Important Considerations for Investing in Mutual Funds
Investing in mutual funds, like investments in other securities, carries a certain degree of risk. The risks may vary from fund to fund depending on several factors, including:

• The investment objective of the fund
• Investment policies, such as hedging strategies
• Security concentrations
• Investments in international securities
• Changes in interest rates, general market conditions and other political, social and economic developments
• Specific matters relating to the companies in whose securities the fund invests

For example, small and mid cap companies typically are subject to a greater degree of change in earnings and business prospects than are larger more established companies. Therefore, mutual funds that invested in small and mid cap stocks generally have a higher level of volatility. For international funds, the risks can include exposure to changes in currency values, economic, political and social conditions, the regulatory environment of the countries in which the fund invests, as well as the difficulties of receiving current and accurate information.

Please be sure to read the PACE Investment Advisory Agreement carefully before investing.

UBS Strategic Advisor is an advisory program in which the ongoing advice of your Financial Advisor is one of the key components and services provided. In selecting UBS Strategic Advisor, you should consider that it is intended for investors who: (i) establish strategic investment goals; (ii) seek and value the ongoing advice of a professional financial advisor but retain discretion over the trading activity in their account; (iii) are looking to implement a medium- to long-term investment plan; and (iv) prefer consistency of costs and aligning of interests with their Financial Advisor. Product mix is another consideration you should make. For example, mutual funds in UBS Strategic Advisor are purchased at NAV with no sales load charged; however, if you would qualify for breakpoint discounts in a commission-based account, purchasing those funds in a commission-based account may be a more cost-efficient option.

Mutual Fund Share Class Suitability: Most mutual funds offered by UBS have different classes of shares with different sales charge options; investors can select the class best-suited to their investment needs. This class determination is an important part of the overall suitability assessment of mutual fund transactions, as there are instances when one class may be more appropriate than another. When determining which class is most appropriate, you should consider:

• The ongoing annual expenses of the fund (Any front-end load or contingent deferred sales charge)
• The availability of the breakpoint or volume purchase discounts

These are key factors in estimating the costs of investing in the different share classes.