary of UBS AM—Americas region (since 2004), and assistant secretary of UBS Asset Management Trust Company (since 1993). Mr. Kemper is vice president and secretary of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Joanne M. Kilkeary*; 48 | Vice President and Assistant Treasurer | Since 1999 | Ms. Kilkeary is an executive director (since 2013) (prior to which she was a director) (since 2008)) and a senior manager (since 2004) of registered fund product control of UBS AM—Americas region. Ms. Kilkeary is a vice president and assistant treasurer of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Tammie Lee*; 45 | Vice President and Assistant Secretary | Since 2005 | Ms. Lee is an executive director (since 2010) (prior to which she was a director) (from 2005 to 2010)) and associate general counsel of UBS AM—Americas region (since 2005). Ms. Lee is a vice president and assistant secretary of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
389
PACE Select Advisors Trust
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 | ||||||||||||
Joshua M. Lindauer*; 28 | Vice President and Assistant Secretary | Since 2016 | Mr. Lindauer is an associate director and associate general counsel of UBS AM—Americas region (since May 2016). Prior to joining UBS AM—Americas region, Mr. Lindauer was an associate counsel at Fred Alger Management, Inc. (from 2015 to 2016) and a paralegal (from 2014 to 2015). From 2010 to 2014, Mr. Lindauer was a law student. Mr. Lindauer is a vice president and assistant secretary of 10 investment companies (consisting of 78 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Mabel Lung*; 58 | Vice President | Since May 2016 | Ms. Lung is a managing director and global head of the Multi-Manager Solutions team of UBS AM—Americas region (since 2005). Ms. Lung is a vice president of 1 investment company (consisting of 15 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
William T. MacGregor*; 41 | Vice President and Assistant Secretary | Since September 2015 | Mr. MacGregor is an executive director and deputy general counsel at UBS AM—Americas region. From June 2012 through July 2015, Mr. MacGregor was Senior Vice President, Secretary and Associate General Counsel of AXA Equitable Funds Management Group, LLC and from May 2008 through July 2015, Mr. MacGregor was Lead Director and Associate General Counsel of AXA Equitable Life Insurance Company. Mr. MacGregor is a vice president and assistant secretary of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Nancy D. Osborn*; 50 | 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 registered fund product control of UBS AM—Americas region (since 2006). Mrs. Osborn is a vice president and assistant treasurer of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Robert Sabatino**; 43 | Vice President | Since 2001 | Mr. Sabatino is a managing director (since 2010) (prior to which he was an executive director) (since 2007)), global head of liquidity portfolio management (since 2015), head of US taxable money markets (from 2009 to 2015), and portfolio manager of UBS AM—Americas region in the short duration fixed income group (since 2001). Mr. Sabatino is a vice president of four investment companies (consisting of 30 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Eric Sanders*; 50 | Vice President and Assistant Secretary | Since 2005 | Mr. Sanders is a director and associate general counsel of UBS AM—Americas region (since 2005). Mr. Sanders is a vice president and assistant secretary of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Gina M. Toth*; 52 | Vice President | Since May 2016 | Ms. Toth is an executive director and portfolio manager in the Multi-Manager Solutions team of UBS AM—Americas region (since 2013). Prior to joining UBS AM—Americas region, Ms. Toth was a senior portfolio manager at AllianceBernstein (from 1993 to 2012). Ms. Toth is a vice president of 1 investment company (consisting of 15 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
David Walczak**; 33 | Vice President | Since February 2016 | Mr. Walczak is an executive director (since January 2016), head of US taxable money markets (since January 2016) and portfolio manager of UBS AM—Americas region. Mr. Walczak is a vice president of five investment companies (consisting of 45 portfolios) for which UBS AM serves as investment advisor or manager. |
390
PACE Select Advisors Trust
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 | ||||||||||||
Keith A. Weller*; 55 | Vice President and Assistant Secretary | Since 2000 | Mr. Weller is an executive director and senior associate general counsel of UBS 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 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Mandy Yu*; 33 | Vice President | Since 2013 | Ms. Yu is an associate director (since 2015) (prior to which she was an authorized officer (from 2012 to 2015)) and tax compliance manager (since 2013) of registered fund product control of UBS AM—Americas region. She was a fund treasury manager (from 2012 to 2013) and a mutual fund administrator (from 2007 to 2012) for UBS AM—Americas region. Ms. Yu is a vice president of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
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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
Mark F. Kemper
Vice President and Secretary
Thomas Disbrow
Vice President and Treasurer
Investment Manager and
Administrator
UBS Asset Management (Americas) Inc.
1285 Avenue of the Americas
New York, New York 10019-6028
Principal Underwriter
UBS 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 2016. All rights reserved.
UBS Asset Management (Americas) Inc.
PRESORTED
STANDARD
U.S. POSTAGE
PAID
COMPUTERSHARE
UBS Asset Management (Americas) Inc.
1285 Avenue of the Americas
New York, NY 10019-6028
S003
PACE® Government Money Market Investments
Annual Report | July 31, 2016
PACE Government Money Market Investments
On September 22, 2015, the Portfolio's Board of Trustees ("the Board") approved a new policy on behalf of the Portfolio to invest at least 99.5% of its total assets in cash, government securities and/or repurchase agreements that are collateralized fully by cash or government securities to allow the Portfolio to qualify as a government money market fund, as defined under the amended Rule 2a-7 of the Investment Company Act of 1940, as amended. In addition, the Board approved changing the Portfolio's name to PACE Government Money Market Investments to ensure that the Portfolio is understood to be a government money market fund. In connection with the change to the Portfolio's name, the Portfolio also adopted a non-fundamental investment policy that the Portfolio invests, under normal circumstances, at least 80% of its net assets (plus the amount of any borrowing for investment purposes) in government securities, including government securities subject to repurchase agreements. The changes became effective on November 28, 2015.
Performance (Unaudited)
For the 12 months ended July 31, 2016, 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
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.
PACE Government Money Market Investments
Investment Advisor:
UBS 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
PACE Government Money Market Investments
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 U.S. Government Money Market Funds category was 0.01%. (Returns over various time periods are shown in the "Performance at a glance" table on page 4. 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.)
Advisor's Comments (Unaudited)
In December 2015, the US Federal Reserve Board (the "Fed") modestly raised the federal funds rate from a historically low range between 0% and 0.25% to a range between 0.25% and 0.50%.The federal funds rate or the "fed funds rate," is the rate US banks charge one another for funds they borrow on an overnight basis. However, during the Fed's first five meetings in 2016, it has kept the federal funds rate on hold. While the yields on a wide range of short-term investments moved higher over the period, yields still remain low by historical comparison. 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 38 days. This was increased to 57 days at the end of the reporting period.
Several adjustments were made to the Portfolio's sector and issuer positioning during the 12-month period due to the Fund's aforementioned change to a government money market fund. We significantly increased the Portfolio's exposure to US government and agency obligations and added to its repurchase agreement allocation. Conversely, we eliminated our allocation to commercial paper, certificates of deposit and short-term corporate 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.)
2
PACE Government Money Market Investments
Sincerely,
Mark E. Carver President PACE Select Advisors Trust Managing Director UBS Asset Management (Americas) Inc. | Robert Sabatino Portfolio Manager PACE Government Money Market Investments Managing Director UBS Asset Management (Americas) Inc. |
Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. A prospectus can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com/am-us.
3
PACE Government Money Market Investments
Performance at a glance (unaudited)
Average annual total returns for periods ended 07/31/16 | 1 year | 5 years | 10 years | ||||||||||||
PACE Government Money Market Investments1 | 0.01 | % | 0.01 | % | 0.90 | % | |||||||||
Lipper U.S. Government Money Market Funds median | 0.01 | % | 0.01 | % | 0.86 | % | |||||||||
Most recent calendar quarter-end returns (unaudited) Average annual total returns for periods ended 06/30/16 | 1 year | 5 years | 10 years | ||||||||||||
PACE Government Money Market Investments1 | 0.01 | % | 0.01 | % | 0.94 | % |
The annualized gross and net expense ratios in the November 28, 2015 prospectus were 0.93% and 0.60%, respectively. Net expenses reflect fee waivers and/or expense reimbursement, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Asset Management (Americas) Inc. ("UBS AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS 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, 2016 (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 0.60%. The Portfolio has agreed to repay UBS 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 and that UBS AM has not waived the right to do so. 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 AM. Upon termination of the agreement, however, UBS AM's three year recoupment rights will survive.
For PACE Government Money Market Investments1, the 7-day current yield for the period ended July 31, 2016 was 0.01% after fee waivers and/or expense reimbursements; the yield was (0.77)% 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.
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PACE Government Money Market Investments
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 Government 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.
5
PACE Government 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, 2016 to July 31, 2016.
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.
6
PACE Government 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, 2016 | Ending account value July 31, 2016 | Expenses paid during period1 02/01/16 to 07/31/16 | Expense ratio during the period | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,000.00 | $ | 1.69 | 0.34 | % | |||||||||||
Hypothetical (5% annual return before expenses) | 1,000.00 | 1,023.17 | 1.71 | 0.34 |
1 Expenses are equal to the Portfolio's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 182 divided by 366 (to reflect the one-half year period).
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PACE Government Money Market Investments
Portfolio statistics (unaudited)
Characteristics | 07/31/16 | ||||||
Net assets (mm) | $ | 183 | |||||
Number of holdings | 32 | ||||||
Weighted average maturity | 57 days | ||||||
Portfolio composition1 | 07/31/16 | ||||||
US government and agency obligations | 75.2 | % | |||||
Repurchase agreements | 25.1 | ||||||
Other assets less liabilities | (0.3 | ) | |||||
Total | 100.0 | % | |||||
Top 10 holdings1 | 07/31/16 | ||||||
Repurchase agreement with Goldman Sachs, Inc., 0.300% due 08/1/16 | 24.9 | % | |||||
US Treasury Notes, 3.125% due 10/31/16 | 6.8 | ||||||
Federal Home Loan Bank, 0.330% due 08/19/16 | 5.5 | ||||||
Federal Home Loan Bank, 0.325% due 09/14/16 | 5.5 | ||||||
US Treasury Bills, 0.515% due 09/15/16 | 5.5 | ||||||
US Treasury Notes, 0.510% due 08/02/16 | 3.3 | ||||||
US Treasury Notes, 0.500% due 09/30/16 | 2.7 | ||||||
Federal Home Loan Bank,0.577% due 08/22/16 | 2.7 | ||||||
Federal Home Loan Bank, 0.406% due 08/12/16 | 2.7 | ||||||
Federal Home Loan Bank, 0.300% due 08/19/16 | 2.7 | ||||||
Total | 62.3 | % |
1 Weightings represent percentages of the Portfolio's net assets as of July 31, 2016. The Portfolio is actively managed and its composition will vary over time.
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PACE Government Money Market Investments
Statement of net assets—July 31, 2016
Face amount | Value | ||||||||||
US government and agency obligations—75.15% | |||||||||||
Federal Farm Credit Bank | |||||||||||
0.586%, due 08/29/161 | $ | 3,000,000 | $ | 3,000,000 | |||||||
Federal Home Loan Bank | |||||||||||
0.300%, due 08/19/162 | 5,000,000 | 4,999,250 | |||||||||
0.320%, due 09/15/162 | 3,000,000 | 2,998,800 | |||||||||
0.320%, due 09/30/162 | 5,000,000 | 4,997,333 | |||||||||
0.325%, due 09/14/162 | 10,000,000 | 9,996,028 | |||||||||
0.330%, due 08/19/162 | 10,000,000 | 9,998,350 | |||||||||
0.350%, due 09/27/162 | 2,593,000 | 2,591,563 | |||||||||
0.370%, due 10/14/162 | 2,000,000 | 1,998,479 | |||||||||
0.379%, due 10/21/162 | 5,000,000 | 4,995,736 | |||||||||
0.400%, due 09/23/162 | 2,000,000 | 1,998,822 | |||||||||
0.400%, due 10/28/16 | 3,000,000 | 2,999,795 | |||||||||
0.406%, due 08/12/161 | 5,000,000 | 5,000,000 | |||||||||
0.455%, due 08/31/162 | 5,000,000 | 4,998,104 | |||||||||
0.480%, due 10/21/162 | 5,000,000 | 4,994,600 | |||||||||
0.500%, due 10/17/162 | 5,000,000 | 4,994,653 | |||||||||
0.577%, due 08/22/161 | 5,000,000 | 5,000,000 | |||||||||
0.586%, due 10/10/161 | 3,500,000 | 3,499,781 | |||||||||
Federal Home Loan Mortgage Corp. | |||||||||||
0.350%, due 12/05/162 | 3,000,000 | 2,996,325 | |||||||||
0.410%, due 01/06/172 | 2,000,000 | 1,996,401 | |||||||||
Federal National Mortgage Association | |||||||||||
0.609%, due 06/01/17 | 2,000,000 | 1,989,921 | |||||||||
0.635%, due 10/11/161 | 2,000,000 | 2,000,000 | |||||||||
US Treasury Bills | |||||||||||
0.390%, due 11/03/162 | 4,000,000 | 3,995,927 | |||||||||
0.515%, due 09/15/162 | 10,000,000 | 9,993,562 | |||||||||
0.568%, due 04/27/172 | 4,000,000 | 3,983,023 | |||||||||
US Treasury Notes | |||||||||||
0.500%, due 09/30/16 | 5,000,000 | 5,001,028 | |||||||||
0.500%, due 01/31/17 | 3,000,000 | 2,999,854 | |||||||||
0.510%, due 08/02/161 | 6,000,000 | 6,001,759 |
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PACE Government Money Market Investments
Statement of net assets—July 31, 2016
Face amount | Value | ||||||||||
US government and agency obligations—(concluded) | |||||||||||
0.750%, due 01/15/17 | $ | 3,000,000 | $ | 3,002,963 | |||||||
0.875%, due 02/28/17 | 2,000,000 | 2,004,445 | |||||||||
3.125%, due 10/31/16 | 12,400,000 | 12,484,896 | |||||||||
Total US government and agency obligations (cost—$137,511,398) | 137,511,398 | ||||||||||
Repurchase agreements—25.10% | |||||||||||
Repurchase agreement dated 07/29/16 with Goldman Sachs & Co., 0.300% due 08/01/16, collateralized by $85,724,000 US Treasury Bonds Principal STRIPs, zero coupon due 08/15/43 to 11/15/43; (value—$46,410,009); proceeds: $45,501,138 | 45,500,000 | 45,500,000 | |||||||||
Repurchase agreement dated 07/29/16 with State Street Bank and Trust Co., 0.010% due 08/01/16, collateralized by $423,077 US Treasury Note, 1.625% due 04/30/19; (value—$434,707); proceeds:$425,000 | 425,000 | 425,000 | |||||||||
Total repurchase agreements (cost—$45,925,000) | 45,925,000 | ||||||||||
Total investments (cost—$183,436,398 which approximates cost for federal income tax purposes)—100.25% | 183,436,398 | ||||||||||
Liabilities in excess of other assets—(0.25)% | (459,853 | ) | |||||||||
Net assets (applicable to 182,975,935 shares of beneficial interest outstanding equivalent to $1.00 per share)—100.00% | $ | 182,976,545 |
10
PACE Government Money Market Investments
Statement of net assets—July 31, 2016
Fair valuation summary
The following is a summary of the fair valuations according to the inputs used as of July 31, 2016 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 | $ | — | $ | 137,511,398 | $ | — | $ | 137,511,398 | |||||||||||
Repurchase agreements | — | 45,925,000 | — | 45,925,000 | |||||||||||||||
Total | $ | — | $ | 183,436,398 | $ | — | $ | 183,436,398 |
At July 31, 2016, there were no transfers between Level 1 and Level 2.
Portfolio footnotes
1 Variable or floating rate security. The interest rate shown is the current rate as of July 31, 2016 and changes periodically.
2 Rates shown are the discount rates at date of purchase unless otherwise noted.
Portfolio acronym
STRIP Separate Trading of Registered Interest and Principal of Securities
See accompanying notes to financial statements
11
PACE Government Money Market Investments
Statement of operations
For the year ended July 31, 2016 | |||||||
Investment income: | |||||||
Interest | $ | 542,855 | |||||
Expenses: | |||||||
Transfer agency and related services fees | 828,698 | ||||||
Investment management and administration fees | 692,313 | ||||||
Reports and notices to shareholders | 134,584 | ||||||
Professional fees | 124,999 | ||||||
State registration fees | 30,064 | ||||||
Trustees' fees | 25,457 | ||||||
Custody and accounting fees | 19,341 | ||||||
Insurance expense | 5,375 | ||||||
Other expenses | 32,874 | ||||||
1,893,705 | |||||||
Fee waivers and/or expense reimbursements by investment manager and administrator | (1,370,692 | ) | |||||
Net expenses | 523,013 | ||||||
Net investment income | 19,842 | ||||||
Net realized gain | 3,848 | ||||||
Net increase in net assets resulting from operations | $ | 23,690 |
See accompanying notes to financial statements
12
PACE Government Money Market Investments
Statement of changes in net assets
For the years ended July 31, | |||||||||||
2016 | 2015 | ||||||||||
From operations: | |||||||||||
Net investment income | $ | 19,842 | $ | 21,010 | |||||||
Net realized gain | 3,848 | 1,868 | |||||||||
Net increase in net assets resulting from operations | 23,690 | 22,878 | |||||||||
Dividends and distributions to shareholders from: | |||||||||||
Net investment income | (19,842 | ) | (21,010 | ) | |||||||
Net realized gains | (5,106 | ) | — | ||||||||
(24,948 | ) | (21,010 | ) | ||||||||
Net increase (decrease) in net assets from beneficial interest transactions | 14,474,686 | (43,523,872 | ) | ||||||||
Net increase (decrease) in net assets | 14,473,428 | (43,522,004 | ) | ||||||||
Net assets: | |||||||||||
Beginning of year | 168,503,117 | 212,025,121 | |||||||||
End of year | $ | 182,976,545 | $ | 168,503,117 | |||||||
Accumulated undistributed net investment income | $ | — | $ | — |
See accompanying notes to financial statements
13
PACE Government Money Market Investments
Financial highlights
Selected financial data throughout each year is presented below:
Years ended July 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
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 | — | — | ||||||||||||||||
Net realized gain | 0.0001 | — | 0.0001 | — | — | ||||||||||||||||||
Net increase from operations | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 | ||||||||||||||||||
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 | % | 0.01 | % | 0.01 | %3 | 0.01 | % | 0.01 | % | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursements | 0.96 | % | 0.93 | % | 0.91 | % | 0.88 | % | 0.89 | % | |||||||||||||
Expenses after fee waivers and/or expense reimbursements | 0.26 | % | 0.14 | % | 0.14 | % | 0.19 | % | 0.19 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | |||||||||||||
Supplemental data: | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 182,977 | $ | 168,503 | $ | 212,025 | $ | 309,842 | $ | 337,091 |
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 fees were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions.
3 In August 2013, UBS 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. Payment from investment advisor had no impact on the Portfolio's total investment return and represents less than $0.0005 per share.
See accompanying notes to financial statements
14
PACE Government Money Market Investments
Notes to financial statements
Organization and significant accounting policies
PACE Government Money Market Investments (formerly, 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 (the "1940 Act"), as amended, 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. The financial statements for the other Portfolios of the Trust are not included herein. Shares of the Portfolio currently are available only to participants in the PACESM Select Advisors Program and the PACESM Multi Advisor Program.
UBS Asset Management (Americas) Inc. ("UBS AM") is the investment manager of the Portfolio. UBS AM is an indirect asset management subsidiary of UBS Group AG. UBS Group AG is an internationally diversified organization with headquarters in Zurich, Switzerland. UBS Group AG operates in many areas of the financial services industry.
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.
15
PACE Government Money Market Investments
Notes to financial statements
The Portfolio seeks to maintain a stable price of $1.00 per share. The Portfolio's Board of Trustees (the "Board") has determined that the Portfolio will operate as a "government money market fund" under Rule 2a-7 of the 1940 Act. The Portfolio has adopted certain investment, portfolio valuation and dividend/distribution policies in an attempt to enable it to do so. As a "government money market fund" under Rule 2a-7, the Portfolio will be permitted to use the amortized cost method of valuation to seek to maintain a $1.00 share price and will not be subject to a liquidity fee and/or a redemption gate on portfolio redemptions.
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.
In August 2014, the FASB issued Accounting Standard Update No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): "Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern" ("ASU 2014-15"). The update provides guidance about management's responsibilty to evaluate whether there is substantial doubt about the entity's ability to continue as a going concern and to provide related footnote disclosure. ASU 2014-15 is effective for annual reporting periods after December 15, 2016, and for annual and interim periods thereafter. Management is currently evaluating the impact of guidance on the disclosures in the financial statements.
The following is a summary of significant accounting policies:
The Portfolio's net asset value per share is expected to be $1.00 per share, although this value is not guaranteed. The Portfolio values its
16
PACE Government Money Market Investments
Notes to financial statements
securities at amortized cost unless the Portfolio's Board determines that this does not represent fair value. 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. The amortized cost method uses a constant amortization to maturity of the difference between the cost of an instrument to the fund and the amount due at maturity.
US GAAP requires disclosure regarding 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 May 2015, the FASB issued Accounting Standards Update No. 2015-07, Fair Value Measurement (Topic 820): "Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)" ("ASU 2015-07"). The modification removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share practical expedient. Early application is permitted and the Portfolio has elected to adopt ASU 2015-07 early. In the event the Portfolio holds investments for which fair value is measured using the NAV per share practical expedient, a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amount presented in the Statement of net assets.
A fair value hierarchy table has been included near the end of the Portfolio's Statement of net assets.
17
PACE Government Money Market Investments
Notes to financial statements
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 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 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 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 subadvised by UBS 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.
18
PACE Government Money Market Investments
Notes to financial statements
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.
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 has approved an investment management and administration contract ("Management Contract") with UBS AM. In accordance with the Management Contract, the Portfolio pays UBS 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, 2016, UBS AM owes $42,504 to the Portfolio, representing investment management and administration fees net of fee waivers/expense reimbursements.
UBS 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
19
PACE Government Money Market Investments
Notes to financial statements
borrowing costs and interest expense, if any) through November 30, 2016 at a level not to exceed 0.60%. For the year ended July 31, 2016, UBS AM waived $706,786 in investment management and administration fees. The Portfolio will make a payment to UBS 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.
At July 31, 2016, the Portfolio had remaining fee waivers/expense reimbursements subject to repayment to UBS AM and respective dates of expiration as follows:
Fee waivers/expense reimbursements subject to repayment | Expires July 31, 2017 | Expires July 31, 2018 | Expires July 31, 2019 | ||||||||||||
$ | 2,248,248 | $ | 855,490 | $ | 685,972 | $ | 706,786 |
No amount was repaid back to UBS AM in the past year.
UBS 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 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, 2016, UBS AM voluntarily waived and/or reimbursed expenses of $386,980 for that purpose.
Until June 16, 2016, the Portfolio could invest cash collateral from securities lending activities into an affiliated private money market fund, UBS Private Money Market Fund, LLC ("Private Money Market"), which operated in compliance with most of the substantive provisions of Rule 2a-7 of the 1940 Act. Private Money Market was managed by UBS AM and was offered only to mutual funds and certain other accounts managed by the Portfolios' investment manager. UBS AM acted as managing member of Private Money Market and received a management fee from Private Money Market payable monthly in arrears at the annual rate of 0.10% of Private Money Market's average
20
PACE Government Money Market Investments
Notes to financial statements
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 AM could, in its sole discretion, waive all or any portion of the management fee to which it might have been entitled from time to time in order to maintain operating expenses at a certain level.
Distributions received from Private Money Market, if any, net of fee rebates paid to borrowers, are included in securities lending income in the Statement of operations.
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, 2016, the Portfolio purchased and sold certain securities (e.g., fixed income securities) in principal trades with Morgan Stanley, having an aggregate value of $41,497,413. 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.
21
PACE Government 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 Government Money Market Investments so that BNY Mellon would correspondingly reduce the fees it would have charged to that Portfolio. Given that UBS 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 AM would have otherwise voluntarily waived/reimbursed. For the year ended July 31, 2016, the amount of the reduction in transfer agency and related services fees charged by BNY Mellon to the Portfolio was $276,926, 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, 2016, UBS Financial Services Inc. received from BNY Mellon, not the Portfolio, $136,454 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
22
PACE Government Money Market Investments
Notes to financial statements
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 Portfolio's lending agent. At July 31, 2016, the Portfolio did not have any securities on loan.
Other liabilities and components of net assets
At July 31, 2016, the Portfolio had the following liabilities outstanding:
Payable for shares of beneficial interest repurchased | $ | 651,635 | |||||
Payable to custodian | 3,268 | ||||||
Dividends payable to shareholders | 677 | ||||||
Other accrued expenses* | 298,199 |
* Excludes investment management and administration fees.
At July 31, 2016, the components of net assets were as follows:
Accumulated paid in capital | $ | 182,977,137 | |||||
Accumulated net realized loss | (592 | ) | |||||
Net assets | $ | 182,976,545 |
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, | |||||||||||
2016 | 2015 | ||||||||||
Shares sold | 256,831,799 | 183,206,846 | |||||||||
Shares repurchased | (242,373,374 | ) | (226,742,570 | ) | |||||||
Dividends reinvested | 16,261 | 11,852 | |||||||||
Net increase (decrease) in shares outstanding | 14,474,686 | (43,523,872 | ) |
23
PACE Government 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, 2016 and July 31, 2015 was ordinary income.
At July 31, 2016 the components of accumulated earnings on a tax basis were undistributed ordinary income of $84.
There were no reclassifications arising from permanent "book/tax" differences for the year ended July 31, 2016.
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 indefinetly, 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. As of July 31, 2016, the Portfolio has no capital loss carryforwards.
ASC 740-10 "Income-Overall" sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken. The Portfolio has analyzed and concluded as of July 31, 2016, that there are no significant uncertain tax positions taken or expected to be taken that would require recognition in the financial statements. 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, 2016, the Portfolio did not incur any interest or penalties.
24
PACE Government Money Market Investments
Notes to financial statements
Each of the tax years in the four year period ended July 31, 2016, remains subject to examination by the Internal Revenue Service and state taxing authorities.
25
PACE Government 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 Government Money Market Investments (formerly, PACE Money Market Investments) (one of the series comprising PACE Select Advisors Trust) (the "Portfolio") as of July 31, 2016, 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, 2016, 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
26
PACE Government Money Market Investments
Report of Ernst & Young LLP, independent
registered public accounting firm
PACE Government Money Market Investments at July 31, 2016, the results of its 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 U.S. generally accepted accounting principles.
New York, New York
September 29, 2016
27
PACE Government 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/usmoneymarketfunds. 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/ubsam-proxy, or on the EDGAR Database on SEC's Web site (http://www.sec.gov).
28
PACE Government Money Market Investments
Board approval of investment managment and administration agreement (unaudited)
Background—At a meeting of the board of PACE Select Advisors Trust (the "Trust") on July 12-13, 2016, 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 Asset Management (Americas) Inc. ("UBS AM") and the Trust, on behalf of PACE Government Money Market Investments (the "Portfolio"). In preparing for the meeting, the Independent Trustees had requested and received extensive information from UBS AM to assist them, including information about UBS AM, as well as the management, administrative and distribution arrangements for the Portfolio. The board reviewed and discussed with management the materials initially provided by UBS AM 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 AM. The board also considered the nature, extent and quality of administrative, distribution and shareholder services performed by UBS 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 information at
29
PACE Government Money Market Investments
Board approval of investment managment and administration agreement (unaudited)
regular meetings throughout the year regarding the services rendered by UBS AM concerning the management of the Portfolio's affairs and UBS AM's role in coordinating and overseeing providers of other services to the Portfolio. The board's evaluation of the services provided by UBS 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 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 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 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 AM report to the board regularly, and that at each regular meeting the board receives a detailed report from UBS AM on the Portfolio's performance. The board also considered, based on its knowledge of UBS AM and its affiliates, the financial resources available to UBS AM and its parent organization, UBS Group AG. In that regard, the board received extensive financial information regarding UBS 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 AM had approximately $143 billion in assets under management as of March 31, 2016 and was part of the UBS Asset Management Division, which had approximately $653 billion in assets under management worldwide as of March 31, 2016. The board also was cognizant of, and considered, the regulatory and litigation actions and investigations occurring in the past few years involving UBS Group AG, UBS 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)
30
PACE Government Money Market Investments
Board approval of investment managment and administration agreement (unaudited)
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 AM in light of the nature, extent and quality of the services provided by UBS AM pursuant to the Investment Management and Administration Agreement. The board also reviewed and considered the fee waiver and/or expense reimbursement arrangement 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 AM had entered into a fee waiver and/or expense reimbursement agreement with the Portfolio under which UBS AM was contractually obligated to waive its management fees and/or reimburse the Portfolio so that the total ordinary operating expenses of the Portfolio through November 30, 2016 (excluding certain miscellaneous items) would not exceed a specified limit. The board also considered that the Portfolio had agreed to repay UBS 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 Broadridge, 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 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 subject 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
31
PACE Government Money Market Investments
Board approval of investment managment and administration agreement (unaudited)
fund, and, therefore, were not totally comparable. The board also received information on fees charged to other mutual funds managed by UBS AM.
The comparative Broadridge information showed that the Portfolio's Contractual Management Fee was below the median, its Actual Management Fee, which was zero, was at the median and its total expenses were above the median in the Portfolio's Expense Group for the comparison periods utilized in the Broadridge report. (Below median fees or expenses represent fees or expenses that are lower relative to the median, and above median fees or expenses represent fees or expenses that are higher relative to the median of the funds in the Expense Group.) Management stated that the Portfolio's total expenses were above the median in its Expense Group in part due to higher transfer agency expenses relative to peers, reflective of the smaller average size of portfolio shareholder accounts. Management also noted that the Portfolio was managed as a "prime" money market fund until November 2015, when it converted to a government money market fund in response to regulatory changes. Management noted that the Portfolio's higher gross yields as a prime money market fund resulted in a lower yield floor waiver compared to other government money market funds in the Portfolio's Expense Group.
In light of the foregoing, the board determined that the proposed contractual management fee payable by the Portfolio to UBS 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 Broadridge over the one-, three-, five-, ten-year and since inception periods ended April 30, 2016, and (b) annualized performance information for each year in the ten-year period ended April 30, 2016. Although the board received information for the ten-year and since inception periods, in its
32
PACE Government Money Market Investments
Board approval of investment managment and administration agreement (unaudited)
analysis, it generally placed greater emphasis on the one-, three- and five-year periods. The board was provided with a description of the methodology Broadridge 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, 2016. The board also noted that it had received information throughout the year at periodic intervals with respect to the Portfolio's performance.
The comparative Broadridge information showed that the Portfolio's performance was 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.) The board noted that the Portfolio's above median performance included periods during which the Portfolio was managed as a prime money market fund, in contrast to the government money market funds in the Portfolio's Performance Universe. 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 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 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 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
33
PACE Government Money Market Investments
Board approval of investment managment and administration agreement (unaudited)
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 AM's profitability data, the Actual Management Fee, the Contractual Management Fee and the current assets of the Portfolio, the board believed that UBS AM's sharing of potential and current economies of scale with the Portfolio was acceptable.
Other benefits to UBS AM—The board considered other benefits received by UBS AM and its affiliates as a result of its 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 AM's ongoing commitment to the Portfolio, the profits and other ancillary benefits that UBS 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 AM were present.
34
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35
PACE Select Advisors Trust
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; 74 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 served 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 promoted interaction with other cities around the world) (2007-2014). Prior to 2004, he was Dean and Professor of Management and Ethics of the Graduate School of Business at Columbia University (since 1989). |
36
PACE Select Advisors Trust
Supplemental information (unaudited)
Name, address, and age | Number of portfolios in fund complex overseen by Trustee | Other directorships held by Trustee | |||||||||
Meyer Feldberg2; 74 Morgan Stanley 1585 Broadway 36th Floor New York, NY 10036 | Professor Feldberg is a director or trustee of 18 investment companies (consisting of 59 portfolios) for which UBS Asset Management (Americas) Inc. ("UBS AM") or one of its affiliates serves as investment 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. |
37
PACE Select Advisors Trust
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; 81 c/o Keith Weller Assistant Fund Secretary UBS 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 international packaged goods companies (responsible for such brands as Canada Dry, Dr. Pepper, Adirondack Beverages and Moët Hennessy, among many others) (from 1982 until 1995). | ||||||||||||
Alan S. Bernikow; 75 207 Benedict Ave. Staten Island, NY 10314 | Trustee | Since 2005 | Mr. Bernikow is retired. Previously, he was deputy chief executive officer at Deloitte & Touche (international accounting and consulting firm). | ||||||||||||
Richard R. Burt; 69 McLarty Associates 900 17th Street Washington, D.C. 20006 | Trustee | Since 2001 | Mr. Burt is a managing director to McLarty Associates (a consulting firm) (since 2007). He was chairman of IEP Advisors (international investments and consulting firm) until 2009. Prior to 2007, he was chairman of Diligence Inc. (international information and risk management firm). |
38
PACE Select Advisors Trust
Supplemental information (unaudited)
Name, address, and age | Number of portfolios in fund complex overseen by Trustee | Other directorships held by Trustee | |||||||||
Richard Q. Armstrong; 81 c/o Keith Weller Assistant Fund Secretary UBS Asset Management (Americas) Inc. 1285 Avenue of the Americas New York, NY 10019 | Mr. Armstrong is a director or trustee of 10 investment companies (consisting of 51 portfolios) for which UBS AM serves as investment advisor or manager. | None | |||||||||
Alan S. Bernikow; 75 207 Benedict Ave. Staten Island, NY 10314 | Mr. Bernikow is a director or trustee of 10 investment companies (consisting of 51 portfolios) for which UBS 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 the compensation committee), the lead director of Mack-Cali Realty Corporation (real estate investment trust) (and serves as the chair of its audit committee); and a director of the Destination XL Group, Inc. (menswear) (and serves as a member of its nominating and corporate governance committee). He is also a director of Florida Community Bank, N.A. (and serves as the chair of its audit committee). | |||||||||
Richard R. Burt; 69 McLarty Associates 900 17th Street Washington, D.C. 20006 | Mr. Burt is a director or trustee of 10 investment companies (consisting of 51 portfolios) for which UBS AM serves as investment advisor or manager. | Mr. Burt is also a director of The Central Europe & Russia Fund, Inc., The 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). |
39
PACE Select Advisors Trust
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 | ||||||||||||
Bernard H. Garil; 76 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; 57 c/o Keith A. Weller Assistant Fund Secretary UBS Asset Management (Americas) Inc. 1285 Avenue of the Americas New York, NY 10019 | Trustee | Since 2005 | Ms. Higgins is the president and director of The Randolph Foundation (charitable foundation) (since 1991). Ms. Higgins also serves (or has 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). | ||||||||||||
David Malpass; 60 Encima Global, LLC 645 Madison Avenue, 5th Floor, New York, NY 10022 | Trustee | Since 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). |
40
PACE Select Advisors Trust
Supplemental information (unaudited)
Name, address, and age | Number of portfolios in fund complex overseen by Trustee | Other directorships held by Trustee | |||||||||
Bernard H. Garil; 76 6754 Casa Grande Way Delray Beach, FL 33446 | Mr. Garil is a director or trustee of 10 investment companies (consisting of 51 portfolios) for which UBS 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; 57 c/o Keith A. Weller Assistant Fund Secretary UBS Asset Management (Americas) Inc. 1285 Avenue of the Americas New York, NY 10019 | Ms. Higgins is a director or trustee of 10 investment companies (consisting of 51 portfolios) for which UBS AM serves as investment advisor or manager. | None | |||||||||
David Malpass; 60 Encima Global, LLC 645 Madison Avenue, 5th Floor, New York, NY 10022 | Mr. Malpass is a director or trustee of 10 investment companies (consisting of 51 portfolios) for which UBS AM serves as investment advisor or manager. | Mr. Malpass is also a director of New Mountain Finance Corporation (business development company) (and serves as a member of its audit committee). |
41
PACE Select Advisors Trust
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*; 51 | Chief Compliance Officer | Since 2014 | Mr. Allessie is a managing director (since 2015) (prior to which he was an executive director) at UBS AM and UBS Asset Management (US) Inc. (collectively, "UBS AM—Americas region"). Mr. Allessie is head of compliance and operational risk control for the UBS 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 of UBS AM—Americas region (from 2005 to 2014). Mr. Allessie is the chief compliance officer (prior to which he was interim chief compliance officer (from January to July 2014)) and had served as a vice president and assistant secretary (from 2005 to 2016) of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Rose Ann Bubloski*; 48 | Vice President and Assistant Treasurer | Since 2011 | Ms. Bubloski is a director (since 2012) (prior to which she was an associate director (from 2008 to 2012)) and senior manager of registered fund product control of UBS AM—Americas region. She is vice president and assistant treasurer of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
42
PACE Select Advisors Trust
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*; 53 | President | Since 2010 | Mr. Carver is a managing director and head of product development and management for UBS 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). Mr. Carver is president of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Thomas Disbrow*; 50 | 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 (from 2007 to 2011)) and is global head of registered fund product control (since January 2016) (prior to which he was head of the North America fund treasury administration department of UBS AM—Americas region (from 2011-2015)). Mr. Disbrow is a vice president and treasurer and/or principal accounting officer of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
43
PACE Select Advisors Trust
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 F. Kemper**; 58 | Vice President and Secretary | Since 2004 | Mr. Kemper is a managing director (since 2006) and head of the legal department of UBS AM—Americas region (since 2004). He has been secretary of UBS AM—Americas region (since 2004), and assistant secretary of UBS Asset Management Trust Company (since 1993). Mr. Kemper is vice president and secretary of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Joanne M. Kilkeary*; 48 | Vice President and Assistant Treasurer | Since 1999 | Ms. Kilkeary is an executive director (since 2013) (prior to which she was a director) (since 2008)) and a senior manager (since 2004) of registered fund product control of UBS AM—Americas region. Ms. Kilkeary is a vice president and assistant treasurer of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
44
PACE Select Advisors Trust
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 | ||||||||||||
Tammie Lee*; 45 | Vice President and Assistant Secretary | Since 2005 | Ms. Lee is an executive director (since 2010) (prior to which she was a director) (from 2005 to 2010)) and associate general counsel of UBS AM—Americas region (since 2005). Ms. Lee is a vice president and assistant secretary of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Joshua M. Lindauer*; 28 | Vice President and Assistant Secretary | Since 2016 | Mr. Lindauer is an associate director and associate general counsel of UBS AM—Americas region (since May 2016). Prior to joining UBS AM—Americas region, Mr. Lindauer was an associate counsel at Fred Alger Management, Inc. (from 2015 to 2016) and a paralegal (from 2014 to 2015). From 2010 to 2014, Mr. Lindauer was a law student. Mr. Lindauer is a vice president and assistant secretary of 10 investment companies (consisting of 78 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Mabel Lung*; 58 | Vice President | Since May 2016 | Ms. Lung is a managing director and global head of the Multi-Manager Solutions team of UBS AM-Americas region (since 2005). Ms. Lung is a vice president of 1 investment company (consisting of 15 portfolios) for which UBS AM serves as investment advisor or manager. |
45
PACE Select Advisors Trust
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 | ||||||||||||
William T. MacGregor*; 41 | Vice President and Assistant Secretary | Since September 2015 | Mr. MacGregor is an executive director and deputy general counsel at UBS AM—Americas region. From June 2012 through July 2015, Mr. MacGregor was Senior Vice President, Secretary and Associate General Counsel of AXA Equitable Funds Management Group, LLC and from May 2008 through July 2015, Mr. MacGregor was Lead Director and Associate General Counsel of AXA Equitable Life Insurance Company. Mr. MacGregor is a vice president and assistant secretary of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Nancy D. Osborn*; 50 | 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 registered fund product control of UBS AM—Americas region (since 2006). Mrs. Osborn is a vice president and assistant treasurer of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
46
PACE Select Advisors Trust
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 | ||||||||||||
Robert Sabatino**; 43 | Vice President | Since 2001 | Mr. Sabatino is a managing director (since 2010) (prior to which he was an executive director) (since 2007)), global head of liquidity portfolio management (since 2015), head of US taxable money markets (from 2009 to 2015), and portfolio manager of UBS AM—Americas region in the short duration fixed income group (since 2001). Mr. Sabatino is a vice president of four investment companies (consisting of 30 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Eric Sanders*; 50 | Vice President and Assistant Secretary | Since 2005 | Mr. Sanders is a director and associate general counsel of UBS AM—Americas region (since 2005). Mr. Sanders is a vice president and assistant secretary of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Gina M. Toth*; 52 | Vice President | Since May 2016 | Ms. Toth is an executive director and portfolio manager in the Multi-Manager Solutions team of UBS AM-Americas region (since 2013). Prior to joining UBS AM-Americas region, Ms. Toth was a senior portfolio manager at Alliance Bernstein (from 1993 to 2012). Ms. Toth is a vice investment of 1 investment company (consisting of 15 portfolios) for which UBS AM serves as investment advisor or manager. |
47
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 | ||||||||||||
David Walczak**; 33 | Vice President | Since February 2016 | Mr. Walczak is an executive director (since January 2016), head of US taxable money markets (since January 2016) and portfolio manager of UBS AM—Americas region. Mr. Walczak is a vice president of five investment companies (consisting of 45 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Keith A. Weller*; 55 | Vice President and Assistant Secretary | Since 2000 | Mr. Weller is an executive director and senior associate general counsel of UBS 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 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. | ||||||||||||
Mandy Yu*; 33 | Vice President | Since 2013 | Ms. Yu is an associate director (since 2015) (prior to which she was an authorized officer (from 2012 to 2015)) and tax compliance manager (since 2013) of registered fund product control of UBS AM—Americas region. She was a fund treasury manager (from 2012 to 2013) and a mutual fund administrator (from 2007 to 2012) for UBS AM—Americas region. Ms. Yu is a vice president of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
48
PACE Select Advisors Trust
Supplemental information (unaudited)
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 Asset Management (Americas) Inc.
1285 Avenue of the Americas
New York, New York 10019-6028
Principal Underwriter
UBS 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 2016. All rights reserved.
UBS Asset Management (Americas), Inc.
PRESORTED
STANDARD
U.S. POSTAGE
PAID
COMPUTERSHARE
UBS 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, 2016 and July 31, 2015, the aggregate Ernst & Young LLP (EY) audit fees for professional services rendered to the registrant were approximately $956,709 and $977,940, 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, 2016 and July 31, 2015, the aggregate audit-related fees billed by EY 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 $44,150 and $44,150, respectively.
Fees included in the audit-related fees category are those associated with the reading and providing of comments on the 2016 and 2015 semiannual financial statements.
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, 2016 and July 31, 2015, the aggregate tax fees billed by EY for professional services rendered to the registrant were approximately $374,607 and $358,813, 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, 2016 and July 31, 2015, there were no fees billed by EY 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 [Asset Management (Americas) Inc. (“UBS 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 [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 [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 [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 [AM] and any service providers controlling, controlled by or under common control with UBS [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, 2016 and July 31, 2015 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, 2016 and
July 31, 2015 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, 2016 and July 31, 2015 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, 2016 and July 31, 2015 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, 2016 and July 31, 2015 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, 2016 and July 31, 2015 on behalf of the registrant’s service providers that relate directly to the operations and financial reporting of the registrant.
(f) According to EY, for the fiscal year ended July 31, 2016, 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 EY was 0%.
(g) For the fiscal years ended July 31, 2016 and July 31, 2015, the aggregate fees billed by EY of $785,804 and $590,690, 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:
|
| 2016 |
| 2015 |
| ||
Covered Services |
| $ | 418,757 |
| $ | 402,963 |
|
Non-Covered Services |
| 367,047 |
| 187,727 |
| ||
(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) Not applicable.
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 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
By: | /s/ Mark E. Carver |
|
| Mark E. Carver | |
| President | |
|
| |
Date: | October 11, 2016 |
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 |
|
| Mark E. Carver | |
| President | |
|
| |
Date: | October 11, 2016 | |
|
| |
By: | /s/ Thomas Disbrow |
|
| Thomas Disbrow | |
| Vice President and Treasurer | |
|
| |
Date: | October 11, 2016 |