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
PACE® Select Advisors Trust
(Exact name of registrant as specified in charter)
1285 Avenue of the Americas, New York, New York								10019-6028
(Address of principal executive offices)								(Zip code)
Mark F. Kemper, Esq. UBS Global Asset Management 1285 Avenue of the Americas New York, NY 10019-6028
(Name and address of agent for service)
Copy to: Jack W. Murphy, Esq. Dechert LLP 1900 K Street, N.W. Washington, DC 20006
Registrant’s telephone number, including area code:					212-821 3000
Date of fiscal year end:	July 31
Date of reporting period:		January 31, 2015

 

 

Item 1.  Reports to Stockholders.

 

PACE Select

January 31, 2015

PACE® Select Advisors Trust

Semiannual Report

PACE® Select Advisors Trust

Table of contents
Introduction					2
Portfolio Advisor's and Sub-Advisors' commentaries and Portfolios of investments
PACE® Money Market Investments					5
PACE® Mortgage-Backed Securities Fixed Income Investments					11
PACE® Intermediate Fixed Income Investments					27
PACE® Strategic Fixed Income Investments					50
PACE® Municipal Fixed Income Investments					79
PACE® International Fixed Income Investments					90
PACE® High Yield Investments					101
PACE® Large Co Value Equity Investments					115
PACE® Large Co Growth Equity Investments					130
PACE® Small/Medium Co Value Equity Investments					138
PACE® Small/Medium Co Growth Equity Investments					148
PACE® International Equity Investments					159
PACE® International Emerging Markets Equity Investments					174
PACE® Global Real Estate Securities Investments					185
PACE® Alternative Strategies Investments					193
Understanding your Portfolio's expenses					232
Statement of assets and liabilities					238
Statement of operations					246
Statement of changes in net assets					250
Statement of cash flows					256
Financial highlights					260
Notes to financial statements					290
General information					334
Board approvals of sub-advisory agreements					335

PACE Select Advisors Trust offers multiple share classes representing interests in 15 separate Portfolios. (PACE Money Market Investments offers only one share class.) Different classes of shares and/or Portfolios are offered by separate prospectuses.

For more information on a portfolio or class of shares, contact your financial advisor. He or she can send you a current prospectus relating to a portfolio or class of shares. Investors should carefully read and consider a mutual fund's investment objectives, risks, charges, and expenses before investing. The prospectus contains this and other information about a mutual fund. For a current prospectus, contact UBS Global Asset Management (Americas) Inc. at 888-793 8637, or visit us on the Web at www.ubs.com/globalam-us.

Derivatives vary in complexity, involve risks which are different from, and may be greater than, the risks associated with investing in securities or other instruments. Please see the funds' prospectuses for more complete discussion of the risks associated with investing in derivatives.

PACE Select Advisors Trust

Introduction

March 18, 2015

Dear PACE Shareholder,

We are pleased to provide you with the semiannual report for the PACE portfolios (the "Portfolios"), comprising the PACE Select Advisors Trust. This report includes summaries of the performance of each Portfolio, as well as commentaries from the investment advisor and Sub-advisors regarding the events that affected Portfolio performance during the six months ended January 31, 2015. Please note that the opinions of the Sub-advisors do not necessarily represent those of UBS Global Asset Management (Americas) Inc.

Mixed growth in the developed world

The overall US economy grew at a solid pace during the reporting period. The Commerce Department reported that second-quarter 2014 gross domestic product ("GDP") growth was 4.6%. The economy gathered additional momentum during the third quarter, with GDP growth of 5.0%—its strongest reading since the third quarter of 2003. The US economic expansion then moderated, as the Commerce Department's second estimate for fourth-quarter GDP growth was 2.2%.¹

The Federal Reserve Board (the "Fed") largely maintained its accommodative monetary policy during the reporting period. The central bank continued to hold the federal funds rate at a historically low range between 0% and 0.25%. The federal funds rate or the "fed funds rate," is the rate banks charge one another for funds they borrow on an overnight basis. During the six months ended January 31, 2015, the Fed wound down its asset purchase program, also known as quantitative easing or QE, a process called tapering, which it began in January 2014. At its meeting in December 2013, the Fed said "Beginning in January, the Committee will add to its holdings of agency mortgage-backed securities at a [reduced] pace of $35 billion per month rather than $40 billion per month, and will add to its holdings of longer-term Treasury securities at a [reduced] pace of $40 billion per month rather than $45 billion per month." The Fed further reduced QE over several months, and at its meeting in October, it said it had concluded its asset purchase program. Finally, at its meeting that concluded on January 28, 2015, the Fed said "Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy."

In its January 2015 World Economic Outlook Update, the International Monetary Fund ("IMF") said "Global growth will receive a boost from lower oil prices, which reflect to an important extent higher supply. But this boost is projected to be more than offset by negative factors, including investment weakness as adjustment to diminished expectations about medium-term growth continues in many advanced and emerging market economies." From a regional perspective, the IMF said 2014 growth was 0.8% in the eurozone, versus -0.5% in 2013. Japan's economy expanded 0.1% in 2014, compared to 1.6% in 2013. Elsewhere, the IMF said that overall growth in emerging market countries decelerated in 2014, with growth of 4.4% versus 4.7% in 2013. On January 22, 2015, the European Central Bank announced that beginning in March 2015 it would start a €60 billion-a-month bond buying program that is expected to run until September 2016.

¹  Based on the Commerce Department's second estimate announced on February 27, 2015, after the reporting period had ended.

PACE Select Advisors Trust

US equities outperform

The US equity market was highly resilient and generated solid results during the reporting period. While there were several setbacks, these were overshadowed by periods of strong investor risk appetite, corporate profits that were solid overall and accommodative central banks. All told, the US stock market, as measured by the S&P 500 Index,² gained 4.37% for the six months ended January 31, 2015. In contrast, international equities produced poor results, as they were dragged down by moderating growth overseas, fears of deflation and several geopolitical issues. International developed equities, as measured by the MSCI EAFE Index (net),³ fell 6.97% during the period. Emerging market equities, as measured by the MSCI Emerging Markets Index (net),⁴ declined 9.05% over the same period.

Positive returns for higher-quality fixed income securities

When 2014 began, there were expectations that the US economy would continue to expand and that Treasury yields would move higher. While the US economy was initially weak in 2014, it quickly recovered and grew at a solid pace. However, concerns about global growth, sharply falling oil prices and geopolitical concerns triggered several flights to quality. Against this backdrop, the yield on the 10-year Treasury fell from 2.58% to 1.68% during the reporting period, and the overall US bond market, as measured by the Barclays US Aggregate Index,⁵ gained 4.36%. Riskier fixed income securities produced weak results during the six months ended January 31, 2015. High yield bonds, as measured by the BofA Merrill Lynch US High Yield Cash Pay Constrained Index⁶ declined 0.96% during the reporting period. Emerging markets debt, as measured by the J.P. Morgan Emerging Markets Bond Index Global (EMBI Global),⁷ fell 3.05%.

Sincerely,

Mark E. Carver
President, PACE Select Advisors Trust
Managing Director, UBS Global Asset Management (Americas) Inc.

²  The S&P 500 Index is an unmanaged, weighted index composed of 500 widely held common stocks varying in composition and is not available for direct investment. Investors should note that indices do not reflect the deduction of fees and expenses.

³  The MSCI EAFE Index (net) is an index of stocks designed to measure the investment returns of developed economies outside of North America. Net total return indices reinvest dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The index is constructed and managed with a view to being fully investable from the perspective of international institutional investors. Investors should note that indices do not reflect the deduction of fees and expenses.

⁴  The MSCI Emerging Markets Index (net) is a market capitalization-weighted index composed of different emerging market countries in Europe, Latin America, and the Pacific Basin. Net total return indices reinvest dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The index is constructed and managed with a view to being fully investable from the perspective of international institutional investors. Investors should note that indices do not reflect the deduction of fees and expenses.

⁵  The Barclays US Aggregate Index is an unmanaged broad based index designed to measure the US dollar-denominated, investment-grade, taxable bond market. The index includes bonds from the Treasury, government-related, corporate, mortgage-backed, asset-backed and commercial mortgage-backed sectors. Investors should note that indices do not reflect the deduction of fees and expenses.

⁶  The BofA Merrill Lynch US High Yield Cash Pay Constrained Index is an unmanaged index of publicly placed, non-convertible, coupon-bearing US dollar denominated, below investment grade corporate debt with a term to maturity of at least one year. The index is market capitalization weighted, so that larger bond issuers have a greater effect on the index's return. However, the representation of any single bond issuer is restricted to a maximum of 2% of the total index. Investors should note that indices do not reflect the deduction of fees and expenses.

⁷  The J.P. Morgan Emerging Markets Bond Index Global (EMBI Global) is an unmanaged index which is designed to track total returns for US-dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady bonds, loans and Eurobonds. Investors should note that indices do not reflect the deduction of fees and expenses.

PACE Select Advisors Trust

This report is intended to assist investors in understanding how the Portfolios performed during the six-month period ended January 31, 2015. The views expressed in the Advisor's and Sub-Advisors' comments sections are as of the end of the reporting period, reflect performance results gross of fees and expenses, and are those of the investment advisor (with respect to PACE Money Market Investments only) and Sub-advisors. Sub-advisors' comments on Portfolios that have more than one Sub-advisor are reflective of their portion of the Portfolio only. The views and opinions in this report were current as of March 18, 2015. They are not guarantees of future performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and the investment advisor and Sub-advisors reserve the right to change their views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of a Portfolio's future investment intent.

PACE Select Advisors Trust

PACE Money Market Investments

Performance

For the six months ended January 31, 2015, the Portfolio returned 0.01% before the deduction of the maximum PACE program fee.¹ Please remember that the PACE program fee is assessed outside the Portfolio at the PACE program account level. The program fee does not impact the determination of the Portfolio's net asset value per share. For comparison purposes, the median return of the Lipper Money Market Funds category was 0.01%. (Returns over various time periods are shown in the "Performance at a glance" table on page 6. Please note that the returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares.) For a detailed commentary on the market environment in general during the period, please refer to page 2.

Advisor's Comments

Throughout the reporting period, the US Federal Reserve Board (the "Fed") continued to hold the federal funds rate at a historically low range between 0% and 0.25%. 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 2.) This continued to depress yields on a wide range of short-term investments. 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 six-month review period. When the reporting period began, the Portfolio had a WAM of 40 days. This was increased to 48 days at the end of the reporting period.

At the issuer level, we maintained a high level of diversification, investing in smaller positions with the goal of reducing risk and keeping the Portfolio highly liquid. To that end, we typically purchased up to 3% in single nongovernment issuers throughout the reporting period. (The Portfolio is generally able to hold up to 5% in any one issuer, subject to certain exceptions.)

Several adjustments were made to the Portfolio's sector positioning during the six-month period. We increased the Portfolio's exposure to US government and agency obligations. Conversely, we reduced our allocation to commercial paper and modestly pared our exposures to certificates of deposit and repurchase agreements. (Repurchase agreements are transactions in which the seller of a security agrees to buy it back at a predetermined time and price or upon demand.)

PACE Select Advisors Trust – PACE Money Market Investments

Investment Advisor:

UBS Global Asset Management (Americas) Inc.

Portfolio Manager:

Robert Sabatino

Objective:

Current income consistent with preservation of capital and liquidity

Investment process:

The Portfolio is a money market mutual fund and seeks to maintain a stable price of $1.00 per share, although it may be possible to lose money by investing in this Portfolio. The Portfolio invests in a diversified portfolio of high-quality money market instruments of governmental and private issuers. Security selection is based on the assessment of relative values and changes in market and economic conditions.

¹  Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.

PACE Select Advisors Trust

PACE Money Market Investments

Performance at a glance (unaudited)

Average annual total returns for periods ended 01/31/15				6 months				1 year				5 years				10 years
PACE Money Market Investments1					0.01	%			0.01	%			0.01	%			1.40	%
Lipper Money Market Funds median					0.01	%			0.01	%			0.01	%			1.38	%

Most recent calendar quarter-end returns (unaudited)

Average annual total returns for periods ended 12/31/14				6 months				1 year				5 years				10 years
PACE Money Market Investments1					0.01	%			0.01	%			0.01	%			1.41	%

For PACE Money Market Investments¹ , the 7-day current yield for the period ended January 31, 2015 was 0.01% after fee waivers and/or expense reimbursements; the yield was (0.76)% 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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted.

Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.

An investment in PACE Money Market Investments is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Portfolio seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Portfolio.

Not FDIC Insured. May lose value. No bank guarantee.

PACE Select Advisors Trust

PACE Money Market Investments

Portfolio statistics (unaudited)

Characteristics				01/31/15
Net assets (mm)				$	224.8
Number of holdings					69
Weighted average maturity					48 days
Portfolio composition1				01/31/15
Commercial paper					44.4	%
Repurchase agreements					15.5
Certificates of deposit					16.0
US government and agency obligations					23.4
Short-term corporate obligation					1.8
Other assets less liabilities					(1.1	)
Total					100.0	%
Top ten holdings1				01/31/15
Repurchase agreement with Goldman Sachs, Inc., 0.060% due 02/02/15					8.6	%
Repurchase agreement with Barclays Capital, Inc., 0.050% due 02/02/15					6.7
Federal Home Loan Bank, 0.120% due 05/15/15					3.1
US Treasury Notes, 0.250% due 02/15/15					2.3
Mizuho Bank Ltd., 0.200% due 03/02/15					2.2
Natixis, 0.070% due 02/02/15					2.2
Manhattan Asset Funding Co. LLC, 0.170% due 02/02/15					2.2
Philip Morris International Co., 0.120% due 02/06/15					2.2
Roche Holdings, Inc., 0.100% due 02/12/15					2.2
Toyota Motor Credit Corp., 0.140% due 02/09/15					2.2
Total					33.9	%

¹  Weightings represent percentages of the Portfolio's net assets as of January 31, 2015. The Portfolio is actively managed and its composition will vary over time.

PACE Select Advisors Trust

PACE Money Market Investments

Portfolio of investments—January 31, 2015 (unaudited)

				Face amount				Value
US government and agency obligations—23.39%
Federal Home Loan Bank 0.050%, due 03/02/151				$	5,000,000			$	4,999,799
0.070%, due 02/04/151					3,100,000				3,099,982
0.085%, due 03/27/151					5,000,000				4,999,362
0.090%, due 03/18/151					4,000,000				3,999,550
0.106%, due 02/12/152,3					2,000,000				2,000,016
0.115%, due 03/17/151					3,000,000				2,999,578
0.120%, due 05/15/151					7,000,000				6,997,597
0.125%, due 06/02/15					3,000,000				2,999,603
0.160%, due 05/01/151					5,000,000				4,998,022
0.180%, due 03/20/151					2,000,000				1,999,530
Federal Home Loan Mortgage Corp.* 0.170%, due 11/04/151					1,000,000				998,697
Federal National Mortgage Association* 0.500%, due 07/02/15					2,000,000				2,002,493
US Treasury Bill 0.180%, due 02/04/161					1,500,000				1,497,270
US Treasury Notes 0.250%, due 02/15/15					5,000,000				5,000,408
0.250%, due 12/15/15					4,000,000				4,000,739
Total US government and agency obligations (cost—$52,592,646)									52,592,646
Certificates of deposit—16.01%
Banking-non-US—10.23%
Credit Industriel et Commercial 0.130%, due 02/03/15					3,000,000				3,000,000
HSBC Bank USA 0.255%, due 06/10/15					2,000,000				2,000,000
Mitsubishi UFJ Trust & Banking Corp. 0.210%, due 03/09/15					3,000,000				3,000,000
Mizuho Bank Ltd. 0.200%, due 03/02/15					5,000,000				5,000,000
Natixis 0.241%, due 02/03/152					2,000,000				2,000,000
Norinchukin Bank 0.170%, due 02/04/15					3,000,000				3,000,000
0.140%, due 02/26/15					3,000,000				3,000,000
Rabobank Nederland NV 0.302%, due 04/10/152					1,000,000				1,000,000
Toronto-Dominion Bank 0.230%, due 02/24/15					1,000,000				1,000,000
									23,000,000
Banking-US—5.78%
BMO Harris Bank N.A. 0.230%, due 02/11/15					2,000,000				2,000,000
0.300%, due 07/23/15					2,000,000				2,000,000
Citibank N.A. 0.250%, due 05/07/15					2,000,000				2,000,000
JPMorgan Chase Bank N.A. 0.240%, due 06/05/15					2,000,000				2,000,000
0.320%, due 10/28/15					2,000,000				2,000,000

				Face amount				Value
Certificates of deposit—(concluded)
Banking-non-US—(concluded)
Wells Fargo Bank N.A. 0.230%, due 04/08/15				$	3,000,000			$	3,000,000
									13,000,000
Total certificates of deposit (cost—$36,000,000)									36,000,000
Commercial paper1—44.37%
Asset backed-miscellaneous—21.79%
Albion Capital Corp. 0.180%, due 02/23/15					2,000,000				1,999,780
0.180%, due 02/26/15					4,000,000				3,999,500
Antalis US Funding Corp. 0.160%, due 02/06/15					2,000,000				1,999,956
CAFCO LLC 0.200%, due 03/18/15					3,000,000				2,999,250
Gotham Funding Corp. 0.150%, due 02/05/15					4,000,000				3,999,933
0.160%, due 03/10/15					2,000,000				1,999,671
LMA Americas LLC 0.160%, due 02/09/15					3,000,000				2,999,893
0.170%, due 02/09/15					4,000,000				3,999,849
Manhattan Asset Funding Co. LLC 0.170%, due 02/02/15					5,000,000				4,999,976
Old Line Funding LLC 0.190%, due 03/19/15					2,000,000				1,999,514
Regency Markets No. 1 LLC 0.150%, due 02/17/15					5,000,000				4,999,667
0.150%, due 02/20/15					2,000,000				1,999,842
Salisbury Receivables Co. LLC 0.170%, due 02/10/15					4,000,000				3,999,830
Victory Receivables Corp. 0.170%, due 02/04/15					3,000,000				2,999,958
0.150%, due 02/25/15					1,000,000				999,900
Working Capital Management Co. 0.160%, due 02/03/15					3,000,000				2,999,973
									48,996,492
Banking-non-US—6.58%
ASB Finance Ltd. 0.257%, due 02/23/152					1,000,000				1,000,000
Caisse Centrale Desjardins 0.160%, due 02/09/15					1,000,000				999,965
HSBC USA, Inc. 0.190%, due 02/02/15					3,800,000				3,799,980
National Australia Bank Ltd. 0.415%, due 01/08/16					2,000,000				1,992,138
Natixis 0.070%, due 02/02/15					5,000,000				4,999,990
Nordea Bank AB 0.220%, due 04/14/15					2,000,000				1,999,120
									14,791,193

PACE Select Advisors Trust

PACE Money Market Investments

Portfolio of investments—January 31, 2015 (unaudited)

				Face amount				Value
Commercial paper1—(concluded)
Banking-US—3.55%
Bedford Row Funding Corp. 0.140%, due 03/16/15				$	3,000,000			$	2,999,498
0.470%, due 01/04/16					2,000,000				1,991,201
BNP Paribas Finance, Inc. 0.080%, due 02/06/15					2,000,000				1,999,978
PNC Bank N.A. 0.300%, due 07/06/15					1,000,000				998,708
									7,989,385
Electric-integrated—0.89%
CNPC Finance HK Ltd. 0.290%, due 02/05/15					2,000,000				1,999,935
Finance-captive automotive—2.67%
Toyota Motor Credit Corp. 0.140%, due 02/09/15					5,000,000				4,999,845
0.210%, due 04/27/15					1,000,000				999,504
									5,999,349
Finance-non-captive diversified—1.78%
General Electric Capital Corp. 0.200%, due 02/02/15					2,000,000				1,999,989
0.350%, due 10/02/15					2,000,000				1,995,275
									3,995,264
Insurance-life—2.67%
MetLife Short Term Funding LLC 0.120%, due 02/18/15					3,000,000				2,999,830
0.120%, due 03/06/15					3,000,000				2,999,670
									5,999,500
Pharmaceuticals—2.22%
Roche Holdings, Inc. 0.100%, due 02/12/15					5,000,000				4,999,847
Tobacco—2.22%
Philip Morris International Co. 0.120%, due 02/06/15					5,000,000				4,999,917
Total commercial paper (cost—$99,770,882)									99,770,882
Short-term corporate obligation—1.78%
Banking-non-US—1.78%
Barclays Bank PLC 0.360%, due 02/05/154 (cost—$4,000,000)					4,000,000				4,000,000

				Face amount				Value
Repurchase agreements—15.52%
Repurchase agreement dated 01/30/15 with Barclays Capital, Inc., 0.050% due 02/02/15, collateralized by $14,289,500 US Treasury Note, 2.500% due 05/15/24; (value—$15,300,019); proceeds: $15,000,063				$	15,000,000			$	15,000,000
Repurchase agreement dated 01/30/15 with Goldman Sachs, Inc., 0.060% due 02/02/15, collateralized by $1,821,000 Federal Home Loan Mortgage Corp. obligations, 0.875% due 10/14/16 and $17,142,000 Federal National Mortgage Association obligations, 1.750% to 5.625% due 09/12/19 to 07/15/37; (value—$19,686,546); proceeds: $19,300,097					19,300,000				19,300,000
Repurchase agreement dated 01/30/15 with State Street Bank and Trust Co., 0.000% due 02/02/15, collateralized by $609,674 Federal Home Loan Mortgage Corp. obligations, 2.060% due 10/17/22; (value—$601,976); proceeds: $590,000					590,000				590,000
Total repurchase agreements (cost—$34,890,000)									34,890,000
Total investments (cost—$227,253,528 which approximates cost for federal income tax purposes)—101.07%									227,253,528
Liabilities in excess of other assets—(1.07)%									(2,408,080	)
Net assets (applicable to 224,845,215 shares of beneficial interest outstanding equivalent to $1.00 per share)—100.00%								$	224,845,448

PACE Select Advisors Trust

PACE Money Market Investments

Portfolio of investments—January 31, 2015 (unaudited)

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 230.

Fair valuation summary

The following is a summary of the fair valuations according to the inputs used as of January 31, 2015 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				$	—			$	52,592,646			$	—			$	52,592,646
Certificates of deposit					—				36,000,000				—				36,000,000
Commercial paper					—				99,770,882				—				99,770,882
Short-term corporate obligation					—				4,000,000				—				4,000,000
Repurchase agreements					—				34,890,000				—				34,890,000
Total				$	—			$	227,253,528			$	—			$	227,253,528

At January 31, 2015, there were no transfers between Level 1 and Level 2.

Issuer breakdown by country or territory of origin

				Percentage of total investments
United States					78.1	%
Japan					8.8
France					4.4
United Kingdom					4.3
Canada					0.9
China					0.9
Sweden					0.9
Australia					0.9
Netherlands					0.4
New Zealand					0.4
Total					100.0	%

Portfolio footnotes

*  On September 7, 2008, the Federal Housing Finance Agency placed the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.

¹  Rates shown are the discount rates at date of purchase.

²  Variable or floating rate security. The interest rate shown is the current rate as of January 31, 2015 and changes periodically. The maturity date reflects earlier of reset date or stated maturity date.

³  Security purchased on a when-issued basis. When-issued refers to a transaction made conditionally because a security, although authorized, has not yet been issued.

⁴  Illiquid investment as of January 31, 2015.

PACE Select Advisors Trust

PACE Mortgage-Backed Securities Fixed Income Investments

Performance

For the six months ended January 31, 2015, the Portfolio's Class P shares returned 2.92% before the deduction of the maximum PACE Select program fee.¹ In comparison, the Barclays US Mortgage-Backed Securities Index (the "benchmark") returned 3.44%, and the Lipper US Mortgage Funds category posted a median return of 3.03%. (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 2.

Sub-Advisor's comments²

The Portfolio underperformed its benchmark during the reporting period. An underweight to US duration detracted from results, as the yield on the 10-year US Treasury fell 92 basis points (i.e., 0.92%). (Duration measures a portfolio's sensitivity to interest rate changes.)

Positioning within the agency mortgage-backed security ("MBS") sector was negative for performance. An overall underweight to agency MBS was modestly positive for performance, as they lagged like-duration Treasuries. However, less exposure to lower coupon Freddie Mac ("FHLMC") and Fannie Mae ("FNMA") mortgages detracted from returns, as these securities outperformed those with higher coupons given elevated prepayment concerns. An overall underweight to Ginnie Mae ("GNMA") bonds contributed to performance, as they underperformed FHLMC and FNMA mortgages. Elsewhere, security selection of non-agency MBS contributed to performance, as prices on selected securities rose amid strong demand.

¹  Class P shares held through the PACE Select Advisors Program are subject to a maximum Program fee of 2.50%, which, if included, would have reduced performance. Class P shares held through other advisory programs also may be subject to a program fee, which, if included, would have reduced performance.

²  All Sub-Advisors discuss performance on a gross-of-fees basis—meaning that no fees or expenses are reflected in their sleeves'/sleeve's performance. Alternately, Portfolio performance is shown net of fees, which does factor in fees and expenses associated with the Portfolio.

³  Barclays US Mortgage-Backed Securities Index, as calculated by the investment advisor, which as of January 31, 2015 had a duration of approximately 3.20 years.

PACE Select Advisors Trust – PACE Mortgage-Backed Securities Fixed
Income Investments

Investment Sub-Advisor:

Pacific Investment Management Company LLC ("PIMCO")

Portfolio Manager:

Daniel Hyman and Michael Cudzil

Objective:

Current income

Investment process:

The Portfolio invests primarily in government fixed income securities which include US bonds, including those backed by mortgages, and related repurchase agreements. Mortgage-backed securities include "to be announced" or "TBA" securities which usually are traded on a forward commitment basis with an approximate principal amount and no defined maturity date; issued or guaranteed by US government agencies and instrumentalities. The Portfolio also invests, to a lesser extent, in investment grade bonds of private issuers, including those backed by mortgages or other assets. The Portfolio may invest in bonds of varying maturities, but normally limits its duration to within +/- 50% of the effective duration of the Portfolio's benchmark index.³ (Duration is a measure of a portfolio's sensitivity to interest rate changes.) The Portfolio may engage in short selling with respect to securities issued by the US Treasury and certain TBA securities coupon trades. PIMCO establishes duration targets based on its expectations for changes in interest rates, and then positions the Portfolio to take advantage of yield curve shifts. PIMCO decides to buy and sell specific bonds based on an analysis of their values relative to other similar securities.

PACE Select Advisors Trust

PACE Mortgage-Backed Securities Fixed Income Investments

Sub-Advisor's comments – concluded

Overall, derivative usage was a modest detractor during the period, primarily due to the negative price action of synthetic, interest-only agency MBS that were traded as total return swaps. The Portfolio also used mortgage pool options during the period, primarily to manage interest rate and volatility risk within the sector. Interest rate swaps were used to adjust interest rate and yield curve exposures, as well as to substitute for physical securities. Additionally, options on swaps were used to manage interest rate and volatility exposures, as well as to generate income in expected interest rate scenarios.

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.

PACE Select Advisors Trust

PACE Mortgage-Backed Securities Fixed Income Investments

Performance at a glance (unaudited)

Average annual total returns for periods ended 01/31/15				6 months				1 year				5 years				10 years
Before deducting maximum sales charge
Class A1					2.86	%			4.48	%			3.41	%			4.36	%
Class C2					2.53	%			3.96	%			2.89	%			3.83	%
Class Y3					3.00	%			4.75	%			3.67	%			4.64	%
Class P4					2.92	%			4.75	%			3.66	%			4.61	%
After deducting maximum sales charge
Class A1					(1.73	)%			(0.21	)%			2.46	%			3.88	%
Class C2					1.78	%			3.21	%			2.89	%			3.83	%
Barclays US Mortgage-Backed Securities Index5					3.44	%			5.33	%			3.63	%			4.78	%
Lipper US Mortgage Funds median					3.03	%			4.89	%			3.70	%			4.21	%

Most recent calendar quarter-end returns (unaudited)

Average annual total returns for periods ended 12/31/14				6 months				1 year				5 years				10 years
Before deducting maximum sales charge
Class A1					1.61	%			5.39	%			3.60	%			4.31	%
Class C2					1.28	%			4.78	%			3.08	%			3.78	%
Class Y3					1.74	%			5.66	%			3.86	%			4.59	%
Class P4					1.66	%			5.57	%			3.84	%			4.57	%
After deducting maximum sales charge
Class A1					(2.98	)%			0.66	%			2.65	%			3.84	%
Class C2					0.53	%			4.03	%			3.08	%			3.78	%

The annualized gross and net expense ratios, respectively, for each class of shares as in the November 28, 2014 prospectuses, were as follows: Class A—1.07% and 0.97%; Class C—1.59% and 1.47%; Class Y—0.87% and 0.72%; and Class P—0.90% and 0.72% Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Portfolio and UBS Global Asset Management (Americas) Inc. ("UBS Global AM") have entered into a written fee waiver/expense reimbursement agreement pursuant to which UBS Global AM is contractually obligated to (1) waive its management fees through November 30, 2015 to the extent necessary to reflect the lower sub-advisory fee paid by UBS Global AM to Pacific Investment Management Company LLC, The Portfolio's investment advisor; and (2) waive its management fees and/or reimburse expenses so that The Portfolio's ordinary total operating expenses of each class through November 30, 2015 (excluding dividend expense, borrowing costs, and interest expense relating to short sales, and expenses attributable to investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) would not exceed Class A—0.97%; Class C—1.47%; Class Y—0.72%; and Class P—0.72%. The Portfolio has agreed to repay UBS Global AM for any waived fees/reimbursed expenses (pursuant to item (2)) to the extent that it can do so over the following three fiscal years without causing The Portfolio's expenses in any of those three years to exceed these expense caps. The fee waiver/expense reimbursement agreement may be terminated by The Portfolio's board at any time and also will terminate automatically upon the expiration or termination of The Portfolio's advisory contract with UBS Global AM. Upon termination of the agreement, however, UBS Global AM's three year recoupment rights will survive.

¹  Maximum sales charge for Class A shares is 4.5%. Class A shares bear ongoing 12b-1 service fees.

²  Maximum contingent deferred sales charge for Class C shares is 0.75% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

³  The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁴  Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.

⁵  The Barclays US Mortgage-Backed Securities Index is an unmanaged index which primarily covers the 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 sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015, there will be a reduction in the redemption holding period from 90 days to 30 days. Shares that an investor holds or purchases prior to implementation of this new holding period are subject to preexisting terms for the holding period as outlined in the prospectus.

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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://globalam-us.ubs.com/corpweb/performance.do.

Lipper peer group data calculated by Lipper Inc.; used with permission. The Lipper median is the return of the fund that places in the middle of a Lipper peer group.

PACE Select Advisors Trust

PACE Mortgage-Backed Securities Fixed Income Investments

Portfolio statistics (unaudited)

Characteristics				01/31/15
Weighted average duration					3.01 yrs.
Weighted average maturity					4.66 yrs.
Average coupon					1.95	%
Average quality1					AA+
Net assets (mm)				$	553.6
Number of holdings					526
Portfolio composition2				01/31/15
Bonds					118.8	%
Repurchase agreements					29.8
Investments sold short					(7.8	)
Options and swaps					(0.4	)
Cash equivalents and other assets less liabilities					(40.4	)
Total					100.0	%
Asset allocation2				01/31/15
US government agency mortgage pass-through certificates					96.6	%
Repurchase agreements					29.8
Collateralized mortgage obligations					14.2
Asset-backed securities					5.4
Stripped mortgage-backed securities					1.5
US government obligation					1.1
Options and swaps					(0.4	)
Investments sold short					(7.8	)
Cash equivalents and other assets less liabilities					(40.4	)
Total					100.0	%

¹  Credit quality ratings shown are based on the ratings assigned to portfolio holdings by Standard & Poor's Ratings Group, an independent rating agency.

²  Weightings represent percentages of the Portfolio's net assets as of January 31,2015. The Portfolio is actively managed and its composition will vary over time.

PACE Select Advisors Trust

PACE Mortgage-Backed Securities Fixed Income Investments

Portfolio of investments—January 31, 2015 (unaudited)

				Face amount				Value
US government obligation—1.13%
US Treasury Note 2.250%, due 11/15/24 (cost—$6,241,352)				$	5,950,000			$	6,254,937
Government national mortgage association certificates—25.84%
GNMA 4.000%, due 12/15/41					2,248,039				2,425,715
4.500%, due 06/15/39					441,404				482,911
4.500%, due 09/15/39					1,546,037				1,719,221
4.500%, due 11/15/39					381,451				417,058
4.500%, due 01/15/40					399,933				438,276
4.500%, due 05/15/40					174,598				191,001
4.500%, due 06/15/40					779,596				854,951
5.000%, due 12/15/34					303,998				337,635
5.000%, due 04/15/38					253,477				279,975
5.000%, due 05/15/38					9,304				10,266
5.000%, due 08/15/39					627,264				694,728
5.000%, due 09/15/39					944,995				1,047,730
5.000%, due 10/15/39					10,082				11,172
5.000%, due 12/15/39					24,556				27,141
5.000%, due 02/15/40					394,853				437,589
5.000%, due 05/15/40					678,094				754,218
5.000%, due 06/15/40					888,320				982,751
5.000%, due 09/15/40					13,366				14,804
5.000%, due 05/15/41					171,203				191,187
5.500%, due 08/15/35					58,070				65,211
5.500%, due 02/15/38					7,168				7,999
5.500%, due 04/15/38					639,883				714,255
5.500%, due 05/15/38					594,170				663,022
5.500%, due 06/15/38					332,132				370,621
5.500%, due 10/15/38					1,670,446				1,864,010
5.500%, due 11/15/38					91,498				102,101
5.500%, due 12/15/38					18,769				20,943
5.500%, due 03/15/39					281,239				313,831
5.500%, due 05/15/39					163,927				182,923
5.500%, due 09/15/39					808,956				902,699
5.500%, due 01/15/40					11,494				12,835
5.500%, due 03/15/40					1,072,094				1,196,476
5.500%, due 05/15/40					61,198				68,292
6.500%, due 02/15/29					1,264				1,468
6.500%, due 01/15/36					12,447				14,318
6.500%, due 03/15/36					1,070				1,235
6.500%, due 09/15/36					341,071				408,615
6.500%, due 02/15/37					18,113				21,510
6.500%, due 04/15/37					14,240				16,985
6.500%, due 01/15/38					12,198				14,264
6.500%, due 06/15/38					41,936				49,685
6.500%, due 07/15/38					44,216				54,654
6.500%, due 11/15/38					12,222				14,318
7.500%, due 08/15/21					3,492				3,702
8.000%, due 02/15/23					634				707
8.250%, due 04/15/19					114,333				123,724
10.500%, due 02/15/19					17,323				17,429
10.500%, due 06/15/19					21,754				21,887
10.500%, due 07/15/19					28,006				28,180

				Face amount				Value
Government national mortgage association certificates—(continued)
10.500%, due 07/15/20				$	2,324			$	2,338
10.500%, due 08/15/20					21,298				21,887
GNMA II 2.500%, due 04/20/43					991,014				995,793
3.500%, due 01/20/44					910,627				963,096
5.000%, due 12/20/33					504,304				564,174
5.000%, due 01/20/34					276,982				310,062
5.000%, due 02/20/38					407,949				444,633
5.000%, due 04/20/38					442,955				483,785
5.000%, due 08/20/41					60,245				67,380
5.000%, due 12/20/42					79,723				88,963
5.000%, due 08/20/43					8,320,504				9,068,973
9.000%, due 04/20/25					10,848				12,361
9.000%, due 12/20/26					3,625				3,862
9.000%, due 01/20/27					11,093				11,478
9.000%, due 09/20/30					1,192				1,203
9.000%, due 10/20/30					3,904				4,093
9.000%, due 11/20/30					5,296				5,405
GNMA II ARM 1.625%, due 07/20/17					1,867				1,900
1.625%, due 09/20/21					86,938				91,764
1.625%, due 06/20/22					77,228				80,230
1.625%, due 01/20/23					54,637				56,656
1.625%, due 03/20/23					27,539				28,374
1.625%, due 01/20/24					65,970				70,611
1.625%, due 04/20/24					114,218				118,039
1.625%, due 02/20/25					16,859				17,288
1.625%, due 08/20/25					21,891				22,711
1.625%, due 09/20/25					28,747				29,824
1.625%, due 03/20/26					15,402				15,952
1.625%, due 04/20/26					150,197				156,939
1.625%, due 06/20/26					63,274				65,740
1.625%, due 08/20/26					31,670				32,993
1.625%, due 01/20/27					129,609				134,198
1.625%, due 04/20/27					35,315				37,035
1.625%, due 07/20/27					11,840				12,308
1.625%, due 01/20/28					14,380				14,919
1.625%, due 02/20/28					9,978				10,340
1.625%, due 04/20/30					11,955				12,429
1.625%, due 05/20/30					139,918				145,462
1.625%, due 07/20/30					71,281				74,202
2.000%, due 01/20/25					7,682				7,984
2.000%, due 05/20/25					8,303				8,637
2.000%, due 09/20/26					4,965				5,181
2.000%, due 01/20/27					6,034				6,259
2.000%, due 02/20/27					11,977				12,506
2.000%, due 04/20/27					4,102				4,370
2.000%, due 08/20/27					32,582				34,817
2.000%, due 04/20/30					13,580				14,260
2.000%, due 05/20/30					406,634				427,550
2.000%, due 07/20/30					21,687				22,808
2.000%, due 08/20/30					113,979				119,597
2.500%, due 04/20/18					2,358				2,369
2.500%, due 11/20/21					18,384				18,841

PACE Select Advisors Trust

PACE Mortgage-Backed Securities Fixed Income Investments

Portfolio of investments—January 31, 2015 (unaudited)

				Face amount				Value
Government national mortgage association certificates—(concluded)
2.500%, due 03/20/25				$	26,533			$	27,383
2.500%, due 07/20/30					48,674				51,709
2.500%, due 08/20/30					4,284				4,433
2.500%, due 10/20/30					14,852				15,257
3.000%, due 04/20/18					3,042				3,119
3.000%, due 05/20/25					59,036				62,772
3.000%, due 06/20/25					20,570				21,463
3.500%, due 03/20/25					11,839				11,967
4.000%, due 01/20/18					45,302				47,306
4.000%, due 05/20/18					3,214				3,253
4.000%, due 06/20/19					21,769				22,580
GNMA TBA 3.500%					4,000,000				4,232,211
4.000%					3,000,000				3,214,852
4.500%					3,000,000				3,274,922
6.000%					1,000,000				1,128,906
GNMA II TBA 3.000%					20,000,000				20,699,999
3.500%					31,000,000				32,709,921
4.000%					27,000,000				28,763,593
4.500%					14,000,000				15,199,843
Total government national mortgage association certificates (cost—$141,997,444)									143,056,296
Federal home loan mortgage corporation certificates*—15.31%
FHLMC 3.000%, due 04/01/43					474,898				491,092
3.000%, due 05/01/43					505,871				522,847
3.000%, due 12/01/44					12,980,781				13,411,309
3.500%, due 09/01/32					917,051				981,458
3.500%, due 11/01/441					6,019,770				6,353,157
4.000%, due 01/01/37					768,355				829,034
4.000%, due 07/01/43					358,109				392,683
5.000%, due 11/01/27					10,378				11,466
5.000%, due 10/01/29					446,102				491,441
5.000%, due 09/01/33					398,034				441,096
5.000%, due 01/01/34					63,159				69,849
5.000%, due 06/01/34					24,206				26,789
5.000%, due 04/01/35					60,344				66,504
5.000%, due 05/01/35					282,372				312,329
5.000%, due 07/01/35					1,748,077				1,934,588
5.000%, due 08/01/35					81,310				89,868
5.000%, due 10/01/35					67,329				74,381
5.000%, due 12/01/35					18,439				20,357
5.000%, due 06/01/37					111,556				122,838
5.000%, due 06/01/39					137,523				151,620
5.000%, due 08/01/39					59,600				65,816
5.000%, due 03/01/40					16,366				18,277
5.000%, due 07/01/40					134,058				147,737
5.000%, due 08/01/40					133,620				147,828
5.000%, due 09/01/40					117,811				129,832
5.000%, due 11/01/40					525,039				582,690
5.000%, due 02/01/41					1,025,874				1,134,956

				Face amount				Value
Federal home loan mortgage corporation certificates*—(continued)
5.000%, due 03/01/41				$	60,879			$	67,090
5.000%, due 04/01/41					2,462,277				2,724,366
5.000%, due 05/01/41					483,145				534,405
5.000%, due 06/01/41					136,244				150,724
5.000%, due 07/01/41					92,645				102,492
5.500%, due 06/01/28					3,451				3,849
5.500%, due 02/01/32					3,947				4,430
5.500%, due 12/01/32					5,478				6,151
5.500%, due 02/01/33					144,188				160,792
5.500%, due 05/01/33					2,540				2,833
5.500%, due 06/01/33					324,748				364,604
5.500%, due 12/01/33					128,963				145,180
5.500%, due 12/01/34					103,508				116,527
5.500%, due 06/01/35					1,831,104				2,060,171
5.500%, due 07/01/35					12,441				13,991
5.500%, due 10/01/35					436,646				487,475
5.500%, due 12/01/35					269,266				302,187
5.500%, due 06/01/361					1,031,621				1,159,565
5.500%, due 12/01/361					1,653,776				1,846,756
5.500%, due 03/01/37					208,816				234,723
5.500%, due 07/01/37					134,270				144,840
5.500%, due 10/01/37					11,244				12,574
5.500%, due 04/01/38					337,412				377,678
5.500%, due 05/01/38					45,631				50,861
5.500%, due 12/01/38					7,235				8,071
5.500%, due 01/01/39					147,424				164,871
5.500%, due 09/01/39					445,601				503,867
5.500%, due 02/01/40					22,275				24,893
5.500%, due 03/01/40					17,051				19,066
5.500%, due 05/01/40					299,283				334,685
5.500%, due 02/01/41					74,841				83,530
5.500%, due 03/01/41					315,218				352,658
6.000%, due 11/01/37					2,860,408				3,230,576
7.000%, due 08/01/25					432				481
9.000%, due 04/01/25					31,319				31,679
11.000%, due 09/01/15					69				69
11.000%, due 10/01/15					21				21
11.000%, due 12/01/15					476				481
11.000%, due 06/01/19					254				255
11.000%, due 09/01/20					257				261
11.500%, due 01/01/16					563				571
11.500%, due 01/01/18					1,526				1,532
11.500%, due 06/01/19					12,391				12,627
FHLMC ARM 2.256%, due 11/01/27					84,699				88,159
2.262%, due 01/01/28					16,977				17,616
2.309%, due 04/01/29					126,734				133,523
2.337%, due 07/01/24					162,328				164,598
2.357%, due 10/01/23					60,657				62,686
2.393%, due 11/01/29					345,682				364,466
2.407%, due 06/01/28					275,645				292,297
2.407%, due 07/01/28					116,650				121,992
2.438%, due 12/01/29					63,956				66,739
2.540%, due 11/01/25					200,843				213,994